DIRECTV 2012 Annual Report Download - page 12

“Tremendous consumer demand for DIRECTV’s diversified
portfolio of businesses across the Americas fueled the largest
annual net subscriber gain in our history.”
Thanks to our sharper focus on cost management, as well as our more
disciplined customer acquisition strategy, DIRECTV U.S. effectively
adapted to a world with higher programming costs. This is particularly
evident when looking at operating profit before depreciation and
amortization growth of nearly 7 percent, as margins expanded modestly
year over year. As I see it, these accomplishments are a strong signal
we’re on the right track with our long-term strategy of striking a more
optimal balance between growth and profitability.
In many ways, DIRECTV Latin America had one of its best years ever in
2012. Our competitive advantages and operating strengths continued to
drive subscriber growth to all-time highs as we expanded our share of
the growing pay-TV household market throughout the region. With more
than 2.4 million net additions, full-year revenues accelerated 23 percent
to more than $6.2 billion. As a better indicator of our achievement,
factoring out the impact of foreign exchange rate fluctuations,
revenues grew 36 percent last year.
DIRECTV Latin America also delivered on its full-year operating profit
before depreciation and amortization margin target of 30 percent.
This is particularly impressive considering the record gross additions
and the increased expenses associated with digesting a nearly 80
percent increase—or 4.5 million new customers—in our base over the
last two years.
In short, our achievements across the enterprise reflect the early
payback from successfully executing our strategy to maintain sustainable
revenue and profit growth over the long term. Coming off one of
the best and largest transitional years in our history, we have a great
deal of momentum and we’re poised to take full advantage of the
opportunities ahead.
DIRECTV U.S.: WINNING CUSTOMER LOYALTY FOR LIFE
We enter 2013 well positioned to build on our successful track record and
deliver on our vision to provide the best video experience in the world
whenever and wherever our customers want it.
The operating environment for our U.S. business in 2013 is expected to be
similar to 2012, with continued modest macroeconomic growth, high levels
of competitive intensity, and rising programming costs. This backdrop
poses some considerable challenges; however, it also presents a world of
opportunity for DIRECTV because consumers remain passionate about our
brand and they’re watching video more than ever before.
To achieve our vision and continue generating first quartile revenue and
operating profit before depreciation and amortization growth in 2013 and
beyond, we must maintain the many things that make the DIRECTV brand
synonymous with the highest quality television experience. We must further
our innovative excellence to advance the entertainment experience, provide
world-class customer service commensurate with the exceptional reputation
of our brand, and deliver on our operating and financial goals to create
long-term value for our shareholders.
ADVANCING THE ENTERTAINMENT EXPERIENCE
It is critical we continue to extend our brand leadership as the premium
pay-TV provider in the marketplace by providing the best and most compelling
video experience both inside and outside of the home.
Delivering this superior entertainment experience begins with leveraging
our greater scale to offer our customers unique and differentiated
content, including our popular NFL SUNDAY TICKET package and