DIRECTV (NASDAQ:DTV) today reported an increase in first quarter 2012 revenues of 12% to $7.05 billion, operating profit before depreciation and amortization¹ (OPBDA) of 8% to $1.90 billion and operating profit of 13% to $1.31 billion compared to last year's first quarter. DIRECTV reported that first quarter net income increased 8% to $731 million and diluted earnings per share grew 26% to $1.07 compared with the same period last year.

"DIRECTV delivered another strong quarter of financial and operating results highlighted by double-digit revenue, EPS and cash flow growth, fueled in part by another quarter of record-setting subscriber growth in Latin America," said Mike White, president and CEO of DIRECTV. "Our industry leading revenue and earnings growth continues to be driven by the strength of our premier brands, popularity of our differentiated product and service offerings, and an enhanced focus on achieving operational excellence through effective cost management."

DIRECTV'S OPERATIONAL REVIEW

First Quarter Review

DIRECTV's first quarter revenues of $7.05 billion increased 12% over the same period last year principally due to strong 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 $1.90 billion and operating profit increased 13% to $1.31 billion. Also in the quarter, OPBDA margin declined primarily due to higher programming and general and administrative (G&A) costs at DIRECTV U.S., increased subscriber acquisition and customer service costs at DTVLA, as well as higher upgrade and retention spending at both DIRECTV U.S. and DTVLA. These increases were partially offset by lower subscriber acquisition costs at DIRECTV U.S. In addition, operating profit margin increased as the lower OPBDA margin was more than offset by lower depreciation expense at DIRECTV U.S.

Net income attributable to DIRECTV increased 8% to $731 million and diluted earnings per share improved 26% to $1.07 compared with the first quarter of last year primarily due to the higher operating profit partially offset by more income tax expense primarily related to the increased earnings before tax and a lower effective tax rate in 2011 resulting from foreign tax credits not previously recognized. Net income also reflected higher interest expense principally resulting from an increase in long-term debt. In addition, diluted earnings per share were favorably impacted by share repurchases made over the last twelve months.

Cash flow before interest and taxes² increased 45% to $1.31 billion and free cash flow³ increased 43% to $952 million compared to the first quarter of 2011 primarily due to the higher OPBDA as well as an increase in cash generated from working capital primarily related to the timing of customer receipts and vendor payments. These increases were partially offset by greater capital expenditures primarily driven by the higher gross additions, infrastructure investment and satellite payments at DTVLA, as well as an increase in equipment upgrades at both DTVLA and DIRECTV U.S. The year over year comparison also reflects a $43 million dividend payment from Sky Mexico in the first quarter of 2011. In addition, free cash flow was impacted by higher interest payments related to an increase in long-term debt and greater tax payments. Also during the quarter but not included in free cash flow, was cash paid for share repurchases of $1.26 billion. In addition, in March 2012, DIRECTV U.S. completed a $4.0 billion debt financing consisting of $1.25 billion in 2.40% Senior Notes due 2017, $1.5 billion in 3.80% Senior Notes due 2022 and $1.25 billion in 5.15% Senior Notes due 2042. In April 2012, DIRECTV announced that it will redeem for cash $1.5 billion of its outstanding 7.625% Senior Notes due 2016 on May 15, 2012, at a price of 103.813% of the principal amount, together with accrued interest.

SEGMENT FINANCIAL REVIEW

DIRECTV U.S. Segment

First Quarter Review

In the quarter, DIRECTV U.S. revenues increased 7% to $5.50 billion primarily due to strong ARPU growth and the larger subscriber base. Net subscriber additions declined principally due to lower gross subscriber additions partially offset by a reduction in the average monthly churn rate. The lower gross additions were mainly due to a greater focus on higher quality subscribers and stricter credit policies while the lower churn rate was mainly driven by a greater percentage of subscribers on commitments and auto-bill pay. ARPU increased 3.6% to $91.99 due mostly to price increases on programming packages and leased boxes, higher advanced service fees and higher penetration of premium channels, partially offset by increased promotional offers to new and existing customers. DIRECTV U.S. ended the quarter with 19.97 million subscribers, an increase of 3% over the 19.41 million subscribers reported for the quarter ended March 31, 2011.

First quarter OPBDA increased 3% to $1.41 billion and operating profit increased 13% to $1.04 billion. OPBDA margin declined principally due to higher programming costs mostly related to program supplier rate increases, greater G&A primarily resulting from a $25 million property tax adjustment in 2011, as well as higher upgrade and retention spending associated with upgrade and churn initiatives. These increases were partially offset by lower subscriber acquisition costs related to the reduction in gross additions. Operating profit margin increased as the decline in OPBDA margin was more than offset by lower depreciation and amortization expense principally related to an increase in the estimated depreciable life of HD set-top boxes from three years to four years implemented in July 2011.

DIRECTV Latin America

DIRECTV Latin America (DTVLA) 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 4.28 million subscribers as of March 31, 2012 bringing the total subscribers in the region to 12.75 million.

First Quarter Review

In the first quarter, DTVLA revenues increased 33% to $1.49 billion principally due to strong subscriber growth partially offset by a 1.8% decline in ARPU. Net additions increased 39% to an all-time record of 593,000 driven by a 35% increase in gross additions to 1.03 million principally due to greater middle market demand across the region, most notably in Brazil, Colombia and Argentina. Also positively impacting net additions was lower total average churn of 1.80% due in large part to higher pre-paid reconnections in PanAmericana. This improvement was partially offset by an increase in monthly post-paid churn in the quarter of 1.47% primarily driven by higher churn in Brazil mostly related to the higher penetration of middle market subscribers. The decline in ARPU to $60.59 was principally due to unfavorable exchange rates, mainly in Brazil and Argentina, as well as from the impact of increased penetration of middle market subscribers, partially offset by price increases and greater penetration of advanced services. Excluding the impact of exchange rates, DTVLA ARPU increased approximately 1.5% in the first quarter.

DIRECTV Latin America's first quarter 2012 OPBDA increased 22% to $468 million and operating profit rose 14% to $249 million. Also in the quarter, OPBDA and operating profit margins declined primarily due to increased subscriber acquisition costs due to higher gross subscriber additions, more upgrade costs and increased customer service expenses across the region.

CONFERENCE CALL INFORMATION

A live webcast of DIRECTV's first quarter 2012 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 8, 2012. Access to the earnings call is also available in the United States by dialing (888) 401-4685 and internationally by dialing (719) 325-2286. The conference ID number is 9400901. A replay of the call can be accessed by dialing (888) 203-1112 in the U.S. and (719) 457-0820 internationally. The Replay pass code is 9400901. The replay will be available from 3:00 p.m. PT Tuesday, May 8, through 11:59 p.m. PT Tuesday, May 15, and will also be archived on our website at www.directv.com/investor.

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 DIRECTV's Annual Report on Form 10-K for the year ended December 31, 2011 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. DIRECTV management uses 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. We 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.

(3) Free cash flow, 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. 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. DIRECTV management uses free cash flow to evaluate the cash generated by our current subscriber base, net of capital expenditures, 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. We 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 free cash flow 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.

(4) DIRECTV Latin America subscriber data exclude subscribers of the Sky Mexico service.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

NOTE: This presentation may include or incorporate by reference certain statements that we believe are, or may be considered to be, "forward-looking statements" within the meaning of various provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by use of statements that include phrases such as "believe," "expect," "estimate," "anticipate," "intend," "plan," "project" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. All of these forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or from those expressed or implied by the relevant forward-looking statement. Such risks and uncertainties include, but are not limited to: increased competition; increasing programming costs and our ability to renew programming contracts under favorable terms; increased subscriber churn or subscriber upgrade and retention costs; potential material increase in subscriber acquisition costs; general economic conditions; risks associated with doing business internationally, which for DIRECTV Latin America include political and economic instability and foreign currency exchange rate volatility and controls; pace of technological development; potential intellectual property infringement; loss of key personnel; satellite construction or launch delays; satellite launch and operational risks; loss of a satellite; theft of satellite programming signals; U.S. and foreign governmental and regulatory action; ability to maintain licenses and regulatory approvals; significant debt; indemnification obligations; reliance on network and information systems; and the outcome of legal proceedings. We may face other risks described from time to time in periodic reports filed by us with the U.S. Securities and Exchange Commission.

DIRECTV (NASDAQ:DTV) is one of the world's leading providers of digital television entertainment services. Through its subsidiaries and affiliated companies in the United States, Brazil, Mexico and other countries in Latin America, DIRECTV provides digital television service to more than 19.9 million customers in the United States and over 12.7 million customers in Latin America. DIRECTV sports and entertainment properties include three regional sports networks (Northwest, Rocky Mountain and Pittsburgh) as well as a 60 percent ownership interest in Game Show Network. For more information on DIRECTV, visit directv.com.

DIRECTV
Media Contact: Darris Gringeri, 212-205-0882
Investor Relations, 310-964-0808

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