DIRECTV U.S.

Business Description

DIRECTV is the world’s leading provider of digital satellite television entertainment. As of year-end 2000, DIRECTV served more than 9.5 million customers, making it the third-largest multi-channel entertainment provider in the United States. With its industry-leading monthly average revenue per user (ARPU) of $59 at year-end 2000, DIRECTV generated more than $4.7 billion in revenues in 2000—a 38-percent increase over 1999—and $151 million in EBITDA.

Major Accomplishments

•	Acquired a record 1.8 million new high-power customers while bringing the total number of DIRECTV customers to more than 9.5 million
•	Completed the conversion of 1.5 million PRIMESTAR By DIRECTV customers to the high-power DIRECTV® service and closed the PRIMESTAR business six months ahead of schedule
•	Introduced its first two interactive/enhanced TV services
• Launched DIRECTV INTERACTIVE™ Powered by Wink® service, reaching approximately two million DIRECTV customers by year-end • Introduced DIRECTV™ Receiver with TiVo® service
•	Completed distribution/marketing alliance with Blockbuster, Inc.
•	Increased availability of local programming to 41 markets, representing more than 60 percent of U.S. television households
•	Completed acquisition of Telocity, Inc.—a company that offers broadband data services via digital subscriber lines (DSL)—in April 2001
•	Generated average monthly revenue per customer of $59 at year-end 2000—the highest of all multi-channel video providers

Business Description

DIRECTV Latin America is the leading regional multi-channel entertainment provider in Latin America, serving more than 1.3 million customers in 27 countries at year-end 2000. DIRECTV Latin America generated monthly average revenues from programming of $36 per subscriber as of year-end 2000; additional monthly revenues are earned from equipment rental and activation fees. In addition, the DIRECTV businesses in Latin America generated more than $541 million in revenue—a 72-percent increase over 1999—and negative EBITDA of $171 million. DIRECTV Latin America is currently a partnership of HUGHES (78-percent ownership) and Darlene Investments, LLC, an affiliate of the Cisneros Group (22-percent ownership).

Major Accomplishments

Business Description

Hughes Network Systems (HNS) is the world’s largest provider of satellite-based private business networks, with an installed base of more than 350,000 very small aperture terminal (VSAT) systems in more than 85 countries. It is also a leading supplier of DIRECTV™ Receiver equipment and broadband terrestrial wireless access equipment. HNS pioneered the development of high-speed satellite Internet access services, which it markets under the DirecPC^® and DIRECWAY™ brands. In 2000, HNS shipped its six millionth DIRECTV Receiver, generated revenues exceeding $1.4 billion and closed the year with a backlog of more than $1.2 billion—a 24-percent increase over 1999.

•	Lead HUGHES’ entry into next-generation broadband products and services
•	Aggressively expand subscriber base for broadband-by-satellite Internet access
• Rapidly deploy DIRECWAY™ two-way broadband services • Maximize sales through Powered By DIRECWAY/DirecPC® Internet access distribution agreements with DIRECTV, AOL, Pegasus, Earthlink, Juno and other strategic partners
•	Increase service focus; introduce new multimedia value-added services—such as interactive distance learning, micro-advertising and high-speed corporate Internet/intranet access—for DIRECWAY enterprise customers globally
•	Continue development of Spaceway™, the next-generation broadband satellite platform, which is scheduled to begin service as early as 2003

Major Accomplishments

Business Description

PanAmSat Corporation is a world leader in satellite services. PanAmSat owns and operates the world’s largest geostationary satellite network. It had 20 spacecraft in orbit at year-end 2000, with plans to expand to 22 satellites by year-end 2001. PanAmSat ended 2000 with more than $1 billion in revenues, a backlog of approximately $6 billion, and EBITDA margins of 68 percent. PanAmSat also introduced its NET-36™ Internet Broadcast Network, signing key agreements with multiple last-mile broadband service providers. HUGHES owns 81 percent of PanAmSat, which is publicly traded on the Nasdaq under the ticker symbol "SPOT."

•	Continue comprehensive expansion and back-up plan with the 2001 launches of PAS-10 and Galaxy IIIC to bring total number of satellites to 22
•	Expand customer base of core video and telecommunications services through introduction of new value-added services
•	Develop strategic alliances and partnerships, and pursue new market opportunities—in Mexico through the PanAmSat de México alliance with a Grupo Pegaso affiliate, and in Brazil, India and China
•	Continue to expand NET-36 service
• Continue network build-out • Develop relationships with additional content and last-mile providers

Major Accomplishments

•	Ended year with backlog of approximately $6 billion
•	Won key contracts from customers including The Walt Disney Company’s family of television channels; HBO; Turner Broadcasting System, Inc.; Lifetime Entertainment Services; and Hughes Network Systems
•	Launched four new satellites as part of comprehensive expansion and back-up plan
•	Obtained authorization from the Australian Communications Authority to use an orbital slot over the Pacific
•	Commercially launched NET-36 service
• Signed alliances with last-mile providers including Excite@Home, Qwest, Bell South and DIRECWAY/DirecPC to provide Internet streaming services via NET-36