Symantec 2016 Annual Report Download - page 111

result, we may decide to issue fewer equity-based incentives and may be impaired in our efforts to attract and
retain necessary personnel. If we are unable to hire and retain qualified employees, or conversely, if we fail to
manage employee performance or reduce staffing levels when required by market conditions, our business and
operating results could be adversely affected.
Effective succession planning is also important to our long-term success. Failure to ensure effective transfer of
knowledge and smooth transitions involving key employees could hinder our strategic planning and execution.
From time to time, key personnel leave our company and the incidence of this increased in recent periods due to
the transitions we have experienced over the last few years including the divestiture of Veritas. For example, we
recently announced that for the third time in four years, we are initiating a Chief Executive Officer transition
process, and appointed an interim President and Chief Operating Officer. While we strive to reduce the negative
impact of changes in our leadership, the loss of any key employee could result in significant disruptions to our
operations, including adversely affecting the timeliness of product releases, the successful implementation and
completion of company initiatives, the effectiveness of our disclosure controls and procedures and our internal
control over financial reporting, and our results of operations. In addition, hiring, training, and successfully
integrating replacement sales and other personnel could be time consuming and expensive, may cause additional
disruptions to our operations, and may be unsuccessful, which could negatively impact future financial results.
These risks may be exacerbated by the uncertainty associated with the transitions we have experienced over the
last few years.
Our contracts with the U.S. government include compliance, audit and review obligations. Any failure to meet
these obligations could result in civil damages and/or penalties being assessed against us by the government.
We sell products and services through government contracting programs directly and via partners, though we no
longer hold a GSA contract. In the ordinary course of business, sales under these government contracting
programs may be subject to audit or investigation by the U.S. government. Noncompliance identified as a result
of such reviews (as well as noncompliance identified on our own) could subject us to damages and other
penalties, which could adversely affect our operating results and financial condition.
Accounting charges may cause fluctuations in our quarterly financial results.
Our financial results have been in the past, and may continue to be in the future, materially affected by non-cash
and other accounting charges, including:
• Amortization of intangible assets;
• Depreciation of property, plant and equipment;
• Impairment of goodwill and other long-lived assets;
• Stock-based compensation expense;
• Restructuring charges; and
• Loss on sale of a business and similar write-downs of assets held for sale.
Our effective tax rate may increase, which could increase our income tax expense and reduce (increase) our
net income (loss).
Our effective tax rate could be adversely affected by several factors, many of which are outside of our control,
including:
• Changes in the relative proportions of revenues and income before taxes in the various jurisdictions in
which we operate that have differing statutory tax rates;
• Changing tax laws, regulations, and interpretations in multiple jurisdictions in which we operate,
including possible corporate tax reform in the U.S., actions resulting from the Organisation for
Economic Cooperation and Development’s base erosion and profit shifting project, proposed actions by
international bodies, as well as the requirements of certain tax rulings;
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