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As a result, the costs actually incurred in connection with the restructuring efforts may be higher than originally planned and may not lead to
the anticipated cost savings and/or improved results.
As part of our review of restructured businesses, we look at the recoverability of their tangible and intangible assets. Future market conditions
may trigger further write downs of these assets due to uncertainties in:
We will continue to review our restructuring work plan based on our ongoing assessment of the industry and the business environment.
Our operating results have historically been subject to yearly and quarterly fluctuations and are expected to continue to fluctuate,
which may adversely affect the market price of our publicly traded securities.
Our operating results have historically been, and are expected to continue to be, subject to quarterly and yearly fluctuations as a result of a
number of factors. These factors include:
Our decision to adopt fair value accounting for employee stock options on a prospective basis as of January 1, 2003 has
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• the estimates and assumptions used in asset valuations, which are based on our forecasts of future business performance; an
d
• accounting estimates related to the useful life and recoverability of the net book value of these assets, including inventory,
goodwill, net deferred taxes and other intangible assets.
• our ability to execute our strategic plan, including the planned workforce reductions, without negatively impacting our relationships
with our customers, the delivery of products based on new and developing technologies at competitive prices, the effectiveness of
our internal processes and organizations and the retention of qualified personnel;
• our ability to focus on the day-to-day operation of our business while implementing improvements in our internal controls and
procedures, including our accounting systems, and addressing the civil litigation actions and investigations related to our
restatements;
• our ability to successfully implement programs to stimulate customer spending by anticipating and offering the kinds of products
and services customers will require in the future to increase the efficiency and profitability of their networks;
• our ability to successfully complete programs on a timely basis to reduce our cost structure, including fixed costs, to streamline our
operations and to reduce product costs;
• our ability to successfully comply with increased and complex regulations;
• our ability to focus our business on what we believe to be potentially higher growth, higher margin businesses and to dispose of or
exit non-core businesses;
• increased price and product competition in the networking industry, including from low cost competitors;
• the inherent uncertainties of using forecasts, estimates and assumptions for asset valuations and in determining the amounts of
accrued liabilities, provisions and other items in our consolidated financial statements;
• the impact of changes in global capital markets and interest rates on our pension plan assets and obligations;
• fluctuations in our gross margins;
• the development, introduction and market acceptance of new technologies, and integrated networking solutions, as well as the
adoption of new networking standards;
• the overall trend toward industry consolidation and rationalization among our customers, competitors and suppliers;
• our ability to make investments, including acquisitions, to strengthen our business;
• the ability of our customers and suppliers to obtain financing to fund capital expenditures;
• variations in sales channels, product costs and the mix of products sold;
• the size and timing of customer orders and shipments;
• our ability to continue to obtain customer performance bonds and contracts;
• our ability to maintain appropriate inventory levels;
• the impact of acquired businesses and technologies;
• the impact of our product development schedules, product quality variances, manufacturing capacity and lead times required to
produce our products; and
• the impact of higher insurance premiums and deductibles and greater limitations on insurance coverage.