DIRECTV 2012 Annual Report Download - page 49

DIRECTV
software, and other malicious activity including industrial espionage and malicious attorneys general where regulators may seek monetary damages and may also seek
social engineering, as well as power outages, natural disasters such as earthquakes, to require or prohibit certain actions by us with regard to our current or potential
terrorist attacks and similar events, pose significant risks. Due to the fast-moving customers. While we do not believe that any of these proceedings alone or in the
pace of technological advancements, it may be difficult to detect, contain and aggregate will have a material effect on our consolidated financial position, an
remediate every such event. Such an event could have an adverse impact on our adverse outcome in one or more of these matters or the imposition of conditions
operations, including service disruption, degradation of service, excessive call volume by regulators on the conduct of our business could be material to our consolidated
to call centers and damage to our broadcast centers, other properties, equipment results of operations and cash flows for any one period. Further, no assurance can
and data. Such an event also could result in large expenditures necessary to repair be given that any adverse outcome would not be material to our consolidated
or replace such networks or information systems or to protect them from similar financial position.
events in the future. Third parties may also experience errors or disruptions that
could adversely impact our business operations and over which we have limited Our strategic initiatives may not be successfully implemented, may not elicit
control. Significant incidents could result in a disruption of our operations, the expected customer response in the market and may result in competitive
customer dissatisfaction, or a loss of customers or revenues. The amount and scope reactions.
of insurance we maintain against losses resulting from these events may not be The Company has identified a number of strategic initiatives that it intends to
sufficient to cover our losses or otherwise adequately compensate us for any pursue which are discussed in more detail in the ‘‘Business Strategy’’ section
disruptions to our business that may result. Furthermore, our operating activities beginning in Part I, Item 1 of this Annual Report. The successful implementation
could be subject to risks caused by misappropriation, misuse, leakage, falsification of those strategic initiatives requires an investment of time, talent and money and is
and accidental release or loss of information maintained in our information dependent upon a number of factors some of which are not within our control.
technology systems and networks, including customer, personnel and vendor data. Those factors include the ability to execute such initiatives in the market, the
We could be exposed to significant costs if such risks were to materialize, and such response of existing and potential new customers, and the reaction of competitors.
events could damage our reputation and credibility and have a negative impact on If we fail to properly execute or deliver products or services that do not address
our revenues. We also could be required to expend significant capital and other customers’ expectations, it may have an adverse effect on our ability to retain and
resources to remedy any such security breach. As a result of the increasing awareness attract customers and may increase our costs and reduce our revenues. Similarly,
concerning the importance of safeguarding personal information, the potential competitive reaction to our initiatives or advancements in technology or competitive
misuse of such information and legislation that has been adopted or is being products or services could impair our ability to execute or could limit the
considered regarding the protection, privacy and security of personal information, effectiveness of those strategic initiatives. There can be no assurance that we will
the liability associated with information-related risks is increasing, particularly for successfully implement these strategic initiatives or that, if successfully pursued, they
businesses like ours that handle a large amount of personal customer data. The will have the desired result on our business or results of operations.
occurrence of any such network or information systems related events or security
breaches could have a material adverse effect on our business and results of We may face other risks described from time to time in periodic reports filed
operations. by us with the SEC.
We face risks arising from the outcome of various legal proceedings. From time to time, we may disclose other relevant risks in other periodic
reports that we file with the SEC. We urge you to consider the above risk factors
We are involved in various legal proceedings, including those arising in the and any other risks disclosed in such periodic reports carefully in evaluating the
ordinary course of business, such as consumer class actions and those described forward-looking statements contained in this Annual Report. The forward-looking
under the caption ‘‘Legal Proceedings’’ in Part I, Item 3 incorporated by reference statements included in this Annual Report are made only as of the date of this
herein. Such matters include investigations and legal actions by the FTC and state
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