54883--3/16/2006--KEANE

related topics

{regulation, government, change}

{debt, indebtedness, cash}

{cost, operation, labor}

{personnel, key, retain}

{operation, international, foreign}

{acquisition, growth, future}

{provision, law, control}

{stock, price, operating}

{product, market, service}

{financial, litigation, operation}

Our "One Keane" transformation initiative may not be successfully implemented, which could materially affect our results of operations. Our quarterly operating results have varied, and are likely to continue to vary significantly. This may result in volatility in the market price of our common stock. We continue to position ourselves to achieve increasing percentages of revenues and growth through outsourcing. If we are successful in obtaining new outsourcing contracts, we may experience increased pressure on our overall margins during the early stages of these contracts. If our clients are not satisfied with our services, we may have exposure to liabilities, which could adversely affect our profitability and financial condition as well as our ability to compete for future work. The termination of a contract by a significant client could reduce our revenue and profitability or adversely affect our financial condition. Our engagement with Melbourne, Victoria Transport Ticketing Authority, or Victoria TTA contract, exposes us to a number of different risks inherent in such long-term, large-scale, fixed-fee projects. Unfavorable government audits could require us to refund payments we have received, to forego anticipated revenue, and could subject us to penalties and sanctions. We have pursued, and intend to continue to pursue, strategic acquisitions. Failure to successfully integrate acquired businesses or assets may adversely affect our financial performance. We face significant competition for our services, and our failure to remain competitive could limit our ability to maintain existing clients or attract new clients. We conduct business in the UK, Canada, India, and Australia, which exposes us to a number of difficulties inherent in international activities. We may be unable to re-deploy our professionals effectively if engagements are terminated unexpectedly, which would adversely affect our results of operations. Our growth could be limited if we are unable to attract and retain personnel in the information technology and business consulting industries. We may be prohibited from repurchasing, and may not have the financial resources to repurchase, our 2.0% Convertible Subordinated Debentures due 2013 (our "Debentures") on the date for repurchase at the option of the holder or upon a designated event, as required by the indenture governing our Debentures, which could cause defaults under our senior revolving credit facility and any other indebtedness we may incur in the future. We incurred indebtedness when we sold our Debentures. We may incur additional indebtedness in the future. The indebtedness created by the sale of our Debentures, and any future indebtedness, could adversely affect our business and our ability to make full payment on the Debentures.

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54883--3/16/2006--KEANE_INC