Dish Network 2011 Annual Report Download - page 42

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32
32
We may need additional capital, which may not be available on acceptable terms or at all, to continue investing
in our business and to finance acquisitions and other strategic transactions.
We may need to raise additional capital in the future, which may not be available on acceptable terms or at all, to
among other things, continue investing in our business, construct and launch new satellites, and to pursue
acquisitions and other strategic transactions.
Furthermore, weakness in the equity markets could make it difficult for us to raise equity financing without
incurring substantial dilution to our existing shareholders. In addition, sustained economic weakness or weak results
of operations may limit our ability to generate sufficient internal cash to fund these investments, capital
expenditures, acquisitions and other strategic transactions. As a result, these conditions make it difficult for us to
accurately forecast and plan future business activities because we may not have access to funding sources necessary
for us to pursue organic and strategic business development opportunities.
A portion of our investment portfolio is invested in securities that have experienced limited or no liquidity and
may not be immediately accessible to support our financing needs.
A portion of our investment portfolio is invested in auction rate securities, mortgage backed securities, and strategic
investments, and as a result a portion of our portfolio has restricted liquidity. Liquidity in the markets for these
investments has been adversely impacted. If the credit ratings of these securities deteriorate or the lack of liquidity
in the marketplace continues, we may be required to record further impairment charges. Moreover, the sustained
uncertainty of domestic and global financial markets has greatly affected the volatility and value of our marketable
investment securities. To the extent we require access to funds, we may need to sell these securities under
unfavorable market conditions, record further impairment charges and fall short of our financing needs.
We have substantial debt outstanding and may incur additional debt.
As of December 31, 2011, our total debt, including the debt of our subsidiaries, was $7.494 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.
It may be difficult for a third party to acquire us, even if doing so may be beneficial to our shareholders,
because of our ownership structure.
Certain provisions of our certificate of incorporation and bylaws may discourage, delay or prevent a change in
control of our company that a shareholder may consider favorable. These provisions include the following:
x a capital structure with multiple classes of common stock: a Class A that entitles the holders to one vote
per share, a Class B that entitles the holders to ten votes per share, a Class C that entitles the holders to one
vote per share, except upon a change in control of our company in which case the holders of Class C are
entitled to ten votes per share;
x a provision that authorizes the issuance of “blank check” preferred stock, which could be issued by our
Board of Directors to increase the number of outstanding shares and thwart a takeover attempt;
x a provision limiting who may call special meetings of shareholders; and