Western Digital 2012 Annual Report Download - page 36

Download and view the complete annual report

Please find page 36 of the 2012 Western Digital annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

‰availability and rates of transportation.
We often ship a high percentage of our total quarterly sales in the third month of the quarter, which makes it
difficult for us to forecast our financial results before the end of the quarter. As a result of the above or other factors,
our forecast of operating results for the quarter may differ materially from our actual financial results. If our results of
operations fail to meet the expectations of analysts or investors, it could cause an immediate and significant decline in
our stock price.
We have made and continue to make a number of estimates and assumptions relating to our consolidated financial reporting, and
actual results may differ significantly from our estimates and assumptions.
We have made and continue to make a number of estimates and assumptions relating to our consolidated finan-
cial reporting. The highly technical nature of our products and the rapidly changing market conditions with which we
deal means that actual results may differ significantly from our estimates and assumptions. These changes have
impacted our financial results in the past and may continue to do so in the future. Key estimates and assumptions for
us include:
‰price protection adjustments and other sales promotions and allowances on products sold to retailers, resellers
and distributors;
‰inventory adjustments for write-down of inventories to lower of cost or market value (net realizable value);
‰reserves for doubtful accounts;
‰accruals for product returns;
‰accruals for warranty costs related to product defects;
‰accruals for litigation and other contingencies;
‰liabilities for unrecognized tax benefits; and
‰expensing of stock-based compensation.
The market price of our common stock is volatile.
The market price of our common stock has been, and may continue to be, extremely volatile. Factors that may
significantly affect the market price of our common stock include the following:
‰actual or anticipated fluctuations in our operating results, including those resulting from the seasonality of our
business;
‰announcements of technological innovations by us or our competitors, which may decrease the volume and
profitability of sales of our existing products and increase the risk of inventory obsolescence;
‰new products introduced by us or our competitors;
‰periods of severe pricing pressures due to oversupply or price erosion resulting from competitive pressures or
industry consolidation;
‰developments with respect to patents or proprietary rights;
‰conditions and trends in the hard drive, computer, data and content management, storage and communication
industries;
‰contraction in our operating results or growth rates that are lower than our previous high growth-rate periods;
‰changes in financial estimates by securities analysts relating specifically to us or the storage industry in general;
and
‰macroeconomic conditions that affect the market generally.
30