DIRECTV 2010 Annual Report Download - page 15

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A Message to Shareholders
When I came on board as DIRECTV CEO at the beginning of last year,
I set out three priorities that I believed would be critical to our success
in 2010 and beyond: deliver on our 2010 operating plan; rework our
strategies to win in the marketplace; and focus on our people, with an
emphasis on teamwork and talent.
I am pleased to report to you that we have met or exceeded these goals
and I could not be more proud of our management team and employees,
who continue to show an amazing ability to innovate, adapt and respond
in an extremely dynamic and turbulent market environment.
We had a terrific year in 2010, as we excelled in every important
category, beating our plans for subscriber growth, revenue and cash flow.
Our consolidated results were impressive as we finished the year
with more than 28 million customers in the Americas – maintaining our
standing as the world’s largest and most popular video service.
We are now a $24 billion business with free cash flow for the full year
at $2.8 billion, growing at 18 percent, and our operating profit before
depreciation and amortization grew 20 percent, finishing 2010 at $6.4
billion—a solid number considering the increase in our gross additions.
delivering outstanding results
Both the U.S. and Latin America businesses delivered outstanding
results. In the U.S., we finished the year with more than 19.2 million
customers for the year. Our cash flow before interest and taxes grew by
14 percent and we increased our market share by 50 basis points, taking
customers primarily from cable. And we are becoming more competitive
in the telco fiber territories.
Latin America, by any measure, continues to be a terrific success story.
The Latin American team shattered the records they set in 2009, adding
1.2 million customers and setting a high-water mark for revenue at nearly
$3.6 billion. We will continue to double down on our Latin America
business as demographic trends remain in our favor and we have a great
service with strong appeal throughout the region.
In short, it was a world-class year for the entire enterprise. We
performed beyond expectations in spite of a lackluster recovery in the
U.S. economy, a rapidly changing video landscape and a challenging
competitive environment.
milestones to success
On top of our solid 2010 performance, we completed several
important transactions that transformed our company and will
benefit our shareholders.
• In June of last year, we completed our transaction with Dr. John
Malone, recapitalizing the Malone family stock ownership, which
simplified our capital structure by eliminating the dual class of
DIRECTV stock. We are now, for the first time, a truly independent
company with an independent board.
• We repurchased over $5 billion, or 136 million shares, of our
outstanding shares during the course of the year.
• And late last year we completed a cash for stock transaction with
Globo, our partner in Brazil, increasing our stake in the SKY Brasil
joint venture to approximately 93 percent, which positions us to
take our industry-leading position even further in a market of
nearly 60 million homes with low pay-TV penetration.
chairman’s leer 2010 annual report
We had a terrific year in 2010, as we
excelled in every important category,
beating our plans for subscriber growth,
revenue and cash flow.