TOTAL ASSESSmENT Of NEXT-GEN IP NETWORKS
COvERING ThE fULL TEChNOLOGy LIfECyCLE
DESIGN DEPLOymENT
Table of ConTenTs
Strong Investment Proposition . . . . . . . . . . . . . . . . . . . . . .1 Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 EXFO at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Management?s Discussion and Analysis . . . . . . . . . . . . .8 Management?s Reports . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Report of Independent Auditors . . . . . . . . . . . . . . . . . . .25 Consolidated Financial Statements . . . . . . . . . . . . . . . .26 Notes to Consolidated Financial Statements . . . . . . .31 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 Management and Corporate Officers . . . . . . . . . . . . . .51 Corporate Governance Practices . . . . . . . . . . . . . . . . . .52 Other Financial Information . . . . . . . . . . . . . . . . . . . . . . .54 Shareholder Information . . . . . . . . . . . . . . . . . . . . . . . . . .55 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56 Worldwide Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 forward-looking sTaTemenTs
SERvICE ASSURANCE
This Annual Report contains forward-looking statements within the meaning of the U .S . Private Securities Litigation Reform Act of 1995, and we intend that such forward-looking statements be subject to the safe harbors created thereby . Forward-looking statements are statements other than historical information or statements of current condition . Words such as may, will, expect, believe, anticipate, intend, could, estimate, continue, or the negative or comparable terminology are intended to identify forward-looking statements . In addition, any statements that refer to expectations, projections or other characterizations of future events and circumstances are considered forward-looking statements . They are not guarantees of future performance and involve risks and uncertainties . Actual results may differ materially from those in forward-looking statements due to various factors, including consolidation in the global telecommunications test, measurement and monitoring industry; capital spending levels in the telecommunications, life sciences and high-precision assembly sectors; concentration of sales; fluctuating exchange rates and our ability to execute in these uncertain conditions; the effects of the additional actions we have taken in response to such economic uncertainty (including our ability to quickly adapt cost structures with anticipated levels of business and to manage inventory levels with market demand); market acceptance of our new products and other upcoming products; limited visibility with regards to customer orders and the timing of such orders; our ability to successfully integrate our acquired and to-be-acquired businesses; our ability to successfully expand international operations; the retention of key technical and management personnel; and future economic, competitive, financial and market conditions, including any slowdown or recession in the global economy . Assumptions relating to the foregoing involve judgments and risks, all of which are difficult or impossible to predict and many of which are beyond our control . Other risk factors that may affect our future performance and operations are detailed in our Annual Report, on Form 20-F, and our other filings with the U .S . Securities and Exchange Commission and the Canadian securities commissions . We believe that the expectations reflected in the forward-looking statements are reasonable based on information currently available to us, but we cannot assure you that the expectations will prove to have been correct . Accordingly, you should not place undue reliance on these forward-looking statements . These statements speak only as of the date of this document . Unless required by law or applicable regulations, we undertake no obligation to revise or update any of them to reflect events or circumstances that occur after the date of this document . Trademarks and logos EXFO and the EXFO logo are registered trademarks of EXFO Electro-Optical Engineering Inc . in Canada, the United States and/or other countries . Other EXFO product names or logos referenced in this document are either trademarks or registered trademarks of EXFO Electro-Optical Engineering Inc . or of its affiliated companies . All other product names and trademarks mentioned herein are trademarks of their respective owners . However, neither the presence nor absence of the identification symbols ® or ? affects the legal status of any trademark . All dollar amounts in this Annual Report are expressed in US dollars, except as otherwise noted .
