Seagate 2006 Annual Report Download - page 32

Table of Contents
Political Risks Associated with International Operations — Our international operations subject us to risks
related to political unrest and terrorism.
We have manufacturing facilities in parts of the world that periodically experience political unrest. This could
disrupt our ability to manufacture important components as well as cause interruptions and/or delays in our ability to
ship components to other locations for continued manufacture and assembly. Any such delays or interruptions could
result in delays in our ability to fill orders and have an adverse effect on our results of operation and financial
condition. U.S. and international responses to the ongoing hostilities in Afghanistan and Iraq and the risk of terrorist
attacks or hostilities elsewhere in the world could exacerbate these risks.
Legal and Operational Risks Associated with International Operations — Our international operations subject
us to risks related to staffing and management, legal and regulatory requirements and the protection of
intellectual property.
Operating outside of the United States creates difficulties associated with staffing and managing our
international manufacturing facilities, complying with local legal and regulatory requirements and protecting our
intellectual property. We cannot assure you that we will continue to be found to be operating in compliance with
applicable customs, currency exchange control regulations, transfer pricing regulations or any other laws or
regulations to which we may be subject. We also cannot assure you that these laws will not be modified.
SOX 404 Compliance —
While we believe that we currently have adequate internal control procedures in place,
we are still exposed to future risks of non-compliance and will continue to incur costs associated with
Section 404 of the Sarbanes-Oxley Act of 2002.
We have completed the evaluation of our internal controls over financial reporting as required by Section 404 of
the Sarbanes-Oxley Act of 2002. Although our assessment, testing, and evaluation resulted in our conclusion that as
of June 29, 2007, our internal controls over financial reporting were effective, we cannot predict the outcome of our
testing in future periods. If our internal controls are ineffective in future periods, our financial results or the market
price of our shares could be adversely affected. We will incur additional expenses and commitment of management’
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time in connection with further evaluations.
Volatile Public Markets — The price of our common shares may be volatile and could decline significantly.
The stock market in general, and the market for technology stocks in particular, has recently experienced
volatility that has often been unrelated to the operating performance of companies. If these market or industry-based
fluctuations continue, the trading price of our common shares could decline significantly independent of our actual
operating performance, and you could lose all or a substantial part of your investment. The market price of our
common shares could fluctuate significantly in response to several factors, including among others:
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actual or anticipated variations in our results of operations;
• announcements of innovations, new products or significant price reductions by us or our competitors,
including those competitors who offer alternative storage technology solutions;
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our failure to meet the performance estimates of investment research analysts;
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the timing of announcements by us or our competitors of significant contracts or acquisitions;
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general stock market conditions;
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the occurrence of major catastrophic events;
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changes in financial estimates by investment research analysts; and
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the sale of our common shares held by certain equity investors or members of management.