Filed by HEC Holdings, Inc.
                                   Subject Company - General Motors Corporation
                                             and Hughes Electronics Corporation
                                        and EchoStar Communications Corporation
                          Pursuant to Rule 425 under the Securities Act of 1933
                                       and Deemed Filed Pursuant to Rule 14a-12
                                      under the Securities Exchange Act of 1934
                                                 Commission File No.: 333-84472

A Message To Shareholders

We are pleased to present HUGHES' 2001 Annual Report. While this year's edition
may not be as colorful and flashy as those you have seen from HUGHES in the
past, it is reflective of our back-to-basics, cost-conscious approach to
managing our company. At mid-year 2001, HUGHES was at a critical juncture with
tremendous challenges facing each of our businesses. We were enjoying leadership
positions in markets that we had pioneered and developed, yet we clearly needed
to do a better job of blocking and tackling-simply executing the fundamentals-to
ensure our success and to capitalize on the company's huge future potential. In
particular, we needed to re-focus on our core operations, strengthen all aspects
of our customer service and aggressively cut costs to improve profitability.

And, of course, in the background was a difficult global economic environment as
well as the formidable task of evaluating alternatives for the restructuring of
General Motors' interest in HUGHES. This process culminated in the announced
merger of HUGHES with EchoStar Communications Corporation on October 28, 2001,
which we will discuss in detail later in this letter.

During the latter half of 2001, we took swift and decisive action to address our
operational challenges. To foster new ideas and fresh thinking, changes in
leadership were made at the most senior levels of the corporation. We also made
an important shift in the strategic direction of HUGHES, moving away from a
primary emphasis on growth-much of it expensive growth-toward a sharp focus on
profitable growth and cash conservation. Underlying these management and
strategic changes, we also began working diligently to instill a culture at
HUGHES that places the highest priority on meeting or exceeding the financial
and business commitments we make to our customers, our investors and ourselves.

We also implemented aggressive cost-cutting measures that included a workforce
reduction, impacting all of our operating companies and the corporate staff. In
total, almost 10% of our U.S. workforce, or nearly 750 jobs, were eliminated,
which we expect will result in annualized savings of approximately $110 million
beginning in 2002. While this was clearly among the year's most difficult
decisions, it was a necessary step in improving the competitiveness of our

Our new strategy started paying dividends in the second half of 2001 in the form
of significantly improved operating results, paving the way to full-year
revenues of $8.3 billion, a 13% improvement over 2000, and $390 million in
earnings before interest, taxes, depreciation and amortization (EBITDA). Perhaps
the accomplishment that makes us most proud is that we achieved our financial
and operational targets for all key metrics during both the third and fourth
quarters of the year. Although we are far from declaring victory, these results
are a good start and demonstrate our determination to improve our credibility
and maximize the tremendous store of value in the HUGHES businesses.

Through it all, the leaders and employees of HUGHES and its businesses were
faced with a great deal of uncertainty and change. To a person, they have worked
tirelessly, performed brilliantly, and enabled us to regain the momentum and
confidence that is so vital to the success of our enterprise.


DIRECTV in the United States is the world's leading provider of direct-to-home
digital television entertainment. Less than eight years after its national
launch, DIRECTV(R) has become the home entertainment service of choice to more
than 10.7 million customers. A statistic that is quite impressive is that one in
every ten households in the United States receives multi-channel television
service from DIRECTV. By all accounts, DIRECTV is a tremendous success story and
is the key value driver for HUGHES.

In 2001, DIRECTV reached a pivotal phase in its relatively short existence. It
became clear to us that we had outgrown many of the business practices and
strategies that served the company well in attaining the first 10 million
customers-where the focus was on growing the subscriber base. We learned that we
needed a different approach to grow from 10 million to 20 million-a strategy
focused on improving customer retention rates, reducing costs and improving the
economic returns on every subscriber we acquire.

Given its huge subscriber base, customer turnover, or churn, has become an
extremely important factor impacting DIRECTV's financial results and valuation.
At DIRECTV, we embrace the notion that superior customer service is the
cornerstone of any successful consumer service. Accordingly, we committed new
resources to rigorously assess and shore-up every aspect of our customer service
and installation network. During the year, we changed policies at our call
centers and invested in new billing and customer relationship management
systems. By year-end, overall customer service performance was at our targeted
world-class levels. Additionally, we re-designed our marketing and distribution
practices to obtain better quality customers, mitigating customer credit risk
through enhanced credit scoring practices, and by requiring an annual
programming commitment for DIRECTV-funded promotional offers. As a result of
these actions, customer turnover rates dropped in the second half of 2001, and
we expect this trend to continue in 2002. It's also important to note that even
though we took a more selective approach to acquiring customers, subscriber
growth during the second half of 2001 exceeded both our internal projections and
Wall Street's expectations, and led to the addition of more than 1.2 million net
new subscribers for the full-year.

We also attacked DIRECTV's operating costs. In addition to savings generated
from the workforce reduction we mentioned earlier, we took steps to reduce the
marketing expenses associated with acquiring new customers. This resulted in
improvements during the second half of 2001 that we believe will reward us with
additional savings going forward. In fact, we currently anticipate subscriber
acquisition costs in 2002 to be approximately $525 per customer, a 10%
improvement over the peak levels of 2001-and a cost baseline from which we
expect to continue to improve.


To strengthen our infrastructure and improve our programming services, we
successfully launched and put into operation DIRECTV 4S in late 2001. DIRECTV 4S
is a state-of-the-art spot beam satellite that immediately provided the capacity
for an additional 225 channels, enabling us to significantly expand our service
offering to include all of the local channels in the 41 markets where we provide
local channel service. In these markets, which comprise more than 60% of the
country's homes, our program offering now competes on an equal footing with

In addition, DIRECTV has begun bundling its video services with broadband
Internet access. Here we offer consumers a choice between digital subscriber
line (DSL) service through our DIRECTV Broadband business, or two-way
satellite-based service with our consumer DIRECWAY(R) offering. The ability to
bundle these services with our core video product makes DIRECTV more
competitive, provides additional revenue streams and helps to attract and retain

Clearly, the evidence suggests that during these tough economic times, people
are watching a lot of television and spending less on other more expensive forms
of entertainment. In 2002, we expect continued strong demand and currently
anticipate adding more than one million net new customers to the DIRECTV
service. This rate of growth is particularly impressive when you consider that
most Wall Street analysts expect the entire cable television industry to add
fewer than one million customers in 2002. Most importantly, we'll accomplish
this growth with a focus on higher financial returns and EBITDA that is expected
to be more than double last year's results.

DIRECTV Latin America

DIRECTV Latin America is the only pan-regional provider of direct-to-home
television services across 28 countries in Latin America and the Caribbean
basin. For the year, DIRECTV Latin America grew more than 23%, adding 305,000
net new customers and bringing the cumulative subscriber base in the region to
more than 1.6 million. Similar to the strategies we're pursuing in the United
States, DIRECTV Latin America is also highly focused on reducing cash
requirements and achieving profitability.

In order to facilitate the implementation of the new operating strategies and
ensure more direct influence over every aspect of the customer experience, in
2001 we continued our efforts to simplify the ownership structure of DIRECTV
Latin America. During the year, we successfully completed negotiations with our
partners in Argentina and Colombia and acquired controlling interests in the
operations in these countries. With the exception of Puerto Rico and Venezuela,
DIRECTV Latin America now directly controls the day-to-day operations in all key
Latin American markets.

Throughout the region, DIRECTV Latin America is facing a very difficult
macro-economic environment-and we've taken aggressive action to mitigate its
impact on the business. In 2001, DIRECTV Latin America implemented new
subscriber acquisition procedures designed specifically to reduce customer
turnover. New subscribers were subject to strict credit checks and were required


to make higher up-front payments in order to activate DIRECTV service. These
policies, along with continued efforts to improve customer service levels, had
the desired effect as customer retention improved steadily during each quarter
of 2001.

We also made strides in improving performance by reducing general and
administrative expenses and marketing costs associated with adding new
customers. During the year, we reduced the workforce across the region by 20%,
which we expect will result in annualized savings of $40 million. Additionally,
due to actions taken during the year to restructure dealer commissions and
advertise more selectively, we expect a nearly 10% reduction in subscriber
acquisition costs.

Looking forward, DIRECTV Latin America has several initiatives designed to
differentiate its service, acquire new customers and generate additional
revenue. For example, we have acquired exclusive rights to broadcast the 2002
and 2006 FIFA World Cup(TM) to key countries in the region. The FIFA World
Cup(TM), which is without question the most popular sporting event in Latin
America, also provides DIRECTV Latin America with additional revenue
opportunities through pay-per-view sales and the re-sale of broadcast rights to
other media companies in the region.

We also recently introduced interactive television services in several countries
in the region, which include real-time weather reports, games, e-mail,
e-commerce and banking applications. In Mexico, we delivered an interactive
broadcast of the NFL's Super Bowl XXXVI, which gave customers the ability to
select camera angles, access real-time game statistics and vote for the game's
most valuable player. Although the interactive services are relatively new, we
are encouraged by high levels of acceptance by customers in markets where these
services have been launched.

As a result of our aggressive cost reductions, as well as reduced customer
turnover and lower marketing costs, we're reaching an important financial
milestone for DIRECTV Latin America. Notwithstanding the economic volatility in
the region, we believe we can attain positive EBITDA by 2003, and expect to
continue our role as the premier provider of digital multi-channel programming
in the region.

Hughes Network Systems (HNS)

HNS' core business is providing satellite-based broadband products and services
to both enterprise customers and individual consumers under a single DIRECWAY
brand. We believe that a single brand across both customer bases creates
economies of scale and cross-channel sales opportunities that provide HNS a
competitive advantage.

In the enterprise market, HNS is the world leader with an installed base of more
than 400,000 very small aperture terminals (VSATs) spanning the globe in 85
countries. HNS is developing new capabilities to provide current customers with
value-added broadband services such as intelligent caching, telecommuting,
micro-advertising, in-store music and business intranet applications. This focus


is opening a world of new opportunities for HNS as a supplier of higher-margin,
content-based communications services.

Additionally, lower equipment costs coupled with the improved breadth and
quality of our services allowed us to enter new markets that had previously been
unavailable. For example, we made a big splash into the fast-food market segment
by providing VSAT services for several large domestic restaurant chains,
including Wendy's and Jack-in-the-Box.

HNS is leveraging its expertise and scale with enterprise customers to the
consumer marketplace. During the year, HNS commenced full-scale production of
the two-way consumer DIRECWAY terminals. As of year-end, HNS was providing
satellite broadband Internet access to more than 100,000 consumers and
small-office/home-office customers. Because this business is in the early stages
of development and requires significant investment, we are closely monitoring
market conditions to ensure that this investment is commensurate with the
expected demand for the service.

HNS also contributes to the success of HUGHES by manufacturing award-winning
set-top receivers for DIRECTV. During 2001, HNS achieved a significant milestone
by shipping its eight millionth unit. By being one of the two leading
manufacturers of DIRECTV receivers, HNS plays an integral role in helping
DIRECTV meet the strong demand for its service in an extremely cost effective

HNS continues to invent, create and perfect satellite broadband communications.
Looking forward, we believe the future of satellite broadband rests on our next
generation SPACEWAY(R) platform. HNS continued the development efforts for
SPACEWAY and is on track to begin commercial operations in early 2004. Compared
to today's offerings, we believe the SPACEWAY platform will provide faster, more
cost effective bandwidth-on-demand, delivering rich multi-media content to its


With a global fleet of 21 in-orbit satellites, PanAmSat is a leading commercial
provider of satellite-based video and data broadcast services. During the year,
we made a sharp turn in the strategic direction of PanAmSat by re-focusing on
our core customers and key markets after several years of pursuing growth by
investing in new markets and new services.

As we worked to better align our investments to more appropriately match the
market opportunity, PanAmSat also undertook aggressive cost-cutting measures to
consolidate operations and improve profitability. These actions produced
immediate and meaningful results, with total annualized savings in excess of $25
million, and have set the stage for expected EBITDA margins of 70% or better in

PanAmSat is well positioned to maintain its position of leadership. PanAmSat has
essentially completed its four-year, $2 billion capital spending program


dedicated to expanding and improving its satellite fleet and the reliability of
its network. Looking ahead, our focus will be to increase the utilization rates
on our satellites while adding to PanAmSat's backlog.

Looking Forward

While 2001 was dedicated to re-crafting the near-term strategic direction of our
businesses and improving financial performance, it was also a year where we made
groundbreaking decisions on the future of HUGHES. On October 28, 2001 we
announced definitive agreements to split-off from General Motors and to
subsequently merge the businesses of HUGHES with EchoStar, the operator of the
Dish Network(TM) direct-to-home television service in the United States.

The foundation for this transaction began more than a year prior to the
announcement, as our parent company, General Motors, sought a means to realize a
portion of the value of its investment in HUGHES, strengthen its financial
position and focus its resources on its core automotive businesses.

In the months leading up to the announcement, several alternatives were
vigorously pursued, analyzed and evaluated and after careful consideration, the
Boards of Directors of both GM and HUGHES selected the merger with EchoStar as
the best choice. At the time of announcement, the agreement provided a 20%
premium to GMH shareholders.

We believe that consumers will reap tremendous benefits from the merger of these
two companies. Specifically, through the elimination of approximately 500
duplicative channels and by creating an array of five spot-beam satellites in
three orbital slots, the merged company plans to offer access to local channels
to every household in the United States. Today, due to channel capacity and
economic constraints, DIRECTV and EchoStar are not able to offer local channels
to approximately 42 million of the nation's 107 million television homes. As a
result, these 42 million homes do not have a true alternative to their cable
television provider. Together, DIRECTV and EchoStar will be able to utilize the
scarce spectrum much more efficiently than we can as independent operators-and
provide a true choice to tens of millions of consumers who would not otherwise
have one.

We also expect to have the capacity to offer expanded video services including a
dozen high-definition television channels as well as more interactive,
pay-per-view and specialty content. Additionally, we believe economies of scale
derived from the merger will improve our ability to offer consumers affordable
satellite-based broadband services. This is especially beneficial to the
millions of consumers for whom "wired" broadband services are unlikely to be
available where they live, for years to come, if ever.

Importantly, no customer will be disenfranchised. In particular, we feel that
customers in rural America will benefit from this transaction since the merged
company will be able to offer the new and expanded services under a national
pricing structure. National pricing will afford the small percentage of rural
Americans living in areas not served by a cable television company the benefits


of the strident competition between multi-channel television providers in urban
and suburban areas. We are one nation and will offer our service at one rate
with one small dish to every household in America!

We believe that this merger will create substantial value for GMH shareholders
through cost savings and incremental revenue opportunities resulting from the
combination. Completion of this transaction is expected in the second half of
2002 and is subject to approval by a majority of both the GMH and GM $1-2/3
shareholders, as well as several governmental regulatory agencies. To date, the
regulatory process has proceeded as anticipated and we remain highly confident
that the transaction will be approved in this timeframe.

With this merger, the future has never been brighter. Collectively, HUGHES and
EchoStar have the assets to enhance our competitive position today and the
ability to tap into new markets tomorrow, thereby creating tremendous benefits
for consumers and value for shareholders. The ingenuity, creativity and
commitment to excellence that has been synonymous with HUGHES for more than 50
years will serve us well as we embark on this next phase in our history.

Jack A. Shaw
President and Chief Executive Officer

Harry J. Pearce
Chairman of the Board


In connection with the proposed transactions, on March 18, 2002, General Motors
Corporation ("GM"), HEC Holdings, Inc. ("Hughes Holdings") and EchoStar
Communications Corporation ("EchoStar") filed preliminary materials with the
Securities and Exchange Commission ("SEC"), including a Registration Statement
of Hughes Holdings on Form S-4 that contains a consent solicitation
statement/information statement/prospectus. These materials are not yet final
and will be amended. Holders of GM $1-2/3 and GM Class H common stock are urged
to read the definitive versions of these materials, as well as any other
relevant documents filed or that will be filed with the SEC, as they become
available, because these documents contain or will contain important
information. The preliminary materials filed on March 18, 2002, the definitive
versions of these materials and other relevant materials (when they become
available), and any other documents filed by GM, Hughes Electronics Corporation
("Hughes"), Hughes Holdings or EchoStar with the SEC may be obtained for free at


the SEC's website,, and GM stockholders will receive information at
an appropriate time on how to obtain transaction-related documents for free from

GM and its directors and executive officers, Hughes and certain of its officers,
and EchoStar and certain of its executive officers may be deemed to be
participants in GM's solicitation of consents from the holders of GM $1-2/3
common stock and GM Class H common stock in connection with the proposed
transactions. Information regarding the participants and their interests in the
solicitation was filed pursuant to Rule 425 with the SEC by EchoStar on November
1, 2001 and by each of GM and Hughes on November 16, 2001. Investors may obtain
additional information regarding the interests of the participants by reading
the preliminary consent solicitation statement/information statement/prospectus
filed with the SEC on March 18, 2002 and the definitive consent solicitation
statement/information statement/prospectus when it becomes available.

This communication shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended.

Materials included in this document contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could cause our actual results to be materially different
from historical results or from any future results expressed or implied by such
forward-looking statements. The factors that could cause actual results of GM,
EchoStar, Hughes, or a combined EchoStar and Hughes, to differ materially, many
of which are beyond the control of EchoStar, Hughes, Hughes Holdings or GM
include, but are not limited to, the following: (1) the businesses of EchoStar
and Hughes may not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected benefits and
synergies from the combination may not be realized within the expected time
frame or at all; (3) revenues following the transaction may be lower than
expected; (4) operating costs, customer loss and business disruption including,
without limitation, difficulties in maintaining relationships with employees,
customers, clients or suppliers, may be greater than expected following the
transaction; (5) generating the incremental growth in the subscriber base of the
combined company may be more costly or difficult than expected; (6) the
regulatory approvals required for the transaction may not be obtained on the
terms expected or on the anticipated schedule; (7) the effects of legislative
and regulatory changes; (8) an inability to obtain certain retransmission
consents; (9) an inability to retain necessary authorizations from the FCC; (10)
an increase in competition from cable as a result of digital cable or otherwise,
direct broadcast satellite, other satellite system operators, and other
providers of subscription television services; (11) the introduction of new
technologies and competitors into the subscription television business; (12)
changes in labor, programming, equipment and capital costs; (13) future
acquisitions, strategic partnership and divestitures; (14) general business and
economic conditions; and (15) other risks described from time to time in


periodic reports filed by EchoStar, Hughes or GM with the Securities and
Exchange Commission. You are urged to consider statements that include the words
"may," "will," "would," "could," "should," "believes," "estimates," "projects,"
"potential," "expects," "plans," "anticipates," "intends," "continues,"
"forecast," "designed," "goal," or the negative of those words or other
comparable words to be uncertain and forward-looking. This cautionary statement
applies to all forward-looking statements included in this document.