EMC 2005 Annual Report Download - page 17

Table of Contents
We may become involved in litigation that may materially adversely affect us.
From time to time in the ordinary course of our business, we may become involved in various legal proceedings, including patent, commercial, product
liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings. Such
matters can be time-consuming, divert management's attention and resources and cause us to incur significant expenses. Furthermore, because litigation is
inherently unpredictable, there can be no assurance that the results of any of these actions will not have a material adverse effect on our business, results of
operations or financial condition.
We may have exposure to additional income tax liabilities.
As a multinational corporation, we are subject to income taxes in both the United States and various foreign jurisdictions. Our domestic and
international tax liabilities are subject to the allocation of revenues and expenses in different jurisdictions and the timing of recognizing revenues and
expenses. Additionally, the amount of income taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we file. From time
to time, we are subject to income tax audits. While we believe we have complied with all applicable income tax laws, there can be no assurance that a
governing tax authority will not have a different interpretation of the law and assess us with additional taxes. Should we be assessed with additional taxes,
there could be a material adverse effect on our results of operations or financial condition.
Changes in regulations could materially adversely affect us.
Our business, results of operations or financial conditions could be materially adversely affected if laws, regulations or standards relating to us or our
products are newly implemented or changed. In addition, our compliance with existing regulations may have a material adverse impact on us. Under
applicable federal securities laws, including the Sarbanes-Oxley Act of 2002, we are required to evaluate and determine the effectiveness of our internal
control structure and procedures for financial reporting. Compliance with this legislation may divert management's attention and resources and cause us to
incur significant expense. Should we or our independent auditors determine that we have material weaknesses in our internal controls, our results of
operations or financial condition may be materially adversely affected or our stock price may decline.
Our stock price is volatile.
Our stock price, like that of other technology companies, is subject to significant volatility because of factors such as:
• the announcement of acquisitions, new products, services or technological innovations by us or our competitors
• quarterly variations in our operating results
• changes in revenue or earnings estimates by the investment community
• speculation in the press or investment community
In addition, our stock price is affected by general economic and market conditions and has been negatively affected by unfavorable global economic
and market conditions. If such conditions deteriorate, our stock price could decline.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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