Filed by General Motors Corporation
                                   Subject Company - General Motors Corporation
                                             and Hughes Electronics Corporation
                                        and EchoStar Communications Corporation
                          Pursuant to Rule 425 under the Securities Act of 1933
                                       and Deemed Filed Pursuant to Rule 14a-12
                                      under the Securities Exchange Act of 1934
                                                 Commission File No.: 333-84472

The following is a transcript of a conference call made available on Hughes'
website beginning October 16, 2002. Certain text contained within the transcript
has been bracketed because it was inaudible.

In connection with the proposed transactions, General Motors Corporation ("GM"),
HEC Holdings, Inc. ("Hughes Holdings") and EchoStar Communications Corporation
("EchoStar") have filed amended preliminary materials with the Securities and
Exchange Commission ("SEC"), including a Registration Statement of Hughes
Holdings on Form S-4 that contains a consent solicitation statement/information
statement/prospectus. These materials are not yet final and will be further
amended. Holders of GM $1-2/3 and GM Class H common stock are urged to read the
definitive versions of these materials, as well as any other relevant documents
filed or that will be filed with the SEC, as they become available, because
these documents contain or will contain important information. The preliminary
materials, the definitive versions of these materials and other relevant
materials (when they become available), and any other documents filed by GM,
Hughes Electronics Corporation ("Hughes"), Hughes Holdings or EchoStar with the
SEC may be obtained for free at the SEC's website, www.sec.gov, and GM
stockholders will receive information at an appropriate time on how to obtain
transaction-related documents for free from GM.

GM and its directors and executive officers, Hughes and certain of its officers,
and EchoStar and certain of its executive officers may be deemed to be
participants in GM's solicitation of consents from the holders of GM $1-2/3
common stock and GM Class H common stock in connection with the proposed
transactions. Information regarding the participants and their interests in the
solicitation was filed pursuant to Rule 425 with the SEC by EchoStar on November
1, 2001 and by each of GM and Hughes on November 16, 2001. Investors may obtain
additional information regarding the interests of the participants by reading
the amended preliminary consent solicitation statement/information
statement/prospectus filed with the SEC and the definitive consent solicitation
statement/information statement/prospectus when it becomes available.

This communication shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended.

Materials included in this document contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could cause our actual results to be materially different
from historical results or from any future results expressed or implied by such
forward-looking statements. The factors that could cause actual results of GM,
EchoStar, Hughes, or a combined EchoStar and Hughes, to differ materially, many
of which are beyond the control of EchoStar, Hughes, Hughes Holdings or GM
include, but are not limited to, the following: (1) the businesses of EchoStar
and Hughes may not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected benefits and
synergies from the combination may not be realized within the expected time
frame or at all; (3) revenues following the transaction may be lower than
expected; (4) operating costs, customer loss and business disruption including,
without limitation, difficulties in maintaining relationships with employees,
customers, clients or suppliers, may be greater than expected following the
transaction; (5) generating the incremental growth in the subscriber base of the
combined company may be more costly or difficult than expected; (6) the
regulatory approvals required for the transaction may not be obtained on the
terms expected or on the anticipated schedule; (7) the effects of legislative
and regulatory changes; (8) an inability to obtain certain retransmission
consents; (9) an inability to retain necessary authorizations from the FCC; (10)
an increase in competition from cable as a result of digital cable or otherwise,
direct broadcast satellite, other satellite system operators, and other
providers of subscription television services; (11) the introduction of new
technologies and competitors into the subscription television business; (12)
changes in labor, programming, equipment and capital costs; (13) future
acquisitions, strategic partnership and divestitures; (14) general business and
economic conditions; and (15) other risks described from time to time in
periodic reports filed by EchoStar, Hughes or GM with the Securities and
Exchange Commission. You are urged to consider statements that include the words
"may," "will," "would," "could," "should," "believes," "estimates," "projects,"
"potential," "expects," "plans," "anticipates," "intends," "continues,"
"forecast," "designed," "goal," or the negative of those words or other
comparable words to be uncertain and forward-looking. This cautionary statement
applies to all forward-looking statements included in this document.

                                    *  *  *




                         HUGHES ELECTRONICS CORPORATION

                              MODERATOR: JON RUBIN
                                OCTOBER 14, 2002
                                   1:00 PM CT



Operator: Good day, everyone. And welcome to today's Hughes Electronics
         Corporation 2002 Third Quarter Earnings Results Conference Call.
         Today's call is being recorded.

         At this time, for opening remarks and introductions, I would like to
         turn the conference over to the Vice President of Investor Relations,
         Mr. Jon Rubin. Please go ahead, sir.

Jon Rubin: Thank you, operator. And thank you, everyone, for joining us for
         our third quarter 2002 earnings conference call. With me today on the
         call are Jack Shaw, our President and CEO; Eddy Hartenstein, Chairman
         and COO of DIRECTV; Roxanne Austin, President and COO of DIRECTV U.S.;
         Mike Gaines, our CFO; Kevin McGrath, Chairman of DIRECTV Latin America;
         Pradman Kaul, Chairman and CEO of Hughes Network Systems; and the CFO's
         from our major businesses.

         Before we proceed, I'd like to remind you that our use of the words
         expect, anticipate, project and similar expressions are intended to
         identify forward-looking statements. While these statements represent
         our current judgment on what the future may hold, and we believe that
         they are reasonable, actual results may differ materially due to
         important factors, including those described in our SEC filings and in
         General Motors' SEC filings.








         And now, I'd like to turn the call over to Jack Shaw for a few opening
         comments.

Jack Shaw: Thank you, Jon. I think it's evident from the results released
         this morning that the third quarter gave us a great deal to be proud
         of. And at the same time, the numbers clearly point to aspects of our
         businesses where there is still a lot of unfinished work.

         In reviewing the highlights of the quarter, I am pleased that we
         achieved our original guidance for Hughes consolidated revenues, while
         exceeding our expectations for EBITDA. Given the difficult global
         economic conditions that in one way or another impact each one of our
         businesses, this alone is quite an accomplishment.

         However, I got the most satisfaction from seeing the steady and
         measurable progress that our DIRECTV U.S. business is making. I was
         disappointed that we fell a bit short of our subscriber guidance.
         However, when I look at the reasons behind the shortfall and look at
         DIRECTV's overall financial performance, I'm quite encouraged by what's
         been accomplished over the past year.

         Specifically, we have implemented many changes to our business that
         were designed to shift our focus to maximizing subscriber returns and
         cash flow. A few years ago, it made a lot more sense to focus on
         subscriber growth essentially - especially considering that we were in
         a more favorable competitive environment. There was greater access to
         capital. And Wall Street had a strong bias towards growth companies.

         Clearly, the world looks a lot different now. And the results at
         DIRECTV offer the best evidence that our strategy is working. We far
         surpassed our EBITDA expectations for the quarter. And we once again -
         and we're once again increasing DIRECTV's full-year estimates for both
         revenue and EBITDA.








         These accomplishments are the result of across-the-board improvements.
         For example, at the top line, we continued to see strength in our
         average monthly subscriber revenue or ARPU. And at the bottom line, we
         continued to reap the benefits from our rigorous and ongoing cost
         reductions. Roxanne will explain these in much greater detail in a
         moment.

         Moving on to PanAmSat, they also had an excellent quarter, as the
         benefits from a much more streamlined cost structure continued to be
         realized. PanAmSat achieved its guidance for all key financial metrics,
         highlighted by a 700 basis point increase in its EBITDA margin to 73%.
         Hopefully many of you were able to listen to PanAmSat's earnings call
         last Friday.

         Hughes Network Systems also had a pretty good quarter. In addition to
         meeting its revenue and EBITDA targets for the quarter, HNS shipped
         approximately 737,000 DIRECTV set-top boxes, which was nearly 50% more
         than last year.

         Despite these accomplishments, we certainly had our share of challenges
         during the quarter. In Latin America, we're battling through what is
         arguably the worst region-wide political and economic crisis in recent
         memory. And I think it's fair to say that even the most pessimistic
         planning scenarios didn't comprehend the magnitude of the economic
         meltdown that we've experienced so far this year.

         As you'll hear from Kevin McGrath, we're doing everything possible to
         stem the losses at DIRECTV Latin America. For the time being, we're
         going to take a no-growth or limited growth strategy in the region.
         We're going to hunker down, conserve cash, and weather the storm until
         the macroeconomic environment turns around.

         And at HNS, due to the unfavorable global economic conditions I
         referred to earlier, they are lowering their full-year estimates for
         revenue and EBITDA, as well as their estimates for DIRECWAY subscriber
         additions.








         I'd also like to mention that we are fully aware of the sense of
         urgency regarding the future direction of our DIRECTV Latin America and
         consumer broadband businesses. As I'm sure you can appreciate, the
         direction of these businesses is partially dependent on the final
         disposition of our merger with EchoStar. I can assure you that we will
         be prepared to communicate these strategies with you as soon as
         practically possible.

         Speaking of the merger, I'd like to give you a brief update on where we
         stand with respect to the transaction with EchoStar. As you know, on
         October 10, the FCC refused to give its consent to transfer the
         licenses necessary to allow the merger to close, finding that the
         merger as structured is not in the public interest. The application has
         been designated for hearing by an administrative law judge. We expect
         that the FCC's orders specifying its concerns will be released later
         this week.

         The FCC, however, has given the party 30 days from the release of the
         order to file an amended application to address the FCC's competitive
         concerns and to file a petition to delay the hearing. We are actively
         pursuing remedies to address both the FCC's concerns and concerns
         expressed by the Department of Justice. We will file with both agencies
         within the specified timelines established by each. And we will
         continue to work aggressively to achieve approval of the merger.

         As much as we'd like to be able to answer all of your questions about
         the merger, I'm sure that you can appreciate that we're not in a
         position at this time to go into any more detail. Thus, we would
         appreciate if you would keep your questions focused on the quarterly
         results and not on the merger.

         So in summary, I believe the key takeaway from the quarter is that
         we're demonstrating the discipline required to ensure that we achieve
         our key goals for DIRECTV U.S., namely, to






         increase the return on every subscriber we attain and to capitalize on
         DIRECTV's significant operating leverage to generate accelerating cash
         flow growth. The third quarter results show that we're right on track.

         That concludes my opening remarks. Now I'd like to turn the call over
         to Mike Gaines. Mike.

Mike Gaines: Thanks, Jack. Before our business unit leaders provide a
         detailed discussion of their quarterly results, I'd like to first give
         a quick overview of Hughes' balance sheet and funding position. For the
         year, we now expect our total cash requirements to be approximately 700
         million.

         This significant improvement from our prior guidance range of 1.2 to
         1.4 billion is due primarily to our ongoing efforts across all our
         business units to reduce expenses and conserve cash, coupled with the
         decision to monetize our remaining shares of Thomson Multimedia and
         SkyPerfecTV!. We completed the sale of our Thomson stock in the third
         quarter, resulting in net proceeds of $211 million.

         In addition, we actually sold our stake in SkyPerfecTV! After the third
         quarter ended, giving us $105 million of proceeds, which will show up
         in fourth quarter cash flow.

         At the end of the third quarter, our consolidated cash balance was 863
         million, up slightly from the second quarter. Our consolidated debt
         balance was about 3.4 billion or about $100 million less than the debt
         balance at the end of last quarter. The improvement in our net debt
         position during the quarter was due mainly to the sale of the Thomson
         stock and better than expected cash flow performance at our business
         units.








         Excluding PanAmSat, Hughes level debt at the end of the third quarter
         to $765 million outstanding under credit facilities totaling 2.5
         billion. Funding requirements during the fourth quarter are expected to
         increase the Hughes level debt balance to roughly 1 billion at
         year-end.

         The existing credit facilities mature on December 5. And over the last
         couple of months, we've been working with our banks to refinance these
         facilities. We are well down the path on this refinancing and certainly
         expect to have new financing in place prior to December 5.

         We expect to maintain credit availability in an amount somewhere in the
         neighborhood of $2 billion or more. And if the merger were not to
         occur, proceeds from the sale of PanAmSat or the break-up fee would be
         used to retire this debt.

         Moving on to Hughes' revenue and EBITDA guidance, we have updated our
         outlook by business unit for the fourth quarter and have revised our
         full-year guidance for Hughes. We now expect full-year revenue for
         Hughes of 8.9 to 9 billion, compared to our prior range of 9 to 9.2
         billion. In addition, EBITDA for the full year is now targeted to be
         approximately 750 million or at the lower end of our prior range of 750
         to 850 million.

         Although we are increasing full-year guidance at DIRECTV U.S. due to
         continued strong performance, this improvement was not enough to offset
         the negative effect of the Latin American economy at DLA and the
         slumping telecom industry impacting HNS.

         With that, I'll turn it over to Roxanne Austin for an update on DIRECTV
         U.S.

Roxanne Austin: Thanks, Mike - appreciate that. In a quarter that presented
         some challenges, including a tough economic environment, DIRECTV U.S.
         made good progress toward our top goals of maximizing cash flow and
         increasing the return on every subscriber that we attained.








         Our strategy for accomplishing these goals is to continue shrinking our
         cost structure and optimize monthly subscriber revenue, with a
         particular emphasis on improving our margins. And because these key
         metrics continue to trend in the right direction, we're pleased once
         again to be increasing our full-year expectations for both revenue and
         EBITDA, true indications of the health of the DIRECTV business here in
         the United States.

         Let's first take a look at revenue. DIRECTV's third quarter revenue of
         slightly more than 1.6 billion exceeded expectations and grew nearly
         19% over last year's revenue. This strong performance was mostly due to
         our continued strength we're seeing in average revenue per user, or
         ARPU, related to the continuing improvements and penetration rates of
         local channel packages, more mirroring fees generated from the larger
         percentage of customers we have now taking multiple set-top boxes, and
         our new programming packages, including the elimination of our lowest
         price Select Choice programming package for new customers.

         As a result, ARPU was $59.20 for the quarter, nearly $2 better than
         last year. In the fourth quarter, due primarily to the full quarter of
         revenue from NFL SUNDAY TICKET, we expect ARPU to exceed $62.

         For the full year, we are increasing our revenue and ARPU estimates. We
         now expect revenues to be about 6.38 billion for 2002, compared to our
         previous guidance of 6.3 billion. And we're increasing full-year ARPU
         guidance to $59 per month, from our prior guidance of about $58.

         With EBITDA of 196 million in the quarter, we're seeing a tremendous
         acceleration in this metric. EBITDA is 176 million greater than last
         year's third quarter result of 20 million, excluding the severance
         charge, and compares very favorably with our original guidance of
         approximately 150 million for the quarter.








         This overachievement was due primarily to the improvements in ARPU that
         I just mentioned and the associated margins, our ongoing success in
         reducing DIRECTV's cost structure, and to a lesser extent, the lower
         marketing expenses associated with the lower subscriber additionS.

         These improvements also drove our pre-marketing cash flow to nearly 41%
         for the quarter, or almost one percentage point better than third
         quarter of last year. As a result of these positive trends, we're
         increasing our EBITDA guidance for the full year to approximately 580
         million from our prior range of 525 to 545 million.

         Our subscriber acquisition costs, or SAC, for basic and advanced boxes,
         came in at $535 per gross subscriber addition in the third quarter,
         bringing our year-to-date SAC average to about $530. We now expect SAC
         to average approximately $535 for the full year for basic and advanced
         boxes. This estimate reflects an increase to the fourth quarter,
         compared to the third quarter, of approximately 20 to $25, due to the
         cost of the NFL acquisition offer and a continued increase in the
         number of two and three-box sales.

         As evidenced in the past couple of quarters, we continue to see more
         and more new DIRECTV customers buy multiple set-top boxes for their
         homes, direct evidence of our strategy and success at positioning
         DIRECTV as a whole-house cable replacement.

         As we said in the past, although SAC is higher for these customers, the
         expected return is greater, because they typically generate an
         incremental $15 of ARPU, and have lower churn rates than customers with
         only one receiver.

         Retention marketing costs or expenses associated with marketing efforts
         to our existing customer base were 84 million in the third quarter.
         These expenses continue to be driven primarily by dealer commissions
         and the costs borne by DIRECTV associated with existing customers






         purchasing additional boxes for their homes. We expect retention
         marketing costs to be in the range of approximately 90 to 100 million
         in the fourth quarter.

         Moving on to our subscriber performance, as Jack indicated, the 206,000
         net new customers we added during the quarter fell short of our
         original projections of 250 to 300,000. The primary reason for the
         shortfall in net additions was due to higher than expected monthly
         churn, which totaled about 1.7% in the quarter.

         As we mentioned in our press release a few weeks ago, we believe the
         higher churn rate was primarily related to our efforts to fight signal
         piracy by replacing some of our customers' older generation conditional
         access cards.

         Roughly 50,000 suspected pirates churned out, once we started running
         on-screen displays, interrupting their normal service, and shutting
         down pay channels. This activity accounted for almost 2/10 of 1% of
         monthly churn during the quarter. This means that churn would have been
         in our target levels of between 1.5 and 1.6%, had we not taken these
         proactive steps to combat signal theft.

         In addition to the higher churn, gross customer additions of 682,000
         during the quarter were modestly below our estimates. This shortfall is
         consistent with the sluggish sales announced by many of our key
         national retailers during the third quarter, most of which attributed
         their results to a soft economy and wavering consumer confidence.

         We also encountered a delay in implementing the certificate program at
         Wal-Mart, which resulted in DIRECTV not being available at most of
         their stores during the third quarter. We have completed a full IT
         systems integration with the Wal-Mart point of sale system. And
         certificates are now available in all stores, with new merchandising to
         be completed by the end of October.








         Looking ahead to the fourth quarter, we anticipate adding 250 to
         300,000 net new customers, which translates into full-year net
         subscriber guidance of 1 to 1.05 million versus our prior expectations
         of approximately 1.2 million. We believe that the net subscriber
         additions in the fourth quarter will be significantly higher than the
         third quarter, because we expect to be able to get churn to the 1.6
         level or lower. And although we don't expect the economic situation to
         improve much in the near term, we are counting on the historically
         strong popularity of DIRECTV during the holiday shopping season. We
         will be aggressively promoting our value proposition versus cable and
         focusing on our J.D. Power Customer Satisfaction Award, with targeted
         radio, newspaper and television in our highest growth markets. We
         expect our overall message to be supported with aggressive two and
         three-room offers during the fourth quarter from our distribution
         partners.

         Before turning it over to Kevin McGrath, I'd like to conclude with a
         few important points on how we're managing this business. We are
         focused on profitable subscriber growth and increasing our cash flow.
         For example, we will have positive operating cash flow for the second
         half of 2002. And in addition to posting our second consecutive quarter
         of positive operating profits, further indications that the actions we
         are taking are starting to pay off.

         These achievements reflect our conscious decision to shift our focus
         away from just maximizing subscriber growth to maximizing our overall
         financial performance. For example, we improved subscriber returns by
         eliminating our lowest-price programming package. We attacked
         first-year churn by requiring annual commitments. We stopped
         subsidizing SAC for NRTC subscribers. And as a result, while we lost
         exclusivity at Radio Shack, across our distribution, this decision
         saved DIRECTV $100 million in 2002.

         We realigned our incentives to our retail partners to focus them on our
         goal of acquiring quality, committed customers. We undertook efforts to
         improve our activation rate and economics at Wal-Mart by changing to a
         certificate program. And we aggressively battled piracy by working






         with federal law enforcement, continuing our end user program
         aggressively, working on electronic countermeasures, and issuing new
         access cards.

         These changes are reflective of our strategy to continue to strive
         toward attaining the highest quality subscriber, which we are convinced
         will lead to higher returns and further improvement in our financial
         performance. The results posted here in the third quarter, along with
         our new full-year guidance, provides the best proof that that strategy
         is working.

         With that, I'll turn it over to Kevin McGrath, who'll provide you with
         an update on DIRECTV Latin America. Kevin.

Kevin McGrath: Thanks, Roxanne. I'd like to start today with a general
         overview of the challenging conditions we're facing in Latin America
         and a summary of the mitigating actions we've taken to address these
         conditions. I will follow with our third quarter results and then move
         on to a discussion of our full-year guidance.

         DLA continues to suffer from further economic and political
         deterioration in Venezuela, Brazil and Argentina. In Venezuela, the
         Bolivar has devalued almost 45% this year. And there is significant
         economic decline due to political unrest. In Brazil, the Real has
         devalued by 25% in the third quarter, mostly related to uncertainty
         surrounding the presidential elections. In Argentina, although the
         currency has held at around 3.7 pesos per dollar, the economy has not
         yet shown signs of improving.

         In reaction to the downturns in these markets, DIRECTV Latin America
         has increased its focus on cash conservation overall and growth in
         Mexico and Puerto Rico, where we continue to experience rapid
         investment payback.








         In addition, DIRECTV Latin America has reduced G&A expenses by
         approximately 25% from 2001 levels, largely due to a reduction of 35%
         of the workforce. Furthermore, our programming costs have been
         significantly reduced through negotiated devaluation and rate relief.
         We have also decreased discretionary sales and promotion expenses, as
         well as eliminated all non-critical business activities and capital
         expenditures.

         In the third quarter, the conditions in Venezuela, Argentina and Brazil
         had a significant impact on revenues, subscribers, and EBITDA. Third
         quarter revenue was $146 million versus 201 million in the same period
         in 2001. The decrease in the quarter is more than explained by the
         impact of the devaluations in Argentina, Brazil, and Venezuela, with
         Argentine devaluation alone amounting to $44 million of the decline.

         In the quarter, DLA lost 65,000 subscribers, primarily due to losses in
         Argentina and Venezuela, where we have drastically cut back on SAC and
         increased prices by 62% and 50%, respectively, which is consistent with
         our cash conservation and risk mitigation strategies. We have naturally
         seen resulting reductions in gross additions and increases in churn.

         Third quarter EBITDA was negative 29 million versus negative 17 million
         in the same quarter in 2001. The deterioration in EBITDA is due to
         lower revenues of 55 million and higher bad debt reserves of 6 million,
         partly offset by significant programming and SG&A reductions.

         Given the economic challenges in Latin America, we have revised our
         full-year outlook to incorporate the negative effects of the current
         actual devaluations, increases in bad debt reserves, the predictions of
         the economists for exchange rate changes for the balance of the year,
         the mitigating impacts of expected fourth quarter improvements in
         programming rate reductions, and the benefits of our G&A and SAC
         reductions.








         We have also reduced our growth initiatives to preserve cash. And thus,
         we've lowered full-year revenues to a range of 670 million to 700
         million, from a range of 745 to 765 million. We have also increased the
         EBITDA loss for the full year to a range of negative 180 million to a
         negative 200 million, from negative 135 million to negative 155
         million. Net adds for the year have been lowered to approximately
         breakeven from a prior range of 120,000 to 140,000.

         As a result of actions we've taken, when the markets improve, we will
         take advantage of our leaner cost structure and improved operating
         margins in order to re-energize the growth in those markets that
         justify the investment. In this regard, DIRECTV Latin America
         anticipates being EBITDA positive for the full year 2003.

         With that, I'll turn the call over to Pradman Kaul for an update on
         HNS. Pradman.

Pradman Kaul: Thanks, Kevin. The telecom market continues to be very difficult,
         with all the major telecom indices falling in the third quarter.
         Despite this tough environment, HNS generated revenues of $300 million,
         18% above the prior quarter. It was also in the middle of the guidance
         range provided in our July call.

         While this revenue was 12% below the third quarter of last year, we
         believe it's significantly better than most of the telecom industry,
         particularly our major competitors. The decline versus prior year is
         almost entirely due to lower sales in our Carrier segment.

         Comparisons for this segment are expected to be negative throughout the
         year, primarily due to substantial completion in 2001 of large projects
         for XM Satellite Radio and Thuraya Satellite Telecommunications
         Company.

         HNS continued to demonstrate its strength in the set-top box market,
         having shipped 737,000 DIRECTV units in the third quarter, a 47%
         increase compared to the 500,000 units shipped






         during the same quarter last year. This continued a favorable trend in
         our set-top box business, as we meet the needs of DIRECTV's growing
         subscriber base.

         As a result, third quarter revenues in our set-top segment grew by 33%
         compared to prior year. We're looking forward to the fourth quarter,
         during which we expect to ship our 10 millionth DIRECTV receiver
         system. During the quarter, we also plan to launch the next generation
         TiVo system.

         We believe that we continue to win the majority of VSAT contracts and
         solidify our leading market position with enterprise customers. During
         the third quarter, HNS booked numerous multimillion-dollar orders with
         leading companies, including one that we converted from our primary
         competitor.

         Third quarter revenues in this segment were up 1% compared to the
         previous quarter and down 3% compared to the same quarter last year.
         The number of consumer and single-site small office/home office
         DIRECWAY subscribers grew to over 138,000. This is 12% higher than
         where we stood at the end of June and a 59% increase over prior year.

         During this quarter, we implemented several initiatives aimed at
         accelerating consumer DIRECWAY subscriber growth and enhancing the user
         experience. DIRECWAY offered through DIRECTV recently launched a
         continuously running infomercial on Channel 227 of DIRECTV and is
         preparing to increase the frequency of commercials directing viewers to
         that channel. This, combined with continuing targeted direct mail and
         email promotions, served to educate consumers and stimulate the
         purchase decision.

         We also continued to expand national retail distribution. DIRECWAY is
         now available through kiosks at all Best Buy, Circuit City, and Gateway
         Computer stores. We continue also to develop the MyDIRECWAY Web site to
         build a relationship with customers once they sign up for the






         service. High quality streaming audio and speed tests have proven
         popular. And over 1/3 of eligible users have now registered at this
         site.

         Based on performance to date, we are refining our subscriber forecast
         and expect to finish the year with approximately 175,000 subscribers,
         which would represent a 75% increase over last year.

         Excluding one-time charges for inventory and severance, HNS's third
         quarter operating EBITDA was negative $17 million, a $6 million
         improvement over the third quarter of last year. Satellite broadband
         improved as the consumer offering continued to build critical mass.
         Set-top boxes also improved because of volume gains. However, cost
         reductions in the Carrier business could not fully offset the margin
         impact of the sales decline.

         Regarding SPACEWAY, I would like to remind you that we provided an
         in-depth presentation at the end of July. Feedback from that meeting
         was positive. And we intend to provide additional information as
         SPACEWAY moves closer to launch. In the meantime, we remain intensely
         focused on this important strategic initiative.

         Looking nearer term, we're trimming our sales guidance for the fourth
         quarter. Although our competitive position remains strong across all
         major product lines, in the current economic environment, it is
         unlikely that we will exceed last year's record fourth quarter.

         As a result, we now project fourth quarter sales of approximately $400
         million, bringing the full-year estimate to around $1.2 billion. The
         satellite, broadband and set-top segments should grow, but continue to
         be offset by negative comparisons for Carrier.

         We expect to continue seeing EBITDA benefits from a growing consumer
         DIRECWAY subscriber base and focus on reducing both product and
         operating costs. However, these structural cost






         reductions have resulted in approximately $10 million of severance
         costs for the year. We are changing EBITDA guidance to minus 85 to $95
         million as a result of these severance costs and an inventory
         provision.

         Looking forward, we are encouraged by a strong position in key product
         and service markets. Our technological expertise continues to yield
         leading products to better meet the customer needs. Not only does this
         position us well in the short term, but it also paves the way for
         further success in the satellite broadband business.

         At this point, I'll turn the call back to Jon.  Jon.

Jon Rubin: Thanks, Pradman. Now let's move on to questions you may have
         about the Hughes third quarter results. Keep in mind that we have
         members of the media on this call in a listen-only mode. I'd like to
         remind the media that they are not authorized to quote any participants
         on this call, either directly or in substance, other than the
         representatives of Hughes. In addition, we're Web-casting this call
         live on the Internet. And an archived copy will be kept on our Web
         site.

         Finally, I'd like to ask callers to limit your questions to only one or
         two, until everyone has had a chance to ask questions. At that point,
         feel free to ask additional questions. Operator, we are ready for the
         first question.

Operator: Thank you. Today's question and answer session will be conducted
         electronically. Press the star key followed by the digit 1 on your
         touchtone phone. We will come to you in the order that you signal.
         We'll pause for one moment to assemble our roster.

         Again, to ask a question, press star 1 on your touchtone phone. Our
         first question comes from Mark Nabi with Merrill Lynch.








Mark Nabi:  Good afternoon, everyone.  How are you today?

Jack Shaw:  Fine, thank you.

Roxanne Austin:  Good, Mark.

Mark Nabi: Just - I'll start off with just two questions. First, Roxanne,
         I'm looking at your expectations for the fourth quarter. And I saw - I
         guess you did $196 million of EBITDA in the third quarter. And then
         this number's going to go down in the fourth quarter.

         I'm actually a little confused. And what I'm trying to figure out is -
         why would the number go down? If your ARPUs are going to be up in the
         fourth quarter, one would think that the pre-marketing cash flow margin
         should be roughly at the 40% level. And I understand about your SAC
         going up. But it's still - it's off by a dramatic amount. I would think
         that number should be higher than where it is, particularly if you're
         saving money on the expense side. That's the first question.

Roxanne Austin:  Let me ask Mike to take you through it.

Mike Palkovic: Yeah, hey, Mark. The biggest impact is SAC. It's about a $40
         million impact due to higher gross and a little bit higher on the rate.
         And pre-marketing cash flow is down a little bit, primarily because
         it's largely sports revenue driving the revenue increase in the
         quarter.

Mark Nabi: So usually what is your pre-marketing cash flow margin in the
         fourth quarter, when you have the Sunday NFL Ticket?

Mike Palkovic:  It'll be around 38-1/2, 39%.








Mark Nabi:  Wow, okay.  So that's down a lot.

Mike Palkovic:  It's slightly down from the third quarter.

Mark Nabi: But I guess a lot of the expense savings you were talking about -
         you would experience.

Mike Palkovic:  They should continue just the way they have in the third
         quarter.

Mark Nabi: Okay. That's my first question. Second one - it relates to the
         NFL package. I know everyone asks about it. I'm just curious from the
         standpoint of package getting stale or not. I mean, roughly, let's say
         there are between 900 to 1 million subscribers that take the package,
         and obviously, people that sign on an ongoing basis. But is it worth
         continuing to sign on for it - number one? And two, I mean, where do
         you stand within that negotiation process?

Roxanne Austin: Well, we are in discussions with the NFL currently. And those I
         would characterize as going fine - no major issues. I think at the end
         of the day, NFL SUNDAY TICKET is something that we like to be able to
         offer our customers, we'll continue to want to offer to our customers.
         So we'll continue those discussions and hopefully resolve those things.

Mark Nabi: Okay. And just last question relates to, I guess, the card
         swap-outs process. Looking - if you look on the Internet, you can find
         that you can - there are hackers, unfortunately, I'd say out there
         today. You can get the most recent DIRECTV card hacked - P4, as you
         classify it, and get the service at a reduced price or for free.

         Where do you stand with respect to how many of your P2's have been
         swapped out and P3's, and obviously to try to complete the P4 process,
         where everyone's on the same card hopefully?








Roxanne Austin: We completed the P2 card swap-out, Mark. We finished that right
         around the end of September. We had almost 2.3 million cards in total -
         about 1.9 million customers that were completed. So those have been
         successfully done and swapped out, the only effect being the blips that
         we saw once we started running the onscreen displays.

         And once we started actually shutting down pay channels, we saw the
         rise in churn that you saw. And you could also see that if you went
         into some of the pirate chat rooms that you referred to - them
         thoroughly indicating that these issues were having an effect on their
         service.

         We are not discussing -- and you can appreciate why -- our P3 process
         about when we're actually starting the P3 change out and how long that
         will take and exactly how we're going to do it. And you can appreciate
         why, because as you read in the chat rooms, as soon as the pirates know
         it, they start working on activities to try to affect it. So you can
         appreciate why I can't say more than that about P3.

Mark Nabi:  No, I fully understand.  I wish you all the best on that front.

Roxanne Austin:  Thank you.

Mark Nabi:  I'll let other people ask questions.  And thanks very much.

Roxanne Austin:  Thanks, Mark.

Operator:  Our next question comes from Karim Zia with Deutsche Bank.

Karim Zia: Thanks. I'll keep my questions to two, as well. Roxanne, on the
         issue - you cited for the third quarter spike in churn, is there any
         way to quantify what residual effect there may be from further
         swap-outs or any comfort you have that that won't be a continued churn
         issue?








Roxanne Austin: Well, obviously, we had no way of knowing the effect we had on
         P2, Karim, as you can appreciate, until we actually started the
         process. And we didn't see the blip until we actually starting
         affecting people's service, when we started putting on onscreen
         displays and actually shutting down the pay channels. So that was
         something that, quite frankly, we had no way of estimating.

         Now there are reasons why we believe that P3 should not have the same
         effect, although we have still again no way of knowing how many
         "partial pirates" may be out there or real pirates may be out there.

         One thing that we do know is that the P3 card has allowed us to do much
         more aggressive electronic countermeasures than the P2 allowed us to
         do. The P2 had more limited capabilities in that regard. And so we have
         been aggressively running P3 electronic countermeasures continuously
         for the last year and will continue to do so up until the actual card
         change-out, whenever that occurs.

Karim Zia: Okay, and secondly, it looks like the suspended subscriber count
         has been declining. Can you explain what would be driving that? Have
         you changed the policy or accounting of suspended subscribers over the
         last few quarters?

Roxanne Austin: No, I think we actually believe it's just seasonality. There
         tends to be a seasonality that - geared around when people are leaving
         for the summer months and then coming back in the fall.

Karim Zia:  Okay, thanks a lot.

Roxanne Austin:  Thank you.








Operator:  We'll take our next question from Vijay Jayant with Morgan Stanley.

Vijay Jayant: Good afternoon. The question, Roxanne, really - if in this
         third quarter, you had 50,000 customers you proactively shut down, you
         would have probably down over 250,000 net adds. And now going into the
         fourth quarter, which is seasonally the strongest quarter, why isn't
         the guidance higher than 300,000?

Roxanne Austin: Well, I mean, I think we've looked at where we believe all of
         our retail partners will be in Q4, Vijay. And maybe I'm being a little
         conservative. But I think we want to be sure that we can achieve our
         goal. And that's something that certainly entered our mind as we set
         that guidance.

         The soft economy - which I think does - as I said in my remarks, I do
         believe the soft economy will continue. I think, based on the meetings
         that we've had with every one of our major distribution partners, I
         think they believe that the soft economy will continue. And while we
         had some optimism going into the fourth quarter, I certainly have
         probably been a little cautious there.

Vijay Jayant: A question for Mike - and then I'll stop. Is there still a goal
         for having free cash flow for the full Hughes enterprise in 2003? And
         if that's the case, when do you anticipate that?

Mike Gaines: That would still be a goal. I guess I'd just like to, on the
         definition of free cash flow, exclude from that any payment we would
         make to Boeing. As I said on the last call, that we - because of the
         status of the arbitration, that was pushed out into 2003. If you
         exclude that, though, our goal is still to be free cash flow breakeven
         in 2003.

Vijay Jayant:  Great, thanks.

Operator:  We'll take our next question from Robert Peck with Bear Stearns.








Shlomi Yedid: Yeah, Shlomi Yedid here for Robert Peck over at Bear. Just a
         couple quick questions. The first one is on insurance. It looks like
         DIRECTV 1, 2, and 3 - the insurance has expired. And I wanted to find
         out what you guys are looking to do with that. Thanks.

Mike Palkovic: Yeah, hi, it's Mike. Yeah, we've looked at that. And I think
         our position on that is going to be to recommend that we do not take
         in-orbit insurance on those three satellites. The way the market is
         today, the likelihood of getting any kind of insurance that would be
         meaningful, given the anomalies, would drive the premiums to an
         unacceptable rate. So we're probably going to recommend passing on
         in-orbit insurance.

Roxanne Austin: And we also have in-orbit backup now that I think fully
         protects us from a service disruption standpoint. So it purely would be
         protecting the balance sheet only in the form of this insurance. So
         based on, as Mike said, the cost of the insurance, the number of
         exclusions by the insurance agencies that we'd be working with, I think
         our position is that, since we do have service backup, there'd be no
         disruption to customers. We would likely decline insuring those
         satellites.

Shlomi Yedid: Thanks. And my second question is just regarding the West Coast
         ports being closed for a couple weeks. I wanted to know how that
         affects your 4Q net adds, if at all, given that some of the parts are
         probably coming from overseas. Thanks.

Roxanne Austin:  It shouldn't affect it.

Shlomi Yedid:  Okay, thank you very much.

Roxanne Austin:  Thank you.








Operator:  We'll go now to Tom Watts with S. G. Cowen.

Tom Watts:  Hello, everybody.

Roxanne Austin:  Hi.

Tom Watts: Just a - for Mike, just a little further clarification - you had
         mentioned on the credit facilities, you expected to be drawn by about 1
         billion at the end of this year. How much additional cash need would
         you need during `03 to get to free cash flow breakeven? And would that
         be fully funded with - if you put a $2 billion facility in place, even
         without the PanAmSat breakup - PanAmSat purchase of the - or the
         breakup fee?

Mike Gaines: Well, the number I used for the total amount of availability
         under the credit facility in the neighborhood of 2 billion - don't
         expect all of that. Some of that would be a revolver, obviously, hope
         not to draw on it. So I think the goal is - that would be more than
         enough to get to cash flow breakeven. Obviously, in the situation where
         we receive the PanAmSat or the breakup fee, we'd be able to pay all of
         that debt down.

Tom Watts:  Okay.

Jack Shaw:  And the breakup fee.

Mike Gaines: Yeah, I'm sorry - the breakup fee and the PanAmSat proceeds -
         more than enough to pay down the outstanding debt.

Tom Watts: Right. And then also - in the recent SPOT credit agreements, are
         there any provisions for upstreaming cash to General Motors at all? And
         then how much could be sent up to GM with that - assuming the merger -
         assuming PanAmSat stayed within Hughes.








Mike Gaines: The PanAmSat credit agreements generally don't allow much
         upstreaming of cash. So that would not be a source.

Tom Watts:  Okay.

Mike Gaines:  Of cash up to GM.

Tom Watts: Okay, and then also just a follow-up to Roxanne - on the NFL
         SUNDAY TICKET negotiations, when should we look for a decision on that
         or a finalization of those discussions?

Roxanne Austin: Well, I think, as I said, Tom, I think they're ongoing. And
         certainly we would like to begin our new year 2003 with an agreement in
         place. That's certainly our goal.

Tom Watts:  Okay, thanks very much.

Roxanne Austin:  Thanks.

Operator:  Our next question comes from William Kidd with Lehman Brothers.

William Kidd: Roxanne, I think my question might fall into your domain. I was
         wondering if you could give us some information as to where subscribers
         are coming from or is it being - how much of your 680,000 net adds are
         coming from local markets and what retailers or what retail channels
         are being the drivers? And to the extent that you can compare that to
         say nine months ago, a year ago, that'd be helpful.

Roxanne Austin: Well, I think this is your lucky day, William, because I
         actually have Steve Cox, who's our Executive Vice President of Sales
         and Distribution, here with me today.








William Kidd:  Excellent.

Roxanne Austin:  So why don't I ask Steve to comment.

Steve Cox: Sure. A couple of points - one, in terms of where the strong horse
         is and particularly compared to nine months ago, it isn't - what we
         have seen is a much broader array of contributors to the overall bottom
         line number. We are not nearly as dependent as we have been really
         historically on any one particular channel or any one particular
         retailer or distributor within that channel. So I think overall, it's
         coming from a broader set of contributors.

         I don't remember - was the first question - I don't -

William Kidd: I guess in terms of - what particular market segments - rural,
         urban, urban with local, those types of differences.

Steve Cox: They're consistent with what we saw in the second quarter and the
         third quarter. We saw significantly greater contribution out of the
         local channel markets, which is not surprising. We have been heavily
         promoting the $39 price point, which includes the local channels in
         those markets. And those continue to substantially outperform the
         non-local channel markets in terms of overall contribution.

         Within the actual distribution itself, we are seeing more contribution
         coming from some of our independent partners, including our independent
         partners, in particular, who focus on direct marketing tactics. We are
         frankly seeing some greater contributions from our own direct sales and
         direct marketing channel, as that message gets out there in terms of
         easy affordability and the recurring $39 price point.








William Kidd: Can you quantify the gross add mix that's coming from local
         markets, one? And two, is that - is it all concerned that your ability
         to serve more and more of the population with local signals is going to
         decline in the future? And therefore, do you think that you're going to
         see some gross adds deterioration as a result say - three, because you
         have less local coverage?

Steve Cox: On the first point, we saw close to 70% of our gross additions
         coming from the local channel markets in the third quarter, which again
         is very strong - continued strong performance relative to the non-local
         channel markets.

         On your second point, I guess I would make a couple of observations.
         One, we do think there is still a substantial amount of opportunity
         left in those local channel markets that we're serving today, where
         we've really only had nine months under our belt of being able to tell
         that complete cable replacement story, relative to the spot beam
         satellite that we launched and the $39 price point. So in those markets
         where we are today, we really feel there is still substantial
         additional growth opportunity that we'll be going after strongly in
         2003.

         The second piece of that is - we do have the ability, particularly when
         we launch a new satellite towards the later part of next year, to add
         additional markets to the mix beyond the 51 that we're serving today.
         So we think there's still a good local channel story we can tell in
         2003.

William Kidd: Great, and the last question - Mike, with respect to the Boeing
         purchase price adjustment, has anything changed there? Is the timing
         still late '03? Is the exposure still exactly the same? And has there
         been any progress in the case that you can mention?

Mike Gaines: I would say that pretty much our comments from a quarter ago
         are still applicable - that we expect a resolution to the arbitration
         sometime in mid to late '03 - really not a lot different since then.








William Kidd:  Great, thank you.

Operator: Our next question comes from Armand Musey with Salomon Smith Barney.

Armand Musey: Good afternoon, guys. I may have missed this. But could you walk
         us through a little bit of how you get to the reduction in cash needs
         from 1.2 to 1.4 billion down to 700 million. I saw the - obviously the
         asset sales - those total about 316 million and about 25 million less
         EBITDA. I'm trying to figure out where the gap comes from.

Mike Gaines: I think the rest of it really comes from improvements in
         capital expenditures and in working capital at all of our businesses.

Armand Musey: Any place that's significantly - because that's a big reduction
         in working capital and cap ex?

Mike Gaines: I think DIRECTV is doing a very good job on working capital.
         And I think you'd also see in Latin America, we're significantly
         ratcheting down capital expenditures.

Armand Musey: Okay. With respect to the selling of DIRECTV in the certificate
         program, do you expect to roll that - the sales plan out to other
         consumer electronic stores?

Steve Cox: This is Steve Cox again. We're looking at some tests. And we have
         done some tests in some of our other consumer electronics channels.
         There was certainly at the more immediate in both elegance and need
         from a Blockbuster and Wal-Mart standpoint - Blockbuster in terms of
         not being a place that wanted to dedicate the space on their floor to
         carrying inventory. So it fit a need there - and then Wal-Mart in terms
         of our desire not to put our goods into that environment. So both of
         those - we were specifically addressing an opportunity or a need.








         We are looking at it across actually a number of our different
         distributors in terms of potentially some tests and seeing how well it
         works and particularly as the type of tactic that could be used to
         attach a DIRECTV system, for example, to a digital television set. So
         there are some specific types of benefits we see in some of those
         channels, but nothing as aggressive as what we've done in those first
         two.

Armand Musey: Okay, the final question is - could you talk to us a little bit
         about how you project DIRECTV subscriber adds, how you sort of come up
         with the guidance numbers, kind of internal process that you go through
         to get that?

Roxanne Austin: Yeah, we actually spend a lot of time talking directly with all
         of our retail partners. We have folks on Steve's staff and Steve who
         spend time -- and I've spent time myself in some of our major
         distribution channels -- in talking with the folks that are actually
         seeing what's happening out on the floor and talking to them about
         their - what they're doing.

         From a bottoms-up basis, what are we doing in the marketplace in
         advertising? What are they doing in the marketplace for advertising?
         What kind of offers are available in the store? What special things
         will they be doing in trying to come up with a bottoms-up look at what
         we think, across all of our distribution, we're able to garner.

Armand Musey:  Okay, thank you very much.

Roxanne Austin: Thanks.

Operator: Our next question comes from Ty Carmichael with Credit Suisse First
         Boston.

Ty Carmichael: Thank you. I just wanted to further clarify the nature of
         the promotions that are going to drive the SAC higher, if you could
         just expand a little bit on that.








Mike Palkovic: Tye, it's Mike. Most of the SAC increase is the NFL offer,
         the acquisition offer, in the third quarter. You have to record that as
         you fulfill the three months of that offer. So that's going to hit us
         throughout the fourth quarter. That's the majority of the impact.

Roxanne Austin: Remember, we gave four months of premium programming, Tye, for
         free during the third quarter offer. And that gets amortized as the
         customers actually enjoy that benefit in the fourth quarter.

Ty Carmichael: So that discounted - the way you account for it - the way
         you account for the discounted programming is - you still record the
         costs that are going through...

Mike Palkovic: Yeah, the cost that's in our SAC is the out-of-pocket
         programming costs to fulfill that offer. The fact that the revenue is
         not there is a reduction in ARPU.

Ty Carmichael: Okay, so you don't flow that - you don't flow through - the
         programming costs through the income statement as part of programming?

Mike Palkovic: Oh, yeah - no, it is part of the income statement. We also
         reflect it in our SAC as an out-of-pocket expenditure.

Ty Carmichael: Okay. And then just - I would like to get an update on the
         relationships with Circuit City and Best Buy, in terms of - how - where
         are we in terms of renewing those agreements? And do you have
         expectations and a desire to maintain exclusivity through those
         channels, given the costs that you may have to incur to do so?

Steve Cox: Sure, Ty. This is Steve again. We actually have gone out through
         all of our distribution over the past six to nine months and
         renegotiated virtually every major agreement that we have in






         place. And a lot of that was just sort of updating the status of the
         things we do together to reflect the business today. A lot of that was
         tied to when we put annual commitments in place. Some of it was tied to
         when we did our repackaging. There were a number of factors that we
         wanted to clean up as part of that.

         In terms of the two, as you've specifically asked about, without going
         into detail about either of those relationships, I can tell you we are
         in contract with both of them. We have a very positive relationship
         with both of them. And we do see long term - we do see a continued
         relationship with them that's comparable to what we have today.

Ty Carmichael: Can you just provide any clarity on when the - is there any
         type of a set deadline by which you have to have renegotiated Circuit
         City and Best Buy?

Roxanne Austin:  We're done.

Steve Cox:  We've completed...

Ty Carmichael:  But for - is that for another year or six months or -

Steve Cox: Again, I'd be hesitant to get into that without their blessing, in
         terms of the term and the terms. But I can tell you that we do have
         longer-term agreements with them. And it is our strong belief that
         they're going to remain focused on our service going forward.

Ty Carmichael: Okay, and then just to follow up on the subscriber
         acquisition cost expectations for the fourth quarter, if you could -
         how about if - just to provide a better comparison to at least the
         EchoStar reports - that if you were to just include the programming
         costs flowing through your programming line, what would the
         pre-marketing cash flow margin look like in that scenario? And


         then what would your SAC look like? So basically if you just
         re-bucketed the programming costs as programming costs and then...

Mike Palkovic: The impact of SAC for that is about $20 in the quarter. The
         impact of pre-marketing cash flow would be...

Jack Shaw: Hang on, Ty. He's got his calculator going.

Mike Palkovic: About a point and a half.

Ty Carmichael: And so, given that it's just related specifically to the NFL
         SUNDAY TICKET, should we then expect your - the definition - DIRECTV's
         definition of SAC to go down in - I guess into the fourth quarter, into
         the first quarter of '03, holding all those equal?

Roxanne Austin: Yeah, except the only issue being again the rate of second and
         third sets. That's the only issue that will be driving our SAC higher.
         Everything else remains constant with the level that you saw prior to
         the fourth quarter amortization of the NFL.

Ty Carmichael: Okay, thank you.

Operator: Moving next to Matthew Harrigan with Janco Partners.

Matthew Harrigan: Most of my questions were answered. But mechanically, the big
         delta in the Other line - is that just attributable to the Thomson
         share gain?

         And then secondly, I don't think this is prohibited under the merger
         discussion. You have to look at doing something down in Latin America
         with Sky, really whether or not EchoStar happens.


         Can you talk a little bit about the technical and regulatory barriers
         to that, since it's in so many markets? Or would you just prefer to
         defer commenting on that?

Mike Gaines: This is Mike. Let me start with your question about the other line.

Matthew Harrigan: Right.

Mike Gaines: In 2002, there was a gain from the sale of the Thomson shares of
         158 million, which pretty much gives you kind of the bulk of the
         change. In the prior year, we actually had a write-off on our
         SkyPerfect shares also, causing the swing.

Matthew Harrigan: Okay.

Jack Shaw: Would you restate your second question, please? This is Jack.

Matthew Harrigan: Well, irrespective of whether EchoStar happens or not, you
         could well end up merging your land services with Sky. Can you talk
         about what the engineering hurdles are to that, in terms of the boxes
         and the satellites and also what the regulatory approvals would be of,
         I guess, (Comitel) down in Mexico and how complicated a process that
         would be.

Jack Shaw: I think we've probably got to defer from that. I apologize to you. It
         is a convoluted process, though, I can tell you that. Eddy, have you
         got anything?

Eddy Hartenstein: Yeah, we have looked at that, Matthew. You are correct, it is
         complicated. There are many parties involved. We are looking at that
         situation in both an operational sense and where we would go in the
         future. We'll have more on that hopefully as - in the not too distant
         future.

Matthew Harrigan: Thank you.




Operator: Our next question comes from Ray Schleinkofer with Thomas Weisel
         Partners.

Ray Schleinkofer: Yes, during the second quarter, there was some confusion at
         Blockbuster as you started to implement the certificate program. Could
         you give us a little bit of a sense of sort of how sales have been
         going in that channel, now that that program's been in place for a
         little while?

Steve Cox: Sure, Ray, yeah, we implemented that program at the end of April and
         got the transition essentially complete by the end of April, early May.
         And there was frankly a bit of a slower uptick than either one of us
         had hoped, relative to getting that program actually starting to
         deliver customers for us.

         I would say, without going into specific numbers, Blockbuster has been
         - was a steady performer for us in the third quarter. And our
         expectation is that it will continue to be in the fourth quarter.

         They - we've spent - as Roxanne said earlier, we've met with all of our
         key distribution. And we met with senior management at Blockbuster
         within the past month or six weeks. And by every indication, they
         remain committed to the partnership.

         So while it certainly isn't delivering the extremely strong numbers
         we've seen at some points in the past, it is delivering steady numbers.
         We've seen them get behind the NFL offer and some of the activities
         we're planning for the fourth quarter.

Ray Schleinkofer: That's great. And then just - you mentioned multiple set-top
         boxes. Do you have a percentage there for the number of homes that are
         taking multiple set tops?



Mike Palkovic: Right now - this is Mike - right now, we average about 1.5 across
         the entire base with new customers coming in. That number has been
         trending up to about 1.6, 1.7 for new customers coming in.

Ray Schleinkofer: That's great. Thanks, guys.

Roxanne Austin: Thank you.

Operator: Our next question comes from Blaine Marder with L.R.L. Capital. Mr.
         Marder.

Blaine Marder: My question's been answered. Thank you.

Operator: Okay. We'll go to Rob Kaimowitz with Bull Path Capital. Mr. Kaimowitz.

Rob Kaimowitz: Yes. ((Inaudible)).

Operator: Your line is open, sir.

Rob Kaimowitz: Yes, hi, thank you.  Good afternoon.

Mike Gaines: Hi.

Roxanne Austin: Hi, Rob.

Rob Kaimowitz: Regarding the churn in the quarter - and most of that was related
         to folks that were partial pirates, is what you were - I was trying to
         understand it a little better.

Roxanne Austin: Well, the thing, Rob, these were paying customers.



Rob Kaimowitz: Right.

Roxanne Austin: Okay, so they were customers who had an account with us. And
         they were taking basic services. And...

Rob Kaimowitz: And they were stealing the premium services.

Roxanne Austin: That's our - that is what we believe, based on the fact that
         once we started to run the onscreen displays and actually once we
         started shutting down - we started shutting down sort of - in a 100
         series at a time.

Rob Kaimowitz: Right.

Roxanne Austin: The premium services - that we saw this huge spike in churn. It
         started in July, accelerated into August and into September. And based
         on the fact - we started doing analysis on these customers in August,
         we found that this group had a disproportionate level of no phone line
         connected to the box, which once again, is another signal - the fact
         that they had no intention of paying for premium services.

Rob Kaimowitz: Understood. And where might they have gone, if not - if they're
         turned off altogether, now they either have to pay their cable or pick
         up somebody else or get another pirate to get you totally for free.

Roxanne Austin: Well, I'd only point you to their Web - their own chat rooms.
         They talk about moving on to other services and that's an array.

Rob Kaimowitz: Understood, okay, thank you.



Operator: Our next question comes from Victor Hawley with Reed, Conner and
         Birdwell.

Victor Hawley: Regarding the 50,000 loss, I take it that - I mean, obviously you
         were doing this program to get rid of pirates. Were you expecting a
         smaller number than the 50,000? Or were you not expecting that there'd
         be any paying customers that would be pirating - that all pirates would
         be non-paying?

Roxanne Austin: Well, understand, Victor, that we had no way of ever estimating
         this number. And remember, put it in context - the 2.3 million cards -
         that over 95% were successfully swapped out at the P4. So this was a
         minor portion of this population. So we had no way of estimating it -
         is really the answer.

         We obviously had suspicions that there were people who were partial
         pirates, based on our monitoring of pirate Web sites, et cetera. But we
         had no way of estimating how many people that might have been.

Victor Hawley: Great, well, I guess what I'm trying to get at is - in your
         initial guidance for the quarter, I'm assuming - regardless, that you
         thought there would be some of these people. And I'm trying to figure
         out how much of the 50,000 was already in your original guidance? And
         therefore, how much was just soft economy, slow sales, up the
         shortfall?

Roxanne Austin: We really didn't assume there would be any significance to the
         number of "partial pirates" in this number.

Victor Hawley: So it was of - kind of out of left field.

Roxanne Austin: Well, understand...




Victor Hawley:  In terms of the magnitude.

Roxanne Austin: That's exactly right. I mean, remember, we started the card
         change, Victor, back - way back in late March, early April.

Victor Hawley: Right.

Roxanne Austin: And it was going very successfully. And we saw no unusual
         changes in churn. You saw this huge dramatic increase in July, August,
         when we started physically affecting their signal. And once we started
         physically affecting their signal and physically affecting their
         services, that's when we saw the large spike.

Victor Hawley: And so, given that you have about 3-1/2 times as many P3
         customers -- and you mentioned earlier that you think that ongoing
         countermeasures are probably helping -- you're not expecting 3-1/2
         times as many as this to be hit when you swap over the P3's.

Roxanne Austin: Well, as I said, I really have no way of estimating that,
         although as I said, we do believe that the electronic countermeasures
         and other activities that we've been doing with the P3 cards should
         have a difference between the two.

Victor Hawley: All right, thanks.

Roxanne Austin: Thanks.

Operator: We'll go next to Sam Hillers with Highfields Capital.



Jon Jacobson: Hi. It's actually Jon Jacobson at Highfields. How do you think
         about continuing to pour more money into DSL? And at what point do you
         say, "Uncle" there? And also in Latin America - I mean, is this process
         just going to perpetuate itself, as shareholders' money continues to go
         down the tubes?

Jack Shaw: This is Jack. Both Latin America, and as I said in my opening
         comments, and Telocity broadband are areas where we've - we're
         expending a lot of time and money and looking at the options that we
         have. We're - in the case of Latin America, it's quite a complicated
         formula because of all of the partners, because of all of the countries
         and because of different economies.

         We understand the urgency of taking some action. And we will share that
         action with you as soon as we have come to a final conclusion.

Jon Jacobson: Okay, just so you understand, I mean, it seems like quarter after
         quarter, I mean, given the operating environment, you continue to make
         great strides at DIRECTV. And those two areas continue to get worse.
         And the shareholders continue to vote with their feet. And a lot of
         value's been destroyed. And it doesn't make any sense.

Jack Shaw: I understand, Jon. Thank you.

Operator: We have a follow up question from Marc Nabi with Merrill Lynch.

Marc Nabi: Just one thing related to cap ex - is - have you shown any
         significant reductions on cap ex? I know you showed it on the side of
         PanAmSat. What about with respect to DIRECTV? Mike, you had said
         initially some of the savings on the cash outlay side was through
         working capital. Is there anything significant on the cap ex side,
         either through A, HNS and SPACEWAY, or B, just DIRECTV U.S.?



         And also, I think you also did a lot of - not a lot, but on a relative
         basis, a decent amount of capital expenditures at Galaxy Latin America
         - I'm sorry DIRECTV Latin America. And maybe now that what's happening
         there, you'll just significantly reduce that number, as well.

Mike Gaines: Let me start with the DIRECTV Latin America. And that's what I was
         referring to earlier. We have significantly reduced cap ex in Latin
         America in terms of retrieving old boxes and really not buying new
         ones. As you know, there's a lease model there. So that's been a
         significant factor in cap ex in Latin America.

Marc Nabi: Mike, could you quantify that? How large of a number - assuming...

Mike Gaines: I don't have one at my fingertips. We could certainly get back to
         - Kevin, do you happen to know what...

Kevin McGrath: Yes, I do. Last year, our capital expenditures, which is box cap
         ex, installation and non-box cap ex - was $260 million. Our forecast
         for 2002 is $77 million - so obviously a huge difference.

Roxanne Austin: And as it relates to DIRECTV in the U.S., we've reduced our
         expectations for capital expenditures. We had originally estimated that
         we'd be somewhere in the $550 million range. We're now projecting those
         to be $400 million. And those are primarily driven by satellite IT
         investments and what we've done with the card change.

Jim Lucchese: Hey, Mark.

Marc Nabi: Yeah.

Jim Lucchese: This is Jim Lucchese.



Marc Nabi:  Hey, Jim, how are you?

Jim Lucchese: All right. Also on cap ex, on the SPACEWAY program, we did lower
         our cap ex this year by 75 million. But it's basically rescheduled for
         payment at the 2003. But it did have a $75 million cash improvement in
         2002.

Marc Nabi: Okay. And actually just one other question for Roxanne. Roxanne, I
         just want to get a better sense of the personal video recorder - see
         what kind of take rates, if any, have they gotten any better? Are they
         consistent to where they were six months ago? I'm just trying to see if
         that's being a bigger device than what we were all anticipating, or
         not, quite frankly.

Roxanne Austin: Well, we're beginning to roll out the new DIRECTV ("Provo") box,
         which is a combination DIRECTV/TiVo box that is being built by Hughes
         Network Systems. And that could be rolling out in the fourth quarter.

         I really believe that you will not see a significant acceleration of
         PVR until we get into 2003. We will be heavily looking at promoting
         that, not only to new customers, but also into our existing subscriber
         base. We've got a lot more quantities of that new box.

         And remember, we've changed our relationship with TiVo. So we're able
         to actually package, promote, and deal with that product in a much more
         effective basis for DIRECTV. So I believe you will see us focusing a
         lot on that as we enter 2003.

Marc Nabi: Okay, well, thank you very much.

Roxanne Austin: Thanks.



Jack Shaw: Thanks, Marc.

Operator: We have a follow-up from Vijay Jayant with Morgan Stanley.

Vijay Jayant: Hi, I think this is more for Mike Gaines. I just want to
         understand - what's the tax basis for GM in Hughes today? And also
         what's Hughes' tax basis in PanAmSat?

Mike Gaines: With respect to GM's tax basis in Hughes, I think we'd have to get
         back to you. I don't have that number at our fingertips. And with
         respect to our tax basis in PanAmSat, it's dipping to 2 to $2.5 million
         range.

Vijay Jayant: Great, thank you.

Operator: We'll take a follow-up from Ty Carmichael with Credit Suisse First
         Boston.

Tye Carmichael: Yeah, thank you. I did want to just call upon the TiVo
         relationship. Given that - my understanding is you're going to be
         assuming full control of those customers. Are you going to continue to
         collect the $10 in PVR revenues that TiVo charges those customers
         today? And if so, does that account for some uptick in the anticipated
         fourth quarter rise in ARPU?

Roxanne Austin: No, there's nothing significant there contributing from that.
         What we're actually going to do for our premium customers, our DIRECTV
         premier customers - they'll be receiving it for free. And the customers
         that are other than premier will be at about half the rate TiVo was
         charging - roughly 4.99.

Ty Carmichael: Those customers will see that take effect in the fourth quarter.

Roxanne Austin: In the fourth quarter - it just took effect in October -
         October 1.



Ty Carmichael: Was the reason for that - was it just - because it seems like
         they were willing to pay that 10 bucks. Was there a reason to lower
         that and eliminate the fee? I'm just trying to - I'd like to understand
         the rationale behind that.

Steve Cox: Well, we looked at PVR in general. In particular, the high-end
         customers - I think you'd understand in terms of trying to reward and
         provide additional value to our best customers, which is the free-price
         point for the premier customers.

         I think when we looked at what was happening competitively with PVR, as
         well as just generally having a uniform price point out across that
         service that we could promote aggressively, we didn't see any reason to
         punish our existing customers and give them a worse deal than the new
         customers coming in the door.

Ty Carmichael: Okay.

Roxanne Austin: That will be the price point for new customers. As we think
         about it, I said in 2003, trying to accelerate PVR into the marketplace
         - that is the price point that we thought would be most competitive and
         be able to generate the most from customers overall.

Ty Carmichael: Okay, and then lastly, I believe you announced an agreement
         earlier in the year with Starz for an SVOD service. And I was hoping
         you could just update us on where we stand with regard to the rollout
         of that product and if there's any initial feedback from how consumers
         are using it.

Steve Cox: It's probably a little bit early. We have done some - we're trying to
         use Starz. And Starz has been a good partner in terms of testing some
         SVOD-type applications from a satellite-based delivery platform. But we
         really don't have enough data yet to tell you anything meaningful.




Ty Carmichael: When did that roll out?

Steve Cox: Boy, it was during this summer, but I couldn't...

Roxanne Austin: Yeah, I don't remember right off the top of my head. I'm sorry.

Steve Cox: June, July timeframe.

Roxanne Austin: It was that general timeframe - June, July.

Ty Carmichael: Just - is there any type of feedback happening? Are customers
         using it? Or are you able to generate - do you think you'll be able to
         generate some incremental revenues from that service? Is that something
         - 2003 that you're going to put a lot of emphasis behind?

Roxanne Austin: I think it's a little early, Ty. We're going to try to get
         through our research with - both them and with us. And then we'll have
         a better answer probably as we get through this quarter.

Ty Carmichael: Okay, thank you.

Operator: Our next question comes from Americo Cascella with Ares Management.

Americo Cascella: Thanks. It's already been answered.

Operator: We'll go now to Adam Comora with Entrust Capital.

Adam Comora: Hi, thanks. Can you just walk us through the major pieces - how
         you get the free cash flow breakeven in 2003?



Mike Gaines: Are you referring to - compared with this year or just...

Adam Comora: No, I think there was an earlier question that said - are you guys
         still forecasting free cash flow breakeven for consolidated Hughes? And
         I just wanted to get the major components of that.

Mike Gaines: Sure, let me try at a high level. I don't think we're ready to give
         2003 cash flow by business unit. But in general, DIRECTV will continue
         to improve significantly. I think with PanAmSat in the fold, it will
         also continue to be a solid provider of cash flow. We expect to reduce
         the cash outflows in Latin America and at DSL. So those combined
         factors should get us there.

Adam Comora: Okay, so you can't really give us ballpark for guidance or for cap
         ex, EBITDA, other...

Mike Gaines: Yeah, we have not gotten to 2003 guidance yet. So it'd be premature
         to do that. I'm sorry.

Adam Comora: Okay.

Operator: Anything further, Mr. Comora?

Adam Comora: Nope.

Operator: We'll go next to Jay Aston with Neuberger Berman.

Jay Aston: Just a question about ARPUs - in a world, over the next few years,
         where multi-channel video product from digital cable is really
         comparable to the multi-channel video product offered over the DBS, how
         does - what's your thoughts on ARPU going forward? And how do we
         continue to take or increase prices over the next couple years?




Roxanne Austin: You know, I think as we look at it, as I said, we're looking at
         much more aggressively rolling out our PVR product and trying to get
         actual traction there in terms of numbers of customers actually taking
         that product as we look into 2003 and beyond.

         So I think we do see some opportunities for incremental revenues there
         coming from that particular product, as it gets much more wide
         acceptance within not only big new customers, but existing base,
         because as you remember, we've got 10.9 million overall customers in
         DIRECTV. And getting that PVR much more penetrated within that existing
         base I think should generate some incremental opportunities for us.

Jay Aston: Using the $62 ARPU number you're speaking of at the end of the year,
         where do you project that should be say three years out?

Roxanne Austin: It's hard to say. And as Mike said, it's a little early to be
         giving guidance beyond 2002, since I've been told I can't do that or
         somebody's going to shoot me here. But I think we do see opportunities
         to improve as we go forward, primarily being driven by these types of
         opportunities.

         And I think you're seeing that our strategy of really focusing on
         quality customers is paying off in the ARPU. I mean, it's easy to bring
         in a customer in the door that's paying you less than $30 a month. But
         it's hard to keep them. And we want to keep them. And we want them to
         pay us a lot of money. So that's our strategy. And I think it's working
         pretty well.

Jay Aston: Okay, thank you.

Operator: Our next question comes from Jim Hoffman with PSAN.



Jim Hoffman: Yes, good afternoon. Jim Hoffman here. I'm just wondering - with
         respect to DIRECTV Latin America, can you please walk us through the
         hypothetical alternatives, without necessarily telling us what you're
         committed to?

Jack Shaw: Jim, this is Jack. That's really hard for me to do right now. I mean,
         obviously, they would go the whole gamut that people have talked about
         - about any company that is in such a severe business environment.

         And the one thing that I can tell you for sure is that we will not
         continue as we are doing now. But past that, I've just got to ask you
         for a little more patience. And I promise we'll come to you with what
         we believe we're going to do just as quickly as I can.

Roxanne Austin: Let me just clarify on the last question. I want to make sure
         that no one's confused. Our full-year ARPU guidance is $59. We tend to
         be seasonally higher in our fourth quarter. And so I don't want anyone
         to be confused that we'll be entering 2003 at the $62 level from the
         get-go - so just to clarify that point. Fifty-nine dollars is our
         full-year ARPU guidance.

Operator: Anything further, Mr. Hoffman?

Jim Hoffman: No, thank you.

Operator: Our next question comes from Harry Demott with Gothic Capital
         Management.

Harry Demott: A couple of just quick questions - more about just the services.
         Can you talk a little bit about just the - how compressed your signals
         are currently on the satellites? And what are the opportunities to do
         more HDTV over time?

Jack Shaw: I think Eddy Hartenstein is the appropriate person for that.




Eddy Hartenstein: We don't specifically get into talking about compression
         rates. We are doing high definition right now. We are also on our
         standard channels, always looking to improve, but at the same time,
         maintain the quality of our signals.

         Also, not all signals are the same. The program content varies -
         anything from a very easy to compress, a talking head, to very
         difficult - a sports program. So we are looking at, on a blended
         average across all our CONUS signals, about 10 or so video channels per
         transponder. And improvements - future - we think might be very small
         on that going forward. We've really begun to push the limits of quality
         here with going any more.

         With respect to high definition, we're looking to be able to get to two
         high definition signals per transponder - and, in fact, are there right
         now.

Harry Demott: Do you mean you have the ability to do it, as opposed to your
         offering it?

Eddy Hartenstein: No, we are actually doing it. We have three high definition
         channels up and operating right now, with plans for a couple more in
         the future. Again, that all depends on making certain that we get our
         7S spot beam satellite launched next year, which will need a
         reshuffling of our spectrum.

Jack Shaw: Those three high definition channels, Eddy, I think are Channel 199,
         509, and 543, if I'm not mistaken.

Eddy Hartenstein: That's correct. That'd be High Def Net, HBO, and Showtime
         high def, respectively.

Harry Demott: Right, okay. And then the other - actually I think you may have
         answered my other question. So okay, I appreciate it. Thank you.



Operator: This does conclude today's question and answer session. Mr. Rubin, I'd
         like to turn the conference back over to you for any additional or
         closing remarks.

Jon Rubin: Thank you all for joining us today. If you have any further
         questions, please don't hesitate calling me or our Investor Relations
         Department at Hughes or PanAmSat. Thank you for your attention. Have a
         great afternoon.

Operator: This does conclude today's conference call. You may disconnect at this
         time.