Dish Network 2006 Annual Report Download - page 40

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30
We cannot be certain that we will sustain profitability.
Due to the substantial expenditures necessary to complete construction, launch and deployment of our DBS system
and to obtain and service DISH Network customers, we have in the past sustained significant losses. If we do not
have sufficient income or other sources of cash, our ability to service our debt and pay our other obligations could be
affected. While we had net income of $608.3 million, $1.515 billion and $214.8 million for the years ended
December 31, 2006, 2005 and 2004, respectively, we may not be able to sustain this profitability. Improvements in
our results of operations will depend largely upon our ability to increase our customer base while maintaining our
price structure, effectively managing our costs and controlling churn. We cannot assure you that we will be
effective with regard to these matters.
We depend on few manufacturers, and in some cases a single manufacturer, for many components of consumer
premises equipment; we may be adversely affected by product shortages.
We depend on relatively few sources, and in some cases a single source, for many components of the consumer
premises equipment that we provide to subscribers in order to deliver our digital television services. Product
shortages and resulting installation delays could cause us to lose potential future subscribers to our DISH Network
service.
We could be exposed to significant financial losses if our international business ventures are unsuccessful.
We have entered into certain strategic transactions in Asia, and we may increase our strategic investment activity in
these and other international markets. These investments, which we expect could become substantial over time,
involve a high degree of risk and could expose us to significant financial losses if the underlying ventures are not
successful.
These risks include, among other things, the risks that required regulatory approvals may not be obtained, that we
may not be able to enter into necessary distribution and other relationships, and that the companies in which we
invest or with whom we partner may not be able to compete effectively in these markets or that there may be
insufficient demand for the new services planned for these markets.
We cannot assure you that there will not be deficiencies leading to material weaknesses in our internal control
over financial reporting.
We periodically evaluate and test our internal control over financial reporting in order to satisfy the requirements of
Section 404 of the Sarbanes-Oxley Act. This evaluation and testing of internal control over financial reporting
includes internal control over financial reporting relating to our operations. Although our management has
concluded that our internal control over financial reporting was effective as of December 31, 2006, if in the future
we are unable to report that our internal control over financial reporting is effective (or if our auditors do not agree
with our assessment of the effectiveness of, or are unable to express an opinion on, our internal control over
financial reporting), investors, customers and business partners could lose confidence in the accuracy of our
financial reports, which could in turn have a material adverse effect on our business.
Item 1B. UNRESOLVED STAFF COMMENTS
None.