DELPHI 2013 Annual Report Download - page 42

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• reduced intellectual property protection;
• limitations on repatriation of earnings;
• withholding and other taxes on remittances and other payments by subsidiaries;
• investment restrictions or requirements;
• export and import restrictions;
• violence and civil unrest in local countries; and
• compliance with the requirements of an increasing body of applicable anti-bribery laws, including the U.S. Foreign
Corrupt Practices Act, the U.K. Bribery Act and similar laws of various other countries.
Additionally, our global operations may also be adversely affected by political events, domestic or international terrorist
events and hostilities or complications due to natural or nuclear disasters. These uncertainties could have a material adverse
effect on the continuity of our business and our results of operations and financial condition.
Increasing our manufacturing footprint in Asian markets, including China, and our business relationships with Asian
automotive manufacturers are important elements of our strategy. In addition, our strategy includes increasing revenue and
expanding our manufacturing footprint in lower-cost regions. As a result, our exposure to the risks described above may be
greater in the future. The likelihood of such occurrences and their potential impact on us vary from country to country and are
unpredictable.
If we fail to manage our growth effectively or to integrate successfully any new or future business ventures,
acquisitions, or strategic alliance into our business, our business could be materially adversely harmed.
We expect to pursue business ventures, acquisitions, and strategic alliances that leverage our technology capabilities,
enhance our customer base, geographic penetration, and scale to complement our current businesses and we regularly evaluate
potential opportunities, some of which could be material. While we believe that such transactions are an integral part of our
long-term strategy, there are risks and uncertainties related to these activities. Assessing a potential growth opportunity involves
extensive due diligence. However, the amount of information we can obtain about a potential growth opportunity may be
limited, and we can give no assurance that new business ventures, acquisitions, and strategic alliances will positively affect our
financial performance or will perform as planned. We may not be able to successfully assimilate or integrate companies that we
acquire, including their personnel, financial systems, distribution, operations and general operating procedures. We may also
encounter challenges in achieving appropriate internal control over financial reporting in connection with the integration of an
acquired company. If we fail to assimilate or integrate acquired companies successfully, our business, reputation and operating
results could be materially impacted. Likewise, our failure to integrate and manage acquired companies successfully may lead
to future impairment of any associated goodwill and intangible asset balances.
We depend on information technology to conduct our business. Any significant disruption could impact our business.
Our ability to keep our business operating effectively depends on the functional and efficient operation of information
technology and telecommunications systems. We rely on these systems to make a variety of day-to-day business decisions as
well as to track transactions, billings, payments and inventory. Our systems, as well as those of our customers, suppliers,
partners, and service providers, are susceptible to interruptions (including those caused by systems failures, malicious computer
software (malware), and other natural or man-made incidents or disasters), which may be prolonged. We are also susceptible to
security breaches that may go undetected. Although we have taken precautions to mitigate such events, including
geographically diverse data centers and redundant infrastructure, a significant or large-scale interruption of our information
technology could adversely affect our ability to manage and keep our operations running efficiently and effectively. An incident
that results in a wider or sustained disruption to our business could have a material adverse effect on our business, financial
condition and results of operations.
Risks Related to Legal, Regulatory, Tax and Accounting Matters
We may incur material losses and costs as a result of warranty claims and product liability and intellectual property
infringement actions that may be brought against us.
We face an inherent business risk of exposure to warranty claims and product liability in the event that our products fail
to perform as expected and, in the case of product liability, such failure of our products results in bodily injury and/or property
damage. The fabrication of the products we manufacture is a complex and precise process. Our customers specify quality,
performance and reliability standards. If flaws in either the design or manufacture of our products were to occur, we could
experience a rate of failure in our products that could result in significant delays in shipment and product re-work or
replacement costs. Although we engage in extensive product quality programs and processes, these may not be sufficient to
avoid product failures, which could cause us to: