Comcast 2009 Annual Report Download - page 22

Table of Contents
Comcast 2009 Annual Report on Form 10-K
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have a material effect on our financial condition, 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
condition.
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
transaction.
From time to time we make acquisitions and investments and
enter into other strategic transactions. In connection with
acquisitions 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 significant indebtedness, or have to delay
or not proceed with announced transactions. The occurrence
of any of the foregoing events could have a material adverse
effect on our business, results of operations, cash flows and
financial condition.
In addition, in connection with our proposed NBC Universal
transaction with GE, we cannot provide any assurance that
we will be able to obtain necessary regulatory and
governmental approvals to consummate the transaction on
acceptable terms or predict whether any conditions that may
be imposed on our businesses in permitting the transaction to
occur would have an adverse effect on our businesses.
Further, we cannot provide any assurance that we will be
able to complete a committed financing of NBC Universal on
currently contemplated terms, including that the new
company will receive an investment grade credit rating from
the debt rating agencies. Moreover, assuming the NBC
Universal transaction is consummated, there can be no
assurance that we can successfully integrate our
programming assets with those of NBC Universal, create
popular programming, develop new digital products and
services or succeed in the highly competitive media industry.
Also, as noted in more detail in Item 7,
“Management’s
Discussion and Analysis of Financial Condition and Results
of Operations,” we are required to pay to GE at the closing of
this transaction $7.1 billion in cash, less certain adjustments
primarily based on the free cash flow generated by NBC
Universal between December 4, 2009 and the closing, and
we have committed to fund up to $2.875 billion in cash or
common stock for each of two potential redemptions by GE
(for an aggregate of up to $5.75 billion, with amounts not
used for the first redemption to be available for the second
redemption) to the extent the new company cannot fund the
redemptions. There can be no assurance that the new
company will be able to generate strong cash flows or
attractive financial returns.
The loss of key management personnel could have a
negative impact on our business.
We rely on certain key management personnel in the
operation of our businesses. While we maintain long-term
and emergency transition plans for key management
personnel and believe we could either identify internal
candidates or attract outside candidates to fill any vacancy
created by the loss of any key management personnel, the
loss of one or more of our key management personnel could
have a negative impact on our business.
Our Class B common stock has substantial voting rights
and separate approval rights over several potentially
material transactions, and our Chairman and CEO has
considerable influence over our operations through his
beneficial ownership of our Class B common stock.
Our Class B common stock has a nondilutable 33 / % of
the combined voting power of our Class A and Class B
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 stock
outstanding on the date of our 2002 acquisition of AT&T
Corp.’s cable business, subject to adjustment in specified
situations. Stock dividends payable on the Class B common
stock in the form of Class B or Class A Special common
stock do not decrease the nondilutable voting power of the
Class B common stock. The Class B common stock also has
separate approval rights over several potentially material
transactions, even if they are approved by our Board of
Directors or by our other stockholders and even if they might
be in the best interests of our other stockholders. These
potentially material transactions include mergers or
consolidations involving Comcast Corporation, transactions
(such as a sale of all or substantially all of our assets) or
issuances of securities that require shareholder
approval, transactions that result in any person or
group owning shares representing more than 10% of the
combined voting power of the resulting or surviving
corporation, issuances of Class B common stock or securities
exercisable or convertible into Class B common stock,
and amendments to our articles of incorporation or by-laws
that would limit the rights of holders of our Class B common
stock.
Brian L. Roberts beneficially owns all of the outstanding
shares of our Class B common stock and, accordingly, has
considerable influence over our operations and the ability
(subject to certain restrictions through November 17, 2012) to
transfer potential effective control by selling the Class B
common stock. In addition, under our articles of
incorporation, Mr. Roberts is entitled to remain as our
Chairman, Chief Executive Officer and President until
May 26, 2010, unless he is removed by the affirmative vote of
at least 75% of the entire Board of Directors or he is no
longer willing or able to serve.
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