DIRECTV Analyst Meeting Highlights Technology, Content and Customer Service Plans

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Conference Call Transcript
DTV - The DIRECTV Group, Inc. Analyst Meeting

Event Date/Time: Feb. 22. 2006 / 9:00AM ET

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Feb. 22. 2006 / 9:00AM, DTV - The DIRECTV Group, Inc. Analyst Meeting

CORPORATE PARTICIPANTS
John Ruben
DIRECTV Group - VP of Investor Relations
Chase Carey
DIRECTV Group - President and CEO
Michael Palkovic
DIRECTV Group - CFO
Romulo Pontual
DIRECTV Group - Chief Technology Officer
David Hill
DIRECTV Group - President, DIRECTV Entertainment
Eric Shanks
DIRECTV Group - EVP, DIRECTV Entertainment
John Suranyi
DIRECTV Group. - President, DIRECTV Sales and Services

CONFERENCE CALL PARTICIPANTS
Aryeh Bourkoff
UBS - Analyst
Rich Greenfield
Poly Research - Analyst
Jason Bazinet
Citigroup - Analyst

PRESENTATION

John Ruben - DIRECTV Group - VP of Investor Relations

Good morning everybody. I'm [John Ruben], VP of Investor Relations. I'd like to thank everybody for joining us here for our first Investor Day.
Before we get started I just wanted to go over a couple of housekeeping items. First, on your table you'll see an agenda. You see we've got a lot of
presentations to get through today, so we're going to ask everybody to hold off on their questions until the end, and we've allocated a lot of time at
the end of the session to make sure we get all of your questions answered. We will have hard copies of the presentation at the break, so if you can
hold off to there, we'll have all the presentations for you.

As you would expect, we will have some forward looking information in this presentation and I am sure most of you at this point have this slide
memorized so we won't spend a lot of time on it. In addition to forward-looking information, we also will be providing some Non-GAAP
measures and in accordance with Regulation G, we reconcile all of these Non-GAAP measurements to the most directly comparable GAAP
measure. We provide reconciliation schedules for the non-GAAP measures to the GAAP measures on our website and also in the handout that
you'll be getting at break. This presentation will be webcast and we will be archiving a copy of the webcast and the slides on our website at
www.directv.com.

That's about it. At this point let's get started.

Chase Carey - DIRECTV Group - President and CEO

Good morning, everybody. I'm Chase Carey and I want to thank you for coming out today. Thanks for the opportunity to speak to you. I'm only
going to make a couple of comments to start. And actually probably one comment I wasn't planning to make until later when I came back, but it



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became pretty clear in the half hour I spent at breakfast talking to a number of you, that question number one seemed to revolve around
broadband. Not to take the wind out of everybody's sails or have half of you leave, we don't have a broadband announcement today.

If you recognize, [Rupert's] given us about five days until the end of February to get an announcement done. I don't think we'll make that deadline
either. I will make some comments when I come back towards the end of the morning about broadband, but it is not the mainstream or the focus
of this event. Although, again, I'm not saying it's not important or it's something that we want touched on and give you our prospective on and our
thoughts about that as the day goes along.

Really our intent here is, and Mike Palkovic and I have been talking about it for a while, to really find an opportunity to sit down with you in a
forum, in a place, in a setting, where we can really give you what we think is a much better picture of what's going on at DIRECTV; in something
better, and they're great for what they are, but the 40 minute cattle prod processes at the investor conferences. An ability to really show you first
hand some of the stuff that hopefully all of you will have a chance to play with during the breaks and afterwards and some of the products we've
got coming, hear from an array of people, and really get a sense of what's really going on and what are our real plans.

We've been talking about trying to get something like this together for a year. It's been a bit of a challenge for us. First we wanted to find a -- we
wanted to make sure we really had the management team in place. We've gone through a series of changes, but that was, for us, a requirement and
really have, in the last year, solidified the management team. Probably about half the people you'll hear this morning have been in their current
role less than a year although they've been in place for a good part of 2005. They're well along the way in terms of executing on the plans we
have.

We also wanted to get to a place where some of the key initiatives that we had planned were far enough along that we could talk to them at a level
of confidence and a level of openness. Certainly our HD boxes, our DVR boxes; we wanted to be able to have that product in the marketplace,
talk about what that product meant to us. We wanted to be able to describe initiatives in the content area like BOD, sales initiatives; they're going
to drive quality and service through that business.

We continued to look and we finally, as we finished out 2005 and headed into 2006, we really feel we've gotten to a point, a place, and it's where
we are today where we can really lay out for you and hopefully provide some clarity as to the management team that's going to drive us forward
and the key initiatives and the key plans that are going to really define DIRECTV over the next few years and ultimately what we expect those to
mean for this business in a way that's probably more tangible than we have in the past.

This morning you'll hear from a number of key senior executives that will lead us forward with these efforts. First, Mike Palkovic, our Chief
Financial Officer, will provide a quick overview of the strength of DIRECTV. He'll touch on recent results and in particular highlight as he goes
through it is when you look at the last year, the progress we've made in terms of driving the bottom line. Both in terms of profits and cash flow,
which clearly will be a continuing theme as we drive the business out over the next few years.

He'll be followed by Romulo Pontual, our Chief Technology Officer, who will lay out our technology road map. He'll describe a plan that
capitalizes and takes advantage of our scale, the upscale customers we've got, ability to launch new initiatives from a technology perspective
much more quickly than our competitors, what the opportunity is for us to be a part of a global agenda with Newscorp that enables us to be at the
forefront of really launching and leading the marketplace in terms of new technologies. Romulo, as you will find, has an accent. We felt that was
important. He'll add a little color to -- give him that sort of bad professor technology edge to him.

We'll follow on after Romulo, David Hill and Eric Shanks, our President and Executive Vice Presidents of the Entertainment Group. We'll
describe a content plan that is going to see us bringing a constant flow of distinctive content, exciting enhancements, an array of things to our
customers. Really at the end of the day what we want to make sure from the content prospective is that people say DIRECTV is the TV service I
have to have. There are things that are constantly going on. It's an exciting service that has features that you want to tell your neighbor about and
we really think we can be at the forefront of that and, again, I think with David and Eric one thing you will certainly see is we've [inaudible] the
television business with David. We are in the television business and then some.

After David, John Suranyi, our President of Sales and Service, will lay out a broad array of initiatives that will really be focused on our ability to
capture the most valued customers on a cost efficient basis and a broad array of initiatives to really bring efficiency and quality to the service side
of our business, which we know has to be a signature part of what DIRECTV is all about, is excellence in service. We have to achieve it; this
market demands we achieve it in a way; that we lead the market in efficiency as well. John is one who has a track record that began many
decades ago in the pay television business and brings a unique prospective of expertise and insights and leadership and a few initiatives will be
launching there.



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Finally, I'll come back and try and wrap up by giving you a view of the business. We expect to build, essentially, the plans that you've seen. What
that means is we build the business out in the next few years. In a nutshell, I think the two words we've looked at upon ourselves is profitable
growth. If I wanted to trace what does profitable growth mean as you look out a few years to make it a bit more tangible, I'd say as we look out to
the end of 2008, or towards 2008, we see a platform that should be close to $18 million subs with a cash flow that exceeds $3 billion. We think
it's a tremendously exciting agenda and set of plans we have.

We hope it's an interesting morning for you. We think it's going to be a great year for us and we really do look forward to the opportunity to share
it with you. With that I'm going to turn it over to Mike. Thank you.

Michael Palkovic - DIRECTV Group - CFO

Good morning. Thanks Chase. I'm going to start with a little bit of where we're at today from an infrastructure standpoint and also give you a
little insight into the customer profile. Infrastructure will cover both technology and the service infrastructure that we've built through the end of
2005. Then I'll talk a little bit about 2005 results and then get into a little bit more color about the key operating metrics that we use to run the
business.

First of all, from the satellite standpoint, this chart shows you, quickly. Basically we have eight satellites today. Seven are owned, one is leased in
orbit today operating at roughly six different orbital locations. By the end of 2007, which this chart depicts, we'll have 12 satellites in operation at
seven orbital frequencies. It will combine both Ku and Ka frequencies as well as [Conus], which is a national footprint technology, along with
stopping technology, which is how we provide the local platform today.

So what does that add up to? It adds up to roughly 3200 channels by the end of 2007. That will break down. A little less than half of that will be
standard definition. Most of that will be coming from the Ku satellites, though more than half of that will be high definition. Most of that coming
off of the new DIRECTV 10 and 11 satellites that we'll be launching in 2007. Local channels will comprise approximately 2650, about 1150 of
that are standard def that we have today. Those channels are servicing 141 markets, about 94% of TV households and another approximately
1500 capable in high def locals once the new satellites are launched.

Important point to make, the first bullet, these satellites at the end of '07 will have an average life of over 10 years for every satellite. Over half of
these satellites will have a life that exceeds 14 years of fuel life. Significant life left in these satellites when we get done with this CapEx, this
somewhat stepped up satellite CapEx period and significant in-orbit backup capacity. Should any type of failure occur in any of these satellites,
there's a number of opportunities we have to quickly replace that capacity.

From a service standpoint, the two areas of service that we've built significant infrastructure; on the left hand side of the chart -- from a call center
standpoint, we have 22 call centers, three of them are manned by DIRECTV employees, 19 are manned today through vendors. Four of those call
centers are outsourced offshore. We have three in the Philippines. We have one in Monterey, Mexico to support our Para Todos business. Most of
the offshore business is somewhat of the easier main bank transactions as opposed to say a more complicated technical call or an activation call.
We handle most of that, first and foremost, through our call centers that have our employees in it. We do that specifically so we can have better
training and more control over the quality of the call in those call centers.

John will get into a little bit more detail in his presentation about some of the initiatives we're doing to try and not only increase quality in the call
centers, but also lower costs. On the right hand side, our home service provider network is approximately 11 companies, 14,000 technicians.
These technicians provide the installation work, the service call work, and all of the upgrade opportunities that our customers take to either
upgrade to DVR, HD, or our movers program.

Today, in 2005, about 8 million work orders were processed through this network. About 85% of the work is done through the network that we
directly manage through these 11 companies. These companies have made significant investments. Today there is over 9,000 DIRECTV branded
vans in the marketplace that these companies have invested in and as a sign of dedication to our business.

Moving on to our customers, just to show you a little bit of insight into the 15+ million customers we have today. 2.5 million of those customers
have a DVR in their home. 1 million have high definition. Of that 1 million, 85% subscribe to the monthly $10.00 package today. We have a
million customers through our Telco partnerships. We have 1 million international subscribers, most of those are the Hispanic service Para
Todos. More recently we approached new markets including Philippino, Vietnamese, South Asian, Russian, Italian, and Korean. We're putting a
more dedicated focus towards the international marketplace beyond just our historical Hispanic service.



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Importantly, 5 million of our customers have their own broadband solution. About 80% of those have a DSL solution and 20% of those have a
cable modem. The point to make there is that one-third of our customers have already picked the best in breed solution for their broadband
solution today, by choosing the best video product and the broadband solution of their choice.

To look at our subscribers from a geographic composition, you can see the U.S. population split down into A and B counties and C and D. A and
B counties are a rough, not exact, but a rough proxy for urban/suburban customers in the country and you can see they comprise approximately a
little bit more than two-thirds of the population. Rural comprises 30% or about one-third of the customers in the country. If you look at our
subscriber base today, we skew more rural. The primary reason for this is when the platform launched in 1994, the early low hanging fruit, if you
will, was in rural America where they were significantly underserved and it was a significant opportunity.

If you look at the second half of 2005, you'll see that our acquisition efforts skew more in line with the U.S. population and roughly 68% of our
growth adds in the second half of the year in A/B counties. We're approaching the U.S. population today. The primary reason for that is we now
have a full favorable price in the market with 141 markets, 94% TV households have local channels and we have a full whole house solution with
boxes in 2005 coming out of the air average a little over 2.6 boxes per home which is approximately the number of TVs in a household.

If we look at the customer base on the demographics standpoint, it shows one statistic, which is basically below or above $60,000 household
income, which is considered upper-mid to wealthy above that range. You can see by the numbers we track very well against the U.S. population,
14% higher than the population. You can see some of the key characteristics, married male, 35-55, college graduates, and the majority of our
customers own a home.

We have a very, very attractive subscriber base and we index much higher than the national average, particularly when you take into
consideration what I just said about rural America and the fact that we skew more rural yet we index much higher on the demographic profile.

Switching it over now to 2005, some of the highlights of 2005. I'll get into a little bit more detail on the next chart on our revenue earnings and
subscriber growth numbers. We built out critical infrastructure. We spent the time to build out -- we launched the DIRECTV owned DVR, we
launched the mpeg-4 receiver, we launched three satellites, and we built the HD regional uplink center to support the new stopping technologies
for the HD platform, and the backhaul network to get the signals back into those uplink centers. All of that work, will be continued work,
obviously, in 2006 and 2007, but all of that work was done in 2005.

We enhanced our content services. We increased our local channel coverage. We added more standard def and we started the fourth quarter by
launching our first 12 markets local HD. Again, we're in 141 markets, 94% are TV households, and we have even more capacity for local HD
than we have today for standard def. We launched a DIRECTV interactive platform, which Eric is going to talk about in a few minutes when he
comes up, and we significantly expanded our international program as I discussed in the previous slide.

Taking a look at the financial results. The first line you see is gross add, $4.2 million in 2005, $4.2 million in 2004. The point I'd like to make
about 2005 is nine months of the year we had a new credit screening process in place, so the quality aspect of those customers, and I've got a slide
that will show you a little bit more detail on that coming up, is significantly better in 2005 than 2004. The issue we had in 2005, which was
primarily caused, I think, in 2004 primarily, and a little bit in 2005, was turn. You've heard us talk a lot about that and lot of the initiatives we've
put in place to address that.

Shifting down to the financial side, the revenue increased $2.4 billion on the platform. I want to note that about $500 million of that is the full
year impact of the NRTC. The remaining $1.9 billion is about two-thirds driven by subscriber growth of volume and one-third of that is driven by
the annual price increase and other ARPU increases.

Operating profit before D & A. The point I'd like to make on this is $917 million increase year over year. If you can stabilize your growth adds,
more importantly your SAC rate, which you'll see in a minute, and control your retention and upgrade spending, the rest of the platform scales
pretty well as you grow the revenue strength. In this case, about 40% of the incremental revenue dropped to the bottom line. That's the
profitability that we're looking forward to seeing in the next two to three years on the platform. It's consistent with one of the comments that
Chase made as we look out to 2008.

CapEx, you can see the stepped up CapEx period as we built up the infrastructure. The majority of that are satellites and ground infrastructure to
support high definition. You can see the pre cash flow number. One note is the $247 million on the left. There is an error in that number. That's
actually cash required. It should be bracketed, so when you get your handouts you'll need to note that on your handouts.



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We went from a use of $247 million to supplying $536 million of cash so we're very happy about that and I think it's just the beginning of what
you're going to see in the future.

I'll talk a little bit about the subscribers we're adding. We picked three what we consider very high value aspects of our subscriber acquisition
efforts. The percentage of customers that take DVRs, those that take HDs, and those that come through our Telco partnership. In 2004 those three
components comprised 14% of our gross adds. They comprised 31% of our gross adds in 2005, so we're acquiring a much higher quality of
subscriber on the platform.

I think you've heard a lot about DVR and HD. From a Telco prospective, while they're also in SAC, is reasonably in line with the rest of the
platform. Their churn is significantly lower today, so we're going to get very, very sticky long term quality subs in the Telco partnerships if the
data we see today holds.

I'll talk a little bit about our ARPU. I'll start at the bottom. We had about a 4% increase on this chart. The 2005 numbers do have a little bit of a
dilutive effect of the NRTC being in our numbers for the full year. If I do an apples to apples comparison, that number is approximately 6%.
Instead of $2.66, you'd see something closer to a $4.00 increase. If you go up to the top line where the majority of the revenue comes from, which
is our monthly packages, premiums, and sports, you see a $0.90 increase. Most of the NRTC dilution is in that number. If I add approximately
$1.50 back to that number, I'm somewhere in the $2.50 range year over year, which is primarily driven from price increases and maintaining, as
you see on the right, 1.3 premium channels. 130% penetration of our sub base takes some type of a premium, either a movie or a monthly sports
package. 55% of our sub take at least one premium. That's significantly higher than our competition both cable and dish.

As you go down the page, you can see the impact of putting these new boxes in the home and how it translates to close to $6.00 in 2005 and as
we come out of the year even higher in 2006. Pay per view at 33%, about two-third of that is driven by movies and the rest of it is driven by
events and other types of pay per view transactions.

Ad sales, while not a big number, it's important to note that it's very fast growing. It's a new revenue stream to us and it's extremely high margins,
so while not as big on an ARPU standpoint, the cash flow is significant.

Advanced products, as we begin to roll out DVR and HD you're going to begin to see that revenue stream start becoming more prominent in our
ARPU growth profile going forward.

Let's talk about churn for a minute. We are highlighting the voluntary/involuntary here because if you look at the voluntary line and you can see
from the last two years, January 2004 to the end of 2005, the voluntary line is essentially flat. If you look at the two bars and you look at July
through July, the voluntary number in July 2004 was 1.16. The number in 2005 was 1.03. If you take out the seasonality and you just do a year
over year comparison. We're actually flat to a little bit down on the voluntary line and all of the problems we're having is on the involuntary side,
which is where we put most of the significant focus in terms of initiatives to address that from a quality standpoint.

As we come in to 2006, we expect to see the benefit of some of the initiatives put in place to address this very issue that is showing up in our
2005 numbers.

As I said earlier, I wanted to give you a little bit more insight to what's going on with the quality of our subs. If you look at the left hand side of
the chart you can see that about two-third of our subs were what we considered high quality, meaning the top two credit score bands in Q4. It
acted out a little bit worse in Q1. We implemented the new credit scoring policy in Q2 of 2005 and you can see the results driving from 61% up
to 82% as we come out of 2005. We expect this number, at least the internal goal, is that we get this number closer to 90% in 2006.

Again, John is going to talk a little bit more about our focus in terms of quality aspects of our acquisition strategy and you can see the breakdown
in the number of gross adds. Most importantly you can see that while we might have lowered our gross adds in total, we increased the number of
gross adds that we considered the highest quality, which is very important to us.

Let's talk about SAC for a minute. There's four main components in SAC. Hardware, which is primarily all the boxes, and to a lesser extent some
of the few of the hardware that has to go into the home like the antennae and the switches and the light, installation work, dealer commission, and
marketing. Hardware, the important point to make there is that number in 2005 while flat, includes significantly more boxes, more DVR, and
more HD. Much higher appetite for advanced products. We were able to cover the cost of that increase in pay grade by lowering the cost of all
the boxes, basic, DVR, and HD throughout 2005.



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Installation was flat to slightly down. Dealer commission was relatively flat. We had a slight increase as we had a little bit more of a fuller media
plan, if you will, in 2005. We decided to have a little bit stronger mix of local and national marketing and that drove that cost up a little bit. At the
end of the day, as I said earlier, to drive this platform from a profitability standpoint, this number has got to stay relatively flat. We have to
continue to look for ways in all of these categories to lower cost.

While we expect box cost to continue to come down, installation is another that there's initiatives that John and his team are focused on to try and
take that cost down a bit. The dealer's commission line, which includes direct sales, is an area where, as we focus on direct sales more as a higher
percentage of our mix, will drive some cost out of that category as well allowing us to fund even higher pay grades of DVR and HD.

From an upgrade in retention standpoint, you can see that we grew roughly 10% on an absolute basis. You'll see in a minute how that translates to
our pre SAC margin chart. If we can hold this category relatively flat or generally flat in absolute dollars, we can improve the margin
significantly. You can see some of the traditional programs like box upgrades and standard local into local upgrades is starting to come down, as
you would naturally expect. DVR and HD and HDDVR are starting to increase and our movers program increasing significantly.

The comment I'd make about movers is a couple of things. First of all, the 1.4 million NRTC customers that we acquired in 2004 now have access
to that program where in the past they did not. We had a full year impact of those customers being able to take advantage of the movers program.
We marketed this program more aggressively in 2005 because it's a point where the customers made a decision to leave our platform. It's one of
the best places we can put an investment just to make sure we stay with that customer during the move process and it's going to naturally grow
with the size of the base. Then we have other more ongoing upgrade and customer communication activities that's in that other marketing line.

We increased the number of transactions by 1 million from 2004 to 2005, in the equipment revenues, we don't often talk about this, but when we
spend that $1 billion or $1.1 billion, we collect over $200 million in upfront revenues but we're required from an accounting standpoint to record
that in the revenue line. The net of those two numbers is just below $900 million of net cash outlay. We typically talk more about the expense
side on the P&L, not the $200 million that's in revenue. That net number is roughly about $5.00 a month per sub. If we can keep that relationship
fairly steady.

Pre SAC margin. You can see basically the components of the P&L. The first component programming, which is just under 40% of our cost,
increasing about seven-tenths of a point. 7% programming costs, which is embedded in the contract. The important point to make there is if I
separate all the sports programming out, ESPN and all the regional sports networks, that number is closer to 5 or 6%. The cost of the sports
programming today is our biggest challenge. That number is more than double what the remainder of the programming services on the platform
are costing us. That's our biggest challenge in getting that category down.

As we grow our ARPU 4 or 5%, if this category stays in the 7% range, we're going to have a natural hit, if you will, to margin on that line. We
have to make that up in order to grow pre SAC margin in other areas of the P&L.

If you look at those other areas and you look at other costs, which are basically other costs of sale costs that are tied primarily to revenue strains,
subscriber services and G&A or broadcast ops and upgrade and retention, as I just talked about, all of those are tracking favorably. The one that
did not in 2005 is subscriber services. That's primarily driven by the cost of the service calls for the hurricane. If I take those out, we were
relatively flat in that area. That's the area that has all of our call center expenses.

John is going to talk a little bit more about how he's going to focus initiatives on quality and to drive costs down in that area.

Let's talk about our balance sheet. We're in a $1 billion net cash position today. We expect to continue to generate significant cash flow beyond
what we did in 2005. You heard the number that Chase mentioned earlier in his comments. From a leverage and a credit rating standpoint, right
now, today, we're very comfortable where we sit with the two rating agencies in terms of our credit rating. That said, we have significant
borrowing capacity.

The only comment I'd make to you today, and I think Chase will make a similar comment later when we get into Q&A, is we don't have a plan
today to go out and do anything to our current debt level. That doesn't mean that if there isn't a compelling reason, if circumstances change, that
we're not going to keep an eye on that. We know we have significant borrowing capacity if we need to do it. Right now, today, we also have --
we've announced the $3 billion buy back. You guys are all aware of it. We're just in the first week or two of getting into that program and we're
going to work through that program. We think it will take us about 2+ years to process through that $3 billion. That does not take into
consideration a significant single transaction if that were to present itself, but just being in the market on an opportunistic basis, it will take us a
little over two years. Right now our focus [inaudible] to execute on that program that's been approved by our board and that's really just a
statement about where we're at today from a balance sheet standpoint.



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Let's talk a little bit about the lease program. We're going to begin our lease program in March. Set-top boxes only will be capitalized. What that
means is all installs, costs, dishes, commissions are expected to be expensed. We'll apply a three-year book deprecation life to those boxes. You
can expect the lease fee to be fairly comparable to the current mirroring fee from an ARPU standpoint. Most of our other policies will remain
unchanged. Commitments, monthly programming fees for DVR and HD, credit policies, and upfront payments, all those current policies will
remain unchanged. Basically the benefit of this program is starting in March all boxes we deploy to new customers and throughout upgrade and
retention activities, we will be able to recover when those customers churn and re-deploy those boxes and get future savings to help pay for our
future run in SAC expenditures on the platform.

To summarize, we feel we are poised for profitable growth and increasing significant cash flow. We are a leading multi-channel TV provider
today. 100% digital. I talked a little bit about the infrastructure that provides that platform to us today from a technology standpoint. We're
introducing unique and exclusive programming. You're going to see some good examples of that today. We're showing strong revenue in outside
growth. Again, if we focus on the right components of the P&L, you can flow a lot of the incremental revenue that this platform generates to the
bottom line. Here we have a strong balance sheet with substantial liquidity.

That's the last thought I have and with that I'd like to introduce our next speaker, DIRECTV's Chief Technology Officer, Romulo Pontual.

Romulo Pontual - DIRECTV Group - Chief Technology Officer

Good morning. As you are going to see later, during the break, we have brought to you some exciting technology components and devices as
they invite all of to be testing and asking questions about them. They are all in the hall behind you. We have also tried to bring a satellite to show,
but the closest we could get to was -- I just wanted to give a glance at how complex and what else we're doing in the space that we can't see in the
ground.

When Chase and I joined DIRECTV about three years ago, the company faced two big challenges. One, there was an array of different set up box
models in the market, each one of them having different user interfaces and remote controls. It was a challenge for DIRECTV to efficiently
support those customers and to control costs with those devices. We had plans to launch an interactive platform, and again this array of devices
made it much more complex and was essentially putting DIRECTV in a dangerous position of being behind others in the interactive platform.

The other challenge we faced was that the world was moving at that pace but it was moving from standard definition to high definition and the
company had no solution for it. [Inaudible] and in less than 24 months we resolved both of these issues. We have brought down the number of
boxes to 4. We have found a solution and we are assisting in a solution to keep that activity at the forefront of the distribution and to be delivered
in the high definition television.

I will address today our roadmap four major categories. It is of paramount importance to this business that we take control and reduce costs.
Particularly the ones related to consumer and consumer premises. Our main charge is to find the balance between equipment costs and the
features and expected life of this equipment. [Inaudible] life can be extended by adding resources, but we have to anticipate resources needed to
achieve what the consumer will demand in the years ahead. We are being [inaudible] participation to the [inaudible] and we believe that has been
quite successful and the first thing I am going to do is dive in and what have we done in set top box loss.

There is a portion of this chart that presents actual data and the other ones are forecasts. The set top box loss has direct impact to us from a
subscriber position and as we average about 2.6 of them per home, it's one of the significant acquisition cost drivers we have. During this period,
the range in years of relationship of our suppliers and put in place real incentives for cost reductions. We have made great strides specifically in
high definition units which in the first two years we have been achieving savings in the average more than $100.00 in savings in equipment in the
consumer home.

We have also increased features. We added memory. We added hard drive space. As a company when we see this high definition cost, we start
with the hard drives of 40 hours and we are now at 160 hours, while at the same time bringing the price down. [Inaudible - highly accented
language] and introduced common interface and remote control design across the category of boxes. After introduction of our HD DVR later this
year, all DIRECTV products will share common user interface elements and a common remote control design, which we are demonstrating today
and you're welcome to experience it in the hall back to you.

The interface consistency across the product line assists customers in having to learn just once. This is even customers who can effortlessly
operate boxes in different room, reduce the number of calls for support in our call center, and greatly assist DIRECTV to improve customer



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service. Another benefit of the customization was that in the process we created a national reference platform to support interactive services.
[Inaudible - highly accented language] that already support these services.

We will be expanding to the high definition products during the summer. We'll start the downloads and introduction of the new HD DVR. The
phase and introduction of the platform come with no shortcuts. We increase the amount of memory in our boxes to allow for future expansion and
launch the most sophisticated DVR with the larger hard drive in its class.

The introduction of DIRECTV plus was not a without challenges and initial snags, but a cornerstone event for DIRECTV. Our DIRECTV plus
DVR supports an array of interactive services and relies on the MDS XTV technology to safeguard the contents. The high [inaudible - heavily
accented language] scheme associated with the powerful interactive support allows more [inaudible - heavily accented language] services.

For example, next month we will be introducing an on demand viewing service that includes valuable early window contents. I will leave that for
Dave and Eric after me to explain the applications themselves. Our consumer app includes a powerful, exciting, easy to use platform and you will
see in a few minutes after we are through this technology stuff that DIRECTV will be introducing new exciting services. Some of these services
will rely on the unique features of our DVR and the high [inaudible - heavily accented language] local storage.

What's next for us in the technology? We need to expand the reach of these services to all television sets in the households. We are seeking the
solutions shown and aiming to resolve both cost equation and the design and functionality. And this solution will expand the full experience of
DIRECTV service to all sets and have a tied benefit to consumers who will be able to record from one set and watch the show on a different set.

Before leaving the consumer premise equipment, I would like to highlight the impact that the high definition position has to us. Clearly,
DIRECTV had to find a path to position its service to high definition and we did. However, because the position required to double the channel
count and because high definition television consumes much more hard drive capacity, we had to find more frequencies, much more satellites,
and introduce new consumer equipment to receive the transmission. DIRECTV has chosen a high frequency, the so-called CabM frequency, for
its expansion and secured significant expansion on two orbital locations.

We [inaudible - heavily accented language] support both previous services and the new services to a single dish. [Inaudible - heavily accented
language] dish of support this new service manufactured last August. We are already working a second generation and the goals of the second
generation were to reduce weight, to reduce size, reduce cost, looks better, and we have here for the second generation, in the hall demonstrating
to you, the new product to be introduced at the end of summer this year.

I have an [inaudible - heavily accented language] to point out that HDTV capacity plan has a most significant advantage to DIRECTV. It is
complex and requires strict cost control, but is worth it. And [inaudible - heavily accented language] is the [inaudible] service debuted next
month. It should gradually grow and accumulate by year-end with hybrid, on demand system that relies on satellite and a broadband access to
make it a high efficient delivery system. From a technical prospective, there is no better way to explain the high definition position than
projecting the channel capacity and that is what I am doing.

Firstly, we will address the need for national channels. We are launching a couple of national high definition channels this year, but the major roll
out will take place next year once our new satellites are launched. We plan to expand HDTV national offerings on our [inaudible] channels today
to 150 by 2007. The expansion put that activity on the forefront and opened facilities for our creative team to introduce new services.

I tried to put an estimation of our competitors' capacity for national coverage and that's what I have, clearly showing that we'll be basically the
absolute leader in the offering of HD and be basically driven by what is it we will find to put in this capacity. The national high definition
expansion plan wouldn't be as valuable if not [inaudible - heavily accented language] of local channels. I will show you in the next slide,
DIRECTV expands coverage in it's HD locals offering from the 12 markets today, to close to 17 by year end and to most of the households by
end of 2007.

This is an opportunity for DIRECTV. Having reached leadership in this area and given that this area is skewed towards the higher wealth
households, we elected to focus in home theater and will be launching a new product, which is specifically designed for home theaters. It will be
a professional grade receiver, which is, based functionality in our HD DVR, but with bells and whistles that are desirable by professional
installers that fits and installs computers at 10 to $25,000.0 installs.

Just switching back to the video download. As I said in the beginning, there is a another DIRECTV service that we are processing and we will
start to offer this later this next month. It's a high efficiency -- we started with a highly efficient delivery mechanism, which is being demonstrated



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here in the hall, and where customers can have an experience that's similar to Netflix and provides instant gratification, there's a rich selection of
[inaudible] and multiple billing options.

Later, as our technology gets ready, we will support delivery of niche broadcasts to the internet, rely on existing consumer broadband access. This
should be the most efficient delivery of this kind of service. While developing those products and getting excited about the possibilities, we're still
keeping our attention to how can we improve efficiency. What else can we do? How can we reduce costs? [Inaudible - heavily accented
language] technician has service calls, we have consumer complaints, or issues and we have installation issues. And while pursuing the high
definition, we have been trying to address few opportunities.

The first one being, we launched last year some solutions for MDU. It was a choice to us given that they are 20 million households located in
multi-dwelling units and are satellite DIRECTV home services [inaudible - heavily accented language]. Last year, we resolved that the last
technological barrier and that had prevented a similar provisioning of this service and we're now uniquely positioned to address these additional
households.

The solution that we found for the MDU. We found dozens of new technologies that can be adapted to resolve also a costly issue we have today.
As a way of example, when our installers reach a home, which was previously served by cable, he ran new wires to each television set. It is costly
to us and unpleasant to our customers. The [inaudible - heavily accented language] model will simplify the installation process and will allow us
to re-use the existing cable wire.

The improvements in retention are aiming to control cost, but also to increase the number of homes [inaudible - heavily accented language] a
return channel. A connection is highly desirable to us to support future service but is also a win to customers, which would get access to some of
our new services. We are starting a trial that relies on power line technology eliminating the need to run phone line to every box and if it is
successful the technology below that for our product line and we should see a savings in installation time and cost, as well as convenience to our
customers.

Here is another are of improvement that may be a win-win to DIRECTV and its customers to provide the ability for hard drive expansions. Hard
drive size is considerably increasing. As a case, that's much faster than the life we want for our set top boxes. We have initiated the development
of hard drive expansion device that is user installable which allows you free storage without the need for [inaudible] or replacement of the
original DVR. The new device should become available next year.

In addition, [inaudible - heavily accented language] improve diagnostic tools where the box will call us back and inform that activity of user
experiences that ought to have been ideal. That will allow and give DIRECTV the opportunity to identify and rectify those problems before
becoming an issue for the consumer. There are also other improvements possible especially if we meet the growing consumer desire for
flexibility and that's where we're going.

The widening scope of our services is certainly a challenge to DIRECTV and is not where we have been. We have a closed system today, but we
hear our customers and you can see the growing demand for flexible solutions. Consumers want to watch our service where they want, when they
want. They want mobility. They want to [inaudible]. They want to be able to be on the road and they want us to make it simple.

We do have several initiatives ongoing. One of them is how can we make it simple to consumers. How can we allow consumers to watch
DIRECTV in the kitchen as they used to in the old kitchen TV. How can we have a space saving solution for small apartments or bedrooms
where they just want to have a TV set? What we have done is we have allowed our partners, in the case [inaudible], to integrate our set-top box
inside the television. This provides the full DIRECTV experience identical to what it would have been a cable high def television with the extra
benefit of no outside wires, having just one remote control, and being simple to use. You are also again invited to play with those devices in our
hall. These devices will be commercially available within a month or two.

Now we come to the product expansions where both the home networks are growing and consumers are getting more services from both
Microsoft technologies and other devices in the home and [inaudible] that we can and we should be able to inter-communicate those devices. In
order to achieve that, DIRECTV has jointed the DLMA Alliance, which sets standards for, the industry and we have selected to partnership with
the two key players and the worldwide leaders in this front; Microsoft and Intel.

To start, we will be offering a suite of services for non proprietary devices such as DC, DIRECTV to go devices, if you have also demonstrated,
[inaudible - heavily accented language] which allows fast deployment and flexible solutions.



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In this consumer home that I am trying to present here, we will offer the consumer DIRECTV to go portable devices. Multiple devices will be
available and you can see there is an array of devices in the room, but we have been working to make sure that our DIRECTV to go initiative
works with any of the [inaudible] devices.

The Microsoft leadership in this technology will make the devices [inaudible] configuration and all other settings similar to consumers to go with
just a plug and play and with [inaudible - heavily accented language]

Microsoft backing and the size of DIRECTV viewer opportunity is bringing device manufacturers to us with offers [inaudible - heavily accented
language].

We're quite excited about this product.

Another dimension is the Intel initiative. Intel came to DIRECTV and DIRECTV met Intel and we entered into a partnership, which is quite
complimentary. Intel's view on the emphasis in the home is that it has to be similar. It has to be easy. It has to work. And that's exactly how we
think; in fact that's how we deliver our service today. Consumers don't have to set up or problems. With the partnership with Intel, we became the
leader and the only one [inaudible] support of device technology

That brings us worldwide coverage attention for all the device suppliers. We're currently working with Intel and Microsoft to integrate [inaudible]
PCs into DIRECTV systems. Later this year we should be able to have the first [inaudible] and demonstrating how DIRECTV experience, the
high definition DIRECTV experience can be and will be digested, not only for our boxes, but [inaudible] PC, potentially Xbox devices.

This partnership has also an additional benefit to consumers which will allow consumers to [inaudible] and what's the purpose and the personal
video and throughout our devices even if the storage may in fact be at their personal computer. In summary, technology innovation is a key
element for competitiveness. It can create opportunities for new revenue generating services. It can reduce costs and it can increase consumer
satisfaction. In itself it's not sufficient. It has to be tailored to the new service needs and to [inaudible] that aim to reduce costs or increase
customer over all satisfaction.

DIRECTV is well positioned to be and to maintain a forefront on the new product services. DIRECTV customer base is skewed for the upscale
customers when compared to [inaudible]. DIRECTV has access to a news corporation, to global issues, [inaudible] and can view the as leverage
of news corporation worldwide presence to capture the interest of major partners and the camp we have seen here today of Microsoft and Intel.

DIRECTV has the unique [inaudible] distribution strength and has a robust and capable fleet. DIRECTV adopted certain protection in [inaudible]
on the industry leader and DIRECTV is the industry leader in both [inaudible] and condition access. And we have a [inaudible - heavily accented
language] infrastructure that is flexible, quick to change, an example you see is we are taking out, finding a different path for our technology and
provide a range of high definition channels. [Inaudible] decision process that's streamlined and incredibly fast.

With that, I'm glad to introduce the most creative person I ever met. He still denies having an engineer background and [for] this is David Hill.

David Hill - DIRECTV Group - President, DIRECTV Entertainment

I too will be speaking with an accent. For those of you who have difficulties with it, there will be subtitles showing on the screen. Two things
about that, the subtitles are from the movie, quot;La Glory de ma pierquot; so they won't make terribly much sense. Secondly, I'm more used to doing
production meetings so most of my remarks will be in single syllables. I've got to tell you, you guys are tougher than an upfront audience. It's
unbelievable. The toughest thing that I've ever done is do the upfronts. You know what the upfronts are? Jessica, can you tell them? And the
funniest thing that ever happened to me was when I was doing the network, when dinosaurs walked the earth, we had a show called, quot;Actionquot; and
I'm not going to tell the story about what Buddy Hackett said because I will face the wrath of Chase afterwards. Do you want to hear the Buddy
Hackett story?

Okay. Here's what happened, but just keep it in this room. All right? You're not to tell a soul. We had this show staring Jay Moore, called,
quot;Action.quot; It was the inside story of Hollywood. It was very cleverly written. Buddy Hackett, for reasons that I still don't fully understand, had a
roll in it. What you do in the upfronts is you address an audience like this, much bigger, but equally stonified. I think you've all done drugs this
morning, but the wrong ones. What happens is that you would show a clip from the show. The audience and the stars would come in. I'm going
this is a story about action. It was going to be running at 8:30 on Tuesday night. What normally happens is that the cast walks past. You wave,



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they wave. Self-applied audience sits there. That actually is a pretty good imitation of [Larry Hunter], who, for some reason, has started making
sounds like a baby seal being clubbed.

But on this particular occasion, the legendary comedian, Buddy Hackett, started walking towards me. It's like being approached by a Sherman
tank. So, I am standing here just like this doing this. So, he bang, bip, bop. So, he looks the audience in the eye, and he says, I am Buddy Hackett.
The audience, for some reason, wakes up. Raaa! I'm 75. Raaa! I take Viagara! Raaa! Do you know why? The audience yells back, why? He said,
so I don't piss on my shoes.

So, he tells them the share price will drop dramatically and they are all sitting there pressing their [inaudible] buttons even as we speak. There is a
pulse out there. You take the blue ones first, followed by the purple ones, then the pink. Do it the other way around, and there's a terrible reaction.
There's a few druggies out there. That got a giggle. It is fascinating that something, which originally made cows terribly uncomfortable and got a
whole bunch of guys hung by the neck until they were dead, should assume such importance to date. Where the hell is he going? Cows, pig guts?
Think about it. I'm talking about branding.

It's probably more important now than it ever was, and probably has more similarity to the wild west activity than ever before. Think about it.
Building a brand and sustaining it is just about as uncomfortable as having a red hot flying J pressed into your butt. If you don't get it right, the
branding that is, you're dead. How many brands do you think we are subjected to each day? Thousands, tens of thousands, hundreds of
thousands? A bunch. And if you work hard enough to make that brand stick in the consumer's mind, you've done good. DIRECTV has done
pretty good. The brand is simple and iconic. It has stickiness.

The messaging may have changed subtly over the years. I know the agencies have. That's a little advertising joke. I'll explain that later. Top of the
side, cost you five bucks a head. True story. For what the brand stands for in the consumer's mind from the get go is that DIRECTV is simply the
best television experience around. Let me define best. It's the best service, the best technology - - you just heard Romulo. I've got to tell you,
these dudes are so smart, they've all got IQs in four figures. But first and foremost, what DIRECTV is all about, and what established it in the first
place is, it's the best entertainment and it's simply unique and distinctive content.

And that entertainment bit, to my mind, tends to get a little lost in all the conversations about our industry. Sure, the opposition scored up a bit.
Didn't need to. There is more technology jargon thrown around now than ever before, and to me, it totally confuses the entertainment picture. But
let me tell you something. Consumers do not look at the back of their television sets. They are not there sitting, looking at the back, marveling at
the coupled wire, the connections, the dingleflappers and beeblepetses. They are technical terms that I too will explain, five bucks a head, later off
to the side.

Consumers buy because of the entertainment because of the entertainment that comes into their home day by day, night after night after night. I'd
love to use the phrase best in breed, but it always makes me think of a Pomeranian prancing around the Westminster Dog Show, so I won't. When
Chase asked me to come down to DIRECTV - - asked - - it implies a friendly exchange, doesn't it? It implies that there was something nice about
it. When Chase asked me to come down to DIRECTV with a cattle prod 12 months ago, it was to build a team, which made unique and
compelling content for us. That's what we've been doing.

What's scrolling through these monitors, apart from the subtitles of the glory [inaudible] is our development slate, some in production and others
just a gleam in the eye. And what we are doing and what Indiana's own Eric Shanks will take you through in just a moment is totally broadening
our entertainment offering. DIRECTV has always appealed to the adult male with our rich, varied and constantly changing sports product. And
those of you who have got Sunday tickets and watched what we did with the [superpad] package, especially the Red Zone, will have more than a
clue than where we are heading in that direction.

But we are also targeting audience segments that we believe were under-served. The reason I am reading is because if I don't, I tend to go for
about three hours. So, I do apologize for reading, but it's in everyone's best interest, trust me. I've had more lawsuits from when I have spoken
extemporaneously. Kids and young adults have been targeted with shows like CD USA and our massive gaming league, which we hope to get up
and running in a couple months, but Eric will take you through that.

Faith-based programming, like our Songs of Praise, coming up over Easter, the huge American Idol audience, the deal we have just cut with the
folks at Reality Channel to repeat their weekly American Idol rap show. Chase keeps telling me not to call it the post game show, but old habits
die hard. And what that show is going to do is sensational because it highlights the angst, emotion, elation, the kissing and the crying of each
week's episode of American Idol.



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Families with young kids, with the addition of cognitive games and channels like Baby First. What we're doing, we're cherry picking potential
audiences, area by area. Let me tell you another thing. You guys are all aware. You're all college educated. You're all bright, taking the right
drugs. You know about the DVR. You understand what the DVR is, understand what it does? Anyone not? Put their hand up. Okay, cool. You
know what it's doing? Totally revolutionizing television before our very eyes. Why? Very simple. It puts the customer in charge of everything.
You totally control your entertainment destiny. And that is the key to what we're doing.

The team which is being built in our original entertainment area is young and smart, but most of all agile, none of which applies to me. We can
move, or they can move, on a dime. And the reason we're doing that is to eventize the year week by week by week. Songs of Praise that we're
doing over Easter is a classic example. Our aim is to eventize the calendar - - Mother's Day, Father's Day, Thanksgiving, Halloween, Valentine's
Day.

Think about it - - programming controlled by the customer through a DIRECTV Plus, our great DVR, which fits the family mood of each and
every holiday. Now I'm not saying that we are going to be doing the Punxatony Phil story anytime soon, but you get the idea, right? Right.
Punxatony Phil - - okay. With me? Anyone not know Punxatony Phil? Good.

Let me give you another example - - movies. I watch with amazement our competition talking about 20,000 titles, 30,000 titles, 40,000 titles on
VOD. Big deal. Now let me ask you a personal and intimate question. How many of you guys have got a DVD that you bought still sitting in
your living room in the plastic wrapper? I bought a DVD for my kids of Finding Nemo. It's still there. It's just gathering dust. So, you know what
I'm saying, right?

How many of you have got a burning desire to watch the Maltese Falcon right now? Sure, there's going to be one or two out there, but that's about
it. Now what we're doing is, instead of bulk, we're working on quality. We're working with one of America's leading movie experts, [Leonard
Morton], to totally make over our pay-per-view movie offering, which is not only to do the best deals that we possibly can with the studios, but
also to offer companion pieces.

For example, Kurt Russell's movie about the racehorse, the little girl. The ideal companion piece to that is where it all started, National Velvet.
So, if you see one, the other. So, we are working with Leonard, going through all the movies that are on offer. We are looking through all the
slates that are coming through and he is - - I tell you what, for a movie nerd, a totally nice guy. Really surprised. No, it's not surprising. I'm
surprised he's a nice guy.

So, what we're trying to do is, in the near future, offer a carefully thought through, compelling offering, which will be the closest thing to a
cineplex in your living room that has ever been available. 60,000 movies. There's still 24 hours in a day and you're still going to sleep a few of
them, you're still going to work and whatever.

So, the entertainment time that you have available to you is still limited. And we believe that if we put on offer simply the best that the audience
is going to respond. What DIRECTV is about is about service, it's about technology and more HD than anyone else. And I'm just wearing my fox
hat that we're pumped out, I think at Fox Sports, more hi-def pictures of Super Bowls and World Series, NASCAR events than any other
broadcaster. So, we've probably got more experience in working with HD - - let me tell you a quick story. So, when HD comes in, right, 16x9
format as opposed to 4x3, so I call a meeting of my directors. And I say, boys, how are we going to handle this? For the next five years the
number of HD sets in the country is going to be minimal.

And one of my directors said, we're going to do what Mr. Ford said. Mr. Ford, I'm thinking, Henry? No, no, the western movie director. He had a
simple instruction for all his cameramen. Keep the stagecoach in the center of frame. There's not a single cameraman in the audience. That, in a
production meeting, brings the house down. The cameraman, you know, like - - side speak. So, you saw what [inaudible] said, so that's where
we're going to be next year.

But above all, what we are above all that is about unique and distinctive content. We're an entertainment company first and foremost. Think about
our name. We're direct. That's simple. And we're TV. We're DIRECTV . And we have been, and still are, and continue to be simply the best
television experience in the world.

Now the reason that Eric Shanks is going to take you through the school programming, which will be on offer, is because a lot of it is technical. I
don't do technical. In fact, I'm still not terribly sure why, if the cable that comes out of the wall is round, why the picture on the TV is square. I'll
leave you to think about that. Ladies and gentlemen, Indiana Jones, Eric Shanks! Round of applause! Come on, give it up! Eric Shanks: I'm sorry,
but now you're going to have to try and deal with my Indiana accent, so I will speak slowly. You can smile. It's not a problem. We're going to get
back to the numbers as quickly as possible and you'll all be happy again.



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Romulo earlier gave you a good sense of our HD capacity in the very near future, but he is a cliche. It's not the size of a pipe, it's what you put
through it that matters. We've already launched 12 local HD markets. We'll be in 22 by April, 36 by the end of June, including such markets as
Seattle, Pittsburgh, Denver and, just to prove that you don't have to win a playoff game to get HD in your city, we've included Cleveland and
Indianapolis.

By the end of this year we'll cover more than three quarters of the country with D10 and D11 to provide local HD, plus capability to launch 150
national hi-def channels, and if you do the math, which I think you all can, by the end of 2007 our HD package will be superior to cable in at
least, if not more, than 75% of the country. But our definition of the best TV experience doesn't end with HD. We've built a team, led by David,
that is committed to producing exclusive and unique programming in an array of genres and formats, ranging from traditional television to
interactive and on-demand. And that's what I will walk you through now.

Our initial on-demand offering capitalizes on the DIRECTV Plus DVR. And here is a snapshot of what our offering will look like by year's end.
You know our drive in the box is partitioned to give 100 hours of use to the customer and roughly 60 hours for us. And here is how it's breaking
down. We've already announced TV deals with NBC, Universal and Fox, which give us access to the most popular shows. And with FX, that
allows us to do what we call pre-runs, allowing viewers access to popular FX series up to 48 hours before they air on FX.

So, in essence, what we're doing is providing the top tier of television and movies right at the customer's fingertips, which is a little different than
what research shows is Cable VOD, which is usually the destination of last resort. We'll also be working with other studios and networks to find
new ways to distribute content. You'll hear more from us about earlier windows for movies and using the DIRECTV Plus DVR to deliver DVD-
like features through DIRECTV Plus.

However, the on-demand offering is not just movies and TV shows. We'll use DIRECTV Plus as a portal for games, as a gaming device, also for
customer service and interactive advertisement. But because we have unique capabilities on DIRECTV Plus, the DVR is completely customizable
to the viewer. So, you can see the bottom line there. If customers are interested in different pieces of content, including movies, they can opt in to
services. So, if somebody is really interested in underwater basket weaving, they just tell DIRECTV Plus, and each week they'll get a mind-
boggling amount of underwater basket weaving.

Plus, in 2007, as Romulo says, we are roughly going to double the size of the drive, so that will give us even more capacity in the viewer's home.
Then later this year, the next generation of DIRECTV Plus will support our MPeg4 HD broadcasts, as well as broadband connectivity. This will
enable the viewer to download titles, through the broadband connection, right to their play list. So, with only a single head end for us to manage,
unlike cable, we will have the technical capabilities to deliver the same volume, tens of thousands of titles, if they want them, that cable can offer.
So, David can watch the Maltese Falcon over and over and over again.

We expect this universe of boxes that will support this service to be around 300,000 by the end of 2006. We'll include rich graphics, promoting
the broadband content inside of our existing EPG. You can see one example of how graphics will be integrated into the EPG to give viewers easy
access to find the titles. Plus customers will be able to use DIRECTV .com or even their mobile phone to select titles and have them downloaded
to their DVR at home. So, broadband VOD is the obvious starting point for us. But once the set-top box is hooked up to the home network, the
possibilities become virtually endless.

Sports - - one of my favorite topics. Since its beginning, DIRECTV has been the leader in delivering sports programming to its customers. We are
now broadcasting more than 50,000 live events each and every year. We are committed to not only maintaining this leadership as we saw with
our renewal of our exclusive NFL Sunday ticket package 320/10 and the NCAA March Madness package, and further enhancing them with
interactive and on-demand services this year, but we will separate ourselves even further from the pack with new alliances.

And today, because somebody up there loves you guys, I'm going to be the first one to let you know that I'm proud to announce our latest addition
to our interactive sports assets. DIRECTV has teamed with the Yes Network and Major League Baseball Advanced Media to deliver the first-ever
interactive broadcast of the 26th-time World Championship New York Yankees.

All Yes Network's broadcast of the Yankees right after the All Star break will give DIRECTV customers access to an array of interactive
services, including exclusive camera angles like StarCam, which is something that we started at [inaudible] and is hugely popular. It would be a
dedicated camera that will follow specific stars for certain periods of the game and the customers will still be able to see the main broadcast.

Other features included on-demand scores and stats, as well as player cards and bios. Plus we will launch an interactive game that viewers can
play during the broadcasts. We are also looking at getting these enhancements tied around the HD side of the Yes Network, but that is probably



FINAL TRANSCRIPT

on tap for 2007. So, we are extremely excited to open this new chapter of the best TV experience with the Yes Network and Major League
Baseball. And as I can tell, you're all very excited. Come on, position players reported yesterday. Come on, you've got to be excited.

We also want to get game service on our set-top boxes called DIRECTV GameStar. Every day in this country millions of people play casual
games on their computer or on their phone and it's now generating about $500 million annually in revenues. We'll create games using some of the
most popular brands in the world, and most of them will be exclusive to us.

And one of the more important things, unlike our competitors, you will be able to watch your favorite TV shows while playing most of these
games. So, you won't be taken away from your entertainment experience. It will not only be entertaining, but also educational. We're teaming up
with some of the children's brands to deliver games that also teach your kids how to count, maybe even teach them Spanish or hopefully count in
Spanish or Portuguese or Australian.

On top of that, our DIRECTV Plus DVR customers will have access to a whole new genre of interactive games. These are DVD-based games that
you're starting to see, but we'll go right to [inaudible]. DVD-based games that retailers are starting to give up shelf space for, games like Scene It,
Disney's [inaudible] Madagascar game. We can essentially take those DVDs and reformat them and broadcast them to the DVR to make them
completely interactive. And they're very family-friendly, some of them educational.

We're also in development with the number one news channel on television, the Fox News channel, to develop a video-rich, interactive
enhancement that will add a new dimension to TV news. We haven't yet set a launch date for this service, but it will probably be sometime in Q3.
So, as you can see, we are taking full advantage of our sister companies within the news corp family. I mentioned the Fox VOD and FX VOD
deals. I mentioned potentially getting earlier windows for movies, Fox News. On the gaming side, with massive gaming league, we're working
with IGN and if you have had a chance to see CD USA, every couple of weeks we take the top band from My Space and let them perform to a
national audience.

Finishing off our interactive slate for 2006, one of the things that I'm most excited about - - it's probably one of the coolest things to build
community around the television experience, that you'll see anywhere. So, if any of you have visited Yahoo or USA Today, you probably have,
and you take a look at some of the most e-mailed articles of the day, what are the top photos of the day? Everybody loves to go see what the most
popular stuff is.

In April, we will launch the first-ever consumer, real-time ratings service that is completely interactive. Viewers will be able to see what the most
popular shows are on DIRECTV right now and, with their remote, directly tune to them. We'll take a look at what that's going to look like.
Viewers can choose either national or local or even drill down into a variety of genres, so they can see what the most popular movies are, what
the most popular sporting events are, and we've actually got a demo of that running out back.

All right. Even though they're pretty, we've had enough of the slides, right? We're an entertainment company. So, as you know, we've already
begun producing our first DIRECTV original entertainment show called CD USA. It's a weekly rock and roll show with a lot of bands that
probably nobody in this room has ever heard about except for bands like the Goo Goo Dolls, Kelly Clarkson, Mariah Carey, who have all already
been on CD USA.

Let's take a look at what is on tap for the rest of original entertainment for the rest of this year. Roll the tape. [video playing] So, one other
interesting note that I had to double check myself about CD USA, we have a CD USA page up on My Space, and the show launched January 21.
During the month of January, the server reports from My Space indicated that we have 70 million page views to our CD USA My Space page,
and just yesterday I removed the bandage from my finger, which I couldn't realize that I could actually click that much.

None of our content initiatives will actually mean a thing if customers don't have an easy way to find and access all of this new content. So, we've
already started a project to design our next generation user interface. The new interface, when it's launched in 2007, will have a powerful search
and recommendation engine, redesigned graphics and community features that allow you to share your entertainment experience with friends.
And because the new boxes that we've deployed over the last two years are upgradable via software download, if we choose to, we can actually
upgrade the interface that is already in customer's homes.

But when we talk about original entertainment, don't get the idea that every week we're going to make Gone With the Wind or even Maltese
Falcon. We've put together a team that can move quickly, can produce unique, compelling content efficiently, either on our own or with sister
companies, and the goal is to really have what David and Chase explained as a constant flow of unique content.



FINAL TRANSCRIPT

Like you said, it's all about the entertainment, and you can see that we're starting to take our shots, and we're going to be constantly analyzing
what works and what doesn't. We'll make changes along the way, but our commitment to producing the best TV experience won't ever change.
And just remember, somebody up there loves you guys. Next, Ruben?

John Ruben - DIRECTV Group - VP of Investor Relations

We're just going to take a short break now for about 10 or 15 minutes. I'd like to remind everyone we do have hard copies of the presentation at
the registration desk, so I'll see you in about 15 minutes. [Break] Okay. If everybody could take a seat, we'd like to get started with the next
presentation, the head of Sales and Service, John Suranyi.

John Suranyi - DIRECTV Group. - President, DIRECTV Sales and Services

Good morning. After Chase introduced me as someone with decades of experience, you probably expected somebody a little bit older. Just to put
it in perspective, I did start in the cable industry in high school as an [inaudible] scholar back in the mid-70s and worked my way through college.
And I've spent about, a little more than half or two-thirds of my career in the cable business, shifted over to the MMDS world, worked in that
business, which was the first wireless video opportunity and then spent a little time at EchoStar and proud to be with DIRECTV . It's certainly an
exciting time for somebody like me who has spent such a long time in the business developing paid television.

I thought a good way to start my presentation would be to show a one-page slide illustrating the responsibilities of my organization as well as the
customer lifecycle of DIRECTV. In simple terms, my team really owns the delivery of the customer experience and that includes from a
functional perspective sales, marketing, field services, which is our installers and technicians, call centers, supply chains, warehousing and
logistics.

We have three primary strategies that we're really focused on as a group that's to generate profitable growth, improve quality and efficiency of
customer care and make measured investments to retain quality customers. The first stage in driving profitable growth for us is to really identify
who is it that we want to go after and target as prospects as future customers. So we started by leveraging our existing customer base to define
segments based upon their profitability which assists us in finding like kind prospects in similar areas.

This chart represents a snapshot we took of our database. DIRECTV does have a very in depth robust database available to us but this chart
represents a snapshot we took in 2005 of our customer base and as you can see in this chart based upon using our internal customer lifetime value
calculation 33% of our customers account for 63% of our profitability from subscription revenue and our intent is to use this data to attract more
customers like those that fall in the 33% category.

We'll take it a step further. We apply a demographic overlay to the profitability segments which puts a face on the lifestyle on our customer base
and also assists us with our targeting efforts. We have learned that our demographics we spot for DIRECTV is for targeting purposes. Is higher
income, higher educated married men with families that range in the age group between 35 and 65 with household incomes that are $60,000 all
the way up to the wealthiest of families.

We also use third party data appends to add other behavioral availables that help us with predicting profitability and that includes home
ownership, home value, how many third party credit and marketing files a prospect might show up on. Total number of credit lines. Total
outstanding credit limits. Average household income and marital status.

Sometimes there's some risks when you do it this way, but we've found this to be very successful that our most profitable customers tend to have
similar demographic characteristics and we don't just cover demographics. We also do an in depth geographic analysis for the purpose of finding
key markets that are ripe for acquiring profitable customers. In this case, we've actually covered up some of the data for obvious reasons.
Specifically, it's illustrated in the spreadsheet. We've identified key DMAs where we've acquired highly profitable customers in the past
combined with an overall penetration rate and our momentum for growth over the past 12 months.

In 2006, we plan to be very aggressive and targeted in at least 20 key DMAs that we consider must win markets or markets that we plan to own
from a growth perspective within our business and our outfits will include marketing alignment in key areas with our business partners including
our Telco partners, consumer electronics, retailers and the independent base. In the past, these efforts were probably not coordinated in an
optimum manner.



FINAL TRANSCRIPT

Finally, we also focused on what we call need based segments or customers who have a real need to switch their television service. We're focused
on two categories as shown here. One is movers, over 18 million movers moving households in the coming year. One thing we've done that is
somewhat new is we've aligned our self with third party middle men who coordinate or simplify the transfer of services when you move such as
when you call to change your power services. Sometimes these companies will also you if they can assist you with changing your television
service, your voice, your data and other services that might be applicable.

We've partnered with those companies to not only take advantage of the opportunities that occurs during that phone call but also ensure that our
DIRECTV customers get transferred across appropriately. We also are working with CE retail partners and television manufacturers to drive
promotions associated to customers who are going to buy a new TV set and of course in 2006 they're varying abstinence between 15 and 20
million new digital TVs should be sold most of which will be high definition and in fact we just finished a promotion with Samsung and the NFL
tied to customers who purchase a Samsung television and subscribe to DIRECTV.

Another strategy that has helped us drive quality growth and balance cost through direct sales. When we thought of direct sales it's really people
who call to subscribe to 1-800-DIRECTV or DIRECTV.com. Not too long ago, the direct sales represented a very small portion of our growth but
in 2006 we see that expanded beyond 30% of our total sales activity. Through our direct sales efforts we've been able to be more targeting going
after quality customers another infrastructure to control the customer experience. This includes targeting by direct mail by zip code, door to door
teams and even leveraging our installation networks to put store hangers on adjacent households in neighborhoods if they're working in.

We're also recapturing some of the alternate media used predominately by our independent dealers in the past such as Yellow Pages, Directory
Service, and add both and in 2006 we plan to increase our .com sales by at least 34%. We've increased our paid searches to ensure that when you
do a search on DIRECTV it comes up on the top of the list. Last year you may not have found it that way. We're coordinating our efforts on paid
search words or keywords in the web space with many of our retail partners. We're also planning to launch a new website for prospects at the end
of April.

Of course, we continue to leverage our existing partnerships with key business partners including the independent dealers. The independent
dealers today represent 40% of all of our activations. January1st, we made some pretty significant changes to the dealer compensation plan to
ensure that they focus on quality growth and specifically we changed the card sack provisions so that there's a six month cliff effect that includes
the installation charges. So any customer that - it's pretty painful for any customer that would churn out prior to a six month window when in the
past it was prorated over a 12-month period and it did not include the installation revenues that they would have received.

Telco, our Telco partners today are a very important part of our business. A few years ago, it was nothing. Today, it's 20% of all activations. That
includes Verizon, Bell South, Qwest, Cincinnati Bell, and we're in discussion with other potential partners right now. Telco deals enable us to
leverage bundling opportunities with broadband, voice, wireless and other services.

Unidentified Company Representative

(inaudible-microphone inaccessible).

John Suranyi - DIRECTV Group. - President, DIRECTV Sales and Services

I have no idea what that was about. Any how we also plan to leverage our recently announced deal with Earthlink to provide a bundle in areas
where we don't have a relationship for the Telco partners today. One other opportunity for existing customers we do provide them with an
opportunity to opt in to a bundle so if they're an existing DIRECTV customer they can actually opt into one of the bundles that we have through
our Telco partners and in some cases even receive a single bill.

It's a little early to compare the results that we get from our Telco partners compared to the rest of our base, but we do believe we're going to
receive some significant benefits through reduced churn and of course increased customer satisfaction.

Consumer electronics channels. About 3 to 5% of our business today is a better opportunity for us to showcase our products and also leverage the
point of sale when the customer is there buying a new TV set. I think you'll see in 2006 Best Buy is going to take a very strong position to
accelerate our business to a much higher level and then the MDU world as Romulo talked about it's really an untapped business for us. It's 33
million MDUs or multiple dwelling units across the United States. Twenty-two million of those have 5 or more units per structure. Between 6 and
8 million structures have 50 or more units within a building such as those that you might find here in New York City and the growth in that
category is pretty significant with over 350,000 per year being built. So it's a big untapped market for us.



FINAL TRANSCRIPT

Today, our share is quite limited. We have about 1.2 million customers in total. Most of those customers receive their service by a dish that's
hanging down on the balcony facing the south. There's a very limited number that actually receive service through a wired infrastructure within
the building. So we're excited to having new single wire technology that we can use to overlay or plug into existing cable infrastructure that might
be in the building to be able to deliver the full DIRECTV experience.

This is an interesting chart that shows sales by activations - or sales by channel that have occurred over last year and you can see a couple of big
points in the early days. Of course, a lot of our business evolved from the consumer electronics business. That of course has changed quite a bit
now. There's a lot of focus for existing customers to buy products there. Then you can also see our continued focus in the direct sales arena as
well as the growth that we've achieved with our Telco partners.

Our next significant area of focus is tied to service. Certainly service and customer satisfaction is the cornerstone to our success with our efforts
really tied to quality and efficiencies. Operating a call center that receives over 130 million phone calls a year certainly brings a lot of challenges
and opportunities and there are many different metrics we utilize to track our progress in the call centers including the number of calls that we
receive by type, the length of time that a customer could be on hold, the service level that they have and in particular the two categories we track.
One is service level and contract rate. Service level in the call center is defined as a percentage of calls that are answered within 30 seconds or
less. Overall, across all call types in all of our call centers our goal is 85%. That might change by category such as in direct sales. We want to
answer the phone immediately or retention call or technical call we might answer the call more promptly and be able to allocate our resources.

We've improved over the last couple of years. However, we're not where we want to be. We ended 2005 with a service level of 72%.

Contact rate which reflects the percentage that our customer base calls us within a given month. It's an important measure because it really needs
to align itself with the forecast that we have for staffing and answering the calls. Sometimes we trigger an event where we prompt our customers
to contact us such as the launch of local channels or HD services or things of that nature. Even the launch of new technologies like a DVR or an
HD box.

We ended 2005 with a 69% contact rate. Sixty-nine percent for a one month period against 15 million customers about 10 million phone calls for
the month that we would receive across many different categories. We do this increasing slightly in 2006 as we continue to rollout advanced
products and launch high definition services.

One big opportunity we have with contact rate is moving customers to a self-care platform where they use technology like an IVR or a website to
handle their issue. We see ourselves as a leader in this category today with over 34% of all of our contacts being handled through a self-care
application where they never talk to a person and in 2006 we plan to introduce more functionality that will us to put that to about 40%.

So as you can see in this chart although we've been successful in reducing costs much of it is a factor of controlling volumes and moving calls to
self-care applications.

Another strategy in the call centers is to leverage our owned and operated call centers to drive quality and reduce costs. As shown in this chart,
about 30% of our calls - total calls received are answered by a DIRECTV employee. We believe that's important. It's important for us to handle
the most critical more difficult calls today by an employee which includes retention, technical.

We also utilize third party outsource centers to handle routine calls and help with the seasonal aspect of our business. In 2006, we expect the
offshore activity to increase to 22% and as Mike said, that includes (inaudible) in the Philippines today and one near shore call center that's in
Monterey, Mexico. So far our customer satisfaction surveys have indicated very positive results to the center and call activities that we're sending
to an outsource or an offshore provider.

We also leverage offshore companies to assist us with administrative activities such as emails which today is a growing activity in our business.

The call center world it's important for us stay focused on people and infrastructure and the tools that we provide. This chart lists quite a few
activities that have been deployed or activities that we're focused on right now. I just want to cover a couple of them.

One is in 2005 in Denver, in our Denver operation we launched a national command center. That activity was previously contracted through one
of our third parties West, and what our command center is it brings all of our call activities into one area and allows us to route the co-activity by
type, to location by time within 15 minute segments, so that we can coordinate the flow of co-activity. It's been a great success story for us



DIRECTV Analyst Meeting Highlights Technology, Content and Customer Service Plans

DIRECTV Analyst Meeting Highlights Technology, Content and Customer Service Plans

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DIRECTV Analyst Meeting Highlights Technology, Content and Customer Service Plans