Washington Post 2014 Annual Report Download - page 46

• Potential Liability for Intellectual Property Infringement Could Adversely Affect the Company’s Businesses
The Company periodically receives claims from third parties alleging that the Company’s businesses infringe on the
intellectual property rights of others. It is likely that the Company will continue to be subject to similar claims, particularly as
they relate to its media and cable businesses. For example, providers of services similar to those offered by Cable ONE
have been the target of patent infringement claims from time to time relating to such matters as cable system architecture,
electronic program guides, cable modem technology and VoIP services. Other parts of the Company’s business could also
be subject to such claims. Addressing intellectual product claims is a time-consuming and expensive endeavor, regardless of
the merits of the claims. In order to resolve such a claim, the Company could determine the need to change its method of
doing business, enter into a licensing agreement or incur substantial monetary liability. It is also possible that one of the
Company’s businesses could be enjoined from using the intellectual property at issue, causing it to significantly alter its
operations. Although the Company cannot predict the impact at this time, if any such claim is successful, the outcome would
likely affect the business utilizing the intellectual property at issue and could have a material adverse effect on that business’s
operating results or prospects.
• Failure to Comply With Privacy Laws or Regulations Could Have an Adverse Effect on the Company’s Business
Various federal, state and international laws and regulations govern the collection, use, retention, sharing and security of
consumer data. This area of the law is evolving, and interpretations of applicable laws and regulations differ. Legislative
activity in the privacy area may result in new laws that are relevant to the Company’s operations, for example, use of
consumer data for marketing or advertising. Claims of failure to comply with the Company’s privacy policies or applicable
laws or regulations could form the basis of governmental or private-party actions against the Company. Such claims and
actions could cause damage to the Company’s reputation and could have an adverse effect on the Company’s business.
• Extensive Regulation of the Health Care Industry Could Adversely Affect the Company’s Health Care Businesses
and Results of Operations
The home health and hospice industries are subject to extensive federal, state and local laws, with regulations affecting
matters including licensure and certification, quality of services, qualifications of personnel, confidentiality and security of
medical records, relationships with physicians and other referral sources, operating policies and procedures, and billing and
coding practices. These laws and regulations and the manner in which they are interpreted are subject to change. The
Patient Protection and Affordable Care Act of 2010 and the overall trend toward cost containment could result in insurers
lowering payment rates, limiting service coverage and engaging in other measures to reduce costs. Reimbursement for
services by third-party payers, including Medicare, Medicaid and private health insurance providers, may not be available,
may be reduced or may be paid on the basis of revised standards as a result of changing regulations and policies.
Managed-care organizations, hospitals, physician practices and other third-party payers continue to consolidate in response
to the evolving regulatory environment, thereby enhancing their ability to influence the delivery of health care services and
decreasing the number of organizations serving patients. This consolidation could adversely impact Celtic’s and Residential’s
businesses if they are unable to maintain their ability to participate in established networks. Changes in existing laws or
regulations, in their interpretation and enforcement, and the enactment of new laws or regulations could have a material
adverse effect on the Company’s health care businesses’ operations.
• The Proposed Spin-Off of Cable ONE May Not Be Completed on the Terms or Timeline Currently Contemplated
In November 2014, the Company announced its plan for a tax-free spin-off of Cable ONE to the stockholders of the
Company. The proposed spin-off may not be completed on the terms or timeline currently contemplated, if at all.
Unanticipated developments could delay, prevent or otherwise adversely affect the proposed spin-off, including possible
problems or delays in obtaining various regulatory approvals or clearances and disruptions in the capital and other
financial markets, among other things.
Completion of the spin-off is subject to the satisfaction, or the Board of Directors’ waiver, of a number of conditions. In
addition, the Company has the right not to complete the spin-off if, at any time, the Board of Directors determines, in its
sole and absolute discretion, that the spin-off is not in the best interests of the Company or its stockholders or is otherwise
not advisable.
The Company has and will continue to incur expenses in connection with the proposed spin-off. In addition, completion of
the proposed spin-off will require significant amounts of management’s time and effort which may divert management’s
attention from operating and growing the Company’s business.
• If the Spin-Off of Cable ONE Is Completed, It May Not Achieve the Intended Results
If the proposed spin-off is completed, the Company’s operational and financial profile will change upon the separation of
the cable operations from its other businesses. As a result, diversification of the Company’s revenue sources will diminish.
30 GRAHAM HOLDINGS COMPANY