| COMPASS MINERALS INTERNATIONAL INC ITEM 1A RISK FACTORS You should carefully consider the following risks and all of the information set forth in this annual report on Form 10-K The risks described below are not the only ones facing our company |
| Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition or results of operations |
| Risks Related to Our Business The seasonal demand for our products and the variations in our operations from quarter to quarter due to weather conditions may have an adverse effect on our results of operations and the price of our common stock |
| Our highway deicing product line is seasonal, with operating results varying from quarter to quarter as a result of weather conditions and other factors |
| On average, over the last five years, our North American highway deicing product line has generated over 64prca of its annual sales, net of shipping and handling costs, during the months of December through March when the need for highway deicing is at its peak |
| We need to stockpile sufficient highway deicing salt in the last three fiscal quarters to meet estimated demand for the winter season |
| Weather conditions that impact our highway deicing product line include temperature, levels of precipitation, number of snow days and duration and timing of snow fall in our relevant geographic markets |
| Lower than expected sales by us during this period could have a material adverse effect on our results of operations and the price of our common stock |
| Our SOP operating results are dependent in part upon conditions in the agriculture markets |
| The agricultural products business can be affected by a number of factors, the most important of which, for US markets, are weather patterns and field conditions (particularly during periods of traditionally high crop nutrients consumption) and quantities of crop nutrients imported to and exported from North America |
| Additionally, our ability to produce SOP at our solar evaporation ponds is dependent upon arid weather conditions |
| Extended periods of precipitation or a prolonged lack of sunshine would hinder our production levels resulting in lower sales volumes |
| 10 _________________________________________________________________ [69]Table of Contents COMPASS MINERALS INTERNATIONAL, INC 2005 FORM 10-K Our substantial indebtedness could adversely affect our financial condition and impair our ability to operate our business |
| As of December 31, 2005, we had dlra615dtta9 million of outstanding indebtedness, including approximately dlra350dtta0 million under CMG’s senior secured term loan facility, dlra31dtta0 million under the CMG senior secured revolving credit facility, dlra2dtta0 million of CMG senior subordinated notes, dlra97dtta1 million of our senior discount notes, dlra135dtta8 million of our senior subordinated discount notes, and a stockholders’ deficit of dlra79dtta1 million |
| This level of leverage could have important consequences, including the following: • it may limit our ability to borrow money or sell stock to fund our working capital, capital expenditures and debt service requirements; • it may limit our flexibility in planning for, or reacting to, changes in our business; • we may be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage; • it may make us more vulnerable to a downturn in our business or the economy; • it will require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing the availability of our cash flow for other purposes; and • it may materially and adversely affect our business and financial condition if we are unable to service our indebtedness or obtain additional financing, as needed |
| Although our operations are conducted through our subsidiaries, none of our subsidiaries is obligated to make funds available to us for payment on our indebtedness or to pay dividends on our capital stock |
| Accordingly, our ability to make payments on our indebtedness and distribute dividends to our stockholders is dependent on the earnings and the distribution of funds from our subsidiaries |
| The terms of our senior secured credit facilities limit the transferability of assets and the amount of dividends that our subsidiaries can distribute to us |
| The terms of our senior credit facilities also restrict our subsidiaries from paying dividends to us in order to fund cash interest payments on the senior discount notes and the senior subordinated discount notes if CMG does not comply with the provisions relating to the adjusted total leverage ratio and consolidated fixed charge coverage ratio, or if a default or event of default has occurred and is continuing under our senior secured credit facilities |
| We cannot assure you that we will remain in compliance with these ratios |
| We cannot assure you that the agreements governing the current and future indebtedness of our subsidiaries will permit our subsidiaries to provide us with sufficient dividends, distributions or loans to fund scheduled interest and principal payments on our indebtedness, when due |
| If we consummate an acquisition, our debt service requirements could increase |
| We may need to refinance all or a portion of our indebtedness on or before maturity |
| We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all |
| We are a holding company with no operations of our own and depend on our subsidiaries for cash |
| Although our operations are conducted through our subsidiaries, none of our subsidiaries are obligated to make funds available to us for payment on our indebtedness or to pay dividends on our capital stock |
| The terms of the CMG senior secured credit facilities (including the term loan and revolving credit facility) include limitations on the amount of dividends and equity distributions our subsidiaries can pay to us, as discussed above |
| All of our subsidiaries are guarantors of the CMG senior secured credit facilities |
| We cannot assure you that the agreements governing the current and future indebtedness of our subsidiaries will permit our subsidiaries to provide us with sufficient dividends, distributions or loans to fund scheduled interest and principal payments on our indebtedness when due |
| Increasing interest rates would have an adverse affect on our interest expense under our senior secured credit facilities |
| Additionally, the restrictive covenants in the agreements governing our indebtedness and the indebtedness of Compass Minerals Group may limit our ability to pursue our business strategies or may require accelerated payments on our debt |
| We pay variable interest on our senior secured credit facilities based on LIBOR or ABR As of December 31, 2005, approximately dlra250 million of our variable rate borrowings totaling dlra381dtta0 million has been hedged through an interest rate swap agreement |
| Consequently, increases in interest rates will adversely affect our cost of debt for the portion that has not been hedged |
| Our senior secured credit facilities and indebtedness limit our ability and the ability of our subsidiaries, among other things, to: • incur additional indebtedness or contingent obligations; • pay dividends or make distributions to our stockholders; • repurchase or redeem our stock; • make investments; • grant liens; • make capital expenditures; • sell assets; and • acquire the assets of, or merge or consolidate with, other companies |
| In addition, our senior secured credit facilities require us to maintain financial ratios |
| These financial ratios include an interest coverage ratio and a total leverage ratio |
| Although we have historically been able to maintain these financial ratios, we may not be able to maintain these ratios in the future |
| Covenants in our senior secured credit facilities may also impair our ability to finance future operations or capital needs or to enter into acquisitions or joint ventures or engage in other favorable business activities |
| If we default under our senior secured credit facilities, the lenders could require immediate payment of the entire principal amount |
| These circumstances include nonpayment of principal, interest, fees or other amounts when due, a change of control, 11 _________________________________________________________________ [70]Table of Contents COMPASS MINERALS INTERNATIONAL, INC 2005 FORM 10-K default under agreements governing our other indebtedness, material judgments in excess of dlra15cmam000cmam000 or inaccuracy of representations and warranties |
| Any default under our senior secured credit facilities or agreements governing our other indebtedness could lead to an acceleration of principal payments under our other debt instruments that contain cross-acceleration or cross-default provisions |
| If the lenders under our senior secured credit facilities require immediate repayment, we will not be able to repay them and also repay our other indebtedness in full |
| Our ability to comply with these covenants and restrictions contained in our senior secured credit facilities and other agreements governing our other indebtedness may be affected by changes in the economic or business conditions or other events beyond our control |
| Economic and other risks associated with international sales and operations could adversely affect our business, including economic loss and a negative impact on earnings |
| Since we manufacture and sell our products primarily in the United States, Canada and the United Kingdom, our business is subject to risks associated with doing business internationally |
| Our sales outside the United States, as a percentage of our total sales, were 30prca for the year ended December 31, 2005 |
| Accordingly, our future results could be adversely affected by a variety of factors, including: • changes in foreign currency exchange rates; • exchange controls; • tariffs, other trade protection measures and import or export licensing requirements; • potentially negative consequences from changes in tax laws; • differing labor regulations; • requirements relating to withholding taxes on remittances and other payments by subsidiaries; • restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses in these jurisdictions; • restrictions on our ability to repatriate dividends from our subsidiaries; and • unexpected changes in regulatory requirements |
| Fluctuations in the value of the US dollar may adversely affect our results of operations |
| Because our consolidated financial results are reported in US dollars, if we generate sales or earnings in other currencies, the translation of those results into US dollars can result in a significant increase or decrease in the amount of those sales or earnings |
| In addition, our debt service requirements are primarily in US dollars even though a significant percentage of our cash flow is generated in Canadian dollars and pounds sterling |
| Significant changes in the value of Canadian dollars and pounds sterling relative to the US dollar could have a material adverse effect on our financial condition and our ability to meet interest and principal payments on US dollar-denominated debt |
| In addition to currency translation risks, we incur currency transaction risk whenever we or one of our subsidiaries enter into either a purchase or a sales transaction using a currency other than the local currency of the transacting entity |
| Given the volatility of exchange rates, we cannot assure you that we will be able to effectively manage our currency transaction and/or translation risks |
| It is possible that volatility in currency exchange rates will have a material adverse effect on our financial condition or results of operations |
| We have experienced and expect to experience economic loss and a negative impact on earnings from time to time as a result of foreign currency exchange rate fluctuations |
| See Management’s Discussion and Analysis of Financial Condition and Results of Operations — Effects of Currency Fluctuations and Inflation and Management’s Discussion and Analysis of Financial Condition and Results of Operations — Market Risk |
| Our overall success as a global business depends, in part, upon our ability to succeed in differing economic and political conditions |
| We cannot assure you that we will continue to succeed in developing and implementing policies and strategies that are effective in each location where we do business |
| Our operations are dependent on natural gas and a significant interruption in the supply or increase in the price of natural gas could have a material adverse effect on our financial condition or results of operations |
| Energy costs, including primarily natural gas and electricity, represented approximately 13prca of our total production costs in 2005 |
| Natural gas is a primary fuel source used in the evaporated salt production process |
| Our profitability is impacted by the price and availability of natural gas we purchase from third parties |
| We have a policy of hedging natural gas prices through the use of swap agreements |
| We have not entered into any long-term contracts for the purchase of natural gas |
| Our contractual arrangements for the supply of natural gas do not specify quantities and are automatically renewed annually unless either party elects not to do so |
| We do not have arrangements in place with back-up suppliers |
| A significant increase in the price of natural gas that is not recovered through an increase in the price of our products or covered through our hedging arrangements, or an extended interruption in the supply of natural gas to our production facilities, could have a material adverse effect on our business, financial condition, results of operations and cash flows |
| Increasing costs or a lack of availability of transportation services could have an adverse effect on our ability to deliver products at competitive prices |
| Because of salt’s relatively low production cost, transportation and handling costs tend to be a significant component of the total delivered cost of sales |
| The high relative cost of transportation tends to favor manufacturers located close to the customer |
| We contract shipping, barge, trucking and rail services to move salt from our production facilities to the distribution outlets and customers |
| A reduction in the availability of transportation services or a significant increase in transportation service rates could impair our ability to economically deliver salt to our markets |
| Competition in our markets could limit our ability to attract and retain customers, force us to continuously make capital investments and put pressure on the prices we can charge for our products |
| We encounter competition in all areas of our business |
| Competition in our product lines is based on a number of 12 _________________________________________________________________ [71]Table of Contents COMPASS MINERALS INTERNATIONAL, INC 2005 FORM 10-K considerations, including product performance, transportation costs in salt distribution, brand reputation, quality of client service and support, and price |
| Additionally, customers for our products are attempting to reduce the number of vendors from which they purchase in order to increase their efficiency |
| Our customers increasingly demand a broad product range and we must continue to develop our expertise in order to manufacture and market these products successfully |
| To remain competitive, we will need to invest continuously in manufacturing, marketing, customer service and support and our distribution networks |
| We may have to adjust the prices of some of our products to stay competitive |
| We may not have sufficient resources to continue to make such investments or maintain our competitive position |
| Some of our competitors have greater financial and other resources than we do |
| Environmental laws and regulation may subject us to significant liability and require us to incur additional costs in the future |
| We are subject to numerous environmental, health and safety laws and regulations in the United States, Canada and Europe, including laws and regulations relating to land reclamation and remediation of hazardous substance releases, and discharges to air and water |
| For example CERCLA imposes liability, without regard to fault or to the legality of a party’s conduct, on certain categories of persons (known as “potentially responsible parties” (“PRPs”)) who are considered to have contributed to the release of “hazardous substances” into the environment |
| Although we are not currently incurring material liabilities pursuant to CERCLA, we may in the future incur material liabilities under CERCLA and other environmental cleanup laws, with regard to our current or former facilities, adjacent or nearby third-party facilities, or off-site disposal locations |
| Under CERCLA, or its various state analogues, one party may, under some circumstances, be required to bear more than its proportional share of cleanup costs at a site where it has liability if payments cannot be obtained from other responsible parties |
| Liability under these laws involves inherent uncertainties |
| Violations of environmental, health and safety laws are subject to civil, and in some cases, criminal sanctions |
| We have received notices from governmental agencies that we may be a PRP at certain sites under CERCLA or other environmental cleanup laws |
| We have entered into “de minimis” settlement agreements with the United States with respect to certain CERCLA sites, pursuant to which we have made one-time cash payments and received statutory protection from future claims arising from those sites |
| At other sites for which we have received notice of potential CERCLA liability, we have provided information to the EPA that we believe demonstrates that we are not liable and the EPA has not asserted claims against us with respect to such sites |
| In some instances, we have agreed, pursuant to consent orders or agreements with the appropriate governmental agencies, to undertake investigations which currently are in progress, to determine whether remedial action may be required to address such contamination |
| At other locations, we have entered into consent orders or agreements with appropriate governmental agencies to perform remedial activities that will address identified site conditions |
| At the present time, we are not aware of any additional sites for which we expect to receive a notice from the EPA of potential CERCLA liability |
| However, based on past operations there is a potential that we may receive such notices in the future for sites of which we are currently unaware |
| Taking into account established reserves, expenditures for our known environmental liabilities and site conditions currently are not expected, individually or in the aggregate, to be material |
| However, material expenditures could be required in the future to remediate the contamination at these or at other current or former sites |
| We have also developed alternative mine uses |
| For example, we entered into a joint venture with a subsidiary of Veolia Environnement, a business with operations in the waste management industry |
| The joint venture is permitted by the jurisdictional environmental agency to dispose of certain stable types of hazardous waste in our salt mine in the United Kingdom |
| We believe that the mine is stable and provides a secure disposal location |
| However, we recognize that any temporary or permanent storage of hazardous waste may involve risks to the environment |
| Although we believe that we have taken these risks into account as much as possible in our planning process, it is possible that material expenditures could be required in the future to further reduce this risk, or to remediate any future contamination |
| Continued government and public emphasis on environmental issues can be expected to result in increased future investments for environmental controls at ongoing operations, which will be charged against income from future operations |
| Present and future environmental laws and regulations applicable to our operations may require substantial capital expenditures and may have a material adverse effect on our business, financial condition and results of operations |
| ” The Canadian government’s proposal to designate road salt as a toxic substance could have a material adverse effect on our business, including reduced sales and the incurrence of substantial costs and expenditures |
| In December 2001, the Canadian government released a Priority Substances List Assessment Report for road salt |
| This report found that road salts are entering the environment under conditions that may have a harmful effect or constitute a danger to the environment |
| Based on this report, the Minister of Environment has proposed designating road salt as a “toxic” substance pursuant to the Canadian Environmental Protection Act |
| Canada’s federal cabinet, which has ultimate responsibility, has not yet taken final action with respect to this proposal and is not subject to any deadline to do so |
| This proposal was subject to a public comment, during which individuals and the municipalities which comprise most of our customers expressed a variety of views, including noting the utility and cost-efficiency of salt as compared to other potential measures to reduce ice-related road hazards |
| At this point, Environment Canada has indicated that, whether or not road salts are declared toxic, their preferred course of action is the establishment of voluntary guidelines for users as opposed to any form of regulation |
| Environment Canada has been developing these guidelines based on consultation with a broad-based stakeholders group, which includes the salt industry |
| On April 3, 2004, Environment Canada published a Code of Practice to serve as these guidelines |
| The Code of Practice requires large road salt users to develop salt management plans |
| We do not believe that this will have a material direct effect on us, but the new salt management plans may lead our customers in Canada to require less road salt |
| 13 _________________________________________________________________ [72]Table of Contents COMPASS MINERALS INTERNATIONAL, INC 2005 FORM 10-K Given the importance of road salt for traffic safety and the current lack of any practical substitute, we deem it unlikely that any guidelines or regulations would result in a complete ban on the use of road salt |
| As noted in the December 2001 report, the use of road salt and other deicing agents “is an important component of strategies to keep roadways open and safe during the winter and minimize traffic crashes, injuries and mortality under icy and snowy conditions |
| ” The report further stated that mitigation measures “must be based on optimization of winter road maintenance practices so as not to jeopardize road safety, while minimizing the potential for harm to the environment |
| ” Environment Canada recently confirmed the high importance of road safety in its proposed regulation of road salt |
| In its September 22, 2003 press release in connection with the proposed Code of Practice, it indicated that the proposed code “will provide those who use road salts with a way to reduce harm to the environment without jeopardizing road safety |
| ” Since the dissemination of the December 2001 report, we have endeavored to work more closely with the national government as well as provinces and municipalities to better manage the use, storage and release of our road salts |
| We cannot predict whether the proposal to designate road salt as a toxic substance will be finalized or the promulgation of any other future regulation |
| Standardized guidelines for the use and storage of road salt or any alternate deicing products may cause us to suffer reduced sales and incur substantial costs and expenses that could have a material adverse effect on our business, financial condition and results of operations |
| In addition, while we are not aware of any similar governmental proposals for such designation of road salt in either the United States or the United Kingdom, we cannot guarantee that such proposals will not arise |
| Our operations are dependent on our rights to mine our property and having received the required permits and approvals from governmental authorities |
| We hold numerous governmental, environmental, mining and other permits and approvals authorizing operations at each of our facilities |
| A decision by a governmental agency to deny or delay issuing a new or renewed permit or approval, or to revoke or substantially modify an existing permit or approval, could have a material adverse effect on our ability to continue operations at the affected facility |
| Expansion of our existing operations also is predicated upon securing the necessary environmental or other permits or approvals |
| We currently do not have any material pending permits or approvals |
| In addition, we are aware of an aboriginal land claim filed by The Chippewas of Nawash and the Chippewas of Saugeen (the “Chippewas”) in the Ontario Superior Court against The Attorney General of Canada and Her Majesty The Queen In Right of Ontario |
| The Chippewas claim that a large part of the land under Lake Huron was never conveyed by treaty and therefore belongs to the Chippewas |
| The land claimed includes land under which our Goderich mine operates and has mining rights granted to it by the government of Ontario |
| We are not a party to this court action |
| Similar claims are pending with respect to other parts of the Great Lakes by other aboriginal claimants |
| We have been informed by the Ministry of the Attorney General of Ontario that “Canada takes the position that the common law does not recognize aboriginal title to the Great Lakes and its connecting waterways |
| ” We do not believe that this action will result in a material adverse financial effect on the Company |
| Protection of proprietary technology — Our intellectual property may be misappropriated or subject to claims of infringement |
| We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright and trade secret protection, as well as licensing agreements and third-party nondisclosure and assignment agreements |
| We cannot assure you that any of our applications for protection of our intellectual property rights will be approved or that others will not infringe or challenge our intellectual property rights |
| We also rely on unpatented proprietary technology |
| It is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology |
| To protect our trade secrets and other proprietary information, we require employees, consultants, advisors and collaborators to enter into confidentiality agreements |
| Many of our important brand names are registered as trademarks in the United States and foreign countries |
| These registrations can be renewed if the trademark remains in use |
| These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure |
| If we are unable to maintain the proprietary nature of our technologies, we may lose the competitive advantage provided by our intellectual property |
| As a result, our results of operations may be adversely affected |
| If we are unsuccessful in negotiating new collective bargaining agreements, we may experience significant increases in the cost of labor or a disruption in our operations |
| As of December 31, 2005, we had 1cmam506 employees, of which 746 are employed in the United States, 673 in Canada and 87 in the United Kingdom |
| Approximately 35prca of our US workforce and 55prca of our global workforce is represented by labor unions |
| Of our nine material collective bargaining agreements, four will expire in 2006, three will expire in 2007 and two will expire in 2008 |
| Additionally, approximately 6prca of our workforce is employed in Europe where trade union membership is common |
| Although we believe that our relations with our employees are good, as a result of general economic, financial, competitive, legislative, political and other factors beyond our control, we cannot assure you that we will be successful in negotiating new collective bargaining agreements, that such negotiations will not result in significant increases in the cost of labor or that a breakdown in such negotiations will not result in the disruption of our operations |
| We rely on independent distributors and the loss of a substantial number of these distributors may reduce our profits and sales |
| In addition to our own direct sales force, we depend on the services of independent distributors to sell our products and provide service and aftermarket support to our customers |
| In 2005, 12prca of our sales, net of shipping and handling costs, were generated through these independent distributors |
| Many of these independent distributors are not bound to us by exclusive 14 _________________________________________________________________ [73]Table of Contents COMPASS MINERALS INTERNATIONAL, INC 2005 FORM 10-K distribution contracts and may offer products of, and services to, businesses that compete with ours |
| In addition, the majority of the distribution contracts we have with these independent distributors are cancelable by the distributor after providing us with notice, which on average is six months prior to termination |
| The loss of a substantial number of these distributors or the decision by many of these distributors to offer competitors’ products to the end customers could materially reduce our sales and profits |
| If we cannot successfully complete acquisitions or integrate acquired businesses, our growth may be limited and our financial condition adversely affected |
| Our business strategy includes supplementing internal growth by pursuing acquisitions of small complementary businesses |
| We may be unable to complete acquisitions on acceptable terms, identify suitable businesses to acquire or successfully integrate acquired businesses in the future |
| We compete with other potential buyers for the acquisition of other small complementary businesses |
| These competition and regulatory considerations may result in fewer acquisition opportunities |
| If we cannot complete acquisitions, our growth may be limited and our financial condition may be adversely affected |
| Our business is dependent upon highly skilled personnel, and the loss of key personnel may have a material adverse effect on our development and results of operations |
| The success of our business is dependent on our ability to attract and retain highly skilled managers and other personnel |
| We cannot assure you that we will be able to attract and retain the personnel necessary for the development of our business |
| The loss of the services of key personnel or the failure to attract additional personnel as required could have a material adverse effect on our development and results of operations |
| We do not currently maintain “key person” life insurance on any of our key employees |
| On November 4, 2005, our Chief Executive Officer, Michael E Ducey, announced plans to retire at the end of 2006 |
| The Company’s board of directors has initiated a search for his replacement although no successor has been named |
| Risks Related to Our Common Stock Our common stock price may be volatile |
| Our common stock price may fluctuate in response to a number of events, including, but not limited to: • our quarterly operating results; • weather conditions that impact our highway deicing product line; • future announcements concerning our business; • changes in financial estimates and recommendations by securities analysts; • changes and developments affecting internal controls over financial reporting; • actions of competitors; • market and industry perception of our success, or lack thereof, in pursuing our growth strategy; • changes in government and environmental regulation; • changes and developments affecting the salt industry; • general market, economic and political conditions; and • natural disasters, terrorist attacks and acts of war |
| We may be restricted from paying cash dividends on our common stock in the future |
| We currently declare and pay regular quarterly cash dividends on our common stock |
| Any payment of cash dividends will depend upon our financial condition, earnings, legal requirements, restrictions in our debt agreements and other factors deemed relevant by our board of directors |
| The terms of our senior secured credit facilities limit annual dividends to dlra55 million plus 50prca of preceding year net income, as defined, and may restrict us from paying cash dividends on our common stock if CMG’s total leverage ratio exceeds 4dtta25 or if a default or event of default has occurred and is continuing under the facilities |
| The terms of our indentures may also restrict us from paying cash dividends on our common stock |
| The payment of a cash dividend on our common stock is considered a restricted payment under our indentures and we are restricted from paying any cash dividend on our common stock unless we satisfy minimum requirements with respect to our cumulative consolidated net income (plus any additional cash proceeds received upon the issuance of our common stock) and our fixed charge coverage ratio |
| We cannot assure you that the agreements governing our current and future indebtedness, including our senior secured credit facilities, will permit us to pay dividends on our common stock |
| Shares eligible for future sale may adversely affect our common stock price |
| Sales of substantial amounts of our common stock in the public market, or the perception that these sales may occur, could cause the market price of our common stock to decline |
| This could also impair our ability to raise additional capital through the sale of our equity securities |
| We are authorized to issue up to 200cmam000cmam000 shares of common stock, of which 31cmam834cmam324 shares of common stock were outstanding and 786cmam519 shares of common stock were issuable upon the exercise of outstanding stock options, issuance of earned deferred stock units, and vesting of restricted stock units as of December 31, 2005 |
| We cannot predict the size of future issuances of our common stock or the effect, if any, that future sales and issuances of shares of our common stock would have on the market price of our common stock |