Oracle 2013 Annual Report Download - page 35

Table of Contents
used for these offerings, human health and safety, and regulating the use of certain chemical substances. We endeavor to comply with these
environmental and other laws, yet compliance with such laws could increase our product design, development, procurement, manufacturing,
delivery and administration costs, limit our ability to manage excess and obsolete non-compliant inventory, change our sales activities, or
otherwise impact future financial results of our cloud and hardware systems businesses. Any violation of these laws can subject us to significant
liability, including fines, penalties and possible prohibition of sales of our products and services into one or more states or countries and result in
a material adverse effect on the financial condition or results of operations of our cloud and hardware systems businesses. The U.S. Securities
and Exchange Commission has adopted disclosure requirements for companies that use certain “conflict minerals” (commonly referred to as
tantalum, tin, tungsten and gold) in their products. Our supply chain is multi-tiered, global and highly complex. As a provider of hardware
systems end products, we are several steps removed from the mining and smelting or refining of any “conflict minerals” in our supply chain.
Accordingly, our ability to determine with certainty the origin and chain of custody of “conflict minerals” is limited. Our relationships with
customers and suppliers could suffer if we are unable to describe our products as “conflict-free.” We may also face increased costs in complying
with conflict mineral disclosure requirements. 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 2.0 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 24.1 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 2.9 million square
feet, or 11%, 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. Mine Safety Disclosures
None.
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