Seagate 2009 Annual Report Download - page 36

Table of Contents
• Global Health Outbreaks. The occurrence of a pandemic disease may adversely impact our operations, and some of our key
customers. Such diseases could also potentially disrupt the timeliness and reliability of the distribution network we rely on.
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, with Thailand being a recent example.
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 operations 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.
Annually we complete an evaluation of our internal control 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 July 2, 2010, our internal control over financial
reporting was 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's time in connection with further evaluations.
Dependence on Key Personnel
—The loss of 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,
results of operations 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.
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