Seagate 2007 Annual Report Download - page 32

Table of Contents
Dependence on Key Personnel—The loss of some key executive officers and employees could negatively impact our business prospects.
Our future performance depends to a significant degree upon the continued service of key members of management as well as marketing,
sales and product development personnel. The loss of one or more of our key personnel may have a material adverse effect on our business,
operating results and financial condition. We believe our future success will also depend in large part upon our ability to attract, retain and
further motivate highly skilled management, marketing, sales and product development personnel. We have experienced intense competition for
personnel, and we cannot assure you that we will be able to retain our key employees or that we will be successful in attracting, assimilating and
retaining personnel in the future.
Substantial Leverage—Our substantial leverage may place us at a competitive disadvantage in our industry.
We are leveraged and have significant debt service obligations. Our significant debt and debt service requirements could adversely affect
our ability to operate our business and may limit our ability to take advantage of potential business opportunities. For example, our high level of
debt presents the following risks:
•
we are required to use a substantial portion of our cash flow from operations to pay principal and interest on our debt, thereby reducing
the availability of our cash flow to fund working capital, capital expenditures, product development efforts, strategic acquisitions,
investments and alliances and other general corporate requirements;
• our interest expense could increase if prevailing interest rates increase, because a substantial portion of our debt bears interest at
floating rates;
•
our substantial leverage increases our vulnerability to economic downturns and adverse competitive and industry conditions and could
place us at a competitive disadvantage compared to those of our competitors that are less leveraged;
• our debt service obligations could limit our flexibility in planning for, or reacting to, changes in our business and our industry and
could limit our ability to pursue other business opportunities, borrow more money for operations or capital in the future and implement
our business strategies;
• our level of debt may restrict us from raising additional financing on satisfactory terms to fund working capital, capital expenditures,
product development efforts, strategic acquisitions, investments and alliances, and other general corporate requirements; and
Significant Debt Service Requirements—Servicing our debt requires a significant amount of cash and our ability to generate cash may
be affected by factors beyond our control.
• covenants in our debt instruments limit our ability to pay dividends or make other restricted payments and investments.
Our business may not generate cash flow in an amount sufficient to enable us to pay the principal of, or interest on, our indebtedness or to
fund our other liquidity needs, including working capital, capital expenditures, product development efforts, strategic acquisitions, investments
and alliances, and other general corporate requirements.
Our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond
our control. We cannot assure you that:
•
our business will generate sufficient cash flow from operations;
• we will continue to realize the cost savings, revenue growth and operating improvements that resulted from the execution of our long-
term strategic plan; or
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• future sources of funding will be available to us in amounts sufficient to enable us to fund our liquidity needs.