DIRECTV 2007 Annual Report Download - page 83
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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
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 ............................................... $15,077 $13,535
Operating profit .......................................... 2,375 624
Income from continuing operations before income taxes and minority
interests ............................................... 2,307 492
Net income .............................................. 1,425 343
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 2005, as the
transferred subscribers met certain retention requirements, we earned a variable note receivable from
Sky Mexico and we recorded a corresponding gain of $70 million during the year ended December 31,
2005 in ‘‘Gain from disposition of businesses, net ‘‘in our Consolidated Statements of Operations. At
completion of the transaction in February 2006, we recorded an additional gain of $57 million in ‘‘Gain
from disposition of businesses, net ‘‘in our Consolidated Statements of Operations when DLA LLC
received an equity interest in Sky Mexico resulting from the sale of DIRECTV Mexico’s subscriber list
and transfer of subscribers to Sky Mexico and cancellation of the note receivable. Also in February
2006, we acquired News Corporation’s and Liberty Media International’s equity interests in Sky Mexico
for $373 million in cash. On April 27, 2006, we sold a portion of our equity interest to Televisa for
$59 million in cash, which reduced our equity interest in Sky Mexico to 41%. We account for our
investment in Sky Mexico using the equity method of accounting. See Note 6 for additional information
regarding this investment.
Other. In 2004, we acquired Sky Multi-Country Partners and related entities for $30 million in
cash. As part of this transaction, News Corporation agreed to reimburse us $127 million for the Sky
entities’ net liabilities we assumed, which we received from News Corporation in August 2006.
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