The DirecTV Group (DTV)

CAUTIONARY STATEMENT FOR PURPOSE OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

        This Annual Report on Form 10-K may contain certain statements that we believe are, or may be considered to be, "forward-looking statements" within the meaning of various provisions of the Securities Act of 1933 and of the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by use of statements that include phrases such as we "believe," "expect," "estimate," "anticipate," "intend," "plan," "foresee," "project" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. All of these forward-looking statements are subject to certain risks and uncertainties including, without limitation, risk factors discussed in more detail in Item 1A of this Annual Report, which could cause actual results to differ materially from historical results or from those expressed or implied by the relevant forward-looking statement. The forward-looking statements included in this Annual Report are made only as of the date of this Annual Report and we undertake no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

2

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.

CAUTIONARY STATEMENT FOR PURPOSE OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

        This Annual Report on Form 10-K may contain certain statements that we believe are, or may be considered to be, "forward-looking statements" within the meaning of various provisions of the Securities Act of 1933 and of the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by use of statements that include phrases such as we "believe," "expect," "estimate," "anticipate," "intend," "plan," "foresee," "project" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. All of these forward-looking statements are subject to certain risks and uncertainties including, without limitation, risk factors discussed in more detail in Item 1A of this Annual Report, which could cause actual results to differ materially from historical results or from those expressed or implied by the relevant forward-looking statement. The forward-looking statements included in this Annual Report are made only as of the date of this Annual Report and we undertake no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

1

THE DIRECTV GROUP, INC.

PART I

ITEM 1.    BUSINESS

        The DIRECTV Group, Inc., which we refer to as the company, we or us, was incorporated in Delaware in 1977 and was subsequently acquired by General Motors Corporation, or GM, in 1985. From 1985 to 2003, we were a subsidiary of GM.

        On December 22, 2003, we, GM and News Corporation completed a series of transactions that resulted in our split-off from GM and the simultaneous sale of GM's then remaining 19.8% economic interest in us to News Corporation. Immediately after the split-off, News Corporation acquired an additional 14.2% of outstanding common stock from our common stockholders, which provided News Corporation with a total of approximately 34% of our outstanding common stock, which was subsequently contributed to its subsidiary, Fox Entertainment Group, Inc. In addition, we paid to GM a special cash dividend of $275 million in connection with the transactions. As a result of these transactions, we became a publicly-traded company.

        Following our February 2004 announcement of our intent to restructure our company to focus on the direct-to-home, or DTH, satellite businesses, during 2004 and 2005 we sold substantially all of our non-strategic businesses, investments and assets, including our approximately 80.4% interest in PanAmSat Corporation, or PanAmSat, and the businesses and assets of Hughes Network Systems, Inc., or HNS. We also announced a series of transactions designed to reorganize our DTH businesses in Latin America. See below for further discussion of these strategic transactions. 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." This name change had no impact on our common stock or the rights of our stockholders. The name of our company was changed to better reflect our commitment to building our business around our DTH businesses.

        On February 7, 2006, our Board of Directors authorized a share repurchase program. Under the repurchase program, we are authorized to spend up to $3.0 billion to repurchase outstanding shares of our common stock. The source of funds for the proposed purchases is from our existing cash on hand and cash from operations. We implemented the repurchase program on February 10, 2006. There is no fixed termination date for the repurchase program and purchases may be made in the open market, through block trades and other negotiated transactions. The program may be suspended, discontinued or accelerated at any time.

        We are a leading provider of digital television entertainment in the United States and Latin America. Our two continuing 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. Through April 22, 2005 we also operated the Network Systems segment, which was a provider of satellite-based private business networks, or VSATs, and consumer broadband Internet access. On April 22, 2005, we completed the contribution of the HNS net assets to HNS LLC and the sale of a 50% interest in HNS LLC to SkyTerra Communications, Inc., or SkyTerra. Subsequent to the sale we accounted for our investment in HNS under the equity method of accounting. In January 2006, we completed the sale of our remaining 50% interest in HNS LLC to SkyTerra. Please refer to Part II Item 7 of this Annual Report for more information related to the HNS transactions.

•

DIRECTV U.S.    DIRECTV Holdings LLC and its subsidiaries, which we refer to as DIRECTV U.S., is the largest provider of DTH digital television services and the second largest provider in the multi-channel video programming distribution, or MVPD, industry in the United States. As

2

of December 31, 2005, DIRECTV U.S. had over 15.1 million subscribers with average monthly revenue per subscriber, or ARPU, of $69.61.

•

DIRECTV Latin America.    DIRECTV Latin America, or DTVLA, which is comprised of a group of companies that primarily includes our approximate 86% owned subsidiary, DIRECTV Latin America, LLC, or DLA LLC, and its consolidated local operating companies, or LOCs, is a leading provider of DTH digital television services throughout Latin America. As of December 31, 2005, DTVLA had approximately 1.6 million subscribers in 27 countries throughout the region of which approximately 85% are located in Brazil, Argentina, Venezuela and Puerto Rico. On October 8, 2004, we entered into a series of transactions with News Corporation, Grupo Televisa, S.A., or Televisa, Globo Comunicacoes e Participacoes S.A., or Globo, and Liberty Media International, Inc., or Liberty, which we refer to as the Sky Transactions. The Sky Transactions are designed to strengthen the operating and financial performance of DTVLA by consolidating the DTH platforms of DTVLA and Sky Latin America into a single platform in each of the major territories served in the region. See "DIRECTV Latin America" below for more information related to these transactions.