Federal Court Narrows Issues for Trial in DIRECTV Litigation with the NRTC and Pegasus

El Segundo, CA May 22, 2003 A federal district court judge in Los Angeles late this afternoon granted significant aspects of the summary judgment relief requested last fall by DIRECTV, Inc. in its litigation with Pegasus and the National Rural Telecommunications Cooperative (NRTC).

In her ruling, Federal District Court Judge Lourdes G. Baird rejected the tort claims of Pegasus and the Class of NRTC Members, establishing that these parties have no right to compensatory or punitive damages from DIRECTV.

"We are pleased that the court has eliminated the damages claims asserted by Pegasus and the Class," said Robert M. Hall, senior vice president and General Counsel, DIRECTV, Inc. "There has been speculation that Pegasus and the Class could recover more than $150 million in damages from DIRECTV on their tort claims. DIRECTV has always believed these claims lacked merit. The court ruling vindicates that view."

The ruling does not affect DIRECTV's claim for approximately $50 million in damages against Pegasus arising out of Pegasus' breach of a joint marketing agreement. That case is still scheduled for trial on June 3, 2003.

In a related ruling, the court also granted DIRECTV summary judgment on its declaratory relief claim that "neither Pegasus nor the Class have a right of first refusal to have DIRECTV provide them with any services after their Member Agreements expire." The court held that "it is undisputed that the NRTC members, including Pegasus and the Class, are not named third party beneficiaries to the DBS Agreement between NRTC and DIRECTV."

"While we have always maintained that there is no ambiguity, this ruling makes clear that DIRECTV has no contractual obligation to provide Pegasus or the Class with any services once their contracts end," said Hall.

The court also limited Pegasus' and the Class' claims under the unfair business practices statute, California Business & Professions Code Section 17200, and reaffirmed that damages are not an available remedy under the statute. The court rejected Pegasus' and the Class's attempt to obtain monetary relief under that statute with respect to premium programming and advanced services.

In addition, the court narrowed the NRTC's damage claims in the litigation, holding that the NRTC cannot collect damages even if it proves a breach by DIRECTV, unless it also establishes that the breach was willful and intentional, and the product of a decision by the Board of Directors or a senior officer empowered to take such action. The court also rejected the NRTC's claims under California Business & Professions Code Section 17200 in their entirety.

"We have acted in good faith, in accordance with our interpretation of the contract," said Hall, "and we are confident that the evidence at trial will demonstrate that we have not breached our contract with the NRTC, intentionally or otherwise."

Trial on the issues remaining in the cases is still scheduled to begin June 3, 2003, although the court has vacated all pretrial dates.

The litigation began in 1999, and consists of a number of separate lawsuits between DIRECTV, the NRTC, Pegasus, and a Class of NRTC Members. The lawsuits involve disputes over the nature and extent of rights stemming from a 1992 contract between DIRECTV and the NRTC that permits the NRTC to distribute certain services in specified, mostly rural, areas of the United States.

DIRECTV is the nation's leading digital multichannel television service provider with more than 11.4 million customers. DIRECTV and the Cyclone Design logo are registered trademarks of DIRECTV, Inc., a unit of Hughes Electronics Corp. HUGHES is the world's leading provider of digital television entertainment, broadband services, satellite-based private business networks, and global video and data broadcasting. The earnings of HUGHES, a unit of General Motors Corporation, are used to calculate the earnings attributable to the General Motors Class H common stock (NYSE: GMH).

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