Support.com 2006 Annual Report Download - page 44

Download and view the complete annual report

Please find page 44 of the 2006 Support.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions
in foreign markets. As most sales are currently made in U.S. dollars, a strengthening of the dollar could make our products less
competitive in foreign markets.
As of December 31, 2006, we held $15.4 million in cash and cash equivalents consisting of highly liquid investments having
original maturity dates of no more than 90 days. A decline in interest rates over time would reduce our interest income from our highly
liquid marketable securities. Based upon our balance of cash and cash equivalents, a decrease in interest rates of 100 basis points
would cause a corresponding decrease in our annual interest income of approximately $154,000. Due to the nature of our highly liquid
cash equivalents, a change in interest rates would not materially change the fair market value of our cash and cash equivalents.
As of December 31, 2006, we held $104.5 million in marketable securities, which consisted primarily of money market funds held
by large institutions in the U.S. and commercial paper. Our marketable securities were primarily invested in corporate bonds,
government debt securities maturing in less than eighteen months and auction−rate securities resetting in less than ninety days. The
weighted average interest rate of our portfolio was approximately 4.14% at December 31, 2006. A decline in interest rates over time
would reduce our interest income from our marketable securities. A decrease in interest rates of 100 basis points would cause a
corresponding decrease in our annual interest income of approximately $1.0 million. Due to the nature of our highly liquid cash
equivalents, a change in interest rates would not materially change the fair market value of our marketable securities.
40
Source: SUPPORTSOFT INC, 10−K, March 16, 2007