DIRECTV 2009 Annual Report Download - page 62

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DIRECTV
Share Repurchase Program. Since 2006 our Board of Directors approved multiple authorizations
for the repurchase of our common stock. The following table sets forth information regarding shares
repurchased and retired for the years ended December 31:
2009 2008 2007
(Amounts in Millions, Except
Per Share Amounts)
Total cost of repurchased and retired shares ........................ $1,696 $3,174 $2,025
Average price per share ....................................... 23.79 24.12 23.48
Number of shares repurchased and retired ......................... 71 131 86
KEY TERMINOLOGY
Revenues. We earn revenues mostly from monthly fees we charge subscribers for subscriptions to
basic and premium channel programming, HD programming and access fees, pay-per-view
programming, and seasonal and live sporting events. We also earn revenues from monthly fees that we
charge subscribers with multiple non-leased set-top receivers (which we refer to as mirroring fees),
monthly fees we charge subscribers for leased set-top receivers, monthly fees we charge subscribers for
digital video recorder, or DVR, service, hardware revenues from subscribers who lease or purchase
set-top receivers from us, our published programming guide, warranty service fees and advertising
services.
Broadcast Programming and Other. These costs primarily include license fees for subscription
service programming, pay-per-view programming, live sports and other events. Other costs include
expenses associated with the publication and distribution of our programming guide, continuing service
fees paid to third parties for active subscribers, warranty service costs and production costs for on-air
advertisements we sell to third parties.
Subscriber Service Expenses. Subscriber service expenses include the costs of customer call centers,
billing, remittance processing and certain home services expenses, such as in-home repair costs.
Broadcast Operations Expenses. These expenses include broadcast center operating costs, signal
transmission expenses (including costs of collecting signals for our local channel offerings), and costs of
monitoring, maintaining and insuring our satellites. Also included are engineering expenses associated
with deterring theft of our signal.
Subscriber Acquisition Costs. These costs include the cost of set-top receivers and other
equipment, commissions we pay to national retailers, independent satellite television retailers, dealers,
telcos, and the cost of installation, advertising, marketing and customer call center expenses associated
with the acquisition of new subscribers. Set-top receivers leased to new subscribers are capitalized in
‘‘Property and equipment, net’’ in the Consolidated Balance Sheets and depreciated over their useful
lives. The amount of set-top receivers capitalized each period for subscriber acquisitions is included in
‘‘Cash paid for property and equipment’’ in the Consolidated Statements of Cash Flows.
Upgrade and Retention Costs. Upgrade and retention costs are associated with upgrade efforts for
existing subscribers that we believe will result in higher average monthly revenue per subscriber, or
ARPU, and lower churn. Our upgrade efforts include subscriber equipment upgrade programs for
DVR, HD and HD DVR receivers and local channels, our multiple set-top receiver offer and similar
initiatives. Retention costs also include the costs of installing and providing hardware under our movers
program for subscribers relocating to a new residence. Set-top receivers leased to existing subscribers
under upgrade and retention programs are capitalized in ‘‘Property and equipment, net’’ in the
Consolidated Balance Sheets and depreciated over their useful lives. The amount of set-top receivers
50