DIRECTV 2006 Annual Report Download - page 62

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THE DIRECTV GROUP, INC.
Corporate and Other
Operating loss from Corporate and Other decreased to $69.9 million in 2006 from $89.9 million in
2005. The $20.0 million decrease was primarily due to higher pension expense in 2005 related to the
divestitures described above, partially offset by higher legal expenses and benefit costs in 2006.
Year Ended December 31, 2005 Compared with the Year Ended December 31, 2004
Consolidated Results of Operations
Revenues. The following table presents our revenues by segment:
Change
Revenues By Segment: 2005 2004 $ %
(Dollars in Millions)
DIRECTV U.S. ................................. $12,216.1 $ 9,763.9 $2,452.2 25.1%
DIRECTV Latin America .......................... 742.1 675.2 66.9 9.9%
Network Systems ................................. 211.4 1,099.1 (887.7) (80.8)%
Corporate and Other .............................. (5.1) (178.2) 173.1 (97.1)%
Total Revenues ............................... $13,164.5 $11,360.0 $1,804.5 15.9%
The increase in our total revenues was primarily due to the $2,452.2 million increase in revenues at
the DIRECTV U.S. segment, partially offset by the decrease in revenues from the Network Systems
segment resulting from the divestitures of the HNS businesses in 2005 and 2004. We discuss these
changes for each of our segments in more detail below.
Total Operating Costs and Expenses. The following table presents our operating costs and expenses
by segment:
Change
Operating Costs and Expenses By Segment: 2005 2004 $ %
(Dollars in Millions)
DIRECTV U.S. ................................. $11,414.1 $ 9,742.0 $ 1,672.1 17.2%
DIRECTV Latin America ......................... 760.8 817.2 (56.4) (6.9)%
Network Systems ................................ 272.2 2,877.6 (2,605.4) (90.5)%
Corporate and Other ............................. 84.8 42.6 42.2 99.1%
Total Operating Costs and Expenses .................. $12,531.9 $13,479.4 $ (947.5) (7.0)%
The decrease in our total operating costs and expenses was primarily due to the $2,605.4 million
decrease in operating costs and expenses at the Network Systems segment, partially offset by the
$1,672.1 million increase at the DIRECTV U.S. segment. We discuss these changes for each of our
segments in more detail below.
Interest Income. Interest income increased to $150.3 million in 2005 compared to $50.6 million in
2004. The increase in interest income was due to an increase in average interest rates on higher
average cash balances and short-term investments.
Interest Expense. Interest expense increased to $237.6 million in 2005 from $131.9 million in 2004.
The increase in interest expense resulted primarily from the decrease in capitalized interest due to the
completion of the construction of the SPACEWAY satellites, an increase in our outstanding borrowings
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