plan to spend approximately $900 million including Marcus Cable, or $1.2 billion
pro forma including our recent and pending acquisitions, to upgrade the systems
we own and the systems we have agreed to acquire in our pending acquisitions. We
also plan to spend an additional $900 million, or $1.3 billion pro forma for our
recent and pending acquisitions, to maintain and expand the systems we own and
the systems we will acquire. We cannot assure you that these amounts will be
sufficient to accomplish our planned system upgrades, maintenance and expansion.
If we cannot obtain the necessary funds from increases in our operating cash
flow, additional borrowings or other sources, we may not be able to fund our
planned upgrades and expansion and offer new products and services on a timely
basis. Consequently, our growth, our financial condition and the results of our
operations could suffer materially.
IF WE ARE UNSUCCESSFUL IN IMPLEMENTING OUR GROWTH STRATEGY, WE MAY BE UNABLE TO
FULFILL OUR OBLIGATIONS UNDER THE NOTES.
We expect that a substantial portion of our future growth will be achieved
through revenues from new products and services and the acquisition of
additional cable systems. We may not be able to offer these new products and
services successfully to our customers and these new products and services may
not generate adequate revenues. In addition, we cannot predict the success of
our acquisition strategy. In the past year, the cable television industry has
undergone dramatic consolidation which has reduced the number of future
acquisition prospects. This consolidation may increase the purchase price of
future acquisitions, and we may not be successful in identifying attractive
acquisition targets in the future. Additionally, those acquisitions we do
complete are not likely to have a positive net impact on our operating results
in the near future. If we are unable to grow our cash flow sufficiently, we may
be unable to fulfill our obligations to you under the notes or obtain
WE MAY NOT HAVE THE ABILITY TO INTEGRATE THE NEW SYSTEMS THAT WE ACQUIRE AND THE
CUSTOMERS THEY SERVE WITH OUR EXISTING SYSTEMS. THIS COULD ADVERSELY AFFECT OUR
OPERATING RESULTS AND GROWTH STRATEGY.
Upon the completion of our pending acquisitions, we will own and operate
cable systems serving approximately 3.7 million customers, as compared to the
cable systems we currently own which serve approximately 2.7 million customers
as of June 30, 1999. In addition, we may acquire more cable systems in the
future, through system swaps or otherwise. The integration of our new cable
systems poses a number of significant risks, including:
- our acquisitions may not have a positive impact on our cash flows from
- the integration of these new systems and customers will place significant
demands on our management and our operations, informational services, and
financial, legal and marketing resources. Our current operating and
financial systems and controls and information services may not be
adequate, and any steps taken to improve these systems and controls may
not be sufficient.
- our current information systems may be incompatible with the information
systems we have acquired or plan to acquire. We may be unable to
integrate these information systems at a reasonable cost or in a timely
- acquired businesses sometimes result in unexpected liabilities and
contingencies which could be significant.