Western Digital 2012 Annual Report Download - page 32

‰currency exchange rate fluctuations or restrictions;
‰political instability and civil unrest;
‰limited transportation availability, delays, and extended time required for shipping, which risks may be com-
pounded in periods of price declines;
‰higher freight rates;
‰labor challenges, including difficulties finding and retaining talent or responding to labor disputes or dis-
ruptions;
‰trade restrictions or higher tariffs;
‰copyright levies or similar fees or taxes imposed in European and other countries;
‰exchange, currency and tax controls and reallocations;
‰increasing labor and overhead costs; and
‰loss or non-renewal of favorable tax treatment under agreements or treaties with foreign tax authorities.
Terrorist attacks may adversely affect our business and operating results.
The continued threat of terrorist activity and other acts of war or hostility have created uncertainty in the finan-
cial and insurance markets and have significantly increased the political, economic and social instability in some of the
geographic areas in which we operate. Additionally, it is uncertain what impact the reactions to such acts by various
governmental agencies and security regulators worldwide will have on shipping costs. Acts of terrorism, either domes-
tically or abroad, could create further uncertainties and instability. To the extent this results in disruption or delays of
our manufacturing capabilities or shipments of our products, our business, operating results and financial condition
could be adversely affected.
Sudden disruptions to the availability of freight lanes could have an impact on our operations.
We generally ship our products to our customers, and receive shipments from our suppliers, via air, ocean or land
freight. The sudden unavailability or disruption of cargo operations or freight lanes, such as due to labor difficulties or
disputes, severe weather patterns or other natural disasters, or political instability or civil unrest, could impact our
operating results by impairing our ability to timely and efficiently deliver our products.
We are vulnerable to system failures or attacks, which could harm our business.
We are heavily dependent on our technology infrastructure, among other functions, to operate our factories, sell
our products, fulfill orders, manage inventory and bill, collect and make payments. Our systems are vulnerable to
damage or interruption from natural disasters, power loss, telecommunication failures, cyber-attacks such as computer
viruses, computer denial-of-service attacks and other events. Our business is also subject to break-ins, sabotage and
intentional acts of vandalism by third parties as well as employees. Despite any precautions we may take, such prob-
lems could result in, among other consequences, loss or theft of our, our customers’ or our business partners’
intellectual property, proprietary business information or personally identifiable information; damage to our reputa-
tion; interruptions in our business; and remediation costs, each of which could harm our business, operating results
and financial condition.
If we fail to identify, manage, complete and integrate acquisitions, investment opportunities or other significant transactions, it
may adversely affect our future results.
As part of our growth strategy, we may pursue acquisitions of, investment opportunities in or other significant
transactions with companies that are complementary to our business. In order to pursue this strategy successfully, we
must identify attractive acquisition or investment opportunities, successfully complete the transaction, some of which
may be large and complex, and manage post-closing issues such as integration of the acquired company or employees.
We may not be able to identify or complete appealing acquisition or investment opportunities given the intense
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