Dish Network 2009 Annual Report Download - page 36

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26
We have substantial debt outstanding and may incur additional debt.
As of December 31, 2009, our total debt, including the debt of our subsidiaries, was $6.497 billion. Our debt levels
could have significant consequences, including:
x requiring us to devote a substantial portion of our cash to make interest and principal payments on our debt,
thereby reducing the amount of cash available for other purposes. As a result, we would have limited
financial and operating flexibility in responding to changing economic and competitive conditions;
x limiting our ability to raise additional debt because it may be more difficult for us to obtain debt financing
on attractive terms; and
x placing us at a disadvantage compared to our competitors that have less debt.
In addition, we may incur substantial additional debt in the future. The terms of the indentures relating to our senior
notes permit us to incur additional debt. If new debt is added to our current debt levels, the risks we now face could
intensify.
We have limited owned and leased satellite capacity and satellite failures could adversely affect our business.
Operation of our programming service requires that we have adequate satellite transmission capacity for the
programming we offer. Moreover, current competitive conditions require that we continue to expand our offering of
new programming, particularly by expanding local HD coverage and offering more HD national channels. While
we generally have had in-orbit satellite capacity sufficient to transmit our existing channels and some backup
capacity to recover the transmission of certain critical programming, our backup capacity is limited.
In the event of a failure or loss of any of our satellites, we may need to acquire or lease additional satellite capacity
or relocate one of our other satellites and use it as a replacement for the failed or lost satellite. Such a failure could
result in a prolonged loss of critical programming or a significant delay in our plans to expand programming as
necessary to remain competitive and thus may have a material adverse effect on our business, financial condition
and results of operations.
Our owned and leased satellites under construction are subject to risks related to construction and launch that
could limit our ability to utilize these satellites.
A key component of our business strategy is our ability to expand our offering of new programming and services,
including increased local and HD programming. In order to accomplish this goal, we need to construct and launch
satellites. Satellite construction and launch is subject to significant risks, including construction and launch delays,
launch failure and incorrect orbital placement. Certain launch vehicles that may be used by us have either unproven
track records or have experienced launch failures in the recent past. The risks of launch delay and failure are usually
greater when the launch vehicle does not have a track record of previous successful flights. Launch failures result in
significant delays in the deployment of satellites because of the need both to construct replacement satellites, which
can take more than three years, and to obtain other launch opportunities. Significant construction or launch delays
could materially and adversely affect our ability to generate revenues. If we were unable to obtain launch insurance,
or obtain launch insurance at rates we deem commercially reasonable, and a significant launch failure were to occur,
it could have a material adverse effect on our ability to generate revenues and fund future satellite procurement and
launch opportunities.
In addition, the occurrence of future launch failures may materially and adversely affect our ability to insure the
launch of our satellites at commercially reasonable premiums, if at all. Please see further discussion under the
caption “We currently have no commercial insurance coverage on the satellites we own and could face significant
impairment charges if one of our satellites fails” below.