Computer Associates 2012 Annual Report Download - page 24

•We may have difficulty forecasting or reporting results subsequent to acquisitions;
•We may have difficulty retaining the skills needed to further market, sell or provide services on the acquired products in a
manner that will be accepted by the market;
•We may have difficulty incorporating the acquired technologies or products into our existing product lines;
•We may have product liability, customer liability or intellectual property liability associated with the sale of the acquired
company’s products;
•Our ongoing business may be disrupted by transition or integration issues and our management’s attention may be diverted from
other business initiatives;
•We may be unable to obtain timely approvals from governmental authorities under applicable competition and antitrust laws;
•We may have difficulty maintaining uniform standards, controls, procedures and policies;
•Our relationships with current and new employees, customers and distributors could be impaired;
•An acquisition may result in increased litigation risk, including litigation from terminated employees or third parties; and
•Our due diligence process may fail to identify significant issues with the acquired company’s product quality, financial
disclosures, accounting practices, internal control deficiencies, including material weaknesses, product architecture, legal and tax
contingencies and other matters.
These factors could materially adversely affect our business, results of operations, financial condition and cash flow, particularly in
the case of a large acquisition or number of acquisitions. To the extent we issue shares of stock or other rights to purchase stock,
including options, to pay for acquisitions or to retain employees, existing stockholders’ interests may be diluted and income per share
may decrease.
If we do not adequately manage and evolve our financial reporting and managerial systems and processes,
including the successful implementation of our enterprise resource planning software, our ability to manage and
grow our business may be harmed.
Our ability to successfully implement our business plan and comply with regulations requires effective planning and management
systems and processes. We need to continue to improve and implement existing and new operational and financial systems,
procedures and controls to manage our business effectively in the future. As a result, we have licensed enterprise resource planning
software, consolidated certain finance functions into regional locations, and are in the process of expanding and upgrading our
operational and financial systems. Any delay in the implementation of, or disruption in the transition to, our new or enhanced
systems, procedures or internal controls, could adversely affect our ability to accurately forecast sales demand, manage our supply
chain, achieve accuracy in the conversion of electronic data and records, and report financial and management information, including
the filing of our quarterly or annual reports with the SEC, on a timely and accurate basis. Failure to properly or adequately address
these issues could result in the diversion of management’s attention and resources, adversely affect our ability to manage our business
and materially adversely affect our business, financial condition, results of operations and cash flow. Refer to Item 9A, “Controls and
Procedures,” for additional information.
If our products do not remain compatible with ever-changing operating environments we could lose customers
and the demand for our products and services could decrease, which could materially adversely affect our
business, financial condition, operating results and cash flow.
The largest suppliers of systems and computing software are, in most cases, the manufacturers of the computer hardware systems
used by most of our customers. Historically, these companies have from time to time modified or introduced new operating systems,
systems software and computer hardware. In the future, new products from these companies could incorporate features that perform
functions currently performed by our products, or could require substantial modification of our products to maintain compatibility
with these companies’ hardware or software. Recently, many established enterprise hardware vendors have begun to bundle in basic
management functionality software with their hardware offerings, putting additional competitive pressures on independent
management software vendors like us. Although we have to date been able to adapt our products and our business to changes
introduced by hardware manufacturers and system software developers, there can be no assurance that we will be able to do so in the
future. Failure to deliver distinctive management functionality, beyond the basic functionality now being bundled by many hardware
vendors, that delivers significant and differentiating value to customers could materially adversely affect our business, financial
condition, operating results and cash flow.
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