DIRECTV 2006 Annual Report Download - page 14

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THE DIRECTV GROUP, INC.
PART I
ITEM 1. BUSINESS
The DIRECTV Group, Inc. is a leading provider of digital television entertainment in the United
States and Latin America. Our two business segments, DIRECTV U.S. and DIRECTV Latin America,
which are differentiated by their geographic location, are engaged in acquiring, promoting, selling
and/or distributing digital entertainment programming via satellite to residential and commercial
subscribers.
•DIRECTV U.S. DIRECTV Holdings LLC and its subsidiaries, which we refer to as DIRECTV
U.S., is the largest provider of direct-to-home, or 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, 2006, DIRECTV U.S. had approximately 16 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, a
group of companies that includes our wholly-owned subsidiary, DIRECTV Latin America, LLC,
or DLA LLC, and its wholly-owned subsidiaries, that provide services in countries other than
Brazil and Mexico; Sky Brasil Servicos Ltda., which we refer to as Sky Brazil, of which we own
74%; and Innova, S. de R.L. de C.V., or Sky Mexico, of which we own 41%, and is carried as an
equity method investment. As of December 31, 2006, PanAmericana had approximately
1.4 million subscribers, Sky Brazil had approximately 1.3 million subscribers and Sky Mexico had
approximately 1.4 million subscribers.
In January 2007, we acquired Darlene Investments LLC’s 14% minority interest in DLA LLC for
$325.0 million in cash and resolved all outstanding disputes with Darlene. During 2006, 2005 and 2004,
we completed a series of transactions that reorganized our DTH satellite businesses in Latin America
and during 2005 and 2004 we restructured our company to focus on the DTH satellite businesses by
selling substantially all of our non-strategic businesses and investments, including our approximately
80.4% interest in PanAmSat Corporation and the businesses and assets of Hughes Network
Systems, Inc., or HNS. See below for further discussion of the Latin America transactions and refer to
Part II Item 7 of this Annual Report for more information related to the divestitures of businesses and
investments, including PanAmSat and HNS.
On March 16, 2004, we changed our corporate name from Hughes Electronics Corporation to The
DIRECTV Group, Inc. Effective on March 17, 2004, we changed our ticker symbol on the New York
Stock Exchange, or NYSE, from ‘‘HS’’ to ‘‘DTV.’’ We were incorporated in Delaware in 1977.
News Corporation, through its wholly-owned subsidiary Fox Entertainment Group, Inc., owns
approximately 38% of our outstanding common stock. On December 22, 2006, News Corporation
announced an agreement with Liberty Media Corporation, or Liberty, to exchange certain assets,
including its stake in our company, for News Corporation shares held by Liberty. The transaction is
subject to certain regulatory approvals and must be approved by certain stockholders of News
Corporation, but is expected to be consummated in the second half of 2007.
DIRECTV U.S.
Through DIRECTV U.S., we provide over 16 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.
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