DIRECTV 2005 Annual Report Download - page 100

THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —(continued)
Our notes payable and credit facility mature as follows: $9.4 million in 2006; $10.1 million in 2007;
$47.6 million in 2008; $97.6 million in 2009, $297.5 million in 2010 and $2,949.7 million thereafter.
These amounts do not reflect potential prepayments that may be required under our senior secured
credit facility, which could result from a computation of excess cash flows that we may be required to
make at each year end under the credit agreement. We were not required to make a prepayment for
the years ended December 31, 2005 and 2004. However, we made a prepayment of $201.0 million on
April 15, 2004 for the year ended December 31, 2003. The amount of interest accrued related to our
outstanding debt was $28.4 million at December 31, 2005 and $36.5 million at December 31, 2004. The
unamortized bond premium included in other debt as of December 31, 2005 was $3.1 million.
Covenants and Restrictions. The senior secured credit facility requires DIRECTV U.S. to comply
with certain financial covenants. The senior notes and the senior secured credit facility also include
covenants that restrict DIRECTV U.S.’ ability to, among other things, (i) incur additional indebtedness,
(ii) incur liens, (iii) pay dividends or make certain other restricted payments, investments or
acquisitions, (iv) enter into certain transactions with affiliates, (v) merge or consolidate with another
person, (vi) sell, assign, lease or otherwise dispose of all or substantially all of our assets, and
(vii) make voluntary prepayments of certain debt, in each case subject to exceptions as provided in the
credit agreement and senior notes indentures. Should we fail to comply with these covenants, all or a
portion of our borrowings under the senior notes and senior secured credit facility could become
immediately payable and the revolving credit facility could be terminated. At December 31, 2005,
DIRECTV U.S. was in compliance with all such covenants.
2005 Refinancing Transactions. In April 2005, we replaced our prior credit facility with the senior
secured credit facility described above. The senior secured credit facility was initially comprised of a
$500.0 million six-year Term Loan A, a $1,500.0 million eight-year Term Loan B, both of which were
fully funded, and a $500.0 million undrawn six-year revolving credit facility. We used a portion of the
$2,000.0 million proceeds from the transaction to repay our prior credit facility that had a then
outstanding balance of $1,001.6 million and to pay related financing costs and accrued interest.
Borrowings under the prior credit facility bore interest at a rate equal to LIBOR plus 1.75%.
On May 19, 2005, we redeemed $490.0 million of our then outstanding $1,400.0 million 8.375%
senior notes at a redemption price of 108.375% plus accrued and unpaid interest, for a total of
$538.3 million.
On June 15, 2005, the Co-Issuers issued $1,000.0 million of 6.375% senior notes. We used a
portion of the proceeds from the transaction to repay $500.0 million of the Term Loan B portion of
our senior secured credit facility and to pay related financing costs.
The repayment of our prior senior secured credit facility, the partial repayment of our senior
secured credit facility and the partial redemption of our 8.375% senior notes resulted in a 2005 pre-tax
charge of $64.9 million ($40.0 million after tax) of which $41.0 million was associated with the premium
paid for the redemption of our 8.375% senior notes and $23.9 million with the write-off of a portion of
our deferred debt issuance costs and other transaction costs. The charge was recorded in ‘‘Other, net’’
in the Consolidated Statements of Operations.
Prior Debt Transactions. During 2003, we raised approximately $2,625.0 million of cash through
the issuance of $1,400.0 million of 8.375% senior notes and $1,225.0 million of borrowings under a
credit facility. We used a portion of these proceeds to repay the $506.3 million outstanding principal
balance plus accrued interest under a prior credit facility agreement, which then terminated.
87