News Release
Intelsat Announces Fourth Quarter and Full-Year 2018 Results
-
Fourth quarter revenue of
$543 million ; or$515 million excluding effects of revenue recognition rules (ASC 606) -
Full-year 2018 revenue of
$2,161 million ; or$2,058 million excluding effects of ASC 606 -
Fourth quarter net loss attributable to
Intelsat S.A. of$111 million ; -
2018 full-year net loss attributable to
Intelsat S.A. of$600 million ; -
Fourth quarter Adjusted EBITDA of
$418 million or 77 percent of revenue;$392 million or 76 percent of revenue excluding effects of ASC 606 -
Full-year 2018 Adjusted EBITDA of
$1,668 million or 77 percent of revenue;$1,565 million or 76 percent of revenue excluding effects of ASC 606 -
$8.1 billion contracted backlog, inclusive of$1.1 billion in effects of ASC 606, providing visibility for future revenue and cash flow -
Intelsat issues 2019 Guidance inclusive of effects of ASC 606
In the first quarter of 2018, we adopted the provisions of the Financial
Accounting Standards Board Accounting Standards Codification Topic 606,
Revenue from Contracts with Customers (“ASC 606”). As a result of the
adoption of ASC 606, total revenue reflects
Total revenue excluding the effects of ASC 606 was
Excluding the effects of ASC 606, Adjusted EBITDA was
“Our fourth quarter financial performance contributes to an in-line
result with our 2018 annual guidance,” said
Mr. Spengler continued, “Our operating priorities for 2019 effectuate the next phase of our high-throughput satellite Intelsat EpicNG strategy. With our global HTS footprint in place, and our managed services platforms fully operational, we are bringing new capabilities to existing and new markets. Further, in 2019 our support of market innovations and use of more flexible software and standards-based technologies will progress our goals of lowering the capital intensity of our business and enabling a seamless interface with the telecom sector. This will broaden our market opportunity over time.
“Finally, we continue to promote our FCC proposal to clear a portion of
our U.S. spectrum to accelerate the deployment of 5G in the U.S.
Fourth Quarter and Full-Year 2018 Business Highlights
Network Services
Network services revenue was
Network Services revenue for the year-ended
Media
Media revenue was
Media revenue was
Government
Government revenue was
Government revenue was
Average Fill Rate
Intelsat’s average fill rate at
Satellite Launches
Contracted Backlog
At
Capital Market Transactions
In
In
Financial Results for the Three Months Ended
Total revenue for the three months ended
Total On-Network Revenues increased by
-
Transponder services reported an aggregate increase of
$5.3 million , of which$23.8 million is attributable to ASC 606 adjustments. Excluding the impact of ASC 606 adjustments, the resulting decrease of$18.5 million is primarily due to an$7.3 million net decrease in revenue from network services customers and a$9.4 million decrease in revenue from media customers and a$1.8 million reduction in revenue from government customers. The decrease in network services revenue was mainly related to declines for wide-beam wireless infrastructure and enterprise services due to pricing pressure, non-renewals, service contractions and end of service, and reduced collection experience in the three months endedDecember 31, 2018 as compared to the prior year period. These declines were partially offset by increases for maritime and aeronautical mobility applications. The decrease in media revenue was primarily related to non-renewals and volume reductions from certain customers in theNorth America andLatin America regions, lower collections and price reductions related to currency fluctuations, as well as transfers of services to off-network capacity. The decrease in revenue from government customers was related to the net effect of price reductions from renewed contracts. -
Managed services revenue of
$96.5 million , which includes$1.7 million attributable to ASC 606 adjustments, reflects an aggregate decrease of$4.3 million as compared to the three months endedDecember 31, 2017 . Excluding the effects of ASC 606, managed services revenue of$94.8 million declined by$6.0 million , primarily due to a decrease of$2.7 million in revenue from government customers resulting from non-renewals and lower pricing. Managed services for media applications declined by$2.4 million due primarily to expiring services and lower occasional use. Declines in point-to-point trunking services for network services customers were offset by$1.8 million in increased revenue from managed mobility services.
Total Off-Network and Other Revenues reported an aggregate
increase of
-
Transponder, MSS and other Off-Network services revenues
increased
$2.1 million to $40.9 million , inclusive of$2.5 million in adjustments attributable to ASC 606. -
Satellite-related services reported an increase of
$1.8 million , or 15 percent, to$14.1 million .
For the three months ended
Direct costs of revenue (excluding depreciation and amortization)
increased by
Selling, general and administrative expenses decreased 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 cap contracts
(which reflect the change in their fair value), offset by interest
income earned and the amount of interest we capitalize related to assets
under construction. As of
Interest expense, net increased by
-
a net increase of
$29.0 million primarily related to the significant financing component identified in customer contracts in accordance with ASC 606; -
an increase of
$18.4 million corresponding to the decrease in fair value of the interest rate cap contracts; -
an increase of
$11.1 million in interest expense primarily driven by our new debt issuances, refinancings and amendments with higher interest rates, which was partially offset by certain debt repurchases and exchanges in 2018; and -
a net increase of
$4.9 million resulting from lower capitalized interest of$9.2 million for the three months endedDecember 31, 2018 , as compared to$14.1 million for the three months endedDecember 31, 2017 , primarily resulting from a decreased number of satellites and related assets under construction.
The non-cash portion of total interest expense, net was
Loss on early extinguishment of debt was
Other income, net was
Provision for income taxes was immaterial for the three months
ended
Cash paid for income taxes, net of refunds, totaled
Net Income, Net Income per Diluted Common Share attributable to
Net loss attributable to
Net loss per diluted common share attributable to
EBITDA was
Adjusted EBITDA was
Free Cash Flow From Operations
Free cash flow from operations1 was
Financial Outlook 2019
Today,
Revenue Guidance: We expect full-year 2019 revenue in a range of
- Growth of 2 percent to a decline of 1 percent in our government business;
- A decline of 3 percent to 6 percent in our media business; and
- A decline of 3 percent to 6 percent in our network services business.
Adjusted EBITDA Guidance:
Capital Expenditure Guidance:
We expect the following capital expenditure ranges:
-
2019:
$250 million to $300 million ; -
2020:
$275 million to $350 million ; and -
2021:
$250 million to $350 million .
Our capital expenditure guidance includes capitalized interest.
Capitalized interest is expected to average approximately
Our capital expenditure plan excludes up to four satellites which we may be required to build should our C-band proposal to the FCC be adopted in all material respects. For more information on our C-band proposal, see our Quarterly Commentary “Our 2019 Operating Priorities,” issued today.
By the conclusion of the Guidance Period at the end of 2021, the net number of transponder equivalents is expected to increase by a compound annual growth rate (“CAGR”) of approximately 2 percent, reflecting the net activity of satellites entering and leaving service during the Guidance Period. Capital expenditure incurrence is subject to the timing of achievement of contract, satellite manufacturing, launch and other milestones.
Cash Taxes: We expect cash taxes to range from
1 In this release, financial measures are presented both in accordance with U.S. GAAP and also on a non-U.S. GAAP basis. EBITDA, Adjusted EBITDA (or “AEBITDA”), free cash flow from (used in) operations and related margins included in this release are non-U.S. GAAP financial measures. Please see the consolidated financial information below for information reconciling non-U.S. GAAP financial measures to comparable U.S. GAAP financial measures. |
4Q 2018 Quarterly Commentary
Conference Call Information
Participants will have access to a replay of the conference call through
About
Intelsat Safe Harbor Statement:
Some of the information and statements contained in this earnings
release and certain oral statements made from time to time by
representatives of
The forward-looking statements reflect
Because actual results could differ materially from
INTELSAT S.A. | ||||||||
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||
($ in thousands, except per share amounts) | ||||||||
Three Months |
Three Months |
|||||||
Revenue | $ | 538,140 | $ | 542,771 | ||||
Operating expenses: | ||||||||
Direct costs of revenue (excluding depreciation and amortization) | 80,720 | 88,516 | ||||||
Selling, general and administrative | 52,034 | 47,805 | ||||||
Depreciation and amortization | 172,440 | 174,076 | ||||||
Total operating expenses | 305,194 | 310,397 | ||||||
Income from operations | 232,946 | 232,374 | ||||||
Interest expense, net | 264,590 | 326,993 | ||||||
Loss on early extinguishment of debt | - | (17,751 | ) | |||||
Other income, net | 3,693 | 2,161 | ||||||
Loss before income taxes | (27,951 | ) | (110,209 | ) | ||||
Provision for (benefit from) income taxes | 61,005 | 150 | ||||||
Net loss | (88,956 | ) | (110,359 | ) | ||||
Net income attributable to noncontrolling interest | (995 | ) | (987 | ) | ||||
Net loss attributable to Intelsat S.A. | $ | (89,951 | ) | $ | (111,346 | ) | ||
Net loss per common share attributable to Intelsat S.A.: | ||||||||
Basic | $ | (0.75 | ) | $ | (0.81 | ) | ||
Diluted | $ | (0.75 | ) | $ | (0.81 | ) | ||
INTELSAT S.A | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
($ in thousands, except per share amounts) | ||||||||
Year Ended |
Year Ended |
|||||||
(unaudited) | ||||||||
Revenue | $ | 2,148,612 | $ | 2,161,190 | ||||
Operating expenses: | ||||||||
Direct costs of revenue (excluding depreciation and amortization) | 324,232 | 330,874 | ||||||
Selling, general and administrative | 205,475 | 200,857 | ||||||
Depreciation and amortization | 707,824 | 687,589 | ||||||
Total operating expenses | 1,237,531 | 1,219,320 | ||||||
Income from operations | 911,081 | 941,870 | ||||||
Interest expense, net | 1,020,770 | 1,212,374 | ||||||
Gain (loss) on early extinguishment of debt | (4,109 | ) | (199,658 | ) | ||||
Other income (expense), net | 10,114 | 4,541 | ||||||
Income (loss) before income taxes | (103,684 | ) | (465,621 | ) | ||||
Provision for income taxes | 71,130 | 130,069 | ||||||
Net income (loss) | (174,814 | ) | (595,690 | ) | ||||
Net income attributable to noncontrolling interest | (3,914 | ) | (3,915 | ) | ||||
Net income (loss) attributable to Intelsat S.A. | $ | (178,728 | ) | $ | (599,605 | ) | ||
Net income (loss) per common share attributable to Intelsat S.A.: | ||||||||
Basic | $ | (1.50 | ) | $ | (4.63 | ) | ||
Diluted | $ | (1.50 | ) | $ | (4.63 | ) | ||
INTELSAT S.A. | ||||||||||||||||
UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO EBITDA | ||||||||||||||||
($ in thousands) | ||||||||||||||||
Three Months |
Three Months |
Year Ended |
Year Ended |
|||||||||||||
Net income (loss) | $ | (88,956 | ) | $ | (110,359 | ) | $ | (174,814 | ) | $ | (595,690 | ) | ||||
Add (Subtract): | ||||||||||||||||
Interest expense, net | 264,590 | 326,993 | 1,020,770 | 1,212,374 | ||||||||||||
Loss (gain) on early extinguishment of debt | - | 17,751 | 4,109 | 199,658 | ||||||||||||
Provision for income taxes | 61,005 | 150 | 71,130 | 130,069 | ||||||||||||
Depreciation and amortization | 172,440 | 174,076 | 707,824 | 687,589 | ||||||||||||
EBITDA | 409,079 | 408,611 | 1,629,019 | 1,634,000 | ||||||||||||
Effect of ASC 606 adoption | - | (25,667 | ) | - | (103,447 | ) | ||||||||||
EBITDA excluding ASC 606 adoption effect | $ | 409,079 | $ | 382,944 | $ | 1,629,019 | $ | 1,530,553 | ||||||||
EBITDA Margin | 76 | % | 75 | % | 76 | % | 76 | % | ||||||||
EBITDA Margin excluding ASC 606 adoption effect | 76 | % | 74 | % | 76 | % | 74 | % | ||||||||
Note: |
Intelsat calculates a measure called EBITDA to assess the operating performance of Intelsat S.A. EBITDA consists of earnings before net interest, gain 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. Accordingly, we consider gain on early extinguishment of debt an element of interest expense. EBITDA is a measure commonly used in the Fixed Satellite Services (“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 financial 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. |
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 |
Year Ended |
Year Ended |
|||||||||||||
Net income (loss) | $ | (88,956 | ) | $ | (110,359 | ) | $ | (174,814 | ) | $ | (595,690 | ) | ||||
Add (Subtract): | ||||||||||||||||
Interest expense, net | 264,590 | 326,993 | 1,020,770 | 1,212,374 | ||||||||||||
Loss (gain) on early extinguishment of debt | - | 17,751 | 4,109 | 199,658 | ||||||||||||
Provision for income taxes | 61,005 | 150 | 71,130 | 130,069 | ||||||||||||
Depreciation and amortization | 172,440 | 174,076 | 707,824 | 687,589 | ||||||||||||
EBITDA | 409,079 | 408,611 | 1,629,019 | 1,634,000 | ||||||||||||
Add: | ||||||||||||||||
Compensation and benefits | 2,147 | 2,181 | 15,995 | 6,824 | ||||||||||||
Unrealized (gain) on derivatives | (732 | ) | - | (732 | ) | - | ||||||||||
Non-recurring and other non-cash items | 5,904 | 7,102 | 20,321 | 27,646 | ||||||||||||
Adjusted EBITDA | 416,398 | 417,894 | 1,664,603 | 1,668,470 | ||||||||||||
Effect of ASC 606 adoption | - | (25,667 | ) | - | (103,447 | ) | ||||||||||
Adjusted EBITDA excluding ASC 606 adoption effect | $ | 416,398 | $ | 392,227 | $ | 1,664,603 | $ | 1,565,023 | ||||||||
Adjusted EBITDA Margin | 77 | % | 77 | % | 77 | % | 77 | % | ||||||||
Adjusted EBITDA Margin excluding ASC 606 adoption effect | 77 | % | 76 | % | 77 | % | 76 | % | ||||||||
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 our Adjusted EBITDA 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. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands, except per share amounts) | ||||||||
As of |
As of |
|||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 525,215 | $ | 485,120 | ||||
Restricted cash | 16,176 | 22,037 | ||||||
Receivables, net of allowances of $29,669 in 2017 and $28,542 in 2018 | 221,223 | 271,393 | ||||||
Contract assets | - | 45,034 | ||||||
Prepaid expenses and other current assets | 56,862 | 24,075 | ||||||
Total current assets | 819,476 | 847,659 | ||||||
Satellites and other property and equipment, net | 5,923,619 | 5,511,702 | ||||||
Goodwill | 2,620,627 | 2,620,627 | ||||||
Non-amortizable intangible assets | 2,452,900 | 2,452,900 | ||||||
Amortizable intangible assets, net | 349,584 | 311,103 | ||||||
Contract assets, net of current portion | - | 96,108 | ||||||
Other assets | 443,830 | 401,414 | ||||||
Total assets | $ | 12,610,036 | $ | 12,241,513 | ||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 116,396 | $ | 108,101 | ||||
Taxes payable | 12,007 | 5,679 | ||||||
Employee related liabilities | 29,328 | 29,696 | ||||||
Accrued interest payable | 263,207 | 284,649 | ||||||
Current portion of long-term debt | 96,572 | - | ||||||
Contract liabilities | - | 137,746 | ||||||
Deferred satellite performance incentives | 25,780 | 35,261 | ||||||
Deferred revenue | 149,749 | - | ||||||
Other current liabilities | 47,287 | 59,080 | ||||||
Total current liabilities | 740,326 | 660,212 | ||||||
Long-term debt, net of current portion | 14,112,086 | 14,028,352 | ||||||
Contract liabilities, net of current portion | - | 1,131,319 | ||||||
Deferred satellite performance incentives, net of current portion | 215,352 | 210,346 | ||||||
Deferred revenue, net of current portion | 794,707 | - | ||||||
Deferred income taxes | 48,434 | 82,488 | ||||||
Accrued retirement benefits | 191,079 | 133,735 | ||||||
Other long-term liabilities | 296,616 | 77,670 | ||||||
Shareholders’ deficit: | ||||||||
Common shares; nominal value $0.01 per share | 1,196 | 1,380 | ||||||
Paid-in capital | 2,173,367 | 2,551,471 | ||||||
Accumulated deficit | (5,894,659 | ) | (6,606,426 | ) | ||||
Accumulated other comprehensive loss | (87,774 | ) | (43,430 | ) | ||||
Total Intelsat S.A. shareholders’ deficit | (3,807,870 | ) | (4,097,005 | ) | ||||
Noncontrolling interest | 19,306 | 14,396 | ||||||
Total liabilities and shareholders’ deficit | $ | 12,610,036 | $ | 12,241,513 | ||||
INTELSAT S.A. | ||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
($ in thousands) | ||||||||
Three months Ended |
Three months Ended |
|||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (88,956 | ) | $ | (110,359 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 172,440 | 174,075 | ||||||
Provision for doubtful accounts | 1,797 | (860 | ) | |||||
Foreign currency transaction (gain) loss | 1,487 | (1,371 | ) | |||||
Loss on disposal of assets | 19 | 27 | ||||||
Share-based compensation | 2,147 | 2,183 | ||||||
Deferred income taxes | 54,541 | (5,592 | ) | |||||
Amortization of discount, premium, issuance costs and related costs | 12,505 | 9,833 | ||||||
Loss on early extinguishment of debt | - | 17,751 | ||||||
Amortization of actuarial loss and prior service credits for retirement benefits | 750 | 418 | ||||||
Unrealized gains on derivatives and investments | 275 | 20,243 | ||||||
Other non-cash items | 14 | 1,709 | ||||||
Changes in operating assets and liabilities: | ||||||||
Receivables | (28,944 | ) | (21,074 | ) | ||||
Prepaid expenses and other assets | (22,988 | ) | 209 | |||||
Accounts payable and accrued liabilities | 1,110 | 11,720 | ||||||
Accrued interest payable | (31,823 | ) | 81,693 | |||||
Deferred revenue and contract liabilities | (49,305 | ) | (18,806 | ) | ||||
Accrued retirement benefits | (2,877 | ) | (3,388 | ) | ||||
Other long-term liabilities | (49 | ) | 11,548 | |||||
Net cash provided by operating activities | 22,143 | 169,959 | ||||||
Cash flows from investing activities: | ||||||||
Payments for satellites and other property and equipment (including capitalized interest) | (57,505 | ) | (79,719 | ) | ||||
Purchase of cost method investments | (9,744 | ) | (4,000 | ) | ||||
Capital contributions to unconsolidated affiliates | (7,359 | ) | (8,404 | ) | ||||
Proceeds from insurance settlements | 21,437 | 14,700 | ||||||
Other proceeds from satellites | - | 11,250 | ||||||
Net cash used in investing activities | (53,171 | ) | (66,173 | ) | ||||
Cash flows from financing activities: | ||||||||
Repayments of long-term debt | - | (954,650 | ) | |||||
Proceeds from issuance of long-term debt | - | 705,250 | ||||||
Debt issuance costs | (20,049 | ) | (1,932 | ) | ||||
Debt modification fees | - | (3,954 | ) | |||||
Payment on early extinguishment of debt | - | (14,242 | ) | |||||
Principal payments on deferred satellite performance incentives | (3,210 | ) | (6,698 | ) | ||||
Proceeds from exercise of employee stock options | 213 | 14 | ||||||
Dividends paid to noncontrolling interest | (2,159 | ) | (2,174 | ) | ||||
Other financing activities | (1 | ) | - | |||||
Net cash used in financing activities | (25,206 | ) | (278,386 | ) | ||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (610 | ) | 457 | |||||
Net change in cash, cash equivalents and restricted cash | (56,844 | ) | (174,143 | ) | ||||
Cash, cash equivalents and restricted cash, beginning of period | 598,235 | 681,300 | ||||||
Cash, cash equivalents and restricted cash, end of period | 541,391 | 507,157 | ||||||
Supplemental cash flow information: | ||||||||
Interest paid, net of amounts capitalized | $ | 283,951 | $ | 194,959 | ||||
Income taxes paid | 3,337 | 3,395 | ||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Accrued capital expenditures and payments for satellites | $ | 21,156 | $ | 13,604 | ||||
INTELSAT S.A. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
($ in thousands) | ||||||||
Year Ended |
Year Ended |
|||||||
(unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (174,814 | ) | $ | (595,690 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 707,824 | 687,589 | ||||||
Benefit from doubtful accounts | (4,094 | ) | (836 | ) | ||||
Foreign currency transaction (gain) loss | (876 | ) | 6,736 | |||||
Loss on disposal of assets | 45 | 46 | ||||||
Share-based compensation | 15,995 | 6,825 | ||||||
Deferred income taxes | 43,931 | 79,160 | ||||||
Amortization of discount, premium, issuance costs and related costs | 48,696 | 48,495 | ||||||
Loss on early extinguishment of debt | 4,109 | 199,658 | ||||||
Unrealized (gains) losses on derivatives financial instruments | 275 | (14,685 | ) | |||||
Amortization of actuarial loss and prior service credits for retirement benefits | 3,287 | 3,823 | ||||||
Other non-cash items | (287 | ) | 1,177 | |||||
Changes in operating assets and liabilities: | ||||||||
Receivables | (14,333 | ) | (63,814 | ) | ||||
Prepaid expenses, contract and other assets | (24,760 | ) | 3,708 | |||||
Accounts payable and accrued liabilities | (42,337 | ) | 7,291 | |||||
Accrued interest payable | 58,367 | 21,442 | ||||||
Deferred revenue and contract liabilities | (134,577 | ) | (39,763 | ) | ||||
Accrued retirement benefits | (13,422 | ) | (15,902 | ) | ||||
Other long-term liabilities | (8,783 | ) | 8,913 | |||||
Net cash provided by operating activities | 464,246 | 344,173 | ||||||
Cash flows from investing activities: | ||||||||
Payments for satellites and other property and equipment (including capitalized interest) | (461,627 | ) | (255,696 | ) | ||||
Purchase of cost method investments | (25,744 | ) | (19,000 | ) | ||||
Capital contributions to unconsolidated affiliate | (30,714 | ) | (48,097 | ) | ||||
Proceeds from insurance settlements | 49,788 | 20,409 | ||||||
Other proceeds from satellites | - | 18,750 | ||||||
Net cash used in investing activities | (468,297 | ) | (283,634 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of long-term debt | 1,500,000 | 4,585,875 | ||||||
Repayments of long-term debt | (1,500,000 | ) | (4,782,451 | ) | ||||
Debt issuance costs | (41,237 | ) | (49,436 | ) | ||||
Debt modification fees | - | (3,954 | ) | |||||
Proceeds from stock issuance, net of issuance costs | - | 224,250 | ||||||
Payment of premium on early extinguishment of debt | - | (33,890 | ) | |||||
Payment on tender, debt exchange and consent |
(14 | ) | - | |||||
Other payments for satellites | (35,396 | ) | - | |||||
Principal payments on deferred satellite performance incentives | (37,186 | ) | (25,488 | ) | ||||
Dividends paid to noncontrolling interest | (8,755 | ) | (8,825 | ) | ||||
Proceeds from exercise of employee stock options | 476 | 3,211 | ||||||
Other financing activities | 414 | 385 | ||||||
Net cash provided by (used in) financing activities | (121,698 | ) | (90,323 | ) | ||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1,116 | (4,450 | ) | |||||
Net change in cash, cash equivalents and restricted cash | (124,633 | ) | (34,234 | ) | ||||
Cash, cash equivalents, and restricted cash beginning of period | 666,024 | 541,391 | ||||||
Cash, cash equivalents, and restricted cash end of period | 541,391 | 507,157 | ||||||
Supplemental cash flow information: | ||||||||
Interest paid, net of amounts capitalized | $ | 915,627 | $ | 1,052,885 | ||||
Income taxes paid, net of refunds | 33,731 | 57,085 | ||||||
Supplemental disclosure of non-cash investing activities: | ||||||||
Accrued capital expenditures | $ | 38,450 | $ | 28,203 | ||||
Capitalization of deferred satellite performance incentives | 44,445 | 28,161 | ||||||
INTELSAT S.A | ||||||||||||||||
UNAUDITED RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES |
||||||||||||||||
TO FREE CASH FLOW FROM (USED IN) OPERATIONS |
||||||||||||||||
($ in thousands) |
||||||||||||||||
Three Months |
Three Months |
Year Ended |
Year Ended |
|||||||||||||
Net cash provided by operating activities | $ | 22,143 | $ | 169,959 | $ | 464,246 | $ | 344,173 | ||||||||
Other proceeds from satellites from investing activities | - | 11,250 | - | 18,750 | ||||||||||||
Payments for satellites and other property
and equipment (including capitalized interest) |
(57,505 | ) | (79,719 | ) | (461,627 | ) | (255,696 | ) | ||||||||
Other payments for satellites from financing activities | - | - | (35,396 | ) | - | |||||||||||
Free cash flow from (used in) operations | $ | (35,362 | ) | $ | 101,490 | $ | (32,777 | ) | $ | 107,227 | ||||||
Note: |
Free cash flow from (used in) operations consists of net cash provided by (used in) operating activities and other proceeds from satellites from investing activities, less payments for satellites and other property and equipment (including capitalized interest) from investing activities and other payments for satellites from financing activities. Free cash flow from (used in) operations is not a measurement of cash flow under U.S. 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 financial 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 U.S. GAAP, and free cash flow from (used in) operations 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 income (loss) or net income (loss), determined in accordance with U.S. GAAP, as an indicator of Intelsat’s 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. |
SUPPLEMENTAL TABLE |
REVENUE BY CUSTOMER SET AND SERVICE TYPE |
($ in thousands) |
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. |
By Customer Set | |||||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||
Three Months |
Revenues |
ASC 606 |
Revenues |
Increase
Adoption of |
Percentage |
Increase |
Percentage |
||||||||||||||||||||||||||||
Network Services | $ | 212,238 | 39 | % | $ | 199,046 | 39 | % | $ | 2,969 | $ | 202,015 | 37 | % | $ | (10,223 | ) | (5 | )% | $ | (13,192 | ) | (6 | )% | |||||||||||
Media | 226,218 | 42 | 214,419 | 42 | 16,723 | 231,142 | 43 | 4,924 | 2 | (11,799 | ) | (5 | ) | ||||||||||||||||||||||
Government | 90,117 | 17 | 89,497 | 17 | 8,239 | 97,736 | 18 | 7,619 | 9 | (620 | ) | (1 | ) | ||||||||||||||||||||||
Other | 9,567 | 2 | 11,845 | 2 | 33 | 11,878 | 2 | 2,311 | 24 | 2,278 | 24 | ||||||||||||||||||||||||
$ | 538,140 | 100 | % | $ | 514,807 | 100 | % | $ | 27,964 | $ | 542,771 | 100 | % | $ | 4,631 | 1 | % | $ | (23,333 | ) | (4 | )% | |||||||||||||
By Service Type | |||||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||
Three Months |
Revenues |
ASC 606 |
Revenues |
Increase |
Percentage |
Increase |
Percentage |
||||||||||||||||||||||||||||
On-Network Revenues | |||||||||||||||||||||||||||||||||||
Transponder services | $ | 385,020 | 72 | % | $ | 366,552 | 71 | % | $ | 23,765 | $ | 390,317 | 72 | % | $ | 5,297 | 1 | % | $ | (18,468 | ) | (5 | )% | ||||||||||||
Managed services | 100,766 | 19 | 94,787 | 18 | 1,676 | 96,463 | 18 | (4,303 | ) | (4 | ) | (5,979 | ) | (6 | ) | ||||||||||||||||||||
Channel | 1,306 | - | 959 | - | - | 959 | - | (347 | ) | (27 | ) | (347 | ) | (27 | ) | ||||||||||||||||||||
Total on-network revenues | 487,092 | 91 | 462,298 | 89 | 25,441 | 487,739 | 90 | 647 | - | (24,794 | ) | (5 | ) | ||||||||||||||||||||||
Off-Network and Other Revenues | - | - | |||||||||||||||||||||||||||||||||
Transponder, MSS and other off-network services | 38,757 | 7 | 38,411 | 8 | 2,490 | 40,901 | 7 | 2,144 | 6 | (346 | ) | (1 | ) | ||||||||||||||||||||||
Satellite-related services | 12,291 | 2 | 14,098 | 3 | 33 | 14,131 | 3 | 1,840 | 15 | 1,807 | 15 | ||||||||||||||||||||||||
Total off-network and other revenues | 51,048 | 9 | 52,509 | 11 | 2,523 | 55,032 | 10 | 3,984 | 8 | 1,461 | 3 | ||||||||||||||||||||||||
Total | $ | 538,140 | 100 | % | $ | 514,807 | 100 | % | $ | 27,964 | $ | 542,771 | 100 | % | $ | 4,631 | 1 | % | $ | (23,333 | ) | (4 | )% | ||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190220005448/en/
Source:
Dianne VanBeber
Vice President, Investor Relations
Dianne.vanbeber@intelsat.com
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