DIRECTV 2002 Annual Report Download - page 108

HUGHES ELECTRONICS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)
The following table sets forth comparative information regarding GM Class H common stock and
the GM Class H dividend base for the years ended December 31, 2002, 2001 and 2000:
2002 2001 2000
(Shares in Millions)
GM Class H Common Stock Outstanding
Shares at January 1 ............................................ 877.5 875.3 411.3
Shares issued for mandatory redemption of GM Series H preference
stock....................................................... 80.1 — —
Shares issued related to GM exchange offer ........................ — — 276.0
Shares issued related to employee benefit plans ..................... — — 181.5
Shares issued for stock options exercised and other .................. 0.7 2.2 6.5
Shares at December 31 ......................................... 958.3 877.5 875.3
Weighted average number of shares of GM Class H common stock
outstanding (Numerator) ....................................... 919.5 876.3 681.2
GM Class H Dividend Base
GM Class H dividend base at January 1 ............................ 1,301.1 1,298.9 1,292.4
Increase for mandatory redemption of GM Series H preference stock .... 80.1 — —
Increase for stock options exercised and other ...................... 0.7 2.2 6.5
GM Class H dividend base at December 31 ......................... 1,381.9 1,301.1 1,298.9
Weighted average GM Class H dividend base (Denominator) .......... 1,343.1 1,300.0 1,297.0
Note 17: Hughes Series A Preferred Stock and Hughes Series B Convertible Preferred Stock
On June 24, 1999, as part of a strategic alliance with Hughes, America Online, Inc. (“AOL”)
invested $1.5 billion in shares of GM Series H preference stock. The preferred stock accrued quarterly
dividends at a rate of 6.25% per year. GM immediately invested the $1.5 billion received from AOL in
shares of Hughes Series A Preferred Stock designed to correspond to the financial terms of the GM
Series H preference stock. Dividends on the Hughes Series A Preferred Stock were payable to GM
quarterly at an annual rate of 6.25%. The underwriting discount on the Hughes Series A Preferred
Stock was amortized over three years.
On June 24, 2002, the GM Series H preference stock, pursuant to its terms, was mandatorily
converted to about 80.1 million shares of GM Class H common stock. As a result, the number of
shares in the Class H dividend base and the number of shares of GM Class H common stock
outstanding were each increased by the number of shares issued. Also on June 24, 2002, in
connection with the automatic conversion of the GM Series H preference stock held by AOL, GM
contributed the $1.5 billion of Hughes Series A Preferred Stock back to Hughes, which Hughes
cancelled and recorded as a contribution to “Capital stock and additional paid-in capital.” In exchange
for the Hughes Series A Preferred Stock, Hughes issued $914.1 million of Hughes Series B
Convertible Preferred Stock to GM, which was recorded as a reduction to “Capital stock and additional
paid-in capital.” The Hughes Series B Convertible Preferred Stock, which does not accrue dividends,
may be converted to Hughes Class B common stock at the option of GM anytime after June 24, 2003
(“Optional Conversion”).
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