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from August 2010 to July 2012, Executive Vice President and Chief Financial Officer from September 2007 to
August 2010, and Executive Vice President, Finance from May 2007 to September 2007. From December 2001 to
May 2007, Mr. Leyden served in senior finance capacities at Sage Software Inc. and Sage Software of California, sub-
sidiaries of Sage Group PLC, a U.K. public company that supplies accounting and business management software to
small and medium-sized businesses, including as Vice President, Finance and Chief Financial Officer from December
2001 to May 2004 and as Senior Vice President, Finance and Chief Financial Officer from May 2004 to May 2007.
Mr. Leyden previously served in various worldwide finance, manufacturing and information technology capacities
with us from 1983 to December 2000.
Mr. Cordano, 48, joined us on March 8, 2012 in connection with our acquisition of HGST. Mr. Cordano was
appointed President of our HGST subsidiary on July 25, 2012. Prior to that, Mr. Cordano served as HGST’s Execu-
tive Vice President, Sales & Marketing, and President, Branded Business, since April 2009. From February 2005 to
April 2009, Mr. Cordano served as Chief Executive Officer and co-founder of Fabrik, Inc., which was acquired by
HGST in April 2009. From 1994 to February 2005, Mr. Cordano served in various roles of increasing responsibility at
Maxtor Corporation, including as the Executive Vice President of Worldwide Sales and Marketing from April 2001
until February 2005, where he formed and managed the Branded Products Business Unit.
Mr. Nickl, 43, was promoted to Executive Vice President and Chief Financial Officer of WDC in August 2012.
Mr. Nickl had previously served as the Company’s Senior Vice President and Chief Financial Officer from August
2010 to August 2012 and Vice President, Finance from October 2005 to August 2010. Prior to that, Mr. Nickl
served as Vice President, Worldwide Business Operations from May 2005 to October 2005, and as Executive Director,
Worldwide Business Operations from July 2003 to May 2005.
Item 1A. Risk Factors
The 2011 severe flooding in Thailand, which inundated our Thailand manufacturing facilities and resulted in the temporary
suspension of all production in those facilities, has affected, and will continue to affect, our near-term business, results of
operations and financial condition.
As previously disclosed, the 2011 severe flooding in Thailand resulted in the temporary suspension of production
in all of our Thailand manufacturing facilities. While production has resumed in our Thailand facilities, material risks
and uncertainties as a result of flooding remain, including the following:
‰Under-Absorption of Assets. Our hard disk drive production capacity has reached a point where we can
adequately meet anticipated customer demand; however, industry demand has not returned to pre-flood levels.
In addition, we lost market share as a result of the flooding due to the impact on our manufacturing capa-
bilities relative to that of our competitors and due to certain of our competitors entering into long-term pur-
chase agreements with customers. If industry demand does not return to pre-flood levels, or if we are not able
to regain market share, our costs will be impacted negatively by significant under-absorption of our assets and
infrastructure and our business and results of operations will be adversely affected.
‰Component Costs. Due to component supply constraints as a result of the flooding, the cost of certain compo-
nent materials has increased and may continue to increase. During the flooding we entered into certain volume
commitment agreements with certain of our component suppliers, and since the flooding we and our suppliers
have taken certain steps to diversify the geographical footprint of our supplier manufacturing base, each of
which has resulted and may continue to result in the cost of certain components increasing over pre-flood lev-
els. An increase in the cost of component materials that cannot be recovered through increased pricing could
adversely affect our operating results.
‰Restored Equipment. The equipment we use is highly sophisticated and complex. We have attempted to repair
or refurbish certain equipment damaged in the flooding; however, the remaining useful life of, and costs asso-
ciated with maintaining, such equipment is uncertain. If repaired or refurbished equipment does not last as
long as planned, we may be required to increase capital expenditures to replace such equipment, which could
adversely affect our financial condition and results of operations.
‰Insurance. We maintain insurance coverage that provides property and business interruption coverage in the
event of losses arising from flooding. The claim process is in its early stages and we are unable to predict how
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