Oracle 2011 Annual Report Download - page 26

Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or our
employees, and prohibitions on the conduct of our business. Any such violations could result in prohibitions on
our ability to offer our products and services in one or more countries, could delay or prevent potential
acquisitions, and could also materially damage our reputation, our brand, our international expansion efforts, our
ability to attract and retain employees, our business and our operating results. Our success depends, in part, on
our ability to anticipate these risks and manage these difficulties. We monitor our international operations and
investigate allegations of improprieties relating to transactions and the way in which such transactions are
recorded. Where circumstances warrant, we provide information and report our findings to government
authorities, but no assurance can be given that action will not be taken by such authorities.
We are also subject to a variety of other risks and challenges in managing an organization operating in various
countries, including those related to:
• general economic conditions in each country or region;
• fluctuations in currency exchange rates and related impacts to our operating results;
• natural disasters, like the recent earthquake and resulting tsunami in Japan;
• regulatory changes;
• political unrest, terrorism and the potential for other hostilities;
• public health risks, particularly in areas in which we have significant operations;
• longer payment cycles and difficulties in collecting accounts receivable;
• overlapping tax regimes;
• our ability to repatriate funds held by our foreign subsidiaries to the United States at favorable tax
rates;
• difficulties in transferring funds from or converting currencies in certain countries; and
• reduced protection for intellectual property rights in some countries.
As a result of our hardware systems business, the volume and complexity of laws and regulations that we are
subject to have increased. The variety of risks and challenges listed above could also disrupt or otherwise
negatively impact the supply chain operations for our hardware systems products segment and the sales of our
products and services in affected countries or regions.
As the majority shareholder of Oracle Financial Services Software Limited, a publicly traded Indian software
company focused on the banking industry, we are faced with several additional risks, including being subject to
local securities regulations and being unable to exert full control.
We may not achieve our financial forecasts with respect to our acquisition of Sun or our hardware systems
business, or the achievement of such forecasts may take longer than expected. Our profitability could decline
if we do not manage the risks associated with our hardware systems business. Our hardware systems business
may adversely affect our overall profitability if we do not manage the associated risks. We may not achieve our
estimated revenue, profit or other financial projections with respect to our acquisition of Sun in a timely manner
or at all due to a number of factors, including:
• our relative inexperience in managing a hardware systems business and related processes or the
unplanned departures of some important employees could adversely impact our ability to successfully
run our hardware systems business, which could adversely impact our ability to realize the forecasts for
our hardware systems business and its results of operations;
• we may not be able to increase sales of hardware systems support contracts or such increase may take
longer than we anticipate, which could result in lower revenues and profitability, or slower than
expected growth of such revenues and profitability;
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