DIRECTV 2005 Annual Report Download - page 101

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —(continued)
Restricted Cash. Restricted cash of $19.3 million as of December 31, 2005 and $36.0 million as of
December 31, 2004 was included as part of ‘‘Prepaid expenses and other’’ in our Consolidated Balance
Sheets. These deposits secure certain of our letters of credit and obligations of certain 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 our income tax expense or benefit on reported ‘‘Income (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.
Our income tax (expense) benefit consisted of the following for the years ended December 31:
2005 2004 2003
(Dollars in Millions)
Current tax (expense) benefit:
U.S. federal ............................................ $ 14.3 $ (34.9) $ 68.2
Foreign ............................................... 6.5 6.0 (53.0)
State and local ......................................... (1.4) (4.6) 0.3
Total ............................................. 19.4 (33.5) 15.5
Deferred tax (expense) benefit:
U.S. federal ............................................ (170.1) 631.0 82.3
State and local ......................................... (22.5) 93.1 6.5
Total ............................................. (192.6) 724.1 88.8
Total income tax (expense) benefit ........................ $(173.2) $690.6 $104.3
‘‘Income (Loss) From Continuing Operations Before Income Taxes, Minority Interests and
Cumulative Effect of Accounting Changes’’ included the following components:
2005 2004 2003
(Dollars in Millions)
U.S. income (loss) ........................................ $523.8 $(1,614.5) $ (74.5)
Foreign loss ............................................. (43.5) (145.6) (403.2)
Total ............................................... $480.3 $(1,760.1) $(477.7)
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