DIRECTV 2003 Annual Report Download - page 92

THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)
ratio, as defined by the credit agreement. Under its original terms, the revolving credit facility and the Tranche A
Term Loan terminate in 2007 and the Tranche B Term Loan matures in 2008. The facilities are secured ratably
with the fixed rate notes described above by substantially all of PanAmSat’s assets, including its satellites.
PanAmSat repaid a $1,725.0 million intercompany loan from the Company in February 2002, using proceeds
from the bank facility and the 8.5% notes described above.
On July 14, 2003, PanAmSat made an optional prepayment of $350.0 million under its $1,250.0 million
bank facility from available cash on hand. The prepayment was applied pro rata against PanAmSat’s then fully
drawn Tranche A Term Loan and Tranche B Term Loan.
On October 29, 2003, PanAmSat amended its bank facility to provide for the refinancing of its Tranche A
Term Loan and Tranche B Term Loan under a new Term Loan B-1 facility with an interest rate of LIBOR plus
2.5% and scheduled annual maturities of principal in varying amounts from 2004 through 2010. As a result of
this amendment, the amount of the revolving credit facility, its termination date and the provisions relating to the
commitment fee remain unchanged. This amendment also adjusted certain operating covenants under the bank
facility to provide greater operational flexibility to PanAmSat. On December 29, 2003, PanAmSat made an
optional prepayment under the Term Loan B-1 of $300.0 million from available cash on hand. As of December
31, 2003, the outstanding amount under the Term Loan B-1 facility was $350.0 million and the revolving credit
facility was undrawn.
On October 1, 2001, the Company entered into a $2.0 billion revolving credit facility with General Motors
Acceptance Corporation (“GMAC”). The facility was subsequently amended in February and November 2002,
and March 2003. The amendments reduced the size of the facility to $1,500.0 million and provided for a
commitment through March 31, 2004. On June 18, 2003, the Company voluntarily prepaid amounts owed
thereunder and terminated the facility. The facility was comprised of a $1,500.0 million tranche secured by a
$1,500.0 million cash deposit of the Company. Borrowings under the facility bore interest at GMAC’s cost of
funds plus 0.125%, and the $1,500.0 million cash deposit earned interest at a rate equivalent to GMAC’s cost of
funds. The Company had the legal right of setoff with respect to the $1,500.0 million GMAC cash deposit and
accordingly offset it against amounts borrowed from GMAC under the $1,500.0 million tranche in the
Consolidated Balance Sheets.
Other
$36.0 million in other short-term and long-term debt, related primarily to DLA and HNS’ international
subsidiaries, was outstanding at December 31, 2003. Principal on these borrowings is due in varying amounts
through 2007.
The Company’s notes payable, credit facilities and other borrowings mature as follows: $229.7 million in
2004; $290.6 million in 2005; $18.5 million in 2006; $30.2 million in 2007; $407.0 million in 2008; and $3,385.0
million thereafter.
Covenants and Restrictions
DIRECTV U.S. and PanAmSat are required to meet certain financial covenants and are also subject to
restrictive covenants under their borrowings. These covenants limit the ability of DIRECTV U.S., PanAmSat and
their respective subsidiaries to, among other things: incur or guarantee additional indebtedness; make restricted
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