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Financial report summary
?Risks
- Changes in technology may limit the competitiveness of and demand for our services.
- Our significant property and equipment additions may not generate a positive return.
- We depend almost exclusively on our relationships with third-party programming providers, broadcasters and rights owners for programming content, and a failure to acquire desirable programming on acceptable terms could adversely affect subscriptions of our video services.
- We depend on third-party suppliers and licensors to supply and maintain necessary equipment, software and certain services required for our businesses.
- We may be unable to obtain or maintain the roaming services we need from other carriers to remain competitive.
- We rely on information technology to operate our business and maintain our competitiveness, and any failure to invest in and adapt to technological developments and industry trends could harm our business.
- If we are unable to retain key employees, our ability to manage our business could be adversely affected.
- We may not have sufficient protection to cover damage or costs incurred due to natural catastrophes, which could expose us to significant liabilities.
- We are involved in disputes and legal proceedings that, if determined unfavorably to us, could have a material adverse effect on our business, financial condition and results of operations.
- A substantial portion of our businesses is conducted outside of the U.S., which gives rise to numerous operational risks.
- Failure to comply with economic and trade sanctions, and similar laws could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.
- Our businesses are subject to risks of adverse regulation.
- Changes to existing legislation and new legislation may significantly alter the regulatory regime applicable to us, which could adversely affect our competitive position and profitability, and we may become subject to more extensive regulation if we are deemed to possess significant market power in any of the markets in which we operate.
- We may not be successful in acquiring future spectrum or other licenses that we need to offer new mobile data or other services.
- We cannot be certain that we will be successful in acquiring new businesses or integrating acquired businesses with our existing operations, or that we will achieve the expected returns on our acquisitions.
- We may not be successful in renewing the necessary regulatory or spectrum licenses, concessions or other operating agreements needed to operate our businesses upon expiration, and such licenses may be subject to termination, revocation or material alteration in the event of a breach or to promote the public interest or as a result of triggering a change of control clause.
- We do not have complete control over the prices that we charge.
- Strikes, work stoppages and other industrial actions could disrupt our operations or make it more costly to operate our businesses.
- We may have exposure to additional tax liabilities.
- Failure to comply with anti-corruption laws and regulations, such as the FCPA.
- Failure to comply with trade controls.
- Our business has been, and could in the future, be adversely affected by a pandemic.
- Our substantial leverage could limit our ability to obtain additional financing and have other adverse effects.
- We may not be able to generate sufficient cash to meet our debt service obligations.
- Certain of our subsidiaries are subject to various debt instruments that contain restrictions on how we finance our operations and operate our businesses, which could impede our ability to engage in beneficial transactions.
- We are exposed to interest rate risks and other adverse changes in the credit market. Shifts in such rates may adversely affect the debt service obligation of our subsidiaries.
- We are subject to increasing operating costs and inflation risks, which may adversely affect our results of operations.
- Uncertainties and challenging conditions in the global economy and in the countries in which we operate may adversely impact our business, financial condition and results of operations.
- We are exposed to sovereign debt and currency instability risks that could have an adverse impact on our liquidity, financial condition and cash flows.
- We are exposed to the risk of default by the counterparties to our derivative and other financial instruments, undrawn debt facilities and cash investments.
- The liquidity and value of our interests in certain of our partially-owned subsidiaries, as well as the ability to make decisions related to their operations, may be adversely affected by shareholder agreements and similar agreements to which we are a party.
- Failure in our technology or telecommunications systems from security attacks or natural disasters could significantly disrupt our operations, which could reduce our customer base and result in lost revenue.
- Cyberattacks or other network disruptions could have an adverse effect on our business.
- Unauthorized access to our network resulting in piracy could result in a loss of revenue.
- Data privacy regulations are expanding and compliance with, and any violations of, these regulations may cause us to incur significant expenses.
- We are a holding company, and we could be unable in the future to obtain cash in amounts sufficient to service our financial obligations or meet our other commitments.
- Different classes of our common shares have different voting rights, but all common shares vote together as one class; if you hold Class C common shares you will have no significant voting rights.
- It may be difficult for a third-party to acquire us, even if doing so may be beneficial to our shareholders.
- Although our Class B common shares are eligible to trade on the OTC Markets, there is no meaningful trading market for these shares and the market price of these shares is subject to volatility.
- We may be significantly influenced by one principal shareholder, and he may sell his shares, which may cause the price of our common shares to decrease.
- Bermuda law may, in certain circumstances, afford less protection to our shareholders than the laws in effect in other jurisdictions.
- We are a Bermuda company and it may be difficult for you to enforce judgments against us or our directors and executive officers.
- We are a Bermuda company and the Bermuda Economic Substance Act 2018 may cause us to incur substantial additional costs, incur significant penalties or possibly require us to re-domicile.
- Our bye-laws generally restrict shareholders from bringing legal action against our officers and directors.
- There are regulatory limitations on the ownership and transfer of our common shares.
- Certain Searchlight parties may sell Class C common shares subject to a Registration Rights Agreement in the public market, which may cause the market price of our common shares to decrease, and therefore make it more difficult to raise equity financing or issue equity as consideration in an acquisition.
- We have identified material weaknesses in our internal control over financial reporting, which could, if not remediated, result in material misstatements in our financial statements.
Management Discussion
- The comparability of our operating results during 2023 and 2022 is affected by an acquisition, a disposition and FX. As we use the term, “organic” changes exclude FX and the impacts of acquisitions and disposals, each as further discussed below.
- In the following discussion, we quantify the estimated impacts on the operating results of the periods under comparison that are attributable to acquisitions and disposals. We (i) acquired América Móvil’s operations in Panama during July 2022 and (ii) in connection with the formation of the Chile JV, disposed of the Chile JV Entities during October 2022. With respect to acquisitions, organic changes exclude the operating results of an acquired entity during the first 12 months following the date of acquisition. With respect to disposals, the prior-year operating results of disposed entities are excluded from organic changes to the same extent that those operations are not included in the current year.
- Changes in foreign currency exchange rates may have a significant impact on our operating results, as Liberty Costa Rica and certain entities within C&W have functional currencies other than the U.S. dollar. The impacts to the various components of our results of operations that are attributable to changes in FX are highlighted below. For information concerning our foreign currency risks and applicable foreign currency exchange rates, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Risk below. For information regarding foreign currency risk, see Item 1A. Risk Factors above.