Oracle 2010 Annual Report Download - page 27

Table of Contents
• we may fail to identify or assess the magnitude of certain liabilities, shortcomings or other circumstances prior to acquiring a company or
technology, which could result in unexpected litigation or regulatory exposure, unfavorable accounting treatment, unexpected increases in taxes due,
a loss of anticipated tax benefits or other adverse effects on our business, operating results or financial condition;
• we may not realize the anticipated increase in our revenues from an acquisition for a number of reasons, including if a larger than predicted number
of customers decline to renew software license updates and product support contracts and hardware systems support contracts, if we are unable to
sell the acquired products to our customer base or if contract models of an acquired company do not allow us to recognize revenues on a timely
basis;
• we may have difficulty incorporating acquired technologies or products with our existing product lines and maintaining uniform standards,
architecture, controls, procedures and policies;
• we may have multiple product lines as a result of our acquisitions that are offered, priced and supported differently, which could cause customer
confusion and delays;
• we may have higher than anticipated costs in continuing support and development of acquired products, in general and administrative functions that
support new business models, or in compliance with associated regulations that are more complicated than we had anticipated;
• we may be unable to obtain timely approvals from, or may otherwise have certain limitations, restrictions, penalties or other sanctions imposed on
us by, worker councils or similar bodies under applicable employment laws as a result of an acquisition, which could adversely affect our integration
plans in certain jurisdictions;
• we may be unable to obtain required approvals from governmental authorities under competition and antitrust laws on a timely basis, if at all, which
could, among other things, delay or prevent us from completing a transaction, otherwise restrict our ability to realize the expected financial or
strategic goals of an acquisition or have other adverse effects on our current business and operations;
• our use of cash to pay for acquisitions may limit other potential uses of our cash, including stock repurchases, dividend payments and retirement of
outstanding indebtedness;
• we may significantly increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition and
we may have to delay or not proceed with a substantial acquisition if we cannot obtain the necessary funding to complete the acquisition in a timely
manner or on favorable terms;
• to the extent that we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and
earnings per share may decrease; and
• we may experience additional or unexpected changes in how we are required to account for our acquisitions pursuant to U.S. generally accepted
accounting principles, including arrangements that we assume from an acquisition.
The occurrence of any of these risks could have a material adverse effect on our business, results of operations, financial condition or cash flows, particularly in
the case of a larger acquisition or several concurrent acquisitions.
Our international sales and operations subject us to additional risks that can adversely affect our operating results. We derive a substantial portion of our
revenues from, and have significant operations, outside of the United States. Our international operations include software and hardware systems development,
manufacturing, assembly, sales, customer support, consulting, Cloud Services and shared administrative service centers.
Compliance with international and U.S. laws and regulations that apply to our international operations increases our cost of doing business in foreign
jurisdictions. These laws and regulations include U.S. laws and local laws which include data privacy requirements, labor relations laws, tax laws,
anti-competition regulations, prohibitions on payments to governmental officials, import and trade restrictions, and export requirements.
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Source: ORACLE CORP, 10-K, June 28, 2011 Powered by Morningstar® Document Research℠