EMC 2008 Annual Report Download - page 16

Table of Contents
accurately forecasting revenues;
training our sales force to sell more software and services;
successfully integrating new acquisitions;
managing inventory levels, including minimizing excess and obsolete inventory, while maintaining sufficient inventory to meet customer
demands;
controlling expenses;
managing our manufacturing capacity, real estate facilities and other assets; and
executing on our plans.
An unexpected decline in revenues without a corresponding and timely reduction in expenses or a failure to manage other aspects of our operations could
have a material adverse effect on our business, results of operations or financial condition.
Our investment portfolio could experience a decline in market value which could adversely affect our financial results.
We held $3.3 billion in short and long-term investments as of December 31, 2008. The investments are invested primarily in investment grade securities,
and we limit the amount of investment with any one issuer. A further deterioration in the economy, including a continuing credit crisis, increased defaults by
issuers, or significant volatility in interest rates, could cause the investments to decline in value or could impact the liquidity of the portfolio. If market
conditions deteriorate significantly, our results of operations or financial condition could be materially adversely affected.
If our cost cutting measures are not successful, our business could be adversely affected.
A variety of factors could prevent us from achieving our goal of better aligning our revenues and cost structure. We may not be able to identify and
implement appropriate cost savings in a timely manner. Additionally, we may determine that the costs of implementing reductions outweigh the
commensurate benefits. Should we implement certain cost reductions, there could be adverse consequences on our business which could have a material
adverse effect on our results of operations or financial position.
Our business may suffer if we are unable to retain or attract key personnel.
Our business depends to a significant extent on the continued service of senior management and other key employees, the development of additional
management personnel and the hiring of new qualified employees. There can be no assurance that we will be successful in retaining existing personnel or
recruiting new personnel. The loss of one or more key or other employees, our inability to attract additional qualified employees or the delay in hiring key
personnel could have a material adverse effect on our business, results of operations or financial condition.
Our quarterly revenues and earnings could be materially adversely affected by uneven sales patterns and changing purchasing behaviors.
Our quarterly sales have historically reflected an uneven pattern in which a disproportionate percentage of a quarter's total sales occur in the last month
and weeks and days of each quarter. This pattern makes prediction of revenues, earnings and working capital for each financial period especially difficult and
uncertain and increases the risk of unanticipated variations in quarterly results and financial condition. We believe this uneven sales pattern is a result of many
factors including:
the relative dollar amount of our product and services offerings in relation to many of our customers' budgets, resulting in long lead times for
customers' budgetary approval, which tends to be given late in a quarter;
the tendency of customers to wait until late in a quarter to commit to purchase in the hope of obtaining more favorable pricing from one or more
competitors seeking their business;
the fourth quarter influence of customers' spending their remaining capital budget authorization prior to new budget constraints in the first nine
months of the following year; and
seasonal influences.
Our uneven sales pattern also makes it extremely difficult to predict near-term demand and adjust manufacturing capacity or our supply chain
accordingly. If predicted demand is substantially greater than orders, there will be excess inventory. Alternatively, if orders substantially exceed predicted
demand, the ability to assemble, test and ship orders
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