1281226--6/15/2006--SENSUS_METERING_SYSTEMS

related topics

{debt, indebtedness, cash}

{customer, product, revenue}

{operation, international, foreign}

{acquisition, growth, future}

{product, liability, claim}

{cost, regulation, environmental}

{condition, economic, financial}

{product, market, service}

{tax, income, asset}

{stock, price, operating}

{cost, operation, labor}

{property, intellectual, protect}

{system, service, information}

{regulation, government, change}

{product, candidate, development}

{financial, litigation, operation}

We are controlled by our principal investors, whose interests in our business may be different, and who control the appointment of our board of directors. As a result, conflicts may exist with respect to fundamental business decisions. We have recorded a significant amount of intangible assets that may never generate the returns we expect, which may require us to write off a significant portion of our intangible assets and would have an adverse effect on our financial condition and results of operations. We are dependent on the utility industry, which may experience volatility. This volatility could cause our results of operations to vary significantly from period to period. We are facing increasing competition. If we are unable to successfully implement our business strategy we risk losing market share to these competitors. We face potential product liability claims relating to products we manufacture or distribute. The successful assertion of a large product liability claim could subject us to substantial damages. We are subject to the effects of fluctuations in foreign exchange rates. Our substantial indebtedness could adversely affect our financial health, harm our ability to react to changes to our business and could prevent us from fulfilling our obligations under our indebtedness. Restrictive covenants in our senior credit facilities and the indenture governing our senior subordinated notes may restrict our ability to pursue our business strategies. We depend on our ability to develop new products for our success. There is no guarantee we will continue to be successful in developing new products. We rely on our information technology systems to conduct our business. If these systems fail to adequately perform these functions, or if we experience an interruption in their operation, our business and financial results could be adversely affected. If we are unable to make necessary capital investments our business may be adversely affected. International operations expose us to numerous risks and business uncertainties. We may face volatility in the availability of energy and raw materials used in our manufacturing process. We have transitioned a substantial portion of our manufacturing capabilities to contract manufacturers. If we are unable to manage our outsourcing arrangements effectively, or if we are unable to accurately project demand, our revenue and profitability could be harmed. Our intellectual property may be inadequately protected, which could result in the loss of our exclusive right to use the intellectual property. Additionally, some of our intellectual property may be misappropriated, which could subject us to claims of infringement. We rely on independent distributors for a significant portion of our sales. There is no guarantee that we will be able to retain the services of these distributors. Our business is subject to the regulation of, and dependent on licenses granted by, the Federal Communications Commission and other governmental bodies. Changes in existing regulations or the losses of our licenses could adversely affect our business. We face potential liability from asbestos exposure claims. We are subject to work stoppages at our facilities, or our customers may be subjected to work stoppages, which could seriously impact the profitability of our business. We may be unable to identify attractive acquisition candidates, successfully integrate our acquired operations or realize the intended benefits of our acquisitions. As a result, growth from acquisitions could be limited.

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1281226--6/15/2006--SENSUS_METERING_SYSTEMS_INC