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DIRECTV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Description of Business obtained shareholder approval of and closed a series of related transactions which
we refer to collectively as the Liberty Transaction. The Liberty Transaction included
DIRECTV, which we sometimes refer to as the company, we, or us, is a the split-off of certain of the assets of the Liberty Entertainment group into Liberty
leading provider of digital television entertainment in the United States and Latin Entertainment, Inc., or LEI, which was then split-off from Liberty. Following the
America. We operate two direct-to-home, or DTH, operating segments: DIRECTV split-off, DIRECTV Group and LEI merged with subsidiaries of DIRECTV. As a
U.S. and DIRECTV Latin America, which are differentiated by their geographic result of the Liberty Transaction, DIRECTV Group, which is comprised of the
location and are engaged in acquiring, promoting, selling and/or distributing digital DIRECTV U.S. and DIRECTV Latin America businesses, and LEI, which held
entertainment programming via satellite to residential and commercial subscribers. Liberty’s 57% interest in DIRECTV Group, a 100% interest in three regional
Since November 19, 2009, we also operate three regional sports networks and own sports networks, a 65% interest in GSN, approximately $120 million in cash and
a 65% interest in Game Show Network LLC, or GSN, a basic television network cash equivalents and approximately $2.1 billion of indebtedness and a related series
dedicated to game-related programming and Internet interactive game playing. We of equity collars, became wholly-owned subsidiaries of DIRECTV.
account for our investment in GSN using the equity method of accounting.
DIRECTV Group has been treated as the acquiring corporation in the Liberty
•DIRECTV U.S. DIRECTV Holdings LLC and its subsidiaries, which we Transaction for accounting and financial reporting purposes and accordingly, the
refer to as DIRECTV U.S., is the largest provider of DTH digital television historical financial statements of DIRECTV Group are reported as the historical
services and the second largest provider in the multi-channel video financial statements of DIRECTV in the accompanying Consolidated Financial
programming distribution, or MVPD, industry in the United States. Statements.
•DIRECTV Latin America. DIRECTV Latin America, or DTVLA, is a See Note 3 for additional information regarding these transactions.
leading provider of DTH digital television services throughout Latin
America. DTVLA is comprised of: PanAmericana, which provides services in Note 2: Basis of Presentation and Summary of Significant Accounting
Venezuela, Argentina, Chile, Colombia, Puerto Rico and certain other Policies
countries in the region; our 93% owned subsidiary, Sky Brasil
Servicos Ltda., which we refer to as Sky Brazil; and our 41% equity method Principles of Consolidation
investment in Innova, S. de R.L. de C.V., or Sky Mexico. We present our accompanying financial statements on a consolidated basis and
•DIRECTV Sports Networks. DIRECTV Sports Networks LLC and its include our accounts and those of our domestic and foreign subsidiaries that we
subsidiaries, or DSN, is comprised primarily of three regional sports control through equity ownership or for which we are deemed to be the primary
television networks based in Seattle, Washington, Denver, Colorado and beneficiary, after elimination of intercompany accounts and transactions.
Pittsburgh, Pennsylvania, currently known as FSN Rocky Mountain, FSN
Northwest and FSN Pittsburgh, respectively. The operating results of DSN Use of Estimates in the Preparation of the Consolidated Financial Statements
beginning November 19, 2009 are reported as part of the ‘‘Sports Networks, We prepare our consolidated financial statements in conformity with
Eliminations and Other’’ operating segment. accounting principles generally accepted in the United States of America, which
requires us to make estimates and assumptions that affect amounts reported herein.
Liberty Transaction We base our estimates and assumptions on historical experience and on various
On November 19, 2009, The DIRECTV Group, Inc., or DIRECTV Group, other factors that we believe to be reasonable under the circumstances. Due to the
and Liberty Media Corporation, which we refer to as Liberty or Liberty Media,
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