DIRECTV 2004 Annual Report Download - page 91

THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)
make capital expenditures. Should DIRECTV U.S. fail to comply with its covenants, all or a portion of the borrowings under
the senior notes and senior secured credit facilities could become immediately payable. At December 31, 2004, DIRECTV U.S.
was in compliance with all such covenants.
As of December 31, 2004, restricted cash of $36.0 million was included as part of “Prepaid expenses and other” in the
Consolidated Balance Sheets. We deposited the $36.0 million to secure certain letters of credit and obligations of the Company
and the Company’s majority-owned foreign subsidiaries. Restrictions on the cash will be removed as the letters of credit expire
and the foreign subsidiaries’ obligations are satisfied or terminated.
Note 10: Income Taxes
We base the income tax benefit on the reported “Loss From Continuing Operations Before Income Taxes, Minority Interests
and Cumulative Effect of Accounting Changes.” Deferred income tax assets and liabilities reflect the impact of temporary
differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts
recognized for tax purposes, as measured by applying currently enacted tax laws.
Prior to our split-off from GM on December 22, 2003, we and our domestic subsidiaries joined with GM in filing a consolidated
U.S. federal income tax return and combined returns for certain states. The portion of the consolidated income tax liability or
receivable we recorded during this period was generally equivalent to the amount that would have been recorded on a separate
return basis.
The income tax benefit consisted of the following for the years ended December 31:
2004
2003
2002
(Dollars in Millions)
Current tax (benefit) expense:
U.S. federal
$
34.9
$
(68.2
)
$
(129.0
)
Foreign
(6.0
)
53.0
74.3
State and local
4.6
(0.3
)
(8.5
)
Total
33.5
(15.5
)
(63.2
)
Deferred tax (benefit) expense:
U.S. federal
(631.0
)
(82.3
)
18.0
State and local
(93.1
)
(6.5
)
3.0
Total
(724.1
)
(88.8
)
21.0
Total income tax benefit
$
(690.6
)
$
(104.3
)
$
(42.2
)
“Loss From Continuing Operations Before Income Taxes, Minority Interests and Cumulative Effect of Accounting Changes”
included the following components:
2004
2003
2002
(Dollars in Millions)
U.S. loss
$
(1,614.5
)
$
(74.5
)
$
424.4
Foreign loss
(145.6
)
(403.2
)
(579.6
)
Total
$
(1,760.1
)
$
(477.7
)
$
(155.2
)
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