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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                             to


Commission file number 333-106529

DIRECTV HOLDINGS LLCDIRECTV FINANCING CO., INC.(Exact name of registrant as specified in its charter)

DIRECTV Holdings LLCDelaware
DIRECTV Financing Co., Inc.Delaware(State or other jurisdiction of
incorporation or organization)

25-1902628
59-3772785(I.R.S. Employer
Identification Number)2230 East Imperial Highway,
El Segundo, California
(Address of principal executive offices)

90245(Zip Code)(310) 964-5000(Registrant's telephone number, including area code)N/A(Former name, former address and former fiscal year, if changed since last report)


Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý (Do not check if a smaller reporting company)

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o    No ý

The registrant has met the conditions set forth in General Instructions H(1) (a) and (b) of Form 10-Q and is therefore
filing this Quarterly Report on Form 10-Q with the reduced disclosure format.



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DIRECTV HOLDINGS LLC

TABLE OF CONTENTS



Page
NoPart IFinancial Information (Unaudited)Item 1. Financial StatementsConsolidated Statements of Operations for the Three Months Ended March 31, 2009 and
2008

1Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008

2Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and
2008

3Notes to the Consolidated Financial Statements

4Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations

18Item 4T. Controls and Procedures

27Part IIOther InformationItem 1. Legal Proceedings

27Item 1A. Risk Factors

27Item 6. Exhibits

28Signature

29


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Table of Contents

DIRECTV HOLDINGS LLC        PART IFINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF OPERATIONS    (Unaudited)

Three Months Ended
March 31,2009

2008(Dollars in Millions)Revenues

$
4,303

$
4,049Operating costs and expensesCosts of revenues, exclusive of depreciation and amortization expenseBroadcast programming and other


1,808


1,683Subscriber service expenses


301


274Broadcast operations expenses


69


61Selling, general and administrative expenses, exclusive of depreciation and amortization expenseSubscriber acquisition costs


653


530Upgrade and retention costs


274


255General and administrative expenses


212


189Depreciation and amortization expense


589


464Total operating costs and expenses


3,906


3,456Operating profit


397


593Interest income


2


9Interest expense


(84
)

(55
)Other, net


(1
)

Income before income taxes


314


547Income tax expense


(117
)

(215
)Net income

$
197

$
332


The
accompanying notes are an integral part of these Consolidated Financial Statements.

1

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DIRECTV HOLDINGS LLC        CONSOLIDATED BALANCE SHEETS        (Unaudited)

March 31,
2009

December 31,
2008(Dollars in Millions)ASSETSCurrent assetsCash and cash equivalents

$
1,612

$
1,149Accounts receivable, net of allowances of $38 and $32


1,205


1,308Inventories


189


182Deferred income taxes


53


46Prepaid expenses and other


214


261Total current assets


3,273


2,946Satellites, net


1,953


1,980Property and equipment, net


3,319


3,348Goodwill


3,196


3,189Intangible assets, net


783


871Other assets


208


212Total assets

$
12,732

$
12,546LIABILITIES AND OWNER'S EQUITYCurrent liabilitiesAccounts payable and accrued liabilities

$
2,535

$
2,582Unearned subscriber revenues and deferred credits


329


316Current portion of long-term debt


120


108Total current liabilities


2,984


3,006Long-term debt


5,696


5,725Deferred income taxes


435


405Other liabilities and deferred credits


753


763Commitments and contingenciesOwner's equityCapital stock and additional paid-in capital


2,423


2,403Retained earnings


441


244Total owner's equity


2,864


2,647Total liabilities and owner's equity

$
12,732

$
12,546


The
accompanying notes are an integral part of these Consolidated Financial Statements.

2

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DIRECTV HOLDINGS LLC        CONSOLIDATED STATEMENTS OF CASH FLOWS        (Unaudited)

Three Months Ended
March 31,2009

2008(Dollars in Millions)Cash Flows from Operating ActivitiesNet income

$
197

$
332Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization


589


464Amortization of deferred revenues and deferred credits


(18
)

(25
)Deferred income taxes


35


26Other


17


14Change in other operating assets and liabilitiesAccounts receivable


102


188Inventories


(1
)

37Prepaid expenses and other


47


1Accounts payable and accrued liabilities


(64
)

(83
)Unearned subscriber revenue and deferred credits


9


9Other, net


22


11Net cash provided by operating activities


935


974Cash Flows from Investing ActivitiesCash paid for property and equipment


(103
)

(106
)Cash paid for subscriber leased equipmentsubscriber acquisitions


(179
)

(156
)Cash paid for subscriber leased equipmentupgrade and retention


(136
)

(161
)Cash paid for satellites


(17
)

(46
)Investment in companies, net of cash acquired


(3
)

Other, net





4Net cash used in investing activities


(438
)

(465
)Cash Flows from Financing ActivitiesRepayment of long-term debt


(18
)

(3
)Repayment of other long-term obligations


(22
)

(40
)Cash dividend to Parent





(100
)Excess tax benefit from share-based compensation


6


7Net cash used in financing activities


(34
)

(136
)Net increase in cash and cash equivalents


463


373Cash and cash equivalents at beginning of the period


1,149


802Cash and cash equivalents at end of the period

$
1,612

$
1,175Supplemental cash flow informationCash paid for interest

$
58

$
58Cash paid for income taxes


3


49


The
accompanying notes are an integral part of these Consolidated Financial Statements.

3

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DIRECTV HOLDINGS LLC        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS        (Unaudited)

Note 1: Basis of Presentation

DIRECTV Holdings LLC is a wholly-owned subsidiary of The DIRECTV Group, Inc. and consists of DIRECTV
Enterprises, LLC and its wholly-owned subsidiaries and DIRECTV Financing Co., Inc. We sometimes refer to DIRECTV Holdings LLC as DIRECTV Holdings, DIRECTV, we or us and
sometimes refer to The DIRECTV Group, Inc. as The DIRECTV Group or Parent.

On
February 27, 2008, Liberty Media Corporation, or Liberty Media, and News Corporation completed a transaction in which Liberty Media acquired News Corporation's approximately
41% interest in our Parent, which we refer to as the Liberty Transaction. Currently, Liberty Media owns approximately 54.4% of our Parent's outstanding common stock, however Liberty Media has agreed
generally to limit its voting rights to approximately 47.9%. See Note 9 of the Notes to the Consolidated Financial Statements for information regarding proposed transactions are expected to
result in the split-off and distribution to holders of the Liberty Media Entertainment tracking stock of shares in Liberty Entertainment, Inc., or LEI, a newly formed company which
will hold certain of Liberty Media's assets, including its interest in our Parent, and subsequent mergers which would result in LEI and our Parent becoming wholly-owned subsidiaries of a new public
company to be named "DIRECTV."

We
have prepared the accompanying unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP, for
interim financial reporting. In the opinion of management, all adjustments (consisting only of normal recurring items) that are necessary for a fair presentation have been included. The results for
interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. For further information, refer to the consolidated financial
statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2008 filed with the SEC on February 27, 2009 and all of our
other filings, including Current Reports on Form 8-K, filed with the SEC after such date and through the date of this report.

Note 2: Accounting Changes

On January 1, 2009 we adopted Statement of Financial Accounting Standards, or SFAS, No. 160 "Noncontrolling Interests in
Consolidated Financial Statementsan amendment to ARB No. 51," which established standards of accounting and reporting of noncontrolling interests in subsidiaries, also known as
minority interests, in consolidated financial statements, provides guidance on accounting for changes in the parent's ownership interest in a subsidiary and establishes standards of accounting for the
deconsolidation of a subsidiary due to the loss of control. SFAS No. 160 requires an entity to present certain noncontrolling interests as a component of equity. Additionally, SFAS
No. 160 requires an entity to present net income and consolidated comprehensive income attributable to the parent and the noncontrolling interest separately in the consolidated financial
statements. Our adoption of SFAS No. 160 did not have any effect on our consolidated financial statements.

On
January 1, 2009 we adopted SFAS No. 141 (revised 2007), "Business Combinations." SFAS No. 141R requires the acquiring entity to record 100% of all assets and
liabilities acquired, including goodwill and any non-controlling interest, generally at their fair values for all business combinations, whether partial, full or step acquisitions. Under
SFAS No. 141R certain contingent assets and liabilities, as well as contingent consideration, are also required to be recognized at fair value on the date of acquisition and acquisition related
transaction and restructuring costs will be expensed. Additionally,

4

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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

SFAS
No. 141R requires disclosures about the nature and financial effect of the business combination and also changes the accounting for certain income tax assets recorded in purchase
accounting. The adoption of SFAS No. 141R as required, on January 1, 2009, changed the way we account for adjustments to deferred tax asset valuation allowances recorded in purchase
accounting for prior business combinations so that adjustments to these deferred tax asset valuation allowances will no longer be recorded to goodwill but rather adjustments will be recorded in
"Income tax expense" in the Consolidated Statements of Operations. Additionally, the adoption of SFAS No. 141R will change the accounting for all business combinations we consummate after
January 1, 2009.

Note 3: Goodwill and Intangible Assets

The changes in the carrying amounts of goodwill for the three months ended March 31, 2009 were as follows:

(Dollars in Millions)Balance as of December 31, 2008

$
3,189Acquisitions of home service providers and assets


7Balance as of March 31, 2009

$
3,196


The
following table sets forth the amounts recorded for intangible assets as of the periods presented:

Estimated
Useful
Lives
(years)

March 31, 2009

December 31, 2008Gross
Amount

Accumulated
Amortization

Net
Amount

Gross
Amount

Accumulated
Amortization

Net
Amount(Dollars in Millions)Orbital slots

Indefinite

$
432




$
432

$
432




$
43272.5° WL Orbital license

5


219

$
190


29


219

$
180


39Subscriber related

5-10


1,348


1,180


168


1,348


1,116


232Dealer network

15


130


81


49


130


79


51Distribution rights

7


334


229


105


334


217


117Total intangible assets



$
2,463

$
1,680

$
783

$
2,463

$
1,592

$
871


The
following table sets forth amortization expense for intangible assets for each of the periods presented:

Three Months Ended
March 31,2009

2008(Dollars in Millions)Amortization expense

$
88

$
88


Estimated
amortization expense for intangible assets in each of the next five years and thereafter is as follows: $201 million for the remainder of 2009, $90 million in
2010, $34 million in 2011, $10 million in 2012, $10 million in 2013 and $6 million thereafter.

5

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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 4: Borrowings

The following table sets forth our outstanding borrowings:

Interest Rates at March 31, 2009

March 31, 2009

December 31, 2008(Dollars in Millions)8.375% senior notes due in 2013


8.375
%
$
910

$
9106.375% senior notes due in 2015


6.375
%

1,000


1,0007.625% senior notes due in 2016


7.625
%

1,500


1,500Senior secured credit facility, net of unamortized discount of $8 million as of March 31, 2009 and $9 million as of December 31,
2008


3.208
%

2,404


2,421Unamortized bond premium





2


2Total debt





5,816


5,833Less: Current portion of long-term debt





(120
)

(108
)Long-term debt




$
5,696

$
5,725


The
senior secured credit facility is secured by substantially all of our assets.

All
of the senior notes have been registered under the Securities Act of 1933, as amended, are unsecured and have been fully and unconditionally guaranteed, jointly and severally, by
substantially all
of our subsidiaries. Principal on the senior notes is payable upon maturity, while interest is payable semi-annually.

The
fair value of our 8.375% senior notes was approximately $922 million at March 31, 2009 and approximately $904 million at December 31, 2008. The fair value
of our 6.375% senior notes was approximately $943 million at March 31, 2009 and approximately $911 million at December 31, 2008. The fair value of our 7.625% senior notes
was approximately $1,473 million at March 31, 2009 and approximately $1,451 million at December 31, 2008. We calculated the fair values based on quoted market prices of our
senior notes, which is a Level 1 input under SFAS No. 157 "Fair Value Measurements" or SFAS No. 157, on those dates.

Our
notes payable and senior secured credit facility mature as follows: $90 million in the remainder of 2009, $308 million in 2010, $108 million in 2011,
$20 million in 2012, $2,796 million in 2013 and $2,500 million thereafter. These amounts do not reflect potential prepayments that may be required under our senior secured credit
facility, which could result from a computation that we may be required to make at each year end under the credit agreement. We were not required to make a prepayment for the year ended
December 31, 2008. The amount of interest accrued related to our outstanding debt was $70 million at March 31, 2009 and $45 million at December 31, 2008.

Covenants and Restrictions.The senior secured credit facility requires us to comply with certain financial covenants. The senior notes
and the
senior secured credit facility also include covenants that restrict our ability to, among other things, (i) incur additional indebtedness, (ii) incur liens, (iii) pay dividends or
make certain other restricted payments, investments or acquisitions, (iv) enter into certain transactions with affiliates, (v) merge or consolidate with another entity, (vi) sell,
assign, lease or otherwise dispose of all or substantially all of its assets, and (vii) make voluntary prepayments of

6

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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

certain
debt, in each case subject to exceptions as provided in the credit agreement and senior notes indentures. Should we fail to comply with these covenants, all or a portion of its borrowings
under the senior notes and senior secured credit facility could become immediately payable and its revolving credit facility could be terminated. At March 31, 2009, we were in compliance with
all such covenants. The senior notes and senior secured credit facility also provide that the borrowings may be required to be prepaid if certain change-in-control events
occur.

Note 5: Commitments and Contingencies

Commitments

At March 31, 2009, our minimum payments under agreements to purchase broadcast programming, and the purchase of services that we
have outsourced to third parties, such as billing services, and satellite telemetry, tracking and control, satellite construction and launch contracts and broadcast center services aggregated
$7,397 million, payable as follows: $1,021 million in the remainder of 2009, $1,231 million in 2010, $1,249 million in 2011, $1,184 million in 2012,
$1,174 million in 2013 and $1,538 million thereafter.



Litigation is subject to uncertainties and the outcome of individual litigated matters is not predictable with assurance. Various legal
actions, claims and proceedings are pending against us arising in the ordinary course of business. We have established loss provisions for matters in which losses are probable and can be reasonably
estimated. Some of the matters may involve compensatory, punitive, or treble damage claims, or demands that, if granted, could require us to pay damages or make other expenditures in amounts that
could not be estimated at March 31, 2009. After discussion with counsel representing us in those actions, it is the opinion of management that such litigation is not expected to have a material
adverse effect on our consolidated results of operations or financial position.

Finisar Corporation.As previously reported, we filed a notice of appeal to the Court of Appeals for the Federal Circuit on
October 5, 2006
from a jury determination that The DIRECTV Group, Inc. and certain of its subsidiaries willfully infringed a patent owned by Finisar Corporation and an award by the jury of approximately
$79 million in damages. The trial court increased the damages award by $25 million because of the jury finding of willful infringement and awarded pre-judgment interest of
$13 million to Finisar. DIRECTV was also ordered to pay into escrow $1.60 per new set-top receiver manufactured for use with the DIRECTV system beginning June 17, 2006 and
continuing until the patent expires in 2012 or was otherwise found to be invalid. On April 18, 2008, the Court of Appeals vacated (set aside) the verdict of infringement, and sent the case back
to the district court for further proceedings and possible retrial on a limited number of claims. The Court of Appeals ruled that the lower court had used erroneous interpretations of certain
important terms in the patent claims. Thus, the district court must now determine whether there is any infringement using the correct interpretations, which are the ones we originally suggested.
Regarding our defenses of invalidity, the Court of Appeals found that one of the principal independent claims of the patent is clearly anticipated by the prior art we presented. The Court of Appeals
then remanded the question of validity for the remaining claims back to the district court for further consideration in view of this invalidity ruling. The Court of Appeals also reversed the verdict
of willful infringement, and affirmed earlier rulings of the district court that held several additional claims to be invalid. Following these decisions, our appeal bond was terminated and
$37 million in escrowed royalties were returned to us on June 10, 2008.

7

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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Initial
summary judgment motions on invalidity of additional claims were submitted December 1, 2008, followed, if necessary, by further proceedings and a trial of remaining issues, which is
presently scheduled for October 2009.



We may purchase in-orbit and launch insurance to mitigate the potential financial impact of satellite launch and
in-orbit failures if the premium costs are considered economic relative to the risk of satellite failure. The insurance generally covers the unamortized book value of covered satellites.
We do not insure against lost revenues in the event of a total or partial loss of the capacity of a satellite. We generally rely on in-orbit spare satellites and excess transponder
capacity at key orbital slots to mitigate the impact a satellite failure could have on our ability to provide service. At March 31, 2009, the net book value of in-orbit satellites
was $1,644 million of which $1,449 million was uninsured.

Note 6: Related Party Transactions

In the ordinary course of our operations, we enter into transactions with related parties as discussed below.

The DIRECTV Group and affiliates

We determine our income taxes based upon our tax sharing agreement with The DIRECTV Group, which generally provides that the current
income tax liability or receivable be computed as if we were a separate taxpayer. Payments made to our Parent under this tax sharing arrangement were $47 million for the three months ended
March 31, 2008. No payments were made under the tax sharing arrangement for the three months ended March 31, 2009. We also receive an allocation of employee benefit expenses from The
DIRECTV Group. We believe that our consolidated financial statements reflect our cost of doing business in accordance with SEC Staff Accounting Bulletin No. 55, "Allocation of Expenses and
Related Disclosures in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity."

During
the first quarter of 2008, we paid a $100 million dividend to our Parent from available cash and cash equivalents. We did not pay any dividends to our Parent during the
first quarter of 2009.

Liberty Media, Liberty Global and Discovery Communications

As a result of the completion of the Liberty Transaction, beginning February 27, 2008, transactions with Liberty Media and its
affiliates, including its equity method investees may be considered to be related party transactions as Liberty Media currently owns approximately 54.4% of our Parent's outstanding common stock. Our
transactions with Liberty Media and its affiliates consist primarily of the purchase of programming.

In
addition, John Malone, Chairman of the Board of Directors of our Parent and of Liberty Media, has an approximate 31% voting interest in Discovery Communications Inc., or
Discovery Communications, and an approximate 34% voting interest in Liberty Global Inc., or Liberty Global, and serves as Chairman of Liberty Global, and certain of Liberty Media's management
and directors also serve as directors of Discovery Communications or Liberty Global. As a result of this common ownership and management, transactions with Discovery Communications and Liberty Global,
and their subsidiaries or equity method investees may be considered to be related party transactions. Our

8

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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

transactions
with Discovery Communications and Liberty Global consist primarily of purchases of programming created, owned or distributed by Discovery Communications and its subsidiaries and
investees.

News Corporation and affiliates

News Corporation and its affiliates were considered related parties until February 27, 2008, when News Corporation transferred
its 41% interest in our Parent's common stock to Liberty Media. Accordingly, the following contractual arrangements with News Corporation and its affiliates were considered related party transactions
and reported through February 27, 2008: purchase of programming, products and advertising; license of certain intellectual property, including patents; purchase of system access products,
set-top receiver software and support services; sale of advertising space; purchase of employee services; and use of facilities.

The
majority of payments under contractual arrangements with Liberty Media, Discovery Communications, Liberty Global and News Corporation entities relate to multi-year
programming contracts. Payments under these contracts are typically subject to annual rate increases and are based on the number of subscribers receiving the related programming.

Other

Companies in which we hold equity method investments are also considered related parties.

The
following table summarizes sales to, and purchases from, related parties:

Three Months Ended
March 31,2009

2008(1)(Dollars in Millions)Sales:Liberty Media and affiliates

$
12

$
7Discovery Communications, Liberty Global and affiliates


3


1News Corporation and affiliates





2Total

$
15

$
10Purchases:Liberty Media and affiliates

$
87

$
27Discovery Communications, Liberty Global and affiliates


53


16News Corporation and affiliates





157The DIRECTV Group and affiliates


1


Other


17


8Total

$
158

$
208


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9

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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The
following table sets forth the amount of accounts receivable from and accounts payable to related parties as of:

March 31,
2009

December 31,
2008(Dollars in Millions)Accounts receivable

$
19

$
29Accounts payable


150


156


The
accounts receivable and accounts payable balances as of March 31, 2009 and December 31, 2008 are primarily related to affiliates of Liberty Media.

Note 7: Acquisitions



180 Connect.On July 8, 2008, we acquired 100% of 180 Connect Inc.'s outstanding common stock and exchangeable shares.
Simultaneously,
in a separate transaction, UniTek USA, LLC acquired 100% of 180 Connect's cable service operating unit and operations in certain of our installation services markets in exchange for satellite
installation operations in certain markets and $7 million in cash. These transactions provide us with control over a significant portion of DIRECTV U.S.' home service provider network. We paid
$91 million in cash, net of the $7 million we received from UniTek USA, for the acquisition, including the equity purchase price, repayment of assumed debt and related transaction costs.

We
accounted for the 180 Connect acquisition using the purchase method of accounting, and began consolidating the results from the date of acquisition. The March 31, 2009
consolidated financial statements reflect the preliminary allocation of the $91 million net purchase price to assets acquired and the liabilities assumed based on their estimated fair values at
the date of acquisition using information currently available. The assets acquired included approximately $5 million in cash. Amounts allocated to current liabilities are estimates pending the
completion of analyses currently in process. The excess of the purchase price over the estimated fair values of the net assets has been recorded as goodwill. We are currently determining the amount of
recorded goodwill that will be deductible for tax purposes. The purchase price allocation is expected to be completed during the second quarter of 2009.

The
following table sets forth the preliminary allocation of the purchase price to the 180 Connect net assets acquired on July 8, 2008 (dollars in millions):

Total current assets

$
19Property and equipment


16Goodwill


148Total assets acquired

$
183Total current liabilities

$
84Other liabilities


8Total liabilities assumed

$
92Net assets acquired

$
91


10

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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following selected unaudited pro forma information is being provided to present a summary of the combined results of us and 180 Connect for the three months
ended March 31, 2008 as if the acquisition had occurred as of the beginning of the period, giving effect to purchase accounting adjustments. The pro forma data is presented for informational
purposes only and may not necessarily reflect the results of our operations had 180 Connect operated as part of us for the period presented, nor are they necessarily indicative of the results of
future operations. The pro forma information excludes the effect of non-recurring charges.

Three Months Ended
March 31, 2008(Dollars in Millions, Except Per Share Amounts)Revenues

$
4,049Net income


325


Note 8: Condensed Consolidating Financial Statements

The following presents the condensed consolidating statements of operations for the three months ended March 31, 2009 and
March 31, 2008, the condensed consolidating
balance sheets as of March 31, 2009 and December 31, 2008, and the condensed consolidating statements of cash flows for the three months ended March 31, 2009 and 2008 of DIRECTV
Holdings together with DIRECTV Financing Co., Inc., or the Co-Issuers, and each of DIRECTV Holdings' material subsidiaries (other than DIRECTV Financing), or the Guarantor
Subsidiaries, and the eliminations necessary to present DIRECTV Holdings' financial statements on a consolidated basis. These condensed consolidating financial statements should be read in conjunction
with the accompanying consolidated financial statements of DIRECTV Holdings.

11

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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Condensed Consolidating Statement of Operations  For the Three Months Ended March 31, 2009

Co-Issuers

Guarantor
Subsidiaries

Eliminations

DIRECTV
Holdings
Consolidated(Dollars in Millions)Revenues

$
82

$
4,303

$
(82
)
$
4,303Operating costs and expensesCosts of revenues, exclusive of depreciation and amortization expenseBroadcast programming and other





1,808





1,808Subscriber service expenses





301





301Broadcast operations expenses





69





69Selling, general and administrative expenses, exclusive of depreciation and amortization expenseSubscriber acquisition costs





653





653Upgrade and retention costs





274





274General and administrative expenses





294


(82
)

212Depreciation and amortization expense





589





589Total operating costs and expenses





3,988


(82
)

3,906Operating profit


82


315





397Equity in income of consolidated subsidiaries


194





(194
)

Interest income


2








2Interest expense


(80
)

(4
)




(84
)Other, net





(1
)




(1
)Income before income taxes


198


310


(194
)

314Income tax expense


(1
)

(116
)




(117
)Net income

$
197

$
194

$
(194
)
$
197


12

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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Condensed Consolidating Statement of Operations  For the Three Months Ended March 31, 2008

Co-Issuers

Guarantor
Subsidiaries

Eliminations

DIRECTV
Holdings
Consolidated(Dollars in Millions)Revenues

$
51

$
4,049

$
(51
)
$
4,049Operating costs and expensesCosts of revenues, exclusive of depreciation and amortization expenseBroadcast programming and other





1,683





1,683Subscriber service expenses





274





274Broadcast operations expenses





61





61Selling, general and administrative expenses, exclusive of depreciation and amortization expenseSubscriber acquisition costs





530





530Upgrade and retention costs





255





255General and administrative expenses





240


(51
)

189Depreciation and amortization expense





464





464Total operating costs and expenses





3,507


(51
)

3,456Operating profit


51


542





593Equity in income of consolidated subsidiaries


327





(327
)

Interest income


9








9Interest expense


(51
)

(4
)




(55
)Income before income taxes


336


538


(327
)

547Income tax expense


(4
)

(211
)




(215
)Net income

$
332

$
327

$
(327
)
$
332


13

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Table of Contents

DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Condensed Consolidating Balance Sheet  As of March 31, 2009

Co-Issuers

Guarantor
Subsidiaries

Eliminations

DIRECTV
Holdings
Consolidated(Dollars in Millions)ASSETSTotal current assets

$
1,640

$
1,695

$
(62
)
$
3,273Satellites, net





1,953





1,953Property and equipment, net





3,319





3,319Goodwill


1,827


1,369





3,196Intangible assets, net





783





783Other assets


8,519


2,178


(10,489
)

208Total assets

$
11,986

$
11,297

$
(10,551
)
$
12,732LIABILITIES AND OWNER'S EQUITYTotal current liabilities

$
216

$
2,829

$
(61
)
$
2,984Long-term debt


5,696








5,696Deferred income taxes





651


(216
)

435Other liabilities and deferred credits


3,210


753


(3,210
)

753Owner's equityCapital stock and additional paid-in capital


2,423


4,497


(4,497
)

2,423Retained earnings


441


2,567


(2,567
)

441Total owner's equity


2,864


7,064


(7,064
)

2,864Total liabilities and owner's equity

$
11,986

$
11,297

$
(10,551
)
$
12,732


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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Condensed Consolidating Balance Sheet  As of December 31, 2008

Co-Issuers

Guarantor
Subsidiaries

Eliminations

DIRECTV
Holdings
Consolidated(Dollars in Millions)ASSETSTotal current assets

$
1,221

$
1,821

$
(96
)
$
2,946Satellites, net





1,980





1,980Property and equipment, net





3,348





3,348Goodwill


1,827


1,362





3,189Intangible assets, net





871





871Other assets


8,070


1,739


(9,597
)

212Total assets

$
11,118

$
11,121

$
(9,693
)
$
12,546LIABILITIES AND OWNER'S EQUITYTotal current liabilities

$
216

$
2,888

$
(98
)
$
3,006Long-term debt


5,725








5,725Deferred income taxes





621


(216
)

405Other liabilities and deferred credits


2,530


763


(2,530
)

763Owner's equityCapital stock and additional paid-in capital


2,403


4,476


(4,476
)

2,403Retained earnings


244


2,373


(2,373
)

244Total owner's equity


2,647


6,849


(6,849
)

2,647Total liabilities and owner's equity

$
11,118

$
11,121

$
(9,693
)
$
12,546


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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Condensed Consolidating Statement of Cash Flows  For the Three Months Ended March 31, 2009

Co-Issuers

Guarantor
Subsidiaries

DIRECTV
Holdings
Consolidated(Dollars in Millions)Cash flows from operating activitiesNet cash provided by operating activities

$
472

$
463

$
935Cash flows from investing activitiesCash paid for property and equipment





(103
)

(103
)Cash paid for subscriber leased equipmentsubscriber acquisition





(179
)

(179
)Cash paid for subscriber leased equipmentupgrade and retention





(136
)

(136
)Cash paid for satellites





(17
)

(17
)Investment in companies, net of cash acquired





(3
)

(3
)Net cash used in investing activities





(438
)

(438
)Cash flows from financing activitiesRepayment of long-term debt


(18
)




(18
)Repayment of other long-term obligations





(22
)

(22
)Excess tax benefit from share-based compensation





6


6Net cash used in financing activities


(18
)

(16
)

(34
)Net increase in cash and cash equivalents


454


9


463Cash and cash equivalents at beginning of the period


1,143


6


1,149Cash and cash equivalents at the end of the period

$
1,597

$
15

$
1,612


16

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DIRECTV HOLDINGS LLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Condensed Consolidating Statement of Cash Flows  For the Three Months Ended March 31, 2008

Co-Issuers

Guarantor
Subsidiaries

DIRECTV
Holdings
Consolidated(Dollars in Millions)Cash flows from operating activitiesNet cash provided by operating activities

$
446

$
528

$
974Cash flows from investing activitiesCash paid for property and equipment





(106
)

(106
)Cash paid for subscriber leased equipmentsubscriber acquisition





(156
)

(156
)Cash paid for subscriber leased equipmentupgrade and retention





(161
)

(161
)Cash paid for satellites





(46
)

(46
)Other





4


4Net cash used in investing activities





(465
)

(465
)Cash flows from financing activitiesRepayment of long-term debt


(3
)




(3
)Repayment of other long-term obligations





(40
)

(40
)Cash dividend to Parent


(100
)




(100
)Excess tax benefit from share-based compensation





7


7Net cash used in financing activities


(103
)

(33
)

(136
)Net increase in cash and cash equivalents


343


30


373Cash and cash equivalents at beginning of the period


790


12


802Cash and cash equivalents at the end of the period

$
1,133

$
42

$
1,175


Note 9: Subsequent Event

On May 3, 2009, our Parent and Liberty Media and certain subsidiaries of our Parent and certain subsidiaries of Liberty Media
entered into definitive agreements with respect to
the combination of our Parent and Liberty Entertainment, Inc., a newly formed entity to be split-off from Liberty Media.

17

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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management's discussion and analysis should be read in conjunction with our management's discussion and analysis of
financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2008 filed with the SEC on February 27, 2009,
and all of our other filings, including Current Reports on Form 8-K, filed with the SEC after such date and through the date of this report.

This
Quarterly Report on Form 10-Q may contain certain statements that we believe are, or may be considered to be, "forward-looking statements" within the meaning of
various provisions of the Securities Act of 1933 and of the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by use of statements that include phrases such
as we "believe," "estimate," "expect," "anticipate," "intend," "plan," "foresee," "project" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also
are forward-looking statements. All of these forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from historical results
or from those expressed or implied by the relevant forward-looking statement. We discuss these risks and uncertainties in detail in Part I, Item 1A of our 2008
Form 10-K.

BUSINESS OVERVIEW

We are a wholly-owned subsidiary of The DIRECTV Group and our subsidiaries include DIRECTV Enterprises, LLC and its wholly-owned
subsidiaries and DIRECTV Financing Co., Inc. We acquire, promote, sell and distribute digital entertainment programming via satellite to residential and commercial subscribers. We are
the largest provider of direct-to-home, or DTH, digital television services and the second largest provider in the multi-channel video programming distribution industry in the
United States. As of March 31, 2009, we had approximately 18.1 million subscribers.

We
currently broadcast from a fleet of eleven geosynchronous satellites, including ten owned satellites and one leased satellite. DIRECTV 12 is under construction and is expected to be
ready for launch in the second half of 2009.

SIGNIFICANT TRANSACTIONS

Financing Transactions

In May 2008, we issued $1.5 billion in senior notes and amended our senior secured credit facility to include a new
$1.0 billion Term Loan C. The senior notes bear interest at a rate of 7.625% and the principal balance is due in May 2016. The Term Loan C currently bears interest at a weighted average rate of
5.25% and was issued at a 1% discount.

Transactions with Liberty Media

On May 3, 2009, our Parent and Liberty Media and certain subsidiaries of our Parent and certain subsidiaries and affiliates of
Liberty Media entered into definitive agreements for and related to the combination of our Parent with Liberty Entertainment, Inc., a newly formed entity to be split-off from Liberty Media. For more
information regarding these transactions please refer to The DIRECTV Group Form 8-K filed with the SEC on May 4, 2009.

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DIRECTV HOLDINGS LLC

Lease Program

The following table sets forth the amount of set-top receivers we capitalized, and depreciation expense we recorded under
the lease program implemented in March 2006 for each of the periods presented:

Three Months Ended
March 31,Capitalized subscriber leased equipment:

2009

2008(Dollars in Millions)Subscriber leased equipmentsubscriber acquisitions

$
179

$
156Subscriber leased equipmentupgrade and retention


136


161Total subscriber leased equipment capitalized

$
315

$
317Depreciation expensesubscriber leased equipment

$
337

$
241


KEY TERMINOLOGY

The following key terminology is used in management's discussion and analysis of financial condition and results of operations:

Revenues.We earn revenues mostly from monthly fees we charge subscribers for subscriptions to basic and premium channel programming,
HD programming
and access fees, pay-per-view programming, and seasonal and live sporting events. We also earn revenues from monthly fees that we charge subscribers with multiple
non-leased set-top receivers (which we refer to as mirroring fees), monthly fees we charge subscribers for leased set-top receivers, monthly fees we charge
subscribers for digital video recorder, or DVR, service, hardware revenues from subscribers who lease or purchase set-top receivers from us, our published programming guide, warranty
service fees and advertising services. Revenues are reported net of customer credits and discounted promotions.

Broadcast programming and other.These costs primarily include license fees for subscription service programming,
pay-per-view programming, live sports and other events. Other costs include expenses associated with the publication and distribution of our programming guide, continuing
service fees paid to third parties for active subscribers, warranty service costs and production costs for on-air advertisements we sell to third parties.

Subscriber service expenses.Subscriber service expenses include the costs of customer call centers, billing, remittance processing and
certain home
services expenses, such as in-home repair costs.

Broadcast operations expenses.These expenses include broadcast center operating costs, signal transmission expenses (including costs
of collecting
signals for our local channel offerings), and costs of monitoring, maintaining and insuring our satellites. Also included are engineering expenses associated with deterring theft of our signal.

Subscriber acquisition costs.These costs include the cost of set-top receivers and other equipment, commissions we pay to national
retailers, independent satellite television retailers, dealers, regional Bell operating companies, and the cost of installation, advertising, marketing and customer call center expenses associated
with the acquisition of new subscribers. Set-top receivers leased to new subscribers are capitalized in "Property and equipment, net" in the Consolidated Balance Sheets and depreciated
over their estimated useful lives. The amount of set-top receivers capitalized each period for subscriber acquisitions is included in "Cash paid for subscriber leased equipment-subscriber
acquisitions" in the Consolidated Statements of Cash Flows.

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Upgrade and retention costs.The majority of upgrade and retention costs are associated with upgrade efforts for existing subscribers
that we believe
will result in higher average monthly revenue per subscriber, or ARPU, and lower churn. Our upgrade efforts include subscriber equipment upgrade programs for DVR, HD and HD DVR receivers and local
channels, our multiple set-top receiver offer and similar initiatives. Retention costs also include the costs of installing and providing hardware under our movers program for subscribers
relocating to a new residence. Set-top receivers leased to existing subscribers under upgrade and retention programs are capitalized in "Property and equipment, net" in the Consolidated
Balance Sheets and depreciated over their estimated useful lives. The amount of set-top receivers capitalized each period for upgrade and retention programs is included in "Cash paid for
subscriber leased equipment-upgrade and retention" in the Consolidated Statements of Cash Flows.

General and administrative expenses.General and administrative expenses include departmental costs for legal, administrative services,
finance,
marketing and information technology. These costs also include
expenses for bad debt and other operating expenses, such as legal settlements, and gains or losses from the sale or disposal of fixed assets.

Average monthly revenue per subscriber.We calculate ARPU by dividing average monthly revenues for the period (total revenues during the
period
divided by the number of months in the period) by average subscribers for the period. We calculate average subscribers for the period by adding the number of subscribers as of the beginning of the
period and for each quarter end in the current year or period and dividing by the sum of the number of quarters in the period plus one.

Average monthly subscriber churn.Average monthly subscriber churn represents the number of subscribers whose service is disconnected,
expressed as a
percentage of the average total number of subscribers. We calculate average monthly subscriber churn by dividing the average monthly number of disconnected subscribers for the period (total
subscribers disconnected, net of reconnects, during the period divided by the number of months in the period) by average subscribers for the period.

Subscriber count.The total number of subscribers represents the total number of subscribers actively subscribing to our service,
including seasonal
subscribers, subscribers who are in the process of relocating and commercial equivalent viewing units. In March 2008, we implemented a change in our commercial pricing and packaging to increase our
competitiveness. As a result, during the first quarter of 2008, we made a one-time downward adjustment to the subscriber count of approximately 71,000 subscribers related to commercial
equivalent viewing units.

SAC.We calculate SAC, which represents total subscriber acquisition costs stated on a per subscriber basis, by dividing total
subscriber acquisition
costs for the period by the number of gross new subscribers acquired during the period. We calculate total subscriber acquisition costs for the period by adding together "Subscriber acquisition costs"
expensed during the period and the amount of cash paid for equipment leased to new subscribers during the period.

EXECUTIVE OUTLOOK UPDATE

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

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

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DIRECTV HOLDINGS LLC

Results of Operations

The following table sets forth our unaudited consolidated statements of operations and certain other operating data:

Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008

Three Months Ended
March 31,

Change2009

2008

$

%(Dollars in Millions)Revenues

$
4,303

$
4,049

$
254


6.3
%Operating costs and expensesCosts of revenues, exclusive of depreciation and amortization expenseBroadcast programming and other


1,808


1,683


125


7.4
%Subscriber service expenses


301


274


27


9.9
%Broadcast operations expenses


69


61


8


13.1
%Selling, general and administrative expenses, exclusive of depreciation and amortization expenseSubscriber acquisition costs


653


530


123


23.2
%Upgrade and retention costs


274


255


19


7.5
%General and administrative expenses


212


189


23


12.2
%Depreciation and amortization expense


589


464


125


26.9
%Total operating costs and expenses


3,906


3,456


450


13.0
%Operating profit


397


593


(196
)

(33.1
)%Interest income


2


9


(7
)

(77.8
)%Interest expense


(84
)

(55
)

(29
)

52.7
%Other, net


(1
)




(1
)

N/AIncome before income taxes


314


547


(233
)

(42.6
)%Income tax expense


(117
)

(215
)

98


(45.6
)%Net income

$
197

$
332

$
(135
)

(40.7
)%Other Data:Operating profit before depreciation and amortization(1)Operating profit

$
397

$
593

$
(196
)

(33.1
)%Add: Depreciation and amortization expense


589


464


125


26.9
%Operating profit before depreciation and amortization

$
986

$
1,057

$
(71
)

(6.7
)%Operating profit before depreciation and amortizationmargin(1)Cash Flow InformationNet cash provided by operating activities

$
935

$
974

$
(39
)

(4.0
)%Net cash used in investing activities


(438
)

(465
)

27


(5.8
)%Net cash used in financing activities


(34
)

(136
)

102


(75.0
)%


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DIRECTV HOLDINGS LLC



Three Months Ended
March 31,

Change2009

2008

$

%(Dollars in Millions,
Except Per Subscriber Amounts)Free cash flow(2)Net cash provided by operating activities

$
935

$
974

$
(39
)

(4.0
)%Less: Cash paid for property and equipment


(103
)

(106
)

3


(2.8
)%Cash paid for subscriber leased equipmentsubscriber acquisitions


(179
)

(156
)

(23
)

14.7
%Cash paid for subscriber leased equipmentupgrade and retention


(136
)

(161
)

25


(15.5
)%Cash paid for satellites


(17
)

(46
)

29


(63.0
)%Free cash flow

$
500

$
505

$
(5
)

(1.0
)%Subscriber dataTotal number of subscribers (000's)(3)


18,081


17,035


1,046


6.1
%ARPU

$
80.35

$
79.70

$
0.65


0.8
%Average monthly subscriber churn %


1.33
%

1.36
%




(2.2
)%Gross subscriber additions (000's)


1,175


964


211


21.9
%Subscriber disconnections (000's)


715


689


26


3.8
%Net subscriber additions (000's)


460


275


185


67.3
%Average subscriber acquisition costsper subscriber (SAC)

$
708

$
712

$
(4
)

(0.6
)%


---



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DIRECTV HOLDINGS LLC



Subscribers.In the first quarter of 2009, gross subscriber additions increased compared to the first quarter of 2008 primarily
due to growth in our
direct sales, telco and retail distribution channels due in large part to more competitive customer promotions and higher demand for HD and DVR services. The decrease in average monthly subscriber
churn was primarily due to increased sales of HD and DVR services as well as from lower involuntary churn associated with the continued effect of stringent credit policies. Net subscriber additions
increased due to higher gross subscriber additions, partially offset by a slight increase in the number of subscriber disconnections.

Revenues.Revenues increased as a result of a larger subscriber base and slightly higher ARPU. The increase in ARPU resulted
primarily from price
increases on programming packages as well as higher HD and DVR service fees, mostly offset by more competitive promotions for both new and existing customers, as well as lower
pay-per-view, premium movie channel and advertising revenues.

Operating profit before depreciation and amortization.The decrease in operating profit before depreciation and amortization was
primarily due to
higher subscriber acquisition, upgrade and retention and general and administrative expense, partially offset by higher gross profit from the increase in revenues.

Broadcast
programming and other costs increased due to annual program supplier rate increases and the larger number of subscribers in the first quarter of 2009 as compared to the first
quarter of 2008. Subscriber service expenses increased primarily due to the larger subscriber base and increased call times in our customer call centers.

Subscriber
acquisition costs increased primarily due to an increase in the number of gross subscriber additions and the continuing increase in demand for advanced services. SAC per
subscriber, which includes the cost of capitalized set-top receivers, decreased due to lower national advertising

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DIRECTV HOLDINGS LLC

costs
per subscriber, partially offset by increased installation and hardware costs due to an increase in subscribers taking advanced services.

Upgrade
and retention costs increased in the first quarter of 2009 due to increased use of the movers program, increased marketing and an increase in upgrades to advanced services.

General
and administrative expenses increased in the first quarter of 2009 primarily due to an increase in labor and benefit costs and rent and other expenses associated with
acquisitions of home service providers.

Operating profit.The decrease in operating profit was primarily due to lower operating profit before depreciation and
amortization and higher
depreciation and amortization expense in the first quarter of 2009 resulting from the capitalization of set-top receivers under the lease program.

Interest income and expense.The decrease in interest income was due to lower average interest rates. The increase in interest
expense was from an
increase in the average debt balance compared to 2008.

Income tax expense.We recognized income tax expense of $117 million for the first quarter of 2009 compared to income tax
expense of
$215 million for the first quarter of 2008. The decrease in income tax expense is primarily attributable to the decrease in income before income taxes and the recognition of a state income tax
benefit associated with recently enacted legislation.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2009, our cash and cash equivalents totaled $1.6 billion compared with $1.1 billion at
December 31, 2008. The $500 million increase resulted primarily from $1.0 billion of cash provided by operating activities, partially offset by $435 million of cash paid
for the acquisition of satellites, property and equipment and subscriber leased equipment and $34 billion in cash used for financing activities.

As
a measure of liquidity, the current ratio (ratio of current assets to current liabilities) was 1.10 at March 31, 2009 and 0.98 at December 31, 2008.

As
of March 31, 2009 we had the ability to borrow up to $500 million under our existing credit facility, which is available until 2011. We are subject to restrictive
covenants under the credit facility. These covenants limit our ability and our respective subsidiaries to, among other things, make restricted payments, including dividends, loans or advances to our
Parent.

We
expect to fund our cash requirements and our existing business plan using our available cash balances, and cash provided by operations. Also, we have received capital contributions
and have borrowed amounts from our Parent in the past to fund certain transactions. We may also provide dividends to our Parent or fund other cash requirements, including additional share repurchase
programs or other distributions to its stockholders, or to fund strategic investment opportunities should they arise. We may use available cash and cash equivalents, cash from operations, or incur
additional borrowings, which may include borrowings under our $500 million revolving credit facility, to fund such dividends.

Several
factors may affect our ability to fund our operations and commitments that we discuss in "Contingencies" below. In addition, our future cash flows may be reduced if we
experience, among other things, significantly higher subscriber additions than planned, increased subscriber churn or upgrade and retention costs, higher than planned capital expenditures for
satellites and broadcast equipment, satellite anomalies or signal theft or if we are required to make a prepayment on our term loans under our senior secured credit facility. Additionally, our ability
to borrow under the senior

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DIRECTV HOLDINGS LLC

secured
credit facility is contingent upon our meeting financial and other covenants associated with our credit facility as more fully described in Note 4 of the Notes to the Consolidated
Financial Statements in Item 1, Part I of this Quarterly Report and in Note 7 to the Notes to the Consolidated Financial Statements in Item 8, Part II of our 2008
Form 10-K.

Borrowings

At March 31, 2009, we had $5,816 million in total outstanding borrowings, bearing a weighted average interest rate of
5.7%. Our outstanding borrowings primarily consist of notes payable and amounts borrowed under a senior secured credit facility as more fully described in Note 4 of the Notes to the
Consolidated Financial Statements in Item 1, Part I of this Quarterly Report and in Note 7 to the Notes to the Consolidated Financial Statements in Item 8, Part II
of our 2008 Form 10-K.

Our
notes payable and senior secured credit facility mature as follows: $90 million in the remainder of 2009, $308 million in 2010, $108 million in 2011,
$20 million in 2012, $2,796 million in 2013 and $2,500 million thereafter. These amounts do not reflect potential prepayments that may be required under our senior secured credit
facility, which could result from a computation that we are required to make at each year end under the credit agreement. We were not required to make a prepayment for the year ended
December 31, 2008.

Covenants and Restrictions.The senior secured credit facility requires us to comply with certain financial covenants. The senior notes
and the
senior secured credit facility also include covenants that restrict our ability to, among other things, (i) incur additional indebtedness, (ii) incur liens, (iii) pay dividends or
make certain other restricted payments, investments or acquisitions, (iv) enter into certain transactions with affiliates, (v) merge or consolidate with another entity, (vi) sell,
assign, lease or otherwise dispose of all or substantially all of its assets, and (vii) make voluntary prepayments of certain debt, in each case subject to exceptions as provided in the credit
agreement and senior notes indentures. Should we fail to comply with these covenants, all or a portion of its borrowings under the senior notes and senior secured credit facility could become
immediately payable and its revolving credit facility could be terminated. At March 31, 2009, we were in compliance with all such covenants.

Debt
ratings by the various rating agencies reflect each agency's opinion of the ability of issuers to repay debt obligations as they come due and the expected estimated loss given a
default. In general, lower ratings result in higher borrowing costs. Please refer to our 2008 Form 10-K for discussion of Moody's Investors Service and Standard & Poor's
Rating Service ratings range.

Currently,
we have the following security ratings:

Senior Secured

Senior Unsecured

Corporate

OutlookStandard & Poor's

BBB-

BB

BB

StableMoody's

Baa3

Ba3

Ba2

Stable


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DIRECTV HOLDINGS LLC

CONTRACTUAL OBLIGATIONS

The following table sets forth our contractual obligations as of March 31, 2009, including the future periods in which payments
are expected. Additional details regarding these obligations are provided in the Notes to the Consolidated Financial Statements in Part I, Item 1 referenced in the table below and the
Notes to the Consolidated Financial Statements in Part II, Item 8 in our Form 10-K for the year ended December 31, 2008.

Payments due by periodContractual Obligations

Total

2009

2010-2011

2012-2013

2014
and thereafter(Dollars in Millions)Long-term debt obligations (Note 4)(a)

$
7,827

$
365

$
1,071

$
3,373

$
3,018Purchase obligations (Note 5)(b)


7,397


1,021


2,480


2,358


1,538Operating lease obligations(c)


206


27


67


61


51Other long-term liabilities reflected on the Consolidated Balance Sheets under GAAP(d)(e)


234


74


145


2


13Total

$
15,664

$
1,487

$
3,763

$
5,794

$
4,620


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DIRECTV HOLDINGS LLC

CONTINGENCIES

For a discussion of "Contingencies," see Part I, Item 1, Note 5 of the Notes to the Consolidated Financial
Statements of this Quarterly Report, which we incorporate herein by reference.

CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

For a discussion of "Certain Relationships and Related-Party Transactions," see Part I, Item 1, Note 6 of the
Notes to the Consolidated Financial Statements of this Quarterly Report, which we incorporate herein by reference.

ACCOUNTING CHANGES

For a discussion of "Accounting Changes" see Part I, Item 1, Note 2 of the Notes to the Consolidated Financial
Statements of this Quarterly Report, which we incorporate herein by reference.

*    *    *

ITEM 4T.    CONTROLS AND PROCEDURES

We carried out an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q under the
supervision and with the participation of
management, including our principal executive officer and our principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on the evaluation, our principal executive officer and
our principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2009.

There
has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that
occurred during our fiscal quarter ended March 31, 2009, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

*    *    *

PART IIOTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

None.

ITEM 1A.    RISK FACTORS

The risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2008 have not
materially changed.

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DIRECTV HOLDINGS LLC

ITEM 6.    EXHIBITS

Exhibit
Number

Exhibit Name**31.1

Certification of the Chief Executive Officer of DIRECTV Holdings LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 ("Section 302").**31.2

Certification of the Chief Financial Officer of DIRECTV Holdings LLC pursuant to Section 302.**31.3

Certification of the Chief Executive Officer of DIRECTV Financing Co., Inc. pursuant to Section 302.**31.4

Certification of the Chief Financial Officer of DIRECTV Financing Co., Inc. pursuant to Section 302.**32.1

Certification of the Chief Executive Officer of DIRECTV Holdings LLC pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
("Section 906").**32.2

Certification of the Chief Financial Officer of DIRECTV Holdings LLC pursuant to Section 906.**32.3

Certification of the Chief Executive Officer of DIRECTV Financing Co., Inc. pursuant to Section 906.**32.4

Certification of the Chief Financial Officer of DIRECTV Financing Co., Inc. pursuant to Section 906.


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DIRECTV HOLDINGS LLC

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

DIRECTV HOLDINGS LLC
(Registrant)Date: May 7, 2009

By:

/s/ PATRICK T. DOYLE Patrick T. Doyle Executive Vice President and
Chief Financial OfficerDIRECTV FINANCING CO., INC.
(Registrant)Date: May 7, 2009

By:

/s/ PATRICK T. DOYLE Patrick T. Doyle Executive Vice President and
Chief Financial Officer


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