DIRECTV 2002 Annual Report Download - page 28

HUGHES ELECTRONICS CORPORATION
satellite, it must notify the FCC in writing prior to commencing satellite construction, and any
construction engaged in is at the applicant’s own risk.
Additionally, Hughes may be required to obtain licenses in other countries to provide services in or
connected to the country. Foreign laws and regulatory practices governing the provision of satellite
services to licensed entities and directly to end users vary substantially. Hughes is required by
international rules to coordinate the use of the frequencies on its satellites with other satellite operators
who may interfere with Hughes or who may suffer interference from Hughes. Hughes may also be
subject to national communications and/or broadcasting laws with respect to its provision of
international satellite service.
Research and Intellectual Property
The ability to continue to generate technological innovations is important to Hughes’ long-term
business strategy. The continued development of new technologies may provide new and improved
products that will continue to fuel business opportunities. Research and development is carried on in
each of Hughes’ business units in connection with ongoing product improvement efforts.
Hughes utilizes a large number of patents and trademarks, which are held by Hughes or its
affiliates. Hughes believes that, in the aggregate, the rights existing under such patents, trademarks
and licenses are important. Hughes believes that its competitive position is dependent on research,
engineering and production capabilities. Hughes actively pursues patent and trademark protections of
its technological and engineering innovations, and actively pursues enforcement of its intellectual
property rights.
Environmental Regulation
Hughes is subject to the requirements of federal, state, local and foreign environmental and
occupational safety and health laws and regulations. These include laws regulating air emissions,
water discharge and waste management. Hughes has an environmental management structure
designed to facilitate and support its compliance with these requirements, and attempts to maintain
complete compliance with all such requirements. Hughes has made and will continue to make capital
and other expenditures to comply with environmental requirements. Hughes does not, however, expect
capital or other expenditures for environmental compliance to be material in 2003 and 2004.
Environmental requirements are complex, change frequently and have become more stringent over
time. Accordingly, Hughes cannot provide assurance that these requirements will not change or
become more stringent in the future in a manner that could have a material adverse effect on Hughes’
business.
Hughes is also subject to environmental laws requiring the investigation and cleanup of
environmental contamination at facilities it formerly owned or operated or currently owns or operates or
to which it sent hazardous wastes for treatment or disposal. Hughes is aware of contamination at one
of its former sites. Hughes believes it has adequately provided for the expected cost of environmental
investigation and cleanup.
Segment Reporting Data
Operating segment and principal geographic area data for 2002, 2001 and 2000 are summarized
in Note 20 of the Notes to the Consolidated Financial Statements in Part II, and are incorporated herein
by reference.
Other
As of December 31, 2002, Hughes and its subsidiaries had approximately 11,600 employees.
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