News Release
Intelsat Reports Second Quarter 2014 Results
-
Second quarter revenue of
$615.7 million ; -
Second quarter net income attributable to
Intelsat S.A. of$66.8 million ; -
Net income per diluted common share of
$0.53 ; Adjusted net income per diluted common share of$0.76 ; -
EBITDA of
$485.5 million and Adjusted EBITDA of$490.4 million or 80% of revenue; -
$10.3 billion contracted backlog provides visibility for future revenue and cash flow; and -
Company updates 2014 guidance, including improved Adjusted EBITDA
margin and increased debt pay down of approximately
$475 million ; reaffirms 2014 revenue guidance
“We remain focused on working with our blue chip customers to provide
them with satellite-based infrastructure that supports their business
growth. During the quarter we announced a new satellite program with
direct-to-home (“DTH”) operator, MultiChoice, as the anchor customer.
The 15-year agreement expands our relationship with the leading pay
television operator in
McGlade continued, “Our satellite programs remain on track, with
Second Quarter 2014 Business Highlights
Network Services comprised 47 percent of Intelsat’s total second quarter
2014 revenue, and at
Media comprised 35 percent of the company’s revenue for the quarter
ended
Government comprised 17 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 76 percent at
Satellite Launches
Our next launch, planned for the fourth quarter of 2014, is
Contracted Backlog
At
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
-
Transponder services reported an aggregate decrease of
$29.3 million , primarily due to a$13.3 million decrease in revenue from network services customers, primarily in theNorth America and theAfrica andMiddle East regions, an$11.8 million decrease in revenue primarily from capacity sold for government applications and a$4.2 million decrease in revenue from media applications due to non-renewals primarily in theNorth America region. -
Managed services reported an aggregate increase of
$1.1 million , largely due to a$2.9 million net increase in revenue from North American network services customers for broadband services for global mobility applications, partially offset by a$1.8 million decrease in international trunking primarily in theAfrica andMiddle East and theEurope regions. -
Channel reported an aggregate decrease of
$3.5 million due to the continued migration of international point-to-point satellite traffic to fiber optic cable, a trend we expect to continue.
Total Off-Network and Other Revenue decreased by
-
Transponder, MSS and other off-network services reported an aggregate
decrease of
$7.8 million , primarily due to declines in services for government applications, primarily related to reduced sales of off-network transponder services. -
Satellite-related services reported an aggregate increase of
$1.4 million , primarily due to increased revenue from government professional services.
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:
-
a net decrease of
$51.1 million in interest expense as a result of our debt offerings, prepayments and redemptions of our unsecured debt in 2013; -
a net decrease of
$5.8 million in interest expense as a result of the decrease in the interest rate for borrowing under the Secured Credit Agreement of our subsidiary,Intelsat Jackson Holdings S.A. (“Intelsat Jackson”); and -
a decrease of
$7.9 million resulting from higher capitalized interest of$17.6 million for the three months endedJune 30, 2014 , as compared to$9.8 million for the three months endedJune 30, 2013 , resulting from increased levels of satellites and related assets under construction; partially offset by -
an increase of
$7.1 million related to the interest expense accrued and the change in fair value on the interest rate swaps.
The non-cash portion of interest expense, net was
Other income, 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
EBITDA was
Adjusted EBITDA was
Net income attributable to
Net income per diluted common share attributable to
Adjusted net income per diluted common share was
By Customer Set | ||||||||||||
Three Months Ended | Three Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2013 | 2014 | |||||||||||
Network Services | $ | 303,665 | 46 | % | $ | 287,442 | 47 | % | ||||
Media | 220,526 | 34 | % | 217,049 | 35 | % | ||||||
Government | 122,390 | 19 | % | 103,629 | 17 | % | ||||||
Other | 7,222 | 1 | % | 7,629 | 1 | % | ||||||
$ | 653,803 | 100 | % | $ | 615,749 | 100 | % | |||||
By Service Type | ||||||||||||
Three Months Ended | Three Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2013 | 2014 | |||||||||||
On-Network Revenues | ||||||||||||
Transponder services | $ | 497,872 | 76 | % | $ | 468,552 | 76 | % | ||||
Managed services | 75,303 | 12 | % | 76,450 | 12 | % | ||||||
Channel | 18,654 | 3 | % | 15,142 | 2 | % | ||||||
Total on-network revenues | 591,829 | 91 | % | 560,144 | 91 | % | ||||||
Off-Network and Other Revenues | ||||||||||||
Transponder, MSS and other off-network services | 51,311 | 8 | % | 43,554 | 7 | % | ||||||
Satellite-related services | 10,663 | 2 | % | 12,051 | 2 | % | ||||||
Total off-network and other revenues | 61,974 | 9 | % | 55,605 | 9 | % | ||||||
Total | $ | 653,803 | 100 | % | $ | 615,749 | 100 | % | ||||
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
Today,
Revenue:
Adjusted EBITDA Margin:
Capital Expenditures: We expect capital expenditures ranges of:
-
2014:
$625 million to $700 million ; -
2015:
$775 million to $850 million ; and -
2016:
$625 million to $700 million .
Capital expenditure guidance assumes investment in ten satellites in the manufacturing or design phase for the three year calendar “Guidance Period” of 2014 through 2016. We expect to launch four satellites in 2014 and 2015, two satellites in 2016, and will continue work on five remaining satellites for which construction will extend beyond the Guidance Period. By the conclusion of the Guidance Period in 2016, the number of transponder equivalents is expected to increase 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. We expect to launch two of our new Intelsat EpicNG high-throughput satellites in the 2015 and 2016 periods, increasing our total transmission capacity.
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. As stated above, due to new contracts signed on the
We expect prepayment ranges of:
-
2014:
$125 million to $150 million ; -
2015:
$125 million to $150 million ; updated fromFebruary 2014 guidance of$75 million to $100 million ; and -
2016:
$0 million to $25 million .
The annual classification of capital expenditure and prepayments could be affected by the timing of achievement of contract, satellite manufacturing, launch and other milestones.
Prepayments during the three months ended
Debt Reduction: Based upon the above revenue, Adjusted EBITDA, capital
expenditure and prepayment guidance,
- - - - - - - - - - - - - - - - - - - - - - - - - - |
1In this release, financial measures are presented both in accordance with GAAP and also on a non-GAAP basis. EBITDA, Adjusted EBITDA, free cash flow from (used in) operations, Adjusted net income per diluted common share and related margins included in this release are non-GAAP financial measures. Please see the consolidated financial information below for information reconciling non-GAAP financial measures to comparable GAAP financial measures. |
Q2 2014 Quarterly Commentary
As previously announced,
Conference Call Information
Participants will have access to a replay of the conference call through
About
Intelsat Safe Harbor Statement:
Some of the statements in this news release and certain oral statements
from time to time by representatives of the company constitute
"forward-looking statements" that do not directly or exclusively relate
to historical facts. The forward-looking statements reflect
Because actual results could differ materially from
INTELSAT S.A. |
||||||||
UNAUDITED CONSOLIDATED STATEMENTS of OPERATIONS |
||||||||
($ in thousands, except per share amounts) |
||||||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
June 30, 2013 | June 30, 2014 | |||||||
Revenue | $ | 653,803 | $ | 615,749 | ||||
Operating expenses: | ||||||||
Direct costs of revenue (excluding depreciation and amortization) | 100,278 | 87,061 | ||||||
Selling, general and administrative | 125,217 | 44,690 | ||||||
Depreciation and amortization | 186,745 | 168,938 | ||||||
Gain on satellite insurance recoveries | (9,618 | ) | - | |||||
Total operating expenses | 402,622 | 300,689 | ||||||
Income from operations | 251,181 | 315,060 | ||||||
Interest expense, net | 297,228 | 239,234 | ||||||
Loss on early extinguishment of debt | (366,794 | ) | - | |||||
Other income (expense), net | (3,184 | ) | 1,512 | |||||
Income (loss) before income taxes | (416,025 | ) | 77,338 | |||||
Provision for (benefit from) income taxes | (8,759 | ) | 9,567 | |||||
Net income (loss) | (407,266 | ) | 67,771 | |||||
Net income attributable to noncontrolling interest | (1,039 | ) | (1,003 | ) | ||||
Net income (loss) attributable to Intelsat S.A. | $ | (408,305 | ) | $ | 66,768 | |||
Cumulative preferred dividends | (10,196 | ) | (9,917 | ) | ||||
Net income (loss) attributable to common shareholders | $ | (418,501 | ) | $ | 56,851 | |||
Net income (loss) per common share attributable to Intelsat S.A.: | ||||||||
Basic | $ | (4.19 | ) | $ | 0.53 | |||
Diluted | $ | (4.19 | ) | $ | 0.53 | |||
INTELSAT S.A. |
||||||||
UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO EBITDA |
||||||||
($ in thousands) |
||||||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
June 30, | June 30, | |||||||
2013 | 2014 | |||||||
Net income (loss) | $ | (407,266 | ) | $ | 67,771 | |||
Add (Subtract): | ||||||||
Interest expense, net | 297,228 | 239,234 | ||||||
Loss on early extinguishment of debt | 366,794 | - | ||||||
Provision for (benefit from) income taxes | (8,759 | ) | 9,567 | |||||
Depreciation and amortization | 186,745 | 168,938 | ||||||
EBITDA | $ | 434,742 | $ | 485,510 | ||||
EBITDA Margin | 66 | % | 79 | % | ||||
Note: |
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. |
INTELSAT S.A. |
||||||||
UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO |
||||||||
ADJUSTED EBITDA |
||||||||
($ in thousands) |
||||||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
June 30, | June 30, | |||||||
2013 | 2014 | |||||||
Net income (loss) | $ | (407,266 | ) | $ | 67,771 | |||
Add (Subtract): | ||||||||
Interest expense, net | 297,228 | 239,234 | ||||||
Loss on early extinguishment of debt | 366,794 | - | ||||||
Provision for (benefit from) income taxes | (8,759 | ) | 9,567 | |||||
Depreciation and amortization | 186,745 | 168,938 | ||||||
EBITDA | 434,742 | 485,510 | ||||||
Add (Subtract): | ||||||||
Compensation and benefits | 18,445 | 4,992 | ||||||
Management fees | 57,954 | - | ||||||
Non-recurring and other non-cash items | (1,764 | ) | (84 | ) | ||||
Adjusted EBITDA | $ | 509,377 | $ | 490,418 | ||||
Adjusted EBITDA Margin | 78 | % | 80 | % | ||||
Note: |
Intelsat calculates a measure called Adjusted EBITDA to assess the operating performance of Intelsat S.A. Adjusted EBITDA consists of EBITDA 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 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, our management believes that Adjusted EBITDA provides a useful means of evaluating the success of our operating activities. We also use 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 Adjusted EBITDA facilitates comparison of our results with those of companies having different capital structures. |
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. |
INTELSAT S.A. |
||||||||
UNAUDITED ADJUSTED NET INCOME (LOSS) per DILUTED COMMON SHARE |
||||||||
($ in thousands, except per share amounts) |
||||||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
June 30, | June 30, | |||||||
2013 | 2014 | |||||||
Numerator (in thousands): | ||||||||
Net income (loss) attributable to Intelsat S.A. | $ | (408,305 | ) | $ | 66,768 | |||
Add (Subtract): | ||||||||
Compensation and benefits (1) | 18,445 | 4,992 | ||||||
Management fees (2) | 57,954 | - | ||||||
(Gain) Loss on derivative financial instruments (3) | (4,457 | ) | 2,671 | |||||
Loss on early extinguishment of debt (4) | 366,794 | - | ||||||
Amortization (5) | 20,578 | 17,058 | ||||||
Non-recurring and other non-cash items (6) | (1,764 | ) | (84 | ) | ||||
Income tax effect of adjustments above & other discrete tax items (7) |
(4,433 | ) | (1 | ) | ||||
Adjusted net income attributable to Intelsat S.A. | 44,812 | 91,404 | ||||||
Less: Preferred share dividends declared | (10,196 | ) | (9,917 | ) | ||||
Adjusted net income attributable to common shareholders | $ | 34,616 | $ | 81,487 | ||||
Denominator (in millions): | ||||||||
Basic weighted average shares outstanding | 100.0 | 106.4 | ||||||
Weighted average dilutive shares outstanding: | ||||||||
Preferred shares | - | - | ||||||
Employee compensation related shares, including options and restricted share units |
0.9 | 0.5 | ||||||
Adjusted diluted weighted average shares outstanding | 100.9 | 106.9 | ||||||
Adjusted net income per diluted common share attributable to Intelsat S.A. |
$ | 0.34 | $ | 0.76 |
Note: | ||
Management evaluates financial performance in part based on adjusted net income per diluted common share attributable to common shareholders. This measure consists of net income per diluted common share attributable to common shareholders as reported, as adjusted to exclude or include certain unusual items, certain other operating expense items and certain other adjustments as described in the table and footnotes below. In addition, in calculating this measure we adjusted our common shares outstanding to reflect dilution when the calculation of the numerator moved from a net loss to net income. We believe investors’ understanding of our operating performance is enhanced by the disclosure of this measure. Adjusted net income per diluted common share attributable to common shareholders is not a recognized financial measure in accordance with U.S. GAAP and should not be considered a substitute for earnings per share or other financial measures as computed in accordance with U.S. GAAP and may not be comparable to similarly titled measures of other companies. | ||
(1) | Reflects non-cash expenses incurred relating to our equity compensation plans and a portion of the expenses related to our defined benefit retirement plan and other postretirement benefits. | |
(2) | Reflects expenses incurred in connection with our monitoring fee agreement dated February 4, 2008. In connection with the Initial Public Offering in April 2013, the monitoring fee agreement was terminated. | |
(3) | Represents (i) the changes in the fair value of the undesignated interest rate swaps and (ii) the difference between the amount of floating rate interest we receive and the amount of fixed rate interest we pay under such swaps, both of which are recognized in interest expense, net. | |
(4) | The 2013 loss related to the repayment of debt in connection with various 2013 refinancings, redemptions, prepayments and offerings. | |
(5) | Intangible assets are amortized based on the expected pattern of consumption. We recorded amortization expense related to our backlog and other and customer intangible assets. | |
(6) | Reflects certain non-recurring gains and losses and non-cash items, including the following: non-recurring litigation expenses; severance, retention and relocation payments; costs associated with a 2013 internal subsidiary reorganization; expenses associated with the relocation of our administrative headquarters and primary satellites operations center; expenses related to the IPO; the total impairment of an immaterial investment; and other various other expenses. These costs were partially offset by the gain on satellite insurance recoveries and non-cash income related to the recognition of deferred revenue on a straight-line basis for certain prepaid capacity service contracts. | |
(7) | Represents the income tax impact of the various adjustments. | |
INTELSAT S.A. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
($ in thousands, except, per share amounts) |
||||||||
As of | As of | |||||||
December 31, | June 30, | |||||||
2013 | 2014 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 247,790 | $ | 370,292 | ||||
Receivables, net of allowance of $35,288 in 2013 and $31,315 in 2014 | 236,347 | 233,583 | ||||||
Deferred income taxes | 44,475 | 67,642 | ||||||
Prepaid expenses and other current assets | 33,224 | 34,939 | ||||||
Total current assets | 561,836 | 706,456 | ||||||
Satellites and other property and equipment, net | 5,805,540 | 5,810,400 | ||||||
Goodwill | 6,780,827 | 6,780,827 | ||||||
Non-amortizable intangible assets | 2,458,100 | 2,458,100 | ||||||
Amortizable intangible assets, net | 568,775 | 534,659 | ||||||
Other assets | 414,592 | 426,367 | ||||||
Total assets | $ | 16,589,670 | $ | 16,716,809 | ||||
LIABILITIES AND SHAREHOLDERS' DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 154,712 | $ | 139,749 | ||||
Employee related liabilities | 28,227 | 34,487 | ||||||
Accrued interest payable | 186,492 | 168,133 | ||||||
Current portion of long-term debt | 24,418 | 12,209 | ||||||
Deferred satellite performance incentives | 22,703 | 21,057 | ||||||
Deferred revenue | 84,185 | 94,081 | ||||||
Other current liabilities | 72,840 | 71,629 | ||||||
Total current liabilities | 573,577 | 541,345 | ||||||
Long-term debt, net of current portion | 15,262,996 | 15,261,356 | ||||||
Deferred satellite performance incentives, net of current portion | 153,904 | 145,024 | ||||||
Deferred revenue, net of current portion | 888,239 | 904,392 | ||||||
Deferred income taxes | 202,638 | 241,135 | ||||||
Accrued retirement benefits | 196,856 | 181,010 | ||||||
Other long-term liabilities | 246,127 | 225,030 | ||||||
Shareholders' deficit: | ||||||||
Common shares; nominal value $0.01 per share | 1,060 | 1,065 | ||||||
5.75% Series A mandatory convertible junior non-voting preferred shares; nominal value $0.01 per share; aggregate liquidation preference of $172,500 ($50 per share) |
35 | 35 | ||||||
Paid-in capital | 2,099,218 | 2,101,474 | ||||||
Accumulated deficit | (3,015,273 | ) | (2,866,559 | ) | ||||
Accumulated other comprehensive loss | (60,393 | ) | (57,033 | ) | ||||
Total shareholders' deficit | (975,353 | ) | (821,018 | ) | ||||
Noncontrolling interest | 40,686 | 38,535 | ||||||
Total liabilities and shareholders' deficit | $ | 16,589,670 | $ | 16,716,809 | ||||
|
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INTELSAT S.A. | ||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
($ in thousands) | ||||||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
June 30, 2013 | June 30, 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (407,266 | ) | $ | 67,771 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
Depreciation and amortization | 186,745 | 168,938 | ||||||
Provision for doubtful accounts | 2,103 | (1,084 | ) | |||||
Foreign currency transaction loss | 2,773 | 104 | ||||||
Loss on disposal of assets | 212 | 32 | ||||||
Gain on satellite insurance recoveries | (9,618 | ) | - | |||||
Share-based compensation | 18,281 | 4,886 | ||||||
Deferred income taxes | (2,517 | ) | 620 | |||||
Amortization of discount, premium, issuance costs and other non-cash items | 19,321 | 5,668 | ||||||
Loss on early extinguishment of debt | 366,794 | - | ||||||
Loss on investment in affiliates | 1,000 | - | ||||||
Unrealized gains on derivative financial instruments | (11,367 | ) | (4,426 | ) | ||||
Amortization of actuarial loss and prior service credits for retirement benefits | 4,904 | 2,536 | ||||||
Other non-cash items | (802 | ) | 46 | |||||
Changes in operating assets and liabilities: | ||||||||
Receivables | (7,265 | ) | 20,932 | |||||
Prepaid expenses and other assets | 20,644 | (4,011 | ) | |||||
Accounts payable and accrued liabilities | 8,790 | 13,841 | ||||||
Accrued interest | (131,620 | ) | (161,859 | ) | ||||
Deferred revenue | 27,644 | 18,602 | ||||||
Accrued retirement benefits | (17,217 | ) | (9,526 | ) | ||||
Other long-term liabilities | (8,654 | ) | 7,362 | |||||
Net cash provided by operating activities | 62,885 | 130,432 | ||||||
Cash flows from investing activities: | ||||||||
Payments for satellites and other property and equipment (including capitalized interest) | (169,054 | ) | (186,047 | ) | ||||
Proceeds from insurance settlements | 235,019 | - | ||||||
Other investing activities | - | 79 | ||||||
Net cash provided by (used in) investing activities | 65,965 | (185,968 | ) | |||||
Cash flows from financing activities: | ||||||||
Repayments of long-term debt | (6,715,609 | ) | - | |||||
Repayment of notes payable to former shareholders | (670 | ) | - | |||||
Payment of premium on early extinguishment of debt | (311,224 | ) | - | |||||
Proceeds from issuance of long-term debt | 6,214,688 | - | ||||||
Debt issuance costs | (84,948 | ) | - | |||||
Proceeds from initial public offering | 572,500 | - | ||||||
Stock issuance costs | (26,377 | ) | - | |||||
Dividends paid to preferred shareholders | - | (2,479 | ) | |||||
Dividends paid to noncontrolling interest | (2,306 | ) | (2,258 | ) | ||||
Principal payments on deferred satellite performance incentives | (5,117 | ) | (5,088 | ) | ||||
Other financing activities | - | 365 | ||||||
Net cash used in financing activities | (359,063 | ) | (9,460 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (2,773 | ) | (104 | ) | ||||
Net change in cash and cash equivalents | (232,986 | ) | (65,100 | ) | ||||
Cash and cash equivalents, beginning of period | 328,778 | 435,392 | ||||||
Cash and cash equivalents, end of period | $ | 95,792 | $ | 370,292 | ||||
Supplemental cash flow information: | ||||||||
Interest paid, net of amounts capitalized |
$ |
417,207 |
$ |
400,151 | ||||
Income taxes paid, net of refunds | 8,452 | 8,241 | ||||||
Supplemental disclosure of non-cash investing activities: | ||||||||
Accrued capital expenditures | 20,009 | (8,543 | ) | |||||
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 | |||||||
June 30, | June 30, | |||||||
2013 | 2014 | |||||||
Net cash provided by operating activities | $ | 62,885 | $ | 130,432 | ||||
Payments for satellites and other property and equipment (including capitalized interest) |
(169,054 | ) | (186,047 | ) | ||||
Free cash flow used in operations | $ | (106,169 | ) | $ | (55,615 | ) |
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 resulting from settlement of insurance claims, 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. |
Source:
Intelsat
Dianne VanBeber
Vice President, Investor Relations
and Communications
+1 703-559-7406
dianne.vanbeber@intelsat.com