10-K

Use these links to rapidly review the document
TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2009
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                        to

Commission file number 1-34554

DIRECTV
(Exact name of registrant as specified in its charter)

DELAWARE	26-4772533
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2230 East Imperial Highway, El Segundo, California	90245
(Address of Principal Executive Offices)	(Zip Code)
Registrant's telephone number, including area code: (310) 964-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Name of Exchange on Which Registered
Class A Common, $0.01 par value	NASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act:
None

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No o

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a smaller
reporting company) Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

         As of June 30, 2009, the aggregate market value of our predecessor, The DIRECTV Group, Inc.'s, voting and non-voting common equity held by non-affiliates was $11,041,195,097. This amount excludes Liberty Media Corporation's approximately 55% ownership interest in our outstanding common stock as of such date.

         As of February 22, 2010, the registrant had outstanding 913,331,533 shares of Class A common stock and 21,809,863 shares of Class B common stock.

         Documents incorporated by reference are as follows:

Document	Part and Item Number of Form 10-K into which Incorporated
DIRECTV Notice of Annual Meeting of Stockholders and Proxy Statement for Annual Meeting of Stockholders to be held on June 3, 2010	Part I, Item 5 Part III, Items 10 through 14

DIRECTV

TABLE OF CONTENTS

			Page No.
Part I
	Item 1. Business			3
	Item 1A. Risk Factors			22
	Item 1B. Unresolved Staff Comments			36
	Item 2. Properties			36
	Item 3. Legal Proceedings			36
	Item 4. Submission of Matters to a Vote of Security Holders			38
Part II
	Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			40
	Item 6. Selected Financial Data			42
	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations			43
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk			71
	Item 8. Financial Statements and Supplementary Data			72
		Report of Independent Registered Public Accounting Firm		72
		Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008 and 2007		73
		Consolidated Balance Sheets as of December 31, 2009 and 2008		74
		Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2009, 2008 and 2007		75
		Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2009, 2008 and 2007		76
		Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007		77
		Notes to the Consolidated Financial Statements		78
	Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure			123
	Item 9A. Controls and Procedures			123
	Item 9B. Other Information			126
Part III
	Item 10. Directors, Executive Officers and Corporate Governance			126
	Item 11. Executive Compensation			126
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			126
	Item 13. Certain Relationships and Related Transactions, and Director Independence			126
	Item 14. Principal Accounting Fees and Services			126
Part IV
	Item 15. Exhibits and Financial Statement Schedules			126
Signatures				136

1

DIRECTV

CAUTIONARY STATEMENT FOR PURPOSE OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

        This Annual Report on Form 10-K may contain certain statements that we believe are, or may be considered to be, "forward-looking statements" within the meaning of various provisions of the Securities Act of 1933 and of the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by use of statements that include phrases such as we "believe," "expect," "estimate," "anticipate," "intend," "plan," "foresee," "project" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. All of these forward-looking statements are subject to certain risks and uncertainties including, without limitation, risk factors discussed in more detail in Item 1A of this Annual Report, which could cause our actual results to differ materially from historical results or from those expressed or implied by the relevant forward-looking statement. The forward-looking statements included in this Annual Report are made only as of the date of this Annual Report and we undertake no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

2

DIRECTV

PART I

ITEM 1.    BUSINESS

        DIRECTV, which we also refer to as the company, we or us, is a leading provider of digital television entertainment in the United States and Latin America. We operate two direct-to-home, or DTH, operating segments: DIRECTV U.S. and DIRECTV Latin America, which are differentiated by their geographic location and are engaged in acquiring, promoting, selling and/or distributing digital entertainment programming via satellite to residential and commercial subscribers. In addition, beginning November 19, 2009, we own and operate three regional sports networks, or RSNs, and own a 65% interest in Game Show Network, LLC, or GSN, a basic television network dedicated to game-related programming and Internet interactive game playing. We account for our investment in GSN using the equity method of accounting.

•

DIRECTV U.S.  DIRECTV Holdings LLC and its subsidiaries, which we refer to as DIRECTV U.S., is the largest provider of DTH digital television services and the second largest provider in the multi-channel video programming distribution, or MVPD, industry in the United States. As of December 31, 2009, DIRECTV U.S. had over 18.5 million subscribers.

•

DIRECTV Latin America.  DIRECTV Latin America, or DTVLA, is a leading provider of DTH digital television services throughout Latin America. DTVLA is comprised of: PanAmericana, which provides services in Venezuela, Argentina, Chile, Colombia, Puerto Rico and certain other countries in the region through our wholly-owned subsidiary, DIRECTV Latin America, LLC, or DLA LLC; our 74% owned subsidiary, Sky Brasil Servicos Ltda., which we refer to as Sky Brazil; and our 41% equity method investment in Innova, S. de R.L. de C.V., or Sky Mexico. As of December 31, 2009, PanAmericana had approximately 2.7 million subscribers, Sky Brazil had approximately 1.9 million subscribers and Sky Mexico had approximately 1.9 million subscribers.

•

DIRECTV Sports Networks.  DIRECTV Sports Networks LLC and its subsidiaries, or DSN, is comprised primarily of three regional sports television networks based in Seattle, Washington, Denver, Colorado and Pittsburgh, Pennsylvania, currently known as FSN Northwest^TM, FSN Rocky Mountain^TM and FSN Pittsburgh^TM, respectively. The operating results of DSN beginning November 19, 2009 are reported as part of the "Sports Networks, Eliminations and Other" operating segment.

Liberty Transaction

        On November 19, 2009, The DIRECTV Group, Inc., or DIRECTV Group, and Liberty Media Corporation, which we refer to as Liberty or Liberty Media, obtained shareholder approval of and closed a series of related transactions which we refer to collectively as the Liberty Transaction. The Liberty Transaction included the split-off of certain of the assets of the Liberty Entertainment group into Liberty Entertainment, Inc., or LEI, which was then split-off from Liberty. Following the split-off, DIRECTV Group and LEI merged with subsidiaries of DIRECTV. As a result of the Liberty Transaction, DIRECTV Group, which is comprised of the DIRECTV U.S. and DIRECTV Latin America businesses, and LEI, which held Liberty's 57% interest in DIRECTV Group, a 100% interest in three regional sports networks, a 65% interest in GSN, approximately $120 million in cash and cash equivalents and approximately $2.1 billion of indebtedness and a series of related equity collars, became wholly-owned subsidiaries of DIRECTV.

        The holders of outstanding shares of DIRECTV Group common stock (other than direct or indirect subsidiaries of LEI) received one share of DIRECTV Class A common stock for each share of DIRECTV Group common stock held. The holders of outstanding shares of LEI Series A common

3

DIRECTV

stock and Series B common stock (other than Dr. John Malone and his family, or the Malones) received 1.11130 shares of DIRECTV Class A common stock for each share of LEI Series A or Series B common stock held. The Malones received 1.11130 shares of DIRECTV Class B common stock for each share of LEI Series B common stock held.

        DIRECTV has two classes of common stock outstanding, Class A common stock and Class B common stock. The DIRECTV Class A common stock is entitled to one vote per share and the Class B common stock is entitled to 15 votes per share. The DIRECTV Class A common stock trades on the NASDAQ® Global Select Market, or NASDAQ, under the ticker "DTV". DIRECTV Group common stock has been delisted and no longer trades on the NASDAQ. The DIRECTV Class B common stock will not be listed on any stock exchange or automated dealer quotation system. The Malones own all outstanding Class B common stock, and have agreed to limit their Class B voting rights to 24% of the total voting power of DIRECTV's common stock. Including their Class A and Class B ownership interests, the Malones hold an approximate 2.7% economic interest and an approximate 24.3% voting interest in DIRECTV.

        DIRECTV Group has been treated as the acquiring corporation in the Liberty Transaction for accounting and financial reporting purposes and accordingly, the historical financial statements of DIRECTV Group are reported as the historical financial statements of DIRECTV.

        For additional information regarding the Liberty Transaction, refer to Note 3 of the Notes to the Consolidated Financial Statements and Amendment No. 5 to DIRECTV's Registration Statement on Form S-4 filed with the SEC on October 20, 2009.

        DIRECTV was incorporated in Delaware in 2009.

DIRECTV U.S.

        Through DIRECTV U.S., we provide over 18.5 million subscribers with access to hundreds of channels of digital-quality video pictures and CD-quality audio programming that we transmit directly to subscribers' homes or businesses via high-powered geosynchronous satellites.

        We believe we provide one of the most extensive collections of programming available in the MVPD industry. As of December 31, 2009, we distributed more than 2,000 digital video and audio channels, including about 200 basic entertainment and music channels, 40 premium movie channels, over 50 regional and specialty sports networks, over 120 Spanish and other foreign language special interest channels, over 31 pay-per-view movie and event choices, and over 130 national high-definition, or HD, television channels. Although we distribute more than 1,500 local channels—over 500 in high-definition—a subscriber generally receives only the local channels in the subscriber's home market. In addition, we offer an on demand service named DIRECTV on DEMAND which, as of the end of 2009, provided a selection of about 6,000 movie and television programs to our subscribers who have a broadband connection to their set-top receiver. As of December 31, 2009, we provided local channel coverage in standard definition to markets covering about 95% of U.S. television households. In addition, we provided HD local channels to markets representing approximately 92% of U.S. TV households. In the second quarter of 2010, we expect to further expand our offering of HD channels when the recently launched DIRECTV 12 satellite begins operations.

        We also provide premium professional and collegiate sports programming such as the NFL SUNDAY TICKET™ package, which allows subscribers to view the largest selection of NFL games available each Sunday during the regular season. Under our contract with the NFL, we have exclusive rights to provide this service through the 2014 season, including rights to provide related broadband, HD, interactive and mobile services.

4

DIRECTV

        To subscribe to the DIRECTV® service, subscribers acquire receiving equipment from either us, our national retailers, independent satellite television retailers or dealers, or regional telephone companies, which we refer to as telcos. Most set-top receivers provided to new and existing subscribers are leased subsequent to the introduction of a lease program on March 1, 2006. The receiving equipment consists of a small receiving satellite dish antenna, a digital set-top receiver and a remote control, which we refer to as a DIRECTV® System. After acquiring and installing a DIRECTV System, subscribers activate the DIRECTV service by contacting us and subscribing to one of our programming packages.

Key Strengths

•

Large Subscriber Base.  We are the largest provider of DTH digital television services and the second largest MVPD provider in the United States, in each case based on the number of subscribers. We believe that our large subscriber base provides us with the opportunity to obtain programming on favorable terms and secure unique and exclusive programming. We also believe that our large subscriber base contributes to achieving other economies of scale in areas such as DIRECTV System equipment purchasing, customer service, installation and repair service, broadcast operations and general and administrative services.

•

Leading Brand Name.  Results from a study we commissioned in 2009 indicated that 96% of consumers in the United States recognized the DIRECTV brand name. We believe the strength of our brand name is an important factor in our ability to attract new subscribers. In addition, we believe our recognized brand name enhances our ability to secure strategic alliances with programmers, distributors and other technology and service providers.

•

Substantial Channel Capacity and Programming Content.  As a result of our significant channel capacity, we believe we are able to deliver to our subscribers one of the widest selections of local and national programming available today in the United States, including exclusive programming such as the NFL SUNDAY TICKET package and international programming. In addition, we have a substantial amount of capacity in the Ka-Band spectrum which enables us to provide one of the most extensive national HD offerings currently available in the industry.

•

High-Quality Digital Picture and Sound, Including HD Programming.  Our video and audio programming is 100% digitally delivered, providing subscribers with digital-quality video and CD-quality sound. We believe this compares favorably with most cable providers that frequently offer popular programming in an analog format and offer a selection of digital channels for an additional fee. In addition, we believe we currently offer one of the nation's most comprehensive selections of HD channels, including the largest choice of 1080p movies.

•

Strong Customer Service.  We have attained top rankings in customer satisfaction studies for our industry. For example, we have been rated ahead of every major cable company in customer service for nine consecutive years in the American Customer Satisfaction Index™. We believe that providing high-quality customer service is an important element in minimizing subscriber disconnection, or churn, and attracting new subscribers.

•

Valuable Orbital Slots and Satellite-Based Technology.  We believe our regulatory authorization to use desirable orbital slots and broadcast spectrum helps sustain our position as one of the leading companies in the MVPD industry. The Federal Communications Commission, or FCC, has designated three direct broadcast satellite, or DBS, orbital slots in the Ku-Band spectrum that provide full coverage across the 48 contiguous states of the United States, often referred to as CONUS coverage. Within these three orbital slots, there are 96 assigned DBS frequencies. We hold licenses to broadcast our services from 46 of these 96 DBS frequencies. The FCC is

5

DIRECTV

currently considering licensing additional DBS slots for satellites that are sometimes referred to as "tweeners" which would provide CONUS coverage. See "Government Regulation—FCC Regulation Under the Communications Act and Related Acts" and "Risk Factors—The ability to maintain FCC licenses and other regulatory approvals is critical to our business" for more information related to these types of slots and satellites.

In addition, we hold licenses in three orbital slots (99° west longitude, or WL, 101° WL, and 103° WL) in the Ka-Band spectrum. The satellites that have been launched into these orbital slots have substantially increased our channel capacity, allowing us to provide one of the most extensive HD channel offerings currently available across the United States. We also have obtained approval from the FCC to transmit our signal in the Ku-Band from one of our satellites that has been stationed at a temporary orbital location at 72.5° WL and from leased capacity on a satellite at 95° WL.

Our satellite-based service provides us with many advantages over ground- based cable television services. We have the ability to distribute hundreds of channels to millions of recipients nationwide with minimal incremental infrastructure cost per additional subscriber. In addition, we have comprehensive coverage to areas with low population density in the United States and the ability to quickly introduce new services to a large number of subscribers.

•

Strong Balance Sheet.  We believe our substantial cash position and relatively low debt levels combined with our current and expected future cash generation capability provides us with significant financial flexibility to improve shareholder value. Additionally, we have repurchased nearly $10 billion of our common stock over the last four years, retiring approximately 34% of our outstanding shares, and have announced a new $3.5 billion share repurchase plan which we expect to complete during 2010.

Business Strategy

        Our vision is to provide customers with the best video experience in the United States both inside and outside of the home by offering subscribers unique, differentiated and compelling programming through leadership in content, technology and customer service.

•

Offer Differentiated and Exclusive Content and Services.  To fulfill our goal, we believe we must provide the most extensive collection of valuable programming and interactive services to our customers.

•

Provide the Most Extensive Collection of Valuable Programming.  We believe that we currently have one of the most extensive collections of programming in the MVPD industry and our strategy is to continue improving our offering. For example, we offer content which is not offered by other MVPD providers such as NFL SUNDAY TICKET where subscribers can watch up to 14 games each week, most of which are offered in HD. We have also signed agreements to be the exclusive MVPD provider of NCAA® MEGA MARCH MADNESS®. In addition, we offer our customers The 101® Network, a free premium channel dedicated to the broadcast of unique and exclusive content including series such as Friday Night Lights, Deadwood®, Sleeper Cell® and The Nine^TM as well as concert performances by top-rated artists. In 2009, we also launched new shows on The 101 Network such as The Dan Patrick Show^TM and Trailer Park Boys®.



We also believe we currently have one of the most extensive national HD channel offerings as well as the largest lineup of 1080p movies in the MVPD industry. Additionally, when our DIRECTV 12 satellite is put into service in the second quarter of 2010, we expect to have

6

DIRECTV

the capacity to broadcast approximately 200 national HD channels to nearly all U.S. television households. As part of this rollout, we plan on offering local channels in HD to 19 additional markets, bringing the total number of HD local channel markets to 157—covering over 95% of TV homes. Subscribers receiving local HD channels will generally only receive the channels broadcast in their home market. Additionally, in 2010 we plan on being one of the first MVPD providers to offer dedicated 3D programming by introducing three 3D channels to our HD customers who have purchased 3D television sets.


We also expect to expand our DIRECTV on DEMAND, our video on demand, or VOD, service for subscribers that have the DIRECTV Plus® digital video recorder, or DVR, or DIRECTV Plus® HD DVR set-top receivers. As of year end 2009, DIRECTV on DEMAND offered about 6,000 titles providing thousands of hours of top programming from the major broadcast and cable networks, as well as popular movies. Most of the titles are offered free of charge and are downloaded from the Internet through a broadband connection for those subscribers with a DIRECTV Plus HD DVR. In addition, we download top movies via our satellites to a customer's DVR hard drive. In 2010, we expect to introduce a new movie service, DIRECTV Cinema^TM, which will substantially increase the number of new release movies available for our customers to view and purchase from either their television, laptop computer or mobile telephone.

•

Expand and Enhance Interactive Services.  We believe that enhanced and interactive services play an important role in the subscriber experience. For example, NFL SUNDAY TICKET subscribers can view a mix-channel with up to 8 games on one screen while the SUPERCAST^TM service lets viewers access games and interactive statistics online through a personal computer. We also offer interactive services for many major tennis and golf events, including the Masters® golf tournament, where we dedicate several extra channels of event coverage, interactive scoreboards and a mix channel, all of which no other MVPD operator provides. In 2009, we launched our free TV Apps service, which are applications that appear on the TV, including Flickr®, weather forecasts and other user generated programs for customers who connect their DIRECTV Plus HD DVR to their broadband router. We have added interactive applications for the 2010 Winter Olympics, such as medal count pages and special USA team coverage.

•

Regional Sports Networks.  Our three regional sports networks acquired in November 2009 provide us with promotional opportunities and will enable us to further develop unique and differentiated sports programming.

•

Technology Leadership.  We believe that technological leadership has been and will continue to be important to our ability to introduce services that are easy to use and subscriber-friendly, while also reducing costs. We believe that advancements in technology will drive subscriber demand for enhanced DVRs and HD equipment, VOD, a whole-house entertainment solution, mobile and portable devices.

•

Introduce Multi-Room, Whole-House, Mobile and Portable Services.  We believe that it is important for our subscribers to have multiple ways to access DIRECTV® programming throughout the home and on devices outside of the home. Accordingly, in 2010 we will be introducing a multi-room viewing service. This service will enable customers with the proper equipment to share content and recorded shows around the house. In the second half of 2010, we expect to introduce a home media center that will provide HD, DVR and standard-definition video functionality throughout the home and allow customers to access stored content, including video, photos and music, seamlessly from any connected television

7

DIRECTV

in a home. We also intend to make DIRECTV programming more ubiquitous by offering it on portable and mobile devices, including cell phones. For example, in 2009, subscribers to our NFL SUNDAY TICKET™ SuperFan® package were able to stream live NFL games to their mobile phones. In addition, we believe that our ongoing marketing relationships with the major wireless telephony providers such as AT&T and Verizon provide us a unique opportunity to develop compelling applications for our customers.

•

Enhance/Improve User Interface/Guide.  We are constantly striving to improve our guide and user interface because it is important that our subscribers are able to access the many offerings we provide in as easy and intuitive a manner as possible. For example, in January 2010 we introduced Smart Search which helps customers find what they are looking for on TV faster and easier as well as providing significantly more information about the television programs and actors they are interested in watching.



DIRECTV has led the industry in the application of remote DVR scheduling technology as over 2 million of our customers have scheduled over 12 million recordings remotely to DIRECTV DVRs through 2009. We also introduced ScoreGuide^TM in 2009 which, at the press of a button, enables customers to easily track scores and start times of major sporting events, see a list of channels carrying each event and tune directly to those channels. In 2010, we expect to further expand ScoreGuide, to include Olympic and soccer coverage. Another example of our improved user interface is GameSearch^TM which automatically recognizes when a customer has tuned to a channel with a blacked-out sports game and immediately looks to see if the game is on another channel. It then provides the customer a message telling them where to find the game or if it is unavailable.

•

Enhance Sales and Marketing; Focus on High Quality Subscribers; Improve Customer Service, Distribution and Installation.  We expect to continue to grow our subscriber base and maintain relatively low churn levels by focusing on acquiring higher quality subscribers, as well as improving our customer service, distribution and installation.

•

Enhance Sales and Marketing.  We expect to continue growing our subscriber base through marketing programs that capitalize on the strength of our brand and extensive programming. In addition, we expect that our expanded national and local HD programming, as well as many of our new services including multi-room viewing, DIRECTV Cinema and the home media center will increase sales from customers purchasing these services. We also intend to continue focusing on local advertising and marketing to ensure that our competitive strengths are effectively targeted based on competitive factors, demographics and geography.

•

Maintain Low Levels of Churn by Attracting High Quality Subscribers.  We believe that in order to maintain churn at relatively low levels, we must continue to improve the overall quality of our subscriber base by regularly refining our credit and identification policies to properly reflect the changing competitive and economic landscape. However, we believe it is also important to balance churn levels by adjusting our upgrade and retention policies and costs to help assure appropriate financial returns.

•

Improve Customer Service, Distribution and Installation.  We strive to attain the gold standard in customer service throughout a customer's lifecycle. We expect to improve customer service, distribution and installation services while also improving operational efficiencies. For example, in 2008 and 2009 we entered into several transactions which resulted in a substantial portion of our previously outsourced service and installation network technicians becoming DIRECTV U.S. employees. By having these technicians as employees of

8

DIRECTV

DIRECTV U.S., we have reduced turnover and improved the overall customer experience, and performance of the remaining outsourced technicians has also generally improved. We have also improved the quality and usage of our web-based customer service capabilities, improved the tools that our customer service representatives have at their disposal, and simplified our customer bills. In addition, we have implemented a new work order management system that has improved the scheduling and tracking of our installation and service calls including the use of wireless handheld devices so that our service technicians can improve the efficiency of their daily work orders. In 2009, we have seen substantial improvements in many of our customer service and installation metrics and we expect to make further improvements in 2010.

•

Improve and Expand Relationships with Telcos.  In February 2009, AT&T began marketing a bundle of broadband Internet, telephone services and DIRECTV video service to new and existing customers. AT&T's territories include 22 states and cover approximately 44 million households. With this relationship, we now have agreements with the three major telecommunications companies—AT&T, Verizon and Qwest—covering approximately 90 million homes in the United States. We are also working with the telcos to develop new services including more integrated bundles and wireless applications.

Infrastructure

        Satellites.    We currently have a fleet of twelve geosynchronous satellites, including eleven owned satellites and one leased satellite. We have seven Ku-Band satellites at the following orbital locations: 101° WL (three), 110° WL (one), 119° WL (one), 72.5° WL (one), and 95° WL (one-leased). We also have five Ka-Band satellites at our 99° WL (two) and 103° WL (three) orbital locations. The 72.5° WL orbital location is used pursuant to an arrangement with Telesat Canada and Bell ExpressVu.

        We are currently evaluating whether to begin construction of an additional satellite to provide additional services as well as backup capacity. If we do decide to acquire such a satellite, we expect that it would be launched and go into service in 2013.

        Satellite Risk Management.    At times, we use launch and in-orbit insurance to mitigate the potential financial impact of satellite fleet launch and in-orbit failures unless the premium costs are considered to be uneconomical relative to the risk of satellite failure. The insurance generally does not compensate for business interruption or loss of future revenues or subscribers. We rely on in-orbit spare satellites and excess transponder capacity at key orbital slots to mitigate the impact of a potential satellite failure on our ability to provide service. However, programming continuity cannot be assured in all instances or in the event of multiple satellite losses.

        Launch insurance typically covers the time frame from ignition of the launch vehicle through separation of the satellite from the launch vehicle. In the past, we have launched satellites without insurance. As of December 31, 2009, the net book value of DIRECTV U.S.' in-orbit satellites was $1,516 million, none of which is insured.

        Digital Broadcast Centers.    To gather programming content, ensure its digital quality, and transmit content to our satellites, we have built two digital broadcast centers, located in Castle Rock, Colorado and Los Angeles, California. These facilities provide the majority of our national and local standard-definition and HD programming. We have also built five uplink facilities which are used to provide HD local channels. Our broadcast centers receive programming from content providers via satellite, fiber optic cable and/or special tape. Most satellite-delivered programming is then digitized, encoded and transmitted to our satellites. We designed each broadcast center and uplink facility with redundant systems to minimize service interruptions.

9

DIRECTV

        Installation Network.    The DIRECTV home service provider, or HSP, installation and service network performs installation, upgrades and other service call work for us. In 2008 and 2009, we entered into several transactions that brought a significant portion of this HSP network activity in-house. We now directly employ nearly 4,000 technicians and utilize an additional 11,000 technicians from seven outsourced companies around the United States. The combined workforce completed approximately 93% of all in-home visits in 2009. We set the standards for the quality of installation and service, perform quality control, manage inventory and monitor the overall service network performance for nearly all of the third-party installation network.

        Customer Service Centers.    As of December 31, 2009, we used 36 customer service centers employing over 16,000 customer service representatives. Most of these customer service centers are operated by Convergys Customer Management Group, Inc., Precision Response Corporation, Sitel Operating Corporation, N.E.W. Customer Service Companies, Inc., VXI Global Solutions, Inc. and Teleperformance. We currently own and operate six customer service centers located in: Boise, Idaho; Tulsa, Oklahoma; Huntsville, Alabama; Missoula, Montana; Huntington, West Virginia and Denver, Colorado that employ approximately 5,000 customer service representatives. Potential and existing subscribers can call a single telephone number 24 hours a day, seven days a week, to request assistance for hardware, programming, installation, technical and other support. We continue to increase the functionality of telephone-based and web-based self-care features in order to better manage customer service costs and improve service levels.

Competition

        We face substantial competition in the MVPD industry and from emerging digital media distribution providers. Our competition includes companies that offer video, audio, interactive programming, telephony, data and other entertainment services, including cable television, other DTH companies, telcos, wireless companies and companies that are developing new technologies. Many of our competitors have access to substantially greater financial and marketing resources. We believe our brand, the quality and variety of video, audio and interactive programming, quality of picture, access to service, availability of HD and DVR services, customer service and price are the key elements for attaining and retaining subscribers. Our over 18.5 million subscribers represent approximately 19% of MVPD subscribers at December 31, 2009.

•

Cable Television.  We encounter substantial competition in the MVPD industry from cable television companies. According to the National Cable & Telecommunications Association's 2008 Industry Overview, 96% of the 128.6 million U.S. housing units are passed by cable. Most cable television operators have a large, established customer base, and many have significant investments in companies that provide programming content. Approximately 100 million households subscribe to an MVPD service and approximately 62% of MVPD subscribers receive their programming from a cable operator. In addition, most cable providers have completed network upgrades that allow for enhanced service offerings such as digital cable, HD channels, broadband Internet access and telephony services. Cable companies bundle these services, offering discounts and providing one bill to the consumer.

•

Telephone Companies.  Several telcos have upgraded a significant portion of their infrastructure by replacing their older copper wire telephone lines with high-speed fiber optic lines. These fiber lines provide the telcos with significantly greater capacity enabling them to offer new and enhanced services, such as Internet access at much greater speeds and digital-quality video. For example, Verizon announced that at the end of 2009, it had the capability to serve 15 million homes with fiber optic lines with the goal of having the capability to serve 18 million homes by the end of 2010. In addition, AT&T has begun deploying fiber optic lines to neighborhoods and

10

DIRECTV

expects to have the capability to serve approximately 30 million of its customers by the end of 2011. As of year end 2009, Verizon had nearly 3 million video subscribers and AT&T had approximately 2 million video subscribers. Similar to the cable companies, the telcos expect to offer their customers multiple services at a discount on one bill.

•

Other Direct Broadcast Satellite and Direct-To-Home Satellite System Operators.  We also compete with DISH Network Corporation, or DISH Network, which had over 14 million subscribers at the end of 2009, representing approximately 14% of MVPD subscribers. Other domestic and foreign satellite operators also have proposed to offer DTH satellite service to U.S. customers using U.S.-licensed satellite frequencies or foreign-licensed frequencies that have the ability of covering the United States.

•

Video via the Internet.  With the large increase in the number of consumers with broadband service, a significant amount of video content has become available on the Internet for users to download and view on their personal computers, televisions and other devices. For example, Apple^TM offers two hundred television shows and 400 movies for rental or purchase, some in high-definition, on the online iTunes® Store. In addition, Hulu™ is an online video service website which provides free movies and TV shows from over 190 content providers including Fox, Disney, NBC Universal, MGM Studios, Sony Pictures and Warner Bros. This content can be accessed on demand through its website and those of its partners—AOL, MSN, MySpace and Yahoo. In addition, several companies, such as Netflix, Blockbuster and Amazon.com, have begun selling and renting movies via Internet download. For example, Netflix has a library of 17,000 movies and TV shows available for download to its over 12 million subscribers. There are also several similar initiatives by companies such as Intel, Microsoft and Sony to make it easier to view Internet-based video on television and personal computer screens. Many television models, Blu-Ray Disc® players and gaming consoles like the Xbox® can be directly connected to the Internet and have the capacity to stream video to the television.

•

Mobile Video.  Many companies are beginning to offer mobile applications for video allowing consumers to watch video on the go. For example, AT&T offers mobile TV which provides users the ability to watch full length TV shows from ABC, CBS, ESPN and other programmers on their cell phones. Verizon Wireless offers V Cast™ which allows subscribers to watch many of the top TV shows including college football and basketball on their mobile phone for a modest fee. In addition other mobile applications and services are becoming available such as FLO TV^TM service from Qualcomm. FLO TV provides portable TV with full length shows from programmers such as Fox, CBS, Fox News Channel and ESPN on a portable device. Other cable and satellite distributors are also focused on distributing their content to their customers on the go.

•

Small and Rural Telephone Companies.  Other telephone companies are also finding ways to deliver video programming services over their wireline facilities or in a bundle with other MVPD providers. For example, DISH Network has agreements with Embarq, CenturyTel, Windstream, TDS, and Frontier to bundle their individual DSL and telephony services with DISH Network's video service.

•

Local Broadcasters.  Most areas of the United States can receive traditional digital television broadcasts of between three and ten channels. These broadcasters are often low to medium power operators with a limited coverage area and provide local, network and syndicated programming typically free of charge. There are over 2,000 TV broadcast stations in the U.S. split among 210 TV markets.

11

DIRECTV

DIRECTV LATIN AMERICA

        DTVLA is the leading provider of DTH digital television services throughout Latin America and the Caribbean, which includes Puerto Rico. DTVLA provides a wide selection of high-quality local and international programming under the DIRECTV and SKY brands to approximately 2.7 million subscribers in PanAmericana and approximately 1.9 million subscribers in Brazil. Our 41% owned affiliate, Sky Mexico, has more than 1.9 million subscribers in Mexico and certain countries in Central America. Including Sky Mexico, DIRECTV and SKY service over 6.5 million customers throughout the region.

        We own 100% of PanAmericana (which operates principally in South America and the Caribbean, including Puerto Rico), 74% of Sky Brazil (which operates in Brazil), and 41% of Sky Mexico (which operates in Mexico, Central America and the Dominican Republic). Globo Comunicações e Participações S.A., or Globo, owns the other 26% of Sky Brazil and Grupo Televisa, S.A., or Televisa, owns the other 59% of Sky Mexico. The results of PanAmericana and Sky Brazil are consolidated in our results. We account for our 41% interest in Sky Mexico under the equity method of accounting.

        In connection with the approval of Liberty Media's acquisition of its equity interest in us from News Corporation in February 2008, the FCC required DTVLA to sever the "attributable interests" between our DIRECTV Puerto Rico subsidiary and Liberty Cablevision of Puerto Rico, Ltd., or LCPR, by February 26, 2009. We assumed responsibility for satisfaction, modification or waiver of this condition. In order to comply with terms of the FCC order, effective February 25, 2009, we placed the shares of DIRECTV Puerto Rico into a trust and appointed an independent trustee who is required to oversee the management and operation of DIRECTV Puerto Rico, and has the authority, subject to certain conditions, to divest ownership of DIRECTV Puerto Rico. We continue to consolidate the results of DIRECTV Puerto Rico following this transaction.

Key Strengths

•

High Quality Digital Picture and Sound.  Our video and audio programming is 100% digitally delivered, providing subscribers with digital-quality picture and sound, as well as interactive features. We believe that this compares favorably with cable providers in Latin America, who typically continue to broadcast only analog services or a combination of analog and digital services to a large percentage of their subscribers.

•

Large Subscriber Base and Pan-Regional Scale of Service.  On a regional basis, we are the largest provider of pay television services in Latin America. We believe that this scale provides us with the opportunity to obtain programming on favorable terms, and contributes to economies of scale in other areas, such as customer service, equipment and technology purchasing and broadcast operations.

•

Relationship with DIRECTV U.S.  We believe that DTVLA's relationship with DIRECTV U.S. is a key strength. PanAmericana and Sky Brazil have aligned their set-top receiver specifications and middleware technologies with those of DIRECTV U.S., allowing them to take advantage of DIRECTV U.S.' economies of scale. We believe it also allows DTVLA to launch new features and services at a lower cost and move more rapidly than its competitors in Latin America. Sky Mexico is also in the process of aligning its set-top receiver technology with DIRECTV U.S.

•

Leading Brands.  DIRECTV and SKY continue to position their brands in Latin America as a leader in digital entertainment and the best quality television available. In 2009, this was particularly accentuated by the aggressive positioning of our advanced products, such as DVRs

12

DIRECTV

and HD DVRs throughout the territory, which translated into pan-regional penetration rates which averaged over 25% of gross subscriber additions in the fourth quarter.

•

Strong Customer Service.  We believe that we have a higher level of customer service than our competitors which is an important element in minimizing subscriber churn and attracting new subscribers.

Business Strategy

        Our goal is to provide subscribers with the best video experience available. Our strategy focuses on leveraging DTVLA's competitive advantages that differentiate our service offerings from those of our competitors.

•

Offer Unique Content.  We expect that we can leverage our greater scale to offer unique and compelling content to subscribers. For example, in most of the territories in which we operate we will be the only provider of television services where subscribers can see all of the 2010 FIFA World Cup™ games, and we are the only operator distributing all of the games in high definition. In some cases, we have exclusive rights to 2010 FIFA World Cup games. Similarly, Sky Brazil, PanAmericana and Sky Mexico have licensed exclusive rights through the 2011-2012 season to the Spanish soccer league, which in most countries is the second most popular soccer league, behind the local country leagues.

•

Increase DVR Penetration.  A key aspect of our strategy is to use the availability of high quality, reasonably priced DVRs as a cornerstone to distinguish our service from our competitors' services. We believe that our technology and pan-regional scale, as well as the relationship with DIRECTV U.S., can be leveraged to provide DVRs that are more functional and less costly than those of our competitors. In most countries in which we operate, our competitors either do not offer DVRs or make them available on terms that have significantly limited their penetration. As a result of this leadership position, as of the end of 2009, approximately 11% of our subscribers had DVR service.

•

Establish Leadership Position in High-Definition.  PanAmericana and Sky Brazil launched HD services in 2008 and mid-2009, respectively. Other than in Chile and Puerto Rico, our competitors have limited or no HD offerings and many face significant network capacity constraints that limit their ability to offer HD services on a significant scale. Although we believe that the HD content offerings will be more limited in Latin America than in the United States for the next several years and the uptake of HD services in Latin America will be much slower than in the United States, we expect that our ability to offer high quality HD services will provide another opportunity for us to differentiate the quality of our services from those of our competitors. As of year end 2009, Sky Brazil offered its customers 30 HD channels and PanAmericana offered on average 8 HD channels.

•

Enhance Programming Features.  We believe that we can differentiate our service from our competitors through the use of enhanced features such as interactivity. For example, we first offered interactive services for soccer matches from the 2006 FIFA World Cup and will provide similar features for the 2010 FIFA World Cup. We have offered similar interactive services for the United States Open and Major League Baseball®.

Infrastructure

        We provide services in PanAmericana and Brazil from leased transponders on two satellites. Sky Mexico provides its services from leased transponders on a separate satellite. Currently, these satellites

13

DIRECTV

do not have a backup, however we have arranged to lease a backup satellite which was successfully launched in February 2010 that will serve Sky Brazil and Sky Mexico. We anticipate that this satellite will be available for operations in the second quarter of 2010.

        See Item 1A. "Risk Factors" below for additional information regarding satellite launch and operational risks.

        Our principal digital broadcast centers are located in the United States and Brazil. We also have several smaller satellite uplink facilities in the region.

Competition

        The pay television and other emerging broadband video and data markets in Latin America are highly competitive. In each of our markets, we compete primarily with other providers of pay television, who distribute their programming by satellite, cable, terrestrial microwave systems, traditional over-the-air broadcasting or the Internet. In addition, in certain markets we face significant competition from illegal and informal sector pay television operations. We compete primarily on the basis of programming selection, price, technology and quality.

        In most of the markets in which we operate, cable television is our principal competition. Cable services have been in commercial operation longer than other pay television platforms, and have established large subscriber bases and widespread brand recognition. They have typically offered analog services for lower monthly fees and with lower upfront installation and connection fees than we do. In addition, the cable operators with which we compete are in various stages of upgrading their networks to provide broadband and telephony services, and in some markets the major cable operators are competing with us based principally on their offer of a "triple play" bundle of video, broadband and telephony services. In most cases, they discount the value of their programming services in order to sell broadband and telephony services, which can adversely affect the attractiveness of our offers to subscribers.

        In addition to competition from cable services, we face increasing competition from other providers of DTH services. Telefonica, the Spanish telephone company, launched DTH services in Peru, Chile and Brazil in 2006, Colombia in 2007 and Venezuela in 2008. Telmex provides DTH service in Chile and Peru, and in 2009 it launched services in Brazil through its affiliate, Embratel. Oi, the second fixed line incumbent in Brazil (in addition to Telefonica), launched a DTH service in 2009. Also, in Mexico a joint venture of EchoStar Corp. and MVS Comunicaciones launched a new DTH service, with substantial commercial support and cooperation from Telmex, which due to regulatory restrictions is not currently permitted to provide its own video services in Mexico. These competitors have significant resources and have proven their ability to grow their businesses rapidly. They typically seek to focus on offering lower-cost, limited services packages in support of their telephony and broadband offerings, which can increase our churn and put pressure on our margins. Also, the existence of multiple DTH operators in a single market dilutes our ability to market our DTH service as an alternative to cable, traditionally our principal competition.

        In a number of markets, existing wireline telephony operators have announced their intention to upgrade their infrastructure in order to provide new and enhanced services, including video programming. These and other companies have announced plans to build wireless broadband networks that will also be capable of delivering broadband, telephony and video services. However, to date only a very small number of such upgrades and build outs have been actively pursued on other than a test basis.

14

DIRECTV

ACQUISITIONS, STRATEGIC ALLIANCES AND DIVESTITURES

        We review our competitive position on an ongoing basis and, from time to time, consider various acquisitions, strategic alliances and divestitures, including potential wireless broadband investments or alliances, in order to continue to compete effectively, improve our financial results, grow our business and allocate our resources efficiently. We also consider periodically making equity investments in companies with which we can jointly provide services to our subscribers.

GOVERNMENT REGULATION

        We are subject to government regulation in the United States, primarily by the FCC, and similar regulatory agencies in Latin America and, to a certain extent, by the legislative branches, other federal agencies, and state and local authorities in the countries where we operate. We are also subject to the rules and procedures of the International Telecommunications Union, or ITU, a specialized agency of the United Nations within which governments and the private sector coordinate global telecommunications networks and services. Depending upon the circumstances, noncompliance with legislation or regulations promulgated by these entities could result in the suspension or revocation of our licenses or registrations, the termination or loss of contracts or the imposition of contractual damages, civil fines or criminal penalties.

        This section sets forth a summary of regulatory issues pertaining to our operations in the United States and is not intended to describe all present and proposed government regulation and legislation affecting the MVPD industry or our business.

        FCC Regulation Under the Communications Act and Related Acts.    The Communications Act and other related acts give the FCC broad authority to regulate the operations of our company.

        The ownership and operation of our DBS/DTH system is regulated by the FCC primarily for:

•

the licensing of DBS and DTH satellites, earth stations and ancillary authorizations;

•

the assignment of frequencies and orbital slots, the relocation of satellites to different orbital locations or the replacement of an existing satellite with a new satellite;

•

compliance with the terms and conditions of assignments and authorizations, including required timetables for construction and operation of satellites;

•

avoidance of interference by and to DBS/DTH operations with operations of other entities that make use of the radio spectrum; and

•

compliance with the Communications Act and FCC rules governing U.S.- licensed DBS and DTH systems.

        The FCC grants authorizations to satellite operators that meet its legal, technical and financial qualification requirements. The FCC conditions such authorizations on satisfaction of ongoing due diligence, construction, reporting and related obligations.

        All of our satellites and earth stations are or have been licensed by the FCC. Currently, two of our satellites are licensed by the government of Canada. While the FCC generally issues DTH space station licenses for a fifteen-year term, DBS space station and earth station licenses are generally issued for a ten-year term, which is less than the useful life of a healthy direct broadcast satellite. Upon expiration of the initial license term, the FCC has the option to renew a satellite operator's license or authorize an operator to operate for a period of time on special temporary authority, or decline to renew the license. If the FCC declines to renew the operator's license, the operator is required to cease operations and the frequencies it was previously authorized to use would revert to the FCC.

15

DIRECTV

        Currently, we have several applications pending before the FCC, including applications to launch and operate future satellites to support DIRECTV's services. In general, the FCC's approval of these applications is required for us to continue to expand our range of service offerings while increasing the robustness of our satellite fleet. We may not obtain these approvals in a timely fashion or at all.

        As a DBS/DTH licensee and operator we are subject to a variety of Communications Act requirements, FCC regulations and copyright laws that could materially affect our business. They include the following:

•

Local-into-Local Service and Limitation on Retransmission of Distant Broadcast Television Signals.  The Satellite Home Viewer Improvement Act, or SHVIA, allows satellite carriers to retransmit the signals of local broadcast television stations in the stations' local markets without obtaining authorization from the holders of copyrights in the individual programs carried by those stations. Another portion of SHVIA, as amended by the Satellite Home Viewer Extension and Reauthorization Act of 2004, or SHVERA, also permits satellite retransmission of distant network stations (those that originate outside of a satellite subscriber's local television market) only to "unserved households." A subscriber qualifies as an "unserved household" if he or she cannot receive, over the air, a signal of sufficient intensity from a local station affiliated with the same network, or falls into one of a few other very limited exceptions. SHVERA also prohibits satellite carriers from signing up a new subscriber to distant analog or digital signals if that subscriber lives in a local market where the satellite carrier provides local analog or local digital signals, respectively. SHVERA imposes a number of notice and reporting requirements, and also permits satellite retransmission of distant stations in neighboring markets where they are determined by the FCC to be "significantly viewed." In implementing SHVIA, the FCC has required satellite carriers to delete certain programming, including sports programming, from the signals of certain distant stations. In addition, the FCC's continuing interpretation, implementation and enforcement of other provisions of SHVIA and SHVERA, as well as judicial decisions interpreting and enforcing these laws, could hamper our ability to retransmit local and distant network and superstation signals, reduce the number of our existing or future subscribers that can qualify for receipt of these signals, impose costs on us in connection with the process of complying with the rules, or subject us to fines, monetary damages or injunctions. Also, the FCC's sports blackout requirements, which apply to all distant network signals, may require costly upgrades to our system. Further, an FCC order interpreting the requirement that satellite carriers retransmit local digital signals with "equivalent bandwidth" of significantly viewed digital signals may constrain our ability to deliver such significantly viewed digital signals. The distant-signal provisions of SHVERA were set to expire at the end of 2009, but Congress has extended that deadline to February 28, 2010. Congress may decline to renew those provisions, which could severely restrict our ability to retransmit distant signals. Congress could also adopt amendments to SHVERA with respect to local or distant signals, including limiting the provision of distant signals. In particular, Congress is considering for the first time making subscribers ineligible for distant signals where they can receive local digital multicast signals over the air. This could adversely affect our ability to deliver distant signals to our existing or future subscribers.

•

Must Carry Requirement.  SHVIA also imposes a must carry obligation on satellite carriers. This must carry obligation requires satellite carriers that choose to take advantage of the statutory copyright license in a local market to carry upon request the signals of all qualifying television broadcast stations within that local market, subject to certain limited exceptions. The FCC has implemented SHVIA's must carry requirement and adopted further detailed must carry rules covering our carriage of both commercial and non-commercial broadcast television stations. These rules generally require us to carry all of the local broadcast stations requesting carriage in

16

DIRECTV

a timely and appropriate manner in markets in which we choose to retransmit the signals of local broadcast stations. We have limited capacity, and the projected number of markets in which we can deliver local broadcast programming will continue to be constrained because of the must carry requirement and may be reduced depending on the FCC's interpretation of its rules in pending and future rulemaking and complaint proceedings, as well as judicial decisions interpreting must carry requirements. For example, the FCC issued an order requiring mandatory carriage of high-definition digital signals in an increasing number of markets each year, requiring so-called "HD carry-one, carry-all" in all local markets served by 2013. We may not be able to comply with these must carry rules, or compliance may mean that we will be required to use capacity that could otherwise be used for new or additional local or national programming services. Moreover, Congress may amend the must carry rules when it considers SHVERA reauthorization. For example, Congress has in the past proposed legislation and may in the future enact legislation that would require us to provide local channels via satellite in all markets in the United States. We currently provide local channel coverage to approximately 155 markets representing approximately 95% of U.S. television households. If such legislation were enacted, we would be required to provide local channel coverage to an additional 55 markets representing about 5% of U.S. television households on an accelerated timetable. We believe that the capital expenditures and ongoing costs to provide this coverage would not be covered by the incremental revenue from the additional subscribers we could potentially gain in these markets. Moreover, depending upon the timetable imposed, we may not be able to comply in a timely manner.

•

Public Interest Requirement.  Under a requirement of the Communications Act, the FCC has imposed certain public interest obligations on DBS operators, including a requirement that such providers set aside four percent of channel capacity exclusively for noncommercial programming of an educational or informational nature, for which we must charge programmers below-market rates and for which we may not impose additional charges on subscribers. FCC rules also require us to comply with a number of political broadcasting requirements to which broadcasters are subject under the Communications Act, as well as limits on the commercialization of children's programming applicable to cable operators. We believe that we are in compliance with all of these requirements, but some of them require our interpretations, which we believe are reasonable and consistent with industry practice. However, if we are challenged, the FCC may not agree with our interpretations. In addition, the FCC could, in the future, attempt to impose additional public interest or content requirements on us, for example, by seeking to impose rules on indecent programming.

•

Emergency Alert System.  The Emergency Alert System, or EAS, requires participants to interrupt programming during nationally-declared emergencies and to pass through emergency-related information. The FCC has adopted rules that require satellite carriers to participate in the "national" portion of EAS. It is also considering whether to mandate that satellite carriers also interrupt programming for local emergencies and weather events. We believe that any such requirement would be very difficult to implement, would require costly changes to our DBS/DTH system, and, depending on how it is implemented, could inconvenience or confuse our viewers. The FCC is also considering whether to require that EAS alerts be provided in multiple languages or via text messages, which could also prove difficult and costly to implement depending upon the nature of any such requirement adopted.

•

Spectrum Allocation and License Assignment Rules.  We depend upon the FCC's allocation of sufficient DBS frequencies and assignment of DBS licenses in order to operate our business. DBS frequencies and available DBS orbital locations capable of supporting our business have become increasingly scarce. While we have obtained additional DTH service capacity and

17

DIRECTV

continue to explore new sources of DBS/DTH capacity, there can be no assurance that we will obtain further capacity. In addition, the FCC had adopted a system of competitive bidding to assign licenses for additional DBS frequencies. On June 21, 2005, the United States Court of Appeals for the D.C. Circuit held that such an auction process was not authorized by statute. The FCC subsequently voided the previous auction and implemented a freeze on applications for authority to provide DBS service in the United States using new frequencies or new orbital locations not assigned to the United States in the ITU Region 2 Broadcasting Satellite Service, or BSS, Plan. On August 18, 2006, the FCC began a proceeding to identify a new system for assigning DBS authorizations. There can be no assurance that we will be able to obtain additional DBS capacity under whatever system the FCC implements in the future.

In 2007, the FCC adopted new service and licensing rules for the BSS in the 17.3-17.8 GHz and 24.75-25.25 GHz bands, or ¹⁷/24 GHz BSS. This spectrum, also known as the "reverse band" (in that transmissions from these satellites to consumers would occur in spectrum currently used for uplinking programming to traditional DBS satellites), could provide a new source of additional DTH capacity. Among other things, the FCC established a licensing procedure under which the four parties with applications then pending—including DIRECTV—would be allowed to amend their applications to conform to the new rules and would be entitled to have those applications processed on a co-equal basis with one another before any new applications would be accepted. On July 28, 2009, the FCC granted four DIRECTV satellite applications in this band. However, foreign operators who may have international priority have indicated an interest in using slots that may conflict with some or all of these licenses. One foreign licensed operator, Spectrum Five LLC, has filed a petition seeking reconsideration of one of DIRECTV's licenses at an orbital location where Spectrum Five also proposes to operate, and that petition remains pending.

•

Rules Governing Co-Existence With Other Satellite and Terrestrial Services and Service Providers in the MVPD Industry.  The FCC has adopted rules to allow non-geostationary orbit fixed satellite services to operate on a co-primary basis in the same frequency band as the one used by direct broadcast satellite and Ku-Band-based fixed satellite services. In the same proceeding, the FCC concluded that multi-channel video and data distribution services, or MVDDS, can share spectrum with DBS operators on a non-interference basis, and adopted rules and a method for assigning licenses in that service, as well. While the FCC has established service and technical rules to govern the non-geostationary orbit and MVDDS services to protect DBS operations from harmful interference, these rules may not be sufficient to prevent such interference, and the introduction of such services into spectrum used by us for DBS service may have a material adverse impact on our operations. A number of aspects of these rules remain subject to judicial review. In addition, one MVDDS operator recently requested a waiver of the applicable rules so that it could operate systems at substantially higher power levels in 80 markets where it holds MVDDS licenses. If granted, such a waiver may have a material adverse impact on our operation in the affected markets. Although we have opposed that waiver request, there can be no assurance that the FCC will deny it.

On August 18, 2006, the FCC released a notice of proposed rulemaking regarding the possible operation of "tweener" or "short spaced" satellites—satellites that would operate in the same DBS uplink and downlink frequency bands as us, from orbital positions located in between those now assigned to the DBS service. This rulemaking follows applications by SES and Spectrum Five LLC to operate tweener satellites. Under rules that the FCC is considering, a provider could, by complying with certain technical restrictions, operate a satellite in between two orbital locations where we have already positioned our satellites without completing coordination of its operations with us and without demonstrating that such operations would not "affect" us as that

18

DIRECTV

term is defined by the ITU. We have opposed this proposal, and believe that tweener satellites as proposed by applicants would cause interference to our current and planned operations and impose a significant constraint on the further growth of our DIRECTV U.S. DBS service. We cannot predict what if any action the FCC may take or the effect of such a proceeding on our business.

On November 29, 2006, despite the pendency of the tweener satellite rulemaking and over our opposition, the FCC's International Bureau granted Spectrum Five's application to operate a tweener satellite at the 114.5^o WL orbital location, only 4.5^o away from our DBS satellites operating at the 110^o WL and 119^o WL orbital locations. While the Bureau limited Spectrum Five's operations to levels below those at which the ITU deems one DBS system to "affect" another in the absence of agreement from all affected DBS operators (including us), the Bureau's grant of Spectrum Five's application prior to coordination could ultimately permit Spectrum Five to operate at levels that would cause interference to our operations. On February 1, 2008, the full FCC denied reconsideration of the International Bureau's order, but clarified that, if Spectrum Five is unable to coordinate its tweener satellite, it must file for a modification of its authorization and demonstrate that its proposed operational parameters would not exceed the ITU trigger for coordination. To date, Spectrum Five has neither contacted us to attempt coordination of its tweener system nor filed for modification of its authorization as directed by the FCC.

The FCC has also adopted rules that require satellite operators to take certain measures to mitigate the dangers of collision and orbital debris. Among other things, these rules impose certain requirements for satellite design and end-of-life disposal maneuvers for all satellites launched after March 18, 2002, which apply to eight of our in-orbit satellites. We believe that we are in compliance with all of these requirements and expect that we will continue to be able to comply with them going forward, but the requirements for end-of-life disposal could result in a slight reduction in the operational life of each new satellite.

•

Geographic Service Rules.  The FCC requires DBS licensees to comply with certain geographic service obligations intended to foster the provision of DBS service to subscribers residing in the states of Alaska and Hawaii. We believe that we are in compliance with these rules although, in the past, some have argued otherwise to the FCC. The FCC has not acted on petitions filed several years ago by the State of Hawaii and an Alaska satellite television dealer. We cannot be sure that the FCC will agree with our view that we are in compliance with the agency's geographic services rules, or that the FCC will not require us to make potentially cumbersome and costly changes to our offerings. The FCC has also adopted similar rules for the ¹⁷/24 GHz BSS service.

•

FCC Conditions Imposed In Connection With the Liberty and News Corporation Transactions.  In approving Liberty's 2008 acquisition of News Corporation's equity investment in us, the FCC imposed a number of regulatory conditions on us and Liberty, some of which directly or indirectly affected our business. In granting authority for the merger of Liberty Entertainment, Inc. and DIRECTV in 2009, the FCC conditioned its approval of the transaction on continued compliance with those conditions. Accordingly, the FCC has imposed on us program carriage conditions intended to prevent discrimination against all forms of unaffiliated programming; and certain program access conditions intended to ensure non-discriminatory access to much of the programming carried on the DIRECTV service. In particular, we may be required to submit to "baseball style" arbitration if we cannot arrive at terms for carriage of our regional sports network programming with an MVPD. We cannot predict what effect our compliance with or the FCC's enforcement of these conditions will have on our business.

19

DIRECTV

Moreover, in the transaction between News Corporation and Liberty, the Commission required us to sever all "attributable" links between DTVLA's subsidiary, DIRECTV Puerto Rico Ltd. ("DTVPR"), and a Puerto Rico cable operator owned by an affiliate of Liberty. In order to comply with this condition, we put our entire interest in DTVPR into a divestiture trust in February 2009. However, we cannot be sure that the FCC will agree with our view that the trust is sufficient to sever all attributable links between the two companies, or that it will not require us to undertake further cumbersome and expensive measures to eliminate such attribution.

        International Telecommunications Union Rules.    We are required by international rules to coordinate the use of the frequencies on our satellites with other satellite operators who may interfere with us or who may suffer interference from our operations.

        Other Legal and Regulatory Requirements.    DBS/DTH providers are subject to other federal and state regulatory requirements, such as Federal Trade Commission, FCC and state telemarketing and advertising rules, and subscriber privacy rules similar to those governing other MVPDs. We have agreed with the Federal Trade Commission to (1) review and monitor compliance with telemarketing laws by any companies we authorize to do telemarketing as well as by independent retailers, (2) investigate and respond to complaints about alleged improper telemarketing and (3) terminate our relationship with marketers or retailers found in violation. Similarly, we have agreed with certain state attorneys general to comply with advertising disclosure requirements and monitor compliance by independent retailers.

        In addition, although Congress has granted the FCC exclusive jurisdiction over the provision of DTH satellite services, aspects of DBS/DTH service remain regulated at the state and local level. For example, the FCC has promulgated rules prohibiting restrictions by local government agencies, such as zoning commissions and private organizations, such as homeowners associations, on the placement of DBS receiving antennas. Local governments and homeowners associations, however, may continue to regulate the placement of such antennas if necessary to accomplish a clearly defined public safety objective or to preserve a recognized historic district, and may also apply to the FCC for a waiver of FCC rules if there are other local concerns of a special or unusual nature. In addition, a number of state and local governments have attempted to impose consumer protection, customer service and other types of regulation on DBS operators. Also, while Congress has prohibited local taxation of the provision of DBS service, taxation at the state level is permissible, and many states have imposed such taxes, and additional states have attempted to do so recently. Incident to conducting a consumer directed business, we occasionally receive inquiries or complaints from authorities such as state attorneys general and state consumer protection offices. These matters are generally resolved in the ordinary course of business.

        In Latin America, DTVLA and its subsidiaries are subject to laws and regulations in each country in which they operate that govern many of the same aspects of our operations as in the United States, such as landing rights for satellites; spectrum, earth station and other licenses; must carry and other requirements with respect to the channels we carry; and regulations governing telemarketing and customer service, etc. Regulatory regimes in Latin America are generally less developed than in the United States, and the application of existing laws and regulations to DBS providers is at times uncertain. In addition, there are certain areas where regulations in Latin America are stricter than in the United States, such as regarding labor and consumer protection laws. Foreign exchange laws in some countries can have a material impact on our ability to repatriate funds to the United States. Also, recently in several countries such as Brazil there have been proposed laws that would require us to carry certain thresholds of domestic or "national" content which, if approved, could have a material impact on our subsidiaries operating in those countries.

20

DIRECTV

INTELLECTUAL PROPERTY

        All DIRECTV companies maintain active programs for identifying and protecting our important intellectual property. With the exception of certain U.S. trademark registrations held by DIRECTV U.S., Sky Mexico and Sky Brazil pursuant to trademark license agreements and various intellectual property licensed from third parties, DIRECTV Group owns all of our intellectual property for the benefit of our company and our subsidiaries.

        We believe that our growing portfolio of pending and issued patents are important assets. We presently hold over 1,950 issued patents worldwide relating to our past and present businesses, including over 450 patents developed by, or otherwise relating to, the businesses of DIRECTV U.S. We hold a worldwide portfolio of over 1,100 trademarks in over 130 countries related to the DIRECTV brand, the Cyclone Design and DIRECTV products and services. In particular, DIRECTV U.S. holds trademark registrations relating to its business, including registrations of the primary "DIRECTV" and Cyclone Design trademarks. In many instances, these trademarks are licensed royalty-free to third parties for use in support of the DIRECTV U.S. business. We actively protect our important patents, trademarks and other intellectual property rights against unauthorized or improper use by third parties.

ENVIRONMENTAL REGULATION

        We are subject to the requirements of federal, state, local and foreign environmental laws and regulations. These include laws regulating air emissions, water discharge and universal and hazardous waste management activities. We have an environmental management function designed to track, facilitate and support our compliance with these requirements and attempt to maintain compliance with all such requirements. We have made and will continue to make, as necessary, capital and other expenditures to comply with environmental requirements. We do not, however, expect capital or other expenditures for environmental compliance to be material in 2010. In addition, we periodically review environmental stewardship concepts (such as green initiatives and energy conservation strategies) and implement these whenever feasible. Environmental requirements are complex, change frequently and have become more stringent over time. Accordingly, we cannot provide assurance that these requirements will not change or become more stringent in the future in a manner that could have a material adverse effect on our business.

        We are also subject to environmental laws requiring the investigation and cleanup of environmental contamination at facilities we formerly owned or operated or currently own or operate or to which we sent hazardous wastes, including specified universal wastes, for treatment, service, disposal or recycling. We are aware of contamination at one of our former sites. We are in the process of complying with the requirements stipulated by the government agency overseeing the site clean up and have allocated the funds to achieve the decontamination goals.

SEGMENT REPORTING DATA

        Operating segment and principal geographic area data for 2009, 2008 and 2007 are summarized in Note 18 of the Notes to the Consolidated Financial Statements in Item 8, Part II of this Annual Report, which we incorporate herein by reference.

EMPLOYEES

        As of December 31, 2009, DIRECTV U.S. had approximately 15,900 full-time and 300 part-time employees, DIRECTV Latin America had approximately 5,700 full-time and 1,200 part-time employees and Sports Networks and Other had approximately 200 full-time employees.

21

DIRECTV

ACCESS TO COMPANY REPORTS

        Our website address is www.directv.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished, if any, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. We are not incorporating by reference in this Annual Report on Form 10-K any information on our website.

        In addition, our DIRECTV U.S. subsidiary, DIRECTV Holdings LLC, is a separate registrant with the SEC. You can access DIRECTV Holdings LLC's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished, if any, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 free of charge through our website at www.directv.com as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.

***

        DIRECTV, DIRECT Plus, SuperFan, SUPERCAST, ScoreGuide, DIRECTV Cinema, Game Search, The 101 Network and the DIRECTV Cyclone Design are trademarks of The DIRECTV Group, Inc. and/or its related entities. Other trademarks, service marks and trade names appearing in this Annual Report are the property of their respective holder.

ITEM 1A.    RISK FACTORS

        You should carefully consider the following risk factors, as well as the more detailed descriptions of our business elsewhere in this Annual Report. The risks described below are not the only ones facing our company. Additional risks not presently known to us or that we currently deem immaterial may also adversely affect our business, financial condition or results of operations.

        Our business, financial condition or results of operations could be materially and adversely affected by the following:

We compete with other MVPDs, some of whom have greater resources than we do and levels of competition are increasing.

        We compete in the MVPD industry against cable television, telcos and wireless companies and other land-based and satellite- based system operators with service offerings including video, audio and interactive programming, data and other entertainment services and telephony service. Some of these competitors have greater financial, marketing and other resources than we do.

        Some cable television operators have large, established customer bases and many cable operators have significant investments in, and access to, programming. According to the National Cable & Telecommunications Association's 2008 Industry Overview, 96% of the 128.6 million U.S. housing units are passed by cable. Of the 128.6 million U.S. housing units, approximately 97.6 million subscribe to an MVPD service and approximately 62% of MVPD subscribers receive their programming from a cable operator. Cable television operators have advantages relative to us, including or as a result of:

•

being the incumbent MVPD operator with an established subscriber base in the territories in which we compete;

•

bundling their analog video service with expanded digital video services delivered terrestrially or via satellite, or with efficient two-way high-speed Internet access or telephone service on upgraded cable systems;

•

having the ability to provide certain local and other programming, including HD programming, in geographic areas where we do not currently provide local or local HD programming; and

•

having legacy arrangements for exclusivity in certain multiple dwelling units and planned communities.

22

DIRECTV

        In addition, cable television operators have grown their subscriber bases through mergers and acquisitions, and a recent federal appeals court decision invalidating the cap on the number of subscribers a single cable operator may allow them additional avenues for growth. Moreover, mergers, joint ventures and alliances among franchise, wireless or private cable television operators, telcos, broadband service providers and others may result in providers capable of offering bundled television, data and telecommunications services in competition with our services.

        We do not currently offer local channel coverage to markets covering approximately five percent of U.S. television households, which places us at a competitive disadvantage in those markets. We also have been unable to secure certain international programming, due to exclusive arrangements of programming providers with certain competitors, which has constrained our ability to compete for subscribers who wish to obtain such programming. And as discussed below, certain cable-affiliated programmers have withheld their programming from us in certain markets, which has further constrained our ability to compete for subscribers in those markets.

        In the United States, various telcos and broadband service providers have deployed fiber optic lines directly to customers' homes or neighborhoods to deliver video services, which compete with the DIRECTV service. It is uncertain whether we will be able to increase our satellite capacity, offer a significant level of new services in existing markets in which we compete or expand to additional markets as may be necessary to compete effectively. Some of these various telcos and broadband service providers also sell the DIRECTV service as part of a bundle with their voice and data services. A new broadly-deployed network with the capability of providing video, voice and data services could present a significant competitive challenge and, in the case of the telcos currently selling the DIRECTV service, could result in such companies focusing less effort and resources selling the DIRECTV service or declining to sell it at all. We may be unable to develop other distribution methods to make up for lost sales through the telcos.

        As a result of these and other factors, we may not be able to continue to expand our subscriber base or compete effectively against cable television or other MVPD operators in the future.

Emerging digital media competition could materially adversely affect us.

        Our business is focused on television, and we face emerging competition from other providers of digital media, some of which have greater financial, marketing and other resources than we do. In particular, programming offered over the Internet has become more prevalent as broadband networks have improved their speed and quality of service. Significant changes in consumer behavior with regard to the means by which they obtain video entertainment and information in response to this emerging digital media competition could materially adversely affect our revenues and earnings or otherwise disrupt our business.

We depend on others to produce programming and programming costs are increasing.

        We depend on third parties to provide us with almost all of our programming services, including third parties who are our affiliates and third parties controlled by competitors. As discussed below, a limited number of cable-affiliated programmers have in the past denied us access to their programming. Our ability to compete successfully will depend on our ability to continue to obtain desirable programming and deliver it to our subscribers at competitive prices. Our programming agreements generally have remaining terms ranging from less than one to up to ten years and contain various renewal and cancellation provisions. We may not be able to renew these agreements on favorable terms, or at all, or these agreements may be canceled prior to expiration of their original terms. If we are unable to renew any of these agreements or the other parties cancel the agreements, we may not

23

DIRECTV

be able to obtain substitute programming, or if we are able to obtain such substitute programming, it may not be comparable in quality or cost to our existing programming.

        In addition, many of our programming agreements are long term agreements and contain fixed annual price increases. When offering new programming, or upon expiration of existing contracts, programming suppliers have historically increased the rates they charge us for programming, increasing our costs. We expect this practice to continue. Increases in programming costs could cause us to increase the rates that we charge our subscribers, which could in turn, especially in a difficult economic environment, cause subscribers to terminate their subscriptions or potential new subscribers to refrain from subscribing to our service. Furthermore, due to the economy and other factors, we may be unable to pass programming cost increases on to our subscribers, which could have a material adverse effect on our earnings or cash flow.

Increased subscriber churn or subscriber upgrade and retention costs could materially adversely affect our financial performance.

        Turnover of subscribers in the form of subscriber service cancellations, or churn, has a significant financial impact on the results of operations of any subscription television provider, including us, as does the cost of upgrading and retaining subscribers. Any increase in our upgrade and retention costs for our existing subscribers may adversely affect our financial performance or cause us to increase our subscription rates, which could increase churn. Churn may also increase due to factors beyond our control, including churn by subscribers who are unable to pay their monthly subscription fees, a slowing economy, significant signal theft, consumer fraud, a maturing subscriber base and competitive offers. Any of the risks described in this Annual Report that could potentially have a material adverse impact on our cost or service quality or that could result in higher prices for our subscribers could also, in turn, cause an increase in churn and consequently have a material adverse effect on our earnings and financial performance.

Our subscriber acquisition costs could materially increase.

        We incur costs relating to subscribers acquired by us and subscribers acquired through third parties. These costs are known as subscriber acquisition costs. For instance, we provide installation incentives to our retailers to enable them to offer standard professional installation as part of the subscriber's purchase or lease of a DIRECTV System. In addition, we pay commissions to retailers for their efforts in offering a DIRECTV System at a lower cost to consumers. Our subscriber acquisition costs may materially increase to the extent we continue or expand current sales promotion activities or introduce other more aggressive promotions, or due to increased competition. Any material increase in subscriber acquisition costs from current levels would negatively impact our earnings and could materially adversely affect our financial performance.

Results are impacted by the effect of, and changes in, United States and Latin America economic conditions and weakening economic conditions may reduce subscriber spending and our rate of growth of subscriber additions and may increase subscriber churn.

        Our business may be affected by factors in the United States and other countries in which we operate that are beyond our control, such as downturns in economic activity in a specific country or region, or in the MVPD industry. Factors such as interest rates and the health of the housing market may impact our business. A substantial portion of our revenues comes from residential customers whose spending patterns may be affected by prevailing economic conditions. Our market share in multiple dwelling units such as apartment buildings is lower than that of many of our competitors. If unemployment and foreclosures of single family residences increase, our earnings and financial

24

DIRECTV

performance could be negatively affected more than those of our competitors. In addition, if our customers seek alternative means to obtain video entertainment, they may choose to purchase fewer services from us. Due to the economic and competitive environment, we may need to spend more to acquire and retain customers who in turn spend less on our services. If our average monthly revenue per subscriber, or ARPU, decreases, our margins could become compressed and the long term value of a customer would then decrease. The weak economy may affect our net subscriber additions and reduce subscriber spending and, if these economic conditions continue or deteriorate further, our subscriber growth could decline and our churn rate could increase which would have a material adverse effect on our earnings and financial performance.

DTVLA is subject to various additional risks associated with doing business internationally, which include political instability, economic instability, and foreign currency exchange rate volatility.

        All of DTVLA's operating companies are located outside the continental United States. DTVLA operates and has subscribers located throughout Latin America and the Caribbean Basin, which makes it vulnerable to risks of conducting business in foreign markets, including:

•

difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;

•

unexpected changes in political or regulatory environments;

•

longer payment cycles;

•

earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs, exchange controls or other restrictions;

•

difficulties and costs associated with the repatriation of cash from foreign countries to the United States;

•

political and economic instability;

•

import and export restrictions and other trade barriers;

•

difficulties in maintaining overseas subsidiaries and international operations;

•

difficulties in obtaining approval for significant transactions;

•

government takeover or nationalization of business; and

•

government mandated price controls.

        In the past, the countries that constitute some of DTVLA's largest markets, including Brazil, Argentina, Colombia and Venezuela have experienced economic crises, caused by external and internal factors, and characterized by exchange rate instability, high inflation, high domestic interest rates, economic contraction, a reduction or cessation of international capital flows, a reduction of liquidity in the banking sector and high unemployment. These economic conditions have often been related to political instability, including political violence. If these economic conditions recur, they could substantially reduce the purchasing power of the population in our markets and materially adversely affect our business.

        Because DTVLA offers premium pay television programming, its business is particularly vulnerable to economic downturns. DTVLA has experienced, and may in the future experience, decreases or instability in consumer demand for its programming, as well as subscriber credit problems. DTVLA's inability to adjust its business and operations to adequately address these issues could materially adversely affect its revenues and ability to sustain profitable operations.

25

DIRECTV

Our ability to keep pace with technological developments is uncertain.

        In the video industry, changes occur rapidly as new technologies are developed, which could cause our services and products that deliver our services to become obsolete. We may not be able to keep pace with technological developments. If the new technologies on which we intend to focus our investments fail to achieve acceptance in the marketplace or our technology does not work and requires significant cost to replace or fix, we could suffer a material adverse effect on our future competitive position, which could cause a reduction in our revenues and earnings. For example, our competitors could be the first to obtain proprietary technologies that are perceived by the market as being superior. Further, after incurring substantial costs, one or more of the technologies under development by us or any of our strategic partners could become obsolete prior to its introduction.

        In addition, technological innovation depends, to a significant extent, on the work of technically skilled employees. Competition for the services of these employees has been vigorous. We cannot assure you that we will be able to continue to attract and retain these employees.

        To access technologies and provide products that are necessary for us to remain competitive, particularly in the area of broadband services, we may make future acquisitions and investments and may enter into strategic partnerships with other companies. Such investments may require a commitment of significant capital and human and other resources. The value of such acquisitions, investments and partnerships and the technology accessed may be highly speculative. Arrangements with third parties can lead to contractual and other disputes and dependence on the development and delivery of necessary technology on third parties that we may not be able to control or influence. These relationships may commit us to technologies that are rendered obsolete by other developments or preclude the pursuit of other technologies which may prove to be superior.

        New technologies could also create new competitors for us. Entities such as telcos are supporting digital video delivery over existing telephone lines and building out fiber optic lines to enhance their capabilities to deliver programming services. Satellite operators such as SES have begun offering turn-key packages of digital programming on a wholesale basis for distribution by rural telcos. In addition, programming services offered over the Internet have become more prevalent as broadband networks have improved their speed and quality of service. We may not be able to compete successfully with new entrants in the market for video services.

Our business relies on intellectual property, some of which is owned by third parties, and we may inadvertently infringe patents and proprietary rights of others.

        Many entities, including some of our competitors, have or may in the future obtain patents and other intellectual property rights that cover or affect products or services related to those that we currently offer or may offer in the future. In general, if a court determines that one or more of our services or the products used to transmit or receive our services infringes on intellectual property owned by others, we and the applicable manufacturers or vendors may be required to cease developing or marketing those services and products, to obtain licenses from the owners of the intellectual property or to redesign those services and products in such a way as to avoid infringing the intellectual property rights. If a third party holds intellectual property rights, it may not allow us or the applicable manufacturers to use its intellectual property at any price, which could materially adversely affect our competitive position.

        We may not be aware of all intellectual property rights that our services or the products used to transmit or receive our services may potentially infringe. In addition, patent applications in the United States are confidential until the Patent and Trademark Office issues a patent. Therefore, we cannot evaluate the extent to which our services or the products used to transmit or receive our services may

26

DIRECTV

infringe claims contained in pending patent applications. Further, without lengthy litigation, it is often not possible to determine definitively whether a claim of infringement is valid.

        We cannot estimate the extent to which we may be required in the future to obtain intellectual property licenses or the availability and cost of any such licenses. Those costs, and their impact on our earnings, could be material. Damages in patent infringement cases may also include treble damages in certain circumstances. To the extent that we are required to pay royalties to third parties to whom we are not currently making payments, these increased costs of doing business could materially adversely affect our operating results. We are currently being sued in patent infringement actions related to use of technologies in our DTH business. There can be no assurance that the courts will conclude that our services or the products used to transmit or receive our services do not infringe on the rights of third parties, that we or the manufacturers would be able to obtain licenses from these persons on commercially reasonable terms or, if we were unable to obtain such licenses, that we or the manufacturers would be able to redesign our services or the products used to transmit or receive our services to avoid infringement. The final disposition of these claims is not expected to have a material adverse effect on our consolidated financial position, but could possibly be material to our consolidated results of operations for any one period. Further, no assurance can be given that any adverse outcome would not be material to our consolidated financial position.

        See "Legal Proceedings—Intellectual Property Litigation" in Part I, Item 3 of this Annual Report.

John C. Malone has significant influence over actions requiring stockholder approval and his interests may differ from ours.

        The Chairman of our Board of Directors, John Malone, is also Chairman and Chief Executive of Liberty Media, Chairman of Liberty Global, Inc., and owns significant voting interests in each of DIRECTV, Liberty Media, Liberty Global, and Discovery Communications, Inc. Mr. Malone, his wife and certain trusts for the benefit of their children own shares of DIRECTV common stock, which represent approximately 24.3% of the total voting power of the outstanding shares of DIRECTV as of December 31, 2009. DIRECTV has two classes of common stock, the Class A common stock entitling holders to one vote per share and the Class B common stock entitling holders to 15 votes per share. The shares of DIRECTV Class B common stock also have certain limited consent rights with respect to certain share distributions and certain amendments to the DIRECTV Amended and Restated Certificate of Incorporation. By virtue of such rights as well as Mr. Malone's position as DIRECTV's Chairman, Mr. Malone may have significant influence over the outcome of any corporate transaction or other matters submitted to DIRECTV stockholders for approval, including the election of directors, mergers, consolidations and the sale of all or substantially all of DIRECTV's assets.

We rely on key personnel.

        We believe that our future success will depend to a significant extent upon the performance of certain of our key executives. The loss of certain of our key executives could have a material adverse effect on our business, financial condition and results of operations.

Construction or launch delays on satellites could materially adversely affect our revenues and earnings.

        A key component of our business strategy is our ability to expand our offering of new programming and services, including increased local and HD programming. In order to accomplish this goal, we need to construct and launch new satellites. The construction and launch of satellites are often subject to delays, including satellite and launch vehicle construction delays, periodic unavailability of

27

DIRECTV

reliable launch opportunities due to competition for launch slots, weather and also due to general delays that result when a launch provider experiences a launch failure, and delays in obtaining regulatory approvals. A significant delay in the future delivery of any satellite would materially adversely affect the use of the satellite and thus could materially adversely affect our anticipated revenues and earnings. If satellite construction schedules are not met, there can be no assurance that a launch opportunity will be available at the time a satellite is ready to be launched. Certain delays in satellite construction could also jeopardize a satellite authorization that is conditioned on timely construction and launch of the satellite.

Our satellites are subject to significant launch and operational risks.

        Satellites are subject to significant operational risks relating to launch and while in orbit. Launch and operational risks include launch failure, incorrect orbital placement or improper commercial operation. Launch failures result in significant delays in the deployment of satellites because of the need both to construct replacement satellites, which can take up to 36 months, and obtain other launch opportunities. We estimate the overall historical loss rate for all launches of commercial satellites in the last seven years to be approximately 5% but it may be higher. Any significant delays or failures in successfully launching and deploying our satellites could materially adversely affect our ability to generate revenues. While we have traditionally purchased insurance covering the launch and, in limited cases, operation of our satellites, such policies typically cover the loss of the satellite itself or a portion thereof, and not the business interruption or other associated direct and indirect costs. For example, we purchased launch insurance covering a portion of our DIRECTV 12 satellite, which we launched at the end of 2009, and launch vehicle costs in the event of a total loss of the satellite prior to separation from the launch vehicle, but did not purchase in-orbit insurance for it.

        In-orbit risks include malfunctions, commonly referred to as anomalies, and collisions with meteoroids, other spacecraft or other space debris. Anomalies occur as a result of various factors, such as satellite manufacturing errors, problems with the power systems or control systems of the satellites and general failures resulting from operating satellites in the harsh space environment. We work closely with our satellite manufacturers to determine and eliminate the potential causes of anomalies in new satellites and provide for redundancies of critical components in the satellites as well as having backup satellite capacity. However, we cannot assure you that we will not experience anomalies in the future, nor can we assure you that our backup satellite capacity will be sufficient for our business purposes. Any single anomaly or series of anomalies could materially adversely affect our operations and revenues and our relationships with our subscribers, as well as our ability to attract new subscribers for our services. Anomalies may also reduce the expected useful life of a satellite, thereby creating additional expenses due to the need to provide replacement or backup satellites and potentially reducing revenues if service is interrupted. Finally, the occurrence of anomalies may materially adversely affect our ability to insure our satellites at commercially reasonable premiums, if at all. While some anomalies are currently covered by existing insurance policies, others are not now covered or may not be covered in the future.

        Our ability to earn revenue also depends on the usefulness of our satellites. Each satellite has a limited useful life. A number of factors affect the useful life of a satellite, including, among other things:

•

the design;

•

the quality of its construction;

•

the durability of its component parts;

28

DIRECTV

•

the launch vehicle's insertion of the satellite into orbit;

•

any required movement, temporary or permanent, of the satellite;

•

the ability to continue to maintain proper orbit and control over the satellite's functions; and

•

the remaining on-board fuel following orbit insertion.

        Generally, the minimum design life of the satellites in our fleet is between 12 and 16 years. The actual useful lives of the satellites may be shorter or longer, in some cases significantly. Our operating results could be adversely affected if the useful life of any of our satellites were significantly shorter than 12 years from the date of launch.

        In the event of a failure or loss of any of our satellites, we may relocate another satellite and use it as a replacement for the failed or lost satellite. In the event of a complete satellite failure, our services provided via that satellite could be unavailable for several days or longer while backup in-orbit satellites are repositioned and services are moved. We are not insured for any resultant lost revenues. The use of backup satellite capacity for our programming may require us to discontinue some programming services due to potentially reduced capacity on the backup satellite. Any relocation of our satellites would require prior FCC approval and, among other things, a demonstration to the FCC that the replacement satellite would not cause additional interference compared to the failed or lost satellite. Such FCC approval may not be obtained. We believe we have or will have in 2010, in-orbit satellite capacity to expeditiously recover transmission of most DIRECTV U.S. programming in the event one of our in-orbit satellites fails. However, programming continuity cannot be assured in the event of multiple satellite losses. DTVLA leases its satellites and may not have a readily available replacement in the event of a failure or loss of any of its satellites. Because we currently have no back-up capacity in place for DTVLA, programming continuity in the countries in which DTVLA operates cannot be assured in the event of a single satellite loss.

The cost of commercial insurance coverage on our satellites or the loss of a satellite that is not insured could materially adversely affect our earnings.

        We use in-orbit and launch insurance to mitigate the potential financial impact of satellite fleet in-orbit and launch failures unless the premium costs are considered uneconomic relative to the risk of satellite failure. When insurance is obtained, it generally covers all or a portion of the unamortized book value of covered satellites. Although the insurance does not compensate for business interruption or loss of future revenues or subscribers, we rely on in-orbit spare satellites and excess transponder capacity at key orbital slots to mitigate the impact that a satellite failure may have on our ability to provide service.

        The price, terms and availability of insurance fluctuate significantly. Launch and in-orbit policies on satellites may not continue to be available on commercially reasonable terms or at all. In addition to higher premiums, insurance policies may provide for higher deductibles, shorter coverage periods and satellite health-related policy exclusions.

        Any launch vehicle failure, or loss or destruction of any of our satellites, even if insured, could have a material adverse effect on our financial condition and results of operations, our ability to comply with FCC regulatory obligations and our ability to fund the construction or acquisition of replacement satellites in a timely fashion, or at all.

        At December 31, 2009, the net book value of in-orbit satellites was $1,984 million, none of which was insured.

29

DIRECTV

We depend on the Communications Act for access to cable-affiliated programming and changes impacting that access could materially adversely affect us.

        We purchase a substantial percentage of our programming from programmers that are affiliated with cable system operators, including key RSNs. Currently, under certain provisions of the Communications Act governing access to programming, cable-affiliated programmers generally must sell and deliver their programming services to all MVPDs on non-discriminatory terms and conditions. The Communications Act and the FCC rules also prohibit certain types of exclusive programming contracts involving programming from cable- affiliated programmers.

        Any change in the Communications Act or the FCC's rules that would permit programmers that are affiliated with cable system operators to refuse to provide such programming or to impose discriminatory terms or conditions could materially adversely affect our ability to acquire programming on a cost-effective basis, or at all. The Communications Act prohibitions on certain cable industry exclusive contracting practices with cable-affiliated programmers were extended by the FCC through October 2012, though it is currently considering proposals that could shorten the term of this extension if a cable operator could show that competition from new entrant MVPDs had reached a sufficient penetration level in the relevant marketing area.

        In addition, certain cable providers have denied us and other MVPDs access to a limited number of channels created by programmers with which the cable providers are affiliated. In other cases, such programmers have denied MVPDs high definition feeds of such programming. The cable providers have asserted that they are not required to provide such programming (or resolution) due to the manner in which that programming is distributed, which they argue is not covered by the program access provisions of the Communications Act. The FCC recently adopted new rules under which such programming would also be subject to certain non-exclusivity and non-discrimination requirements. These rules have not yet gone into effect, and likely will be challenged in court. In addition, they will require a further evidentiary showing by an MVPD seeking access to such programming. If these new rules are successfully challenged in court or we cannot make the required evidentiary showing, we may continue to be precluded from obtaining such programming, which in turn could materially adversely affect our ability to compete in regions serviced by those cable providers. Although the FCC also addressed some of these issues in a limited fashion by placing access conditions on certain regional sports networks affiliated with Time Warner Cable, Inc. and Comcast Corporation, it is not clear that we will be able to assure continued access to this programming on fair and nondiscriminatory terms.

        DIRECTV itself is subject to similar restrictions with respect to certain programmers affiliated with us. The FCC imposed a number of conditions on its approval of Liberty Media's acquisition of News Corporation's interest in DIRECTV in 2007. Among other things, those conditions require DIRECTV to offer national and regional programming services it controls to all MVPDs on non-exclusive and non-discriminatory terms and conditions, and prohibits DIRECTV from entering into exclusive arrangements with affiliated programmers or unduly influencing such programmers in their dealings with other MVPDs. The conditions also require DIRECTV to engage in "baseball style" arbitration if elected by an MVPD where the parties cannot agree on terms and conditions for carriage of RSN programming owned, managed or controlled by DIRECTV. This condition currently applies to the three RSNs DIRECTV acquired from Liberty Media in 2009.

Changes to and implementation of statutory copyright license requirements may negatively affect our ability to deliver local and distant broadcast stations, as well as other aspects of our business.

        We carry the signals of distant broadcast stations pursuant to statutory copyright licenses contained in the Satellite Home Viewer Improvement Act (SHVIA) and its successors, including the Satellite

30

DIRECTV

Home Viewer Extension and Reauthorization Act of 2004 (SHVERA). Critical provisions of SHVERA related to distant signals were due to expire at the end of 2009, but Congress has extended that deadline to February 28, 2010. Expiration of or changes to SHVERA, the FCC's interpretation, implementation and enforcement of provisions of SHVIA and SHVERA, as well as judicial decisions interpreting and enforcing these laws, could hamper our ability to retransmit distant network and superstation signals, reduce the number of our existing or future subscribers that can qualify for receipt of these signals, impose costs on us in connection with the process of complying with the rules, or subject us to fines, monetary damages or injunctions.

        SHVERA, related laws, and FCC implementing rules also govern our provision of local broadcast signals. While those provisions of SHVERA do not expire on February 28, 2010, they may be changed by Congress. Such changes could limit our ability to deliver local broadcast signals. More generally, we have limited capacity, and the projected number of markets in which we can deliver local broadcast programming will continue to be constrained because of SHVERA's "carry-one, carry-all" requirement and may be reduced depending on changes to that requirement, the FCC's interpretation of its rules in pending and future rulemaking and complaint proceedings, as well as judicial decisions interpreting must carry requirements. We may not be able to comply with these must carry rules, or compliance may mean that we are not able to use capacity that could otherwise be used for new or additional local or national programming services. In addition, the FCC has issued an increasing obligation for carriage of local digital broadcast transmissions in HD format. We may be unable to comply with this requirement in markets where we currently carry such signals without ceasing HD local service entirely in some markets, and would be precluded from launching additional markets currently planned.

        In addition, the FCC has adopted rules requiring us to negotiate in good faith with broadcast stations seeking carriage outside of the mandatory carriage regime described elsewhere. The rules for "retransmission consent" negotiations, which are similar to those that have applied to broadcast stations for years, require us to comply with certain indicia of good faith negotiation, as well as to demonstrate good faith under a "totality of the circumstances" test. Failure to comply with these rules could subject us to administrative sanctions and other penalties.

Satellite programming signals have been stolen and may be stolen in the future, which could result in lost revenues and would cause us to incur incremental operating costs that do not result in subscriber acquisition.

        The delivery of subscription programming requires the use of conditional access technology to limit access to programming to only those who subscribe and are authorized to view it. The conditional access system uses, among other things, encryption technology to protect the transmitted signal from unauthorized access. It is illegal to create, sell or otherwise distribute software or devices to circumvent that conditional access technology. However, theft of cable and satellite programming has been widely reported, and the access cards used in our conditional access system have been compromised in the past and could be compromised in the future.

        We have undertaken various initiatives with respect to our conditional access system to further enhance the security of the DIRECTV signal. To help combat signal theft, we provide our subscribers with more advanced access cards that we believe significantly enhance the security of our signal. Currently, we believe these access cards have not been compromised. However, we cannot guarantee that those advanced access cards will prevent the theft of our satellite programming signals in the future. Furthermore, there can be no assurance that we will succeed in developing the technology we need to effectively restrict or eliminate signal theft. If our current access cards are compromised, our revenue and our ability to contract for video and audio services provided by programmers could be

31

DIRECTV

materially adversely affected. In addition, our operating costs could increase if we attempt to implement additional measures to combat signal theft.

The ability to maintain FCC licenses and other regulatory approvals is critical to our business.

        If we do not obtain all requisite U.S. regulatory approvals for the construction, launch and operation of any of our existing or future satellites for the use of frequencies at the orbital locations planned for these satellites or for the provision of service, or the licenses obtained impose operational restrictions on us, our ability to generate revenue and profits could be materially adversely affected. In addition, under certain circumstances, existing licenses are subject to revocation or modification and upon expiration, renewal may not be granted. If existing licenses are not renewed, or are revoked or materially modified, our ability to generate revenue could be materially adversely affected.

        In certain cases, satellite system operators are obligated by governmental regulation and procedures of the ITU to coordinate the operation of their systems with other users of the radio spectrum in order to avoid causing interference to those other users. Coordination may require a satellite system operator to reduce power, avoid operating on certain frequencies, relocate its satellite to another orbital location and/or otherwise modify planned or existing operations. For example, the FCC has conditionally granted Spectrum Five authority to provide DBS service using frequencies assigned to it by the Government of the Netherlands from an orbital slot located halfway between slots at which we currently operate. Other operators have filed similar requests. We believe this closer proximity, if ultimately implemented, would significantly increase the risk of interference which could adversely affect the quality of service provided to our subscribers. We may not be able to successfully coordinate our satellites to the extent we are required to do so, and any modifications we make in the course of coordination, or any inability to successfully coordinate, may materially adversely affect our ability to generate revenue. In addition, the FCC is currently conducting a rulemaking proceeding to consider, among other things, the adoption of operating parameters under which such "tweener" systems would be automatically deemed coordinated.

        Other regulatory risks include, among others:

•

the relocation of satellites to different orbital locations if the FCC determines that relocation is in the public interest;

•

the denial by the FCC of an application to replace an existing satellite with a new satellite, or to operate a satellite beyond the term of its current authorization, or to operate an earth station to communicate with such satellite;

•

the loss of authorizations to operate satellites on certain frequencies at certain locations if we do not construct, launch and operate satellites for those locations by certain dates; and

•

the authorization by the United States or foreign governments of the use of frequencies by third party satellite or terrestrial facilities that have the potential to interfere with communication to or from our satellites, which could interfere with our contractual obligations or services to subscribers or other business operations.

        All of our FCC satellite authorizations are subject to conditions imposed by the FCC in addition to the FCC's general authority to modify, cancel or revoke those authorizations. Use of FCC licenses and other authorizations are often subject to conditions, including technical requirements and implementation deadlines. Failure to comply with such requirements, or comply in a timely manner, could lead to the loss of authorizations and could have a material adverse effect on our ability to generate revenue. For example, loss of an authorization could potentially reduce the amount of programming and other services available to our subscribers. The materiality of such a loss of

32

DIRECTV

authorization would vary based upon, among other things, the orbital location at which the frequencies may be used.

        In addition, in connection with its approval of Liberty Media's acquisition of News Corporation's interest in DIRECTV in 2007, the FCC required the parties to the transaction to sever all attributable links between DTVPR and Liberty Cablevision Puerto Rico, Ltd. (a subsidiary of Liberty Global, Inc. in which John Malone holds an interest). After attempts to sell DTVPR were unsuccessful, DIRECTV placed its entire interest in DTVPR into a trust, and it is currently operated by an independent trustee pending divestiture. DIRECTV believes that this trust effectively renders its interest in DTVPR non-attributable, consistent with past FCC precedent, and thus satisfies the FCC condition. However, the FCC has not ruled on the efficacy of the trust, and may take a different view. If so, we may have to find an alternative method for severing the attributable links between the two companies, which could adversely effect our financial performance.

        Moreover, some of our authorizations and future applications may be subject to petitions and oppositions, and there can be no assurance that our authorizations will not be canceled, revoked or modified or that our applications will not be denied. Moreover, the FCC has adopted new rules for licensing satellites that may limit our ability to file applications and secure licenses in the future.

        Congress has continued to shape the scope of the FCC's regulatory authority and enact legislation that affects our business. In addition, FCC proceedings to implement legislation and enact additional regulations are ongoing. The outcomes of these legislative or regulatory proceedings or their effect on our business cannot be predicted.

We control a substantial portion of interaction with our customers and we may not be as efficient or effective as our outsourced providers resulting in higher costs.

        We have a number of insourced call centers and installation service providers to handle customer service calls, installations and repairs. We may not be as efficient or effective as our outsourced providers resulting in higher costs. Also, there is a risk that our customer satisfaction could be impacted, which may lead to higher subscriber churn and an inability to attract new subscribers. In addition, our outsourced providers could encounter financial difficulties, which may disrupt our ability to make installation service calls or to provide a level of customer service we expect, and which also may lead to higher subscriber churn and an inability to attract new subscribers.

We have significant debt.

        We have debt totaling $8.0 billion as of December 31, 2009. If we do not have sufficient income or other sources of cash, it could affect our ability to service debt and pay other obligations.

        As a result of completing the merger transactions, we assumed, on a consolidated basis, approximately $1.9 billion of indebtedness to Bank of America and also assumed rights and obligations connected with the related equity collars. We requested that Bank of America settle the equity collars prior to their expiration, pursuant to agreed upon market practices. In February 2010, we completed the settlement of the equity collars and repaid the indebtedness.

We face risks arising from possible union legislation in the United States.

        There is a possibility that the proposed Employee Free Choice Act, or EFCA, may be enacted. The EFCA, also referred to as the "card check" bill, if passed in its current form could significantly change the nature of labor relations in the United States, specifically, how union elections and contract negotiations are conducted. With respect to our owned and operated home service provider installation

33

DIRECTV

business, it would be easier for unions to win elections and we could face arbitrator-imposed labor scheduling, costs and standards. Therefore, the EFCA could impose more labor relations requirements and union activity on our business, thereby potentially increasing our costs, and could have a material adverse effect on our overall competitive position. Currently, neither we nor most of our outsourced home service provider installation vendors have any unions.

We may not be able to obtain or retain certain foreign regulatory approvals.

        There can be no assurance that any current regulatory approvals held by us are, or will remain, sufficient in the view of foreign regulatory authorities, or that any additional necessary approvals will be granted on a timely basis or at all, in all jurisdictions in which we operate, or that applicable restrictions in those jurisdictions will not be unduly burdensome. The failure to obtain the authorizations necessary to operate satellites or provide satellite service internationally could have a material adverse effect on our ability to generate revenue and our overall competitive position.

We may have a significant indemnity obligation to Liberty Media, which is not limited in amount or subject to any cap, if parts of the merger transactions are treated as a taxable transaction.

        Despite obtaining a private letter ruling from the IRS and an opinion of legal counsel to the effect that parts of the merger transactions with Liberty Media qualified as a tax-free distribution for U.S. federal income tax purposes, the continuing validity of such ruling and opinion is subject to the accuracy of factual representations and certain assumptions. Any inaccuracy in such representations could invalidate the ruling or failure to comply with any undertakings made in connection with such tax opinion, could alter the conclusions reached in such opinion. Even if parts of the merger transactions otherwise qualify for tax-free treatment, it would result in a significant U.S. federal income tax liability to Liberty Media if one or more persons acquire a 50% or greater interest in the DIRECTV common stock as part of a plan or series of related transactions that includes the merger transactions within a certain time frame. The process for determining whether an acquisition is part of a plan under these rules is complex, inherently factual and subject to interpretation of the facts and circumstances of a particular case. Liberty Media or DIRECTV might inadvertently cause or permit a prohibited change in the ownership of DIRECTV to occur, thereby triggering a tax liability to Liberty Media.

        In addition, Liberty Media entered into a tax matters agreement with News Corporation in connection with the News/Liberty transaction in 2008, pursuant to which Liberty Media agreed, among other things, to indemnify News Corporation and certain related persons for taxes resulting from actions taken by Liberty Media or its affiliates that cause the News/Liberty transaction (or related restructuring transactions) not to qualify as tax-free transactions. Liberty Media's indemnification obligations to News Corporation and certain related persons are not limited in amount or subject to any cap.

        Under a Tax Sharing Agreement between Liberty Media and us, we are obligated to indemnify Liberty Media and certain related persons for any losses and taxes resulting from the failure of the merger transactions to be tax-free transactions in certain circumstances and from any losses resulting from Liberty Media's indemnity obligations to News Corporation under the tax matters agreement between News Corporation and Liberty. If we are required to indemnify Liberty Media or certain related persons under the circumstances set forth in the Tax Sharing Agreement, we may be subject to substantial liabilities not limited in amount or subject to any cap, which could materially adversely affect our financial position and short term operating results.

34

DIRECTV

We may determine to forgo certain transactions in order to avoid the risk of incurring significant tax-related liabilities.

        We might determine to forgo certain transactions that might have otherwise been advantageous in order to preserve the tax-free treatment of the Liberty Transaction or the News/Liberty transaction. In particular, we might determine to continue to operate certain of our business operations for the foreseeable future even if a liquidation or sale of such business might have otherwise been advantageous. Moreover, we might determine to forgo certain transactions, including stock issuances, asset dispositions or other strategic transactions for some period of time following the mergers so as not to run afoul of the 50-percent limitation. In addition, our potential indemnity obligation under the Tax Sharing Agreement might discourage, delay or prevent a change of control transaction for some period of time following the Liberty Transaction.

The excess share provision in our charter has the effect of placing limitations on the shares held by certain stockholders, which may make it difficult for a third party to acquire our company.

        The excess share provision of our charter is designed to prevent transfers of our stock that could cause potentially adverse tax effects relating to the Liberty Transaction. Accordingly, if during the first year after the Liberty Transaction closed there is a purported transfer or non-transfer event that meets certain requirements, including causing a person to become, actually or constructively, the owner of 10% or more of any class of our capital stock, then that acquisition will be null and void to the intended holder, such shares of our common stock will be transferred to a trust for the exclusive benefit of a charitable beneficiary, and the purported transferee will have no rights in such shares, except to receive the lesser of (i)(A) the amount the transferee paid for such shares or (B) in the case of a non-transfer event or a purported transfer in which value was not given for the shares, the fair market value of the stock on the date of such event or transfer and (ii) the net proceeds of the sale described in the next sentence. The trust is required to sell the DIRECTV excess shares to a permitted transferee who will not trigger the application of the excess share provision. We also have the right to redeem DIRECTV excess shares held by the trust. These provisions may make it difficult for a third party to make an offer to acquire our company.

The success of our regional sports networks, or RSNs, depends on audience acceptance of their programs and programming services which is difficult to predict.

        Entertainment content production is an inherently risky business because the revenue derived from the production and distribution of a cable program depends primarily upon its acceptance by the public, which is difficult to predict. The commercial success of a cable program depends on the quality and acceptance of other competing programs released into the marketplace at or near the same time, the availability of alternative forms of entertainment and leisure time activities, general economic conditions and other tangible and intangible factors, many of which are difficult to predict. Audience sizes for cable programming are important factors when cable and DTH satellite video providers negotiate affiliation agreements with cable programmers and, in the case of cable programming, when advertising rates are negotiated. Consequently, low public acceptance of our RSNs' cable programs could hurt the ability of our RSNs to maintain rates charged to affiliates, subscribers and advertisers. The success of our RSNs is dependent upon our ability to obtain and retain broadcast rights from professional sports teams, college sports conferences and other sources of sports programming. There is no assurance that we will be able to obtain or retain such rights on terms that are economically reasonable or at all, and our failure do to so could materially adversely affect the financial position and operating results of our RSNs.

35

DIRECTV

We face risks arising from the outcome of various legal proceedings.

        We are involved in various legal proceedings, including those arising in the ordinary course of business and those described under the caption "Legal Proceedings" in Item 3. Such matters include investigations and legal actions by state attorneys general where regulators may seek monetary damages and may also seek to require or prohibit certain actions by the Company with regard to its current or potential customers. While we do not believe that any of these proceedings alone or in the aggregate will have a material effect on our consolidated financial position, an adverse outcome in one or more of these matters or the imposition of conditions by regulators on the conduct of our business could be material to our consolidated results of operations and cash flows for any one period. Further, no assurance can be given that any adverse outcome would not be material to our consolidated financial position.

We may face other risks described from time to time in periodic reports filed by us with the SEC.

        We urge you to consider the above risk factors carefully in evaluating forward-looking statements contained in this Annual Report. The forward-looking statements included in this Annual Report are made only as of the date of this Annual Report and we undertake no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

        None.

ITEM 2.    PROPERTIES

        As of December 31, 2009, we had approximately 230 owned and leased locations operating in the United States and Latin America. The major locations of the DIRECTV U.S. segment include eight administrative offices, two broadcast centers and six call centers. The major locations of the DIRECTV Latin America segment include 10 administrative offices, four broadcast centers and eight call centers. We consider our properties adequate for our present needs.

ITEM 3.    LEGAL PROCEEDINGS

        (a)   Material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which we became or were a party during the year ended December 31, 2009 or subsequent thereto, but before the filing of the report, are summarized below:

        Intellectual Property Litigation.    We are a defendant in several unrelated lawsuits claiming infringement of various patents relating to various aspects of our businesses. In certain of these cases other industry participants are also defendants, and also in certain of these cases we expect that any potential liability would be the responsibility of our equipment vendors pursuant to applicable contractual indemnification provisions. To the extent that the allegations in these lawsuits can be analyzed by us at this stage of their proceedings, we believe the claims are without merit and intend to defend the actions vigorously. The final disposition of these claims is not expected to have a material adverse effect on our consolidated financial position, but could possibly be material to our consolidated results of operations of any one period. No assurance can be given that any adverse outcome would not be material to our consolidated financial position.

        Finisar Corporation.    As previously reported, we were successful in 2008 getting the jury verdict in the Finisar case vacated on appeal. The original verdict found the patent to be valid and willfully infringed, and the jury awarded approximately $79 million in damages. The trial court increased the

36

DIRECTV

damages award by $25 million because of the jury finding of willful infringement and awarded pre-judgment interest of $13 million. DIRECTV was also ordered to pay into escrow $1.60 per new set-top receiver manufactured for use with the DIRECTV system beginning June 17, 2006 and continuing until the patent expires in 2012 or was otherwise found to be invalid. On April 18, 2008, the Court of Appeals reversed the verdict of the district court in part, vacated the findings of infringement, and remanded for further proceedings on the remaining issues finding that the district court had applied erroneous interpretations of certain terms of the claims. On remand, we sought and obtained summary judgment on the invalidity of all remaining claims, and the case against DIRECTV was dismissed on May 19, 2009. Finisar filed a Notice of Appeal with the Fifth Circuit Court of Appeals, and oral argument on the appeal was held on January 6, 2010. On January 8, 2010, the Court of Appeals affirmed per curiam the grant of summary judgment on all claims. This case is now resolved and there will be no further proceedings in this matter.

        Early Cancellation Fees.    In 2008, a number of plaintiffs filed putative class action lawsuits in state and federal courts challenging the early cancellation fees DIRECTV U.S. assesses its customers when they do not fulfill their programming commitments. Several of these lawsuits are pending—some in California state court purporting to represent statewide classes, and some in federal courts purporting to represent nationwide classes. The lawsuits seek both monetary and injunctive relief. While the theories of liability vary, the lawsuits generally challenge these fees under state consumer protection laws as both unfair and inadequately disclosed to customers. Each of the lawsuits is at an early stage. Where possible, we are moving to compel these cases to arbitration in accordance with our Customer Agreement, but in states such as California where the enforceability of the arbitration provision is limited, we intend to defend against these allegations in court. We believe that our early cancellation fees are adequately disclosed, and represent reasonable estimates of the costs we incur when customers cancel service before fulfilling their programming commitments.

        From time to time, we receive investigative inquiries or subpoenas from state authorities with respect to alleged violations of state statutes. These inquiries may lead to legal proceedings in some cases. Currently, we are the subject of an investigation by a multistate group of state attorneys general regarding alleged violations of their respective state consumer protection statutes. The state of Washington, originally a part of the multistate group, filed an action in Washington state court in December 2009 seeking injunctive relief and civil penalties of up to $2,000 per violation of Washington's Consumer Protection Act. The multistate investigation and the Washington lawsuit allege a variety of purported violations of the statutes, but primarily allege that we do not adequately disclose the terms and conditions of consumer offers, including subscriber commitments and early cancellation fees. We are cooperating with the multistate group by providing information about our sales and marketing practices and customer complaints. We are defending the Washington lawsuit.

        Liberty Media Corporation Litigation.    We have been notified that a purported class action was filed on February 9, 2010 in Delaware Chancery Court against certain past and present directors of Liberty Media Corporation alleging, among other things, that the defendants breached their fiduciary duties as Liberty board members in connection with the business terms and approval process by Liberty stockholders of the merger of Liberty Entertainment, Inc. with a subsidiary of DIRECTV as part of the Liberty Transaction. The plaintiff purports to represent approximately 85 former LMDIB stockholders (other than the defendants) that allegedly held approximately 1.8 million LMDIB shares prior to the consummation of the Liberty Transaction. The complaint alleges, among other things, that John Malone and certain other LMDIB stockholders received disparate allocation of consideration in the Liberty Transaction. The complaint seeks equitable reallocation and disgorgement of the improper consideration received by the defendants and other relief. The defendants are seeking indemnification and have tendered defense of this litigation to DIRECTV pursuant to agreements executed as part of

37

DIRECTV

the Liberty Transaction. We are in the process of assessing the merits of the allegations in the complaint and the indemnification obligations of DIRECTV regarding this litigation.

        Other.    We are subject to other legal proceedings and claims that arise in the ordinary course of our business. The amount of ultimate liability with respect to such actions is not expected to materially affect our financial position, results of operations or liquidity.

        (b)   The following previously reported legal proceedings were terminated during the fourth quarter ended December 31, 2009:

        Legal Proceedings Regarding the Liberty Transaction.    As previously reported, multiple purported class action complaints were filed against The DIRECTV Group, Inc., Liberty Media and The DIRECTV Group Board of Directors in the Delaware Court of Chancery and California State Court on behalf of the public stockholders of DIRECTV Group. Four stockholder class action complaints were brought in Delaware Chancery Court from May 12, 2009 to May 19, 2009, all of which were subsequently consolidated on May 22, 2009, which we refer to as the Delaware Action. One stockholder class action complaint was brought in California State Court on May 29, 2009, which we refer to as the California Action. The consolidated Delaware complaint and the California complaint alleged, among other things, that the members of the DIRECTV Group Board of Directors breached their fiduciary duties in approving the merger agreement with Liberty Media. On October 16, 2009, all of the parties to the Delaware Action entered into a Stipulation and Agreement of Compromise, Settlement and Release. After a hearing on November 25, 2009, the settlement agreement was approved by the Delaware court and a final judgment was entered on that date. The terms of the settlement are set forth in the Stipulation and the Notice of Settlement filed as Exhibits 99.1 and 99.2, respectively to the DIRECTV Group's Current Report on Form 8-K filed on October 20, 2009.

        In September 2009, the California Action was stayed pending conclusion of the consolidated Delaware Action. The ruling in the Delaware Action is expected to result in the formal dismissal of the California Action.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        At the special meeting of stockholders held on November 19, 2009, the following matters were submitted to a vote of the stockholders of DIRECTV Group:

Item No. 1

        The adoption of the Agreement and Plan of Merger by and among Liberty Media Corporation, Liberty Entertainment, Inc., The DIRECTV Group, Inc., DIRECTV, DTVG One, Inc. and DTVG Two, Inc. The final voting results were:

For	864,150,937
Against	8,123,875
Abstain	3,350,513
Majority of the Minority
For	317,890,782
Percent	78	%

38

DIRECTV

Item No. 2

        The approval of the Voting and Right of First Refusal Agreement by The DIRECTV Group, Inc., Liberty Entertainment, Inc., DIRECTV, John C. Malone, Leslie Malone, The Tracy L. Neal Trust A and the Evan D. Malone Trust A. The final voting results were:

For	856,431,240
Against	8,403,993
Abstain	10,790,092
Majority of the Minority
For	311,838,612
Percent	76	%

Item No. 3

        The adjournment of the special meeting, if there are not sufficient votes. The final voting results were:

For	836,464,877
Against	32,094,932
Abstain	7,060,081
No Vote	4,262
Majority of the Minority
For	296,185,172
Percent	72	%

        All matters voted on at the special meeting were approved.

***

39

DIRECTV

PART II

ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Common Stock Price

        Our Class A common stock is publicly traded on The NASDAQ Global Select Market under the symbol "DTV." The following table sets forth for the quarters indicated the high and low sales prices for our Class A common stock, as reported on the NASDAQ Global Select Market. From January 1, 2008 through November 18, 2009, the stock that traded was the common stock of The DIRECTV Group, Inc. On November 19, 2009, we completed our merger with Liberty Entertainment Inc., and from that date, the stock traded on the NASDAQ is the Class A common stock of DIRECTV.

2009	High		Low
Fourth Quarter	$	34.25	$	25.16
Third Quarter		27.99		22.81
Second Quarter		26.00		21.47
First Quarter		24.28		18.81

2008	High		Low
Fourth Quarter	$	26.52	$	17.70
Third Quarter		28.83		23.65
Second Quarter		29.10		24.26
First Quarter		26.82		18.20

        As of the close of business on February 22, 2010, there were 70,617 holders of record of our Class A common stock. Our Class B common stock held by the Malones is not registered and does not trade on any public market.

Dividend Rights and Other Stockholder Matters

        Holders of our common stock are entitled to such dividends and other distributions in cash, stock or property as may be declared by our Board of Directors in its sole discretion, subject to the preferential and other dividend rights of any outstanding series of our preferred stock. There were no shares of our preferred stock outstanding at December 31, 2009.

        No dividends on our common stock have been declared by our Board of Directors for more than five years. We have no current plans to pay any dividends on either class of our common stock. We currently expect to use our future earnings, if any, for the development of our businesses or other corporate purposes, including share repurchases.

        DIRECTV U.S. is subject to restrictive covenants under its credit facility. These covenants limit the ability of DIRECTV U.S. to, among other things, make restricted payments, including dividends, loans or advances to us.

        Information regarding compensation plans under which our equity securities may be issued is included in Item 12 through incorporation by reference to our Proxy Statement for the Annual Meeting of Stockholders scheduled to be held on June 3, 2010.

40

DIRECTV

Share Repurchase Program

        Since 2006 our Board of Directors has approved multiple authorizations for the repurchase of over $13 billion of our Class A common stock, including $3.5 billion of authorized repurchases announced on February 18, 2010. The authorizations allow us to repurchase our Class A common stock from time to time through open market purchases and negotiated transactions or otherwise. The timing, nature and amount of such transactions will depend on a variety of factors, including market conditions and the program may be suspended, discontinued or accelerated at any time. The sources of funds for the purchases is our existing cash on hand, cash from operations and potential additional borrowings. Purchases are made on the open market, through block trades and other negotiated transactions. Repurchased shares are retired but remain authorized for registration and issuance in the future.

        All purchases were made in accordance with Rule 10b-18 of Securities Exchange Act of 1934. A summary of the repurchase activity for the three months ended December 31, 2009 is as follows:

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
	(Amounts in Millions, Except Per Share Amounts)
October 1 - 31, 2009		1	$	27.08		1	$	304
November 1 - 30, 2009		—		—		—		304
December 1 - 31, 2009		—		—		—		304
Total		1		27.08		1		304

        Share repurchases were suspended from October 20, 2009 until February 2010, during the pendency of the vote on the Liberty Transaction and thereafter while the Collar Loan was repaid and the associated equity collars were unwound.

        For additional information regarding our share repurchases see Note 13 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report.

***

41

DIRECTV

ITEM 6.    SELECTED FINANCIAL DATA

	Years Ended and As of December 31,
	2009		2008		2007		2006		2005
	(Dollars in Millions, Except Per Share Amounts)
Consolidated Statements of Operations Data:
Revenues	$	21,565	$	19,693	$	17,246	$	14,755	$	13,164
Total operating costs and expenses		18,892		16,998		14,760		12,398		12,531
Operating profit	$	2,673	$	2,695	$	2,486	$	2,357	$	633
Income from continuing operations attributable to DIRECTV	$	942	$	1,515	$	1,434	$	1,420	$	305
Income from discontinued operations, net of taxes attributable to DIRECTV		—		6		17		—		31
Net income attributable to DIRECTV	$	942	$	1,521	$	1,451	$	1,420	$	336
Basic earnings per common share:
Income from continuing operations attributable to DIRECTV	$	0.96	$	1.36	$	1.20	$	1.13	$	0.22
Diluted earnings per common share:
Income from continuing operations attributable to DIRECTV	$	0.95	$	1.36	$	1.20	$	1.12	$	0.22
Weighted average number of common shares outstanding (in millions):
Basic		985		1,110		1,195		1,262		1,388
Diluted		992		1,114		1,202		1,270		1,395
Consolidated Balance Sheet Data:
Total assets	$	18,260	$	16,539	$	15,063	$	15,141	$	15,630
Obligations under capital leases		586		584		57		91		80
Long-term debt		6,500		5,725		3,347		3,395		3,405
Total stockholders' equity		2,911		4,631		6,013		6,473		7,989

See the Notes to the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information regarding other significant transactions during each of the three years in the period ended December 31, 2009.

***

42

DIRECTV

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following is a discussion of our results of operations and financial condition. This discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report. Information in this section is organized as follows:

•

Summary Results of Operations and Financial Condition

•

Significant Transactions Affecting the Comparability of the Results of Operations

•

Key Terminology

•

Executive Overview and Outlook

•

Results of Operations

•

Liquidity and Capital Resources

•

Contractual Obligations

•

Off-Balance Sheet Arrangements

•

Contingencies

•

Certain Relationships and Related-Party Transactions

•

Critical Accounting Estimates

•

Accounting Changes and New Accounting Pronouncements

•

Security Ratings

43

DIRECTV

SUMMARY RESULTS OF OPERATIONS AND FINANCIAL CONDITION

		Years Ended December 31,
		2009			2008			2007
		(Dollars in Millions, Except Per Share Amounts)
Consolidated Statements of Operations Data:
Revenues		$	21,565		$	19,693		$	17,246
Total operating costs and expenses			18,892			16,998			14,760
Operating profit			2,673			2,695			2,486
Interest income			41			81			111
Interest expense			(423	)		(360	)		(235	)
Liberty transaction and related charges			(491	)		—			—
Other, net			34			55			26
Income from continuing operations before income taxes			1,834			2,471			2,388
Income tax expense			(827	)		(864	)		(943	)
Income from continuing operations			1,007			1,607			1,445
Income from discontinued operations, net of taxes			—			6			17
Net income			1,007			1,613			1,462
Less: Net income attributable to noncontrolling interest			(65	)		(92	)		(11	)
Net income attributable to DIRECTV		$	942		$	1,521		$	1,451
Amounts attributable to DIRECTV common shareholders:
Income from continuing operations, net of taxes		$	942		$	1,515		$	1,434
Income from discontinued operations, net of taxes			—			6			17
Net income		$	942		$	1,521		$	1,451
Basic earnings per common share attributable to DIRECTV:
Income from continuing operations		$	0.96		$	1.36		$	1.20
Income from discontinued operations, net of taxes			—			0.01			0.01
Net income		$	0.96		$	1.37		$	1.21
Diluted earnings per common share attributable to DIRECTV:
Income from continuing operations		$	0.95		$	1.36		$	1.20
Income from discontinued operations, net of taxes			—			0.01			0.01
Net income		$	0.95		$	1.37		$	1.21
Weighted average number of common shares outstanding (in millions):
	Basic		985			1,110			1,195
	Diluted		992			1,114			1,202

	December 31,
	2009		2008
	(Dollars in Millions)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	2,605	$	2,005
Total current assets		5,055		4,044
Total assets		18,260		16,539
Total current liabilities		5,701		3,585
Long-term debt		6,500		5,725
Redeemable noncontrolling interest		400		325
Total stockholders' equity		2,911		4,631

Reference should be made to the notes to the Consolidated Financial Statements.

44

DIRECTV
SUMMARY RESULTS OF OPERATIONS AND FINANCIAL CONDITION—(continued)

	Years Ended December 31,
	2009			2008			2007
	(Dollars in Millions)
Other Data:
Operating profit before depreciation and amortization (1)
Operating profit	$	2,673		$	2,695		$	2,486
Add: Depreciation and amortization expense		2,640			2,320			1,684
Operating profit before depreciation and amortization	$	5,313		$	5,015		$	4,170
Operating profit before depreciation and amortization margin		24.6	%		25.5	%		24.2	%
Cash flow information
Net cash provided by operating activities	$	4,431		$	3,910		$	3,645
Net cash used in investing activities		(2,194	)		(2,388	)		(2,822	)
Net cash used in financing activities		(1,637	)		(600	)		(2,239	)
Free cash flow (2)
Net cash provided by operating activities	$	4,431		$	3,910		$	3,645
Less: Cash paid for property and equipment		(2,012	)		(2,101	)		(2,523	)
Less: Cash paid for satellites		(59	)		(128	)		(169	)
Free cash flow	$	2,360		$	1,681		$	953

(1)

Operating profit before depreciation and amortization, which is a financial measure that is not determined in accordance with accounting principles generally accepted in the United States of America, or GAAP, can be calculated by adding amounts under the caption "Depreciation and amortization expense" to "Operating profit." This measure should be used in conjunction with GAAP financial measures and is not presented as an alternative measure of operating results, as determined in accordance with GAAP. Our management and our Board of Directors use operating profit before depreciation and amortization to evaluate the operating performance of our company and our business segments and to allocate resources and capital to business segments. This metric is also used as a measure of performance for incentive compensation purposes and to measure income generated from operations that could be used to fund capital expenditures, service debt or pay taxes. Depreciation and amortization expense primarily represents an allocation to current expense of the cost of historical capital expenditures and for acquired intangible assets resulting from prior business acquisitions. To compensate for the exclusion of depreciation and amortization expense from operating profit, our management and our Board of Directors separately measure and budget for capital expenditures and business acquisitions.

We believe this measure is useful to investors, along with GAAP measures (such as revenues, operating profit and net income), to compare our operating performance to other communications, entertainment and media service providers. We believe that investors use current and projected operating profit before depreciation and amortization and similar measures to estimate our current or prospective enterprise value and make investment decisions. This metric provides investors with a means to compare operating results exclusive of depreciation and amortization expense. Our management believes this is useful given the significant variation in depreciation and amortization expense that can result from the timing of capital expenditures, the capitalization of intangible assets, potential variations in expected useful lives when compared to other companies and periodic changes to estimated useful lives.

Operating profit before depreciation and amortization margin is calculated by dividing operating profit before depreciation and amortization by Revenues.

(2)

Free cash flow, which is a financial measure that is not determined in accordance with GAAP, can be calculated by deducting amounts under the captions "Cash paid for property and equipment" and "Cash paid for satellites" from "Net cash provided by operating activities" from the Consolidated Statements of Cash Flows. This financial measure should be used in conjunction with other GAAP financial measures and is not presented as an alternative measure of cash flows from operating activities, as determined in accordance with GAAP. Our management and our Board of Directors use free cash flow to evaluate the cash generated by our current subscriber base, net of capital expenditures, for the purpose of allocating resources to activities such as adding new subscribers, retaining and upgrading existing subscribers, for additional capital expenditures and other capital investments or transactions and as a measure of performance for incentive compensation purposes. We believe this measure is useful to investors, along with other GAAP measures (such as cash flows from operating and investing activities), to compare our operating performance to other communications, entertainment and media companies. We believe that investors also use current and projected free cash flow to determine the ability of revenues from our current and projected subscriber base to fund required and discretionary spending and to help determine our financial value.

45

DIRECTV
SUMMARY RESULTS OF OPERATIONS AND FINANCIAL CONDITION—(concluded)

Selected Segment Data

	Years Ended December 31,
	2009			2008			2007
	(Dollars in Millions)
DIRECTV U.S.
Revenues	$	18,671		$	17,310		$	15,527
% of total revenues		86.6	%		87.9	%		90.0	%
Operating profit	$	2,410		$	2,330		$	2,402
Add: Depreciation and amortization expense		2,275			2,061			1,448
Operating profit before depreciation and amortization	$	4,685		$	4,391		$	3,850
Operating profit margin		12.9	%		13.5	%		15.5	%
Operating profit before depreciation and amortization margin		25.1	%		25.4	%		24.8	%
Segment assets	$	12,408		$	12,546		$	12,297
Capital expenditures		1,485			1,765			2,326
DIRECTV Latin America
Revenues	$	2,878		$	2,383		$	1,719
% of total revenues		13.3	%		12.1	%		10.0	%
Operating profit	$	331		$	426		$	159
Add: Depreciation and amortization expense		366			264			235
Operating profit before depreciation and amortization	$	697		$	690		$	394
Operating profit margin		11.5	%		17.9	%		9.2	%
Operating profit before depreciation and amortization margin		24.2	%		29.0	%		22.9	%
Segment assets	$	3,772		$	3,301		$	2,456
Capital expenditures		584			447			336
Sports Networks, Eliminations and Other
Revenues	$	16			—			—
% of total revenues		0.1	%		—			—
Operating loss	$	(68	)	$	(61	)	$	(75	)
Add: Depreciation and amortization expense		(1	)		(5	)		1
Operating loss before depreciation and amortization	$	(69	)	$	(66	)	$	(74	)
Segment assets	$	2,080		$	692		$	310
Capital expenditures		2			17			30
Total
Revenues	$	21,565		$	19,693		$	17,246
Operating profit	$	2,673		$	2,695		$	2,486
Add: Depreciation and amortization expense		2,640			2,320			1,684
Operating profit before depreciation and amortization	$	5,313		$	5,015		$	4,170
Operating profit margin		12.4	%		13.7	%		14.4	%
Operating profit before depreciation and amortization margin		24.6	%		25.5	%		24.2	%
Total assets	$	18,260		$	16,539		$	15,063
Capital expenditures		2,071			2,229			2,692

46

DIRECTV

SIGNIFICANT TRANSACTIONS AFFECTING THE COMPARABILITY OF THE RESULTS OF OPERATIONS

Acquisitions

        Liberty Transaction.    On November 19, 2009, The DIRECTV Group, Inc., or DIRECTV Group, and Liberty Media Corporation, which we refer to as Liberty or Liberty Media, obtained shareholder approval of and closed a series of related transactions which we refer to collectively as the Liberty Transaction. The Liberty Transaction included the split-off of certain of the assets of the Liberty Entertainment group into Liberty Entertainment, Inc., or LEI, which was then split-off from Liberty. Following the split-off, DIRECTV Group and LEI merged with subsidiaries of DIRECTV. As a result of Liberty Transaction, DIRECTV Group, which is comprised of the DIRECTV U.S. and DIRECTV Latin America businesses, and LEI, which held Liberty's 57% interest in DIRECTV Group, a 100% interest in three regional sports networks, a 65% interest in Game Show Network, LLC, approximately $120 million in cash and cash equivalents and approximately $2.1 billion of indebtedness and a series of related equity collars became wholly-owned subsidiaries of DIRECTV.

        The Liberty Transaction has been accounted for using the acquisition method of accounting pursuant to accounting standards for business combinations. DIRECTV Group has been treated as the acquiring corporation for accounting and financial reporting purposes, and accordingly the historical financial statements of DIRECTV Group have become the historical financial statements of DIRECTV. The acquisition date fair value of consideration paid, in the form of DIRECTV common stock, for the assets and liabilities of LEI (excluding LEI's interest in DIRECTV Group) has been allocated to a premium expensed at the close of the transaction and to LEI's other tangible and intangible assets acquired and liabilities assumed based on their estimated acquisition date fair values, with any excess being treated as goodwill. The assets, liabilities and results of operations of LEI have been consolidated beginning on the acquisition date, November 19, 2009.

        As a result of the Liberty Transaction, we recorded $491 million in charges to "Liberty transaction and related charges" in the Consolidated Statements of Operations for the year ended December 31, 2009, which is comprised of: a $337 million charge related to a premium paid to LEI shareholders to complete the merger in the form of an equity interest that exceeded the fair value of net assets acquired by DIRECTV; $43 million of costs incurred to complete the transaction, including legal, accounting, financial printing, investment banking and other costs; and $111 million in net losses recorded for the partial settlement of the equity collars and stock options and stock appreciation rights held by Liberty employees subsequent to the acquisition date, and adjustments of the equity collars and stock options and stock appreciation rights carried as liabilities to fair value as of December 31, 2009.

        As part of the Liberty Transaction, we assumed a credit facility with a principal balance of $1,878 million, which we refer to as the Collar Loan, and a series of related equity collars which were in a liability position with an estimated acquisition date fair value of $369 million. In connection with the assumption of the Collar Loan, we agreed with the lending bank to promptly repay the Collar Loan and settle the equity collars, which is based on DTV shares. From the acquisition date to December 31, 2009, we repaid a total of $751 million, including $676 million in principal payments and $75 million in payments to settle a portion of the equity collars.

        Cash paid, net of cash acquired in connection with the transaction was $97 million and includes a $226 million repayment of LEI's existing loan from Liberty at the close of the transaction and $43 million of cash paid for transaction costs, partially offset by $120 million in cash at LEI, and $56 million of cash at the regional sports networks.

47

DIRECTV

        See Note 3 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report, which we incorporate herein by reference. Financial Statements and Supplementary Data for additional information regarding these transactions and Amendment No. 5 to DIRECTV's Registration Statement on Form S-4 filed with the SEC on October 20, 2009.

        180 Connect.    In July 2008, we acquired 100% of 180 Connect's outstanding common stock and exchangeable shares. Simultaneously, in a separate transaction, UniTek USA, LLC acquired 100% of 180 Connect's cable service operating unit and operations in certain of our installation services markets in exchange for satellite installation operations in certain markets and $7 million in cash. These transactions provide us with control over a significant portion of DIRECTV U.S.' home service provider network. We paid $91 million in cash, net of the $7 million we received from UniTek USA, for the acquisition, including the equity purchase price, repayment of assumed debt and related transaction costs.

        Darlene Transaction.    On January 30, 2007, we acquired Darlene's 14% equity interest in DLA LLC for $325 million in cash. We accounted for this acquisition using the purchase method of accounting.

Other Developments

        In addition to the items described above, the following items had a significant effect on the comparability of our operating results and financial position as of and for the years ended December 31, 2009, 2008 and 2007:

        Lease Program.    On March 1, 2006, DIRECTV U.S. introduced a new set-top receiver lease program. Prior to March 1, 2006, we expensed most set-top receivers provided to new and existing DIRECTV U.S. subscribers upon activation as a subscriber acquisition or upgrade and retention cost in the Consolidated Statements of Operations. Subsequent to the introduction of our lease program, we lease most set-top receivers provided to new and existing subscribers, and therefore capitalize the set-top receivers in "Property and equipment, net" in the Consolidated Balance Sheets.

        The following table sets forth the amount of DIRECTV U.S. set-top receivers we capitalized, and depreciation expense we recorded, under the lease program for the years ended December 31:

Capitalized subscriber leased equipment:	2009		2008		2007
	(Dollars in Millions)
Subscriber leased equipment—subscriber acquisitions	$	564	$	599	$	762
Subscriber leased equipment—upgrade and retention		419		537		774
Total subscriber leased equipment capitalized	$	983	$	1,136	$	1,536
Depreciation expense—subscriber leased equipment	$	1,333	$	1,100	$	645

        Financing Transactions.    On September 22, 2009, DIRECTV U.S. issued $1 billion in five year 4.750% senior notes due in 2014 at a 0.3% discount resulting in $997 million of proceeds. DIRECTV U.S. also issued $1 billion in 10 year 5.875% senior notes due in 2019 at a 0.7% discount resulting in $993 million of proceeds.

        On September 22, 2009, DIRECTV U.S. purchased, pursuant to a tender offer, $583 million of its then outstanding $910 million 8.375% senior notes at a price of 103.125% plus accrued and unpaid interest, for a total of $603 million. On September 23, 2009, DIRECTV U.S. exercised its right to redeem the remaining $327 million of the 8.375% senior notes at a price of 102.792% plus accrued and

48

DIRECTV

unpaid interest. DIRECTV U.S. redeemed the remaining 8.375% senior notes on October 23, 2009 for a total of $339 million.

        The purchase of our 8.375% senior notes resulted in a 2009 pre-tax charge of $34 million, $21 million after tax, of which $29 million resulted from the premium paid for redemption of our 8.375% senior notes and $5 million resulted from the write-off of deferred debt issuance costs and other transaction costs. The charge was recorded in "Other, net" in our Consolidated Statements of Operations.

        In May 2008, DIRECTV U.S. issued $1.5 billion in senior notes and amended its senior secured credit facility to include a new $1.0 billion Term Loan C. The senior notes bear interest at a rate of 7.625% and the principal balance is due in May 2016. The Term Loan C currently bears interest at a rate of 5.25% and was issued at a 1% discount. Principal payments on the Term Loan C began on September 30, 2008. The principal is payable in installments with the final installment due in April 2013.

        Venezuela Exchange Controls.    We are required to obtain Venezuelan government approval to exchange Venezuelan bolivars fuerte into U.S. dollars at the official rate of 2.15 Venezuelan bolivars fuerte per U.S. dollar. Additionally, a legal parallel exchange process exists, however the rates implied by transactions in the parallel market are significantly higher than the official rate (recently 5 to 7 bolivars fuerte per U.S. dollar). The official approval process has been delayed in recent periods and our Venezuelan subsidiary has in many cases relied on the parallel exchange process to settle U.S. dollar obligations and to repatriate accumulated cash balances. As a result, we recorded a $213 million charge in 2009 and a $29 million charge in 2008 in "General and administrative expenses" in the Consolidated Statements of Operations in connection with the exchange of accumulated Venezuelan cash balances to U.S. dollars using the parallel exchange process. See "Liquidity and Capital Resources" below for additional information and the implications of the devaluation of the Venezuelan currency in January 2010.

        Sky Brazil Functional Currency.    Based on cumulatively significant changes in economic facts and circumstances, we have determined that the local Brazilian currency should be the functional currency of Sky Brazil for purposes of financial statement translation beginning in the second quarter of 2009. As a result of this change in functional currency, changes in exchange rates result in gain or losses, which we record in "Other, net" in the Consolidated Statements of Operations related to the revaluation of U.S. dollar denominated monetary assets and liabilities, such as cash deposits, notes payable and capital lease obligations held by Sky Brazil. During 2009, we recorded a net foreign currency transaction gain of $62 million in "Other, net" in the Consolidated Statements of Operations related to U.S. dollar denominated monetary assets and liabilities held by Sky Brazil.

        Other Than Temporary Impairment.    In 2009, we recognized a $45 million charge for the other than temporary impairment of certain of our investments in "Other, net" in the Consolidated Statements of Operations.

49

DIRECTV

        Share Repurchase Program.    Since 2006 our Board of Directors approved multiple authorizations for the repurchase of our common stock. The following table sets forth information regarding shares repurchased and retired for the years ended December 31:

	2009		2008		2007
	(Amounts in Millions, Except Per Share Amounts)
Total cost of repurchased and retired shares	$	1,696	$	3,174	$	2,025
Average price per share		23.79		24.12		23.48
Number of shares repurchased and retired		71		131		86

KEY TERMINOLOGY

        Revenues.    We earn revenues mostly from monthly fees we charge subscribers for subscriptions to basic and premium channel programming, HD programming and access fees, pay-per-view programming, and seasonal and live sporting events. We also earn revenues from monthly fees that we charge subscribers with multiple non-leased set-top receivers (which we refer to as mirroring fees), monthly fees we charge subscribers for leased set-top receivers, monthly fees we charge subscribers for digital video recorder, or DVR, service, hardware revenues from subscribers who lease or purchase set-top receivers from us, our published programming guide, warranty service fees and advertising services.

        Broadcast Programming and Other.    These costs primarily include license fees for subscription service programming, pay-per-view programming, live sports and other events. Other costs include expenses associated with the publication and distribution of our programming guide, continuing service fees paid to third parties for active subscribers, warranty service costs and production costs for on-air advertisements we sell to third parties.

        Subscriber Service Expenses.    Subscriber service expenses include the costs of customer call centers, billing, remittance processing and certain home services expenses, such as in-home repair costs.

        Broadcast Operations Expenses.    These expenses include broadcast center operating costs, signal transmission expenses (including costs of collecting signals for our local channel offerings), and costs of monitoring, maintaining and insuring our satellites. Also included are engineering expenses associated with deterring theft of our signal.

        Subscriber Acquisition Costs.    These costs include the cost of set-top receivers and other equipment, commissions we pay to national retailers, independent satellite television retailers, dealers, telcos, and the cost of installation, advertising, marketing and customer call center expenses associated with the acquisition of new subscribers. Set-top receivers leased to new subscribers are capitalized in "Property and equipment, net" in the Consolidated Balance Sheets and depreciated over their useful lives. The amount of set-top receivers capitalized each period for subscriber acquisitions is included in "Cash paid for property and equipment" in the Consolidated Statements of Cash Flows.

        Upgrade and Retention Costs.    Upgrade and retention costs are associated with upgrade efforts for existing subscribers that we believe will result in higher average monthly revenue per subscriber, or ARPU, and lower churn. Our upgrade efforts include subscriber equipment upgrade programs for DVR, HD and HD DVR receivers and local channels, our multiple set-top receiver offer and similar initiatives. Retention costs also include the costs of installing and providing hardware under our movers program for subscribers relocating to a new residence. Set-top receivers leased to existing subscribers under upgrade and retention programs are capitalized in "Property and equipment, net" in the Consolidated Balance Sheets and depreciated over their useful lives. The amount of set-top receivers

50

DIRECTV

capitalized each period for upgrade and retention programs is included in "Cash paid for property and equipment" in the Consolidated Statements of Cash Flows.

        General and Administrative Expenses.    General and administrative expenses include departmental costs for legal, administrative services, finance, marketing and information technology. These costs also include expenses for bad debt and other operating expenses, such as legal settlements, and gains or losses from the sale or disposal of fixed assets.

        Average Monthly Revenue Per Subscriber.    We calculate ARPU by dividing average monthly revenues for the period (total revenues during the period divided by the number of months in the period) by average subscribers for the period. We calculate average subscribers for the period by adding the number of subscribers as of the beginning of the period and for each quarter end in the current year or period and dividing by the sum of the number of quarters in the period plus one.

        Average Monthly Subscriber Churn.    Average monthly subscriber churn represents the number of subscribers whose service is disconnected, expressed as a percentage of the average total number of subscribers. We calculate average monthly subscriber churn by dividing the average monthly number of disconnected subscribers for the period (total subscribers disconnected, net of reconnects, during the period divided by the number of months in the period) by average subscribers for the period.

        Subscriber Count.    The total number of subscribers represents the total number of subscribers actively subscribing to our service, including seasonal subscribers, subscribers who are in the process of relocating and commercial equivalent viewing units. In March 2008, we implemented a change in DIRECTV U.S.' commercial pricing and packaging to increase our competitiveness. As a result, during the first quarter of 2008, DIRECTV U.S. made a one-time downward adjustment to the subscriber count of approximately 71,000 subscribers related to commercial equivalent viewing units.

        SAC.    We calculate SAC, which represents total subscriber acquisition costs stated on a per subscriber basis, by dividing total subscriber acquisition costs for the period by the number of gross new subscribers acquired during the period. We calculate total subscriber acquisition costs for the period by adding together "Subscriber acquisition costs" expensed during the period and the amount of cash paid for equipment leased to new subscribers during the period.

EXECUTIVE OVERVIEW AND OUTLOOK

        The United States and the other countries in which we operate are continuing to undergo a period of substantial economic uncertainty. As discussed in "Competition" in Item 1, in addition to cable and satellite system operators, we are experiencing increasing competition from telcos and other emerging digital media distribution providers. A more severe downturn in economic activity or further competitive pressures could have a detrimental impact on our forecasted revenue, operating margins, net subscriber additions, free cash flow and net income. Please refer to "Risk Factors" in Item 1A for a further discussion of risks which may affect forecasted results or our business generally.

        DIRECTV U.S.    Our revenue growth is generated by both increases in the average monthly rates we earn from subscribers, or ARPU, and increases in the total number of subscribers. In 2010, we expect revenue growth in the mid-to-high single digit percentage range. We anticipate higher ARPU growth in 2010, offset by a reduction in revenue growth from net subscriber additions compared to 2009.

        In 2010, as a result of the anticipated growth in revenues, the economies of scale in our business, and lower gross subscriber additions, we expect operating profit before depreciation and amortization growth in the low-teens percentage range.

51

DIRECTV

        In 2010, we expect capital expenditures to approximate capital expenditures reported for 2009.

        DIRECTV Latin America.    In 2010, we expect revenue growth of roughly half of the growth experienced in 2009. Although we anticipate net subscriber additions to be similar to 2009, this growth will likely be partially offset by lower ARPU in the region caused by the recently announced devaluation of the Venezuelan currency, discussed in more detail below under "Liquidity and Capital Resources".

        As a result of the anticipated growth in revenues and the economies of scale in Latin America, in 2010 we expect operating profit before depreciation and amortization growth of more than 20%.

        In 2010, we expect capital expenditures in Latin America to exceed 2009 capital expenditures due to anticipated higher gross subscriber additions and increased sales of advanced products.

        DIRECTV.    At the consolidated DIRECTV level, we anticipate free cash flow, or cash provided by operating activities less capital expenditures, to grow in the mid-single digit percent range. The improvements in operating profit before depreciation and amortization are expected to be partly offset by an increase in cash paid for income taxes due to the anticipated increase in pre-tax earnings and the cessation of benefits realized during the past two years associated with two Federal economic stimulus programs in the U.S. as well as higher capital expenditures at DIRECTV Latin America and higher expected interest expense.

        2010 diluted earnings per common share is expected to more than double compared to 2009. The expected increase in 2010 is due to the anticipated growth in operating profit before depreciation and amortization, lower depreciation and amortization expense, and a continued decline in weighted average common shares outstanding due to anticipated share repurchases.

RESULTS OF OPERATIONS

Year Ended December 31, 2009 Compared with the Year Ended December 31, 2008

Consolidated Results of Operations

        We discuss changes for each of our segments in more detail below.

        Revenues.    The following table presents our revenues by segment:

Revenues by segment:						Change
		2009		2008		$		%
		(Dollars in Millions)
DIRECTV U.S.		$	18,671	$	17,310	$	1,361		7.9	%
DIRECTV Latin America			2,878		2,383		495		20.8	%
Sports Networks, Eliminations and Other			16		—		16		N/A
	Total Revenues	$	21,565	$	19,693	$	1,872		9.5	%

        The increase in our total revenues was due to subscriber growth and higher ARPU at DIRECTV U.S. and DIRECTV Latin America.

52

DIRECTV

        Operating profit before depreciation and amortization.    The following table presents our operating profit (loss) before depreciation and amortization by segment:

Operating profit (loss) before depreciation and amortization by segment:
							Change
	2009			2008			$			%
	(Dollars in Millions)
DIRECTV U.S.	$	4,685		$	4,391		$	294			6.7	%
DIRECTV Latin America		697			690			7			1.0	%
Sports Networks, Eliminations and Other		(69	)		(66	)		(3	)		4.5	%
Total operating profit before depreciation and amortization	$	5,313		$	5,015		$	298			5.9	%

        The increase in total operating profit before depreciation and amortization was due to higher gross profit from the increase in revenues, partially offset by higher subscriber acquisition, upgrade and retention and general and administrative costs at both DIRECTV U.S. and DIRECTV Latin America.

        Operating profit.    The following table presents our operating profit (loss) by segment:

Operating profit (loss) by segment:							Change
	2009			2008			$			%
	(Dollars in Millions)
DIRECTV U.S.	$	2,410		$	2,330		$	80			3.4	%
DIRECTV Latin America		331			426			(95	)		(22.3	)%
Sports Networks, Eliminations and Other		(68	)		(61	)		(7	)		11.5	%
Total operating profit	$	2,673		$	2,695		$	(22	)		(0.8	)%

        The decrease in our operating profit was primarily due to increased depreciation and amortization from the DIRECTV U.S. and DIRECTV Latin America set-top receiver lease programs, more than offsetting our increase in operating profit before depreciation and amortization.

        Interest income.    The decrease in interest income to $41 million in 2009 from $81 million in 2008 was due to lower interest rates and lower average cash balances due mostly to the use of cash to fund our share repurchase program.

        Interest expense.    The increase in interest expense to $423 million in 2009 from $360 million in 2008 was due to an increase in the average debt balance compared to 2008, partially offset by decreased interest rates. We capitalized $18 million of interest costs in both 2008 and 2009.

        Liberty transaction and related charges.    In 2009 we incurred $491 million in costs related to the Liberty Transaction, which is comprised of a $337 premium paid to LEI shareholders, $111 million in net losses for the partial settlement and fair-value adjustments related to the equity collars and non-employee stock options and stock appreciation rights and $43 million of charges for transaction related costs.

53

DIRECTV

        Other, net.    The significant components of "Other, net" were as follows:

		2009			2008			Change
		(Dollars in Millions)
Equity in earnings of unconsolidated subsidiaries		$	51		$	55		$	(4	)
Net foreign currency transaction gain			62			—			62
Loss from impairment of investments			(45	)		—			(45	)
Loss on early extinguishment of debt			(34	)		—			(34	)
Net gain (loss) from sale of investments			—			1			(1	)
Other			—			(1	)		1
	Total	$	34		$	55		$	(21	)

        In 2009, Other, net decreased due primarily to the recognition of a charge for the other than temporary impairment of investments, a loss on the early extinguishment of our 8.375% senior notes and decreased earnings from our unconsolidated subsidiaries, partially offset by a foreign currency transaction gain related to net U.S. dollar denominated liabilities held by Sky Brazil.

        Income tax expense.    The increase in the effective tax rate to 45% in 2009 from 35% in 2008 is primarily attributable to the non-recoverability of Liberty Transaction related charges.

        Income from discontinued operations, net of taxes.    During 2008, we recorded a net $6 million adjustment as a result of the expiration of the statute of limitations in the federal jurisdiction offset by the write-off of foreign incentive income tax benefits related to previously divested businesses.

        Noncontrolling interests in net earnings of subsidiaries.    We recognized noncontrolling interest in net earnings of subsidiaries of $65 million in 2009 and $92 million in 2008 at Sky Brazil. Noncontrolling interest in net earnings of subsidiaries in 2009 decreased due to lower net income at Sky Brazil.

54

DIRECTV

DIRECTV U.S. Segment

        The following table provides operating results and a summary of key subscriber data for the DIRECTV U.S. segment:

										Change
				2009			2008			$			%
				(Dollars in Millions, Except Per Subscriber Amounts)
Revenues				$	18,671		$	17,310		$	1,361			7.9	%
Operating costs and expenses
	Costs of revenues, exclusive of depreciation and amortization expense
		Broadcast programming and other			8,027			7,424			603			8.1	%
		Subscriber service expenses			1,268			1,139			129			11.3	%
		Broadcast operations expenses			274			265			9			3.4	%
	Selling, general and administrative expenses, exclusive of depreciation and amortization expense
		Subscriber acquisition costs			2,478			2,191			287			13.1	%
		Upgrade and retention costs			1,045			1,027			18			1.8	%
		General and administrative expenses			894			873			21			2.4	%
Depreciation and amortization expense					2,275			2,061			214			10.4	%
			Total operating costs and expenses		16,261			14,980			1,281			8.6	%
Operating profit				$	2,410		$	2,330		$	80			3.4	%
Other data:
Operating profit before depreciation and amortization				$	4,685		$	4,391		$	294			6.7	%
Total number of subscribers (000's) (1)					18,560			17,621			939			5.3	%
ARPU				$	85.48		$	83.90		$	1.58			1.9	%
Average monthly subscriber churn %					1.53	%		1.47	%		—			4.1	%
Gross subscriber additions (000's)					4,273			3,904			369			9.5	%
Subscriber disconnections (000's)					3,334			3,043			291			9.6	%
Net subscriber additions (000's)					939			861			78			9.1	%
Average subscriber acquisition costs—per subscriber (SAC)				$	712		$	715		$	(3	)		(0.4	)%

(1)

As discussed above in "Key Terminology," during 2008, we had a one-time downward adjustment to our subscriber count of approximately 71,000 subscribers related to commercial equivalent viewing units. This adjustment did not affect our revenue, operating profit, cash flows, net subscriber additions or average monthly subscriber churn.

        Subscribers.    In 2009, gross subscriber additions increased primarily due to more aggressive promotions, marketing of the AT&T/DIRECTV bundle which began in February 2009, higher demand for advanced services and the impact of the transition to digital programming by broadcasters in the first half of 2009. Net subscriber additions increased from 2008 primarily due to the increase in gross additions, partially offset by higher subscriber disconnections due to a higher average monthly churn rate on a larger subscriber base. Average monthly subscriber churn increased primarily due to stricter upgrade and retention policies for existing customers as well as more aggressive competitor promotions combined with a weaker economy.

55

DIRECTV

        Revenues.    DIRECTV U.S.' revenues increased as a result of the larger subscriber base and higher ARPU. The increase in ARPU resulted primarily from price increases on programming packages, higher HD and DVR product penetration, partially offset by more competitive customer promotions, the elimination of satellite lease revenue and lower premium movie package buy rates.

        Operating profit before depreciation and amortization.    The improvement of operating profit before depreciation and amortization was primarily due to the gross profit generated from the higher revenues, partially offset by higher subscriber acquisition costs principally related to the increase in gross subscriber additions.

        Broadcast programming and other costs increased due to the larger number of subscribers in 2009 and annual program supplier rate increases. Subscriber service expenses increased primarily due to a larger subscriber base in 2009 and costs associated with service quality improvement initiatives.

        Subscriber acquisition costs increased primarily due to an increase in gross subscriber additions compared to 2008 and increased marketing and advertising costs. SAC per subscriber, which includes the cost of capitalized set-top receivers, decreased primarily due to lower set-top receiver costs and greater savings related to the increased usage of refurbished set-top receivers through our lease program.

        Upgrade and retention costs increased in 2009 primarily due to the larger subscriber base, partially offset by decreased installation costs and decreased spending on other programs due to stricter spending policies.

        General and administrative expenses increased in 2009 primarily due to increased labor and benefit expense from the increase in headcount within our owned and operated home service provider installation business, partially offset by a $14 million charge in 2008 for the write-off of accounts receivable for equipment and other costs incurred to effect the orderly transition of services from one of our home service providers that ceased operations.

        Operating profit.    The increase in operating profit was primarily due to higher operating profit before depreciation and amortization, partially offset by higher depreciation and amortization expense in 2009 resulting from the capitalization of set-top receivers under the lease program.

56

DIRECTV

DIRECTV Latin America Segment

        The following table provides operating results and a summary of key subscriber data for the DIRECTV Latin America segment:

							Change
	2009			2008			$			%
	(Dollars in Millions, Except Per Subscriber Amounts)
Revenues	$	2,878		$	2,383		$	495			20.8	%
Operating profit before depreciation and amortization		697			690			7			1.0	%
Operating profit		331			426			(95	)		(22.3	)%
Other data:
ARPU	$	57.12		$	55.07		$	2.05			3.7	%
Average monthly subscriber churn % (1)		1.75	%		1.78	%		—			(1.7	)%
Total number of subscribers (000's) (2)		4,588			3,883			705			18.2	%
Gross subscriber additions (000's)		1,575			1,393			182			13.1	%
Net subscriber additions (000's)		692			623			69			11.1	%

(1)

In the year ended December 31, 2008, DIRECTV Latin America had a subscriber adjustment totaling 78,000 subscribers in Sky Brazil as a result of the inconsistent application of churn policies in previous periods and the completion of the Sky Brazil and DIRECTV Brazil business integration.

(2)

DIRECTV Latin America subscriber data excludes subscribers of the Sky Mexico platform. We migrated approximately 3,000 subscribers from DIRECTV Latin America to Sky Mexico during 2009 and migrated approximately 19,000 subscribers from DIRECTV Latin America to Sky Mexico during 2008. Additionally, we migrated approximately 16,000 subscribers from a local pay television service provider in Latin America to Sky Brazil during 2009. Net subscriber additions as well as churn exclude the effect of these migrations.

        The increase in net subscriber additions was due to strong subscriber demand across the region, particularly in Colombia, Brazil and Puerto Rico, increased demand for DVR, HD and pre-paid services, as well as targeted customer promotions. The decrease in average monthly subscriber churn was primarily due to two downward subscriber adjustments in 2008 totaling 78,000 subscribers. Excluding these subscriber adjustments, churn would have increased 17 basis points principally due to the growth of DTVLA's prepaid business.

        Revenues increased in 2009 primarily due to strong subscriber and ARPU growth. ARPU increased mainly due to price increases in Venezuela, Brazil and Argentina, as well as higher fees for HD and DVR services, partially offset by foreign currency devaluations, particularly in Brazil and Argentina.

        The higher operating profit before depreciation and amortization is primarily due to the gross profit generated from the higher revenues, partially offset by higher general and administrative expense due primarily to $213 million in currency related transaction fees in Venezuela, an increase in subscriber acquisition costs mostly due to an increase in gross subscriber additions and higher subscriber service costs primarily related to customer service improvement initiatives and the larger subscriber base.

57

DIRECTV

        The lower operating profit was primarily due to the increase in operating profit before depreciation and amortization, offset by higher depreciation and amortization expense primarily due to an increase in basic and advance product receivers leased over the last year.

Sports Networks, Eliminations and Other

        Operating loss from Sports Networks, Elimination and Other increased to $68 million in 2009 from $61 million in 2008. Sports Networks, Eliminations and Other primarily consisted of corporate operating costs until November 19, 2009 when we completed the Liberty Transaction and acquired the RSNs.

Year Ended December 31, 2008 Compared with the Year Ended December 31, 2007

Consolidated Results of Operations

        We discuss changes for each of our segments in more detail below.

        Revenues.    The following table presents our revenues by segment:

Revenues by segment:						Change
		2008		2007		$		%
		(Dollars in Millions)
DIRECTV U.S.		$	17,310	$	15,527	$	1,783		11.5	%
DIRECTV Latin America			2,383		1,719		664		38.6	%
	Total Revenues	$	19,693	$	17,246	$	2,447		14.2	%

        The increase in our total revenues was due to higher ARPU and subscriber growth at DIRECTV U.S. and DIRECTV Latin America.

        Operating profit before depreciation and amortization.    The following table presents our operating profit (loss) before depreciation and amortization by segment:

Operating profit (loss) before depreciation and amortization by segment:
							Change
	2008			2007			$		%
	(Dollars in Millions)
DIRECTV U.S.	$	4,391		$	3,850		$	541		14.1	%
DIRECTV Latin America		690			394			296		75.1	%
Sports Networks, Eliminations and Other		(66	)		(74	)		8		(10.8	)%
Total operating profit before depreciation and amortization	$	5,015		$	4,170		$	845		20.3	%

        The increase in total operating profit before depreciation and amortization was due to higher gross profit from the increase in revenues, partially offset by higher subscriber acquisition, upgrade and retention and general and administrative costs at both DIRECTV U.S. and DIRECTV Latin America.

58

DIRECTV

        Operating profit.    The following table presents our operating profit (loss) by segment:

Operating profit (loss) by segment:							Change
	2008			2007			$			%
	(Dollars in Millions)
DIRECTV U.S.	$	2,330		$	2,402		$	(72	)		(3.0	)%
DIRECTV Latin America		426			159			267			167.9	%
Sports Networks, Eliminations and Other		(61	)		(75	)		14			(18.7	)%
Total operating profit	$	2,695		$	2,486		$	209			8.4	%

        The increase in our operating profit was primarily due to increased operating profit before depreciation and amortization, partially offset by the increase in depreciation and amortization expense due to the DIRECTV U.S. lease program.

        Interest income.    The decrease in interest income to $81 million in 2008 from $111 million in 2007 was due to lower interest rates and lower average cash balances due mostly to the use of cash to fund our share repurchase program.

        Interest expense.    The increase in interest expense from $235 million in 2007 to $360 million in 2008 was due to an increase in the average debt balance compared to 2007 and lower capitalization of interest cost in 2008. We capitalized $18 million of interest costs in 2008 and $51 million in 2007. The reduction in the capitalization of interest costs was due to the successful completion and launch of two satellites.

        Other, net.    The significant components of "Other, net" were as follows:

		2008			2007			Change
		(Dollars in Millions)
Equity in earnings of unconsolidated subsidiaries		$	55		$	35		$	20
Net gain (loss) from sale of investments			1			(6	)		7
Other			(1	)		(3	)		2
	Total	$	55		$	26		$	29

        Income tax expense.    We recognized income tax expense of $864 million in 2008 compared to $943 million in 2007. The lower income tax expense in 2008 is primarily attributable to foreign earnings taxed at less than our domestic statutory rates, a partial reversal of a valuation allowance on deferred tax assets of foreign subsidiaries as a result of recent profitability and recognition of tax credits due to state tax legislation.

        Net Income attributable to noncontrolling interests.    We recognized net income attributable to noncontrolling interest in net earnings of subsidiaries of $92 million in 2008 and $11 million in 2007 primarily from Sky Brazil. Net income attributable to noncontrolling interest in 2008 increased due to higher net income and $23 million from the partial reversal of a valuation allowance on deferred tax assets at Sky Brazil attributable to the noncontrolling interest holder.

        Income from discontinued operations, net of taxes.    During 2008, we recorded a net $6 million adjustment as a result of the expiration of the statute of limitations in the federal jurisdiction offset by the write-off of foreign incentive income tax benefits related to previously divested businesses. During 2007, we recorded a $17 million reduction to our unrecognized tax benefits as a result of a settlement of a foreign withholding dispute from a previously divested business.

59

DIRECTV

DIRECTV U.S. Segment

        The following table provides operating results and a summary of key subscriber data for the DIRECTV U.S. segment:

										Change
				2008			2007			$			%
				(Dollars in Millions, Except Per Subscriber Amounts)
Revenues				$	17,310		$	15,527		$	1,783			11.5	%
Operating costs and expenses
	Costs of revenues, exclusive of depreciation and amortization expense
		Broadcast programming and other			7,424			6,681			743			11.1	%
		Subscriber service expenses			1,139			1,137			2			0.2	%
		Broadcast operations expenses			265			216			49			22.7	%
	Selling, general and administrative expenses, exclusive of depreciation and amortization expense
		Subscriber acquisition costs			2,191			1,901			290			15.3	%
		Upgrade and retention costs			1,027			958			69			7.2	%
		General and administrative expenses			873			784			89			11.4	%
Depreciation and amortization expense					2,061			1,448			613			42.3	%
			Total operating costs and expenses		14,980			13,125			1,855			14.1	%
Operating profit				$	2,330		$	2,402		$	(72	)		(3.0	)%
Other data:
Operating profit before depreciation and amortization				$	4,391		$	3,850		$	541			14.1	%
Total number of subscribers (000's) (1)					17,621			16,831			790			4.7	%
ARPU				$	83.90		$	79.05		$	4.85			6.1	%
Average monthly subscriber churn %					1.47	%		1.51	%		—			(2.6	)%
Gross subscriber additions (000's)					3,904			3,847			57			1.5	%
Subscriber disconnections (000's)					3,043			2,969			74			2.5	%
Net subscriber additions (000's)					861			878			(17	)		(1.9	)%
Average subscriber acquisition costs—per subscriber (SAC)				$	715		$	692		$	23			3.3	%

(1)

As discussed above in "Key Terminology," during 2008, we had a one-time downward adjustment to our subscriber count of approximately 71,000 subscribers related to commercial equivalent viewing units. This adjustment did not affect our revenue, operating profit, cash flows, net subscriber additions or average monthly subscriber churn.

        Subscribers.    In 2008, gross subscriber additions increased primarily due to growth in the direct sales and retail distribution channels due in large part to more attractive promotions and higher demand for HD and DVR services, partially offset by the loss of a distribution relationship with BellSouth during the last three quarters of 2008. Average monthly subscriber churn decreased primarily due to increased sales of HD and DVR services as well as from lower involuntary churn associated with the continued effect of stringent credit policies. Net subscriber additions declined slightly from 2007 as the increase in gross additions was offset by higher subscriber disconnections.

        Revenues.    DIRECTV U.S.' revenues increased as a result of higher ARPU and the larger subscriber base. The increase in ARPU resulted primarily from price increases on programming

60

DIRECTV

packages, higher HD and DVR service fees, and an increase in lease fees due to higher average number of receivers per subscriber, partially offset by more competitive customer promotions and slightly lower upfront equipment fees.

        Operating profit before depreciation and amortization.    The improvement of operating profit before depreciation and amortization was primarily due to the gross profit generated from the higher revenues, partially offset by higher subscriber acquisition, upgrade and retention costs for the increased number of new and existing customers adding HD and DVR services, as well as increased general and administrative costs.

        Broadcast programming and other costs increased due to annual program supplier rate increases and the larger number of subscribers in 2008. Subscriber service expenses remained essentially flat with a larger subscriber base in 2008 due to the cost savings from a decline in customer call volume and a lower call handle time. Broadcast operations expense increased in 2008 due primarily to costs to support advanced services, HD enhancements and VOD.

        Subscriber acquisition costs increased due to higher sales, marketing and advertising costs and higher costs associated with the acquisition of higher quality and advanced product customers. SAC per subscriber, which includes the cost of capitalized set-top receivers, increased due to higher sales, marketing and advertising costs and higher costs associated with the acquisition of higher quality and advanced product customers, partially offset by lower set-top receiver costs.

        Upgrade and retention costs increased in 2008 due to an increase in the movers program and other marketing programs.

        General and administrative expenses increased in 2008 primarily due to a $25 million one-time gain recognized in the second quarter of 2007 related to hurricane insurance recoveries, a $14 million charge in 2008 for the write-off of accounts receivable for equipment and other costs incurred to effect the orderly transition of services from one of our home service providers that ceased operations, $24 million in charges associated with the settlement of multiple legal proceedings and an increase in labor and benefit costs.

        Operating profit.    The increase in operating profit was primarily due to higher operating profit before depreciation and amortization, partially offset by higher depreciation and amortization expense in 2008 resulting from the capitalization of set-top receivers under the lease program.

61

DIRECTV

DIRECTV Latin America Segment

        The following table provides operating results and a summary of key subscriber data for the DIRECTV Latin America segment:

							Change
	2008			2007			$		%
	(Dollars in Millions, Except Per Subscriber Amounts)
Revenues	$	2,383		$	1,719		$	664		38.6	%
Operating profit before depreciation and amortization		690			394			296		75.1	%
Operating profit		426			159			267		167.9	%
Other data:
ARPU	$	55.07		$	48.33		$	6.74		13.9	%
Average monthly subscriber churn %		1.78	%		1.38	%		—		29.0	%
Total number of subscribers (000's) (1)		3,883			3,279			604		18.4	%
Gross subscriber additions (000's)		1,393			1,080			313		29.0	%
Net subscriber additions (000's)		623			588			35		6.0	%

(1)

DIRECTV Latin America subscriber data exclude subscribers of the Sky Mexico platform. Net subscriber additions as well as churn exclude the effect of the migration of approximately 19,000 subscribers from Central America to Sky Mexico in 2008 and approximately 20,000 in 2007.

        The increase in net subscriber additions was due to higher gross subscriber additions mainly in Brazil, Argentina and Venezuela, partially offset by higher churn of 1.78% in the region. The increase in churn was due to two downward subscriber adjustments totaling 78,000 subscribers in Sky Brazil as a result of the inconsistent application of churn policies in previous periods and the completion of the Sky Brazil and DIRECTV Brazil business integration. Excluding these subscriber adjustments in the current year, churn would have been 1.58%, which is higher than the prior year period primarily due to increased competition, higher churn in our prepaid business and a more challenging macroeconomic environment.

        Revenues increased in 2008 primarily due to strong subscriber and ARPU growth. ARPU increased mainly due to favorable exchange rates in Brazil in the first three quarters of 2008, as well as strong ARPU growth in PanAmericana, particularly in Venezuela and Argentina.

        The higher operating profit before depreciation and amortization is primarily due to the gross profit generated from the higher revenues, partially offset by an increase in subscriber acquisition costs mostly due to the 29% increase in gross additions, higher general and administrative expense due primarily to $29 million in currency related transaction fees in Venezuela and increased costs related to foreign currency exchange rate appreciation.

        The higher operating profit was primarily due to the increase in operating profit before depreciation and amortization partially offset by higher depreciation and amortization expense.

Sports Networks, Eliminations and Other

        Operating loss from Sports Networks, Eliminations and Other decreased to $61 million in 2008 from $75 million in 2007.

62

DIRECTV

LIQUIDITY AND CAPITAL RESOURCES

        Our principal sources of liquidity are our cash, cash equivalents and the cash flow that we generate from our operations. From 2007 to 2009 we experienced significant growth in net cash provided by operating activities and free cash flow. We expect net cash provided by operating activities and free cash flow to continue to grow and believe that our existing cash balances and cash provided by operations will be sufficient to fund our existing business plan. Additionally, as of December 31, 2009, DIRECTV U.S. had the ability to borrow up to $500 million under its existing credit facility, which is available until 2011. Borrowings under this facility may be required to fund strategic investment opportunities should they arise.

        At December 31, 2009, our cash and cash equivalents totaled $2.6 billion compared with $2.0 billion at December 31, 2008.

        As a measure of liquidity, the current ratio (ratio of current assets to current liabilities) was 0.89 at December 31, 2009 and 1.13 at December 31, 2008. Working capital decreased by $1,105 million to a $646 million deficit at December 31, 2009 from working capital of $459 million at December 31, 2008. The decrease during the period was mostly due to the increase in our current debt balance due to the assumption of debt and the related equity collars as part of the Liberty Transaction.

Summary Cash Flow Information

	Years Ended December 31,
	2009			2008			2007
	(Dollars in Millions)
Net cash provided by operating activities	$	4,431		$	3,910		$	3,645
Net cash used in investing activities		(2,194	)		(2,388	)		(2,822	)
Net cash used in financing activities		(1,637	)		(600	)		(2,239	)
Free cash flow:
Net cash provided by operating activities	$	4,431		$	3,910		$	3,645
Less: Cash paid for property, equipment and satellites		(2,071	)		(2,229	)		(2,692	)
Free cash flow	$	2,360		$	1,681		$	953

Cash Flows Provided By Operating Activities

        The increases in net cash provided by operating activities in 2009 and 2008 were primarily due to our higher operating profit before depreciation and amortization, which resulted from the higher gross profit generated from an increase in revenues, and in 2009 due to lower payments for income taxes compared to 2008. Cash paid for income taxes was $484 million in 2009, $706 million in 2008 and $408 million in 2007. The decrease in cash paid for income taxes in 2009 resulted mainly from decreased income from continuing operations and prior year tax credits.

Cash Flows Used In Investing Activities

        During both 2008 and 2009, we experienced a reduction in set-top receiver costs and benefited from the use of refurbished set-top receivers from the DIRECTV U.S. lease program, which resulted in a reduction in capital expenditures for property and equipment in 2008 and 2009.

        Also at DIRECTV U.S., during 2007, 2008 and 2009, we were in the process of constructing three satellites. We have completed and placed two of these satellites into service, which resulted in decreasing satellite capital expenditures over the three year period. We expect to place the last of these

63

DIRECTV

satellites in service in the second quarter of 2010. Additionally, our capital expenditures for broadcast facilities and equipment to support our HD programming has decreased from 2007 to 2009 as we have largely completed the build out of the infrastructure necessary to launch HD programming both locally and nationally.

        These decreases in capital expenditures for property and equipment have been offset by an increase in capital expenditures in Latin America for set-top receivers provided to subscribers under lease programs. Part of our business strategy in Latin America is to increase advanced product and multi-box penetrations; therefore, our capital expenditures in Latin America are expected to increase.

        Additionally, we paid $37 million in 2009, $204 million in 2008 and $348 million in 2007 for investments, net of cash acquired, in various companies and $97 million, net of cash acquired, as part of the Liberty Transaction. These transactions are described in Notes 3 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report. Also, in 2007 we had cash flows from investing activities resulting from net cash proceeds received from the sale of short-term investments. Our cash spending on investment in companies is discretionary and we may fund strategic investment opportunities should they arise in the future.

Cash Flows Used in Financing Activities

        Under stock repurchase plans approved by our Board of Directors we completed the repurchase of our common stock as follows: $1,696 million during 2009, $3,174 million during 2008, and $2,025 million during 2007. In February 2010, we announced an increase in the amount of authorized repurchases to $3.5 billion, which is expected to be completed during 2010. We may make purchases under this program in the open market, through negotiated transactions or otherwise. The timing, nature and amount of such transactions will depend on a variety of factors, including market conditions, and the program may be suspended, discontinued or accelerated at any time. The sources of funds for the purchases under the remaining authorization are our existing cash on hand, cash from operations and potential additional borrowings.

        During 2008 we had $2,490 million of net cash proceeds from the issuance of senior notes and borrowings under our senior secured credit facility which were completed in May 2008 and received a $160 million capital contribution in connection with Liberty's acquisition of its equity interest in us from News Corporation. During 2009, we had $1,990 million of net cash proceeds from the issuance of senior notes which were completed in September 2009. We also repaid $1,018 million of our long-term debt, and paid approximately $751 million to settle a portion of the debt and related equity collars assumed as part of the Liberty Transaction.

Free Cash Flow

        Free cash flow increased in 2009 as compared to 2008 due to an increase in net cash provided by operating activities described above, and the decrease in capital expenditures and the decrease in cash paid for taxes described above. The decrease in capital expenditures resulted from lower costs for set-top receivers capitalized under the DIRECTV U.S. lease program and lower capital expenditures for satellite and broadcast facilities and equipment to support HD programming partially offset by increased capital expenditures in Latin America for subscriber leased equipment.

        During 2010, we expect continued free cash flow growth primarily as a result of the anticipated increase in operating profit before depreciation and amortization.

64

DIRECTV

Debt

        At December 31, 2009, we had $8,010 million in total outstanding borrowings, bearing a weighted average interest rate of 5.0%. Our outstanding borrowings primarily consist of notes payable, the Collar Loan and amounts borrowed under a senior secured credit facility of DIRECTV U.S. as more fully described in Note 9 of the Notes to the Consolidated Financial Statements in Item 8, Part II of this Annual Report, which we incorporate herein by reference.

        During the first quarter of 2010, we paid $1,537 million to repay the remaining principal balance of the Collar Loan and settle the related equity collars, and accordingly will report a gain of approximately $65 million in the first quarter of 2010 related to the Collar Loan.

        Our notes payable and senior secured credit facility mature as follows: $308 million in 2010, $108 million in 2011, $20 million in 2012, $1,887 million in 2013, $1,000 million in 2014 and $3,500 million thereafter. These amounts do not reflect potential prepayments that may be required under our senior secured credit facility, which could result from a computation that we are required to make at each year end under the credit agreement. We were not required to make a prepayment for the years ended December 31, 2009 and 2008.

        Covenants and Restrictions.    The senior secured credit facility requires DIRECTV U.S. to comply with certain financial covenants. The senior notes and the senior secured credit facility also include covenants that restrict DIRECTV U.S.' ability to, among other things, (i) incur additional indebtedness, (ii) incur liens, (iii) pay dividends or make certain other restricted payments, investments or acquisitions, (iv) enter into certain transactions with affiliates, (v) merge or consolidate with another entity, (vi) sell, assign, lease or otherwise dispose of all or substantially all of its assets, and (vii) make voluntary prepayments of certain debt, in each case subject to exceptions as provided in the credit agreement and senior notes indentures. DIRECTV U.S.' 4.750% and 5.875% senior notes are rated as investment grade and have fewer covenants and restrictions than our other senior notes. Should DIRECTV U.S. fail to comply with these covenants, all or a portion of its borrowings under the senior notes and senior secured credit facility could become immediately payable and its revolving credit facility could be terminated. At December 31, 2009, DIRECTV U.S. was in compliance with all such covenants and we expect to continue to be in compliance with all covenants in 2010.

Contingencies

        As discussed in Note 19 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report, Globo has the right to exchange Sky Brazil shares for cash or our common shares. If Globo exercises this right, we have the option to elect to pay the consideration in cash, shares of our common stock, or a combination of both.

        Venezuela Exchange Controls.    Through December 31, 2009 we utilized the official exchange rate of 2.15 bolivars fuerte per U.S. dollar to translate the financial statements of our Venezuelan subsidiary. This rate has been fixed despite significant inflation in Venezuela in recent periods. We are required to obtain Venezuelan government approval to exchange Venezuelan bolivars fuerte into U.S. dollars at the official rate, or alternatively, a legal parallel exchange process exists, however the rates implied by transactions in the parallel market are significantly higher than the official rate (recently 5 to 7 bolivars fuerte per U.S. dollar). The official approval process has been delayed in recent periods and our Venezuelan subsidiary has relied on the parallel exchange process to settle U.S. dollar obligations and to repatriate accumulated cash balances. As a result we recorded a $213 million charge during the year ended December 31, 2009 and a $29 million charge during the year ended December 31, 2008 in "General and administrative expense" in the Consolidated Statements of

65

DIRECTV

Operations in connection with the exchange of accumulated Venezuelan cash balances to U.S. dollars using the parallel exchange process.

        In January 2010, the Venezuelan government announced the creation of a dual exchange rate system, including an exchange rate of 4.3 bolivars fuerte per U.S. dollar for most of the activities of our Venezuelan operations. As a result of this devaluation, we estimate an approximate $6 million charge to net income in the first quarter of 2010 related to the adjustment of net bolivars fuerte denominated monetary assets to the new official exchange rate. We will also begin reporting the operating results of our Venezuelan subsidiary in the first quarter of 2010 using the devalued rate, which will result in a 50% reduction in revenues and local currency operating costs. As a result of our policy of repatriating excess cash balances using the parallel exchange rate beginning in 2009, we do not expect a significant reduction in operating profits from our Venezuelan operations in 2010 due to the devaluation of the official exchange rate as the effect of devaluation will be offset by lower charges for the repatriation of cash.

        We currently expect to continue to repatriate cash generated in Venezuela in excess of local operating requirements, and to the extent we are unable to obtain timely approval to exchange bolivars fuerte at the official rate, we may use the legal parallel exchange process and we expect to incur additional charges in the future. Using the official exchange rate as of December 31, 2009, our Venezuelan subsidiary had Venezuelan bolivar fuerte denominated assets of $15 million in excess of Venezuelan bolivar fuerte denominated liabilities, including cash of $33 million as of December 31, 2009.

        Other.    Several factors may affect our ability to fund our operations and commitments that we discuss in "Contractual Obligations", "Off-Balance Sheet Arrangements" and "Contingencies" below. In addition, our future cash flows may be reduced if we experience, among other things, significantly higher subscriber additions than planned, increased subscriber churn or upgrade and retention costs, higher than planned capital expenditures for satellites and broadcast equipment, satellite anomalies or signal theft or if we are required to make a prepayment on our term loans under DIRECTV U.S.' senior secured credit facility. Additionally, DIRECTV U.S.' ability to borrow under the senior secured credit facility is contingent upon DIRECTV U.S. meeting financial and other covenants associated with its facility as more fully described above.

CONTRACTUAL OBLIGATIONS

        The following table sets forth our contractual obligations as of December 31, 2009, including the future periods in which payments are expected. Additional details regarding these obligations are

66

DIRECTV

provided in the Notes to the Consolidated Financial Statements in Part II, Item 8 referenced in the table.

	Payments Due By Period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(Dollars in Millions)
Long-term debt obligations (Note 9) (a)	$	9,102	$	665	$	830	$	3,473	$	4,134
Purchase obligations (Note 19) (b)		9,696		1,805		3,705		2,745		1,441
Operating lease obligations (Note 19) (c)		402		65		118		74		145
Capital lease obligations (Note 11)		930		89		171		159		511
Other long-term liabilities reflected on the Consolidated Balance Sheets under GAAP (Note 19) (d)		140		91		49		—		—
Total (e)	$	20,270	$	2,715	$	4,873	$	6,451	$	6,231

(a)

Long-term debt obligations include interest calculated based on the rates in effect at December 31, 2009, however, the obligations do not reflect potential prepayments that may be required under DIRECTV U.S.' senior secured credit facility, if any, or permitted under its indentures.

(b)

Purchase obligations consist primarily of broadcast programming commitments, regional professional team rights agreements, service contract commitments and satellite launch contracts. Broadcast programming commitments include guaranteed minimum contractual commitments that are typically based on a flat fee or a minimum number of required subscribers subscribing to the related programming. Actual payments may exceed the minimum payment requirements if the actual number of subscribers subscribing to the related programming exceeds the minimum amounts. Service contract commitments include minimum commitments for the purchase of services that have been outsourced to third parties, such as billing services, telemetry, tracking and control services and broadcast center services. In most cases, actual payments, which are typically based on volume, usually exceed these minimum amounts.

(c)

Certain of the operating leases contain escalation clauses and renewal or purchase options, which we do not consider in the amounts disclosed.

(d)

Payments due by period for other long-term liabilities reflected on the Consolidated Balance Sheet under GAAP do not include payments that could be made related to our net unrecognized tax benefits liability, which amounted to $367 million as of December 31, 2009. The timing and amount of any future payments is not reasonably estimable, as such payments are dependent on the completion and resolution of examinations with tax authorities. We do not expect a significant payment related to these obligations within the next twelve months.

(e)

Excluded from these obligations are the $1,202 million Collar Loan and the related $400 million equity collars. During the first quarter of 2010, we paid the remaining principal balance of the loan and settled the equity collars.

OFF-BALANCE SHEET ARRANGEMENTS

        As of December 31, 2009, we were contingently liable under standby letters of credit and bonds in the aggregate amount of $35 million primarily related to insurance deductibles.

67

DIRECTV

CONTINGENCIES

        For a discussion of "Contingencies", see Note 19 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report, which we incorporate herein by reference.

CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

        For a discussion of "Certain Relationships and Related-Party Transactions," see Note 17 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report, which we incorporate herein by reference.

CRITICAL ACCOUNTING ESTIMATES

        The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates, judgments and assumptions that affect amounts reported. Management bases its estimates, judgments and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported for future periods may be affected by changes in those estimates. The following represents what we believe are the critical accounting policies that may involve a higher degree of estimation, judgment and complexity. For a summary of our significant accounting policies, including those discussed below, see Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report.

        Multi-Year Programming Contracts for Live Sporting Events.    We charge the cost of multi-year programming contracts for live sporting events with minimum guarantee payments, such as DIRECTV U.S.' agreement with the NFL, based on the contractual rates in the contract per season, unless the contractual rates are inconsistent with the relative value of the programming from season to season, in which case we record the expense based on the ratio of each period's sports programming package revenues to the estimated total package revenues to be earned over the contract period. Management evaluates estimated total programming package revenues at least annually. Estimates of forecasted revenues rely on assumptions regarding the number of subscribers to a given sporting events package and the estimated package price throughout the contract. While we base our estimates on past experience and other relevant factors, actual results could differ from our estimates. If actual results were to significantly vary from forecasted amounts, the profit recorded on such contracts in a future period could vary from current rates and the resulting change in profits recorded could be material to our consolidated results of operations.

        Income Taxes.    We must make certain estimates and judgments in determining provisions for income taxes. These estimates and judgments occur in the calculation of tax credits, tax benefits and deductions, and in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

        We assess the recoverability of deferred tax assets at each reporting date and where applicable, record a valuation allowance to reduce the total deferred tax asset to an amount that will, more-likely-than-not, be realized in the future. Our assessment includes an analysis of whether deferred tax assets will be realized in the ordinary course of operations based on the available positive and negative evidence, including the scheduling of deferred tax liabilities and forecasted income from operating activities. The underlying assumptions we use in forecasting future taxable income require significant judgment. In the event that actual income from operating activities differs from forecasted amounts, or if we change our estimates of forecasted income from operating activities, we could record additional charges or reduce allowances in order to adjust the carrying value of deferred tax assets to their realizable amount. Such adjustments could be material to our consolidated financial statements.

68

DIRECTV

        In addition, the recognition of a tax benefit for tax positions involves dealing with uncertainties in the application of complex tax regulations. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. We provide for taxes for uncertain tax positions where assessments have not been received. We believe such tax reserves are adequate in relation to the potential for additional assessments. Once established, we adjust these amounts only when more information is available or when an event occurs necessitating a change to the reserves. Future events such as changes in the facts or law, judicial decisions regarding the application of existing law or a favorable audit outcome will result in changes to the amounts provided.

        Contingent Matters.    Determining when, or if, an accrual should be recorded for a contingent matter, including but not limited to legal and tax issues, and the amount of such accrual, if any, requires a significant amount of management judgment and estimation. We develop our judgments and estimates in consultation with outside counsel based on an analysis of potential outcomes. Due to the uncertainty of determining the likelihood of a future event occurring and the potential financial statement impact of such an event, it is possible that upon further development or resolution of a contingent matter, we could record a charge in a future period that would be material to our consolidated financial statements.

        Depreciable Lives of Leased Set-Top Receivers.    We currently lease most set-top receivers provided to new and existing subscribers and therefore capitalize the cost of those set-top receivers. We depreciate capitalized set-top receivers at DIRECTV U.S. over a three year estimated useful life, which is based on, among other things, management's judgment of the 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 depreciation expense. Based on the book value of the DIRECTV U.S. set-top receivers capitalized as of December 31, 2009, if we extended the depreciable life of the set-top receivers by one half of a year, it would result in an approximately $200 million reduction in annual depreciation expense.

        Valuation of Long-Lived Assets.    We evaluate the carrying value of long-lived assets to be held and used, other than goodwill and intangible assets with indefinite lives, when events and circumstances warrant such a review. We consider the carrying value of a long-lived asset impaired when the anticipated undiscounted future cash flow from such asset is separately identifiable and is less than its carrying value. In that event, we recognize a loss based on the amount by which the carrying value exceeds the fair value of the long-lived asset. We determine fair value primarily using the estimated future cash flows associated with the asset under review, discounted at a rate commensurate with the risk involved, and other valuation techniques. We determine losses on long-lived assets to be disposed of in a similar manner, except that we reduce the fair value for the cost of disposal. Changes in estimates of future cash flows could result in a write-down of the asset in a future period.

        Valuation of Goodwill and Intangible Assets with Indefinite Lives.    We evaluate the carrying value of goodwill and intangible assets with indefinite lives annually in the fourth quarter or more frequently when events and circumstances change that would more likely than not result in an impairment loss. We completed our annual impairment testing during the fourth quarter of 2009, and determined that there was no impairment of goodwill or intangible assets with indefinite lives. As of December 31, 2009, the fair value of each reporting unit and our intangible assets with indefinite lives significantly exceed their carrying values. See Note 6 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report, which we incorporate herein by reference.

        The goodwill evaluation requires the estimation of the fair value of reporting units where we record goodwill. We determine fair values primarily using estimated cash flows discounted at a rate

69

DIRECTV

commensurate with the risk involved, when appropriate. Estimation of future cash flows requires significant judgment about future operating results, and can vary significantly from one evaluation to the next. Risk adjusted discount rates are not fixed and are subject to change over time. As a result, changes in estimated future cash flows and/or changes in discount rates could result in a write-down of goodwill or intangible assets with indefinite lives in a future period which could be material to our consolidated financial statements.

ACCOUNTING CHANGES AND NEW ACCOUNTING PRONOUNCEMENTS

        For a discussion of accounting changes and new accounting pronouncements see Note 2 of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report, which we incorporate herein by reference.

SECURITY RATINGS

        Debt ratings by the various rating agencies reflect each agency's opinion of the ability of issuers to repay debt obligations as they come due and expected loss given a default. Ratings in the Baa range for Moody's Investors Service, and the BBB range for Standard & Poor's Ratings Services, or S&P, and the BBB range for Fitch Ratings, generally indicate adequate current protection of interest payments and principal security, with certain protective elements lacking. Ratings in the Ba range for Moody's and the BB range for S&P and Fitch, generally indicate moderate protection of interest and principal payments, potentially outweighed by exposure to uncertainties or adverse conditions. In general, lower ratings result in higher borrowing costs. A security rating is not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organization.

        Currently, DIRECTV has the following security rating:

	Corporate	Outlook
Standard & Poor's	BBB-	Stable

        Currently, DIRECTV U.S. has the following security ratings:

	Senior Secured	Senior Unsecured	Corporate	Outlook
Standard & Poor's	BBB-	BBB-	BBB-	Stable
Moody's	Baa2	Ba2	Ba1	Stable
Fitch	BBB	BBB-	BBB-	Stable

***

70

DIRECTV

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The following discussion and the estimated amounts generated from the sensitivity analyses referred to below include forward-looking statements of market risk which assume for analytical purposes that certain adverse market conditions may occur. Actual future market conditions may differ materially from such assumptions and the amounts noted below are the result of analyses used for the purpose of assessing possible risks and the mitigation thereof. Accordingly, you should not consider the forward-looking statements as our projections of future events or losses.

General

        Our cash flows and earnings are subject to fluctuations resulting from changes in foreign currency exchange rates, interest rates and changes in the market value of our equity investments. We manage our exposure to these market risks through internally established policies and procedures and, when deemed appropriate, through the use of derivative financial instruments. We enter into derivative instruments only to the extent considered necessary to meet our risk management objectives, and do not enter into derivative contracts for speculative purposes.

Foreign Currency Risk

        We generally conduct our business in U.S. dollars with some business conducted in a variety of foreign currencies and therefore we are exposed to fluctuations in foreign currency exchange rates. Our objective in managing our exposure to foreign currency changes is to reduce earnings and cash flow volatility associated with foreign exchange rate fluctuations. Accordingly, we may enter into foreign exchange contracts to mitigate risks associated with foreign currency denominated assets, liabilities, commitments and anticipated foreign currency transactions. The gains and losses on derivative foreign exchange contracts offset changes in value of the related exposures. As of December 31, 2009, we had no significant foreign currency exchange contracts outstanding. The impact of a hypothetical 10% adverse change in exchange rates on our net assets would be a loss of $109 million, net of taxes, at December 31, 2009, a significant portion of which would be recorded in "Foreign currency translation activity during the period" in our Consolidated Statement of Changes in Stockholders' Equity.

Interest Rate Risk

        We are subject to fluctuating interest rates, which may adversely impact our consolidated results of operations and cash flows. We had outstanding debt of $8,010 million at December 31, 2009, which consisted of DIRECTV U.S.' fixed rate borrowings of $4,490 million, collar loan of $1,202 million and variable rate borrowings of $2,316 million. As of December 31, 2009, a hypothetical one percentage point increase in interest rates related to our outstanding variable rate debt would have increased our annual interest expense by approximately $23 million.

***

71

DIRECTV

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of DIRECTV
El Segundo, California

        We have audited the accompanying consolidated balance sheets of DIRECTV (formerly, The DIRECTV Group, Inc.) (the "Company") as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes in stockholders' equity, comprehensive income, and cash flows for each of the three years in the period ended December 31, 2009. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of DIRECTV at December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

        As discussed in Note 2 of the Notes to the Consolidated Financial Statements, effective January 1, 2009, the Company adopted new accounting standards for the accounting and reporting of noncontrolling interests in subsidiaries, also known as minority interests and effective January 1, 2009, the Company adopted new accounting standards regarding the financial statement classification and measurement of equity securities that are subject to mandatory redemption requirements or whose redemption is out of the control of the issuer.

        We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2010 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Los Angeles, California
February 25, 2010

72

DIRECTV

CONSOLIDATED STATEMENTS OF OPERATIONS

					Years Ended December 31,
					2009			2008			2007
					(Dollars in Millions, Except Per Share Amounts)
Revenues					$	21,565		$	19,693		$	17,246
Operating costs and expenses
		Costs of revenues, exclusive of depreciation and amortization expense
			Broadcast programming and other			9,064			8,298			7,346
			Subscriber service expenses			1,525			1,290			1,240
			Broadcast operations expenses			341			360			323
		Selling, general and administrative expenses, exclusive of depreciation and amortization expense
			Subscriber acquisition costs			2,773			2,429			2,096
			Upgrade and retention costs			1,092			1,058			976
			General and administrative expenses			1,457			1,243			1,095
Depreciation and amortization expense						2,640			2,320			1,684
				Total operating costs and expenses		18,892			16,998			14,760
Operating profit						2,673			2,695			2,486
Interest income						41			81			111
Interest expense						(423	)		(360	)		(235	)
Liberty transaction and related charges						(491	)		—			—
Other, net						34			55			26
Income from continuing operations before income taxes						1,834			2,471			2,388
Income tax expense						(827	)		(864	)		(943	)
Income from continuing operations						1,007			1,607			1,445
Income from discontinued operations, net of taxes						—			6			17
Net income						1,007			1,613			1,462
Less: Net income attributable to noncontrolling interest						(65	)		(92	)		(11	)
Net income attributable to DIRECTV					$	942		$	1,521		$	1,451
Amounts attributable to DIRECTV common shareholders:
Income from continuing operations, net of taxes					$	942		$	1,515		$	1,434
Income from discontinued operations, net of taxes						—			6			17
Net income					$	942		$	1,521		$	1,451
Basic earnings attributable to DIRECTV per common share:
Income from continuing operations					$	0.96		$	1.36		$	1.20
Income from discontinued operations, net of taxes						—			0.01			0.01
Net income					$	0.96		$	1.37		$	1.21
Diluted earnings attributable to DIRECTV per common share:
Income from continuing operations					$	0.95		$	1.36		$	1.20
Income from discontinued operations, net of taxes						—			0.01			0.01
Net income					$	0.95		$	1.37		$	1.21
Weighted average number of common shares outstanding (in millions):
	Basic					985			1,110			1,195
	Diluted					992			1,114			1,202

The accompanying notes are an integral part of these Consolidated Financial Statements.

73

DIRECTV

CONSOLIDATED BALANCE SHEETS

			December 31,
			2009			2008
			(Dollars in Millions, Except Share Data)
ASSETS
Current assets
	Cash and cash equivalents		$	2,605		$	2,005
	Accounts receivable, net			1,625			1,423
	Inventories			212			192
	Deferred income taxes			217			68
	Prepaid expenses and other			396			356
		Total current assets		5,055			4,044
Satellites, net				2,338			2,476
Property and equipment, net				4,138			4,171
Goodwill				4,164			3,753
Intangible assets, net				1,131			1,172
Investments and other assets				1,434			923
		Total assets	$	18,260		$	16,539
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable and accrued liabilities		$	3,757		$	3,115
	Unearned subscriber revenues and deferred credits			434			362
	Current portion of long-term debt			1,510			108
		Total current liabilities		5,701			3,585
Long-term debt				6,500			5,725
Deferred income taxes				1,070			524
Other liabilities and deferred credits				1,678			1,749
Commitments and contingencies
Redeemable noncontrolling interest				400			325
Stockholders' equity
	Common stock and additional paid-in capital—$0.01 par value, 3,500,000,000 shares authorized, 911,377,919 shares issued and outstanding of DIRECTV Class A common stock at December 31, 2009, $0.01 par value, 30,000,000 shares authorized, 21,809,863 shares issued and outstanding of DIRECTV Class B common stock at December 31, 2009 and $0.01 par value, 3,000,000,000 shares authorized, 1,024,182,043 shares issued and outstanding of The DIRECTV Group, Inc. common stock at December 31, 2008			6,689			8,318
	Accumulated deficit			(3,722	)		(3,559	)
	Accumulated other comprehensive loss			(56	)		(128	)
		Total stockholders' equity		2,911			4,631
		Total liabilities and stockholders' equity	$	18,260		$	16,539

The accompanying notes are an integral part of these Consolidated Financial Statements.

74

DIRECTV

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

	The DIRECTV Group, Inc. Common Shares			DIRECTV Class A Common Shares		DIRECTV Class B Common Shares		Common Stock and Additional Paid-In Capital			Accu- mulated Deficit			Accu- mulated Other Compre- hensive Loss, net of taxes			Non- controlling Interest			Total Stock- holders' Equity			Redeem- able Non- controlling Interest			Net Income
	(Dollars in Millions, Except Share Data)
Balance at January 1, 2007		1,226,490,193						$	9,566		$	(3,107	)	$	(48	)	$	62		$	6,473		$	270
Net Income												1,451									1,451			11		$	1,462
Stock repurchased and retired		(86,173,710	)						(692	)		(1,333	)								(2,025	)
Stock options exercised and restricted stock units vested and distributed		7,951,720							118												118
Share-based compensation expense									49												49
Tax benefit from stock option exercises									18												18
Other									(11	)											(11	)
Purchase of Darlene Investments LLC's interest in DIRECTV Latin America																		(62	)		(62	)
Adjustment to initially record cumulative effect of adopting accounting standard for uncertainty in income taxes, net of tax												(5	)								(5	)
Adjustment to record adoption of accounting standard to change measurement date provisions of defined benefit pension and other postretirement plans, net of tax												(1	)								(1	)
Adjustment to the fair value of redeemable noncontrolling interest									(19	)											(19	)		19
Amortization of amounts resulting from changes in defined benefit plan experience and actuarial assumptions, net of tax															16						16
Foreign currency translation activity during the period															(1	)					(1	)
Unrealized gains on securities, net of tax															12						12
Balance at December 31, 2007		1,148,268,203			—		—		9,029			(2,995	)		(21	)		—			6,013			300
Net Income												1,521									1,521			92		$	1,613
Stock repurchased and retired		(131,476,804	)						(1,089	)		(2,085	)								(3,174	)
Stock options exercised and restricted stock units vested and distributed		7,390,644							105												105
Share-based compensation expense									51												51
Tax benefit from stock option exercises									15												15
Capital contribution									160												160
Adjustment to the fair value of redeemable noncontrolling interest									67												67			(67	)
Other									(20	)											(20	)
Amortization of amounts resulting from changes in defined benefit plan experience and actuarial assumptions, net of tax															(87	)					(87	)
Unrealized losses on securities, net of tax															(20	)					(20	)
Balance at December 31, 2008		1,024,182,043			—		—		8,318			(3,559	)		(128	)		—			4,631			325
Net Income												942									942			65		$	1,007
Stock repurchased and retired		(71,242,534	)						(591	)		(1,105	)								(1,696	)
Stock options exercised and restricted stock units vested and distributed		4,191,329			1,898,770				35												35
Liberty Transaction		(957,130,838	)		909,479,149		21,809,863		(1,145	)											(1,145	)
Share-based compensation expense									55												55
Tax benefit from stock option exercises									29												29
Adjustment to the fair value of redeemable noncontrolling interest									(16	)											(16	)		16
Other									4												4
Amortization of amounts resulting from changes in defined benefit plan experience and actuarial assumptions, net of tax															(2	)					(2	)
Cumulative effect of change in functional currency at Sky Brazil															(112	)					(112	)
Foreign currency translation activity during the period															179						179			(6	)
Unrealized gains on securities, net of tax															7						7
Balance at December 31, 2009		—			911,377,919		21,809,863	$	6,689		$	(3,722	)	$	(56	)	$	—		$	2,911		$	400

The accompanying notes are an integral part of these Consolidated Financial Statements.

75

DIRECTV

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

			Years Ended December 31,
			2009			2008			2007
			(Dollars in Millions)
Net income			$	1,007		$	1,613		$	1,462
Other comprehensive income (loss):
	Amortization of amounts resulting from changes in defined benefit plan experience and actuarial assumptions, net of tax			(2	)		(87	)		16
	Foreign currency translation adjustments
		Cumulative effect of change in functional currency at Sky Brazil		(112	)		—			—
		Foreign currency translation activity during the period		179			—			(1	)
	Unrealized holding (losses) gains on securities, net of taxes			7			(20	)		12
Comprehensive income				1,079			1,506			1,489
	Comprehensive income attributable to noncontrolling interests			(59	)		(92	)		(11	)
Comprehensive income attributable to DIRECTV.			$	1,020		$	1,414		$	1,478

The accompanying notes are an integral part of these Consolidated Financial Statements.

76

DIRECTV

CONSOLIDATED STATEMENTS OF CASH FLOWS

					Years Ended December 31,
					2009			2008			2007
					(Dollars in Millions)
Cash Flows From Operating Activities
	Net income				$	1,007		$	1,613		$	1,462
	Income from discontinued operations, net of taxes					—			(6	)		(17	)
	Income from continuing operations					1,007			1,607			1,445
	Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
		Depreciation and amortization				2,640			2,320			1,684
		Amortization of deferred revenues and deferred credits				(48	)		(104	)		(98	)
		Dividends received				94			35			—
		Share-based compensation expense				55			51			49
		Net loss from impairment of investments				45			—			—
		Net foreign currency transaction gain				(62	)		—			—
		Liberty transaction and related charges				491			—			—
		Deferred income taxes				441			107			439
		Other				(3	)		(24	)		(15	)
		Change in operating assets and liabilities:
			Accounts and notes receivable			(141	)		95			(166	)
			Inventories			(12	)		18			(45	)
			Prepaid expenses and other			(5	)		(96	)		46
			Accounts payable and accrued liabilities			(215	)		(23	)		255
			Unearned subscriber revenues and deferred credits			55			8			72
			Other, net			89			(84	)		(21	)
				Net cash provided by operating activities		4,431			3,910			3,645
Cash Flows From Investing Activities
	Cash paid for property and equipment					(2,012	)		(2,101	)		(2,523	)
	Cash paid for satellites					(59	)		(128	)		(169	)
	Cash paid for Liberty transaction, net of cash acquired					(97	)		—			—
	Investment in companies, net of cash acquired					(37	)		(204	)		(348	)
	Purchase of short-term investments					—			—			(588	)
	Sale of short-term investments					—			—			748
	Other, net					11			45			58
				Net cash used in investing activities		(2,194	)		(2,388	)		(2,822	)
Cash Flows From Financing Activities
	Cash proceeds from debt issuance					1,990			2,490			—
	Debt issuance costs					(14	)		(19	)		—
	Repayment of long-term debt					(1,018	)		(53	)		(220	)
	Repayment of collar loan					(751	)		—			—
	Net increase in short-term borrowings					—			—			2
	Repayment of other long-term obligations					(116	)		(117	)		(121	)
	Common shares repurchased and retired					(1,696	)		(3,174	)		(2,025	)
	Capital contribution					—			160			—
	Stock options exercised					35			105			118
	Taxes paid in lieu of shares issued for share-based compensation					(72	)		—			—
	Excess tax benefit from share-based compensation					5			8			7
				Net cash used in financing activities		(1,637	)		(600	)		(2,239	)
Net increase (decrease) in cash and cash equivalents						600			922			(1,416	)
Cash and cash equivalents at beginning of the year						2,005			1,083			2,499
Cash and cash equivalents at end of the year					$	2,605		$	2,005		$	1,083
Supplemental Cash Flow Information
	Cash paid for interest				$	412		$	334		$	230
	Cash paid for income taxes					484			706			408

The accompanying notes are an integral part of these Consolidated Financial Statements.

77

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Description of Business

        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 America. We operate two direct-to-home, or DTH, operating segments: DIRECTV U.S. and DIRECTV Latin America, which are differentiated by their geographic location and are engaged in acquiring, promoting, selling and/or distributing digital entertainment programming via satellite to residential and commercial subscribers. Beginning November 19, 2009 we also operate three regional sports networks and own a 65% interest in Game Show Network LLC, or GSN, a basic television network dedicated to game-related programming and Internet interactive game playing. We account for our investment in GSN using the equity method of accounting.

•

DIRECTV U.S.  DIRECTV Holdings LLC and its subsidiaries, which we refer to as DIRECTV U.S., is the largest provider of DTH digital television services and the second largest provider in the multi-channel video programming distribution, or MVPD, industry in the United States.

•

DIRECTV Latin America.  DIRECTV Latin America, or DTVLA, is a leading provider of DTH digital television services throughout Latin America. DTVLA is comprised of: PanAmericana, which provides services in Venezuela, Argentina, Chile, Colombia, Puerto Rico and certain other countries in the region through our wholly-owned subsidiary, DIRECTV Latin America, LLC, or DLA LLC; our 74% owned subsidiary Sky Brasil Servicos Ltda., which we refer to as Sky Brazil; and our 41% equity method investment in Innova, S. de R.L. de C.V., or Sky Mexico.

•

DIRECTV Sports Networks.  DIRECTV Sports Networks LLC and its subsidiaries is comprised primarily of three regional sports television networks based in Seattle, Washington, Denver, Colorado and Pittsburgh, Pennsylvania, currently known as FSN Rocky Mountain, FSN Northwest and FSN Pittsburgh, respectively. The operating results of DSN beginning November 19, 2009 are reported as part of the "Sports Networks, Eliminations and Other" operating segment.

Liberty Transaction

        On November 19, 2009, The DIRECTV Group, Inc., or DIRECTV Group, and Liberty Media Corporation, which we refer to as Liberty or Liberty Media, obtained shareholder approval of and closed a series of related transactions which we refer to collectively as the Liberty Transaction. The Liberty Transaction included the split-off of certain of the assets of the Liberty Entertainment group into Liberty Entertainment, Inc., or LEI, which was then split-off from Liberty. Following the split-off, DIRECTV Group and LEI merged with subsidiaries of DIRECTV. As a result of the Liberty Transaction, DIRECTV Group, which is comprised of the DIRECTV U.S. and DIRECTV Latin America businesses, and LEI, which held Liberty's 57% interest in DIRECTV Group, a 100% interest in three regional sports networks, a 65% interest in GSN, approximately $120 million in cash and cash equivalents and approximately $2.1 billion of indebtedness and a related series of equity collars became wholly-owned subsidiaries of DIRECTV.

        DIRECTV Group has been treated as the acquiring corporation in the Liberty Transaction for accounting and financial reporting purposes and accordingly, the historical financial statements of DIRECTV Group are reported as the historical financial statements of DIRECTV in the accompanying Consolidated Financial Statements.

        As a result of the Liberty Transaction, Liberty's 57% ownership interest in DIRECTV Group has been effectively distributed to certain of Liberty's shareholders. DIRECTV has two classes of common stock outstanding, Class A common stock and Class B common stock. The DIRECTV Class A common

78

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

stock is entitled to one vote per share and the Class B common stock is entitled to 15 votes per share. The DIRECTV Class A common stock trades on the NASDAQ Global Select Market, or NASDAQ, under the ticker "DTV". DIRECTV Group common stock has been delisted and no longer trades on the NASDAQ. The DIRECTV Class B common stock will not be listed on any stock exchange or automated dealer quotation system. Dr. John Malone and his family, or the Malones, own all outstanding Class B common stock, and have agreed to limit their Class B voting rights to 24% of the total voting power of DIRECTV's common stock. Including their Class A and Class B ownership interests, the Malones hold an approximate 2.7% economic interest and an approximate 24.3% voting interest in DIRECTV.

        See Note 3 for additional information regarding these transactions.

Note 2: Basis of Presentation and Summary of Significant Accounting Policies

Principles of Consolidation

        We present our accompanying financial statements on a consolidated basis and include our accounts and those of our domestic and foreign subsidiaries that we control through equity ownership or for which we are deemed to be the primary beneficiary, after elimination of intercompany accounts and transactions. We allocate earnings and losses to noncontrolling interests only to the extent of a noncontrolling investor's investment in a subsidiary.

Use of Estimates in the Preparation of the Consolidated Financial Statements

        We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, which requires us to make estimates and assumptions that affect amounts reported herein. We base our estimates and assumptions on historical experience and on various other factors that we believe to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, our actual results reported in future periods may be affected by changes in those estimates.

Revenue Recognition

        We recognize subscription and pay-per-view revenues when programming is broadcast to subscribers. We recognize subscriber fees for multiple set-top receivers, our published programming guide, warranty services and equipment rental as revenue, as earned. We recognize advertising revenues when the related services are performed. We defer programming payments received from subscribers in advance of the broadcast as "Unearned subscriber revenues and deferred credits" in the Consolidated Balance Sheets until earned. We recognize revenues to be received under contractual commitments on a straight line basis over the minimum contractual period.

Broadcast Programming and Other

        We recognize the costs of television programming distribution rights when we distribute the related programming. We recognize the costs of television programming rights to distribute live sporting events for a season or tournament to expense using the straight-line method over the course of the season or tournament. However, we charge the cost of multi-year programming contracts for live sporting events with minimum guarantee payments, such as DIRECTV U.S.' agreement with the NFL, based on the contractual rates in the contract per season, unless the contractual rates are inconsistent with the relative value of the programming from season to season, in which case we record the expense based on the ratio of each period's sports programming package revenues to the estimated total package

79

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

revenues to be earned over the contract period. We evaluate estimated total contract revenues at least annually.

        We defer advance payments in the form of cash and equity instruments from programming content providers for carriage of their signal and recognize them as a reduction of "Broadcast programming and other" in the Consolidated Statements of Operations on a straight-line basis over the related contract term. We record equity instruments at fair value based on quoted market prices or values determined by management.

Subscriber Acquisition Costs

        Subscriber acquisition costs consist of costs we incur to acquire new subscribers. We include the cost of set-top receivers and other equipment, commissions we pay to national retailers, independent satellite television retailers, dealers, telephone communication companies and the cost of installation, advertising, marketing and customer call center expenses associated with the acquisition of new subscribers in subscriber acquisition costs. We expense these costs as incurred, or when subscribers activate the DIRECTV® service, as appropriate, except for the cost of set-top receivers leased to new subscribers which we capitalize in "Property and equipment, net" in the Consolidated Balance Sheets. Although paid in advance, the retailer or dealer earns substantially all commissions paid for customer acquisitions over 12 months from the date of subscriber activation. Should the subscriber cancel our service during the 12 month service period, we are reimbursed for the unearned portion of the commission by the retailer or dealer and record a decrease to subscriber acquisition costs. We include the amount of our set-top receivers capitalized each period for subscriber acquisition activities in the Consolidated Statements of Cash Flows under the caption "Cash paid for property and equipment." See Note 5 for additional information.

Upgrade and Retention Costs

        Upgrade and retention costs consist primarily of costs we incur for loyalty programs offered to existing subscribers. The costs for loyalty programs include the costs of installing or providing hardware under our movers program (for subscribers relocating to a new residence), multiple set-top receiver offers, digital video recorder, or DVR, high-definition, or HD, local channel upgrade programs and other similar initiatives, and third party commissions we incur for the sale of additional set-top receivers to existing subscribers. We expense these costs as incurred, except for the cost of set-top receivers leased to existing subscribers which we capitalize in "Property and equipment, net" in the Consolidated Balance Sheets. We include the amount of our set-top receivers capitalized each period for upgrade and retention activities in the Consolidated Statements of Cash Flows under the caption "Cash paid for property and equipment." See Note 5 for additional information.

Cash and Cash Equivalents

        Cash and cash equivalents consist of highly liquid investments we purchase with original maturities of three months or less.

Inventories

        We state inventories at the lower of average cost or market. Inventories consist of finished goods for DIRECTV System equipment and DIRECTV System access cards.

80

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

Property and Equipment, Satellites and Depreciation

        We carry property and equipment, and satellites at cost, net of accumulated depreciation. The amounts we capitalize for satellites currently being constructed and those that have been successfully launched include the costs of construction, launch, launch insurance, incentive obligations and related capitalized interest. We generally compute depreciation using the straight-line method over the estimated useful lives of the assets. We amortize leasehold improvements over the lesser of the life of the asset or term of the lease.

Goodwill and Intangible Assets

        Goodwill and intangible assets with indefinite lives are carried at historical cost and are subject to write-down, as needed, based upon an impairment analysis that we must perform at least annually, or sooner if an event occurs or circumstances change that would more likely than not result in an impairment loss. We perform our annual impairment analysis in the fourth quarter of each year. If an impairment loss results from the annual impairment test, we would record the loss as a pre-tax charge to operating income.

        We amortize other intangible assets using the straight-line method over their estimated useful lives, which range from 5 to 20 years.

Valuation of Long-Lived Assets

        We evaluate the carrying value of long-lived assets to be held and used, other than goodwill and intangible assets with indefinite lives, when events and circumstances warrant such a review. We consider the carrying value of a long-lived asset impaired when the anticipated undiscounted future cash flow from such asset is separately identifiable and is less than its carrying value. In that event, we would recognize a loss based on the amount by which the carrying value exceeds the fair value of the long-lived asset. We determine fair value primarily using estimated future cash flows associated with the asset under review, discounted at a rate commensurate with the risk involved, or other valuation techniques. We determine losses on long-lived assets to be disposed of in a similar manner, except that we reduce the fair value for the cost of disposal.

Foreign Currency

        The U.S. dollar is the functional currency for most of our foreign operations. We recognize gains and losses resulting from remeasurement of these operations' foreign currency denominated assets, liabilities and transactions into the U.S. dollar in the Consolidated Statements of Operations.

        We also have foreign operations where the local currency is their functional currency. Accordingly, these foreign entities translate assets and liabilities from their local currencies to U.S. dollars using year end exchange rates while income and expense accounts are translated at the average rates in effect during the year. We record the resulting translation adjustment as part of accumulated other comprehensive income (loss), which we refer to as OCI, a separate component of stockholders' equity.

Investments and Financial Instruments

        We maintain investments in equity securities of unaffiliated companies. We carry non-marketable equity securities at cost. We consider marketable equity securities available-for-sale and they are carried at current fair value based on quoted market prices with unrealized gains or losses (excluding other-than-temporary losses), net of taxes, reported as part of OCI. We continually review our investments to determine whether a decline in fair value below the cost basis is

81

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

"other-than-temporary." We consider, among other factors: the magnitude and duration of the decline; the financial health and business outlook of the investee, including industry and sector performance, changes in technology, and operational and financing cash flow factors; and our intent and ability to hold the investment. If we judge the decline in fair value to be other-than-temporary, we write-down the cost basis of the security to fair value and recognize the amount in the Consolidated Statements of Operations as part of "Other, net" and record it as a reclassification adjustment from OCI.

        We account for investments in which we own at least 20% of the voting securities or have significant influence under the equity method of accounting. We record equity method investments at cost and adjust for the appropriate share of the net earnings or losses of the investee. We record investee losses up to the amount of the investment plus advances and loans made to the investee, and financial guarantees made on behalf of the investee.

        The carrying value of cash and cash equivalents, accounts receivable, investments and other assets, accounts payable, and amounts included in accrued liabilities and other meeting the definition of a financial instrument approximated their fair values at December 31, 2009 and 2008.

Debt Issuance Costs

        We defer costs we incur to issue debt and amortize these costs to interest expense using the straight-line method over the term of the respective obligation.

Share-Based Payment

        We grant restricted stock units and common stock options to our employees and directors.

        We record compensation expense equal to the fair value of stock-based awards at the date approved on a straight-line basis over the requisite service period of up to three years, reduced for estimated forfeitures and adjusted for anticipated payout percentages related to the achievement of performance targets.

Income Taxes

        We determine deferred tax assets and liabilities based on the difference between the financial statement and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which we expect the differences to reverse. We must make certain estimates and judgments in determining income tax provisions, assessing the likelihood of recovering our deferred tax assets, and evaluating tax positions.

        We recognize a benefit in "Income tax expense" in the Consolidated Statements of Operations for uncertain tax positions that are more-likely-than-not to be sustained upon examination, measured at the largest amount that has a greater than 50% likelihood of being realized upon settlement. Unrecognized tax benefits represent tax benefits taken or expected to be taken in income tax returns, for which the benefit has not yet been recognized in "Income tax expense" in the Consolidated Statements of Operations due to the uncertainty of whether such benefits will be ultimately realized. We recognize interest and penalties accrued related to unrecognized tax benefits in "Income tax expense" in the Consolidated Statements of Operations. Unrecognized tax benefits are recorded in "Income tax expense" in the Consolidated Statement of Operations at such time that the benefit is effectively settled.

82

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

Advertising Costs

        We expense advertising costs primarily in "Subscriber acquisition costs" in the Consolidated Statements of Operations as incurred. Advertising expenses, net of payments received from programming content providers for marketing support, were $317 million in 2009, $301 million in 2008, and $261 million in 2007.

Market Concentrations and Credit Risk

        We sell programming services and extend credit, in amounts generally not exceeding $200 each, to a large number of individual residential subscribers throughout the United States and most of Latin America. As applicable, we maintain allowances for anticipated losses.

Accounting Changes

        Noncontrolling interests.    On January 1, 2009 we adopted new accounting standards for the accounting and reporting of noncontrolling interests in subsidiaries, also known as minority interests, in consolidated financial statements. The new standards also provide guidance on accounting for changes in the parent's ownership interest in a subsidiary and establishes standards of accounting for the deconsolidation of a subsidiary due to the loss of control. Reporting entities must now present certain noncontrolling interests as a component of equity and present net income and consolidated comprehensive income attributable to the parent and the noncontrolling interest separately in the consolidated financial statements. These new standards are required to be applied prospectively, except for the presentation and disclosure requirements, which must be applied retrospectively for all periods presented. As a result of our adoption of these standards, "Net income" in the Consolidated Statements of Operations now includes net income attributable to noncontrolling interest as compared to the previous presentation, where net income attributable to the noncontrolling interest was deducted in the determination of net income. Additionally, the Consolidated Statements of Cash Flows are now presented using net income as calculated pursuant to the new accounting requirements.

        On January 1, 2009 we adopted the revisions made by the SEC to accounting standards regarding the financial statement classification and measurement of equity securities that are subject to mandatory redemption requirements or whose redemption is outside the control of the issuer. The revisions to the accounting guidance require that redeemable noncontrolling interests, such as Globo Comunicacoes e Participacoes S.A.'s, or Globo's, redeemable noncontrolling interest in Sky Brazil described in Note 19 of the Notes to the Consolidated Financial Statements that are redeemable at the option of the holder be recorded outside of permanent equity at fair value, and the redeemable noncontrolling interests be adjusted to their fair value at each balance sheet date. Adjustments to the carrying amount of a redeemable noncontrolling interest are recorded to retained earnings (or additional paid-in-capital in the absence of retained earnings). As a result of the adoption of this accounting requirement, we have reported Globo's redeemable noncontrolling interest in Sky Brazil in "Redeemable noncontrolling interest" at fair value in the Consolidated Balance for each period presented. See Note 19 for additional information.

83

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        The following tables present the changes to previously reported amounts in our Consolidated Balance Sheets as a result of the adoption of the revised guidance:

December 31, 2008	As Originally Reported		As Adjusted		Effect of Change
	(Dollars in Millions)
Redeemable noncontrolling interest	$	103	$	325	$	222
Common stock and additional paid in capital		8,540		8,318		(222	)
Total stockholders' equity		4,853		4,631		(222	)

December 31, 2007	As Originally Reported		As Adjusted		Effect of Change
	(Dollars in Millions)
Redeemable noncontrolling interest	$	11	$	300	$	289
Common stock and additional paid in capital		9,318		9,029		(289	)
Total stockholders' equity		6,302		6,013		(289	)

December 31, 2006	As Originally Reported		As Adjusted		Effect of Change
	(Dollars in Millions)
Redeemable noncontrolling interest	$	—	$	270	$	270
Common stock and additional paid in capital		9,836		9,566		(270	)
Total stockholders' equity		6,681		6,473		(208	)

        Business Combinations.    On January 1, 2009 we adopted a new business combination accounting standard that requires the acquiring entity in a business combination to record 100% of all assets and liabilities acquired, including goodwill and any non-controlling interest, generally at their fair values for all business combinations, whether partial, full or step acquisitions. Under the new standard, certain contingent assets and liabilities, as well as contingent consideration, are also required to be recognized at fair value on the date of acquisition and acquisition-related transaction and restructuring costs will be expensed. Additionally, disclosures are required describing the nature and financial effect of the business combination and the standard also changes the accounting for certain income tax assets recorded in purchase accounting. The adoption of the new accounting requirements as required, on January 1, 2009, changed the way we account for adjustments to deferred tax asset valuation allowances recorded in purchase accounting for prior business combinations so that adjustments to these deferred tax asset valuation allowances will no longer be recorded to goodwill but rather adjustments will be recorded in "Income tax expense" in the Consolidated Statements of Operations. Additionally, the adoption of the new accounting guidance changed the accounting for all business combinations we consummate after January 1, 2009.

        Sky Brazil Functional Currency.    Based on cumulatively significant changes in economic facts and circumstances, we have determined that the local Brazilian currency should be the functional currency of Sky Brazil for purposes of financial statement translation beginning in the second quarter of 2009. As a result of this change in functional currency, on April 1, 2009 we recorded a $165 million decrease to previously reported values for nonmonetary assets and a $53 million increase in our related deferred income tax assets and liabilities, and an offsetting $112 million decrease to the "Cumulative translation adjustment", a component of "Accumulated other comprehensive loss" in stockholders' equity in the Consolidated Balance Sheets. In addition, as a result of this change in functional currency, changes in

84

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

exchange rates will result in gains or losses, which will be recorded in "Other, net" in the Consolidated Statements of Operations related to the revaluation of U.S. dollar denominated monetary assets and liabilities, such as cash deposits, notes payable and capital lease obligations held by Sky Brazil. During 2009, we recorded a net foreign currency transaction gain of $62 million in "Other, net" in the Consolidated Statements of Operations related to U.S. dollar denominated monetary assets and liabilities held by Sky Brazil.

        Fair Value Recognition, Measurement and Disclosure.    On January 1, 2008 we adopted new accounting standards which permit, but do not require, companies to report at fair value the majority of recognized financial assets, financial liabilities and firm commitments. Under this standard, unrealized gains and losses on items for which the fair value option is elected are reported in earnings at each subsequent reporting date. Our adoption of these accounting standards did not have any effect on our consolidated financial statements, as we have not elected to report subject instruments at fair value.

        On January 1, 2008 we adopted new accounting standards for fair value measurements which defines fair value, sets out a framework for measuring fair value under accounting principles generally accepted in the United States of America, or GAAP, and expands disclosures about fair value measurements of assets and liabilities to include disclosure about inputs used in the determination of fair value using the following three categories:

        Level 1: Quoted market prices in active markets for identical assets or liabilities.

        Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

        Level 3: Unobservable inputs that are not corroborated by market data.

        The new accounting standards apply under other accounting pronouncements previously issued by the Financial Accounting Standards Board, or FASB, that require or permit fair value measurements. Our adoption of the new accounting standards did not have any effect on our consolidated financial statements.

        Payments to Manufacturers and Resellers.    On January 1, 2008 we adopted new accounting standards which provide guidance to service providers regarding the proper reporting of consideration given to manufacturers or resellers of equipment necessary for an end-customer to receive its services. Depending on the circumstances, such consideration is reported as either an expense or a reduction of revenues. Our adoption of the new accounting standards did not have any effect on our consolidated financial statements.

        Uncertain Tax Positions.    We adopted accounting standards for accounting for uncertainty in income taxes on January 1, 2007, the cumulative effect of which resulted in a $5 million increase to "Accumulated deficit" in the Consolidated Balance Sheets. As of the date of adoption, our unrecognized tax benefits and accrued interest totaled $204 million, including $166 million of tax positions the recognition of which would affect the annual effective income tax rate. As of the date of adoption, we have accrued $45 million in interest and penalties as part of our liability for unrecognized tax benefits. See Note 10 for additional information regarding unrecognized tax benefits.

        Pensions.    On December 31, 2007, we adopted new accounting standards that requires the measurement of plan assets and benefit obligations as of the date of our fiscal year end and accordingly resulted in a change in our measurement date, which was previously November 30. As a result of the adoption of this provision, we recorded an adjustment of $1 million to recognize net periodic benefit

85

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

cost for the one month difference to "Accumulated deficit" in the Consolidated Balance Sheets as of December 31, 2007.

New Accounting Standards

        Consolidation of Variable Interest Entities.    In June 2009, the FASB issued revisions to consolidation accounting standards for variable interest entities, or VIEs. The new standard replaces the quantitative-based risks and rewards calculation for determining which enterprise, if any, has a controlling financial interest in a variable interest entity. Instead, the new approach is qualitative and focused on identifying which enterprise has the power to direct the activities of a VIE that most significantly impact the entity's performance and (1) the obligation to absorb the losses of an entity or (2) the right to receive benefits from the entity. As a result of the changed requirements, it is possible that an entity's previous assessment of a VIE will change, and the standard now requires ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE. Disclosure requirements under the new standard have been enhanced, and now include disclosure of the method the entity used to determine whether they are the primary beneficiary of the VIE. We do not expect the adoption of these changes to have an effect on our consolidated results of operations and financial position, when adopted, as required, on January 1, 2010.

        Multiple Element Revenue Arrangements.    In September 2009, the FASB approved a revised standard for revenue arrangements with multiple deliverables. Under the revised standard, the criteria for determining whether a deliverable should be considered a separate unit of accounting has changed to remove a limitation for separation to only items with objective and reliable evidence of fair value. Instead, the revised standard allows entities to use the "best estimate of selling price" in addition to third-party evidence or actual selling prices for determining the fair value of a deliverable. The standard also includes additional disclosure requirements for revenue arrangements for multiple deliverables. We currently do not expect the adoption of the revised standard to have an effect on our consolidated results of operations and financial position, when adopted, as required, on January 1, 2011.

Note 3: Acquisitions

Liberty Transaction

        On November 19, 2009, DIRECTV Group and Liberty Media, obtained shareholder approval of and closed a series of related transactions which we refer to collectively as the Liberty Transaction. The Liberty Transaction included the split-off of certain of the assets of the Liberty Entertainment group into LEI, which was then split-off from Liberty. Following the split-off, DIRECTV Group and LEI merged with subsidiaries of DIRECTV. As a result of Liberty Transaction, DIRECTV Group, which is comprised of the DIRECTV U.S. and DIRECTV Latin America businesses, and LEI, which held Liberty's 57% interest in DIRECTV Group, a 100% interest in three regional sports networks, a 65% interest in Game Show Network, LLC, approximately $120 million in cash and cash equivalents and approximately $2.1 billion of indebtedness and a related series of equity collars became wholly-owned subsidiaries of DIRECTV.

        DIRECTV Group entered into the Liberty Transaction to eliminate the approximate 57% ownership interest in DIRECTV group held by Liberty Media, thereby reducing the concentration of voting power in a single stockholder or group of affiliated stockholders. The merger also resulted in greater liquidity of the DIRECTV common stock, greater operating and governance independence and

86

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

the elimination of the risk that Liberty could transfer control of DIRECTV without DIRECTV public stockholders participating in any control premium.

        The holders of outstanding shares of DIRECTV Group common stock (other than direct or indirect subsidiaries of LEI) received one share of DIRECTV Class A common stock for each share of DIRECTV Group common stock held. The holders of outstanding shares of LEI Series A common stock and Series B common stock (other than the Malones) received 1.11130 shares of DIRECTV Class A common stock for each share of LEI Series A or Series B common stock held. The Malones received 1.11130 shares of DIRECTV Class B common stock for each share of LEI Series B common stock held. Based on these terms, DIRECTV issued 408.4 million Class A shares to the holders of DIRECTV Group common stock other than LEI, and 501.1 million Class A and 21.8 million Class B shares to the former LEI shareholders. The 931.3 million total Class A and Class B shares issued by DIRECTV was 25.8 million less than the 957.1 million DIRECTV Group common shares outstanding immediately preceding the merger, as the exchange ratio contemplated the fact that LEI would be contributing net liabilities (excluding LEI's interest in DIRECTV Group) to DIRECTV.

        The Liberty Transaction has been accounted for using the acquisition method of accounting pursuant to accounting standards for business combinations. DIRECTV Group has been treated as the acquiring corporation in the Liberty Transaction for accounting and financial reporting purposes, and accordingly the historical financial statements of DIRECTV Group have become the historical financial statements of DIRECTV. The acquisition date fair value of consideration paid, in the form of DIRECTV common stock, for the assets and liabilities of LEI (excluding LEI's interest in DIRECTV Group) has been allocated to a premium expensed at the close of the transaction as discussed in more detail below and to LEI's other tangible and intangible assets acquired and liabilities assumed based on their estimated acquisition date fair values, with any excess being treated as goodwill. The assets, liabilities and results of operations of LEI have been consolidated beginning on the acquisition date, November 19, 2009.

        The following table sets forth the preliminary allocation of the purchase price to the LEI net liabilities assumed on November 19, 2009 (dollars in millions):

Total current assets		$	244
Property and equipment			5
Goodwill			341
Investments and other assets			754
Total assets acquired		$	1,344
Total current liabilities		$	2,492
Other liabilities			305
Total liabilities assumed		$	2,797
	Net liabilities assumed	$	1,453

        Costs incurred to complete the transaction, including legal, accounting, financial printing, investment banking and other costs, totaled $43 million and have been included as an expense in "Liberty transaction and related charges" in the Consolidated Statements of Operations for the year ended December 31, 2009.

        We currently expect that none of the goodwill will be deductible for tax purposes. Goodwill is primarily related to the value of the three regional sports networks' intangibles that do not qualify for

87

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

separate recognition, such as exploitable advertising space, assembled production and distribution networks and assembled workforces.

        The exchange ratio of LEI common stock to DIRECTV Group common stock was determined in a manner such that LEI stockholders as a group received a premium in the form of a larger economic interest in DIRECTV than would have been otherwise determined based on the relative fair values of DIRECTV Group and LEI. This premium, calculated as the value of the economic interest in DIRECTV distributed to LEI stockholders based on the fair value of the merged assets of DIRECTV as of November 19, 2009, in excess of the acquisition date fair value of the assets and liabilities of LEI, amounted to $337 million and has been expensed as a disproportionate distribution upon completion of the mergers in "Liberty transaction and related charges" in the Consolidated Statements of Operations for the year ended December 31, 2009.

        The premium was calculated as follows:

Former LEI shareholder interest in the fair value of the net assets of DIRECTV	$	16,054
Less: Fair value of net assets contributed by LEI, including 57% interest in DIRECTV Group		15,717
Premium	$	337

        As part of the mergers, DIRECTV assumed 16.7 million common stock options and stock appreciation rights issued by LEI. Since many of the replacement awards are held by individuals who remained employees of Liberty and did not become employees or directors of DIRECTV, they are reported as a liability at fair value by DIRECTV in accordance with accounting standards for non-employee awards. See Note 15 for additional information regarding these stock based awards.

        Also, the assumed indebtedness includes related equity collars which were in a liability position with an estimated negative fair value of approximately $369 million as of the acquisition date. We account for the derivative financial instruments of the equity collars acquired as a net asset or liability at fair value. Adjustments to the fair values of the stock based awards and the equity collars are recorded in "Liberty transaction and related charges" in the Consolidated Statements of Operations. See Note 9 for additional information regarding the indebtedness and equity collars.

        For the year ended December 31, 2009, amounts charged to "Liberty transaction and related charges" in the Consolidated Statements of Operations totaled $491 million, and include, the $337 million premium, $111 million of net losses recorded for the partial settlement and fair value adjustment of the equity collars and non-employee stock based awards from the acquisition date to December 31, 2009 and the $43 million of acquisition related costs.

        Cash paid, net of cash acquired in connection with the transaction was $97 million and includes a $226 million repayment of LEI's existing loan from Liberty at the close of the transaction and $43 million of cash paid for transaction costs, partially offset by $120 million in cash at LEI, and $56 million of cash at the regional sports networks.

        We assigned $228 million to definite lived intangible assets of the regional sports networks for affiliate and advertising relationships. The weighted average live of these intangibles is 19 years. These intangibles are included in the Trade name and other component of "Intangible assets, net" in the Consolidated balance sheets.

        The following selected unaudited pro forma information is being provided to present a summary of the combined results of DIRECTV and Liberty Entertainment for the years ended December 31, 2009

88

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

and 2008 as if the acquisition had occurred as of the beginning of the period, giving effect to purchase accounting adjustments. The pro forma data is presented for informational purposes only and may not necessarily reflect the results of our operations had LEI operated as part of us for the period presented, nor are they necessarily indicative of the results of future operations. The pro forma information excludes the effect of non-recurring charges.

	Years Ended December 31,
	2009		2008
	(Dollars in Millions)
Revenues	$	21,753	$	19,905
Net income attributable to DIRECTV		1,113		1,651

Home Services Providers

        180 Connect.    In July 2008, we acquired 100% of 180 Connect Inc.'s outstanding common stock and exchangeable shares. Simultaneously, in a separate transaction, UniTek USA, LLC acquired 100% of 180 Connect's cable service operating unit and operations in certain of our installation services markets in exchange for satellite installation operations in certain markets and $7 million in cash. These transactions provide us with control over a significant portion of DIRECTV U.S.' home service provider network. We paid $91 million in cash, net of the $7 million we received from UniTek USA, for the acquisition, including the equity purchase price, repayment of assumed debt and related transaction costs.

        We accounted for the 180 Connect acquisition using the purchase method of accounting, and began consolidating the results from the date of acquisition. The December 31, 2009 consolidated financial statements reflect the final allocation of the $91 million net purchase price to assets acquired and the liabilities assumed based on their estimated fair values at the date of acquisition using information currently available. The assets acquired included approximately $5 million in cash. The excess of the purchase price over the estimated fair values of the net assets has been recorded as goodwill, $28 million of which will be deductible for tax purposes.

        The following table sets forth the final allocation of the purchase price to the 180 Connect net assets acquired in July 2008 (dollars in millions):

Total current assets		$	18
Property and equipment			16
Goodwill			97
Investments and other assets			51
Total assets acquired		$	182
Total current liabilities		$	83
Other liabilities			8
Total liabilities assumed		$	91
	Net assets acquired	$	91

        The following selected unaudited pro forma information is being provided to present a summary of the combined results of DIRECTV and 180 Connect for 2008 as if the acquisition had occurred as of the beginning of the respective periods, giving effect to purchase accounting adjustments. The pro forma data is presented for informational purposes only and may not necessarily reflect the results of

89

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

our operations had 180 Connect operated as part of us for each of the periods presented, nor are they necessarily indicative of the results of future operations. The pro forma information excludes the effect of non-recurring charges.

	Years Ended December 31, 2008
	(Dollars in Millions,)
Revenues	$	19,693
Net income		1,479

Darlene Transaction

        On January 30, 2007, we acquired Darlene's 14% equity interest in DLA LLC for $325 million in cash. We accounted for the acquisition of this interest using the purchase method of accounting.

Note 4: Accounts Receivable, Net

        The following table sets forth the amounts recorded for "Accounts receivable, net" in our Consolidated Balance Sheets as of December 31:

		2009			2008
		(Dollars in Millions)
Subscriber		$	1,036		$	918
Trade and other			645			555
Subtotal			1,681			1,473
Less: Allowance for doubtful accounts			(56	)		(50	)
	Accounts receivable, net	$	1,625		$	1,423

Note 5: Satellites, Net and Property and Equipment, Net

        The following table sets forth the amounts recorded for "Satellites, net" and "Property and equipment, net" in our Consolidated Balance Sheets at December 31:

		Estimated Useful Lives (years)		2009			2008
		(Dollars in Millions)
Satellites			10-16	$	2,839		$	2,956
Satellites under construction			—		354			292
Total					3,193			3,248
Less: Accumulated depreciation					(855	)		(772	)
	Satellites, net			$	2,338		$	2,476
Land and improvements			9-30	$	37		$	37
Buildings and leasehold improvements			2-40		361			342
Machinery and equipment			2-23		3,337			3,211
Subscriber leased set-top receivers			3-7		5,636			4,853
Construction in-progress			—		360			271
Total					9,731			8,714
Less: Accumulated depreciation					(5,593	)		(4,543	)
	Property and equipment, net			$	4,138		$	4,171

90

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        We capitalized interest costs of $18 million in 2009, $18 million in 2008, and $51 million in 2007 as part of the cost of our property and satellites under construction. Depreciation expense was $2,287 million in 2009, $1,907 million in 2008, and $1,264 million in 2007.

        On March 1, 2006, DIRECTV U.S. introduced a set-top receiver lease program. Prior to March 1, 2006, most set-top receivers provided to new and existing DIRECTV U.S. subscribers were immediately expensed upon activation as a subscriber acquisition or upgrade and retention cost in the Consolidated Statements of Operations. Subsequent to the introduction of the lease program, we lease most set-top receivers provided to new and existing subscribers, and therefore capitalize the set-top receivers in "Property and equipment, net" in the Consolidated Balance Sheets. We depreciate capitalized set-top receivers over a three year estimated useful life and include the amount of set-top receivers capitalized each period in "Cash paid for property and equipment" in the Consolidated Statements of Cash Flows.

        The following table sets forth the amount of DIRECTV U.S. set-top receivers we capitalized, and depreciation expense we recorded, under the lease program for each of the periods presented:

Capitalized subscriber leased equipment:	Years ended December 31,
	2009		2008		2007
	(Dollars in Millions)
Subscriber leased equipment—subscriber acquisitions	$	564	$	599	$	762
Subscriber leased equipment—upgrade and retention		419		537		774
Total subscriber leased equipment capitalized	$	983	$	1,136	$	1,536
Depreciation expense—subscriber leased equipment	$	1,333	$	1,100	$	645

Note 6: Goodwill and Intangible Assets

        The following table sets forth the changes in the carrying amounts of "Goodwill" in the Consolidated Balance Sheets by segment for the years ended December 31, 2009 and 2008:

		DIRECTV U.S.			DIRECTV Latin America			Sports Networks, Eliminations and Other		Total
Balance as of January 1, 2008		$	3,032		$	637		$	—	$	3,669
Acquisition related to home service provider business			157			—			—		157
Sky Brazil deferred income tax valuation allowance			—			(73	)		—		(73	)
Balance as of December 31, 2008			3,189			564			—		3,753
Liberty Transaction			—			—			341		341
Sky Brazil foreign currency translation adjustment			—			92					92
Purchase or acquisition accounting adjustments:
	New acquisitions		24			—			—		24
	Finalization of prior acquisitions		(46	)		—			—		(46	)
Balance as of December 31, 2009		$	3,167		$	656		$	341	$	4,164

91

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        The following table sets forth the components for "Intangible assets, net" in the Consolidated Balance Sheets at:

			December 31, 2009						December 31, 2008
	Estimated Useful Lives (years)		Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
			(Dollars in Millions)
Orbital slots		Indefinite	$	432			$	432	$	432			$	432
72.5° WL Orbital license		5		208	$	208		—		208	$	171		37
Subscriber related		5-10		1,787		1,526		261		1,697		1,255		442
Dealer network		15		130		90		40		130		79		51
Trade name and other		5-20		344		17		327		102		9		93
Distribution rights		7		334		263		71		334		217		117
Total intangible assets			$	3,235	$	2,104	$	1,131	$	2,903	$	1,731	$	1,172

        Amortization expense of intangible assets was $352 million in 2009, $412 million in 2008 and $419 million in 2007.

        Estimated amortization expense for intangible assets in each of the next five years and thereafter is as follows: $188 million in 2010; $132 million in 2011; $85 million in 2012; $38 million in 2013; $31 million in 2014 and $225 million thereafter.

        We performed our annual impairment tests for goodwill and orbital slots in the fourth quarters of 2009, 2008, and 2007. The estimated fair values for each reporting unit and the orbital slots exceeded our carrying values, and accordingly, no impairment losses were recorded during 2009, 2008, or 2007.

Note 7: Investments

Equity Method Investments

        The following table sets forth the book value of our investments which we account for under the equity method of accounting:

	As of December 31,
	2009		2008
	(Dollars in Millions)
Sky Mexico	$	484	$	537
GSN		462		—
Other equity method investments		130		130
Total investments accounted for the equity method of accounting	$	1,076	$	667

        We paid cash of $11 million in 2009, $96 million in 2008 and $13 million in 2007 to acquire interests in companies we account for under the equity method of accounting.

92

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        The following table sets forth equity in earnings and losses of our investments accounted for under the equity method of accounting for the periods presented:

	Years Ended December 31,
	2009		2008			2007
	(Dollars in Millions)
Sky Mexico	$	32	$	63		$	41
Other		19		(8	)		(6	)
Total equity earnings for investments accounted for under the equity method of accounting	$	51	$	55		$	35

        Game Show Network.    As result of the Liberty Transaction, DIRECTV and Sony Pictures Entertainment, or Sony, a division of Sony Corporation of America, which is a subsidiary of Sony Corporation, own 65% and 35% of GSN, respectively as of December 31, 2009. GSN owns and operates a basic cable network dedicated to game-related programming and Internet interactive game playing. Due to certain governance arrangements which limit DIRECTV's ability to control GSN, we account for GSN as an equity method investment.

        DIRECTV accounts for the excess of the carrying value for its investment in GSN over DIRECTV's share of GSN's equity in memo accounts allocated to goodwill and definite lived intangibles attributable to affiliate and advertising relationships. For 2009 we recognized $1 million of amortization on definite lived intangibles in equity earnings.

        We received cash dividends of $94 million in 2009 and $35 million in 2008 from companies that we account for under the equity method.

Other Investments

        We had investments in marketable equity securities of $31 million as of December 31, 2009 and $23 million as of December 31, 2008, which were stated at current fair value and classified as available-for-sale. We calculated the fair values based on quoted market prices of our investments, which is a Level 1 input under the accounting guidance.

        Accumulated unrealized gains, net of taxes, included as part of accumulated other comprehensive income were $8 million in 2009, $1 million in 2008 and $21 million in 2007.

        In 2009, we recognized a $45 million charge for the other than temporary impairment of certain of our investments.

93

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

Note 8: Accounts Payable and Accrued Liabilities; Other Liabilities and Deferred Credits

        The following represent significant components of "Accounts payable and accrued liabilities" in our Consolidated Balance Sheets as of December 31:

		2009		2008
		(Dollars in Millions)
Programming costs		$	1,788	$	1,640
Accounts payable			582		433
Equity collars (see Note 9 for additional information)			400		—
Property and income taxes			157		161
Payroll and employee benefits			204		165
Interest payable			47		45
Other			579		671
	Total accounts payable and accrued liabilities	$	3,757	$	3,115

        The following represent significant components of "Other liabilities and deferred credits" in our Consolidated Balance Sheets as of December 31:

		2009		2008
		(Dollars in Millions)
Other accrued taxes		$	595	$	428
Obligations under capital leases			537		542
Pension and other postretirement benefits			135		179
Deferred credits			78		122
Programming costs			76		251
Other			257		227
	Total other liabilities and deferred credits	$	1,678	$	1,749

Note 9: Debt

        The following table sets forth our outstanding debt:

		December 31,
		2009			2008
		(Dollars in Millions)
Senior notes		$	4,490		$	3,410
Senior secured credit facility, net of unamortized discount of $7 million as of December 31, 2009 and $9 million as of December 31, 2008			2,316			2,421
Collar Loan			1,202			—
Unamortized bond premium			2			2
	Total debt		8,010			5,833
Less: Current portion of long-term debt			(1,510	)		(108	)
	Long-term debt	$	6,500		$	5,725

        All of the senior notes and the senior secured credit facility were issued by DIRECTV U.S. The senior secured credit facility is secured by substantially all of DIRECTV U.S.' assets.

94

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

Collar Loan

        As part of the Liberty Transaction completed on November 19, 2009, we assumed a credit facility with a principal balance of $1,878 million and related equity collars which were in a liability position with an estimated acquisition date negative fair value of $369 million, which we refer to as the Collar Loan. The loan bears interest at an effective weighted average interest rate of approximately 3.5%.

        The equity collars, which use DTV shares as the underlying security, were entered into by Liberty prior to the Liberty Transaction for the purpose of providing credit security to the lending bank on the Collar Loan and, as a consequence, hedging Liberty's exposure to default on the Collar Loan by limiting Liberty's exposure to downward movements in the price of DTV stock in exchange for Liberty's increased exposure to upward movements in the price of DTV stock. As the derivative financial instruments were in respect of DTV stock, the original hedging function of the equity collars ceased upon the completion of the Liberty Transaction by reason of the acquisition of the DTV stock underlying the hedge by DIRECTV, and we became exposed to significant potential cash liability upon any upward movements in the price of DTV stock.

        Thus, the equity collars, when acquired by DIRECTV in the Liberty Transaction, posed an unhedged risk of substantial economic loss upon upward movements in the price of DTV stock, which was adverse to the company's short and long-term operational and stock price goals and was therefore an uneconomic and burdensome obligation to DIRECTV. Accordingly, in connection with the assumption of the Collar Loan, we agreed with the lending bank to promptly repay the Collar Loan and settle the equity collars. From the acquisition date to December 31, 2009, we repaid a total of $751 million, including $676 million in principal payments and $75 million in payments to settle a portion of the equity collars. We also recorded a $105 million loss during the year ended December 31, 2009 in "Liberty transaction and related charges" in the Consolidated Statements of Operations related to the partial settlement of the collar and the adjustment of the remaining collar derivative financial instruments to their fair value as of December 31, 2009 to a liability of $400 million. During the first quarter of 2010, we paid $1,537 million to repay the remaining principal balance of the loan and settle the equity collars, and accordingly will report a gain of approximately $65 million in the first quarter of 2010 related to the Collar Loan.

        We account for the collar pursuant to the accounting standards for derivatives and hedging, which require that all derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. The collar is not designated as a hedge, and therefore changes in the fair value of the derivative are recognized in earnings. We determine the fair value of the collar using the Black- Scholes Model. Changes in the fair value of the collar are recorded in "Liberty transaction and related charges" in the Consolidated Statements of Operations. Our use of the Black-Scholes Model to value the collar is considered a Level 2 valuation technique, which uses observable inputs such as exchange-traded equity prices, risk-free interest rates, dividend yields and volatilities.

        See Note 3 for further discussion of the Liberty Transaction.

2009 Financing Transactions

        On September 22, 2009, DIRECTV U.S. issued $1,000 million in five-year 4.750% senior notes due in 2014 at a 0.3% discount resulting in $997 million of proceeds and $1,000 million in 10 year 5.875% senior notes due in 2019 at a 0.7% discount resulting in $993 million of proceeds in private placement transactions. Principal on these senior notes is payable upon maturity, while interest is payable semi-annually commencing April 1, 2010. We incurred $14 million of debt issuance costs in connection with these transactions. The senior notes have been fully and unconditionally guaranteed,

95

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

jointly and severally, by substantially all of DIRECTV U.S.' current and certain of its future domestic subsidiaries on a senior unsecured basis. Pursuant to a registration rights agreement with the initial purchasers of the senior notes, DIRECTV U.S. has filed a registration statement, whereby all holders of the original notes can elect to exchange their existing notes for registered notes with identical terms, except that the registered notes will be registered under the Securities Act of 1933, as amended and will not bear the legends restricting their transfer. We expect to complete the registration and exchange of these senior notes within the first half of 2010.

        On September 22, 2009, DIRECTV U.S. purchased, pursuant to a tender offer, $583 million of its then outstanding $910 million 8.375% senior notes at a price of 103.125% plus accrued and unpaid interest, for a total of $603 million. On September 23, 2009, DIRECTV U.S. exercised its right to redeem the remaining $327 million of the 8.375% senior notes at a price of 102.792% plus accrued and unpaid interest. On October 23, 2009, DIRECTV U.S. redeemed the remaining $327 million of its 8.375% senior notes at a price of 102.792% plus accrued and unpaid interest for a total of $339 million.

        The redemption of our 8.375% senior notes resulted in a 2009 pre-tax charge of $34 million, $21 million after tax, of which $27 million resulted from the premium paid for redemption of our 8.375% senior notes and $7 million resulted from the write-off of deferred debt issuance and other transaction costs. The charge was recorded in "Other, net" in our Consolidated Statements of Operations.

2008 Financing Transactions

        In May 2008, DIRECTV U.S. completed financing transactions that included the issuance of senior notes and an amendment to its existing senior secured credit facility as discussed below. We incurred $19 million of debt issuance costs in connection with these transactions.

        DIRECTV U.S. issued $1,500 million in senior notes due in 2016 in a private placement transaction. The eight-year notes bear interest at 7.625%. Principal on the senior notes is payable upon maturity, while interest is payable semi-annually commencing November 15, 2008. The senior notes have been fully and unconditionally guaranteed, jointly and severally, by substantially all of DIRECTV U.S.' current and certain of its future domestic subsidiaries on a senior unsecured basis. On November 11, 2008, we completed an exchange offer in which holders of substantially all of the outstanding principal amount of the senior notes exchanged the original senior notes for registered notes with identical terms, except that the registered notes are registered under the Securities Act of 1933, as amended, and do not bear the legends restricting their transfer.

        DIRECTV U.S. also amended its senior secured credit facility to include a new $1,000 million Term Loan C, which was issued at a 1% discount, resulting in $990 million of proceeds. Initially, borrowings under Term Loan C bear interest at 5.25%, however the rate is variable based on changes in the London InterBank Offered Rate, or LIBOR. The interest rate may be increased or decreased under certain conditions. The Term Loan C has a final maturity of April 13, 2013, and we began making quarterly principal payments totaling 1% annually on September 30, 2008. The senior secured credit facility is secured by substantially all of DIRECTV U.S.' assets and the assets of its current and certain of its future domestic subsidiaries and is fully and unconditionally guaranteed, jointly and severally, by substantially all of DIRECTV U.S.' current and certain of its future domestic subsidiaries.

96

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        Senior Notes.    The following table sets forth our outstanding senior notes balance and fair value as of December 31:

		Outstanding Balance				Fair value
		2009		2008		2009		2008
		(Dollars in millions)
8.375% senior notes due in 2013		$	—	$	910	$	—	$	904
4.750% senior notes due in 2014, net of unamortized discount of $3 million as of December 31, 2009			997		—		1,017		—
6.375% senior notes due in 2015			1,000		1,000		1,038		911
7.625% senior notes due in 2016			1,500		1,500		1,642		1,451
5.875% senior notes due in 2019, net of unamortized discount of $7 million as of December 31, 2009			993		—		1,016		—
	Total senior notes	$	4,490	$	3,410	$	4,713	$	3,266

        We calculated the fair values based on quoted market prices of our senior notes, which is a Level 1 input under the accounting guidance.

        All of our senior notes were issued by DIRECTV U.S. and have been, or in the case of the 4.750% and 5.875% senior notes are in the process of being, registered under the Securities Act of 1933, as amended. All of our senior notes are unsecured and have been fully and unconditionally guaranteed, jointly and severally, by substantially all of DIRECTV U.S.' assets and additionally, our 4.750% and 5.875% senior notes are rated as investment grade. Principal on the senior notes is payable upon maturity, while interest is payable semi-annually.

        Credit Facility.    At December 31, 2009, DIRECTV U.S.' senior secured credit facility consisted of a $375 million six-year Term Loan A, a $962 million eight-year Term Loan B, a $979 million five-year Term Loan C and a $500 million undrawn six-year revolving credit facility. The Term Loan A, Term Loan B and Term Loan C components of the senior secured credit facility currently bear interest at a rate equal to the LIBOR plus 0.75%, 1.50% and 2.25%, respectively. The weighted average interest for the senior secured credit facilities at December 31, 2009 was 3.143%. In addition, we pay a commitment fee of 0.175% per year for the unused commitment under the revolving credit facility. The interest rate and commitment fee may be increased or decreased under certain conditions. The senior secured credit facility is secured by substantially all of DIRECTV U.S.' assets and is fully and unconditionally guaranteed, jointly and severally by substantially all of DIRECTV U.S.' material domestic subsidiaries.

        Our notes payable and credit facility mature as follows: $1,510 million in 2010, $108 million in 2011, $20 million in 2012, $1,887 million in 2013, $1,000 million in 2014 and $3,500 million thereafter. These amounts do not reflect potential prepayments that may be required under our senior secured credit facility, which could result from a computation of excess cash flows that we may be required to make at each year end under the credit agreement. We were not required to make a prepayment for the years ended December 31, 2009, 2008, or 2007. The amount of interest accrued related to our outstanding debt was $47 million at December 31, 2009 and $45 million at December 31, 2008.

        Covenants and Restrictions.    The senior secured credit facility requires DIRECTV U.S. to comply with certain financial covenants. The senior notes and the senior secured credit facility also include covenants that restrict DIRECTV U.S.' ability to, among other things, (i) incur additional indebtedness,

97

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

(ii) incur liens, (iii) pay dividends or make certain other restricted payments, investments or acquisitions, (iv) enter into certain transactions with affiliates, (v) merge or consolidate with another entity, (vi) sell, assign, lease or otherwise dispose of all or substantially all of its assets, and (vii) make voluntary prepayments of certain debt, in each case subject to exceptions as provided in the credit agreement and senior notes indentures. DIRECTV U.S. 4.750% and 5.875% senior notes are rated as investment grade and have fewer covenants and restrictions than our other senior notes. Should DIRECTV U.S. fail to comply with these covenants, all or a portion of its borrowings under the senior notes and senior secured credit facility could become immediately payable and its revolving credit facility could be terminated. At December 31, 2009, DIRECTV U.S. was in compliance with all such covenants. The senior notes and senior secured credit facility also provide that the borrowings may be required to be prepaid if certain change-in-control events occur. In September 2008, Liberty Media became the majority owner of DIRECTV Group's outstanding common stock. There was no ratings decline for the senior notes associated with that event, and DIRECTV U.S. was not required either to offer to redeem any of the senior notes pursuant to their respective indentures or to prepay any of the borrowings under the senior secured credit facility.

        Restricted Cash.    Restricted cash of $16 million as of December 31, 2009 and $15 million as of December 31, 2008 was included as part of "Prepaid expenses and other" in our Consolidated Balance Sheets. These amounts secure our letter of credit obligations. Restrictions on the cash will be removed as the letters of credit expire.

Note 10: Income Taxes

        We base our income tax expense or benefit on reported "Income from continuing operations before income taxes." Deferred income tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes, as measured by applying currently enacted tax laws.

        Our income tax expense consisted of the following for the years ended December 31:

			2009			2008			2007
			(Dollars in Millions)
Current tax expense:
	U.S. federal		$	(308	)	$	(543	)	$	(450	)
	Foreign			(97	)		(128	)		(73	)
	State and local			(63	)		(72	)		(103	)
		Total		(468	)		(743	)		(626	)
Deferred tax expense:
	U.S. federal			(309	)		(210	)		(285	)
	Foreign			1			97			5
	State and local			(51	)		(8	)		(37	)
		Total		(359	)		(121	)		(317	)
		Total income tax expense	$	(827	)	$	(864	)	$	(943	)

98

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        "Income from continuing operations before income taxes" in the Consolidated Statements of Operations included the following components for the years ended December 31:

		2009		2008		2007
		(Dollars in Millions)
U.S. income		$	1,446	$	1,981	$	2,154
Foreign income			388		490		234
	Total	$	1,834	$	2,471	$	2,388

        Our income tax expense was different than the amount computed using the U.S. federal statutory income tax rate for the reasons set forth in the following table for the years ended December 31:

		2009			2008			2007
		(Dollars in Millions)
Expected expense at U.S. federal statutory income tax rate		$	(642	)	$	(865	)	$	(836	)
U.S. state and local income tax expense, net of federal benefit			(77	)		(73	)		(91	)
Liberty Transaction charges not recoverable			(127	)		—			—
Change in unrecognized tax benefits			(21	)		(18	)		(18	)
Minority interests in partnership earnings			30			26			4
Foreign taxes, net of tax deduction			31			27			(14	)
Change in valuation allowance			(33	)		12			5
Tax credits			3			32			4
Other			9			(5	)		3
	Total income tax expense	$	(827	)	$	(864	)	$	(943	)

        Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities at December 31 were as follows:

		2009					2008
		Deferred Tax Assets			Deferred Tax Liabilities		Deferred Tax Assets			Deferred Tax Liabilities
		(Dollars in Millions)
Accruals and advances		$	328		$	103	$	278		$	67
Prepaid expenses			—			21		—			29
State taxes			57			—		31			—
Depreciation, amortization and asset impairment charges			—			608		—			273
Net operating loss and tax credit carryforwards			881			—		643			—
Programming contract liabilities			127			—		162			—
Unrealized foreign exchange gains or losses			—			134		—			59
Tax basis differences in investments and affiliates			188			795		84			705
Other			5			14		6			6
Subtotal			1,586			1,675		1,204			1,139
Valuation allowance			(711	)		—		(511	)		—
	Total deferred taxes	$	875		$	1,675	$	693		$	1,139

        Included in "Investments and other assets" in the Consolidated Balance Sheets are $53 million and $10 million of non current deferred tax assets at December 31, 2009 and 2008, respectively.

99

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        We assessed the deferred tax assets for the respective periods for recoverability and, where applicable, we recorded a valuation allowance to reduce the total deferred tax assets to an amount that will, more likely than not, be realized in the future.

        The valuation allowance balances of $711 million at December 31, 2009 and $511 million at December 31, 2008, are primarily attributable to unused foreign operating losses and unused capital losses, both of which are available for carry forward. For the year ended December 31, 2009, $124 million of the increase in the valuation allowance was attributable to an increase in deferred tax assets in Brazil as a result of the strength of the Brazilian real against the United States dollar during 2009, and $76 million was attributable to both foreign losses for which we do not expect to realize a tax benefit and other losses for which there is no immediate plan to generate offsetting gains.

        Although realization is not assured, we have concluded that it is more likely than not that our unreserved deferred tax assets will be realized in the ordinary course of operations based on available positive and negative evidence, including scheduling of deferred tax liabilities and projected income from operating activities. The underlying assumptions we use in forecasting future taxable income require significant judgment and take into account our recent performance.

        As of December 31, 2009, we have $35 million of federal net operating loss carryforward which expires between 2027 and 2028. The utilization of the federal net operating loss carryforward is subject to an annual limitation under Section 382 of the Internal Revenue Code, however we believe that we will have sufficient taxable income during the limitation period to utilize all of the carryforward. We also have California research tax credits of $60 million which can be carried forward indefinitely and approximately $2.2 billion of foreign net operating losses that are primarily attributable to operations in Brazil with varying expiration dates.

        No income tax provision has been made for the portion of undistributed earnings of foreign subsidiaries deemed permanently reinvested that amounted to approximately $2 million in 2009. It is not practicable to determine the amount of the unrecognized deferred tax liability related to the investments in foreign subsidiaries.

100

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:

		Unrecognized Tax Benefits
		(Dollars in Millions)
Gross unrecognized tax benefits at January 1, 2007		$	159
	Increases in tax positions for prior years		102
	Increases in tax positions for the current year		34
	Settlements		(4	)
Gross unrecognized tax benefits at December 31, 2007			291
	Increases in tax positions for prior years		75
	Increases in tax positions for the current year		26
	Statute expiration		(38	)
	Settlements		9
Gross unrecognized tax benefits at December 31, 2008			363
	Increases in tax positions for prior years		26
	Increases in tax positions for the current year		147
	Settlements		(9	)
Gross unrecognized tax benefits at December 31, 2009		$	527

        As of December 31, 2009, our unrecognized tax benefits totaled $527 million, including $295 million of tax positions the recognition of which would affect the annual effective income tax rate.

        We recognize interest and penalties accrued related to unrecognized tax benefits in "Income tax expense" in the Consolidated Statements of Operations. As of December 31, 2009, we have accrued $72 million in interest and penalties as part of our liability for unrecognized tax benefits.

        We file numerous consolidated and separate income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. For U.S. federal tax purposes, the tax years 2007 through 2009 remain open to examination. The California tax years 1994 through 2009 remain open to examination and the income tax returns in the other state and foreign tax jurisdictions in which we have operations are generally subject to examination for a period of 3 to 5 years after filing of the respective return.

        We do not anticipate changes to the total unrecognized tax benefits in the next twelve months which will have a significant effect on our results of operations or financial position.

Note 11: Capital Lease Obligations

Satellite Leases

        During the first quarter of 2008, Sky Brazil began broadcasting its service on a new satellite, IS 11, pursuant to a satellite transponder capacity agreement, which we are accounting for as a capital lease. The present value of the lease payments at the inception of the 15 year lease term was $247 million. The capitalized value of the satellite has been included in "Satellites, net" in the Consolidated Balance Sheets. The capitalized lease obligations are included in "Accounts payable and accrued liabilities" and "Other liabilities and deferred credits" in the Consolidated Balance Sheets.

        During the third quarter of 2008, DTVLA amended its satellite transponder capacity agreement for the GIIIC satellite, which provides broadcast services to PanAmericana, and was previously

101

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

classified as an operating lease. The extension of the lease term to December 2020 required a reassessment of the lease classification and we determined that we should change the classification of the amended agreement to a capital lease. The present value of the lease payments at the inception of the lease renewal was $333 million. The capitalized value of the satellite is included in "Satellites, net" and the capitalized lease obligation is included in "Accounts payable and accrued liabilities" and "Other liabilities and deferred credits" in the Consolidated Balance Sheets.

        The following table sets forth total minimum lease payments under capital leases along with the present value of the net minimum lease payments as of December 31, 2009:

	(Dollars in Millions)
2010	$	89
2011		87
2012		84
2013		82
2014		77
Thereafter		511
Total minimum lease payments		930
Less: Amount representing interest		344
Present value of net minimum lease payments	$	586

        Assets held under capitalized leases are included in Satellites, net and Property and Equipment, net in our Consolidated Balance Sheets. We had the following assets held under capital leases as of December 31:

	2009			2008
	(Dollars in Millions)
Satellites under capital leases	$	543		$	533
Less: Accumulated amortization		(63	)		(20	)
Satellites, net under capital leases	$	480		$	513
Property and equipment under capital leases	$	63		$	27
Less: Accumulated amortization		(14	)		(4	)
Property and equipment, net under capital leases	$	49		$	23

        We paid interest for capital leases of $56 million in 2009, $27 million in 2008 and $4 million in 2007.

Note 12: Pension and Other Postretirement Benefit Plans

        Most of our employees are eligible to participate in our funded non-contributory defined benefit pension plan, which provides defined benefits based on either years of service and final average salary, or eligible compensation while employed by the company. Additionally, we maintain a funded contributory defined benefit plan for employees who elected to participate prior to 1991, and an unfunded, nonqualified pension plan for certain eligible employees. For participants in the contributory pension plan, we also maintain a postretirement benefit plan for those eligible retirees to participate in health care and life insurance benefits generally until they reach age 65. Participants may become eligible for these health care and life insurance benefits if they retire from our company between the

102

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

ages of 55 and 65. The health care plan is contributory with participants' contributions subject to adjustment annually; the life insurance plan is non-contributory.

        The components of the pension benefit obligation and the other postretirement benefit obligation, including amounts recognized in the Consolidated Balance Sheets, are shown below for the years ended December 31:

			Pension Benefits						Other Postretirement Benefits
			2009			2008			2009			2008
			(Dollars in Millions)
Change in Net Benefit Obligation
Net benefit obligation at beginning of year			$	452		$	430		$	22		$	24
Service cost				16			16			—			—
Interest cost				28			27			1			1
Plan participants' contributions				1			1			—			—
Actuarial loss				48			29			—			—
Benefits paid				(47	)		(51	)		(2	)		(3	)
Net benefit obligation at end of year				498			452			21			22
Change in Plan Assets
Fair value of plan assets at beginning of year				283			368			—			—
Actual return (loss) on plan assets				66			(85	)		—			—
Employer contributions				72			51			2			3
Benefits paid				(47	)		(51	)		(2	)		(3	)
Fair value of plan assets at end of year				374			283			—			—
Funded status at end of year			$	(124	)	$	(169	)	$	(21	)	$	(22	)
Amounts recognized in the consolidated balance sheets consist of:
	Accounts payable and accrued liabilities		$	(8	)	$	(9	)	$	(2	)	$	(3	)
	Other liabilities and deferred credits			(116	)		(160	)		(19	)		(19	)
	Deferred tax assets (liabilities)			80			79			(1	)		(1	)
	Accumulated other comprehensive loss (gain)			131			129			(1	)		(1	)
Amounts recognized in the accumulated other comprehensive loss consist of:
	Unamortized net amount resulting from changes in defined benefit plan experience and actuarial assumptions, net of taxes		$	127		$	125		$	—		$	—
	Unamortized amount resulting from changes in defined benefit plan provisions, net of taxes			4			4			(1	)		(1	)
		Total	$	131		$	129		$	(1	)	$	(1	)

103

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        We estimate that the following amounts will be amortized from accumulated other comprehensive income into net periodic benefit cost during the year ending December 31, 2010:

	Pension Benefits		Other Postretirement Benefits
	(Dollars in Millions)
Expense resulting from changes in plan experience and actuarial assumptions	$	13		—
Expense (benefit) resulting from changes in plan provisions		1	$	(1	)

        The accumulated benefit obligation for all pension plans was $456 million as of December 31, 2009 and $415 million as of December 31, 2008.

        Information for pension plans with an accumulated benefit obligation in excess of plan assets at December 31:

	2009		2008
	(Dollars in Millions)
Accumulated benefit obligation	$	456	$	415
Fair value of plan assets		374		283

        Information for pension plans with a projected benefit obligation in excess of plan assets at December 31:

	2009		2008
	(Dollars in Millions)
Projected benefit obligation	$	498	$	452
Fair value of plan assets		374		283

        Components of net periodic benefit cost for the years ended December 31:

		Pension Benefits									Other Postretirement Benefits
		2009			2008			2007			2009		2008		2007
		(Dollars in Millions)
Components of net periodic benefit cost
Benefits earned during the year		$	16		$	16		$	18		$	—	$	—	$	—
Interest accrued on benefits earned in prior years			28			27			28			1		1		1
Expected return on plan assets			(30	)		(30	)		(33	)		—		—		—
Amortization components
	Amount resulting from changes in plan provisions		1			1			1			—		—		(1	)
	Net amount resulting from changes in plan experience and actuarial assumptions		8			4			6			—		—		—
Net periodic benefit cost		$	23		$	18		$	20		$	1	$	1	$	—

104

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

Assumptions

        Weighted-average assumptions used to determine benefit obligations at December 31:

	Pension Benefits						Other Postretirement Benefits
	2009			2008			2009			2008
Discount rate—Qualified Plans		5.64	%		6.06	%		5.21	%		5.88	%
Discount rate—Non-Qualified Plans		5.63	%		6.04	%		—			—
Rate of compensation increase		4.00	%		4.00	%		4.00	%		4.00	%

        Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:

	Pension Benefits									Other Postretirement Benefits
	2009			2008			2007			2009			2008			2007
Discount rate—Qualified Plan		6.06	%		6.22	%		5.67	%		5.88	%		5.76	%		5.43	%
Discount rate—Non-Qualified Plans		6.04	%		6.24	%		5.69	%		—			—			—
Expected long-term return on plan assets		8.25	%		8.75	%		8.75	%		—			—			—
Rate of compensation increase		4.00	%		4.00	%		4.00	%		4.00	%		4.00	%		4.00	%

        We base our expected long-term return on plan assets assumption on a periodic review and modeling of the plans' asset allocation and liability structure over a long-term horizon. Expectations of returns for each asset class are the most important of the assumptions used in the review and modeling and are based on comprehensive reviews of historical data and economic/financial market theory.

        The following table provides assumed health care costs trend rates:

	2009			2008
Health care cost trend rate assumed for next year		8.00	%		8.00	%
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)		5.00	%		5.00	%
Year that trend rate reaches the ultimate trend rate		2017			2015

Plan Assets

        Our investment policy includes various guidelines and procedures designed to ensure we invest assets in a manner necessary to meet expected future benefits earned by participants. The investment guidelines consider a broad range of economic conditions. Central to the policy are target allocation ranges by major asset categories. The target allocations for plan assets are 40% to 56% equity securities, 24% to 40% debt securities, 0% to 10% real estate and 0% to 10% of other types of investments.

        The objectives of the target allocations are to maintain investment portfolios that diversify risk through prudent asset allocation parameters, achieve asset returns that meet or exceed the plans' actuarial assumptions, and achieve asset returns that are competitive with like institutions employing similar investment strategies.

105

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        The investment policy is periodically reviewed by us and a designated third- party fiduciary for investment matters. We establish and administer the policy in a manner so as to comply at all times with applicable government regulations.

        The fair value measurements of the plan assets as of December 31, 2009 were as follows:

			Fair Value Measurements as of December 31, 2009
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Percentage of Plan Assets as of December 31, 2009
	(Dollars in millions)
Asset Category
Common collective trusts (1)	$	351	$	—	$	351	$	—		94	%
Insurance contracts at contract value		2		—		2		—		0	%
Partnership and joint venture interests (2)		21		—		—		21		6	%
Total	$	374	$	—	$	353	$	21		100	%

(1)

As of December 31, 2009, common collective trusts were invested in approximately 59% in equity securities, 37% in debt securities, 3% in real estate and 1% in cash and cash equivalents.

(2)

As of December 31, 2009 partnership and joint venture interests were invested in both foreign and domestic venture capital funds.

        There were no shares of our common stock included in plan assets as of December 31, 2009 and 2008.

        The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2009 due to the following:

		Partnerships and Joint Venture Interests
		(Dollars in Millions)
Balance at January 1, 2009		$	23
	Realized losses		(1	)
	Unrealized losses		(1	)
Balance at December 31, 2009		$	21

Cash Flows

Contributions

        We expect to contribute approximately $15 million to our qualified pension plans and make payments of $10 million to our nonqualified pension plan participants in 2010.

106

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

Estimated Future Benefit Payments

        We expect the following benefit payments, which reflect expected future service, as appropriate, to be paid by the plans during the years ending December 31:

	Estimated Future Benefit Payments
	Pension Benefits		Other Postretirement Benefits
	(Dollars in Millions)
2010	$	45	$	2
2011		41		2
2012		41		2
2013		38		2
2014		39		2
2015-2019		218		9

        We maintain 401(k) plans for qualified employees. We match a portion of our employee contributions and our match amounted to $16 million in 2009, $12 million in 2008 and $10 million in 2007.

        We have disclosed certain amounts associated with estimated future postretirement benefits other than pensions and characterized such amounts as "other postretirement benefit obligation." Notwithstanding the recording of such amounts and the use of these terms, we do not admit or otherwise acknowledge that such amounts or existing postretirement benefit plans of our company (other than pensions) represent legally enforceable liabilities of us.

Note 13: Stockholders' Equity

Capital Stock and Additional Paid-In Capital

        Our certificate of incorporation provides for the following capital stock: Class A common stock, par value $0.01 per share, 3,500,000,000 shares authorized; Class B common stock, par value $0.01 per share, 30,000,000 shares authorized; Class C common stock, par value $0.01 per share, 420,000,000 shares authorized; and preferred stock, par value $0.01 per share, 50,000,000 shares authorized. As of December 31, 2009, there were no shares outstanding of the Class C common stock or preferred stock.

        Class A and Class B common stock have similar dividend distribution rights.

Share Repurchase Program

        Since 2006 our Board of Directors has approved multiple authorizations for the repurchase of our common stock, the most recent of which was announced in February 2010, authorizing share repurchases of $3.5 billion. The authorizations allow us to repurchase our common stock from time to time through open market purchases and negotiated transactions, or otherwise. The timing, nature and amount of such transactions will depend on a variety of factors, including market conditions, and the program may be suspended, discontinued or accelerated at any time. The sources of funds for the purchases under the remaining authorizations are our existing cash on hand, cash from operations and potential additional borrowings. Purchases are made in the open market, through block trades and other negotiated transactions. Repurchased shares are retired but remain authorized for registration and issuance in the future.

107

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        The following table sets forth information regarding shares repurchased and retired for the years ended December 31:

	2009		2008		2007
	(Amounts in Millions, Except Per Share Amounts)
Total cost of repurchased and retired shares	$	1,696	$	3,174	$	2,025
Average price per share		23.79		24.12		23.48
Number of shares repurchased and retired		71		131		86

        For the year ended December 31, 2009, we recorded the $1,696 million in repurchases as a decrease of $591 million to "Common stock and additional paid in capital" and an increase of $1,105 million to "Accumulated deficit" in the Consolidated Balance Sheets. For the year ended December 31, 2008, we recorded the $3,174 million in repurchases as a decrease of $1,089 million to "Common stock and additional paid in capital" and an increase of $2,085 million to "Accumulated deficit" in the Consolidated Balance Sheets. For the year ended December 31, 2007, we recorded the $2,025 million in repurchases as a decrease of $692 million to "Common stock and additional paid in capital" and an increase of $1,333 million to "Accumulated deficit" in the Consolidated Balance Sheets.

Other Comprehensive Income

        The following represents the components of OCI, net of taxes, for the years ended December 31:

	2009									2008									2007
	Pre-tax Amount			Tax (Benefit) Expense			Net Amount			Pre-tax Amount			Tax Benefit			Net Amount			Pre-tax Amount			Tax (Benefit) Expense			Net Amount
	(Dollars in Millions)
Amortization of amounts resulting from changes in defined benefit plan experience and actuarial assumptions, net of taxes	$	(3	)	$	(1	)	$	(2	)	$	(140	)	$	(53	)	$	(87	)	$	26		$	10		$	16
Cumulative effect of change in functional currency at Sky Brazil		(181	)		(69	)		(112	)		—			—			—			—			—			—
Foreign currency translation activity during the period		290			111			179			—			—			—			(2	)		(1	)		(1	)
Unrealized holding gains (losses) on securities		11			4			7			(32	)		(12	)		(20	)		19			7			12

108

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

Accumulated Other Comprehensive Loss

        The following represent the components of "Accumulated other comprehensive loss" in our Consolidated Balance Sheets as of December 31:

		2009			2008
		(Dollars in Millions)
Unamortized net amount resulting from changes in defined benefit plan experience and actuarial assumptions, net of taxes		$	(127	)	$	(125	)
Unamortized amount resulting from changes in defined benefit plan provisions, net of taxes			(3	)		(3	)
Accumulated unrealized gains on securities, net of taxes			8			1
Accumulated foreign currency translation adjustments			66			(1	)
	Total accumulated other comprehensive loss	$	(56	)	$	(128	)

Note 14: Earnings Per Common Share

        Earnings per share has been computed using the number of outstanding shares of DIRECTV Group through November 19, 2009, and based on the outstanding shares of DIRECTV Class A and Class B common stock subsequent to that date as a result of the Liberty Transaction. See Note 3 for additional information regarding the Liberty Transaction.

        We compute basic earnings per common share, or EPS, by dividing net income by the weighted average number of common shares outstanding for the period.

        Diluted EPS considers the effect of common equivalent shares, which consist entirely of common stock options and unvested restricted stock units issued to employees. In the computation of diluted EPS under the treasury stock method, the amount of assumed proceeds from nonvested stock awards and unexercised stock options includes the amount of compensation cost attributable to future services not yet recognized, proceeds from the exercise of the options, and the incremental income tax benefit or liability as if the awards were distributed during the period. We exclude common equivalent shares from the computation in loss periods as their effect would be antidilutive and we exclude common stock options from the computation of diluted EPS when their exercise price is greater than the average market price of our common stock. The following table sets forth the number of common stock options excluded from the computation of diluted EPS because the options' exercise prices were greater than the average market price of our common stock during the years presented:

	December 31,
	2009		2008		2007
	(Shares in Millions)
Common stock options excluded		16		27		34

109

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        The following table sets forth comparative information regarding common shares outstanding:

	2009			2008			2007
	(Shares in Millions)
Common shares outstanding at January 1		1,024			1,148			1,226
Decrease for common shares repurchased and retired		(71	)		(131	)		(86	)
Liberty Transaction adjustment		(26	)		—			—
Increase for stock options exercised and restricted stock units vested and distributed		6			7			8
Common shares outstanding at December 31		933			1,024			1,148
Weighted average number of common shares outstanding		985			1,110			1,195

        The reconciliation of the amounts used in the basic and diluted EPS computation was as follows:

		Income		Shares		Per Share Amounts
		(Dollars and Shares in Millions, Except Per Share Amounts)
Year Ended December 31, 2009:
Basic EPS
	Income from continuing operations attributable to DIRECTV	$	942		985	$	0.96
Effect of Dilutive Securities
	Dilutive effect of stock options and restricted stock units		—		7		(0.01	)
Diluted EPS
	Adjusted income from continuing operations attributable to DIRECTV	$	942		992	$	0.95
Year Ended December 31, 2008:
Basic EPS
	Income from continuing operations attributable to DIRECTV	$	1,515		1,110	$	1.36
Effect of Dilutive Securities
	Dilutive effect of stock options and restricted stock units		—		4		—
Diluted EPS
	Adjusted income from continuing operations attributable to DIRECTV	$	1,515		1,114	$	1.36
Year Ended December 31, 2007:
Basic EPS
	Income from continuing operations attributable to DIRECTV	$	1,434		1,195	$	1.20
Effect of Dilutive Securities
	Dilutive effect of stock options and restricted stock units		—		7		—
Diluted EPS
	Adjusted income from continuing operations attributable to DIRECTV	$	1,434		1,202	$	1.20

110

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

Note 15: Share-Based Payment

        As a result of the Liberty Transaction completed on November 19, 2009, DIRECTV assumed share based payment awards granted under plans of both the DIRECTV Group and LEI. See Note 3 for additional information regarding the Liberty Transaction.

        Under The DIRECTV Group, Inc. Amended and Restated 2004 Stock Plan, or the DIRECTV Plan, as approved by DIRECTV Group stockholders on June 5, 2007, shares, rights or options to acquire up to 21 million shares of common stock plus the number of shares that were granted under a former plan but which, after December 22, 2003 are forfeited, expire or are cancelled without the delivery of shares of common stock or otherwise result in the return of such shares to us, were authorized for grant through June 4, 2017, subject to the approval of the Compensation Committee of our Board of Directors.

        As part of the Liberty Transaction on November 19, 2009, we assumed the Liberty Entertainment Transitional Stock Plan, or the LEI Plan. Under the LEI Plan, we assumed 16.7 million stock options and stock appreciation rights, or SARs, and issued 1.1 million shares of Class A common stock to holders of restricted stock units issued under the LEI Plan. We are authorized to issue shares, rights or options to acquire up to 21 million shares of common stock under the LEI Plan. Equity instruments from the LEI Plan that are forfeited, expire or are cancelled without the delivery of shares of common stock or otherwise result in the return of such shares to us will be authorized for grant subject to the approval of the Compensation Committee of our Board of Directors.

        Under both the DIRECTV Plan and the LEI Plan, we issue new shares of our Class A common stock when restricted stock units are earned and when stock options are exercised.

Restricted Stock Units

        The Compensation Committee has granted restricted stock units under our stock plans to certain of our employees and executives. Annual awards are mostly performance-based, with final payments in shares of our Class A common stock. Final payment can be reduced from the target award amounts based on our company's performance over a three year performance period in comparison with pre-established targets. We determine the fair value of restricted stock units based on the closing stock price of our Class A common shares on the date of grant.

        Changes in the status of outstanding restricted stock units were as follows:

	Stock Units			Weighted-Average Grant-Date Fair Value
Nonvested at January 1, 2009		7,697,440		$	20.25
Granted		2,982,031			21.57
Vested and Distributed		(2,535,130	)		13.78
Forfeited		(679,628	)		22.10
Nonvested at December 31, 2009		7,464,713			22.80

        The weighted average grant-date fair value of restricted stock units granted during the year ended December 31, 2008 was $23.19. The weighted average grant-date fair value of restricted stock units granted during the year ended December 31, 2007 was $23.69.

111

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        The total fair value of restricted stock units vested and distributed was $35 million during the year ended December 31, 2009, $54 million during the year ended December 31, 2008 and $33 million during the year ended December 31, 2007.

Stock Options

        The Compensation Committee has also granted stock options to acquire our Class A common stock under our stock plans to certain of our employees and executives. The exercise price of options granted is equal to at least 100% of the fair market value of the common stock on the date the options were granted. These nonqualified options generally vest over one to five years, expire seven to ten years from date of grant and are subject to earlier termination under certain conditions.

        Changes in the status of outstanding options were as follows:

	Shares Under Option			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
								(in millions)
Outstanding at January 1, 2009		37,066,744		$	29.38
Stock options and stock appreciation rights assumed in Liberty Transaction		16,697,580			18.83
Granted		—			—
Exercised		(16,478,768	)		20.76
Forfeited or expired		(7,863,119	)		34.70
Outstanding and exercisable at December 31, 2009		29,422,437			31.15		1.59	$	218

        The total intrinsic value of options exercised was $144 million during the year ended December 31, 2009, $38 million during the year ended December 31, 2008 and $59 million during the year ended December 31, 2007, based on the intrinsic value of individual awards on the date of exercise.

        The following table presents the estimated weighted average fair value as of November 19, 2009 of the 16.7 million stock options and stock appreciation rights assumed under the LEI Plan as part of the Liberty Transaction using the Black-Scholes valuation model, along with the assumptions used in the fair value calculations. Expected stock volatility is based primarily on the historical volatility of our common stock. The risk-free rate for periods within the contractual lives of the options are based on the U.S. Treasury yield curve in effect at the time of grant. The expected option life is based on historical exercise behavior, the contractual life of the awards, and other factors.

	November 19, 2009
Average estimated fair value per equity instrument assumed	$	14.17
Average exercise price per equity instrument assumed	$	18.90
Expected stock volatility		24.73	%
Range of risk-free interest rates		0.16 - 2.87	%
Range of expected option lives (in years)		0.7 - 7.5

        The holders of the majority of the equity instruments assumed as a result of the Liberty Transaction did not become DIRECTV employees or directors. Accordingly, we recognize those equity instruments as a liability that is subject to fair value measurement at each reporting date pursuant to

112

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

accounting rules for non-employee awards. We include that liability within "Other liabilities and deferred credits" in our Consolidated Balance Sheets. Of the 16.7 million equity instruments assumed on November 19, 2009, 8.8 million were held by persons other than employees or directors. As of December 31, 2009, 4.0 million non-employee awards remain outstanding with a fair value of approximately $61 million. The intrinsic value of awards carried as liabilities which were exercised during the period was $67 million. During the year ended December 31, 2009, we recorded a net loss of $6 million to "Liberty transaction and related charges" in the Consolidated Statements of Operations for gains and losses recognized for exercised options and the adjustment of the liability to fair value as of December 31, 2009.

        The following table presents the estimated weighted average fair value as of December 31, 2009 for the equity instruments issued to persons other than employees and directors carried as a liability using the Black-Scholes valuation model along with the assumptions used in the fair value calculations. Expected stock volatility is based primarily on the historical volatility of our common stock. The risk-free rate for periods within the contractual lives of the options are based on the U.S. Treasury yield curve in effect at the time of grant. The expected option life is based on the contractual life of the awards.

	December 31, 2009
Average estimated fair value per equity instrument assumed	$	15.19
Average exercise price per equity instrument assumed	$	20.06
Expected stock volatility		25.2	%
Range of risk-free interest rates		0.19 - 3.34	%
Range of expected option lives (in years)		0.6 - 7.4

        The following table presents the estimated weighted average fair value for stock options granted under the DIRECTV Plan using the Black-Scholes valuation model along with the assumptions used in the fair value calculations. Expected stock volatility is based primarily on the historical volatility of our common stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected option life is based on historical exercise behavior and other factors.

	2007
Estimated fair value per option granted	$	8.27
Average exercise price per option granted		22.43
Expected stock volatility		22.5	%
Risk-free interest rate		4.65	%
Expected option life (in years)		7.0

        There were no stock options granted under the DIRECTV Plan during the years ended December 31, 2008 and 2009.

113

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        The following table presents amounts recorded related to share-based compensation:

	For the Years Ended December 31,
	2009		2008		2007
	(Dollars in Millions)
Share-based compensation expense recognized	$	55	$	51	$	49
Tax benefits associated with share-based compensation expense		21		19		19
Actual tax benefits realized for the deduction of share-based compensation expense		42		43		36
Proceeds received from stock options exercised		144		105		118

        As of December 31, 2009, there was $62 million of total unrecognized compensation expense related to unvested restricted stock units that we expect to recognize as follows: $40 million in 2010 and $22 million in 2011.

        During 2009, we implemented a net exercise plan pursuant to which we only issue new shares in connection with employee option exercises equal to the intrinsic value of the exercised award on the exercise date reduced by the amount of statutory employee withholding taxes and divided by the current market price of the our common stock. As a result, we no longer receive cash in connection with the exercise of stock options, but rather issue significantly fewer shares. In addition, the company is required to pay the employee withholding taxes to taxing authorities, the cash payments for which are reported in "Taxes paid in lieu of shares issued for share-based compensation" in the Consolidated Statements of Cash Flows.

Note 16: Other Income and Expenses

        The following table summarizes the components of "Other, net" in our Consolidated Statements of Operations for the years ended December 31:

		2009			2008			2007
		(Dollars in Millions)
Equity in earnings from unconsolidated affiliates		$	51		$	55		$	35
Net foreign currency transaction gain			62			—			—
Loss from impairment of investments			(45	)
Loss on early extinguishment of debt			(34	)		—			—
Net gain (loss) from sale of investments			—			1			(6	)
Other			—			(1	)		(3	)
	Total other, net	$	34		$	55		$	26

        See Note 7 regarding equity method investments and net gains and losses recorded on the sale of investments.

Note 17: Related-Party Transactions

        In the ordinary course of our operations, we enter into transactions with related parties as discussed below.

114

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

Liberty Media, Liberty Global and Discovery Communications

        Beginning with Liberty's acquisition of its ownership interest in DIRECTV Group from News Corporation on February 27, 2008, transactions with Liberty Media Corporation, or Liberty Media, and its affiliates, including its equity method investees, may be considered to be related party transactions. Our transactions with Liberty Media and its affiliates consist primarily of the purchase of programming.

        Although as a result of the Liberty Transaction, Liberty no longer has any equity interest in DIRECTV, John Malone, Chairman of the Board of Directors of DIRECTV and of Liberty Media, has an approximate 24% voting interest in DIRECTV, an approximate 31% voting interest in Discovery Communications, Inc., or Discovery Communications, and an approximate 40% voting interest in Liberty Global Inc., or Liberty Global, and serves as Chairman of Liberty Global, and certain of Liberty Media's management and directors also serve as directors of Discovery Communications or Liberty Global. As a result of this common ownership and management, transactions with Discovery Communications and Liberty Global, and their subsidiaries or equity method investees may be considered to be related party transactions. Our transactions with Discovery Communications and Liberty Global consist primarily of purchases of programming created, owned or distributed by Discovery Communications and its subsidiaries and investees.

News Corporation and affiliates

        News Corporation and its affiliates were considered related parties until February 27, 2008, when News Corporation transferred its 41% interest in our common stock to Liberty Media. Accordingly, the following contractual arrangements with News Corporation and its affiliates are considered related party transactions and reported through February 27, 2008: purchase of programming, products and advertising; license of certain intellectual property, including patents; purchase of system access products, set-top receiver software and support services; sale of advertising space; purchase of employee services; and use of facilities.

        As discussed below in Note 19, during the first quarter of 2008, we received a $160 million cash capital contribution, which we recorded as "Additional paid-in-capital" in the Consolidated Balance Sheets.

        The majority of payments under contractual arrangements with Liberty Media, Discovery Communications, Liberty Global and News Corporation entities relate to multi-year programming contracts. Payments under these contracts are typically subject to annual rate increases and are based on the number of subscribers receiving the related programming.

Other

        Other related parties include Globo, which provides programming and advertising to Sky Brazil, and companies in which we hold equity method investments, including Sky Mexico.

115

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        The following table summarizes sales and purchase transactions with related parties:

		2009		2008		2007
		(Dollars in Millions)
Sales:
Liberty Media and affiliates		$	56	$	36	$	—
Discovery Communications, Liberty Global and affiliates			11		10		—
News Corporation and affiliates			—		2		24
Other			10		9		—
	Total	$	77	$	57	$	24
Purchases:
Liberty Media and affiliates		$	358	$	269	$	—
Discovery Communications, Liberty Global and affiliates			255		186		—
News Corporation and affiliates			—		167		901
Other			504		384		223
	Total	$	1,117	$	1,006	$	1,124

        The following table sets forth the amount of accounts receivable from and accounts payable to related parties as of December 31:

	2009		2008
	(Dollars in Millions)
Accounts receivable	$	26	$	29
Accounts payable		184		165

        The accounts receivable and accounts payable balances as of December 31, 2009 and 2008 are primarily related to affiliates of Liberty Media.

Note 18: Segment Reporting

        Our three reportable segments, which are differentiated by their products and services as well as geographic location, are DIRECTV U.S. and DIRECTV Latin America, which acquire, promote, sell and distribute digital entertainment programming via satellite to residential and commercial subscribers, and the Sports Networks, Eliminations and Other segment which includes our three regional sports networks that provide programming devoted to local professional sports teams and college sporting events and locally produces its own local programming. Sports Networks, Eliminations and Other also includes the corporate office, eliminations and other entities.

116

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        Selected information for our operating segments is reported as follows:

	DIRECTV U. S.		DIRECTV Latin America		Sports Networks, Eliminations and Other			Total
	(Dollars in millions)
2009
External revenues	$	18,664	$	2,878	$	23		$	21,565
Intersegment revenues		7		—		(7	)		—
Revenues	$	18,671	$	2,878	$	16		$	21,565
Operating profit (loss)	$	2,410	$	331	$	(68	)	$	2,673
Add: Depreciation and amortization expense		2,275		366		(1	)		2,640
Operating profit (loss) before depreciation and amortization (1)	$	4,685	$	697	$	(69	)	$	5,313
Segment assets	$	12,408	$	3,772	$	2,080		$	18,260
Capital expenditures		1,485		584		2			2,071
2008
External revenues	$	17,310	$	2,383	$	—		$	19,693
Intersegment revenues		—		—		—			—
Revenues	$	17,310	$	2,383	$	—		$	19,693
Operating profit (loss)	$	2,330	$	426	$	(61	)	$	2,695
Add: Depreciation and amortization expense		2,061		264		(5	)		2,320
Operating profit (loss) before depreciation and amortization (1)	$	4,391	$	690	$	(66	)	$	5,015
Segment assets	$	12,546	$	3,301	$	692		$	16,539
Capital expenditures		1,765		447		17			2,229
2007
External revenues	$	15,527	$	1,719	$	—		$	17,246
Intersegment revenues		—		—		—			—
Revenues	$	15,527	$	1,719	$	—		$	17,246
Operating profit (loss)	$	2,402	$	159	$	(75	)	$	2,486
Add: Depreciation and amortization expense		1,448		235		1			1,684
Operating profit (loss) before depreciation and amortization (1)	$	3,850	$	394	$	(74	)	$	4,170
Segment assets	$	12,297	$	2,456	$	310		$	15,063
Capital expenditures		2,326		336		30			2,692

(1)

Operating profit (loss) before depreciation and amortization, which is a financial measure that is not determined in accordance with GAAP can be calculated by adding amounts under the caption "Depreciation and amortization expense" to "Operating profit (loss)." This measure should be used in conjunction with GAAP financial measures and is not presented as an alternative measure of operating results, as determined in accordance with GAAP. Our management and Board of

117

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

Directors use operating profit (loss) before depreciation and amortization to evaluate the operating performance of our company and our business segments and to allocate resources and capital to business segments. This metric is also used as a measure of performance for incentive compensation purposes and to measure income generated from operations that could be used to fund capital expenditures, service debt or pay taxes. Depreciation and amortization expense primarily represents an allocation to current expense of the cost of historical capital expenditures and for intangible assets resulting from prior business acquisitions. To compensate for the exclusion of depreciation and amortization expense from operating profit, our management and our Board of Directors separately measure and budget for capital expenditures and business acquisitions.

We believe this measure is useful to investors, along with GAAP measures (such as revenues, operating profit and net income), to compare our operating performance to other communications, entertainment and media service providers. We believe that investors use current and projected operating profit (loss) before depreciation and amortization and similar measures to estimate our current or prospective enterprise value and make investment decisions. This metric provides investors with a means to compare operating results exclusive of depreciation and amortization. Our management believes this is useful given the significant variation in depreciation and amortization expense that can result from the timing of capital expenditures, the capitalization of intangible assets, potential variations in expected useful lives when compared to other companies and periodic changes to estimated useful lives.

        The following represents a reconciliation of operating profit before depreciation and amortization to reported net income on the Consolidated Statements of Operations:

	Years Ended December 31,
	2009			2008			2007
	(Dollars in Millions)
Operating profit before depreciation and amortization	$	5,313		$	5,015		$	4,170
Depreciation and amortization expense		(2,640	)		(2,320	)		(1,684	)
Operating profit		2,673			2,695			2,486
Interest income		41			81			111
Interest expense		(423	)		(360	)		(235	)
Liberty transaction and related charges		(491	)		—			—
Other, net		34			55			26
Income from continuing operations before income taxes		1,834			2,471			2,388
Income tax expense		(827	)		(864	)		(943	)
Income from continuing operations		1,007			1,607			1,445
Income from discontinued operations, net of taxes		—			6			17
Net income		1,007			1,613			1,462
Less: Net income attributable to noncontrolling interests		(65	)		(92	)		(11	)
Net income attributable to DIRECTV	$	942		$	1,521		$	1,451

118

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

        The following table presents revenues earned from subscribers located in different geographic areas. Property is grouped by its physical location.

		Years Ended and As of December 31,
		2009				2008				2007
		Revenues		Net Property & Satellites		Revenues		Net Property & Satellites		Revenues		Net Property & Satellites
		(Dollars in Millions)
United States		$	18,844	$	5,247	$	17,454	$	5,728	$	15,687	$	5,330
Latin America and the Caribbean			2,721		1,229		2,239		919		1,559		503
	Total	$	21,565	$	6,476	$	19,693	$	6,647	$	17,246	$	5,833

Note 19: Commitments and Contingencies

Commitments

        At December 31, 2009, minimum future commitments under noncancelable operating leases having lease terms in excess of one year were primarily for satellite transponder leases and real property and aggregated $402 million, payable as follows: $65 million in 2010, $60 million in 2011, $58 million in 2012, $45 million in 2013, $29 million in 2014 and $145 million thereafter. Certain of these leases contain escalation clauses and renewal or purchase options, which we have not considered in the amounts disclosed. Rental expenses under operating leases were $72 million in 2009, $95 million in 2008 and $114 million in 2007.

        At December 31, 2009, our minimum payments under agreements to purchase broadcast programming, regional professional team rights and the purchase of services that we have outsourced to third parties, such as billing services, and satellite telemetry, tracking and control, satellite launch contracts and broadcast center services aggregated $9,696 million, payable as follows: $1,805 million in 2010, $1,796 million in 2011, $1,909 million in 2012, $1,497 million in 2013, $1,248 million in 2014 and $1,441 million thereafter.

        As of December 31, 2009, other long-term obligations totaling $132 million are payable approximately as follows: $85 million in 2010 and $47 million in 2011. These amounts are recorded in "Accounts payable and accrued liabilities" and "Other liabilities and deferred credits" in the Consolidated Balance Sheets.

Contingencies

Puerto Rico Condition

        In connection with approval by the Federal Communications Commission, or FCC, of the sale of News Corporation's interest in DIRECTV Group to Liberty Media in 2008, the FCC imposed certain conditions related to attributable interests in two pay television operations: DIRECTV Puerto Rico and Liberty Cablevision of Puerto Rico Ltd. We refer to the FCC's requirements as the "Puerto Rico Condition". Because neither News Corporation nor Liberty Media could satisfy the Puerto Rico Condition, in connection with the close of that transaction a Special Committee of independent directors of our Board of Directors approved an agreement with News Corporation and Liberty Media in which we assumed responsibility for the satisfaction, modification or waiver of the Puerto Rico Condition within the one year period specified by the FCC. As part of this agreement, during the first

119

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

quarter of 2008, we received a $160 million cash capital contribution, which we recorded as "Additional paid-in-capital" in the Consolidated Balance Sheets.

        In order to comply with terms of the FCC order, effective February 25, 2009, we placed the shares of DIRECTV Puerto Rico into a trust and appointed an independent trustee who oversees the management and operation of DIRECTV Puerto Rico, and has the authority, subject to certain conditions, to divest ownership of DIRECTV Puerto Rico. We cannot be sure that the FCC will agree with our view that the trust is sufficient to sever all attributable links between DIRECTV and Liberty, or that it will not require us to undertake further cumbersome and expensive measures to eliminate such attribution. We continue to consolidate the results of DIRECTV Puerto Rico.

Redeemable Noncontrolling Interest

        In connection with our acquisition of Sky Brazil in 2006, our partner who holds the remaining 25.9% interest, Globo was granted the right, until January 2014, to require us to purchase all or a portion (but not less than half) of its shares in Sky Brazil. Upon exercising this right, the fair value of Sky Brazil shares will be determined by mutual agreement or by an outside valuation expert, and we have the option to elect to pay for the Sky Brazil shares in cash, shares of our common stock or a combination of both. As of December 31, 2009, we estimate that Globo's 25.9% equity interest in Sky Brazil has a fair value of approximately $400 million to $550 million. As of December 31, 2008, we estimate that Globo's 25.9% equity interest in Sky Brazil had a fair value of approximately $325 million to $450 million. Adjustments to the carrying amount of the redeemable noncontrolling interest were recorded to additional paid-in-capital. We determined the range of fair values using significant unobservable inputs including forecasted operating results, which are Level 3 inputs pursuant to fair value accounting standards.

Litigation

        Litigation is subject to uncertainties and the outcome of individual litigated matters is not predictable with assurance. Various legal actions, claims and proceedings are pending against us arising in the ordinary course of business. We have established loss provisions for matters in which losses are probable and can be reasonably estimated. Some of the matters may involve compensatory, punitive, or treble damage claims, or demands that, if granted, could require us to pay damages or make other expenditures in amounts that could not be estimated at December 31, 2009. After discussion with counsel representing us in those actions, it is the opinion of management that such litigation is not expected to have a material adverse effect on our consolidated financial statements.

        Finisar Corporation.    As previously reported, we were successful in 2008 getting the jury verdict in the Finisar case vacated on appeal. The original verdict found the patent to be valid and willfully infringed, and the jury awarded approximately $79 million in damages. The trial court increased the damages award by $25 million because of the jury finding of willful infringement and awarded pre-judgment interest of $13 million. DIRECTV was also ordered to pay into escrow $1.60 per new set-top receiver manufactured for use with the DIRECTV system beginning June 17, 2006 and continuing until the patent expires in 2012 or was otherwise found to be invalid. On April 18, 2008, the Court of Appeals reversed the verdict of the district court in part, vacated the findings of infringement, and remanded for further proceedings on the remaining issues finding that the district court had applied erroneous interpretations of certain terms of the claims. On remand, we sought and obtained summary judgment on invalidity of all remaining claims, and the case against DIRECTV was dismissed on May 19, 2009. Finisar filed a Notice of Appeal, and oral argument on the appeal was held on

120

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)

January 6, 2010. On January 8, 2010, the Court of Appeals affirmed per curiam the grant of summary judgment on all claims. This case is now resolved and there will be no further proceedings in this matter.

Income Tax Matters

        We have received tax assessments from certain foreign jurisdictions and have agreed to indemnify previously divested businesses for certain tax assessments relating to periods prior to their respective divestitures. These assessments are in various stages of the administrative process or litigation, and we believe we have adequately provided for any related liability.

        While the outcome of these assessments and other tax issues cannot be predicted with certainty, we believe that the ultimate outcome will not have a material effect on our consolidated financial statements.

Satellites

        We may purchase in-orbit and launch insurance to mitigate the potential financial impact of satellite launch and in-orbit failures if the premium costs are considered economic relative to the risk of satellite failure. The insurance generally covers the unamortized book value of covered satellites. We do not insure against lost revenues in the event of a total or partial loss of the capacity of a satellite. We generally rely on in-orbit spare satellites and excess transponder capacity at key orbital slots to mitigate the impact a satellite failure could have on our ability to provide service. At December 31, 2009, the net book value of in-orbit satellites was $1,984 million, all of which was uninsured.

Other

        We are contingently liable under standby letters of credit and bonds in the aggregate amount of $35 million at December 31, 2009.

121

DIRECTV

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(concluded)

Note 20: Selected Quarterly Data (Unaudited)

        The following table presents unaudited selected quarterly data for 2009 and 2008:

	1st		2nd		3rd		4th
	(Dollars in Millions, Except Per Share Amounts)
2009 Quarters
Revenues	$	4,901	$	5,218	$	5,465	$	5,981
Operating profit		424		702		685		862
Income (loss) from continuing operations attributable to DIRECTV		201		407		366		(32	)
Income from discontinued operations, net of taxes, attributable to DIRECTV		—		—		—		—
Net income attributable to DIRECTV		201		407		366		(32	)
Basic earnings (loss) per common share from continuing operations		0.20		0.40		0.38		(0.03	)
Diluted earnings (loss) per common share from continuing operations		0.20		0.40		0.37		(0.03	)
2008 Quarters
Revenues	$	4,591	$	4,807	$	4,981	$	5,314
Operating profit		657		801		658		579
Income from continuing operations attributable to DIRECTV		371		455		363		326
Income from discontinued operations, net of taxes, attributable to DIRECTV		—		—		—		6
Net income attributable to DIRECTV		371		455		363		332
Basic earnings per common share from continuing operations		0.32		0.40		0.33		0.31
Diluted earnings per common share from continuing operations		0.32		0.40		0.33		0.31

***

122

DIRECTV

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        None.

ITEM 9A.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

        We carried out an evaluation as of the end of the year covered by this Annual Report on Form 10-K under the supervision and with the participation of management, including our principal executive officers and financial officers, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on the evaluation, our principal executive officers and our financial officers concluded that our disclosure controls and procedures were effective as of December 31, 2009.

        There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended December 31, 2009, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Internal Control Over Financial Reporting

Management's Report on Internal Control Over Financial Reporting

        Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934. Those rules define internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America, or GAAP, and includes those policies and procedures that:

•

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

•

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

•

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2009. In making this assessment, our management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the

123

DIRECTV

Treadway Commission (COSO). Based on their assessment and those criteria, management believes that, as of December 31, 2009, our internal control over financial reporting is effective.

        Our independent registered public accounting firm has issued an audit report on internal control over financial reporting, which appears below.

        REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of DIRECTV
El Segundo, California

        We have audited the internal control over financial reporting of DIRECTV (formerly, The DIRECTV Group, Inc.) (the "Company") as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

        A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

        Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal Control—

124

DIRECTV

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

        We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2009 of the Company and our report dated February 25, 2010 expressed an unqualified opinion on those financial statements and financial statement schedules and included an explanatory paragraph regarding the Company's adoption of new accounting standards.

/s/ DELOITTE & TOUCHE LLP

Los Angeles, California
February 25, 2010

125

DIRECTV

ITEM 9B.    OTHER INFORMATION

        None.

***

PART III

ITEMS    10, 11, 12, 13 and 14

        We hereby incorporate by reference information required by Part III (Items 10, 11, 12, 13 and 14) of this Annual Report from DIRECTV's definitive Proxy Statement for its 2010 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission, pursuant to Regulation 14A, not later than 120 days after the end of the fiscal year.

***

PART IV

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES

			Page Number
(a)	1.	All Consolidated Financial Statements		See Part II
	2.	Financial Statement Schedule I—Condensed Financial Information of the Registrant		132
		Financial Statement Schedule II—Valuation and Qualifying Accounts for the Years Ended December 31, 2009, 2008 and 2007		135
	3.	Exhibits

Exhibit Number	Exhibit Name
*3.1	DIRECTV Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K of DIRECTV filed November 20, 2009 (SEC File No. 1-34554))
*3.2	DIRECTV Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Form 8-K of DIRECTV filed November 20, 2009 (SEC File No. 1-34554))
**4.1	Specimen form of certificate representing Class A Common Stock of DIRECTV
*4.2	Indenture, dated as of June 15, 2005, by and among DIRECTV Holdings LLC, DIRECTV Financing Co, Inc., the Guarantors signatory thereto and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.1 to the Form 8-K of DIRECTV Holdings LLC and DIRECTV Financing Co, Inc. filed June 20, 2005 (SEC File No. 333-106529))
*4.3	Form of 63/8% Senior Notes due 2015 (incorporated by reference to Exhibit 10.1 to the Form 8-K of DIRECTV Holdings LLC and DIRECTV Financing Co, Inc. filed June 20, 2005 (SEC File No. 333-106529))

126

DIRECTV

Exhibit Number	Exhibit Name
*4.4	Supplemental Indenture dated as of April 28, 2006 by and among LABC Productions, LLC, DIRECTV Holdings LLC, DIRECTV Financing Co, Inc., the Guarantors signatory thereto and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.8 to the Form 10-K of The DIRECTV Group, Inc. filed March 1, 2007 (SEC File No. 1-31945))
*4.5	Indenture, dated as of May 14, 2008, by and among DIRECTV Holdings LLC, DIRECTV Financing Co, Inc., the Guarantors signatory thereto and The Bank of New York, as trustee (incorporated by reference to Exhibit 10.1 to the Form 8-K of DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. filed May 16, 2008 (SEC File No. 333-106529))
*4.6	Form of 75/8% Senior Notes due 2016 (included in Exhibit 4.5)
*4.7	Indenture, dated as of September 22, 2009, by and among DIRECTV Holdings LLC, DIRECTV Financing Co, Inc., the Guarantors signatory thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.1 of the Form 8-K of DIRECTV Holdings, LLC filed on September 25, 2009 (SEC File No. 333-106529)).
*4.8	Form of 43/4% Senior Notes due 2014 (included in Exhibit 4.7)
*4.9	Form of 57/8% Senior Notes due 2019 (included in Exhibit 4.7)
*10.1	Amended and Restated Agreement for the Allocation of United States Income Taxes, dated as of April 9, 2003, by and between General Motors Corporation and Hughes Electronics Corporation (incorporated by reference to Exhibit 99.3 to the Form S-4 of Hughes Electronics Corporation filed June 5, 2003 (SEC File No. 1-31945))
*10.2	DTH Agreement, dated as of October 8, 2004, by and among Grupo Televisa, S.A., The News Corporation Limited, Innova, S. de R.L. de C.V., The DIRECTV Group, Inc. and DIRECTV Latin America, LLC (incorporated by reference to Exhibit 10.8 to the Form 8-K of The DIRECTV Group, Inc. filed October 15, 2004 (SEC File No. 1-31945))
*10.3	Credit Agreement dated as of April 13, 2005 by and among DIRECTV Holdings LLC, Bank of America, N.A., as Administrative Agent and Collateral Agent, the lenders party to the Credit Agreement, certain subsidiaries of the DIRECTV Holdings LLC, as guarantors, JP Morgan Chase Bank, N.A., as Syndication Agent, Credit Suisse First Boston, Goldman Sachs Credit Partners, L.P. and Citicorp North America, Inc. as Co-Documentation Agents, and Banc of America Securities LLC and J.P. Morgan Securities Inc., as Co-Lead Arrangers and Co-Book Managers (incorporated by reference to Exhibit 10.1 to the Form 8-K of DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. filed April 13, 2005 (SEC File No. 333-106529))
*10.4	Security Agreement, dated as of April 13, 2005, by and among DIRECTV Holdings LLC, its subsidiaries named therein as grantors and Bank of America, N.A., as Collateral Agent (incorporated by reference to Exhibit 10.2 to the Form 8-K of DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. filed April 13, 2005 (SEC File No. 333-106529))

127

DIRECTV

Exhibit Number	Exhibit Name
*10.5	Pledge Agreement, dated as of April 13, 2005, by and among DIRECTV Holdings LLC, its subsidiaries named therein as pledgors and Bank of America, N.A., as Collateral Agent (incorporated by reference to Exhibit 10.3 to the Form 8-K of DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. filed April 13, 2005 (SEC File No. 333-106529))
*10.6	Amendment No.1, dated as of May 14, 2008, by and among DIRECTV Holdings LLC, the Guarantors and Lenders signatory thereto and Bank of America, N.A. as Administrative Agent (incorporated by reference to Exhibit 10.3 of the Form 8-K of DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. filed May 16, 2008 (SEC File No. 333-106529))
*10.7	Tranche C Term Loan Joinder Agreement, dated as of May 14, 2008, by and among DIRECTV Holdings LLC and Bank of America, N.A., as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.4 of the Form 8-K of DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. filed May 16, 2008 (SEC File No. 333-106529))
*10.8	Letter Agreement dated December 21, 2006 between The DIRECTV Group, Inc. and Liberty Media Corporation (incorporated by reference to Exhibit 10.3 to the Form 8-K of The DIRECTV Group, Inc. filed February 27, 2008 (SEC File No. 1-31945))
*10.9	Confidentiality, Non-Solicitation and Non-Competition Agreement dated as of December 22, 2006 between The DIRECTV Group,  Inc. and News Corporation (incorporated by reference to Exhibit 10.2 to the Form 8-K of The DIRECTV Group, Inc. filed February 27, 2008 (SEC File No. 1-31945))
*10.10	Separation Agreement dated as of February 26, 2008 between The DIRECTV Group, Inc. and News Corporation (incorporated by reference to Exhibit 10.1 to the Form 8-K of The DIRECTV Group, Inc. filed February 27, 2008 (SEC File No. 1-31945))
*10.11	Letter Agreement dated May 6, 2008 among The DIRECTV Group, Inc., Liberty Media Corporation, Greenlady Corporation and Greenlady II, LLC (incorporated by reference to Exhibit 10.1 to the Form 8-K of The DIRECTV Group, Inc. filed May 6, 2008 (SEC File No. 1-31945))
*10.12	Agreement dated May 6, 2008 between The DIRECTV Group, Inc. and Liberty Media Corporation (incorporated by reference to Exhibit 10.1 to Form 8-K of The DIRECTV Group, Inc. filed May 7, 2008 (SEC File No. 1-31945))
†† *10.13	The DIRECTV Group, Inc. Executive Deferred Compensation Plan, amended and restated effective as of January 1, 2005 (incorporated by reference to Exhibit 10.19 to the Form 10-K of The DIRECTV Group, Inc. filed February 27, 2009 (SEC File No. 1-31945))
†† *10.14	The DIRECTV Group, Inc. Amended and Restated 2004 Stock Plan (incorporated by reference to Annex B to the The DIRECTV Group, Inc.'s Definitive Proxy Statement dated April 27, 2007 and filed on April 27, 2007 (SEC File No. 1-31945))

128

DIRECTV

Exhibit Number	Exhibit Name
†† *10.15	The Liberty Entertainment, Inc. Transitional Stock Adjustment Plan (incorporated by reference to Exhibit 99(a) of the Form S-8 of DIRECTV filed on November 19, 2009 (SEC File No. 1-34554))
†† *10.16	The DIRECTV Group, Inc. Amended and Restated Executive Officer Cash Bonus Plan (incorporated by reference to Annex C to the The DIRECTV Group, Inc.'s Definitive Proxy Statement dated April 27, 2007 and filed on April 27, 2007 (SEC File No. 1-31945))
†† *10.17	Terms and conditions of 2008 Restricted Stock Unit Grants to applicable executive officers (incorporated by reference to Exhibit 10.1 to the Form 8-K of The DIRECTV Group, Inc. filed February 14, 2008 (SEC File No. 1-31945))
†† *10.18	Summary Terms 2009 Restricted Stock Unit Grants to applicable executive officers (incorporated by reference to Exhibit 10.1 to the Form 8-K of The DIRECTV Group, Inc. filed February 25, 2009 (SEC File No. 1-31945))
†† *10.19	Summary Terms 2010 Restricted Stock Unit Grants to applicable executive officers (incorporated with reference to Exhibit 10.1 of the Form 8-K of DIRECTV filed February 17, 2010 (SEC File No. 1-34554))
†† *10.20	Summary Terms—2009 Bonus (incorporated by reference to Exhibit 10.2 to the Form 8-K of The DIRECTV Group,  Inc. filed February 25, 2009 (SEC File No. 1-31945))
†† *10.21	Summary Terms—2010 Bonus (incorporated by reference to Exhibit 10.2 to the Form 8-K of DIRECTV filed February 17, 2010 (SEC File No. 1-34554))
†† *10.22	Interim Chief Executive Officer Short-Term Cash Incentive Plan (incorporated by reference to Exhibit 10.1 of the Form 8-K of The DIRECTV Group, Inc. filed on August 10, 2009 (SEC File No. 1-31945))
†† *10.23	Employment Contract of Bruce Churchill dated as of July 1, 2009 (incorporated by reference to Exhibit 10.4 of the Form 10-Q of The DIRECTV Group, Inc. filed on August 7, 2009 (SEC File No. 1-31945))
†† *10.24	Employment Agreement dated as of October 30, 2008, between Patrick T. Doyle and The DIRECTV Group, Inc. (incorporated by reference to Exhibit 10.1 to the Form 8-K of The DIRECTV Group, Inc. filed on November 5, 2008 (SEC File No. 1-31945))
†† *10.25	Employment Contract of Patrick T. Doyle dated as of July 1, 2009 (incorporated by reference to Exhibit 10.5 of the Form 10-Q of The DIRECTV Group, Inc. filed on August 7, 2009 (SEC File No. 1-31945))
†† *10.26	Employment Contract of Larry Hunter dated as of July 1, 2009 (incorporated by reference to Exhibit 10.6 of the Form 10-Q of The DIRECTV Group, Inc. filed on August 7, 2009 (SEC File No. 1-31945))
†† *10.27	Employment Contract of Romulo Pontual dated as of July 1, 2009 (incorporated by reference to Exhibit 10.7 of the Form 10-Q of The DIRECTV Group, Inc. filed on August 7, 2009 (SEC File No. 1-31945))
†† *10.28	Michael D. White Employment Agreement effective as of January 1, 2010 (incorporated by reference to Exhibit 10.1 of the Form 8-K of DIRECTV filed on January 7, 2010 (SEC File No. 1-34554))

129

DIRECTV

Exhibit Number	Exhibit Name
†† *10.29	DIRECTV Non-Qualified Stock Option Agreement between DIRECTV and Michael D. White dated as of January 4, 2010 (incorporated by reference to Exhibit 10.2 of the Form 8-K of DIRECTV filed on January 7, 2010 (SEC File No. 1-34554))
†† *10.30	DIRECTV Performance Stock Unit Award Agreement between DIRECTV and Michael D. White dated as of January 4, 2010 (incorporated by reference to Exhibit 10.3 of the Form 8-K of DIRECTV filed on January 7, 2010 (SEC File No. 1-34554))
*10.31	Registration Rights Agreement dated as of September 22, 2009, by and among DIRECTV Holdings LLC, DIRECTV Financing Co., Inc., the Guarantors signatory thereto and the Initial Purchasers named therein (incorporated by reference to Exhibit 10.2 of the Form 8-K of DIRECTV Holdings LLC filed on September 25, 2009 (SEC File No. 333-106529))
*10.32	Voting, Standstill, Non-Competition and Non-Solicitation Agreement, dated as of May 3, 2009, by and among Liberty Media Corporation, DIRECTV, The DIRECTV Group, Inc., Liberty Entertainment, Inc., Greenlady Corporation, and Greenlady II, LLC (incorporated by reference to Exhibit 10.2 of the Form 8-K of The DIRECTV Group, Inc. filed on May 4, 2009 (SEC File No. 1-31945))
*10.33	Voting and Right of First Refusal Agreement, dated as of May 3, 2009, by and among Liberty Entertainment, Inc., The DIRECTV Group, Inc., DIRECTV, Dr. John C. Malone, Mrs. Leslie Malone, The Tracy L. Neal Trust A and The Evan D. Malone Trust A (incorporated by reference to Exhibit 10.3 of the Form 8-K of The DIRECTV Group, Inc. filed on May 4, 2009 (SEC File No. 1-31945))
*10.34	Amendment No. 1, dated as of July 29, 2009, to the Voting and Right of First Refusal Agreement, dated as of May 3, 2009, by and among Liberty Entertainment, Inc., The DIRECTV Group, Inc., DIRECTV, Dr. John C. Malone, Mrs. Leslie Malone, The Tracy L. Neal Trust A and The Evan D. Malone Trust A (incorporated by reference to Exhibit 10.2 of the Form 8-K of The DIRECTV Group, Inc. filed on July 30, 2009 (SEC File No. 1-31945))
*10.35	Amendment No. 2, dated as of October 2, 2009, to the Voting and Right of First Refusal Agreement, dated as of May 3, 2009, by and among Liberty Entertainment, Inc., The DIRECTV Group, Inc., DIRECTV, Dr. John C. Malone, Mrs. Leslie Malone, The Tracy L. Neal Trust A and The Evan D. Malone Trust A (incorporated by reference to Exhibit 10.2 of the Form 8-K of The DIRECTV Group, Inc. filed on October 2, 2009 (SEC File No. 1-31945))
**10.36	Tax Sharing Agreement by and between Liberty Media Corporation and Liberty Entertainment, Inc. dated November 19, 2009
**10.37	Standstill Agreement by and among John C. Malone, Leslie Malone, The Tracy L. Neal Trust A, The Evan D. Malone Trust A, and DIRECTV dated November 19, 2009
**10.38	Credit Agreement, dated as of April 9, 2008 by and between Bank of America, N.A. and Greenlady II, LLC
**10.39	Pledge Agreement, dated as of April 9, 2008 by and between Bank of America, N.A. and Greenlady II, LLC

130

DIRECTV

Exhibit Number	Exhibit Name
**10.40	Amendment, Unwind, Consent and Waiver Agreement, dated as of November 19, 2009 among Greenlady II, LLC, DIRECTV and Bank of America, N.A.
**10.41	Guaranty of DIRECTV in favor of Bank of America, N.A. dated as of November 19, 2009
*14.1	The DIRECTV Group, Inc. Code of Ethics and Business Conduct, adopted February 6, 2007 (incorporated by reference to Exhibit 14.1 to the Form 8-K of The DIRECTV Group, Inc. filed on February 12, 2007 (SEC File No. 1-31945))
**14.2	DIRECTV Code of Ethics and Business Conduct, adopted November 19, 2009
**21	Subsidiaries of the Registrant as of December 31, 2009
**23	Consent of Deloitte & Touche LLP
***31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
***31.2	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
***32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
***32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
****101.INS	XBRL Instance Document
****101.SCH	XBRL Taxonomy Extension Schema Document
****101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
****101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
****101.LAB	XBRL Taxonomy Extension Label Linkbase Document
****101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*

Incorporated by reference.

**

Filed herewith.

***

Furnished not filed.

****

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

††

Management contract or compensatory plan or arrangement.

        A copy of any of the exhibits included in this Annual Report on Form 10-K, other than those as to which confidential treatment has been granted by the Securities and Exchange Commission, upon payment of a fee to cover the reasonable expenses of furnishing such exhibits, may be obtained by written request to us at the address set forth on the front cover, attention General Counsel.

131

DIRECTV

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

CONDENSED STATEMENTS OF OPERATIONS
(Parent Company Only)

		Years Ended December 31,
		2009			2008			2007
		(Dollars in Millions)
Operating costs and expenses
	General and administrative expenses	$	80		$	68		$	87
Operating loss			(80	)		(68	)		(87	)
Interest income			14			35			43
Interest expense			(3	)		(3	)		(3	)
Equity in net earnings of subsidiaries			2,223			2,430			2,434
Liberty transaction and related charges			(384	)		—			—
Other, net			(1	)		(15	)		(10	)
Income from continuing operations before income taxes			1,769			2,379			2,377
Income tax expense			(827	)		(864	)		(943	)
Income from continuing operations			942			1,515			1,434
Income from discontinued operations, net of taxes			—			6			17
Net income		$	942		$	1,521		$	1,451

CONDENSED BALANCE SHEETS
(Parent Company Only)

			December 31,
			2009		2008
			(Dollars in Millions)
ASSETS
Current assets
	Cash and cash equivalents		$	557	$	536
	Accounts and interest receivables from subsidiaries			4		30
	Deferred income taxes			131		15
	Prepaid expenses and other			163		110
		Total current assets		855		691
Investments in subsidiaries				3,314		5,134
Other assets				5		67
Total assets			$	4,174	$	5,892
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable, and accrued liabilities		$	47	$	112
Total current liabilities				47		112
Deferred income taxes				542		424
Other liabilities and deferred credits				274		400
Commitments and contingencies
Redeemable Noncontrolling Interest				400		325
Stockholders' equity				2,911		4,631
Total liabilities and stockholders' equity			$	4,174	$	5,892

Reference should be made to the Notes to the Condensed Financial Statements.

132

DIRECTV

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

CONDENSED STATEMENTS OF CASH FLOWS
(Parent Company Only)

		Years Ended December 31,
		2009			2008			2007
		(Dollars in Millions)
Cash Flows from Operating Activities
	Net cash used in operating activities	$	(33	)	$	(16	)	$	(388	)
Cash Flows from Investing Activities
Dividends from, net of investments in, subsidiaries			1,927			3,390			1,259
Cash paid for Liberty transaction, net of cash acquired			(153	)		—			—
Cash paid for property and equipment			(2	)		(17	)		(30	)
Purchase of short-term investments			—			—			(588	)
Sale of short-term investments			—			—			748
Other, net			10			6			(5	)
	Net cash provided by investing activities		1,782			3,379			1,384
Cash Flows from Financing Activities
Common shares repurchased and retired			(1,696	)		(3,174	)		(2,025	)
Capital contribution			—			160			—
Stock options exercised			35			105			118
Taxes paid in lieu of shares issued for share-based compensation			(72	)		—			—
Excess tax benefit from share-based compensation			5			8			7
	Net cash used in financing activities		(1,728	)		(2,901	)		(1,900	)
Net increase in cash and cash equivalents			21			462			(904	)
Cash and cash equivalents at beginning of the year			536			74			978
Cash and cash equivalents at end of the year		$	557		$	536		$	74

Reference should be made to the Notes to the Condensed Financial Statements.

133

DIRECTV

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Note 1: Basis of Presentation

        The following parent only condensed financial statements represent the activity of The DIRECTV Group Inc., until November 19, 2009, when the Liberty Transaction was completed, and DIRECTV thereafter. See Note 3 of the Consolidated Financial Statements for further details of the merger.

        As discussed in Note 9 of the Notes to the Consolidated Financial Statements, the terms of the DIRECTV Holdings LLC credit facility limit DIRECTV Holdings LLC and its respective subsidiaries from transferring funds to us in the form of cash dividends, loans or advances. In the parent company only financial statements, we state our investments in subsidiaries at cost, net of equity in earnings of subsidiaries, since the date of formation/acquisition. As a result, we include our interest in the net assets of DIRECTV Holdings LLC, which total approximately $1.5 billion at December 31, 2009 and $2.7 billion at December 31, 2008 in "Investments in subsidiaries" in the accompanying Condensed Balance Sheets of the parent company. The parent company only financial statements and related notes should be read in conjunction with our consolidated financial statements and notes thereto.

Note 2: Credit Facilities

        See Note 9 of the Notes to the Consolidated Financial Statements.

Note 3: Contingencies

        See Note 19 of the Notes to the Consolidated Financial Statements.

Note 4: Dividends Received

        We received dividends from our subsidiaries in the amounts of $1,927 million in 2009, $3,400 million in 2008 and $1,050 million in 2007 from available cash and cash equivalents. See Note 7 of the Notes to the Consolidated Financial Statements for other dividends received.

134

DIRECTV
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Description		Balance at beginning of year			Additions charged to costs and expenses			Additions charged to other accounts			Deductions			Balance at end of year
		(Dollars in Millions)
For the Year Ended December 31, 2009
Allowances Deducted from Assets
	Accounts receivable	$	(50	)	$	(240	)	$	(238)	(a)	$	472	(b)	$	(56	)
For the Year Ended December 31, 2008
Allowances Deducted from Assets
	Accounts receivable	$	(56	)	$	(210	)	$	(192)	(a)	$	408	(b)	$	(50	)
For the Year Ended December 31, 2007
Allowances Deducted from Assets
	Accounts receivable	$	(46	)	$	(196	)	$	(160)	(a)	$	346	(b)	$	(56	)

(a)

Primarily reflects the recovery of accounts previously written-off.

(b)

Primarily relates to accounts written-off.

135

DIRECTV

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	DIRECTV (Registrant)
Date: February 25, 2010
	By:	/s/ PATRICK T. DOYLE Patrick T. Doyle (Executive Vice President and Chief Financial Officer)

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on this 25th day of February 2010 by the following persons on behalf of the Registrant and in the capacities indicated.

Signature	Title
/s/ JOHN MALONE (John Malone)	Chairman of the Board of Directors
/s/ MICHAEL D. WHITE (Michael D. White)	Director, President and Chief Executive Officer	}	Principal Executive Officer
/s/ PATRICK T. DOYLE (Patrick T. Doyle)	Executive Vice President and Chief Financial Officer	}	Principal Financial Officer
/s/ JOHN F. MURPHY (John F. Murphy)	Senior Vice President and Controller	}	Principal Accounting Officer
/s/ CHASE CAREY (Chase Carey)	Director
/s/ NEIL R. AUSTRIAN (Neil R. Austrian)	Director
/s/ RALPH F. BOYD, JR. (Ralph F. Boyd, Jr.)	Director
/s/ PAUL GOULD (Paul Gould)	Director
/s/ GREG MAFFEI (Greg Maffei)	Director
/s/ NANCY NEWCOMB (Nancy Newcomb)	Director

136

DIRECTV

Signature	Title
/s/ CHARLES R. LEE (Charles R. Lee)	Director
/s/ PETER A. LUND (Peter A. Lund)	Director
/s/ HAIM SABAN (Haim Saban)	Director

***

137

DIRECTV

EXHIBIT INDEX

Exhibit Number	Exhibit Name
4.1	Specimen form of certificate representing Class A Common Stock of DIRECTV
10.36	Tax Sharing Agreement by and between Liberty Media Corporation and Liberty Entertainment, Inc. dated November 19, 2009
10.37	Standstill Agreement by and among John C. Malone, Leslie Malone, The Tracy L. Neal Trust A, The Evan D. Malone Trust A, and DIRECTV dated November 19, 2009
10.38	Credit Agreement, dated as of April 9, 2008 by and between Bank of America, N.A. and Greenlady II,  LLC
10.39	Pledge Agreement, dated as of April 9, 2008 by and between Bank of America, N.A. and Greenlady II,  LLC
10.40	Amendment, Unwind, Consent and Waiver Agreement, dated as of November 19, 2009 among Greenlady II, LLC, DIRECTV and Bank of America, N.A.
10.41	Guaranty of DIRECTV in favor of Bank of America, N.A. dated as of November 19, 2009
14.2	DIRECTV Code of Ethics and Business Conduct, adopted November 19, 2009
21	Subsidiaries of the Registrant as of December 31, 2009
23	Consent of Deloitte & Touche LLP
31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

        A copy of any of the exhibits included in this Annual Report on Form 10-K, other than those as to which confidential treatment has been granted by the Securities and Exchange Commission, upon payment of a fee to cover the reasonable expenses of furnishing such exhibits, may be obtained by written request to us at the address set forth on the front cover, attention General Counsel.

EX-4.1

Exhibit 4.1

THIS CERTIFIES THAT is the owner of CUSIP DATED COUNTERSIGNED AND REGISTERED: COMPUTERSHARE TRUST COMPANY, N.A. TRANSFER AGENT AND REGISTRAR, FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS A COMMON STOCK, PAR VALUE $0.01, OF DIRECTV (hereinafter called the “Corporation”) transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby are issued and shall be subject to the express terms and provisions of the Certificate of Incorporation of the Corporation filed in the office of the Secretary of State of Delaware. This certificate is not valid unless countersigned by the Transfer Agent and registered by a Registrar. Witness the seal of the Corporation and the signatures of its duly authorized officers. CLASS A COMMON STOCK PAR VALUE $0.01 CLASS A COMMON STOCK THIS CERTIFICATE IS TRANSFERABLE IN CANTON, MA AND NEW YORK, NY SEE REVERSE FOR CERTAIN DEFINITIONS Certificate Number Shares . DIRECTV INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE Executive Vice President Secretary By AUTHORIZED SIGNATURE 016570| 003590|127C|RESTRICTED||4|057-423 25490A 10 1 <<Month Day, Year>> ** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Sample **** Mr. Sample **600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares*** *600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares**** 600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****6 00620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****60 0620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600 620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares***600620**Shares****600620**Shares****60062 0**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620 **Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620* *Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620** Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**S hares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Sh * * * SIX HUNDRED THOUSAND SIX HUNDRED AND TWENTY* * * MR. SAMPLE & MRS. SAMPLE & MR. SAMPLE & MRS. SAMPLE [SEAL]

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT- . . . . . . . . . .Custodian . . . . . . . . . . . . . . . TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act . . . . . . . . . . . . . JT TEN - as joint tenants with right of survivorship UNIF TRF MIN ACT . . . . . . . . . . . . . . .Custodian (until age. . . ). . . . . . . . . . . and not as tenants in common (Cust) (Minor) under Uniform Transfers to Minors Act. . . . . . . . . . (State) Additional abbreviations may also be used though not in the above list. (Cust) (Minor) (State) THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS A COPY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF, WHICH THE CORPORATION IS AUTHORIZED TO ISSUE, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. ANY SUCH REQUEST MAY BE MADE IN WRITING TO THE OFFICE OF THE SECRETARY OF THE CORPORATION OR THE TRANSFER AGENT. For value received, ____________________________hereby sell, assign and transfer unto _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________ Shares _______________________________________________________________________________________________________________________ Attorney Dated: __________________________________________20__________________ Signature: ____________________________________________________________ Signature: ____________________________________________________________ Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises. . DIRECTV Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.

EX-10.36

Exhibit 10.36

TAX SHARING AGREEMENT

BETWEEN

LIBERTY MEDIA CORPORATION

AND

LIBERTY ENTERTAINMENT, INC.

TABLE OF CONTENTS

		Page
SECTION 1.         Definition of Terms		2
SECTION 2.         Allocation of Taxes and Tax-Related Losses		11
2.1	Allocation of Taxes	11
2.2	Special Rules	12
2.3	Tax Payments	13
SECTION 3.         Preparation and Filing of Tax Returns		13
3.1	Combined Returns	13
3.2	Separate Returns	13
3.3	Provision of Information	13
3.4	Special Rules Relating to the Preparation of Tax Returns	14
3.5	Refunds, Credits or Offsets	16
3.6	Carrybacks	17
3.7	Amended Returns	17
SECTION 4.         Tax Payments		18
4.1	Payment of Taxes to Tax Authority	18
4.2	Indemnification Payments	18
4.3	Interest on Late Payments	18
4.4	Tax Consequences of Payments	18
SECTION 5.         Assistance and Cooperation		19
5.1	Cooperation	19
5.2	Supplemental Rulings	19
SECTION 6.         Tax Records		20
6.1	Retention of Tax Records	20
6.2	Access to Tax Records	20
6.3	Confidentiality	21
6.4	Delivery of Tax Records	21
SECTION 7.         Restriction on Certain Actions of LMC and LEI; Indemnity		21
7.1	Restrictive Covenants	21
7.2	LMC Indemnity	22
7.3	LEI Indemnity	23
7.4	Scope	23
7.5	Notices of Tax Contests (Other than Third Party Claims)	23
7.6	Control of Tax Contests (Other than Third Party Claims)	24
7.7	Cooperation	24
7.8	Third Party Claims	24

i

7.9	Other Claims	25
SECTION 8.         General Provisions		25
8.1	Termination	25
8.2	Predecessors or Successors	25
8.3	Expenses	26
8.4	Governing Law	26
8.5	Waiver of Jury Trial	26
8.6	Notices	26
8.7	Counterparts	27
8.8	Binding Effect; Assignment	27
8.9	Severability	28
8.10	Amendments; Waivers	28
8.11	Effective Date	29
8.12	Change in Law	29
8.13	Authorization, Etc.	29
8.14	No Third Party Beneficiaries	29
8.15	Entire Agreement	29
8.16	No Strict Construction; Interpretation	29
8.17	Headings	30
8.18	Assignment of Rights under the Tax Matters Agreement	30

ii

TAX SHARING AGREEMENT

THIS TAX SHARING AGREEMENT (this “Agreement”) is entered into as of November 19, 2009, between Liberty Media Corporation, a Delaware corporation (“LMC”), and Liberty Entertainment, Inc., a Delaware corporation (“LEI”). Unless otherwise indicated, all “Section” references in this Agreement are to sections of this Agreement.

RECITALS

WHEREAS, LEI is a wholly owned subsidiary of LMC; and

WHEREAS, the Board of Directors of LMC has determined that it would be appropriate and desirable for LMC to separate the LEI Group from the LMC Group; and

WHEREAS, the Board of Directorsof LEI has also approved such transaction; and

WHEREAS, following the Contribution, LMC intends to distribute its entire interest in the stock of LEI to holders of Liberty Entertainment Common Stock (the “Distribution”), in what is intended to qualify as a tax-free transaction described under Sections 368(a), 355, and 361 of the Code; and

WHEREAS, the parties set forth in the Reorganization Agreement the principal arrangements between them regarding the separation of the LEI Group from the LMC Group; and

WHEREAS, LMC, LEI, Holdings, Merger Sub One, Merger Sub Two and DTV have entered into the Merger Agreement; and

WHEREAS, pursuant to the Malone Agreement and the Merger Agreement, provided that the conditions set forth in the Malone Agreement and the Merger Agreement have been satisfied (or if permitted, waived), following the Distribution, (i) the Malone Contribution will occur, and (ii) Merger Sub One, a direct wholly-owned Subsidiary of Holdings, will merge with and into DTV, with DTV as the surviving corporation (the “DTV Merger”) and following the DTV Merger, DTV will be a wholly-owned Subsidiary of Holdings; and

WHEREAS, immediately following the DTV Merger, Merger Sub Two will merge with and into LEI, with LEI as the surviving corporation (the “LEI Merger”) and following the LEI Merger, LEI will be a wholly-owned direct Subsidiary of Holdings; and

WHEREAS, the parties desire to provide for and agree upon the allocation between the parties of liabilities for Taxes arising prior to, as a result of, and subsequent to the Distribution, and to provide for and agree upon other matters relating to Taxes.

1

NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth below, and intending to be legally bound hereby, LMC and LEI hereby agree as follows:

SECTION 1. Definition of Terms. For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings:

“Affiliate” means with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person. For the avoidance of doubt, (v) neither DTV nor any of its Subsidiaries will be treated as Affiliates of any party hereto or any member of such party’s Group during any period in which (1) such party beneficially owns less than 50% of the outstanding common stock of DTV or (2) if such party beneficially owns 50% or more of the outstanding common stock of DTV, such party’s right to vote such shares of common stock of DTV in its sole discretion is restricted or limited pursuant to any agreement or arrangement to which DTV or any of its Subsidiaries is a party, including the Letter Agreement, dated as of May 6, 2008, by and among DTV, LMC, Greenlady Corp. and Greenlady II, LLC; (w) neither IAC/InteractiveCorp nor Expedia, Inc., nor any of their respective Subsidiaries, will be treated as Affiliates of any member of the LMC Group or the LEI Group; (x) Game Show Network, LLC and its Subsidiaries will be treated as Affiliates of LEI; (y) no member of the LEI Group will be treated as an Affiliate of any member of the LMC Group; and (z) no member of the LMC Group will be treated as an Affiliate of any member of the LEI Group.

“Agreement” has the meaning set forth in the preamble hereof.

“business day” means any day other than a Saturday, Sunday or a day on which banking institutions in New York City, New York or London, England are authorized or required by law or executive order to close.

“Closing of the Books Method” means the apportionment of items between portions of a Taxable period based on a closing of the books and records as of the end of the day on the Distribution Date (as if the Distribution Date were the end of the Taxable period), provided that any items not susceptible to such apportionment shall be apportioned pro rata on the basis of elapsed days during the relevant portion of the Taxable period.

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor law.

“Combined Return” means a consolidated, combined or unitary Tax Return that includes, by election or otherwise, one or more members of the LMC Group and one or more members of the LEI Group.

“Company” means LMC or LEI, as the context requires.

2

“Compensatory Equity Interests” means options, stock appreciation rights, restricted stock, stock units or other rights with respect to LMC stock or LEI Stock that are granted on or prior to the Distribution Date by LMC, LEI or any of their respective Subsidiaries (including, for the avoidance of doubt, options, stock appreciation rights, restricted stock, stock units or other rights issued in substitution for any of the foregoing by reason of the Malone Contribution or the LEI Merger or any other LEI Transaction) in connection with employee or director compensation or other employee benefits.

“Contribution” means the contribution by Liberty Media LLC, a Delaware limited liability company, to LEI of its entire interest in each of Liberty Genius, Inc., Liberty Freedom, LLC, Greenlady Corp. and LDIG, LLC, and the full amount of any intercompany receivable due to LMC from LDIG Gamenet, LLC.

“Control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of securities or partnership, membership, limited liability company, or other ownership interests, by contract or otherwise and the terms “Controlling” and “Controlled” have meanings correlative to the foregoing.

“Delaware Chancery Court” has the meaning set forth in Section 8.4.

“Disclosing Party” has the meaning set forth in Section 6.3.

“Distribution” has the meaning set forth in the recitals hereof.

“Distribution Date” means the date on which the Distribution occurs.

“DTV” means The DIRECTV Group, Inc., a Delaware corporation.

“DTV Merger” has the meaning set forth in the recitals hereto.

“Due Date” has the meaning set forth in Section 4.3.

“Effective Time” means the time at which the Distribution is effected on the Distribution Date.

“Employing Party” has the meaning set forth in Section 3.4(d)(i).

“Final Determination” means a determination within the meaning of Section 1313 of the Code or any similar provision of state or local Tax Law.

“Group” means the LMC Group or the LEI Group, as the context requires.

“Holdings” means DIRECTV, a Delaware corporation and a direct wholly-owned subsidiary of DTV.

3

“Income Tax” means all Taxes (i) based upon, measured by, or calculated with respect to, net income, net profits or deemed net profits (including any capital gains Tax, minimum Tax based upon, measured by, or calculated with respect to, net income, net profits or deemed net profits, any Tax on items of Tax preference and depreciation recapture or clawback, but not including sales, use, real or personal property, gross or net receipts, gross profits, transfer and similar Taxes), (ii) imposed by a foreign country which qualify under Section 903 of the Code or (iii) based upon, measured by, or calculated with respect to multiple bases (including, but not limited to, corporate franchise and occupation Taxes) if such Taxes may be based upon, measured by, or calculated with respect to one or more bases described in clause (i) above.

“Interest Rate” means the Rate determined below, as adjusted as of each Interest Rate Determination Date. The “Rate,” means, with respect to each period between two consecutive Interest Rate Determination Dates, a rate determined at approximately 11:00 a.m., London time, two London business days before the first Interest Rate Determination Date equal to the greater of: (x) the sum of (i) the six month dollar LIBOR rate as displayed on page “LR” of Bloomberg (or such other appropriate page as may replace such page), plus (ii) 2%, and (y) the interest rate that would be applicable at such time to a “large corporate underpayment” (within the meaning of Section 6621(c) of the Code) under Sections 6601 and 6621 of the Code. Interest will be calculated on the basis of a year of 365 days and the actual number of days for which due.

“Interest Rate Determination Date” means the Due Date and each March 31, June 30, September 30 and December 31 thereafter.

“IRS” means the Internal Revenue Service.

“IRS Submissions” means the Ruling Request, each supplemental submission and any other correspondence or supplemental materials submitted to the IRS in connection with obtaining the Ruling.

“issuing corporation” has the meaning set forth in Section 3.4(d)(ii).

“LDIG Gamenet Restructuring” means the transactions contemplated by Step 8 of the Restructuring Plan attached as Schedule 1.1 to the Reorganization Agreement.

“LEI” has the meaning set forth in the preamble hereof.

“LEI Asset Successor” has the meaning set forth in Section 8.8(b).

“LEI Group” means (x) with respect to any Tax Year (or portion thereof) ending at or before the Effective Time, LEI and each of its Subsidiaries at the Effective Time; and (y) with respect to any Tax Year (or portion thereof) beginning after the Effective Time, LEI and each Subsidiary of LEI (but only while such Subsidiary is a Subsidiary of LEI).

4

“LEI Indemnitees” has the meaning set forth in Section 7.2.

“LEI Merger” has the meaning set forth in the recitals hereto.

“LEI Stock” means the Series A LEI common stock, par value $.01 per share, the Series B LEI common stock, par value $.01 per share, and if and when issued, the Series C LEI common stock, par value $.01 per share, and any series or class of stock into which the Series A, Series B, or Series C LEI common stock is redesignated, reclassified, converted or exchanged following the Effective Time (including stock of Holdings pursuant to the Malone Contribution and the LEI Merger).

“LEI Successor” has the meaning set forth in Section 8.8(b).

“LEI Successor Entity” has the meaning set forth in Section 8.8(b).

“LEI Successor Parent” has the meaning set forth in Section 8.8(b).

“LEI Transaction” means the LEI Merger and any other asset transfer, business combination or other transaction described in Section 8.8(b) pursuant to which any Person becomes an LEI Successor.

“Liberty Entertainment Common Stock” means the Series A Liberty Entertainment common stock, par value $.01 per share, and the Series B Liberty Entertainment common stock, par value $.01 per share.

“LMC” has the meaning set forth in the preamble hereof.

“LMC Group” means LMC and each Subsidiary of LMC (but only while such Subsidiary is a Subsidiary of LMC) other than any Person that is a member of the LEI Group (but only during the period such Person is treated as a member of the LEI Group).

“LMC Indemnitees” has the meaning set forth in Section 7.3.

“LMC Section 355(e) Event” means the application of Section 355(e) of the Code to the Distribution as a result of the Distribution being “part of a plan (or series of related transactions) pursuant to which 1 or more persons acquire directly or indirectly stock representing a 50-percent or greater interest” in LMC (within the meaning of Section 355(e) of the Code).

“Losses” means any and all damages, losses, deficiencies, liabilities, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including the fees and expenses of any and all actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder); provided, however, that “Losses” shall exclude any special or punitive damages; provided, further, that the foregoing proviso will not be interpreted to limit

5

indemnification for Losses incurred as a result of the assertion by a claimant (other than the parties hereto and their successors and assigns) in a third-party claim for special or punitive damages.

“Malone Agreement” has the meaning given to such term in the Merger Agreement.

“Malone Contribution” has the meaning given to such term in the Merger Agreement.

“Merger Agreement” means the Agreement and Plan of Merger, dated as of May 3, 2009, as amended, by and among LMC, LEI, Holdings, Merger Sub One, Merger Sub Two and DTV.

“Merger Agreement Date” means the date of execution of the Merger Agreement.

“Merger Effective Time” has the meaning given to such term in the Merger Agreement.

“Merger Sub One” means DTVG One, Inc., a Delaware corporation and a direct wholly-owed Subsidiary of Holdings.

“Merger Sub Two” means DTVG Two, Inc., a Delaware corporation and a direct wholly-owed Subsidiary of Holdings.

“News” means News Corporation, a Delaware corporation.

“News Distributions” means “Distribution 1,” “Distribution 2,” “Distribution 3,” “Distribution 4,” and “Distribution 5,” in each case as defined in the News Rulings.

“News IRS Submissions” means the News Ruling Requests, each supplemental submission and any other correspondence or supplemental materials submitted to the IRS in connection with obtaining the News Rulings.

“News Tax-Related Losses” mean any Losses resulting from the failure of any of the News Transactions to qualify (i) as a tax-free transaction described under Sections 368(a), 355 and/or 361 of the Code, as applicable, or (ii) in whole for nonrecognition of income, gain and loss for U.S. federal income tax purposes to News, each of its Subsidiaries immediately prior to the News Transactions, LMC and each of its Subsidiaries on February 27, 2008.

“News Opinions” means the tax opinion delivered by Baker Botts L.L.P. to LMC, and the tax opinion delivered by Skadden, Arps, Slate, Meagher & Flom LLP to News, in connection with the News Transactions.

6

“News Ruling Requests” means the requests for rulings, dated February 26, 2007 and March 20, 2007, filed by News and LMC with the IRS in connection with the News Transactions.

“News Rulings” means PLR 200812003 that was issued to News on September 25, 2007 and PLR 200812004 that was issued to LMC on September 25, 2007.

“News Tax Materials” means (i) the News Rulings, (ii) each News IRS Submission, (iii) the representation letters delivered by LMC to Baker Botts L.L.P. and Skadden, Arps, Slate, Meagher & Flom LLP in connection with the delivery of the News Opinions, and (iv) any other materials delivered by LMC in connection with the rendering by Baker Botts L.L.P. and Skadden, Arps, Slate, Meagher & Flom LIP of the News Opinions or the issuance by the IRS of the News Rulings.

“News Transactions” means “Contribution 1,” “Contribution 2,” and “Contribution 3,” in each case as defined in the News Rulings, and each of the News Distributions.

“News Transaction Taxes” means any Taxes resulting from the News Transactions.

“Non-Preparer” means the Company that is not responsible for the preparation and filing of the applicable Tax Return pursuant to Sections 3.1 or 3.2.

“Payment Date” means (x) with respect to any U.S. federal income tax return, the due date for any required installment of estimated taxes determined under Code Section 6655, the due date (determined without regard to extensions) for filing the return determined under Code Section 6072, and the date the return is filed, and (y) with respect to any other Tax Return, the corresponding dates determined under the applicable Tax Law.

“Person” means any individual, corporation, company, partnership, trust, incorporated or unincorporated association, joint venture or other entity of any kind.

“Post-Distribution Period” means any Tax Year or other Taxable period beginning after the Distribution Date and, in the case of any Straddle Period, that part of the Tax Year or other taxable period that begins at the beginning of the day after the Distribution Date.

“Pre-Distribution Period” means any Tax Year or other taxable period that ends on or before the Distribution Date and, in the case of any Straddle Period, that part of the Tax Year or other taxable period through the end of the day on the Distribution Date.

“Preparer” means the Company that is responsible for the preparation and filing of the applicable Tax Return pursuant to Sections 3.1 or 3.2.

7

“Receiving Party” has the meaning set forth in Section 6.3.

“Reorganization Agreement” means the Reorganization Agreement between LMC and LEI dated November 9, 2009.

“Requesting Party” has the meaning set forth in Section 5.2(a).

“Restructuring” has the meaning assigned to such term in the Reorganization Agreement.

“Ruling” means PLR 103888-09 that was issued to LMC on October 22, 2009.

“Ruling Request” means the request for rulings, dated January 16, 2009, filed by LMC with the IRS in connection with the Distribution, as the same shall have been amended or supplemented.

“Separate Return” means (a) in the case of any Tax Return required to be filed by any member of the LMC Group (including any consolidated, combined or unitary Tax Return), any such Tax Return that does not include any member of the LEI Group, and (b) in the case of any Tax Return required to be filed by any member of the LEI Group (including any consolidated, combined or unitary Tax Return), any such Tax Return that does not include any member of the LMC Group.

“Straddle Period” means any Taxable period commencing on or prior to, and ending after, the Distribution Date.

“Subsidiary” when used with respect to any Person, means (i)(A) a corporation a majority in voting power of whose share capital or capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, (B) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of determination, (1) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (2) in the case of a limited liability company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability company, or (C) any other Person (other than a corporation) in which such Person, one or more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has or have (1) the power to elect or direct the election of a majority of the members of the governing body of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, or (2) in the absence of such a governing body, at least a majority ownership interest or (ii) any other Person of which an aggregate of 50% or more of the equity interests are, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person. For

8

purposes of the foregoing, (x) neither DTV nor any of its Subsidiaries will be treated as Subsidiaries of any party hereto during any period in which (1) such party beneficially owns less than 50% of the outstanding common stock of DTV or (2) if such party beneficially owns 50% or more of the outstanding common stock of DTV, such party’s right to vote such shares of common stock of DTV in its sole discretion is restricted or limited pursuant to any agreement or arrangement to which DTV or any of its Subsidiaries is a party, including the Letter Agreement, dated as of May 6, 2008, by and among DTV, LMC, Greenlady Corp. and Greenlady II, LLC; and (y) neither IAC/InteractiveCorp nor Expedia, Inc., nor any of their respective Subsidiaries, will be treated as Subsidiaries of LMC.

“Supplemental IRS Submissions” means any request for a Supplemental Ruling, each supplemental submission and any other correspondence or supplemental materials submitted to the IRS in connection with obtaining any Supplemental Ruling.

“Supplemental Ruling” means any private letter ruling obtained by LMC or LEI from the IRS which supplements or otherwise modifies the Ruling.

“Tax” or “Taxes” means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers compensation, employment, unemployment, disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, alternative minimum, estimated or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any Tax Authority and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.

“Tax Authority” means, with respect to any Tax, the governmental entity or political subdivision, agency, commission or authority thereof that imposes such Tax, and the agency, commission or authority (if any) charged with the assessment, determination or collection of such Tax for such entity or subdivision.

“Tax Contest” means an audit, review, examination, or any other administrative or judicial proceeding with the purpose, potential or effect of redetermining Taxes of any member of either Group (including any administrative or judicial review of any claim for refund).

“Tax Counsel” means Skadden, Arps, Slate, Meagher & Flom LLP.

“Tax Item” means, with respect to any Tax, any item of income, gain, loss, deduction, credit or other attribute that may have the effect of increasing or decreasing any Tax.

“Tax Law” means the law of any governmental entity or political subdivision thereof, and any controlling judicial or administrative interpretations of such law, relating to any Tax.

9

“Tax Materials” means (i) the Ruling and each Supplemental Ruling issued by the IRS in connection with the Distribution, (ii) each IRS Submission and Supplemental IRS Submission, (iii) the representation letters delivered to Tax Counsel in connection with the delivery of the Tax Opinions, and (iv) any other materials delivered or deliverable by LMC, LEI and others in connection with the rendering by Tax Counsel of the Tax Opinions or the issuance by the IRS of any Ruling or Supplemental Ruling.

“Tax Matters Agreement” means the Tax Matters Agreement entered into as of December 22, 2006, by and among News and LMC.

“Tax Opinions” means the opinions to be delivered by Tax Counsel to LMC and LEI in connection with the Distribution to the effect that (i) the Contribution and the Distribution will qualify as a tax-free transaction described under Sections 368(a) and 355 of the Code to LMC and the holders of Liberty Entertainment Common Stock (except, in the case of the holders of Liberty Entertainment Common Stock, with respect to cash received in lieu of fractional shares), and (ii) the Distribution will not affect the tax-free treatment under Sections 368(a) and/or 355 of the Code of, and will not cause Section 355(e) of the Code to apply to, any of the News Distributions.

“Tax Records” means Tax Returns, Tax Return work papers, documentation relating to any Tax Contests, and any other books of account or records required to be maintained under applicable Tax Laws (including but not limited to Section 6001 of the Code) or under any record retention agreement with any Tax Authority.

“Tax Return” means any report of Taxes due, any claims for refund of Taxes paid, any information return with respect to Taxes, or any other similar report, statement, declaration, or document filed or required to be filed (by paper, electronically or otherwise) under any applicable Tax Law, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.

“Tax Year” means, with respect to any Tax, the year, or shorter period, if applicable, for which the Tax is reported as provided under applicable Tax Law.

“Third Party Claim” has the meaning set forth in Section 7.8.

“Transaction Taxes” means any Taxes resulting from the Restructuring and the Distribution, other than (i) Transfer Taxes, and (ii) subject to the following proviso, any Taxes attributable to “deferred intercompany transactions” or “excess loss accounts” (as those terms are defined by Treasury Regulations); provided that, Transaction Taxes shall include Taxes attributable to “deferred intercompany transactions” or “excess loss accounts” that are created as a result of the transactions comprising the Restructuring.

“Transaction Tax-Related Losses” means any Losses resulting from the failure of (i) the LDIG Gamenet Restructuring to qualify as a tax-free reorganization under Section 368(a) of the Code, (ii) the Restructuring to qualify in whole for

10

nonrecognition of income, gain and loss for U.S. federal income tax purposes to LMC, LEI and each of their respective Subsidiaries immediately prior to the Distribution, (iii) the Contribution and Distribution to qualify as a tax-free transaction described under Sections 368(a), 355 and 361 of the Code, or (iv) the Contribution and Distribution to qualify in whole for nonrecognition of income, gain and loss for U.S. federal income tax purposes to LMC, LEI, each of their respective Subsidiaries at the Effective Time, and the holders of Liberty Entertainment Common Stock that receive stock of LEI in the Distribution (except with respect to cash received in lieu of fractional shares).

“Transfer Taxes” means all U.S. federal, state, local or foreign sales, use, privilege, transfer, documentary, gains, stamp, duties, recording, and similar Taxes and fees (including any penalties, interest or additions thereto) imposed upon any party hereto or any of its Affiliates in connection with the Restructuring or the Distribution.

“Treasury Regulations” means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Year.

SECTION 2. Allocation of Taxes and Tax-Related Losses

2.1Allocation of Taxes. Except as provided in Section 2.2 (Special Rules) and Section 3.4(d) (Compensatory Equity Interests), Taxes shall be allocated as follows:

(a)Combined Returns.

(i)Allocation of Taxes for Combined Returns.     LMC shall be allocated: (A) all Taxes that are attributable to members of the LMC Group and reported on, or required to be reported on, a Combined Return; and (B) all Taxes that are attributable to members of the LEI Group for the Pre-Distribution Period and reported on, or required to be reported on, a Combined Return. LEI shall be allocated all Taxes that are attributable to members of the LEI Group for the Post-Distribution Period and reported on, or required to be reported on, a Combined Return.

(ii)Transactions Occurring on the Distribution Date.     Notwithstanding the provisions of Section 2.1(a)(i) (but subject to the provisions of Section 2.2), Taxes attributable to any transaction or action taken by or with respect to any member of the LEI Group outside the ordinary course of business before the Distribution on the Distribution Date shall be allocated to the Pre-Distribution Period, and Taxes attributable to any transaction or action taken by or with respect to any member of the LEI Group outside the ordinary course of business after the Distribution on the Distribution Date shall be allocated to the Post-Distribution Period.

11

(b)Separate Returns.

(i)LEI Separate Returns.     LEI shall be allocated all Taxes that are attributable to members of the LEI Group and reported on, or required to be reported on, a Separate Return that is required to be filed by a member of the LEI Group.

(ii)LMC Separate Returns.     LMC shall be allocated all Taxes that are attributable to members of the LMC Group and reported on, or required to be reported on, a Separate Return that is required to be filed by a member of the LMC Group.

(c)Taxes Not Reported on Tax Returns.     LEI shall be allocated any Tax attributable to members of the LEI Group that is not required to be reported on a Tax Return, and LMC shall be allocated any Tax attributable to members of the LMC Group that is not required to be reported on a Tax Return.

2.2Special Rules.

(a)Transaction Taxes and Transaction Tax-Related Losses.     Notwithstanding any other provision in this Section 2:

(i)LEI shall be allocated all Transaction Taxes and Transaction Tax-Related Losses other than any Transaction Taxes and Transaction Tax-Related Losses allocated to LMC pursuant to clause (ii) of this Section 2.2(a).

(ii)LMC will be allocated any Transaction Taxes (including corresponding state and local Taxes) and Transaction Tax-Related Losses that (x) result primarily from, individually or in the aggregate, any breach by LMC of any of its covenants set forth in Section 7.1 hereof, (y) result from the Liberty Entertainment Common Stock not being treated as stock of LMC for U.S. federal income tax purposes, or (z) result from a LMC Section 355(e) Event.

(b)News Transaction Taxes and News Tax-Related Losses. Notwithstanding any other provision in this Section 2:

(i)LMC will be allocated all News Transaction Taxes and News Tax-Related Losses other than any News Transaction Taxes and News Tax-Related Losses allocated to LEI pursuant to clause (ii) of this Section 2.2(b).

(ii)LEI shall be allocated any News Transaction Taxes (including corresponding state and local Taxes) and News Tax-Related Losses that (x) result primarily from, individually or in the aggregate, any breach by LEI of any of its covenants set forth in Section 7.1 hereof, or (y) result from Section 355(e) of the Code applying to any of the News Transactions as a result of the Distribution, actions taken by LEI or its Subsidiaries following the Effective Time, or any change in ownership (by vote or value) of LEI Stock following the Effective Time, except to the extent that such News

12

Transaction Taxes and News Tax-Related Losses result primarily from, individually or in the aggregate, any breach by LMC of any of its covenants set forth in Section 7.1 hereof.

(c)Transfer Taxes.     Notwithstanding any other provision in this Section 2, all Transfer Taxes shall be allocated 50% to LEI and 50% to LMC.

2.3Tax Payments.     Each Company shall pay the Taxes allocated to it by this Section 2 either to the applicable Tax Authority or to the other Company (or, with respect to News Transaction Taxes, to the applicable Tax Authority or News) in accordance with Section 4 and the other applicable provisions of this Agreement.

SECTION 3. Preparation and Filing of Tax Returns.

3.1Combined Returns.

(a)Preparation of Combined Returns.     LMC shall be responsible for preparing and filing (or causing to be prepared and filed) all Combined Returns for any Tax Year.

3.2Separate Returns.

(a)Tax Returns to be Prepared by LMC.     LMC shall be responsible for preparing and filing (or causing to be prepared and filed) all Separate Returns which relate to one or more members of the LMC Group for any Tax Year.

(b)Tax Returns to be Prepared by LEI.     LEI shall be responsible for preparing and filing (or causing to be prepared and filed) all Separate Returns which relate to one or more members of the LEI Group for any Tax Year.

3.3Provision of Information.

(a)LMC shall provide to LEI, and LEI shall provide to LMC, any information about members of the LMC Group or the LEI Group, respectively, that the Preparer needs to determine the amount of Taxes due on any Payment Date with respect to a Tax Return for which the Preparer is responsible pursuant to Section 3.1 or 3.2 and to properly and timely file all such Tax Returns.

(b)If a member of the LEI Group supplies information to a member of the LMC Group, or a member of the LMC Group supplies information to a member of the LEI Group, and an officer of the requesting member intends to sign a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then a duly authorized officer of the member supplying such information shall certify, to the best of such officer’s knowledge, the accuracy of the information so supplied.

13

3.4Special Rules Relating to the Preparation of Tax Returns.

(a)In General.     All Tax Returns that include any members of the LEI Group or LMC Group, or any of their respective Affiliates, shall be prepared in a manner that is consistent with the Ruling Request, the Ruling, and the Tax Opinions. Except as otherwise set forth in this Agreement, all Tax Returns for which LMC is responsible under Section 3.1 shall be prepared in accordance with elections, Tax accounting and other practices used with respect to such Tax Returns filed prior to the Merger Agreement Date (unless such past practices are not permissible under applicable Law), and to the extent any items are not covered by past practices (or in the event such past practices are not permissible under applicable Tax Law), in accordance with reasonable practices selected by LMC with the consent, not to be unreasonably withheld or delayed, of LEI, unless (i) (w) the use of such election, Tax accounting or other practice proposed to be used by LMC, relates to Fox Sports Net Rocky Mountain, LLC, Fox Sports Net Northwest, LLC, or Fox Sports Net Pittsburgh, LLC, (x) LMC uses the same election, Tax accounting or other practice for the same item on the same Tax Return with respect to a member of the LMC Group, (y) no principal purpose for the use of such election, Tax accounting or other practice proposed to be used by LMC is to defer any income or gain into the Post-Distribution Period or to accelerate any item of deduction or credit into the Pre-Distribution Period, and (z) the use of such election, Tax accounting or other practice proposed to be used by LMC would not reasonably be expected to result in a material increase in the amount of Taxes or Losses for which LEI may be responsible under this Agreement, (ii) the use of such election, accounting or other practice proposed to be used by LMC would not reasonably be expected to result in more than a de minimis increase in the amount of Taxes or Losses for which LEI or its Affiliates may be responsible under this Agreement, (iii) otherwise required as a result of a Final Determination, or (iv) LMC indemnifies LEI and the members of the LEI Group for any additional amount for which they may be liable as a result. For the avoidance of doubt, LMC shall not make any election to apply Treasury Regulation Section 1.1502-76(b)(2).

(b)LEI Tax Returns.    With respect to any Separate Return for which LEI is responsible pursuant to Section 3.2(b), LEI and the other members of the LEI Group must allocate Tax Items between such Separate Return for which LEI is responsible pursuant to Section 3.2(b) and any related Combined Return for which LMC is responsible pursuant to Section 3.1 that are filed with respect to the same Tax Year in a manner that is consistent with the reporting of such Tax Items on the related Combined Return for which LMC is responsible pursuant to Section 3.1.

(c)Election to File Consolidated, Combined or Unitary Tax Returns.     LMC shall have the sole discretion of filing any Tax Return on a consolidated, combined or unitary basis, if such Tax Return would include at least one member of each Group and the filing of such Tax Return is elective under the relevant Tax Law.

(d)Compensatory Equity Interests.

(i)Deductions Related to Compensatory Equity Interests.     To the extent permitted by applicable Tax Law, Income Tax deductions with

14

respect to the issuance, exercise, vesting or settlement after the Distribution Date of any Compensatory Equity Interests held by any Person shall be claimed (A) in the case of an active employee, solely by the Group that employs such Person at the time of such issuance, exercise, vesting, or settlement, as applicable; (B) in the case of a former employee, solely by the Group that was the last to employ such Person; and (C) in the case of a director or former director (who is not an employee or former employee of a member of either Group), (x) solely by the LEI Group, if (i) such Income Tax deductions arise with respect to LEI Stock (or any options, stock appreciation rights, restricted stock, stock units or other rights with respect thereto) and (ii) such Person is or was a director of any member of the LEI Group at any time following the Distribution Date, and (y) solely by the LMC Group in all other cases (the party whose Group is described in (A), (B), or (C), the “Employing Party”).

(ii)Withholding and Reporting.     For any Tax Year (or portion thereof), the Employing Party shall (A) satisfy, or shall cause to be satisfied, all applicable Tax reporting obligations with respect to the issuance, exercise, vesting or settlement of Compensatory Equity Interests and (B) satisfy, or cause to be satisfied, all liabilities for Taxes imposed in connection with such issuance, exercise, vesting or settlement (including the employer portion of any employment taxes); provided that, (x) in the event Compensatory Equity Interests are settled by the corporation that is the issuer or obligor under the Compensatory Equity Interest (the “issuing corporation”) and the issuing corporation is not a member of the same Group as the Employing Party, the issuing corporation shall promptly remit to the Employing Party an amount of cash equal to the amount required to be withheld in respect of any withholding Taxes, and (y) the Employing Party shall not be liable for failure to remit to the applicable Tax Authority any amount required to have been withheld from the recipient of the Compensatory Equity Interest in connection with such issuance, exercise, vesting or settlement, except to the extent that the issuing corporation shall have remitted such amount to the Employing Party. LMC shall promptly notify LEI, and LEI shall promptly notify LMC, regarding the exercise of any option or the issuance, vesting, exercise or settlement of any other Compensatory Equity Interest to the extent that, as a result of such issuance, exercise, vesting or settlement, any other party may be entitled to a deduction or required to pay any Tax, or such information otherwise may be relevant to the preparation of any Tax Return or payment of any Tax by such other party or parties.

(iii)LMC Employees.     For purposes of this Section 3.4(d), (x) if an officer or employee is on the payroll of LMC or any member of the LMC Group for any Tax Year (or portion thereof), then such officer or employee will exclusively be considered to be an employee of LMC (or the applicable member of the LMC Group) for such Tax Year (or portion thereof); and (y) if a Person is an officer or employee of LMC (or any member of the LMC Group) immediately prior to an LEI Transaction and ceases to be an officer or employee of LMC and each other member of the LMC Group as a result of an LEI Transaction, or the LMC Group was the last Group to employ such Person immediately prior to an LEI Transaction, then such Person will exclusively be considered to be an employee of LMC (or the applicable member of the LMC Group) on the date the LEI Transaction is effected (regardless of whether such Person becomes an officer or employee of the LEI Group as a result of the LEI

15

Transaction). For the avoidance of doubt the foregoing shall not apply to determine the status of any employee or officer of a member of the LEI Group for any period after the date of the LEI Merger. If following the LEI Merger, (x) an officer or employee is on the payroll of both LMC or any member of the LMC Group and LEI or any member of the LEI Group, or (y) a Person is an officer or employee of both LMC (or any member of the LMC Group) and LEI (or any member of the LEI Group), then such Person will be treated as an employee of both LMC and LEI and any Income Tax deductions referred to in Section 3.4(d)(i) shall be allocated between the LMC Group and the LEI Group based on the respective number of hours such Person spends providing services for LMC (or any member of the LMC Group) and the number of hours such Person spends providing services for LEI (or any member of the LEI Group); provided, however, that for purposes of the foregoing, a Person will not be considered to be an officer or employee on the payroll of, or an officer or employee of, LEI (or any member of the LEI Group) solely by reason of holding the position of (or performing services as) the Chairman of the Board of Directors of any member of the LEI Group or the receipt of compensation in connection therewith.

3.5Refunds, Credits or Offsets.

(a)Except as otherwise contemplated by this Section 3.5 or Section 3.6, any refunds, credits or offsets with respect to Taxes of any member of (i) the LMC Group that were reported on any Combined Return shall be for the account of LMC, (ii) the LEI Group that were reported on any Combined Return and are attributable to the Pre-Distribution Period shall be for the account of LMC, (iii) the LEI Group that were reported on any Combined Return and are attributable to the Post-Distribution Period shall be for the account of LEI, (iv) the LMC Group that were reported on any Separate Return required to be filed by a member of the LMC Group shall be for the account of LMC, and (v) the LEI Group that were reported on any Separate Return required to be filed by a member of the LEI Group shall be for the account of LEI.

(b)Notwithstanding Section 3.5(a), (i) any refunds, credits or offsets with respect to Taxes, including Transaction Taxes and News Transaction Taxes, allocated to, and actually paid by, LMC pursuant to this Agreement shall be for the account of LMC, and (ii) any refunds, credits or offsets with respect to Taxes, including Transaction Taxes and News Transaction Taxes, allocated to, and actually paid by, LEI pursuant to this Agreement shall be for the account of LEI.

(c)LMC shall forward to LEI, or reimburse LEI for, any such refunds, credits or offsets, plus any interest received thereon, net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith, that are for the account of LEI within five business days from receipt thereof by LMC or any of its Affiliates. LEI shall forward to LMC, or reimburse LMC for, any refunds, credits or offsets, plus any interest received thereon, net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith, that are for the account of LMC within five business days from receipt thereof by LEI or any of its Affiliates. Any refunds, credits or offsets, plus any interest received thereon, or reimbursements not forwarded or made within the five business day period

16

specified above shall bear interest from the date received by the refunding or reimbursing party (or its Affiliates) through and including the date of payment at the Interest Rate (treating the date received as the Due Date for purposes of determining such Interest Rate). If, subsequent to a Tax Authority’s allowance of a refund, credit or offset, such Tax Authority reduces or eliminates such allowance, any refund, credit or offset, plus any interest received thereon, forwarded or reimbursed under this Section 3.5 shall be returned to the party who had forwarded or reimbursed such refund, credit or offset and interest upon the request of such forwarding party in an amount equal to the applicable reduction, including any interest received thereon.

3.6Carrybacks. To the extent permitted by applicable Tax Law, LEI and its Affiliates shall waive the right to carryback any Tax attribute of the members of the LEI Group arising in a Post-Distribution Period to a Pre-Distribution Period. If and to the extent that LEI or any of its Affiliates is not permitted by applicable Tax Law to elect to forego such carryback and LEI requests in writing that LMC or any of its Affiliates obtain a refund, credit or offset of Taxes with respect to such carryback, and provided that LMC or any of its Affiliates would not otherwise be required to forego a refund, credit or offset of Taxes for its own account or otherwise be adversely affected as a result of such carryback, then (i) LMC (or its Affiliate) shall take all reasonable measures to obtain a refund, credit or offset of Tax with respect to such carryback (including by filing an amended Tax Return), and (ii) to the extent that LMC or any of its Affiliates receives any refund, credit or offset of Taxes attributable (on a last dollar basis) to such carryback, LMC shall pay such refund, credit or offset, plus any interest received thereon, to LEI within five business days from receipt thereof by LMC or any of its Affiliates; provided, however, that LMC shall be entitled to reduce the amount of any such refund, credit or offset for its reasonable out-of-pocket costs and expenses incurred in connection therewith and any Taxes incurred with respect to the receipt or accrual thereof; and provided further, that LEI, upon the request of LMC, agrees to repay such refund, credit or offset, plus any interest received thereon and net of Taxes, to LMC in the event, and to the extent, that LMC is required to repay such refund, credit or offset, plus any interest received thereon, to a Tax Authority.

3.7Amended Returns. Any amended Tax Return or claim for Tax refund, credit or offset with respect to any member of the LEI Group may be made only by the Company (or its Affiliates) responsible for preparing the original Tax Return with respect to such member pursuant to Sections 3.1 and 3.2. Such Company (or its Affiliates) shall not, without the prior written consent of the other Company (which consent shall not be unreasonably withheld or delayed), file, or cause to be filed, any such amended Tax Return or claim for Tax refund, credit or offset to the extent that such filing, if accepted, is likely to increase the Taxes allocated to, or the Tax indemnity obligations under this Agreement of, such other Company for any Tax Year (or portion thereof) by more than a de minimis amount; provided, however, that such consent need not be obtained if the Company filing the amended Tax Return agrees to indemnify the other Company for the incremental Taxes allocated to, or the incremental Tax indemnity obligation resulting under this Agreement to, such other Company as a result of the filing of such amended Tax Return.

17

SECTION 4. Tax Payments.

4.1Payment of Taxes to Tax Authority.  LMC shall be responsible for remitting to the proper Tax Authority the Tax shown on any Tax Return for which it is responsible for the preparation and filing pursuant to Section 3.1 or Section 3.2, and LEI shall be responsible for remitting to the proper Tax Authority the Tax shown on any Tax Return for which it is responsible for the preparation and filing pursuant to Section 3.2.

4.2Indemnification Payments.

(a)Tax Payments Made by the LMC Group.  If any member of the LMC Group is required to make a payment to a Tax Authority for Taxes allocated to LEI under this Agreement, LEI will pay the amount of Taxes allocated to it to LMC not later than the later of (i) five business days after receiving notification requesting such amount, and (ii) one business day prior to the date such payment is required to be made to such Tax Authority.

(b)Tax Payments Made by the LEI Group.  If any member of the LEI Group is required to make a payment to a Tax Authority for Taxes allocated to LMC under this Agreement, LMC will pay the amount of Taxes allocated to it to LEI not later than the later of (i) five business days after receiving notification requesting such amount, and (ii) one business day prior to the date such payment is required to be made to such Tax Authority.

4.3Interest on Late Payments.  Payments pursuant to this Agreement that are not made by the date prescribed in this Agreement or, if no such date is prescribed, not later than five business days after demand for payment is made (the “Due Date”) shall bear interest for the period from and including the date immediately following the Due Date through and including the date of payment at the Interest Rate. Such interest will be payable at the same time as the payment to which it relates.

4.4Tax Consequences of Payments.  For all Tax purposes and to the extent permitted by applicable Tax Law, the parties hereto shall treat any payment made pursuant to this Agreement as a capital contribution or a distribution, as the case may be, immediately prior to the Distribution. If the receipt or accrual of any indemnity payment under this Agreement causes, directly or indirectly, an increase in the taxable income of the recipient under one or more applicable Tax Laws, such payment shall be increased so that, after the payment of any Taxes with respect to the payment, the recipient thereof shall have realized the same net amount it would have realized had the payment not resulted in taxable income. To the extent that Taxes for which any party hereto (the indemnifying party) is required to pay another party (the indemnified party) pursuant to this Agreement may be deducted or credited in determining the amount of any other Taxes required to be paid by the indemnified party (for example, state Taxes which are permitted to be deducted in determining federal Taxes), the amount of any payment made to the indemnified party by the indemnifying party shall be decreased by taking into account any resulting reduction in other Taxes of the indemnified party. If such a reduction in Taxes of the indemnified party occurs following the payment made to the

18

indemnified Party with respect to the relevant indemnified Taxes, the indemnified party shall promptly repay the indemnifying party the amount of such reduction when actually realized. If the Tax benefit arising from the foregoing reduction of Taxes described in this Section 4.4 is subsequently decreased or eliminated, then the indemnifying party shall promptly pay the indemnified party the amount of the decrease in such Tax benefit.

SECTION 5. Assistance and Cooperation.

5.1Cooperation.  In addition to the obligations enumerated in Sections 3.3 and 7.7, LMC and LEI will cooperate (and cause their respective Subsidiaries and Affiliates to cooperate) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with Tax matters, including provision of relevant documents and information in their possession and making available to each other, as reasonably requested and available, personnel (including officers, directors, employees and agents of the parties or their respective Subsidiaries or Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to Taxes.

5.2Supplemental Rulings.

(a)Each of the parties agrees that, at the reasonable request of another party (the “Requesting Party”), LMC and LEI shall (and shall cause each member of its Group) to cooperate and use reasonable best efforts to obtain, as expeditiously as reasonably practicable, a Supplemental Ruling from the IRS. Notwithstanding the foregoing, LMC shall not be required to file any Supplemental IRS Submission unless LEI represents to LMC that (i) it has reviewed the Supplemental IRS Submission, and (ii) all information and representations, if any, relating to any member of the LEI Group and their Affiliates contained in the Supplemental IRS Submission are true, correct and complete in all material respects. The Requesting Party shall reimburse the other parties for all reasonable out-of-pocket costs and expenses incurred by such parties or their Affiliates in connection with obtaining or requesting such Supplemental Ruling within five business days after receiving an invoice from such party therefor.

(b)LMC shall provide LEI with a reasonable opportunity to review and comment on each Supplemental IRS Submission to be filed by LMC prior to the filing of such Supplemental IRS Submission with the IRS, and LEI shall provide LMC with a reasonable opportunity to review and comment on each Supplemental IRS Submission to be filed by LEI prior to the filing of such Supplemental IRS Submission with the IRS. No Supplemental IRS Submission shall be filed by LEI with the IRS unless, prior to such filing LMC shall have agreed as to the contents of such Supplemental IRS Submission to the extent that the Supplemental IRS Submission (i) includes statements or representations relating to facts that are or will be under the control of any member of the LMC Group or any of its Affiliates or (ii) is relevant to, or creates, any actual or potential obligations of, or limitations on, any member of the LMC Group or any of their Affiliates; provided, however, that if the IRS requests same-day

19

filing of a Supplemental IRS Submission that does not include any material issue or statement, then LEI is required only to make a good faith effort to notify LMC’s representatives and to give such representatives an opportunity to review and comment on such Supplemental IRS Submission prior to filing it with the IRS. No Supplemental IRS Submission shall be filed by LMC with the IRS unless, prior to the filing, LEI shall have agreed as to the contents of such Supplemental IRS Submission to the extent that the Supplemental IRS Submission (i) includes statements or representations relating to facts that are or will be under the control of any member of the LEI Group or any of its Affiliates or (ii) is relevant to, or creates, any actual or potential obligations of, or limitations on, any member of the LEI Group or any of their Affiliates; provided, however, that if the IRS requests same-day filing of a Supplemental IRS Submission that does not include any material issue or statement, then LMC is required only to make a good faith effort to notify LEI’s representatives and to give such representatives an opportunity to review and comment on such Supplemental IRS Submission prior to filing it with the IRS. Each Company (or its representatives) shall provide the other Company (or its representatives) with copies of each Supplemental IRS Submission filed with the IRS promptly following the filing thereof. Neither Company nor its representatives shall conduct any substantive communications with the IRS regarding any material issue arising with respect to any Supplemental Ruling, including meetings or conferences with IRS personnel, whether telephonically, in person or otherwise, without first notifying the other Company (or its representatives) and giving the other Company (or its representatives) a reasonable opportunity to participate, and a reasonable number of such Company’s representatives shall have an opportunity to participate in all conferences or meetings with IRS personnel that take place in person, regardless of the nature of the issues expected to be discussed; provided, however, that in the case of communications concerning a Supplemental Ruling that occur during an unscheduled conference initiated by the IRS or a conference initiated by a Company or its representatives for a purpose unrelated to a Supplemental Ruling in connection with which it is not reasonably practicable to provide to the other Company or its representatives advance notice and an opportunity to participate, such Company (or its representatives) shall promptly update the other Company and its representatives as to the content of such communications. Each Company shall promptly provide the other Company (or its representatives) with copies of any correspondence received by such Company (or its representatives) from the IRS relating to any Supplemental Ruling.

SECTION 6. Tax Records.

6.1Retention of Tax Records.  Each of LMC and LEI shall preserve, and shall cause their respective Subsidiaries to preserve, all Tax Records that are in their possession, and that could affect the liability of any member of the other Group for Taxes, for as long as the contents thereof may become material in the administration of any matter under applicable Tax Law, but in any event until the later of (x) the expiration of any applicable statutes of limitation, as extended, and (y) seven years after the Distribution Date.

6.2Access to Tax Records.  LEI shall make available, and cause its Subsidiaries to make available, to members of the LMC Group for inspection and

20

copying (x) all Tax Records in their possession that relate to a Pre-Distribution Period, and (y) the portion of any Tax Record in their possession that relates to a Post-Distribution Period and which is reasonably necessary for the preparation of a Tax Return by a member of the LMC Group or any of their Affiliates or with respect to an audit or litigation by a Tax Authority of such return. LMC shall make available, and cause its Subsidiaries to make available, to members of the LEI Group for inspection and copying the portion of any Tax Record in their possession that relates to a Pre-Distribution Period and which is reasonably necessary for the preparation of a Tax Return by a member of the LEI Group or any of their Affiliates or with respect to an audit or litigation by a Tax Authority of such return.

6.3Confidentiality.  Each party hereby agrees that it will hold, and shall use its reasonable best efforts to cause its officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence all records and information prepared and shared by and among the parties in carrying out the intent of this Agreement, except as may otherwise be necessary in connection with the filing of Tax Returns or any administrative or judicial proceedings relating to Taxes or unless disclosure is compelled by a governmental authority. Information and documents of one party (the “Disclosing Party”) shall not be deemed to be confidential for purposes of this Section 6.3 to the extent such information or document (i) is previously known to or in the possession of the other party or parties (the “Receiving Party”) and is not otherwise subject to a requirement to be kept confidential, (ii) becomes publicly available by means other than unauthorized disclosure under this Agreement by the Receiving Party or (iii) is received from a third party without, to the knowledge of the Receiving Party after reasonable diligence, a duty of confidentiality owed to the Disclosing Party.

6.4Delivery of Tax Records.  On or before the Distribution Date, LMC shall provide to LEI (to the extent not previously provided or held by any member of the LEI Group on the Distribution Date) copies of (i) the Separate Returns of any member of the LEI Group, (ii) the relevant portions of any other Tax Returns with respect to any member of the LEI Group, and (iii) other existing Tax Records (or the relevant portions thereof) reasonably necessary to prepare and file any Tax Returns of, or with respect to, the members of the LEI Group, or to defend or contest Tax matters relevant to the members of the LEI Group, including in each case, all Tax Records related to Tax attributes of the members of the LEI Group and any and all communications or agreements with, or rulings by, any Tax Authority with respect to any member of the LEI Group.

SECTION 7. Restriction on Certain Actions of LMC and LEI; Indemnity.

7.1Restrictive Covenants.

(a)General Restrictions.  Following the Effective Time, LEI shall not, and shall cause the members of the LEI Group and their Affiliates not to, and LMC shall not, and shall cause the members of the LMC Group and their Affiliates not to, take any action that, or fail to take any action the failure of which, (i) would be

21

inconsistent with the LDIG Gamenet Restructuring qualifying, or would preclude the LDIG Gamenet Restructuring from qualifying, as a tax-free reorganization under Section 368(a) of the Code, (ii) would cause LMC or any Subsidiary of LMC immediately prior to the Distribution to recognize gain or loss, or otherwise include any amount in income, as a result of the Restructuring for U.S. federal income tax purposes, (iii) would be inconsistent with the Contribution and Distribution qualifying, or would preclude the Contribution and Distribution from qualifying, as a tax-free transaction described under Sections 368(a), 355 and 361 of the Code, (iv) would cause LMC, LEI, any of their respective Subsidiaries at the Effective Time, or the holders of Liberty Entertainment Common Stock that receive stock of LEI in the Distribution, to recognize gain or loss, or otherwise include any amount in income, as a result of the Contribution and/or the Distribution for U.S. federal income tax purposes (except with respect to cash received in lieu of fractional shares), (v) would be inconsistent with the News Transactions qualifying, or would preclude the News Transactions from qualifying, as tax-free transactions described under Sections 368(a), 355 and/or 361 of the Code, as applicable, or (vi) would cause News, any Subsidiary of News immediately prior to any of the News Transactions, LMC or any of its Subsidiaries on February 27, 2008 to recognize gain or loss, or otherwise include any amount in income, as a result of the News Transactions for U.S. federal income tax purposes.

(b)Restricted Actions.  Without limiting the provisions of Section 7.1(a) hereof, following the Effective Time, LEI shall not, and shall cause the members of the LEI Group not to, and LMC shall not, and shall cause the members of the LMC Group not to, take any action that, or fail to take any action the failure of which, (i) would be inconsistent with, or would cause any Person to be in breach of, any representation or covenant, or any material statement, made in the Tax Materials or the News Tax Materials, or (ii) would be inconsistent with, or would cause LMC to be in breach of, any representation or covenant made in the Tax Matters Agreement.

(c)Reporting.  Unless and until there has been a Final Determination to the contrary, each party agrees not to take any position on any Tax Return, in connection with any Tax Contest, or otherwise for Tax purposes (in each case, excluding any position taken for financial accounting purposes) that is inconsistent with the Ruling or the Tax Opinions.

7.2LMC Indemnity.LMC agrees to indemnify and hold harmless each member of the LEI Group and their respective directors, officers, employees, agents, successors and assigns (the “LEI Indemnitees”) from and against any and all (without duplication) (a) Taxes allocated to LMC pursuant to Section 2.1, (b) liabilities of the members of the LEI Group for Taxes of any Person (other than any member of the LEI Group) as a result of such member being, or having been, on or before the Distribution Date, a member of an affiliated, consolidated, combined or unitary group, pursuant to Treasury Regulations Section 1.1502-6 or any other provision of federal, state, local or foreign Tax Law, (c) Transaction Taxes and Transaction Tax-Related Losses allocated to LMC pursuant to Section 2.2, (d) News Transaction Taxes and News Tax-Related Losses allocated to LMC pursuant to Section 2.2, (e) Taxes and Losses arising out of or based upon any breach or nonperformance of any covenant or agreement made or to be

22

performed by LMC contained in this Agreement, (f) Transfer Taxes allocated to LMC pursuant to Section 2.2, and (g) reasonable out-of-pocket legal, accounting and other advisory and court fees and expenses incurred in connection with the items described in clauses (a) through (f); provided, however, that notwithstanding clauses (a), (b), (e) and (g) of this Section 7.2, LMC shall not be responsible for, and shall have no obligation to indemnify or hold harmless any LEI Indemnitee for, (x) any Transaction Taxes, Transaction Tax-Related Losses, News Transaction Taxes or News Tax-Related Losses that are allocated to LEI pursuant to Section 2.2, or (y) any Taxes or Losses arising out of or based upon any breach or nonperformance of any covenant or agreement made or to be performed by LEI contained in this Agreement.

7.3LEI Indemnity.  LEI agrees to indemnify and hold harmless each member of the LMC Group and their respective directors, officers, employees, agents, successors and assigns (the “LMC Indemnitees”) from and against any and all (without duplication) (a) Taxes allocated to LEI pursuant to Section 2.1, (b) Transaction Taxes and Transaction Tax-Related Losses allocated to LEI pursuant to Section 2.2, (c) News Transaction Taxes and News Tax-Related Losses allocated to LEI pursuant to Section 2.2, (d) Taxes and Losses arising out of or based upon any breach or nonperformance of any covenant or agreement made or to be performed by LEI contained in this Agreement, (e) Transfer Taxes allocated to LEI pursuant to Section 2.2, and (f) reasonable out-of-pocket legal, accounting and other advisory and court fees incurred in connection with the items described in clauses (a) through (e); provided, however, that notwithstanding clauses (a), (d) and (f) of this Section 7.3, LEI shall not be responsible for, and shall have no obligation to indemnify or hold harmless any LMC Indemnitee for, (x) any Transaction Taxes, Transaction Tax-Related Losses, News Transaction Taxes or News Tax-Related Losses that are allocated to LMC pursuant to Section 2.2, or (y) any Taxes or Losses arising out of or based upon any breach or nonperformance of any covenant or agreement made or to be performed by LMC contained in this Agreement.

7.4Scope.  The provisions of this Section 7 are intended to be for the benefit of, and shall be enforceable by, each LMC Indemnitee and its successors in interest and each LEI Indemnitee and its successors in interest.

7.5Notices of Tax Contests (Other than Third Party Claims).  Each Company shall provide prompt notice to the other Company of any pending or threatened Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware relating to Taxes for which it is or may be indemnified by such other Company hereunder (other than any Transaction Taxes or News Transaction Taxes which shall be governed by Section 7.8). Such notice shall contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect of any such matters; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except, and only to the extent that, the indemnifying Company shall have been actually prejudiced as a result of such failure. Thereafter, the indemnified Company shall deliver to the indemnifying Company such additional information with respect to such Tax Contest in its possession that the indemnifying Company may reasonably request.

23

7.6Control of Tax Contests (Other than Third Party Claims).

(a)General Rule.  Except as provided in Sections 7.6(b) and 7.8, each Company (or the appropriate member of its Group) shall have full responsibility, control and discretion in handling, defending, settling or contesting any Tax Contest involving a Tax reported (or that, it is asserted, should have been reported) on a Tax Return for which such Company is responsible for preparing and filing (or causing to be prepared and filed) pursuant to Section 3 of this Agreement.

(b)Non-Preparer Participation Rights.  With respect to a Tax Contest (other than with respect to a Third Party Claim) of any Tax Return which could result in a Tax liability for which the Non-Preparer may be liable under this Agreement, (i) the Non-Preparer shall, at its own cost and expense, be entitled to participate in such Tax Contest, (ii) the Preparer shall keep the Non-Preparer updated and informed, and shall consult with the Non-Preparer, (iii) the Preparer shall act in good faith with a view to the merits in connection with the Tax Contest, and (iv) the Preparer shall not settle or compromise such Tax Contest without the prior written consent of the Non-Preparer (which consent shall not be unreasonably withheld) if the settlement or compromise could have a more than de minimis impact on the Non-Preparer or its Affiliates.

7.7Cooperation.  The parties shall provide each other with all information relating to a Tax Contest which is needed by the other party or parties to handle, participate in, defend, settle or contest the Tax Contest. At the request of any party, the other parties shall take any action (e.g., executing a power of attorney) that is reasonably necessary in order for the requesting party to exercise its rights under this Agreement in respect of a Tax Contest. LEI shall assist LMC, and LMC shall assist LEI, in taking any remedial actions that are necessary or desirable to minimize the effects of any adjustment made by a Tax Authority. The indemnifying party or parties shall reimburse the indemnified party or parties for any reasonable out-of-pocket costs and expenses incurred in complying with this Section 7.7.

7.8Third Party Claims.  Each Company shall promptly give notice to the other Company of any pending or threatened Tax Contest, claim, action, suit, investigation or proceeding brought by a third party relating to (x) any Transaction Taxes or News Transaction Taxes or (y) any Transaction Tax-Related Losses or News Tax-Related Losses for which such Company is or may be indemnified by the other Company under this Section 7 (each, a “Third Party Claim”). Such notice shall contain (i) factual information (to the extent known) describing any asserted Tax liability or other claim in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority or third party relating to the Third Party Claim, and (ii) the amount of the Third Party Claim. Such notice shall be given within a reasonable period of time after notice thereof was received by such Company, but any failure to give timely notice shall not affect the indemnities given hereunder except, and only to the extent that, the indemnifying Company shall have been actually prejudiced as a result of such failure. Thereafter, each Company shall deliver to the other Company such additional information with respect to such Third Party Claim in its possession that the other Company may reasonably request. LMC and LEI will have the right to jointly

24

control the defense, compromise or settlement of any Third Party Claim; provided, however, that with respect to any Third Party Claim arising under the Tax Matters Agreement (or otherwise subject to the indemnification provisions of the Tax Matters Agreement), LEI’s rights to jointly control, or otherwise participate in the defense of, such Third Party Claim will be subject to the terms of the Tax Matters Agreement, and LEI acknowledges that it will be limited to those rights that LMC is able, through use of reasonable efforts, to obtain on behalf of LEI under the Tax Matters Agreement. LMC shall use reasonable efforts to provide LEI with the right to jointly control with LMC any Third Party Claim arising under the Tax Matters Agreement (or otherwise subject to the indemnification provisions of the Tax Matters Agreement); provided, however, that LMC shall not be required to relinquish any rights that it has to control the defense, compromise or settlement of any such Third Party Claim (other than to LEI pursuant to the foregoing). LMC hereby agrees to make a partial assignment to LEI of any rights it has under the Tax Matters Agreement to allow LEI to jointly control with LMC and News the defense, compromise or settlement of any Tax Contest relating to a News Transaction Tax for which LEI has any indemnity obligation hereunder. No indemnified Company shall settle or compromise or consent to entry of any judgment with respect to any such Third Party Claim without the prior written consent of the indemnifying Company, which consent may be withheld in the indemnifying Company’s sole discretion. No indemnifying Company shall settle or compromise or consent to entry of any judgment with respect to any such Third Party Claim without the prior written consent of the indemnified Company, which consent may not be unreasonably withheld or delayed.

7.9Other Claims.  In the event any LMC Indemnitee should have a claim against LEI, or any LEI Indemnitee should have a claim against LMC, under this Section 7 that does not involve a third party action, such indemnified Company (or LMC on behalf of all LMC Indemnitees or LEI on behalf of all LEI Indemnitees, as applicable) shall as promptly as practicable notify the indemnifying Company of such claim, describing such claim and the factual basis thereof, the amount of such claim (if known) and the method of computation of such amount, all with reasonable particularity.

SECTION 8. General Provisions.

8.1Termination.  This Agreement shall terminate at such time as all obligations and liabilities of the parties hereto have been satisfied. The obligations and liabilities of the parties arising under this Agreement shall continue in full force and effect until all such obligations have been satisfied and such liabilities have been paid in full, whether by expiration of time, operation of law, or otherwise.

8.2Predecessors or Successors.  Any reference to LMC, LEI, News, DTV, a Person, or a Subsidiary in this Agreement shall include any predecessors or successors (e.g., by merger or other reorganization, liquidation, conversion, or election under Treasury Regulations Section 301.7701-3) of LMC, LEI, News, DTV, such Person, or such Subsidiary, respectively.

25

8.3Expenses.  Except as otherwise expressly provided for herein, each party and its Subsidiaries shall bear their own expenses incurred in connection with preparation of Tax Returns and other matters related to Taxes under the provisions of this Agreement for which they are liable.

8.4Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement will be brought exclusively in the Court of Chancery of the State of Delaware (the “Delaware Chancery Court”), or, if the Delaware Chancery Court does not have subject matter jurisdiction, in the federal courts located in the State of Delaware. Each of the parties hereby consents to personal jurisdiction in any such action, suit or proceeding brought in any such court (and of the appropriate appellate courts therefrom) and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8.6 shall be deemed effective service of process on such party.

8.5Waiver of Jury Trial.  EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH ACTION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.5.

8.6Notices.  All notices and other communications hereunder shall be in writing and shall be delivered in person, by facsimile (with confirming copy sent by one of the other delivery methods specified herein), by overnight courier or sent by certified, registered or express air mail, postage prepaid, and shall be deemed given when

26

so delivered in person, or when so received by facsimile or courier, or, if mailed, three (3) calendar days after the date of mailing, as follows:

(a)If to LMC, to:

Liberty Media Corporation

12300 Liberty Boulevard

Englewood, Colorado 80112

Attn: Albert Rosenthaler

Facsimile: (720) 875-5447

(b)If to LEI, to:

Liberty Entertainment, Inc.

12300 Liberty Boulevard

Englewood, Colorado 80112

Attn: Charles Tanabe

Facsimile: (720) 875-5382

or to such other address as the party to whom notice is given may have previously furnished to the other parties in writing in the manner set forth above.

8.7Counterparts.This Agreement may be executed in two or more identical counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same agreement. The Agreement may be delivered by facsimile transmission of a signed copy thereof.

8.8Binding Effect; Assignment.

(a)This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except with respect to a merger of a party, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other parties; provided, however, that each of LMC and LEI may assign its respective rights, interests, duties, liabilities and obligations under this Agreement to any other member of their Group, but such assignment shall not relieve LMC or LEI, as the assignor, of its liabilities or obligations hereunder.

(b)In the event of (i) any sale, assignment, transfer or other disposition of all or substantially all of the assets of LEI (on a consolidated basis) to any person or group, including by means of a stock dividend, stock redemption, spin-off, split-off or similar transaction or event (the Person whose securities are issued in payment therefor or, if no securities are so issued, the Person(s) who hold title to such assets, a “LEI Asset Successor”), in one or a series of related transactions, or (ii) any merger, consolidation, statutory share exchange, conversion of LEI from a corporation to

27

a limited liability company or other legal entity or other business combination or similar transaction affecting LEI, that results in the exchange or conversion of equity securities of LEI for or into equity securities or other consideration (x) consisting of securities issued by the successor or the surviving entity to LEI upon consummation of such transaction (the “LEI Successor Entity”) or, if the successor or surviving entity in such transaction is a Subsidiary of a publicly traded or privately held parent company (the “LEI Successor Parent”), securities of the LEI Successor Parent delivered in such transaction, or (y) consisting of cash or other consideration paid or payable by any LEI Successor Entity or LEI Successor Parent (the applicable of the LEI Asset Successor, the LEI Successor Entity and the LEI Successor Parent, the “LEI Successor”), then (i) all references herein to capital stock or other equity interests of LEI shall mean and refer to, for periods (or portions thereof) beginning after the consummation of such transaction, the equivalent securities of or ownership interest in the LEI Successor, as applicable, and (ii) prior to, and as a condition to effecting any such asset transfer or business combination (or in the case of a series of transactions, the first such transaction), the LEI Successor shall have executed and delivered to LMC an instrument, in form and substance reasonably acceptable to LMC, pursuant to which such LEI Successor has agreed, effective upon the consummation of such transaction, to be bound by and perform all of the covenants and agreements made by LEI hereunder and upon such consummation such LEI Successor will be jointly and severally liable with LEI for all of the obligations and liabilities of LEI under this Agreement. The foregoing provisions of this Section 8.8(b) will be applicable to any successor or any parent thereof (as determined in accordance with the foregoing) to any LEI Successor; provided that, effective as of immediately following the Merger Effective Time, the foregoing provisions of this Section 8.8(b) shall cease to apply so long as Holdings has executed a joinder agreement in accordance with Section 6.25 of the Merger Agreement.

8.9Severability.Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Upon a determination that any provision of this Agreement is prohibited or unenforceable in any jurisdiction, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the provisions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

8.10Amendments; Waivers.Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise provided herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by applicable law. Any consent provided under this

28

Agreement must be in writing, signed by the party against whom enforcement of such consent is sought.

8.11Effective Date.  This Agreement shall become effective on the date recited above on which the parties entered into this Agreement.

8.12Change in Law.  Any reference to a provision of the Code or any other Tax Law shall include a reference to any applicable successor provision or law.

8.13Authorization, Etc.  Each of the parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such party, that this Agreement constitutes a legal, valid and binding obligation of such party and that the execution, delivery and performance of this Agreement by such party does not contravene or conflict with any provision of law or of its charter or bylaws or any agreement, instrument or order binding such party.

8.14No Third Party Beneficiaries.  Except as provided in Sections 7.2 and 7.3 of this Agreement, this Agreement is solely for the benefit of LMC, LEI, and their Subsidiaries and is not intended to confer upon any other Person any rights or remedies hereunder. Notwithstanding anything in this Agreement to the contrary, this Agreement is not intended to confer upon any LEI Indemnitees any rights or remedies against LEI hereunder, and this Agreement is not intended to confer upon any LMC Indemnitees any rights or remedies against LMC hereunder.

8.15Entire Agreement.  This Agreement embodies the entire understanding among the parties relating to its subject matter and supersedes and terminates any prior agreements and understandings among the parties with respect to such subject matter, and no party to this Agreement shall have any right, responsibility, obligation or liability under any such prior agreement or understanding. Any and all prior correspondence, conversations and memoranda are merged herein and shall be without effect hereon. No promises, covenants or representations of any kind, other than those expressly stated herein, have been made to induce any party to enter into this Agreement.

8.16No Strict Construction; Interpretation.

(a)LMC and LEI each acknowledge that this Agreement has been prepared jointly by the parties hereto and shall not be strictly construed against any party hereto.

(b)When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference shall be to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”. The words “hereof”, “herein” and

29

“hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.

8.17Headings.  The headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.

8.18Assignment of Rights under the Tax Matters Agreement.  LMC hereby assigns to LEI all its rights to indemnification and related rights under the Tax Matters Agreement with respect to any liability for Taxes or related Losses (other than News Transaction Taxes or News Tax-Related Losses) that are allocated to LEI hereunder; provided that, if any Third Party Claim is made against any member of the LEI Group with respect to News Transaction Taxes or News Tax-Related Losses, then at LEI’s request, LMC shall assert a claim for indemnification against News under the Tax Matters Agreement in respect of such News Transaction Taxes or News Tax-Related Losses to the extent such a claim would not be frivolous, and LEI and LMC shall jointly control the prosecution of such claim under the principles contained in Section 7.8. Any amounts awarded in respect of the claim asserted against News shall be deposited with a third party escrow agent mutually acceptable to LMC and LEI. Following the resolution of the Third Party Claim, the escrow agent shall release to LEI an amount of the proceeds equal to the amount of the indemnification claim that LEI has against LMC hereunder, and the escrow agent shall release the remainder of the proceeds to LMC. LMC shall not amend, modify or terminate the Tax Matters Agreement, or waive any rights thereunder, without the prior written consent of LEI.

30

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the respective officers as of the date set forth above.

LIBERTY MEDIA CORPORATION
	By:	/s/ Albert E. Rosenthaler
	Name:		Albert E. Rosenthaler
	Title:		Senior Vice President
LIBERTY ENTERTAINMENT, INC.
	By:	/s/ Charles Y. Tanabe
	Name:		Charles Y. Tanabe
	Title:		Executive Vice President

EX-10.37

Exhibit 10.37

STANDSTILL AGREEMENT

This AGREEMENT (this “Agreement”) is made and entered into as of November 19, 2009, by and among DIRECTV, a Delaware corporation (the “Company”), on the one hand, and each of John C. Malone (“JCM”), Leslie Malone (“LM”), The Tracy L. Neal Trust A (the “Tracy Trust”) and The Evan D. Malone Trust A (such trust, collectively with JCM, LM and the Tracy Trust, the “Malones” and each individually, a “Malone”), on the other hand.

RECITALS

WHEREAS, on May 4, 2009, the DIRECTV Group, Inc. (“DIRECTV”) and Liberty Media Corporation (“Liberty Media”), announced that they, together with certain affiliated entities, had entered into an Agreement and Plan of Merger, dated as of May 3, 2009, as amended (the “Merger Agreement”), to combine, subject to the terms and conditions thereof, DIRECTV with Liberty Entertainment, Inc. (“LEI”), a wholly owned subsidiary of Liberty Media, to form the Company;

WHEREAS, in connection with the transactions contemplated by the Merger Agreement each of the Malones will, among other things, receive shares of Holdings Class A Common Stock (as defined in the Merger Agreement);

WHEREAS, between May 12, 2009 and May 19, 2009, four proposed shareholder class actions (the “Delaware Actions”) were filed in the Court of Chancery in the State of Delaware (the “Court”) against DIRECTV, Liberty Media, LEI and certain present and former members of the board of directors of DIRECTV (collectively, the “Defendants”), alleging that the Defendants breached their fiduciary duties, or aided and abetted the breach of fiduciary duties owed by other Defendants, to DIRECTV and its unaffiliated shareholders, in connection with the negotiation and execution of the Merger Agreement;

WHEREAS, on May 22, 2009, the Court consolidated the Delaware Actions under the caption In re The DIRECTV Group Inc., Shareholder Litig., Consolid. C.A. No. 4581-VCP (the “Action”);

WHEREAS, the parties to the Action, by their respective counsel, have entered into a certain Stipulation and Agreement of Compromise, Settlement and Release (the “Stipulation”), dated October 16, 2009, a copy of which is attached hereto as Exhibit A; and

WHEREAS, in connection with the settlement of the Action pursuant to the Stipulation, the parties hereto have agreed that at the time of the closing of the transactions contemplated by the Merger Agreement the Company and the Malones will enter into this Agreement which restricts the Malones from making certain purchases or other acquisitions of additional shares of Holdings Class A Common Stock.

AGREEMENTS

In consideration of the foregoing and the mutual agreements and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

1.Definitions.For purposes of this Agreement, capitalized terms used and not defined herein will have the respective meanings ascribed to them in the Merger Agreement. Terms defined in the singular shall have the same meanings when used in the plural and vice versa.

2.Standstill.

(a)Each Malone agrees, severally for himself, herself or itself and not jointly with any other Malone, that during the period commencing from and after the Merger Effective

2

Time and ending on the termination of this Agreement pursuant to Section 4, he, she or it will not purchase or otherwise acquire any shares of Holdings Class A Common Stock other than a purchase or other acquisition that is a Permitted Acquisition. For the purposes of this Agreement, each of the following acquisitions of shares of Holdings Class A Common Stock by a Malone will be deemed a “Permitted Acquisition”:

(i)any acquisition of shares of Holdings Class A Common Stock from the Company pursuant to the Merger Agreement;

(ii)any acquisition of shares of Holdings Class A Common Stock from another Malone;

(iii)any acquisition of shares of Holdings Class A Common Stock pursuant to the grant, exercise or vesting of any equity incentive awards;

(iv)any acquisition of shares of Holdings Class A Common Stock as a result of any stock dividend, stock split or other distribution so long as such dividend or distribution is made on a pro rata basis to all holders of Holdings Common Stock;

(v)any acquisition of shares of Holdings Class A Common Stock pursuant to the exercise of any rights, warrants or other securities issued or distributed to all holders of Holdings Common Stock on a pro rata basis;

(vi)any acquisition of shares of Holdings Class A Common Stock received in exchange for shares of Holdings Class B Common Stock so long as the aggregate voting power of the Malones, collectively, does not increase as a result of such exchange;

(vii)any acquisition of shares of Holdings Class A Common Stock upon the redemption of shares of Holdings Class B Common Stock following the death

3

of JCM in accordance with the provisions of the certificate of incorporation of the Company, as amended in accordance with Section 1.5(c) of the Merger Agreement; and

(viii)commencing on the first anniversary of the Split-Off Effective Time, any acquisition of shares of Holdings Class A Common Stock (in open market transactions or otherwise) in an amount not to exceed a number of shares equal to 1.0% of the number of shares of Holdings Common Stock outstanding (on a fully diluted basis) immediately following the Merger Effective Time (with such number of shares to be subject to adjustment to reflect the effects of stock splits, reverse splits, stock dividends and similar events occurring after the Merger Effective Time); provided, that the Malones will not acquire more than 50% of the number of shares permitted to be acquired pursuant to this clause (viii) prior to the second anniversary of the Split-Off Effective Time; and provided, further, that shares acquired by any Malone pursuant to clauses (i) through (vii) above will not be counted against acquisitions permitted pursuant to this clause (viii).

3.Representations and Warranties.The Company, on the one hand, and each of the Malones, severally and not jointly, on the other hand, hereby represents and warrants to the other as follows:

(a)Such party has the legal right and all requisite power and authority to make and enter into this Agreement and to perform his, her or its obligations hereunder and comply with the provisions hereof. If such party is other than a natural person, the execution, delivery and performance of this Agreement by such party has been duly authorized by all necessary corporate, trust or other action on its part. This Agreement has been duly executed and delivered by such party and constitutes the valid and binding obligation of such party enforceable

4

against him, her or it in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any proceeding therefor may be brought;

(b)The execution, delivery and performance of this Agreement by such party, and the compliance by such party with the provisions hereof, do not and will not (with or without notice or lapse of time, or both) conflict with, or result in any violation of, or default under, or give rise to any right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to such party or any of his, her or its properties or assets, other than any such conflicts, violations, defaults, or other effects which, individually or in the aggregate, do not and will not prevent, restrict or impede such party’s performance of his, her or its obligations under and compliance with the provisions of this Agreement. If such party is other than a natural person, the execution, delivery and performance of and compliance with this Agreement by it does not and will not contravene its certificate of incorporation, by-laws, trust agreement or other organizational document currently in effect or, in the case of the Company, those contemplated by the Merger Agreement to be in effect after the Closing; and

(c)No consent, approval, order or authorization of, or registration, declaration or filing with, any governmental or regulatory authority or any other person is required by such party in connection with the execution, delivery or performance of this Agreement by such party, other than as may be required under applicable Federal and state securities laws.

5

4.Termination.

(a)This Agreement will continue in full force and effect until the earliest to occur of (i) such time as the Malones in the aggregate do not own shares of Holdings Class B Common Stock entitling them to vote at least 10% of the combined voting power of the Holdings Class A Common Stock and the Holdings Class B Common Stock; (ii) 5 p.m. Eastern Time on the Business Day immediately preceding the third anniversary of the Mergers; (iii) the death of JCM and (iv) June 30, 2010 in the event the Effective Date (as such term is defined in the Stipulation) has not occurred prior to such date.

(b)Upon the termination or expiration of this Agreement as provided herein, all of the covenants and agreements set forth in this Agreement applicable to any party shall terminate and be of no further force and effect.

5.Miscellaneous.

(a)Remedies.The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement.

(b)Expenses.  Except as otherwise expressly provided in this Agreement, all costs and expenses incurred in connection with the transactions contemplated by this Agreement shall be paid by the party incurring such costs and expenses.

(c)Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

6

(d)           Jurisdiction.          All actions and proceedings arising out of or relating to this Agreement shall be heard and determined in the Court of Chancery of the State of Delaware, or, if the Court of Chancery lacks subject matter jurisdiction, in any federal court sitting in the State of Delaware, and the parties hereto hereby irrevocably submit to the exclusive jurisdiction of such courts (and, in the case of appeals, appropriate appellate courts therefrom) in any such action or proceeding and irrevocably waive the defense of an inconvenient forum to the maintenance of any such action or proceeding. The consents to jurisdiction set forth in this paragraph shall not constitute general consents to service of process in the State of Delaware and shall have no effect for any purpose except as provided in this paragraph and shall not be deemed to confer rights on any Person other than the parties hereto. The parties hereto agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.

(e)           Assignment; Successors.   Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned or delegated in whole or in part, by operation of Law, or otherwise, by any of the parties without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement shall inure to the benefit of, and be enforceable by, a successor to the Company only in the event that (i) such successor entity results from a merger involving the Company, (ii) the stockholders of the Company immediately prior to any such merger are the sole stockholders of such successor immediately after such merger, and (iii) the rights, privileges and preferences of the respective classes of common stock

7

received by holders of Holdings Class A Common Stock and Holdings Class B Common Stock in such merger are, in all material respects, the same as the rights, privileges and preferences of the Holdings Class A Common Stock and Holdings Class B Common Stock, respectively, held by such persons immediately prior to such merger.

(f)            Descriptive Headings.         Headings of Sections and subsections of this Agreement are for convenience of the parties only, and shall be given no substantive or interpretive effect whatsoever.

(g)           Entire Agreement; No Third-Party Beneficiaries.           This Agreement constitutes the entire agreement among the parties, and supersedes all other prior agreements and understandings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof and thereof; provided, that nothing herein will be deemed to affect the validity of or the obligations of the parties under the Voting and Right of First Refusal Agreement, dated as of May 3, 2009, as amended, by and among LEI, DIRECTV, the Company and each of the Malones. Nothing in this Agreement shall be construed as giving any person, other than the parties hereto and as provided in Section 5(e) any right, remedy or claim under or in respect of this Agreement or any provision hereof.

(h)           Notices. All notices, requests and other communications to any party hereunder shall be in writing and shall be deemed given if delivered personally, facsimiled (which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses:

If to any Malone, to:

John C. Malone or Leslie A. Malone
c/o Liberty Media Corporation
12300 Liberty Boulevard
Englewood, CO 80112
Facsimile: (720) 875-5401

8

with a copy (which shall not constitute notice) to:

Baker Botts L.L.P.

30 Rockefeller Plaza

New York, NY 10112

Attention: Frederick H. McGrath

Facsimile: (212) 259-2530

If to the Company to:

The DIRECTV Group, Inc.

2230 East Imperial Highway

El Segundo, CA 90245

Attention: Larry D. Hunter

General Counsel

Facsimile: (310) 964-0838

with a copy (which shall not constitute notice) to:

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attention: Frederick S. Green

Michael E. Lubowitz

Facsimile: (212) 310-8007

with a copy (which shall not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Attention: Richard I. Beattie

Marni J. Lerner

Kathryn King Sudol

Facsimile: (212) 455-2502

or such other address or facsimile number as such party may hereafter specify by like notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.

9

(i)            Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended or modified, unless (i) approved in writing by (A) each of the Malones and (B) the Company, and (ii) approved by either (A) the board of directors of the Company (including the unanimous approval of the Qualifying Directors (as such term is defined in the by-laws of the Company attached as Exhibit A-2 to the Merger Agreement)) or (B) the holders of a majority of the outstanding shares of the Holdings Class A Common Stock (other than any such shares held by the Malones).

(j)            No Implied Waivers.  No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained herein or made pursuant hereto. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by any party to exercise any right or privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or times hereunder.

(k)           Interpretation.  When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”. The words

10

“hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(l)            Counterparts. This Agreement may be executed in counterparts (each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement) and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

[Remainder of page intentionally left blank.]

11

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.

DIRECTV
By:	/s/ Larry D. Hunter
	Name: Larry D. Hunter
	Title: Executive Vice President
	JOHN C. MALONE, individually
	LESLIE MALONE, individually
TRACY L. NEAL TRUST A
By:
	Name:
	Title:
EVAN D. MALONE TRUST A
By:
	Name:
	Title:

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.

DIRECTV
By:
	Name:
	Title:
	/s/ John C. Malone
	JOHN C. MALONE, individually
	/s/ Leslie Malone
	LESLIE MALONE, individually
TRACY L. NEAL TRUST A
By:	/s/ David Thomas III
	Name: David Thomas III
	Title: Trustee
EVAN D. MALONE TRUST A
By:	/s/ David Thomas III
	Name: David Thomas III
	Title: Trustee

EX-10.38

Exhibit 10.38

CREDIT AGREEMENT

Dated as of April 9, 2008

between

GREENLADY II, LLC

and

BANK OF AMERICA, N.A.

TABLE OF CONTENTS

		Page
	ARTICLE I
	DEFINITIONS AND ACCOUNTING TERMS
1.01	Defined Terms	1
1.02	Other Interpretive Provisions	11
1.03	Accounting Terms	12
1.04	Calculation Conventions	12
1.05	References to Agreements and Laws	12
1.06	Times of Day	12
	ARTICLE II
	THE COMMITMENTS AND CREDIT EXTENSIONS
2.01	The Loans	13
2.02	Borrowings	13
2.03	Prepayments	14
2.04	Termination or Reduction of Commitments	14
2.05	Repayment of Loans	14
2.06	Interest	15
2.07	Computation of Interest	15
2.08	Averaging Period Interest Refund	15
2.09	Evidence of Debt	15
2.10	Payments Generally	16
2.11	Modification of Margin Delimited Commitment	16
	ARTICLE III
	TAXES, YIELD PROTECTION AND ILLEGALITY
3.01	Taxes	17
3.02	Increased Costs	18
3.03	Funding Losses	18
3.04	Requests for Compensation	18
3.05	Survival	18
	ARTICLE IV
	CONDITIONS
4.01	Conditions to Closing Date	19
4.02	Conditions to each Borrowing	20

i

TABLE OF CONTENTS
(continued)

		Page
	ARTICLE V
	REPRESENTATIONS AND WARRANTIES
5.01	Existence, Qualification and Power; Compliance with Laws	21
5.02	Authorization; No Contravention	21
5.03	Governmental Authorization; Other Consents	21
5.04	Binding Effect	21
5.05	Litigation	21
5.06	No Default	21
5.07	Liens	22
5.08	Taxes	22
5.09	ERISA	22
5.10	Subsidiaries	22
5.11	Indebtedness	22
5.12	Margin Regulations; Investment Company Act	22
5.13	Disclosure	22
5.14	Compliance with Organization Documents	23
5.15	Compliance with Laws	23
5.16	Ownership of the Borrower	23
	ARTICLE VI
	AFFIRMATIVE COVENANTS
6.01	Notices	23
6.02	Payment of Obligations	23
6.03	Preservation of Existence, Etc	24
6.04	Compliance with Laws	24
6.05	Compliance with Organization Documents	24
6.06	Books and Records	24
6.07	Use of Proceeds	24
6.08	ERISA Matters	24
6.09	Collar Agreement Opinion	24

ii

TABLE OF CONTENTS
(continued)

		Page
	ARTICLE VII
	NEGATIVE COVENANTS
7.01	Liens	25
7.02	Investments	25
7.03	Indebtedness	25
7.04	Fundamental Changes	25
7.05	Dispositions	25
7.06	Restricted Payments	25
7.07	Change in Nature of Business	26
7.08	Transactions with Affiliates	26
7.09	Burdensome Agreements	26
7.10	[Intentionally Omitted.]	26
7.11	ERISA Matters	26
7.12	Change of Control	26
7.13	Lock-Up	26
	ARTICLE VIII
	EVENTS OF DEFAULT AND REMEDIES
8.01	Events of Default	27
8.02	Remedies Upon Event of Default	28
8.03	Application of Funds	29
	ARTICLE IX
	MISCELLANEOUS
9.01	Amendments; Etc	29
9.02	Notices and Other Communications; Facsimile Copies	29
9.03	No Waiver; Cumulative Remedies	30
9.04	Attorney Costs, Expenses and Taxes	30
9.05	Indemnification by the Borrower	31
9.06	Payments Set Aside	31
9.07	Successors and Assigns	31
9.08	Confidentiality	34
9.09	Set-off	34

iii

TABLE OF CONTENTS
(continued)

		Page
9.10	Lender’s Obligations with respect to Credit Support	35
9.11	Interest Rate Limitation	35
9.12	Counterparts	35
9.13	Integration; Entire Agreement	36
9.14	Survival of Representations and Warranties	36
9.15	Severability	36
9.16	Deemed ISDA Master Agreement	36
9.17	Collar Agreement Modifications	37
9.18	Amendments to Schedules	37
9.19	Safe Harbors	37
9.20	Governing Law	37
9.21	Waiver of Right to Trial by Jury	38
9.22	USA Patriot Act Notice	38

iv

SCHEDULES
	1	Tranche Information
	2	Gradual Repayment
	3	Averaging Period Interest Refund
	4	Loan Amount at Maturity and Prepayment Amount
	9.02	Lending Office, Addresses for Notices
EXHIBITS
	A.	Form of Loan Notice
	B.	Form of Note
	C.	Form of Opinion of Borrower’s Counsel
	D.	Form of Opinion of Counsel to Liberty Media Corporation
	E.	Form of Pledge Agreement
	F.	Copy of Transaction Acknowledgement

CREDIT AGREEMENT

This CREDIT AGREEMENT (this “Agreement”) is entered into as of April 9, 2008 by and between GREENLADY II, LLC, a Delaware limited liability company (together with its successors and permitted assigns, the “Borrower”), and BANK OF AMERICA, N.A. (together with its successors and permitted assigns, the “Lender”).

The Borrower has requested that the Lender extend the Loans (as hereinafter defined), and the Lender is willing to do so on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

“Adjustment Event” means any event that occurs in respect of the Shares, including any Adjustment Event (as defined in the applicable Collar Transaction Document), that results in the Borrower becoming obligated to make any payment under the applicable Collar Transaction Document or to repay, in whole or in part, any Loan hereunder.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Agreement” has the meaning specified in the introductory paragraph hereof.

“Assignment Conditions” has the meaning specified in Section 9.07(f).

“Associated Person” has the meaning specified in Section 7.13.

“Attorney Costs” means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel.

“Availability Period” means, with respect to a Tranche, the period from and including the Closing Date to and including the first Averaging Date for the Related Component.

“Averaging Date,” with respect to each Related Component, has the meaning specified in the Collar Transaction.

“Averaging Midpoint Date” means, with respect to each Tranche, the date set forth for such Tranche in the sixth column of Schedule 1 hereto.

“Averaging Period Interest Refund” has the meaning specified in Schedule 3 hereto.

“Bankruptcy Code” means the United States Bankruptcy Code, Title 11 of the United States Code, as amended.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Business Day” means an Exchange Business Day (as such term is defined in the 1996 ISDA Equity Derivatives Definitions published by ISDA).

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

“Change of Control” means, with respect to any Person, an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 25% or more of the voting power of all equity securities of such Person entitled to vote for members of the board of directors or equivalent governing body of such Person on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or

(b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors).

2

“Closing Date” means the date on which all the conditions contained in Section 4.01 have been satisfied.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collar Agreement” has the meaning specified in the immediately following definition of “Collar Transaction.”

“Collar Transaction” means (i) the six distinct Components (a) initially specified in (and defined under) the Transaction Acknowledgement and (b) thereafter as evidenced by a confirmation entered into between the Lender and the Borrower subject to an agreement in the form of an ISDA Master Agreement entered into between the Lender and the Borrower for the purposes of replacing and superseding the Transaction Acknowledgement (such replacement and superseding documentation, including any Credit Support Annex subject to such ISDA Master Agreement, the “Collar Agreement”) and (ii) the Parent Guarantee entered into in connection therewith.

“Collar Transaction Documents” means the Transaction Acknowledgement until replaced and superseded by the Collar Agreement and, thereafter, the Collar Agreement.

“Collateral” means all of the “Collateral” referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Lender.

“Collateral Account” means the Collateral Account (as such term is defined in the Pledge Agreement).

“Collateral Documents” means, collectively, the Pledge Agreement, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Lender.

“Commitment” means, with respect to a Tranche, the amount set forth for such Tranche in the third column of Schedule 1 hereto, as reduced from time to time pursuant to Section 2.04.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party-or by which it or any of its property is bound.

“Control” has the meaning specified in the definition of “Affiliate.”

“Current Market Value” means, with respect to any item of Collateral, if such item of Collateral is a security, (i) if quotations are available, the closing sale price of such security on the preceding Business Day, as appearing on any regularly published reporting or quotation service selected by Lender, or (ii) if there is no closing sale price, any reasonable estimate by the Lender of the market value of such security as of the close of business on the preceding Business Day or (iii) in connection with one or more Loans the proceeds of which are used to finance the purchase of such security, the total cost of purchase (including any commissions charged).

3

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means, for any period for which such rate is calculated, (a) the Reference LIBOR Rate plus (b) 1% per annum.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Dollar” and “$” mean lawful money of the United States.

“Eligible Assignee” has the meaning specified in Section 9.07(f).

“Eligible Collateral” has the meaning specified in the Pledge Agreement.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“Event of Default” has the meaning specified in Section 8.01.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Funding Date” has the meaning specified in Section 2.01(a).

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“Good Faith Loan Value” means with respect to any item of Collateral, that amount (not exceeding 100% of the Current Market Value of such item of Collateral, if applicable) which the Lender determines in the exercise of its sound credit judgment that it would lend against such item of Collateral without regard to any of the Borrower’s other assets.

4

“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Gradual Repayment Amount” means, with respect to each Tranche for each Gradual Repayment Date, the amount calculated for such Tranche and date in accordance with Schedule 2 hereto.

“Gradual Repayment Date” means, with respect to a Tranche, the Business Day immediately prior to each Averaging Date for the Related Component.

“Gradual Repayment Notification Date” means, with respect to each Tranche, (i) for the first Gradual Repayment Date, the Business Day immediately following the fourth Exchange Business Day (as defined in the 1996 ISDA Equity Derivatives Definitions), where the specified Exchange (as defined in the 1996 ISDA Equity Derivatives Definitions) is NASDAQ, preceding the first Gradual Repayment Date and (ii) for each subsequent Gradual Repayment Date, the Business Day immediately following the Averaging Date for the related Tranche that immediately precedes such Gradual Repayment Date.

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“Guarantor” means Liberty Media LLC.

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

5

(a)all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b)all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c)net obligations of such Person under any Swap Contract;

(d)all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

(e)indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f)capital leases and Synthetic Lease Obligations; and

(g)all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.

“Indemnified Liabilities” has the meaning specified in Section 9.05.

“Indemnitees” has the meaning specified in Section 9.05.

“Initial Loans” has the meaning specified in Section 2.01(b).

“Interpolated Zero Coupon Swap Rate” means the discount rate or interest rate, as applicable, determined by the Lender by reference to the Reference LIBOR Rate (and any other commercially reasonable factors that the Lender may deem appropriate).

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Investment Company Act” means the Investment Company Act of 1940.

6

“IRS” means the United States Internal Revenue Service.

“ISDA” means the International Swaps and Derivatives Association, Inc.

“ISDA Master Agreement” means the printed form of the 1992 ISDA Master Agreement (Multicurrency - Cross Border), including any Credit Support Annex subject thereto, as published by ISDA.

“Issuer” means The DIRECTV Group, Inc., a Delaware corporation, and its successors. The term “Issuer” shall also include the issuer of any shares that holders of the shares of The DIRECTV Group, Inc. or any successors thereto receive as a result of a spinoff, recapitalization, merger, consolidation or other corporate action of such Person.

“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.

“Lender” has the meaning specified in the introductory paragraph hereto.

“Lending Office” means the office or offices of the Lender described as such on Schedule 9.02, or such other office or offices as the Lender may from time to time notify the Borrower.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing).

“Loan” means, with respect to a Tranche, each advance made by the Lender to the Borrower related to such Tranche pursuant to Section 2.01(a).

“Loan Amount at Maturity” has the meaning specified in Schedule 4 hereto.

“Loan Documents” means, collectively, (a) this Agreement, (h) the Notes, (c) the Collateral Documents, (d) the Collar Transaction Documents and (e) the Parent Guarantee.

“Loan Notice” means the notice of the borrowing of the Loans pursuant to Section 2.02, which, if in writing, shall be substantially in the form of Exhibit A.

“Managing Member” means, as to the Borrower, Greenlady Corp. or any successor Managing Member of the Borrower (as defined in the Organization Documents of the Borrower).

“Margin Delimited Commitment” means, with respect to each Tranche, the amount set forth for such Tranche in the last column of Schedule 1 hereto, as modified from time to time pursuant to Section 2.11.

7

“Margin Stock” has the meaning specified in Regulation U promulgated by the FRB.

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Borrower; (b) a material impairment of the ability of the Borrower to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower of any Loan Document to which it is a party.

“Maturity Date” means, with respect to the Loans of any Tranche, the final Gradual Repayment Date for such Tranche.

“Maximum Loan Value” means:

(a)with respect to any item of Collateral consisting of Margin Stock, 50% of the Current Market Value of such Margin Stock;

(b)with respect to any item of Collateral consisting of the Collar Transaction or other puts, calls or combinations thereof (that are not themselves Margin Stock), $0.00; and

(iii)with respect to any other item of Collateral, its Good Faith Loan Value.

“Maximum Rate” has the meaning specified in Section 9.11.

“Member” means, as to the Borrower, each Member of the Borrower (as defined in the Organization Documents of the Borrower).

“Note” means any promissory note made by the Borrower in favor of the Lender evidencing the Loans made by the Lender, substantially in the form of Exhibit B.

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or otherwise with respect to the Loans, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including any interest and fees that accrue after the commencement by or against the Borrower of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

8

“Other Taxes” has the meaning specified in Section 3.01(b).

“Parent Guarantee” means the Guaranty of the Guarantor in favor of the Lender related to the Collar Transaction and dated as of April 2, 2008.

“Participant” has the meaning specified in Section 9.07(c).

“Participant Conditions” has the meaning specified in Section 9.07(f).

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA) that (a) is subject to Section 302 or Title IV of ERISA or Section 412 of the Code and (b) is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes, has an obligation to contribute, or has made contributions at any time during the immediately preceding five plan years.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) other than a Pension Plan.

“Plan Assets” means assets of any (i) employee benefit plan (as defined in Section 3(3) of ERISA) subject to Title I of ERISA, (ii) plan (as defined in Section 4975(e)(l) of the Code) subject to Section 4975 of the Code, or (iii) governmental plan (as defined in Section 3(32) of ERISA) subject to federal, state or local laws, rules or regulations substantially similar to Title I of ERISA or Section 4975 of the Code.

“Pledge Agreement” means the Pledge Agreement executed and delivered on the Closing Date by the Lender and the Borrower, substantially in the form of Exhibit E.

“Prepaid Loan Amount at Maturity” means, with respect to any prepayment of a Loan relating to a Tranche, the portion of the related Loan Amount at Maturity being prepaid pursuant to Section 2.03(a) or 2.03(b).

“Prepayment Amount” has the meaning specified in Schedule 4 hereto.

“Proceeds” means, with respect to a Loan of any Tranche, the amount specified as such in the related Loan Notice (or in the case of the Initial Loans the amounts specified as such in Schedule 1 hereto).

“Purchased DTV Shares” means the 78,300,000 Shares purchased by the Borrower on April 2, 2008.

“Reference LIBOR Rate” means, for any period, the rate determined by the Lender, by linear interpolation if necessary, using the “offer side” U.S. Dollar Swap rate posted on Bloomberg Financial Markets Page “IYC1 USD S[go], page [go]” (or any successor or replacement page).

9

All percentages resulting from any calculations or determinations referred to in this definition will be rounded upwards to the nearest multiple of 1/100 of 1% and all U.S. dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent or more being rounded upwards).

“Related Component” means, with respect to each Tranche, the Component (as defined in the Collar Transaction) having the number set forth opposite such Tranche on Schedule 1 hereto and having the terms set forth in the Collar Transaction.

“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of the Borrower or, if the Borrower does not have officers, the Managing Member of the Borrower (or, if the Managing Member does not have officers, its managing member).

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other equity interest of the Borrower, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other equity interest or of any option, warrant or other right to acquire any such capital stock or other equity interest.

“Securities Act” means the Securities Act of 1933.

“Shares” means the shares of the relevant Issuer(s). The initial Shares are shares of the common stock of The DIRECTV Group, Inc.

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transaction, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by ISDA, any International Foreign Exchange Master Agreement, or any other master agreement (any such

10

master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Taxes” has the meaning specified in Section 3.01(a).

“Tranche” means each of the six tranches listed on Schedule 1 hereto.

“Transaction Acknowledgement” means the Cashless Collar, Transaction Acknowledgement, dated as of April 2, 2008 and attached as Exhibit F hereto, among Liberty Media LLC, the Borrower and the Lender and regarding the collared share option transaction on certain Shares between the Lender and the Borrower.

“United States” and “U.S.” mean the United States of America.

1.02Other Interpretive Provisions. With reference to this Agreement, any Note and the Pledge Agreement, unless otherwise specified herein or in such other document:

(a)The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b)The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any document shall refer to such document as a whole, including schedules and exhibits thereto, and not to any particular provision thereof.

(i)Article, Section, Exhibit and Schedule references are to the document in which such reference appears.

(ii)The term “including” is by way of example and not limitation.

(iii)The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

(c)In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(d)Section headings herein and in the other documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or such other documents.

11

1.03Accounting Terms.

(a)All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, except as otherwise specifically prescribed herein.

(b)If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in this Agreement, the Pledge Agreement or any Note, and either the Borrower or the Lender shall so request, the Lender and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Lender), provided that, until so amended by agreement between the Borrower and the Lender, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Lender such documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

1.04Calculation Conventions.

(a)Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

(b)With respect to any interest rate or discount rate based on the Interpolated Zero Coupon Swap Rate and used for determining any amount herein, the Lender shall make such adjustments to such rate as are appropriate to reflect continuous compounding (and not semi-annual, or other method of, compounding) over any applicable period.

(c)With respect to any period to be used in calculating an amount based on the Interpolated Zero Coupon Swap Rate, such period shall be determined on the basis of a year with 365.25 days.

1.05References to Agreements and Laws. Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

1.06Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

12

ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS

2.01The Loans.

(a)Subject to the terms and conditions set forth herein, the Lender agrees to make Loans with respect to one or more Tranches to the Borrower from time to time, on any Business Day during the relevant Availability Period (each such date a “Funding Date”); provided, however, that as of any Funding Date and after giving effect to the related borrowings, the aggregate outstanding Loan Amount at Maturity of the Loans for each Tranche shall not exceed the Commitment applicable to such Tranche. With respect to a Tranche, during the relevant Availability Period and subject to the other terms and conditions hereof, the Borrower may borrow and (subject to prior repayment) reborrow Loans relating to such Tranche.

(b)The Borrower agrees that on the Closing Date it shall borrow a Loan with respect to each Tranche having a Loan Amount at Maturity set forth for such Tranche in the fourth column of Schedule 1 hereto (collectively, the “Initial Loans”).

2.02Borrowings.

(a)Each borrowing of a Loan other than the Initial Loans shall be made upon the Borrower’s irrevocable notice to the Lender, which may be given by telephone. Each such notice must be received by the Lender not later than 10:00 a.m. on the third Business Day (the seventh Business Day if the aggregate Proceeds of the proposed Loans is $250,000,000 or more) prior to the requested Funding Date. Notwithstanding anything to the contrary contained herein, but subject to the provisions of Section 9.02(d), any such telephonic notice may be given by a Responsible Officer of the Borrower or an individual who has been authorized in writing to do so by a Responsible Officer of the Borrower. Each such telephonic notice must be confirmed promptly by delivery to the Lender of a written Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each borrowing of one or more Loans on a particular Funding Date shall have an aggregate Loan Amount at Maturity of $25,000,000 or more. Each Loan Notice (whether telephonic or written) shall specify (1) the requested Funding Date of the proposed Loan or Loans (which shall be a Business Day), (2) the Tranche to which each Loan is related, (3) the requested Proceeds for each Loan and (4) the expected Loan Amount at Maturity of each Loan to be borrowed. Not later than the Business Day immediately following the day that the Borrower delivers a completed Loan Notice to the Lender, the Lender shall calculate and notify the Borrower of the Loan Amount at Maturity applicable to such Proceeds for each Loan requested to be borrowed on the related Funding Date.

(b)(i) Upon satisfaction of the applicable conditions set forth in Section 4.01 (in the case of the Initial Loans) and Section 4.02 (in the case of all Loans), the Lender shall advance an amount equal to the Proceeds related to each Loan being made on the applicable Funding Date either by (1) crediting the account of the Borrower on the books of the Lender with the amount of such advance or (2) wire transfer of such amount, in each case in accordance with instructions provided to (and reasonably acceptable to) the Lender by the Borrower.

(ii) Notwithstanding the preceding clause (i), in the case of the Initial Loans, the entire Proceeds shall be netted against the purchase price of the Purchased DTV Shares and none of the Proceeds thereof will be distributed to the Borrower on the initial Funding Date.

13

2.03Prepayments.

(a)Voluntary Prepayments. With respect to each Loan, the Borrower may, upon notice to the Lender, voluntarily prepay the related Loan Amount at Maturity, in full or in part, by payment to the Lender of the applicable Prepayment Amount. The Borrower may prepay one or more Loans on any single Business Day; provided that the aggregate Prepaid Loan Amount at Maturity of Loans being repaid on any single Business Day is not less than $25,000,000 or increments of $1,000,000 in excess thereof. With respect to each Loan being prepaid, notice of prepayment must be received by the Lender not later than 10:00 a.m. on the third Business Day preceding the date of the prepayment and shall specify the date of the prepayment, the Tranche of such Loan and the Prepaid Loan Amount at Maturity of such Loan. Not later than two Business Days before the date of repayment, the Lender shall calculate and notify the Borrower of the applicable Prepayment Amount. If notice of prepayment is given by the Borrower, payment of the foregoing amount with respect to the Loan to be prepaid shall be due and payable on the prepayment date specified therein.

(b)Mandatory Prepayments. If at any time the amount of a Commitment with respect to a Tranche shall be reduced pursuant to Section 2.04, the Borrower shall on the date of such reduction prepay the Loan Amount at Maturity of one or more Loans related to such Tranche such that the aggregate Loan Amount at Maturity of the Loans related to such Tranche immediately after such prepayment does not exceed the amount of such Commitment as so reduced and the amount of such prepayment shall be allocated among the Loans of such Tranche in such manner as may be determined by the Borrower and notified to the Lender. With respect to each Loan being prepaid pursuant to the preceding sentence, any such prepayment shall be in an amount equal to the applicable Prepayment Amount.

2.04Termination or Reduction of Commitments.

(a)If at any time after the date hereof, with respect to a Tranche, the product of the Put Strike Price (as defined in the Collar Transaction for the Related Component), the number of Options (as so defined) and the Option Entitlement (as so defined) is reduced pursuant to the terms thereof (which for the avoidance of doubt includes any reduction due to a partial or full termination of the Related Component), the Commitment for such Tranche shall be automatically and permanently reduced on the date of such reduction by a corresponding amount.

(b)On each Gradual Repayment Date pursuant to Section 2.05(b), the Commitment for the applicable Tranche shall be automatically and permanently reduced on such date by an amount equal to the corresponding Gradual Repayment Amount.

2.05Repayment of Loans.

(a)With respect to all the Loans of a Tranche outstanding, if any, on the related Maturity Date, the Borrower shall repay to the Lender on such date an amount equal to the aggregate Loan Amount at Maturity for such Loans plus any amount payable by the Borrower pursuant to Section 2.08.

14

(b)With respect to each Tranche and each Gradual Repayment Date related thereto, the Lender shall on the related Gradual Repayment Notification Date notify the Borrower not later than 11:00 a.m. on such date of the Gradual Repayment Amount due on such Gradual Repayment Date. On such Gradual Repayment Date, the Borrower shall pay to the Lender an amount equal to such Gradual Repayment Amount and the aggregate Loan Amount at Maturity of all Loans of such Tranche shall be reduced pro rata by a corresponding amount.

2.06Interest. If any amount payable by the Borrower under any Loan Document (other than the Collar Transaction Documents) is not paid when due (without regard to any applicable grace periods), whether at prepayment, stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at an interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws, which interest shall accrue from the date such overdue amount was originally due to the date of payment in full of such amount, including interest thereon, has been made to the Lender. Accrued and unpaid interest on past due amounts, including interest on interest, shall be due and payable upon demand. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

2.07Computation of Interest. Unless otherwise provided herein, all computations of interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365-day year).

2.08Averaging Period Interest Refund. With respect to a Tranche, on each Gradual Repayment Notification Date related thereto, the Lender shall notify the Borrower of the Averaging Period Interest Refund in respect of the related Gradual Repayment Date. On such Gradual Repayment Date, if such Averaging Period Interest Refund is a positive number, the Lender shall pay to the Borrower an amount equal to such number and if such Averaging Period Interest Refund is a negative number, the Borrower shall pay to the Lender an amount equal to the absolute value of such negative number; provided that if on any Gradual Repayment Date the Lender shall owe one or more Averaging Period Interest Refunds to the Borrower and the Borrower shall owe one or more Averaging Period Interest Refunds or Gradual Repayment Amounts to the Lender, such amounts shall be netted and the net amount shall be paid by the applicable party to the other party.

2.09Evidence of Debt. The Loans made by the Lender shall be evidenced by one or more accounts or records maintained by the Lender in the ordinary course of business. The accounts or records maintained by the Lender shall be conclusive absent manifest error. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. Upon the request of the Lender, the Borrower shall execute and deliver to the Lender a Note with respect to each Tranche, which shall evidence the Loans related to such Tranche in addition to such accounts or records. The Lender may attach schedules to each Note and endorse thereon the date, the aggregate Loan Amount at Maturity related to such Tranche and the Maturity Date for all the Loans related to such Tranche and payments with respect thereto.

15

2.10Payments Generally.

(a)All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff (except as may be permitted by the second paragraph of Section 9.09 and Section 2.08). Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Lender at the applicable Lending Office in Dollars and in immediately available funds not later than 3:00 p.m. on the date specified herein. All payments received by the Lender after 3:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest shall continue to accrue.

(b)If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or present value.

(c)Nothing herein shall be deemed to obligate the Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by the Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

(d)The determination of the Reference LIBOR Rate, the Interpolated Zero Coupon Swap Rate, any Loan Amount at Maturity, any Prepaid Loan Amount at Maturity, any Prepayment Amount, any Averaging Period Interest Refund, any Gradual Repayment Amount and all other calculations hereunder by the Lender shall be conclusive absent manifest error. With respect to any of the foregoing determinations, unless another time period is specified herein, as soon as reasonably practicable after the determination thereof, the Lender shall notify the Borrower of each such determination including reasonable detail regarding the calculation thereof.

2.11Modification of Margin Delimited Commitment.

(a)Upon the pledge of additional Eligible Collateral pursuant to the Pledge Agreement and provided that the Lender has received not less than two Business Days’ prior notice of the allocation of such additional Eligible Collateral to a Tranche, the Margin Delimited Commitment applicable to such Tranche shall be increased by an amount equal to the Maximum Loan Value of such Eligible Collateral on the date the Lender receives a perfected, first priority security interest in such Eligible Collateral under the Pledge Agreement.

(b)The Borrower may, at any time upon two Business Days’ prior notice to the Lender, request a recalculation of the Maximum Loan Value of the Collateral relating to a Tranche, and after such recalculation, the Margin Delimited Commitment applicable to such Tranche shall be equal to the Maximum Loan Value as of such date of recalculation of the Collateral allocated to such Tranche.

(c)With respect to any Tranche, if the Margin Delimited Commitment for such Tranche is modified pursuant to this Section 2.11, on such date of modification, the Borrower shall deliver to the Lender a duly executed “Statement of Purpose for an Extension of Credit Secured by Margin Stock” on Federal Reserve Form U-l with respect to such Tranche, completed in form and substance satisfactory to the Lender.

16

ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY

3.01     Taxes.

(a)       Any and all payments by the Borrower to or for the account of the Lender under this Agreement, a Note or the Pledge Agreement shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding taxes imposed on or measured by the Lender’s overall net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Lender is organized or maintains a lending office, which excluded taxes include, for the avoidance of doubt, United States federal income taxes imposed on a Lender which is organized within the United States (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as “Taxes”). If the Borrower shall be required by any Laws to deduct any Taxes from or in respect of any sum payable under any such document to the Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), the Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within 30 days after the date of such payment, the Borrower shall furnish to the Lender the original or a certified copy of a receipt evidencing payment thereof.

(b)       In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under this Agreement, any Note or the Pledge Agreement or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any such document (hereinafter referred to as “Other Taxes”).

(c)       If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under this Agreement, any Note or the Pledge Agreement to the Lender, the Borrower shall also pay to the Lender, at the time interest is paid, such additional amount that the Lender specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) that the Lender would have received if such Taxes or Other Taxes had not been imposed.

(d)       The Borrower agrees to indemnify the Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Lender, (ii) amounts payable under Section 3.01(c) and (iii) any liability (including additions to tax, penalties, interest and expenses) arising therefrom or with respect thereto, in each case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Payment under this subsection (d) shall be made within 30 days after the date the Lender makes a demand therefor.

17

(e)       The Lender shall deliver to the Borrower on the Closing Date a properly completed and executed IRS Form W-9. Prior to the expiration of such form, the Lender shall deliver a new properly completed and executed IRS Form W-9 (or successor form). The Borrower shall be entitled to rely upon such form and, notwithstanding the other provisions of Section 3.01 to the contrary, shall be held harmless by the Lender for any losses sustained from relying upon such form. If, pursuant to Section 9.07(b), the Lender assigns its rights and obligations under this Agreement to an Eligible Assignee, such assignee shall deliver to the Borrower, prior to the date on which the first payment to such assignee is due hereunder and from time to time thereafter, a properly completed and executed IRS Form W-9, IRS Form W-8BEN or similar form, as appropriate.

3.02     Increased Costs. If any Change in Law shall: (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, the Lender; (ii) subject the Lender to any tax of any kind whatsoever with respect to this Agreement, any Loan made by it, or change the basis of taxation of payments to the Lender in respect thereof; or (iii) impose on the Lender any other condition, cost or expense affecting this Agreement or Loans made by the Lender; and the result of any of the foregoing shall be to increase the cost to the Lender of making or maintaining any Loan (or of maintaining its obligation to make any Loan), or to increase the cost to the Lender, or to reduce the amount of any sum received or receivable by the Lender (whether of principal, interest or any other amount) then, upon request of the Lender, the Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.

3.03     Funding Losses. Upon demand of the Lender from time to time, the Borrower shall promptly compensate the Lender for and hold the Lender harmless from any loss, cost or expense incurred by it as a result of any failure by the Borrower (for a reason other than the failure of the Lender to make a Loan) to prepay or borrow any Loan on the date or in the amount notified by the Borrower, including any loss, cost or expense (but excluding loss of anticipated profits) actually incurred by reason of liquidation or reemployment of deposits or other funds acquired by the Lender to fund or maintain such Loan. The Borrower shall also pay any customary administrative fees charged by the Lender in connection with the foregoing.

3.04     Requests for Compensation. A certificate of the Lender claiming compensation under this Article III and setting forth the additional amount or amounts to be paid to it hereunder and calculations in reasonable detail therefor shall be conclusive in the absence of manifest error. In determining such amount, the Lender may use any reasonable averaging and attribution methods.

3.05     Survival. All of the Borrower’s obligations under this Article III shall survive termination of the Commitments and repayment, satisfaction or discharge of all other Obligations hereunder.

18

ARTICLE IV
CONDITIONS

4.01     Conditions to Closing Date. The provisions of Article II hereof and the obligation of the Lender to make the Loans shall come into force on the date of the Lender’s receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the Borrower, each dated the Closing Date (unless specified otherwise or, in the case of certificates of governmental officials, dated a recent date before the Closing Date) and each in form and substance satisfactory to the Lender and its legal counsel:

(a)       executed counterparts of the Pledge Agreement, the Transaction Acknowledgment and the Parent Guarantee, sufficient in number for distribution to the Lender and the Borrower;

(b)       such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of the Borrower as the Lender may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents;

(c)       executed copies of the Organization Documents of the Borrower and the Guarantor;

(d)       such other documents and certifications as the Lender may reasonably require to evidence that the Borrower is duly formed, and that the Borrower is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

(e)       a certificate of a Responsible Officer of the Borrower either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by the Borrower and the validity against the Borrower of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required;

(f)        a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified it Sections 4.02(a) and (b) have been satisfied, (B) that there has been no event or circumstance since the date of the Borrower’s formation that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect;

(g)       the opinion of Baker Botts L.L.P., counsel to the Borrower and the Guarantor, addressed to the Lender, substantially in the form set forth in Exhibit C, and the opinion of Sherman and Howard LLC stating that the Borrower is not required to register as an investment company under the Investment Company Act, addressed to the Lender, substantially in the form set forth in Exhibit D;

19

(h)       evidence that all other action that the Lender may deem necessary or desirable in order to perfect the security interests created under the Collateral Documents has been taken (including filing of UCC financing statements);

(i)        such other assurances, certificates, documents or consents as the Lender reasonably may require; and

(j)        on or prior to the Closing Date, delivery by the Borrower of 170,000,000 Shares (and, if such Shares are in certificated form, together with proper instruments of assignment duly executed in favor of the Lender or its designee or in blank) to the Lender or its designee, in each case in a manner acceptable to the Lender for the Lender to hold as Collateral pursuant to the terms of the Pledge Agreement.

4.02     Conditions to each Borrowing. The obligation of the Lender to make each Loan is further subject to the following conditions precedent:

(a)       The representations and warranties of the Borrower contained in Article V and the Pledge Agreement, and which are contained in any document furnished at any time under or in connection herewith, shall be true and correct on and as of the date of such Loan, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date. Without limiting the foregoing, the Lender shall have determined, in its discretion, that the representation in Section 5.12 (b) is true and correct.

(b)       No Default shall exist, or would result from such proposed Loan.

(c)       The Lender shall have received a Loan Notice with respect to such Loan in accordance with the requirements hereof (other than the Initial Loans).

(d)       The Lender shall have received a duly executed “Statement of Purpose for an Extension of Credit Secured by Margin Stock” on Federal Reserve Form U-l with respect to each Tranche, completed in form and substance satisfactory to the Lender.

(e)       If requested by the Lender, the Lender shall have received a Note for such Loan executed by the Borrower.

(f)        With respect to any such Loan made at any-time on-or prior to the-withdrawal of all the Shares from the lien created under the Pledge Agreement pursuant to Section 5(j) thereof, after giving effect to such Loan, the aggregate of all Proceeds advanced by the Lender in respect of the Tranche to which such Loan relates and not repaid at or prior to such time shall not exceed the Margin Delimited Commitment then applicable to such Tranche (after giving effect to modification of such Margin Delimited Commitment on such date pursuant to Section 2.11 hereof).

Each Loan Notice submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) (except for the last sentence thereof) and (b) have been satisfied on and as of the date of such Loan.

20

ARTICLE V
REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender that:

5.01     Existence, Qualification and Power; Compliance with Laws. The Borrower (a) is a limited liability company duly organized or formed, validly existing and in good standing under the Laws of Delaware, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, and (d) is in compliance with all Laws; except in each case referred to in clause (b)(i), (c) or (d), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02     Authorization; No Contravention. The execution, delivery and performance by the Borrower of each Loan Document to which it is a party have been duly authorized by all necessary limited liability company action, and do not and will not (a) contravene the terms of any of the Borrower’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, (i) any Contractual Obligation to which the Borrower is a party or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Borrower or its property is subject; or (c) violate any Law.

5.03     Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower of this Agreement or any other Loan Document.

5.04     Binding Effect. This Agreement has been, and each other Loan Document to be delivered by the Borrower hereunder when delivered hereunder, will have been, duly executed and delivered by the Borrower. This Agreement constitutes, and each other Loan Document to be so delivered when so delivered will constitute, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms.

5.05     Litigation. There are no actions, suits, proceeding’s, claims or disputes pending or, to the knowledge of the Borrower after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or against any of its properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect.

5.06     No Default. The Borrower is not in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result

21

from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

5.07     Liens. The property of the Borrower is subject to no Liens, other than Liens permitted by Section 7.01.

5.08     Taxes. The Borrower has filed all Federal, state and other material tax returns and reports required to be filed, and has paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon it or its properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against the Borrower that would, if made, have a Material Adverse Effect.

5.09     ERISA.

(a)       The Borrower has not established any Plan.

(b)       The Borrower does not, and would not be deemed to, hold Plan Assets.

(c)       Neither the Borrower nor any ERISA Affiliate of the Borrower has incurred or could be subjected to any liability under Title IV or Section 302 of ERISA or Section 412 of the Code or maintains or contributes to, or is or has been required to maintain or contribute to, any Pension Plan that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.10     Subsidiaries. The Borrower has no Subsidiaries and the Borrower has no Investments except as permitted under its Organization Documents.

5.11     Indebtedness. The Borrower has no Indebtedness except as permitted under its Organization Documents.

5.12     Margin Regulations; Investment Company Act.

(a)       [Intentionally Omitted.]

(b)       The execution of this Agreement, the making of any of the Loans hereunder, and the direct or indirect use of the proceeds thereof shall not cause the Lender to be in violation of the FRB’s Regulation U or the Borrower to be in violation of the FRB’s Regulation X.

(c)       Neither the Borrower nor Liberty Media Corporation is required to be registered as an “investment company” under the Investment Company Act.

5.13     Disclosure. The Borrower has disclosed to the Lender all agreements, instruments and corporate or other restrictions to which it is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of the Borrower to the Lender in connection with

22

the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

5.14     Compliance with Organization Documents. The Borrower is in compliance with the terms and provisions of its Organization Documents.

5.15     Compliance with Laws. The Borrower is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

5.16     Ownership of the Borrower. On the date hereof and on the Closing Date, Liberty Media Corporation indirectly owns all of the equity interests in the Borrower.

ARTICLE VI
AFFIRMATIVE COVENANTS

So long as the Commitments shall be in effect or the Loans or any other Obligations hereunder shall remain unpaid or unsatisfied, the Borrower shall:

6.01     Notices. Promptly notify the Lender:

(a)       of the occurrence of any Default;

(b)       of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of the Borrower; (ii) any dispute, litigation, investigation, proceeding or suspension between the Borrower and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting the Borrower; and

(c)       of any material change in accounting policies or financial reporting practices by the Borrower.

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.01(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

6.02     Payment of Obligations. Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower; (b) all lawful claims which, if

23

unpaid, would by law become a Lien upon its property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.

6.03     Preservation of Existence, Etc. (a) Preserve, renew and maintain in fall force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization; and (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to take such action could not reasonably be expected to have a Material Adverse Effect.

6.04     Compliance with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

6.05     Compliance with Organization Documents. Comply with the terms and provisions of its Organization Documents.

6.06     Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower.

6.07     Use of Proceeds. In the case of the Initial Loans, use the proceeds in connection with the purchase of the Purchased DTV Shares by the Borrower and, in the cases of all other Loans, distribute the proceeds of the Loans to its Members who may, in their discretion, make a distribution to Liberty Media Corporation or any Subsidiary thereof for use by Liberty Media Corporation or such Subsidiary for general corporate purposes, or lend the proceeds of the Loans to Liberty Media Corporation or a Subsidiary thereof for general corporate purposes, or otherwise use the proceeds of the Loans for general corporate purposes, in each case, not in contravention of any Law or of any Loan Document.

6.08     ERISA Matters. The Borrower will do, or cause to be done, all things necessary to ensure that it will not be deemed to hold Plan Assets at any time.

6.09     Collar Agreement Opinion. In connection with the execution and delivery of the Transaction Documents (as defined in the Transaction Acknowledgement), the Borrower shall deliver such legal opinions relating thereto as the Lender shall reasonably request, which opinions shall be satisfactory in form and substance to the Lender.

24

ARTICLE VII
NEGATIVE COVENANTS

So long as the Commitments shall be in effect or the Loans or any other Obligations hereunder shall remain unpaid or unsatisfied, the Borrower shall not, directly or indirectly:

7.01     Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:

(a)       Liens pursuant to any Loan Document; or

(b)       Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP.

7.02     Investments. Make any Investments, except as permitted under the Organization Documents of the Borrower.

7.03     Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except as permitted under the Organization Documents of the Borrower.

7.04     Fundamental Changes.

(a)       Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, other than in accordance with Section 6.07.

(b)       Amend, restate, modify or waive any provision of the Organization Documents of the Borrower.

7.05     Dispositions. Make any Disposition or enter into any agreement to make any Disposition, other than in accordance with Section 6.07, the Organization Documents of Borrower, the Collar Transaction or any Restricted Payment permitted under Section 7.06.; provided that no Disposition shall be made of any assets of the Borrower constituting Collateral other than in accordance with the Pledge Agreement; provided further that the Borrower may Dispose of the Purchased DTV Shares without any limitation.

7.06     Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, other than any Restricted Payment (a) consisting solely of the Purchased DTV Shares, (b) consisting of any distribution of any kind received on the Shares or (c) otherwise permitted by Section 6.07 or the Organization Documents of the Borrower; provided that if an Adjustment Event occurs, the Borrower shall be entitled to make a Restricted Payment of any property of the Borrower (including any property consisting of any distribution on Shares received by or on behalf of Borrower in respect of such Adjustment Event or received by or on behalf of Borrower after such Adjustment Event occurs but prior to the time clauses (i) and (ii) of this proviso are satisfied) only (i) after any adjustments to the Put Strike Price (as defined in the Collar Transaction for the Related Component), the Number of Options (as so defined) or the Option Entitlement (as so defined) under the Collar Transaction and the affected Related Components required by the operation of the terms of the Collar Transaction as a result of such Adjustment Event are final and effective and (ii) after the

25

Borrower has paid any Prepayment Amount, pursuant to Section 2.03 (b), or any other amount under the applicable Collar Transaction Document required to paid as a result of any such adjustment.

7.07     Change in Nature of Business. Engage in any material line of business substantially different from the line of business conducted by the Borrower on the date hereof or any business substantially related or incidental thereto.

7.08     Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower as would be obtainable by the Borrower at the time in a comparable arm’s length transaction with a Person other than an Affiliate, other than in accordance with Section 6.07, Section 7.05, Section 7.06 and the Organization Documents of the Borrower.

7.09     Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits the ability of the Borrower to create, incur, assume or suffer to exist Liens on its property; or (b) requires the grant of a Lien to secure an obligation of the Borrower if a Lien is granted to secure another obligation of the Borrower.

7.10     [Intentionally Omitted.]

7.11     ERISA Matters.

(a)       The Borrower shall not incur or become subject to any liability under Title IV or Section 302 of ERISA or Section 412 of the Code or maintain or contribute to, or be required to maintain or contribute to, any Plan or Pension Plan.

(b)       The Borrower shall not engage in any transaction that would cause any obligation or action taken or to be taken hereunder (or the exercise by the Lender of any of its rights under this Agreement or any of the Loan Documents) to be a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of the Code, or substantially similar provisions under federal, state or local laws, sales or regulations.

7.12     Change of Control. The Borrower shall not permit or become subject to a Change of Control without the prior consent of the Lender (such consent not to be unreasonably withheld conditioned and delayed).

7.13     Lock-Up. Prior to February 27,2009, the Borrower will not, nor will the Borrower permit its Affiliates or any “person” associated with the Borrower within the meaning of paragraph (a)(2) of Rule 144 of the Securities Act (each such other person an “Associated Person”) to, without the Lender’s prior written consent (i) sell, pledge or otherwise dispose of any Shares issued by the Issuer (as defined in the Pledge Agreement) (or any other security or instrument that would be subject to aggregation under Rule 144(e) of the Securities Act) or (ii) act in concert with any Person in connection with the sale, pledge or other disposition of any such Shares or securities or any interest therein, other than pursuant to the Collar Transaction, in each case to the extent such sale, pledge or other disposition, may be aggregated pursuant to Rule 144 with any disposition of the Shares constituting Collateral under the Pledge Agreement if the

26

number of Shares being sold, pledged or otherwise disposed of, when added to the number of Shares constituting Collateral under the Pledge Agreement, would exceed the volume permitted under Rule 144(e) of the Securities Act.

ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES

8.01     Events of Default. Any of the following shall constitute an “Event of Default”:

(a)       Non-Payment. The Borrower fails to pay (i) any amount when and as required to be paid herein, including any interest due hereunder, or (ii) when and as required to be paid any amount payable under any other Loan Document (other than the Collar Transaction Documents); or

(b)       Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 2.01(b), 6.02, 6.03, 6.04, 6.05, 6.07, 6.08 or 6.09 or Article VII; or

(c)       Other Defaults. (i) The Borrower fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document (other than the Collar Transaction Documents) on its part to be performed or observed and such failure continues for 30 days or (ii) any Collateral Event of Default occurs under (and as defined in) the Pledge Agreement; or

(d)       Default under the Collar Transaction. (i) Prior to the date of execution by the Lender and the Borrower of the Collar Agreement, any Event of Default (as defined in the ISDA Master Agreement) in respect of which the Borrower is the Defaulting Party (as defined in the ISDA Master Agreement) or an Early Termination Date (as defined in the ISDA Master Agreement) occurs under the ISDA Master Agreement deemed to be entered into between the Lender and the Borrower pursuant to Section 9.16, or (ii) on or after the date of execution by the Lender and the Borrower of the Collar Agreement, any Event of Default (as defined in the ISDA Master Agreement) in respect of which the Borrower in the Defaulting Party (as defined in the ISDA Master Agreement) or an Early Termination Date (as defined in the ISDA Master Agreement) occurs under the Collar Agreement; or

(e)       Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or behalf of the Borrower herein, in any other Loan Document, or in any document delivered in connection herewith or therewith, shall be incorrect or misleading in any material respect when made or deemed made; or

(f)        Insolvency Proceedings, Etc. The Borrower institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or the Borrower takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of the Borrower; or any proceeding under any Debtor Relief Law relating to the

27

Borrower or to all or any material part of its property is instituted without the consent of the Borrower and is not dismissed, discharged, stayed or restrained within 30 days of the institution thereof; or

(g)       Inability to Pay Debts; Attachment. (i) The Borrower becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of the Borrower; or

(h)       Judgments. There is entered against the Borrower (i) a final judgment or order for the payment of money (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and enforcement proceedings are commenced by any creditor upon such judgment or order;

(i)        Invalidity of Loan Documents. Any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or the Borrower or any of its Affiliates or Subsidiaries contests in any manner the validity or enforceability of any Loan Document; or the Borrower or any of its Affiliates denies that it has any or further liability or obligation under any Loan Document to which the Borrower or such Affiliate is a party, or purports to revoke, terminate or rescind any Loan Document to which the Borrower or such Affiliate is a party; or

(j)        Failure to Execute Transaction Documents. The Lender elects to terminate the Transaction Acknowledgement pursuant to the last paragraph of the section titled “Greenlady Conditions” thereunder because Transaction Documents (as defined in the Transaction Acknowledgement) are not executed within the time period specified in such paragraph.

8.02     Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Lender may take any or all of the following actions:

(a)       declare the Commitments to be terminated, whereupon the Commitments shall be terminated;

(b)       declare the aggregate Loan Amount at Maturity of all the Loans, and all other amounts owing or payable hereunder (including interest) or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; and

(c)       exercise all rights and remedies available to it under the Loan Documents or applicable law;

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code, the Commitments shall automatically terminate, and the aggregate Loan Amount at Maturity and all other amounts as

28

aforesaid shall automatically become due and payable, in each case without further act of the Lender.

8.03     Application of Funds. After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied by the Lender in such order as it elects in its sole discretion.

ARTICLE IX
MISCELLANEOUS

9.01     Amendments; Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing and signed by the Lender and the Borrower, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

9.02     Notices and Other Communications; Facsimile Copies.

(a)       General. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission). All such written notices shall be mailed, faxed or delivered to the address, facsimile number or (subject to subsection (c) below) electronic mail address specified for notices to the applicable party on Schedule 9.02; or to such other address, facsimile number or electronic mail address as shall be designated by such party in a notice to the other party. All notices and other communications expressly permitted hereunder to be given by telephone shall be made to the telephone number specified for notices to the applicable party on Schedule 9.02, or to such other telephone number as shall be designated by such party in a notice to the other party. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of subsection (c) below), when delivered; provided, however, that notices and other communications to the Lender pursuant to Article II shall not be effective until actually received by the Lender. In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder.

(b)       Effectiveness of Facsimile Documents and Signatures. Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on the Borrower and the Lender. The Lender may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature.

29

(c)       Limited Use of Electronic Mail. Electronic mail and Internet and intranet websites may be used only to distribute routine communications, and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose.

(d)       Reliance by Lender. The Lender shall be entitled to rely and act upon any notices (including telephonic Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof varied from any confirmation thereof. The Borrower shall indemnify the Lender, its Affiliates, and their respective officers, directors, employees, agents and attorneys-in-fact from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other communications with the Lender may be recorded by the Lender, and the Borrower hereby consents to such recording.

9.03     No Waiver; Cumulative Remedies. No failure by the Lender to exercise, and no delay by the Lender in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

9.04     Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the Lender for all costs and expenses incurred after the date hereof in connection with any amendment, waiver, consent or other modification of this Agreement, any Note or the Pledge Agreement (whether or not the transactions contemplated by such amendment, waiver, consent or modification are consummated), and the consummation and administration of the transactions contemplated by such amendment, waiver, consent or modification, including all Attorney Costs, and (b) to pay or reimburse the Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement, any Note or the Pledge Agreement (including all such costs and expenses incurred during any “workout” or restructuring in respect of the Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall include all search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Lender and the cost of independent public accountants and other outside experts retained by the Lender after the date hereof, provided that the costs and expenses of any UCC filings and searches, including Attorney Costs related thereto, including those incurred prior to the date hereof, shall be reimbursed by Borrower. Except as set forth in the prior sentence, no costs related to the preparation and negotiation of any Loan Documents shall be reimbursed by Borrower. Notwithstanding anything to the contrary contained in this Agreement, in no event shall the Borrower be responsible for any expenses, costs, charges, fees, taxes or payments made by or imposed upon the Lender due to any assignment effected by Lender pursuant to Section 9.07 hereof. All amounts due under this Section 9.04 shall be payable within ten Business Days after demand therefor. The agreements in this Section shall survive the termination of the Commitments and repayment, satisfaction or discharge of all other Obligations.

30

9.05     Indemnification by the Borrower. Whether or not the transactions contemplated hereby are consummated, the Borrower shall indemnify and hold harmless the Lender, its Affiliates, and their respective directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the “Indemnitees”) from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of this Agreement or the Pledge Agreement, (b) the Commitments, any Loan or the use or proposed use of the proceeds from any Loan or (c) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any of the Borrower’s members, managers, directors, shareholders or creditors (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”); provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. No Indemnitee shall have any liability for any indirect or consequential damages relating to this Agreement or any other Loan Document (other than as may be provided in the Collar Transaction) or arising out of its activities in connection herewith or therewith (other than as may be provided in the Collar Transaction) (whether before or after the Closing Date). All amounts due under this Section 9.05 shall be payable within ten Business Days after demand therefor accompanied by reasonable supporting documentation. The agreements in this Section shall survive the termination of the Commitments and the repayment, satisfaction or discharge of all the Obligations.

9.06     Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to the Lender, or the Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then, to the extent of such recovery the obligation or part thereof originally intended to be satisfied-shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred.

9.07     Successors and Assigns.

(a)       The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender and the Lender may not assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the

31

provisions of subsection (c) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (c) of this Section and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)       The Lender may at any time assign to an Eligible Assignee all (but not less than all) of its rights and obligations under this Agreement (including all of the Commitments and the Loans at the time owing to it) pursuant to documentation acceptable to the Lender and the assignee; provided that (i) the Assignment Conditions have been satisfied, (ii) the Borrower shall not as a result of the assignment be required to pay the assignee amounts under this Agreement greater than amounts the Borrower would have been required to pay to the Lender in the absence of such assignment and (iii) the Borrower shall not as a result of the assignment receive from the assignee amounts less than amounts the Borrower would have received from the Lender in the absence of such assignment. From and after the effective date specified in such documentation, such Eligible Assignee shall be a party to this Agreement and have the rights and obligations of the Lender under this Agreement, and the Lender shall be released from its obligations under this Agreement (and shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.02, 3.03, 9.04 and 9.05 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, the Borrower (at its expense) shall execute and deliver new or replacement Notes to the Lender and the assignee (in exchange for the existing Notes from the Lender), and shall execute and deliver any other documents reasonably necessary or appropriate to give effect to such assignment and to provide for the administration of this Agreement after giving effect thereto.

(c)       The Lender may at any time, without the consent of, or notice to, the Borrower, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of the Lender’s rights and/or obligations under this Agreement (including all or a portion of any Commitment and/or the Loans); provided that (i) the Lender’s obligations under this Agreement shall remain unchanged, (ii) the Lender shall remain solely responsible to the Borrower for the performance of such obligations, (iii) the Borrower shall continue to deal solely and directly with the Lender in connection with the Lender’s rights and obligations under this Agreement, (iv) the Participant Conditions have been satisfied, (v) the Borrower shall not as a result of the participation be required to pay the Lender amounts under this Agreement greater than amounts the Borrower would have been required to pay to the Lender in the absence of such participation and (vi) the Borrower will not as a result of the participation receive from the Lender amounts less than amounts the Borrower would have received from the Lender in the absence of such participation. Any agreement or instrument pursuant to which the Lender sells such a participation shall provide that the Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that the Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification that would (i) postpone any date upon which any payment of money is scheduled to be made to such Participant or (ii) reduce the principal, interest, fees or other amounts payable to such Participant (provided,

32

however, that the Lender may, without the consent of the Participant, (A) amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder and (B) waive the right to be paid interest at the Default Rate), or (iii) release any Lien on any Collateral granted to or held by the Lender under any Loan Document. Subject to subsection (d) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.02 and 3.03 to the same extent as if it were the Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.09 as though it were the Lender.

(d)       Notwithstanding anything else to the contrary herein, a Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.02 than the Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to provide to the Lender such tax forms prescribed by the IRS as are necessary or desirable to establish an exemption from, or reduction of, U.S. withholding tax.

(e)       The Lender may at any time pledge or assign a security interest in all or any portion of its rights to receive payments under this Agreement (including under the Note, if any) to secure obligations of the Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release the Lender from any of its obligations hereunder or substitute any such pledgee or assignee for the Lender as a party hereto.

(f)        As used herein, the following terms have the following meanings:

“Assignment Conditions” shall consist of the following: (i) Borrower shall have received a duly executed acceptance and assumption by the assignee of the obligations under this Agreement; (ii) the Lender shall, concurrently with its assignment to such assignee, assign its rights and obligations under the Collar Transaction to such assignee and (iii) on the effective date of such assignment an Event of Default where the Lender is a “defaulting party” or Termination Event where the Lender is the sole “affected party” (each as defined in the ISDA Master Agreement) shall not have occurred or be continuing pursuant to the Collar Transaction and will not occur under the Collar Transaction as a result of such assignment.

“Eligible Assignee” means (i) any Affiliate of the Lender or any special purpose entity created, controlled or sponsored by the Lender, in either case, of substantially equivalent or greater credit quality having the demonstrable ability to provide the maximum funding to Borrower contemplated by this Agreement or (ii) any other Person (other than a natural person) approved by the Borrower (such approval not to be unreasonably withheld or delayed); provided that no such approval shall be required if an Event of Default has occurred and is continuing.

33

“Participant Conditions” shall consist of the following: (i) the Lender will identify the Participant to the Borrower and provide the Borrower with a copy of the participation agreement; (ii) the Participant shall be a Bank, Broker or Dealer (as such terms are defined in the Exchange Act) or a special purpose entity controlled or sponsored by a Bank, Broker or Dealer; (iii) the Participant shall agree not to sell participations to any other Person; and (iv) on the effective date of such participation an Event of Default where the Lender is a “defaulting party” or Termination Event where the Lender is the sole “affected party” (each as defined in the ISDA Master Agreement) shall not have occurred or be continuing pursuant to the Collar Transaction and will not occur under the Collar Transaction as a result of such participation.

9.08     Confidentiality. The Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any permitted assignee of or Participant in, or any prospective permitted assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations (including this Agreement or the Collar Transaction), (g) with the consent of the Borrower or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or the agreements required by this Section or (y) becomes available to the Lender on a nonconfidential basis from a source other than the Borrower. For purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Lender on a nonconfidential basis prior to disclosure by the Borrower, provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

9.09     Set-off. In addition to any rights and remedies of the Lender provided by law, upon the occurrence and during the continuance of any Event of Default, the Lender is authorized at any time and from time to time, without prior notice to the Borrower, any such notice being waived by the Borrower to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness or obligations at any time owing by, the Lender to or for the credit or the account of the Borrower against any and all Obligations owing to the Lender hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not the Lender shall have made demand under this Agreement or any other Loan Document and although such

34

Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable deposit, indebtedness or other obligation. The Lender agrees promptly to notify the Borrower after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.

Notwithstanding anything contained herein to the contrary, if, and only if, (i) the Lender would be required to post collateral under the Collar Agreement or (ii) on a Cash Settlement Payment Date (as defined in the Collar Transaction) an amount is due and payable by the Lender under the Collar Transaction or (iii) following an Early Termination Date (as defined in the ISDA Master Agreement), an amount calculated pursuant to Section 6(e) of the ISDA Master Agreement is due and payable by the Lender, and the Lender fails to pay any such amount or post such collateral, so long as such requirement to post collateral would apply, in each case after the expiration of any applicable grace period, the Borrower is authorized, without prior notice to the Lender, any such notice being waived by the Lender to the fullest extent permitted by law, to set off and apply any Obligations then due and owing by the Borrower to or for the credit or the account of the Lender against any obligations then due and owing to the Borrower from the Lender under the Collar Transaction.

9.10     Lender’s Obligations with respect to Credit Support. The Lender and the Borrower agree and acknowledge that any obligation of the Lender to post certain collateral under the Collar Agreement in accordance with the terms thereof shall not apply or shall cease to be in effect to the extent that the Lender has made any Loans to the Borrower the aggregate outstanding Loan Amount at Maturity of which equals or exceeds the Exposure (as such term is defined in the ISDA Master Agreement) of the Lender to the Borrower under the Collar Agreement. The Lender and the Borrower agree and acknowledge that the Lender shall be obligated, however, to post certain collateral under the Collar Agreement, in accordance with, subject to and to the extent provided by the terms of the related ISDA Master Agreement, to the extent that the Exposure of the Lender to the Borrower under the Collar Agreement, on any Business Day, exceeds the aggregate Loan Amount at Maturity of the Loans to the Borrower outstanding on that Business Day.

9.11     Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, any interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether any interest contracted for, charged, or received by the Lender exceeds the Maximum Rate, the Lender may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of any interest throughout the contemplated term of the Obligations hereunder.

9.12     Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

35

9.13     Integration; Entire Agreement. This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter including, for the avoidance of doubt, the Credit Agreement Transaction Acknowledgement, dated as of April 2, 2008, between the Lender and the Borrower but excluding, for the avoidance of doubt, the Transaction Acknowledgement (which shall be replaced and superseded only from and after execution by the Lender and the Borrower of the Collar Agreement). This Agreement and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Lender in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.

9.14     Survival of Representations and Warranties. All representations and warranties made hereunder and in any Note, the Pledge Agreement or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof but shall only be deemed to be made as of the time or times specified herein or therein. Such representations and warranties have been or will be relied upon by the Lender, regardless of any investigation made by the Lender or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default at the time of any Loan, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

9.15     Severability. If any provision of this Agreement, any Note or the Pledge Agreement is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of such agreements shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

9.16     Deemed ISDA Master Agreement. Prior to the execution by the Lender and the Borrower of the Collar Agreement, the Borrower and the Lender agree that the Transaction Acknowledgement shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Master Agreement as if the Lender and the Borrower had executed an agreement in such form on the date of the Transaction Acknowledgement (without any Schedule except for (1) the election of Market Quotation and Second Method, New York law (without regard to the conflicts of law principles) as the governing law and U.S. Dollars as the Termination Currency, (2) the election that the “Cross Default” provisions of Section 5(a)(vi) of the ISDA Master Agreement will apply to the Lender and the Borrower with a “Threshold Amount” of $50,000,000, (3) the specification of the Pledge Agreement and the Parent Guarantee as Credit Support Documents in relation to the Borrower and the Guarantor as a Credit Support Provider

36

in relation to the Borrower and (4) with an additional Event of Default (as defined under the ISDA Master Agreement) added as a new Section 5(a)(ix) of the ISDA Master Agreement in respect of which the Borrower shall be the Defaulting Party (as defined in the ISDA Master Agreement) if either of the following occurs; (A) a Collateral Event of Default as defined in the Pledge Agreement or (B) an Event of Default under this Agreement (each term used in this parenthetical but not defined in this Agreement or, if so specified, the Pledge Agreement shall have the meaning specified in the ISDA Master Agreement)).

9.17     Collar Agreement Modifications. References herein to the terms of the Collar Transaction are based on the provisions of the Transaction Acknowledgement. If any relevant provisions of the Collar Agreement differ in any material respect from those of the Transaction Acknowledgement as described herein, the parties hereto will negotiate in good faith to modify the terms of this Agreement in a manner that preserves the economic intent of the parties.

9.18     Amendments to Schedules. If as a result of the operation of Section 9.17 or as a result of the operation of any provision of the Collar Transaction any of the information appearing in Schedule 1, Schedule 2, Schedule 3 or Schedule 4 hereto must be amended, the Lender shall provide the Borrower with a copy of such amended schedule, which shall automatically be deemed to replace the prior schedule.

9.19     Safe Harbors. The Borrower and the Lender agree that (a) this Agreement, together with the Collar Transaction, is a “securities contract” (as defined in Section 741(7) of the Bankruptcy Code), (b) the Pledge Agreement and the Parent Guarantee are being entered into in connection with the Collar Transaction Documents and are or will be a “security agreement or arrangement” or other “credit enhancement” that forms a part of such “securities contract” within the meaning of Section 362 of the Bankruptcy Code and (c) all transfers of cash, securities or other property under or in connection with this Agreement or the Collar Transaction (including all pledges under the Pledge Agreement) to the Lender are “transfers” made “by or to (or for the benefit of)” the Lender as a “financial institution” or a “financial participant” (each as defined in the Bankruptcy Code) within the meaning of Section 546(e) of the Bankruptcy Code and are “in connection with” a “securities contract” within the meaning of Section 546(e) and 548(d)(2) of the Bankruptcy Code.

9.20     Governing Law.

(a)       THIS AGREEMENT AND ALL MATTERS ARISING OUT OF OR RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

(b)       ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER AND THE LENDER EACH CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO

37

THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER AND THE LENDER EACH IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER AND THE LENDER EACH WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

9.21     Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

9.22     USA Patriot Act Notice. The Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Lender to identify the Borrower in accordance with the Act.

38

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

GREENLADY II, LLC
By: Greenlady Corp., its sole managing member
By:	/s/ David J.A. Flowers
Name:	David J.A. Flowers
Title:	Senior Vice President

BANK OF AMERICA, N.A.
By:	/s/ William Brett
Name:	William Brett
Title:	Managing Director

Signature Page- Credit Agreement

SCHEDULE 1

TRANCHE INFORMATION

Tranche	Component related to such Tranche	Commitment as of the Closing Date		Loan Amount at Maturity of Initial Loan		Proceeds of Initial Loan		Averaging Midpoint Date	Margin Delimited Commitment as of the Closing Date
1	1	$	515,005,300	$	468,511,698.06	$	447,084,893.99	Sept. 30, 2009	$	485,286,296.82
2	2	$	366,226,000	$	333,163,818.50	$	312,253,334.05	Apr. 12, 2010	$	350,813,195.98
3	3	$	286,114,100	$	260,261,498.70	$	238,572,129.76	Oct. 20, 2010	$	277,327,881.61
4	4	$	313,908,000	$	285,547,634.69	$	255,746,062.68	May 4, 2011	$	294,456,150.43
5	5	$	400,559,700	$	364,338,298.86	$	318,276,802.12	Nov. 11, 2011	$	356,820,643.66
6	6	$	523,180,000	$	475,878,613.32	$	405,141,777.39	May 23, 2012	$	467,395,831.50
	TOTALS:	$	2,404,993,100	$	2,187,701,562.12	$	1,977,075,000		$	2,232,100,000.00

1

SCHEDULE 2

GRADUAL REPAYMENT

“Gradual Repayment Amount” means, with respect to a Tranche, (i) for each related Gradual Repayment Date other than the last Gradual Repayment Date for such Tranche, an amount equal to the greater of (a) the aggregate Loan Amount at Maturity as of such date for all Loans related to such Tranche (without giving effect to prepayments, if any, made on such date) minus the Effective Protection Level Amount for such date and (b) zero and (ii) for the last Gradual Repayment Date for such Tranche, an amount equal to the aggregate Loan Amount at Maturity as of such date for all Loans related to such Tranche.

“Effective Protection Level Amount” means, with respect to a Tranche and a related Gradual Payment Date, an amount calculated using the following formula:

MAX [(K – (wi x Ai)), 0] x N

where,

“K” means the Put Strike Price (as defined in the Collar Transaction) for the Related Component;

“wi” means i/n where “n” means the total number of Averaging Dates for the Related Component;

“i” means (i) with respect to the first Gradual Repayment Date, 1 and (ii) with respect to each subsequent Gradual Repayment Date, a number equal to 1 plus the number of Gradual Repayment Dates prior to such Gradual Repayment Date.

“Ai” means the arithmetic average of the closing price for one Share on every Exchange Business Day (as defined in the 1996 ISDA Equity Derivatives Definitions), where the specified Exchange (as defined in the 1996 ISDA Equity Derivatives Definitions) is NASDAQ, for the period from and including the first Averaging Date for the Related Component to and including the Averaging Date immediately prior to such Gradual Repayment Date; provided that, with respect to the first Gradual Repayment Date, “Ai” shall mean the closing price for one Share on the fourth Exchange Business Day prior to such Gradual Repayment Date; and

“N” means the product of the Number of Options (as defined in the Collar Transaction) and the Option Entitlement (as so defined) for the Related Component.

For the avoidance of doubt, with respect to each Tranche, as of the last Averaging Date for the Related Component for such Tranche, the sum of all Gradual Repayment Amounts for such Tranche shall be equal to the aggregate Loan Amount at Maturity for all Loans of such Tranche (determined without giving effect to any Gradual Repayment Amounts for such Tranche).

1

SCHEDULE 3

AVERAGING PERIOD INTEREST REFUND

“Averaging Period Interest Refund” means, with respect to a Tranche and each related Gradual Repayment Date, the product of (i) the Gradual Repayment Amount for such Gradual Repayment Date and (ii) the Carry.

“Carry” means, with respect to a Tranche and each related Gradual Repayment Date, an amount determined using the following formula:

(e(r + 0.5%) x (t))- 1

where,

“e” means 2.718282;

“r” means (i) if such Gradual Repayment Date is on or prior to the Averaging Midpoint Date for such Tranche, the Interpolated Zero Coupon Swap Rate for a period from and excluding such Gradual Repayment Date to and including the Averaging Midpoint Date and (ii) if such Gradual Repayment Date is after the Averaging Midpoint Date for such Tranche, the arithmetic average of the overnight LIBOR rates for a period from and excluding such Averaging Midpoint Date to and including such Gradual Repayment Date, determined using the rates posted on Bloomberg Financial Markets Page “US00O/N [index],[go]” (or any successor or replacement page).

“t” means (i) if such Gradual Repayment Date is on or prior to the Averaging Midpoint Date for such Tranche, the time (expressed in whole years, a fraction thereof or both and carried to the 6th decimal place) from and excluding such Gradual Repayment Date to and including such Averaging Midpoint Date, expressed as a positive number, and (ii) if such Gradual Repayment Date is after the Averaging Midpoint Date for such Tranche, the time (expressed in whole years, a fraction thereof or both and carried to the 6th decimal place) from and excluding such Averaging Midpoint Date to and including such Gradual Repayment Date, expressed as a negative number.

1

SCHEDULE 4

LOAN AMOUNT AT MATURITY AND PREPAYMENT AMOUNT

“Loan Amount at Maturity” means, with respect to each Loan made and outstanding under the Credit Agreement or to be made thereunder, as of any date of determination (i) an amount equal to the future accreted amount of such Loan, which future accreted amount shall be, in the case of each Initial Loan, the amount set forth in the fourth column opposite the Tranche related thereto in Schedule 1 to the Credit Agreement and, in the case of each other Loan, shall be determined by the Lender on or as of the applicable Funding Date, using the following formula:

Proceeds of such Loan x e(r + 0.5%) x (t)

where,

“e” means 2.718282;

“r” means the Interpolated Zero Coupon Swap Rate for a period from and excluding such Funding Date to and including the Averaging Midpoint Date of the Tranche related to such Loan; and

“t” means the time (expressed in whole years, a fraction thereof or both and carried to the 6th decimal place) from and excluding the applicable Funding Date to and including the Averaging Midpoint Date of the Tranche related to such Loan, calculated on the basis of a year with 365.25 days;

less (ii)(a) any Prepaid Loan Amount at Maturity relating to such Loan and (b) any Gradual Repayment Amount relating to the applicable Tranche and allocated to such Loan pursuant to Section 2.04(b), in each case paid prior to such date of determination.

“Prepayment Amount” means, with respect to a Loan being prepaid pursuant to Section 2.03(a) or Section 2.03(b) and as of any date of prepayment, (i) if such prepayment is being made on or prior to the Averaging Midpoint Date for the Tranche related to such Loan, an amount equal to the present value of the related Prepaid Loan Amount at Maturity, determined by the Lender on or as of the applicable date of prepayment, using the following formula:

Prepaid Loan Amount at Maturity x e(r + Spread) x (-t3)

where,

“e” means 2.718282;

1

“r” means the Interpolated Zero Coupon Swap Rate for a period from and excluding the date of prepayment to and including the Averaging Midpoint Date of the Tranche related to such Loan;

“t3” means the time (expressed in whole years, a fraction thereof or both and carried to the 6th decimal place) from and excluding such date of prepayment to and including the Averaging Midpoint Date of the Tranche related to such Loan, calculated on the basis of a year with 365.25 days;

“Spread” is determined using the following formula: 0.50% - - MAX [(0.50% x ((t1- t2)/t3)),0],

where,

“t1” means the time (expressed in whole years, a fraction thereof or both and carried to the 6th decimal place) from and excluding the applicable Funding Date to and including the Averaging Midpoint Date of the Tranche related to such Loan multiplied by 0.667, calculated on the basis of a year with 365.25 days; and

“t2” means the time (expressed in whole years, a fraction thereof or both and carried to the 6th decimal place) from and excluding the applicable Funding Date to and including such date of prepayment, calculated on the basis of a year with 365.25 days;

or (ii) if such prepayment is made after the Averaging Midpoint Date for the Tranche related to such Loan, an amount equal to the value of the related Prepaid Loan Amount at Maturity, determined by the Lender on or as of the applicable date of prepayment, using the following formula:

Prepaid Loan Amount at Maturity x e(r + 0.50%) x (t)

where,

“r” means the arithmetic average of the overnight LIBOR rates for a period from and excluding the Averaging Midpoint Date of the Tranche related to such Loan to and including the date of prepayment, determined using the rates posted on Bloomberg Financial Markets Page “US00O/N [index],[go]” (or any successor or replacement page); and

“t” means the-time (expressed in whole years, a fraction thereof or both and carried to the 6th decimal place) from and excluding the Averaging Midpoint Date of the Tranche related to such Loan to and including the date of such prepayment, calculated on the basis of a year with 365.25 days.

2

SCHEDULE 9.02

NOTICE ADDRESSES AND LENDING OFFICE

BORROWER:

Greenlady II, LLC

c/o Neal Dermer

Liberty Media Corporation

12300 Liberty Boulevard

Englewood, CO 80112

Telephone: 720-875-5419

Facsimile: 720-875-5915

LENDER

Lending Office

From the Closing Date to May 4, 2008:

BANK OF AMERICA, N.A.

c/o Bank of America Securities, LLC

9 West 57th Street, 40th Floor

New York, NY 10019

Attn:     John Servidio

 Telephone: 212-847-6527

 Facsimile: 704-208-2869

 Account No. 12333-34172

 ABA# 026-009-593

After May 4, 2008 (unless the Lender notifies the Borrower otherwise):

BANK OF AMERICA, N.A.

c/o Bank of America Securities, LLC

Bank of America Tower, 3rd Floor

One Bryant Park

New York, New York 10036-6715

Attn:      John Servidio

 Telephone: 212-847-6527

 Facsimile: 704-208-2869

 Account No. 12333-34172

 ABA# 026-009-593

1

Notices:

Same as address for the Lending Office.

2

EXHIBIT A

FORM OF LOAN NOTICE

Date:           ,

To: Bank of America, N.A.

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of April 9, 2008 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), between Greenlady II, LLC, a Delaware limited liability company, and Bank of America, N.A.

The undersigned hereby requests on                                          (a Business Day) one or more Loans with the following characteristics:

Loan No.	Applicable Tranche	Proceeds Requested	Expected Loan Amount at Maturity
1.
2.
3.

With respect to each Tranche and the Loan(s) requested herein related thereto, the aggregate Loan Amount at Maturity of such Loan(s), together with the aggregate Loan Amount at Maturity of all other Loans related to such Tranche outstanding on the proposed Funding Date, will not exceed the then current amount of the related Commitment.

GREENLADY II, LLC

By: Greenlady Corp., its sole managing member

By:

Name:

Title:

A-1

EXHIBIT B

FORM OF NOTE

Aggregate Loan Amount at Maturity	[DATE]
of up to U.S.$[          ]

Tranche [     ]

FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to the order of BANK OF AMERICA, N.A. (together with its permitted assigns, the “Lender”), on the Maturity Date set forth in that certain Credit Agreement, dated as of April 9, 2008 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), between the Borrower and the Lender, in lawful money of the United States of America in immediately available funds, the aggregate Loan Amount at Maturity of the Loan(s) of the Tranche indicated above made by the Lender to the Borrower pursuant to the Agreement, together with any amounts payable in respect of such Loan(s) pursuant to Section 2.08 of the Agreement.

All payments shall be made to the Lender in Dollars in immediately available funds at the Lender’s Lending Office. If any amount is not paid in full when due hereunder or under the Agreement, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

This Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and is subject to optional and mandatory prepayment in whole or in part as provided therein. This Note is secured by the Collateral. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, the aggregate Loan Amount at Maturity of the Loan(s) of the Tranche indicated above shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. All borrowings evidenced by this Note and all payments and prepayments of the aggregate Loan Amount at Maturity hereof and the respective dates thereof shall be endorsed by the holder hereof on the schedules attached hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by such holder in its internal records; provided, however, that the failure of the holder hereof to make such a notation or any error in such notation shall not affect the obligations of the Borrower under this Note.

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

The transferability of this Note is restricted pursuant to the terms of the Agreement and any transfer hereof not in compliance with the terms of the Agreement is void.

B-1

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

GREENLADY II, LLC

By: Greenlady Corp., its sole managing member

By:

Name:

Title:

B-2

Schedule to Note

LOANS AND REPAYMENTS OF LOANS

Date Proceeds from Loans Amount of Prepaid
Loan Amount at
Maturity of Loans Aggregate Loan
Amount at Maturity of
Loans Notation Made
By

B-3

EXHIBIT C

FORM OF OPINION OF BORROWER’S COUNSEL

EXHIBIT D

FORM OF OPINION OF COUNSEL TO LIBERTY MEDIA CORPORATION

EXHIBIT E

FORM OF PLEDGE AGREEMENT

EXHIBIT F

TRANSACTION ACKNOWLEDGEMENT

EX-10.39

Exhibit 10.39

PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (this “Pledge Agreement”) is dated as of April 9, 2008, between Greenlady II, LLC (“Pledgor”), a limited liability company organized under Delaware law and Bank of America, N.A. (together with its permitted assigns, “Secured Party”).

WHEREAS, Pledgor and Secured Party have entered into a Credit Agreement, dated as of even date herewith (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which Secured Party will make the Loans (as defined therein) to Pledgor on the terms set forth therein (all capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement);

WHEREAS, pursuant to the Transaction Acknowledgement, Pledgor and Secured Party have entered into six distinct Components specified in (and defined under) the Transaction Acknowledgement, further to be evidenced by the Collar Agreement;

WHEREAS, Pledgor has agreed to secure its obligations to Secured Party under the Credit Agreement, the Collar Transaction Documents and each transaction thereunder;

NOW, THEREFORE, in consideration of their mutual covenants contained herein and to secure the full and punctual observance and performance by Pledgor of all Secured Obligations (as defined herein), the parties hereto, intending to be legally bound, hereby mutually covenant and agree as follows:

1.Definitions. As used herein, the following words and phrases shall have the following meanings:

“Additions and Substitutions” has the meaning provided in Section 2(a).

“Authorized Officer” of Pledgor means any officer, trustee, managing member or general partner (or any officer thereof), as applicable, as to whom Pledgor shall have delivered notice to Secured Party that such trustee, managing member, general partner or officer is authorized to act hereunder on behalf of Pledgor. The managing member of Pledgor shall be an Authorized Officer without the provision of such notice.

“Base Number” means the product of the Number of Options and the Option Entitlement, each as defined in the Collar Transaction Documents.

“Business Day” shall mean any day on which commercial banks are open for general business in New York City.

“Cash” means U.S. dollars.

“Collateral” has the meaning provided in Section 2(a).

1

“Collateral Account” means the securities account (as defined in Section 8-501 of the UCC) titled “Bank of America Collateral Account of Greenlady II, LLC” and established and maintained at Bane of America Securities LLC.

“Collateral Deficiency” means, at any time, the failure of the Collateral to include, as Eligible Collateral, Shares at least equal in number to the Base Number or Substitute Collateral having a value equal to 105% of the net amount of the Secured Obligations outstanding at such time as determined by the Secured Party.

“Collateral Event of Default” means (A) a Collateral Deficiency continues unremedied on the Business Day following notice from Secured Party or (B) failure at any time of the Security Interests to constitute valid and perfected security interests in all of the Collateral, subject to no prior or equal Lien in favor of any Person other than Secured Party (or any Affiliate thereof), or assertion of such by Pledgor in writing, or (C) any material misrepresentation, breach of warranty or breach of covenant hereunder.

“Control” means “control” as defined in Section 8-106 and Section 9-106 of the UCC.

“Credit Agreement” has the meaning ascribed to such term in the preamble of this Agreement.

“Custodian” means Bane of America Securities LLC.

“Default Event” means (i) any Event of Default with respect to Pledgor under the Collar Transaction Documents, (ii) any Event of Default under the Credit Agreement and (iii) any Collateral Event of Default hereunder.

“Eligible Collateral” means Shares, Substitute Collateral and, for purposes of Section 5(k), Eligible Collateral within the meaning of such Section 5(k) or other collateral acceptable to Secured Party in its sole discretion, provided in each case that Pledgor has good and marketable title thereto, free of all Liens (other than the Security Interests) and Transfer Restrictions (other than any Existing Transfer Restrictions) and that Secured Party has a valid, first priority perfected security interest therein, a first lien thereon and, if applicable, Control with respect thereto.

“Existing Transfer Restrictions” means Transfer Restrictions existing due to the Shares being “restricted securities” and “control securities” within the meaning of Rule 144 under the Securities Act and those contained in the certificate of incorporation of the Issuer as in effect on the date hereof.

“Greenlady” means Greenlady Corp., a Delaware corporation.

“Initial Shares” means 170,000,000 Shares.

“ISDA Receivable” has the meaning provided in Section 2(a).

“Issuer” means The DIRECTV Group, Inc. The term “Issuer” shall also include the issuer of any shares which holders of The DIRECTV Group, Inc. shares receive as a

2

result of a spinoff, recapitalization, merger, consolidation or other corporate action of the applicable Issuer.

“Lien” means any lien, mortgage, security interest, pledge, charge or encumbrance of any kind.

“Location” means, with respect to any party, the place such party is located within the meaning of Section 9-307 of the UCC.

“Margin Deficiency” means at any time, with respect to each Tranche (as defined in the Credit Agreement) the excess, if any, of (i) the aggregate of all Proceeds (as defined in the Credit Agreement) advanced by the Lender under the Credit Agreement related to such Tranche and not repaid at that time over (ii) the aggregate Maximum Loan Value (as defined in the Credit Agreement) of the Eligible Collateral allocated to such Tranche at that time.

“Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Pledged Items” means, as of any date, any and all securities (or security entitlements with respect thereto) and instruments, cash, financial assets or other property delivered by Pledgor to be held by or on behalf of Secured Party under this Pledge Agreement as Collateral, including without limitation the Initial Shares delivered pursuant to Section 5.

“Pledgor” has the meaning ascribed to such term in the introductory paragraph of this Agreement.

“Secured Obligations” means, at any time, any and all obligations, covenants and agreements of any kind whatsoever of Pledgor to Secured Party under (i) the Collar Transaction Documents, (ii) the Credit Agreement, (iii) each Note and (iv) this Pledge Agreement, whether with respect to the payment of money, delivery of securities or other instruments or property or otherwise, whether now in existence or hereafter arising.

“Secured Party” has the meaning ascribed to such term in the introductory paragraph of this Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

“Security Interests” means the security interests in the Collateral created hereby.

“Shares” means the shares of the relevant Issuer. The initial Shares are shares of the common stock of The DIRECTV Group, Inc.

“Substitute Collateral” has the meaning provided in Section 5(k).

“Transfer Restrictions” means, with respect to any property or item of Collateral (including, in the case of securities, security entitlements in respect thereof), any

3

condition to or restriction on the ability of the holder thereof to sell, assign or otherwise transfer such property or item of Collateral or to exercise or enforce the provisions thereof or of any document related thereto whether set forth in such property or item of Collateral itself or in any document related thereto, including, without limitation, (i) any requirement that any pledge, sale, assignment, transfer or exercise or enforcement of, or with respect to, such property or item of Collateral be consented to or approved by any Person, including, without limitation, the issuer thereof or any other obligor thereon, (ii) any limitations on the type or status, financial or otherwise, of any purchaser, pledgee, assignee or transferee of such property or item of Collateral, (iii) any requirement of the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document of any Person to the issuer of, any other obligor on or any registrar or transfer agent for, such property or item of Collateral, prior to the sale, pledge, assignment or other transfer or exercise or enforcement of, or with respect to, such property or item of Collateral, (iv) any registration or qualification requirement or prospectus delivery requirement for such property or item of Collateral pursuant to any federal, state or foreign securities law (including, without limitation, any such requirement arising under the Securities Act) and (v) any legend or other notification appearing on any certificate representing such property or item of Collateral to the effect that any such condition or restriction exists, provided however, that the required delivery of any assignment, stock power, instruction or entitlement order from the seller, pledgor, assignor or transferor of a security or other item of Collateral, together with any evidence of the authority of the Person executing or delivering such assignment, stock power, instruction or entitlement order, shall not constitute a “Transfer Restriction”.

“Treasury Obligations” means negotiable obligations issued by the United States Treasury Department which (i) are unconditional direct obligations of the United States of America; (ii) are debt obligations in a stated principal amount having a fixed maturity and cannot be called by, or put to, the issuer prior to the stated maturity; (iii) bear interest on the stated principal amount at a non-variable fixed rate until maturity (or, in the case of obligations having an original maturity at issuance of one year or less, bear no interest at all) and (iv) are issued in uncertificated form and are transferable only on the securities transfer system of the Federal Reserve System. For purposes of this Pledge Agreement, Treasury Obligations shall be valued as Eligible Collateral at the following percentages of their stated principal amount, based on their remaining term to maturity: One year or less, 99.5%; more than one year, but not more than five years, 98%; more than five years; 95%.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York.

2.         The Security Interests. In order to secure the full and punctual observance and performance by Pledgor of all Secured Obligations:

(a) Pledgor hereby assigns and pledges to Secured Party and grants to Secured Party, security interests in and to, and a lien upon and right of set-off against, and transfers to Secured Party, as and by way of a security interest having priority over all other security interests, with power of sale, all of its right, title and interest in and to

4

(i) the Pledged Items; (ii) subject to Section 6(a), all additions to and substitutions for any Pledged Items including without limitation any additional or substitute shares of any capital stock of any class (such additions and substitutions, the “Additions and Substitutions”); (iii) all of Pledgor’s right, title and interest in and to the Collar Transaction Documents, including any amount payable at the maturity or upon the termination of the Collar Transaction Documents or any portion thereof (the “ISDA Receivable”); (iv) subject to Section 6(a), the Collateral Account and all cash, securities and other financial assets (each as defined in Section 8-102 of the UCC), including the Pledged Items and the Additions and Substitutions, and other funds, property or assets from time to time held therein or credited thereto; (v) subject to Section 6(a), all interest, income, proceeds, distributions and collections received or to be received, or derived or to be derived, now or any time hereafter (whether before or after the commencement of any proceeding under applicable bankruptcy, insolvency or similar law, by or against Pledgor, with respect to Pledgor) from or in connection with any of the foregoing (including, without limitation, any shares of capital stock issued by any issuer in respect of any Shares or other securities constituting Collateral or any cash, securities or other property distributed in respect of or exchanged for any Shares or other securities constituting Collateral, or into which any such Shares or other securities are converted, in connection with any merger or similar event or otherwise, and any security entitlements in respect of any of the foregoing); and (vi) all powers and rights now owned or hereafter acquired under or with respect to the Pledged Items or the Additions and Substitutions (such Pledged Items, Additions and Substitutions, ISDA Receivable, proceeds, collections, powers, rights, the Collateral Account and assets held therein or credited thereto being herein collectively called the “Collateral”). Secured Party shall have all of the rights, remedies and recourses with respect to the Collateral afforded a secured party by the UCC, in addition to, and not in limitation of, the other rights, remedies and recourses afforded to Secured Party by this Pledge Agreement. For the avoidance of doubt, the Collateral shall not include the Delta DTV Shares (as such term is defined in the Operating Agreement of the Pledgor).

(b) On or prior to the date hereof, Pledgor shall deliver to Secured Party in the manner described in Section 5(c) in pledge hereunder Eligible Collateral consisting of the Initial Shares.

(c) In the event that the Issuer at any time issues to Pledgor in respect of any Shares constituting Collateral hereunder any Additions or Substitutions, Pledgor shall immediately pledge and deliver to Secured Party in accordance with Section 5(c) all Additions and Substitutions as additional Collateral hereunder, subject to Section 6(a).

(d) The parties hereto expressly agree that (i) all rights, assets and property at any time held in or credited to the Collateral Account shall be treated as financial assets (as defined in Section 8-102 of the UCC) and (ii) until all Secured Obligations are satisfied in full and the Commitment is terminated, Custodian will act only on entitlement orders (as defined in Section 8-102 of the UCC) or other instructions of Secured Party (without further consent of Pledgor).

5

(e) Notwithstanding anything contained in the Collar Transaction Documents to the contrary, all amounts payable by Secured Party thereunder shall be paid into the Collateral Account.

3.         Representations and Warranties of Pledgor. Pledgor hereby represents, warrants and covenants to Secured Party on the date hereof, on the date that the Loans (as defined under the Credit Agreement) are made under the Credit Agreement and on each date on which Pledgor delivers or Secured Party otherwise receives Collateral that:

(a) Pledgor (i) owns and, at all times prior to the release of the Collateral pursuant to the terms of this Pledge Agreement, will own the Collateral free and clear of any Liens (other than the Security Interests) or Transfer Restrictions (other than any Existing Transfer Restrictions) and (ii) is not and will not become a party to or otherwise be bound by any agreement, other than this Pledge Agreement and the Credit Agreement that (x) restricts in any manner the rights of any present or future owner of the Collateral with respect thereto or (y) provides any Person other than Pledgor, Secured Party or any securities intermediary through whom any Collateral is held (but in the case of any such securities intermediary only in respect of Collateral held through it) with Control with respect to any Collateral.

(b) Other than financing statements or other similar or equivalent documents or instruments with respect to the Security Interests, no financing statement, security agreement or similar or equivalent document or instrument covering all or any part of the Collateral is on file or of record in any jurisdiction in which such filing or recording would be effective to perfect a Lien, security interest or other encumbrance of any kind on such Collateral.

(c) Upon (i) the delivery of certificates evidencing any Collateral consisting of Shares or other securities, as applicable, to Secured Party in accordance with Section 5(c)(A) or (ii) the crediting of any securities or other financial assets or of any cash to the Collateral Account, Secured Party will have a valid and perfected security interest in such Collateral, subject to no prior Lien.

(d) Except for the filing of a UCC financing statement in the Location of Pledgor, no registration, recordation or filing with any governmental body, agency or official, other than such as have been made, is required in connection with the execution and delivery of this Pledge Agreement or necessary for the validity or enforceability hereof or thereof or for the perfection or enforcement of the Security Interests.

(e) Pledgor has not performed and will not perform any acts that might prevent Secured Party from enforcing any of the terms of this Pledge Agreement or that might limit Secured Party in any such enforcement.

(f) The Location of Pledgor is Delaware.

4.         Certain Covenants of Pledgor. Pledgor agrees that, so long as any Secured Obligation remains outstanding:

6

(a) Upon notice from Secured Party as provided herein that a Collateral Deficiency exists, Pledgor shall pledge additional Eligible Collateral in the manner described in Sections 5(b) and 5(c) as necessary to cause such Collateral Deficiency to cease to exist.

(b) Pledgor shall, at the expense of Pledgor and in such manner and form as Secured Party may require, give, execute, deliver, file and record any financing statement, notice, instrument, document, undated stock or bond powers or other instruments of transfer, agreement or other papers that may in Secured Party’s sole discretion be necessary or desirable in order (i) to create, preserve, perfect, substantiate or validate any security interest granted pursuant hereto, (ii) to create or maintain Control with respect to any such security interests in the Collateral or any part thereof or (iii) to enable Secured Party to exercise and enforce its rights hereunder with respect to such security interest. To the extent permitted by applicable law, Pledgor hereby authorizes Secured Party to execute and file, in the name of Pledgor as debtor, UCC financing or continuation statements that Secured Party in its sole discretion may deem necessary or desirable to further perfect, or maintain the perfection of, the Security Interests.

(c) Pledgor shall warrant and defend its title to the Collateral, subject to the rights of Secured Party, against the claims and demands of all persons. Secured Party may elect, but without an obligation to do so, to discharge any Lien of any third party on any of the Collateral.

(d) Pledgor agrees that it shall not (1) change its name or identity or its organizational structure in any manner or (2) change its Location, unless in any such case (A) it shall have given Secured Party not less than 30 days’ prior notice thereof and (B) such change shall not cause any of the Security Interests to become unperfected, cause Secured Party to cease to have Control in respect of any of the Security Interests in any Collateral consisting of investment property (as defined in Section 9-102(a)(49) of the UCC) or subject any Collateral to any other Lien.

(e) Pledgor agrees that it shall not (1) create or permit to exist any Lien (other than the Security Interests) upon or with respect to the Collateral (2) create or approve any Transfer Restriction (other than any Existing Transfer Restrictions) upon or with respect to the Collateral, (3) sell or otherwise dispose of, or grant any option with respect to, any of the Collateral (other than those contemplated by the terms of the Collateral) or (4) enter into or consent to any agreement pursuant to which any Person other than Pledgor, Secured Party and any securities intermediary through whom any of the Collateral is held (but in the case of any such securities intermediary only in respect of Collateral held through it) has or will have Control in respect of any Collateral.

5.         Administration of the Collateral and Valuation of the Securities.

(a) Secured Party shall determine on each Business Day whether a Collateral Event of Default shall have occurred.

7

(b) Pledgor may pledge additional Eligible Collateral hereunder at any time. Concurrently with the delivery of any such additional Eligible Collateral, Pledgor shall deliver to Secured Party a certificate of Pledgor in form and substance reasonably satisfactory to Secured Party and dated the date of such delivery (A) identifying the additional items of Collateral being pledged and (B) repeating the representations, warranties and covenants set forth in Section 3 with respect to such additional items of Collateral (as modified by any change in Pledgor’s Location as notified to Secured Party in accordance with Section 4(d) hereof or by any change in Pledgor’s status as notified to Secured Party in accordance with Section 4(d) hereof). Pledgor hereby covenants and agrees to take all actions required to create for the benefit of Secured Party a valid, first priority, perfected security interest in, and a first lien upon, such additional Eligible Collateral, as to which Secured Party will have Control, if applicable.

(c) Delivery of the Initial Shares shall be effected by physical delivery to the Secured Party of certificates evidencing the Initial Shares registered in the name of Greenlady or the Pledgor, accompanied by any required transfer tax stamps, and in suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank, with signatures appropriately guaranteed, all in form and substance satisfactory to Custodian and the crediting by Custodian of such securities to the Collateral Account; provided that, if any Initial Shares so delivered are registered in the name of Greenlady, Pledgor shall cause such Initial Shares to be reregistered in the name of Pledgor within five Business Days after the date hereof and certificates evidencing such reregistered Shares shall be delivered in accordance with clause (A) below. Subject to the foregoing, any delivery by Pledgor of securities as Collateral shall be effected (A) in the case of Collateral consisting of certificated securities registered in the name of Pledgor, by delivery of certificates representing such securities to Secured Party, accompanied by any required transfer tax stamps, and in suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank, with signatures appropriately guaranteed, all in form and substance satisfactory to Custodian and Secured Party and the crediting by Custodian of such securities to the Collateral Account, (B) in the case of shares or other securities in respect of which security entitlements are held by Pledgor through a securities intermediary (including, without limitation, Secured Party or Custodian), by the crediting of such shares or other securities, accompanied by any required transfer tax stamps, to a securities account of Custodian at such securities intermediary, including Custodian, or, at the option of Custodian at another securities intermediary satisfactory to Custodian and Secured Party and the crediting by Custodian of such securities to the Collateral Account or (C) in any case, by complying with such alternative delivery instructions as Secured Party shall provide to Pledgor in writing. Upon delivery of any such Pledged Item under this Agreement, Secured Party or Custodian may examine such Pledged Item and any certificates delivered pursuant to Section 5(b) or otherwise pursuant to the terms hereof in connection therewith to determine that they comply as to form with the requirements for Collateral herein.

(d) Any delivery by Pledgor of Cash as Collateral shall be effected by the delivery of such Cash to the Collateral Account.

8

(e) If on any Business Day Secured Party determines that a Collateral Event of Default shall have occurred, Secured Party shall promptly notify Pledgor of such determination by telephone call to an Authorized Officer of Pledgor followed by a written confirmation of such call.

(f) If on any Business Day after the end of the Availability Period in respect of a Tranche or the termination of all Commitments applicable to such Tranche, Secured Party determines that no Default Event or failure by Pledgor to meet any of its obligations under Sections 4 or 5 hereof has occurred and is continuing, Pledgor may obtain the release from the Security Interests of any Collateral allocated to such Tranche provided that, after such release, no Collateral Event of Default would occur and, if applicable, Section 5(k) was complied with and provided further, such release does not create or increase a Margin Deficiency in respect of such Tranche.

(g) If on any Business Day after the payment in full of all amounts owed under the Credit Agreement and the permanent termination of all Commitments thereunder, Secured Party determines that no Default Event or failure by Pledgor to meet any of its obligations under Sections 4 or 5 hereof has occurred and is continuing, Pledgor may obtain the release from the Security Interests of any Collateral provided that, after such release, no Collateral Event of Default would occur and, if applicable, Section 5(k) was complied with.

(h) Subject to Existing Transfer Restrictions, Secured Party may at any time or from time to time, but only after the occurrence of a Default Event that is continuing at such time or with the prior consent of Pledgor, cause any or all of the Shares pledged hereunder not registered in the name of the Secured Party or its nominee to be transferred of record into the name of Secured Party or its nominee. Pledgor shall promptly give to Secured Party copies of any notices or other communications received by Pledgor with respect to Shares pledged hereunder registered, or held through a securities intermediary, in the name of Pledgor or Pledgor’s nominee and Secured Party shall promptly give to Pledgor copies of any notices and communications received by Secured Party with respect to Shares pledged hereunder registered, or held through a securities intermediary, in the name of Secured Party or Secured Party’s nominee.

(i) Pledgor agrees that Pledgor shall forthwith upon demand pay to Secured Party:

i.     the amount of any taxes that Secured Party may have been required to pay by reason of the Security Interests or to free any of the Collateral from any Lien thereon, and

ii.    the amount of any and all out-of-pocket expenses, including the reasonable fees and disbursements of counsel and of any other experts, that Secured Party may incur in connection with (A) the enforcement of this Pledge Agreement, including such expenses as are incurred to preserve the value of the Collateral and the validity, perfection, rank and value of the Security Interests, (B) the collection, sale or other

9

disposition of any of the Collateral or (C) the exercise by Secured Party of any of the rights conferred upon it hereunder.

Any such amount not paid on demand shall bear interest (computed on the basis of a year of 360 days and payable for the actual number of days elapsed) at a rate per annum equal to 1% plus the prime rate as published in The Wall Street Journal, Eastern Edition in effect from time to time during the period from the date hereof to the date of the termination of this Pledge Agreement.

(j) Pledgor hereby acknowledges that during such time as any Collateral is held by Secured Party pursuant to the terms of this Pledge Agreement, Pledgor will not receive periodic account statements with respect to the value thereof.

(k) Unless a Default Event shall have occurred and is continuing, Pledgor shall be entitled, upon not less than two Business Days’ prior written notice to Secured Party, to withdraw all but not less than all of the Shares from the lien created herein upon (x) delivering to Secured Party Substitute Collateral having a market value at least equal to 105% of the aggregate amount of the Secured Obligations then outstanding, on the date of such delivery, and (y) taking such other actions as Secured Party may reasonably require to create for the benefit of Secured Party a valid and perfected security interest in such Substitute Collateral, a first lien thereon and, if applicable, Control of Secured Party with respect thereto. The “Substitute Collateral” shall consist of (i) Treasury Obligations, (ii) cash or (iii) such other securities as Secured Party may approve. Pledgor shall make each delivery of Substitute Collateral to Secured Party in a manner prescribed by Section 5(c) or 5(d) hereof. Pledgor shall make deliveries of additional Substitute Collateral on a daily basis as necessary so that the market value of the Substitute Collateral pledged is at least equal to 105% of the aggregate amount of the Secured Obligations then outstanding, determined daily. Provided that no Default Event has occurred and is continuing, if at the close of business on any Business Day the aggregate market value of the Substitute Collateral pledged hereunder exceeds 108% of the aggregate amount of the Secured Obligations then outstanding, Secured Party shall upon written notice by Pledgor release Substitute Collateral from the lien created herein and return them to Pledgor to the extent that the aggregate market value of such Substitute Collateral exceeds 108% of the aggregate amount of the Secured Obligations then outstanding. All calculations of the market value of Substitute Collateral shall be made in good faith by Secured Party on a “mark-to-market” basis.

(1) For the avoidance of doubt, the parties acknowledge that Secured Party shall have no right to rehypothecate the Collateral prior to a Default Event.

(m) As of the date hereof, the Collateral allocated to each Tranche shall be as set forth in Schedule 1 hereto. Any Additions and Substitutions in respect of specific Collateral shall be allocated to the Tranche to which such Collateral relates. In connection with any Collateral Adjustment, the Borrower shall allocate the additional Collateral pledged to a specific Tranche by providing written notice of such allocation to the Secured Party on or prior to the date of such Collateral Adjustment.

10

6.         Income and Voting Rights in Collateral.

(a) For so long as no Default Event shall have occurred and be continuing, Secured Party shall have the right to receive and retain as Collateral hereunder all proceeds of the Collateral provided that the Pledgor shall be entitled to receive and retain any dividends, interest and other distributions that it is entitled to receive as holder of the Shares and if and when such dividends, interest and other distributions do not or no longer constitute (as applicable) Restricted Payments that would be prohibited by Section 7.06 of the Credit Agreement if such dividends, interest and other distributions were to be distributed in respect of the equity interests in Pledgor, such dividends, interests and other distributions shall, thereupon, be free and clear of all Liens created hereunder. If a Default Event shall have occurred and be continuing, Secured Party shall have the right to receive and retain as Collateral hereunder all proceeds (including, without limitation, any dividends, interest and other distributions) of the Collateral, and Pledgor shall in each case take all such action as Secured Party shall reasonably deem necessary or appropriate to give effect to such right. All such proceeds that are received by Pledgor contrary to the provisions of this Pledge Agreement shall be received in trust for the benefit of Secured Party and, if Secured Party so directs, shall be segregated from other funds of Pledgor and shall, forthwith upon demand by Secured Party, be delivered over to Secured Party as Collateral in the same form as received (with any necessary endorsement). Notwithstanding the foregoing, if Pledgor shall be required under the Collar Transaction Documents to deliver any dividend or other distribution to Secured Party, then if and to the extent that such dividend or other distribution is received into or credited to the Collateral Account, Pledgor may instruct Secured Party to satisfy Pledgor’s obligation to pay or deliver such dividend or other distribution to Secured Party pursuant to the Collar Transaction Documents by applying such dividend or distribution to such obligation. Otherwise, so long as no Default Event shall have occurred and be continuing, Secured Party shall promptly deliver over to Pledgor any dividends, interest and other distributions received in or credited to the Collateral Account.

(b) At all times prior to the disposition of any Shares by the Secured Party pursuant to Section 7 hereof, Pledgor shall have the right, from time to time, to vote and to give consents, ratifications and waivers with respect to the Collateral for all purposes, provided that the Pledgor agrees that the Pledgor will not vote the Shares in any manner that is inconsistent with the terms of this Agreement, the Credit Agreement or any Collateral Transaction Document or would reasonably be expected to have a material adverse effect on the value of the Shares or the Secured Party’s interest therein. For the avoidance of doubt, the Secured Party shall have no voting rights with respect to the Shares, except to the extent that the Secured Party buys any Shares in a sale or other disposition made pursuant to Section 7.

(c) If a Default Event shall have occurred and be continuing, all proceeds that are received by Pledgor shall be received in trust for the benefit of Secured Party, shall be segregated from other property of Pledgor and shall immediately be delivered over to Secured Party as Collateral in the same form as received (with any necessary endorsement).

11

7.         Remedies upon Default Events.

(a) Subject to Section 7(b) below, if any Default Event shall have occurred and be continuing, Secured Party may exercise all the rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) and, in addition, without being required to give any notice, except as herein provided or as may be required by mandatory provisions of law, may:

(i)           deliver or cause to be delivered to itself or to an affiliate from the Collateral Account, Collateral consisting of Shares with a value sufficient to satisfy in full all Secured Obligations, whereupon Secured Party shall hold such Shares absolutely free from any claim or right of whatsoever kind, including any equity or right of redemption of Pledgor that may be waived or any other right or claim of Pledgor, and Pledgor, to the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal that Pledgor has or may have under any law now existing or hereafter adopted;

(ii)          sell such Collateral as may be necessary to generate proceeds sufficient to satisfy in full all Secured Obligations, at public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery, and at such price or prices as Secured Party may deem satisfactory;

(iii)         collect any amounts payable under the ISDA Receivable and apply such amounts against any Secured Obligation;

(iv)         take any combination of the actions described in clauses (i), (ii) and (iii) above.

Pledgor covenants and agrees that it will execute and deliver such documents and take such other action as Secured Party deems necessary or advisable in order that any such sale, may be made in compliance with law. Upon any such sale Secured Party shall have the right to deliver, assign and transfer to the buyer thereof the Collateral so sold. Each buyer at any such sale shall hold the Collateral so sold absolutely and free from any claim or right of whatsoever kind, including any equity or right of redemption of Pledgor that may be waived or any other right or claim of Pledgor, and Pledgor, to the extent permitted by law, hereby specifically waives all rights of redemption, stay or appraisal that Pledgor has or may have under any law now existing or hereafter adopted. The notice (if any) of such sale required by Section 9-611 of the UCC shall (1) in case of a public sale, state the time and place fixed for such sale, (2) in case of sale at a broker’s board or on a securities exchange, state the board or exchange at which such sale is to be made and the day on which the Collateral, or the portion thereof so being sold, will first be offered for sale at such board or exchange, and (3) in the case of a private sale, state the day after which such sale may be consummated. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as Secured Party may fix in the notice of such sale. At any such sale the Collateral may be sold in

12

one lot as an entirety or in separate parcels, as Secured Party may determine. Secured Party shall not be obligated to make any such sale pursuant to any such notice. Secured Party may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the same may be so adjourned. In case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral so sold may be retained by Secured Party until the sale price is paid by the buyer thereof, but Secured Party shall not incur any liability in case of the failure of such buyer to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may again be sold upon like notice. Secured Party, instead of exercising the power of sale herein conferred upon it, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction.

(b) The Pledgor and the Secured Party agree that (i) the Secured Party shall not be entitled to exercise its remedies hereunder in a manner that would cause it to become at any one time the beneficial owner of more than 9.9% of the common shares of the Issuer then outstanding and (ii) the Secured Party will not sell, in any single transaction, to one or more purchasers, an amount of Shares representing Shares in excess of 9.9% of the common shares of the Issuer then outstanding. The Pledgor hereby (x) acknowledges that selling or otherwise disposing of the Collateral in accordance with the restrictions set forth in this Section 7(b) may result in prices and terms less favorable to the Secured Party than those that could be obtained by selling or otherwise disposing of the Shares in a single transaction to a single purchaser and (y) agrees and acknowledges that no method of sale or other disposition of Collateral shall be deemed commercially unreasonable because of any action taken or not taken by the Secured Party to comply with such restrictions.

(c) Pledgor hereby irrevocably appoints Secured Party its true and lawful attorney, with full power of substitution, in the name of Pledgor, Secured Party or otherwise, for the sole use and benefit of Secured Party, but at the expense of Pledgor, to the extent permitted by law, to exercise, at any time and from time to time while a Default Event has occurred and is continuing, all or any of the following powers with respect to all or any of the Collateral:

i.             to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof,

ii.            to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto,

iii.           to sell, transfer, assign or otherwise deal in or with the same or the proceeds or avails thereof, as fully and effectually as if Secured Party were the absolute owner thereof (including, without limitation, the giving of instructions and entitlement orders in respect thereof), and

13

iv.           to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto;

provided that Secured Party shall give Pledgor not less than one day’s prior written notice of the time and place of any sale or other intended disposition of any of the Collateral, except any Collateral that threatens to decline speedily in value, including, without limitation, equity securities, or is of a type customarily sold on a recognized market. Secured Party and Pledgor agree that such notice constitutes “reasonable authenticated notification of disposition” within the meaning of Section 9-611 of the UCC. Pledgor and Secured Party hereby acknowledge and agree that the Shares are of a type (or are convertible into securities of a type) customarily sold on a recognized market.

(d) Upon any delivery or sale of all or any part of any Collateral made either under the power of delivery or sale given hereunder or under judgment or decree in any judicial proceedings for foreclosure or otherwise for the enforcement of this Pledge Agreement, Secured Party is hereby irrevocably appointed the true and lawful attorney of Pledgor, in the name and stead of Pledgor, to make all necessary deeds, bills of sale, instruments of assignment, transfer or conveyance of the property, and all instructions and entitlement orders in respect of the property, thus delivered or sold. For that purpose Secured Party may execute all such documents, instruments, instructions and entitlement orders. This power of attorney shall be deemed coupled with an interest, and Pledgor hereby ratifies and confirms that which Pledgor’s attorney acting under such power, or such attorney’s successors or agents, shall lawfully do by virtue of this Pledge Agreement. If so requested by Secured Party or by any buyer of the Collateral or a portion thereof, Pledgor shall further ratify and confirm any such delivery or sale by executing and delivering to Secured Party or to such buyer or buyers at the expense of Pledgor all proper deeds, bills of sale, instruments of assignment, conveyance or transfer, releases, instructions and entitlement orders as may be designated in any such request.

(e) If a Default Event shall have occurred and be continuing, Secured Party may proceed to realize upon the Security Interests in the Collateral against any one or more of the types of Collateral, at any time, as Secured Party shall determine in its sole discretion subject to the foregoing provisions of this Section 7. The proceeds of any sale of, or other realization upon, or other receipt from, any of the Collateral shall be applied by Secured Party in the following order of priorities:

first, to the payment to Secured Party of the expenses of such sale or other realization, including reasonable compensation to the agents and counsel of Secured Party, and all expenses, liabilities and advances incurred or made by Secured Party in connection therewith, including brokerage fees in connection with the sale by Secured Party of any Collateral;

second, to the payment to Secured Party of the aggregate amount (or the value of any delivery or other performance) owed by Pledgor to Secured Party under the Secured Obligations;

14

finally, if all of the Secured Obligations have been fully discharged or sufficient funds have been set aside by Secured Party at the request of Pledgor for the discharge thereof, any remaining proceeds shall be released to Pledgor.

8.         Netting and Set-off.

(a) If on any date, cash would otherwise be payable or Shares or other property would otherwise be deliverable pursuant to the Collar Transaction Documents, the Credit Agreement or this Pledge Agreement, as applicable, by Secured Party to Pledgor and by Pledgor to Secured Party, and the type of property required to be paid or delivered by each such party on such date is the same, then, on such date, each such party’s obligation to make such payment or delivery will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable or deliverable by one such party exceeds the aggregate amount that would otherwise have been payable or deliverable by the other such party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable or deliverable to pay or deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

(b) In addition to and without limiting any right, for so long as such Default Event is continuing, to set off that Secured Party may have as a matter of law, pursuant to contract or otherwise, the occurrence of any Default Event shall constitute an Event of Default with respect to Pledgor under the Collar Transaction Documents and an Event of Default with respect to Pledgor under the Credit Agreement, and Secured Party shall have the right to terminate, liquidate, accelerate and otherwise close out all transactions under the Collar Transaction Documents and the Credit Agreement pursuant to the default provisions thereof and may reduce any amount payable by or other obligation of Secured Party to Pledgor by its set-off against any amount payable by Pledgor to Secured Party (whether or not arising under the Collar Transaction Documents or the Credit Agreement, matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation). To the extent that such amounts are set off, such obligations will be discharged promptly and in all respects. Secured Party shall give notice to Pledgor after any set-off effected pursuant to this Section 8.

(c) In the exercise of its set-off rights as set forth in this Section 8, upon the occurrence and during the continuation of a Default Event, Secured Party may set off any obligation it may have to release from the Security Interests or return to Pledgor any Collateral pursuant to the terms of this Pledge Agreement against any right Secured Party or any of its affiliates may have against Pledgor pursuant to this Pledge Agreement or any other agreement between Pledgor and Secured Party, including, without limitation, any right to receive a payment or delivery pursuant to any provision of the Collar Transaction Documents, the Credit Agreement or this Pledge Agreement. In the case of a set-off of any obligation to return or replace assets against any right to receive assets of the same type, such obligation and right shall be set off in kind. In the case of a set-off of any obligation to return or replace assets against any right to receive assets of any other type, the value of each of such obligation and such right shall be reasonably determined by

15

Secured Party and the result of such set-off shall be that the net obligor shall pay or deliver to the other party an amount of cash or assets, at the net obligor’s option, with a value (reasonably determined, in the case of a delivery of assets, by Secured Party) equal to that of the net obligation. In determining the value of any obligation to release or deliver any securities or right to receive any securities, the value at any time of such obligation or right shall be determined by Secured Party by reference to the fair market value of such securities at such time. If an obligation or right is unascertained at the time of any such set-off, Secured Party may in good faith estimate the amount or value of such obligation or right, in which case set-off will be effected in respect of that estimate, and the relevant party shall account to the other party at the time such obligation or right is ascertained.

9.         Miscellaneous.

(a) To the extent permitted by law, the unenforceability or invalidity of any provision or provisions of this Pledge Agreement shall not render any other provision or provisions herein contained unenforceable or invalid.

(b) Any provision of this Pledge Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Pledgor and Secured Party or, in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(c) All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard forms of telecommunication. Notices to Pledgor shall be directed to Pledgor c/o Neal Dermer, Liberty Media Corporation, 12300 Liberty Boulevard, Englewood, CO 80112, Telephone: 720-875-5419, Facsimile: 720-875-5915. Notices to Secured Party before May 5, 2008 shall be directed to it care of Bank of America, N.A. Attention: Equity Derivatives Group Middle Office, with copy to Equity Derivatives - Legal at 9 West 57th Street, 40th floor, NY, NY 10019. Notices to Secured Party after May 5, 2008 shall be directed to it care of Bank of America, N.A. Attention: Equity Derivatives Group Middle Office, with copy to Equity Derivatives – Legal* Bank of America Tower, 3rd Floor, One Bryant Park, NewYork, New York 10036-6715.

(d) All calculations and determinations required hereunder shall be made by Secured Party acting in good faith and in a reasonable manner.

(e)      THIS PLEDGE AGREEMENT AND ALL MATTERS ARISING OUT OF OR RELATING HERETO SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE); PROVIDED THAT AS TO COLLATERAL LOCATED IN ANY

16

JURISDICTION OTHER THAN THE STATE OF NEW YORK, SECURED PARTY SHALL HAVE, IN ADDITION TO ANY RIGHTS UNDER THE LAW OF THE STATE OF NEW YORK, ALL OF THE RIGHTS TO WHICH A SECURED PARTY IS ENTITLED UNDER THE LAW OF SUCH OTHER JURISDICTION. THE PARTIES HERETO HEREBY AGREE CUSTODIAN’S JURISDICTION, WITHIN THE MEANING OF SECTION 8-110(e) OF THE UCC, INSOFAR AS IT ACTS AS A SECURITIES INTERMEDIARY HEREUNDER OR IN RESPECT HEREOF, IS THE STATE OF NEW YORK.

(f)       EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, TO THE EXTENT PERMITTED BY APPLICABLE LAW.

(g)      EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(h) This Pledge Agreement may be executed, acknowledged and delivered in any number of counterparts and all such counterparts taken together shall be deemed to constitute one and the same agreement.

(i) The parties hereto agree and acknowledge that this Pledge Agreement and the Credit Agreement shall each be a “Credit Support Document” (as defined in the Collar Transaction Documents) under the Collar Transaction Documents with respect to Pledgor.

(j) Pledgor and Secured Party hereby agree that Section 7 of the ISDA Master constituting part of the Collar Transaction Documents shall not apply to Pledgor to the extent necessary for Pledgor to grant a security interest in the ISDA Receivable to Secured Party hereunder and for Secured Party to exercise the remedies set forth herein.

(k) Pledgor and Secured Party hereby agree that (a) the Credit Agreement, together with this Pledge Agreement, is a “securities contract” (as defined in Section 741(7) of the United States Bankruptcy Code (the “Bankruptcy Code”), (b) this Pledge Agreement and the Parent Guarantee entered into in connection with the Collar Transaction Documents are or will be a “security agreement or arrangement” or other “credit enhancement” that forms a part of such “securities contract” within the meaning of Section 362 of the Bankruptcy Code and (c) all transfers of cash, securities or other property under or in connection with the Credit Agreement or the Collar Transaction (including all pledges under this Pledge Agreement) to Secured Party are “transfers” made “by or to (or for the benefit of)” Secured Party as a “financial institution” or a

17

“financial participant” (each as defined in the Bankruptcy Code) within the meaning of Section 546(e) of the Bankruptcy Code and are “in connection with” a “securities contract” within the meaning of Section 546(e) and 548(d)(2) of the Bankruptcy Code.

(l) Whenever any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party. All the covenants and agreements herein contained by or on behalf of Pledgor and Secured Party shall bind, and inure to the benefit of, such party’s respective successors and assigns whether so expressed or not, and shall be enforceable by and inure to the benefit of the other party and its successors and assigns. Subject to the following, neither Pledgor nor Secured Party may assign its rights or obligations under this Pledge Agreement, except with the prior written consent of the other party, and any purported assignment without such prior written consent shall be void and of no effect. Notwithstanding the foregoing, Secured Party may, from time to time, without the consent of Pledgor assign all of its rights and obligations hereunder to an Eligible Assignee (as defined in the Credit Agreement) to which the Credit Agreement has been assigned provided that, Secured Party shall also assign its rights and obligations under the Collar Transaction Documents to the same extent and in connection with its assignment of the Credit Agreement to such Eligible Assignee, pursuant to the terms thereof.

10.       Termination of Pledge Agreement. This Pledge Agreement and the rights granted by Pledgor in the Collateral shall cease and terminate upon satisfaction in full of all of the Secured Obligations. Any Collateral remaining at the time of such termination shall be fully released and discharged from the Security Interests and delivered to Pledgor by Secured Party, all at the request and expense of Pledgor.

11.       Relationship to Collar Transaction Documents. The parties hereto acknowledge and agree that (a) in no event shall any provision of this Pledge Agreement, or the performance hereof, constitute a breach or violation of, or default under, the Collar Transaction Documents and (b) in the event that, upon execution of documentation replacing and superseding the Transaction Acknowledgement, any relevant provisions of the Collar Transaction Documents then in effect differ in any material respect from those of the Transaction Acknowledgement, the parties will negotiate in good faith to modify this Agreement in a manner that preserves the economic intent of the parties and the Lien intended to be created hereby.

18

IN WITNESS WHEREOF, the parties have signed this Pledge Agreement as of the date and year first above written.

PLEDGOR:			SECURED PARTY:
GREENLADY II, LLC			BANK OF AMERICA, N.A.
By:	Greenlady Corp., its sole Managing member
By:	/s/ David J.A. Flowers		By:	/s/ William Brett
	Name:	David J.A. Flowers		Name: William Brett
	Title:	Senior Vice President		Title: Managing Director

Accepted and agreed solely for purposes of
Sections 2(b) and 9(e) hereof:
BANC OF AMERICA SECURITIES LLC
By:	/s/ William Brett
	Name: William Brett
	Title: Managing Director

Signature Page- Pledge Agreement

SCHEDULE 1

Tranches under the Credit Agreement	Share Allocations as of April 9, 2008
1	36,960,114
2	26,718,446
3	21,121,697
4	22,426,211
5	27,175,982
6	35,597,550
Total Shares:	170,000,000

Signature Page - Pledge Agreement

EX-10.40

Exhibit 10.40

AMENDMENT, UNWIND, CONSENT AND WAIVER AGREEMENT

Amendment, Unwind, Consent and Waiver Agreement, dated as of November 19, 2009 (the “Agreement”), among Greenlady II, LLC (“Greenlady II”), DIRECTV (“New DTV”) and Bank of America, N.A. (“BofA”).

WHEREAS, BofA and Greenlady II have entered into the Credit Agreement, dated as of April 9, 2008 (the “Credit Agreement”), the Pledge Agreement, dated as of April 9, 2008 (the “Pledge Agreement”), and the Master Confirmation, dated as of April 9, 2008, and the Supplemental Confirmations thereunder (together, the “Collar Confirmation” and, together with the Credit Agreement and the Pledge Agreement, the “Transaction Documents”), relating to six collar transactions (the “Collar Transactions” and each, a “Component”, five of which are further described in Exhibit A hereto) between Greenlady II and BofA with respect to the common stock, par value USD 0.01 per share, of The DIRECTV Group, Inc. (“Old DTV”);

WHEREAS, Liberty Media Corporation, Liberty Entertainment, Inc., Old DTV, New DTV, DTVG One, Inc. and DTVG Two, Inc. have entered into the Agreement and Plan of Merger, dated as of May 3, 2009, as amended and supplemented by Amendment No. 1 thereto, dated as of July 29, 2009, and Amendment No. 2 thereto, dated as of October 2, 2009 (together, the “Merger Agreement”);

WHEREAS, after the consummation of the transactions contemplated by Section 1.1 of the Merger Agreement and the Split-Off (as defined in the Merger Agreement) (collectively, the “Merger Transactions”), New DTV will indirectly own all of the equity interests in Greenlady II;

WHEREAS, in connection with the Merger Transactions, the parties hereto desire to amend the Transaction Documents and unwind certain Collar Transactions;

NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto covenant and agree as follows:

ARTICLE I

UNWIND OF CERTAIN COLLAR TRANSACTIONS

Capitalized terms used but not defined in this Article I shall have the meanings given to such terms in the Collar Confirmation.

SECTION 1.01. Unwind of Certain Collar Transactions. Each of Components 2 through 6 under the Collar Confirmation shall be terminated in the order indicated in Exhibit A hereto pursuant to the methodology set forth in Section 1.02(b) below (each such termination, a “Component Unwind”). For the avoidance of doubt, Component 1 shall not be subject to any Component Unwind and the “Valuation” and “Settlement Terms” provisions of Section 2 of the Collar Confirmation shall not apply to any Component Unwind hereunder.

SECTION 1.02. Unwind Methodology.

(a)           Definitions.

(i)            “2002 Definitions” means the 2002 ISDA Equity Derivatives Definitions, as published by the International Swaps and Derivatives Association, Inc.

1

(ii)           “Component Unwind Date” means, (A) with respect to Component 2, the scheduled Exchange Business Day immediately following the Closing Date (as defined in Section 7.01(a) below), subject to adjustment as provided in Section 7.01(a) below and (B) with respect to each subsequent Component to be terminated, the scheduled Exchange Business Day immediately following the final day of the immediately preceding Component Unwind Reference Period.

(iii)          “Component Unwind Payment Date” means, for each Component Unwind, the third Currency Business Day following the final day of the related Component Unwind Reference Period.

(iv)          “Component Unwind Reference Period” means, for each Component Unwind, the period beginning on and including the related Component Unwind Date and ending on and including the date BofA notifies Greenlady II that it has unwound its existing hedge position(s) for the related Component in the open market and/or in private transactions, as determined by BofA in its sole discretion.

(v)           “Component Unwind Reference Price” means, for each Component Unwind, the volume-weighted average price per Share at which BofA unwinds its existing hedge position(s) for the related Component.

(vi)          “Market Disruption Event” has the meaning specified in Section 6.3(a) of the 2002 Definitions, determined as if (v) BofA were the “Calculation Agent”, (w) New DTV were the relevant “Issuer”, (x) the New DTV Shares (as defined in Section 8.02(h)) were the relevant “Shares”, (y) The NASDAQ Global Select Market were the “Exchange” and (z) the “Related Exchange” were “All Exchanges”; provided that the third and fourth line of Section 6.3(a) of the 2002 Definitions shall be amended by deleting the words “, at any time during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,”.

(vii)         “Merger Event” has the meaning specified in Section 12.1(b) of the 2002 Definitions, determined as if (x) BofA were the “Calculation Agent”, (y) New DTV were the relevant “Issuer” and (z) the New DTV Shares were the relevant “Shares”; provided that, for the avoidance of doubt, no Merger Transaction shall constitute a Merger Event.

(viii)        “Potential Adjustment Event” has the meaning specified in Section 11.2(e) of the 2002 Definitions, determined as if (x) BofA were the “Calculation Agent”, (y) New DTV were the relevant “Issuer” and (z) the New DTV Shares were the relevant “Shares”.

(ix)           “Reference Call Volatility” means, for each Component Unwind, the “Reference Call Volatility” set forth for the related Component in Exhibit A hereto.

(x)            “Reference LIBOR Rate” means, for each Component Unwind Reference Period, the rate determined by BofA for the remaining term of the related Component, by linear interpolation if appropriate, using the “offer side” of the U.S. Dollar Swap rate, as set forth on Bloomberg Financial Markets Page “IYC1 USD S<go>, page <go>“ (or any successor or replacement page); provided that, if such page is not available for any reason, BofA shall determine such rate in good faith.

(xi)           “Reference Put Volatility” means, for each Component Unwind, the “Reference Put Volatility” set forth for the related Component in Exhibit A hereto.

2

(xii)          “Reference Rate” means, for each Component Unwind, the discount rate, quoted as a zero coupon, continuously-compounded rate, as determined by BofA assuming the then-current Reference LIBOR Rate and taking into account any other factors that BofA reasonably deems appropriate for such determination.

(xiii)         “Regulatory Disruption” means any event that BofA, in its reasonable discretion, determines makes it appropriate with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures, for it to refrain from or decrease any market activity in connection with any Component Unwind.

(xiv)        “Tender Offer” has the meaning specified in Section 12.1(d) of the 2002 Definitions, determined as if (x) BofA were the “Calculation Agent”, (y) New DTV were the relevant “Issuer” and (z) the New DTV Shares were the relevant “Shares”; provided that Section 12.1(d) of the 2002 Definitions shall be amended by inserting the words “or the New DTV Shares” after the words “voting shares of the Issuer” in the fourth line thereof; provided further, that, for the avoidance of doubt, no Merger Transaction shall constitute a Tender Offer.

(xv)         “Unwind Adjustment Event” means any Market Disruption Event, Merger Event, Potential Adjustment Event, Regulatory Disruption or Tender Offer.

(xvi)        “Unwind Borrow Rate” means, for each Component Unwind, the per annum rate set forth as the “Unwind Borrow Rate” for the related Component in Exhibit A hereto.

(b)           Component Unwind. With respect to each Component to be terminated, (i) BofA shall calculate a Loss amount payable by one party to the other party under the Collar Confirmation (taking into account the amendments contained herein) in respect of such Component (the “Component Unwind Payment Amount”) as if an Additional Termination Event had occurred with respect to which Greenlady II (as Party B under the Collar Transactions) were the sole Affected Party and the relevant Component were the sole Affected Transaction and (ii) an Early Termination Date with respect to such Component shall be deemed to occur on the related Component Unwind Date and BofA and Greenlady II shall have all rights, obligations and liabilities in respect thereof pursuant to the terms of the Collar Confirmation (taking into account the amendments contained herein). In determining the Component Unwind Payment Amount in respect of a Component, BofA shall take into account only the following factors: the related Component Unwind Reference Price, Reference Put Volatility, Reference Call Volatility, Reference Rate and Unwind Borrow Rate (together, the “Agreed Factors”) using such models as it uses in the regular course of business for pricing or valuing similar transactions between it and unrelated third parties; provided that, notwithstanding the foregoing, upon the earlier of (x) the occurrence of any Unwind Adjustment Event and (y) the announcement of any potential event or transaction that, in the reasonable discretion of BofA, if consummated could become an Unwind Adjustment Event, BofA may adjust the Agreed Factors, take into account any other factors it deems appropriate and make such other adjustments to its unwind activities in connection with the related Component and its calculations of the related Component Unwind Payment Amount to account for such Unwind Adjustment Event or potential Unwind Adjustment Event. With respect to each Component, BofA shall promptly notify the parties of the related Component Unwind Payment Amount, and the party owing such amount shall make payment of such amount to the party to whom such amount is owed on or prior to the related Component Unwind Payment Date.

If New DTV objects in writing to BofA’s determination of a Component Unwind Payment Amount within three Exchange Business Days after it receives notice thereof, BofA will obtain a quotation for such determination provided by a leading equity derivatives dealer, as selected by BofA,

3

and BofA shall consider such quotation in good faith but shall not be bound by such quotation in making the relevant determination.

(c)           Instruction Days. New DTV may provide, at any time on a particular Exchange Business Day and on no more than fifteen Exchange Business Days in the aggregate for all Component Unwinds, (and upon such provision, BofA shall implement) instructions directing BofA not to unwind its hedge position(s) on such Exchange Business Day, it being understood that any such instruction shall apply only for a single Exchange Business Day and that the Component Unwind Reference Price for such day shall take into account any unwind by BofA of its hedge position(s) in respect of the related Component occurring prior to the time BofA is able, using commercially reasonable efforts, to implement such instructions (any such Exchange Business Day with respect to which New DTV provides such an instruction, an “Instruction Day”). For the avoidance of doubt, (i) New DTV may only instruct or direct BofA to suspend fully its unwind of its hedge position(s) on a particular Exchange Business Day in a manner set forth above, (ii) subject to the other provisions of this Agreement, BofA shall maintain full discretion as to how any hedge position is unwound on any day that is not an Instruction Day or prior to its implementing any instructions given by New DTV on an Instruction Day and (iii) New DTV will not seek to control or influence BofA’s decision with respect to how, when or whether to unwind any hedge position. Notwithstanding the foregoing, the parties acknowledge that any exercise by New DTV of its rights under the first sentence of this Section 1.02(c) shall not be deemed a breach of clause (iii) of the immediately preceding sentence.

ARTICLE II

FIRST AMENDMENT TO THE CREDIT AGREEMENT

Capitalized terms used but not defined in this Article II shall have the meanings given to such terms in the Credit Agreement.

SECTION 2.01. Definitions.

(a)           The introductory paragraph of the Credit Agreement is amended by inserting the words “as amended from time to time,” in the first parenthetical therein before the words “this ‘Agreement’”.

(b)           The definition of “Collar Transaction” in Section 1.01 of the Credit Agreement is amended by inserting the words “, each as amended and supplemented from time to time” after the first instance of the word “Agreement” and before the comma in the penultimate line thereof.

(c)           The definition of “Issuer” in Section 1.01 of the Credit Agreement is replaced with the following:

“Issuer” has the meaning assigned to such term in the Collar Agreement.

(d)           The definition of “Loan Document” in Section 1.01 of the Credit Agreement is amended by (i) replacing the word “and” in the second line thereof with a comma and (ii) inserting the words “ and (f) the Amendment, Unwind, Consent and Waiver Agreement among Greenlady II, LLC, DIRECTV and Bank of America, N.A., dated as of November 19, 2009 (the “Unwind Agreement”)” after the words “Parent Guarantee” in the last line thereof.

(e)           The definition of “Parent Guarantee” in Section 1.01 of the Credit Agreement is replaced with the following:

4

“Parent Guarantee” means the Guarantee of DIRECTV in favor of the Lender related to the Loan Documents, dated as of November 19, 2009.

(f)            The definition of “Shares” in Section 1.01 of the Credit Agreement is replaced with the following:

“Shares” has the meaning assigned to such term in the Collar Agreement.

SECTION 2.02. Termination of Commitments in connection with Component Unwinds.  The Commitment with respect to each Tranche shall be reduced to zero and terminated commencing on the Component Unwind Date for the related Component (as determined by reference to Schedule 1 to the Credit Agreement), with such reduction deemed to have occurred pursuant to Section 2.04(a) of the Credit Agreement in part on each day during the related Component Unwind Reference Period in an amount determined by BofA based on the portion of the related Component for which BofA has unwound its hedge position(s). For the avoidance of doubt, the parties acknowledge and agree that, as a result of such reduction and termination, (a) pursuant to Section 2.03(b) of the Credit Agreement, Greenlady II (as the Borrower under the Credit Agreement) shall be obligated to pay to BofA (as the Lender under the Credit Agreement) a Prepayment Amount determined by BofA as of the relevant Unwind Prepayment Date pursuant to Schedule 4 of the Credit Agreement (each, a “Tranche Partial Unwind Prepayment Amount”) and (b) Greenlady II’s right to borrow and reborrow Loans relating to the Commitment for such Tranche shall be permanently extinguished. Notwithstanding anything to the contrary in the Credit Agreement, an Event of Default described in Section 8.01(a) of the Credit Agreement shall occur with respect to the payment of any Tranche Partial Unwind Prepayment Amount only if Greenlady II has not paid such Tranche Partial Unwind Prepayment Amount to BofA on or prior to the close of business in New York City on the relevant Unwind Prepayment Date.  “Unwind Prepayment Date” means, with respect to a Tranche Partial Unwind Prepayment Amount, the Business Day following the day on which BofA unwinds the portion of its hedge position(s) to which such Tranche Partial Unwind Prepayment Amount relates.

ARTICLE III

FIRST AMENDMENT TO THE PLEDGE AGREEMENT

SECTION 3.01. Definitions.

(a)           The introductory paragraph of the Pledge Agreement is amended by inserting the words “as amended from time to time,” in the first parenthetical therein before the words “this ‘Pledge Agreement’”.

(b)           The definition of “Initial Shares” in Section 1 of the Pledge Agreement is replaced with the following:

“Initial Shares” means 170,000,000 shares of the common stock of The DIRECTV Group, Inc.

(c)           The definition of “Issuer” in Section 1 of the Pledge Agreement is replaced with the following:

“Issuer” has the meaning assigned to such term in the Collar Agreement.

(d)           The definition of “Shares” in Section 1 of the Pledge Agreement is replaced with the following:

5

“Shares” has the meaning assigned to such term in the Collar Agreement.

ARTICLE IV

FIRST AMENDMENT TO THE COLLAR CONFIRMATION

Capitalized terms used but not defined in this Article III shall have the meanings given to such terms in the Collar Confirmation.

SECTION 4.01. Modified Cancellation and Payment. The definition of “Modified Cancellation and Payment” in Section 2 of the Collar Confirmation is amended by deleting the second paragraph thereof.

SECTION 4.02. Payments on Early Termination. Section 3 of the Collar Confirmation shall be amended by replacing the phrase “Market Quotation” with the word “Loss”.

SECTION 4.03. Credit Support Document and Credit Support Provider.  The New DTV Guaranty (as defined in Section 7.01(b) below) shall be a Credit Support Document in relation to Greenlady II (as Party B) under the Collar Confirmation and New DTV shall be a Credit Support Provider in relation to Greenlady II (as Party B) under the Collar Confirmation.

SECTION 4.04. Effect of Merger.  The parties agree that the consummation of the Merger Transactions pursuant to the terms of the Merger Agreement will result in the substitution as “Shares” under the Collar Transactions of shares of Class A common stock of New DTV for the shares of common stock of Old DTV, and the Calculation Agent shall make appropriate changes to the definition of Issuer and the other terms of the Collar Transactions to reflect such substitution.

ARTICLE V

CONSENT AGREEMENT

SECTION 5.01. Merger Consent. For avoidance of doubt, nothing in this Agreement shall imply or be construed as an agreement, acceptance or acknowledgment by New DTV or Greenlady II that the Merger Transactions constitute or result in a Change of Control (as defined in the Credit Agreement). Subject to Section 7.01 hereof, BofA hereby consents to the Merger Transactions for purposes of Section 7.12 of the Credit Agreement, which consent shall, subject to Section 7.01 hereof, be deemed to have been effectively given by BofA as of the time immediately preceding the effective time of the Merger Transactions (determined in accordance with the terms of the Merger Agreement).

ARTICLE VI

WAIVER AND RELEASE AGREEMENT

SECTION 6.01. Waiver of Certain Rights Related to the Collar Transactions. For avoidance of doubt, nothing in this Agreement shall imply or be construed as an agreement, acceptance or acknowledgment by New DTV or Greenlady II that the Merger Transactions constitute or result in an Insider Acquisition Event, a Liberty Induced Float Reduction Event or a Liberty Control Event (each, as defined in the Collar Confirmation). The parties hereby agree that, subject to Section 7.01 hereof, while any of the Collar Transactions are outstanding, BofA shall not exercise any rights it may have under the terms of the Collar Confirmation as a result of the consummation of the Merger Transactions pursuant to any of an Insider Acquisition Event, a Liberty Induced Float Reduction Event or a Liberty Control Event (each, as defined in the Collar Confirmation).

6

SECTION 6.02. Release of Liberty Guaranty.  Subject to Section 7.01 hereof, BofA hereby releases Liberty Media LLC from any and all of its obligations under the Guaranty of Liberty Media LLC in favor of BofA in relation to the Collar Transactions, dated as of April 2, 2008, and shall promptly execute such documentation as may be reasonably requested by Liberty Media LLC evidencing such release.

ARTICLE VII

CONDITIONS PRECEDENT

SECTION 7.01. Conditions Precedent. The parties agree that the Component Unwinds described in Article I hereof, the amendments described in Articles II through IV hereof, BofA’s consent to the Merger Transactions pursuant to Section 5.01 hereof, BofA’s waiver of certain rights under the Collar Transactions pursuant to Section 6.01 hereof and BofA’s release of Liberty Media LLC from its obligations under its Guaranty pursuant to Section 6.02 hereof shall each be subject to the satisfaction of the condition set forth in Section 7.01(a) and the satisfaction (or the waiver by BofA) of the conditions set forth in Sections 7.01(b), (c) and (d).

(a)           Consummation of the Merger Transactions.  The Closing (as defined in the Merger Agreement) of the Merger Transactions shall have occurred pursuant to the terms of the Merger Agreement (the date of such occurrence, the “Closing Date”) on or prior to 5:00 p.m. (New York City time) on November 30, 2009 (or such later date as BofA may agree in writing, in which case BofA shall be entitled to adjust the Component Unwind Date for Component 2).

(b)           Guaranty by New DTV. BofA shall have received from New DTV a duly executed and delivered guaranty (substantially in the form of Exhibit B hereto) of all of Greenlady II’s obligations under this Agreement and each of the Transaction Documents (the “New DTV Guaranty”).

(c)           Representations, Warranties and Agreements. Neither Greenlady II nor New DTV shall have breached any of its representations, warranties or agreements contained herein or in any other Transaction Document.

(d)           Closing Documentation. BofA shall have received from each of Greenlady II and New DTV (i) on or prior to the Closing Date, incumbency certificates and secretary’s certificates of good standing and authority and (ii) as soon as reasonably practicable following the Closing Date (and in any case on or prior to December 4, 2009), an opinion of counsel relating to the enforceability of New DTV’s obligations under this Agreement and the New DTV Guaranty and Greenlady II’s obligations under this Agreement, in form and substance reasonably satisfactory to BofA.

ARTICLE VIII

REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF GREENLADY II AND NEW DTV

SECTION 8.01. Representations and Warranties of Greenlady II.  As of the date of this Agreement:

(a)           each of Greenlady II’s representations and warranties contained in Article V of the Credit Agreement shall be deemed to be repeated as if set forth herein; and

(b)           each of Greenlady II’s representations and warranties contained in Sections 10(a) and (c) of the Collar Confirmation shall be deemed to be repeated as if set forth herein.

7

SECTION 8.02. Representations, Warranties and Agreements of New DTV.  New DTV represents and warrants to, and agrees with, BofA as follows:

(a)           it is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has full power to execute, deliver and perform the obligations arising from this Agreement and the New DTV Guaranty;

(b)           it has duly authorized this Agreement and the New DTV Guaranty, and each signatory of this Agreement and the New DTV Guaranty has been duly authorized and has full power to execute and deliver this Agreement and the New DTV Guaranty on behalf of New DTV;

(c)           this Agreement and the New DTV Guaranty and the execution thereof do not violate any of New DTV’s constitutive documents, and this Agreement and the New DTV Guaranty do not violate any law, regulation or agreement applicable to New DTV or its assets;

(d)           all governmental and other consents that are required to have been obtained by it with respect to this Agreement and the New DTV Guaranty have been obtained and are in full force and effect and all conditions of any such consents have been complied with;

(e)           it has duly executed and delivered this Agreement and the New DTV Guaranty, and this Agreement and the New DTV Guaranty each constitutes a valid, binding and enforceable agreement of New DTV in accordance with its respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar rights affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general applicability);

(f)            upon the consummation of the Merger Transactions, New DTV will indirectly own all of the equity interests in Greenlady II;

(g)           on and after the Closing Date, it shall cause Greenlady II to perform all of its obligations under this Agreement and the Transaction Documents; and

(h)           at all times during the Relevant Period, it shall not, and shall cause Greenlady II not to, communicate, directly or indirectly, any material non-public information concerning the business, operations or prospects of the Issuer (as defined in the Collar Confirmation, as amended by this Agreement) or the Shares (as defined in the Collar Confirmation, as amended by this Agreement) (“New DTV Shares”), to any Equity Derivatives Group Personnel (as defined below). “Material” information for these purposes is any information to which an investor would reasonably attach importance in reaching a decision to buy, sell or hold securities of the relevant issuer.  “Equity Derivatives Group Personnel” means any employee of BofA or its affiliates who effects purchases or sales of Shares in connection with this Agreement or is otherwise involved in unwinding BofA’s hedge position(s).

SECTION 8.03. Representations, Warranties and Agreements of Greenlady II and New DTV. Each of Greenlady II and New DTV represents and warrants to, and agrees with, BofA as follows on the date hereof and, in the case of Section 8.03(b) and (c), on each Instruction Day:

(a)           (i)            it has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent that it has deemed necessary, and it has made its own decisions based on its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by BofA or any of its affiliates or agents; and (ii) it is entering into this Agreement and, with respect to New DTV, the New DTV Guaranty with a full understanding of the terms, conditions and risks thereof and is capable of and willing to assume those risks;

8

(b)           none of it, its officers and directors, its affiliates and any other member of a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or the regulations promulgated thereunder, of which it is a member (a “Counterparty Group” and each member of a Counterparty Group, together with it, its officers and directors and its affiliates, a “Counterparty Person”) is aware of any material non-public information concerning the business, operations or prospects of the Issuer (as defined in the Collar Confirmation, as amended by this Agreement) or the New DTV Shares. “Material” information for these purposes is any information to which an investor would reasonably attach importance in reaching a decision to buy, sell or hold securities of the relevant issuer;

(c)           it is not entering this Agreement nor taking any action hereunder to create actual or apparent trading activity in the New DTV Shares (or any security convertible into or exchangeable or exercisable for New DTV Shares) or to raise or depress or otherwise manipulate the price of the New DTV Shares (or any security convertible into or exchangeable or exercisable for New DTV Shares) or otherwise in violation of the Exchange Act;

(d)           during the period beginning on and including the Component Unwind Date with respect to Component 2 through and including the last day in the Component Unwind Reference Period with respect to Component 5 (being the final Component to be subject to a Component Unwind hereunder) (the “Relevant Period”), neither New DTV nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) of New DTV shall directly or indirectly (including, without limitation, by means of any derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, the New DTV Shares (or any security convertible into or exchangeable or exercisable for New DTV Shares). The foregoing shall not limit any purchase of or offer to purchase New DTV Shares (or any security convertible into or exchangeable or exercisable for New DTV Shares) (i) by New DTV or any of its affiliates from holders of awards granted under New DTV’s stock incentive plans, in connection with the vesting, exercise, settlement, expiration or termination of such awards (or New DTV or any of its affiliates being a party to a repurchase or similar agreement for such purpose), (ii) by any affiliate or “affiliated purchaser” (as defined in Rule 10b-18) of New DTV pursuant to awards granted under New DTV’s stock incentive plans or pursuant to New DTV’s share purchase or 401(k) plan(s) or (iii) by New DTV or any of its affiliates in a private transaction from any director, officer or employee of New DTV or any of its affiliates; provided that, in the case of each of clauses (i), (ii) and (iii), that such purchase or offer to purchase is a privately negotiated transaction (i.e., not open market) or does not constitute a “Rule 10b-18 purchase” (as defined in Rule 10b-18);

(e)           it shall, at least one day prior to the first Component Unwind Date hereunder, notify BofA of the total number of New DTV Shares purchased (if any) pursuant to the once-a-week block exception set forth in Rule 10b-18(b)(4) by or for it or by any of its “affiliates” or “affiliated purchasers” (each, as defined in Rule 10b-18) during each of the four calendar weeks preceding such day and during the week in which such day occurs;

(f)            it is not currently, and during the Relevant Period will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended;

(g)           during the Relevant Period, the New DTV Shares and securities that are convertible into or exchangeable or exercisable for New DTV Shares are not, and shall not be, subject to a “restricted period” (as such term is defined in Regulation M under the Exchange Act (“Regulation M”)), and it shall not engage in any “distribution” (as such term is defined under Regulation M), other than a distribution of securities (i) that are not New DTV Shares and (ii) for which New DTV Shares are not a “reference

9

security” (as such term is defined under Regulation M), until the second Exchange Business Day (as defined in the Collar Confirmation) immediately following the Relevant Period;

(h)           it is not “insolvent” (as such term is defined under Section 101(32) of Title 11 of the United States Code); and

(i)            it shall (i) on or prior to the Closing Date, deliver to BofA incumbency certificates and secretary’s certificates of good standing and authority in connection with its entry into this Agreement and, in the case of New DTV, the New DTV Guaranty and (ii) as soon as reasonably practicable following the Closing Date (and in any case on or prior to December 4, 2009), cause to be delivered to BofA an opinion of counsel relating to the enforceability of, in the case of New DTV, New DTV’s obligations under this Agreement and the New DTV Guaranty and, in the case of Greenlady II, Greenlady II’s obligations under this Agreement, in each case in form and substance reasonably satisfactory to BofA.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. No Additional Amendments, Consents or Waivers. Except as provided herein, all the terms of the Credit Agreement, the Pledge Agreement and the Collar Transactions are hereby confirmed and ratified and shall remain and continue in full force and effect.

SECTION 9.02. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement.

SECTION 9.03. Notices.  Except as otherwise provided herein, any notices or other communication relating to this Agreement shall be in writing and the effectiveness of such communication shall be determined in accordance with Section 12(a) of the ISDA 2002 Master Agreement, as published by the International Swaps and Derivatives Association, Inc.

Notices to or other communications with any party to this Agreement shall be sent to the relevant address set forth below. Each party to this Agreement shall be entitled to update its address for notice by effective notice to the other parties of such change.

Greenlady II:	Greenlady II, LLC
	c/o DIRECTV
	2230 East Imperial Highway
	El Segundo, CA 90245
	Attention: Larry D. Hunter, General Counsel
	Facsimile: (310) 964-0838
New DTV:	DIRECTV
	2230 East Imperial Highway
	El Segundo, CA 90245
	Attention: Larry D. Hunter, General Counsel
	Facsimile: (310) 964-0838

10

BofA:	Bank of America, N.A.
	c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
	Bank of America Tower
	One Bryant Park
	New York, NY 10036
	Telephone: 646-855-5383
	Facsimile: 212-230-8492
	Email: rdilworth@bofasecurities.com
	Attn: Equity Derivatives Legal — Robert Dilworth

SECTION 9.04. Release of Claims. After effective notice from BofA to Greenlady II and New DTV (which notice BofA shall provide promptly upon such receipt) that it has received payment of (x) all Tranche Partial Unwind Prepayment Amounts and Component Unwind Payment Amounts arising in connection with the Component Unwinds for Components 2 through 6 and (y) all amounts payable by Greenlady II to BofA pursuant to the Transaction Documents with respect to Component 1 and Tranche 1, each of BofA, on the one hand, and Greenlady II and New DTV, on the other hand (in such capacity, each of BofA, Greenlady II and New DTV, a “Releasor”) shall automatically release and forever discharge the other party, its corporate parents, subsidiaries and affiliates and their respective present and former directors, managing directors, officers, control persons, stockholders, general partners, limited partners, employees, agents, attorneys, administrators, successors, personal representatives, executors and assigns (collectively, the “Released Group”) from any and all actions, causes of action, injunctions, accounts, agreements, bonds, bills, covenants, contracts, controversies, claims, damages, demands, debts, dues, extents, executions, judgments, liabilities, obligations, promises, predicate acts, reckonings, specialties, suits, sums of money, and variances whatsoever, whether known or unknown, in law or equity, which against any of them the Releasor, its corporate parents, subsidiaries and affiliates and their respective present and former directors, managing directors, officers, control persons, stockholders, general partners, limited partners, employees, agents, attorneys, administrators, successors, personal representatives, executors and assigns may now have, have ever had or may hereafter have against any member of the Released Group arising out of, or in connection with, or in any manner related to, this Agreement and the Transaction Documents, and all rights or obligations each Releasor has against or owes to the other party arising from this Agreement and the Transaction Documents (collectively, the “Claims”) shall be simultaneously terminated.

With respect to any and all Claims released pursuant to the foregoing paragraph, each of the Releasors shall expressly waive the provisions, rights, and benefits of California Civil Code § 1542 and any provisions, rights and benefits conferred by any law of any state or territory of the United States or principle of common law which is similar, comparable, or equivalent to California Civil Code § 1542, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

The Releasors may, after the release described above, discover facts in addition to or different from those that any of them now knows or believes to be true with respect to the subject matter of the Claims released at the time such release becomes effective; however, each Releasor shall, at such effective time, fully, finally, and forever settle and release any and all Claims released as described above, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, reckless,

11

intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. The Releasors acknowledge and agree that the foregoing waiver was separately bargained for and a key element of this Agreement.

SECTION 9.05. Governing Law; Jurisdiction.  THIS AGREEMENT AND ALL MATTERS ARISING OUT OF OR RELATING HERETO SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.  THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS ARISING OUT OF OR RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

SECTION 9.06. Waiver of Right to Trial by Jury. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

[Signature page follows.]

12

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

GREENLADY II, LLC
By:	Greenlady Corp., its sole managing member
By:	/s/ J. William Little
Name:	J. William Little
Title:	SVP
DIRECTV
By:	/s/ J. William Little
Name:	J. William Little
Title:	SVP
BANK OF AMERICA, N.A.
By:	/s/ David Morse
Name:	David Morse
Title:	Managing Director

Signature Page to Amendment, Unwind,
Consent and Waiver Agreement

EXHIBIT A

COMPONENTS TO BE TERMINATED

Component:	2	6	3	4	5
Reference Number:	NY-34256	NY-34260	NY-34257	NY-34258	NY-34259
Number of Options:	17,500,000	25,000,000	12,500,000	15,000,000	17,500,000
Unwind Borrow Rate:	0.15%	0.15%	0.15%	0.15%	0.15%
Reference Put Volatility:	41.60%	38.71%	37.21%	38.04%	37.64%
Reference Call Volatility:	38.89%	36.00%	35.01%	35.33%	35.62%

ORDER OF COMPONENT TERMINATIONS

1.  Component 2

2.  Component 6

3.  Component 3

4.  Component 4

5.  Component 5

A-1

EX-10.41

Exhibit 10.41

EXECUTION VERSION

GUARANTY OF DIRECTV

THIS GUARANTY, dated as of November 19, 2009 is given by DIRECTV, a Delaware corporation (the “Guarantor”) in favor of Bank of America, N.A., a national banking association organized under the laws of the United States of America (“BANA”).

1. Unconditional Guaranty. In consideration of and to induce BANA to enter into the Amendment, Unwind, Consent and Waiver Agreement, dated as of November 19, 2009 among BANA, Greenlady II, LLC (the “Company”) and the Guarantor (the “Unwind Agreement”), the Guarantor unconditionally guarantees to BANA and its successors and assigns (collectively, the “Bank”), the prompt payment when due (whether at their scheduled due dates, upon acceleration or otherwise (or would otherwise be owing, due or payable but for the commencement of any bankruptcy, insolvency or similar proceeding in respect of the Company)) of all present and future obligations and liabilities of all kinds (including any renewals, extensions or modifications thereof, and whether for principal, interest, fees, breakage costs, expenses, indemnification or otherwise and whether arising before or after the issuance of this Guaranty), and the performance of all delivery and other obligations, of the Company arising out of or relating to the Transaction Documents (as defined in and amended by the Unwind Agreement) and the Unwind Agreement (any and all such obligations and liabilities, collectively, the “Obligations”).

The word “Obligations” is used herein in its most comprehensive sense and includes any and all obligations and liabilities of the Company heretofore, now, or hereafter made, incurred or created, whether voluntary or involuntary and however arising, whether direct or acquired by the Bank by assignment or succession, whether originally incurred by or assumed by the Company, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether the Company may be liable individually or jointly with others, or whether recovery upon such Obligations may be or hereafter become barred by any statute of limitations, or whether such Obligations may be or hereafter become otherwise unenforceable. This Guaranty is unconditional and shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations or any instrument evidencing any Obligations, or by the existence, validity, enforceability, perfection, or extent of any collateral therefor, or by any circumstance relating to the Obligations which might otherwise constitute a defense to this Guaranty.

This Guaranty is absolute and unconditional and shall remain in full force and effect and is binding upon the Guarantor, its successors and assigns until all of the Obligations have been satisfied in full. If at any time any payment by the Company in respect of any Obligations is rescinded or must otherwise be returned for any reason whatsoever, in whole or in part, the Guarantor shall remain liable hereunder in respect of such Obligations as if such payment had not been made, and this Guaranty shall remain in full force and effect or shall be reinstated (as the case may be) with respect to such Obligations.

This is a guaranty of payment and not a guaranty of collection, and the Guarantor agrees that the Bank may resort to the Guarantor for payment of any of the Obligations whether or not the Bank has proceeded against any other obligor principally or secondarily liable for any Obligations, including the Company, or against any collateral for the Obligations, and whether or not the Bank has pursued any other remedy available to it. The Bank shall not be obligated to file any claim relating to the Obligations, including any claim in the event that the Company becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Bank to file any such claim shall not affect the Guarantor’s obligations hereunder. The Guarantor also specifically waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance, and all other notices whatsoever with respect to this Guaranty and of the existence, creation, or incurring of new or additional Obligations. The liability of the Guarantor under this Guaranty is in addition to the liability of the Guarantor under any other guaranties executed by it. The Guarantor waives the benefit of any statute of limitations affecting its liability hereunder.

B-1

2. Consents. The Guarantor agrees that the Bank may at any time extend the time of payment of or renew any of the Obligations, or make any agreement with the Company or with any other party or person liable on any of the Obligations, for the extension, renewal, payment, compromise, discharge or release of the Obligations (in whole or in part), or for any modifications of the terms thereof or of any agreement between the Bank and the Company or any such other party or person, without in any way impairing or affecting this Guaranty for any outstanding Obligations. The Guarantor authorizes the Bank, without notice or demand and without affecting its liability hereunder, from time to time, to assign or transfer the Obligations, to waive, forbear, indulge or take other action or inaction in respect of this Guaranty or the Obligations, or to exercise or not exercise any right or remedy hereunder or otherwise with respect to the Obligations.

3. Rights; Expenses. No failure by the Bank to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Bank of any right, remedy or power hereunder, preclude any other or future exercise of any right, remedy or power. Each and every right, remedy and power hereby granted to the Bank or allowed by law or other agreement shall be cumulative and not exclusive of any other right, remedy or power. The Guarantor agrees to pay on demand all out-of-pocket expenses (including the reasonable fees and expenses of the Bank’s counsel) in any way relating to the enforcement or protection of the Bank’s rights under this Guaranty.

4. Benefit; Company. The Guarantor will benefit from the Bank entering into the Unwind Agreement with Company and the Guarantor, and the governing body of the Guarantor has determined that the execution and delivery by the Guarantor of this Guaranty is necessary and convenient to the conduct, promotion and attainment of the business of the Guarantor. The Guarantor acknowledges and agrees that it shall have the sole responsibility for obtaining from the Company such information concerning the Obligations and the Company’s financial conditions or business operations as the Guarantor may require, and that the Bank has no duty at any time to disclose to the Guarantor any such information. The Guarantor acknowledges and agrees that it is not necessary for the Bank to inquire into the powers of the Company or of the officers, directors, partners or agents acting or purporting to act on its behalf, the appropriateness of any transaction described in any of the Transaction Documents or the Unwind Agreement for the Company (any such transaction, a “Covered Transaction”), or the purpose of any such Covered Transaction, and any Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

5. Subrogation. The Guarantor shall not exercise any rights which it may have or acquire by way of subrogation until all of the Obligations are paid in full to the Bank. If any amounts are paid to the Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Bank and shall forthwith be paid to the Bank to reduce the amount of outstanding Obligations, whether matured or unmatured. Subject to the foregoing, upon payment of all of the Obligations to the Bank, the Guarantor shall be subrogated to the rights of the Bank against the Company, and the Bank agrees to take at the Guarantor’s expense such actions as the Guarantor may reasonably require to implement such subrogation.

6. Assignment. The Guarantor shall not assign its rights, interest, duties or obligations hereunder to any other person without the Bank’s prior written consent. The Bank may, without notice to the Guarantor and without affecting the Guarantor’s obligations hereunder, assign the Obligations and this Guaranty, in whole or in part. The Guarantor agrees that the Bank may disclose to any prospective purchaser and any purchaser of all or part of the Obligations any and all information in the Bank’s possession concerning the Guarantor, this Guaranty and any security of this Guaranty. None of the terms or provisions of this Guaranty may be waived, amended, supplemented or otherwise modified, and no consent with respect to

B-2

any departure by the Guarantor from the terms hereof shall be effective, except as set forth in a written instrument executed by the Guarantor and the Bank.

7. Taxes. All payments by the Guarantor hereunder will be made in full without set-off or counterclaim and free and clear of and without withholding or deduction for or on account of any present or future taxes, duties or other charges, unless the withholding or deduction of such taxes or duties is required by law. In any such event, however, the Guarantor shall (a) promptly notify the Bank of such requirement, (b) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid to the Bank pursuant to this paragraph), (c) promptly forward to the Bank an official receipt (or a certified copy) evidencing such payment, and (d) pay to the Bank such additional amounts as may be necessary in order that the net amount received by the Bank after such withholding or deduction shall equal the full amounts of moneys which would have been received by the Bank in the absence of such withholding or deduction. The Guarantor will pay all stamp, registration, documentation, or other similar taxes payable in connection with this Guaranty and will keep the Bank indemnified against failure to pay the same.

8. Payments. The Guarantor hereby guarantees that the Obligations will be paid to the Bank without set-off or counterclaim, in lawful currency of the United States of America or such other freely available currency selected by the Bank, provided that such currency shall be one of the currencies in which payments are required to be made under a Covered Transaction, at the offices of the Bank specified by the Bank for such payment. The obligations of the Guarantor hereunder shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency except to the extent to which such tender or recovery shall result in the effective receipt by the Bank of the full amount of the currency or currencies owing under this Guaranty and the Guarantor shall indemnify the Bank (as an alternative or additional cause of action) for the amount (if any) by which such effective receipt shall fall short of the full amount of currency or currencies owing under this Guaranty and such obligation to indemnify shall not be affected by judgment being obtained for any other sums due hereunder.

9. Representations. The Guarantor is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has full corporate power to execute, deliver and perform this Guaranty. The Guarantor has duly authorized this Guaranty, and the signatory of this Guaranty has been duly authorized and has full power to execute and deliver this Guaranty on behalf of the Guarantor. This Guaranty and the providing thereof to the Bank does not violate any of the Guarantor’s constitutive documents, and this Guaranty does not violate any law, regulation or agreement applicable to the Guarantor or its assets. This Guaranty has been duly executed and delivered by the Guarantor to the Bank and constitutes a valid, binding and enforceable agreement against the Guarantor in accordance with its terms.

10. Governing Law; Jurisdiction. This Guaranty shall be governed by, and construed in accordance with, the laws of the State of New York, without reference to its conflicts of laws principles. With respect to any suit, action or proceeding concerning this Guaranty, the Guarantor submits to the exclusive jurisdiction of the Federal and State courts located in the City, County and State of New York. The Guarantor specifically and irrevocably waives (a) any objection which it may have at any time to the laying of venue of any suit, action or proceeding brought in such courts, (b) any claim that the same has been brought in an inconvenient forum, and (c) the right to object that such courts do not have jurisdiction over it. The Guarantor waives personal service of any summons, complaint or other process, which may be made by any other means permitted by New York law, including, without limitation, by registered mail directed to the Guarantor’s principal place of business.

B-3

11. Miscellaneous. This Guaranty contains the entire and exclusive agreement of the parties hereto with reference to the matters discussed herein. This Guaranty supersedes all prior drafts and communications with respect thereto. The headings of paragraphs herein are inserted only for convenience and shall in no way define, describe or limit the scope or intent of any provision of this Guaranty. If any term or provision of this Guaranty shall be deemed prohibited by or invalid under any applicable law, such provision shall be invalidated without affecting the remaining provisions of this Guaranty.

B-4

IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered by the Guarantor to the Bank as of the date first above written.

DIRECTV

By:	/s/ J. William Little
	Name: J. William Little
	Title: SVP

B-5

EX-14.2

Exhibit 14.2

DIRECTV (the “Company)
Code of Ethics and Business Conduct

As Adopted as of November 19, 2009

I.INTRODUCTION

This Code of Ethics and Business Conduct (“Code”) has been adopted by the Board of Directors of DIRECTV (the “Company”) and is designed to promote honest, ethical and lawful conduct. It shall apply to the Company, its direct and indirect subsidiaries and divisions and the directors, officers and employees of each. Accordingly, references in this Code to the Company shall include its direct or indirect subsidiaries and divisions. This Code is not intended to be all encompassing. Situations may arise that are not expressly covered or where the proper course of action is unclear. Employees should consult with their supervisors if any questions as to interpretation of this Code arise. Any employee may bring problems to the attention of higher management for review. The Company’s attorneys are also available to assist in resolving such matters.

The Company may modify or supplement this Code from time to time, as it deems appropriate. Accordingly, all employees must review this Code at least once every year. Additionally, some Company subsidiaries or divisions may adopt more restrictive or supplemental rules governing certain matters. Employees of these subsidiaries or divisions have the obligation to become familiar with and observe any such rules as well.

Application of this Code to directors and executive officers of the Company may only be waived by the Board of Directors of the Company or a committee of the Board. The Company must disclose promptly any waivers of these standards.

Any employee of the Company having information or knowledge regarding a violation, or potential violation, of this Code shall immediately report the same either to such person’s supervisor or through the Company’s Helpline (800-385-9470) or in the case of DIRECTV Latin America, its Ethics Helpline (800-233-5030). Retaliation or reprisal of any kind against an employee who reports a violation (or, in good faith, potential violation) of this Code is strictly prohibited.

The Company may regard any employee’s acts in violation of this Code to be outside the course and scope of that employee’s employment. Any employee who is found to have violated this Code may be subject to immediate disciplinary action, including reassignment, demotion or, when appropriate, dismissal. Legal proceedings may also be commenced against such individual to recover the amount of any improper expenditures, any other losses which the Company may have incurred or other appropriate relief. Violators may also be prosecuted by public officials under applicable criminal statutes.

1

In general, this Code requires that employees must:

·Conduct all dealings with customers, contractors or subcontractors, suppliers, and competitors with honesty and fairness, exercising good judgment and high ethical standards in business or personal interactions that may reflect upon the Company in any way.

·Avoid conflicts of interest between personal and professional relationships, including, but not limited to, any investment, interest or association that interferes, or potentially could interfere, with independent exercise of judgment in the best interest of the Company.

·Never improperly use the assets, information or relationships of the Company or any affiliate of the Company for personal gain.

·Know, understand and comply with all applicable U.S. and non-U.S. laws, regulations, rules, and policies governing the conduct of the Company’s business, both domestic and foreign, including trade, import and export activities (e.g., the Foreign Corrupt Practices Act and the International Traffic in Arms Regulations), employment issues, marketing activities and insider trading restrictions.

·Assist the Company in complying with its obligations under the U.S. federal securities laws to provide full, fair, accurate, timely and understandable disclosure in each report or other document filed with or submitted to the Securities and Exchange Commission (“SEC”), and in any other public communication made by or on behalf of the Company or any of its affiliates.

·Ensure that all transactions are handled honestly, comply with applicable accounting principles and are recorded fully and accurately in the books and records of the Company, as well as on the books and records of any affiliate of the Company.

·Respect the right of all employees to fair treatment and equal opportunity, free from discrimination, retaliation or harassment of any type.

·Safeguard information that belongs to the Company. Treat all such information as confidential and do not disclose it outside of the Company except when specifically authorized.

·Do not improperly solicit, obtain nor disclose any proprietary or other confidential data concerning suppliers, contractors or subcontractors, customers, competitors, employees or directors, nor use any inappropriate means to investigate or obtain data concerning such persons, including, without limitation, pretexting.

·Avoid any conduct that could potentially obstruct a government proceeding or investigation,
including falsifying or failing to maintain or produce records, documents and information.

·Avoid even the appearance of misconduct or impropriety.

II.CORPORATE ASSETS AND INFORMATION

A.Company Funds and Property

Employees of the Company are responsible and accountable for the proper expenditure of funds and use of Company assets under their control, including all funds and assets entrusted to the Company’s custody by customers and others. The Company’s assets are to be used only for proper purposes both during and following employment with the Company. Examples of improper uses include unauthorized taking or use of Company property or other

2

resources, and the disbursement of Company funds, directly or indirectly, for any form of payment that is illegal or otherwise not in accordance with Company policy. Unless authorized by appropriate Company executives, the sale, loan or gift of Company assets to Company employees, customers or suppliers is prohibited.

B.Corporate Records and Public Disclosure

Data, Records and Reports

All Company data, records and reports must be accurate and truthful and prepared in a proper manner. These include everyday documents such as expense reports and accounting entries, as well as cost estimates, contract proposals and other presentations to management, customers and the public. It is essential that those who rely on these records and reports — managers, creditors, customers, auditors and other decision makers — have truthful and accurate information. The integrity of the Company’s accounting, technical, personnel, financial and other records is based on their validity, accuracy and completeness.

Anyone preparing the type of information described above must be diligent in assuring its integrity and anyone representing or certifying the accuracy of such information should make an inquiry or review adequate to establish a good faith belief in the accuracy of the information. Custodians of the Company’s data, records and reports must be sure that such information is released, whether internally or outside the Company, only if adequately protected and then only for authorized purposes.

The Company and certain of its subsidiaries file periodic reports and other documents with various stock exchanges and regulatory authorities, including the SEC. Employees involved in the preparation and submission of these reports and other public disclosures must ensure that the information presented is full, fair, accurate, timely and understandable.

C.Confidential and Proprietary Information

The Company’s employees are responsible for protecting the Company’s confidential and proprietary information. No employee shall disclose confidential or proprietary information to a third party without proper authorization or shall improperly use such information for his or her own personal benefit, or in any manner inconsistent with the Company’s interest.

Confidential information includes, without limitation, information or data relating to the Company’s planning, business strategy, projects, existing or potential customers, competitors or suppliers, financial results or operations, or any other information that is not generally known to the public. This prohibition also applies to the confidential information of the Company’s customers, suppliers and other parties with whom the Company does business.

Proprietary information includes, without limitation, information relating to trade secrets, patents, research studies and results, manufacturing techniques and marketing strategies.

3

It includes records, practices, letters, plans, drawings, software and data stored on electronic or magnetic media. Proprietary information also includes inventions and other information or data employees may create or develop which relate to the Company’s business. Proprietary information is a Company asset. Employees are required to report the creation or development of proprietary information to permit the Company to take the necessary steps to protect its assets. Improper disclosure or use could destroy the value of such information to the Company, substantially weaken the Company’s competitive position and subject it to substantial liability to any third-party licensor of such information.

Access to confidential and proprietary information must be limited to authorized persons with a need to know that particular information. Unauthorized disclosure even to other Company employees, for example, in non-job related discussions, is prohibited. Employees should take care not to: (1) discuss Company matters in public places where discussions can be overheard; (2) read Company documents where others can see them; or (3) discard Company documents where they can be retrieved. Employees should also be aware of the insecure nature of conversations conducted in a car, on an airplane, or by mobile and cellular telephones, and act accordingly.

At the conclusion of employment with the Company, employees are required to return all Company documents, records and other property in their possession, including those that contain confidential or proprietary information. After leaving the Company, former employees have a continuing obligation to safeguard confidential and proprietary information, including keeping it confidential and avoiding its unauthorized use.

D.Insider Trading

If an employee has material non-public information relating to the Company, he or she may not buy or sell securities of the Company or engage in any other action to take advantage of, or pass on to others, that information. Information is “material” if it would influence a reasonable person to buy or sell securities. Examples include undisclosed subscriber counts, earnings, sales or profitability data, impending announcements of acquisitions or investments, and significant project or product developments. Information should be considered “non-public” until a reasonable time after it has been disseminated widely to the general public through press releases, news reports, or current, quarterly or annual reports.

The prohibition on insider trading also applies to information relating to any other company, including any customer, competitor or supplier of the Company. These restrictions also apply to an employee’s immediate family members, and any other person with whom the employee may share material, non-public information. An “immediate family member” includes an employee’s spouse, parent, sibling, child, mother or father-in-law, son or daughter-in-law, brother or sister-in-law and anyone sharing your household. Employees are expected to be responsible for the compliance of their immediate family members. Transactions that may appear to be necessary or justifiable for personal, independent reasons (such as the need to raise money for an emergency expenditure) are no exception to the prohibition on insider trading. You should avoid any transaction that could even appear improper.

4

Any short-term or speculative transaction involving the stock of the Company may also be improper and inappropriate. These transactions may include purchases of securities on margin, short sales or buying or selling of puts or calls with respect to securities of the Company.

Any employee who buys or sells securities of the Company should be aware that if the transactions become the subject of scrutiny, they will be viewed after-the-fact with the benefit of hindsight. As a result, before engaging in any such transaction, an individual should carefully consider how regulators and others might view the transaction. In the United States, as a general rule, it is considered safe for employees to buy or sell securities of the company that employs them on or after the third business day after the release to the general public of the Company’s quarterly or annual reports. Even then, you should not trade in a security if you have material non-public information at that time. Also, the rules differ from jurisdiction to jurisdiction and are subject to change. Accordingly, any employee in possession of confidential information wishing to trade in Company securities should consult the Company’s General Counsel beforehand.

More detailed information regarding the prohibition on insider trading is contained in the Company’s Insider Trading Policy, which is available to employees on the Company’s Intranet website.

E.Inquiries from the Media and Public

The Company is committed to providing full, fair and accurate disclosure in all public communications and in compliance with all applicable law, regulations and rules. Consistent with this commitment and the Company’s policies relating to insider trading and Regulation FD, employees are not authorized to answer questions from the media, analysts, investors or any other members of the public. If you should receive such an inquiry, immediately notify the Investor Relations Department.

F.Legal Disputes

Employees involved with a Company lawsuit or other legal dispute may not discuss it with outsiders or other Company employees without the prior approval of the Company’s General Counsel. Failure to follow these restrictions could constitute a breach of the attorney-client privilege and result in the loss of the confidential status of the information. Additionally, any employee contacted by any regulatory or law enforcement authority seeking Company information should promptly contact his or her supervisor who shall immediately bring the matter to the attention of the Company’s General Counsel. No employee should respond to any inquiry by any government authority regarding the Company without first consulting with the Company’s General Counsel.

5

III.CONFLICTS OF INTEREST

A.Conflicts of Interest

Although Company employees are generally free to engage in personal financial and business transactions, there are certain limitations. No employee, officer or director or immediate family member should receive improper benefits as a result of his or her position with the Company. All employees have a duty to avoid situations where their loyalties may be divided between the Company’s interests and their own interests. Employees should avoid even the appearance of such a conflict of interest.

While it is impossible to outline every situation that may give rise to a conflict of interest or the appearance of impropriety, the following are some examples:

1.No employee or immediate family member may have an unauthorized financial interest or stock ownership in, or obligation to, a competitor, customer or supplier of the Company, where the interest or obligation might cause divided loyalty or even the appearance of divided loyalty.

2.No employee may perform services as an employee, independent contractor, advisor or consultant for any competitor of the Company. No employee may perform such services for a customer or supplier of the Company without the written approval of the Company’s General Counsel.

3.No employee may serve as a director of any competitor of the Company. No employee may serve as a director of any customer or supplier of the Company without the written approval of the Company’s General Counsel.

4.No employee may accept a position with another company if doing so would impair the employee’s ability to fulfill his or her obligations to the Company.

5.No employee may seek or accept elected or appointed public office, unless he or she has received written authorization from the Company’s General Counsel.

6.No employee may deprive the Company of a business opportunity, or divert a business opportunity to such employee’s own benefit.

Memberships on Outside Boards of Directors

Any employee of the Company seeking permission to serve on an outside board of directors must submit his or her request to the General Counsel of the Company together with a description of the company, and his or her obligations as a board member. The Chief Executive Officer and General Counsel of the Company shall review employee requests for permission to serve on outside boards, on a case-by-case basis. The determination whether to permit such service will be based on several factors, the most important of which will be whether the employee’s service as a director will be beneficial to the employee’s primary obligation to

6

the Company. Other factors to be considered include the nature of the Company’s business, whether it is a publicly traded company with shares traded on the New York Stock Exchange or NASDAQ, and whether the obligations of a board member can be performed without interfering with the individual’s job performance. No requests shall be entertained by the Company unless first approved by the employee’s immediate supervisor. Finally, no requests shall be entertained for participation on boards of competitors of the Company.

B.Dealing with Government Officials

Employees who have dealings with government officials shall conform to the following standards:

1.All employees who contact public officials must be familiar with the applicable lobbying laws and public disclosure requirements, particularly those laws or regulations that pertain to registrations or filings that must be made by the Company.

2.No payment shall be made to, or for the benefit of, any public official in order to induce or entice such official to enact, defeat or violate any law or regulation for the Company’s benefit; to influence any official act; or to obtain any favorable action by a governmental agency or official on behalf of the Company.

3.Social amenities, entertainment and other courtesies may be extended to government officials or employees only to the extent appropriate and reasonable under applicable laws and customs. Before extending any such amenity, courtesy or entertainment opportunity to any public official, an employee must first be knowledgeable about all applicable laws and customs, or must consult with, or inquire about such laws and customs with the Company’s General Counsel or the General Counsel’s designee(s).Gifts of greater than nominal value to, or lavish entertainment of, public officials are prohibited. No gifts in the form of cash, stock or other similar consideration shall be given, regardless of amount. Any gift about which an employee is uncertain should not be made without the written approval of the Company’s General Counsel. Any expenses incurred by a Company employee in connection with the matters discussed herein shall be accurately recorded on the Company’s books and records.

C.Business Hospitality

Business entertainment (including meals and transportation), gratuities and gifts, whether offered by Company employees or their immediate family members to third parties or extended to Company employees or their immediate family members by third parties, are permitted, provided the entertainment, meal or transportation is not lavish or excessive and the gift or gratuity given is of nominal value and does not consist of cash or cash equivalents (e.g., gift certificates). Neither should exceed the bounds of good taste or customary business standards in the community. Care should be exercised to ensure that any business entertainment or gift cannot reasonably be construed by the recipient as a bribe or improper inducement. The nature of the transactions should be such that their public disclosure would not be embarrassing to the Company or the recipient. All funds expended for business entertainment and gifts must be documented accurately and reflected in the books and records of the Company.

7

For more detailed information on these restrictions, reference is made to the Company’s Policy on Company-Paid Expenses for Business Visitors, which is available to employees on the Company’s Intranet website.

D.Prohibited Payments

Bribery and Kickbacks

No employee of the Company shall directly or indirectly offer, give, solicit or accept any money, privilege, special benefit, gift or other item of value for the purpose of obtaining, retaining or directing business, or bestowing or receiving any kind of special or favored treatment for the Company. The Company does not permit or condone the use or receipt of bribes, kickbacks or any other illegal or improper payments in the transaction of its business. The use of any outside consultant, attorney, accountant, or agent in any manner or for any purpose that would be contrary to this prohibition is prohibited.

Business Dealings Outside the United States

The Foreign Corrupt Practices Act (the “FCPA”) prohibits a U.S. citizen from engaging in certain types of activities. In accordance with the provisions of the FCPA, no director, officer, employee or agent of the Company shall give, or offer to give, directly or indirectly, anything of value to any foreign official (including an official of any political party or candidate for any political office) for the purpose of (i) influencing any act or decision of the recipient in his official capacity; (ii) inducing the recipient to use his influence to affect any act or decision of any foreign government; or (iii) inducing the recipient to do or omit to do any act in violation of the lawful duty of such person. The FCPA provides that an individual may be fined up to $100,000 and imprisoned for up to five years for any violation of the FCPA. In addition, the Company is subject to substantial monetary penalties for violations of the FCPA by its employees or agents and is prohibited from directly or indirectly paying the monetary fines imposed on individual violators of the law. Modest gratuities and tips may be paid solely for the purpose of expediting or securing the performance of a routine action required to be taken by foreign governmental officials, representatives of customers or suppliers or other persons whose duties are essentially ministerial or clerical in nature. However, such payments may not be made if they are in violation of local law or in order to influence a foreign official or other person to make a decision that the individual is not required to make, such as any decision whether, or on what terms, to award new business to or to continue business with a particular party.

Political Activity

The Company’s General Counsel (and a designated government affairs officer) will manage, review and approve federal, state and local lobbying activities, political action programs, onsite political events, activities and visits from federal, state and local officials, and requests for consultant services involving state and local legislative lobbying.

8

No corporate funds or services shall be paid or furnished to nor any corporate assets used, including but not limited to the Company’s facilities, in connection with any political party or any candidate for, or incumbent in, any public office except as permitted by law and as approved by the Company’s General Counsel.

The prohibitions and limitations on political contributions outlined above relate only to the use of corporate funds, assets, facilities and services and are not intended to discourage employees from making personal contributions to candidates or political parties of their choice. Personal involvement in political activity is permitted as long as the activity does not interfere with or impair the performance of the employee’s duties for the Company. In addition, any employee who becomes involved with a political group must make it clear that his or her activities are being conducted purely in a personal capacity and not on behalf of or in connection with the Company.

Sales Representatives and Marketing Consultants

The Company has adopted specific policies relating to engagement of sales representatives or marketing consultants for international business, which are intended to facilitate compliance with applicable law, including the FCPA. Reference is made to the Company’s Policy on International Sales and Marketing Representatives which is available on the Company’s Intranet website.

IV.EQUAL EMPLOYMENT OPPORTUNITY AND UNLAWFUL HARASSMENT

A.Equal Employment Opportunity

The Company is committed to a policy of equal employment opportunity for applicants and employees. The Company does not discriminate against qualified applicants or employees on the basis of race, sex, pregnancy, citizenship, ancestry, national origin, religion, age, physical or mental disability, color, marital status, medical condition, sexual orientation or identity, veteran status or any other characteristic protected by state or federal law. Equal employment opportunity will be extended to all persons in all aspects of the employer-employee relationship, including recruitment, hiring, training, promotion, transfer, discipline, layoff and termination.

B.Non-Harassment

The Company is committed to maintaining a work environment that is free of harassment. In keeping with this commitment, the Company will not tolerate harassment of its employees by anyone, including any supervisor, manager, co-worker, vendor, customer or contract labor. Harassment of any kind whether verbal, physical, or visual that is based upon a person’s status such as race, ancestry, national origin, religion, age, physical/mental disability, gender, sexual orientation or gender identity, is specifically prohibited.

9

C.How to Access Company Policies

Specific policies of the Company regarding equal employment opportunity and anti-harassment, including how to file a complaint and the prohibition against retaliation of any kind are available to employees on the Company’s Intranet website.

V.SAFETY OF THE WORKPLACE AND ENVIRONMENT PROTECTION

The Company requires each employee to perform his or her work in a safe manner so as not to cause harm to themselves or to others. The Company similarly insists that work conducted under its leadership or supervision be performed safely. Work performed individually or under Company leadership must also comply with applicable environmental standards and regulations.

Working or supervising work with hazardous equipment or materials, or under hazardous conditions, requires knowledge of and compliance with all applicable occupational safety and health standards, informational requirements and government regulations. Any employee having any questions about these standards, requirements or regulations should consult with his or her supervisor.

VI.RELATIONSHIPS WITH COMPETITORS AND OTHER TRADE PRACTICES

A.Relationships with Competitors

Employees of the Company must be aware that there are laws protecting and promoting competition, including laws protecting competitors’ proprietary and other sensitive information; such laws apply in many of the countries in which the Company does business. Company employees and consultants, especially any persons having direct contact with competitors, have a clear responsibility to know and obey these laws.

1.Proprietary and Sensitive Information

The Company will not acquire another company’s trade secrets or other proprietary information by improper means, or permit the unauthorized use of a third party’s patents, copyrights or trademarks. The acquisition of trade secrets or other proprietary information by other than open, independent (e.g., “reverse engineering”) or owner-authorized means (e.g., teaming agreements or written releases from suppliers) may subject individuals and entities to criminal or civil liability. Additionally, means such as reverse engineering may be prohibited by contractual arrangements or may violate certain patent or other proprietary rights.

2.Fair Competition

The Company will compete fairly for business, respecting the rights of other parties. This includes respect for the legitimate business relationships of competitors with the

10

Company’s prospective customers. If as a result of our wrongful act a customer breaches a contract or terminates a business relationship with a competitor, the Company and its employees may be liable for damages.

3.Price Fixing

Any kind of joint action taken by two or more companies which directly or indirectly influences the price of the products or services they sell in competition with one another is price fixing. Such an agreement is illegal whether or not the parties have arrived at a specific price or even a range of prices.

4.Customer Allocation, Dividing Territories, or Limiting Production

Any agreement between competitors not to compete by allocating customers or potential customers is illegal, whether the allocation is by territory, by specific customer or by customer classification. Agreements with competitors to limit production or avoid production innovation are also illegal.

If you have any questions regarding relationships with competitors or trade practices in general, you should consult with a member of the Company’s Legal Staff.

B.Restrictive International Trade Practices

United States law prohibits U.S. corporations and their foreign operations from complying with restrictive trade practices, including boycotts, instituted by foreign countries against other countries or against U.S. organizations or persons. These laws require companies to report any such requests to the U.S. Government. To ensure compliance with United States and applicable foreign laws, employees must report promptly to management any request received for compliance with international restrictive trade practices.

VII.EXPORT/IMPORT LAWS AND REGULATIONS

The Company is committed to full compliance with the export and import laws and regulations of the United States in order to protect the interests of national security and proprietary interests of the Company. The penalty for violation of those laws and regulations, whether intentional or inadvertent, can be civil and/or criminal and can range from fines, license denials, jail terms, suspension of export or import privileges and disciplinary action directed at employees, up to and including employment termination.

Guidelines applicable to all employees are provided in the Company’s Policy on Compliance with Export/Import Laws and Regulations. Also, the General Counsel of the Company has issued an export compliance directive, which provides more detailed guidance for each operating subsidiary and their employees. The Policy, and this directive are available on the Company’s Intranet website.

11

VIII.CODE OF ETHICS FOR THE CHIEF EXECUTIVE OFFICER AND SENIOR FINANCIAL OFFICERS

The Company has developed and adopted this Code of Ethics applicable to its Chief Executive Officer and senior financial officers to promote honest and ethical conduct; full, fair, accurate, timely and understandable disclosure; and compliance with applicable laws, rules and regulations. As used herein, “senior financial officers” means the Company’s principal financial officer and principal accounting officer or controller, or persons performing similar functions. The Company’s Chief Executive Officer and senior financial officers are also subject to the following specific policies (this Code of Ethics shall be deemed to constitute the code of ethics referred to in Item 406 of Regulation S-K promulgated by the SEC):

1.The Chief Executive Officer and all senior financial officers shall at all times conduct themselves in an honest and ethical manner, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.

2.The Chief Executive Officer and all senior financial officers are responsible for full, fair, accurate, timely and understandable disclosure in (a) the reports and documents that the Company files with, or submits to, the SEC and (b) the Company’s other communications with the public, including both written and oral disclosures, statements and presentations. It shall be the responsibility of the Chief Executive Officer and each senior financial officer promptly to bring to the attention of the Company’s Board or Audit Committee any material information of which he or she may become aware that may render the disclosures made by the Company in its public filings or otherwise materially misleading, and to assist the Company’s Board and Audit Committee in fulfilling their responsibilities.

3.The Chief Executive Officer and all senior financial officers shall not, directly or indirectly, take any action to fraudulently influence, coerce, manipulate or mislead any independent public or certified public accountant engaged in the performance of any audit or review of the financial statements of the Company that are required to be filed with the SEC if such person knew (or was unreasonable in not knowing) that such action could, if successful, result in rendering such financial statements materially misleading. For purposes of this Code of Ethics, actions that “could, if successful, result in rendering such financial statements materially misleading” include, but are not limited to, actions taken at any time with respect to the professional engagement period to fraudulently influence, coerce, manipulate, or mislead an auditor:

(a)To issue a report on the Company’s financial statements that is not warranted in the circumstances (due to material violations of generally accepted accounting principles, generally accepted auditing standards or other applicable standards);

(b)Not to perform audit, review or other procedures required by generally accepted auditing standards or other applicable professional standards;

(c)Not to withdraw an issued report; or

12

(d)Not to communicate matters to the Company’s Audit Committee.

4.The Chief Executive Officer and each senior financial officer shall promptly bring to the attention of the Company’s Audit Committee any information he or she may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s financial reporting, disclosures or internal controls.

5.The Chief Executive Officer and each senior financial officer shall promptly bring to the attention of the Company’s General Counsel or the Chief Executive Officer or, where he or she deems it appropriate, directly to the Company’s Board or Audit Committee, any information he or she may have concerning any violations of this Code of Ethics.

6.The Company intends to prevent the occurrence of conduct not in compliance with this Code of Ethics and to halt any such conduct that may occur as soon as reasonably possible after its discovery. Allegations of non-compliance will be investigated whenever necessary and evaluated at the proper level(s). Those found to be in violation of this Code of Ethics are subject to appropriate disciplinary action, up to and including termination of employment. Criminal misconduct may be referred to the appropriate legal authorities for prosecution.

13

EX-21

Exhibit 21

Subsidiaries of the Registrant

As of December 31, 2009

	State of Inc.
	/Formation/
Entity Name	Partnership
DIRECTV	DE
DTV Entertainment, Inc.	DE
DTV Freedom, LLC	DE
Greenlady Corp	DE
DIRECTV Sports Networks, LLC	DE
DIRECTV Sports Net Northwest, LLC	DE
DIRECTV Sports Net Pittsburgh, LLC	DE
DIRECTV Sports Net Rocky Mountain LLC	DE
LDIG, LLC	DE
LDIG Gamenet, Inc.	DE
DTV Genius, Inc.	DE
Game Show Network, LLC	DE
The DIRECTV Group, Inc.	DE
DIRECTV UK, Ltd.	UK
DTV Satellite Broadband, LLC	DE
DTVG Licensing, Inc. (DBA S2 Licensing)	CA
DIRECTV Holdings LLC	DE
DIRECTV Financing Co., Inc.	DE
DIRECTV Enterprises, LLC	DE
180 Connect, Inc.	DE
DIRECTV Customer Services, Inc.	DE
DIRECTV, Inc.	CA
DIRECTV Programming Holdings I, Inc.	DE
DIRECTV Programming Holdings II, Inc.	DE
DIRECTV Home Services, LLC	DE
UpSat Direct LLC	DE
LABC Productions, LLC	CA
LABC On-Air Music, Inc.	DE
LABC TV Music, Inc.	DE
DIRECTV Merchandising, Inc.	DE
DIRECTV Operations, LLC	CA
DIRECTV International, Inc.	DE
DIRECTV Latin America Holdings, Inc.	CA
DIRECTV Brasil DTH Ltda.	Brazil
DIRECTV DTH Investments Limited	Cayman Islands
DIRECTV DTH do Brasil Comarcio e Participacoes Ltda.	Brazil
Sky Brasil Servicios Ltda.	Brazil
ITSA, Ltda.	Brazil
Link Express, Ltda.	Brazil
TV Filme Belem, Ltd.	Brazil
TV Filme Brasilia, Ltd.	Brazil
TV Filme Goiania Ltd.	Brazil
TV Filme Operacoes Ltd.	Brazil
TV Filme Programadora, Ltda	Brazil
TV Filme Servicos Ltd.	Brazil
TV Filme Sistema, Ltd.	Brazil
TV Capital Participacoes Ltda.	Brazil
Promancor, S.A.	DE
DIRECTV Latin America, LLC	DE
California Broadcast Center, LLC	DE
DIRECTV Argentina, S.A.	Argentina

	State of Inc.
	/Formation/
Entity Name	Partnership
DIRECTV Caribbean LLC	DE
DIRECTV Caribe Ltd.	Saint Lucia
DIRECTV Trinidad Limited	Trinidad/ Tobago
DIRECTV Curaçao N.V.	Curaçao
DIRECTV (Barbados) Ltd.	Barbados
DIRECTV Chile LLC	Chile
DIRECTV Chile Television Limitada (dba DIRECTV Chile Ltda.)	Chile
DIRECTV Colombia, Ltda.	Colombia
DIRECTV de Paraguay SRL	Paraguay
DIRECTV Puerto Rico Ltd.	BVI
DIRECTV de Uruguay Ltda.	Uruguay
DIRECTV Latin America Sports, LLC	DE
DIRECTV Mexico Holdings, LLC	DE
Grupo Galaxy Mexicana, S.R.L. de C.V.	Mexico
DIRECTV Peru S.r.L.	Peru
DTH Ecuador C. Ltda.	Ecuador
DIRECTV Ecuador C. Ltda	Ecuador
DTVLA Brazil Investment Holdings, LLC	DE
Galaxy Latin America (Argentina) S.r.L.	Argentina
GLA Brasil Ltda.	Brazil
GLB Brazil Telecommunicacoes Ltda.	Brazil
Galaxy Brasil Ltda.	Brazil
DIRECTV Programacoes Videofonografica Ltda	Brazil
Galaxy Entertainment de Venezuela C.A.	Venezuela
Galaxy Latin America Investments, LLC	DE
Galaxy Latin America Venezuela, S.r.L.	Venezuela
Latin America Sports, LLC	DE
Pasiones TV LLC	DE
Servicios Galaxy Sat III R, C.A.	Venezuela
SurFin LLC	DE
Alpha Tel Holdings, Ltd.	Cayman Island
Alpha Tel S.A.	Argentina
White Holding, B.V.	Netherlands
Telecenter Panamericana Ltda.	Colombia
White Holding Mexico S. de R.L. de C.V.	Mexico
T2Green Equipos S.r.L.	Argentina
Torneos y Competencias S.A.	Argentina
Merkin S.A.	Uruguay
Productora De Eventos S.A.	Uruguay
Revistas Deportivas S.A.	Argentina
South American Sports S.A.	Argentina
T&T Sports Marketing, Ltd.	Cayman Islands
Tele Net Image Corp.	British Virgin Islands
Tele Red Images S.A.	Argentina
Toreos y Competencias S.A.	Uruguay
Workjoy Argentina S.A.	Argentina
Television Satelital Codificada S.A.	Argentina
TyC International B.V.	Netherlands
TyC Minor S.A.	Argentina
DTH (Mexico) Investment Ltd.	Cayman Island
DTH TechCo, Inc.	DE
DTVLA Mexico Investment Holdings, Inc.	DE
Innova Holdings S. de R.L. de C.V.	Mexico
Innova S. de R.L. de C.V.	Mexico
Corporacion de Radio y Television del Norte de Mexico SrL de CV	Mexico
Corporacion Novamagen SrL de CV	Mexico
Corporacion Novavision SrL de CV	Mexico

	State of Inc.
	/Formation/
Entity Name	Partnership
Novavision Group, Inc.	CA
Novavision Honduras S.A. de C.V.	Honduras
Novavision Panamá S.A.	Panama
Media Vision de Panama, S.A.	Panama
Ridge Manor, Inc.	Panama
Eminent Shine, Inc.	Panama
Galaxy	Nicaragua
SDS	Costa Rica
Sky El Salvador S.A. de C.V.	El Salvador
Television Novavision de Guatemala S.A.	Guatemala
Servicios Novasst SrL de CV	Mexico
Corporacion Satelital Novavision Dominicana S.A.	Mexico
Nova Call Center S. de R.L. de C.V.	Mexico
Servicios Corporativos de Telefonia SrL de CV	Mexico
MCOP Holdings, Inc.	DE
News America DTH TechCo. Inc.	DE
DTH TechCo Partners	DE
Sky Multi-Country Partners	DE
Sky Argentina DTH Management LLC	DE
Sky Argentina DTH Holdings LLC	DE
Sky Argentina S.C.A.	Argentina
Sky Sistemas Argentina SRL	Argentina
Sky Venezuela DTH Holdings LLC	DE
Sky Entertainment Venezuela S.A.	Venezuela
Sky Chile DTH Holdings LLC	DE
Multi-Country DTH Holdings Ltd.	Cayman Island.
Sky Colombia S.A.	Colombia
DTV Network Systems, Inc.	DE
DTV-Mauritius Holdings	Mauritius
First DTV Mauritius Ltd.	Mauritius
Goldman Agent Private Limited	India
DTVG Europe Limited	UK
DTVG UK Limited	UK

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-163226 and 333-163227 of our reports related to the consolidated financial statements and financial statement schedules of DIRECTV (formerly, The DIRECTV Group, Inc.) (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the adoption of new accounting standards),and the effectiveness of DIRECTV’s internal control over financial reporting, appearing in the Annual Report on Form 10-K of DIRECTV for the year ended December 31, 2009.

/s/ DELOITTE & TOUCHE LLP

Los Angeles, California

February 25, 2010

EX-31.1

QuickLinks -- Click here to rapidly navigate through this document

DIRECTV

EXHIBIT 31.1

CERTIFICATION

I, Michael D. White, certify that:

1.

I have reviewed this Annual Report on Form 10-K of DIRECTV;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15d(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 25, 2010

/s/ MICHAEL D. WHITE
Michael D. White
Director, President and Chief Executive Officer

QuickLinks

EXHIBIT 31.1

EX-31.2

QuickLinks -- Click here to rapidly navigate through this document

DIRECTV

EXHIBIT 31.2

CERTIFICATION

I, Patrick T. Doyle, certify that:

1.

I have reviewed this Annual Report on Form 10-K of DIRECTV;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15d(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 25, 2010

/s/ PATRICK T. DOYLE
Patrick T. Doyle
Executive Vice President and Chief Financial Officer

QuickLinks

EXHIBIT 31.2

CERTIFICATION

EX-32.1

QuickLinks -- Click here to rapidly navigate through this document

DIRECTV

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of DIRECTV (the "Corporation") on Form 10-K for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael D. White, Director, President and Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ MICHAEL D. WHITE
Michael D. White
Director, President and Chief Executive Officer

Date: February 25, 2010

QuickLinks

EXHIBIT 32.1

EX-32.2

QuickLinks -- Click here to rapidly navigate through this document

DIRECTV

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of DIRECTV (the "Corporation") on Form 10-K for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Patrick T. Doyle, Executive Vice President and Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ PATRICK T. DOYLE
Patrick T. Doyle
Executive Vice President and Chief Financial Officer

Date: February 25, 2010

QuickLinks

EXHIBIT 32.2