Symantec 2007 Annual Report Download - page 24

• Our OEM partners may develop, market, and distribute their own products and market and distribute
products of our competitors, which could reduce our sales
If we fail to manage our sales and distribution channels successfully, these channels may conflict with one
another or otherwise fail to perform as we anticipate, which could reduce our sales and increase our expenses as well
as weaken our competitive position. Some of our distribution partners have experienced financial difficulties in the
past, and if our partners suffer financial difficulties in the future, we may have reduced sales or increased bad debt
expense that could adversely affect our operating results. In addition, reliance on multiple channels subjects us to
events that could cause unpredictability in demand, which could increase the risk that we may be unable to plan
effectively for the future, and could result in adverse operating results in future periods.
We have grown, and may continue to grow, through acquisitions that give rise to risks and challenges that
could adversely affect our future financial results.
We have in the past acquired, and we expect to acquire in the future, other businesses, business units, and
technologies. Acquisitions can involve a number of special risks and challenges, including:
• Complexity, time, and costs associated with the integration of acquired business operations, workforce,
products, and technologies into our existing business, sales force, employee base, product lines, and
technology
• Diversion of management time and attention from our existing business and other business opportunities
• Loss or termination of employees, including costs associated with the termination or replacement of those
employees
• Assumption of debt or other liabilities of the acquired business, including litigation related to the acquired
business
• The incurrence of additional acquisition-related debt as well as increased expenses and working capital
requirements
• Dilution of stock ownership of existing stockholders
• Increased costs and efforts in connection with compliance with Section 404 of the Sarbanes-Oxley Act
• Substantial accounting charges for restructuring and related expenses, write-off of in-process research and
development, impairment of goodwill, amortization of intangible assets, and stock-based compensation
expense
Integrating acquired businesses has been and will continue to be a complex, time consuming, and expensive
process, and can impact the effectiveness of our internal control over financial reporting. For example, as disclosed
in Item 9A in this annual report, we have remediated a material weakness in our internal control over financial
reporting that was largely related to Symantec having insufficient personnel resources with adequate expertise to
properly manage the increased volume and complexity of income tax matters arising from the acquisition of Veritas.
If integration of our acquired businesses is not successful, we may not realize the potential benefits of an
acquisition or undergo other adverse effects that we currently do not foresee. To integrate acquired businesses, we
must implement our technology systems in the acquired operations and integrate and manage the personnel of the
acquired operations. We also must effectively integrate the different cultures of acquired business organizations into
our own in a way that aligns various interests, and may need to enter new markets in which we have no or limited
experience and where competitors in such markets have stronger market positions.
Any of the foregoing, and other factors, could harm our ability to achieve anticipated levels of profitability
from acquired businesses or to realize other anticipated benefits of acquisitions. In addition, because acquisitions of
high technology companies are inherently risky, no assurance can be given that our previous or future acquisitions
will be successful and will not adversely affect our business, operating results, or financial condition.
18