Earthlink 2005 Annual Report Download - page 32

(2) Investments in marketable securities consist of debt securities classified as available-for-sale and have maturities greater than 90 days
from the date of acquisition. We have invested primarily in government agency notes, asset-backed debt securities (including auction rate
debt securities), corporate notes and commercial paper, all of which bear a minimum short-term rating of A1/P1 or a minimum long-term
rating of A/A2.
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operation.
The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial
statements and notes thereto included elsewhere in this Annual Report on Form 10-K.
Safe Harbor Statement
The Management’s Discussion and Analysis and other portions of this Annual Report on Form 10-K include “forward-looking”
statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those
described. Although we believe that the expectations expressed in these forward-looking statements are reasonable, we cannot promise that our
expectations will turn out to be correct. Our actual results could be materially different from and worse than our expectations. With respect to
such forward-looking statements, we seek the protections afforded by the Private Securities Litigation Reform Act of 1995. These risks
include, without limitation, (1) that we may be unable to successfully enhance existing or develop new products and services in a cost-effective
manner to meet customer demand in the rapidly evolving market for Internet, wireless and IP-based communications services, including new
products and services offered in connection with our voice and municipal broadband network initiatives; (2) that we may not realize the
benefits we are seeking from our investments in the HELIO joint venture or our other investment activities, as a result of lower than predicted
revenues or subscriber levels of the companies in which we invest, larger funding requirements for those companies or otherwise; (3) that our
service offerings may fail to be competitive with existing and new competitors; (4) that competitive product, price or marketing pressures could
cause us to lose existing customers to competitors, or may cause us to reduce prices for our services which would adversely impact average
revenue per user; (5) that we may experience significant fluctuations in our operating results and rate of growth and may not be profitable in the
future; (6) that we may not be successful in making and integrating acquisitions and investments into our business, which could result in
operating difficulties; (7) that the continued decline of our narrowband revenues would adversely affect us; (8) that we may not be able to
successfully execute our broadband strategy which could materially and adversely affect our subscriber growth rates, future overall revenues
and profitability; (9) that we may be unable to maintain or increase our customer levels if ILECs and cable companies do not provide last mile
broadband access to us on a wholesale basis or on terms or at prices that allow us to grow and be profitable in the broadband market, especially
as a result of the U.S. Supreme Court ruling and FCC order concerning wholesale broadband access; (10) that our commercial and alliance
arrangements, including marketing arrangements with Sprint and Dell, may be terminated or may not be as beneficial to us as we anticipate;
(11) that the market for VoIP services may not develop as anticipated; (12) that we may not generate the returns anticipated on our investments
to construct and deploy municipal wireless broadband networks; (13) that our third-party network providers may be unwilling or unable to
provide Internet, wireline and wireless telecommunications access; (14) that our third-party providers for technical and customer support and
billing services may be unable to provide these services on an economical basis or at all; (15) that service interruptions or impediments could
harm our business; (16) that business failures and mergers in the telecommunications industry may inhibit our ability to manage our costs; (17)
that government regulations could force us to change our business practices; (18) that we may be unable to protect our proprietary technologies
or successfully defend infringement claims and that we may be required to enter licensing arrangements on unfavorable terms; (19) that we
may be accused of infringing upon the intellectual
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