716823--3/13/2006--MILACRON

related topics

{debt, indebtedness, cash}

{operation, international, foreign}

{cost, operation, labor}

{tax, income, asset}

{cost, contract, operation}

{cost, regulation, environmental}

{condition, economic, financial}

{financial, litigation, operation}

{competitive, industry, competition}

{property, intellectual, protect}

{product, market, service}

{control, financial, internal}

{personnel, key, retain}

Our substantial level of indebtedness may adversely affect our financial condition, limit our ability to grow and compete and prevent us from fulfilling our obligations under our indebtedness. Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage. Restrictions and covenants in debt agreements limit our ability to take certain actions. An ownership change for U.S. federal income tax purposes will cause utilization of our pre-change tax loss carryforwards and other tax attributes to be substantially delayed, which could increase income tax expense and decrease available cash in future years. Risks Relating to Our Business If we fail to continue to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 or to remedy any material weaknesses in our internal controls that we may identify in the future, such failure could result in material misstatements in our financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our common stock. Many of our customers are in cyclical industries that have historically experienced significant downturns, which has resulted in substantially reduced demand for our products. If a large portion of our North American and Western European customers continue to outsource their manufacturing activities to areas where we do not currently have manufacturing operations, we may encounter difficulties keeping these customers. We operate in highly competitive industries, many of which are currently subject to intense price competition, and if we are unable to compete successfully our results of operations could fail to further improve or could deteriorate. We may encounter difficulties in our restructuring and cost-savings efforts, which could prevent us from achieving our anticipated cost savings. Further increases in our cost structure will have an adverse effect on our operating results on cash flows. Our significant international operations subject us to risks such as unfavorable political, regulatory, labor and tax conditions. Our operations are conducted worldwide and our results of operations are subject to currency translation risk and currency transaction risk that could adversely affect our financial condition and results of operations. Our operations depend to a great extent on the economy of the European and Asian markets. These economies may not be as stable as that of the U.S. Our principal U.S. pension plan is underfunded, which we expect will require us to make cash contributions to the plan, which, in turn, will reduce the cash available for our business, and adverse equity market or interest rate conditions may increase our pension liability and expense. We may be unable to respond in an effective and timely manner to technological changes in our industry and could lose customers as a result. We may not be able to adequately protect our intellectual property and proprietary rights, which could harm our future success and competitive position. We are subject to litigation that could have an adverse effect upon our business, financial condition, results of operations or reputation. Our operations may subject us to potential responsibilities and costs under environmental laws that could have an adverse effect on our business, financial condition and results of operations. A significant softening of the U.S. economy could require us to change our assumptions regarding our deferred tax assets, which could materially increase our income tax expense and adversely affect our results of operations. If we are unable to retain key employees, our performance may be hindered.

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716823--3/13/2006--MILACRON_INC