Western Digital 1999 Annual Report Download - page 34

Bowne Conversion 29
The market price of our common stock has been, and may continue to be, extremely volatile. Factors such as the following may
significantly affect the market price of our common stock:
•actual or anticipated fluctuations in our operating results
•announcements of technological innovations by us or our competitors which may decrease the volume and profitability of sales
of our existing products and increase the risk of inventory obsolescence
•new products introduced by us or our competitors
•periods of severe pricing pressures due to oversupply or price erosion resulting from competitive pressures
•developments with respect to patents or proprietary rights
•conditions and trends in the hard drive industry
•changes in financial estimates by securities analysts relating specifically to us or the hard drive industry in general.
In addition, the stock market in recent months has experienced extreme price and volume fluctuations that have particularly affected
the stock price of many high technology companies. These fluctuations are often unrelated to the operating performance of the
companies.
Securities class action lawsuits are often brought against companies after periods of volatility in the market price of their securities.
A number of such suits have been filed against us in the past, and any of these litigation matters could result in substantial costs and a
diversion of resources and management's attention.
We may be unable to raise future capital through debt or equity financing.
Due to our recent financial performance and the risks described in this Report, in the future we may be unable to maintain adequate
financial resources for capital expenditures, working capital and research and development. If we decide to increase or accelerate our
capital expenditures or research and development efforts, or if results of operations do not meet our expectations, we could require
additional debt or equity financing. However, we cannot insure that additional financing will be available to us or available on favorable
terms. An equity financing could also be dilutive to our existing stockholders.
We may experience Year 2000 computer problems that harm our business.
The Year 2000 issue is the result of computer programs, microprocessors, and embedded date reliant systems using two digits rather
than four to define the applicable year. This could result in a program, microprocessor or embedded system recognizing a date using
"00" as the year 1900 rather than the year 2000. We consider a product to be Year 2000 compliant if:
•the product's performance and functionality are unaffected by processing of dates prior to, during and after the Year 2000, and
•all elements used with the product (for example, hardware, software and firmware) properly exchange accurate date data with it.
Our Products. We believe our hard drive products are Year 2000 compliant, although some older, non-hard drive products
previously sold by us may not be Year 2000 compliant. Even if our products are Year 2000 compliant, we may be named as a defendant
in litigation against makers of components of systems that are unable to properly manage data related to the Year 2000. Our agreements
with customers typically contain provisions designed to limit our liability for such claims. These provisions may not provide protection
from liability, however, because of existing or future federal, state or local laws or ordinances or unfavorable judicial decisions. Any
such claims, with or without merit, could materially harm our business.
Our Systems. We have established a comprehensive program with a dedicated program management office to deal with Year 2000
readiness in our internal systems and with our customers and suppliers. We addressed our most critical internal systems first. We have