The DIRECTV Group Announces Second Quarter 2007 Results

Business Wire, August 9, 2007

DIRECTV Group Revenues Increase 17% to over $4.1 Billion

* DIRECTV U.S. Revenues Increase 12% to $3.7 Billion Fueled by Average Monthly Revenue Per Subscriber (ARPU) Growth of 6.8% to $76.43

* DIRECTV Latin America Revenues More Than Double to $409 Million

DIRECTV Group Operating Profit Before Depreciation and Amortization Increases 16% to over $1.1 Billion

* DIRECTV U.S. Generates 9% Growth to $1.1 Billion

* DIRECTV Latin America up Threefold to $95 Million

Strong Demand Drives Subscriber Growth and Lower Churn

* DIRECTV U.S. Adds 128,000 Net Subscribers Driven by Higher Gross Additions of 900,000 and Lower Monthly Churn of 1.58%

* DIRECTV Latin America Attains Strong Net Subscriber Additions of 141,000 Propelled by Higher Gross Additions of 260,000 and Lower Monthly Churn of 1.38%

Board of Directors Authorizes Share Repurchase of up to $1.0 Billion

* Prior $1 Billion Share Repurchase Program Completed in Early August 2007

EL SEGUNDO, Calif. -- The DIRECTV Group, Inc. (NYSE:DTV) today reported that second quarter revenues increased 17% to $4.14 billion and operating profit before depreciation and amortization1 increased 16% to $1.13 billion compared to last year's second quarter. The DIRECTV Group reported that second quarter 2007 operating profit of $740 million and net income of $448 million were relatively unchanged from last year's second quarter. Earnings per share were $0.37 compared with $0.36 in the same period last year. In addition, DIRECTV's Board of Directors has authorized up to a $1.0 billion share repurchase program. DIRECTV expects these repurchases to occur from time to time, in the open market or in private transactions, subject to market conditions.

"The DIRECTV Group's second quarter results highlight the financial and operating strengths of our businesses in both the United States and Latin America. Looking first at the quarterly results for DIRECTV U.S., in many ways they reflect the growing demand for advanced services by our customers," said Chase Carey, president and CEO of The DIRECTV Group, Inc. "Strong revenue growth of 12% to over $3.7 billion was fueled by a nearly 7% increase in ARPU to $76.43 due in large part to approximately 50% more high definition (HD) and digital video recorder (DVR) customers in the quarter. This increase in customer demand for advanced services also contributed to the higher gross additions of 900,000 and lower monthly churn rate of 1.58%, resulting in net subscriber additions of 128,000 for DIRECTV U.S. in the quarter."

Carey continued, "The strong revenue growth drove the increase in DIRECTV U.S. operating profit before depreciation and amortization to $1.06 billion. In addition, upgrade and acquisition costs, including capitalized equipment, were higher than the prior year due to the increased number of customers adding HD and DVR services, as well as converting to our MPEG-4 HD equipment. It's important to highlight that households with HD and/or DVR services generate superior financial returns due to the significantly greater cash flows compared to homes without these services."

"Second quarter results were also very strong in our DIRECTV Latin America businesses where we attained significantly higher net subscriber additions of 141,000 driven by strong gross additions of 260,000 and a large reduction in the monthly churn rate to 1.38%. In addition, revenues in the region more than doubled to $409 million and operating profit before depreciation and amortization was up threefold to $95 million primarily due to strong subscriber growth and the merger with Sky Brazil which was completed in the second half of last year."

Carey added, "In light of the rapidly growing demand for advanced services in the United States, it is particularly exciting to look ahead a couple of months when we leapfrog the competition by offering up to 100 national HD channels. We believe our HD line-up will provide DIRECTV U.S. with a significant competitive advantage in the rapidly growing market for HD television. Consumers are passionate about HD and DIRECTV will be the clear choice for anyone looking for the best HD television experience."

THE DIRECTV GROUP'S OPERATIONAL REVIEW

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Second Quarter Review

In the second quarter of 2007, The DIRECTV Group's revenues of $4.14 billion increased 17% over the same period last year principally due to strong growth in average revenue per subscriber (ARPU) and a larger subscriber base at DIRECTV U.S., as well as the consolidation of Sky Brazil's financial results due to the completion of the merger with DIRECTV Brazil on August 23, 2006.

The 16% increase in operating profit before depreciation and amortization to $1.13 billion was primarily due to the gross profit associated with the higher revenues discussed above and a $25 million gain from the settlement of several hurricane related insurance claims, partially offset by higher upgrade and acquisition costs at DIRECTV U.S. primarily related to the increased number of new and existing customers adding HD and DVR services. Operating profit of $740 million and net income of $448 million were relatively unchanged with the second quarter of last year as the higher operating profit before depreciation and amortization was offset by higher depreciation and amortization primarily from increased capitalization of customer equipment under the DIRECTV U.S. lease program, as well as the consolidation of Sky Brazil.