320345--9/13/2006--MICROS_SYSTEMS

related topics

{customer, product, revenue}

{property, intellectual, protect}

{operation, international, foreign}

{regulation, change, law}

{system, service, information}

{operation, natural, condition}

{tax, income, asset}

{product, market, service}

{cost, operation, labor}

{cost, contract, operation}

{stock, price, operating}

{loan, real, estate}

{gas, price, oil}

{personnel, key, retain}

{condition, economic, financial}

{cost, regulation, environmental}

Our business is very sensitive to the threat of terrorism and political uncertainty. Our business is very sensitive to environmental and health disasters. Higher oil and gas prices worldwide have a material adverse impact on the travel and tourism industries. We maintain offices in certain parts of the world that are subject to economic instability, political unrest and terrorism, such as Argentina, Brazil and Israel. Economic, Pricing and Financial Risks. Because almost half of our sales are outside of the US, our results could be significantly affected by economic conditions in countries and regions in which we conduct business. Our quarterly financial results are dependent upon the timing and size of customer orders and the shipment of products for large orders. Our ability to establish pricing is subject to rapidly changing market and competitive conditions. Our gross margins will vary from quarter to quarter based upon product mix. Our non-major account business is difficult to predict. Some of the advanced systems we sell are very complex and require a high level of technical sophistication. We are subject to certain material cost increases out of our control. We are subject to fluctuations in foreign currencies and exchange rates. As a publicly traded company, our stock price is subject to certain market gyrations that are out of our control and that have nothing to do with our actual operating performance. With the increasing complexity of products and the increasingly sophisticated requirements of our customers, we may encounter difficulties or delays in the development, production, testing, and marketing of our products. The manufacturing of our hardware platform is performed primarily by a company in Singapore. Large customized deployments may be difficult and may result in cost overruns that are not recoverable. Ever-shifting changes in technology may result in our investing in certain technologies that become obsolete, or may result in our delaying investing in technologies to our detriment. Actual or perceived security vulnerabilities in our software products may result in reduced sales or liabilities. Some of our vendors have unionized workers who could strike to our detriment. Our inability to hire or our delay in hiring qualified resources could adversely impact our ability to satisfy customers needs and our ability to maintain appropriate internal controls. Although we attempt to protect our proprietary technology through a combination of trade secrets, copyright, trademark law, nondisclosure agreements, and technical measures, these protections will not preclude competitors from developing products with features similar to our products. As a company that does business with many customers, employees and vendors throughout the world, we are subject to legal and administrative claims, cases, proceedings, settlements, and investigations, including claims made by or against us relating to intellectual property rights and intellectual property licenses. Each year we incur many costs associated with changes in, laws, regulations, directives, and other activities of governments, agencies and similar organizations. We from time to time receive unsolicited letters from entities which suggest or assert that we may be infringing a patent. Credit card issuers have promulgated credit card security guidelines as part of their ongoing effort to battle identity theft and credit card fraud. We may have additional tax liabilities. If our goodwill or amortizable intangible assets become impaired we may be required to record a charge to earnings. Changes in accounting may affect our reported earnings and operating income.

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320345--9/13/2006--MICROS_SYSTEMS_INC