DIRECTV 2003 Annual Report Download - page 106

THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)
Note 17). As a result of the completion of the News Corporation transactions, beginning on December 23, 2003,
News Corporation and its affiliates are considered related parties.
The following table summarizes related-party transactions for the years ended December 31:
2003 2002 2001
(Dollars in Millions)
Revenues ..................................................... $99.5 $211.1 $238.8
Costsandexpenses.............................................. 69.7 117.9 126.2
The following table sets forth the amount of accounts receivable from and payable to related parties as of
December 31:
2003 2002
(Dollars in Millions)
Accounts receivable from related parties .................................... $32.9 $317.4
Accounts payable to related parties ......................................... 75.1 —
The December 31, 2003 accounts receivable and accounts payable balances are primarily related to affiliates
of News Corporation.
Note 16. DLA LLC Reorganization
On March 18, 2003, DLA LLC filed a voluntary petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the Bankruptcy Court. The filing did not include any of the LOCs providing the DIRECTV
service in Latin America and the Caribbean. During the bankruptcy proceedings, DLA LLC continued to manage
its business as a debtor-in-possession.
On December 11, 2003, DLA LLC filed a proposed Reorganization Plan that reflected an agreement
reached between DLA LLC, its owners and unsecured creditors. On February 13, 2004, the Bankruptcy Court
confirmed DLA LLC’s Reorganization Plan, which became effective on February 24, 2004. The Bankruptcy
Court has retained jurisdiction to resolve certain remaining matters primarily related to the enforcement and
interpretation of the Reorganization Plan. However, it is anticipated that resolution of these matters will not have
a material impact on DLA LLC’s operations.
While the bankruptcy was proceeding, the Company provided DLA LLC with a $300 million senior secured
debtor-in-possession financing facility. The facility was fully drawn and converted, in accordance with the
Reorganization Plan, into an equity interest in DLA LLC on February 24, 2004. As part of the Reorganization
Plan, the Company also agreed to provide “exit” financing, consisting of a revolving credit facility of up to $200
million, decreasing from time to time based on a schedule in the revolving credit facility agreement. The
revolving credit facility expires on February 27, 2009 and borrowings bear interest at a variable rate, calculated
as the base rate (as defined in the revolving credit facility agreement) plus 6%, not to exceed the greater of 12%
or the Company’s cost of funds.
The Reorganization Plan and/or a contribution agreement between the Company and Darlene Investments,
LLC (the “Contribution Agreement”) provided for the contribution by the Company of its claims against DLA
LLC of approximately $1.4 billion, to the extent not previously discharged in the Chapter 11 proceedings, as well
as the contribution of approximately $530 million in intercompany loans made by the Company to SurFin, Ltd.
and its subsidiaries (“SurFin”), the Company’s 75% owned financing affiliate of DLA LLC. Also, in accordance
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