Adobe 2013 Annual Report Download - page 26

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are located in the Salt Lake Valley Area, both of which are near major earthquake faults. We have developed certain disaster
recovery plans and backup systems to reduce the potentially adverse effect of such events, but a catastrophic event that results in
the destruction or disruption of any of our data centers or our critical business or information technology systems could severely
affect our ability to conduct normal business operations and, as a result, our future operating results could be adversely affected.
Net revenue, margin or earnings shortfalls or the volatility of the market generally may cause the market price of our stock to
decline.
The market price for our common stock has in the past experienced significant fluctuations and may fluctuate significantly
in the future. A number of factors may affect the market price for our common stock, including:
• shortfalls in our revenue, margins, earnings, the number of paid, active Creative Cloud subscribers, ARR, bookings
within our Adobe Marketing Cloud business or other key performance metrics;
• changes in estimates or recommendations by securities analysts;
• the announcement of new products, product enhancements or service introductions by us or our competitors;
• the loss of a large customer or our inability to increase sales to existing customers or attract new customers;
• variations in our or our competitors' results of operations, changes in the competitive landscape generally and
developments in our industry; and
• unusual events such as significant acquisitions, divestitures, litigation, general socio-economic, regulatory, political or
market conditions and other factors, including factors unrelated to our operating performance.
We are subject to risks associated with compliance with laws and regulations globally which may harm our business.
We are a global company subject to varied and complex laws, regulations and customs domestically and internationally.
These laws and regulations relate to a number of aspects of our business, including trade protection, import and export control,
data and transaction processing security, payment card industry data security standards, records management, user-generated
content hosted on websites we operate, corporate governance, employee and third-party complaints, gift policies, conflicts of
interest, employment and labor relations laws, securities regulations and other regulatory requirements affecting trade and
investment. The application of these laws and regulations to our business is often unclear and may at times conflict. Compliance
with these laws and regulations may involve significant costs or require changes in our business practices that result in reduced
revenue and profitability. Non-compliance could also result in fines, damages, criminal sanctions against us, our officers or our
employees, prohibitions on the conduct of our business, and damage to our reputation. We incur additional legal compliance costs
associated with our global operations and could become subject to legal penalties if we fail to comply with local laws and regulations
in U.S. jurisdictions or in foreign countries, which laws and regulations may be substantially different from those in the U.S. In
many foreign countries, particularly in those with developing economies, it is common to engage in business practices that are
prohibited by U.S. regulations applicable to us, including the Foreign Corrupt Practices Act. Although we implement policies and
procedures designed to ensure compliance with these laws, there can be no assurance that all of our employees, contractors and
agents, as well as those companies to which we outsource certain of our business operations, including those based in or from
countries where practices that violate such U.S. laws may be customary, will not take actions in violation of our internal policies.
Any such violation, even if prohibited by our internal policies, could have an adverse effect on our business.
As a global business that generates approximately 47% of our total revenue from sales to customers outside of the Americas,
we are subject to a number of risks, including:
• foreign currency fluctuations;
• changes in government preferences for software procurement;
• international economic, political and labor conditions;
• tax laws (including U.S. taxes on foreign subsidiaries);
• increased financial accounting and reporting burdens and complexities;
• unexpected changes in, or impositions of, legislative or regulatory requirements;
• failure of laws to protect our intellectual property rights adequately;
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