Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding new service and product offerings; future expenses; the performance of our equity affiliate, Charter Communications, Inc. ("Charter"), and its expectations related to COVID-19 (as defined below); our projected sources and uses of cash; indebtedness; and the anticipated non-material impact of certain contingent liabilities related to legal proceedings and other matters arising in the ordinary course of business. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but such statements necessarily involve risks and uncertainties and there can be no assurance that the expectation or belief will result or be achieved or accomplished. The following include some but not all of the factors (as they relate to our consolidated subsidiary and equity affiliate) that could cause actual results or events to differ materially from those anticipated:
The impact of the novel coronavirus ("COVID-19") pandemic and local, state and
? federal governmental responses to the pandemic on the economy, our customers,
our vendors, and our businesses generally;
Charter's ability to sustain and grow revenue and cash flow from operations by
offering Internet, video, voice, mobile, advertising and other services to
? residential and commercial customers, to adequately meet the customer
experience demands in its service areas and to maintain and grow its customer
base, particularly in the face of increasingly aggressive competition, the need
for innovation and the related capital expenditures;
the impact of competition from other market participants, including but not
limited to incumbent telephone companies, direct broadcast satellite operators,
? wireless broadband and telephone providers, digital subscriber line providers,
fiber to the home providers, and providers of video content over broadband
Internet connections;
Charter's ability to obtain programming at reasonable prices or to raise prices
? to offset, in whole or in part, the effects of higher programming costs
(including retransmission consents);
Charter's ability to develop and deploy new products and technologies,
? including mobile products and any other consumer services and service
platforms;
any events that disrupt Charter's or Skyhook's networks, information systems or
? properties and impair their operating activities or negatively impact their
respective reputation;
the effects of governmental regulation on the business of Charter and Skyhook,
? including costs, disruptions and possible limitations on Charter's operating
flexibility related to, and its ability to comply with, regulatory conditions
applicable to Charter as a result of previous mergers;
general business conditions, economic uncertainty or downturn, including the
? impacts of the COVID-19 pandemic to unemployment levels and the level of
activity in the housing sector;
failure to protect the security of personal information about the customers of
? our operating subsidiary and equity affiliate, subjecting us to costly
government enforcement actions or private litigation and reputational damage;
changes in, or failure or inability to comply with, government regulations,
? including, without limitation, regulations of the
Commission, and adverse outcomes from regulatory proceedings;
? the ability to retain and hire key personnel;
? the ability of suppliers and vendors to deliver products, equipment, software
and services;
? the outcome of any pending or threatened litigation;
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? changes in the nature of key strategic relationships with partners, vendors and
joint ventures;
the availability and access, in general, of funds to meet debt obligations
? prior to or when they become due and to fund operations and necessary capital
expenditures, either through (i) cash on hand, (ii) free cash flow, or (iii)
access to the capital or credit markets;
the ability of Charter and our company to comply with all covenants in their
? and our respective debt instruments, any violation of which, if not cured in a
timely manner, could trigger a default of other obligations under cross-default
provisions; and
? our ability to successfully monetize certain of our assets.
For additional risk factors, please see Part I, Item 1A of our Annual Report on
Form 10-K for the year ended
The following discussion and analysis provides information concerning our
results of operations and financial condition. This discussion should be read in
conjunction with our accompanying condensed consolidated financial statements
and the notes thereto and our Annual Report on Form 10-K for the year ended
Overview
During
Through a number of prior years' transactions,
The Company's wholly owned subsidiary,
The financial information represents a consolidation of the historical financial
information of Skyhook,
In
As the COVID-19 pandemic develops and significantly impacts
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capacity increases, Charter expects to be able to continue to respond to the
significant increase in network activity from the private and public response to
COVID-19. Charter's front-line service infrastructure in call centers and field
operations is experiencing higher service transaction volume and is performing
well, although it has seen increased wait times for customer calls to its call
centers. Much of that increase in activity is being driven by increased demand
for its connectivity services to residential, healthcare, government and
educational customers. The response to Charter's Remote Education Offer ("REO")
pursuant to which new customers with students or educators in the household are
eligible to receive Internet service for free for 60 days has generated 119,000
new Internet accounts in March, while new connects for its residential Internet
services, when excluding the REO, were also up in March as compared to
However, Charter cannot predict the ultimate impact of COVID-19 on its business, including the depth and duration of the economic impact to its residential and business customers' ability to pay for its products and services - including the impact of extended unemployment benefits and other stimulus packages and what assistance Charter may provide to its customers. In addition, there is uncertainty regarding the impact of government emergency declarations, the ability of suppliers and vendors to provide products and services to Charter, the pace of new housing construction, changes in business spend in its local and national ad sales business, the effects to employees' health and safety and resulting reorientation of its work activities, and the risk of limitations on the deployment and maintenance of services (including by limiting customer support and on-site service repairs and installations).
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