DIRECTV 2002 Annual Report Download - page 94

Download and view the complete annual report

Please find page 94 of the 2002 DIRECTV annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

HUGHES ELECTRONICS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)
2005; $9.2 million in 2006; $9.2 million in 2007; and $58.6 million thereafter. The increase in
amortization expense from 2002 to estimated amortization expense in 2003 is due to the reinstatement
of subscriber base and dealer network intangible assets as a result of the issuance of EITF Issue No.
02-17, “Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination.”
See Note 3 for further discussion.
As discussed in Note 3, Hughes ceased amortization of goodwill and intangible assets with
indefinite lives with the adoption of SFAS No. 142 on January 1, 2002.
Note 7: Investments in Marketable Securities
Investments in marketable equity securities stated at current fair value and classified as available-
for-sale totaled $98.2 million and $725.4 million at December 31, 2002 and 2001, respectively, and
were recorded in the Consolidated Balance Sheets in “Investments and Other Assets.” Investments in
debt securities, stated at current fair value and classified as available-for-sale, totaled $209.9 million at
December 31, 2002. Investments in debt securities with maturities of less than one year totaling
$99.8 million are carried in “Prepaid expenses and other.” Investments in debt securities with
remaining maturities of six years totaling $110.1 million are carried in “Investments and Other Assets.”
At December 31, 2002, $3.4 million of accumulated unrealized pre-tax losses were recorded as
part of OCI. At December 31, 2001, $323.1 million of accumulated unrealized pre-tax gains were
recorded as part of OCI. During 2002 and 2001, Hughes recorded a write-down for other-than-
temporary declines in certain marketable equity investments of $148.9 million and $226.1 million,
respectively.
On August 21, 2002, Hughes sold about 8.8 million shares of Thomson multimedia S.A.
(“Thomson”) common stock for approximately $211.0 million in cash, resulting in a pre-tax gain of
about $158.6 million.
On November 19, 2001, Hughes repaid $74.9 million of debt pursuant to the terms of a debt
guarantee provided by Hughes for the benefit of Motient Corporation (“Motient”). In connection with the
payment, Hughes received from Motient 7.1 million common shares of XM Satellite Radio Holdings Inc.
stock, with a market value as of November 2001 of $67.9 million and $3.6 million in cash. The
repayment of Motient’s debt released Hughes from any further obligations related to Motient’s
indebtedness and therefore Hughes reversed a related reserve of $39.5 million. The net effect of these
actions resulted in a credit of $36.1 million to “Other, net” in the Consolidated Statements of Operations
and Available Separate Consolidated Net Income.”
On July 31, 2001, Hughes sold about 4.1 million shares of Thomson common stock for
approximately $132.7 million in cash, resulting in a pre-tax gain of approximately $108.3 million.
Aggregate investments in affiliated companies accounted for under the equity method at
December 31, 2002 and 2001 amounted to $6.8 million and $76.6 million, respectively.
84