Plantronics 2006 Annual Report Download - page 37

part i
Compliance with regulatory restrictions may impact the technical quality and capabilities of our products
reducing their marketability.
Our stock price may be volatile and the value of your investment in Plantronics stock could be
diminished.
The market price for our common stock may continue to be affected by a number of factors, including:
)Uncertain economic conditions and the decline in investor confidence in the market place;
)Changes in our published forecasts of future results of operations;
)Quarterly variations in our or our competitors’ results of operations and changes in market share;
)The announcement of new products or product enhancements by us or our competitors;
)The loss of services of one or more of our executive officers or other key employees;
)Changes in earnings estimates or recommendations by securities analysts;
)Developments in our industry;
)Sales of substantial numbers of shares of our common stock in the public market;
)Integration of the Altec Lansing business or market reaction to future acquisitions;
)General market conditions; and
)Other factors unrelated to our operating performance or the operating performance of our
competitors.
In addition, the stock market has experienced extreme price and volume fluctuations that have affected
the market price of many technology companies in particular, and that have often been unrelated to the
operating performance of these companies. Such factors and fluctuations, as well as general economic,
political and market conditions, such as recessions, could materially adversely affect the market price of
our common stock.
Our corporate tax rate may increase, which could adversely impact our cash flow, financial condition
and results of operations.
We have significant operations in various tax jurisdictions throughout the world and a substantial portion
of our taxable income historically has been generated in these jurisdictions. Currently, some of our
operations are taxed at rates substantially lower than U.S. tax rates. If our income in these lower tax
jurisdictions were no longer to qualify for these lower tax rates, if the applicable tax laws were rescinded or
changed, or if the mix of our earnings shifts from lower rate jurisdictions to higher rate jurisdictions, our
operating results could be materially adversely affected. Altec Lansing’s historical tax rates are higher
than those of Plantronics’ pre-acquisition tax rates and will negatively impact our corporate tax rate for
the combined entity. While we are looking at opportunities to reduce our combined tax rate, there is no
assurance that our tax planning strategies will be successful. In addition, many of these strategies will
require a period of time to implement. Moreover, if U.S. or other foreign tax authorities were to change
applicable foreign tax laws or successfully challenge the manner in which our profits are currently
recognized, our overall taxes could increase, and our business, cash flow, financial condition and results of
operations could be materially adversely affected.
Changes in stock option accounting rules will adversely impact our operating results and may
adversely impact our stock price and our ability to compete for employees.
We have previously measured compensation expense for our employee stock compensation plans under
the intrinsic value method of accounting prescribed by APB Opinion No. 25, ‘‘Accounting for Stock
Issued to Employees’’ (‘‘APB 25’’). In December 2004, the Financial Accounting Standards Board
AR 2006 ⯗31