DIRECTV 2011 Annual Report Download - page 95

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DIRECTV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
value of the assets and liabilities of LEI, amounted to $337 million and has been Operations totaled $491 million, and include the $337 million premium,
expensed as a disproportionate distribution upon completion of the mergers in $111 million of net losses recorded for the partial settlement and fair value
‘‘Liberty transaction and related gains (charges)’’ in the Consolidated Statements of adjustment of the equity collars and non-employee stock based awards from the
Operations for the year ended December 31, 2009. acquisition date to December 31, 2009 and the $43 million of acquisition related
costs.
The premium was calculated as follows (dollars in millions):
Cash paid, net of cash acquired in connection with the transaction was
Former LEI stockholder interest in the fair value of the net assets of $97 million and includes a $226 million repayment of LEI’s existing loan from
DIRECTV ....................................... $16,054 Liberty at the close of the transaction and $43 million of cash paid for transaction
Less: Fair value of net assets contributed by LEI, including 57% interest costs, partially offset by $120 million in cash at LEI, and $56 million of cash at
in DIRECTV Group ................................. 15,717 the regional sports networks.
Premium .......................................... $ 337 We assigned $228 million to definite lived intangible assets of the regional
sports networks for affiliate and advertising relationships. The weighted average life
As part of the Liberty Transaction, DIRECTV assumed 16.7 million common of these intangibles is 19 years. These intangibles are included in the Trade name
stock options and stock appreciation rights issued by LEI. Since many of the and other component of ‘‘Intangible assets, net’’ in the Consolidated Balance
replacement awards are held by individuals who remained employees of Liberty and Sheets.
did not become employees or directors of DIRECTV, they are reported as a liability The following selected unaudited pro forma information is being provided to
at fair value by DIRECTV in accordance with accounting standards for present a summary of the combined results of DIRECTV and Liberty
non-employee awards. See Note 16 for additional information regarding these stock Entertainment for the year ended December 31, 2009 as if the acquisition had
based awards. occurred as of the beginning of the period, giving effect to purchase accounting
Also, the assumed indebtedness included related equity collars which were in a adjustments. The pro forma data is presented for informational purposes only and
liability position with an estimated negative fair value of approximately may not necessarily reflect the results of our operations had LEI operated as part of
$369 million as of the acquisition date. We completed settlement of those equity us for the period presented, nor are they necessarily indicative of the results of
collars during the first quarter of 2010. We accounted for the derivative financial future operations. The pro forma information excludes the effect of non-recurring
instruments of the equity collars acquired as a net asset or liability at fair value. charges.
For the year ended December 31, 2010, amounts recorded as ‘‘Liberty Year Ended
transaction and related gains (charges)’’ in the Consolidated Statements of December 31, 2009
Operations totaled $67 million, related to net gains recorded for the final (Dollars in Millions)
settlement of the equity collars. See Note 10 for additional information regarding Revenues .................................... $21,753
the indebtedness and equity collars. Net income attributable to DIRECTV ................. 1,113
For the year ended December 31, 2009, amounts charged to ‘‘Liberty
transaction and related gains (charges)’’ in the Consolidated Statements of
71