DIRECTV 2002 Annual Report Download - page 47

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HUGHES ELECTRONICS CORPORATION
Satellite Fleet
Hughes has a fleet of 28 satellites, seven owned by DIRECTV and 21 owned and operated by
PanAmSat. Eight additional satellites are currently under construction, including one for DIRECTV, four
for PanAmSat and three for the SPACEWAY®platform under development by HNS.
In the fourth quarter of 2001, DIRECTV successfully launched and commenced service from the
DIRECTV 4S high-power spot-beam satellite. In the second quarter of 2002, DIRECTV successfully
launched DIRECTV 5, which is currently providing services from the 119 degrees west longitude orbital
location previously provided by DIRECTV 6, which is now serving as a backup at that location. The
DIRECTV 4S and DIRECTV 5 satellites enabled DIRECTV to increase its capacity to approximately
800 channels, including the capacity to transmit more than 530 local channels.
DIRECTV U.S. currently has one satellite under construction, the DIRECTV 7S satellite, a high-
powered spot-beam, which is expected to be launched in the fourth quarter of 2003. DIRECTV 7S will
be positioned at 119 degrees west longitude and will provide additional capacity, enabling DIRECTV to
further expand its services, including local channel coverage.
PanAmSat completed a three-year, $2.0 billion, seven-satellite fleet modernization program in
2002. The program added approximately 400 36-megahertz equivalent transponders, bringing the total
number of transponders to 913. PanAmSat’s satellite fleet was expanded in 2000 with the
commencement of service on Galaxy XR, Galaxy XI, Galaxy IVR and PAS-9. Also during 2000,
PanAmSat completed the planned retirement of its SBS-4 and SBS-5 satellites. In 2001, PanAmSat
commenced service on PAS-1R and PAS-10. In 2002, PanAmSat commenced service on its Galaxy
IIIC satellite. Galaxy IIIC supports direct-to-home services for DLA as well as video and broadcast
services for other customers.
PanAmSat is currently constructing and expects to launch up to four satellites by 2006. PanAmSat
expects to launch Galaxy XII in the second quarter of 2003 and expects to launch the Galaxy XIII/
Horizons-1 satellite in mid-2003. PanAmSat is currently scheduled to launch a third satellite to replace
Galaxy V prior to the end of its useful life in 2005. The fourth satellite is scheduled to replace
Galaxy 1R prior to the end of its useful life in 2006.
HNS is currently developing the SPACEWAY platform for DIRECWAY’s next generation of
services. SPACEWAY will eventually include three satellites, which are currently under construction.
SPACEWAY is expected to begin its North American service in 2004.
Results of Operations
2002 compared to 2001
Overall
Revenues. Revenues increased 8.1% to $8,934.9 million in 2002 compared with $8,264.0 million
in 2001. The increase in revenues resulted primarily from $886.9 million of higher revenues in the
Direct-To-Home Broadcast segment from the addition of new DIRECTV subscribers in the United
States and higher ARPU. The increased revenues from the Direct-To-Home Broadcast segment were
partially offset by a decrease in revenues of $155.9 million in the Network Systems segment and $57.8
million at the Satellite Services segment. The decrease in revenues from the Network Systems
segment resulted from the substantial completion in late 2001 of two significant customer contracts for
the sale of phones and systems for mobile satellite programs. The decrease in revenues from the
Satellite Services segment was primarily due to a sales-type lease transaction executed during 2001
for which there was no comparable transaction in 2002.
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