912093--9/14/2006--JDS_UNIPHASE_CORP

related topics

{customer, product, revenue}

{product, market, service}

{control, financial, internal}

{product, liability, claim}

{property, intellectual, protect}

{operation, international, foreign}

{personnel, key, retain}

{stock, price, share}

{condition, economic, financial}

{financial, litigation, operation}

{cost, contract, operation}

{system, service, information}

{capital, credit, financial}

{regulation, change, law}

{tax, income, asset}

{provision, law, control}

{cost, regulation, environmental}

{debt, indebtedness, cash}

{acquisition, growth, future}

{regulation, government, change}

We have a history of net losses, and our future profitability is not assured. If information networks do not continue to expand as expected, or if industry consolidation continues, our business will be adversely impacted. Our Communications Test Measurement Segment is particularly vulnerable to seasonal variations in our business. Without stability and growth in our non-communications businesses our margins and profitability may be adversely impacted. Our Custom Optics business has experienced significant recent setbacks and is subject to major transition and risk. Actions to improve our cost structure are costly and risky and the timing and extent of expected benefits is uncertain. If we incur more restructuring-related charges than currently anticipated, our consolidated financial condition and results of operations may be adversely impacted. If our contract manufacturers fail to perform their obligations, our business will be adversely impacted. We have continuing concerns regarding the manufacture, quality and distribution of our products. These concerns are heightened as new product offerings and overall demand increase. Variability of manufacturing yields may affect our gross margins. If our customers do not qualify our manufacturing lines for volume shipments, our operating results could be adversely impacted. We could incur significant costs to correct defective products. If we cannot develop new product offerings or if our new product offerings fail in the market, our business will be adversely impacted. Signs of market stability are not necessarily indicative of long-term growth. The communications equipment industry has extremely long product development cycles requiring us to incur product development costs without assurances of an acceptable investment return. Our business and financial condition could be harmed by our long-term growth strategy. One of our products is dependent upon a single customer for a majority of sales. We depend on a limited number of vendors. Any failure to remain competitive would harm our operating results. If we fail to attract and retain key personnel, our business could be adversely impacted. If we fail to attract and retain key finance personnel, our ability to maintain internal control over financial reporting may be impaired. Certain of our non-communications related products are subject to governmental and industry regulations, certifications and approvals. We face risks related to our international operations and revenue. Changes in our effective tax rate or adverse outcomes resulting from tax audits may have an adverse impact our results. We are increasing operations in China, which exposes us to risks inherent in doing business in China. Managing our inventory is complex and may include write-downs of excess or obsolete inventory. Our business and operations would be adversely impacted in the event of a failure of our information technology infrastructure. If we fail to remediate our current system of internal controls to an effective level, we may not be able to accurately report our financial results or prevent fraud. As a result, our business could be harmed and current and potential investors could lose confidence in our financial reporting, which could have a negative effect on the trading price of our debt and equity securities. If we fail to timely file with the trustee of our Zero Coupon Senior Convertible Notes or our 1% Senior Convertible Notes certain information, documents and reports required to be filed by us with the SEC, such notes could become due and payable immediately. As a result, our liquidity position could be adversely impacted or we may not have enough cash to pay the note holders, which would harm our business and the trading price of our debt and equity securities. If we have insufficient proprietary rights or if we fail to protect those we have, our business would be materially harmed. We face certain litigation risks that could harm our business. Recently enacted and proposed regulatory changes will cause us to incur increased costs. If we fail to manage our exposure to worldwide financial and securities markets successfully, our operating results and financial statements could be materially impacted. We may be subject to environmental liabilities which could increase our expenses and harm our operating results. We are exposed to risks related to our indemnification of third parties. We sold $475 million of senior convertible notes in 2003 and $425 million of senior convertible notes in 2006, which may cause our reported earnings per share to be more volatile because of the conversion contingency features of these notes. Our rights plan and our ability to issue additional preferred stock could harm the rights of our common stockholders. Some anti-takeover provisions contained in our charter and under Delaware laws could hinder a takeover attempt.

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912093--9/14/2006--JDS_UNIPHASE_CORP_/CA/