Comcast 2008 Annual Report Download - page 17

We rely on network and information systems and other
technology, and a disruption or failure of such networks,
systems or technology may disrupt our business.
Network and information systems and other technologies are critical
to our business activities. Network and information systems-related
events, such as computer hackings, computer viruses, worms or
other destructive or disruptive software, process breakdowns, denial
of service attacks, malicious social engineering or other malicious
activities, or any combination of the foregoing, or power outages,
natural disasters, terrorist attacks or other similar events, could result
in a degradation or disruption of our cable services, excessive call
volume to call centers or damage to our equipment and data. These
network and information systems-related events also could result in
large expenditures to repair or replace the damaged networks or
information systems or to protect them from similar events in the
future. Further, any security breaches, such as misappropriation,
misuse, leakage, falsification or accidental release or loss of
information maintained in our information technology systems and
networks, including customer, personnel and vendor data, could
damage our reputation and require us to expend significant capital
and other resources to remedy any such security breach. The
occurrence of any such network or information system-related
events or security breaches could have a material adverse effect on
our business and results of operations.
We may be unable to obtain necessary hardware, software
and operational support.
We depend on third party vendors to supply us with a significant
amount of the hardware, software and operational support neces-
sary to provide certain of our services. Moreover, some of these
vendors represent our primary source of supply or grant us the
right to incorporate their intellectual property into some of our
hardware and software products. While we actively monitor the
operations and financial condition of key vendors in an attempt to
detect any potential difficulties, there can be no assurance that we
would timely identify any operating or financial difficulties asso-
ciated with these vendors or that we could effectively mitigate our
risks with respect to any such difficulties. If any of these vendors
experience operating or financial difficulties or if demand exceeds
their capacity or they cannot otherwise meet our specifications,
our ability to provide some services may be materially adversely
affected, in which case, our business, results of operation and
financial position may be adversely affected.
Our business depends on certain intellectual property rights
and on not infringing the intellectual property rights of
others.
We rely on our patents, copyrights, trademarks and trade secrets,
as well as licenses and other agreements with our vendors and
other parties, to use our technologies, conduct our operations and
sell our products and services. Legal challenges to our intellectual
property rights and claims of intellectual property infringement by
third parties could require that we enter into royalty or licensing
agreements on unfavorable terms, incur substantial monetary
liability or be enjoined preliminarily or permanently from further use
of the intellectual property in question or from the continuation of
our businesses as currently conducted, which could require us to
change our business practices or limit our ability to compete effec-
tively or could have an adverse effect on our results of operations.
Even if we believe any such claims are without merit, they can be
time-consuming and costly to defend and divert management’s
attention and resources away from our business. Moreover,
because of the rapid pace of technological change, we rely on
technologies developed or licensed by third parties, and if we are
unable to obtain or continue to obtain licenses from these third
parties on reasonable terms, our business and results of oper-
ations could be adversely affected.
We face risks arising from the outcome of various litigation
matters.
We are subject to various legal proceedings and claims, including
those described under the caption “Legal Proceedings” in Item 3
and those arising in the ordinary course of business, including
regulatory and administrative proceedings, claims and audits.
While we do not expect the final disposition of any of these liti-
gation matters will have a material effect on our consolidated
financial position, an adverse outcome in one or more of these
matters could be material to our consolidated results of operations
and cash flows for any one period, and any litigation resulting from
any such legal proceedings could be time consuming, costly and
injure our reputation. Further, no assurance can be given that any
adverse outcome would not be material to our financial position.
Acquisitions and other strategic transactions present many
risks, and we may not realize the financial and strategic
goals that were contemplated at the time of any trans-
action.
From time to time we make acquisitions and investments and
enter into other strategic transactions. In connection with acquis-
itions and other strategic transactions, we may incur unanticipated
expenses; fail to realize anticipated benefits; have difficulty
incorporating the acquired businesses; disrupt relationships with
current and new employees, customers and vendors; incur sig-
nificant indebtedness; or have to delay or not proceed with
announced transactions. These factors could have a material
adverse effect on our business, results of operations, cash flows
and financial position.
Our Class B common stock has substantial voting rights
and separate approval rights over several potentially
material transactions, and our Chairman and CEO has con-
siderable influence over our operations through his
beneficial ownership of our Class B common stock.
Our Class B common stock has a nondilutable 33
1
⁄ 3 %ofthe
combined voting power of our common stock. This nondilutable
voting power is subject to proportional decrease to the extent the
number of shares of Class B common stock is reduced below
9,444,375, which was the number of shares of Class B common
15 Comcast 2008 Annual Report on Form 10-K