DIRECTV 2010 Annual Report Download - page 63

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DIRECTV
Interest income. Interest income was $39 million in 2010 and $41 million in Income tax expense. The increase of income tax expense to $1,202 million in
2009. 2010 from $827 million in 2009 is primarily due to an increase in income before
taxes, partially offset by tax benefits associated with the release of valuation
Interest expense. The increase in interest expense to $557 million in 2010 allowances in certain foreign subsidiaries, multi-state income tax planning and
from $423 million in 2009 was due to an increase in the average debt balances recognition of previously unrecognized tax benefits. The increase was also offset by
compared to 2009, partially offset by decreased interest rates. We capitalized interest higher tax expense in the prior year primarily attributable to the non deductibility
costs of $6 million in 2010 and $18 million in 2009. of the Liberty Transaction charge for tax purposes.
Liberty transaction and related gains (charges). In 2010, we recorded a Noncontrolling interests in net earnings of subsidiaries. We recognized
$67 million net gain from the settlement of the equity collars and debt assumed as noncontrolling interest in net earnings of subsidiaries of $114 million in 2010 and
part of the Liberty Transaction. In 2009 we incurred $491 million in costs related $65 million in 2009 at Sky Brazil. Noncontrolling interest in net earnings of
to the Liberty Transaction, which is comprised of a $337 million premium paid to subsidiaries in 2010 increased due to higher net income at Sky Brazil and a net tax
LEI shareholders, $111 million in net losses for the partial settlement and fair-value benefit attributable to the noncontrolling interest resulting from the release of a
adjustments related to the equity collars and non-employee stock options and stock deferred income tax asset valuation allowance.
appreciation rights and $43 million of charges for transaction related costs.
Earnings Per Share. Class A common stock earnings per share (DIRECTV
Other, net. The significant components of ‘‘Other, net’’ were as follows: Group common stock for the period January 1, 2009 through November 19, 2009)
and weighted shares outstanding were as follows for the years ended December 31:
2010 2009 Change
(Dollars in Millions) 2010 2009
Equity in earnings of unconsolidated subsidiaries ....... $90 $51 $39 (Shares in
Net foreign currency transaction gain ............... 11 62 (51) Millions)
Loss from impairment of investments ............... — (45) 45 Basic earnings attributable to DIRECTV Class A common
Fair-value adjustment loss on non-employee stock options . (11) — (11) stockholders per common share ...................... $2.31 $0.96
Loss on early extinguishment of debt ............... (16) (34) 18 Diluted earnings attributable to DIRECTV Class A common
Net gain from sale of investments ................. 6 — 6 stockholders per common share ...................... 2.30 0.95
Other .................................... (11) — (11) Weighted average number of Class A common shares outstanding
Basic ......................................... 870 982
Total ................................... $69 $34 $35 Diluted ....................................... 876 989
In 2010, Other, net increased due primarily to increased equity in earnings of The increases in basic and diluted earnings per share for Class A common
unconsolidated subsidiaries due to our investment in GSN, the recognition of a stock were due to higher net income attributable to DIRECTV, the charge recorded
charge for the other than temporary impairment of investments in 2009, and for the Liberty Transaction in 2009 and a reduction in weighted shares outstanding
reduced losses on the early extinguishment of debt in 2010, partially offset by lower resulting from our share repurchase program and the effect of the Liberty
foreign currency transaction gain related to net U.S. dollar denominated liabilities Transaction, partially offset by the $160 million inducement in 2010 paid in
held by Sky Brazil and fair-value adjustment loss on non-employee stock options in connection with the Malone Transaction.
connection with the Liberty Transaction completed in 2009.
41