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DIRECTV Announces Third Quarter 2012 Results

DIRECTV Latin America

DIRECTV Latin America owns approximately 93% of Sky Brasil, 41% of Sky Mexico and 100% of PanAmericana, which covers most of the remaining countries in the region. Sky Mexico, whose results are accounted for as an equity method investment and therefore are not consolidated by DTVLA, had approximately 4.88 million subscribers as of September 30, 2012, bringing the total subscribers in the region to 14.55 million.

DIRECTV Latin America

Three Months Ended

September 30,


Nine Months Ended

September 30,

Dollars in Millions except ARPU       2012       2011       2012       2011
Revenues       $ 1,577         $ 1,356         $ 4,570         $ 3,724  
Average Monthly Revenue per Subscriber (ARPU) ($)       55.97         64.63         57.83         63.58  
Operating Profit Before Depreciation and Amortization (1) 455       434 1,368       1,241
OPBDA Margin (1)       28.9 %       32.0 %       29.9 %       33.3 %
Operating Profit 221 236 694 696
Operating Profit Margin       14.0 %       17.4 %       15.2 %       18.7 %
Capital Expenditures and Cash Flow                                
Cash paid for property and equipment       40         28         167         54  
Cash paid for subscriber leased equipment - subscriber acquisitions       195         248         619         609  
Cash paid for subscriber leased equipment - upgrade and retention       107         115         324         305  
Cash paid for satellites       22         74         86         74  
Cash Flow Before Interest and Taxes (2)       81         32         238         329  
Free Cash Flow (3)       15         (23 )       (5 )       124  
Subscriber Data (4) (in 000's except Churn)                                
Gross Subscriber Additions       1,081         957         3,234         2,545  
Average Monthly Total Subscriber Churn       1.91 %       1.83 %       1.84 %       1.83 %
Average Monthly Post-paid Subscriber Churn       1.54 %       1.39 %       1.51 %       1.42 %
Net Subscriber Additions       543         574         1,781         1,473  
Cumulative Subscribers       9,666         7,281         9,666         7,281  

Third Quarter Review

In the third quarter, DTVLA revenues increased 16% to $1.58 billion compared to the same period last year principally due to strong subscriber growth partially offset by a 13.4% decline in ARPU. Net additions of 543,000 were modestly lower than the year ago period as increased gross additions were more than offset by higher average monthly churn on the larger subscriber base. Gross additions increased 13% to a third quarter record of 1.08 million principally due to greater middle market demand across the region, most notably in Argentina, Colombia and Brazil. Also in the quarter, average monthly post-paid churn increased to 1.54% and total average monthly churn increased to 1.91% primarily driven by higher churn in Brazil mostly related to the increased penetration of middle market subscribers. The decline in ARPU to $55.97 was due to unfavorable exchange rates, mainly in Brazil and Argentina. Excluding the impact of exchange rates, ARPU increased slightly in the quarter principally due to price increases and more upgrades including advanced services, partially offset by the higher penetration of lower ARPU middle market subscribers.

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