Oracle 2011 Annual Report Download - page 34

with these environmental laws, yet compliance with such laws could increase our product design, development,
procurement and manufacturing costs, limit our ability to manage excess and obsolete non-compliant inventory,
change our sales activities, or otherwise impact future financial results of our hardware systems business. Any
violation of these laws can subject us to significant liability, including fines, penalties, and possible prohibition
of sales of our products into one or more states or countries, and result in a material adverse effect on the
financial condition or results of operations of our hardware systems business. A significant portion of our
hardware systems revenues come from international sales. Environmental legislation within the European Union
(EU), including the EU Directive on Restriction of Hazardous Substances (RoHS) and Waste Electrical and
Electronic Equipment Directive (WEEE Directive), as well as China’s regulation on Management Methods for
Controlling Pollution Caused by Electronic Information Products may increase our cost of doing business
internationally and impact our hardware systems revenues from EU countries and China as we endeavor to
comply with and implement these requirements. In addition, similar environmental legislation has been or may
be enacted in other jurisdictions, the cumulative impact of which could be significant.
Our stock price could become more volatile and your investment could lose value. All of the factors discussed
in this section could affect our stock price. The timing of announcements in the public market regarding new
products, product enhancements or technological advances by our competitors or us, and any announcements by
us of acquisitions, major transactions, or management changes could also affect our stock price. Changes in the
amounts and frequency of share repurchases or dividends could adversely affect our stock price. Our stock price
is subject to speculation in the press and the analyst community, changes in recommendations or earnings
estimates by financial analysts, changes in investors’ or analysts’ valuation measures for our stock, our credit
ratings and market trends unrelated to our performance. A significant drop in our stock price could also expose
us to the risk of securities class actions lawsuits, which could result in substantial costs and divert management’s
attention and resources, which could adversely affect our business.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our properties consist of owned and leased office facilities for sales, support, research and development,
consulting, manufacturing and administrative personnel. Our headquarters facility consists of approximately
2.1 million square feet in Redwood City, California, substantially all of which we own. We lease our principal
internal manufacturing facility for our hardware systems products in Hillsboro, Oregon. We also own or lease
other office facilities for current use consisting of approximately 27.1 million square feet in various other
locations in the United States and abroad. We believe our facilities are in good condition and suitable for the
conduct of our business. Approximately 6.5 million square feet, or 22%, of total owned and leased space is sublet
or is being actively marketed for sublease or disposition.
Item 3. Legal Proceedings
The material set forth in Note 18 of Notes to Consolidated Financial Statements in Item 15 of this Annual Report
on Form 10-K is incorporated herein by reference.
Item 4. Removed and Reserved
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