DIRECTV 2003 Annual Report Download - page 73

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Description of Business
The DIRECTV Group, Inc. (the “Company”) is a world-leading provider of digital television entertainment,
broadband satellite networks and services, and global video and data broadcasting. The Company provides
advanced communication services on a global basis and has developed a wide range of entertainment,
information and communication services for home and business use, including video, data, voice, multimedia and
Internet services.
On March 16, 2004, the Company changed its corporate name from Hughes Electronics Corporation to The
DIRECTV Group, Inc. Effective on March 17, 2004, the Company’s ticker symbol on the New York Stock
Exchange was changed to “DTV.” The name change has no impact on the Company’s common stock or the
rights of stockholders. The name of the Company was changed to better reflect the Company’s commitment to
building its business around the DIRECTV businesses.
The Company’s principal operations are carried out through four businesses organized in three segments:
Direct-To-Home Broadcast Segment
The Direct-To-Home Broadcast segment consists of the DIRECTV digital multi-channel entertainment
businesses located in the United States and Latin America.
• DIRECTV Holdings LLC (“DIRECTV U.S.”) launched its direct-to-home service in 1994.
DIRECTV U.S. is the largest provider of direct broadcast satellite television services and the second
largest multi-channel video program provider in the U.S., in each case based on the number of
subscribers.
• DIRECTV Latin America (“DLA”) is a provider of digital direct-to-home satellite television
entertainment in Latin America, which includes South America, Central America, Mexico and the
Caribbean. When the Company refers to DLA, it is referring to a group of companies that combine
to provide the DIRECTV service throughout Latin America. The most significant companies
include DIRECTV Latin America, LLC (“DLA LLC”), which was 74.7% owned by the Company
as of December 31, 2003, as well as the local operating companies (“LOCs”) selling the DIRECTV
service in Latin America. As of December 31, 2003, DLA LLC owned, directly or indirectly and
along with certain affiliates, sixteen subsidiaries, including the LOCs in Brazil, Mexico, Venezuela,
Argentina and Puerto Rico. The DIRECTV service is provided to DLA’s customers via the Galaxy
3C satellite that was placed into service in September 2002. DLA LLC leases the satellite
transponder capacity on Galaxy 3C from PanAmSat Corporation (“PanAmSat”). On March 18,
2003, DLA LLC filed a voluntary petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”) in order to address its financial and operational challenges. In February 2004, DLA LLC
announced the confirmation of its Plan of Reorganization (the “Reorganization Plan”) by the
Bankruptcy Court and its emergence from Chapter 11. See Note 16 for further information.
The Company records 100% of the net losses incurred by DLA LLC and certain other consolidated
LOCs due to the accumulation of net losses in excess of the minority investors’ investments and the
Company’s continued funding of those businesses.
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