1051848--7/9/2007--CSK_AUTO

related topics

{financial, litigation, operation}

{debt, indebtedness, cash}

{operation, natural, condition}

{control, financial, internal}

{condition, economic, financial}

{competitive, industry, competition}

{customer, product, revenue}

{cost, regulation, environmental}

{operation, international, foreign}

{acquisition, growth, future}

{interest, director, officer}

We have extensive work remaining to remedy the material weaknesses in our internal control over financial reporting. The continuing existence of material weaknesses in our internal control over financial reporting and the frequency of our restatements of our financial statements may make it more difficult and expensive to refinance our capital structure. Risks Related to Our Restatement of Financial Statements and Audit Committee-led Investigation Pending and future governmental inquiries may adversely affect us, the trading prices of our securities and our ability to access the capital markets. We have been named as a defendant in a class action and other lawsuits that may adversely affect our financial condition, results of operations and cash flows. Continuing negative publicity may adversely affect our business. Potential indemnification obligations and limitations of our director and officer liability insurance could adversely affect us. Risks Related to our Industry and Business Our industry is highly competitive and we may not have the resources to compete effectively. We may not be able to grow our number of stores in a profitable manner or achieve the synergies anticipated when acquisitions are made. A decrease in vehicle miles driven, higher gasoline prices and mild summer or winter temperatures may negatively affect our revenues. A decrease in the demand for products we offer for sale could adversely affect our financial condition and results of operations. A decrease in the ability and willingness of our suppliers to supply products to us on favorable terms may have a negative impact on our business. Our operations are concentrated in the Western United States, and therefore our business is subject to fluctuations when adverse conditions occur in that region. War or acts of terrorism or the threat of either may have a negative impact on our financial condition, results of operations and cash flows. Because we are involved in litigation from time to time, and are subject to numerous governmental laws and regulations, we could incur substantial judgments, fines, legal fees and other costs. We are subject to environmental laws and the cost of compliance with these laws could negatively impact our financial condition, results of operations and cash flows. Risks Related to Our Financial Condition Our failure to file our SEC reports by the deadlines contained in our Debt Agreements could have a material adverse effect on our financial condition and our ability to meet our debt obligations. Our substantial debt and increased interest payment obligations could adversely affect our financial health, undermine our ability to grow and operate profitably and prevent us from fulfilling our obligations under the Debt Agreements. Our Debt Agreements restrict or prohibit our ability to engage in or enter into some operating and financing arrangements, which may limit our ability to operate our business.

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1051848--7/9/2007--CSK_AUTO_CORP