DIRECTV 2008 Annual Report Download - page 91

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THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
Note 5: Goodwill and Intangible Assets
The following table sets forth the changes in the carrying amounts of ‘‘Goodwill’’ in the
Consolidated Balance Sheets by segment for the years ended December 31, 2008 and 2007:
DIRECTV
DIRECTV U.S. Latin America Total
(Dollars in Millions)
Balance as of January 1, 2007 .......................... $3,032 $483 $3,515
Acquisition of Darlene interest in DLA LLC ............... — 187 187
Sky Brazil purchase price allocation ...................... — (31) (31)
Other ............................................ — (2) (2)
Balance as of December 31, 2007 ........................ 3,032 637 3,669
Acquisition related to home service provider business ......... 157 — 157
Sky Brazil deferred income tax valuation allowance ........... — (73) (73)
Balance as of December 31, 2008 ........................ $3,189 $564 $3,753
The following table sets forth the components for ‘‘Intangible assets, net’’ in the Consolidated
Balance Sheets at:
December 31, 2008 December 31, 2007
Estimated
Useful Lives Gross Accumulated Net Gross Accumulated Net
(years) Amount Amortization Amount Amount Amortization Amount
(Dollars in Millions)
Orbital slots ................... Indefinite $ 432 $ 432 $ 432 $ 432
72.5⍭ WL Orbital license .......... 5 208 $ 171 37 208 $ 132 76
Subscriber related ............... 5-10 1,697 1,255 442 1,697 942 755
Dealer network ................. 15 130 79 51 130 71 59
Trade name and other ............ 10-20 102 9 93 95 5 90
Distribution rights ............... 7 334 217 117 334 169 165
Total intangible assets ............ $2,903 $1,731 $1,172 $2,896 $1,319 $1,577
Amortization expense of intangible assets was $412 million in 2008 and $419 million in 2007 and
$369 million in 2006.
Estimated amortization expense for intangible assets in each of the next five years and thereafter is
as follows: $350 million in 2009; $152 million in 2010; $97 million in 2011; $55 million in 2012;
$17 million in 2013 and $69 million thereafter.
We performed our annual impairment tests for goodwill and orbital slots in the fourth quarters of
2008, 2007, and 2006. The estimated fair values for each reporting unit and the orbital slots exceeded
our carrying values, and accordingly, no impairment losses were recorded during 2008, 2007, or 2006.
Note 6: Investments
Equity Method Investments
We have investments in companies that we account for under the equity method of accounting
totaling $667 million as of December 31, 2008 and $551 million as of December 31, 2007.
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