Seagate 2013 Annual Report Download - page 36

Table of Contents
We mitigate default risk by investing in high-quality investment grade securities, limiting the time to maturity and by monitoring the counter-
parties and underlying obligors closely.
While as of the date of this filing, we are not aware of any material downgrades, losses, or other significant deterioration in the fair value of
our cash equivalents or short-
term investments, no assurance can be given that future deterioration in conditions of the global credit and financial
markets would not negatively impact our current portfolio of cash equivalents or short-term investments or our ability to meet our financing
objectives.
Failure to comply with applicable environmental laws and regulations could have a material adverse effect on our business, results of
operations and financial condition.
The sale and manufacturing of products in certain states and countries may subject us and our suppliers to state, federal and international
laws and regulations governing protection of the environment, including those governing discharges of pollutants into the air and water, the
management and disposal of hazardous substances and wastes, the cleanup of contaminated sites, restrictions on the presence of certain
substances in electronic products and the responsibility for environmentally safe disposal or recycling. We endeavor to ensure that we and our
suppliers comply with all applicable environmental laws and regulations, however, compliance may increase our operating costs and otherwise
impact future financial results. If additional or more stringent requirements are imposed on us in the future, we could incur additional operating
costs and capital expenditures. If we fail to comply with applicable environmental laws, regulations, initiatives, or standards of conduct, our
customers may refuse to purchase our products and we could be subject to fines, penalties and possible prohibition of sales of our products into
one or more states or countries, liability to our customers and damage to our reputation, which could result in a material adverse effect on the
financial condition or results of operations.
New conflict minerals regulations may cause us to incur additional expenses and could limit the supply and increase the cost of certain
metals used in manufacturing our products.
In August 2012, the SEC adopted new rules establishing additional disclosure and reporting requirements regarding the use of specified
minerals, or conflict minerals, that are necessary to the functionality or production of products manufactured or contracted to be manufactured.
These new rules will require us to determine, disclose and report whether or not such conflict minerals originate from the Democratic Republic
of the Congo or an adjoining country, the first such report of which was filed on May 30, 2014. These new rules could affect our ability to source
certain materials used in our products at competitive prices and could impact the availability of certain minerals used in the manufacture of our
products, including gold, tantalum, tin and tungsten. As there may be only a limited number of suppliers of "conflict free" minerals, we cannot
be sure that we will be able to obtain necessary conflict free minerals in sufficient quantities or at competitive prices. Our customers, including
our OEM customers, may require that our products be free of conflict minerals, and our revenues and margins may be harmed if we are unable to
procure conflict free minerals at a reasonable price, or at all, or are unable to pass through any increased costs associated with meeting these
demands. Additionally, we may face reputational challenges with our customers and other stakeholders if we are unable to sufficiently verify the
origins of all minerals used in our products through the due diligence procedures that we implement. We may also face challenges with
government regulators and our customers and suppliers if we are unable to sufficiently verify that the metals used in our products are conflict
free. We expect that there may be material costs associated with complying with the disclosure requirements, such as costs related to determining
the source of certain minerals used in our products, as well as costs related to possible changes to products, processes, or sources of supply as a
consequence of such verification and disclosure requirements.
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