DIRECTV 2002 Annual Report Download - page 58

HUGHES ELECTRONICS CORPORATION
payment related to the terminated merger agreement with EchoStar and $452.6 million of lower cash
requirements for the change in operating assets and liabilities. The change in 2001 compared to 2000
resulted from $506.9 million of higher cash requirements for the change in operating assets and
liabilities and $393.5 million of lower income from continuing operations excluding non-cash
adjustments, such as deferred income taxes and other, depreciation and amortization, net gain from
sale of investments and net loss on write-down of investments.
Cash provided by (used in) investing activities was $(887.2) million in 2002 compared to
$(1,741.2) million in 2001 and $2,210.8 million in 2000. The change from 2002 to 2001 was primarily
from reduced expenditures for satellites and property, reduced investments in companies, increased
proceeds from the sale of investments and insurance claims, partially offset by a $99.8 million
purchase of short-term investments by PanAmSat in 2002. The change from 2001 to 2000 was
primarily from decreased proceeds from the sale of investments, which in 2000 included the proceeds
from the sale of the Satellite Businesses to Boeing, and an increase in satellites and investment in
companies in 2001, offset by lower expenditures for property and higher proceeds from insurance
claims in 2001.
Cash provided by (used in) financing activities was $189.6 million in 2002 compared to
$742.9 million in 2001 and $(849.6) million in 2000. Financing activities in 2002 includes net
borrowings of $470.5 million, partially offset by the $134.2 million final payment of the Raytheon
settlement, the payment of preferred stock dividends to GM and debt issuance costs of $85.4 million.
Financing activities in 2001 includes an increase in borrowings of $1,314.8 million, partially offset by
the $500 million partial payment of the Raytheon settlement and the payment of preferred stock
dividends to GM. Financing activities in 2000 reflect the repayment of debt and payment of preferred
stock dividends to GM.
Cash used in discontinued operations was $1.2 billion in 2000, which was primarily due to
$1.1 billion of taxes associated with the sale of the Satellite Businesses.
Property and Satellites. Property, net of accumulated depreciation, decreased $180.4 million to
$2,017.4 million in 2002 from $2,197.8 million in 2001. The decrease in property resulted primarily from
depreciation partially offset by capital expenditures of $566.4 million. The decrease in capital
expenditures for property of $233.0 million in 2002 compared to 2001 was primarily due to a decrease
in the purchase of DIRECTV receiving equipment in Latin America due to the economic environment
and reduction in subscribers as well as decreased capital expenditures for property at PanAmSat.
Satellites, net of accumulated depreciation, increased $116.0 million to $4,922.6 million in 2002 from
$4,806.6 million in 2001. The increase in satellites resulted primarily from capital expenditures of
$731.7 million for the construction of satellites, offset by depreciation of $375.7 million and the write-off
of PAS-7 during the first quarter of 2002. The decrease in capital expenditures for satellites of
$212.4 million in 2002 compared to 2001 was primarily due to decreased spending on SPACEWAY as
the platform nears completion and DIRECTV 4S, which was launched in the fourth quarter of 2001.
Total capital expenditures decreased to $1,298.1 million in 2002 from $1,743.5 million in 2001.
Notes Payable and Credit Facilities. Notes Payable. In February 2002, PanAmSat completed an
$800 million private placement notes offering. Such notes were exchanged for registered notes in
November 2002. These unsecured notes bear interest at an annual rate of 8.5%, payable semi-
annually and mature in 2012.
In January 2002, PanAmSat repaid in full the $46.5 million outstanding balance of variable rate
notes assumed in 1999 in connection with the early buy-out of a satellite sale-leaseback.
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