Charter 2013 Annual Report Download - page 37

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other dispositions or acquisitions of interests in our "5-percent stockholders"), our ability to use our loss carryforwards could
become subject to further limitations. Our common stock is subject to certain transfer restrictions contained in our amended and
restated certificate of incorporation. These restrictions, which are designed to minimize the likelihood of an ownership change
occurring and thereby preserve our ability to utilize our loss carryforwards, are not currently operative but could become operative
in the future if certain events occur and the restrictions are imposed by our board of directors. However, there can be no assurance
that our board of directors would choose to impose these restrictions or that such restrictions, if imposed, would prevent an
ownership change from occurring.
If we are unable to retain key employees, our ability to manage our business could be adversely affected.
Our operational results have depended, and our future results will depend, upon the retention and continued performance of our
management team. Our ability to retain and hire new key employees for management positions could be impacted adversely by
the competitive environment for management talent in the broadband communications industry. The loss of the services of key
members of management and the inability or delay in hiring new key employees could adversely affect our ability to manage our
business and our future operational and financial results.
Our inability to successfully acquire and integrate other businesses, assets, products or technologies could harm our operating
results.
We actively evaluate acquisitions and strategic investments in businesses, products or technologies that we believe could
complement or expand our business or otherwise offer growth or cost-saving opportunities. From time to time, we may enter into
letters of intent with companies with which we are negotiating for potential acquisitions or investments, or as to which we are
conducting due diligence. An investment in, or acquisition of, complementary businesses, products or technologies in the future
could materially decrease the amount of our available cash or require us to seek additional equity or debt financing. We may not
be successful in negotiating the terms of any potential acquisition, conducting thorough due diligence, financing the acquisition
or effectively integrating the acquired business, product or technology into our existing business and operations. Our due diligence
may fail to identify all of the problems, liabilities or other shortcomings or challenges of an acquired business, product or technology,
including issues related to intellectual property, product quality or product architecture, regulatory compliance practices, revenue
recognition or other accounting practices, or employee or customer issues.
Additionally, in connection with any acquisitions we complete, we may not achieve the synergies or other benefits we expected
to achieve, and we may incur write-downs, impairment charges or unforeseen liabilities that could negatively affect our operating
results or financial position or could otherwise harm our business. Further, contemplating or completing an acquisition and
integrating an acquired business, product or technology could divert management and employee time and resources from other
matters.
Risks Related to Ownership Position of Liberty Media Corporation
Liberty Media Corporation owns a significant amount of Charter’s common stock, giving it influence over corporate
transactions and other matters.
Members of our board of directors include directors who are also officers and directors of our principal stockholder. Dr. John
Malone is the Chairman of Liberty Media Corporation, and Mr. Greg Maffei is the president and chief executive officer of Liberty
Media Corporation. As of December 31, 2013, Liberty Media Corporation beneficially held approximately 26% of our Class A
common stock. Liberty Media Corporation has the right to designate up to four directors as nominees for our board of directors
through our 2015 annual meeting of stockholders with one designated director to be appointed to each of the Audit Committee,
the Nominating and Corporate Governance Committee and the Compensation and Benefits Committee. Liberty Media Corporation
may be able to exercise substantial influence over all matters requiring stockholder approval, including the election of directors
and approval of significant corporate action, such as mergers and other business combination transactions should Liberty Media
Corporation retain a significant ownership interest in us. Liberty Media Corporation and its affiliates are not restricted from
investing in, and have invested in, and engaged in, other businesses involving or related to the operation of cable television systems,
video programming, Internet service, voice or business and financial transactions conducted through broadband interactivity and
Internet services. Liberty Media Corporation and its affiliates may also engage in other businesses that compete or may in the
future compete with us.
Liberty Media Corporation's substantial influence over our management and affairs could create conflicts of interest if Liberty
Media Corporation faced decisions that could have different implications for it and us.