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FOR IMMEDIATE RELEASE

HUGHES ANNOUNCES THIRD QUARTER GROWTH OF 17% IN REVENUES AND 33% IN OPERATING PROFIT BEFORE D&A; OPERATING PROFIT QUADRUPLES

DIRECTV U.S. Adds 326,000 Owned and Operated Subscribers in the Quarter, a 58% Increase over Last Year

“This quarter’s results are yet another indication of the rather significant changes we have made across our company to continuously improve operational performance. Compared to last year, each of our businesses generated higher revenues and operating profit before depreciation and amortization in the quarter,” said Jack A. Shaw, HUGHES’ president and chief executive officer. “Importantly, DIRECTV U.S. had its second best quarter ever in terms of gross owned and operated subscriber additions, and the 326,000 net new subscribers added in the quarter represented a 58% increase over last year’s third quarter. I believe that this sharp increase in DIRECTV's subscriber growth reflects consumers’ desire for DIRECTV’s superior, all digital television programming as well as their continued dissatisfaction with their cable television service.”

Shaw continued: “At the top line, DIRECTV U.S. once again was the major contributor to our growth in the quarter with a nearly 20% increase in revenues driven by continued strong subscriber growth and a $4.50 increase in average monthly revenue per subscriber to $63.70. Hughes Network Systems – or HNS – also contributed to HUGHES’ growth with a 17% increase in revenues principally due to strong sales in its enterprise and residential DIRECWAY broadband businesses, as well as in its set-top box business. Driven by the gross profit on this revenue growth, DIRECTV U.S. and HNS were also the primary contributors to HUGHES’ 33% growth in operating profit before depreciation and amortization.”

Shaw finished: “We’re also demonstrating significant improvement in our cash flow—which we define as cash flows from operating activities plus cash flows from investing activities—where, for the third quarter in a row, HUGHES generated positive cash flow. Also for the third consecutive quarter, HUGHES is increasing its full-year guidance for revenues, operating profit and cash flow primarily due to the strong DIRECTV U.S. and HNS results in the third quarter as well as the continued solid results expected for the remainder of the year.”

HUGHES’ operating profit increased to $77 million in the third quarter of 2003 from $16 million in the same period of last year. The improvement was due to the higher operating profit before depreciation and amortization partially offset by higher depreciation and amortization, primarily at DIRECTV U.S. due to the reinstatement of amortization expense during the fourth quarter of 2002 related to certain intangible assets in accordance with Emerging Issues Task Force (“EITF”) Issue No. 02-17, as well as additional infrastructure expenditures during the last year.

HUGHES recorded a third quarter 2003 net loss of $23 million compared to a net loss of $14 million in the same period of 2002. The higher net loss was primarily due to a $159 million pre-tax gain in 2002 resulting from the sale of 8.8 million shares of Thomson Multimedia common stock and a third quarter 2003 non-cash charge of $65 million recorded as “Cumulative effect of accounting change, net of taxes” related to the adoption of FASB Interpretation No. 46 (“FIN 46”). These changes were partially offset by the higher 2003 operating profit discussed above, the favorable resolution of certain tax refund claims for $48 million in the quarter, a $32 million write-down of two equity investments and a pre-tax loss of $25 million related to the sale of SkyPerfecTV! common stock in the third quarter of 2002, and the absence of net losses in 2003 at DIRECTV Broadband due to its shutdown on February 28, 2003.

NINE-MONTH FINANCIAL REVIEW

For the first nine months of 2003, revenues increased 12% to $7.17 billion, compared to $6.41 billion in the first nine months of 2002. The increase was primarily due to continued subscriber growth and higher average monthly revenue per subscriber (“ARPU”) at DIRECTV U.S. as well as increased sales in the residential DIRECWAY® broadband business at HNS, partially offset by lower DIRECTV Latin America revenues related to the World Cup programming services in 2002 as well as a smaller subscriber base and further devaluations to several Latin American currencies in 2003.

Operating profit before depreciation and amortization for the first nine months of 2003 was $1.07 billion compared with $586 million in the same period of 2002. Operating profit before depreciation and amortization margin was 15% compared to 9% in the first nine months of 2002. The 82% increase in operating profit before depreciation and amortization and the corresponding increase in margin were primarily attributable to the additional gross profit gained from the DIRECTV U.S. revenue growth, reduced losses from the 2002 World Cup programming at DIRECTV Latin America and improved efficiencies associated with HNS’ larger residential DIRECWAY subscriber base. Also impacting the 2002 operating profit before depreciation and amortization results was a charge of $48 million related to a settlement with GECC and a $95 million one-time gain due to the favorable resolution of a lawsuit filed against the U.S. government on March 22, 1991.

HUGHES’ operating profit for the first nine months of 2003 was $258 million compared with an operating loss of $170 million in the same period of 2002. The improvement was due to the higher operating profit before depreciation and amortization discussed above partially offset by higher depreciation and amortization expense, particularly at DIRECTV U.S. resulting from the reinstatement of amortization expense related to certain intangible assets in accordance with EITF Issue No. 02-17 during the fourth quarter of 2002, as well as additional infrastructure expenditures during the last year.

For the first nine months of 2003, HUGHES had a net loss of $52 million compared to a net loss of $1.01 billion in the same period of 2002. The improvement was primarily due to a first quarter 2002 charge associated with HUGHES’ adoption of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets” of $681 million, recorded as “Cumulative effect of accounting change, net of taxes.” Also contributing to the change was the improved 2003 operating profit discussed above, a 2002 net interest expense charge of $74 million related to the GECC settlement and higher losses in 2002 at DIRECTV Broadband. These improvements were partially offset by the $159 million pre-tax gain on the sale of Thomson shares in 2002, a higher income tax benefit generated in 2002 resulting from the larger pre-tax loss and the $65 million charge related to the adoption of FIN 46 in 2003.

SEGMENT FINANCIAL REVIEW: THIRD QUARTER 2003

Direct-To-Home Broadcast
Third quarter 2003 revenues for the segment increased 18% to $2.09 billion from $1.76 billion in the third quarter of 2002. The segment had operating profit before depreciation and amortization of $222 million compared with $177 million in the third quarter of 2002. Operating profit for the segment was $42 million in the third quarter of 2003 compared to $21 million in the same period of 2002.

On February 28, 2003, HUGHES completed the shutdown of the DIRECTV DSL™ service. As a result, DIRECTV Broadband is accounted for as a discontinued operation in the consolidated financial statements and its revenues, operating costs and expenses, and non-operating results are no longer included in the Direct-To-Home Broadcast segment for the periods presented.

United States²: Excluding subscribers in the National Rural Telecommunications Cooperative (“NRTC”) territories, DIRECTV U.S. added 811,000 gross subscribers and after accounting for churn, 326,000 net subscribers in the quarter. DIRECTV U.S. owned and operated subscribers totaled 10.28 million as of September 30, 2003, 12% more than the 9.20 million subscribers as of September 30, 2002. For the third quarter of 2003, the total number of subscribers in NRTC territories fell by 32,000, reducing the total number of NRTC subscribers as of September 30, 2003, to 1.57 million. As a result, the DIRECTV U.S. platform ended the quarter with 11.85 million total subscribers.

DIRECTV U.S. reported quarterly revenues of $1.93 billion, an increase of 20% over last year’s third quarter revenues of $1.62 billion. The increase was primarily due to continued strong subscriber growth as well as higher ARPU. ARPU increased approximately $4.50, or 8%, to $63.70 in the quarter primarily due to the March 2003 price increase, additional fees from the increased number of customers that have multiple set-top receivers, the adoption of EITF Issue No. 00-21 that relates to the recognition of certain customer-related revenues, increased revenues from the NFL SUNDAY TICKET® package and increased customer purchases of local channels.

Operating profit before depreciation and amortization for the third quarter of 2003 increased 15% to $235 million compared to $205 million in last year’s third quarter. The increase was due to the additional gross profit gained from the increased revenues, an improved mix of higher-margin revenues primarily related to fees from customers that have multiple set-top receivers and increased sales of local channel packages, and the favorable impact from a continued emphasis on cost management. These were partially offset by increased marketing expenses associated with the larger gross subscriber additions and higher acquisition costs per subscriber (“SAC”) in the quarter.

Operating profit in the quarter increased to $112 million compared to $102 million in the third quarter of 2002. The improved operating profit was primarily due to the reasons discussed above for the change in operating profit before depreciation and amortization partially offset by the reinstatement of amortization expense related to certain intangible assets in accordance with EITF Issue No. 02-17 during the fourth quarter of 2002, as well as increased depreciation expense due to additional infrastructure expenditures during the last year.

Latin America: On March 18, 2003, DIRECTV Latin America, LLC announced that in order to aggressively address the company’s financial and operational challenges, it had filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filing applies only to DIRECTV Latin America, LLC, a U.S. company, and does not include any of its operating companies in Latin America and the Caribbean. DIRECTV Latin America, LLC and its operating companies are continuing regular operations.

The DIRECTV® service in Latin America lost 44,000 net subscribers in the third quarter of 2003 mostly due to significantly higher involuntary churn in Mexico resulting from changes in disconnection processes associated with past-due subscribers. The total number of DIRECTV subscribers in Latin America as of September 30, 2003, was 1.45 million compared to 1.60 million as of September 30, 2002, representing a decline of 10%.

Revenues for DIRECTV Latin America increased to $155 million in the quarter from $146 million in the third quarter of 2002 primarily due to the consolidation of the local operating companies in Puerto Rico and Venezuela in accordance with HUGHES’ adoption of FIN 46, partially offset by lower revenues from the smaller subscriber base.

DIRECTV Latin America recorded an operating loss before depreciation and amortization of $17 million in the quarter compared to an operating loss before depreciation and amortization of $29 million in the same period of 2002. The operating loss in the quarter was $74 million compared to an operating loss of $84 million in the third quarter of 2002. These improvements were primarily due to aggressive cost cutting over the past year including programming cost reductions resulting from the rejection of certain contracts in connection with the Chapter 11 reorganization, partially offset by reduced revenues associated with the smaller subscriber base.

Satellite Services
PanAmSat Corporation (“PanAmSat”), which is approximately 81%-owned by HUGHES, generated third quarter 2003 revenues of $210 million compared with $199 million in the same period of the prior year. The increase was primarily due to additional government revenues related to PanAmSat’s new G2 Satellite Solutions™ division, which was formed after the acquisition of Hughes Global Services on March 7, 2003, and an increase in network service revenues.

PanAmSat’s operating profit before depreciation and amortization for the quarter was $152 million compared with $145 million in the third quarter 2002. Operating profit remained relatively unchanged at $67 million in the third quarter of 2003. The increase in operating profit before depreciation and amortization was primarily due to lower bad debt expense and improved operational efficiencies. The operating profit was also impacted by higher depreciation expense primarily related to the shorter estimated useful lives of two satellites that experienced anomalies in 2003.

As of September 30, 2003, PanAmSat’s contracts for satellite services representing future payments (backlog) declined to approximately $4.8 billion compared to approximately $5.3 billion at the end of the second quarter of 2003 primarily due to reduced contract values related to a satellite anomaly.

Network Systems
HNS generated third quarter 2003 revenues of $353 million compared with $300 million in the third quarter of 2002. The 17% increase was principally due to higher revenues in the enterprise and residential DIRECWAY® broadband businesses, and increased sales of DIRECTV® receiver systems. HNS shipped 946,000 DIRECTV receiver systems in the third quarter of 2003 compared to 737,000 units in the same period last year. Additionally, as of September 30, 2003, the DIRECWAY service had approximately 178,000 residential subscribers in North America compared to 138,000 one year ago, representing an increase of approximately 29%.

HNS reported operating profit before depreciation and amortization of $9 million compared to an operating loss before depreciation and amortization of $23 million in the third quarter of 2002. The operating loss in the quarter was $10 million compared to an operating loss of $43 million in the third quarter of 2002. These improvements were primarily attributable to a smaller loss in the residential DIRECWAY business due to improved efficiencies associated with the larger subscriber base, increased revenues and profit margins in the set-top box and DIRECWAY enterprise businesses, as well as a $9 million charge taken in the third quarter of 2002 related to severance costs and an inventory provision.

BALANCE SHEET

From December 31, 2002, to September 30, 2003, HUGHES’ consolidated cash balance increased $1.50 billion to $2.63 billion and total debt increased $1.58 billion to $4.70 billion.

In the third quarter, HUGHES’ consolidated cash balance decreased by $558 million and debt decreased by $311 million compared to the June 30, 2003, balances. During the quarter, HUGHES generated over $100 million of cash flow (cash flows from operating activities plus cash flows from investing activities) bringing the total cash flow generated by HUGHES to approximately $400 million through September 30, 2003. Also in the quarter, HUGHES and The Boeing Company reached an agreement whereby HUGHES paid Boeing $360 million to settle the outstanding purchase price adjustment disputes arising from Boeing’s October 2000 acquisition of HUGHES’ satellite manufacturing operations. This payment will be reported as “Net cash used in discontinued operations” in the Condensed Consolidated Statements of Cash Flows. Additionally, PanAmSat made an optional prepayment of $350 million in the quarter under its $1.25 billion bank facility from available cash on hand. The prepayment was applied pro rata against PanAmSat’s Term Loan A and Term Loan B.

During 2003, DIRECTV U.S. completed several financing transactions, which included $1.40 billion of borrowings under a senior notes offering and approximately $1.23 billion of borrowings under a $1.68 billion credit facility. Approximately $2.56 billion of the proceeds from the financings were distributed to HUGHES to repay $506 million of outstanding short-term debt and to fund HUGHES’ business plan through projected cash flow breakeven.

Hughes Electronics Corporation is a unit of General Motors Corporation. The earnings of HUGHES are used to calculate the earnings attributable to the General Motors Class H common stock (NYSE:GMH).

A live webcast of HUGHES’ third quarter 2003 earnings call will be available on the company’s website at www.hughes.com or www.directv.com. The call will begin at 2:00 p.m. ET, today. The dial in number for the call is (913) 981-4900. The webcast will be archived on the Investor Relations portion of the HUGHES’ website and a replay of the call will be available (dial in number: 719-457-0820, code: 438314) beginning at 7:00 p.m. ET on Wednesday, October 15 through Monday, October 20 at 1:00 a.m. ET.

(1) Operating profit (loss) before depreciation and amortization, which is a non-GAAP financial measure, should be used in conjunction with other GAAP financial measures and is not presented as an alternative measure of operating results, as determined in accordance with accounting principles generally accepted in the United States of America. Please see HUGHES and DIRECTV Holdings LLC recent SEC filings for further discussion of operating profit (loss) before depreciation and amortization.

(2) The discussion of financial results for DIRECTV U.S. reflects amounts included in the stand-alone financial statements of DIRECTV Holdings LLC that are included later in this earnings release. HUGHES records certain items as corporate expenses in HUGHES consolidated financial statements pursuant to Statement of Financial Accounting Standards No. 131, “Disclosure about Segments of an Enterprise and Related Information.” Generally accepted accounting principles also require these expenses to be reflected in the stand-alone financial statements of DIRECTV Holdings LLC. As a result, the DIRECTV U.S. operating profit before depreciation and amortization and operating profit results include approximately $3 million and $4 million of pension expense in the third quarter of 2002 and 2003, respectively, which HUGHES includes in “Eliminations and Other” for segment reporting purposes in its consolidated statements.

NOTE: This release may contain certain statements that Hughes and/or DIRECTV U.S. believe are, or may be considered to be, “forward-looking statements,” within the meaning of various provisions of the Securities Act of 1933 and of the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by use of statements that include phrases such as we “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. All of these forward-looking statements are subject to certain risks and uncertainties that could cause Hughes’ and/or DIRECTV U.S.’ actual results to differ materially from historical results or from those expressed or implied by the relevant forward-looking statement. Risk factors which could cause actual performance and future actions to differ materially from forward-looking statements made herein may include, but are not limited to, economic conditions, product demand and market acceptance, government action, local political or economic developments in or affecting countries where Hughes has operations, including political, economic and social uncertainties in many Latin American countries in which the DIRECTV Latin America businesses operate, potential adverse effects of the DIRECTV Latin America, LLC Chapter 11 bankruptcy proceedings, foreign currency exchange rates, ability to obtain export licenses, competition, the outcome of legal proceedings, ability to achieve cost reductions, ability to timely perform material contracts, ability to renew programming contracts under favorable terms, technological risk, limitations on access to distribution channels, the success and timeliness of satellite launches, in-orbit performance of satellites, loss of uninsured satellites, ability of customers to obtain financing, ability to access capital to maintain financial flexibility and the effects of the strategic transactions that GM and Hughes have entered into with News Corporation.

	Nine months ended September 30, 2003 Actual	Nine months ended September 30, 2002 Actual
HUGHES
Operating profit/(loss)	$258M	$(170)M
Plus: Depreciation & Amortization (D&A)	$810M	$756M
Operating profit before depreciation and amortization	$1.07B	$586M

*Additional DIRECTV U.S. non-GAAP financial reconciliation is included with the DIRECTV U.S. stand-alone financial statements included in this earnings release.