DIRECTV 2007 Annual Report Download - page 81

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
assets, financial liabilities and firm commitments. Under this standard, unrealized gains and losses on
items for which the fair value option is elected are reported in earnings at each subsequent reporting
date. We do not expect the adoption of SFAS No. 159 on January 1, 2008 to have any effect on our
consolidated results of operations or financial position.
In September 2006, the FASB issued SFAS No. 157, ‘‘Fair Value Measurements.’’ SFAS No. 157
defines fair value, sets out a framework for measuring fair value in generally accepted accounting
principles, and expands disclosures about fair value measurements of assets and liabilities. SFAS
No. 157 applies under other accounting pronouncements previously issued by the FASB that require or
permit fair value measurements. We do not expect the adoption of SFAS No. 157 on January 1, 2008 to
have any effect on our consolidated results of operations or financial position.
In September 2006, the Emerging Issues Task Force, or EITF, issued EITF No. 06-1, ‘‘Accounting
for Consideration Given by a Service Provider to a Manufacturer or Reseller of Equipment Necessary
for an End-Customer to Receive Service from the Service Provider.’’ EITF No. 06-1 provides guidance
to service providers regarding the proper reporting of consideration given to manufacturers or resellers
of equipment necessary for an end-customer to receive its services. Depending on the circumstances,
such consideration is reported as either an expense or a reduction of revenues. We do not expect the
adoption of EITF No. 06-1 on January 1, 2008 to have any effect on our consolidated results of
operations.
Note 3: Acquisitions, Divestitures and Other Transactions
Acquisitions
Darlene Transaction
On January 30, 2007, we acquired Darlene’s 14% equity interest in DLA LLC for $325 million in
cash. We accounted for the acquisition of this interest using the purchase method of accounting. In the
fourth quarter of 2007, we completed the valuation of acquired intangible assets and finalized the
purchase accounting, which resulted in adjustments decreasing the preliminary allocation of the
purchase price to the acquired intangible assets by $30 million, goodwill by $9 million and deferred tax
liabilities by $39 million.
The following table set forth the final allocation of the excess purchase price over the book value
of the minority interest acquired:
Goodwill ......................................................... $187
Intangible assets .................................................... 75
Total assets acquired ................................................. 262
Net assets acquired ................................................ $262
Intangible assets that are included in ‘‘Intangible assets, net’’ in our Consolidated Balance Sheets
include a subscriber related intangible asset to be amortized over six years and a trade name intangible
asset to be amortized over 20 years from the Darlene Transaction.
Sky Transactions
During 2006 we completed the last in a series of transactions with News Corporation, Grupo
Televisa, S.A., or Televisa, Globo Comunicacoes e Participacoes S.A., or Globo, and Liberty Media
72