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DIRECTV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Description of Business Sky Brasil and PanAmericana. We have restated certain prior period amounts to
conform to the current year presentation of reporting segments.
DIRECTV, which we sometimes refer to as the company, we, or us, is a
leading provider of digital television entertainment in the United States and Latin Note 2: Basis of Presentation and Summary of Significant Accounting
America. We operate two direct-to-home, or DTH, business units: DIRECTV U.S. Policies
and DIRECTV Latin America, which are differentiated by their geographic
locations and are engaged in acquiring, promoting, selling and distributing digital Principles of Consolidation
entertainment programming primarily via satellite to residential and commercial We present our accompanying financial statements on a consolidated basis and
subscribers. In addition, we own and operate three regional sports networks and include our accounts and those of our domestic and foreign subsidiaries that we
own a 42% interest in Game Show Network LLC, or GSN, a television network control through equity ownership or for which we are deemed to be the primary
dedicated to game-related programming and Internet interactive game playing. We beneficiary, after elimination of intercompany accounts and transactions.
account for our investment in GSN using the equity method of accounting.
•DIRECTV U.S. DIRECTV Holdings LLC and its subsidiaries, which we Use of Estimates in the Preparation of the Consolidated Financial Statements
refer to as DIRECTV U.S., is the largest provider of DTH digital television We prepare our consolidated financial statements in conformity with
services and the second largest provider in the multi-channel video accounting principles generally accepted in the United States of America, which
programming distribution industry in the United States. requires us to make estimates and assumptions that affect amounts reported herein.
•DIRECTV Latin America. DIRECTV Latin America Holdings Inc. and its We base our estimates and assumptions on historical experience and on various
subsidiaries, or DIRECTV Latin America, is a leading provider of DTH digital other factors that we believe to be reasonable under the circumstances. Due to the
television services throughout Latin America. DIRECTV Latin America is inherent uncertainty involved in making estimates, our actual results reported in
comprised of: PanAmericana, which provides services in Argentina, Chile, future periods may be affected by changes in those estimates.
Colombia, Ecuador, Puerto Rico, Venezuela and certain other countries in the
region, and Sky Brasil Servicos Ltda., which we refer to as Sky Brasil, which is Revenue Recognition
a 93% owned subsidiary. DIRECTV Latin America also includes our 41% We enter into multiple-deliverable revenue arrangements with our subscribers
equity method investment in Innova, S. de R.L. de C.V., or Sky Mexico, which under which we provide DIRECTV receiving equipment, services and programming
we include in the PanAmericana segment. during their contract period, of up to two years. We allocate consideration to each
•DIRECTV Sports Networks. DIRECTV Sports Networks LLC and its deliverable in the arrangement based on its relative selling price. We determine the
subsidiaries, or DSN, is comprised primarily of three regional sports selling price of the DIRECTV receiving equipment using our best estimate. We
networks based in Seattle, Washington, Denver, Colorado and Pittsburgh, determine the selling price for services based on prices charged by third parties. We
Pennsylvania, each of which operates under the brand name ROOT determine the selling price of the programming using our standard programming
SPORTS威. The operating results of DSN are reported as part of the ‘‘Sports rates. The DIRECTV receiving equipment, services and programming are each
Networks, Eliminations and Other’’ reporting segment. considered separate units of accounting.
During the first quarter of 2012, we revised our reportable segments. As We recognize subscription and pay-per-view revenues when programming is
further discussed in Note 20, our DIRECTV Latin America business unit, which broadcast to subscribers. We recognize subscriber fees for multiple set-top receivers
was previously reported as a single segment, is now being reported as two segments, and warranty services as revenue, as earned. We recognize advertising revenues when
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