DIRECTV 2007 Annual Report Download - page 84

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
Divestitures
Hughes Network Systems
On April 22, 2005, we completed the contribution of substantially all of HNS’ net assets to a new
entity, Hughes Network Systems LLC, or HNS LLC, in exchange for cash proceeds of $196 million and
sold a 50% interest in HNS LLC to SkyTerra in exchange for cash proceeds of $50 million and 300,000
shares of SkyTerra common stock with a fair value of $11 million. We recorded pre-tax impairment
charges of $25 million during 2005 to ‘‘Gain from disposition of businesses, net ‘‘in our Consolidated
Statements of Operations related to this transaction.
In January 2006, we completed the sale of our remaining 50% interest in HNS LLC to SkyTerra,
and resolved a working capital adjustment from the prior transaction, in exchange for $110 million in
cash, which resulted in our recording in the first quarter of 2006 a gain of $14 million related to the
sale in ‘‘Other, net’’ in the Consolidated Statements of Operations.
HNS’ operating results are included in continuing operations in our Consolidated Statements of
Operations through April 22, 2005. The following table sets forth our pro forma revenues and
operating profit excluding the HNS operations that were contributed as part of the SkyTerra
transaction.
Year Ended
December 31, 2005
(Dollars in Millions)
Revenues ................................................ $12,957
Operating profit ........................................... 693
Other Discontinued Operations
During 2007, we recorded a $17 million reduction to our unrecognized tax benefits in ‘‘Income
from discontinued operations, net of taxes’’ in our Consolidated Statements of Operations as a result of
a settlement of a foreign withholding tax dispute from a previously divested business.
As discussed in more detail in Note 18, during 2005, we recorded a $31 million gain in ‘‘Income
from discontinued operations, net of taxes’’ in our Consolidated Statements of Operations that resulted
from a favorable tax settlement related to a previously discontinued operation.
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