DIRECTV 2002 Annual Report Download - page 115

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HUGHES ELECTRONICS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (continued)
and its business segments, to allocate resources and capital to its business segments and as a
measure of performance for incentive compensation purposes. Hughes believes EBITDA is a
measure of performance used by some investors, equity analysts and others to make informed
investment decisions. EBITDA is used as an analytical indicator of income generated to service
debt and fund capital expenditures. In addition, multiples of current or projected EBITDA are used
to estimate current or prospective enterprise value. Hughes management believes that EBITDA is
a common measure used to compare Hughes’ operating performance and enterprise value to
other communications, entertainment and media service providers. EBITDA does not give effect to
cash used for debt service requirements consisting of interest payments of $398.0 million,
$268.4 million and $312.9 million for the years ended December 31, 2002, 2001 and 2000,
respectively. As a result, EBITDA does not reflect funds available for investment in the business of
Hughes, dividends or other discretionary uses. EBITDA as presented herein may not be
comparable to similarly titled measures reported by other companies.
The following represents a reconciliation of EBITDA to reported net income (loss) on the
Consolidated Statements of Operations and Available Separate Consolidated Net Income (Loss):
Years Ended December 31,
2002 2001 2000
(Dollars in Millions)
EBITDA .................................................. $ 668.0 $ 389.9 $ 594.0
Depreciationandamortization................................ (1,067.1) (1,147.7) (948.1)
Operatingloss ............................................ (399.1) (757.8) (354.1)
Interest income ............................................ 24.5 56.7 49.3
Interest expense ........................................... (336.2) (195.9) (218.2)
Other,net ................................................ 425.5 (92.7) (292.6)
Loss from continuing operations before income taxes, minority
interest and cumulative effect of accounting changes ........... (285.3) (989.7) (815.6)
Income tax benefit ......................................... 94.4 325.6 406.1
Minority interests in net (earnings) losses of subsidiaries .......... (21.6) 49.9 54.1
Loss from continuing operations before cumulative effect of
accounting changes ...................................... (212.5) (614.2) (355.4)
Income from discontinued operations, net of taxes ............... — — 36.1
Gain on sale of discontinued operations, net of taxes ............. — — 1,132.3
Cumulative effect of accounting changes, net of taxes ............ (681.3) (7.4) —
Net income (loss) .......................................... $ (893.8) $ (621.6) $ 813.0
105