914024--10/28/2010--SHAW_GROUP

related topics

{cost, contract, operation}

{capital, credit, financial}

{debt, indebtedness, cash}

{regulation, change, law}

{operation, international, foreign}

{cost, regulation, environmental}

{cost, operation, labor}

{customer, product, revenue}

{personnel, key, retain}

{control, financial, internal}

{financial, litigation, operation}

{product, liability, claim}

{tax, income, asset}

{interest, director, officer}

{investment, property, distribution}

{system, service, information}

{loss, insurance, financial}

{property, intellectual, protect}

{provision, law, control}

{condition, economic, financial}

Our results of operations depend on new contract awards; however, the selection process and timing for performing these contracts are not within our control. Our backlog of unfilled orders is subject to unexpected adjustments and cancellations and is, therefore, not a reliable indicator of our future revenues or earnings. The nature of our contracts, particularly our reimbursable and fixed-price contracts, could adversely affect us. Our failure to meet contractual schedule or performance requirements could adversely affect our revenue and profitability. If our joint venture or consortium partners, subcontractors or equipment manufacturers fail to perform their contractual obligations on a project, we could be exposed to the risk of loss, and in some cases, joint and several liability to our clients, loss of reputation and additional financial performance obligations that could result in reduced profits or, in some cases, significant losses. If we are unable to form teaming arrangements, particularly for some of our international opportunities, our ability to compete for and win business may be negatively impacted. Our government contracts may present risks to us. The limitation or the modification of the Price-Anderson Act s indemnification authority and similar federal programs for nuclear and other potentially hazardous activities, could adversely affect our business. If the U.S. were to change its support of nuclear power or revoke or limit DOE s Loan Guarantee Program (LGP), it could have a material adverse effect on our operations. We may be exposed to additional risks in our Power segment, as we begin to execute our significant nuclear backlog and book new nuclear awards. These risks include greater backlog concentration in fewer projects, possibly increasing requirements for letters of credit and potential cost overruns which could have a material adverse effect on our future revenues and liquidity. Additionally, the current economic conditions may impact the pace of the development of nuclear projects. Environmental laws and regulations expose us to certain risks, could increase our costs and liabilities and impact demand for our services. While all of our operations are impacted by environmental laws and regulations, these impacts may be most significant for our nuclear and integrated environmental solutions businesses. Our, our clients and our partners ability to receive the applicable regulatory and environmental approvals for our projects and the timeliness of those approvals could adversely affect us. Due to the international nature of our business we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act, similar worldwide anti-bribery laws, and various international trade and export laws. Political and economic conditions in foreign countries in which we operate could adversely affect us. Foreign exchange risks may affect our ability to realize a profit from certain projects or to obtain projects. The recent adoption of financial reform legislation by the United States Congress could have an adverse effect on our ability to use derivative instruments to hedge risks associated with our business. Risks related to our Investment in Westinghouse could have an adverse effect on us. The nature of our projects exposes us to potential professional liability, product liability, warranty and other claims, which may reduce our profits. Risks Related to Financial Reporting and Corporate Governance Actual results could differ from the estimates and assumptions that we use to prepare our financial statements. If we were required to write down all or part of our goodwill and/or our intangible assets, our net earnings and net worth could be materially adversely affected. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, investors could lose confidence in our financial reporting, which would harm our business and the trading price of our stock. We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect our business and results of operations. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed. We have in place a shareholder rights plan, and provisions in our articles of incorporation by-laws that may discourage a change of control of our company. Risks Related to Our Liquidity and Capital Resources Non-compliance with covenants in our Credit Facility, without waiver or amendment from the lenders, could require us to post cash collateral for outstanding letters of credit and could adversely affect our ability to borrow under the Facility. Downgrades by rating agencies, inability to obtain adequate surety bonding or letters of credit could affect our business strategies by requiring us to modify existing bonding facilities and/or reduce our ability to bid on new work which could have a material adverse effect on our future revenues and business prospects. Restrictive covenants in our Facility may restrict our ability to pursue our business strategies. Because of the capital-intensive nature of our business, we are vulnerable to significant fluctuations in our liquidity that may vary substantially over time. Our borrowing levels and debt service obligations could adversely affect our financial condition and impair our ability to fulfill our obligations under our Facility. Risks Related to Labor and Employment Our failure to attract and retain qualified personnel, including engineers, skilled workers and key officers, could have an adverse effect on us. Work stoppages, Union negotiations and other labor problems could adversely affect us. We may be required to contribute cash to meet our underfunded pension obligations in certain multi-employer pension plans. Our employees work on projects that are inherently dangerous and a failure to maintain a safe work site could result in significant losses. Lawsuits and regulatory proceedings could adversely affect our business. If we are unable to enforce our intellectual property rights or if our technology becomes obsolete, our competitive position could be adversely impacted.

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914024--10/28/2010--SHAW_GROUP_INC