This excerpt taken from the DTV 8-K filed Feb 13, 2008.
DIRECTV Group Net Subscriber Additions Increase 35% to 474,000
The DIRECTV Group, Inc. (NASDAQ:DTV) today reported that fourth quarter 2007 revenues increased 17% to $4.88 billion, operating profit before depreciation and amortization1 (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’s content and service leadership continue to drive superior results in a tougher marketplace that reflects increasing competition and a slowing economy. Advanced services—including the launch of the industry’s best HD programming—played an increasingly important role in DIRECTV U.S.’s top-line and bottom-line results,” said Chase Carey, president and CEO of The DIRECTV Group, Inc. “Strong net subscriber additions of 275,000 were punctuated by the lowest monthly churn rate in eight years. This 15 basis point reduction in monthly churn to 1.42% was largely due to the significant growth in customers with HD and DVR services—increasing from about 30% of our subscriber base last year to over 40% this year—as well as tighter credit policies. The continued strong subscriber growth coupled with an 8.3% increase in ARPU drove revenues up 14% to $4.38 billion. As with churn, the strong ARPU growth reflects the improving quality of our customers who are purchasing an array of new services.”
Carey continued, “DIRECTV U.S. OPBDA increased 14% to $1.00 billion primarily due to the gross profit generated from the strong revenue growth. OPBDA margin of 23% in the quarter was unchanged from the prior year as operating efficiencies gained in subscriber services and G&A were offset by higher acquisition and upgrade costs associated with the significant increase in new and existing customers purchasing advanced.”
Carey added, “DIRECTV’s operating momentum continued in Latin America as these businesses also had very strong fourth quarter results. An 82% increase in gross subscriber additions plus continued low monthly churn of 1.35% drove a more than doubling of net additions to 199,000 in the fourth quarter. In addition, DIRECTV Latin America’s revenues increased 41% to $499 million and OPBDA more than doubled to $114 million mostly due to the continued strong subscriber and ARPU growth, as well as favorable exchange rates, primarily in Brazil.”
Carey concluded, “We exit 2007 with tremendous operating and financial momentum. We believe we are delivering on our goal to provide the best television experience, including the most extensive HD programming in America. With the launch of our next satellite in a couple of months, we will extend DIRECTV’s leadership by introducing even more local and national HD channels. With full awareness of an industry that will be characterized by increasing competition and a slowing economy, we’re continuing to target extremely strong results in 2008 highlighted by a material increase in free cash flow driven by DIRECTV’s brand and content leadership, along with improved operating scale and efficiencies.”