DIRECTV 2011 Annual Report Download - page 97

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DIRECTV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
The following table sets forth property and equipment leased to our Note 7: Goodwill and Intangible Assets
subscribers as of December 31: The following table sets forth the changes in the carrying amounts of
‘‘Goodwill’’ in the Consolidated Balance Sheets by segment for the years ended
2011 2010
December 31, 2011 and 2010:
(Dollars in Millions)
Subscriber leased set-top equipment ................. $8,105 $ 6,971 Sports
Less: Accumulated depreciation of subscriber leased DIRECTV Networks,
DIRECTV Latin Eliminations
equipment ................................ (4,618) (4,096) U.S. America and Other Total
Subscriber leased set-top equipment, net .............. $3,487 $ 2,875 (Dollars in Millions)
Balance as of January 1, 2010 ...... $3,167 $656 $341 $4,164
As discussed above in Note 3, effective July 1, 2011, we began depreciating Foreign currency translation
capitalized HD set-top receivers at DIRECTV U.S. over a four-year estimated adjustment ................. — 21 — 21
useful life. Previously, we depreciated HD set-top receivers at DIRECTV U.S. over Acquisition accounting adjustments . . . 9 — (46) (37)
a three-year estimated useful life. We continue to depreciate standard-definition Balance as of December 31, 2010 . . . 3,176 677 295 4,148
set-top receivers at DIRECTV U.S. over a three-year useful life. At DIRECTV Foreign currency translation
Latin America, we depreciate capitalized subscriber leased equipment, which adjustment ................. — (52) — (52)
includes the cost of the set-top receiver, installation and dish, over a three-year Acquisition accounting adjustments . . . 1 — — 1
estimated useful life for HD set-top receivers and a seven-year useful life for Balance as of December 31, 2011 . . . $3,177 $625 $295 $4,097
standard-definition set-top receivers. The useful life used to depreciate capitalized
set-top receivers is based on, among other things, management’s judgment of the
Satellite Rights
risk of technological obsolescence. Changes in the estimated useful lives of set-top
receivers capitalized could result in significant changes to the amounts recorded as Sky Brazil has an agreement for the right to use a satellite should its existing
depreciation expense. We regularly evaluate the estimate useful life of our capitalized leased satellite suffer a significant failure and replacement capacity is needed.
set-top receivers. During the first quarter of 2010, the satellite was launched and successfully placed
into its assigned orbit, and we recorded the total obligation for the right to use the
satellite of $116 million in ‘‘Intangible Assets’’ in the Consolidated Balance Sheets.
We made a $29 million payment during 2010 and we made the remaining
$87 million payment during 2011. The intangible asset is being amortized on a
straight line basis over the 15-year term of the agreement.
73