# Hughes, DirecTV Report 1Q



## Steve Mehs (Mar 21, 2002)

Hughes Electronics and its DirecTV unit reported results for the first quarter, numbers that included a record number of DirecTV gross subscriber additions for the three-month period but a change in the overall subscriber count for the satellite TV service.

During the three-month period, DirecTV added 849,000 gross subscribers. Executives said that 849,000 reflects the best ever figure in terms of gross additions for any first quarter. After accounting for churn, the service enrolled 342,000 net customers for the quarter.

However, Hughes and DirecTV reduced the satellite TV service's cumulative subscriber base by approximately 360,000 to take into account customers previously identified as pending subscribers. That took the satellite TV service's total to 10.56 million.

Beginning with the first quarter, DirecTV said it no longer will include pending subscribers in its cumulative subscriber base. Pending subscribers are customers who have purchased equipment and have had all of the required customer information entered into DirecTV's billing system, but have not yet activated service.

Executives said the new policy reflects a more simplified and conservative approach to counting customers, and is consistent with the rest of the multichannel television industry. DirecTV President Roxanne Austin added that the switch is part of a larger overhaul of operations at the satellite TV unit.

Austin said the change has no impact on DirecTV's past or future revenues, EBITDA or cash flow.

As for the rest of 2002, Austin said DirecTV expects to add 1.2 million customers this year for its core business, an estimate that's independent of the National Rural Telecommunications Cooperative's DirecTV business. Austin also said 70 percent of new subscriber additions in the 41 cities that get local TV channels from DirecTV are taking the company's local TV packages.

Hughes said first quarter 2002 revenues increased 7.7 percent to $2.038 billion, compared with $1.893 billion reported during the same period in 2001. EBITDA for the quarter was $134.2 million, compared with first quarter 2001 EBITDA of $113.2 million. The first quarter net loss was $156.4 million, compared to a net loss of $105.3 million in the same period in 2001.

From SkyReport (Used with permission)


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## TNGTony (Mar 23, 2002)

WOW! Look at that churn! 500,000 people quit DirecTV in that three month period! That's nearly 5% churn! When I worked for a cell phone company, they got all bent out of shape if a number ever came back over 1.4%

Lets put it this way...If DirecTV sold a subscription to EVERY man woman and child in the City of Cincinnati in the next three months, they would still have to sell another 150,000 units before they made up for what they lost in the first quarter.

And they keep on falling further into the red ink rather than coming up. The EBITDA is up only slightly while the net loss is up nearly 40%! No wonder they can afford all those channel Dish isn't willing to pay for. 

Really though, I need to see E*'s numbers (coming May 2) before we can really compare.

See ya
Tony


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