DIRECTV 2010 Annual Report Download - page 92

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DIRECTV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
DIRECTV distributed to LEI stockholders based on the fair value of the merged adjustment of the equity collars and non-employee stock based awards from the
assets of DIRECTV as of November 19, 2009, in excess of the acquisition date fair acquisition date to December 31, 2009 and the $43 million of acquisition related
value of the assets and liabilities of LEI, amounted to $337 million and has been costs.
expensed as a disproportionate distribution upon completion of the mergers in Cash paid, net of cash acquired in connection with the transaction was
‘‘Liberty transaction and related gains (charges)’’ in the Consolidated Statements of $97 million and includes a $226 million repayment of LEI’s existing loan from
Operations for the year ended December 31, 2009. Liberty at the close of the transaction and $43 million of cash paid for transaction
The premium was calculated as follows (dollars in millions): costs, partially offset by $120 million in cash at LEI, and $56 million of cash at
the regional sports networks.
Former LEI shareholder interest in the fair value of the net assets of We assigned $228 million to definite lived intangible assets of the regional
DIRECTV ....................................... $16,054 sports networks for affiliate and advertising relationships. The weighted average life
Less: Fair value of net assets contributed by LEI, including 57% interest of these intangibles is 19 years. These intangibles are included in the Trade name
in DIRECTV Group ................................. 15,717 and other component of ‘‘Intangible assets, net’’ in the Consolidated Balance
Premium .......................................... $ 337 Sheets.
The following selected unaudited pro forma information is being provided to
As part of the mergers, DIRECTV assumed 16.7 million common stock present a summary of the combined results of DIRECTV and Liberty
options and stock appreciation rights issued by LEI. Since many of the replacement Entertainment for the years ended December 31, 2009 and 2008 as if the
awards are held by individuals who remained employees of Liberty and did not acquisition had occurred as of the beginning of the period, giving effect to purchase
become employees or directors of DIRECTV, they are reported as a liability at fair accounting adjustments. The pro forma data is presented for informational purposes
value by DIRECTV in accordance with accounting standards for non-employee only and may not necessarily reflect the results of our operations had LEI operated
awards. See Note 15 for additional information regarding these stock based awards. as part of us for the period presented, nor are they necessarily indicative of the
Also, the assumed indebtedness included related equity collars which were in a results of future operations. The pro forma information excludes the effect of
liability position with an estimated negative fair value of approximately non-recurring charges.
$369 million as of the acquisition date. We completed settlement of those equity
Years Ended
collars during the first quarter of 2010. We accounted for the derivative financial December 31,
instruments of the equity collars acquired as a net asset or liability at fair value. 2009 2008
For the year ended December 31, 2010, amounts recorded as ‘‘Liberty (Dollars in Millions)
transaction and related gains (charges)’’ in the Consolidated Statements of Revenues ................................... $21,753 $19,905
Operations totaled $67 million, related to net gains recorded for the final Net income attributable to DIRECTV ............... 1,113 1,651
settlement of the equity collars. See Note 9 for additional information regarding the 180 Connect. In July 2008, we acquired 100% of 180 Connect Inc.’s
indebtedness and equity collars. outstanding common stock and exchangeable shares. Simultaneously, in a separate
For the year ended December 31, 2009, amounts charged to ‘‘Liberty transaction, UniTek USA, LLC acquired 100% of 180 Connect’s cable service
transaction and related gains (charges)’’ in the Consolidated Statements of operating unit and operations in certain of our installation services markets in
Operations totaled $491 million, and include the $337 million premium, exchange for satellite installation operations in certain markets and $7 million in
$111 million of net losses recorded for the partial settlement and fair value
70