40888--2/4/2010--GENCORP

related topics

{cost, contract, operation}

{regulation, government, change}

{regulation, change, law}

{customer, product, revenue}

{cost, regulation, environmental}

{loan, real, estate}

{debt, indebtedness, cash}

{product, liability, claim}

{acquisition, growth, future}

{loss, insurance, financial}

{cost, operation, labor}

{stock, price, operating}

{product, market, service}

{control, financial, internal}

{personnel, key, retain}

{financial, litigation, operation}

If our operating subsidiaries do not generate sufficient cash flow or if they are not able to pay dividends or otherwise distribute their cash to us, or if we have insufficient funds on hand, we may not be able to service our debt. Our pension plan is currently underfunded and we expect to be required to make cash contributions, which may reduce the cash available for our businesses. The level of returns on retirement benefit plan assets, changes in interest rates, changes in legislation, and other factors could affect our financial results. Economic conditions could materially adversely affect our ability to amend our Senior Credit Facility, and we face the risks of either not being able to do so, or doing so at higher interest expense. Our operations and properties are currently the subject of significant environmental liabilities, and the numerous environmental and other government requirements to which we are subject may become more stringent in the future. Although some of our environmental costs may be recoverable and we have established reserves, given the many uncertainties involved in assessing liability for environmental claims, our reserves may not be sufficient, which could adversely affect our financial results. We are from time to time subject to significant litigation, the outcome of which could adversely affect our financial results. The cancellation or material modification of one or more significant contracts could adversely affect our financial results. Future reductions or changes in U.S. government spending could adversely affect our financial results. If we experience cost overruns on our contracts, we would have to absorb the excess costs which could adversely affect our financial results and our ability to win new contracts. If our subcontractors or suppliers fail to perform their contractual obligations, our contract performance and our ability to win new contracts may be adversely affected. Our success and growth in our Aerospace and Defense segment depends on our ability to secure contracts. Our Aerospace and Defense segment is subject to procurement and other related laws and regulations inherent in contracting with the U.S. government, non-compliance with which could adversely affect our financial results. Our inability to adapt to rapid technological changes could impair our ability to remain competitive. We may experience warranty claims for product failures, schedule delays or other problems with existing or new products and systems. The release or explosion of dangerous materials used in our business could disrupt our operations and could adversely affect our financial results. Disruptions in the supply of key raw materials, difficulties in the supplier qualification process or increases in prices of raw materials could adversely affect our financial results. The real estate market is inherently risky, which could adversely affect our financial results. Substantially all of our excess real estate, that we are in the process of entitling for new opportunities, is located in Sacramento County, California making us vulnerable to changes in economic and other conditions in that particular market. We may expand our operations through acquisitions, which may divert management s attention and expose us to unanticipated liabilities and costs. We may experience difficulties integrating any acquired operations, and we may incur costs relating to acquisitions that are never consummated. We may incur additional costs related to divestitures, which could adversely affect our financial results. A strike or other work stoppage, or our inability to renew collective bargaining agreements on favorable terms, could adversely affect our financial results. In order to be successful, we must attract and retain key employees. Due to the nature of our business, our sales levels may fluctuate causing our quarterly operating results to fluctuate. We face certain significant risk exposures and potential liabilities that may not be adequately covered by indemnity or insurance. We use estimates in accounting for most of our programs. Changes in our estimates could affect our future financial results. New accounting standards could result in changes to our methods of quantifying and recording accounting transactions, and could affect our financial results. The accounting method for convertible debt securities that may be settled in cash is the subject of recent changes that could have a material effect on our reported financial results. Failure to maintain effective internal controls in accordance with the Sarbanes-Oxley Act of 2002 could negatively impact the market price of our common stock.

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40888--2/4/2010--GENCORP_INC