strength in diversity

exemptions, several states have not. If a court or other applicable authority were to determine that Environmental
Services does not benefit from federal or state exemptions from liability in providing emergency response
services, Environmental Services could be liable together with the local contractor and the responsible party for
any resulting damages, including damages caused by others. In the international market, Environmental Services
does not benefit from the spill response liability protection provided by the CWA and therefore is subject to the
liability terms and conditions negotiated with its international clients.
Inland River Services could experience variation in freight rates. Freight transportation rates may fluctuate
as the volume of cargo and availability of barges changes. Volume of freight transported on the U.S. Inland River
Waterways may vary as a result of various factors, such as global economic conditions and business cycles,
domestic and international agricultural production and demand and foreign currency exchange rates. Barge
participation in the industry can also vary year to year and is dependent on the number of barges built and retired
from service. Extended periods of high barge availability and low cargo demand could adversely impact Inland
River Services.
Inland River Services’ results of operations could be adversely affected by the decline in United States
grain exports. Inland River Services’ business is significantly affected by the volume of grain exports handled
through U.S. Gulf of Mexico ports. Grain exports can vary due to a number of factors including the crop harvest
yield levels in the United States and abroad, and the demand for grain in the United States. The shortage of
available grain overseas can increase demand for U.S. grain. Conversely, an abundance of grain overseas can
decrease demand for U.S. grain. A decline in exports could result in excess barge capacity, which would likely
lower freight rates earned by Inland River Services.
Inland River Services’ results of operations could be adversely affected by international economic and
political factors. The actions of foreign governments could affect the import and export of the dry-bulk
commodities typically transported by Inland River Services. Foreign trade agreements and each country’s
adherence to the terms of such agreements can raise or lower demand for U.S. imports and exports of the
dry-bulk commodities Inland River Services transports. National and international boycotts and embargoes of
other countries’ or U.S. imports or exports together with the raising or lowering of tariff rates will affect the
demand for transportation of the cargos Inland River Services transports. These actions or developments could
have an adverse impact on Inland River Services.
Inland River Services’ results of operations are affected by seasonal activity. Inland River Services’
business is seasonal, and its quarterly revenues and profits have historically been lower during the first and
second quarters of the year and higher during the third and fourth quarters during the grain harvest.
Inland River Services’ results of operations are affected by adverse weather and river conditions. Weather
patterns can affect river levels and cause ice conditions during winter months, which can hamper barge
navigation. Locks on river systems may be closed for maintenance or other causes, which may delay barge
movements. These conditions could adversely impact Inland River Services.
Inland River Services’ results of operations could be materially and adversely affected by fuel price
fluctuations. For the most part, Inland River Services purchases towboat and fleeting services from third party
vendors. The price of these services can rise when fuel prices escalate and could adversely impact Inland River
Services’ results of operations.
The Company’s insurance coverage may be inadequate to protect it from the liabilities that could arise in
its businesses. Although the Company maintains insurance coverage against the risks related to its businesses,
risks may arise for which it may not be insured. Claims covered by insurance are subject to deductibles, the
aggregate amount of which could be material. Insurance policies are also subject to compliance with certain
conditions, the failure of which could lead to a denial of coverage as to a particular claim or the voiding of a
particular insurance policy. There also can be no assurance that existing insurance coverage can be renewed at
commercially reasonable rates or that available coverage will be adequate to cover future claims. If a loss occurs
that is partially or completely uninsured, the Company could be exposed to substantial liability.
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