DIRECTV 2004 Annual Report Download - page 83

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)
The carrying amounts of assets and liabilities for the discontinued operations of HSS are as follows:
December 31, 2003
(Dollars in Millions)
Total assets
$
90.5
Total liabilities
47.5
DIRECTV Broadband
On February 28, 2003, DIRECTV Broadband completed the transition of its customers to alternative service providers and shut
down its high-speed Internet service business. In the fourth quarter of 2002, we recorded a charge of $92.8 million related to
accruals for employee severance benefits, contract termination payments and the write-off of customer premise equipment.
Included in the $92.8 million charge were accruals for employee severance benefits of $21.3 million and contract termination
payments of $18.6 million. During 2003, we reduced the accrual due to the favorable settlement of certain contractual
commitments by recording a gain of $1.6 million to “Income (loss) from discontinued operations, net of taxes” in the
Consolidated Statements of Operations. As of December 31, 2004, $0.9 million of accruals remained. During the year ended
December 31, 2002, DIRECTV Broadband reported a $88.9 million loss from discontinued operations, net of taxes.
Satellite Systems Manufacturing Businesses
Pursuant to a settlement agreement executed on July 15, 2003 related to the purchase price adjustment dispute arising from the
2000 sale of our satellite systems manufacturing businesses to The Boeing Company, or Boeing, we recorded an after-tax
charge of $6.3 million to discontinued operations during the quarter ended June 30, 2003. On July 18, 2003, we paid the $360
million settlement amount to Boeing, which is included in “Net cash used in discontinued operations” in the Consolidated
Statements of Cash Flows.
We included the after-tax charge of $6.3 million resulting from the settlement with Boeing discussed above in “Income (loss)
from discontinued operations, net of taxes” in the Consolidated Statements of Operations for the year ended December 31,
2003. We present the net cash flows used by DIRECTV Broadband and the $360 million settlement payment to Boeing in 2003
in the Consolidated Statements of Cash Flows as “Net cash used in discontinued operations.”
“Income (loss) from discontinued operations, net of taxes,” as reported in the Consolidated Statements of Operations, is
comprised of the following:
Years Ended December 31,
2004
2003
2002
(Dollars in Millions, Except
Per Share Amounts)
Income (loss) from discontinued operations, net of taxes
$
50.8
$
82.8
$
(4.8
)
Loss on sale of discontinued operations, net of taxes
(633.1
)
(4.7
)
(92.8
)
Income (loss) from discontinued operations, net of taxes
$
(582.3
)
$
78.1
$
(97.6
)
Basic and Diluted Earnings (Loss) Per Common Share:
Income from discontinued operations, net of taxes
$
0.04
$
0.06
$
—
Loss on sale of discontinued operations, net of taxes
(0.46
)
—
(0.07
)
Income (loss) from discontinued operations, net of taxes
$
(0.42
)
$
0.06
$
(0.07
)
74