DIRECTV 2012 Annual Report Download - page 44

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DIRECTV
financial position, but could possibly be material to our consolidated results of traditionally purchased insurance covering the launch and, in limited cases,
operations for any one period. Further, no assurance can be given that any adverse operation of our satellites, such policies typically cover the loss of the satellite itself
outcome would not be material to our consolidated financial position. See ‘‘Legal or a portion thereof, and not the business interruption or other associated direct
Proceedings-Intellectual Property Litigation’’ in Part I, Item 3 which is incorporated and indirect costs.
by reference herein. In-orbit risks include malfunctions, commonly referred to as anomalies, and
collisions with meteoroids, other spacecraft or other space debris. Anomalies occur
We rely on key personnel. as a result of satellite manufacturing errors, problems with the power systems or
We believe that our future success will depend to a significant extent upon the control systems of the satellites and general failures resulting from operating
performance of certain of our key executives. The loss of certain of our key satellites in the harsh space environment. We work closely with our satellite
executives could have a material adverse effect on our business, financial condition manufacturers to determine and eliminate the potential causes of anomalies in new
and results of operations. satellites and provide for redundancies of critical components as well as having
backup satellite capacity. However, we cannot assure that we will not experience
Construction or launch delays on satellites could materially adversely affect our anomalies in the future, nor can we assure you that our backup satellite capacity
revenues and earnings. will be sufficient.
A key component of our business strategy is our ability to expand our offering Any single anomaly or series of anomalies could materially adversely affect our
of new programming and services, including HD programming. In order to operations and revenues and our relationships with our subscribers, as well as our
accomplish this goal, we need to construct and launch new satellites. The ability to attract new subscribers for our services. Anomalies may also reduce the
construction and launch of satellites are often subject to delays, including expected useful life of a satellite, creating additional expenses due to the need to
construction delays, unavailability of launch opportunities due to competition for provide replacement or backup satellites and potentially reducing revenues if service
launch slots, weather, general delays when a launch provider experiences a launch is interrupted. Finally, the occurrence of anomalies may materially adversely affect
failure, and delays in obtaining regulatory approvals. A significant delay in the our ability to insure our satellites at commercially reasonable premiums, if at all.
delivery of any satellite would materially adversely affect the use of the satellite and Our ability to earn revenue also depends on the usefulness of our satellites.
thus could materially adversely affect our anticipated revenues and earnings. If Each satellite has a limited useful life. A number of factors affect the useful life of a
satellite construction schedules are not met, there can be no assurance that a launch satellite, including, among other things:
opportunity will be available at the time a satellite is ready to be launched. Certain
delays in satellite construction could also jeopardize a satellite authorization that is • the design;
conditioned on timely construction and launch of the satellite. • the quality of its construction;
Satellites are subject to significant launch and operational risks. • the durability of its component parts;
Satellites are subject to significant operational risks relating to launch and • the insertion of the satellite into orbit;
while in orbit. These risks include launch failure, incorrect orbital placement or • any required movement, temporary or permanent, of the satellite;
improper operation. Launch failures result in significant delays in the deployment
of satellites because of the need both to construct replacement satellites, which can • the ability to continue to maintain proper orbit and control over the
take up to 36 months, and to obtain other launch opportunities. Any significant satellite’s functions; and
delays or failures in successfully launching and deploying our satellites could • the remaining on-board fuel following orbit insertion.
materially adversely affect our ability to generate revenues. While we have
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