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DirecTV Group Warns of $1 Billion-Plus Charge in Q3

Oct 22, 2004  •  Post A Comment

DirecTV Group said Friday it would take a one-time, pre-tax noncash charge of $1.4 billion to $1.6 billion in the third quarter in connection with the planned launch of two satellites next year.

The disclosure, made in a Securities and Exchange Commission filing submitted Friday, reflected the determination by the company that the satellites’ book value of approximately $1.9 billion exceeded the fair value for use in DirecTV’s direct-to-home broadcast service by between $1.4 billion and $1.6 billion.

The satellites originally were to be used to provide next-generation satellite-based broadband data services, but DirecTV officials altered their plans in favor of further building out the company’s video business.

The satellites, Spaceway 1 and Spaceway 2, are scheduled to be launched into orbit next year. A third Spaceway satellite is under construction.

DirecTV is scheduled to report third-quarter earnings Nov. 2.