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|Intelsat Reports Third Quarter 2014 Results|
“The successful launch of
McGlade continued, “Our future satellite programs remain on track, with
Third Quarter 2014 Business Highlights
Network Services comprised 47 percent of Intelsat’s total third quarter
2014 revenue, and at
Media comprised 36 percent of the company’s revenue for the quarter
Government comprised 16 percent of our revenue for the quarter ended
Average Fill Rate
Intelsat’s average fill rate on our approximately 2,150 station-kept
transponders was 75 percent at
Capital Markets Activity
Financial Results for the Three Months ended
On-Network revenue generally includes revenue from 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 On-Network Revenue decreased by
Total Off-Network and Other Revenue decreased by
For the three month period ended
Direct costs of revenue decreased by
Selling, general and administrative expenses decreased by
Depreciation and amortization expense decreased by
Interest expense, net consists of the gross interest expense we incur
together with gains and losses on interest rate swaps (which reflects
net interest accrued on the interest rate swaps as well as the change in
their fair value), offset by interest income earned and the amount of
interest we capitalize related to assets under construction. Interest
expense, net decreased by
The decrease in interest expense, net was principally due to the following:
The non-cash portion of interest expense, net was
Other expense, net was
Provision for income taxes was
EBITDA, Adjusted EBITDA, Net Income, Net Income per Diluted Common Share and Adjusted Net Income per Diluted Common Share
Adjusted EBITDA was
Net income attributable to
Net income per diluted common share attributable to
Adjusted net income per diluted common share was
Free Cash Flow from (used in) Operations
Free cash flow from (used in) operations1 was
Payments for satellites and other property and equipment during the
three months ended
Financial Outlook 2014
Adjusted EBITDA: Given continued favorable collections experience year
Capital Expenditures: We expect capital expenditures ranges of:
Capital expenditure guidance assumes investment in nine satellites in the manufacturing or design phase for the three year calendar “Guidance Period” of 2014 through 2016. Of the nine satellites, we expect to launch three satellites in 2015, two satellites in 2016, and will continue work on four remaining satellites for which construction will extend beyond the Guidance Period. We expect to launch two of our new Intelsat EpicNG high-throughput satellites in the 2015 and 2016 periods, increasing our total transmission capacity.
The number of transponder equivalents is expected to increase over the period 2013-2018 by a compound annual growth rate (CAGR) of 4.7 percent as a result of the launch of the satellites covered by the Guidance Period, with the growth heavily weighted to later in the period. The growth also includes capacity on a payload which we will procure from another operator and which we expect will be launched in 2016, but which is not covered by our Capital Expenditure guidance.
Our capital expenditures guidance includes capitalized interest.
Prepayments: During the Guidance Period, we expect to receive significant customer prepayments under our existing customer service contracts.
We expect prepayment ranges of:
The annual classification of capital expenditure and prepayments could be affected by the timing of achievement of contract, satellite manufacturing, launch and other milestones.
Prepayments during the three months ended
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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, Adjusted net income per diluted common share 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.
Q3 2014 Quarterly Commentary
As previously announced,
Conference Call Information
Participants will have access to a replay of the conference call through
Intelsat Safe Harbor Statement:
Some of the statements in this news release and certain oral statements
from time to time by representatives of the company constitute
"forward-looking statements" that do not directly or exclusively relate
to historical facts. The forward-looking statements reflect
Because actual results could differ materially from
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 our costs of borrowing. 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.
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.