The DirecTV Group (DTV)

Our international operation, DTVLA, is subject to various additional risks associated with doing business internationally, which include political instability, economic instability, and foreign currency exchange rate volatility.

        All of DTVLA's operating companies are located outside the United States. DTVLA operates and has subscribers located throughout Latin America and the Caribbean Basin, which makes it vulnerable to risks of conducting business in foreign markets, including:

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difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;



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unexpected changes in regulatory environments;



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longer payment cycles;



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earnings that may be subject to tax withholding requirements or the imposition of tariffs, exchange controls or other restrictions;



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political and economic instability;



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export restrictions and other trade barriers;



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difficulties in maintaining overseas subsidiaries and international operations; and



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difficulties in obtaining approval for significant transactions, such as the Sky Transactions.

        In the past, the countries that constitute some of DTVLA's largest markets, including Brazil, Argentina, Colombia and Venezuela have experienced economic crises, caused by external and internal factors, and characterized by exchange rate instability, high inflation, high domestic interest rates, economic contraction, a reduction of international capital flows, a reduction of liquidity in the banking sector and high unemployment. These economic conditions have often been related to political instability, including political violence. If these economic conditions recur, they could substantially reduce the purchasing power of the population in our markets and materially adversely affect our business.

        Because DTVLA offers premium pay television programming, its business is particularly vulnerable to economic downturns. DTVLA has experienced, and may in the future experience, decreases or instability in consumer demand for its programming, as well as subscriber credit problems. DTVLA's inability to adjust its business and operations to adequately address these issues could materially adversely affect its revenues and ability to achieve profitability.