DIRECTV 2006 Annual Report Download - page 64
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THE DIRECTV GROUP, INC.
The $50.8 million in income from discontinued operations relates to the PanAmSat and HSS
businesses sold in 2004. Loss on sale of discontinued operations of $633.1 million in 2004 includes the
loss recorded for the sale of PanAmSat, net of taxes, of $723.7 million, partially offset by the
$90.7 million gain on HNS’ sale of its approximate 55% interest in HSS. The discontinued operations
of PanAmSat and HSS are more fully discussed in ‘‘Divestitures’’ above.
Cumulative Effect of Accounting Change. The $310.5 million cumulative effect of accounting
change, net of taxes, in 2004 was due to our change in our method of accounting for subscriber
acquisition, upgrade and retention costs.
DIRECTV U.S. Segment
The following table provides operating results and a summary of key subscriber data for the
DIRECTV U.S. segment:
Change
2005 2004 $ %
(Dollars in Millions, Except Per
Subscriber Amounts)
Revenues ....................................... $12,216.1 $9,763.9 $2,452.2 25.1%
Operating Costs and Expenses
Costs of revenues, exclusive of depreciation and
amortization expense
Broadcast programming and other .............. 5,050.1 4,010.5 1,039.6 25.9%
Subscriber service expenses ................... 935.4 740.2 195.2 26.4%
Broadcast operations expenses ................. 145.8 129.7 16.1 12.4%
Selling, general and administrative expenses, exclusive of
depreciation and amortization expense
Subscriber acquisition costs ................... 2,675.8 2,644.9 30.9 1.2%
Upgrade and retention costs ................... 1,106.5 993.2 113.3 11.4%
General and administrative expenses ............. 802.3 662.3 140.0 21.1%
Depreciation and amortization expense ................. 698.2 561.2 137.0 24.4%
Total Operating Costs and Expenses .......... 11,414.1 9,742.0 1,672.1 17.2%
Operating Profit .................................. $ 802.0 $ 21.9 $ 780.1 NM*
Other Data:
Operating Profit Before Depreciation & Amortization ...... $ 1,500.2 $ 583.1 $ 917.1 NM
Total number of subscribers (000’s) .................... 15,133 13,940 1,193 8.6%
ARPU ......................................... $ 69.61 $ 66.95 $ 2.66 4.0%
Average monthly subscriber churn% ................... 1.70% 1.59% — 6.9%
Gross subscriber additions (000’s) (1) ................... 4,170 4,218 (48) (1.1)%
Net subscriber additions (000’s) ....................... 1,193 1,728 (535) (31.0)%
Average subscriber acquisition costs—per subscriber (SAC) (2) $ 642 $ 643 $ (1) (0.2)%
* Percentage not meaningful
(1) Gross subscriber additions for 2004 excludes the 1.4 million subscribers purchased as part of the
NRTC and Pegasus transactions.
(2) Gross subscriber additions used in the calculation of SAC also do not include subscribers added in
the former NRTC and Pegasus territories prior to the NRTC and Pegasus transactions in 2004.
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