DIRECTV 2007 Annual Report Download - page 111

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(concluded)
Other
As of December 31, 2007, included in ‘‘Investments and other assets’’ in the Consolidated Balance
Sheets is a receivable for $34 million of the $57 million rebate that we can earn from Thomson by
purchasing at least $4 billion of set-top receivers through June 2010. We have accrued this receivable
based on our assessment that achievement of the minimum purchase requirement is both probable and
reasonably estimable. On a quarterly basis, we assess the probability of earning the rebate over the
contract term. If we subsequently determine that it is no longer probable that we will earn the rebate,
we would be required to reverse the amount of the rebate earned to date as a charge to the
Consolidated Statements of Operations at the time such determination is made. In connection with this
agreement, we received approximately $200 million in cash in 2004 which has been deferred to
‘‘Unearned subscriber revenue and deferred credits’’ and ‘‘Other liabilities and deferred credits’’ in our
Consolidated Balance Sheets and is recognized as a pro-rata reduction to the cost of set-top receivers
purchased from Thomson.
We are contingently liable under standby letters of credit and bonds in the aggregate amount of
$138 million at December 31, 2007.
In connection with the Sky Brazil transaction, Globo was granted the right, until January 2014, to
exchange shares in Sky Brazil for cash or common shares of the company. Upon exercising the
exchange rights, the value of Sky Brazil shares will be determined by an outside valuation expert and
we have the option to elect the consideration to be paid in cash, shares of our common stock or a
combination of both.
***
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