DIRECTV 2008 Annual Report Download - page 69

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THE DIRECTV GROUP, INC.
The increase in net subscriber additions, excluding the Sky Brazil acquisition in 2006, was primarily
due to subscriber growth in Brazil, Argentina, Venezuela and Colombia, as well as a decrease in churn
in Brazil and Venezuela.
The increase in revenues primarily resulted from a $527 million increase in revenue in Brazil
primarily due to the acquisition of Sky Brazil in August 2006, higher ARPU and favorable exchange
rates, as well as subscriber and ARPU growth in PanAmericana.
The higher operating profit before depreciation and amortization is primarily due to the gross
profit generated by the increase in revenues, partially offset by gains totaling $118 million for the
completion of the Sky Mexico and Sky Brazil transactions in 2006 and the increase in costs from the
addition of Sky Brazil.
The higher operating profit was primarily due to the increase in operating profit before
depreciation and amortization partially offset by higher depreciation and amortization expense resulting
from the Darlene and Sky Brazil transactions.
Corporate and Other
Operating loss from Corporate and Other increased to $75 million in 2007 from $70 million in
2006.
LIQUIDITY AND CAPITAL RESOURCES
Our principal sources of liquidity are our cash, cash equivalents and the cash flow that we generate
from our operations. From 2006 to 2008 we experienced significant growth in net cash provided by
operating activities and free cash flow. We expect net cash provided by operating activities and free
cash flow to continue to grow and believe that our existing cash balances and cash provided by
operations will be sufficient to fund our existing business plan. Additionally, as of December 31, 2008,
DIRECTV U.S. had the ability to borrow up to $500 million under its existing credit facility, which is
available until 2011. Borrowings under this facility may be required to fund strategic investment
opportunities should they arise.
At December 31, 2008, our cash and cash equivalents totaled $2.0 billion compared with
$1.1 billion at December 31, 2007.
As a measure of liquidity, the current ratio (ratio of current assets to current liabilities) was 1.13 at
December 31, 2008 and 0.92 at December 31, 2007. Working capital increased by $747 million to
$459 million at December 31, 2008 from working capital deficit of $288 million at December 31, 2007.
The increase during the period was mostly due to the increase in our cash and cash equivalent balances
resulting from the changes discussed below.
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