DIRECTV 2005 Annual Report Download - page 95

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —(continued)
Note 4: Satellites, Net and Property and Equipment, Net
The following table sets forth the amounts recorded for satellites, net and property and equipment,
net at December 31:
Estimated
Useful Lives
(years) 2005 2004
(Dollars in Millions)
Satellites ............................................ 12-16 $1,571.7 $1,265.1
Satellites under construction .............................. — 834.2 714.4
Total ............................................... 2,405.9 1,979.5
Less accumulated depreciation ............................. 530.4 419.1
Satellites, net ......................................... $1,875.5 $1,560.4
Land and improvements ................................. 9-30 $ 29.2 $ 25.7
Buildings and leasehold improvements ....................... 4-30 209.7 174.9
Machinery and equipment ................................ 3-24 1,827.3 1,598.3
Subscriber leased set-top receivers .......................... 4-7 1,036.4 1,018.4
Furniture, fixtures and office machines ....................... 3-15 71.9 98.6
Construction in-progress ................................. — 290.9 178.9
Total ............................................... 3,465.4 3,094.8
Less accumulated depreciation ............................. 2,266.2 1,959.7
Property and Equipment, net .......................... $1,199.2 $1,135.1
We capitalized interest costs of $30.5 million in 2005, $101.2 million in 2004 and $120.0 million in
2003 as part of the cost of our property and satellites under construction. Depreciation expense was
$501.6 million in 2005, $651.4 million in 2004 and $653.8 million in 2003.
Note 5: Asset Sales and Impairment Charges
We recorded the following transactions in ‘‘(Gain) loss from asset sales and impairment charges,
net’’ in our Consolidated Statement of Operations during the years ended December 31:
2005 2004
(Dollars in Millions)
SkyTerra transaction impairment charge .......................... $25.3 $ 190.6
DIRECTV Mexico gain on sale of subscriber list ................... (70.4) —
DIRECTV Mexico impairment charge ........................... — 36.5
SPACEWAY impairment charge ................................ — 1,466.1
Total ................................................ $(45.1) $1,693.2
See Note 3 for further discussion of the SkyTerra and DIRECTV Mexico transactions.
SPACEWAY Assets
In the third quarter of 2004, we decided to utilize certain of our SPACEWAY assets for DIRECTV
U.S. HD programming, which included two satellites, SPACEWAY 1 and SPACEWAY 2, that were
nearing completion and ground segment equipment and systems. This decision to no longer use these
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