EMC 2009 Annual Report Download - page 17

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Table of Contents
• the failure of the acquisition to result in expected benefits, which may include benefits relating to enhanced revenues, technology, human resources,
cost savings, operating efficiencies and other synergies;
• the difficulty and cost of integrating the acquired business, including costs and delays in implementing common systems and procedures and costs
and delays caused by communication difficulties or geographic distances between the two companies' sites;
• the assumption of liabilities of the acquired business, including litigation-related liability;
• the potential impairment of acquired assets;
• the lack of experience in new markets, products or technologies or the initial dependence on unfamiliar supply or distribution partners;
• the diversion of our management's attention from other business concerns;
• the impairment of relationships with customers or suppliers of the acquired business or our customers or suppliers;
• the potential loss of key employees of the acquired company; and
• the potential incompatibility of business cultures.
These factors could have a material adverse effect on our business, results of operations or financial condition. To the extent that we issue shares of our
common stock or other rights to purchase our common stock in connection with any future acquisition, existing shareholders may experience dilution.
Additionally, regardless of the form of consideration issued, acquisitions could negatively impact our net income and our earnings per share.
In addition to the risks commonly encountered in the acquisition of a business as described above, we may also experience risks relating to the
challenges and costs of closing a transaction. Further, the risks described above may be exacerbated as a result of managing multiple acquisitions at the same
time.
We also seek to invest in businesses that offer complementary products, services or technologies. These investments are accompanied by risks similar
to those encountered in an acquisition of a business.
Our pension plan assets are subject to market volatility.
We have a noncontributory defined benefit pension plan assumed as part of our Data General acquisition. The plan's assets are invested in common
stocks, bonds and cash. The expected long-term rate of return on the plans' assets is 8.25%. This rate represents the average of the expected long-term rates of
return weighted by the plan's assets as of December 31, 2009. As of December 31, 2009, the ten-year historical rate of return on plan assets was 2.8%, and the
inception to date return on plan assets was 9.7%. In 2009 and 2008, we experienced a 25.1% gain and 27.0% loss, respectively, on plan assets. Given current
market conditions, should we not achieve the expected rate of return on our plans' assets or if our plans experience a decline in the fair value of their assets,
we may be required to contribute assets to the plans which could materially adversely affect our results of operations or financial condition.
Our business could be materially adversely affected by changes in regulations or standards regarding energy use of our products.
We continually seek ways to increase the energy efficiency of our products. Recent analyses have estimated the amount of global carbon emissions that
are due to information technology products. As a result, governmental and non-governmental organizations have turned their attention to development of
regulations and standards to drive technological improvements and reduce such amount of carbon emissions. There is a risk that the rush to development of
these standards will not fully address the complexity of the technology developed by the IT industry or will favor certain technological approaches.
Depending on the regulations or standards that are ultimately adopted, compliance could adversely affect our business, results of operations or financial
condition.
Our business could be materially adversely affected as a result of war or acts of terrorism.
Terrorist acts or acts of war may cause damage or disruption to our employees, facilities, customers, partners, suppliers, distributors and resellers, which
could have a material adverse effect on our business, results of operations or financial condition. Such conflicts may also cause damage or disruption to
transportation and communication systems and to our ability to manage logistics in such an environment, including receipt of components and distribution of
products.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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