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DirecTV U.S. Q2 Revenue Up 15%

7/16/2002 09:55:00 AM Eastern

El Segundo, Calif. - Subscriber growth helped power second quarter revenue 15 percent at the DirecTV U.S. business of Hughes Electronics, reaching $1.5 billion, up from $1.3 billion in the year-ago three months.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in Hughes' U.S. DirecTV segment during the second quarter, ended June 30, hit $148 million, nearly double the $75 million reported in the same quarter in 2001. This increase was due primarily to the additional gross profit gained from DirecTV's increased revenue and lower subscriber acquisition costs associated with higher levels of set-top box sales to existing subscribers.

Operating profit for the segment in the second three months climbed to $53 million, up from an operating loss of $39 million in the same period last year.

'The improving performance of DirecTV U.S. continues to fuel Hughes' growth,' said Jack A. Shaw, president/CEO. The company reported net subscriber additions of 202,000 in the second quarter - short of a targeted 225,000, but 53 percent higher than the subscriber additions reported in the second three months last year.

Although U.S. DirecTV individual subscriber acquisition costs during the second quarter increased to $530, up from $520 in the preceding three months, average revenue per user increased to $58.10 in the second quarter, compared with $56.70 in the previous three months.

Total revenue for Hughes' Direct-To-Home Broadcast segment jumped 17.4 percent in the second quarter, hitting $1.8 billion, up from $1.5 billion in the year-ago three months. The segment had an EBITDA of $20.6 million in the second quarter, compared with a negative EBITDA of $1.3 million year over year. The operating loss in the second three months was $136.4 million, down from $182.9 million in the same period in 2001.

In the six months, the Direct-To-Home Broadcast segment reported total revenue of $3.4 billion, up from $3 billion in the same period last year. The segment reported a negative EBITDA of $42 million, compared with EBITDA of $4.7 million in the first six months of 2001. The segment's operating loss increased to $351.9 million in the six months, up from a loss of $328.4 million in the year-ago period.

Looking ahead, DirecTV U.S. expects third quarter revenue of $1.6 billion and EBITDA of $150 million. Net subscriber additions for the third quarter are expected to be in the range of 250,000 to 300,000.

Prior full year guidance for DirecTV U.S. in 2002 had placed revenue at $6.2 billion. This has been increased to an expected $6.3 billion. The prior EBITDA guidance for the 12 months in 2002 had been $525 million. This has been increased to an expected range of $525 million to $545 million. Net subscriber additions expected for the full year 2002 remain at 1.2 million.