1278061--3/26/2010--VOUGHT_AIRCRAFT_INDUSTRIES

related topics

{regulation, government, change}

{debt, indebtedness, cash}

{cost, contract, operation}

{customer, product, revenue}

{cost, regulation, environmental}

{operation, natural, condition}

{capital, credit, financial}

{cost, operation, labor}

{loss, insurance, financial}

{acquisition, growth, future}

{operation, international, foreign}

{product, liability, claim}

{system, service, information}

{control, financial, internal}

{property, intellectual, protect}

{personnel, key, retain}

{gas, price, oil}

{condition, economic, financial}

Financial market conditions could impact our ability to access new capital to meet our liquidity needs and impact our results of operations. Large customer concentration may negatively impact revenue, results of operations and cash flows. Our fixed-price contracts may commit us to unfavorable terms. We incur risk associated with new programs that are critical to our future profitability. Failure to, or delays in, negotiations of favorable contract terms with our customers for current and follow-on contract effort could materially impact our operations. We may be subject to work stoppages at our facilities or those of our principal customers and suppliers, which could seriously impact the profitability of our business. Financial market conditions may adversely affect our benefit plan assets, increase funding requirements and materially impact our statement of financial position. A decline in the U.S. defense budget or change of funding priorities may reduce demand for our customers military aircraft and reduce our sales of products used on military aircraft. Any significant disruption from key suppliers of raw materials and key components could delay production and decrease revenue. We are exposed to economic and geo-political risks in the countries in which our suppliers are located. The price volatility of energy costs may adversely affect our profitability. Commercial airlines have been and, as a result, we may be materially adversely affected by high fuel prices. We are subject to regulation of our technical data and goods exports. We are implementing a new Enterprise Resource Planning (ERP) system. The construction of aircraft is heavily regulated and failure to comply with applicable laws could reduce our sales or require us to incur additional costs to achieve compliance, which could reduce our results of operations. Our operations depend on our manufacturing facilities throughout the U.S., which are subject to physical and other risks that could disrupt production. The U.S. Government is a significant customer of our largest customers and we and they are subject to specific U.S. Government contracting rules and regulations. We depend on key personnel and may not be able to retain those employees or recruit additional qualified personnel. We are subject to environmental regulation and our ongoing operations may expose us to environmental liabilities. Any product liability claims in excess of insurance may require us to dedicate cash flow from operations to pay such claims and damage our reputation impacting our ability to obtain future business. Significant consolidation by aerospace industry suppliers could adversely affect our business. High switching costs may substantially limit our ability to obtain business that is currently under contract with other suppliers. We are subject to the requirements of the National Industrial Security Program Operating Manual for our facility security clearance, which is a prerequisite for our ability to perform on classified contracts for the U.S. Government. We do not own most of the intellectual property and tooling used in our business. Future terrorist attacks may have a material adverse impact on our commercial business. We may be unable to satisfy commitments related to grants received. Any future business combinations, acquisitions or mergers expose us to risks, including the risk that we may not be able to successfully integrate these businesses or achieve expected operating synergies. Our financial statements are based on estimates required by GAAP, and actual results may differ materially from those estimated under different assumptions or conditions. While we believe our control systems are effective, there are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected. Risks Relating to Our Indebtedness Market conditions may make it difficult to refinance our indebtedness with favorable terms. Our substantial indebtedness could prevent us from fulfilling our obligations under our outstanding senior notes and our senior credit facilities. We will require a significant amount of cash to service our indebtedness. Our ability to generate cash depends on many factors beyond our control. Restrictive covenants in our senior credit facilities and our outstanding senior notes may restrict our ability to pursue our business strategies.

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1278061--3/26/2010--VOUGHT_AIRCRAFT_INDUSTRIES_INC