The DIRECTV Group Announces 2005 Results

-- DIRECTV U.S. Reports Strong Financial Results:

-- Generated Over $3.4 Billion in Revenues in the Fourth Quarter, Bringing Full Year Revenues to $12.2 Billion, or 25% Greater than the Prior Year

-- Operating Profit before Depreciation and Amortization Increased to $442 Million, Leading to Full Year Results of over $1.5 Billion, or Nearly 3 Times 2004 Results

-- Generated Free Cash Flow of $155 Million in the Fourth Quarter, Driving a Record $536 Million for the Full Year of 2005

-- Board of Directors Authorizes Share Repurchase Program of up to $3 Billion

The DIRECTV Group, Inc. (NYSE:DTV) today reported full year 2005net income of $336 million, compared with a net loss of $1.95 billionin 2004, and operating profit of $633 million, improved from anoperating loss of $2.12 billion. Full year revenues increased nearly16% to $13.16 billion, and operating profit before depreciation andamortization(1) improved to $1.49 billion from an operating lossbefore depreciation and amortization of $1.28 billion last year. Inaddition, DIRECTV's Board of Directors has authorized up to a $3billion share repurchase program. DIRECTV expects these repurchases tooccur from time to time, in the open market or in privatetransactions, subject to market conditions.

In the fourth quarter of 2005, net income was $121 million,compared with a net loss of $289 million in the fourth quarter of2004, and operating profit of $219 million improved from an operatingloss of $445 million. In addition, revenues increased 7% to $3.60billion, and operating profit before depreciation and amortizationimproved to $441 million from an operating loss before depreciationand amortization of $164 million in the fourth quarter of last year.

"Fourth quarter results for DIRECTV U.S. reflect our strategy toimprove the quality of our subscriber base and reduce customer churn,while at the same time drive significant revenue and earnings growth.Quarterly revenues increased 15% to $3.4 billion due to our largersubscriber base and a solid 5% ARPU increase in the quarter to$75.53," said Chase Carey, president and CEO. "Operating profit beforedepreciation and amortization of $442 million was up nearly 4 timesover last year's fourth quarter primarily due to the revenue growthand higher operating margin related to improved scale and operatingefficiencies. Importantly, these improvements drove free cash flow to$155 million in the quarter and $536 million for the full year -- anearly $1 billion increase in DIRECTV U.S. free cash flow compared to2004."

Carey continued, "Subscriber growth in the quarter -- althoughbelow expectations -- was consistent with our initiatives to improvethe quality of new subscribers and drive lower churn. In fact, eventhough gross subscriber additions of 965,000 were 13% below lastyear's fourth quarter additions, the number of high-quality subscriberadditions actually increased about 14% over the prior year. Thesesignificant improvements were due to a stricter credit policy andchanges made to our distribution network -- including dealerterminations and new incentive plans -- designed to better aligndealers with our objective to improve the overall credit quality ofDIRECTV customers. With these changes, our average monthly churn rateis starting to decline -- monthly churn was 1.70% in the fourthquarter compared to 1.89% in the third quarter, resulting in netsubscriber additions of 200,000. A key priority in 2006 is to continueimproving the quality of new subscribers while driving furtherreductions in churn."

Carey continued, "Just as 2004 was an important year for DIRECTVin terms of restructuring the business and selling non-core assets,2005 was important because we built out critical infrastructure thatwill provide us with the foundation for future growth. For example, welaunched three new satellites, including two that will broadcasthigh-definition local channels, and we also introduced the industry'sfirst MPEG-4 high-definition receiver and one of the most advanceddigital video recorders. With these assets, we believe we are in anexcellent position to extend our video leadership in 2006 through theintroduction of more high-definition programming, original andcompelling content, a video-on-demand service, new interactiveservices and an enhanced NFL Sunday Ticket(TM) package."

Carey concluded, "We are pleased to announce a share repurchaseprogram of up to $3 billion. This repurchase program reflects ourstrong balance sheet and confidence in continued strong DIRECTVrevenue, earnings and free cash flow growth, as well as our beliefthat our stock price is far below the intrinsic value of our company."

THE DIRECTV GROUP'S OPERATIONAL REVIEW

Fourth Quarter Review

In the fourth quarter of 2005, The DIRECTV Group's revenues of$3.60 billion increased 7%, compared to the fourth quarter of 2004,primarily due to strong DIRECTV U.S. subscriber growth and higheraverage monthly revenue per subscriber (ARPU). These changes werepartially offset by the deconsolidation of the results of HughesNetwork Systems (HNS) due to its sale.
Three Months Twelve Months
The DIRECTV Group Ended December 31, Ended December 31,
------------------ ------------------
2005 2004 2005 2004
-------------------------------- ------- -------- ------- --------
Revenues ($M) $ 3,596 $ 3,362 $13,165 $ 11,360
-------------------------------- ------- -------- ------- --------
Operating Profit (Loss) Before
Depreciation and Amortization
($M) 441 (164) 1,486 (1,281)
-------------------------------- ------- -------- ------- --------
Operating Profit (Loss) ($M) 219 (445) 633 (2,119)
-------------------------------- ------- -------- ------- --------
Net Income (Loss) ($M) 121 (289) 336 (1,949)
-------------------------------- ------- -------- ------- --------
Net Income (Loss) Per Common
Share ($) 0.09 (0.21) 0.24 (1.41)
-------------------------------- ------- -------- ------- --------
Free Cash Flow(1) 195 (64) 283 (795)
-------------------------------- ------- -------- ------- --------

The fourth quarter change in operating profit before depreciationand amortization to $441 million was primarily due to theaforementioned increased revenues combined with higher DIRECTV U.S.operating margin resulting from lower subscriber acquisition costs andthe stabilizing of expenses in key areas such as upgrade and retentionmarketing and general and administrative (G&A). The comparison wasalso impacted by fourth quarter 2004 charges of $191 million for thesale of HNS and $45 million related to the shut-down of DIRECTV LatinAmerica's Mexico operations. Operating profit of $219 million improveddue to the higher operating profit before depreciation andamortization, as well as the absence of depreciation and amortizationexpense at HNS.

Net income of $121 million in the fourth quarter of 2005 improveddue to the increased operating profit and higher interest income dueto larger average cash balances, partially offset by higher income taxexpense associated with the pre-tax income.

Full Year Review

The DIRECTV Group's full year 2005 revenues of $13.16 billionincreased 16% from 2004 primarily due to strong DIRECTV U.S.subscriber and ARPU growth, as well as the consolidation of the fulleconomics of the former National Rural Telecommunications Cooperative(NRTC) and Pegasus subscribers purchased by DIRECTV U.S. in mid-2004.These changes were partially offset by lower revenues at HNS due tothe sale of its businesses in 2004 and 2005.

Operating profit before depreciation and amortization of $1.49billion and operating profit of $633 million in 2005 improvedprimarily due to the $1.47 billion SPACEWAY impairment charge(2) takenin 2004, increased DIRECTV U.S. revenues in 2005 combined with higheroperating margins resulting primarily from the stabilizing of costs inkey areas such as subscriber acquisition and upgrade and retentionmarketing, and a $191 million fourth quarter 2004 charge related tothe sale of HNS. Also impacting the comparison were charges in the2004 period of $170 million related to severance, pension benefits andemployee retention plans and a $70 million non-cash gain in 2005 fromthe sale of DIRECTV Latin America subscribers in Mexico.

The change in 2005 net income to $336 million was due to thehigher operating profit and two non-cash after-tax charges included inthe 2004 results: $724 million related to the sale of PanAmSat(reflected in "Income (loss) from discontinued operations, net oftaxes" in the Consolidated Statements of Operations) and $311 millionresulting from a change in the DIRECTV U.S. method of accounting forsubscriber acquisition, upgrade and retention costs (reflected in"Cumulative effect of accounting change, net of taxes" in theConsolidated Statements of Operations). These changes were partiallyoffset by higher 2005 income tax expense related to the pre-taxearnings and a first quarter 2004 pre-tax gain of $387 million for thesale of approximately 19 million shares of XM Satellite Radio(recorded in "Other, net" in the Consolidated Statements ofOperations).

SEGMENT FINANCIAL REVIEW

DIRECTV U.S. Segment
Three Months Twelve Months
DIRECTV U.S. Ended December 31, Ended December 31,
------------------ ------------------
2005 2004 2005 2004
-------------------------------- ------- -------- ------- --------
Revenue ($M) $ 3,406 $ 2,960 $12,216 $ 9,764
-------------------------------- ------- -------- ------- --------
Average Monthly Revenue per
Subscriber (ARPU) ($) 75.53 71.92 69.61 66.95
-------------------------------- ------- -------- ------- --------
Operating Profit Before
Depreciation and Amortization
($M) 442 118 1,500 583
-------------------------------- ------- -------- ------- --------
Operating Profit (Loss) ($M) 260 (65) 802 22
-------------------------------- ------- -------- ------- --------
Free Cash Flow(1) ($M) 155 (23) 536 (247)(2)
-------------------------------- ------- -------- ------- --------
Subscriber Data(3):
-------------------------------- ------- -------- -------- --------
Gross Platform Subscriber
Additions (000's) 965 1,103 4,170 4,218
-------------------------------- ------- -------- ------- --------
Average Monthly Platform
Subscriber Churn 1.70% 1.60% 1.70% 1.59%
-------------------------------- ------- -------- ------- --------
Net Platform Subscriber
Additions (000's) 200 444 1,193 1,728
-------------------------------- ------- -------- ------- --------
Cumulative Subscribers (000's) 15,133 13,940 15,133 13,940
-------------------------------- ------- -------- ------- --------

(1) See footnote 3 below for the definition of free cash flow.
(2) Includes $200 million of cash received for a set-top receiver
supply and development agreement with Thomson.
(3) The amounts presented for 2004 and 2005 include the results
from the former NRTC and Pegasus territories.

Fourth Quarter Review

DIRECTV U.S. gross subscriber additions of 965,000 were 13% lowerthan the same period a year ago primarily due to a more stringentcredit policy implemented during the second quarter of 2005. Averagemonthly churn in the quarter increased to 1.70% principally due tohigher involuntary churn from customers with lower credit scoresattained in 2004 and early 2005, a more competitive marketplace and10,000 disconnected subscribers associated with Hurricane Katrina.After accounting for this churn, DIRECTV U.S. added 200,000 netsubscribers in the quarter. Over the past twelve months, thecumulative number of DIRECTV subscribers increased 9% to 15.13million.

Fourth quarter revenues increased 15% to $3.41 billion due tocontinued strong subscriber and ARPU growth. ARPU increased 5% to$75.53 from the same period last year principally due to programmingpackage price increases and higher mirroring fees from an increase inthe average number of set-top receivers per customer.

Operating profit before depreciation and amortization nearlyquadrupled to $442 million and operating profit increased to $260million due to the revenue increase combined with higher operatingmargins primarily resulting from lower subscriber acquisition costsdue to a decline in gross subscriber additions and lower acquisitioncosts per subscriber. Also contributing to the margin improvement wasthe stabilizing of costs in key areas such as upgrade and retentionmarketing and general and administrative (G&A) costs. Theseimprovements were partially offset by a $10 million charge related toHurricanes Katrina, Wilma and Rita.

Full Year Review

DIRECTV U.S. gross subscriber additions in 2005 of 4,170,000 wereslightly lower than a year ago primarily due to more stringent creditpolicies implemented during the second quarter of 2005. Averagemonthly churn during the year increased to 1.70% principally due tohigher involuntary churn from customers with lower credit scoresattained in 2004 and early 2005, and a more competitive marketplace.After accounting for this churn, DIRECTV U.S. added 1,193,000 netsubscribers in 2005.

DIRECTV U.S. generated annual revenues of $12.22 billion in 2005,an increase of 25% compared to the prior year's revenues. The increasewas due to continued strong subscriber and ARPU growth, as well as theconsolidation of the full economics of the former NRTC and Pegasussubscribers purchased in late 2004. ARPU increased 4% to $69.61 fromlast year principally due to programming package price increases andhigher mirroring fees from an increase in the average number ofset-top receivers per customer. Excluding the dilutive impact from theconsolidation of the former NRTC and Pegasus subscribers primarily dueto the lower ARPU received from these subscribers, ARPU would haveincreased approximately 6%.

Operating profit before depreciation and amortization nearlytripled to $1.50 billion and operating profit increased to $802million due to the revenue increase combined with higher operatingmargins primarily resulting from the stabilizing of costs in key areassuch as subscriber acquisition and upgrade and retention marketing.This improvement was partially offset by charges of $24 millionrelated to Hurricanes Katrina, Wilma and Rita. Operating profit wasnegatively impacted by higher amortization expense resulting fromintangible assets recorded as part of the NRTC and Pegasustransactions.

DIRECTV Latin America Segment

On October 11, 2004, The DIRECTV Group announced a series oftransactions with News Corporation, Grupo Televisa, Globo and LibertyMedia that are designed to strengthen the operating and financialperformance of DIRECTV Latin America by consolidating theDirect-To-Home (DTH) platforms of DIRECTV Latin America and Sky into asingle platform in each of the major territories served in the region.In aggregate, The DIRECTV Group is paying approximately $580 millionin cash for the News Corporation and Liberty Media equity stakes inthe Sky platforms, of which approximately $398 million was paid inOctober 2004, with the remaining amount expected to be paid in 2006.

In Mexico, as of December 31, 2005, DIRECTV Latin America hadcompleted the migration of 144,000 subscribers to the Sky Mexicoplatform and ceased operations. During 2005, DIRECTV Latin Americarecorded a non-cash gain of $70 million, $12 million of which wasrecorded in the fourth quarter, related to the successful migrationand retention of a portion of the Mexico subscribers. At the close ofthe transaction -- which is expected to occur in the first quarter2006 -- an additional non-cash gain of approximately $58 million isexpected to be recognized.

In Brazil, DIRECTV Brazil and Sky Brazil have agreed to merge,with DIRECTV Brazil customers migrating to the Sky Brazil platform.The transactions in Brazil are subject to local regulatory approval,which has not yet been granted. In the rest of the region, The DIRECTVGroup began consolidating Sky's DTH satellite platforms in Colombiaand Chile, resulting in the addition of approximately 89,000subscribers beginning in the fourth quarter of 2004. During 2005,DIRECTV Latin America completed the migration of the majority of thesesubscribers to the DIRECTV Latin America platform.
Three Months Twelve Months
DIRECTV Latin America Ended December 31, Ended December 31,
------------------ ------------------
2005 2004 2005 2004
-------------------------------- ------- -------- ------- --------
Revenue ($M) $ 190 $ 182 $ 742 $ 675
-------------------------------- ------- -------- ------- --------
Operating Profit (Loss) Before
Depreciation and
Amortization(1)($M) 19 (25) 142 46
-------------------------------- ------- -------- ------- --------
Operating Loss(1) ($M) (21) (76) (19) (142)
-------------------------------- ------- -------- ------- --------
Net Subscriber Additions(2)
(000's) 39 57 149 124
-------------------------------- ------- -------- ------- --------
Cumulative Subscribers(3)
(000's) 1,593 1,646 1,593 1,646
-------------------------------- ------- -------- ------- --------

(1) The fourth quarter and full year 2005 results include a non-cash
gain of $12 million and $70 million, respectively, due to the
successful migration of a portion of DIRECTV Latin America
subscribers in Mexico to Sky Mexico.
(2) Excludes Mexico and the one-time impact from the Sky Chile and
Sky Colombia acquisitions.
(3) Includes Mexico, however, as of June 30 2005, there were no
remaining DIRECTV Latin America subscribers in Mexico.

Fourth Quarter Review

In the fourth quarter of 2005, DIRECTV Latin America added 39,000net subscribers. Revenues for DIRECTV Latin America increased 4% to$190 million, compared to last year's fourth quarter, due to a largersubscriber base in Argentina, Venezuela and Puerto Rico and higherARPU, driven primarily by select price increases in the region and theappreciation of the Brazilian real. These improvements were partiallyoffset by lower revenues due to the shut-down of DIRECTV LatinAmerica's operations in Mexico. The improvement in fourth quarter 2005operating profit before depreciation and amortization to $19 millionand operating loss to $21 million was primarily attributable to a $45million charge recorded in 2004 related to the shut-down of DIRECTVLatin America's operations in Mexico, principally for assetwrite-downs, severance and other shut-down-related costs, as well asthe $12 million gain recorded in 2005 for the sale of DIRECTV LatinAmerica's subscribers in Mexico. This improvement was partially offsetby charges in 2005 totaling $15 million for transaction-related costsin Colombia, the change from a lease model to a sales model in PuertoRico, and foreign exchange costs in Venezuela.

Full Year Review

In 2005, DIRECTV Latin America added 149,000 net subscribers.Revenues for DIRECTV Latin America increased 10% to $742 million,compared to last year, driven primarily by a larger subscriber base inArgentina, Venezuela and Puerto Rico, higher ARPU due to select priceincreases in the region and by the appreciation of the Brazilian real,as well as the consolidation of Sky Chile and Sky Colombia. Theseimprovements were partially offset by lower revenues due to theshut-down of DIRECTV Latin America's operations in Mexico. Theimprovement in 2005 operating profit before depreciation andamortization to $142 million and operating loss to $19 million wasprimarily attributable to the $70 million gain recorded for the saleof DIRECTV Latin America's subscribers in Mexico, as well as $45million in 2004 charges primarily for asset write-downs, severance andother shut-down-related costs in Mexico. This improvement waspartially offset by charges in 2005 totaling $25 million associatedwith the change from a lease model to a sales model in Puerto Rico andtransaction-related costs in Colombia.

Network Systems Segment
Three Months Twelve Months
HNS Ended December 31, Ended December 31,
------------------ ------------------
2005 2004 2005 2004
-------------------------------- ------- -------- ------- --------
Revenue ($M) $ 0 $ 223 $ 211 $ 1,099
-------------------------------- ------- -------- ------- --------
Operating Loss Before
Depreciation and Amortization
($M) 0 (184) (61) (1,683)
-------------------------------- ------- -------- ------- --------
Operating Loss ($M) 0 (232) (61) (1,779)
-------------------------------- ------- -------- ------- --------

On April 22, 2005, The DIRECTV Group completed the sale of a 50%interest in HNS LLC, an entity that owns substantially all of theassets of HNS, to SkyTerra Communications, Inc., an affiliate ofApollo Management, L.P., which is a New York-based private equityfirm. At the close of the transaction, The DIRECTV Group received $246million in cash and 300,000 shares of SkyTerra common stock valued atabout $11 million. As of the date of this sale, The DIRECTV Group nolonger consolidated the results of HNS and accounted for 50% of HNS'net income or loss as an equity investment in "Other, net" in theConsolidated Statements of Operations. In January 2006, The DIRECTVGroup completed the sale of the remaining 50% interest in HNS LLC toSkyTerra and received $110 million in cash. A gain of approximately$25 million related to this sale is expected to be recorded in thefirst quarter of 2006.

The fourth quarter 2004 operating loss before depreciation andamortization and operating loss was principally due to a $191 millionimpairment write-down of HNS assets to their fair value based on thesales price agreed upon with SkyTerra for the initial 50% sale of HNSand a $13 million severance charge also associated with the sale. Thefull year 2004 operating loss before depreciation and amortization andoperating loss also includes an impairment charge of $1.47 billion forthe SPACEWAY assets.

CONSOLIDATED BALANCE SHEET AND CASH FLOW
The DIRECTV Group December 31, December 31,
2005 2004
------------------------------------- --------------- --------------
Cash, Cash Equivalents & Short-Term
Investments ($B) $ 4.38 $ 2.83
------------------------------------- --------------- --------------
Total Debt ($B) 3.42 2.43
------------------------------------- --------------- --------------
Net Debt (Cash) ($B) (0.96) (0.40)
------------------------------------- --------------- --------------
Free Cash Flow(1) ($M) 283 (795)
------------------------------------- --------------- --------------

(1) See footnote 3 below for the definition of free cash flow.

The DIRECTV Group's consolidated cash and short-term investmentbalance increased by $1.55 billion to $4.38 billion and total debtincreased by $986 million to $3.42 billion, compared to the December31, 2004, balances due primarily to the debt refinancings discussedbelow. Also impacting the change in the cash balance was cashgenerated from operations and the proceeds from the sale of businessesand investments, which were partially offset by cash paid forproperty, equipment and satellites.

In April 2005, DIRECTV U.S. entered into a new senior securedcredit facility. The new facility consists of a $1.5 billioneight-year Term Loan B (subsequently reduced to $1.0 billion, asdescribed below) and a $500 million six-year Term Loan A (both ofwhich are fully funded), as well as a $500 million undrawn six-yearrevolving credit facility. The interest rate on each of the term loansis currently LIBOR plus 1.50% and 1.25%, respectively, per annum. Theproceeds of the term loans were used to repay an existing $1.0 billionsenior secured loan and pay related financing costs, with theremaining proceeds to be used for general corporate purposes.

In addition, DIRECTV U.S. redeemed $490 million, plus interest anda redemption premium, of its 8 3/8% senior notes in May 2005. In June,DIRECTV U.S. raised an additional $1 billion in 6 3/8% senior notes,of which $500 million of the proceeds was used to pay down the newTerm Loan B discussed above and $500 million remains available forgeneral corporate purposes.

CONFERENCE CALL INFORMATION

A live webcast of The DIRECTV Group's fourth quarter 2005 earningscall will be available on the company's website at www.directv.com.The call will begin at 11:00 a.m. ET, today, February 8, 2006. Thedial in number for the call is 973-582-2751. The webcast will bearchived on our website, and a replay of the call will be available(dial in number: 973-341-3080, code: 6921009) beginning at 3:30 p.m.ET today through 11:59 p.m. ET Wednesday, February 15, 2006.
FOOTNOTES

(1) Operating profit (loss) 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, should be used in conjunction with other GAAP
financial measures and is not presented as an alternative measure
of operating results, as determined in accordance with accounting
principles generally accepted in the United States of America.
Please see each of The DIRECTV Group's and DIRECTV Holdings LLC's
Annual Reports on Form 10-K for the year ended December 31, 2005,
for further discussion of operating profit (loss) before
depreciation and amortization. Operating profit before
depreciation and amortization margin is calculated by dividing
operating profit before depreciation and amortization by total
revenues.

(2) In 2004, The DIRECTV Group announced plans to significantly
expand its programming capacity for local and national
high-definition channels by launching four new satellites over a
3-year period. The first two of these satellites, SPACEWAY 1 and
SPACEWAY 2, were reconfigured during 2004 to offer video services
as their primary application for DIRECTV U.S. This decision
triggered a requirement to test the SPACEWAY assets for
impairment. A valuation analysis showed that the assets were
impaired and their book value exceeded fair value for use in the
Company's U.S. direct-to-home broadcast business by approximately
$1.47 billion ($903 million after-tax), which was recorded as a
non-cash charge in the third quarter of 2004 (reflected in "(Gain)
loss from asset sales and impairment charges, net" in the
Consolidated Statements of Operations).

(3) Free cash flow, which is a financial measure that is not
determined in accordance with GAAP, is 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" on 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. The DIRECTV Group and DIRECTV
U.S. management use free cash flow to evaluate the cash generated
by DIRECTV U.S.' 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 and for additional capital expenditures. The
DIRECTV Group and DIRECTV U.S. believe this measure is useful to
investors, along with other GAAP measures (such as cash flows from
operating and investing activities), to compare DIRECTV U.S.'
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 our current
and projected subscriber base to fund required and discretionary
spending and to help determine the financial value of the company.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

NOTE: This release may include or incorporate by reference certainstatements that we believe are, or may be considered to be,"forward-looking statements" within the meaning of various provisionsof the Securities Act of 1933 and of the Securities Exchange Act of1934. These forward-looking statements generally can be identified byuse of statements that include phrases such as "believe," "expect,""estimate," "anticipate," "intend," "plan," "foresee," "project" orother similar words or phrases. Similarly, statements that describeour objectives, plans or goals also are forward-looking statements.All of these forward-looking statements are subject to certain risksand uncertainties that could cause actual results to differ materiallyfrom historical results or from those expressed or implied by therelevant forward-looking statement. Such risks and uncertaintiesinclude, but are not limited to: economic conditions; product demandand market acceptance; ability to simplify aspects of our businessmodel, improve customer service, create new and desirable programmingcontent and interactive features and achieve anticipated economies ofscale; government action; local political or economic developments inor affecting countries where we have operations, including political,economic and social uncertainties in many Latin American countries inwhich DTVLA operates; foreign currency exchange rates; competition;the outcome of legal proceedings; ability to achieve cost reductions;ability to renew programming contracts under favorable terms;technological risk; limitations on access to distribution channels;the success and timeliness of satellite launches; in-orbit performanceof satellites, including technical anomalies; loss of uninsuredsatellites; theft of satellite programming signals; and our ability toaccess capital to maintain our financial flexibility. We urge you toconsider these factors carefully in evaluating the forward-lookingstatements.
NON-GAAP FINANCIAL RECONCILIATION SCHEDULES
(Numbers may not add due to rounding)

The following table reconciles Operating Profit Before Depreciation
and Amortization to Operating Profit (Loss).(a)

Dollars in Millions Three Months Twelve Months
Ended December 31, Ended December 31,
-------------------------------- ------------------ ------------------
2005 2004 2005 2004
-------------------------------- ------- -------- ------- --------
The DIRECTV Group
Operating Profit (Loss) $ 219 $ (445) $ 633 $ (2,119)
Plus: Depreciation &
Amortization (D&A) 222 281 853 838
------- -------- ------- --------
Operating Profit (Loss) Before
D&A $ 441 $ (164) $ 1,486 $ (1,281)
-------------------------------- ======= ======== ======= ========

(a) For a reconciliation of this non-GAAP financial measure for each
of our segments, please see the Notes to the Consolidated
Financial Statements which will be included in The DIRECTV Group's
Annual Report on Form 10-K for the year ended December 31, 2005,
which is expected to be filed with the SEC in March 2006.
Additional DIRECTV U.S. non-GAAP financial reconciliation
schedules are included with the DIRECTV Holdings LLC's stand-alone
financial statements included in this earnings release.


The following tables reconcile Free Cash Flow to "Net Cash Provided by
Operating Activities."

Dollars in Millions Three Months Twelve Months
Ended December 31, Ended December 31,
2005 2004 2005 2004
-------------------------------- ------- -------- ------- --------
The DIRECTV Group
Free Cash Flow $ 195 $ (64) $ 283 $ (795)
Plus: Cash paid for property &
equipment 152 153 489 476
Plus: Cash paid for satellites 121 106 400 547
------- -------- ------- --------
Net Cash Provided by Operating
Activities 468 196 $ 1,172 $ 229
-------------------------------- ======= ======== ======= ========


Dollars in Millions Three Months Twelve Months
Ended December 31, Ended December 31,
-------------------------------- ------------------ ------------------
2005 2004 2005 2004
-------------------------------- ------- -------- ------- --------
DIRECTV U.S.
Free Cash Flow $ 155 $ (23) $ 536 $ (247)
Plus: Cash paid for property &
equipment 130 76 381 249
Plus: Cash paid for satellites 120 87 367 423
------- -------- ------- --------
Net Cash Provided by Operating
Activities $ 406 $ 140 $ 1,283 $ 425
-------------------------------- ======= ======== ======= ========

DIRECTV is the nation's leading digital multichannel televisionservice provider, with over 15.1 million customers. DIRECTV and theCyclone Design logo are registered trademarks of DIRECTV, Inc. DIRECTVis a world-leading provider of digital multichannel televisionentertainment. DIRECTV (NYSE: DTV) is approximately 34% owned by NewsCorporation. For more information visit www.directv.com.
THE DIRECTV GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)

Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- ---------------------
2005 2004 2005 2004
-------- -------- --------- ---------

Revenues $3,595.5 $3,362.1 $13,164.5 $11,360.0
---------------------------- -------- -------- --------- ---------

Operating Costs and Expenses,
exclusive of depreciation
and amortization expense
shown separately below
Broadcast programming and
other costs of sale 1,594.9 1,532.4 5,485.3 4,996.5
Subscriber service expenses 267.8 231.0 981.9 779.9
Subscriber acquisition
costs:
Third-party customer
acquisitions 448.2 559.3 2,053.9 2,009.8
Direct customer
acquisitions 189.7 194.3 697.7 694.0
Upgrade and retention costs 342.5 334.2 1,117.0 1,002.4
Broadcast operations
expenses 63.3 52.8 254.1 196.7
General and administrative
expenses 260.5 395.1 1,133.9 1,268.9
(Gain) loss from asset
sales and impairment
charges, net (12.0) 227.1 (45.1) 1,693.2
Depreciation and
amortization expense 221.8 281.3 853.2 838.0
---------------------------- -------- -------- --------- ---------
Total Operating Costs and
Expenses 3,376.7 3,807.5 12,531.9 13,479.4
---------------------------- -------- -------- --------- ---------

Operating Profit (Loss) 218.8 (445.4) 632.6 (2,119.4)

Interest income 52.4 17.6 150.3 50.6
Interest expense (57.7) (61.6) (237.6) (131.9)
Reorganization income - 0.1 - 43.0
Other, net 6.3 - (65.0) 397.6
---------------------------- -------- -------- --------- ---------

Income (Loss) From Continuing
Operations Before Income
Taxes, Minority Interests and
Cumulative Effect of
Accounting Change 219.8 (489.3) 480.3 (1,760.1)

Income tax (expense) benefit (99.6) 193.3 (173.2) 690.6
Minority interests in net
(earnings) losses of
subsidiaries 1.0 7.6 (2.5) 13.1
---------------------------- -------- -------- --------- ---------

Income (loss) from
continuing operations
before cumulative effect of
accounting change 121.2 (288.4) 304.6 (1,056.4)
Income (loss) from
discontinued operations,
net of taxes - (0.1) 31.3 (582.3)
---------------------------- -------- -------- --------- ---------

Income (loss) before
cumulative effect of
accounting change 121.2 (288.5) 335.9 (1,638.7)
Cumulative effect of
accounting change, net of
taxes - - - (310.5)
---------------------------- -------- -------- --------- ---------

Net Income (Loss) $ 121.2 $ (288.5) $ 335.9 $(1,949.2)
============================ ======== ======== ========= =========

Basic and Diluted Earnings (Loss) Per
Common Share:
Income (loss) from
continuing operations
before cumulative effect of
accounting change $ 0.09 $ (0.21) $ 0.22 $ (0.77)
Income (loss) from
discontinued operations,
net of taxes - - 0.02 (0.42)
Cumulative effect of
accounting change, net of
taxes - - - (0.22)
---------------------------- -------- -------- --------- ---------
Net Income (Loss) $ 0.09 $ (0.21) $ 0.24 $ (1.41)
============================ ======== ======== ========= =========

Weighted average number of common
shares outstanding (in millions)
Basic 1,390.9 1,385.7 1,388.4 1,384.8
Diluted 1,397.0 1,385.7 1,394.8 1,384.8
============================ ======== ======== ========= =========


THE DIRECTV GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
(Unaudited)

December 31, December 31,
ASSETS 2005 2004
------------------------------------- --------------- --------------
Current Assets
Cash and cash equivalents $ 3,701.3 $ 2,307.4
Short-term investments 683.2 522.6
Accounts and notes receivable, net of
allowances of $114.9 and $121.7 1,033.2 918.6
Inventories, net 283.1 124.4
Prepaid expenses and other 395.6 377.0
Assets of business held for sale - 521.1
------------------------------------- --------------- --------------

Total Current Assets 6,096.4 4,771.1
Satellites, net 1,875.5 1,560.4
Property and Equipment, net 1,199.2 1,135.1
Goodwill 3,045.3 3,044.1
Intangible Assets, net 1,878.0 2,227.1
Investments and Other Assets 1,535.8 1,586.6
------------------------------------- --------------- --------------

Total Assets $ 15,630.2 $ 14,324.4
===================================== =============== ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------- ---------------- ---------------
Current Liabilities
Accounts payable $ 1,607.0 $ 1,290.9
Accrued liabilities and other 934.8 881.7
Unearned subscriber revenue and
deferred credits 276.6 261.5
Short-term borrowings and current
portion of long-term debt 9.8 19.8
Liabilities of business held for sale - 240.6
------------------------------------- --------------- --------------

Total Current Liabilities 2,828.2 2,694.5
Long-Term Debt 3,405.2 2,409.5
Other Liabilities and Deferred
Credits 1,407.6 1,665.4
Commitments and Contingencies
Minority Interests 49.2 47.9
Stockholders' Equity 7,940.0 7,507.1
------------------------------------- --------------- --------------

Total Liabilities and Stockholders'
Equity $ 15,630.2 $ 14,324.4
===================================== =============== ==============


THE DIRECTV GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)

Twelve Months Ended December 31,
2005 2004
------------------------------------- ---------------- --------------
Cash Flows from Operating Activities
Income (Loss) from continuing
operations before cumulative effect
of accounting change $ 304.6 $ (1,056.4)
Adjustments to reconcile income
(loss) from continuing operations
before cumulative effect of
accounting change to net cash
provided by operating activities:
Depreciation and amortization 853.2 838.0
(Gain) loss from asset sales and
impairment charges, net (45.1) 1,693.2
Net (gain) loss from sale of
investments 0.6 (396.5)
Loss on disposal of fixed assets 2.5 24.9
Stock-based compensation expense 40.6 57.1
Write-off of debt issuance costs 19.0 -
Deferred income taxes and other 188.1 (850.4)
Accounts receivable credited
against Pegasus purchase price - (220.2)
Change in other operating assets
and liabilities
Accounts and notes receivable (129.5) 18.8
Inventories (158.7) 23.2
Prepaid expenses and other (34.7) (20.8)
Accounts payable 281.3 (46.7)
Accrued liabilities 30.8 (101.7)
Unearned subscriber revenue and
deferred credits 15.1 60.7
Other (195.9) 205.4
------------------------------------- ---------------- --------------
Net Cash Provided by Operating
Activities 1,171.9 228.6
------------------------------------- ---------------- --------------
Cash Flows from Investing Activities
Purchase of short-term investments (4,672.7) (4,255.3)
Sale of short-term investments 4,512.1 4,077.5
Investment in companies, net of cash
acquired (1.1) (388.5)
Cash paid for acquired assets (3.3) (965.8)
Cash paid for property and equipment (489.2) (476.4)
Cash paid for satellites (399.5) (546.7)
Proceeds from sale of investments 113.1 510.5
Proceeds from sale of businesses 246.0 2,918.4
Other, net (28.7) 13.1
------------------------------------- ---------------- --------------
Net Cash Provided by (Used in)
Investing Activities (723.3) 886.8
------------------------------------- ---------------- --------------
Cash Flows from Financing Activities
Net decrease in short-term borrowings (2.5) (6.2)
Long-term debt borrowings 3,003.3 1.2
Repayment of long-term debt (2,005.5) (214.8)
Debt issuance costs (4.7) (2.4)
Repayment of other long-term
obligations (90.5) (43.5)
Stock options exercised 45.2 23.0
------------------------------------- ---------------- --------------
Net Cash Provided by (Used in)
Financing Activities 945.3 (242.7)
------------------------------------- ---------------- --------------
Net increase in cash and cash
equivalents 1,393.9 872.7
Cash and cash equivalents at
beginning of the year 2,307.4 1,434.7
------------------------------------- ---------------- --------------
Cash and cash equivalents at the end
of the year $ 3,701.3 $ 2,307.4
------------------------------------- ---------------- --------------

Supplemental Cash Flow Information
Interest paid $ 239.5 $ 128.5
Income taxes paid (refunded) 13.2 (49.2)


THE DIRECTV GROUP, INC.
SELECTED SEGMENT DATA
(Dollars in Millions)
(Unaudited)

Three Months Twelve Months
Ended December 31, Ended December 31,
------------------ --------------------
2005 2004 2005 2004
----------------------------------------------------------------------
DIRECTV U.S.
Revenues $3,406.4 $2,959.7 $12,216.1 $ 9,763.9
Operating Profit Before
Depreciation and
Amortization(1) 442.2 117.9 1,500.2 583.1
Operating Profit Before
Depreciation and
Amortization Margin(1) 13.0% 4.0% 12.3% 6.0%
Operating Profit (Loss) $ 259.8 $ (65.3) $ 802.0 $ 21.9
Operating Profit Margin 7.6% N/A 6.6% 0.2%
Depreciation and
Amortization $ 182.4 $ 183.2 $ 698.2 $ 561.2
Capital Expenditures(2) 235.1 162.9 782.0 671.5

----------------------------------------------------------------------
DIRECTV LATIN AMERICA
Revenues $ 189.5 $ 182.0 $ 742.1 $ 675.2
Operating Profit (Loss)
Before Depreciation and
Amortization(1) 19.4 (25.2) 141.5 45.9
Operating Profit Before
Depreciation and
Amortization Margin(1) 10.2% N/A 19.1% 6.8%
Operating Loss $ (21.2) $ (76.4) $ (18.7) $ (142.0)
Depreciation and
Amortization 40.6 51.2 160.2 187.9
Capital Expenditures(2) 21.6 21.7 90.4 81.7

----------------------------------------------------------------------
NETWORK SYSTEMS
Revenues $ - $ 223.3 $ 211.4 $ 1,099.1
Operating Loss Before
Depreciation and
Amortization(1) - (184.1) (60.8) (1,682.9)
Operating Loss - (231.7) (60.8) (1,778.5)
Depreciation and
Amortization - 47.6 - 95.6
Capital Expenditures(2) - 49.5 18.1 132.1

----------------------------------------------------------------------
ELIMINATIONS and OTHER
Revenues $ (0.4) $ (2.9) $ (5.1) $ (178.2)
Operating Loss Before
Depreciation and
Amortization(1) (21.0) (72.7) (95.1) (227.5)
Operating Loss (19.8) (72.0) (89.9) (220.8)
Depreciation and
Amortization (1.2) (0.7) (5.2) (6.7)
Capital Expenditures(2) 1.0 25.3 33.2 137.8

----------------------------------------------------------------------
TOTAL
Revenues $3,595.5 $3,362.1 $13,164.5 $11,360.0
Operating Profit (Loss)
Before Depreciation and
Amortization(1) 440.6 (164.1) 1,485.8 (1,281.4)
Operating Profit Before
Depreciation and
Amortization Margin(1) 12.3% N/A 11.3% N/A
Operating Profit (Loss) $ 218.8 $ (445.4) $ 632.6 $(2,119.4)
Operating Profit Margin 6.1% N/A 4.8% N/A
Depreciation and
Amortization $ 221.8 $ 281.3 $ 853.2 $ 838.0
Capital Expenditures(2) 257.7 259.4 923.7 1,023.1

======================================================================

(1)See footnote 1 above.
(2)Capital expenditures include cash paid and amounts accrued during
the period for property, equipment and satellites.


The Following Reflects DIRECTV U.S.' Financial Statements and Other
Data as a Stand-Alone Entity

DIRECTV HOLDINGS LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Millions)
(Unaudited)

Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- --------------------
2005 2004 2005 2004
--------- -------- ---------- --------

Revenues $3,406.4 $2,959.7 $12,216.1 $9,763.9
------------------------------ --------- --------- ---------- --------

Operating Costs and Expenses,
exclusive of depreciation
and amortization expense
shown separately below
Programming and other costs 1,522.1 1,320.3 5,050.1 4,010.5
Subscriber service expenses 255.3 220.2 935.4 740.2
Subscriber acquisition
costs:
Third-party customer
acquisitions 431.9 549.4 1,999.4 1,960.8
Direct customer
acquisitions 184.7 188.6 676.4 684.1
Upgrade and retention costs 339.8 332.0 1,106.5 993.2
Broadcast operations
expenses 35.7 31.3 145.8 129.7
General and administrative
expenses 194.7 200.0 802.3 662.3
Depreciation and amortization
expense 182.4 183.2 698.2 561.2
------------------------------ --------- --------- ---------- --------
Total Operating Costs and
Expenses 3,146.6 3,025.0 11,414.1 9,742.0
------------------------------ --------- --------- ---------- --------

Operating Profit (Loss) 259.8 (65.3) 802.0 21.9

Interest expense, net (39.3) (55.6) (201.9) (192.1)
Other expense (0.3) -- (66.7) --
------------------------------ --------- --------- ---------- --------

Income (Loss) Before Income
Taxes and Cumulative Effect
of Accounting Change 220.2 (120.9) 533.4 (170.2)

Income tax (expense) benefit (87.9) 43.4 (208.1) 61.3
------------------------------ --------- --------- ---------- --------

Income (loss) before
cumulative effect of
accounting change 132.3 (77.5) 325.3 (108.9)
Cumulative effect of
accounting change, net of
taxes -- -- -- (311.5)
------------------------------ --------- --------- ---------- --------

Net Income (Loss) $ 132.3 $ (77.5) $ 325.3 $ (420.4)
============================== ========= ========= ========== ========


DIRECTV HOLDINGS LLC
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
(Unaudited)

December 31,
-------------------------------
ASSETS 2005 2004
-------------------------------------- ---------------- --------------
Current Assets
Cash and cash equivalents $ 1,164.8 $ 34.5
Accounts receivable, net of
allowances of $75.0 and $86.4 995.9 885.0
Inventories, net 281.4 122.0
Prepaid expenses and other 285.0 289.8
-------------------------------------- ---------------- --------------

Total Current Assets 2,727.1 1,331.3
Satellites, net 1,907.9 1,597.4
Property and Equipment, net 848.3 686.1
Goodwill 3,031.7 3,031.7
Intangible Assets, net 1,875.0 2,224.9
Other Assets 135.0 122.8
-------------------------------------- ---------------- --------------

Total Assets $ 10,525.0 $ 8,994.2
====================================== ================ ==============

LIABILITIES AND OWNER'S EQUITY
----------------------------------------------------------------------
Current Liabilities
Accounts payable and accrued
liabilities $ 2,362.9 $ 1,771.7
Unearned subscriber revenue and
deferred credits 259.0 255.9
Current portion of long-term debt 7.8 10.2
-------------------------------------- ---------------- --------------

Total Current Liabilities 2,629.7 2,037.8
Long-Term Debt 3,405.3 3,276.6
Other Liabilities and Deferred
Credits 989.2 1,128.6
Deferred Income Taxes 204.4 172.3
Commitments and Contingencies

Owner's Equity
Capital stock and additional paid-in
capital 4,050.9 3,458.7
Accumulated deficit (754.5) (1,079.8)
-------------------------------------- ---------------- --------------
Total Owner's Equity 3,296.4 2,378.9
-------------------------------------- ---------------- --------------

Total Liabilities and Owner's Equity $ 10,525.0 $ 8,994.2
====================================== ================ ==============


DIRECTV HOLDINGS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)

Twelve Months Ended December 31,
2005 2004
-------------------------------------- ---------------- --------------
Cash Flows from Operating Activities
Income (Loss) Before Cumulative
Effect of Accounting Change $ 325.3 $ (108.9)
Adjustments to reconcile income
(loss) before cumulative effect
of accounting change to net cash
provided by operating activities:
Depreciation and amortization
expense 698.2 561.2
Net loss on sale or disposal of
property -- 15.8
Stock-based compensation expense 27.1 28.0
Amortization of debt issuance
costs 6.2 8.9
Write-off of debt issuance costs 19.0 --
Deferred income taxes and other 10.6 (21.6)
Accounts receivable credited
against Pegasus purchase price -- (220.2)
Change in other operating assets
and liabilities
Accounts receivable, net (130.9) (115.7)
Inventories (159.4) (21.4)
Prepaid expenses and other 28.1 (125.2)
Other assets (15.6) (23.3)
Accounts payable and accrued
liabilities 575.9 200.0
Unearned subscriber revenue and
deferred credits 3.1 61.3
Other liabilities and deferred
credits (104.4) 185.6
-------------------------------------- ---------------- --------------
Net Cash Provided by Operating
Activities 1,283.2 424.5
-------------------------------------- ---------------- --------------
Cash Flows from Investing Activities
Cash paid for property and equipment (380.5) (249.0)
Cash paid for satellites (366.6) (422.5)
Cash paid for acquired assets (3.3) (965.8)
Proceeds from sale of property 0.5 3.7
-------------------------------------- ---------------- --------------
Net Cash Used in Investing Activities (749.9) (1,633.6)
-------------------------------------- ---------------- --------------
Cash Flows from Financing Activities
Cash proceeds from refinancing
transactions 3,003.3 --
Cash contribution from Parent 538.3 200.0
Repayment of debt (2,001.8) (213.2)
Borrowing from Parent -- 875.0
Repayment of borrowing from Parent (875.0) --
Payments for other long-term
obligations (63.1) (31.5)
Debt issuance costs (4.7) (2.4)
-------------------------------------- ---------------- --------------
Net Cash Provided by Financing
Activities 597.0 827.9
-------------------------------------- ---------------- --------------
Net increase (decrease) in cash and
cash equivalents 1,130.3 (381.2)
Cash and cash equivalents at
beginning of the year 34.5 415.7
-------------------------------------- ---------------- --------------
Cash and cash equivalents at end of
the year $ 1,164.8 $ 34.5
====================================== ================ ==============

Supplemental Cash Flow Information
Interest paid $ 229.3 $ 201.8
Income taxes paid 36.1 0.6


DIRECTV HOLDINGS LLC
Non-GAAP Financial Reconciliation and Other Data
(Unaudited)

------------------------------- --------- -------- -------- ---------
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
2005 2004 2005 2004
-------- ------- -------- --------
(Dollars in Millions)

Operating Profit (Loss) $ 259.8 $ (65.3) $ 802.0 $ 21.9
Add back: Subscriber
acquisition costs:
Third-party customer
acquisitions 431.9 549.4 1,999.4 1,960.8
Direct customer
acquisitions 184.7 188.6 676.4 684.1
Depreciation and
amortization expense 182.4 183.2 698.2 561.2
-------- ------- -------- --------
Subtotal 799.0 921.2 3,374.0 3,206.1
-------- ------- -------- --------

Pre-SAC margin(1) $1,058.8 $ 855.9 $4,176.0 $3,228.0
======== ======= ======== ========
Pre-SAC margin as a percentage
of revenue(1) 31.1% 28.9% 34.2% 33.1%
------------------------------- -------- ------- -------- --------

---------------------------------------------------------------------
Other Data
---------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ -------------------
2005 2004 2005 2004
-------- ------- -------- --------
Average monthly revenue per
subscriber (ARPU) $ 75.53 $ 71.92 $ 69.61 $ 66.95
Average monthly churn %(2) 1.70% 1.60% 1.70% 1.59%
Average subscriber acquisition
costs-per subscriber (SAC) $ 639 $ 669 $ 642 $ 643
Total number of subscribers-
platform (000's)(2) 15,133 13,940 15,133 13,940
Capital expenditures
(millions)(3) $ 235.1 $ 162.9 $ 782.0 $ 671.5
------------------------------- -------- ------- -------- --------

(1) Pre-SAC Margin, which is a financial measure that is not
determined in accordance with accounting principles generally
accepted in the United States of America, or GAAP, is calculated
by adding amounts under the captions "Subscriber acquisition
costs" and "Depreciation and amortization expense" to "Operating
Profit (Loss)." This financial measure should be used in
conjunction with other GAAP financial measures and is not
presented as an alternative measure of operating results, as
determined in accordance with GAAP. The DIRECTV Group and DIRECTV
U.S. management use Pre-SAC Margin to evaluate the profitability
of DIRECTV U.S.' current subscriber base for the purpose of
allocating resources to discretionary activities such as adding
new subscribers, upgrading and retaining existing subscribers and
for capital expenditures. To compensate for the exclusion of
"Subscriber acquisition costs," management also uses operating
profit and operating profit before depreciation and amortization
expense to measure profitability.

The DIRECTV Group and DIRECTV U.S. believe this measure is useful
to investors, along with other GAAP measures (such as revenues,
operating profit and net income), to compare DIRECTV U.S.'
operating performance to other communications, entertainment and
media companies. The DIRECTV Group and DIRECTV U.S. believe that
investors also use current and projected Pre-SAC Margin to
determine the ability of DIRECTV U.S.' current and projected
subscriber base to fund discretionary spending and to determine
the financial returns for subscriber additions.

(2) The amounts presented for 2004 include the results from the former
NRTC and Pegasus subscribers.

(3) Capital expenditures represent cash paid and amounts accrued
during the period for property, equipment and satellites.