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FOR IMMEDIATE RELEASE

EL SEGUNDO,  CA - October 12, 1998 -  Hughes Electronics Corporation (Hughes) today reported that third quarter 1998 revenues increased 20.3% to $1,513.3 million compared with $1,258.3 million in the third quarter of 1997.

Operating profit(1) in the quarter was $67.5 million compared with $124.2 million in the third quarter of 1997. Third quarter operating profit margin on the same basis was 4.5% in 1998 versus 9.9% in 1997.

Third quarter earnings(1) were $42.9 million compared with last year's $52.4 million. Earnings per share on the same basis was $0.11 per share versus pro forma earnings per share(2) of $0.13 in 1997.

Michael T. Smith, Hughes chairman and chief executive officer, said that "each of Hughes' four primary business segments contributed to the strong revenue growth. DIRECTV® accounted for most of the increase primarily due to continued record subscriber growth in the United States." In addition, he stated that increased sales of commercial satellites by Hughes Space and Communications and higher DIRECTV receiver equipment sales by Hughes Network Systems also contributed to the revenue growth.

Mr. Smith attributed the decline in operating profit and net income primarily to the expected increase in DIRECTV operating losses resulting from higher sales and marketing expenditures to support the record subscriber growth. Also contributing to the earnings decline were DIRECTV Japan™> start-up losses and other increased expenses, including pension expense. The reduction in earnings was partially offset by lower interest expense and higher interest income.

Nine-Month Financial Review

For the first nine months of 1998, revenues increased 21.5% to $4,173.3 million compared with $3,433.7 million in 1997. This growth was primarily the result of record DIRECTV subscriber growth, the May 1997 PanAmSat merger and higher commercial satellite sales.

Driven by the revenue growth, operating profit1 for the first nine months of 1998 increased 6.8% to $229.3 million versus $214.6 million in 1997. Operating profit margin on the same basis was 5.5% compared with 6.2% in the first nine months of 1997. The decline in operating profit margin was principally due to a provision for estimated losses related to the bankruptcy filing by a Hughes Network Systems customer, goodwill amortization associated with the 1997 PanAmSat merger and subsequent additional investment by Hughes in 1998, and other increased expenses, including pension expense.

Earnings(1) and earnings per share in the first nine months of 1998 were $152.7 million and $0.38, respectively. Excluding the one-time gain associated with the PanAmSat merger in May 1997, earnings and pro forma earnings per share(2) in the first nine months of 1997 were $82.4 million and $0.20 per share, respectively. The increases in earnings and earnings per share were principally a result of the aforementioned operating profit growth, increased interest income and lower interest expense, which more than offset the losses related to the start of service for DIRECTV Japan, a 32% Hughes-owned affiliate.

SEGMENT FINANCIAL REVIEW: THIRD QUARTER 1998

Direct-To-Home Broadcast

For the quarter, revenues increased 33.6% to $459.1 million from $343.7 million in the third quarter of 1997. The increase resulted from continued strong subscriber growth and average monthly revenue per subscriber, as well as low subscriber churn rates. Domestic DIRECTV propelled this growth with quarterly revenues of $408 million, a 37% increase over last year's third quarter revenues of $298 million. With 303,000 net new subscribers in the third quarter, total DIRECTV subscribers grew to 4,058,000 in the United States as of September 30, 1998. The Company's Latin American DIRECTV subsidiary, Galaxy Latin America (GLA), had third quarter revenues of $37 million compared with $22 million in 1997. With the addition of 36,000 net new subscribers in the third quarter, total DIRECTV subscribers in Latin America were 423,000 as of September 30, 1998. In addition, DIRECTV Japan had a total of 181,900 subscribers by the end of the third quarter.

The segment operating loss in the quarter was $61.8 million compared with an operating loss of $43.3 million in the third quarter of 1997. The larger operating loss in 1998 was principally due to higher sales and marketing expenditures that more than offset increased subscriber revenues. The third quarter 1998 operating loss for the domestic DIRECTV business was $31 million compared with $15 million last year, and GLA's third quarter operating loss was $30 million compared with $26 million last year.

Satellite Services

PanAmSat's third quarter 1998 revenues were up 9.5% to $186.5 million compared with $170.3 million in the prior year. Overall revenue from video services increased by 4 percent to $135.8 million, primarily due to the commencement of service agreements for full-time, as well as short-term, special events video distribution. Telecommunications services revenue increased by 16 percent to $40.7 million in the third quarter, in large part due to the growth in data and Internet-related service agreements.

As a result of this revenue growth, PanAmSat's operating profit in the quarter rose 10.3% to $79.1 million from $71.7 million in 1997. Operating profit margin in the third quarter increased slightly to 42.4% compared with 42.1% one year ago.

Satellite Systems

For the third quarter of 1998, revenues increased 14.0% to $688.9 million from revenues of $604.3 million for the same period in 1997. The increase was principally due to higher commercial satellite sales to customers such as Thuraya Satellite Telecommunications Company, ICO Global Communications and American Mobile Radio Corporation.

Driven primarily by the revenue growth, operating profit in the quarter increased 20.2% to $63.8 million from $53.1 million in the prior year. Operating profit margin in the quarter increased to 9.3% versus 8.8% last year.

Network Systems

Third quarter revenues for Hughes Network Systems (HNS) increased 23.9% to $267.7 million compared with $216.0 million in the same period last year. The growth was primarily due to increased sales of DIRECTV receiver equipment, which more than offset lower international sales of private business networks.

HNS operating profit in the quarter was $16.9 million compared with $22.4 million in the third quarter of 1997. Third quarter operating profit margin declined to 6.3% compared with 10.4% last year. The decline in operating profit and margin was principally a result of lower international sales of private business networks.

BALANCE SHEET

The cash balance of $1,509.7 million at September 30, 1998 declined $1,274.1 million from December 31, 1997 primarily due to the $851.4 million additional investment in PanAmSat to increase Hughes' ownership from 71.5% to 81.0% and a $204.7 million cash payment to GM in connection with the finalization of the purchase price adjustment amount related to the transfer of Delco Electronics to GM in December 1997 as part of the Hughes Transactions. The Hughes Transactions also included the spin-off and subsequent merger of Hughes Defense with Raytheon Company.

(1) Excludes the effects of purchase accounting adjustments related to General Motors' (GM) acquisition of Hughes in 1985.

(2) 1997 earnings per share are presented on a pro forma basis. Historically, such earnings per share amounts were calculated based on the financial performance of former Hughes, which consisted of the defense electronics, automotive electronics, and telecommunications and space businesses. Since these financial statements relate only to the telecommunications and space businesses of former Hughes, the pro forma presentation is used to present the earnings per share that would have been achieved relative to the GM Class H common stock had it been calculated based upon only such telecommunications and space businesses.