[February 28, 2013] |
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Intelsat Reports Fourth Quarter and Full Year 2012 Results
LUXEMBOURG --(Business Wire)--
Intelsat S.A., the world's leading provider of satellite services, today
reported financial results for the three and twelve months ended
December 31, 2012.
Intelsat S.A. reported revenue of $672.4 million and a net loss of $3.7
million for the three months ended December 31, 2012. The company also
reported Intelsat S.A. EBITDA1, or earnings before net
interest, loss on early extinguishment of debt, taxes and depreciation
and amortization, of $520.0 million, and Intelsat S.A. Adjusted EBITDA1
of $516.5 million, or 77 percent of revenue, for the three months ended
December 31, 2012.
For the twelve months ended December 31, 2012, Intelsat S.A. reported
revenue of $2,610.2 million and a net loss of $146.6 million. The
company also reported Intelsat S.A. EBITDA of $1,940.6 million, and
Intelsat S.A. Adjusted EBITDA of $2,016.5 million, or 77 percent of
revenue, for the twelve months ended December 31, 2012. Contracted
backlog at December 31, 2012, was $10.7 billion.
Intelsat CEO Dave McGlade said, "In 2012, we achieved steady revenue and
Adjusted EBITDA performance while accomplishing a number of important
milestones that improve our growth profile. We launched and placed into
service five new satellites, with capacity that refreshed our premier
video neighborhoods and established the first global broadband mobility
infrastructure. We also announced our next generation satellite
platform, Intelsat EpicNG, which is based on spot-beam,
high-throughput technology that enables increased bandwidth quantity and
efficiency to support future customer growth and access to expanded
markets. We positioned Intelsat for further diversification of our
government business when selected as a supplier under the Custom SatCom
Solutions contract.
"While the failure of the launch of Intelsat 27 early this month was
deeply disappointing, we are already reconfiguring our satellite fleet
to accommodate customer requirements, including on our global broadband
mobility infrastructure, a demonstration of the resilience and
flexibility of our global satellite network. We also plan to order a
replacement satellite with a payload that addresses the specific needs
of our media customers in the Americas. We enter 2013 with $10.7 billion
in contract backlog and the resources to meet expanding demand for
broadband connectivity, global media distribution solutions, and
innovative, end-to-end government services."
Business Highlights
Intelsat provides services to customers in the network services, media
and government sectors. Our customers use our services for video
distribution and broadband infrastructure for telecommunications,
enterprise, mobility and government applications.
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Intelsat's network services business, which provides broadband
infrastructure for wireless telecommunications, enterprise and
mobility applications, accounted for 46 percent of Intelsat's total
2012 revenue. Network services revenue was $1,192.8 million for the
full year 2012, a decline of two percent versus 2011 due primarily to
lower channel services revenue. For the fourth quarter 2012, network
services revenue of $304.3 million advanced two percent as compared to
the fourth quarter of 2011, due to growth in mobility and broadband
services related to capacity on satellites entering service in the
second half of 2012.
In the fourth quarter, the network
services business won new and renewed business with providers of a
wide variety of telecommunications services. New and renewing
customers for our cellular backhaul and related services included:
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African wireless operator Airtel recently signed two multi-year
agreements with Intelsat. Under the first agreement, Airtel will
renew its capacity on Intelsat 905 and Intelsat 906 for cellular
backhaul service and connectivity between mobile switching
centers. The company has also contracted for an IntelsatOneSM
managed solution on Intelsat 905 and Intelsat 22 for 3G and data
service implementation, which will be supported via Intelsat's
teleport in Fuchsstadt, Germany.
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MegaFon, one of the largest mobile operators in Russia, recently
signed an agreement to expand its cellular network to remote
regions of eastern Russia, as the company continues deploying its
2G and 3G networks. MegaFon will utilize capacity on Intelsat 19
as part of the multi-year agreement.
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Japan-based SoftBank Mobile, a leading provider of mobile
communications solutions, recently signed a multi-year,
multi-transponder agreement using capacity on Intelsat 8 at 169º
East and the fully managed IntelsatOneSM terrestrial
network. SoftBank Mobile will use our solutions to complete
infrastructure for cellular and data backhaul services to its
customers throughout the southern islands of Japan.
Over the course of 2012, Intelsat deployed the world's first Ku-band
global mobility infrastructure, with contiguous beams providing true
broadband coverage of the world's most active transportation routes,
complemented by the Intelsat global network. Designed to serve
mobility services providers in the air and at sea, Intelsat's
infrastructure is being used by service providers for maritime,
aeronautical and oil and gas applications. Examples of recent business
activity for mobility applications include:
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Astrium Services, which recently signed a multi-year renewal
agreement for capacity to be used by its maritime customers in the
Mediterranean, Atlantic Ocean, North Sea and Gulf of Mexico. As
previously announced, the agreement on Intelsat 907 supports
Astrium's broadband connectivity services and expands its
capabilities in the cruise, ferry, and offshore oil and gas
sectors.
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Gogo, a leader of in-flight connectivity and a pioneer in wireless
in-flight digital entertainment, signed an agreement for services
on multiple Intelsat satellites to provide in-flight Internet
access on transoceanic air routes starting in early 2013.
Value-added network service providers use our capacity to deliver
reliable broadband connectivity and other services for enterprises
with expansive regional and global networking requirements.
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In the fourth quarter of 2012, Harris CapRock Communications, a
global provider of fully managed communications for remote and
harsh environments, signed agreements to renew and expand its
currently contracted capacity on multiple Intelsat satellites. The
agreements will enable Harris CapRock to continue meeting the
advanced broadband requirements of its energy, maritime and
government sector customers.
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Switzerland-based NewSat Communications, a leading provider of
VSAT services, recently signed an agreement for capacity on
multiple Intelsat satellites, including ground support from the
IntelsatOneSM terrestrial network. NewSat
Communications will provide VSAT connectivity for its oil and gas
customers in Europe for the distribution of services in western
Africa.
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Intelsat's media business, which provides satellite capacity for the
transmission of entertainment, news, sports and educational
programming for approximately 300 broadcasters, content providers and
direct-to-home (DTH) platform operators worldwide, accounted for 33%
of our revenue for the year ended December 31, 2012. Annual media
revenue of $858.7 million, and fourth quarter revenue of $224.1
million, increased five percent and six percent, respectively, as
compared to 2011 results, as service volume increased on satellites
providing DTH and cable and broadcast program distribution.
Over
the course of 2012, Intelsat launched satellites that refreshed
capacity at three video neighborhoods, allowing expansion of services
such as video distribution, DTH and digital terrestrial television for
Intelsat's blue chip media customers. We signed new and expanded
contracts with numerous media customers in the fourth quarter,
including:
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MVS Multivision Digital, one of Mexico's major providers of
programming content, secured a long term commitment on Intelsat
21. The company will use the capacity for program distribution
into Mexico and Latin America's cable systems.
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As announced in October 2012, Fiji TV will use capacity on the
Intelsat 19 video neighborhood, located at 166° East, to offer DTH
services to customers across the Pacific Ocean region, which
includes Papua New Guinea, Fiji, Vanuatu, Samoa and the Solomon
Islands.
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Jain TV Group's Noida Software Technology Park Limited, India's
leading provider of satellite broadcast infrastructure services,
contracted for capacity on Intelsat 902 and Intelsat 904 to launch
its 'Headend in the Sky' platform. The platform is expected to
launch in March 2013 with more than 200 channels.
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France-based GlobeCast, a leading global content management and
delivery company, recently renewed a multiyear agreement on
multiple Intelsat satellites and the IntelsatOneSM
terrestrial network. GlobeCast will use the capacity to support
event coverage across the globe.
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Intelsat's government business, which provides highly customized,
secure commercial satellite-based solutions to civilian agencies and
the U.S. military defense sector, accounted for 20 percent of our
revenue for the year ended December 31, 2012. Full year 2012
government revenue of $524.2 million and fourth quarter revenue of
$135.5 million increased one percent and three percent, respectively,
as compared to 2011 results, with demand for transponder services and
consulting services offsetting declines in usage-based mobile services.
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DRS Technologies, a leading supplier of integrated products,
services and support to military forces, intelligence agencies and
prime contractors worldwide, chose Intelsat to provide over 200
MHz of capacity to be used in a troop morale and welfare network.
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Intelsat successfully launched five satellites in 2012 to expand and
refresh its service capacity. Satellites launching or entering service
in the fourth quarter included Intelsat 21 and Intelsat 23. Intelsat
21 entered into service in October at its orbital destination of 302°
East, where it followed the Intelsat 9 satellite. Intelsat 23, which
was successfully launched in October 2012, entered service in November
2012 at 307° East, following Intelsat 707. Intelsat 23 provides C-band
services to customers in the Americas, Europe and Africa, and Ku-band
coverage for Latin America.
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On February 1, 2013, the launch vehicle for our Intelsat 27 satellite
failed shortly after liftoff, resulting in the complete loss of the
satellite. The satellite and launch were fully insured, and we have
filed a total loss claim of approximately $406 million with our
insurers. A portion of the insurance proceeds are expected to be used
to fund the cost of building a replacement satellite, Intelsat 27R;
excess proceeds will be used for general corporate purposes, which
could include the repayment of indebtedness. The customers expected to
be served by Intelsat 27 will remain on the Intelsat 805 and Galaxy 11
satellites, which have remaining useful lives through the fourth
quarter of 2017 and the third quarter of 2019, respectively. The
launch failure ended our industry record of 39 consecutive successful
launches, dating back to 1996. Intelsat's next satellite launch is
expected in the fourth quarter of 2014.
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We have filed a partial loss claim with our insurers relating to the
solar array anomaly on the Intelsat 19 satellite. We expect to receive
approximately $82 million of insurance proceeds related to the partial
loss claim in the first quarter of 2013. The insurance proceeds are
expected to be used for general corporate purposes, which could
include the repayment of indebtedness.
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Intelsat's average fill rate on our approximately 2,150 station-kept
transponders was 78 percent at December 31, 2012, reflecting a slight
increase in net new transponders resulting from the entry into service
of recently launched satellites and an increase of active transponders
due to new contract activity.
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In December, Intelsat announced it plans to move its US administrative
headquarters to McLean, Virginia, in 2014, having sold its facility in
Washington, DC, in October 2012. The transaction resulted in a pre-tax
gain of $12.8 million. Net cash proceeds from the transaction of $82.4
million were received in the fourth quarter.
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During the quarter ended December 31, 2012, we repaid outstanding
borrowings under our revolving credit facility. As of December 31,
2012, we had available borrowing capacity of $485.3 million under this
facility.
Financial Results for the Three Months Ended December 31, 2012
On-Network revenue generally include revenue from any services delivered
via our satellite or ground network. Off-Network and Other revenue
generally include revenue from transponder services, Mobile Satellite
Services (MSS) and other satellite-based transmission services using
capacity procured from other operators, often in frequencies not
available on our network. Off-Network and Other revenue also include
revenue from consulting and other services and sales of customer
premises equipment.
Total revenue for the three months ended December 31, 2012, increased by
$19.5 million, or 3%, to $672.4 million, as compared to the three months
ended December 31, 2011. By service type, our revenue increased or
decreased due to the following:
On-Network Revenue:
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Transponder services-an aggregate increase of $16.8 million,
principally due to a $12.8 million increase in revenue from growth in
services sold to media customers largely in the Latin America and
Caribbean, the Africa and the Europe regions. On-net transponder
services revenue also increased due to growth in services sold to
network services and government customers.
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Managed services-an aggregate increase of $3.1 million, largely
due to increases in revenue from broadband services for mobility
applications.
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Channel-an aggregate decrease of $2.8 million related to a
continued decline from the migration of international point-to-point
satellite traffic to fiber optic cable, a trend that we expect will
continue.
Off-Network and Other Revenue:
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Transponder, MSS and other off-network services-an aggregate
decrease of $4.6 million, primarily due to declines in off-network
transponder services for government customers, partially offset by an
increase in revenue, non-recurring in nature, that related to
customer-premises equipment provided to network services and
government customers in the fourth quarter of 2012.
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Satellite-related services-an aggregate increase of $6.9
million, primarily due to higher professional fees earned for
providing government professional services, some of which were
non-recurring in nature, as compared to the fourth quarter of 2011.
Changes in direct costs of revenue, selling, general and administrative
expenses, depreciation and amortization, income from operations,
interest expense, net, and other significant income-statement items are
described below.
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Direct costs of revenue increased by $8.2 million, or 8%, to $108.7
million for the three months ended December 31, 2012, as compared to
the three months ended December 31, 2011. The increase was due to a
$7.5 million increase in costs associated primarily with a satellite
joint venture and $4.0 million of higher staff-related expenses,
including higher costs related to our pension plan. The increases were
partially offset by a $6.5 million decrease in costs related to lower
revenue from off-network services provided by third parties.
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Selling, general and administrative expenses increased by $1.6
million, or 3%, to $52.3 million for the three months ended December
31, 2012, as compared to the three months ended December 31, 2011,
primarily due to an increase in bad debt expense as compared to a
credit in the fourth quarter of 2011.
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Depreciation and amortization expense increased by $11.2 million, or
6%, to $197.4 million for the three months ended December 31, 2012, as
compared to the three months ended December 31, 2011. This increase
primarily resulted from the impact of satellites placed into service
during 2011 and 2012, partially offset by lower depreciation expense
due to the timing of certain satellites becoming fully depreciated,
together with variation from year to year in the expected pattern of
consumption of amortizable intangible assets.
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Our income from operations decreased by $3.4 million, to $311.7
million, for the three months ended December 31, 2012, compared to
$315.1 million for the three months ended December 31, 2011, due
primarily to the effects described above, including higher expenses,
most notably higher depreciation and amortization. Income from
operations was further affected by:
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a $2.3 million loss recognized on our derivative financial
instruments for the three months ended December 31, 2012, related
to the net loss on our interest rate swaps, which reflects
interest expense accrued on the interest rate swaps as well as the
change in fair value. For the three months ended December 31,
2011, we recorded a loss of $0.5 million on derivative financial
instruments.
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Interest expense, net consists of the gross interest expense we incur
less the amount of interest we capitalize related to capital assets
under construction and less interest income earned. Interest expense,
net decreased by $0.7 million to $316.7 million for the three months
ended December 31, 2012, as compared to $317.4 million for the three
months ended December 31, 2011. The decrease in interest expense, net
was principally due to the following:
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a net decrease of $21.2 million in interest expense, primarily as
a result of Intelsat Jackson Holdings S.A.'s notes offerings,
repurchases and redemptions in 2012, largely offset by
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an increase of $18.8 million from lower capitalized interest
resulting from decreased levels of satellites and related assets
under construction.
Non-cash items in total interest expense, net were $14.6 million for
the three months ended December 31, 2012, primarily for amortization
of deferred financing fees incurred as a result of new or refinanced
debt and the amortization of premiums.
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Loss on early extinguishment of debt was $27.1 million for the three
months ended December 31, 2012, with no similar charge for the three
months ended December 31, 2011.
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Other income, net was $10.9 million for the three months ended
December 31, 2012, as compared to other expense, net of $5.8 million
for the three months ended December 31, 2011. The difference of $16.7
million was primarily due to a $12.8 million pre-tax gain on the sale
of Intelsat's U.S. administrative headquarters facility in Washington,
DC. Additionally, the comparable fourth quarter in 2011 included a
$6.1 million expense related to the settlement of a legal dispute.
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Our benefit from income taxes was $18.5 million for the three months
ended December 31, 2012, as compared to a benefit of $6.5 million for
the three months ended December 31, 2011.
EBITDA, Intelsat S.A. Adjusted EBITDA and Other Financial Metrics
Intelsat S.A. EBITDA of $520.0 million for the three months ended
December 31, 2012, reflected an increase of $24.5 million from $495.5
million for the same period in 2011. Intelsat S.A. Adjusted EBITDA
increased by $1.9 million to $516.5 million, or 77 percent of revenue,
for the three months ended December 31, 2012, from $514.6 million, or 79
percent of revenue, for the same period in 2011.
Intelsat S.A. EBITDA of $1,940.6 million for the twelve months ended
December 31, 2012, reflected an increase of $24.9 million from $1,915.7
million for the same period in 2011. Intelsat S.A. Adjusted EBITDA
decreased by $0.7 million to $2,016.5 million, or 77 percent of revenue,
for the twelve months ended December 31, 2012, as compared to $2,017.2
million, or 78 percent of revenue, for the same period in 2011.
At December 31, 2012, Intelsat's contracted backlog, representing
expected future revenue under contracts with customers, was $10.7
billion, compared to $10.8 billion at September 30, 2012. The loss of
the Intelsat 27 satellite is not expected to have a material impact on
backlog.
Intelsat management has reviewed the data pertaining to the use of the
Intelsat network and is providing revenue information with respect to
that use by customer set and service type in the following tables.
Intelsat management believes this provides a useful perspective on the
changes in revenue and customer trends over time.
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Revenue Comparison by Customer Set and Service Type
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($ in thousands)
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By Customer Set
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Three Months Ended
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Three Months Ended
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December 31,
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December 31,
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2011
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2012
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Network Services
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$
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298,940
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46
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%
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$
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304,331
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45
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%
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Media
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212,312
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33
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%
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224,112
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34
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%
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Government
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131,447
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20
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%
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135,519
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20
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%
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Other
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10,212
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1
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%
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8,406
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1
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%
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$
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652,911
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100
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%
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$
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672,368
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100
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%
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By Service Type
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Three Months Ended
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Three Months Ended
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December 31,
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December 31,
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2011
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2012
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On-Network Revenues
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Transponder services
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$
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485,604
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74
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%
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$
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502,433
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75
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%
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Managed services
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69,955
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11
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%
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73,096
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11
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%
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Channel
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24,604
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4
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%
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21,780
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3
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%
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Total on-network revenues
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580,163
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89
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%
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597,309
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89
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%
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Off-Network and Other Revenues
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Transponder, MSS and other off-network services
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58,078
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9
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%
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53,477
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8
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%
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Satellite-related services
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14,670
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2
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%
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21,582
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3
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%
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Total off-network and other revenues
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72,748
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11
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%
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75,059
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11
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%
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Total
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$
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652,911
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100
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%
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$
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672,368
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100
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%
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Free Cash Flow From (Used in) Operations and Capital Expenditures
Free cash flow from operationsi was $122.1 million during the
three months ended December 31, 2012. Free cash flow from operations is
defined as net cash provided by operating activities, less payments for
satellites and other property and equipment (including capitalized
interest). Free cash flow from operations excludes $82.4 million of net
proceeds from the sale of our US administrative headquarters facility
received during the fourth quarter of 2012. Payments for satellites and
other property and equipment during the three months ended December 31,
2012, totaled $150.9 million. Payments for satellites and other property
and equipment during the twelve months ended December 31, 2012, totaled
$866.0 million. Significant customer prepayments received in the twelve
months ended December 31, 2012, totaled $180 million, consistent with
previous guidance of $150 million to $200 million.
We are updating and extending our capital expenditure guidance for the
three calendar years 2013 through 2015 (the "Guidance Period"). The
primary difference between our previous and current guidance is the
addition of the Intelsat 27 replacement satellite, Intelsat 27R. Today's
guidance assumes investment in nine satellites during the Guidance
Period. We finalized construction of the first of these, the Intelsat 27
satellite, in January 2013; the satellite was destroyed during launch on
February 1, 2013. We expect to launch four satellites in 2014 and 2015,
during the Guidance Period, including Intelsat 27R. By the conclusion of
the Guidance Period, our total transmission capacity is expected to
increase modestly from levels at year end 2012. The first of our new
Intelsat EpicNG high-throughput satellites is expected to
launch in 2015 and enter service in 2016, significantly increasing our
total transmission capacity.
We expect our capital expenditures to range from $600 million to $675
million in 2013, and $575 million to $650 million in 2014, or $50
million above previously-issued guidance in each year, reflecting the
addition of Intelsat 27R to our planning. For 2015, we anticipate
capital expenditures of $775 million to $850 million, which will include
expenditures for four additional replacement satellites that we plan to
launch beyond the Guidance Period. Our capital expenditures guidance
includes capitalized interest. The annual classification of capital
expenditure payments could be affected by the timing of achievement of
satellite manufacturing and launch contract milestones.
During the Guidance Period, we expect to receive significant customer
prepayments under our customer service contracts. We also anticipate
that prepayments will be received under customer contracts to be signed
in the future. Significant prepayments are currently expected to range
from $150 million to $200 million in 2013, from $100 million to $150
million in 2014, and from $25 million to $50 million in 2015, with the
majority of these prepayment amounts coming from existing customer
contracts.
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End Notes
i In this release, financial measures are presented both in
accordance with GAAP and also on a non-GAAP basis. EBITDA, Intelsat S.A.
Adjusted EBITDA, free cash flow from operations and related margins
included in this release are non-GAAP financial measures. Please see the
consolidated financial information below for information reconciling
non-GAAP financial measures to comparable GAAP financial measures.
Conference Call Information
Intelsat management will host a conference call with investors and
analysts at 11:00 a.m. EDT on Thursday, February 28, 2013, to discuss
the company's financial results for the three and twelve months ended
December 31, 2012. Access to the live conference call will also be
available via the Internet at the Intelsat Web site: www.intelsat.com/investors/events.
To participate on the live call, participants should call (866) 356-4441
from North America, and +1 (617) 597-5396 from all other locations. The
participant pass code is 23681360. Participants will have access to a
replay of the conference call through March 7, 2013. The replay number
for North America is (888) 286-8010 and for all other locations, +1
(617) 801-6888. The participant pass code for the replay is 68778693.
About Intelsat
Intelsat is the leading provider of satellite services worldwide. For
over 45 years, Intelsat has been delivering information and
entertainment for many of the world's leading media and network
companies, multinational corporations, Internet Service Providers and
governmental agencies. Intelsat's satellite, teleport and fiber
infrastructure is unmatched in the industry, setting the standard for
transmissions of video, data and voice services. From the globalization
of content and the proliferation of HD, to the expansion of cellular
networks and broadband access, with Intelsat, advanced communications
anywhere in the world are closer, by far.
Intelsat Safe Harbor Statement: Some of the statements in this news
release constitute "forward-looking statements" that do not directly or
exclusively relate to historical facts. The forward-looking statements
made in this release reflect Intelsat's intentions, plans, expectations,
assumptions and beliefs about future events and are subject to risks,
uncertainties and other factors, many of which are outside of Intelsat's
control. Important factors that could cause actual results to differ
materially from the expectations expressed or implied in the
forward-looking statements include known and unknown risks. Some of the
factors that could cause actual results to differ from historical
results or those anticipated or predicted by these forward-looking
statements include: risks associated with operating our in-orbit
satellites; satellite launch failures, satellite launch and construction
delays and in-orbit failures or reduced performance; potential changes
in the number of companies offering commercial satellite launch services
and the number of commercial satellite launch opportunities available in
any given time period that could impact our ability to timely schedule
future launches and the prices we pay for such launches; our ability to
obtain new satellite insurance policies with financially viable
insurance carriers on commercially reasonable terms or at all, as well
as the ability of our insurance carriers to fulfill their obligations;
possible future losses on satellites that are not adequately covered by
insurance; U.S. and other government regulation; changes in our
contracted backlog or expected contracted backlog for future services;
pricing pressure and overcapacity in the markets in which we compete;
inadequate access to capital markets; the competitive environment in
which we operate; customer defaults on their obligations to us; our
international operations and other uncertainties associated with doing
business internationally; and litigation. Known risks include, among
others, the risks included in Intelsat's annual report on Form 10-K for
the year ended December 31, 2012, and its other filings with the U.S.
Securities and Exchange Commission, the political, economic and legal
conditions in the markets we are targeting for communications services
or in which we operate and other risks and uncertainties inherent in the
telecommunications business in general and the satellite communications
business in particular. Because actual results could differ materially
from Intelsat's intentions, plans, expectations, assumptions and beliefs
about the future, you are urged to view all forward-looking statements
contained in this news release with caution. Intelsat does not undertake
any obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
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|
|
|
INTELSAT S.A.
|
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
|
($ in thousands)
|
|
|
|
|
|
|
|
Three Months
|
|
Three Months
|
|
|
Ended
|
|
Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2011
|
|
|
|
2012
|
|
Revenue
|
|
$
|
652,911
|
|
|
$
|
672,368
|
|
Operating expenses:
|
|
|
|
|
Direct costs of revenue (excluding depreciation and amortization)
|
|
|
100,430
|
|
|
|
108,676
|
|
Selling, general and administrative
|
|
|
50,673
|
|
|
|
52,263
|
|
Depreciation and amortization
|
|
|
186,244
|
|
|
|
197,432
|
|
Losses on derivative financial instruments
|
|
|
472
|
|
|
|
2,284
|
|
Total operating expenses
|
|
|
337,819
|
|
|
|
360,655
|
|
Income from operations
|
|
|
315,092
|
|
|
|
311,713
|
|
Interest expense, net
|
|
|
317,399
|
|
|
|
316,740
|
|
Loss on early extinguishment of debt
|
|
|
-
|
|
|
|
(27,053
|
)
|
Other income (expense), net
|
|
|
(5,800
|
)
|
|
|
10,854
|
|
Loss before income taxes
|
|
|
(8,107
|
)
|
|
|
(21,226
|
)
|
Benefit from income taxes
|
|
|
(6,462
|
)
|
|
|
(18,520
|
)
|
Net loss
|
|
|
(1,645
|
)
|
|
|
(2,706
|
)
|
Net income attributable to noncontrolling interest
|
|
|
(1,835
|
)
|
|
|
(995
|
)
|
Net loss attributable to Intelsat S.A.
|
|
$
|
(3,480
|
)
|
|
$
|
(3,701
|
)
|
|
|
|
|
|
INTELSAT S.A.
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
($ in thousands)
|
|
|
|
|
|
|
|
Year Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2011
|
|
|
|
2012
|
|
Revenue
|
|
$
|
2,588,426
|
|
|
$
|
2,610,152
|
|
Operating expenses:
|
|
|
|
|
Direct costs of revenue (excluding depreciation and amortization)
|
|
|
417,179
|
|
|
|
415,900
|
|
Selling, general and administrative
|
|
|
208,189
|
|
|
|
203,563
|
|
Depreciation and amortization
|
|
|
769,440
|
|
|
|
764,903
|
|
Losses on derivative financial instruments
|
|
|
24,635
|
|
|
|
39,935
|
|
Total operating expenses
|
|
|
1,419,443
|
|
|
|
1,424,301
|
|
Income from operations
|
|
|
1,168,983
|
|
|
|
1,185,851
|
|
Interest expense, net
|
|
|
1,309,484
|
|
|
|
1,266,813
|
|
Loss on early extinguishment of debt
|
|
|
(326,183
|
)
|
|
|
(73,542
|
)
|
Loss from previously unconsolidated affiliates
|
|
|
(24,658
|
)
|
|
|
-
|
|
Other income (expense), net
|
|
|
1,955
|
|
|
|
(10,128
|
)
|
Loss before income taxes
|
|
|
(489,387
|
)
|
|
|
(164,632
|
)
|
Benefit from income taxes
|
|
|
(55,393
|
)
|
|
|
(19,628
|
)
|
Net loss
|
|
|
(433,994
|
)
|
|
|
(145,004
|
)
|
Net (income) loss attributable to noncontrolling interest
|
|
|
1,106
|
|
|
|
(1,639
|
)
|
Net loss attributable to Intelsat S.A.
|
|
$
|
(432,888
|
)
|
|
$
|
(146,643
|
)
|
|
|
|
|
|
|
|
|
|
INTELSAT S.A.
|
UNAUDITED RECONCILIATION OF NET LOSS TO EBITDA
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Three Months
|
|
|
|
|
|
|
Ended
|
|
Ended
|
|
Year Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
Net loss
|
|
$
|
(1,645
|
)
|
|
$
|
(2,706
|
)
|
|
$
|
(433,994
|
)
|
|
$
|
(145,004
|
)
|
Add (Subtract):
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
317,399
|
|
|
|
316,740
|
|
|
|
1,309,484
|
|
|
|
1,266,813
|
|
Loss on early extinguishment of debt
|
|
|
-
|
|
|
|
27,053
|
|
|
|
326,183
|
|
|
|
73,542
|
|
Benefit from income taxes
|
|
|
(6,462
|
)
|
|
|
(18,520
|
)
|
|
|
(55,393
|
)
|
|
|
(19,628
|
)
|
Depreciation and amortization
|
|
|
186,244
|
|
|
|
197,432
|
|
|
|
769,440
|
|
|
|
764,903
|
|
EBITDA
|
|
$
|
495,536
|
|
|
$
|
519,999
|
|
|
$
|
1,915,720
|
|
|
$
|
1,940,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
|
|
76
|
%
|
|
|
77
|
%
|
|
|
74
|
%
|
|
|
74
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
EBITDA consists of earnings before net interest, gain (loss) on early
extinguishment of debt, taxes and depreciation and amortization. Given
our high level of leverage, refinancing activities are a frequent part
of our efforts to manage costs of borrowing. Accordingly, we consider
(gain) loss on early extinguishment of debt an element of interest
expense. EBITDA is a measure commonly used in the FSS sector, and we
present EBITDA to enhance the understanding of our operating
performance. We use EBITDA as one criterion for evaluating our
performance relative to that of our peers. We believe that EBITDA is an
operating performance measure, and not a liquidity measure, that
provides investors and analysts with a measure of operating results
unaffected by differences in capital structures, capital investment
cycles and ages of related assets among otherwise comparable companies.
However, EBITDA is not a measure of financial performance under U.S.
GAAP, and our EBITDA may not be comparable to similarly titled measures
of other companies. EBITDA should not be considered as an alternative to
operating income (loss) or net income (loss), determined in accordance
with U.S. GAAP, as an indicator of our operating performance, or as an
alternative to cash flows from operating activities, determined in
accordance with U.S. GAAP, as an indicator of cash flows, or as a
measure of liquidity.
|
|
|
|
|
|
|
|
|
INTELSAT S.A.
|
UNAUDITED RECONCILIATION OF NET LOSS TO
|
INTELSAT S.A. ADJUSTED EBITDA
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Three Months
|
|
|
|
|
|
|
Ended
|
|
Ended
|
|
Year Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
Net loss
|
|
$
|
(1,645
|
)
|
|
$
|
(2,706
|
)
|
|
$
|
(433,994
|
)
|
|
$
|
(145,004
|
)
|
Add (Subtract):
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
317,399
|
|
|
|
316,740
|
|
|
|
1,309,484
|
|
|
|
1,266,813
|
|
Loss on early extinguishment of debt
|
|
|
-
|
|
|
|
27,053
|
|
|
|
326,183
|
|
|
|
73,542
|
|
Benefit from income taxes
|
|
|
(6,462
|
)
|
|
|
(18,520
|
)
|
|
|
(55,393
|
)
|
|
|
(19,628
|
)
|
Depreciation and amortization
|
|
|
186,244
|
|
|
|
197,432
|
|
|
|
769,440
|
|
|
|
764,903
|
|
Intelsat S.A. EBITDA
|
|
|
495,536
|
|
|
|
519,999
|
|
|
|
1,915,720
|
|
|
|
1,940,626
|
|
Add (Subtract):
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
4,536
|
|
|
|
533
|
|
|
|
8,811
|
|
|
|
5,237
|
|
Management fees
|
|
|
6,217
|
|
|
|
6,265
|
|
|
|
24,867
|
|
|
|
25,062
|
|
Loss from previously unconsolidated affiliates
|
|
|
-
|
|
|
|
-
|
|
|
|
24,658
|
|
|
|
-
|
|
Losses on derivative financial instruments
|
|
|
472
|
|
|
|
2,284
|
|
|
|
24,635
|
|
|
|
39,935
|
|
Non-recurring and other non-cash items
|
|
|
7,817
|
|
|
|
(12,587
|
)
|
|
|
18,488
|
|
|
|
5,641
|
|
Intelsat S.A. Adjusted EBITDA
|
|
$
|
514,578
|
|
|
$
|
516,494
|
|
|
$
|
2,017,179
|
|
|
$
|
2,016,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intelsat S.A. Adjusted EBITDA Margin
|
|
|
79
|
%
|
|
|
77
|
%
|
|
|
78
|
%
|
|
|
77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
Intelsat calculates a measure called Intelsat S.A. Adjusted EBITDA to
assess the operating performance of Intelsat S.A. Intelsat S.A. Adjusted
EBITDA consists of EBITDA of Intelsat S.A. as adjusted to exclude or
include certain unusual items, certain other operating expense items and
certain other adjustments as described in the table above. Our
management believes that the presentation of Intelsat S.A. Adjusted
EBITDA provides useful information to investors, lenders and financial
analysts regarding our financial condition and results of operations,
because it permits clearer comparability of our operating performance
between periods. By excluding the potential volatility related to the
timing and extent of non-operating activities, such as gains (losses) on
derivative financial instruments, our management believes that Intelsat
S.A. Adjusted EBITDA provides a useful means of evaluating the success
of our operating activities. We also use Intelsat S.A. Adjusted EBITDA,
together with other appropriate metrics, to set goals for and measure
the operating performance of our business, and it is one of the
principal measures we use to evaluate our management's performance in
determining compensation under our incentive compensation plans.
Adjusted EBITDA measures have been used historically by investors,
lenders and financial analysts to estimate the value of a company, to
make informed investment decisions and to evaluate performance. Our
management believes that the inclusion of Intelsat S.A. Adjusted EBITDA
facilitates comparison of our results with those of companies having
different capital structures.
Intelsat S.A. Adjusted EBITDA is not a measure of financial performance
under U.S. GAAP and may not be comparable to similarly titled measures
of other companies. Intelsat S.A. Adjusted EBITDA should not be
considered as an alternative to operating income (loss) or net income
(loss), determined in accordance with U.S. GAAP, as an indicator of our
operating performance, or as an alternative to cash flows from operating
activities, determined in accordance with U.S. GAAP, as an indicator of
cash flows, or as a measure of liquidity.
|
|
|
|
|
INTELSAT S.A.
|
CONSOLIDATED BALANCE SHEETS
|
($ in thousands, except per share amounts)
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
December 31,
|
|
December 31,
|
|
|
2011
|
|
2012
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents, net of restricted cash
|
|
$
|
294,700
|
|
|
$
|
187,446
|
|
Restricted cash
|
|
|
94,131
|
|
|
|
-
|
|
Receivables, net of allowance of $20,830 in 2011 and $23,583 in 2012
|
|
|
331,371
|
|
|
|
318,805
|
|
Deferred income taxes
|
|
|
26,058
|
|
|
|
94,779
|
|
Prepaid expenses and other current assets
|
|
|
42,934
|
|
|
|
38,708
|
|
Total current assets
|
|
|
789,194
|
|
|
|
639,738
|
|
Satellites and other property and equipment, net
|
|
|
6,142,731
|
|
|
|
6,355,192
|
|
Goodwill
|
|
|
6,780,827
|
|
|
|
6,780,827
|
|
Non-amortizable intangible assets
|
|
|
2,458,100
|
|
|
|
2,458,100
|
|
Amortizable intangible assets, net
|
|
|
742,868
|
|
|
|
651,087
|
|
Other assets
|
|
|
447,686
|
|
|
|
416,777
|
|
Total assets
|
|
$
|
17,361,406
|
|
|
$
|
17,301,721
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDER'S DEFICIT
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
143,097
|
|
|
$
|
136,863
|
|
Taxes payable
|
|
|
11,764
|
|
|
|
9,244
|
|
Employee related liabilities
|
|
|
43,315
|
|
|
|
46,565
|
|
Accrued interest payable
|
|
|
359,336
|
|
|
|
367,676
|
|
Current portion of long-term debt
|
|
|
164,818
|
|
|
|
56,598
|
|
Deferred satellite performance incentives
|
|
|
17,715
|
|
|
|
21,479
|
|
Deferred revenue
|
|
|
64,609
|
|
|
|
84,066
|
|
Other current liabilities
|
|
|
76,460
|
|
|
|
72,715
|
|
Total current liabilities
|
|
|
881,114
|
|
|
|
795,206
|
|
Long-term debt, net of current portion
|
|
|
15,837,512
|
|
|
|
15,846,728
|
|
Deferred satellite performance incentives, net of current portion
|
|
|
113,974
|
|
|
|
172,663
|
|
Deferred revenue, net of current portion
|
|
|
724,413
|
|
|
|
834,161
|
|
Deferred income taxes
|
|
|
265,181
|
|
|
|
286,673
|
|
Accrued retirement benefits
|
|
|
305,902
|
|
|
|
299,187
|
|
Other long-term liabilities
|
|
|
322,735
|
|
|
|
300,195
|
|
Redeemable noncontrolling interest
|
|
|
3,024
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Shareholder's deficit:
|
|
|
|
|
Ordinary shares, $1.00 par value, 100,000,000 shares authorized
and 5,000,000 shares issued and outstanding at December 31, 2011
and December 31, 2012
|
|
|
5,000
|
|
|
|
5,000
|
|
Paid-in capital
|
|
|
1,571,855
|
|
|
|
1,590,011
|
|
Accumulated deficit
|
|
|
(2,608,702
|
)
|
|
|
(2,755,345
|
)
|
Accumulated other comprehensive loss
|
|
|
(111,528
|
)
|
|
|
(118,428
|
)
|
Total Intelsat S.A. shareholder's deficit
|
|
|
(1,143,375
|
)
|
|
|
(1,278,762
|
)
|
Noncontrolling interest
|
|
|
50,926
|
|
|
|
45,670
|
|
Total liabilities and shareholder's deficit
|
|
$
|
17,361,406
|
|
|
$
|
17,301,721
|
|
|
|
|
|
|
INTELSAT S.A.
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
($ in thousands)
|
|
|
|
|
|
|
|
Three Months
|
|
Three Months
|
|
|
Ended
|
|
Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2011
|
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
Net loss
|
|
$
|
(1,645
|
)
|
|
$
|
(2,706
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
186,244
|
|
|
|
197,432
|
|
Provision for doubtful accounts
|
|
|
(186
|
)
|
|
|
2,304
|
|
Foreign currency transaction loss
|
|
|
1,530
|
|
|
|
2,586
|
|
(Gain) loss on disposal of assets
|
|
|
17
|
|
|
|
(12,622
|
)
|
Share-based compensation expense
|
|
|
4,429
|
|
|
|
429
|
|
Deferred income taxes
|
|
|
(19,840
|
)
|
|
|
(51,137
|
)
|
Amortization of discount, premium, issuance costs and other non-cash
items
|
|
|
13,617
|
|
|
|
14,590
|
|
Interest paid-in-kind
|
|
|
4,161
|
|
|
|
-
|
|
Loss on early extinguishment of debt
|
|
|
-
|
|
|
|
27,053
|
|
Unrealized gains on derivative financial instruments
|
|
|
(19,484
|
)
|
|
|
(9,015
|
)
|
Other non-cash items
|
|
|
1,674
|
|
|
|
3,668
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Receivables
|
|
|
(3,344
|
)
|
|
|
6,331
|
|
Prepaid expenses and other assets
|
|
|
10,939
|
|
|
|
(3,334
|
)
|
Accounts payable and accrued liabilities
|
|
|
34,113
|
|
|
|
69,051
|
|
Deferred revenue
|
|
|
28,569
|
|
|
|
29,112
|
|
Accrued retirement benefits
|
|
|
(2,978
|
)
|
|
|
(5,175
|
)
|
Other long-term liabilities
|
|
|
5,024
|
|
|
|
4,482
|
|
Net cash provided by operating activities
|
|
|
242,840
|
|
|
|
273,049
|
|
Cash flows from investing activities:
|
|
|
|
|
Payments for satellites and other property and equipment (including
capitalized interest)
|
|
|
(229,575
|
)
|
|
|
(150,915
|
)
|
Proceeds from sale of building, net of fees
|
|
|
-
|
|
|
|
82,415
|
|
Loan to affiliated party
|
|
|
(10,000
|
)
|
|
|
(1,000
|
)
|
Other investing activities
|
|
|
9,756
|
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
(229,819
|
)
|
|
|
(69,500
|
)
|
Cash flows from financing activities:
|
|
|
|
|
Repayments of long-term debt
|
|
|
(8,125
|
)
|
|
|
(985,798
|
)
|
Proceeds from issuance of long-term debt
|
|
|
-
|
|
|
|
790,521
|
|
Debt issuance costs
|
|
|
(752
|
)
|
|
|
(7,940
|
)
|
Payment of premium on early extinguishment of debt
|
|
|
-
|
|
|
|
(26,443
|
)
|
Dividends paid to noncontrolling interest
|
|
|
-
|
|
|
|
(2,056
|
)
|
Principal payments on deferred satellite performance incentives
|
|
|
(3,335
|
)
|
|
|
(4,303
|
)
|
Repurchase of redeemable noncontrolling interest
|
|
|
-
|
|
|
|
(8,744
|
)
|
Net cash used in financing activities
|
|
|
(12,212
|
)
|
|
|
(244,763
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(1,530
|
)
|
|
|
(2,586
|
)
|
Net change in cash and cash equivalents
|
|
|
(721
|
)
|
|
|
(43,800
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
295,421
|
|
|
|
231,246
|
|
Cash and cash equivalents, end of period
|
|
$
|
294,700
|
|
|
$
|
187,446
|
|
|
|
|
|
|
INTELSAT S.A.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
($ in thousands)
|
|
|
|
|
|
|
|
Year Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2011
|
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
Net loss
|
|
$
|
(433,994
|
)
|
|
$
|
(145,004
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
769,440
|
|
|
|
764,903
|
|
Provision for doubtful accounts
|
|
|
5,129
|
|
|
|
8,911
|
|
Foreign currency transaction (gain) loss
|
|
|
(1,375
|
)
|
|
|
7,329
|
|
(Gain) loss on disposal of assets
|
|
|
846
|
|
|
|
(12,647
|
)
|
Share-based compensation expense
|
|
|
8,385
|
|
|
|
4,819
|
|
Deferred income taxes
|
|
|
(72,866
|
)
|
|
|
(61,889
|
)
|
Amortization of discount, premium, issuance costs and other non-cash
items
|
|
|
62,855
|
|
|
|
57,305
|
|
Interest paid-in-kind
|
|
|
27,291
|
|
|
|
4,949
|
|
Loss on early extinguishment of debt
|
|
|
326,183
|
|
|
|
73,542
|
|
Loss from previously unconsolidated affiliates
|
|
|
24,658
|
|
|
|
-
|
|
Unrealized gains on derivative financial instruments
|
|
|
(54,663
|
)
|
|
|
(9,004
|
)
|
Termination of third-party commitment costs and expenses
|
|
|
-
|
|
|
|
21,000
|
|
Other non-cash items
|
|
|
6,851
|
|
|
|
10,125
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Receivables
|
|
|
(40,038
|
)
|
|
|
(9,272
|
)
|
Prepaid expenses and other assets
|
|
|
(8,870
|
)
|
|
|
(430
|
)
|
Accounts payable and accrued liabilities
|
|
|
20,632
|
|
|
|
18,491
|
|
Deferred revenue
|
|
|
296,414
|
|
|
|
124,458
|
|
Accrued retirement benefits
|
|
|
(20,693
|
)
|
|
|
(26,627
|
)
|
Other long-term liabilities
|
|
|
(125
|
)
|
|
|
1,653
|
|
Net cash provided by operating activities
|
|
|
916,060
|
|
|
|
832,612
|
|
Cash flows from investing activities:
|
|
|
|
|
Payments for satellites and other property and equipment (including
capitalized interest)
|
|
|
(844,688
|
)
|
|
|
(866,016
|
)
|
Proceeds from sale of building, net of fees
|
|
|
-
|
|
|
|
82,415
|
|
Capital contributions to previously unconsolidated affiliates
|
|
|
(12,209
|
)
|
|
|
-
|
|
Loan to affiliated party
|
|
|
(10,000
|
)
|
|
|
(11,000
|
)
|
Other investing activities
|
|
|
16,466
|
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
(850,431
|
)
|
|
|
(794,601
|
)
|
Cash flows from financing activities:
|
|
|
|
|
Repayments of long-term debt
|
|
|
(6,331,144
|
)
|
|
|
(2,474,811
|
)
|
Proceeds from issuance of long-term debt
|
|
|
6,119,425
|
|
|
|
2,451,521
|
|
Debt issuance costs
|
|
|
(70,091
|
)
|
|
|
(27,384
|
)
|
Payment of premium on early extinguishment of debt
|
|
|
(171,047
|
)
|
|
|
(65,920
|
)
|
Capital contribution from noncontrolling interest
|
|
|
-
|
|
|
|
12,209
|
|
Dividend paid to noncontrolling interest
|
|
|
-
|
|
|
|
(8,838
|
)
|
Noncontrolling interest in New Dawn
|
|
|
1,734
|
|
|
|
-
|
|
Principal payments on deferred satellite performance incentives
|
|
|
(14,111
|
)
|
|
|
(15,969
|
)
|
Repurchase of redeemable noncontrolling interest
|
|
|
-
|
|
|
|
(8,744
|
)
|
Net cash used in financing activities
|
|
|
(465,234
|
)
|
|
|
(137,936
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
1,375
|
|
|
|
(7,329
|
)
|
Net change in cash and cash equivalents
|
|
|
(398,230
|
)
|
|
|
(107,254
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
692,930
|
|
|
|
294,700
|
|
Cash and cash equivalents, end of period
|
|
$
|
294,700
|
|
|
$
|
187,446
|
|
|
|
|
|
|
|
|
|
|
INTELSAT S.A.
|
UNAUDITED RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES
|
TO FREE CASH FLOW FROM (USED IN) OPERATIONS
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Year Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
242,840
|
|
|
$
|
273,049
|
|
|
$
|
916,060
|
|
|
$
|
832,612
|
|
Payments for satellites and other property and equipment
(including capitalized interest)
|
|
|
(229,575
|
)
|
|
|
(150,915
|
)
|
|
|
(844,688
|
)
|
|
|
(866,016
|
)
|
Free cash flow from (used in) operations
|
|
$
|
13,265
|
|
|
$
|
122,134
|
|
|
$
|
71,372
|
|
|
$
|
(33,404
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
Free cash flow from (used in) operations consists of net cash provided
by operating activities, less payments for satellites and other property
and equipment (including capitalized interest). Free cash flow from
(used in) operations excludes proceeds from the sale of our Washington,
D.C. facility, and is not a measurement of cash flow under GAAP.
Intelsat believes free cash flow from (used in) operations is a useful
measure of financial performance that shows a company's ability to fund
its operations. Free cash flow from (used in) operations is used by
Intelsat in comparing its performance to that of its peers and is
commonly used by analysts and investors in assessing performance. Free
cash flow from (used in) operations does not give effect to cash used
for debt service requirements and thus does not reflect funds available
for investment or other discretionary uses. Free cash flow from (used
in) operations is not a measure of financial performance under GAAP, and
may not be comparable to similarly titled measures of other companies.
You should not consider free cash flow from (used in) operations as an
alternative to operating or net income, determined in accordance with
GAAP, as an indicator of Intelsat's operating performance, or as an
alternative to cash flows from operating activities, determined in
accordance with GAAP, as an indicator of cash flows or as a measure of
liquidity.
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