ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this report are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements usually relate to future events and anticipated revenues, earnings, cash flows or other aspects of our operations or operating results. Forward-looking statements are often identified by the words "believe," "expect," "anticipate," "plan," "intend," "foresee," "should," "would," "could," "may," "estimate," "outlook" and similar expressions, including the negative thereof. The absence of these words, however, does not mean that the statements are not forward-looking. These forward-looking statements are based on our current expectations, beliefs and assumptions concerning future developments and business conditions and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All of our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Known material factors that could cause actual results to differ materially from those contemplated in the forward-looking statements, include those set forth in Part II, Item 1A, "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q and Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as well as the following:
• Demand for our systems and services, which is affected by changes in the price of, and demand for, crude oil and natural gas in domestic and international markets;

• Potential liabilities arising out of the installation or use of our systems;

• Continuing consolidation within our customers' industries;

• U.S. and international laws and regulations that may increase our costs, limit the demand for our products and services or restrict our operations;

• Disruptions in the political, regulatory, economic and social conditions of the foreign countries in which we conduct business;

• Fluctuations in currency markets worldwide;

• Cost overruns that may affect profit realized on our fixed price contracts;

• The cumulative loss of major contracts or alliances;

• Our dependence on the continuing services of key managers and employees and our ability to attract, retain and

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motivate additional highly-skilled employees for the operation and expansion of our business;
• Rising costs and availability of raw materials;

• A failure of our information technology infrastructure or any significant breach of security;

• Our ability to develop and implement new technologies and services, as well as our ability to protect and maintain critical intellectual property assets;

• The outcome of uninsured claims and litigation against us;

• Disruptions in the timely delivery of our backlog and its effect on our future sales, profitability and our relationships with our customers;

• Disruptions in the financial and credit markets and its impact on our customers' activity levels, spending for our products and services and ability to pay amounts owed us;

• Deterioration in future expected profitability or cash flows and its effect on our goodwill;

• Downgrade in the ratings of our debt could restrict our ability to access the debt capital markets; and

• Our ability to successfully integrate Pure Energy's operations and to realize synergies from the acquisition.

We wish to caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.