Seagate 2014 Annual Report Download - page 29

TableofContents
•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
•covenantsinourdebtinstrumentslimitourabilitytopayfuturedividendsormakeotherrestrictedpaymentsandinvestments.
Intheeventthatweneedtorefinancealloraportionofouroutstandingdebtasitmatures,wemaynotbeabletoobtaintermsasfavorableasthetermsofour
existingdebtorrefinanceourexistingdebtatall.Ifprevailinginterestratesorotherfactorsexistingatthetimeofrefinancingresultinhigherinterestratesupon
refinancing,thentheinterestexpenserelatingtotherefinanceddebtwouldincrease.Furthermore,ifanyratingagencychangesourcreditratingoroutlook,our
debtandequitysecuritiescouldbenegativelyaffected,whichcouldadverselyaffectourabilitytorefinanceexistingdebtorraiseadditionalcapital.
Servicingourdebtrequiresasignificantamountofcashandourabilitytogeneratecashmaybeaffectedbyfactorsbeyondourcontrol.
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resultfromtheexecutionofourlong-termstrategic
plan;or
•futuresourcesoffundingwillbeavailabletousinamountssufficienttoenableustofundourliquidityneeds.
Ifwecannotfundourliquidityneeds,wewillhavetotakeactionssuchasreducingordelayingcapitalexpenditures,productdevelopmentefforts,strategic
acquisitions,investmentsandalliances,andothergeneralcorporaterequirements.Wecannotassureyouthatanyoftheseremediescould,ifnecessary,beeffected
oncommerciallyreasonableterms,oratall,orthattheywouldpermitustomeetourscheduleddebtserviceobligations.Inadditionifweincuradditionaldebt,the
risksassociatedwithoursubstantialleverage,includingtheriskthatwewillbeunabletoserviceourdebtorgenerateenoughcashflowtofundourliquidityneeds,
couldintensify.
Ifrevenuesfallorcustomerdemanddecreasessignificantly,wemaynotmeetallofourpurchasecommitmentstocertainsuppliers.
Fromtimetotime,weenterintolong-term,non-cancelablepurchasecommitmentsormakelargeup-frontinvestmentswithcertainsuppliersinordertosecure
certaincomponentsortechnologiesfortheproductionofourproductsortosupplementourinternalmanufacturingcapacityforcertaincomponents.Ifouractual
revenuesinthefuturearelowerthanourprojectionsorifcustomerdemanddecreasessignificantlybelowourprojections,wemaynotmeetallofourpurchase
commitmentswiththesesuppliers.Asaresult,itispossiblethatourrevenueswillnotbesufficienttorecoupourup-frontinvestments,inwhichcasewewillhave
toshiftoutputfromourinternalmanufacturingfacilitiestothesesuppliersormakepenalty-typepaymentsunderthesecontracts.
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