1035983--3/2/2010--COMFORT_SYSTEMS_USA

related topics

{tax, income, asset}

{control, financial, internal}

{cost, contract, operation}

{acquisition, growth, future}

{capital, credit, financial}

{loss, insurance, financial}

{personnel, key, retain}

{investment, property, distribution}

{financial, litigation, operation}

{interest, director, officer}

{stock, price, share}

{provision, law, control}

{operation, natural, condition}

{cost, regulation, environmental}

{condition, economic, financial}

{competitive, industry, competition}

Our business is subject to a variety of risks. You should carefully consider the risks described below, together with all the information included in this report. Our business, financial condition and results of operations could be adversely affected by the occurrence of any of these events, which could cause actual results to differ materially from expected and historical results, and the trading price of our common stock could decline. Because we bear the risk of cost overruns in most of our contracts, we may experience reduced profits or, in some cases, losses under these contracts if costs increase above our estimates. Many of the markets we do work in are currently experiencing an economic downturn that may materially and adversely affect our business because our business is dependent on levels of construction activity. Our backlog is subject to unexpected adjustments and cancellations, which means that amounts included in our backlog may not result in actual revenue or translate into profits. A significant portion of our business depends on our ability to provide surety bonds. Current difficulties in the financial and surety markets may adversely affect our bonding capacity and availability. Goodwill impairment charges have negatively impacted our earnings in the past. Earnings for future periods may be impacted by additional charges for goodwill and intangible assets. Our use of the percentage-of-completion method of accounting could result in a reduction or reversal of previously recorded revenues or profits. Intense competition in our industry could reduce our market share and our profit. We are a decentralized company and place significant decision making powers with our subsidiaries' management, which presents certain risks. If we are unable to attract and retain qualified managers and employees, we will be unable to operate efficiently, which could reduce our profitability. Past and future environmental, safety and health regulations could impose significant additional costs on us that reduce our profits. Our insurance policies against many potential liabilities require high deductibles, and our risk management policies and procedures may leave us exposed to unidentified or unanticipated risks. Additionally, current difficulties in the insurance markets may adversely affect our ability to obtain necessary insurance. If we experience delays and/or defaults in customer payments, we could be unable to recover all expenditures. Actual and potential claims, lawsuits and proceedings could ultimately reduce our profitability and liquidity and weaken our financial condition. Our recent and future acquisitions may not be successful. Our common stock, which is listed on the New York Stock Exchange, has from time-to-time experienced significant price and volume fluctuations. These fluctuations are likely to continue in the future, and our stockholders may suffer losses. If we do not effectively manage our growth, our existing infrastructure may become strained, and we may be unable to increase revenue growth. Failure or circumvention of our disclosure controls and procedures or internal controls over financial reporting could seriously harm our financial condition, results of operations, and our business. Our charter contains certain anti-takeover provisions that may inhibit or delay a change in control. Failure to successfully comply with Section 404 of the Sarbanes-Oxley Act of 2002 on a timely basis could seriously harm our business.

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1035983--3/2/2010--COMFORT_SYSTEMS_USA_INC