108312--11/18/2010--WOODWARD_GOVERNOR

related topics

{customer, product, revenue}

{cost, operation, labor}

{operation, natural, condition}

{product, market, service}

{tax, income, asset}

{operation, international, foreign}

{product, candidate, development}

{cost, contract, operation}

{product, liability, claim}

{regulation, government, change}

{financial, litigation, operation}

{cost, regulation, environmental}

{property, intellectual, protect}

{debt, indebtedness, cash}

{loss, insurance, financial}

{competitive, industry, competition}

The long sales cycle, customer evaluation process and implementation period of our products and services may increase the costs of obtaining orders and reduce the predictability of sales cycles and our inventory requirements. We have engaged in restructuring activities and may need to implement further restructurings in the future, and there can be no assurance that our restructuring efforts will have the intended effects. Suppliers may be unable to provide us with materials of sufficient quality or quantity required to meet our production needs at favorable prices or at all. Our profitability may suffer if we are unable to manage our expenses while responding to sales increases or decreases. Subcontractors may fail to perform contractual obligations. Our product development activities may not be successful or may be more costly than currently anticipated. Activities necessary to integrate acquisitions may result in costs in excess of current expectations or be less successful than anticipated. Our debt obligations and the restrictive covenants in the agreements governing our debt could limit our ability to operate our business or pursue our business strategies, and could adversely affect our business, financial condition, results of operations, and cash flows. Our business may be affected by government contracting risks. Changes in the estimates of fair value of reporting units or of long-lived assets may result in future impairment charges, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. Future subsidiary results or changes in domestic or international tax statutes may change the amount of valuation allowances provided for deferred income tax assets. Manufacturing activities may result in future environmental costs or liabilities. Our performance depends on continued access to a stable workforce and on favorable labor relations with our employees. A natural disaster could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our intellectual property rights may not be sufficient to protect all our products or technologies. Product liability claims, product recalls or other liabilities associated with the products and services we provide may force us to pay substantial damage awards and other expenses that could exceed our accruals and insurance coverage. Amounts accrued for contingencies may be inadequate to cover the amount of loss when the matters are ultimately resolved. Legal and regulatory proceedings, inquiries or investigations of our business practices by the U.S. Government are unpredictable and an adverse decision in any such matter, or an adverse decision resulting in a loss that exceeds our best estimates, could have a material adverse impact on our business, liquidity, financial condition, results of operations, and cash flows. Changes in the legal and regulatory environments of the countries in which we operate may affect future sales and expenses. Operations and suppliers may be subject to physical and other risks that could disrupt production. We have significant investments outside the United States and significant sales and purchases in foreign denominated currencies, creating exposure to foreign currency exchange rate fluctuations. Our net postretirement benefit obligation liabilities may grow, and the fair value of our pension plan assets may decrease, which could require us to make additional and/or unexpected cash contributions to our pension plans, increase the amount of postretirement benefit expenses, affect our liquidity or affect our ability to comply with the terms of our outstanding debt arrangements. Competitors may develop breakthrough technologies that are adopted by our customers. Industry consolidation trends could reduce our sales opportunities, decrease sales prices, and drive down demand for our product. We operate in a highly competitive industry. Unforeseen events may occur that significantly reduce commercial aviation.

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108312--11/18/2010--WOODWARD_GOVERNOR_CO