1043604--2/29/2008--JUNIPER_NETWORKS

related topics

{customer, product, revenue}

{system, service, information}

{product, market, service}

{operation, international, foreign}

{financial, litigation, operation}

{tax, income, asset}

{acquisition, growth, future}

{control, financial, internal}

{personnel, key, retain}

{product, candidate, development}

{regulation, government, change}

{property, intellectual, protect}

{loan, real, estate}

{condition, economic, financial}

{competitive, industry, competition}

{loss, insurance, financial}

Fluctuating economic conditions make it difficult to predict revenues for a particular period and a shortfall in revenues may harm our operating results. Telecommunications companies and other large companies generally require more onerous terms and conditions of their vendors. As we seek to sell more products to such customers, we may be required to agree to terms and conditions that may have an adverse effect on our business or ability to recognize revenues. If we do not successfully anticipate market needs and develop products and product enhancements that meet those needs, or if those products do not gain market acceptance, we may not be able to compete effectively and our ability to generate revenues will suffer. We expect gross margin to vary over time and our recent level of product gross margin may not be sustainable. We rely on value-added resellers and distribution partners to sell our products, and disruptions to, or our failure to effectively develop and manage, our distribution channel and the processes and procedures that support it could adversely affect our ability to generate revenues from the sale of our products. If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience manufacturing delays which would harm our business. Our ability to process orders and ship products in a timely manner is dependent in part on our business systems and performance of the systems and processes of third parties such as our contract manufacturers, suppliers or other partners, as well as interfaces with the systems of such third parties. If our systems, the systems and processes of those third parties or the interfaces between them experience delays or fail, our business processes and our ability to build and ship products could be impacted, and our financial results could be harmed. We are dependent on sole source and limited source suppliers for several key components, which makes us susceptible to shortages or price fluctuations in our supply chain and we may face increased challenges in supply chain management in the future. We are dependent on contract manufacturers with whom we do not have long-term supply contracts, and changes to those relationships, expected or unexpected, may result in delays or disruptions that could cause us to lose revenue and damage our customer relationships. We face intense competition that could reduce our revenues and adversely affect our financial results. A limited number of our customers comprise a significant portion of our revenues and increases the degree of customer concentration risk, and any decrease in revenue from these customers could have an adverse effect on our net revenues and operating results. We are a party to lawsuits, which are costly to investigate and defend and, if determined adversely to us, could require us to pay damages or prevent us from taking certain actions, any or all of which could harm our business and financial condition. We are currently implementing upgrades to key internal IT systems, and problems with the design or implementation of these systems could interfere with our business and operations. Litigation or claims regarding intellectual property rights may be time consuming, expensive and require a significant amount of resources to prosecute, defend or make our products non-infringing. We are exposed to fluctuations in currency exchange rates which could negatively affect our financial results and cash flows. We are required to expense equity compensation given to our employees, which has reduced our reported earnings, will significantly harm our operating results in future periods and may reduce our stock price and our ability to effectively utilize equity compensation to attract and retain employees. Matters related to the investigation into our historical stock option granting practices and the restatement of our financial statements may result in additional litigation, regulatory proceedings and government enforcement actions. If we fail to adequately evolve our financial and managerial control and reporting systems and processes, our ability to manage and grow our business will be negatively affected. Our success depends upon our ability to effectively plan and manage our resources and restructure our business through rapidly fluctuating economic and market conditions. Our ability to develop, market and sell products could be harmed if we are unable to retain or hire key personnel. We sell our products to customers that use those products to build networks and IP infrastructure and, if the demand for network and IP systems does not continue to grow, then our business, operating results and financial condition could be adversely affected. The long sales and implementation cycles for our products, as well as our expectation that some customers will sporadically place large orders with short lead times, may cause our revenues and operating results to vary significantly from quarter to quarter. Integration of past acquisitions and future acquisitions could disrupt our business and harm our financial condition and stock price and may dilute the ownership of our stockholders. Our products are highly technical and if they contain undetected errors, our business could be adversely affected and we might have to defend lawsuits or pay damages in connection with any alleged or actual failure of our products and services. A breach of network security could harm public perception of our security products, which could cause us to lose revenues. If our products do not interoperate with our customers networks, installations will be delayed or cancelled and could harm our business. Governmental regulations affecting the import or export of products could negatively affect our revenues. Due to the global nature of our operations, economic or social conditions or changes in a particular country or region could adversely affect our sales or increase our costs and expenses, which could have a material adverse impact on our financial condition. Our products incorporate and rely upon licensed third-party technology and if licenses of third-party technology do not continue to be available to us or become very expensive, our revenues and ability to develop and introduce new products could be adversely affected. We are subject to risks arising from our international operations. While we believe that we currently have adequate internal control over financial reporting, we are exposed to risks from legislation requiring companies to evaluate those internal controls. Regulation of the telecommunications industry could harm our operating results and future prospects. Our reported financial results could suffer if there is an additional impairment of goodwill or other intangible assets with indefinite lives. Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results. The investment of our cash balance and our investments in government and corporate debt securities are subject to risks which may cause losses and affect the liquidity of these investments. Uninsured losses could harm our operating results.

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1043604--2/29/2008--JUNIPER_NETWORKS_INC