XO Communications 2009 Annual Report Download - page 29

statements filed by us from time to time. As of December 31, 2009, none of the Class B convertible preferred
stock shares have been registered.
Our common stock may be affected by limited trading volume and may fluctuate significantly.
Currently our common stock is quoted on the Over-the-Counter Bulletin Board and on the Pink Sheets and the
trading volume developed to date is limited by the fact that many major institutional investment funds and
mutual funds, as well as many individual investors, follow a policy of not investing in Over-the-Counter
Bulletin Board and/or Pink Sheets stocks and, moreover, certain major brokerage firms restrict their brokers
from recommending such stocks because they are considered speculative, volatile and thinly traded. The Over-
the-Counter Bulletin Board and Pink Sheets market is an inter-dealer market and is much less regulated than
the major stock exchanges, and trading in our common stock is potentially subject to abuses, volatilities and
shorting.
In addition, there has been a limited public market for our common stock, and an active trading market for our
common stock may not develop. As a result, this could reduce our stockholders’ ability to sell our common
stock in short time periods, or possibly at all. Our common stock has experienced, and is likely to experience
in the future, significant price and volume fluctuations which could reduce the market price of our common
stock without regard to our operating performance. In addition, we believe that factors such as quarterly
fluctuations in our financial results and changes in the overall economy or the condition of the financial
markets could cause the price of our common stock to fluctuate substantially.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We lease facilities for our administrative and sales offices, central switching offices, network nodes and
warehouse space in various cities throughout the United States. These leases have various expiration dates
through 2019. Our corporate headquarters is located at 13865 Sunrise Valley Drive, Herndon, VA, where we
occupy approximately 105,000 square feet of administrative space. We do not own any real property.
We currently have facilities in excess of our needs and have entered into various sublease agreements for our
unused office and technical space in order to reduce our ongoing operating expenses regarding such space. As
a result of fresh start accounting upon our emergence from bankruptcy, included in our other current liabilities
and other liabilities are costs to be incurred through 2019 related to facilities that are subleased or are expected
to be subleased at rates below our costs. We believe the facilities we are retaining are suitable and adequate
for our business operations. For additional information regarding our obligations under leases, see Note 19 of
our consolidated financial statements in Item 8 of this Annual Report.
ITEM 3. LEGAL PROCEEDINGS
XOH is involved in lawsuits, claims, investigations and proceedings consisting of commercial, securities, tort
and employment matters, which arise in the ordinary course of its business. XOH believes it has adequate
provisions for any such matters. We review these provisions at least quarterly and adjust these provisions to
reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and
events pertaining to a particular case. Litigation is inherently unpredictable. However, we believe that we have
valid defenses with respect to legal matters pending against it. Nevertheless, it is possible that cash flows or
results of operations could be materially and adversely affected in any particular period by the unfavorable
resolution of one or more of these contingencies. Legal costs related to litigation in these matters are expensed
as incurred.
25