The DIRECTV Group Announces First Quarter 2008 Results

Business Wire, May 7, 2008

First Quarter Review

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In the first quarter of 2008, DIRECTV Latin America net subscriber additions more than doubled to 200,000 compared to the same period last year. The increase was due to higher gross additions mainly in Brazil, Venezuela and Argentina, partially offset by higher churn of 1.57% reflecting the significant increase in first-year subscribers who typically have higher churn rates compared to longer tenured subscribers. The total number of DIRECTV subscribers in Latin America as of March 31, 2008 increased 24% to 3.48 million compared to 2.80 million as of March 31, 2007.

Revenues for DIRECTV Latin America increased 47% to $542 million in the quarter principally due to strong subscriber and ARPU growth. ARPU increased 19.9% to $53.52 primarily due to favorable exchange rates in Brazil and the benefits from the merger with Sky Brazil, as well as strong growth in Venezuela and Argentina. DIRECTV Latin America's first quarter 2008 OPBDA of $138 million was 73% higher than last year's results and operating profit more than quadrupled to $78 million primarily due to the gross profit generated from the higher revenues. These improvements were partially offset by higher acquisition costs mostly due to the increase in gross additions and increased costs related to the exchange rate appreciation.

CONFERENCE CALL INFORMATION

A live webcast of The DIRECTV Group's first quarter 2008 earnings call will be available on the company's website at www.directv.com/investor. The webcast will begin at 2:00 p.m. ET, today May 7, 2008 and will be archived on our website at www.directv.com/investor. Access to the earnings call is also available in the United States by dialing (866) 409-1555 and internationally by dialing (913) 312-0400. The confirmation code is 9859451.

FOOTNOTES

(1) Operating profit before depreciation and amortization, which is a financial measure that is not determined in accordance with accounting principles generally accepted in the United States of America, or GAAP, 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 GAAP. 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, 2007 for further discussion of operating profit before depreciation and amortization. Operating profit before depreciation and amortization margin is calculated by dividing operating profit before depreciation and amortization by total revenues.

(2) Cash flow before interest and taxes, which is a financial measure that is not determined in accordance with GAAP, is calculated by deducting amounts under the captions "Cash paid for property and equipment", "Cash paid for satellites", "Cash paid for subscriber leased equipment - subscriber acquisitions" and "Cash paid for subscriber leased equipment - upgrade and retention" from "Net cash provided by operating activities" from the Consolidated Statements of Cash Flows and adding back net interest paid and "Cash paid for income taxes". This financial measure should be used in conjunction with other GAAP financial measures and is not presented as an alternative measure of cash flows from operating activities, as determined in accordance with GAAP. The DIRECTV Group and DIRECTV U.S. management use cash flow before interest and taxes to evaluate the cash generated by our current subscriber base, net of capital expenditures, and excluding the impact of interest and taxes, for the purpose of allocating resources to activities such as adding new subscribers, retaining and upgrading existing subscribers, for additional capital expenditures and as a measure of performance for incentive compensation purposes. The DIRECTV Group and DIRECTV U.S. believe this measure is useful to investors, along with other GAAP measures (such as cash flows from operating and investing activities), to compare our operating performance to other communications, entertainment and media companies. We believe that investors also use current and projected cash flow before interest and taxes to determine the ability of our current and projected subscriber base to fund required and discretionary spending and to help determine the financial value of the company.