1333142--6/15/2010--DynCorp_International

related topics

{debt, indebtedness, cash}

{cost, contract, operation}

{regulation, government, change}

{acquisition, growth, future}

{cost, operation, labor}

{financial, litigation, operation}

{stock, price, operating}

{personnel, key, retain}

{investment, property, distribution}

{competitive, industry, competition}

{operation, natural, condition}

{customer, product, revenue}

{control, financial, internal}

{cost, regulation, environmental}

{condition, economic, financial}

{operation, international, foreign}

{regulation, change, law}

We rely on sales to U.S. government entities. A loss of contracts, a failure to obtain new contracts or a reduction of sales under existing contracts with the U.S. government could adversely affect our operating performance and our ability to generate cash flow to fund our operations. Our U.S. government contracts may be terminated by the U.S. government at any time prior to their completion and contain other unfavorable provisions, which could lead to an unexpected loss of revenue and a reduction in backlog. Our U.S. government contracts are subject to competitive bidding, both upon initial issuance and re-competition. If we are unable to successfully compete in the bidding process or if we fail to win re-competitions, it could adversely affect our operating performance and lead to an unexpected loss of revenue. Current or worsening economic conditions could impact our business. Our operations involve considerable risks and hazards. An accident or incident involving our employees or third parties could harm our reputation, affect our ability to compete for business, and if not adequately insured or indemnified, could adversely affect our results of operations and financial condition. Political destabilization or insurgency in the regions in which we operate may have a material adverse effect on our operating performance. We are exposed to risks associated with operating internationally. Our IDIQ contracts are not firm orders for services, and we may never receive revenue from these contracts, which could adversely affect our operating performance. Our cost of performing under time-and-materials and fixed-price contracts may exceed our revenue, which would result in a recorded loss on the contracts. A negative audit or other actions by the U.S. government could adversely affect our operating performance. We are subject to investigation by the U.S. government, which could result in our inability to receive government contracts and could adversely affect our future operating performance. The expiration of our collective bargaining agreements could result in increased operating costs or work disruptions, which could potentially affect our operating performance. Proceedings against us in domestic and foreign courts could result in legal costs and adverse monetary judgments, adversely affecting our operating performance and causing harm to our reputation. We are subject to certain U.S. laws and regulations, which are the subject of rigorous enforcement by the U.S. government; our noncompliance with such laws and regulations could adversely affect our future operating performance. Competition in our industry could limit our ability to attract and retain customers or employees, which could result in a loss of revenue and/or a reduction in margins, which could adversely affect our operating performance. Loss of our skilled personnel, including members of senior management, may have an adverse effect on our operations and/or our operating performance. If our subcontractors or joint venture partners fail to perform their contractual obligations, then our performance as the prime contractor and our ability to obtain future business could be materially and adversely impacted. Environmental laws and regulations may subject us to significant costs and liabilities that could adversely affect our operating performance. Our substantial level of indebtedness may make it difficult for us to satisfy our debt obligations and may adversely affect our ability to obtain financing for working capital, capitalize on business opportunities or respond to adverse changes in our industry. The indenture governing our senior subordinated notes and our senior secured credit facility contain various covenants limiting the discretion of our management in operating our business. Servicing our indebtedness requires a significant amount of cash. Our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations, which could adversely affect our financial condition. Despite our current indebtedness level, our company, including our subsidiaries, may, subject to conditions in the Merger Agreement, incur substantially more debt, which could exacerbate the risks associated with our substantial leverage. We have recently acquired two complementary businesses. Acquisition transactions require substantial management resources and may disrupt our business and divert our management from other responsibilities. Acquisitions are accompanied by other risks, including: We may not be able to profitably deploy all of our helicopter assets. We are subject to the Internal Control Evaluation and Attestation Requirements of Section 404 of the Sarbanes-Oxley Act of 2002. We are significantly influenced by Veritas Capital, whose interests may not be aligned with yours The Merger is subject to satisfaction or waiver of certain customary conditions, including the approval of the Merger by Our Parent s stockholders. The Merger may not be completed if sufficient financing is not funded. Our future business and financial position may be adversely affected if the Merger is not completed. Since announcing the proposed Merger, two class action lawsuits have been filed against the Company and its directors. The outcome or settlement of these claims may have an adverse effect upon the Company s results of operation. The Merger creates unique risks in the time leading up to closing, and there are also risks of completing the conditions to closing. If we are unable to complete our proposed Merger with affiliates of Cerberus Our Parent s stock price could suffer.

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1333142--6/15/2010--DynCorp_International_LLC