1038914--2/28/2007--GLOBALSANTAFE_CORP

related topics
{provision, law, control}
{stock, price, operating}
{operation, natural, condition}
{tax, income, asset}
{investment, property, distribution}
{property, intellectual, protect}
{customer, product, revenue}
{acquisition, growth, future}
{personnel, key, retain}
{product, candidate, development}
{regulation, change, law}
A M ATERIAL OR E XTENDED D ECLINE IN E XPENDITURES BY THE O IL AND G AS I NDUSTRY , D UE TO A D ECLINE OR V OLATILITY IN O IL AND G AS P RICES , A D ECREASE IN D EMAND FOR O IL AND G AS OR O THER F ACTORS , C OULD S IGNIFICANTLY R EDUCE O UR R EVENUE AND I NCOME . T HE I NTENSE P RICE C OMPETITION AND C YCLICALITY OF THE D RILLING I NDUSTRY , W HICH IS C URRENTLY M ARKED BY H IGH D EMAND , L IMITED R IG A VAILABILITY , H IGH D AYRATES , AND A S UBSTANTIAL I NCREASE IN THE S UPPLY OF D RILLING U NITS , C OULD H AVE A M ATERIAL A DVERSE E FFECT ON O UR R EVENUES AND P ROFITABILITY . C ONTINUING W ORLD T ENSIONS , I NCLUDING AS THE R ESULT OF W ARS , O THER A RMED C ONFLICTS AND T ERRORIST A TTACKS , C OULD H AVE A M ATERIAL A DVERSE E FFECT ON OUR B USINESS . W E AND C ERTAIN OF O UR S UBSIDIARIES ARE S UBJECT TO L ITIGATION T HAT , IF N OT R ESOLVED IN O UR F AVOR AND N OT S UFFICIENTLY I NSURED A GAINST , C OULD H AVE A M ATERIAL A DVERSE E FFECT ON U S . T URNKEY D RILLING O PERATIONS ARE C ONTINGENT ON OUR A BILITY TO W IN B IDS AND ON R IG A VAILABILITY , AND THE F AILURE TO W IN B IDS OR O BTAIN R IGS FOR ANY R EASON M AY H AVE A M ATERIAL A DVERSE E FFECT ON OUR F INANCIAL R ESULTS . T URNKEY D RILLING O PERATIONS E XPOSE U S TO A DDITIONAL R ISKS , W HICH C AN A DVERSELY A FFECT O UR P ROFITABILITY , B ECAUSE W E A SSUME THE R ISK F OR O PERATIONAL P ROBLEMS AND THE C ONTRACTS ARE ON A F IXED -P RICE B ASIS . F AILURE TO O BTAIN AND R ETAIN K EY P ERSONNEL C OULD I MPEDE O PERATIONS . W E R ELY H EAVILY ON A S MALL N UMBER OF C USTOMERS AND THE L OSS OF A S IGNIFICANT C USTOMER C OULD H AVE A M ATERIAL A DVERSE I MPACT ON O UR F INANCIAL R ESULTS . W E M AY S UFFER L OSSES IF OUR C USTOMERS T ERMINATE OR S EEK TO R ENEGOTIATE T HEIR C ONTRACTS . R IG U PGRADE , R EFURBISHMENT AND C ONSTRUCTION P ROJECTS , I NCLUDING O UR C URRENT S EMISUBMERSIBLE C ONSTRUCTION P ROJECT , AND R IG M AINTENANCE AND R EPAIRS ARE S UBJECT TO R ISKS I NCLUDING D ELAYS AND C OST O VERRUNS , W HICH C OULD H AVE A M ATERIAL A DVERSE I MPACT ON O UR R ESULTS OF O PERATIONS . O UR B USINESS I NVOLVES N UMEROUS O PERATING H AZARDS AND W E ARE N OT F ULLY I NSURED A GAINST A LL OF T HEM AND THE A MOUNT OF R ISK A GAINST W HICH WE ARE N OT I NSURED MAY I NCREASE ; T HE OCCURRENCE OF AN U NINSURED OR U NIDENTIFIED E VENT C OULD H AVE A M ATERIAL A DVERSE E FFECT ON O UR R ESULTS OF O PERATIONS AND F INANCIAL C ONDITION . O UR A BILITY T O O PERATE O UR R IGS IN THE U.S. G ULF OF M EXICO C OULD BE R ESTRICTED BY G OVERNMENT R EGULATION OR R EQUIREMENTS OF O UR I NSURANCE U NDERWRITERS . O UR I NTERNATIONAL O PERATIONS I NVOLVE A DDITIONAL R ISKS N OT G ENERALLY A SSOCIATED WITH D OMESTIC O PERATIONS , W HICH C OULD H AVE A M ATERIAL A DVERSE E FFECT ON O UR O PERATIONS OR F INANCIAL R ESULTS . P UBLIC H EALTH T HREATS C OULD H AVE A M ATERIAL A DVERSE E FFECT ON O UR I NTERNATIONAL O PERATIONS AND O UR F INANCIAL R ESULTS . W E M AY S UFFER L OSSES A S A R ESULT OF F OREIGN E XCHANGE R ESTRICTIONS , F OREIGN C URRENCY F LUCTUATIONS , AND L IMITATIONS ON THE A BILITY TO R EPATRIATE I NCOME OR C APITAL TO THE U.S. L AWS AND G OVERNMENTAL R EGULATIONS M AY A DD TO C OSTS OR L IMIT D RILLING A CTIVITY . G OVERNMENTAL R EGULATIONS AND E NVIRONMENTAL M ATTERS C OULD S IGNIFICANTLY A FFECT O UR O PERATIONS AND E NVIRONMENTAL L IABILITIES C OULD H AVE A M ATERIAL A DVERSE E FFECT O N U S . W E ARE S UBJECT TO C HANGES IN T AX L AWS AND O UR T AX R ETURNS ARE S UBJECT TO R EVIEW AND P OSSIBLE A DJUSTMENTS . W E M AY B E L IMITED IN O UR U SE OF N ET O PERATING L OSSES . W E M AY B E R EQUIRED TO A CCRUE A DDITIONAL T AX L IABILITY ON C ERTAIN E ARNINGS . O UR S HAREHOLDERS H AVE L IMITED R IGHTS U NDER C AYMAN I SLANDS L AW .

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