The DIRECTV Group Announces First Quarter 2005 Results

Business Wire, May 2, 2005

In the first quarter of 2005, The DIRECTV Group had negative free cash flow(2) of $202 million mostly due to capital expenditures in the quarter. To better conform to industry convention and improve visibility on operating performance, beginning in the first quarter of 2005, DIRECTV defines free cash flow as "Net Cash Provided by (Used in) Operating Activities" less capital expenditures which consists of "Expenditures for property" and "Expenditures for satellites." The DIRECTV Group's consolidated cash and short term investment balance decreased by $152 million to $2.68 billion and total debt declined by $10 million to $2.42 billion compared to the December 31, 2004 balances due to the negative free cash flow discussed above and $32 million used in financing activities primarily for the repayment of debt and other obligations, partially offset by $79 million of cash received from the sale of an equity investment.

In April 2005, DIRECTV U.S. entered into a new senior secured credit facility. The new facility consists of a $500 million undrawn six-year revolving credit facility, a $500 million six-year Term Loan A and a $1.5 billion eight-year Term Loan B, both of which are fully funded. The interest rate on each of the term loans is currently LIBOR plus 1.50% per annum. The proceeds of the term loans were used to repay an existing $1.0 billion senior secured loan and to pay related financing costs. The remaining proceeds are available for working capital or other requirements.

In addition, DIRECTV U.S. intends to redeem $490 million, plus interest and a redemption premium, of its senior notes on May 19, 2005. As a result of these transactions, DIRECTV expects to record a pre-tax charge of approximately $56 million in the second quarter of 2005 related to the premium paid for the redemption of the senior notes and the write-off of deferred debt issuance costs.

CONFERENCE CALL INFORMATION

A live webcast of The DIRECTV Group's first quarter 2005 earnings call will be available on the company's website at www.directv.com. The call will begin at 11:00 a.m. ET, today May 2, 2005. The dial in number for the call is (913) 312-1295. The webcast will be archived on our website and a replay of the call will be available (dial in number: 719-457-0820, code: 6748515) beginning at 3:30 p.m. ET today through 11:59 p.m. ET Friday, May 6, 2005.

FOOTNOTES

(1) Operating profit (loss) before depreciation and amortization, which is a non-GAAP financial measure, should be used in conjunction with other GAAP financial measures and is not presented as an alternative measure of operating results, as determined in accordance with accounting principles generally accepted in the United States of America. Please see each of The DIRECTV Group's and DIRECTV Holdings LLC's Annual Reports on Form 10-K for the year ended December 31, 2004 for further discussion of operating profit (loss) before depreciation and amortization. Operating profit before depreciation and amortization margin is calculated by dividing operating profit before depreciation and amortization by total revenues.