DIRECTV Announces Fourth Quarter And Full Year 2012 Results

DIRECTV (NASDAQ:DTV) today reported increases in fourth quarter 2012 revenues of 8% to $8.05 billion, operating profit before depreciation and amortization ¹ (OPBDA) of 8% to $1.92 billion and operating profit of 7% to $1.30 billion compared to last year's fourth quarter. DIRECTV reported an increase in fourth quarter net income of 31% to $942 million and diluted earnings per share of 52.0% to $1.55 compared with the same period last year.

“Our solid fourth quarter consolidated results capped off another year of impressive revenue, earnings and cash flow growth,” said Mike White, Chairman, President and CEO of DIRECTV. “Strong consumer demand for DIRECTV's diversified portfolio of businesses across the Americas fueled the largest annual net subscriber gain in our history with nearly 3.8 million net customers added including Sky Mexico. As a result, we furthered our lead as the world's largest and most popular provider of Pay TV video services with over 35 million subscribers and growing rapidly. This tremendous subscriber performance along with solid ARPU and margin performance fueled a 9% top-line increase bringing DIRECTV to nearly $30 billion in revenues, a 32% increase in diluted EPS to $4.58 and a 13% increase in free cash flow to $2.3 billion in 2012.”

White concluded, “We exit 2012 with good momentum as we continue to successfully execute on our long-term strategy to drive sustainable profitable growth across the Americas while also significantly advancing DIRECTV's service oriented culture by winning our customers' loyalty for life. We believe that these strategies along with our share repurchase plan - highlighted by the approval of a new $4 billion buyback authorization - will continue to create significant shareholder value for years to come.”

DIRECTV'S Operational Review

Fourth Quarter Review

DIRECTV's fourth quarter revenues of $8.05 billion increased 8% principally due to subscriber growth at DIRECTV Latin America (DTVLA) and DIRECTV U.S., as well as higher ARPU at DIRECTV U.S. Operating profit before depreciation and amortization (OPBDA) increased 8% to $1.92 billion and operating profit increased 7% to $1.30 billion in the quarter compared with the same period last year. OPBDA and operating profit margin were relatively unchanged compared to the same period in 2011.

DIRECTV Consolidated Dollars in Millions except Earnings per Common Share					Three Months EndedDecember 31,											Twelve Months EndedDecember 31,
					2012						2011					2012						2011
Revenues					$	8,054					$	7,463				$	29,740					$	27,226
Operating Profit Before Depreciation and Amortization (1)					1,924						1,782					7,522						6,978
OPBDA Margin (1)					23.9		%				23.9		%			25.3		%				25.6		%
Operating Profit					1,298						1,214					5,085						4,629
Operating Profit Margin					16.1		%				16.3		%			17.1		%				17.0		%
Net Income Attributable to DIRECTV					942						718					2,949						2,609
Diluted Earnings Per Common Share					1.55						1.02					4.58						3.47
Capital Expenditures and Cash Flow
Cash paid for property and equipment					211						201					757						665
Cash paid for subscriber leased equipment - subscriber acquisitions					412						392					1,493						1,547
Cash paid for subscriber leased equipment - upgrade and retention					177						171					710						712
Cash paid for satellites					158						90					389						246
Cash Flow Before Interest and Taxes (2)					1,120						1,025					4,413						3,710
Free Cash Flow (3)					543						720					2,285						2,015

Net income attributable to DIRECTV increased 31% to $942 million and diluted earnings per share improved 52.0% to $1.55 compared with the fourth quarter of last year primarily due to the higher operating profit, a $111 million pre-tax gain related to the sale of an 18% ownership in the Game Show Network and a lower effective tax rate in 2012 related to the resolution of prior year income tax audits. These changes were partially offset by higher interest expense in 2012 driven by higher average debt balances. In addition, diluted earnings per share were favorably impacted by share repurchases made over the last twelve months.

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