The DIRECTV Group Announces Second Quarter 2006 Results

Business Wire, August 8, 2006

The increase in first half 2006 net income to $694 million was due to the higher operating profit discussed above, a second quarter 2005 charge of $65 million related to the premium paid for the redemption of senior notes and the write-off of a portion of deferred debt issuance costs from debt refinancing, and higher interest income in 2006 resulting primarily from higher average interest rates. Partially offsetting these improvements were higher 2006 income tax expense resulting from an increase in pre-tax income and a $31 million credit in the second quarter of 2005 related to the favorable settlement of a U.S. federal income tax dispute associated with a previously divested business.

SEGMENT FINANCIAL REVIEW
                         DIRECTV U.S. Segment

                                        Three Months     Six Months
                                       Ended June 30,  Ended June 30,
DIRECTV U.S.                           --------------- ---------------
Dollars in Millions except ARPU         2006    2005    2006    2005
-------------------------------------- ------- ------- ------- -------
Revenue                                $3,318  $2,961  $6,512  $5,761
-------------------------------------- ------- ------- ------- -------
Average Monthly Revenue per Subscriber
 (ARPU) ($)                             71.59   67.79   70.73   66.91
-------------------------------------- ------- ------- ------- -------
Operating Profit Before Depreciation
 and Amortization(1)                      977     505   1,521     720
-------------------------------------- ------- ------- ------- -------
Operating Profit                          774     333   1,137     372
-------------------------------------- ------- ------- ------- -------
Cash Flow Before Interest and Taxes(3)    450     154     661     217
-------------------------------------- ------- ------- ------- -------
Free Cash Flow(2)                         224     126     272     151
-------------------------------------- ------- ------- ------- -------
Subscriber Data (in 000's except
 Churn)
-------------------------------------- ------- ------- ------- -------
Gross Subscriber Additions                863     964   1,782   2,101
-------------------------------------- ------- ------- ------- -------
Average Monthly Subscriber Churn         1.59%   1.69%   1.52%   1.59%
-------------------------------------- ------- ------- ------- -------
Net Subscriber Additions                  125     225     380     730
-------------------------------------- ------- ------- ------- -------
Cumulative Subscribers                 15,513  14,670  15,513  14,670
-------------------------------------- ------- ------- ------- -------

DIRECTV U.S. gross subscriber additions of 863,000 declined 10% compared to the second quarter of 2005 primarily due to the implementation of revised credit policies and dealer incentives designed to improve the quality of new subscriber additions. As a result of these changes, DIRECTV U.S. increased the number of higher quality subscribers attained in the quarter by 11% compared to last year. This trend of attaining higher quality subscribers was a major contributor to the reduction in monthly churn from 1.69% to 1.59% in the current quarter. DIRECTV U.S. added 125,000 net subscribers in the quarter bringing the total number of DIRECTV U.S. subscribers to 15.51 million as of June 30, 2006, an increase of 6% over the 14.67 million subscribers on June 30, 2005.