DIRECTV 2007 Annual Report Download - page 90

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
2005 Refinancing Transactions. In April 2005, we replaced our prior credit facility with the senior
secured credit facility described above. The senior secured credit facility was initially comprised of a
$500 million six-year Term Loan A, a $1,500 million eight-year Term Loan B, both of which were fully
funded, and a $500 million undrawn six-year revolving credit facility. We used a portion of the
$2,000 million proceeds from the transaction to repay our prior credit facility that had a then
outstanding balance of $1,002 million and to pay related financing costs and accrued interest.
Borrowings under the prior credit facility bore interest at a rate equal to LIBOR plus 1.75%.
On May 19, 2005, we redeemed $490 million of our then outstanding $1,400 million 8.375% senior
notes at a redemption price of 108.375% plus accrued and unpaid interest, for a total of $538 million.
On June 15, 2005, DIRECTV U.S. issued $1,000 million of 6.375% senior notes. We used a
portion of the proceeds from the transaction to repay $500 million of the Term Loan B portion of our
senior secured credit facility and to pay related financing costs.
The repayment of our prior senior secured credit facility, the partial repayment of our senior
secured credit facility and the partial redemption of our 8.375% senior notes resulted in a 2005 pre-tax
charge of $65 million ($40 million after tax) of which $41 million was associated with the premium paid
for the redemption of our 8.375% senior notes and $24 million with the write-off of a portion of our
deferred debt issuance costs and other transaction costs. The charge was recorded in ‘‘Other, net’’ in
the Consolidated Statements of Operations.
Restricted Cash. Restricted cash of $5 million as of December 31, 2007 and $6 million as of
December 31, 2006 was included as part of ‘‘Prepaid expenses and other’’ in our Consolidated Balance
Sheets. These amounts secure our letter of credit obligations. Restrictions on the cash will be removed
as the letters of credit expire.
Note 9: Income Taxes
We base our income tax expense or benefit on reported ‘‘Income from continuing operations
before income taxes and minority interests.’’ Deferred income tax assets and liabilities reflect the
impact of temporary differences between the amounts of assets and liabilities recognized for financial
reporting purposes and such amounts recognized for tax purposes, as measured by applying currently
enacted tax laws.
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