Failure to Attract and Retain Key Management and Technical Personnel  International Operations Exposed to Currency Devaluation and Fluctuation Risk  Consolidation of the Company's Customer Base  Risks Associated with Vessel Construction and Maintenance  Also, difficult economic market conditions and/or prolonged distress in credit and capital markets may  hamper the ability of shipyards to meet their scheduled deliveries of new vessels or the ability of the  company to renew its fleet through new vessel construction or acquisitions. In addition, there is always the  risk of insolvency of the shipyards that construct or drydock our vessels, which could adversely affect our  new construction program, and consequently, adversely affect our financial condition, results of operations  or cash flows. A significant delay in either construction or drydockings of vessels could have a material adverse effect on  contract commitments and revenues with respect to vessels under construction, conversion or other  drydockings. Significant cost overruns or delays for vessels under construction could also adversely affect  the company's financial condition, results of operations or cash flows. The demand for vessels currently  under construction may diminish from originally anticipated levels. If the company fails to obtain favorable  contracts for newly constructed vessels, such failure could have a material adverse effect on the company's  revenues and profitability. The company has a number of vessels under construction, and it may construct additional vessels in  response to current and future market conditions. In addition, the company routinely engages shipyards to  drydock vessels for regulatory compliance and to provide repair and maintenance services. Construction  projects and drydockings are subject to risks of delay and cost overruns, resulting from shortages of  equipment, materials and skilled labor; lack of shipyard availability; unforeseen design and engineering  problems; work stoppages; weather interference; unanticipated cost increases; unscheduled delays in the  delivery of material and equipment; and inability to obtain necessary certifications and approvals. Oil and natural gas companies, energy companies and drilling contractors have undergone consolidation,  and additional consolidation is possible. Consolidation reduces the number of customers for the company’s  equipment, and may negatively affect exploration, development and production activity as consolidated  companies focus on increasing efficiency and reducing costs and delay or abandon exploration activity with  less promise. Such activity could adversely affect demand for the company's vessels, and reduce the  company's revenues. In addition, consolidation could result in the absorption of an oil and gas company with  whom the company has a strong commercial relationship into another company with which the company  does not and vice-versa.  Due to the company’s international operations, the company is exposed to foreign currency exchange rate  risks on all charter hire contracts denominated in foreign currencies. For some of our international contracts,  a portion of the revenue and local expenses are incurred in local currencies with the result that the company  is at risk of changes in the exchange rates between the U.S. Dollar and foreign currencies. The company  generally does not hedge against any foreign currency rate fluctuations associated with foreign currency  contracts that arise in the normal course of business. To minimize the financial impact of these items, the  company attempts to contract a significant majority of its services in U.S. dollars. The company attempts to  minimize its financial impact of these risks, by matching the currency of the company’s operating costs with  the currency of the revenue streams when considered appropriate. The company continually monitors the  currency exchange risks associated with all contracts not denominated in U.S. dollars.  The company’s success depends on the continued service of its executive officers and other key  management and technical personnel (particularly the company’s area managers, fleet and information  technology personnel) and the company’s ability to attract, retain, and motivate highly qualified personnel.  The loss of the services of a number of the company’s executive officers, area managers, fleet personnel or  other key employees, or the company’s ability to recruit replacements for such personnel or to otherwise  attract, retain and motivate highly qualified personnel could harm the company. The company currently does  not carry key employee life insurance payable to the company with respect to any of its management  employees. -19- 