The DirecTV Group (DTV)

Restructuring of DTVLA

        From March 2003 to January 2007 we initiated and completed a series of restructuring transactions to strengthen our operating and financial performance, which include:

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Reorganization of DLA LLC.    On March 18, 2003, DLA LLC filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware, and in February 2004 DLA LLC's Plan of Reorganization was approved and became effective. As a result of the restructuring and related transactions, DLA LLC eliminated indebtedness, acquired full ownership of the principal local operating companies that provided DIRECTV branded services in Latin America and Puerto Rico, and was able to restructure and renegotiate certain programming and operating contracts to obtain more favorable terms that would allow us to operate the business more economically. Following the restructuring, we owned approximately 86% of DLA LLC. The remaining 14% was owned by Darlene, one of DLA LLC's other founders.



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Sky Transactions.    During 2006, we completed the Sky Transactions, a series of transactions that were agreed in October 2004 with News Corporation, Grupo Televisa, S.A., or Televisa, Globo Comunicacoes e Participacoes S.A., or Globo, and Liberty Media International, or Liberty, and which resulted in the consolidation of the DTH platforms of DIRECTV and SKY in Latin America into a single platform in each of the major territories served in the region. These transactions were completed as follows:



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On October 8, 2004, we acquired Sky Multi-Country Partners and certain related entities from News Corporation, Liberty, Globo and Televisa. Sky Multi-Country Partners had subscribers in Colombia and Chile, which were later migrated to our PanAmericana platform in these countries.



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On February 16, 2006, we completed the acquisition of our equity interest in Sky Mexico, which included the acquisition of a 12% equity interest in Sky Mexico in exchange for the sale of DIRECTV Mexico subscribers to Sky Mexico, as well as our acquisition of News Corporation's and Liberty's interests in Sky Mexico.



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On August 23, 2006, we completed the merger of our Brazil business, Galaxy Brasil Ltda., or GLB, with Sky Brazil, as well as our purchase of News Corporation's and Liberty's interests in Sky Brazil.



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Purchase of Darlene Interest in DLA LLC.    In January 2007 we purchased Darlene's 14% interest in DLA LLC, so that we now own 100% of DLA LLC. As part of the purchase, we resolved all outstanding disputes with Darlene. See Item 3 "Legal Proceedings" section below.

        As a result of these transactions, we own 100% of PanAmericana, 74% of Sky Brazil, and 41% of Sky Mexico. Globo owns the other 26% of Sky Brazil and Televisa owns the other 59% of Sky Mexico. The results of PanAmericana and Sky Brazil are consolidated in our results. We account for our 41% interest in Sky Mexico under the equity method of accounting.