DirecTV in the News

DirecTV Expects Cash Flow Increase

NEW YORK, May 1 (Reuters) - DirecTV, the satellite television service owned by General Motors Corp.'s Hughes Electronics Corp. unit, reiterated expectations that its cash flow will grow by as much as threefold this year.

DirecTV Chief Financial Officer Bob Meyers said in a speech to be delivered later Tuesday he expected earnings before interest, taxes amortization and depreciation (EBITDA) of $325 million to $425 million, vs. $151 million in the year-ago period. EBITDA is a widely watched measurement of cash flow.

Meyers' presentation to Morgan Stanley's virtual satellite conference was made available on Hughes' Web site.

His presentation shed no light on the status of negotiations with Rupert Murdoch's News Corp., which is seeking to merge DirecTV with his satellite television network Sky Global Networks.

He repeated the company's party line that GM and Hughes would continue to evaluate a variety of possible alternatives. "Whether and when we would have anything to announce remains uncertain,'' he said.

Meyers said the company's goal was to grow its subscriber base to 15 million over the next five years from its current level of just under 10 million. He also predicted annual EBITDA growth of over 50 percent over the next 5 years.

He reiterated expectations for net subscriber growth, average revenue per user, subscriber acquisition costs and churn, or customer turnover.

He projected 1.5 million to 1.7 million net subscriber additions in 2001, which represents 16 percent to 18 percent growth, a slower pace from last year's 19 percent.

Meyers expected a modest increase in the monthly average revenue per user over the next year or two, citing stronger market penetration, new products and more local programming services, although he acknowledged that a slower economy could restrain growth.

He expected subscriber acquisition costs to be steady at $535 per customer, while customer turnover, or churn, is expected to be 1.5 percent to 1.7 percent, compared with 1.6 percent last year.