3Ware 2002 Annual Report Download - page 28

September 11, 2001 disrupted commerce throughout the world and intensified the uncertainty of the U.S.
economy and other economies around the world. The continued threat of terrorism and heightened security and
military action in response to this threat, or any future acts of terrorism, may cause further disruptions and create
further uncertainties. To the extent that such disruptions or uncertainties result in delays or cancellations of
customer orders, or the manufacture or shipment of our products, our business, operating results and financial
condition could be materially and adversely affected.
We could incur substantial fines or litigation costs associated with our storage, use and disposal of
hazardous materials.
We are subject to a variety of federal, state and local governmental regulations related to the use, storage,
discharge and disposal of toxic, volatile or otherwise hazardous chemicals used in our manufacturing process.
Any failure to comply with present or future regulations could result in the imposition of fines, the suspension of
production or a cessation of operations. These regulations could require us to acquire costly equipment or incur
other significant expenses to comply with environmental regulations or clean up prior discharges. Since 1993, we
have been named as a potentially responsible party, along with a large number of other companies that used
Omega Chemical Corporation in Whittier, California to handle and dispose of certain hazardous waste material.
We are a member of a large group of potentially responsible parties that has agreed to fund certain remediation
efforts at the Omega site, which efforts are ongoing. To date, our payment obligations with respect to these
funding efforts have not been material, and we believe that our future obligations to fund these efforts will not
have a material adverse effect on our business, financial condition or operating results. Although we believe that
we are currently in material compliance with applicable environmental laws and regulations, we cannot assure
you that we are or will be in material compliance with these laws or regulations or that our future obligations to
fund any remediation efforts, including those at the Omega site, will not have a material adverse effect on our
business.
We have in the past and may in the future make acquisitions that will involve numerous risks. We may not
be able to address these risks successfully without substantial expense, delay or other operational or
financial problems.
The risks involved with acquisitions include:
• diversion of management’s attention;
• failure to retain key personnel;
• difficulty in completing an acquired company’s in-process research or development projects;
• amortization of acquired intangible assets and deferred compensation;
• customer dissatisfaction or performance problems with an acquired company’s products or services;
• the cost associated with acquisitions and the integration of acquired operations;
• ability of the acquired companies to meet their financial projections; and
• assumption of unknown liabilities, or other unanticipated events or circumstances.
As with past purchase acquisitions, future acquisitions could adversely affect operating results. In particular,
acquisitions may materially and adversely affect our results of operations because they may require large one-
time charges or could result in increased debt or contingent liabilities, adverse tax consequences, substantial
additional depreciation or deferred compensation charges. In connection with our six purchase acquisitions in
fiscal 2001, we recorded goodwill in the aggregate amount of approximately $4.0 billion. In accordance with
Statement of Financial Accounting Standard No. 121, “Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets to be Disposed Of”, we recorded a goodwill impairment charge of $3.1 billion in the three
months ended June 30, 2001 to write down the value of goodwill associated with certain of our purchase
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