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|Intelsat Reports Third Quarter 2013 Results|
“Despite the solid performance, we are managing through two trends
affecting our revenue growth and our operating expense profile. These
include revenue declines due to on-going effects of the U.S. government
reduced spending and budget sequestration. It also includes the impact
of fiber deployments and the oversupply environment in
McGlade continued, “While these issues will continue to influence
near-term results, our long-term outlook remains positive as we execute
on our two-phase strategy to deliver returns to equity investors: use
near-term improving cash flows to de-lever our balance sheet, while
positioning the company for organic growth upon the entry into service
of our new Intelsat EpicNG satellites beginning in 2016,
which support the growth plans for existing and future customers. During
the quarter, we announced the first customer for
Financial Results for the Three Months ended
On-Network revenue generally includes revenue from any services delivered via our satellite or ground network. Off-Network and Other revenue generally includes 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 includes revenue from consulting and other services and sales of customer premises equipment.
Total revenue for the three months ended
On-Network Revenue increased by
Off-Network and Other Revenue decreased by
Changes in operating expenses, interest expense, net, and other significant income-statement items are described below.
EBITDA, Adjusted EBITDA and Other Financial Metrics
Free Cash Flow From Operations
Free cash flow from operations1 was
Financial Outlook 2013 with Updated Revenue Guidance
Our 2013 capital expenditure guidance for the three calendar years 2013
through 2015 (the “Guidance Period”) is unchanged, and assumes
investment in ten satellites in the manufacturing or design phase during
the Guidance Period, including one destroyed in a launch failure in
Consistent with prior guidance, we expect our capital expenditures to
During the Guidance Period, we expect to receive significant customer
prepayments under our existing customer service contracts, for which we
are confirming existing guidance. Significant prepayments are currently
expected to range from
The annual classification of capital expenditure and prepayments could be affected by the timing of achievement of contract, satellite manufacturing, launch and other milestones.
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1In this release, financial measures are presented both in accordance with GAAP and also on a non-GAAP basis. EBITDA, Adjusted EBITDA, free cash flow from (used in) 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 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
EBITDA consists of earnings before net interest, 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.
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. 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.
(1) Common shares and paid-in capital amounts reflect the retroactive impact of the Class A and Class B share reclassification into common shares and the share splits related to our Initial Public Offering.
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 resulting from settlement of
insurance claims, and is not a measurement of cash flow under GAAP.