| GOODYEAR TIRE & RUBBER CO /OH/ ITEM 1A RISK FACTORS You should carefully consider the risks described below and other information contained in this Annual Report on Form 10-K when considering an investment decision with respect to our securities |
| Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, may also impair our business operations |
| Any of the events discussed in the risk factors below may occur |
| If they do, our business, results of operations or financial condition could be materially adversely affected |
| In such an instance, the trading price of our securities could decline, and you might lose all or part of your investment |
| It is uncertain whether we will successfully implement the turnaround strategy for our North American Tire segment |
| We are in the process of implementing a turnaround strategy for our North American Tire Segment |
| Based in part on successes in implementing this strategy, North American Tire had positive segment operating income in 2004 and 2005, after recording operating losses in the previous two years |
| Additional progress in implementing the turnaround strategy is needed, however, to enable the North American Tire business segment to continue to achieve and maintain profitability |
| The ability of the North American Tire Segment to achieve and maintain profitability may be hampered by trends that continue to negatively affect the business, including industry overcapacity, which limits pricing power, increased competition from low-cost manufacturers and uncertain economic conditions in the United States |
| In addition, our North American Tire Segment has been, and may continue to be negatively affected by higher than expected raw materials and energy costs, weakness in the domestic auto industry, as well as the continuing burden of legacy pension and postretirement benefit costs |
| The success of our turnaround strategy is dependent, in part, on our ability to address and manage these costs as well as the costs associated with operating our manufacturing facilities in North America and to implement productivity improvements in these facilities |
| The success of the turnaround strategy is also dependent on North American Tire’s ability to continue to improve the proportion, or mix, of higher margin tires it sells |
| In order to continue this improvement, North American Tire must be successful in marketing and selling products that offer higher margins such as the Assurance and Fortera lines of tires and in developing additional higher margin tires that achieve broad market acceptance |
| Other initiatives that may impact our turnaround effort include our ability to successfully expand into the truck service business and to continue our selective fitment strategy with our OE customers |
| We cannot assure that our turnaround strategy will be successful |
| If our turnaround strategy is not successful, we may not be able to achieve or sustain future profitability, which would impair our ability to meet our debt and other obligations and would otherwise negatively affect our financial condition and operations |
| 11 _________________________________________________________________ [69]Table of Contents We face significant global competition and our market share could decline |
| We compete with other tire manufacturers on the basis of product design, performance, price, reputation, warranty terms, customer service and consumer convenience |
| On a worldwide basis, we have two major competitors, Bridgestone (based in Japan) and Michelin (based in France), that dominate the markets of the countries in which they are based and are aggressively seeking to maintain or improve their respective shares of the North American, European, Latin American and other world tire markets |
| Other significant competitors include Continental, Cooper Tire, Pirelli, Toyo, Yokohama, Kumho, Hankook and various regional tire manufacturers |
| Our competitors produce significant numbers of tires in low-cost markets |
| We are limited by our master contract with the United Steelworkers (USW) in our ability to shift production of certain products from US facilities to low-cost markets and our credit agreements limit the amount of capital expenditures we may make |
| Our ability to compete successfully will depend, in significant part, on our ability to reduce costs by such means as reduction of excess capacity, leveraging global purchasing, improving productivity, elimination of redundancies and increasing production at low-cost supply sources |
| If we are unable to compete successfully, our market share may decline, materially adversely affecting our results of operations and financial condition |
| Our pension plans are significantly underfunded and our required contributions to these plans are expected to increase |
| The unfunded amount of the projected benefit obligation for our US and non-US pension plans was dlra2 billion and dlra1 billion at December 31, 2005, respectively |
| Our funding obligations for our US plans are governed by the Employee Retirement Income Security Act of 1974, or ERISA In 2005, we met or exceeded our required funding obligations for these plans under ERISA Estimates of the amount and timing of our future funding obligations are based on various assumptions |
| These include assumptions concerning, among other things, the actual and projected market performance of the pension plan assets; interest rates on long-term obligations; statutory requirements; and demographic data for pension plan participants |
| The amount and timing of our future funding obligations also depend on whether we elect to make contributions to the pension plans in excess of those required under ERISA, as such voluntary contributions could reduce or defer our future funding obligations |
| At the end of 2005, interest rate relief measures relating to the calculation of pension funding obligations expired |
| Since new legislation has not yet been enacted, the interest rate reverted to a 30-year US Treasury bond basis beginning in 2006 and we estimate that we will be required to contribute approximately dlra700 million to dlra750 million to our domestic pension plans in 2006 under this basis |
| If new legislation is enacted in 2006, we expect that the interest rate used for 2006 will be based on a corporate bond basis |
| Using an estimate of these rates would result in estimated required contributions to our domestic pension plans in 2006 of dlra550 million to dlra600 million |
| For more information on the calculation of our estimated domestic pension plan contributions, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Commitments and Contingent Liabilities |
| ” The anticipated funding obligations under our pension plans for 2007 and thereafter cannot be reasonably estimated at this time because of the current uncertainty around pension reform legislation |
| Pension reform legislation before Congress would replace the interest rate used to calculate pension funding obligations starting in 2007, require more rapid funding of underfunded plans, restrict the use of techniques that reduce funding volatility, and limit pension increases in underfunded plans |
| In addition, Congress has recently passed legislation increasing the insurance premiums charged by the Pension Benefit Guaranty Corporation |
| It is not possible to predict whether Congress will adopt pension reform legislation, or what form any final legislation might take |
| If legislation similar to the pending bills were enacted, it could materially increase our pension funding obligations and insurance premiums, and could limit our ability to negotiate pension increases for our union-represented employees |
| Nevertheless, we presently expect that our funding obligations under our pension plans in 2007 and subsequent years will be substantial and could have a material adverse impact on our liquidity |
| 12 _________________________________________________________________ [70]Table of Contents Higher raw material and energy costs may materially adversely affect our operating results and financial condition |
| Raw material costs increased significantly over the past few years driven by increases in costs of oil and natural rubber |
| Market conditions may prevent us from passing these increased costs on to our customers through timely price increases |
| Additionally, higher raw material costs around the world may continue to hinder our ability to fully realize our turnaround strategy |
| Continued pricing pressures from vehicle manufacturers may materially adversely affect our business |
| Approximately 28prca of the tires we sell are sold to vehicle manufacturers for mounting as OE Pricing pressure from vehicle manufacturers has been a characteristic of the tire industry in recent years |
| Many vehicle manufacturers have policies of seeking price reductions each year |
| Although we have taken steps to reduce costs and resist price reductions, current and future price reductions could materially adversely impact our sales and profit margins |
| If we are unable to offset continued price reductions through improved operating efficiencies and reduced expenditures, those price reductions may result in declining margins and operating results |
| If we fail to extend or renegotiate our primary collective bargaining contracts with our labor unions as they expire from time to time, or if our unionized employees were to engage in a strike or other work stoppage, our business and operating results could be materially adversely affected |
| We are a party to collective bargaining contracts with our labor unions, which represent a significant number of our employees |
| In particular, our master collective bargaining agreement with the USW covers approximately 13cmam600 employees in the United States at December 31, 2005 and expires in July 2006 |
| Although we believe that our relations with our employees are satisfactory, no assurance can be given that we will be able to successfully extend or renegotiate our collective bargaining agreements as they expire from time to time |
| If we fail to extend or renegotiate our collective bargaining agreements, if disputes with our unions arise, or if our unionized workers engage in a strike or other work stoppage, we could incur higher labor costs or experience a significant disruption of operations, which could have a material adverse effect on our business, financial position and results of operations |
| Pending litigation relating to our 2003 restatement could have a material adverse effect on our financial position, cash flows and results of operation |
| At least 36 lawsuits were filed against us and certain of our current or former officers or directors following our October 2003 announcement regarding the restatement of our previously issued financial results |
| These actions have been consolidated into three separate actions in the United States District Court for the Northern District of Ohio |
| We intend to vigorously defend these lawsuits |
| However, we cannot currently predict or determine the outcome or resolution of these proceedings or the timing for their resolution, or reasonably estimate the amount, or potential range, of possible loss, if any |
| In addition to any damages that we may suffer, our management’s efforts and attention may be diverted from our ordinary business operations in order to address these claims |
| The final resolution of these lawsuits could have a material adverse effect on our financial position, cash flows and results of operation |
| An ongoing SEC investigation regarding our accounting restatement could materially adversely affect us |
| Following our October 2003 announcement regarding the restatement of our previously issued financial results, the SEC advised us that it had initiated an informal inquiry into the facts and circumstances related to the restatement |
| On February 5, 2004, the SEC advised us that it had approved the issuance of a formal order of investigation |
| On August 16, 2005, we announced that we had received a “Wells Notice” from the SEC indicating that the staff of the SEC intends to recommend that a civil or administrative enforcement action be brought against us for alleged violations of the Securities Exchange Act of 1934, relating to the maintenance of books, records and internal accounting controls, the establishment of disclosure controls and procedures, 13 _________________________________________________________________ [71]Table of Contents and periodic SEC filing requirements |
| The alleged violations relate to the account reconciliation matters giving rise to our initial decision to restate in October 2003 |
| We have also been informed that Wells Notices have been issued to a former chief financial officer and a former chief accounting officer of ours |
| We continue to cooperate with the SEC regarding this matter |
| We are unable to predict the outcome of this process, and an unfavorable outcome could harm our reputation and our business |
| Our long-term ability to meet our obligations and to repay maturing indebtedness is dependent on our ability to access capital markets in the future and to improve our operating results |
| The adequacy of our liquidity depends on our ability to achieve an appropriate combination of operating improvements, financing from third parties, access to capital markets and asset sales |
| Although we completed a major refinancing of our senior secured credit facilities on April 8, 2005, issued dlra400 million in Senior unsecured notes in June 2005, and repaid our 6^3/8prca Euro Notes due 2005 upon maturity on June 6, 2005, we may undertake additional financing actions in the capital markets in order to ensure that our future liquidity requirements are addressed |
| These actions may include the issuance of additional equity |
| Our access to the capital markets cannot be assured and is dependent on, among other things, the degree of success we have implementing our North American Tire turnaround strategy |
| See “— It is uncertain whether we will successfully implement the turnaround strategy for our North American Tire segment |
| ” Future liquidity requirements also may make it necessary for us to incur additional debt |
| A substantial portion of our assets is subject to liens securing our indebtedness |
| As a result, we are limited in our ability to pledge our remaining assets as security for additional secured indebtedness |
| Our failure to access the capital markets or incur additional debt in the future could have a material adverse effect on our liquidity and operations, and could require us to consider further measures, including deferring planned capital expenditures, reducing discretionary spending, selling additional assets and restructuring existing debt |
| We have a substantial amount of debt, which could restrict our growth, place us at a competitive disadvantage or otherwise materially adversely affect our financial health |
| As of December 31, 2005, our debt (including capital leases) on a consolidated basis was approximately dlra5dtta4 billion |
| Our substantial amount of debt and other obligations could have important consequences |
| For example, it could: • Make it more difficult for us to satisfy our obligations; • Impair our ability to obtain financing in the future for working capital, capital expenditures, research and development, acquisitions or general corporate requirements; • Increase our vulnerability to general adverse economic and industry conditions; • Limit our ability to use operating cash flow in other areas of our business because we would need to dedicate a substantial portion of these funds for payments on our indebtedness; • Limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and • Place us at a competitive disadvantage compared to our competitors that have less debt |
| The agreements governing our debt, including our credit agreements, limit, but do not prohibit, us from incurring additional debt and we may incur a significant amount of additional debt in the future, including additional secured debt |
| If new debt is added to our current debt levels, our ability to satisfy our debt obligations may become more limited |
| Our ability to make scheduled payments on, or to refinance, our debt and other obligations will depend on our financial and operating performance, which, in turn, is subject to our ability to implement our turnaround strategy, prevailing economic conditions and certain financial, business and other factors beyond our control |
| If our cash flow and capital resources are insufficient to fund our debt service and other obligations, including required pension contributions, we may be forced to reduce or delay expansion plans and capital expenditures, sell material assets or operations, obtain additional capital or restructure our debt |
| We cannot assure you that our operating performance, cash flow and capital resources will be sufficient to pay our debt obligations when they become due |
| We cannot assure you that we would be able to dispose of material assets or operations or 14 _________________________________________________________________ [72]Table of Contents restructure our debt or other obligations if necessary or, even if we were able to take such actions, that we could do so on terms that were acceptable to us |
| Any failure to be in compliance with any material provision or covenant of our debt instruments could have a material adverse effect on our liquidity and operations |
| The indentures and other agreements governing our secured credit facilities and secured notes and our other outstanding indebtedness impose significant operating and financial restrictions on us |
| These restrictions may affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise |
| These restrictions limit our ability to, among other things: • Incur additional indebtedness and issue preferred stock; • Pay dividends and other distributions with respect to our capital stock or repurchase our capital stock or make other restricted payments; • Enter into transactions with affiliates; • Create or incur liens to secure debt; • Make certain investments; • Enter into sale/leaseback transactions; • Sell or otherwise transfer or dispose of assets; • Incur dividend or other payment restrictions affecting certain subsidiaries; • Use proceeds from the sale of certain assets; and • Engage in certain mergers or consolidations and transfers of substantially all assets |
| Our ability to comply with these covenants may be affected by events beyond our control, and unanticipated events could require us to seek waivers or amendments of covenants or alternative sources of financing or to reduce expenditures |
| We cannot assure you that such waivers, amendments or alternative financing could be obtained, or if obtained, would be on terms acceptable to us |
| Our first lien credit facility and European term loan and revolving credit facility require us to maintain certain specified thresholds of Consolidated EBITDA to Consolidated Interest Expense (as defined in each of the facilities) |
| In addition, under these facilities, we are required not to permit our ratio of Consolidated Net Secured Indebtedness (net of cash in excess of dlra400 million) to Consolidated EBITDA to be greater than certain specified thresholds |
| These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict capital activities |
| A breach of any of the covenants or restrictions contained in any of our existing or future financing agreements, including the financial covenants in our secured credit facilities, could result in an event of default under those agreements |
| Such a default could allow the lenders under our financing agreements, if the agreements so provide, to discontinue lending, to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies, and/or to declare all borrowings outstanding thereunder to be due and payable |
| In addition, the lenders could terminate any commitments they have to provide us with further funds |
| If any of these events occur, we cannot assure you that we will have sufficient funds available to pay in full the total amount of obligations that become due as a result of any such acceleration, or that we will be able to find additional or alternative financing to refinance any such accelerated obligations |
| Even if we obtain additional or alternative financing, we cannot assure you that it would be on terms that would be acceptable to us |
| Finally, we have agreed with the USW that if we do not remain in compliance with our prevailing principal bank financial covenants, we will seek a substantial private equity investment |
| Any such investor or investors could exercise influence over the management of our business and may have interests that conflict with the interests of our other investors |
| We cannot assure you that we will be able to remain in compliance with the covenants to which we are subject in the future and, if we fail to do so, that we will be able to obtain waivers from our lenders or amend the covenants |
| 15 _________________________________________________________________ [73]Table of Contents Our capital expenditures may not be adequate to maintain our competitive position |
| Our capital expenditures are limited by our liquidity and capital resources and restrictions in our credit agreements |
| The amount Goodyear has available for capital spending is limited by the need to pay its other expenses and to maintain adequate cash reserves and borrowing capacity to meet unexpected demands that may arise |
| In addition, our credit facilities limit the amount of capital expenditures that we may make to dlra700 million in each year through 2010 |
| The amounts of permitted capital expenditures may be increased with the proceeds of equity issuances |
| In addition, unused capital expenditures may be carried over into the next year |
| In 2005, capital expenditures as defined in our borrowing agreements totaled dlra621 million and are expected to increase to approximately dlra665 million in 2006 |
| Capital expenditures as defined in our borrowing agreements do not include capitalized software and include non-cash capital lease transactions and, accordingly, differ from capital expenditures reported in our Consolidated Statements of Cash Flows |
| We believe that our ratio of capital expenditures to sales is lower than the comparable ratio for our principal competitors |
| Productivity improvements through process re-engineering, design efficiency and manufacturing cost improvements may be required to offset potential increases in labor and raw material costs and competitive price pressures |
| In addition, as part of our strategy to increase the percentage of tires sold in higher cost markets that are produced at our lower-cost production facilities, we may need to modernize or expand certain of those facilities |
| If we are unable to make sufficient capital expenditures, or to maximize the efficiency of the capital expenditures we do make, we may be unable to achieve productivity improvements, which may harm our competitive position |
| Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly |
| Certain of our borrowings, primarily borrowings under our credit facilities, are at variable rates of interest and expose us to interest rate risk |
| If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, which would require us to use more of our available cash to service our indebtedness |
| There can be no assurance that we will be able to enter into swap agreements or other hedging arrangements in the future, or that existing or future hedging arrangements will offset increases in interest rates |
| At December 31, 2005, we had dlra2cmam764 million of variable rate debt outstanding |
| We may incur significant costs in connection with asbestos claims |
| We are among many defendants named in legal proceedings involving claims of individuals relating to alleged exposure to asbestos |
| At December 31, 2005, approximately 125cmam500 claims were pending against us alleging various asbestos-related personal injuries purported to have resulted from alleged exposure to asbestos in certain rubber encapsulated products or aircraft braking systems manufactured by us in the past or to asbestos in certain of our facilities |
| We expect that additional claims will be brought against us in the future |
| Our ultimate liability with respect to such pending and unasserted claims is subject to various uncertainties, including the following: • the number of claims that are brought in the future; • the costs of defending and settling these claims; • the risk of insolvencies among our insurance carriers; • the possibility that adverse jury verdicts could require us to pay damages in amounts greater than the amounts for which we have historically settled claims; • the risk of changes in the litigation environment or Federal and state law governing the compensation of asbestos claimants; and • the risk that the bankruptcies of other asbestos defendants may increase our costs |
| Because of the uncertainties related to such claims, it is possible that we may incur a material amount in excess of our current reserve for such claims |
| In addition, if any of the foregoing risks were to materialize, the 16 _________________________________________________________________ [74]Table of Contents resulting costs could have a material adverse impact on our liquidity, financial position and results of operations in future periods |
| We may be required to deposit cash collateral to support an appeal bond if we are subject to a significant adverse judgment, which may have a material adverse effect on our liquidity |
| We are subject to various legal proceedings |
| If we wish to appeal any future adverse judgment in any of these proceedings, we may be required to post an appeal bond with the relevant court |
| We may be required to issue a letter of credit to the surety posting the bond |
| We may issue up to an aggregate of dlra700 million in letters of credit under our dlra1dtta5 billion US first lien credit facility |
| As of December 31, 2005, we had dlra499 million in letters of credit issued under this facility |
| If we are subject to a significant adverse judgment and do not have sufficient availability under our credit facilities to issue a letter of credit to support an appeal bond, we may be required to pay down borrowings under the facilities or deposit cash collateral in order to stay the enforcement of the judgment pending an appeal |
| A significant deposit of cash collateral may have a material adverse effect on our liquidity |
| If we are unable to post cash collateral, we may be unable to stay enforcement of the judgment |
| We are subject to extensive government regulations that may materially adversely affect our operating results |
| We are subject to regulation by the Department of Transportation and by the National Highway Traffic Safety Administration, or NHTSA, which have established various standards and regulations applicable to tires sold in the United States and tires sold in a foreign country that are identical or substantially similar to tires sold in the United States |
| NHTSA has the authority to order the recall of automotive products, including tires, having safety-related defects |
| NHTSA’s regulatory authority was expanded in November 2000 as a result of the enactment of the Transportation Recall Enhancement, Accountability, and Documentation Act, or TREAD Act |
| The TREAD Act imposes numerous requirements with respect to the early warning reporting of warranty claims, property damage claims, and bodily injury and fatality claims and also requires tire manufacturers, among other things, to conform with revised and more rigorous tire testing standards, once the revised standards are implemented |
| Compliance with the TREAD Act regulations will increase the cost of producing and distributing tires in the United States |
| In addition, while we believe that our tires are free from design and manufacturing defects, it is possible that a recall of our tires, under the TREAD Act or otherwise, could occur in the future |
| A substantial recall could have a material adverse effect on our reputation, operating results and financial position |
| Compliance with these and other Federal, state and local laws and regulations in the future may require a material increase in our capital expenditures and could materially adversely affect the Company’s earnings and competitive position |
| Our international operations have certain risks that may materially adversely affect our operating results |
| Goodyear has manufacturing and distribution facilities throughout the world |
| The international operations are subject to certain inherent risks, including: • exposure to local economic conditions; • adverse changes in the diplomatic relations of foreign countries with the United States; • hostility from local populations and insurrections; • adverse currency exchange controls; • restrictions on the withdrawal of foreign investment and earnings; • withholding taxes and restrictions on the withdrawal of foreign investment and earnings; • labor regulations; • expropriations of property; • the potential instability of foreign governments; • risks of renegotiation or modification of existing agreements with governmental authorities; • export and import restrictions; and • other changes in laws or government policies |
| 17 _________________________________________________________________ [75]Table of Contents The likelihood of such occurrences and their potential effect on Goodyear vary from country to country and are unpredictable |
| Certain regions, including Latin America and Asia, are inherently more economically and politically volatile and as a result, our business units that operate in these regions could be subject to significant fluctuations in sales and operating income from quarter to quarter |
| Because a significant percentage of our operating income in recent years has come from these regions, adverse fluctuations in the operating results in these regions could have a disproportionate impact on our results of operations in future periods |
| We have foreign currency translation and transaction risks that may materially adversely affect our operating results |
| The financial condition and results of operations of certain of our operating entities are reported in various foreign currencies and then translated into US dollars at the applicable exchange rate for inclusion in our financial statements |
| As a result, the appreciation of the US dollar against these foreign currencies has a negative impact on our reported sales and operating margin (and conversely, the depreciation of the US dollar against these foreign currencies has a positive impact) |
| For the fiscal year ended December 31, 2005, we estimate that foreign currency translation favorably impacted sales and segment operating income by approximately dlra210 million and dlra95 million, respectively, compared to the prior year |
| The volatility of currency exchange rates may materially adversely affect our operating results |
| The terms and conditions of our global alliance with Sumitomo Rubber Industries, Ltd |
| (“SRI”) provide for certain exit rights available to SRI upon the occurrence of certain events, which could require us to make a substantial payment to acquire SRI’s interest in certain of their joint venture alliances |
| In 1999, we entered into a global alliance with SRI Under the global alliance agreements, we acquired 75prca, and SRI owned 25prca, of Goodyear Dunlop Tires Europe BV, which concurrently with the transaction acquired substantially all of SRI’s tire businesses in Europe and most of Goodyear’s tire businesses in Europe |
| We also acquired 75prca, and SRI acquired 25prca, of Goodyear Dunlop Tires North America, Ltd, a holding company that purchased SRI’s tire manufacturing operations in North America and certain of its primarily OE-related tire sales and distribution operations |
| In addition, we also acquired 25prca of the capital stock of two newly-formed tire companies in Japan, as well as 51prca of the capital stock of a newly-formed technology company and 80prca of the capital stock of a newly-formed global purchasing company |
| SRI owns the balance of the capital stock in each of these companies |
| Under the Umbrella Agreement between us and SRI, SRI has the right to require us to purchase from SRI its ownership interests in the European and North American joint ventures in September 2009 if certain triggering events have occurred |
| In addition, the occurrence of certain other events enumerated in the Umbrella Agreement, including certain bankruptcy events or changes in control of Goodyear, could provide SRI with the right to require us to repurchase these interests immediately |
| While we have not done any current valuation of these businesses, our cost of acquiring an interest in these businesses in 1999 was approximately dlra1dtta2 billion |
| Any payment required to be made to SRI pursuant to an exit under the terms of the global alliance agreements could be substantial |
| We cannot assure you that our operating performance, cash flow and capital resources would be sufficient to make such a payment or, if we were able to make the payment, that there would be sufficient funds remaining to satisfy our other obligations |
| The withdrawal of SRI from the global alliance could also have other adverse effects on our business |
| If we are unable to attract and retain key personnel our business could be materially adversely affected |
| Our business substantially depends on the continued service of key members of our management |
| The loss of the services of a significant number of members of our management could have a material adverse effect on our business |
| Our future success will also depend on our ability to attract and retain highly skilled personnel, such as engineering, marketing and senior management professionals |
| Competition for these employees is intense, and we could experience difficulty from time to time in hiring and retaining the personnel necessary to support our business |
| If we do not succeed in retaining our current employees and attracting new high quality employees, our business could be materially adversely affected |