Computer Associates 2006 Annual Report Download - page 35

• Magnitude of price and product and/or services competition;
• Introduction of new hardware;
• General economic conditions in countries in which customers do a substantial amount of business;
• Changes in customer budgets for hardware, software and services;
• Ability to develop and introduce new or enhanced versions of our products;
• Changes in foreign currency exchange rates;
• Ability to control costs;
• The number and terms and conditions of licensing transactions;
• Reorganizations of the sales and technical services forces;
• The results of litigation, including the government and internal investigations; and
• Ability to retain and attract qualified personnel.
Any of the foregoing factors, among others, may cause our operating expenses to be disproportionately high, or
cause our revenue and operating results to fluctuate. As a consequence, our business, financial condition, operating
results and cash flow could be adversely affected. For a discussion of certain factors that could affect our cash flow
in the future, for example, please see Item 7, “Management’s Discussion and Analysis of Financial Condition and
Results of Operations — Liquidity and Capital Resources — Sources and Uses of Cash.”
The timing of orders from customers and channel partners may cause fluctuations in some of our key financial
metrics which may impact our quarterly financial results and stock price.
Historically, the vast majority of our license agreements are executed in the last week of a quarter. Any failure or
delay in executing new or renewed license agreements in a given quarter could cause fluctuations in some of our key
financial metrics (i.e. billings or cash flow), which may have a material adverse effect on our quarterly financial
results. The uneven sales pattern also makes it difficult to predict future billings and cash flow for each period and,
accordingly, increases the risk of unanticipated variations in our quarterly results and financial condition. If we do
not achieve our forecasted results for a particular period, our stock price could decline significantly.
Given the global nature of our business, economic or political events beyond our control can affect our
business in unpredictable ways.
International revenue has historically represented a significant percentage of our total worldwide revenue.
Continued success in selling our products outside the United States will depend on a variety of market and
business factors, including:
• Reorganizations of the sales and technical services workforce;
• Fluctuations in foreign exchange currency rates;
• Staffing key managerial positions;
• The ability to successfully localize software products for a significant number of international markets;
• General economic conditions in foreign countries;
• Political stability; and
• Trade restrictions such as tariffs, duties or other controls affecting foreign operations.
Any of the foregoing factors, among others, could adversely affect our business, financial condition, operating
results and cash flow.
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