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<div> <div><!-- 2.0.3575.42017 --><div><!-- body --><div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <div> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; font-family: 'Times New Roman','serif';"><b>Note 5: Borrowings</b></p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">The following table sets forth our outstanding borrowings:</p> <!--EndFragment--> <p></p> <table class="MsoNormalTable" style="font-size: 11pt; line-height: 115%; font-family: 'Calibri','sans-serif'; border-collapse: separate;" cellspacing="0" cellpadding="0" border="0"> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="bottom" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 1pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: center;" align="center"> </p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1pt solid;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 1pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b><font class="_mt" style="font-size: 8pt;">Interest Rates at<br /> September 30, 2009</font></b></p> </div> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1pt solid;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 1pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b><font class="_mt" style="font-size: 8pt;">September 30,<br /> 2009</font></b></p> </div> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1pt solid;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 1pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b><font class="_mt" style="font-size: 8pt;">December 31,<br /> 2008</font></b></p> </div> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="bottom" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: center;" align="center"> </p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: center;" align="center"> </p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; padding-top: 0in;" valign="bottom" colspan="2"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: center;" align="center"><b><font class="_mt" style="font-size: 8pt;">(Dollars in Millions)</font></b></p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="top" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">8.375% senior notes due in 2013<font class="_mt">.........................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">8.375%</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">$327</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">$910</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="top" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">4.750% senior notes due in 2014, net of unamortized discount of $3 million as of September 30, 2009<font class="_mt">...........................................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">4.750%</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">997</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">—</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="top" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">6.375% senior notes due in 2015<font class="_mt">.........................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">6.375%</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">1,000</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">1,000</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="top" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">7.625% senior notes due in 2016<font class="_mt">.........................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">7.625%</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">1,500</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">1,500</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="top" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">5.875% senior notes due in 2019, net of unamortized discount of $7 million as of September 30, 2009<font class="_mt">...........................................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">5.875%</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">993</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">—</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="top" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">Senior secured credit facility, net of unamortized discount of $7 million as of September 30, 2009 and $9 million as of December 31, 2008<font class="_mt">..................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">3.090%</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">2,344</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">2,421</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="top" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 1pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">Unamortized bond premium<font class="_mt">.................................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 1pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">—</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1pt solid;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 1pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: right;" align="right">2</p> </div> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1pt solid;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 1pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: right;" align="right">2</p> </div> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="top" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 20pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">Total debt<font class="_mt">.............................................................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right"> </p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">7,163</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">5,833</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="top" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 1pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">Less: Current portion of long-term debt<font class="_mt">..............................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 1pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right"> </p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1pt solid;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 1pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: right;" align="right">(572)</p> </div> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1pt solid;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 1pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: right;" align="right">(108)</p> </div> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 64.18%; padding-top: 0in;" valign="top" width="64%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 2pt 20pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">Long-term debt<font class="_mt">....................................................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 14.3%; padding-top: 0in;" valign="bottom" width="14%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 2pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right"> </p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.98%; padding-top: 0in;" valign="bottom" width="10%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1.5pt double;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 2pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: right;" align="right">$6,591</p> </div> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 10.54%; padding-top: 0in;" valign="bottom" width="10%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1.5pt double;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 2pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: right;" align="right">$5,725</p> </div> </td> </tr> </table> <!--EndFragment--> <p class="MsoNormal" style="font-size: 10pt; margin: 12pt 0in 10pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">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.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 10pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">The 8.375% senior notes, 6.375% senior notes and the 7.625% senior notes have been registered under the Securities Act of 1933, as amended, are unsecured and have been fully and unconditionally guaranteed, jointly and severally, by substantially all of DIRECTV U.S.’ subsidiaries. Principal on the senior notes is payable upon maturity, while interest is payable semi-annually.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt 0.75in; text-indent: -0.25in; font-family: 'Times New Roman','serif';"><i>2009 Financing Transactions</i></p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 12pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">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, 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 agreed to use its reasonable best efforts to cause to become effective 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 process of these senior notes within several months.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 10pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">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. DIRECTV U.S. redeemed the remaining 8.375% senior notes on October 23, 2009 for a total of $339 million.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 10pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">The partial redemption of our 8.375% senior notes resulted in a third quarter of 2009 pre-tax charge of $23 million, $14 million after tax, of which $18 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 and other transaction costs. The charge was recorded in “Other, net” in our Consolidated Statements of Operations.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 10pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">The following table sets forth the approximate fair value of our senior notes as of:</p> <div align="center"> <table class="MsoNormalTable" style="font-size: 11pt; font-family: 'Calibri','sans-serif'; border-collapse: separate;" cellspacing="0" cellpadding="0" border="0"> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 73.02%; padding-top: 0in;" valign="bottom" width="73%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 1pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: center;" align="center"> </p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.02%; padding-top: 0in;" valign="bottom" width="13%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1pt solid;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 1pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b><font class="_mt" style="font-size: 8pt;">September 30,<br /> 2009</font></b></p> </div> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.96%; padding-top: 0in;" valign="bottom" width="13%"> <div style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 0in; border-bottom: windowtext 1pt solid;"> <p class="MsoNormal" style="border-right: medium none; padding-right: 0in; border-top: medium none; padding-left: 0in; font-size: 10pt; padding-bottom: 0in; margin: 0in 0in 1pt; border-left: medium none; padding-top: 0in; border-bottom: medium none; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b><font class="_mt" style="font-size: 8pt;">December 31,<br /> 2008</font></b></p> </div> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 73.02%; padding-top: 0in;" valign="bottom" width="73%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: center;" align="center"> </p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; padding-top: 0in;" valign="bottom" colspan="2"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: center;" align="center"><b><font class="_mt" style="font-size: 8pt;">(Dollars in Millions)</font></b></p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 73.02%; padding-top: 0in;" valign="top" width="73%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">8.375% senior notes due in 2013<font class="_mt">....................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.02%; padding-top: 0in;" valign="bottom" width="13%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">$337</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.96%; padding-top: 0in;" valign="bottom" width="13%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">$904</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 73.02%; padding-top: 0in;" valign="top" width="73%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">4.750% senior notes due in 2014<font class="_mt">....................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.02%; padding-top: 0in;" valign="bottom" width="13%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">1,003</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.96%; padding-top: 0in;" valign="bottom" width="13%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">—</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 73.02%; padding-top: 0in;" valign="top" width="73%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">6.375% senior notes due in 2015<font class="_mt">....................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.02%; padding-top: 0in;" valign="bottom" width="13%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">1,016</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.96%; padding-top: 0in;" valign="bottom" width="13%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">911</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 73.02%; padding-top: 0in;" valign="top" width="73%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">7.625% senior notes due in 2016<font class="_mt">....................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.02%; padding-top: 0in;" valign="bottom" width="13%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">1,608</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.96%; padding-top: 0in;" valign="bottom" width="13%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">1,451</p> </td> </tr> <tr> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 73.02%; padding-top: 0in;" valign="top" width="73%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt 10pt; text-indent: -10pt; font-family: 'Times New Roman','serif'; white-space: nowrap;">5.875% senior notes due in 2019<font class="_mt">....................................................................................</font></p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.02%; padding-top: 0in;" valign="bottom" width="13%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">997</p> </td> <td style="padding-right: 0.05in; border-top: 0px; padding-left: 0.05in; padding-bottom: 0in; width: 13.96%; padding-top: 0in;" valign="bottom" width="13%"> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; white-space: nowrap; text-align: right;" align="right">—</p> </td> </tr> </table> </div> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';"> </p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 10pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">We calculated the fair values based on quoted market prices of our senior notes, which is a Level 1 input under the accounting guidance for measuring fair value, on those dates.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 10pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';">Our notes payable and senior secured credit facility mature as follows: $356 million in the remainder of 2009 (including the $327 million of principal remaining on the 8.375% senior notes redeemed in October 2009), $308 million in 2010, $108 million in 2011, $20 million in 2012, $1,886 million in 2013 and $4,500 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 year ended December 31, 2008 and do not currently expect to be required to make a prepayment for the year ending December 31, 2009. The amount of interest accrued related to our outstanding debt was $71 million at September 30, 2009 and $45 million at December 31, 2008.</p> <p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 10pt; text-indent: 0.5in; font-family: 'Times New Roman','serif';"><i>Covenants and Restrictions.</i><font class="_mt"> 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. 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 September 30, 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.</font></p> <!--EndFragment--><!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div> <!-- body --></div> </div><!-- body --></div></div> </div>
Note 5: Borrowings The following table sets forth our outstanding borrowings: Interest Rates at September 30, 2009
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