The DirecTV Group (DTV)

EXECUTIVE OUTLOOK UPDATE

        DIRECTV U.S. experienced a significant increase in subscriber additions during the 2009 first quarter, well exceeding our previous outlook. Based on this performance and our outlook for the remainder of the year, DIRECTV U.S. now expects net new subscriber additions to be over one million for 2009. We previously reported in our 2008 Form 10-K that we expected 2009 net new subscriber additions to approximate the 861,000 net new subscriber additions reported for 2008.

        During the first quarter of 2009, DIRECTV U.S. experienced continuing competitive and economic pressures, which led to an increase in the use of discounted offers for new and existing subscribers, as well as decreased demand for premium movie services and pay-per-view, and lower advertising revenues. These changes resulted in lower than expected ARPU during the first quarter of 2009. Due to these factors, we now expect ARPU growth to be 2% to 3% for the year, with higher ARPU growth expected in 2010. We previously reported in our 2008 Form 10-K that we expected ARPU growth of about 4% for 2009.

        The costs of acquiring the higher than anticipated number of new subscribers coupled with lower than expected ARPU growth have decreased our expected basic and diluted earnings per common share for 2009. We now expect basic and diluted earnings per common share to increase by less than 15% during 2009, instead of our previous outlook of at least 15% reported in our 2008 Form 10-K. Basic and diluted earnings per common share will continue to be influenced by the degree to which we experience increased subscriber additions and slower ARPU growth.

EXECUTIVE OUTLOOK UPDATE

        During the nine months ended September 30, 2007, DIRECTV U.S. experienced higher than expected demand for HD and digital video recorder, or DVR, services, which resulted in increased acquisition, upgrade and retention costs as we make investments in advanced equipment required to receive HD and DVR services. DIRECTV U.S. also experienced higher than expected revenue growth primarily due to higher average monthly revenue per subscriber, or ARPU. In our 2006 Form 10-K, we reported that we expected DIRECTV U.S. upgrade and retention costs incurred during 2007, including the cost of set-top receivers capitalized under the lease program but excluding the cost of replacing MPEG-2 HD subscriber equipment with our new MPEG-4 HD subscriber equipment, to be relatively unchanged as compared to the approximately $1,250 million spent in 2006. As previously reported in our Form 10-Q for the quarter ended June 30, 2007, we now expect upgrade and retention costs incurred for the year ending December 31, 2007 to be greater than in 2006. We also reported in our 2006 Form 10-K that we expected DIRECTV U.S. ARPU to increase 5% or more due to price increases and higher penetration of advanced products. We now expect ARPU to increase 6% or more.

        We previously reported in our 2006 Form 10-K that we expected free cash flow, defined as net cash provided by operating activities less cash paid for property and satellites, for The DIRECTV Group to remain relatively consistent with the $1,186 million of free cash flow generated in 2006 and that we expected free cash flow for DIRECTV U.S. to increase from the $545 million of free cash flow generated in 2006. Primarily due to the increase in upgrade and retention costs discussed above, we now expect free cash flow for The DIRECTV Group to be lower in 2007 than in 2006 and that free cash flow for DIRECTV U.S. may be lower in 2007 than in 2006.

EXECUTIVE OUTLOOK UPDATE

        During the first half of 2007, DIRECTV U.S. experienced higher than expected demand for HD and DVR services, which resulted in increased upgrade and retention costs as we make investments in advanced equipment required to receive HD and DVR services. DIRECTV U.S. also experienced higher than expected revenue growth primarily due to higher ARPU. In our 2006 Form 10-K, we reported that we expected DIRECTV U.S. upgrade and retention costs incurred during 2007, including the cost of set-top receivers capitalized under the lease program but excluding the cost of replacing MPEG-2 HD subscriber equipment with our new MPEG-4 HD subscriber equipment, to be relatively unchanged as compared to the approximately $1,250 million spent in 2006. As previously reported in our Form 10-Q for the quarter ended March 31, 2007, we expect upgrade and retention costs incurred for the year ending December 31, 2007 to be greater than in 2006. We also reported in our 2006 Form 10-K that we expected DIRECTV U.S. ARPU to increase 5% or more due to price increases and higher penetration of advanced products. We now expect ARPU to increase 6% or more.

        We previously reported in our 2006 Form 10-K that we expected The DIRECTV Group's free cash flow, defined as net cash provided by operating activities less cash paid for property and satellites, to remain relatively consistent with the $1,186 million of free cash flow generated in 2006. Primarily due to the anticipated increase in upgrade and retention costs discussed above, we now expect free cash flow to be lower in 2007.

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EXECUTIVE OUTLOOK UPDATE

        In our 2006 Form 10-K, we reported that we expected DIRECTV U.S.' upgrade and retention costs incurred during 2007, including the cost of set-top receivers capitalized under the lease program but excluding the cost of replacing MPEG-2 HD subscriber equipment with our new MPEG-4 HD subscriber equipment, to be relatively unchanged as compared to the approximately $1,250 million spent in 2006. Upgrade and retention costs incurred for the quarter ending March 31, 2007 exceeded upgrade and retention costs incurred for the quarter ending March 31, 2006 due to higher demand for advanced products. We now expect the upgrade and retention costs incurred for the year ending December 31, 2007 to be greater than in 2006.

EXECUTIVE OUTLOOK UPDATE

        Based on net subscriber additions of 255,000 for the first quarter of 2006 and other recent trends, DIRECTV U.S. now expects net subscriber additions for 2006 of less than 1.0 million.