DIRECTV 2002 Annual Report Download - page 121

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HUGHES ELECTRONICS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (concluded)
manufacturing businesses to Boeing, Hughes retained liability for certain possible fines and penalties
and certain financial consequences of debarment or suspension that could be imposed by the State
Department in connection with this matter. Hughes and BSS have now settled this matter through
execution of a Consent Agreement with the State Department and a separate agreement among
Hughes, BSS and Boeing. The Consent Agreement requires the payment of a fine in the aggregate
amount of $20 million ($5 million of which is to be reimbursed to Hughes by BSS) to be paid in 8 equal
installments over 7 years, which has been provided for in Hughes’ consolidated financial statements as
of December 31, 2002, a commitment by Hughes to spend $2 million over 5 years on internal export
compliance, and various improvements in Hughes’ export program. The State Department has agreed
that there will be no suspension or debarment for either company as part of the settlement. This
resolves all outstanding government action related to the China matters and all claims among Boeing,
BSS and Hughes related to these matters.
***
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