DIRECTV 2008 Annual Report Download - page 112

THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
We accounted for the 180 Connect acquisition using the purchase method of accounting, and
began consolidating the results from the date of acquisition. The December 31, 2008 consolidated
financial statements reflect the preliminary allocation of the $91 million net purchase price to assets
acquired and the liabilities assumed based on their estimated fair values at the date of acquisition using
information currently available. The assets acquired included approximately $5 million in cash.
Amounts allocated to tangible assets, deferred tax assets and liabilities, and accrued liabilities are
estimates pending the completion of analyses currently in process. The excess of the purchase price
over the estimated fair values of the net assets acquired has been recorded as goodwill, resulting in an
increase in goodwill of $142 million during 2008. We are currently evaluating whether the recorded
goodwill will be deductible for tax purposes. The purchase price allocation is expected to be completed
during the first half of 2009.
The following table sets forth the preliminary allocation of the purchase price to the 180 Connect
net assets acquired on July 8, 2008 (dollars in millions):
Total current assets .................................................. $ 21
Property and equipment .............................................. 16
Goodwill ......................................................... 142
Total assets acquired ................................................. $179
Total current liabilities ............................................... $ 80
Other liabilities .................................................... 8
Total liabilities assumed .............................................. $ 88
Net assets acquired .............................................. $ 91
The following selected unaudited pro forma information is being provided to present a summary of
the combined results of The DIRECTV Group and 180 Connect for 2008 and 2007 as if the acquisition
had occurred as of the beginning of the respective periods, giving effect to purchase accounting
adjustments. The pro forma data is presented for informational purposes only and may not necessarily
reflect the results of our operations had 180 Connect operated as part of us for each 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,
2008 2007
(Dollars in Millions,
Except Per Share
Amounts)
Revenues ............................................... $19,693 $17,246
Net income .............................................. 1,479 1,416
Basic and diluted earnings per common share ..................... 1.33 1.18
Other. In August 2008, we paid $11 million in cash to purchase certain assets and we assumed
certain liabilities of another home service provider for DIRECTV U.S. We accounted for the
acquisition using the purchase method of accounting, and began consolidating the results from the date
of acquisition. Amounts allocated to tangible assets, deferred tax assets and liabilities, and accrued
liabilities are estimates pending the completion of analyses currently in process. The excess of the
purchase price over the estimated fair values of the net assets acquired has been recorded as goodwill,
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