941604--2/26/2009--COINSTAR

related topics

{product, market, service}

{system, service, information}

{customer, product, revenue}

{condition, economic, financial}

{regulation, change, law}

{stock, price, operating}

{product, liability, claim}

{property, intellectual, protect}

{operation, international, foreign}

{operation, natural, condition}

{financial, litigation, operation}

{acquisition, growth, future}

{control, financial, internal}

{competitive, industry, competition}

{gas, price, oil}

{regulation, government, change}

The termination, non-renewal or renegotiation on materially adverse terms of our contracts with one or more of our significant retailers could seriously harm our business, financial condition and results of operations. Events outside of our control, including the current economic crisis, has and could continue to negatively affect customers use of our products and services. There are many risks related to our DVD services business that may negatively impact our business. Our DVD services business has a limited operating history and a history of operating losses. If we do not manage our DVD inventory effectively, our business, financial condition and results of operations could be materially and adversely affected. If our sell-back prices to distributors continue to decrease or we are restricted from selling DVDs at all, or if there is an increase in customer demand for titles or formats that are more expensive for us to acquire, our margins in the DVD services business could be adversely affected. Litigation, arbitration, mediation, regulatory actions, investigations or other legal proceedings could result in material rulings, decisions, settlements, fines, penalties or publicity that could adversely affect our business, financial condition and results of operations. Our most extensive business relationship is with Wal-Mart, and changes to this relationship have had and are expected to continue to have material effects on our operations and results. We may be unable to identify and define product and service trends or anticipate, gauge and react to changing consumer demands in a timely manner. Competitive pressures could seriously harm our business, financial condition and results of operations. We may be unable to adequately protect or enforce our patents and other proprietary rights. Our strategy to cross-sell our products and services to retailers may be unsuccessful. We may be unable to attract new retailers and penetrate new markets and distribution channels. Payment of increased service fees to retailers could negatively affect our business results. The entertainment services market has brought with it risks that have and could continue to adversely affect our business, operating results and financial condition. Defects, failures or security breaches in and inadequate upgrade of our operating systems could harm our business. Failure to adequately comply with information security policies or to safeguard against breaches of such policies could adversely affect our operations and could damage our business, reputation, financial position and results of operations. Lack of consumer confidence, whether real or perceived, in our coin-counting machines could harm our business. Our future operating results may fluctuate. We depend upon third-party manufacturers, suppliers and service providers for key components and substantial support for our coin-counting, entertainment, E-payment and DVD services machines and equipment. We are subject to substantial federal, state, local and foreign laws and government regulation specific to our business. There are risks associated with conducting our business and sourcing goods internationally. Our money transfer services business requires us to meet specific federal, state, local and foreign laws and government regulations, subjecting us to additional risk. Our money transfer service is and will remain reliant on an effective agent network. Our business involves the movement of large sums of money, and, as a result, our business is particularly dependent on our ability to process and settle transactions accurately and efficiently. Volatile petroleum prices may adversely affect our operating results and reduce our profitability. Our customers ability to access our products and services can be adversely affected by severe weather, natural disasters and other events beyond our control, such as fires, power failures, telecommunication loss and terrorist attacks. Acquisitions and investments involve risks that could harm our business and impair our ability to realize potential benefits from such acquisitions and investments. Recall of any of the products dispensed by our entertainment services machines or by the entertainment services industry generally could adversely affect our entertainment services business. We may be subject to product liability claims if property or people are harmed by our products and services. Our stock price has been and may continue to be volatile.

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941604--2/26/2009--COINSTAR_INC