DIRECTV 2008 Annual Report Download - page 16

Download and view the complete annual report

Please find page 16 of the 2008 DIRECTV annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 142

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142

THE DIRECTV GROUP, INC.
PART I
ITEM 1. BUSINESS
The DIRECTV Group, Inc., which we refer to as The DIRECTV Group, the company, we or us,
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, 2008, DIRECTV U.S. had over 17.6 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, 2008, PanAmericana had approximately 2.2 million subscribers, Sky Brazil had
approximately 1.6 million subscribers and Sky Mexico had approximately 1.8 million subscribers.
On February 27, 2008, Liberty Media Corporation, or Liberty Media, and News Corporation
completed a transaction in which Liberty Media acquired News Corporation’s approximately 41%
interest in us, which we refer to as the Liberty Transaction. On April 3, 2008, Liberty Media announced
that it had purchased an additional 78.3 million shares of our common stock in a private transaction.
Currently, Liberty Media owns approximately 53.6% of our outstanding common stock, however Liberty
Media has agreed to limit its voting rights to approximately 47.9%.
In January 2009, Liberty Media filed with the Securities and Exchange Commission, or SEC, a
preliminary proxy statement requesting shareholder approval for a redemption proposal which would
allow Liberty Media to redeem a portion of the outstanding shares of its Liberty Entertainment
common stock, a tracking stock, using shares of a newly formed, wholly owned subsidiary of Liberty
Media, Liberty Entertainment, Inc., or LEI. As described further in the proxy statement, LEI would
hold Liberty Media’s approximately 54% interest in The DIRECTV Group, a 100% interest in each of
FUN Technologies, Inc. and Liberty Sports Holdings LLC, a 73% interest in PicksPal, Inc., a 50%
interest in GSN, LLC and up to $300 million in cash and cash equivalents, together with $2 billion of
indebtedness, and an associated equity collar relating to The DIRECTV Group share acquisition in
April 2008. The redemption proposal is subject to the satisfaction of various conditions including, but
not limited to, an effective registration statement, the receipt of a tax ruling and applicable shareholder
approvals. Successful implementation of the redemption proposal will result in the split-off of LEI as a
separately traded public company.
We were incorporated in Delaware in 1977, and our common stock trades on the The NASDAQ
Global Select Market under the ticker symbol ‘‘DTV.’’
DIRECTV U.S.
Through DIRECTV U.S., we provide over 17.6 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.
3