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                                                                      EXHIBIT 99

RISK FACTORS

OUR CONTROLLED RELEASE PRODUCTS THAT ARE GENERIC VERSIONS OF BRANDED CONTROLLED
RELEASE PRODUCTS THAT ARE COVERED BY ONE OR MORE PATENTS MAY BE SUBJECT TO
LITIGATION

         We expect that our collaborators will file ANDAs for our controlled
release products that are generic versions of branded controlled release
products that are covered by one or more patents. It is likely that the owners
of the patents covering the brand name product or the sponsors of the NDA with
respect to the branded product will sue or undertake regulatory initiatives to
preserve marketing exclusivity, as Pfizer did with respect to Nifedipine XL. Any
significant delay in obtaining FDA approval to market our product candidates as
a result of litigation, as well as the expense of such litigation, whether or
not we or our collaborators are successful, could have a material adverse effect
on our business, financial condition and results of operations.

WE ARE DEPENDENT ON MYLAN AND OTHER CORPORATE COLLABORATORS TO CONDUCT
FULL-SCALE BIOEQUIVALENCE STUDIES AND CLINICAL TRIALS, OBTAIN REGULATORY
APPROVALS FOR, AND MANUFACTURE, MARKET, AND SELL OUR TIMERx CONTROLLED RELEASE
PRODUCTS

         We develop and commercialize our TIMERx controlled release products in
collaboration with pharmaceutical companies. We are parties to collaborative
agreements with third parties relating to certain of our principal products. We
are relying on Mylan to conduct full-scale bioequivalence studies and clinical
trials, obtain regulatory approvals for, and manufacture, market and sell one of
our TIMERx controlled release products, and Endo to develop and commercialize a
controlled release version of Numorphan. We are also dependent on Mylan with
respect to the marketing and sale of the 30 mg strength of Pfizer's generic
version of Procardia XL. Our collaborators may not devote the resources
necessary or may otherwise be unable to complete development and
commercialization of these potential products. Our existing collaborations are
subject to termination without cause on short notice under certain
circumstances.

         If we cannot maintain our existing collaborations or establish new
collaborations, we would be required to terminate the development and
commercialization of our potential products or undertake product development and
commercialization activities at our own expense. Moreover, we have limited or no
experience in conducting full-scale bioequivalence studies and clinical trials,
preparing and submitting regulatory applications and manufacturing, marketing
and selling our TIMERx controlled release products. We may not be successful in
performing these activities.



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         Our existing collaborations and any future collaborations with third
parties may not be scientifically or commercially successful. Factors that may
affect the success of our collaborations include the following:

        -    our collaborators may be pursuing alternative technologies or
             developing alternative products, either on their own or in
             collaboration with others, that may be competitive with the product
             as to which they are collaborating with us, which could affect our
             collaborator's commitment to the collaboration with us;

        -    reductions in marketing or sales efforts or a discontinuation of
             marketing or sales of our products by our collaborators would
             reduce our revenues, which will be based on a percentage of net
             sales by the collaborator;

        -    our collaborators may terminate their collaborations with us, which
             could make it difficult for us to attract new collaborators or
             adversely affect our perception in the business and financial
             communities; and

        -    our collaborators may pursue higher priority programs or change the
             focus of their development programs, which could affect the
             collaborator's commitment to us.


WE HAVE NOT BEEN PROFITABLE

         We have incurred net losses since our inception, including net losses
of approximately $7.7 million, $8.8 million and $7.3 million during 1999, 1998
and 1997, respectively. As of December 31, 1999, our accumulated deficit was
approximately $36.2 million. A substantial portion of our revenues have been
generated from the sales of our pharmaceutical excipients. Our future
profitability will depend on several factors, including:

        -    the timing of the commercial launch by Mylan of Pfizer's generic
             version of the 30 mg strength of its Procardia XL in the United
             States;

        -    the successful commercialization of our controlled release products
             for which regulatory approval currently is pending;

        -    the completion of the development of other pharmaceuticals using
             our TIMERx controlled release technology;

        -    an increase in sales of our pharmaceutical excipient products; and

        -    our funding obligations under certain of our collaborations.




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WE FACE SIGNIFICANT COMPETITION, WHICH MAY RESULT IN OTHERS DISCOVERING,
DEVELOPING OR COMMERCIALIZING PRODUCTS BEFORE OR MORE SUCCESSFULLY THAN WE DO

         The pharmaceutical industry is highly competitive and is affected by
new technologies, governmental regulations, health care legislation,
availability of financing, litigation and other factors. Many of our competitors
have longer operating histories and greater financial, marketing, legal and
other resources than we do and than certain of our collaborators do.

         Our TIMERx business faces competition from numerous public and private
companies and their controlled release technologies, including ALZA's oral
osmotic pump (OROS(R)) technology, multiparticulate systems marketed by Elan and
Biovail, traditional matrix systems marketed by SkyePharma, plc and other
controlled release technologies marketed or under development by Andrx
Corporation, among others.

         In addition to developing controlled release versions of immediate
release products, we have concentrated a significant portion of our initial
development efforts on generic versions of branded controlled release products.
The success of generic versions of branded controlled release products based on
our TIMERx technology will depend, in large part, on the intensity of
competition from the branded controlled release product, other generic versions
of the branded controlled release product and other drugs and technologies that
compete with the branded controlled release product, as well as the timing of
product approval. Competition from other generic versions of branded controlled
release products will also reduce the royalty rate to be paid to us under
several of our collaborations.

         The generic drug industry is characterized by frequent litigation
between generic drug companies and branded drug companies. Those companies with
significant financial resources will be better able to bring and defend any such
litigation.

         In our excipients business, we compete with a number of large
manufacturers and other distributors of excipient products, many of which have
substantially greater financial, marketing and other resources than the Company.
Our principal competitor in this market is FMC Corporation, which markets its
own line of MCC excipient products.

WE MAY REQUIRE ADDITIONAL FUNDING

         Our requirements for additional capital could be substantial and will
depend on many factors, including:

        -    the timing and amount of payments received under existing and
             possible future collaborative agreements;

        -    the structure of any future collaborative or development
             agreements;

        -    the progress of our collaborative and independent development
             projects;




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        -    revenues from our excipients business;

        -    the costs to us of clinical studies for our products;


        -    the prosecution, defense and enforcement of patent claims and other
             intellectual property rights; and

        -    the development of manufacturing, marketing and sales capabilities.


         After the March 6, 2000 financing (see Part II, Item 5), we have no
committed sources of capital. We may seek additional funds through collaborative
arrangements and public or private financing. Additional financing may not be
available to us on acceptable terms, if at all. If we raise additional funds by
issuing equity securities, further dilution to our then existing stockholders
will result. In addition, the terms of the financing may adversely affect the
holdings or the rights of such stockholders. If we are unable to obtain funding
on a timely basis, we may be required to significantly curtail one or more of
our research or development programs. We also could be required to seek funds
through arrangements with collaborators or others that may require us to
relinquish rights to certain of our technologies, product candidates or products
which we otherwise pursue on our own.

OUR SUCCESS DEPENDS ON OUR PROTECTING OUR PATENTS AND PATENTED RIGHTS

         Our success depends in significant part on our ability to develop
patentable products, to obtain patent protection for our products, both in the
United States and in other countries, and to enforce these patents. The patent
positions of pharmaceutical firms, including us, are generally uncertain and
involve complex legal and factual questions. As a result, patents may not issue
from any patent applications that we own or license. If patents do issue, the
claims allowed may not be sufficiently broad to protect our technology. In
addition, issued patents that we own or license may be challenged, invalidated
or circumvented. Our patents also may not afford us protection against
competitors with similar technology.

         Our success also depends on our not infringing patents issued to
competitors or others. We are aware of patents and patent applications belonging
to competitors and others that may require us to alter our products or
processes, pay licensing fees or cease certain activities.

         We may not be able to obtain a license to any technology owned by a
third party that we require to manufacture or market one or more products. Even
if we can obtain a license, the financial and other terms may be
disadvantageous.

         Our success also depends on our maintaining the confidentiality of our
trade secrets and patented know-how. We seek to protect such information by
entering into confidentiality agreements with employees, consultants, licensees
and pharmaceutical companies. These agreements may be breached by such parties.
We may not be able to




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obtain an adequate, or perhaps, any remedy to such a breach. In addition, our
trade secrets may otherwise become known or be independently developed by our
competitors.

WE ARE INVOLVED IN AND MAY BECOME INVOLVED IN ADDITIONAL PATENT LITIGATION OR
OTHER INTELLECTUAL PROPERTY PROCEEDINGS RELATING TO OUR PRODUCTS OR PROCESSES
WHICH COULD RESULT IN LIABILITY FOR DAMAGE OR STOP OUR DEVELOPMENT AND
COMMERCIALIZATION EFFORTS

         The pharmaceutical industry has been characterized by significant
litigation and interference and other proceedings regarding patents, patent
applications and other intellectual property rights. In addition to the recently
dismissed litigation involving Mylan, Pfizer and the still pending litigation
involving Mylan and Bayer, we may become parties to, or our products (or
products based on our TIMERx controlled release technology) may become the
subject of, additional patent litigation and other proceedings in the future.
The types of situations in which we may become parties to such litigation or
proceedings include:

        -    We or our collaborators may initiate litigation or other
             proceedings against third parties to enforce our patent rights.

        -    We or our collaborators may initiate litigation or other
             proceedings against third parties to seek to invalidate the patents
             held by such third parties or to obtain a judgment that our
             products or processes do not infringe such third parties' patents.

        -    If our competitors file patent applications that claim technology
             also claimed by us, we or our collaborators may participate in
             interference or opposition proceedings to determine the priority of
             invention.

        -    If third parties initiate litigation claiming that our processes or
             products infringe their patent or other intellectual property
             rights, we and our collaborators will need to defend against such
             proceedings.

         An adverse outcome in any litigation or other proceeding could subject
us to significant liabilities to third parties and require us to cease using the
technology that is at issue or to license the technology from third parties. We
may not be able to obtain any required licenses on commercially acceptable terms
or at all.

         The cost of any patent litigation or other proceeding, even if resolved
in our favor, could be substantial. Although the legal costs of defending
litigation relating to a patent infringement claim (unless such claim relates to
TIMERx in which case such costs are our responsibility) are generally the
contractual responsibility of our collaborators, we could nonetheless incur
significant unreimbursed costs in participating and assisting in the litigation.
Some of our competitors may be able to sustain the cost of such litigation and
proceedings more effectively than we can because of their substantially greater
resources. Uncertainties resulting from the initiation and continuation of
patent litigation



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or other proceedings could have a material adverse effect on our ability to
complete in the marketplace. Patent litigation and other proceedings may also
absorb significant management time.

         In 1994, the Boots Company PLC filed in the European Patent Office, or
the EPO, an opposition to a patent granted by the EPO to us relating to our
TIMERx technology. In June 1996, the EPO dismissed Boots' opposition, leaving
intact all claims included in the patent. Boots has appealed this decision to
the EPO Board of Appeals, but no judgment has been rendered. We can provide no
assurance that we will prevail in this matter.

IF OUR CLINICAL TRIALS ARE NOT SUCCESSFUL OR TAKE LONGER TO COMPLETE THAN WE
EXPECT, WE MAY NOT BE ABLE TO DEVELOP AND COMMERCIALIZE CERTAIN OF OUR PRODUCTS

         In order to obtain regulatory approvals for the commercial sale of
certain of our potential products, including controlled release versions of
immediate release drugs and new chemical entities, our collaborators will be
required to complete clinical trials in humans to demonstrate the safety and
efficacy of the products. Our collaborators may not be able to obtain authority
from the FDA or other regulatory agencies to commence or complete these clinical
trails.

         The results from preclinical testing of a product that is under
development may not be predictive of results that will be obtained in human
clinical trials. In addition, the results of early human clinical trials may not
be predictive of results that will be obtained in larger scale advanced stage
clinical trials. Furthermore, we, one of our collaborators, or the FDA may
suspend clinical trails at any time if the subjects or patients participating in
such trails are being exposed to unacceptable health risks, or for other
reasons.




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         The rate of completion of clinical trials is dependent in part upon the
rate of enrollment of patients. Patient accrual is a function of many factors
including the size of the patient population, the proximity of patients to
clinical sites, the eligibility criteria for the study and the existence of
competitive clinical trials. Delays in planned patient enrollment may result in
increased costs and program delays.

         We and our collaborators may not be able to successfully complete any
clinical trial of a potential product within any specified time period. In some
cases, we may not be able to complete the trial at all. Moreover, clinical
trials may not show any potential product to be safe or efficacious. Thus, the
FDA and other regulatory authorities may not approve any of our potential
products for any indication.

         Our business, financial condition, or results of operations could be
materially adversely affected if:

        -    we or our collaborators are unable to complete a clinical trial of
             one of our potential products;

        -    the results of any clinical trial are unfavorable; or

        -    the time or cost of completing the trial exceeds our expectations.

WE MAY NOT OBTAIN REGULATORY APPROVAL; THE APPROVAL PROCESS CAN BE
TIME-CONSUMING AND EXPENSIVE

         The development, clinical testing, manufacture, marketing and sale of
pharmaceutical products are subject to extensive federal, state and local
regulation in the United States and other countries. This regulatory approval
process can be time-consuming and expensive.

         We may encounter delays or rejections during any stage of the
regulatory approval process based upon the failure of clinical data to
demonstrate compliance with, or upon the failure of the product to meet, the
FDA's requirements for safety, efficacy and quality; and those requirements may
become more stringent due to changes in regulatory agency policy or the adoption
of new regulations. After submission of a marketing application, in the form of
an NDA or an ANDA, the FDA may deny the application, may require additional
testing or data and/or may require postmarketing testing and surveillance to
monitor the safety or efficacy of a product. While the U.S. Food, Drug and
Cosmetic Act, or FDCA, provides for a 180-day review period, the FDA commonly
takes one to two years to grant final approval to a marketing application (NDA
or ANDA). Further, the terms of approval of any marketing application, including
the labeling content, may be more restrictive than we desire and could affect
the marketability of products incorporating our controlled release technology.

         Many of the controlled release products that we are developing with our
collaborators are generic versions of branded controlled release products, which
require the filing of ANDAs. Certain ANDA procedures for generic versions of
controlled


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release products are the subject of petitions filed by brand name drug
manufacturers, which seek changes from the FDA in the approval process for
generic drugs. These requested changes include, among other things, tighter
standards for certain bioequivalence studies and disallowance of the use by a
generic drug manufacturer in its ANDA of proprietary data submitted by the
original manufacturer as part of an original new drug application. Any changes
in FDA regulations that make ANDA approvals more difficult may have a material
adverse effect on our business, financial condition and results of operations.

         Other products containing our TIMERx controlled release technology
require the filing of an NDA. A full NDA must include complete reports of
preclinical, clinical and other studies to prove adequately that the product is
safe and effective, which involves, among other things, full clinical testing,
and as a result requires the expenditure of substantial resources. In certain
cases involving controlled release versions of FDA-approved immediate release
drugs, we may be able to rely on existing publicly available safety and efficacy
data to support an NDA for controlled release products under Section 505(b)(2)
of the FDCA when such data exists for an approved immediate release version of
the same chemical entity. However, we can provide no assurance that the FDA will
accept such section 505(b)(2) NDA, or that we will be able to obtain publicly
available data that is useful. The section 505(b)(2) NDA process is a highly
uncertain avenue to approval because the FDA's policies on section 505(b)(2)
NDAs have not yet been fully developed. There can be no assurance that the FDA
will approve an application submitted under section 505(b)(2) in a timely manner
or at all.

         The FDA also has the authority to revoke or suspend approvals of
previously approved products for cause, to debar companies and individuals from
participating in the drug-approval process, to request recalls of allegedly
violative products, to seize allegedly violative products, to obtain injunctions
to close manufacturing plants allegedly not operating in conformity with current
Good Manufacturing Practices (GMP) and to stop shipments of allegedly violative
products. The FDA may seek to impose pre-clearance requirements on products
currently being marketed without FDA approval, and there can be no assurance
that the Company or its third-party manufacturers or collaborators will be able
to obtain approval for such products within the time period specified by the
FDA.

EVEN IF WE OBTAIN MARKETING APPROVAL, OUR PRODUCTS WILL BE SUBJECT TO ONGOING
REGULATORY REVIEW

         If regulatory approval of a product is granted, such approval may be
subject to limitations on the indicated uses for which the product may be
marketed or contain requirements for costly post-marketing follow-up studies. As
to products for which marketing approval is obtained, the manufacturer of the
product and the manufacturing facilities will be subject to continual review and
periodic inspections by the FDA and other regulatory authorities. The subsequent
discovery of previously unknown problems with the product, manufacturer or
facility may result in restrictions on the product or manufacturer, including
withdrawal of the product from the market.




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         If we fail to comply with applicable regulatory requirements, we may be
subject to fines, suspension or withdrawal of regulatory approvals, product
recalls, seizure of products, operating restrictions and criminal prosecution.

THE MARKET MAY NOT BE RECEPTIVE TO PRODUCTS INCORPORATING OUR TIMERx CONTROLLED
RELEASE TECHNOLOGY

         The commercial success of products incorporating our controlled release
technology that are approved for marketing by the FDA and other regulatory
authorities will depend upon their acceptance by the medical community and third
party payors as clinically useful, cost-effective and safe.

        Other factors that we believe could materially affect market acceptance
of these products include:

        -    the timing of the receipt of marketing approvals and the countries
             in which such approvals are obtained;

        -    the safety and efficacy of the product as compared to competitive
             products; and

        -    the cost-effectiveness of the product and the ability to receive
             third party reimbursement.

WE HAVE ONLY LIMITED MANUFACTURING CAPABILITIES AND WILL BE DEPENDENT ON THIRD
PARTY MANUFACTURERS.

         We lack commercial scale facilities to manufacture our TIMERx material
in accordance with current GMP requirements prescribed by the FDA. We currently
rely on a third party pharmaceutical company for the bulk manufacture of our
TIMERx material for delivery to our collaborators.

         There are a limited number of manufacturers that operate under GMP
regulations capable of manufacturing our TIMERx material. We have not yet
qualified a second source of supply. In the event that our current manufacturer
is unable to manufacture the TIMERx material in the required quantities or at
all, we may be unable to obtain alternative contract manufacturing, or obtain
such manufacturing on commercially reasonable terms.

         If our third party manufacturer fails to perform its obligations, we
may be adversely affected in a number of ways, including:

        -    our collaborators may not be able to meet commercial demands for
             our products on a timely basis;

        -    our collaborators may not be able to initiate or continue clinical
             trials of products that are under development; and



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        -    our collaborators may be delayed in submitting applications for
             regulatory approvals of our products.

         We have limited experience in manufacturing TIMERx material on a
commercial scale and no facilities or equipment to do so. If we determine to
develop our own manufacturing capabilities, we will need to recruit qualified
personnel and build or lease the requisite facilities and equipment. We may not
be able to successfully develop our own manufacturing capabilities. Moreover, it
may be very costly and time consuming for us to develop such capabilities.

         The manufacture of any of our products (both TIMERx material and
excipients) is subject to regulation by the FDA and comparable agencies in
foreign countries. Any delay in complying or failure to comply with such
manufacturing requirements could materially adversely affect the marketing of
our products and our business, financial condition and results of operations.

WE ARE DEPENDENT UPON A SOLE SOURCE SUPPLIER FOR THE GUMS USED IN OUR TIMERx
MATERIAL AND UPON A LIMITED NUMBER OF SUPPLIERS FOR THE WOOD PULP USED IN THE
MANUFACTURE OF OUR EXCIPIENTS

         Our TIMERx drug delivery system is a hydrophilic matrix combining
primarily two polysaccharides, xanthan and locust bean gums, in the presence of
dextrose. We purchase these gums from a sole source supplier. Emcocel and
Prosolv, our two largest selling excipients, are manufactured from a specialty
grade of wood pulp. We have qualified alternate suppliers with respect to these
materials, but we can provide no assurance that interruptions in supplies will
not occur in the future or that we will not have to obtain substitute suppliers.
Any interruption in these supplies could have a material adverse effect on our
ability to manufacture bulk TIMERx for delivery to our collaborators or to
manufacture these excipients.

IF OUR COLLABORATORS FAIL TO OBTAIN AN ADEQUATE LEVEL OF REIMBURSEMENT BY THIRD
PARTY PAYORS FOR OUR CONTROLLED RELEASE PRODUCTS, THEY MAY NOT BE ABLE TO
SUCCESSFULLY COMMERCIALIZE CONTROLLED RELEASE PRODUCTS IN CERTAIN MARKETS

         The availability of reimbursement by governmental and other third party
payors affects the market for any pharmaceutical product. These third party
payors continually attempt to contain or reduce the costs of health care by
challenging the prices charged for medical products and services. In certain
foreign countries, particularly the countries of the European Union, the pricing
of prescription pharmaceuticals is subject to governmental control.

         The generic versions of controlled release products being developed by
us and our collaborators may be assigned an AB rating if the FDA considers the
product to be therapeutically equivalent to the branded controlled release drug.
Failure to obtain an AB




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rating from the FDA would indicate that for certain purposes the drug would not
be deemed to be therapeutically equivalent, would not be fully substitutable for
the branded controlled release drug and would not be relied upon by Medicaid and
Medicare formularies for reimbursement.

         In both the U.S. and certain foreign jurisdictions, there have been a
number of legislative and regulatory proposals to change the health care system.
Further proposals are likely. The potential for adoption of these proposals may
affect our ability to raise capital, obtain additional collaborative partners
and market our products.

         If we or our collaborators obtain marketing approvals for our products,
we expect to experience pricing pressure due to the trend toward managed health
care, the increasing influence of health maintenance organizations and
additional legislative proposals. We may not be able to sell our products
profitably if reimbursement is unavailable or limited in scope or amount.

WE WILL BE EXPOSED TO PRODUCT LIABILITY CLAIMS AND MAY NOT BE ABLE TO OBTAIN
ADEQUATE PRODUCT LIABILITY INSURANCE

         Our business exposes us to potential product liability risks which are
inherent in the testing, manufacturing, marketing and sale of pharmaceutical
products. Product liability claims might be made by consumers, health care
providers or pharmaceutical companies or others that sell our products. These
claims may be made even with respect to those products that are manufactured in
licensed and regulated facilities or that otherwise possess regulatory approval
for commercial sale.

         We are currently covered by primary product liability insurance in the
amount of $1.0 million per occurrence and $2.0 million annually in the aggregate
on a claims-made basis and by umbrella liability insurance in excess of $25.0
million which can also be used for product liability insurance. This coverage
may not be adequate to cover any product liability claims. Product liability
coverage is expensive. In the future, we may not be able to maintain or obtain
such product liability insurance at a reasonable cost or in sufficient amounts
to protect us against losses due to liability claims. Any claims that are not
covered by product liability insurance could have a material adverse effect on
our business, financial condition and results of operations.

THE MARKET PRICE OF OUR COMMON STOCK MAY BE VOLATILE

         The market price of our common stock, like the market prices for
securities of pharmaceutical, biopharmaceutical and biotechnology companies,
have historically been highly volatile. The market from time to time experiences
significant price and volume fluctuations that are unrelated to the operating
performance of particular companies. Factors such as fluctuations in our
operating results, future sales of our common stock, announcements of
technological innovations or new therapeutic products by us or our competitors,
announcements regarding collaborative agreements, clinical trial results,
government regulation, developments in patent or other proprietary rights,
public concern as to the safety of drugs developed by us or others, changes in
reimbursement policies,




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comments made by securities analysts and general market conditions may have a
significant effect on the market price of the common stock.

CERTAIN PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS AND OF
WASHINGTON LAW, AS WELL AS THE RIGHTS AGREEMENT TO WHICH WE ARE A PARTY, MAKE A
TAKEOVER OF PENWEST MORE DIFFICULT

         Provisions of our Certificate of Incorporation, our Bylaws and
Washington law, as well as the Rights Agreement to which we are a party, may
have the effect of deterring hostile takeovers or delaying or preventing changes
in control or management of our company, including transactions in which our
stockholders might otherwise receive a premium for their shares over then
current market prices. In addition, these provisions may limit the ability of
stockholders to approve transactions that they may deem to be in their best
interest.

RESIDUAL YEAR 2000 ISSUES MAY ADVERSELY AFFECT OUR BUSINESS, FINANCIAL POSITION,
RESULTS OF OPERATIONS AND RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS

         Prior to January 1, 2000, there was a great deal of concern regarding
the ability of computer programs and hardware and other equipment to adequately
recognize 21st century dates from 20th century dates due to the two-digit date
fields used by many systems. For example, computer programs that have
time-sensitive components may recognize a date represented as "00" as the year
1900 rather than the year 2000. In addition, programs may have failed to
recognize February 29, 2000 as a leap year date as a result of an exception to
the calculation of leap years that did occur in the year 2000 and otherwise
occurs only once every 400 years. As of March 7, 2000, our computer programs and
hardware and other equipment are functioning normally and the compliance and
remediation work performed by us appears to be effective to prevent any
problems. However, computer experts have warned that there may still be residual
consequences of the change in centuries. If residual Year 2000 issues cause the
failure of any of the computer programs and hardware and other equipment
necessary to operate our business, our business, financial position and results
of operations, as well as our relationships with customers and suppliers, may be
adversely affected. Furthermore, if third parties of business importance to us
do not successfully and timely anticipate and address their own residual Year
2000 issues, any residual Year 2000 issues that arise could have a material
adverse effect on our business, financial position and results of operations.