DIRECTV 2005 Annual Report Download - page 68

THE DIRECTV GROUP, INC.
accelerated at any time. Through March 7, 2006, we have repurchased approximately 110.3 million
shares for $1.7 billion, at an average price of $15.50 per share, which includes 100 million shares of our
common stock purchased from General Motors employee pension and benefit trusts.
We expect to fund our operations and the balance of the share repurchase program from a
combination of existing cash balances, cash provided from operations and amounts available under
DIRECTV U.S.’ existing credit facility. We believe the financing transactions completed in 2005, as
described in Note 9 of the Notes to the Consolidated Financial Statements in Item 8, Part II, provide
liquidity to fund our operations and commitments for the foreseeable future. However, several factors
may affect our ability to fund our operations and commitments that we discuss in ‘‘Contractual
Obligations, Off-Balance Sheet Arrangements and Contingencies’’ below.
In addition, our future cash flows may be reduced if we experience, among other things,
significantly higher subscriber additions than planned, increased subscriber churn or upgrade and
retention costs, higher than planned capital expenditures for satellites and broadcast equipment,
satellite anomalies or signal theft or if we are required to make a prepayment on our Term Loans.
Notes Payable and Credit Facilities
At December 31, 2005, we had $3,415.0 million in total outstanding borrowings, bearing a weighted
average interest rate of approximately 6.7%. Our outstanding borrowings primarily consist of notes
payable and amounts borrowed under a credit facility as more fully described in Note 9 of the Notes to
the Consolidated Financial Statements in Item 8, Part II of this Annual Report, which we incorporate
herein by reference.
Our short-term borrowings, notes payable, credit facility and other borrowings mature as follows:
$9.4 million in 2006; $10.1 million in 2007; $47.6 million in 2008; $97.6 million in 2009; $297.5 million
in 2010; and $2,949.7 million thereafter. However, these amounts do not reflect potential prepayments
that may be required under our senior secured credit facility. We were not required to make a
prepayment for the years ended December 31, 2005 and 2004. However, we made a prepayment of
$201.0 million on April 15, 2004 for the year ended December 31, 2003.
Dividend Policy and Stockholders’ Equity
Dividends may be paid on our common stock only when, as, and if declared by our Board of
Directors in its sole discretion. Except for the $275 million special cash dividend paid to GM in
connection with the split-off in 2003, our Board of Directors has not declared dividends on our
common stock for more than five years. We have no current plans to pay any dividends on our
common stock. We currently expect to retain our future earnings, if any, for the development of our
business or other corporate purposes.
We are a publicly-traded company with our common stock listed as ‘‘DTV’’ on the NYSE. As part
of the News Corporation transactions completed on December 22, 2003, our certificate of incorporation
was amended to provide for the following capital stock: common stock, par value $0.01 per share,
3,000,000,000 shares authorized; Class B common stock, par value $0.01 per share, 275,000,000 shares
authorized; excess stock, par value $0.01 per share, 800,000,000 shares authorized; and preferred stock,
par value $0.01 per share, 9,000,000 shares authorized. As of December 31, 2005, there were no
outstanding shares of the Class B common stock, excess stock or preferred stock. Repurchased shares
will cease to be issued and outstanding but remain authorized for registration and issuance in the
future.
55