DIRECTV 2009 Annual Report Download - page 76

DIRECTV
satellites in service in the second quarter of 2010. Additionally, our capital expenditures for broadcast
facilities and equipment to support our HD programming has decreased from 2007 to 2009 as we have
largely completed the build out of the infrastructure necessary to launch HD programming both locally
and nationally.
These decreases in capital expenditures for property and equipment have been offset by an
increase in capital expenditures in Latin America for set-top receivers provided to subscribers under
lease programs. Part of our business strategy in Latin America is to increase advanced product and
multi-box penetrations; therefore, our capital expenditures in Latin America are expected to increase.
Additionally, we paid $37 million in 2009, $204 million in 2008 and $348 million in 2007 for
investments, net of cash acquired, in various companies and $97 million, net of cash acquired, as part
of the Liberty Transaction. These transactions are described in Notes 3 of the Notes to the
Consolidated Financial Statements in Part II, Item 8 of this Annual Report. Also, in 2007 we had cash
flows from investing activities resulting from net cash proceeds received from the sale of short-term
investments. Our cash spending on investment in companies is discretionary and we may fund strategic
investment opportunities should they arise in the future.
Cash Flows Used in Financing Activities
Under stock repurchase plans approved by our Board of Directors we completed the repurchase of
our common stock as follows: $1,696 million during 2009, $3,174 million during 2008, and
$2,025 million during 2007. In February 2010, we announced an increase in the amount of authorized
repurchases to $3.5 billion, which is expected to be completed during 2010. We may make purchases
under this program in the open market, through negotiated transactions or otherwise. The timing,
nature and amount of such transactions will depend on a variety of factors, including market
conditions, and the program may be suspended, discontinued or accelerated at any time. The sources of
funds for the purchases under the remaining authorization are our existing cash on hand, cash from
operations and potential additional borrowings.
During 2008 we had $2,490 million of net cash proceeds from the issuance of senior notes and
borrowings under our senior secured credit facility which were completed in May 2008 and received a
$160 million capital contribution in connection with Liberty’s acquisition of its equity interest in us
from News Corporation. During 2009, we had $1,990 million of net cash proceeds from the issuance of
senior notes which were completed in September 2009. We also repaid $1,018 million of our long-term
debt, and paid approximately $751 million to settle a portion of the debt and related equity collars
assumed as part of the Liberty Transaction.
Free Cash Flow
Free cash flow increased in 2009 as compared to 2008 due to an increase in net cash provided by
operating activities described above, and the decrease in capital expenditures and the decrease in cash
paid for taxes described above. The decrease in capital expenditures resulted from lower costs for
set-top receivers capitalized under the DIRECTV U.S. lease program and lower capital expenditures
for satellite and broadcast facilities and equipment to support HD programming partially offset by
increased capital expenditures in Latin America for subscriber leased equipment.
During 2010, we expect continued free cash flow growth primarily as a result of the anticipated
increase in operating profit before depreciation and amortization.
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