The DIRECTV Group Announces Fourth Quarter 2007 Results

Wednesday, February 13th, 2008
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DIRECTV Group Revenues Increase 17% to Nearly $4.9 Billion

  • DIRECTV U.S. Revenues Increase 14% to $4.4 Billion
    — Average Monthly Revenue Per Subscriber (ARPU) Grew 8.3% to $87.40
  • DIRECTV Latin America Revenues Up 41% to $499 Million
    — ARPU Increases 18.1% to $52.22

DIRECTV Group Operating Profit Before Depreciation and Amortization Increases 21% to $1.1 Billion

  • DIRECTV U.S. Up 14% to $1.0 Billion
  • DIRECTV Latin America More than Doubles to $114 Million

DIRECTV Group Net Subscriber Additions Increase 35% to 474,000

  • DIRECTV U.S. Net Subscriber Additions of 275,000 Driven by Strong Gross Additions and the Lowest Monthly Churn Rate in 8 Years of 1.42%
  • DIRECTV Latin America Net Subscriber Additions More than Double to 199,000 Due to Higher Gross Additions and Low Monthly Churn of 1.35%

EL SEGUNDO, Calif. — The DIRECTV Group, Inc. (NASDAQ:DTV) today reported that fourth quarter 2007 revenues increased 17% to $4.88 billion, operating profit before depreciation and amortization (OPBDA) increased 21% to $1.10 billion and operating profit increased 4% to $617 million compared to last year’s fourth quarter. The DIRECTV Group reported that fourth quarter net income of $348 million declined 2% and earnings per share increased one cent to $0.30 compared with the same period last year.

DIRECTV U.S. Segment

Fourth Quarter Review

Gross subscriber additions were 986,000 and average monthly churn declined to 1.42% primarily due to increased sales of HD and DVR services, as well as more stringent credit policies. As a result, net subscriber additions of 275,000 were unchanged from last year’s fourth quarter bringing the total number of DIRECTV U.S. subscribers as of December 31, 2007 to 16.83 million, an increase of 6% over the 15.95 million subscribers reported on December 31, 2006.

                                         Three Months     Twelve Months
DIRECTV U.S.                                 Ended            Ended
                                         December 31,     December 31,
                                        ---------------------------------
Subscriber Data (in 000's except Churn)   2007    2006    2007     2006
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Gross Subscriber Additions                 986   1,021    3,847    3,809
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Average Monthly Subscriber Churn          1.42%   1.57%    1.51%    1.60%
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Net Subscriber Additions                   275     275      878      820
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Cumulative Subscribers                  16,831  15,953   16,831   15,953
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Full Year Review

In 2007, gross subscriber additions were up slightly to 3,847,000 as higher demand for HD and DVR services was mostly offset by tighter credit policies. Average monthly churn for the year declined to 1.51% primarily due to increased sales of HD and DVR services, as well as more stringent credit policies. As a result, net subscriber additions of 878,000 increased 7% compared with 2006.

DIRECTV Latin America Segment

The DIRECTV Group owns approximately 74% of Sky Brazil, 41% of Sky Mexico and 100% of PanAmericana, which covers most of the remaining countries in the region. Sky Mexico, whose results are accounted for as an equity method investment and therefore are not consolidated by DIRECTV Latin America, had approximately 1.59 million subscribers as of December 31, 2007.

Fourth Quarter Review

In the fourth quarter of 2007, DIRECTV Latin America net subscriber additions of 199,000 more than doubled compared to the same period last year primarily due to subscriber growth in Brazil, Venezuela and Argentina. The total number of DIRECTV subscribers in Latin America as of December 31, 2007 increased 21% to 3.28 million compared to 2.71 million as of December 31, 2006.

                                          Three Months     Twelve Months
DIRECTV Latin America                         Ended            Ended
                                          December 31,     December 31,
                                        ---------------------------------
Subscriber Data (in 000's except Churn)   2007    2006    2007     2006
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Gross Subscriber Additions                328     180   1,080      602
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Average Monthly Subscriber Churn         1.35%   1.29%   1.38%    1.46%
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Net Subscriber Additions(1)               199      77     588      249
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Cumulative Subscribers(1)               3,279   2,711   3,279    2,711
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Full Year Review

In the full year of 2007, DIRECTV Latin America net subscriber additions of 588,000 more than doubled compared to 2006 primarily due to subscriber growth in Brazil, Argentina, Venezuela and Colombia. Also contributing to the net subscriber increase was a decline in aggregate churn to 1.38% mostly due to improved performance in Venezuela and Brazil.

(1) DIRECTV Latin America net and cumulative subscribers exclude subscribers of the Sky Mexico service. Cumulative subscriber totals include the impact of 869,000 subscribers acquired through the merger with Sky Brazil in the third quarter of 2006 and the sale of 20,000 subscribers in Central America to Sky Mexico in the second half of 2007 (12,000 in Q4 2007).