Earthlink 2004 Annual Report Download - page 29

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Item 7 .
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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 Report.
Safe Harbor Statement
The Management’s Discussion and Analysis and other portions of this Report 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 not be able to successfully implement our broadband strategy which would materially and adversely affect our subscriber growth rates,
future overall revenues and profitability; (2) that we may not 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 wireline communications services; (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 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; (6) that the continued decline of our narrowband revenues may adversely affect
us; (7) that we may experience significant fluctuations in our operating results and rate of growth and we may not be able to sustain
profitability; (8) that our third-party network providers may be unwilling or unable to provide Internet, wireline and wireless
telecommunications access; (9) that we may be unable to maintain or increase our customer levels if we do not have uninterrupted and
reasonably priced access to local and long distance telecommunications systems for delivering dial-up and/or broadband access, including,
specifically, that integrated local exchange carriers and cable companies may 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; (10) that service interruptions or impediments could
harm our business; (11) that we may not be able to protect our proprietary technologies or successfully defend infringement claims and may be
required to enter licensing arrangements on unfavorable terms; (12) that we may be accused of infringing upon the intellectual property rights
of third parties, which is costly to defend and could limit our ability to use certain technologies in the future; (13) that government regulations
could force us to change our business practices; (14) that we may not realize the benefits we are seeking from the SK-EarthLink joint venture
transaction or 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; (15) that our third-party providers for technical and customer support may be
unable to provide these services on an economical basis or at all; (16) that if we are unable to successfully defend against legal actions, we
could face substantial liabilities; (17) that we may be unable to continually develop effective business systems, processes and personnel to
support our business; (18) that declining levels of economic activity or fluctuations in the use of the Internet could negatively impact our
subscriber growth rates and incremental revenue levels; (19) that we may be unable to hire and retain qualified personnel, including our key
executive officers; (20) that provisions in our certificate of incorporation, bylaws and shareholder rights plan could limit our share price and
delay a change of management; (21) that our stock price has been volatile historically and may continue to be volatile; and (22) that some other
unforeseen difficulties may occur. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to
differ significantly from management’s expectations, are described in greater detail in
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