DIRECTV 2009 Annual Report Download - page 7

Our 2009 Report comes at a time of significant momentum
in terms of our operating performance and free cash flow growth,
strengthening our position at the leading edge of the television
experience. It’s also a time of transition, as this marks my first letter
to DIRECTV shareholders. As someone who’s been looking into
every corner of this company since coming onboard as CEO in
January, I’m convinced that DIRECTV brings the total package:
a video symphony highlighted by an advantaged technology
platform delivering distinctive content done with a twist, and
industry-leading customer service backed up by the best brand
in the business. It also doesn’t hurt to bring a strong balance
sheet to today’s competitive market with the power to generate
significant amounts of free cash flow.
In some ways, DIRECTV’s strengths come as no surprise. The fact
is, long before I ever imagined becoming CEO at DIRECTV, I was
a DIRECTV customer. What I wanted was a service that used the latest
technology to bring me and my family the hot new shows, hit movies
and big games – with superior sound and picture, and outstanding
customer service at a competitive price. As I soon found out, DIRECTV
delivered. But I also knew that as a consumer, I had choices when it
came to home entertainment. That customer perspective is one I’m
going to work hard to keep as a means of testing how well we’re
delivering the DIRECTV experience in the future.
The reasons for DIRECTV’s success are hardly a secret: It’s
a terrific product delivered by a talented team of people. No new
CEO taking the helm could ask for a stronger foundation. In the
5 ½ years that Chase Carey led DIRECTV, the company added
over 11 million subscribers in the U.S. and Latin America, more
than doubling revenues while generating over $5 billion of free
cash flow. Since leaving, Chase has been very generous with
his time, sharing advice and perspectives. I’m also grateful to
Larry Hunter for his steady leadership during the transition period
before my arrival earlier this year.
A Message
to Shareholders
DRIVING RETURNS FROM A STRONG BASE
Our full-year results confirm that 2009 was an extremely strong
year for both our U.S. and Latin American businesses giving us
a great base to build on in 2010 and beyond.
n In the U.S., despite an increasingly competitive industry and the
continued impact of the economic downturn, DIRECTV added
the most net subscribers in four years.
n We grew our Pre-SAC margin by more than a point and drove
capital expenditures down about 15% – and we did both while
significantly improving our call center and installer network’s
performance.
n In 2009, DIRECTV once again posted the highest customer service
rating in the ASCI – the American Customer Satisfaction Index
– beating all major cable companies for the 9th consecutive year.
n In Latin America, our performance was even more impressive,
as we established new records for most key metrics including
net additions, revenues and operating profit before depreciation
and amortization.
n All told, these achievements drove industry-leading results at
the consolidated DIRECTV level, including nearly 10% revenue
growth and 40% free cash flow growth.
n On top of all of that, we completed the merger with Liberty
Entertainment and repurchased another $1.7 billion of stock,
bringing the total buyback to nearly $10 billion in the past four
years, reducing our shares outstanding by a third.
The strengths we’ve shown will prove critical, especially now.
Today is a time of several simultaneous transitions: In the macro-
economic environment, consumers are decidedly more cautious
and focused on getting good value for every dollar they spend. In
the world of technology, the pace of change provides consumers
Michael D. White
President and Chief Executive Officer
ANNUAL REPORT 5