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In addition, general economic conditions may cause the stock market to experience extreme price and volume
fluctuations from time to time that particularly affect the stock prices of many high technology companies. These
fluctuations often appear to be 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 should any new lawsuits be filed,
such matters could result in substantial costs and a diversion of resources and management's attention.
Current economic conditions have caused us difficulty in adequately protecting our increased cash and cash equivalents from
financial institution failures.
The uncertain global economic conditions and volatile investment markets have caused us to hold more cash and
cash equivalents than we would hold under normal circumstances. Since there has been an overall increase in demand
for low-risk, U.S. government-backed securities with a limited supply in the financial marketplace, we face increased
difficulty in adequately protecting our increased cash and cash equivalents from possible sudden and unforeseeable
failures by banks and other financial institutions. A failure of any of these financial institutions in which deposits
exceed FDIC limits could have an adverse impact on our financial position.
If our internal controls are found to be ineffective, our financial results or our stock price may be adversely affected.
Our most recent evaluation resulted in our conclusion that as of June 29, 2012, in compliance with Section 404
of the Sarbanes-Oxley Act of 2002, our internal control over financial reporting was effective. As a result of our
acquisition of HGST on March 8, 2012, our internal control over financial reporting, subsequent to the date of acquis-
ition, includes certain existing controls adopted from HGST. If our internal control over financial reporting is found
to be ineffective or if we identify a material weakness in our financial reporting in future periods, investors may lose
confidence in the reliability of our financial statements, which may adversely affect our financial results or our stock
price.
From time to time we may become subject to income tax audits or similar proceedings, and as a result we may incur additional
costs and expenses or owe additional taxes, interest and penalties that may negatively impact our operating results.
We are subject to income taxes in the United States and certain foreign jurisdictions, and our determination of
our tax liability is subject to review by applicable domestic and foreign tax authorities. For example, as we have pre-
viously disclosed, we are under examination by the Internal Revenue Service for certain fiscal years and in connection
with that examination, we received Revenue Agent Reports seeking certain adjustments to income as disclosed in Part
II, Item 8, Note 9 in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
Although we believe our tax positions are properly supported, the final timing and resolution of the notice of pro-
posed adjustment and the audits are subject to significant uncertainty and could result in our having to pay amounts
to the applicable tax authority in order to resolve examination of our tax positions, which could result in an increase or
decrease of our current estimate of unrecognized tax benefits and may negatively impact our financial position, results
of operations, net income or cash flows.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2.
Properties
Our principal executive offices are located in Irvine, California. As a result of our acquisition of HGST, we added
facilities in San Jose, California, Rochester, Minnesota, China, Japan, Malaysia, the Philippines, Singapore and Thailand.
Our leased facilities are occupied under leases that expire at various times through 2022.
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