DIRECTV 2006 Annual Report Download - page 88

THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS —(continued)
of the purchase price over the estimated fair values of the net assets acquired has been recorded as
goodwill, resulting in an increase in goodwill of $463.5 million during 2006. The purchase price
allocation is expected to be completed during the first half of 2007.
As part of the transaction, we have guaranteed Sky Brazil’s long-term satellite transponder
obligations.
The following table sets forth the preliminary allocation of the purchase price to the Sky Brazil net
assets acquired on August 23, 2006:
Total current assets ................................................. $ 84.0
Goodwill ........................................................ 463.5
Intangible assets ................................................... 288.6
Other long-term assets .............................................. 100.3
Total assets acquired ................................................ $936.4
Total current liabilities, including $210.0 million of bank debt .................. $359.8
Other liabilities ................................................... 116.6
Total liabilities assumed ............................................. $476.4
Net assets acquired ............................................. $460.0
The following selected unaudited pro forma information is being provided to present a summary of
the combined results of The DIRECTV Group and Sky Brazil for the years ended December 31, 2006
and 2005 as if the acquisition had occurred as of the beginning of the respective periods, giving effect
to purchase accounting adjustments. The pro forma data is presented for informational purposes only
and may not necessarily reflect our results of operations had Sky Brazil operated as part of us for each
of the periods presented, nor are they necessarily indicative of the results of future operations. The pro
forma information excludes the effect of non-recurring charges.
Years Ended
December 31,
2006 2005
(Dollars in Millions, Except
Per Share Amounts)
Revenues .......................................... $15,076.8 $13,535.2
Operating Profit ..................................... 2,374.5 624.1
Income From Continuing Operations Before Income Taxes and
Minority Interests .................................. 2,306.7 492.3
Net Income ........................................ 1,425.2 343.3
Basic Earnings Per Common Share ....................... 1.13 0.25
Diluted Earnings Per Common Share ..................... 1.12 0.25
Mexico. In Mexico, also as part of the Sky Transactions, DTVLA’s local operating company,
DIRECTV Mexico, sold its subscriber list to Sky Mexico and, after completing the transfer of its
subscribers to Sky Mexico, ceased providing services in the third quarter of 2005. During 2004 we
wrote-down certain of DIRECTV Mexico’s long-lived assets to their fair values in connection with the
planned shut-down of its operations resulting in a pre-tax charge of $36.5 million that we included in
‘‘(Gain) loss from disposition of businesses and impairment charges, net’’ in the Consolidated
Statements of Operations. During 2005, as the transferred subscribers met certain retention
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