DIRECTV 2005 Annual Report Download - page 63

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THE DIRECTV GROUP, INC.
Income (Loss) from Discontinued Operations. Income (loss) from discontinued operations, net of
taxes, which includes the results of operations of discontinued businesses and the loss recorded for the
disposition of those operations, is as follows:
2004 2003 Change
(Dollars in Millions)
Income from discontinued operations, net of taxes ................... $ 50.8 $82.8 $ (32.0)
Loss on sale of discontinued operations, net of taxes ................. (633.1) (4.7) (628.4)
Income (loss) from discontinued operations, net of taxes .............. $(582.3) $78.1 $(660.4)
The $32.0 million decrease in income from discontinued operations, net of taxes, is primarily
related to the completion of the sale of our approximately 80.4% interest in PanAmSat in August 2004.
In addition, PanAmSat recorded a one-time expense related to employee benefits in 2004 resulting
from the PanAmSat transaction.
The $633.1 million loss on sale of discontinued operations, net of taxes, in 2004 relates to the
$723.7 million loss on the sale of our approximately 80.4% interest in PanAmSat, partially offset by the
$90.7 million gain on HNS’ sale of its approximately 55% interest in HSS. The $4.7 million loss for
2003 relates primarily to the settlement reached with Boeing of a purchase price adjustment arising out
of the 2000 sale of our satellite systems manufacturing businesses. We discuss discontinued operations
more fully above in ‘‘Strategic Developments.’’
Cumulative Effect of Accounting Changes. The $310.5 million cumulative effect of accounting
change, net of taxes, in 2004 was due to our change in our method of accounting for subscriber
acquisition, upgrade and retention costs. The $64.6 million cumulative effect of accounting change, net
of taxes, in 2003 was due to our adoption of FIN 46 on July 1, 2003, resulting in the consolidation of
the Venezuelan and Puerto Rican LOCs.
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