DirecTV writes off satellites
Posted: Tue, Nov 2, 2004, 8:06 PM ET (0106 GMT)
Satellite TV operator DirecTV announced Tuesday that it was writing off most of the value of two satellite originally planned for a broadband Internet service. The company, in its quarterly earnings report, said that a decision to reconfigure the Spaceway 1 and 2 spacecraft to provide direct-to-home television instead of Internet prompted a requirement to test if the assets were "impaired" according to accounting rules. The company said in a statement that the satellites, originally valued at $1.9 billion, exceeded their new fair value by $1.47 billion, and the company took a $903-million after-tax charge to its earnings in the third quarter. The company had previously stated that the two satellites would be used primarily for television, including HD TV; the impairment charge suggests that it is unlikely those satellites will be used much, if at all, for data services.
Satellite TV operator DirecTV announced Tuesday that it was writing off most of the value of two satellite originally planned for a broadband Internet service. The company, in its quarterly earnings report, said that a decision to reconfigure the Spaceway 1 and 2 spacecraft to provide direct-to-home television instead of Internet prompted a requirement to test if the assets were "impaired" according to accounting rules. The company said in a statement that the satellites, originally valued at $1.9 billion, exceeded their new fair value by $1.47 billion, and the company took a $903-million after-tax charge to its earnings in the third quarter. The company had previously stated that the two satellites would be used primarily for television, including HD TV; the impairment charge suggests that it is unlikely those satellites will be used much, if at all, for data services.
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