DIRECTV Announces Fourth Quarter and Full Year 2012 Results

  DIRECTV Announces Fourth Quarter and Full Year 2012 Results

DIRECTV Adds 761,000 Net Additions in the Quarter Driven by DIRECTV Latin
America's All-Time Record of 658,000.

  *For the year, DIRECTV Latin America sets record with 4.4 million gross
    additions and 2.4 million net additions while Sky Mexico adds 1.1 million
    net new subscribers.
  *DIRECTV U.S. adds 199,000 net new customers in 2012.

DIRECTV Fourth Quarter Revenue and Operating Profit before Depreciation and
Amortization (OPBDA) Growth of 8% Drive Full Year Revenue to Nearly $30
billion and OPBDA to over $7.5 billion.

  *DIRECTV Latin America increases 2012 revenues by 23% to $6 billion and
    achieves 29.8% OPBDA margin.
  *DIRECTV U.S. grows revenues 6% to $23 billion and improves OPBDA margin to
    24.3% in 2012.

DIRECTV Full Year Diluted Earnings per Share Rise 32% to $4.58 fueled in part
by $5.2 billion of Repurchases in 2012; Free Cash Flow Increases 13% to $2.3
billion in the Year.

DIRECTV Authorizes New $4 billion Stock Repurchase Program.

Business Wire

EL SEGUNDO, Calif. -- February 14, 2013

DIRECTV (NASDAQ:DTV) today reported increases in fourth quarter 2012 revenues
of 8% to $8.05 billion, operating profit before depreciation and
amortization^1 (OPBDA) of 8% to $1.92 billion and operating profit of 7% to
$1.30 billion compared to last year's fourth quarter. DIRECTV reported an
increase in fourth quarter net income of 31% to $942 million and diluted
earnings per share of 52.0% to $1.55 compared with the same period last year.

“Our solid fourth quarter consolidated results capped off another year of
impressive revenue, earnings and cash flow growth,” said Mike White, Chairman,
President and CEO of DIRECTV. “Strong consumer demand for DIRECTV's
diversified portfolio of businesses across the Americas fueled the largest
annual net subscriber gain in our history with nearly 3.8 million net
customers added including Sky Mexico. As a result, we furthered our lead as
the world's largest and most popular provider of Pay TV video services with
over 35 million subscribers and growing rapidly. This tremendous subscriber
performance along with solid ARPU and margin performance fueled a 9% top-line
increase bringing DIRECTV to nearly $30 billion in revenues, a 32% increase in
diluted EPS to $4.58 and a 13% increase in free cash flow to $2.3 billion in
2012.”

White concluded, “We exit 2012 with good momentum as we continue to
successfully execute on our long-term strategy to drive sustainable profitable
growth across the Americas while also significantly advancing DIRECTV's
service oriented culture by winning our customers' loyalty for life. We
believe that these strategies along with our share repurchase plan -
highlighted by the approval of a new $4 billion buyback authorization - will
continue to create significant shareholder value for years to come.”

                         DIRECTV'S Operational Review

Fourth Quarter Review

DIRECTV's fourth quarter revenues of $8.05 billion increased 8% principally
due to subscriber growth at DIRECTV Latin America (DTVLA) and DIRECTV U.S., as
well as higher ARPU at DIRECTV U.S. Operating profit before depreciation and
amortization (OPBDA) increased 8% to $1.92 billion and operating profit
increased 7% to $1.30 billion in the quarter compared with the same period
last year. OPBDA and operating profit margin were relatively unchanged
compared to the same period in 2011.

DIRECTV
Consolidated         Three Months Ended          Twelve Months Ended
Dollars in               December 31,                  December 31,
Millions except
Earnings per         2012         2011        2012          2011
Common Share
Revenues             $ 8,054     $ 7,463    $ 29,740     $ 27,226 
Operating Profit
Before               1,924       1,782      7,522        6,978    
Depreciation and
Amortization^(1)
OPBDA Margin^(1)     23.9    %    23.9    %   25.3     %    25.6     %
Operating Profit     1,298       1,214      5,085        4,629    
Operating Profit     16.1    %    16.3    %   17.1     %    17.0     %
Margin
Net Income
Attributable to      942         718        2,949        2,609    
DIRECTV
Diluted Earnings     1.55        1.02       4.58         3.47     
Per Common Share
Capital
Expenditures and                                         
Cash Flow
Cash paid for
property and         211         201        757          665      
equipment
Cash paid for
subscriber
leased equipment     412         392        1,493        1,547    
- subscriber
acquisitions
Cash paid for
subscriber
leased equipment     177         171        710          712      
- upgrade and
retention
Cash paid for        158         90         389          246      
satellites
Cash Flow Before
Interest and         1,120       1,025      4,413        3,710    
Taxes^(2)
Free Cash            543         720        2,285        2,015    
Flow^(3)
                                                                 

Net income attributable to DIRECTV increased 31% to $942 million and diluted
earnings per share improved 52.0% to $1.55 compared with the fourth quarter of
last year primarily due to the higher operating profit, a $111 million pre-tax
gain related to the sale of an 18% ownership in the Game Show Network and a
lower effective tax rate in 2012 related to the resolution of prior year
income tax audits. These changes were partially offset by higher interest
expense in 2012 driven by higher average debt balances. In addition, diluted
earnings per share were favorably impacted by share repurchases made over the
last twelve months.

Cash flow before interest and taxes^2 increased 9% to $1,120 million compared
to the fourth quarter of 2011 primarily due to the higher OPBDA as well as
cash generated from working capital mostly due to the timing of customer and
vendor receivables at DIRECTV U.S., partially offset by an increase in capital
expenditures principally due to higher satellite payments at both DIRECTV U.S.
and DTVLA. Also in the quarter, free cash flow^3 decreased 25% to $543 million
as the improved cash flow before interest and taxes and lower net interest
payments were more than offset by higher tax payments. Both the lower net
interest payments and higher tax payments were primarily a result of the
timing of payments. Also during the quarter but not included in free cash flow
was cash paid for share repurchases of $1.35 billion. In addition, DIRECTV
U.S. launched a $2.5 billion commercial paper program in the quarter. As of
December 31, 2012 there was $358 million outstanding under the program.

Subsequent to the end of the quarter, the Venezuelan government devalued its
currency resulting in the official exchange rate moving from 4.30 bolivars per
U.S. dollar to 6.30 bolivars per U.S. dollar. This devaluation does not have
any impact on DIRECTV’s 2012 results of operations, financial position or cash
flows. In the first quarter of 2013, DIRECTV Latin America expects to incur a
one-time pre-tax charge of approximately $160 million related to the
re-measurement of bolivar denominated net monetary assets at the date of the
devaluation on February 9, 2013. There will also be an ongoing unfavorable
financial impact in 2013 to DIRECTV Latin America’s revenues, earnings and
cash flow growth related to the translation of the local currency financial
statements to the new official exchange rate.

Full Year Review

DIRECTV's full year 2012 revenues increased 9% to $29.74 billion over last
year principally due to subscriber growth over the last year at DTVLA and
DIRECTV U.S., as well as higher ARPU at DIRECTV U.S. DIRECTV's OPBDA increased
8% to $7.52 billion and operating profit increased 10% to $5.09 billion in
2012. OPBDA margin slightly declined in the period primarily due to increased
DTVLA costs in customer service, general and administrative, and upgrade and
retention. In addition, operating profit margin was favorably impacted by
lower depreciation expense at DIRECTV U.S. primarily driven by an increase in
the estimated depreciable life of HD set-top boxes from three years to four
years implemented in July 2011.

Net income attributable to DIRECTV increased 13% to $2.95 billion and diluted
earnings per share improved 32% to $4.58 for the period primarily due to the
higher operating profit and a $59 million increase in earnings from the sale
of equity investments. These were partially offset by higher income tax
expense principally related to the increased earnings before tax, as well as
higher interest expense resulting from higher average debt balances. In
addition, diluted earnings per share were favorably impacted by share
repurchases made over the last twelve months.

In 2012, cash flow before interest and taxes increased 19% to $4.41 billion
and free cash flow increased 13% to $2.29 billion primarily due to the higher
OPBDA as well as an increase in cash generated from working capital mostly
related to the timing of customer and vendor receipts at DIRECTV U.S. These
increases were partially offset by greater capital expenditures principally
driven by increased satellite payments at both DIRECTV U.S. and DTVLA, and
higher infrastructure investment at DTVLA (including $51 million towards the
purchase of a building in Venezuela) partially offset by lower capital
expenditures on leased equipment at DIRECTV U.S. primarily resulting from the
lower gross additions. In addition, free cash flow was impacted by higher cash
tax payments mostly related to the higher pre-tax earnings and a change in
bonus depreciation deductions in 2012, as well as increased net interest
payments related to the higher average long-term debt balances. Also during
2012 but not included in free cash flow, was cash paid for share repurchases
of $5.18 billion  and a decrease of $92 million related to cash received for
the sale of investments. Below is a table summarizing 2012's Senior Note
issuances.

Senior Note Debt Financings in 2012
Issue Month       Amount            Coupon    Due Date
March 2012        $1.25B            2.400%    2017
March 2012        $1.5B             3.800%    2022
March 2012        $1.25B            5.150%    2042
September 2012    £750M (~$1.2B)    4.375%    2029
                                             

In addition, in May 2012, DIRECTV redeemed $1.5 billion of its outstanding
7.625% Senior Notes due in 2016. In September 2012, DIRECTV U.S. entered into
two senior unsecured revolving credit agreements totaling $2.5 billion to
replace a $2.0 billion credit agreement that was terminated. Both revolving
credit agreements were undrawn as of the end of 2012. Also in the fourth
quarter, DIRECTV U.S. launched a $2.5 billion commercial paper program backed
by the revolving credit agreements and as of December 31, 2012, there was $358
million outstanding under the program. Subsequent to the end of the year in
January 2013, DIRECTV U.S. issued $750 million principal amount of 1.75%
Senior Notes due in 2018.

                           SEGMENT FINANCIAL REVIEW

                             DIRECTV U.S. Segment

Fourth Quarter Review

DIRECTV U.S.         Three Months Ended          Twelve Months Ended       
                         December 31,                  December 31,
Dollars in
Millions except      2012         2011        2012          2011     
ARPU
Revenues             $ 6,320     $ 6,029    $ 23,235     $ 21,872 
Average Monthly
Revenue per          105.15      101.38     96.98        93.27    
Subscriber
(ARPU) ($)
Operating Profit
Before               1,408       1,327      5,654        5,289    
Depreciation and
Amortization^(1)
OPBDA Margin^(1)     22.3    %    22.0    %   24.3     %    24.2     %
Operating Profit     1,023       965        4,153        3,702    
Operating Profit     16.2    %    16.0    %   17.9     %    16.9     %
Margin
Capital
Expenditures and                                                 
Cash Flow
Cash paid for
property and         164         163        541          567      
equipment
Cash paid for
subscriber
leased equipment     194         167        656          713      
- subscriber
acquisitions
Cash paid for
subscriber
leased equipment     82          79         291          315      
- upgrade and
retention
Cash paid for        114         58         253          141      
satellites
Cash Flow Before
Interest and         1,023       910        4,041        3,267    
Taxes^(2)
Subscriber Data
(in 000's except                                                 
Churn)
Gross Subscriber     963         1,030      3,874        4,316    
Additions
Average Monthly      1.43    %    1.52    %   1.53     %    1.56     %
Subscriber Churn
Net Subscriber       103         125        199          662      
Additions
Cumulative           20,084      19,885     20,084       19,885   
Subscribers
                                                                 

In the quarter, DIRECTV U.S. revenues increased 5% to $6.32 billion primarily
due to strong ARPU growth and a larger subscriber base. Net subscriber growth
in the quarter of 103,000 decreased from the prior year period principally due
to lower gross subscriber additions partially offset by a lower average
monthly churn rate. Gross additions declined mainly due to a greater focus on
higher quality subscribers and stricter credit policies. The lower churn rate
was mainly driven by a greater percentage of subscribers on commitments,
auto-bill pay and with advanced equipment, as well as the stricter credit
policies on new customers. ARPU increased 4% to $105.15 mostly due to price
increases on programming packages, higher advanced service, commercial and ad
sales, partially offset by increased promotional offers to new and existing
customers. DIRECTV U.S. ended the quarter with 20.08 million subscribers, an
increase of 1% compared with 19.89 million subscribers reported for the year
ended December31, 2011.

Fourth quarter OPBDA increased 6% to $1.41 billion and OPBDA margin improved
to 22.3% principally due to lower subscriber acquisition costs related to the
reduction in gross additions and relatively unchanged retention and upgrade
costs, partially offset by higher programming costs mostly related to
programming supplier rate increases. Operating profit also increased 6% to
$1.02 billion and operating profit margin increased to 16.2% in the fourth
quarter mainly due to the OPBDA and OPBDA margin improvements.

Full Year Review

In 2012, DIRECTV U.S. revenues increased 6% to $23.24 billion due to strong
ARPU growth and a larger subscriber base. Net subscriber growth in the year of
199,000 decreased from the prior year principally due to lower gross
subscriber additions mainly due to a greater focus on higher quality
subscribers and stricter credit policies, as well as lower gross additions
from the Telco sales channel. The lower churn rate of 1.53% was mainly driven
by a greater percentage of subscribers on commitments, auto-bill pay and with
advanced equipment, as well as the stricter credit policies on new customers.
ARPU increased 4% to $96.98 mostly due to price increases on programming
packages, more advanced service and lease fees, as well as higher commercial,
premium movie channel, pay-per-view movie and ad sales, partially offset by
increased promotional offers to new and existing customers.

In 2012 OPBDA increased 7% to $5.65 billion and operating profit increased 12%
to $4.15 billion. OPBDA margin increased slightly to 24.3% during the year
primarily driven by lower subscriber acquisition costs related to the
reduction in gross additions and improved productivity in subscriber services
driven in part by investments in customer care. These gains were mostly offset
by higher programming costs principally related to programming supplier rate
increases. Operating profit margin rose to 17.9% primarily due to an increase
in the estimated depreciable life of HD set-top boxes from three years to four
years implemented in July 2011, the completion of amortization for a
subscriber-related intangible asset, as well as the improved OPBDA margin.

                            DIRECTV Latin America

DIRECTV Latin        Three Months Ended          Twelve Months Ended
America                  December 31,                  December 31,
Dollars in
Millions except      2012        2011       2012        2011    
ARPU
Revenues             $ 1,674     $ 1,372    $ 6,244     $ 5,096 
Average Monthly
Revenue per          55.84       60.41      57.25       62.64   
Subscriber
(ARPU) ($)
Operating Profit
Before               494         422        1,862       1,663   
Depreciation and
Amortization^(1)
OPBDA Margin^(1)     29.5    %    30.8    %   29.8    %    32.6    %
Operating Profit     261         220        955         916     
Operating Profit     15.6    %    16.0    %   15.3    %    18.0    %
Margin
Capital
Expenditures and                                            
Cash Flow
Cash paid for
property and         47          39         214         93      
equipment
Cash paid for
subscriber
leased equipment     218         225        837         834     
- subscriber
acquisitions
Cash paid for
subscriber
leased equipment     95          92         419         397     
- upgrade and
retention
Cash paid for        42          30         128         104     
satellites
Cash Flow Before
Interest and         82          101        320         430     
Taxes^(2)
Subscriber
Data^(4) (in                                                
000's except
Churn)
Gross Subscriber     1,183       965        4,417       3,510   
Additions
Average Monthly
Total Subscriber     1.75    %    1.65    %   1.81    %    1.78    %
Churn
Average Monthly
Post-paid            1.48    %    1.42    %   1.50    %    1.42    %
Subscriber Churn
Net Subscriber       658         590        2,439       2,063   
Additions
Cumulative           10,328      7,871      10,328      7,871   
Subscribers
                                                                

DIRECTV Latin America owns approximately 93% of Sky Brasil, 41% of Sky Mexico
and 100% of PanAmericana, which covers most of the remaining countries in the
region. Sky Mexico, whose results are accounted for as an equity method
investment and therefore are not consolidated by DTVLA, had approximately 5.15
million subscribers as of December31, 2012, bringing the total subscribers in
the region to 15.48 million.

Fourth Quarter Review

In the fourth quarter, DTVLA revenues increased 22% to $1.67 billion compared
to 2011 principally due to strong subscriber growth partially offset by an 8%
decline in ARPU. Net additions increased to a record 658,000 driven by higher
gross additions partially offset by higher average monthly churn on the larger
subscriber base. Gross additions increased 23% to a record of 1.18 million
principally due to greater middle market demand across the region, most
notably in Brazil, Argentina, Colombia and Venezuela. Also in the quarter,
average monthly post-paid churn increased to 1.48% and total average monthly
churn increased to 1.75% primarily due to higher churn from middle market
subscribers in Brazil. The decline in ARPU to $55.84 was mostly due to
unfavorable exchange rates in Brazil and Argentina. Excluding the impact of
exchange rates, ARPU increased 1.4% in the quarter principally due to price
increases and more subscribers with advanced services, partially offset by the
higher penetration of lower ARPU middle market subscribers. DTVLA ended the
quarter with 10.33 million subscribers, an increase of 31% compared with 7.87
million subscribers reported for the year ended December31, 2011.

DIRECTV Latin America's fourth quarter 2012 OPBDA increased 17% to $494
million and operating profit increased 19% to $261 million compared with the
same period last year. OPBDA and operating profit margin declined in the
quarter to 29.5% and 15.6%, respectively, primarily due to $18 million in
charges related to certain litigation in Brazil and Argentina.

Full Year Review

In 2012, DTVLA revenues increased 23% to $6.24 billion compared to the same
period last year principally due to strong subscriber growth partially offset
by an 8.6% decline in ARPU. Net additions increased to a record 2.44 million
driven by more gross additions partially offset by higher average monthly
churn on the larger subscriber base. Gross additions increased 26% to a full
year record of 4.42 million principally due to greater middle market demand
across the region, most notably in Brazil, Argentina, Colombia and Venezuela.
Also in 2012, average monthly post-paid churn increased to 1.50% and total
average monthly churn increased to 1.81% primarily driven by higher churn from
middle market subscribers in Brazil. The decline in ARPU to $57.25 was
principally due to unfavorable exchange rates mainly in Brazil and Argentina.
Excluding the impact of exchange rates, ARPU increased 1.7% in 2012
principally due to price increases and more subscribers with advanced services
and upgrades, partially offset by the higher penetration of lower ARPU middle
market subscribers.

DIRECTV Latin America's 2012 OPBDA increased 12% to $1.86 billion and
operating profit increased 4% to $955 million compared to the year ago period.
OPBDA and operating profit margins declined to 29.8% and 15.3%, respectively,
due in part to higher PanAmericana general and administrative and subscriber
services costs mostly resulting from inflationary pressure on labor expenses.
Also impacting PanAmericana margins were increased programming costs
principally associated with the Olympics and certain soccer events, higher
subscriber acquisition costs driven by record prepaid gross additions, as well
as increased upgrade costs mainly associated with the replacement of first
generation set-top boxes. In addition, Sky Brasil's customer service expenses
increased primarily reflecting higher costs related to serving a growing
penetration of middle market customers.

                         CONFERENCE CALL INFORMATION

A live webcast of DIRECTV's fourth quarter 2012 earnings call will be
available on the company's website at www.directv.com/investor. The webcast
will begin at 2:00 p.m. ET, today February 14, 2013. Access to the earnings
call is also available in the United States by dialing (888) 271-8583 and
internationally by dialing (913) 312-0711. The conference ID number is
9265354. A replay of the call can be accessed by dialing (888) 203-1112 in the
U.S. and (719) 457-0820 internationally. The replay pass code is 9265354. The
replay will be available from 3:00 p.m. PT Thursday, February 14 through 3:00
p.m. PT Thursday February 21 and will also be archived on our website at
www.directv.com/investor.

                                  FOOTNOTES

(1) Operating profit before depreciation and amortization, which is a
financial measure that is not determined in accordance with accounting
principles generally accepted in the United States of America, or GAAP, should
be used in conjunction with other GAAP financial measures and is not presented
as an alternative measure of operating results, as determined in accordance
with GAAP. Please see DIRECTV's Annual Report on Form 10-K for the year ended
December 31, 2012, which is expected to be filed in February, 2013, for
further discussion of operating profit before depreciation and amortization.
Operating profit before depreciation and amortization margin is calculated by
dividing operating profit before depreciation and amortization by total
revenues.

(2) Cash flow before interest and taxes, which is a financial measure that is
not determined in accordance with GAAP, is calculated by deducting amounts
under the captions “Cash paid for property and equipment”, “Cash paid for
satellites”, “Cash paid for subscriber leased equipment - subscriber
acquisitions” and “Cash paid for subscriber leased equipment - upgrade and
retention” from “Net cash provided by operating activities” from the
Consolidated Statements of Cash Flows and adding back net interest paid and
“Cash paid for income taxes”. This financial measure should be used in
conjunction with other GAAP financial measures and is not presented as an
alternative measure of cash flows from operating activities, as determined in
accordance with GAAP. DIRECTV management uses cash flow before interest and
taxes to evaluate the cash generated by our current subscriber base, net of
capital expenditures, and excluding the impact of interest and taxes, for the
purpose of allocating resources to activities such as adding new subscribers,
retaining and upgrading existing subscribers, for additional capital
expenditures and as a measure of performance for incentive compensation
purposes. We believe this measure is useful to investors, along with other
GAAP measures (such as cash flows from operating and investing activities), to
compare our operating performance to other communications, entertainment and
media companies. We believe that investors also use current and projected cash
flow before interest and taxes to determine the ability of our current and
projected subscriber base to fund required and discretionary spending and to
help determine the financial value of the company.

(3) Free cash flow, which is a financial measure that is not determined in
accordance with GAAP, is calculated by deducting amounts under the captions
“Cash paid for property and equipment”, “Cash paid for satellites”, “Cash paid
for subscriber leased equipment - subscriber acquisitions”, and “Cash paid for
subscriber leased equipment - upgrade and retention” from “Net cash provided
by operating activities” from the Consolidated Statements of Cash Flows. This
financial measure should be used in conjunction with other GAAP financial
measures and is not presented as an alternative measure of cash flows from
operating activities, as determined in accordance with GAAP. DIRECTV
management uses free cash flow to evaluate the cash generated by our current
subscriber base, net of capital expenditures, for the purpose of allocating
resources to activities such as adding new subscribers, retaining and
upgrading existing subscribers, for additional capital expenditures and as a
measure of performance for incentive compensation purposes. We believe this
measure is useful to investors, along with other GAAP measures (such as cash
flows from operating and investing activities), to compare our operating
performance to other communications, entertainment and media companies. We
believe that investors also use current and projected free cash flow to
determine the ability of our current and projected subscriber base to fund
required and discretionary spending and to help determine the financial value
of the company.

(4) DIRECTV Latin America subscriber data exclude subscribers of the Sky
Mexico service. In addition, DTVLA gross and net additions exclude 4,000 video
subscribers acquired in the fourth quarter, 2012 and 18,000 video subscribers
acquired during the full year 2012 in recent transactions. DTVLA cumulative
subscriber counts include these acquired customers.

          CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

NOTE: This presentation may include or incorporate by reference certain
statements that we believe are, or may be considered to be, “forward-looking
statements” within the meaning of various provisions of the Securities Act of
1933 and the Securities Exchange Act of 1934. These forward-looking statements
generally can be identified by use of statements that include phrases such as
“believe,” “expect,” “estimate,” “anticipate,” “intend,” “plan,” “project,”
"strive" or other similar words or phrases. Similarly, statements that
describe our objectives, plans or goals also are forward-looking statements.
All of these forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or from those expressed or implied by the relevant
forward-looking statement. Such risks and uncertainties include, but are not
limited to: increased competition; increasing programming costs and our
ability to renew programming contracts under favorable terms; increased
subscriber churn or subscriber upgrade and retention costs; potential material
increase in subscriber acquisition costs; general economic conditions; risks
associated with doing business internationally, which for DIRECTV Latin
America include political and economic instability and foreign currency
exchange rate volatility and controls; pace of technological development;
potential intellectual property infringement; loss of key personnel; satellite
construction or launch delays; satellite launch and operational risks; loss of
a satellite; theft of satellite programming signals; U.S. and foreign
governmental and regulatory action; ability to maintain licenses and
regulatory approvals; significant debt; indemnification obligations; reliance
on network and information systems; and the outcome of legal proceedings. We
may face other risks described from time to time in periodic reports filed by
us with the U.S. Securities and Exchange Commission.

DIRECTV (NASDAQ:DTV) is one of the world's leading providers of digital
television entertainment services. Through its subsidiaries and affiliated
companies in the United States, Brazil, Mexico and other countries in Latin
America, DIRECTV provides digital television service to over 20 million
customers in the United States and over 15.5 million customers in Latin
America. DIRECTV sports and entertainment properties include three regional
sports networks (Northwest, Rocky Mountain and Pittsburgh) as well as a 42
percent ownership interest in Game Show Network. For more information on
DIRECTV, visit directv.com.

DIRECTV                                                     
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Millions,
Except Per Share
Amounts)
(Unaudited)
                                                                    
                               Three Months Ended      Years Ended
                               December 31,            December 31,
                               2012       2011        2012        2011
Revenues                   $ 8,054   $ 7,463   $ 29,740   $ 27,226 
                                                                    
Operating costs and
expenses
Costs of revenues,
exclusive of
depreciation and
amortization expense
Broadcast programming          3,779       3,443       13,028       11,655
and other
Subscriber service             545         496         2,137        1,911
expenses
Broadcast operations           104         100         414          389
expenses
Selling, general and
administrative
expenses, exclusive of
depreciation and
amortization expense
Subscriber acquisition         848         866         3,397        3,390
costs
Upgrade and retention          371         354         1,427        1,327
costs
General and
administrative                 483         422         1,815        1,576
expenses
Depreciation and           626       568       2,437      2,349    
amortization expense
Total operating costs      6,756     6,249     24,655     22,597   
and expenses
Operating profit               1,298       1,214       5,085        4,629
Interest income                19          9           59           34
Interest expense               (220    )   (194    )   (842     )   (763     )
Other, net                 127       10        140        84       
Income before income           1,224       1,039       4,442        3,984
tax
Income tax expense         (276    )  (316    )  (1,465   )  (1,348   )
Net Income                     948         723         2,977        2,636
Less: Net income
attributable to            (6      )  (5      )  (28      )  (27      )
noncontrolling
interest
Net income
attributable to            $ 942     $ 718     $ 2,949    $ 2,609  
DIRECTV
Basic earnings
attributable to                $ 1.57      $ 1.02      $ 4.62       $ 3.49
DIRECTV per common
share
Diluted earnings
attributable to                $ 1.55      $ 1.02      $ 4.58       $ 3.47
DIRECTV per common
share
Weighted average
number of total common
shares outstanding (in
millions):
Basic                          601         702         638          747
Diluted                        607         707         644          752
                                                                             

DIRECTV                                              
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
(Unaudited)
                                                             
ASSETS                           December 31, 2012    December 31, 2011
Current assets
Cash and cash equivalents            $    1,902              $    873
Accounts receivable, net of          2,696                   2,474
allowances of $81 and $79
Inventories                          412                     280
Deferred income taxes                73                      62
Prepaid expenses and other       471                 552           
Total current assets                 5,554                   4,241
Satellites, net                      2,357                   2,215
Property and equipment, net          6,038                   5,223
Goodwill                             4,063                   4,097
Intangible assets, net               832                     909
Investments and other assets     1,711               1,738         
Total assets                     $    20,555         $    18,423   
                                                             
LIABILITIES AND                                      
STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued         $    4,618              $    4,210
liabilities
Unearned subscriber revenues         565                     533
and deferred credits
Short-term borrowings            358                 —             
Total current liabilities            5,541                   4,743
Long-term debt                       17,170                  13,464
Deferred income taxes                1,672                   1,771
Other liabilities and                1,203                   1,287
deferred credits
Commitments and
contingencies
Redeemable noncontrolling            400                     265
interest
Stockholders' deficit            (5,431        )      (3,107        )
Total liabilities and            $    20,555         $    18,423   
stockholders' deficit
                                                                           

DIRECTV                                                     
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)                                        Years Ended December 31,
                                              2012          2011
Cash Flows From Operating Activities
Net income                                         $ 2,977           $ 2,636
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense              2,437             2,349
Amortization of deferred revenues and              (75     )         (39     )
deferred credits
Share-based compensation expense                   109               103
Equity in earnings from unconsolidated             (131    )         (109    )
affiliates
Net foreign currency transaction loss              34                50
Dividends received                                 79                104
Gain on sale of investments                        (122    )         (63     )
Deferred income taxes                              (102    )         353
Excess tax benefit from share-based                (30     )         (25     )
compensation
Other                                              85                53
Change in other operating assets and
liabilities:
Accounts receivable                                (50     )         (524    )
Inventories                                        (206    )         (33     )
Prepaid expenses and other                         58                (139    )
Accounts payable and accrued liabilities           370               391
Unearned subscriber revenue and deferred           28                47
credits
Other, net                                     173          31      
Net cash provided by operating activities      5,634        5,185   
Cash Flows From Investing Activities
Cash paid for property and equipment               (2,960  )         (2,924  )
Cash paid for satellites                           (389    )         (246    )
Investment in companies, net of cash               (16     )         (11     )
acquired
Proceeds from sale of investments                  24                116
Other, net                                     (22     )     43      
Net cash used in investing activities          (3,363  )     (3,022  )
Cash Flows From Financing Activities
Issuance of commercial paper (maturity 90          156               —
days or less), net
Proceeds from short-term borrowings                202               —
Repayment of short-term borrowings                 —                 (39     )
Proceeds from borrowings under revolving           400               —
credit facility
Repayment of borrowings under revolving            (400    )         —
credit facility
Proceeds from issuance of long-term debt           5,190             3,990
Debt issuance costs                                (36     )         (30     )
Repayments of long-term debt                       (1,500  )         (1,000  )
Repayment of other long-term obligations           (51     )         (184    )
Common shares repurchased and retired              (5,175  )         (5,496  )
Stock options exercised                            3                 —
Taxes paid in lieu of shares issued for            (61     )         (58     )
share-based compensation
Excess tax benefit from share-based            30           25      
compensation
Net cash used in financing activities          (1,242  )     (2,792  )
Net increase in cash and cash equivalents          1,029             (629    )
Cash and cash equivalents at beginning of      873          1,502   
the period
Cash and cash equivalents at end of the        $ 1,902      $ 873   
period
Supplemental Cash Flow Information
Cash paid for interest                             $ 781             $ 687
Cash paid for income taxes                         1,406             1,042
                                                                             

DIRECTV                                                
SELECTED
SEGMENT DATA
(Dollars in
Millions)
(Unaudited)
                   Three Months Ended              Years Ended
                   December 31,                    December 31,
               2012         2011         2012          2011
DIRECTV U.S.
Revenues           $ 6,320         $ 6,029         $ 23,235         $ 21,872
Operating
profit
before
depreciation       1,408           1,327           5,654            5,289
and
amortization
(1)
Operating
profit
before
depreciation       22.3    %       22.0    %       24.3     %       24.2     %
and
amortization
margin (1)
Operating          $ 1,023         $ 965           $ 4,153          $ 3,702
profit
Operating
profit             16.2    %       16.0    %       17.9     %       16.9     %
margin
Depreciation
and             $ 385       $ 362       $ 1,501      $ 1,587  
amortization
                                                                    
SKY BRASIL
Revenues           $ 914           $ 808           $ 3,501          $ 3,020
Operating
profit
before
depreciation       286             260             1,088            991
and
amortization
(1)
Operating
profit
before
depreciation       31.3    %       32.2    %       31.1     %       32.8     %
and
amortization
margin (1)
Operating          $ 156           $ 139           $ 555            $ 542
profit
Operating
profit             17.1    %       17.2    %       15.9     %       17.9     %
margin
Depreciation
and             $ 130       $ 121       $ 533        $ 449    
amortization
                                                                    
PANAMERICANA
Revenues           $ 760           $ 564           $ 2,743          $ 2,076
Operating
profit
before
depreciation       208             162             774              672
and
amortization
(1)
Operating
profit
before
depreciation       27.4    %       28.7    %       28.2     %       32.4     %
and
amortization
margin (1)
Operating          $ 105           $ 81            $ 400            $ 374
profit
Operating
profit             13.8    %       14.4    %       14.6     %       18.0     %
margin
Depreciation
and             $ 103       $ 81        $ 374        $ 298    
amortization
                                                                    
SPORTS
NETWORKS,
ELIMINATIONS
and OTHER
Revenues           $ 60            $ 62            $ 261            $ 258
Operating
profit
(loss)
before             22              33              6                26
depreciation
and
amortization
(1)
Operating
profit             14              29              (23      )       11
(loss)
Depreciation
and             8           4           29           15       
amortization
                                                                    
TOTAL
Revenues           $ 8,054         $ 7,463         $ 29,740         $ 27,226
Operating
profit
before
depreciation       1,924           1,782           7,522            6,978
and
amortization
(1)
Operating
profit
before
depreciation       23.9    %       23.9    %       25.3     %       25.6     %
and
amortization
margin (1)
Operating          $ 1,298         $ 1,214         $ 5,085          $ 4,629
profit
Operating
profit             16.1    %       16.3    %       17.1     %       17.0     %
margin
Depreciation
and             $ 626       $ 568       $ 2,437      $ 2,349  
amortization
                                                                    
(1) See
footnote 1
above
                                                                    

DIRECTV
HOLDINGS LLC                                              
(DIRECTV U.S.)
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in
Millions)
(Unaudited)
                       Three Months Ended              Years Ended
                       December 31,                    December 31,
                       2012         2011         2012          2011
Revenues           $ 6,320     $ 6,029     $ 23,235     $ 21,872 
                                                                        
Operating
costs and
expenses
Costs of
revenues,
exclusive of
depreciation
and
amortization
expense
Broadcast
programming            3,194           2,981           10,743           9,799
and other
Subscriber
service                368             354             1,464            1,435
expenses
Broadcast
operations             77              76              306              300
expenses
Selling,
general and
administrative
expenses,
exclusive of
depreciation
and
amortization
expense
Subscriber
acquisition            656             693             2,673            2,794
costs
Upgrade and
retention              323             320             1,253            1,209
costs
General and
administrative         294             278             1,142            1,046
expenses
Depreciation
and                385         362         1,501        1,587    
amortization
expense
Total
operating          5,297       5,064       19,082       18,170   
costs and
expenses
Operating              1,023           965             4,153            3,702
profit
Interest               —               —               1                1
income
Interest               (199    )       (177    )       (776     )       (696     )
expense
Other, net         7           6           (32      )    35       
Income before          831             794             3,346            3,042
income taxes
Income tax         (285    )    (259    )    (1,221   )    (1,107   )
expense
Net income         $ 546       $ 535       $ 2,125      $ 1,935  
                                                                                 

DIRECTV HOLDINGS LLC                                 
(DIRECTV U.S.)
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
(Unaudited)
                                                             
ASSETS                           December 31, 2012    December 31, 2011
Current assets
Cash and cash equivalents            $    739                $    232
Accounts receivable, net of          2,096                   2,126
allowances of $42 and $51
Inventories                          372                     253
Prepaid expenses and other       247                 419           
Total current assets                 3,454                   3,030
Satellites, net                      1,795                   1,724
Property and equipment, net          3,290                   3,084
Goodwill                             3,177                   3,177
Intangible assets, net               453                     461
Other assets                     321                 320           
Total assets                     $    12,490         $    11,796   
                                                             
LIABILITIES AND OWNER'S                              
DEFICIT
Current liabilities
Accounts payable and accrued         $    3,391              $    3,226
liabilities
Unearned subscriber revenues         367                     377
and deferred credits
Short-term borrowings            358                 —             
Total current liabilities            4,116                   3,603
Long-term debt                       17,170                  13,464
Deferred income taxes                1,386                   1,321
Other liabilities and                326                     239
deferred credits
Commitments and
contingencies
Owner's deficit                  (10,508       )      (6,831        )
Total liabilities and            $    12,490         $    11,796   
owner's deficit
                                                                           

DIRECTV HOLDINGS LLC (DIRECTV U.S.)                          
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
                                                     Years Ended December 31,
                                                2012         2011
Cash Flows From Operating Activities
Net income                                           $ 2,125         $ 1,935
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense                1,501           1,587
Amortization of deferred revenues and                (75     )       (39     )
deferred credits
Share-based compensation expense                     86              84
Deferred income taxes                                116             524
Excess tax benefit from share-based                  (25     )       (21     )
compensation
Other                                                18              (33     )
Change in other operating assets and
liabilities:
Accounts receivable                                  62              (442    )
Inventories                                          (119    )       (26     )
Prepaid expenses and other                           173             (230    )
Accounts payable and accrued liabilities             176             230
Unearned subscriber revenue and deferred             (14     )       (1      )
credits
Other, net                                       91          3       
Net cash provided by operating activities        4,115       3,571   
Cash Flows From Investing Activities
Cash paid for property and equipment                 (541    )       (567    )
Cash paid for subscriber leased equipment -          (656    )       (713    )
subscriber acquisitions
Cash paid for subscriber leased equipment -          (291    )       (315    )
upgrade and retention
Cash paid for satellites                             (253    )       (141    )
Investment in companies, net of cash                 (7      )       (11     )
acquired
Proceeds from sale of investments                    24              55
Other, net                                       —           1       
Net cash used in investing activities            (1,724  )    (1,691  )
Cash Flows From Financing Activities
Issuance of commercial paper (maturity 90            156             —
days or less, net)
Proceeds from short-term borrowings                  202             —
Proceeds from borrowings under revolving             400             —
credit facility
Repayment of borrowings under revolving              (400    )       —
credit facility
Cash proceeds from debt issuance                     5,190           3,990
Debt issuance costs                                  (36     )       (30     )
Repayment of long-term debt                          (1,500  )       (1,000  )
Repayment of other long-term obligations             (21     )       (66     )
Cash dividend to Parent                              (5,900  )       (5,250  )
Excess tax benefit from share-based              25          21      
compensation
Net cash used in financing activities            (1,884  )    (2,335  )
Net increase in cash and cash equivalents            507             (455    )
Cash and cash equivalents at beginning of        232         687     
the period
Cash and cash equivalents at end of the          $ 739       $ 232   
period
Supplemental Cash Flow Information
Cash paid for interest                               $ 715           $ 619
Cash paid for income taxes                           953             814
                                                                             

Non-GAAP Financial Measure Reconciliation                     
Schedules
(Unaudited)                   
                                                                  
DIRECTV
Reconciliation of Operating Profit Before Depreciation and Amortization to
Operating Profit*
                  Three Months Ended              Years Ended
                  December 31,                    December 31,
                2012           2011           2012           2011
Operating
profit before
depreciation      $  1,924        $  1,782        $  7,522        $  6,978
and
amortization
Subtract:
Depreciation     626           568           2,437         2,349     
and
amortization
Operating        $  1,298      $  1,214      $  5,085      $  4,629  
profit
                                                                  
* For a reconciliation of this non-GAAP financial measure for each of our
segments, please see the Notes to the Consolidated Financial Statements which
will be included in DIRECTV's Annual Report on Form 10-K for the year ended
December 31, 2012, which is expected to be filed with the SEC in February
2013.
DIRECTV
Reconciliation of Cash Flow Before Interest and Taxes^2 and Free Cash Flow^3
to

Net Cash Provided by Operating Activities
                  Three Months Ended              Years Ended
                  December 31,                    December 31,
                2012           2011           2012           2011
Cash Flow
Before            $  1,120        $  1,025        $  4,413        $  3,710
Interest and
Taxes
Adjustments:
Cash paid for     (71       )     (125      )     (781      )     (687      )
interest
Interest          19              9               59              34
income
Income taxes     (525      )    (189      )    (1,406    )    (1,042    )
paid
Subtotal -        543             720             2,285           2,015
Free Cash Flow
Add Cash Paid
For:
Property and      800             764             2,960           2,924
equipment
Satellites       158           90            389           246       
Net Cash
Provided by      $  1,501      $  1,574      $  5,634      $  5,185  
Operating
Activities
                                                          
DIRECTV Latin America
Reconciliation of Cash Flow Before Interest and Taxes^2 and Free Cash Flow^3
to

Net Cash Provided by Operating Activities
                  Three Months Ended              Years Ended
                  December 31,                    December 31,
                2012           2011           2012           2011
Cash Flow
Before            $  82           $  101          $  320          $  430
Interest and
Taxes
Adjustments:
Cash paid for     (9        )     (13       )     (49       )     (55       )
interest
Interest          17              8               56              32
income
Income taxes      (73       )     (47       )     (315      )     (234      )
paid
Add Cash Paid
For:
Property and      47              39              214             93
equipment
Subscriber
leased
equipment -       218             225             837             834
subscriber
acquisitions
Subscriber
leased
equipment -       95              92              419             397
upgrade and
retention
Satellites       42            30            128           104       
Net Cash
Provided by      $  419        $  435        $  1,610      $  1,601  
Operating
Activities
                                                                            
(2) and (3) - See footnotes above
                                                                            

DIRECTV HOLDINGS LLC (DIRECTV U.S.)                           
Non-GAAP Financial Measure Reconciliation and
SAC Calculations
(Unaudited)                   
Reconciliation of Pre-SAC Margin^* to Operating Profit
                  Three Months Ended              Years Ended
                  December 31,                    December 31,
                2012           2011           2012           2011
Operating         $  1,023        $  965          $  4,153        $  3,702
profit
Adjustments:
Subscriber
acquisition       656             693             2,673           2,794
costs
(expensed)
Depreciation
and               385             362             1,501           1,587
amortization
Cash paid for
subscriber
leased           (82       )    (79       )    (291      )    (315      )
equipment -
upgrade and
retention
Pre-SAC Margin   $  1,982      $  1,941      $  8,036      $  7,768  
Pre-SAC Margin
as a              31.4      %     32.2      %     34.6      %     35.5      %
percentage of
revenue
                                                          
Reconciliation of Cash Flow Before Interest and Taxes^2 and Free Cash Flow^3
to

Net Cash Provided by Operating Activities
                  Three Months Ended              Years Ended
                  December 31,                    December 31,
                2012           2011           2012           2011
Cash Flow
Before            $  1,023        $  910          $  4,041        $  3,267
Interest and
Taxes
Adjustments:
Cash paid for     (50       )     (107      )     (715      )     (619      )
interest
Interest          —               —               1               1
income
Income taxes      (372      )     (123      )     (953      )     (814      )
paid
Add Cash Paid
For:
Property and      164             163             541             567
equipment
Subscriber
leased
equipment -       194             167             656             713
subscriber
acquisitions
Subscriber
leased
equipment -       82              79              291             315
upgrade and
retention
Satellites       114           58            253           141       
Net Cash
Provided by      $  1,155      $  1,147      $  4,115      $  3,571  
Operating
Activities
                                                                  
(2) and (3) -
See footnotes                                              
above
* Pre-SAC Margin, which is a financial measure that is not determined in
accordance with accounting principles generally accepted in the United States
of America, or GAAP, is calculated for DIRECTV U.S. by adding amounts under
the captions “Subscriber acquisition costs” and “Depreciation and amortization
expense” to “Operating Profit” from the Consolidated Statements of Operations
and subtracting "Cash paid for subscriber leased equipment - upgrade and
retention" from the Consolidated Statements of Cash Flows. This financial
measure should be used in conjunction with GAAP financial measures and is not
presented as an alternative measure of operating results, as determined in
accordance with GAAP. DIRECTV management use Pre-SAC Margin to evaluate the
profitability of DIRECTV U.S.' current subscriber base for the purpose of
allocating resources to discretionary activities such as adding new
subscribers, upgrading and retaining existing subscribers and for capital
expenditures. To compensate for the exclusion of “Subscriber acquisition
costs,” management also uses operating profit and operating profit before
depreciation and amortization expense to measure profitability.
                                                                  
DIRECTV believes this measure is useful to investors, along with GAAP measures
(such as revenues, operating profit and net income), to compare DIRECTV U.S.’
operating performance to other communications, entertainment and media
companies. DIRECTV believes that investors also use current and projected
Pre-SAC Margin to determine the ability of DIRECTV U.S.’ current and projected
subscriber base to fund discretionary spending and to determine the financial
returns for subscriber additions.
                                                          
SAC Calculation
                  Three Months Ended              Years Ended
                  December 31,                    December 31,
                2012           2011           2012           2011
Subscriber
acquisition       $  656          $  693          $  2,673        $  2,794
costs
(expensed)
Cash paid for
subscriber
leased           194           167           656           713       
equipment -
subscriber
acquisitions
Total
acquisition      $  850        $  860        $  3,329      $  3,507  
costs
Gross
subscriber        963             1,030           3,874           4,316
additions
(000's)
Average
subscriber
acquisition      $  883        $  835        $  859        $  813    
costs - per
subscriber
(SAC)

Contact:

DIRECTV
Media Contact: Darris Gringeri, 212-205-0882
or
Investor Relations: 310-964-0808
 
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