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| DIRECTV
Holdings LLC |
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| Non-GAAP
Financial Reconciliation and Other Data |
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| (Unaudited) |
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Pre-Marketing
Margin Reconciliation to Operating Profit |
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For
the Quarter Ended |
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For
the Six Months |
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Guidance |
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June
30, |
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Ended
June 30, |
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Full
Year |
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2003 |
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2002 |
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2003
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2002 |
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2003 |
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(dollars
in millions) |
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| Operating profit |
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$
200.7 |
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$ 60.6
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306.7 |
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$
69.2 |
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~$ 475 |
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| Add back:
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Subscriber acquisition costs |
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Third party customer acquisitions |
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306.1 |
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320.8
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619.2 |
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682.5 |
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** |
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Direct customer acquisitions |
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69.5 |
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36.4 |
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137.2 |
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65.8 |
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** |
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Depreciation and amortization
expense |
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124.1 |
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96.0
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248.5 |
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181.1 |
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** |
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Retention, upgrade and other
marketing costs |
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88.7 |
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116.4
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182.5 |
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194.0
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** |
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| Subtotal |
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588.4 |
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569.6 |
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1,187.4 |
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1,123.4
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2,600 - 2,675 |
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| Pre-marketing margin* |
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$
789.1 |
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$ 630.2
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1,494.1 |
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$ 1,192.6
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$3,075 - $3,150 |
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| Pre-marketing margin
as a percentage of revenue* |
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43.8% |
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40.7% |
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42.6% |
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39.6% |
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41% - 42% |
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Other
Data |
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For
the Quarter Ended |
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For
the Six Months |
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June
30, |
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June
30, |
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2003
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2002 |
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2003
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2002 |
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| Average monthly
revenue per subscriber (ARPU) |
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$
60.90 |
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$
58.10 |
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$
60.10 |
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$
57.50 |
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| Average monthly
subscriber churn -% |
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1.5% |
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1.7% |
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1.5% |
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1.7% |
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| Average subscriber
acquisition costs (SAC) |
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$
595 |
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$
545 |
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$
565 |
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$
530 |
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| Total number
of subscribers - platform (000's) |
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11,557 |
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10,746 |
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11,557 |
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10,746 |
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| Total owned and
operated subscribers (000's) |
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9,949 |
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8,995 |
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9,949 |
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8,995 |
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(*) Pre-Marketing 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 by adding amounts under the captions “Subscriber acquisition costs”, “Retention, upgrade and other marketing
costs” and “Depreciation and amortization expense“ to “Operating Profit“.
This financial measure 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.
Hughes and DIRECTV management use Pre-Marketing Margin to evaluate the profitability of DIRECTV’s
current subscriber base for the purpose of allocating resources to discretionary activities such as,
adding new subscribers, retaining and upgrading existing subscribers and for capital expenditures.
To compensate for the exclusion of “Subscriber acquisition costs” and “Retention, upgrade and other marketing costs”,
management also uses operating profit and operating profit before depreciation and amortization expense to measure profitability.
Hughes and DIRECTV believe this measure is useful to investors, along with other GAAP measures (such as revenues, operating profit and net income), to compare DIRECTV’s operating performance to other communications, entertainment and media companies. Hughes and DIRECTV believe that investors also use current and projected Pre-Marketing Margin to determine the ability of DIRECTV’s current and projected subscriber base to fund discretionary spending and to determine the financial returns for subscriber additions.
(**) No individual guidance provided.
All 2003 2Q Results
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