Hughes Electronics Corporation, the world's leading provider of digital television entertainment, broadband services, satellite-based private business networks, and global video and data broadcasting, today reported fourth quarter 2001 revenues increased 10.8% to $2,280.6 million, compared with $2,059.0 million in the fourth quarter of 2000.
EBITDA(1) for the quarter was $118.2 million and EBITDA margin(1) was 5.2%, compared with the fourth quarter of 2000 EBITDA of $153.8 million and EBITDA margin of 7.5%.
"I am pleased to report that in the fourth quarter we met or exceeded all of our key financial commitments while making excellent progress toward our goal of improving operational performance," said Jack A. Shaw, Hughes' president and chief executive officer.
"Our DirecTV U.S. business substantially exceeded expectations by adding 405,000 net new subscribers in the quarter. Additionally, we had solid revenue growth in the quarter driven by continued strong demand for DirecTV services in both the United States and Latin America, as well as increased sales of DirecTV receivers and Direcway systems at Hughes Network Systems."
Shaw continued, "EBITDA increased in each of our key businesses driven by operational improvements including aggressive cost reductions, a reduced workforce and lower customer churn at our DirecTV businesses.
"These improvements were partially offset by the losses from our new DirecTV DSL(TM) service, which were not included in our 2000 results, and a $29 million charge at DirecTV Latin America due to the devaluation of the Argentinean peso."
Also impacting the EBITDA change were one-time favorable adjustments in the fourth quarter of 2000 for corporate expenditures primarily related to pension and other employee costs.
Hughes had a fourth quarter 2001 net loss of $132.6 million compared to net income of $1,057.8 million in the same period of 2000. The change was primarily due to the gain on the sale of Hughes' satellite manufacturing businesses in the fourth quarter of 2000, increased net interest expense, and the lower EBITDA.
These reductions were partially offset by a $42 million tax benefit resulting from losses previously booked on Hughes' investment in Motient Corporation.
FULL-YEAR Financial review
For 2001, revenues increased 13.4% to $8,262.0 million, compared to $7,287.6 million for the same period in 2000. This increase was primarily due to continued subscriber growth at DirecTV in the United States and Latin America, partially offset by fewer sales and sales-type leases at PanAmSat and lower shipments of DirecTV receiver systems at Hughes Network Systems.
EBITDA for 2001 was $389.9 million and EBITDA margin was 4.7%, compared to EBITDA of $594.0 million and EBITDA margin of 8.2% in 2000. The decrease in EBITDA and EBITDA margin was primarily attributable to the higher outright sales and sales-type leases of satellite transponders at PanAmSat in 2000, increased investment in HNS' consumer Direcway business, losses from the new DirecTV DSL service, as well as one-time severance charges recorded in the third quarter of 2001.
These items were partially offset by improved DirecTV operating performance due to the higher gross profit resulting from the larger subscriber bases in the United States and Latin America, and lower corporate expenses.
For 2001, net losses totaled $621.6 million compared to net income of $813.0 million in 2000. The change was primarily due to the sale of Hughes' satellite manufacturing businesses in 2000, the lower EBITDA and an increase in depreciation and amortization expense in the Direct-To-Home Broadcast segment and at PanAmSat.
