DIRECTV 2009 Annual Report Download - page 77

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