DIRECTV 2007 Annual Report Download - page 58

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THE DIRECTV GROUP, INC.
The higher operating profit before depreciation and amortization is primarily due to the gross
profit generated by the increase in revenues, partially offset by gains totaling $118 million for the
completion of the Sky Mexico and Sky Brazil transactions in 2006 and the increase in costs from the
addition of Sky Brazil.
The higher operating profit was primarily due to the increase in operating profit before
depreciation and amortization partially offset by higher depreciation and amortization expense resulting
from the Darlene and Sky Brazil transactions.
Corporate and Other
Operating loss from Corporate and Other increased to $75 million in 2007 from $70 million in
2006.
Year Ended December 31, 2006 Compared with the Year Ended December 31, 2005
Consolidated Results of Operations
Revenues. The following table presents our revenues by segment:
Change
Revenues by segment: 2006 2005 $ %
(Dollars in Millions)
DIRECTV U.S. .................................... $13,744 $12,216 $1,528 12.5%
DIRECTV Latin America ............................. 1,013 742 271 36.5%
Network Systems .................................... — 211 (211) (100.0)%
Corporate and Other ................................. (2) (5) 3 (60.0)%
Total revenues .................................. $14,755 $13,164 $1,591 12.1%
The increase in our total revenues was due to higher ARPU and a larger subscriber base at
DIRECTV U.S., higher revenues from the acquisition of Sky Brazil and subscriber growth at
DIRECTV Latin America, partially offset by the decrease in revenues from the Network Systems
segment that resulted from the divestiture of the HNS business. We discuss these changes for each of
our segments in more detail below.
Operating profit before depreciation and amortization. The following table presents our operating
profit (loss) before depreciation and amortization by segment:
Change
Operating profit (loss) before depreciation and amortization by segment: 2006 2005 $ %
(Dollars in Millions)
DIRECTV U.S. ...................................... $3,221 $1,500 $1,721 114.7%
DIRECTV Latin America ............................... 244 141 103 73.0%
Network Systems ..................................... — (61) 61 (100.0)%
Corporate and Other .................................. (74) (94) 20 (21.3)%
Total operating profit before depreciation and amortization . . . $3,391 $1,486 $1,905 128.2%
The increase in total operating profit before depreciation and amortization was due to higher gross
profit from the increase in revenues and the implementation of the lease program in March 2006 at
DIRECTV U.S., higher gross profits at DIRECTV Latin America, and the divestiture of our HNS
business in 2005. We discuss these changes for each of our segments in more detail below.
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