1168478--11/17/2006--HEWITT_ASSOCIATES

related topics

{system, service, information}

{provision, law, control}

{control, financial, internal}

{product, market, service}

{regulation, government, change}

{cost, contract, operation}

{condition, economic, financial}

{personnel, key, retain}

{operation, international, foreign}

{cost, operation, labor}

{property, intellectual, protect}

{stock, price, operating}

{competitive, industry, competition}

{loss, insurance, financial}

{customer, product, revenue}

The outsourcing and consulting markets are highly competitive, and if we are not able to compete effectively our revenues and profit margins will be adversely affected. A significant or prolonged economic downturn could have a material adverse effect on our revenues and profit margin. The profitability of our engagements with clients may not meet our expectations due to unexpected costs, cost overruns, early contract terminations, unrealized assumptions used in our contract bidding process and the inability to maintain our prices. We might not be able to achieve the cost savings required to sustain and increase our profit margins. Our accounting for our long-term contracts requires using estimates and projections that may change over time. Such changes may have a significant or adverse effect on our reported results of operations or consolidated balance sheet. The loss of a significantly large client or several clients could have a material adverse effect on our revenues and profitability. We may have difficulty integrating or managing acquired businesses, which may harm our financial results or reputation in the marketplace. Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in government regulations or if government regulations decrease the need for our services or increase our costs. If we are unable to satisfy regulatory requirements relating to internal controls over financial reporting, our business could suffer. Our business performance and growth plans will be negatively affected if we are not able to effectively apply technology in driving value for our clients through technology-based solutions or gain internal efficiencies through the effective application of technology and related tools. If our clients or third parties are not satisfied with our services, we may face damage to our professional reputation or legal liability. Improper disclosure of personal data could result in liability and harm our reputation. We depend on our employees; the inability to attract new talent or the loss of key employees could damage or result in the loss of client relationships and adversely affect our business. Our global operations and expansion strategy pose complex management, foreign currency, legal, tax and economic risks, which we may not adequately address. The demand for our services may not grow at rates we anticipate. If we fail to establish and maintain alliances for developing, marketing and delivering our services, our ability to increase our revenues and profitability may suffer. We rely on third parties to provide services and their failure to perform the service could do harm to our business. We have only a limited ability to protect the intellectual property rights that are important to our success, and we face the risk that our services or products may infringe upon the intellectual property rights of others. We rely heavily on our computing and communications infrastructure and the integrity of these systems in the delivery of services for our clients, and our operational performance and revenue growth depends, in part, on the reliability and functionality of this infrastructure as a means of delivering human resources services. Our quarterly revenues, operating results and profitability will vary from quarter to quarter, which may result in volatility of our stock price. There are significant limitations on the ability of any person or company to buy Hewitt without the approval of the Board of Directors, which may decrease the price of our Class A common stock. Section 203 of the Delaware General Corporation Law may delay, defer or prevent a change in control that our stockholders might consider to be in their best interest.

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1168478--11/17/2006--HEWITT_ASSOCIATES_INC