Dell 2011 Annual Report Download - page 22

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Table of Contents
capital markets in the future, and require us to incur additional costs to improve our internal control systems and procedures.
•Current or future environmental and safety laws, or other regulatory laws, may harm our business.
Our operations are subject to environmental and safety regulation in all of the areas in which we conduct business. Our product design and procurement
operations must comply with new and future requirements relating to climate change laws and regulations, materials composition, sourcing, energy efficiency
and collection, recycling, treatment, transportation, and disposal of our electronics products, including restrictions on mercury, lead, cadmium, lithium metal,
lithium ion, and other substances. If we fail to comply with applicable rules and regulations regarding the transportation, source, use, and sale of such
regulated substances, we could be subject to liability. The costs and timing of costs under environmental and safety laws are difficult to predict, but could
have an unfavorable impact on our business.
In addition, we are subject to provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act intended to improve transparency and
accountability concerning the supply of minerals originating from the conflict zones of the Democratic Republic of Congo or adjoining countries. We will
incur costs to comply with the new disclosure requirements of this law and may realize other costs relating to the sourcing and availability of minerals used in
our products. Further, since our supply chain is complex, we may face reputational harm if our customers or other stakeholders conclude that we are unable to
verify sufficiently the origins of the minerals used in the products we sell.
•Armed hostilities, terrorism, natural disasters, or public health issues could harm our business.
Armed hostilities, terrorism, natural disasters, or public health issues, whether in the U.S. or abroad, could cause damage or disruption to us, our suppliers, or
our customers, or could create political or economic instability, any of which could harm our business. These events could cause a decrease in demand for our
products, could make it difficult or impossible for us to deliver products or for our suppliers to deliver components, and could create delays and inefficiencies
in our supply chain.
The earthquake and tsunami in Japan and severe flooding in Thailand which occurred during Fiscal 2012 caused damage to infrastructure and factories that
disrupted the supply chain for a variety of components used in our products. In particular, the flooding in Thailand resulted in a significant shortage in the
supply of hard disk drives that has adversely affected our operations. If we are unsuccessful in our continuing efforts to minimize the impact of these events
on our customers and operations, our business and financial results could suffer.
ITEM 1B — UNRESOLVED STAFF COMMENTS
None.
20