S&P's DirecTV ratings unaffected

Standard & Poor's said that The DirecTV Group Inc.'s (BB/stable) announcement that its board of directors' has authorized a $3 billion share repurchase program has no impact on the rating or outlook, as the rating already incorporates the potential for significant share repurchase activity.

The company has substantial liquidity from $4.4 billion of cash at the end of 2005 (exceeding the $3.4 billion debt balance) and generated $283 million of discretionary cash flow in 2005, compared with a nearly $800 million discretionary cash flow deficit in 2004.

S&P predicted that discretionary cash flow will continue to grow at a healthy rate in 2006 as the company benefits from significant 2004 and 2005 subscriber additions, incurs proportionately less subscriber acquisition expense as customer growth moderates and realizes cost benefits from churn-reducing initiatives.

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