SEC to DirecTV: No Accounting Changes2/10/2005 3:12 AM Eastern
DirecTV Group Inc. said it received a letter from the Securities and Exchange Commission stating that the agency has completed its inquiry into certain transactions by the company last year, and that no changes to the accounting of those transactions are required.
DirecTV announced last month that the SEC had asked for additional information regarding the accounting for four transactions in 2004 -- with the National Rural Telecommunications Cooperative, Pegasus Communications Corp. and Thomson Multimedia SA in the second quarter and a $1.47 billion write-down of certain satellite assets connected with its scuttled Spaceway program in the third quarter.
Last June, DirecTV ended an agreement that allowed the NRTC to market its service exclusively in rural markets, and in August, the direct-broadcast satellite company purchased some subscribers from Pegasus for about $900 million.
In May, DirecTV entered into a deal to sell its set-top-box business to Thomson for $250 million. As part of that deal, DirecTV agreed to buy set-tops from Thomson over several years.
The write-down was associated with DirecTV’s plan, announced in September, to shelve the Spaceway high-speed-data-over-satellite initiative and instead use the satellites earmarked for that program to deliver HDTV signals.
At the time, DirecTV said that because the satellites would be used for a purpose other than what they were originally intended, the write-down was required.
That write-down had no effect on revenue, but it swung the DBS provider to a $1 billion loss in the third quarter.
DirecTV shares were up 39 cents each to $15.13 per share in morning trading Thursday.