DIRECTV 2010 Annual Report Download - page 94

Download and view the complete annual report

Please find page 94 of the 2010 DIRECTV annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 142

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142

DIRECTV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
Note 5: Satellites, Net and Property and Equipment, Net construction. Depreciation expense was $2,292 million in 2010, $2,287 million in
2009 and $1,907 million in 2008.
The following table sets forth the amounts recorded for ‘‘Satellites, net’’ and
‘‘Property and equipment, net’’ in our Consolidated Balance Sheets at The following table sets forth the amount of DIRECTV U.S. set-top receivers
December 31: capitalized, and depreciation expense recorded, under its lease program for each of
the periods presented:
Estimated
Useful Lives Years ended December 31,
(years) 2010 2009
Capitalized subscriber leased equipment: 2010 2009 2008
(Dollars in Millions)
(Dollars in Millions)
Satellites ........................... 10-16 $ 3,233 $ 2,839 Subscriber leased equipment—subscriber acquisitions . $ 651 $ 564 $ 599
Satellites under construction .............. — 70 354 Subscriber leased equipment—upgrade and retention . 316 419 537
Total ............................. 3,303 3,193 Total subscriber leased equipment capitalized ...... $ 967 $ 983 $1,136
Less: Accumulated depreciation ............ (1,068) (855)
Depreciation expense—subscriber leased equipment . . $1,145 $1,333 $1,100
Satellites, net ...................... $ 2,235 $ 2,338
We depreciate capitalized set-top receivers at DIRECTV U.S. over a three year
Land and improvements ................ 9-30 $ 43 $ 37
estimated useful life, which is based on, among other things, management’s
Buildings and leasehold improvements ....... 2-40 365 361
judgment of the risk of technological obsolescence. Changes in the estimated useful
Machinery and equipment ............... 2-23 1,923 1,771
lives of set-top receivers capitalized could result in significant changes to the
Capitalized software ................... 3 1,889 1,566
amounts recorded as depreciation expense. We regularly evaluate the estimated
Subscriber leased set-top receivers .......... 3-7 6,971 5,636
useful life of our set-top receivers and it is possible that we may change the useful
Construction in-progress ................ — 290 360
life of set-top receivers at DIRECTV U.S. in the near term. If we had changed the
Total ............................. 11,481 9,731 depreciable life of DIRECTV U.S.’ set-top receivers as of January 1, 2010 to four
Less: Accumulated depreciation ............ (7,037) (5,593) years, annual depreciation for 2010 would have decreased by over $300 million.
Property and equipment, net ............ $ 4,444 $ 4,138
We capitalized interest costs of $6 million in 2010, $18 million in 2009 and
$18 million in 2008 as part of the cost of our property and satellites under
72