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FOR IMMEDIATE RELEASE

HUGHES 1998 RESULTS PROPELLED BY RECORD DIRECTV SUBSCRIBER GROWTH

EL SEGUNDO,  CA - January 20, 1999 -  Hughes Electronics Corporation today reported its fourth quarter and full-year 1998 financial results.

"Our revenues increased 16.3% for 1998," said Michael T. Smith, Hughes chairman and chief executive officer. "And, excluding one-time items, earnings increased 50.5%."

Revenues for 1998 were $5,963.9 million compared with $5,128.3 million in 1997. Smith stated that each of Hughes' four primary business segments contributed to the revenue growth, with the DIRECTV® businesses generating the majority of the increase.

"Our U.S. DIRECTV business achieved its best year ever for subscriber growth, contributing to a 42% increase in 1998 revenues for the direct-to-home broadcast segment," Smith said. "Additionally, Hughes Space and Communications Company (HSC) posted another year of double-digit growth in satellite sales, we completed the integration of PanAmSat following our 1997 merger, and Hughes Network Systems (HNS) grew revenues with a four-fold increase in sales of DIRECTV receiver equipment. In fact, those increased equipment sales were an important factor in DIRECTV's ability to achieve its record subscriber numbers in the United States."

Earnings(1) for 1998, excluding one-time items, increased to $165.9 million compared with $110.2 million in 1997, resulting in earnings per share on the same basis for the full year of $0.41 per share versus pro forma earnings per share(2) of $0.28 in 1997.

"DIRECTV, HSC and PanAmSat all contributed to this earnings growth," Smith said, noting that additional earnings were attributable to higher interest income and lower interest expense, which more than offset lower HNS earnings and the impact from Hughes' minority share of DIRECTV Japan™ start-up losses.

Earnings in 1998 were $271.7 million ($0.68 per share) compared with last year's $470.7 million ($1.18 per share on a pro forma basis) in 1997.

"The change in our year-over-year earnings is largely attributable to the one-time after-tax gain of $318.3 million ($0.80 per share) we reported in 1997 arising from the PanAmSat merger," Smith explained.

One-time items included in the 1998 results were a favorable adjustment to the income tax provision in the fourth quarter of $115.0 million ($0.29 per share), which resulted from a tax settlement with the Internal Revenue Service (IRS), and a $9.2 million after-tax charge ($0.02 per share) for the cumulative effect of an accounting change mandated by the American Institute of Certified Public Accountants for the write-off of previously capitalized start-up costs.

Additional one-time items included in the 1997 results were a $62.8 million after-tax gain ($0.16 per share) related to the sale of Hughes-Avicom International, and a $20.6 million after-tax extraordinary charge ($0.05 per share) associated with PanAmSat's tender offer to retire its high-yield debt securities.

Operating profit(1) in 1998 was $270.1 million compared with $306.4 million last year. Full-year 1998 operating profit margin on the same basis was 4.5% versus 6.0% in 1997. Smith said the lower 1998 operating profit and margin were principally a result of lower sales of wireless telephone systems and private business networks in the Asia Pacific region, as well as provisions for estimated losses at HNS associated with uncollectible amounts from certain wireless customers.

Fourth Quarter Financial Review

Revenues for the fourth quarter increased 5.7% to $1,790.6 million compared with $1,694.6 million for the same period in 1997. This growth was primarily the result of record DIRECTV U.S. subscriber growth and higher sales of commercial satellites.

Fourth quarter operating profit(1) was $40.8 million versus $91.8 million in 1997. The majority of the decline was due to losses in HNS' international wireless telephone business, which are attributable to lower sales and a provision for uncollectible amounts from a customer in the Asia Pacific region. Also contributing to the operating profit decline in the fourth quarter were higher operating losses associated with DIRECTV in Latin America, and increased operating costs related to PanAmSat's satellite fleet expansion. Operating profit margin, on the same basis, was 2.3% in the quarter compared with 5.4% in 1997. The decline in operating profit margin was also impacted by higher development costs for HSC's geostationary mobile telephony product line.

Earnings(1) in the fourth quarter of 1998 were $128.2 million compared with $70.0 million last year. Earnings per share on the same basis were $0.32 in the quarter versus pro forma earnings per share(2) of $0.18 in 1997. Excluding one-time items, earnings were $13.2 million compared with $27.8 million in last year's fourth quarter, resulting in earnings per share of $0.03 in the period versus $0.07 in 1997.

The 1998 fourth quarter one-time item was the favorable adjustment to the income tax provision ($115.0 million, $0.29 per share), which resulted from an IRS tax settlement. One-time items included in the 1997 fourth quarter results were the after-tax gain related to the sale of Hughes-Avicom International ($62.8 million, $0.16 per share) and the after-tax extraordinary charge related to PanAmSat's tender offer to retire its high-yield debt securities ($20.6 million, $0.05 per share).

The decline in earnings and earnings per share was principally a result of the quarter's lower operating profit, as well as higher losses related to the first full year of service for DIRECTV Japan, a 32% Hughes-owned affiliate. These reductions to earnings more than offset the improvements resulting from increased interest income and lower interest expense.

SEGMENT FINANCIAL REVIEW FULL YEAR AND FOURTH QUARTER 1998

Direct-To-Home Broadcast

Full Year 1998. Revenues for the full year rose 42.2% to $1,816.1 million from $1,276.9 million in 1997. The increase was driven by record U.S. subscriber growth, strong average monthly revenue per subscriber and low subscriber churn rates. As a result of DIRECTV's best-ever year of 1,157,000 net new subscribers in the United States, domestic DIRECTV revenues rose 45% to $1,604 million. The company's Latin American DIRECTV subsidiary, Galaxy Latin America™ (GLA™), with 184,000 net new subscribers in 1998, more than doubled its revenues in 1998 to $141 million.

Operating loss in 1998 improved to $228.1 million compared with an operating loss of $254.6 million in 1997. This was principally due to continued strong subscriber growth, and the resulting lower operating loss, in the domestic DIRECTV business -- which more than offset higher GLA operating losses attributable to increased sales and marketing expenditures. The full-year 1998 operating loss for domestic DIRECTV was $100 million compared with $137 million in 1997. GLA's operating loss was $126 million in 1998 versus $116 million in 1997.

Fourth Quarter 1998. Fourth quarter revenues increased 36.5% to $567.6 million from $415.9 million in the fourth 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 $476 million, a 44% increase over last year's fourth quarter revenues of $330 million. With 400,000 net new subscribers in the fourth quarter, total DIRECTV subscribers grew to 4,458,000 in the United States as of December 31, 1998. GLA had fourth quarter revenues of $41 million compared with $28 million in 1997. With the addition of 61,000 net new subscribers in the fourth quarter, total DIRECTV subscribers in Latin America were 484,000 as of December 31, 1998. In addition, DIRECTV Japan had a total of 231,000 subscribers by the end of 1998.

The segment operating loss in the fourth quarter was $94.5 million compared with an operating loss of $95.9 million in the fourth quarter of 1997. Continued strong subscriber growth resulted in lower fourth quarter 1998 operating losses for the domestic DIRECTV business ($53 million in 1998 compared with $62 million last year). These were offset by higher GLA fourth quarter operating losses ($42 million in 1998 compared with $27 million last year), which were primarily due to the increased cost of the new higher capacity Galaxy VIII-I satellite, which was deployed in spring of 1998, as well as increased subscriber acquisition costs.

Satellite Services

Full Year 1998. Full-year 1998 revenues increased 21.8% to $767.3 million compared with $629.9 million in 1997. The increase was primarily due to the May 1997 PanAmSat merger and increased operating lease revenues, which were partially offset by a decrease in sales and sales-type lease revenues.

As a result of this revenue growth, operating profit in 1998 rose 8.6% to $321.6 million versus $296.2 million last year. Operating profit margin for the year declined to 41.9% from 47.0% in 1997, principally due to a full year of goodwill amortization associated with the PanAmSat merger.

Fourth Quarter 1998. PanAmSat's fourth quarter 1998 revenues were $196.7 million compared with $197.9 million in the prior year. This slight change was due primarily to lower revenues on the PAS-6 satellite due to its reduction in usable capacity, which was partially offset by revenues associated with new service agreements, particularly in data and Internet-related services.

PanAmSat's operating profit in the quarter was $82.4 million versus $93.3 million in 1997. Operating profit margin in the fourth quarter was 41.9% compared with 47.1% one year ago. The decrease was primarily attributable to increased operating costs associated with the expansion of PanAmSat's worldwide operations.

Satellite Systems

Full Year 1998. For the full year, revenues were $2,831.1 million, a 13.6% increase over 1997 revenues of $2,491.9 million. The increase was principally due to higher commercial satellite sales to customers such as ICO Global Communications, PanAmSat, Thuraya Satellite Telecommunications Company and Orion Asia Pacific Corporation.

Driven by this revenue growth, operating profit in 1998 increased 8.8% to $246.3 million compared with $226.3 million last year. Operating profit margin declined to 8.7% from 9.1% last year primarily due to higher development costs for the geostationary mobile telephony and HS 702 satellite product lines.

Fourth Quarter 1998. For the fourth quarter of 1998, revenues increased 13.4% to $843.1 million from revenues of $743.8 million for the same period in 1997. The increase was principally due to higher commercial satellite sales to customers such as ICO Global Communications, PanAmSat, DIRECTV and Thuraya Satellite Telecommunications Company.

Operating profit in the quarter was $67.4 million compared with $66.6 million in the prior year. Operating profit margin in the quarter declined to 8.0% versus 9.0% last year. The decline in operating profit margin was primarily due to higher development costs related to the geostationary mobile telephony and HS 702 satellite product lines.

Network Systems

Full Year 1998. Full-year revenues for Hughes Network Systems (HNS) were $1,076.7 million compared with $1,011.3 million in 1997. This improvement was driven primarily by the increase in sales of DIRECTV receiver equipment, which more than offset lower international sales of wireless telephone systems and private business networks, primarily in the Asia Pacific region.

HNS operating profit in 1998 was $10.9 million versus $74.1 million last year. Operating profit margin declined to 1.0% from 7.3% in 1997. The decline in operating profit and operating profit margin was mostly due to lower international sales of wireless telephone systems and private business networks, and provisions for estimated losses related to uncollectible amounts due from certain wireless customers.

Fourth Quarter 1998. Fourth quarter revenues for HNS were $402.6 million compared with $401.9 million in the same period last year. Increased sales of DIRECTV receiver equipment offset the impact from lower international sales of wireless telephone systems, predominantly in the Asia Pacific region.

HNS operating profit in the quarter was $31.1 million compared with $68.0 million in the fourth quarter of 1997. Operating profit margin declined to 7.7% compared with 16.9% last year. The decline in operating profit and margin was principally a result of lower international sales of wireless systems and a provision for uncollectible amounts due from a wireless telephony customer.

BALANCE SHEET

The cash balance of $1,342.1 million at December 31, 1998, declined $1,441.7 million from December 31, 1997. This variance consisted primarily of two items: an additional investment of $851.4 million in PanAmSat in May 1998, which increased Hughes' ownership from 71.5% to 81.0%, and a $204.7 million cash payment to General Motors (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).

Hughes Electronics Corporation is a unit of General Motors Corp. The earnings of Hughes Electronics are used to calculate the earnings per share attributable to GMH (NYSE symbol) common stock.

(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.