The DirecTV Group (DTV)

Consolidated Results of Operations

        Revenues.    The following table presents our revenues by segment:

        The $661 million increase in our total revenues was primarily due to the $482 million increase in revenues at the DIRECTV U.S. segment, which resulted from higher ARPU on a larger subscriber base, as well as an increase in revenues at the DIRECTV Latin America segment, which resulted from added revenues from the acquisition of Sky Brazil, an increase in the number of subscribers throughout the region and favorable changes in foreign currency exchange rates in several countries.

        Total operating costs and expenses.    The following table presents our operating costs and expenses by segment:

        The $724 million increase in our total operating costs and expenses was primarily due to a $541 million increase at the DIRECTV U.S. segment primarily due to increased programming costs, depreciation expense, upgrade and retention costs and subscriber acquisition costs, and a $183 million increase at the DIRECTV Latin America segment primarily due to the acquisition of Sky Brazil in August 2006.

        Interest income.    Interest income decreased $3 million to $25 million for the third quarter of 2007 compared to $28 million for the same period of 2006.

        Interest expense.    Interest expense was $61 million for the third quarter of 2007 and $64 million for the third quarter of 2006. Interest expense is net of capitalized interest of $11 million for the third quarter of 2007 and $15 million for the third quarter of 2006.

        Other, net.    Other, net was $10 million during the third quarter of 2007 and $12 million for the third quarter of 2006 and was primarily comprised of equity in earnings from our investment in Sky Mexico.

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        Income tax expense.    We recognized income tax expense of $220 million for the third quarter of 2007 compared to an income tax expense of $228 million for the third quarter of 2006. The change in income tax expense is primarily attributable to the change in income before income taxes and minority interests.

Consolidated Results of Operations

        Revenues.    The following table presents our revenues by segment:

        The $615 million increase in our total revenues was primarily due to the $407 million increase in revenues at the DIRECTV U.S. segment, which resulted from higher ARPU on a larger subscriber base, and an increase in revenues at the DIRECTV Latin America segment, which resulted from added revenues from the acquisition of our interest in Sky Brazil and an increase in the number of subscribers throughout the region.

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        Total operating costs and expenses.    The following table presents our operating costs and expenses by segment:

        The $616 million increase in our total operating costs and expenses was primarily due to a $460 million increase at the DIRECTV U.S. segment primarily due to increased programming costs, depreciation expense, upgrade and retention costs and subscriber acquisition costs, and a $153 million increase at the DIRECTV Latin America segment primarily due to the acquisition of Sky Brazil in August 2006.

        Interest income.    Interest income was $34 million for the second quarter of 2007 and $33 million for the same period of 2006.

        Interest expense.    Interest expense was $57 million for the second quarter of 2007 and $56 million for the second quarter of 2006. Interest expense is net of capitalized interest of $14 million for the second quarter of 2007 and the second quarter of 2006.

        Other, net.    Other, net increased by $9 million to $7 million in income during the second quarter of 2007 as compared to a $2 million loss in the second quarter of 2006 due to the increase in our equity in earnings from our investment in Sky Mexico.

        Income tax expense.    We recognized income tax expense of $287 million for the second quarter of 2007 compared to an income tax expense of $257 million for the second quarter of 2006. Income tax expense for the second quarter of 2006 was reduced by $27 million due to a tax deduction arising from the write-off of investments in certain entities.

        Income from discontinued operations.    As a result of a favorable tax settlement which we discuss in Note 2 of the Notes to the Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report, during the second quarter of 2007 we recorded a $17 million gain in "Income from discontinued operations, net of taxes" in our Consolidated Statements of Operations.

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Consolidated Results of Operations

        Revenues.    The following table presents our revenues by segment:

        The $433.6 million increase in our total revenues was primarily due to the $354.7 million increase in revenues at the DIRECTV U.S. segment, which resulted mostly from higher ARPU and an increase in total subscribers, and an increase in revenues of $78.8 million at the DIRECTV Latin America segment mostly resulting from the added revenues from the acquisition of Sky Brazil in August 2006, and an increase in the total number of subscribers. We discuss these changes for each of our segments in more detail below.

        Operating Costs and Expenses.    The following table presents our operating costs and expenses by segment:

        The $38.2 million decrease in our total operating costs and expenses was primarily due to the $72.1 million decrease at the DIRECTV U.S. segment, partially offset by the $39.1 million increase in

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operating costs and expenses at the DIRECTV Latin America segment. We discuss these changes for each of our segments in more detail below.

        Interest Income.    Interest income decreased $16.4 million to $28.4 million for the third quarter of 2006 compared to $44.8 million for the same period of 2005. The decrease in interest income is due to lower average cash and short-term investment balances due mostly to the share repurchase program, partially offset by an increase in average interest rates.

        Interest Expense.    Interest expense decreased $1.2 million to $63.2 million for the third quarter of 2006 from $64.4 million for the third quarter of 2005. The decrease in interest expense is due to an increase in capitalized interest resulting from an increase in capitalized costs for satellites under construction, partially offset by higher weighted average interest rates on outstanding debt balances. Interest expense is net of capitalized interest of $15.3 million for the third quarter of 2006 and $5.5 million for the third quarter of 2005.

        Other, Net.    The loss recorded in "Other, net" increased by $10.1 million during the third quarter of 2006 as compared to the same period in 2005. The significant components of "Other, net" were as follows:

        The increase in equity earnings from unconsolidated affiliates is due mostly to the acquisition of the equity interest in Sky Mexico on February 16, 2006.

        Income Tax Expense.    We recognized income tax expense of $228.5 million for the third quarter of 2006 compared to an income tax expense of $41.7 million for the third quarter of 2005. The change in income tax expense is primarily attributable to the change in income before income taxes and minority interests.

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