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|Intelsat Reports First Quarter 2015 Results|
Spengler continued, “One of our top priorities in 2015 is delivering capacity for launch. Of our satellites expected to launch over the next 12 months, our
First Quarter 2015 Business Highlights
Network Services comprised 46 percent of Intelsat’s total first quarter 2015 revenue, and at
Media comprised 37 percent of the company’s revenue for the quarter ended
Government comprised 16 percent of our revenue for the quarter ended
Average Fill Rate
Intelsat’s average fill rate on our approximately 2,200 station-kept transponders was 75 percent at
We have had no material change in our launch plans since our last earnings report on
Financial Results for the Three Months ended
Effective first quarter 2015, on-network services are comprised primarily of services delivered on our owned network infrastructure, as well as commitments for third-party capacity, generally long-term in nature, that we integrate and market as part of our owned infrastructure. In the case of third-party services in support of government applications, the commitments for third-party capacity are shorter and matched to the government contracting period, and thus remain classified as off-network services. Off-network services can include transponder services and other satellite-based transmission services, such as mobile satellite services (“MSS”), which are sourced from other operators, often in frequencies not available on our network. Under the category Off-Network and Other Revenues, we also include revenues from consulting and other services. In addition, effective first quarter 2015, certain revenues have been reclassified between transponder services and managed services across our customer sets in order to better reflect the nature of the underlying business.
A supplemental schedule of historical revenues was prepared for the periods 2013-2014 by quarter and full year that reflects the above classification changes. The supplemental schedule is attached to our quarterly commentary issued this morning.
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 increased by
Depreciation and amortization expense increased 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 attributable to
Free Cash Flow from Operations
Free cash flow from operations1 was
Payments for satellites and other property and equipment during the three months ended
Financial Outlook 2015
Capital Expenditures: We expect capital expenditures ranges of:
Capital expenditure guidance assumes investment in twelve satellites in the concept, design or manufacturing phase for the three calendar year “Guidance Period” of 2015 through 2017. In addition, two custom payloads are being built for us on third-party satellites, which will not require capital expenditure. Of the twelve satellites in our capital expenditure guidance, we expect to launch one satellite in 2015, four satellites in 2016, and one satellite in 2017, and will continue work on the six 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 2016, increasing our total transmission capacity. By the conclusion of the Guidance Period in 2017, the net number of transponder equivalents will increase by a compound annual growth rate (CAGR) of 7.5 percent as a result of the satellites entering service during the Guidance Period. The growth also includes capacity from one of the customized payloads noted above which we expect will be launched in 2016.
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
Debt Reduction: As was previously disclosed,
Cash Taxes: Expected to be approximately 1.5 percent of revenue for each of the next several years.
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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 operations, Adjusted net income per diluted common share attributable to
Q1 2015 Quarterly Commentary
As previously announced,
Conference Call Information
Participants will have access to a replay of the webcast and conference call through
Intelsat Safe Harbor Statement:
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. When used in this earnings release, the words “may,” “will,” “might,” “should,” “expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,” “intend,” “potential,” “outlook,” and “continue,” and the negative of these terms, and other similar expressions are intended to identify forward-looking statements and information. Forward-looking statements include: our expectation that our media business will benefit in the near to mid-term from the launch of three satellites that serve our video neighborhoods; our plans for satellite launches in the near to mid-term; our guidance regarding our expectations for our revenue performance, including in our different customer sets, and Adjusted EBITDA performance in 2015; our capital expenditure and customer prepayment guidance for 2015 and the next several years; our expectations as to the increased number of transponder equivalents on our fleet over the next several years; our expectations as to the level of our cash tax expenses over the next several years; our debt repayment guidance for 2015; and our belief that as we execute on our initiatives, we will build the inventory and service capabilities to allow us to capture future growth, including in emerging opportunities that we believe represent larger and more sustainable markets for our services.
The forward-looking statements reflect
Because actual results could differ materially from
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 or net income, 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 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 operations excludes proceeds resulting from settlement of insurance claims, and is not a measurement of cash flow under GAAP.