DIRECTV adds 139,000 subscribers; DTVLA adds 260,000 in 3Q 2013

Tuesday, November 5th, 2013

DIRECTV Eclipses 37 Million Total Subscribers in the Quarter

  • DIRECTV U.S. attains net subscriber additions of 139,000 driven by the lowest third quarter churn in 6 years
  • Sky Brasil and PanAmericana add 260,000 net new customers in the quarter
  • DIRECTV Latin America and Sky Mexico surpass 17 million customers

EL SEGUNDO, Calif. — DIRECTV (NASDAQ:DTV) today announced an increase in third quarter 2013 revenues of 6% to $7.88 billion, operating profit before depreciation and amortization (OPBDA) of 15% to $1.93 billion, operating profit of 15% to $1.23 billion, and earnings per share of 42% to $1.28 compared to last year’s third quarter.

DIRECTV U.S. Segment

In the quarter, DIRECTV U.S. revenues increased 7% to $6.17 billion compared with the third quarter of 2012 primarily due to strong ARPU growth along with a larger subscriber base. DIRECTV U.S. net subscriber additions increased in the quarter relative to the prior year period principally due to a lower average monthly churn rate of 1.61%. In the third quarter of 2012, churn was unfavorably impacted by a contract dispute with a large programmer that resulted in the removal of several channels for nine days. ARPU increased 6.2% to $102.37 mostly due to higher advanced receiver service fees, price increases on programming packages, higher fees for a new enhanced warranty program, as well as higher pay-per-view revenues. These improvements were partially offset by increased promotional offers to new and existing customers. DIRECTV U.S. ended the quarter with 20.16 million subscribers compared with 19.98 million subscribers reported for the quarter ended September 30, 2012.

Subscriber Data (in 000′s except Churn):

                                             Three Months Ended     Nine Months Ended
                                                  September 30,         September 30,
                                                2013       2012       2013       2012
                                           ---------  ---------  ---------  ---------
Gross Subscriber Additions                     1,109      1,107      2,841      2,911
Average Monthly Subscriber Churn               1.61%      1.74%      1.53%      1.57%
Net Subscriber Additions (Disconnections)        139         67         76         96
Cumulative Subscribers                        20,160     19,981     20,160     19,981

DIRECTV Latin America

In the third quarter, DTVLA revenues increased 5% to $1.66 billion principally due to strong subscriber growth over the last year partially offset by an 11.7% decline in ARPU mostly driven by unfavorable changes in foreign exchange rates. Net additions of 260,000 were lower than the prior year due to a decline in gross additions and higher churn. Gross additions fell 5% to 1.02 million principally due to certain limitations on importing set-top boxes for new customers in Venezuela, as well as lower post-paid subscriber additions in Argentina and Brazil mostly associated with stricter credit and sales filters. These declines were partially offset by improved gross additions in Chile and Colombia. Total average monthly churn increased to 2.27% and average monthly post-paid churn increased to 1.93% mainly due to higher churn in Brazil primarily related to the effect of a higher mix of middle market subscribers along with more challenging economic and competitive conditions.

Subscriber Data* (in 000′s except Churn):

                                               Three Months Ended     Nine Months Ended
                                                    September 30,         September 30,
                                                  2013       2012       2013       2012
                                             ---------  ---------  ---------  ---------
Gross Subscriber Additions                       1,023      1,081      3,393      3,234	
Average Monthly Total Subscriber Churn*          2.27%      1.91%      2.43%      1.84%
Average Monthly Post-paid Subscriber Churn*      1.93%      1.54%      2.18%      1.51%
Net Subscriber Additions                           260        543      1,008      1,781
Cumulative Subscribers                          11,337      9,666     11,337      9,666

* DIRECTV Latin America subscriber data exclude subscribers of the Sky Mexico service. In addition, DTVLA gross and net additions exclude 7,000 video subscribers acquired during the three months ended September 30, 2012 as well as 1,000 and 14,000 video subscribers acquired during the nine months ended September 30, 2013 and September 30, 2012, respectively. DTVLA cumulative subscriber counts include these acquired customers.

DIRECTV Latin America owns approximately 93% of Sky Brasil, 41% of Sky Mexico and 100% of PanAmericana, which covers most of the remaining countries in the region. Sky Brasil and PanAmericana ended the third quarter with 5.26 million and 6.08 million subscribers, respectively. Sky Mexico, whose results are accounted for as an equity method investment and therefore are not consolidated by DTVLA, had approximately 5.88 million subscribers as of September 30, 2013, bringing the total subscribers in the region to 17.22 million.