Symantec 2016 Annual Report Download - page 104

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 because of general economic conditions or
for other reasons, these partners may delay paying their obligations to us and 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.
Over the long term we intend to invest in research and development activities, and these investments may
achieve delayed, or lower than expected, benefits which could harm our operating results.
While we continue to focus on managing our costs and expenses, over the long term, we also intend to invest
significantly in research and development activities as we focus on organic growth through internal innovation in
each of our business segments. We believe that we must continue to dedicate a significant amount of resources to
our research and development efforts to maintain our competitive position. We recognize the costs associated
with these research and development investments earlier than the anticipated benefits, and the return on these
investments may be lower, or may develop more slowly, than we expect. If we do not achieve the benefits
anticipated from these investments, or if the achievement of these benefits is delayed, our operating results may
be adversely affected.
Changes in industry structure and market conditions could lead to charges related to discontinuances of
certain of our products or businesses and asset impairments.
In response to changes in industry and market conditions and in connection with the recent divestiture of Veritas,
we may be required to strategically reallocate our resources and consider restructuring, disposing of or otherwise
exiting businesses. Any decision to limit investment in or dispose of or otherwise exit businesses may result in
the recording of special charges, such as inventory and technology-related write-offs, workforce reduction costs,
charges relating to consolidation of excess facilities or claims from third parties who were resellers or users of
discontinued products. Our estimates with respect to the useful life or ultimate recoverability of our carrying
basis of assets, including purchased intangible assets, could change as a result of such assessments and decisions.
Although in certain instances our supply agreements allow us the option to cancel, reschedule and adjust our
requirements based on our business needs prior to firm orders being placed, our loss contingencies may include
liabilities for contracts that we cannot cancel, reschedule or adjust with contract manufacturers and suppliers.
Further, our estimates relating to the liabilities for excess facilities are affected by changes in real estate market
conditions. Additionally, we are required to evaluate goodwill impairment on an annual basis and between annual
evaluations in certain circumstances, and future goodwill impairment evaluations may result in a charge to
earnings.
Our inability to successfully recover from a disaster or other business continuity event could impair our ability
to deliver our products and services and harm our business.
We are heavily reliant on our technology and infrastructure to provide our products and services to our
customers. For example, we host many of our products using third-party data center facilities and we do not
control the operation of these facilities. These facilities are vulnerable to damage, interruption or performance
problems from earthquakes, hurricanes, floods, fires, power loss, telecommunications failures and similar events.
They are also subject to break-ins, computer viruses, sabotage, intentional acts of vandalism and other
misconduct. The occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without
adequate notice or other unanticipated problems could result in lengthy interruptions in the delivery of our
products and services.
Furthermore, our business administration, human resources and finance services depend on the proper
functioning of our computer, telecommunication and other related systems and operations. A disruption or failure
of these systems or operations because of a disaster or other business continuity event could cause data to be lost
16