101116--3/31/2009--UNITED_COMPONENTS

related topics

{debt, indebtedness, cash}

{operation, international, foreign}

{competitive, industry, competition}

{cost, operation, labor}

{cost, regulation, environmental}

{product, market, service}

{gas, price, oil}

{product, liability, claim}

{tax, income, asset}

{financial, litigation, operation}

{personnel, key, retain}

{property, intellectual, protect}

{capital, credit, financial}

{condition, economic, financial}

Our business could be adversely affected if GM and/or Chrysler filed for bankruptcy or were unable to comply with the terms of the Secured Term Loan Facility provided by the U.S. Treasury and any additional requirements of the Troubled Asset Relief Program (TARP). The current economic environment and adverse credit market conditions may significantly affect our ability to meet liquidity needs and access to capital. Our lean manufacturing and other cost saving plans may not be effective. It may be difficult for us to recruit and retain the types of highly-skilled employees we need to remain competitive. We may be subject to work stoppages at our facilities, or our customers may be subjected to work stoppages, either of which could negatively impact the profitability of our business. We are subject to increasing pricing pressure from import activity, particularly from Asia. Increased crude oil and energy prices and overall economic conditions could reduce global demand for and use of automobiles, which could have an adverse effect on our profitability. Environmental regulations may impose significant environmental compliance costs and liabilities on us. We could face potential product liability claims relating to products we manufacture or distribute. We are subject to class action lawsuits alleging conspiracy violations of Section 1 of the Sherman Act, 15 U.S.C. 1 and state law, related to aftermarket oil, air, fuel and transmission filters and lawsuits alleging violations of the Canadian Competition Act. If the plaintiffs in these lawsuits against us are successful, our financial condition, results of operations and liquidity, as well as our reputation may be materially and adversely affected. Increases in our raw materials and component costs or the loss of a number of our suppliers could adversely affect our financial health. We face competition in our markets. If we are unable to meet future capital requirements, our business may be adversely affected. The introduction of new and improved products and services poses a potential threat to the aftermarket for automotive parts. We are subject to risks associated with changing manufacturing techniques, which could place us at a competitive disadvantage. Our international operations are subject to uncertainties that could affect our operating results. We could be materially adversely affected by changes or imbalances in currency exchange and other rates. Our intellectual property may be misappropriated or subject to claims of infringement. An impairment in the carrying value of goodwill or other assets could negatively affect our consolidated results of operations and net worth. Our substantial indebtedness could adversely affect our financial health. To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control. Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial financial leverage. Restrictive covenants in the indenture governing our debt may restrict our ability to pursue our business strategies.

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101116--3/31/2009--UNITED_COMPONENTS_INC