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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Intelsat SA | NYSE:I | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.3826 | 0 | 01:00:00 |
☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Grand Duchy of Luxembourg
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98-1009418
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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4 rue Albert Borschette
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L-1246
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Luxembourg
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+352
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27 84
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1600
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(Address of principal executive offices, including zip code)
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(Registrant’s telephone number, including area code)
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Title of Each Class
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Trading Symbol
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Name of Each Exchange on Which Registered
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Common Shares, nominal value $0.01 per share
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I
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated Filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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Item 15
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Item 16
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•
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risks associated with operating our in-orbit satellites;
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•
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satellite launch failures, satellite launch and construction delays and in-orbit failures or reduced satellite performance;
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potential changes in the number of companies offering commercial satellite launch services and the number of commercial satellite launch opportunities available in any given time period that could impact our ability to timely schedule future launches and the prices we pay for such launches;
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our ability to obtain new satellite insurance policies with financially viable insurance carriers on commercially reasonable terms or at all, as well as the ability of our insurance carriers to fulfill their obligations;
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possible future losses on satellites that are not adequately covered by insurance;
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U.S. and other government regulation;
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changes in our contracted backlog or expected contracted backlog for future services;
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pricing pressure and overcapacity in the markets in which we compete;
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our ability to access capital markets for debt or equity;
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the competitive environment in which we operate;
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customer defaults on their obligations to us;
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our international operations and other uncertainties associated with doing business internationally;
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litigation; and
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other risks discussed under Item 1A—Risk Factors.
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Item 1.
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Business
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Key Information
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•
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Global distribution of television entertainment and news programming to fixed and mobile devices;
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•
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Completion and extension of international, national and regional data networks, fixed and wireless, notably in emerging and developed regions, and the upgrade of those networks to 3G/4G/5G as content is increasingly consumed on mobile devices;
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•
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Universal access to broadband connectivity through fixed and mobile networks for consumers, corporations, government and other organizations;
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•
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Increasing deployment of in-flight and on-board broadband access for consumer and business applications in the commercial, business aviation and maritime sectors;
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•
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Requirements for cost-efficient space-based network solutions for fixed and mobile government and military applications; and
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•
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Global demand for services which enable connected devices, such as machine-to-machine communications and the Internet of Things (“IoT”), particularly with respect to connected car applications.
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•
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Fast, scalable, secure and high-performance infrastructure deployments;
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•
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Superior end-to-end network availability as compared to the availability of terrestrial networks, due to fewer potential points of failure;
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•
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Highly reliable bandwidth and consistent application performance, as satellite beams effectively blanket service regions;
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•
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Ability to extend beyond terrestrial network end points or to provide an alternative path to terrestrial infrastructure;
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•
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Efficient content distribution through the ability to broadcast high quality signals from a single location to many locations simultaneously;
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•
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Maximizing potential distribution of television programming, video neighborhoods, or capacity at orbital locations with a large number of consumer dishes or cable headend dishes pointed to them; and
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Rapidly deployable communications infrastructure for disaster recovery.
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Significant long-term contracted backlog, providing a foundation for predictable revenue streams;
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Entry into service of our next generation Intelsat Epic platform that was designed to support new services representing $4.4 billion of potential incremental growth by 2024 from expanded enterprise, wireless infrastructure, mobility, IoT and government applications;
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•
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High operating leverage, which has allowed us to generate an average Adjusted EBITDA margin of 76% in the past three years; and
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•
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A stable, efficient and sustainable tax profile for our global business.
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•
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Connectivity and broadband access are essential elements of infrastructure supporting the rapid economic growth of developing nations. Globally dispersed organizations and regional businesses often turn to satellite-based infrastructure to provide better access, reliability and control of broadband services. Penetration of broadband connectivity in less developed regions has been growing rapidly and is expected to continue. Over the past 10 years, broadband penetration, including satellite connectivity, in the East Asia & Pacific Ocean regions grew at a 13% CAGR, in the Latin America & Caribbean region at a 11% CAGR, in the Middle East & North Africa regions at a 21% CAGR, and in Sub-Saharan Africa at a 18% CAGR according to the World Bank.
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•
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Wireless infrastructure in the global race to 5G represents a potentially generational opportunity for satellite technology. Wireless telecommunications companies often use satellite-based solutions to extend networks into areas where geographic or low population density makes it economically unfeasible to deploy other technology. Further deployments of wireless telecom infrastructure and the migration from 2G to 3G, 4G and 5G networks, which adds content and data to basic voice communications, create demand for satellite bandwidth. We believe that the emergence of 5G networks will result in a new growth vector for satellite connectivity. Satellite technology is uniquely responsive to the 5G requirement of ubiquitous coverage and fast deployments. We believe satellite systems will complement terrestrial networks and enable reliable and consistent global 5G user experience in a cost-effective manner. In 2018, 3GPP, the telecommunications standard development organization, approved work item studies to incorporate satellite systems in 5G standards to demonstrate key satellites attributes, including broadcasting, multicasting, and ubiquity and global mobile connectivity. According to the Global System for Mobile Communications Association, 4G & 5G mobile connections are expected to increase from 43% to 74% of total connections for the period from 2018 to 2025.
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•
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Mobility applications, such as maritime communications and aeronautical broadband services for commercial and government applications, are fueling demand for mobile connectivity. Commercial applications, such as broadband services for consumer air flights and cruise ships, as well as broadband requirements from the maritime commercial shipping and oil and gas sectors, provide increased demand for satellite-based services. The increasing demand for global broadband connectivity on commercial airlines is a key driver of satellite connectivity and services. 80% of North American aircraft provide in-flight entertainment and Wi-Fi services, while about 17% of European, African, Asian-Pacific and South American aircraft were connected in 2019, according to Valour Consultancy and Boeing. Global satellite services revenue related to demand for broadband mobility applications from land, aeronautical and maritime is expected to grow at a CAGR of 13% for the period from 2019 to 2024, according to NSR.
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Globalization of economic activities is increasing the geographic expansion of corporations and the communications networks that support them, while creating new audiences for content. Globalization also increases the communications requirements for governments supporting embassy and military applications.
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The emergence of new content consumers resulting from economic growth in developing regions leads to increased demand for free-to-air and pay-TV content. According to NSR, the highest expected growth in television channels is from developing regions, including Latin America at a CAGR of 1.8%, the Middle East and North Africa at 2.7%, Sub-Saharan Africa at 4.1%, and Asia-Pacific at 2.3% for the period from 2019 to 2024, respectively.
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Proliferation of formats and new sources of entertainment content result in increased bandwidth requirements, as content owners seek to maximize distribution to multiple viewing audiences across multiple technologies. HDTV, the introduction of ultra-high definition (“UHD”) television, internet distribution of traditional television programming known as “Over the Top” or “OTT”, and video to mobile devices are all examples of the expanding format and distribution requirements of media programmers, the implementation of which varies greatly from developed to emerging regions. In its 2019 study, NSR forecasted that the aggregate number of standard definition (“SD”), high definition (“HD”), and UHD television channels distributed worldwide for cable, broadcast and direct-to-home ("DTH") is expected to grow at a CAGR of 2% for the period from 2019 to 2024.
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Connected Devices and vehicles, such as those contemplated by machine-to-machine communications, the IoT and other future technology trends, will require ubiquitous coverage that might be best provided by satellite technology for certain applications in certain regions, and also for applications where ubiquitous, global access is required, such as enabling software downloads for connected cars marketed by the automotive sector or for the operations of connected vehicles, such as in agriculture applications. This represents an important potential source of longer-term demand.
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Customer Set
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Representative Customers
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Year
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Annual
Revenue
(1) (2)
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% of 2019
Total
Revenue
(2)
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% of 2019
Total
Backlog
(1) (2)
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Backlog to
2019
Revenue
Multiple
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Media
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AT&T, MultiChoice, The Walt Disney Company, Discovery Communications, Telefonica, Sentech, Corporacion de Radio Television del Norte
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2017
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$
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910
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2018(3)
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$
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938
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2019
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$
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883
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43
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%
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61
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%
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4.8x
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Network Services
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Marlink, KVH Industries, Speedcast, Global Eagle, Gogo, Verizon, SoftBank, Orange, Telecom Italia, Ministry of Transport and Communications of Myanmar
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2017
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$
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852
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2018(4)
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$
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798
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2019
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$
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770
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37
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%
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25
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%
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2.3x
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Government
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Australian Defence Force, U.S. Department of Defense, U.S. Department of State, Leonardo
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2017
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$
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353
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2018(5)
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$
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392
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2019
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$
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378
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18
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%
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11
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%
|
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2.0x
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(1)
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Dollars in millions; backlog as of December 31, 2019.
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(2)
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Does not include satellite-related services and other.
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(3)
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Includes $67 million of ASC 606 adjustments.
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(4)
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Includes $3 million of ASC 606 adjustments.
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(5)
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Includes $33 million of ASC 606 adjustments.
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•
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Transponder services
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•
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Managed services
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•
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Transponder services
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•
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Mobile satellite services and other
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•
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Our fleet hosts 34 premium video neighborhoods, offering programmers superior audience penetration, with eight serving North America, nine serving Latin America, seven serving Africa and the Middle East, six serving Asia and four serving Europe;
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•
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We are a leading provider of services used in global content distribution to media customers, according to Euroconsult. Our top 10 video distribution customers buy services on our network, on average, across three geographic regions, demonstrating the value provided by the global reach of our network;
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•
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We believe that we are the leading provider of satellite service capacity for the distribution of cable television programming in North America, with thousands of cable headends pointed to our satellites. Our Galaxy 13 satellite provided the first HD neighborhood in North America, and today, our Galaxy fleet distributes over 380 HD channels; globally, we distribute over 5,500 TV channels, including approximately 1,600 HD channels;
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•
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We are a leading provider of satellite services for DTH providers, supporting 29 DTH platforms around the world with over 50 million subscribers, including DIRECTV in Latin America, Telefonica in Brazil, MultiChoice in Africa, and Canal+ in multiple regions;
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•
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We are a leading provider of services used in video contribution managed occasional use services, supporting coverage of major events for news and sports organizations, according to Euroconsult. For instance, we have carried programming on a global basis for every Olympiad since 1968; and
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•
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In its 2019 study, NSR forecasted that the number of SD, HD, and UHD television channels distributed worldwide for cable, broadcast and DTH is expected to grow at a CAGR of 2% for the period from 2019 to 2024. According to NSR, the highest expected growth in television channels is from developing regions, including Latin America at a CAGR of 1.8%, the Middle East and North Africa at 2.7%, Sub-Saharan Africa at 4.1%, and Asia-Pacific at 2.3% for the period from 2019 to 2024, respectively.
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•
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Our largest network services customer type is enterprise networking. We are the world’s largest provider of satellite capacity for satellite-based private data networks, including VSAT networks, according to Euroconsult;
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•
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The fastest growing customer type in our network services business is mobility services for the aeronautical and maritime sectors. We believe we hold a leading share of the aeronautical broadband services powering in-flight passenger connectivity. FSS revenue growth related to capacity demand for broadband aeronautical services is expected to grow from approximately $300 million to just over $1 billion annually, for the period from 2019 to 2024, at a CAGR of 28% according to Euroconsult. In addition, Euroconsult forecasts growth in FSS aeronautical terminals (excluding mobile satellite services ("MSS") and air-to-ground technology) at a CAGR of 17% for the period from 2019 to 2024;
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•
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We are the leader in the provision of FSS bandwidth for maritime broadband connectivity. 14% of our 2019 total Company revenues were derived from commercial mobility services, the largest segment of which was maritime. The number of FSS VSATs related to capacity demand for maritime broadband services (excluding MSS) is expected to grow at a CAGR of 12% for the period from 2019 to 2024 according to Euroconsult. Of the world’s largest cruise vessels, Intelsat’s services are incorporated in the broadband infrastructure for a majority of ships, in substantially all cases as the exclusive or primary source of satellite services;
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•
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Infrastructure for wireless operator services represents our third largest network services customer type. We believe we are the leading provider of satellite capacity for cellular backhaul applications in emerging regions, connecting cellular towers to the global telecommunications network, a global sector expected to generate over $900 million in revenue in 2020, according to NSR. Approximately 85 of our customers use our satellite-based backhaul services as a core component of their network infrastructure due to unreliable or non-existent terrestrial infrastructure. Our cellular backhaul customers include five of the top ten mobile groups worldwide, which serve a fifth of the world’s subscribers, excluding China;
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•
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Approximately 130 value-added network operators use our IntelsatOne broadband hybrid infrastructure to deliver their regional and global services. Applications for these services include corporate networks for multinationals, internet access and broadband for maritime and commercial aeronautical applications. C-, Ku- and Ka-band and HTS revenue from capacity demand for mobility applications is expected to grow at a CAGR of 13.5% for the period from 2019 to 2024, according to NSR; and
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•
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The fixed enterprise VSAT sector (excluding all non-GEO HTS bandwidth) is expected to generate capacity revenues of approximately $2.7 billion in 2020, and capacity revenues are expected to grow at a CAGR of 7% from 2019 to 2024, according to NSR.
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•
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Our government business is fully engaged in the Intelsat managed services strategy, simplifying the use of high-throughput services. In 2019, we introduced FlexGround, a global end-to-end managed service providing cost-effective, high-performance connectivity for small land mobility applications, including airline checkable manpack terminals. FlexGround leverages the Intelsat Epic HTS network, which has high-powered spot beams, enabling high data rate services to small antennas. Operating in the Ku-band, these terminals are designed to be set up and connected in minutes by non-technical users operating in remote environs, enabling communications across a wide spectrum of scenarios.
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•
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The reliability and scale of our fleet and planned launches of new and replacement satellites allow us to address changing demand for satellite coverage and to provide mission-critical communications capabilities. For example, in 2019, we were awarded a key supplier contract by DRS Technologies to support their $977 million eight-year award to provide the United States Special Operations Command with worldwide satellite communications and support. We are providing significant on-net capacity on our newest satellites, as well as off-network capacity.
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•
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The U.S. government and military is one of the largest users of commercial satellites for U.S. government and military applications on a global basis. In 2019, we served approximately 80 customers consisting of U.S. government customers, resellers to U.S. government customers or integrators.
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•
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According to a study by NSR, global revenue from FSS used for U.S. government and military applications is expected to grow at a CAGR of 6.7% for the period from 2019 to 2024.
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•
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Our global footprint, which is essential given that the fastest growing applications, such as mobility and upcoming 5G deployments, require ubiquitous, consistent network performance;
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•
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Operating scale, with service delivery in approximately 200 countries and territories, which is important to new opportunities, such as connected car, machine-to-machine, land mobility and government applications, where service providers will look for global access. We believe the ability to serve these and other applications on a global basis creates new satellite-based communication solutions with multi-billion dollar revenue potential;
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•
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Our innovative technology, especially our high-throughput fleet that is already in-orbit, and that we will continue to evolve with satellites and other technologies that complement the high performance capabilities of our global network, provides our customers first-to-market advantage and experience; and
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•
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Our portfolio of spectrum rights, which provides unmatched flexibility and agility as we look at new opportunities.
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•
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Drive stability in our core business;
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•
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Selectively invest, employ a disciplined yield management approach and emphasize the development of strong distribution channels for our four primary customer sets of broadband, mobility, media and government;
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•
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Scale our differentiated managed service offerings in targeted growth verticals in broadband, mobility, media and government, leveraging the global footprint, higher performance and better economics of our Intelsat Epic fleet and the flexibility of our innovative terrestrial network;
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Complete targeted investments and partnerships in differentiated space and ground infrastructure to develop a standards-based ecosystem that will provide a seamless interface with the broader telecommunications ecosystem; and
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Seek partnerships and investments for vertical expansion in the growing mobility sector and in adjacent space-based businesses to position for longer-term growth.
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Providing network infrastructure for 2G/3G/4G/5G wireless in developing regions;
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Providing signal ubiquity in support of 5G services globally;
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Providing flexible broadband services for enterprise networks and for commercial and government-related aeronautical, maritime and other mobile applications, and using our high-throughput platform and global footprint to provide differentiated services;
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Optimizing content distribution networks to support cloud-based media applications, UHD, OTT programming and other multiscreen viewing applications; and
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•
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Providing ubiquitous broadband for global deployment of connected devices, such as the connected car, and the continuing formation of the IoT.
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•
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Lower overall capital intensity and improve cost effectiveness through innovation emphasis on software-defined infrastructure and encourage a standards-based ecosystem built on widely adopted technologies, including the 3GPP standards. We will enhance our space and terrestrial infrastructure with platforms that are software-defined and less expensive to manufacture resulting in faster deployments and mission flexibility; and
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•
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Maximize the value of our spectrum rights. Leverage our sizeable portfolio of spectrum rights in the C-, Ku- and Ka-bands that provides the foundation of our ability to provide communications services over 99% of the Earth’s populated regions. Continue to participate in the FCC C-band proceeding, proposing solutions that address the need
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•
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Prime orbital locations, reflecting a valuable portfolio of coordinated fixed satellite spectrum rights;
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Highly reliable services, including transponder availability of 99.999% on all operational satellites for the year ended December 31, 2019;
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•
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Flexibility to relocate satellites to other orbital locations as we manage fleet replacement, demand patterns change or in response to new customer requirements;
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Design features and steerable beams on many of our satellites enable us to reconfigure capacity to provide different areas of coverage; and
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Resilience, with multiple satellites serving each region, allows for improved restoration alternatives should a satellite anomaly occur.
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Satellite
|
|
Manufacturer
|
|
Orbital
Location
|
|
Launch Date
|
|
Estimated End of
Service Life (1) |
Station Kept Satellites:
|
|
|
|
|
|
|
|
|
Intelsat 26
|
|
BSS (2)
|
|
63.65°E
|
|
Feb-97
|
|
2022
|
Galaxy 25
|
|
SSL (3)
|
|
32.9°E
|
|
May-97
|
|
2023
|
Intelsat 5
|
|
BSS
|
|
137°W
|
|
Aug-97
|
|
2024
|
Intelsat 805
|
|
LM (4)
|
|
169.1°E
|
|
Jun-98
|
|
2020
|
Galaxy 11
|
|
BSS
|
|
93.1°W
|
|
Dec-99
|
|
2024
|
Intelsat 9
|
|
BSS
|
|
DRIFT
|
|
Jul-00
|
|
2022
|
Intelsat 12
|
|
SSL
|
|
64.25°E
|
|
Oct-00
|
|
2021
|
Intelsat 1R
|
|
BSS
|
|
157.1°E
|
|
Nov-00
|
|
2023
|
Intelsat 10
|
|
BSS
|
|
47.5°E
|
|
May-01
|
|
2026
|
Intelsat 901
|
|
SSL
|
|
DRIFT
|
|
Jun-01
|
|
2024
|
Satellite
|
|
Manufacturer
|
|
Orbital
Location
|
|
Launch Date
|
|
Estimated End of
Service Life (1) |
Intelsat 902
|
|
SSL
|
|
DRIFT
|
|
Aug-01
|
|
2024
|
Intelsat 904
|
|
SSL
|
|
29.5°W
|
|
Feb-02
|
|
2025
|
Intelsat 903
|
|
SSL
|
|
31.5°W
|
|
Mar-02
|
|
2030
|
Intelsat 905
|
|
SSL
|
|
24.5°W
|
|
Jun-02
|
|
2032
|
Galaxy 3C
|
|
BSS
|
|
95.05°W
|
|
Jun-02
|
|
2023
|
Intelsat 906
|
|
SSL
|
|
64.15°E
|
|
Sep-02
|
|
2020
|
Intelsat 907
|
|
SSL
|
|
27.5°W
|
|
Feb-03
|
|
2020
|
Galaxy 12
|
|
NGIS(5)
|
|
129°W
|
|
Apr-03
|
|
2025
|
Galaxy 23 (6)
|
|
SSL
|
|
121°W
|
|
Aug-03
|
|
2023
|
Galaxy 13/Horizons 1 (7)
|
|
BSS
|
|
127°W
|
|
Oct-03
|
|
2025
|
Intelsat 1002 (8)
|
|
Airbus
|
|
1°W
|
|
Jun-04
|
|
2021
|
Galaxy 28
|
|
SSL
|
|
89°W
|
|
Jun-05
|
|
2023
|
Galaxy 14
|
|
NGIS
|
|
125°W
|
|
Aug-05
|
|
2021
|
Galaxy 15
|
|
NGIS
|
|
133°W
|
|
Oct-05
|
|
2024
|
Galaxy 16
|
|
SSL
|
|
99°W
|
|
Jun-06
|
|
2027
|
Galaxy 17
|
|
Thales (9)
|
|
91°W
|
|
May-07
|
|
2024
|
Intelsat 11
|
|
NGIS
|
|
42.99°W
|
|
Oct-07
|
|
2022
|
Horizons 2 (10)
|
|
NGIS
|
|
84.85°E
|
|
Dec-07
|
|
2024
|
Galaxy 18
|
|
SSL
|
|
123°W
|
|
May-08
|
|
2028
|
Intelsat 25
|
|
SSL
|
|
31.5°W
|
|
Jul-08
|
|
2024
|
Galaxy 19
|
|
SSL
|
|
97°W
|
|
Sep-08
|
|
2028
|
Intelsat 14
|
|
SSL
|
|
45°W
|
|
Nov-09
|
|
2027
|
Intelsat 15
|
|
NGIS
|
|
85.15°E
|
|
Nov-09
|
|
2027
|
Intelsat 16
|
|
NGIS
|
|
76.2°W
|
|
Feb-10
|
|
2028
|
Intelsat 17
|
|
SSL
|
|
66°E
|
|
Nov-10
|
|
2027
|
Intelsat 28 (11)
|
|
NGIS
|
|
32.8°E
|
|
Apr-11
|
|
2025
|
Intelsat 18
|
|
NGIS
|
|
180°E
|
|
Oct-11
|
|
2028
|
Intelsat 22 (12)
|
|
BSS
|
|
72.1°E
|
|
Mar-12
|
|
2028
|
Intelsat 19
|
|
SSL
|
|
166°E
|
|
Jun-12
|
|
2028
|
Intelsat 20
|
|
SSL
|
|
68.5°E
|
|
Aug-12
|
|
2030
|
Intelsat 21
|
|
BSS
|
|
58°W
|
|
Aug-12
|
|
2030
|
Intelsat 23
|
|
NGIS
|
|
53°W
|
|
Oct-12
|
|
2030
|
Intelsat 30
|
|
SSL
|
|
95.05°W
|
|
Oct-14
|
|
2032
|
Intelsat 34
|
|
SSL
|
|
55.5°W
|
|
Aug-15
|
|
2033
|
Intelsat 31
|
|
SSL
|
|
95.05°W
|
|
Jun-16
|
|
2034
|
Intelsat 36
|
|
SSL
|
|
68.5°E
|
|
Aug-16
|
|
2032
|
Intelsat 33e
|
|
BSS
|
|
60°E
|
|
Aug-16
|
|
2028
|
Intelsat 35e
|
|
BSS
|
|
34.5°W
|
|
Jul-17
|
|
2033
|
Intelsat 37e
|
|
BSS
|
|
18°W
|
|
Sep-17
|
|
2030
|
Horizons 3e (13)
|
|
BSS
|
|
169°E
|
|
Sep-18
|
|
2036
|
Intelsat 39
|
|
SSL
|
|
61.95°E
|
|
Aug-19
|
|
2037
|
Payload Hosted on Third-Party Satellites:
|
|
|
|
|
|
|
|
|
Intelsat 1W (14)
|
|
Thales
|
|
0.8°W
|
|
Oct-09
|
|
2025
|
Intelsat 32e (15)
|
|
Airbus
|
|
43.0°W
|
|
Feb-17
|
|
2033
|
Intelsat 38 (16)
|
|
SSL
|
|
45.1°E
|
|
Sep-18
|
|
2036
|
(1)
|
Engineering estimates of the service life as of December 31, 2019 as determined by remaining fuel levels, consumption rates and other considerations (including power) and assuming no relocation of the satellite. Such estimates are subject to change based upon a number of factors, including updated operating data from manufacturers.
|
(2)
|
Boeing Satellite Systems, Inc. ("BSS"), formerly Hughes Aircraft Company.
|
(3)
|
Space Systems/Loral, LLC (“SSL”).
|
(4)
|
Lockheed Martin Corporation ("LM").
|
(5)
|
Northrop Grumman Innovation Systems ("NGIS").
|
(6)
|
EchoStar Communications Corporation owns all of this satellite’s Ku-band transponders and a portion of the common elements of the satellite.
|
(7)
|
Horizons Satellite Holdings LLC (“Horizons Holdings”), a joint venture with JSAT International, Inc. (“JSAT”), owns and operates the Ku-band payload on this satellite. We are the exclusive owner of the C-band payload.
|
(8)
|
Telenor owns 18 Ku-band transponders (measured in equivalent 36 MHz transponders) on this satellite. EADS Astrium was renamed AIRBUS Defence & Space.
|
(9)
|
Thales Alenia Space ("Thales").
|
(10)
|
Horizons Holdings owns the payload on this satellite and we operate the payload for the joint venture.
|
(11)
|
Intelsat 28 was formerly known as Intelsat New Dawn.
|
(12)
|
Intelsat 22 includes an ultra high-frequency payload owned by the Australian Defence Force.
|
(13)
|
Horizons-3 Satellite LLC, a joint venture with JSAT, owns and operates this satellite. Horizons 3e entered into service in Q1 2019.
|
(14)
|
Intelsat 1W refers to a Ku-band payload on Thor 6, a satellite operated by Telenor.
|
(15)
|
Intelsat 32e refers to a HTS Ku-band payload we operate on a satellite also known as Sky Brasil 1.
|
(16)
|
Intelsat 38 refers to a Ku-band payload on Azerspace-2, a satellite operated by Azercosmos. Intelsat 38 entered into service in Q1 2019.
|
•
|
C-band-low power, broad beams requiring use of relatively larger antennae, valued as spectrum least susceptible to transmission impairments such as rain;
|
•
|
Ku-band-high power, narrow to medium size beams facilitating use of smaller antennae favored by businesses; and
|
•
|
Ka-band-very high power, very narrow beams facilitating use of very small transmit/receive antennae, but somewhat less reliable due to high transmission weather-related impairments. The Ka-band is utilized for various applications, including consumer broadband services.
|
Satellite
|
|
Manufacturer
|
|
Role
|
|
Earliest
Launch Date
|
|
Expected
Launch
Provider
|
Galaxy 30
|
|
NGIS
|
|
Next generation North American video distribution platform
|
|
2020
|
|
Arianespace
|
•
|
designated reserve transponders on the satellite or other on-board backup systems or designed-in redundancies;
|
•
|
an in-orbit spare satellite; or
|
•
|
interim restoration capacity on other satellites.
|
•
|
failure of the on-board satellite control processor ("SCP") in Boeing 601 (“BSS 601”) satellites;
|
•
|
failure of the on-board Xenon-Ion Propulsion System ("XIPS") used to maintain the in-orbit position of Boeing 601 High Power Series (“BSS 601 HP”) satellites;
|
•
|
accelerated solar array degradation in early Boeing 702 High Power Series (“BSS 702 HP”) satellites; and
|
•
|
failure of gyroscopes on certain SSL satellites.
|
•
|
611 employees in engineering, operations and related information systems;
|
•
|
193 employees in finance, legal and other administrative functions;
|
•
|
305 employees in sales, marketing and strategy; and
|
•
|
86 employees in support of government sales and marketing.
|
Item 1A.
|
Risk Factors
|
•
|
make it more difficult for us to satisfy obligations with respect to indebtedness, and any failure to comply with the obligations of any of our debt instruments, including financial and other restrictive covenants, could result in an event of default under the indentures governing our notes and the agreements governing such other indebtedness;
|
•
|
require us to dedicate a substantial portion of available cash flow to pay principal and interest on our outstanding debt, which will reduce the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes;
|
•
|
limit flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
|
•
|
increase our vulnerability to general adverse economic and industry conditions and to deterioration in operating results;
|
•
|
limit our ability to engage in strategic transactions or implement our business strategies;
|
•
|
limit our ability to borrow additional funds, or to refinance, repay or restructure our existing indebtedness; and
|
•
|
place us at a disadvantage compared to any competitors that have less debt.
|
•
|
incur or guarantee additional debt or issue disqualified stock;
|
•
|
pay dividends (including to fund cash interest payments at different entity levels), or make redemptions, repurchases or distributions, with respect to ordinary shares or capital stock;
|
•
|
create or incur certain liens;
|
•
|
make certain loans or investments;
|
•
|
engage in mergers, acquisitions, amalgamations, asset sales and sale and leaseback transactions; and
|
•
|
engage in transactions with affiliates.
|
•
|
the satellite manufacturer’s error, whether due to the use of new and largely unproven technology or due to a design, manufacturing or assembly defect that was not discovered before launch, including:
|
•
|
failure of components from inadvertent susceptibility to the harshest spaceweather conditions; and/or
|
•
|
problems with the power systems of the satellites, including:
|
•
|
circuit failures or other array degradation causing reductions in the power output of the solar arrays on the satellites, which could cause us to lose some of our capacity, require us to forego the use of some transponders initially and to turn off additional transponders in later years; and/or
|
•
|
failure or other degradation of the cells within the batteries, whose sole purpose is to power the payload and spacecraft operations during the daily eclipse periods which occur for brief periods of time during two 40-day periods around March 21 and September 21 of each year; and/or
|
•
|
problems with the control systems of the satellites, including:
|
•
|
failure of the command or telemetry processing units; and/or
|
•
|
failure of the primary and/or backup SCP; and/or
|
•
|
failure of one or more earth sensors, star trackers, gyroscope and/or associated electronics that are used to provide satellite attitude information; and/or
|
•
|
failure of the control wheel actuators; and/or
|
•
|
problems with the propulsion systems of the satellites, including:
|
•
|
failure of the primary and/or backup chemical thrusters; and/or
|
•
|
failure of the XIPS used on certain Boeing satellites, which is an electronic propulsion system that maintains the spacecraft’s proper in-orbit position; and/or
|
•
|
propellant leaks from lines or thrusters; and/or
|
•
|
problems associated with strikes from micrometeoroids or space orbit debris; and/or
|
•
|
general failures resulting from operating satellites in the harsh space environment, such as premature component failure or wear out of mechanisms exceeding available redundancy.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Item 6.
|
Selected Financial Data
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2016 (1)
|
|
2017 (1)
|
|
2018 (2)
|
|
2019 (4)
|
||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||
Consolidated Statement of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
2,352,521
|
|
|
$
|
2,188,047
|
|
|
$
|
2,148,612
|
|
|
$
|
2,161,190
|
|
|
$
|
2,061,465
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct costs of revenue (excluding depreciation and amortization)
|
328,501
|
|
|
342,634
|
|
|
324,232
|
|
|
330,874
|
|
|
406,153
|
|
|||||
Selling, general and administrative
|
199,412
|
|
|
232,537
|
|
|
205,475
|
|
|
200,857
|
|
|
226,918
|
|
|||||
Impairment of goodwill and other intangibles
|
4,165,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization
|
687,729
|
|
|
694,891
|
|
|
707,824
|
|
|
687,589
|
|
|
658,233
|
|
|||||
Satellite impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
381,565
|
|
|||||
Total operating expenses
|
5,381,042
|
|
|
1,270,062
|
|
|
1,237,531
|
|
|
1,219,320
|
|
|
1,672,869
|
|
|||||
Income (loss) from operations
|
(3,028,521
|
)
|
|
917,985
|
|
|
911,081
|
|
|
941,870
|
|
|
388,596
|
|
|||||
Interest expense, net
|
890,279
|
|
|
938,501
|
|
|
1,020,770
|
|
|
1,212,374
|
|
|
1,273,112
|
|
|||||
Gain (loss) on early extinguishment of debt
|
7,061
|
|
|
1,030,092
|
|
|
(4,109
|
)
|
|
(199,658
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
(6,201
|
)
|
|
522
|
|
|
10,114
|
|
|
4,541
|
|
|
(34,078
|
)
|
|||||
Income (loss) before income taxes
|
(3,917,940
|
)
|
|
1,010,098
|
|
|
(103,684
|
)
|
|
(465,621
|
)
|
|
(918,594
|
)
|
|||||
Provision for (benefit from) income taxes
|
1,513
|
|
|
15,986
|
|
|
71,130
|
|
|
130,069
|
|
|
(7,384
|
)
|
|||||
Net income (loss)
|
(3,919,453
|
)
|
|
994,112
|
|
|
(174,814
|
)
|
|
(595,690
|
)
|
|
(911,210
|
)
|
|||||
Net income attributable to noncontrolling interest
|
(3,934
|
)
|
|
(3,915
|
)
|
|
(3,914
|
)
|
|
(3,915
|
)
|
|
(2,385
|
)
|
|||||
Net income (loss) attributable to Intelsat S.A.
|
(3,923,387
|
)
|
|
990,197
|
|
|
(178,728
|
)
|
|
(599,605
|
)
|
|
(913,595
|
)
|
|||||
Cumulative preferred dividends
|
(9,919
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) attributable to common shareholders
|
$
|
(3,933,306
|
)
|
|
$
|
990,197
|
|
|
$
|
(178,728
|
)
|
|
$
|
(599,605
|
)
|
|
$
|
(913,595
|
)
|
Other Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
$
|
724,362
|
|
|
$
|
714,570
|
|
|
$
|
461,627
|
|
|
$
|
255,696
|
|
|
$
|
229,818
|
|
Other payments for satellites
|
$
|
—
|
|
|
$
|
18,333
|
|
|
$
|
35,396
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Basic income (loss) per common share attributable to Intelsat S.A.
|
$
|
(36.68
|
)
|
|
$
|
8.65
|
|
|
$
|
(1.50
|
)
|
|
$
|
(4.63
|
)
|
|
$
|
(6.51
|
)
|
Diluted income (loss) per common share attributable to Intelsat S.A.
|
$
|
(36.68
|
)
|
|
$
|
8.36
|
|
|
$
|
(1.50
|
)
|
|
$
|
(4.63
|
)
|
|
$
|
(6.51
|
)
|
Basic weighted average shares outstanding (in millions)
|
107.2
|
|
|
114.5
|
|
|
118.9
|
|
|
129.6
|
|
|
140.4
|
|
|||||
Diluted weighted average shares outstanding (in millions)
|
107.2
|
|
|
118.5
|
|
|
118.9
|
|
|
129.6
|
|
|
140.4
|
|
|||||
Dividends declared per 5.75% series A mandatory convertible junior non-voting preferred share
|
$
|
2.88
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Consolidated Cash Flow Data(3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
910,031
|
|
|
$
|
678,755
|
|
|
$
|
464,246
|
|
|
$
|
344,173
|
|
|
$
|
255,539
|
|
Net cash used in investing activities
|
(749,354
|
)
|
|
(730,589
|
)
|
|
(468,297
|
)
|
|
(283,634
|
)
|
|
(292,733
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(102,986
|
)
|
|
546,347
|
|
|
(121,698
|
)
|
|
(90,323
|
)
|
|
362,910
|
|
|||||
Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents, net of restricted cash(3)
|
$
|
171,541
|
|
|
$
|
666,024
|
|
|
$
|
525,215
|
|
|
$
|
485,120
|
|
|
$
|
810,626
|
|
Restricted cash(3)
|
—
|
|
|
—
|
|
|
16,167
|
|
|
22,037
|
|
|
20,238
|
|
|||||
Satellites and other property and equipment, net
|
5,998,317
|
|
|
6,185,842
|
|
|
5,923,619
|
|
|
5,511,702
|
|
|
4,702,063
|
|
|||||
Total assets
|
12,253,590
|
|
|
12,942,009
|
|
|
12,610,036
|
|
|
12,241,513
|
|
|
11,804,382
|
|
|||||
Total debt
|
14,611,379
|
|
|
14,198,084
|
|
|
14,208,658
|
|
|
14,028,352
|
|
|
14,465,483
|
|
|||||
Shareholders’ deficit
|
(4,649,565
|
)
|
|
(3,634,145
|
)
|
|
(3,807,870
|
)
|
|
(4,097,005
|
)
|
|
(4,999,858
|
)
|
|||||
Net assets
|
(4,620,353
|
)
|
|
(3,609,998
|
)
|
|
(3,788,564
|
)
|
|
(4,082,609
|
)
|
|
(4,988,848
|
)
|
|||||
Number of common shares (in millions)
|
107.6
|
|
|
118.0
|
|
|
119.6
|
|
|
138.0
|
|
|
141.1
|
|
|||||
Number of 5.75% series A mandatory convertible junior non-voting preferred shares (in millions)
|
3.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
We adopted Accounting Standard Update (“ASU”) 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ("ASC 715"), on January 1, 2018 using the retrospective method. As a result, the Company reclassified a net credit for pension and postretirement benefits from operating expenses to other income for the years ended December 31, 2017 and 2016, to conform to the current year presentation. Years prior to 2016 do not reflect the effects from our January 1, 2018, adoption of ASC 715.
|
(2)
|
We adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"), effective January 1, 2018, using the modified retrospective method. Years prior to 2018 do not reflect the effects from our January 1, 2018, adoption of ASC 606.
|
(3)
|
We adopted ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments and ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash on January 1, 2018 using the retrospective method. Balance sheets prior to 2017 and statements of cash flows prior to 2016 have not been restated.
|
(4)
|
We adopted ASU 2016-02, Leases (Topic 842) ("ASC 842"), and ASU 2019-01, Leases (Topic 842) - Codification Improvements on January 1, 2019 using the effective date method and applied the package of practical expedients included therein. By applying ASC 842 at the January 1, 2019 adoption date, as opposed to at the beginning of the earliest period presented, our reporting for periods prior to January 1, 2019 continues to be in accordance with ASC 840, Leases. Our accounting policies and reported amounts with respect to the year ended December 31, 2018 and prior were not affected by the adoption of ASC 842.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Service Type
|
|
Description
|
On-Network Revenues:
|
|
|
|
|
|
Transponder Services
|
|
Commitments by customers to receive service via, or to utilize capacity on, particular designated transponders according to specified technical and commercial terms. Transponder services also include revenues from hosted payload capacity. Transponder services are marketed to each of our primary customer sets as follows:
•Network Services: fixed and wireless telecom operators, data network operators, enterprise operators of private data networks, and value-added network operators for fixed and mobile broadband network infrastructure.
•Media: broadcasters (for distribution of programming and full time contribution, or gathering, of content), programmers and DTH operators.
•Government: civilian and defense organizations, for use in implementing private fixed and mobile networks, or for the provision of capacity or capabilities through hosted payloads.
|
|
|
|
Managed Services
|
|
Hybrid services primarily using IntelsatOne, including our IntelsatOne Flex broadband platform, which combine satellite capacity, teleport facilities, satellite communications hardware such as broadband hubs or video multiplexers and fiber optic cable and other ground facilities to provide managed and monitored broadband, trunking, video and private network services to customers. Managed services are marketed to each of our customer sets as follows:
•Network Services: enterprises, cellular operators and fixed and mobile value-added service providers which deliver end-services such as private data networks, wireless infrastructure and maritime and aeronautical broadband.
•Media: programmers outsourcing elements of their transmission infrastructure and part time occasional use services used primarily by news and sports organizations to gather content from remote locations.
•Government: users seeking secured, integrated, end-to-end solutions.
|
|
|
|
Channel
|
|
Standardized services of predetermined bandwidth and technical characteristics primarily used for point-to-point bilateral services for telecommunications providers. Channel is not considered a core service offering due to changing market requirements and the proliferation of fiber alternatives for point-to-point customer applications. Channel services are exclusively marketed to traditional telecommunications providers in our network services customer set.
|
|
|
|
Transponder, Mobile Satellite Services and Other
|
|
Capacity for voice, data and video services provided by third-party commercial satellite operators for which the desired frequency type or geographic coverage is not available on our network. These services include L-band MSS, for which Intelsat General is a reseller. In addition, this revenue category includes the sale of customer premises equipment and other hardware, as well as certain fees related to services provided to other satellite operators. These products are primarily marketed as follows:
•Government: direct government users, and government contractors working on programs where aggregation of capacity is required.
|
|
|
|
Satellite-related Services
|
|
Services include a number of satellite-related consulting and technical services that involve the lifecycle of satellite operations and related infrastructure, from satellite and launch vehicle procurement through TT&C services and related equipment sales. These services are typically marketed to other satellite operators.
|
•
|
Growth in demand from wireless telecommunications companies seeking to complete or enhance broadband infrastructure, particularly those operating in developing regions or regions with geographic challenges;
|
•
|
Growth in demand for broadband connectivity for enterprises and government organizations, providing fixed and mobile services and value-added applications on a global basis;
|
•
|
Lower overall pricing for satellite-based services, resulting from oversupply of wide beam capacity or due to the introduction of high-throughput technology, which is designed to achieve a lower cost per unit;
|
•
|
Lower demand for satellite-based solutions, resulting from fiber substitution;
|
•
|
Satellite capacity needed to provide broadband connectivity for mobile networks on ships, planes and oil and gas platforms;
|
•
|
Global demand for television content in SD, HD and UHD television formats, which uses our satellite network and IntelsatOne terrestrial services for distribution, in some regions offset by next generation compression technologies;
|
•
|
Increased popularity of OTT content distribution, which will increase the demand for broadband infrastructure in the developing world, but could decrease demand in developed markets over the mid to long-term as niche and ethnic programming transitions from satellite to internet distribution;
|
•
|
Use of commercial satellite services by governments for military and other operations, which has partially slowed as a result of the tempo of military operations and recent changes in the U.S. budget; and
|
•
|
Our use of third-party or off-network services to satisfy government demand for capacity not available on our network. These services are low risk in nature, with no required upfront investment and terms and conditions of the procured capacity which typically match the contractual commitments from our customers. Demand for certain of these off-network services has declined with reductions in troop deployment in regions of conflict.
|
Period
|
Contracted Backlog
|
||
2020
|
$
|
1,611
|
|
2021
|
1,137
|
|
|
2022
|
870
|
|
|
2023
|
681
|
|
|
2024
|
550
|
|
|
2025 and thereafter
|
2,108
|
|
|
Total
|
$
|
6,957
|
|
Service Type
|
Contracted Backlog
|
Percent
|
|||
Transponder services
|
$
|
5,663
|
|
81
|
%
|
Managed services
|
1,010
|
|
15
|
%
|
|
Off-Network and Other
|
281
|
|
4
|
%
|
|
Channel
|
3
|
|
—
|
%
|
|
Total
|
$
|
6,957
|
|
|
|
Operating Results Years Ended December 31, 2018 and 2019
|
|
Year Ended
December 31, 2018 |
|
Year Ended
December 31, 2019 |
|
Increase
(Decrease) |
|
Percentage
Change |
|||||||
Revenue
|
$
|
2,161,190
|
|
|
$
|
2,061,465
|
|
|
$
|
(99,725
|
)
|
|
(5
|
)%
|
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Direct costs of revenue (excluding depreciation and amortization)
|
330,874
|
|
|
406,153
|
|
|
75,279
|
|
|
23
|
%
|
|||
Selling, general and administrative
|
200,857
|
|
|
226,918
|
|
|
26,061
|
|
|
13
|
%
|
|||
Depreciation and amortization
|
687,589
|
|
|
658,233
|
|
|
(29,356
|
)
|
|
(4
|
)%
|
|||
Satellite impairment loss
|
—
|
|
|
381,565
|
|
|
381,565
|
|
|
NM
|
|
|||
Total operating expenses
|
1,219,320
|
|
|
1,672,869
|
|
|
453,549
|
|
|
37
|
%
|
|||
Income from operations
|
941,870
|
|
|
388,596
|
|
|
(553,274
|
)
|
|
(59
|
)%
|
|||
Interest expense, net
|
1,212,374
|
|
|
1,273,112
|
|
|
60,738
|
|
|
5
|
%
|
|||
Loss on early extinguishment of debt
|
(199,658
|
)
|
|
—
|
|
|
199,658
|
|
|
NM
|
|
|||
Other income (expense), net
|
4,541
|
|
|
(34,078
|
)
|
|
(38,619
|
)
|
|
NM
|
|
|||
Loss before income taxes
|
(465,621
|
)
|
|
(918,594
|
)
|
|
(452,973
|
)
|
|
97
|
%
|
|||
Provision for (benefit from) income taxes
|
130,069
|
|
|
(7,384
|
)
|
|
(137,453
|
)
|
|
NM
|
|
|||
Net loss
|
(595,690
|
)
|
|
(911,210
|
)
|
|
(315,520
|
)
|
|
53
|
%
|
|||
Net income attributable to noncontrolling interest
|
(3,915
|
)
|
|
(2,385
|
)
|
|
1,530
|
|
|
(39
|
)%
|
|||
Net loss attributable to Intelsat S.A.
|
$
|
(599,605
|
)
|
|
$
|
(913,595
|
)
|
|
$
|
(313,990
|
)
|
|
52
|
%
|
|
Year Ended
December 31, 2018 |
|
Year Ended
December 31, 2019 |
|
Increase
(Decrease) |
|
Percentage
Change |
|||||||
On-Network Revenues
|
|
|
|
|
|
|
|
|||||||
Transponder services
|
$
|
1,570,278
|
|
|
$
|
1,468,791
|
|
|
$
|
(101,487
|
)
|
|
(6
|
)%
|
Managed services
|
393,264
|
|
|
374,026
|
|
|
(19,238
|
)
|
|
(5
|
)%
|
|||
Channel
|
4,250
|
|
|
2,400
|
|
|
(1,850
|
)
|
|
(44
|
)%
|
|||
Total on-network revenues
|
1,967,792
|
|
|
1,845,217
|
|
|
(122,575
|
)
|
|
(6
|
)%
|
|||
Off-Network and Other Revenues
|
|
|
|
|
|
|
|
|||||||
Transponder, MSS and other off-network services
|
150,186
|
|
|
175,602
|
|
|
25,416
|
|
|
17
|
%
|
|||
Satellite-related services
|
43,212
|
|
|
40,646
|
|
|
(2,566
|
)
|
|
(6
|
)%
|
|||
Total off-network and other revenues
|
193,398
|
|
|
216,248
|
|
|
22,850
|
|
|
12
|
%
|
|||
Total
|
$
|
2,161,190
|
|
|
$
|
2,061,465
|
|
|
$
|
(99,725
|
)
|
|
(5
|
)%
|
•
|
Transponder services— an aggregate decrease of $101.5 million, primarily due to a $53.0 million net decrease in revenue from network services customers and a $48.8 million decrease from media customers. The decline from network services customers was primarily due to non-renewals, renewals at lower pricing or lower capacity, and service contractions for enterprise and wireless infrastructure applications mainly in the Latin America, North America, and Europe regions. This decline includes approximately $22.5 million in lost revenue resulting from the failure of Intelsat 29e, a portion of which services were restored with off-network services. Revenue from network
|
•
|
Managed services—an aggregate decrease of $19.2 million, largely due to a $12.5 million decrease in revenue from government customers and a $6.6 million decrease in revenue from media customers mainly due to non-renewals and renewals at lower pricing. This decline includes approximately $12.6 million in lost revenue resulting from the failure of Intelsat 29e, a portion of which services were restored with off-network services. These declines were partially offset by increased revenues from maritime mobility services.
|
•
|
Transponder, MSS and other off-network services—an aggregate increase of $25.4 million, primarily due to a $27.3 million increase in revenue from network services customers largely relating to revenue recognized in the first quarter of 2019 accounted for as a sales-type lease under ASC 842 as well as the transfer of certain Intelsat 29e customer services to off-network capacity. This was partially offset by a $2.5 million decrease in revenue from government customers.
|
•
|
Satellite-related services—an aggregate decrease of $2.6 million, reflecting decreased revenues from professional services supporting third-party satellites.
|
•
|
an increase of $48.7 million in costs incurred in connection with the purchase of capacity from two uncapitalized satellites, Intelsat 38 and Horizons 3e, that entered into service in 2019;
|
•
|
an increase of $16.2 million in equipment and third-party capacity costs recognized under ASC 842;
|
•
|
an increase of $13.2 million in third-party capacity costs incurred as part of the Intelsat 29e customer restoration process; and
|
•
|
an increase of $9.7 million in staff-related expenses; partially offset by
|
•
|
a decrease of $5.7 million in costs largely due to the write-off of uncollectible revenue related to Horizons 2 that is payable to JSAT as part of a revenue sharing agreement;
|
•
|
a decrease of $3.9 million in third-party costs for off-network services; and
|
•
|
a decrease of $3.0 million in satellite-related insurance costs.
|
•
|
an increase of $18.0 million in bad debt expense largely related to certain customers in the Europe, Latin America and Africa regions;
|
•
|
an increase of $16.8 million in staff-related expenses; and
|
•
|
an increase of $3.2 million in costs for licenses and fees; partially offset by
|
•
|
a decrease of $15.1 million in professional fees largely due to higher costs incurred in 2018 relating to financing transactions and the reorganization of ownership of certain assets among our subsidiaries that was implemented in 2018 (the "2018 Internal Reorganization").
|
•
|
a decrease of $27.0 million in depreciation expense due to the write-off of Intelsat 29e;
|
•
|
a decrease of $21.9 million in depreciation expense due to the timing of certain satellites becoming fully depreciated; and
|
•
|
a decrease of $4.1 million in amortization expense primarily due to changes in the pattern of consumption of amortizable intangible assets, as these assets primarily include acquired backlog, which relates to contracts covering varying periods that expire over time, and acquired customer relationships, for which the value diminishes over time; partially offset by
|
•
|
an increase of $14.3 million in depreciation expense resulting from the impact of satellites placed in service; and
|
•
|
an increase of $9.2 million in depreciation expense resulting from the impact of certain ground segment assets placed in service.
|
•
|
an increase of $37.4 million corresponding to the decrease in fair value of the interest rate cap contracts;
|
•
|
a net increase of $30.1 million primarily resulting from our refinancing activities in 2018 and incremental debt raise in 2019; and
|
•
|
an increase of $5.2 million from lower capitalized interest primarily resulting from decreased levels of satellites and related assets under construction; partially offset by
|
•
|
a decrease of $6.9 million resulting from increased interest income largely due to higher cash balances; and
|
•
|
a decrease of $3.4 million from lower interest expense associated with deferred satellite performance incentives.
|
|
|
Year Ended
December 31, 2017
|
|
Year Ended
December 31, 2018
|
|
Year Ended
December 31, 2019
|
||||||
Net loss
|
|
$
|
(174,814
|
)
|
|
$
|
(595,690
|
)
|
|
$
|
(911,210
|
)
|
Add:
|
|
|
|
|
|
|
||||||
Interest expense, net
|
|
1,020,770
|
|
|
1,212,374
|
|
|
1,273,112
|
|
|||
Loss on early extinguishment of debt
|
|
4,109
|
|
|
199,658
|
|
|
—
|
|
|||
Provision for (benefit from) income taxes
|
|
71,130
|
|
|
130,069
|
|
|
(7,384
|
)
|
|||
Depreciation and amortization
|
|
707,824
|
|
|
687,589
|
|
|
658,233
|
|
|||
EBITDA
|
|
$
|
1,629,019
|
|
|
$
|
1,634,000
|
|
|
$
|
1,012,751
|
|
|
|
Year Ended
December 31, 2017
|
|
Year Ended
December 31, 2018
|
|
Year Ended
December 31, 2019
|
||||||
Net loss
|
|
$
|
(174,814
|
)
|
|
$
|
(595,690
|
)
|
|
$
|
(911,210
|
)
|
Add:
|
|
|
|
|
|
|
||||||
Interest expense, net
|
|
1,020,770
|
|
|
1,212,374
|
|
|
1,273,112
|
|
|||
Loss on early extinguishment of debt
|
|
4,109
|
|
|
199,658
|
|
|
—
|
|
|||
Provision for (benefit from) income taxes
|
|
71,130
|
|
|
130,069
|
|
|
(7,384
|
)
|
|||
Depreciation and amortization
|
|
707,824
|
|
|
687,589
|
|
|
658,233
|
|
|||
EBITDA
|
|
1,629,019
|
|
|
1,634,000
|
|
|
1,012,751
|
|
|||
Add:
|
|
|
|
|
|
|
||||||
Compensation and benefits (1)
|
|
15,995
|
|
|
6,824
|
|
|
13,189
|
|
|||
Non-recurring and other non-cash items (2)
|
|
19,589
|
|
|
27,646
|
|
|
58,625
|
|
|||
Satellite impairment loss (3)
|
|
—
|
|
|
—
|
|
|
381,565
|
|
|||
Proportionate share from unconsolidated joint
venture(4):
|
|
|
|
|
|
|
||||||
Interest expense, net
|
|
—
|
|
|
—
|
|
|
5,014
|
|
|||
Depreciation and amortization
|
|
—
|
|
|
—
|
|
|
10,320
|
|
|||
Adjusted EBITDA(5)(6)
|
|
$
|
1,664,603
|
|
|
$
|
1,668,470
|
|
|
$
|
1,481,464
|
|
(1)
|
Reflects non-cash expenses incurred relating to our equity compensation plans.
|
(2)
|
Reflects certain non-recurring expenses, gains and losses and non-cash items, including the following: professional fees related to our liability, business strategy and tax management initiatives; costs associated with our C-band spectrum solution proposal; severance, retention and relocation payments; changes in fair value of certain investments; certain foreign exchange gains and losses; and other various non-recurring expenses. These costs were partially offset by non-cash income related to the recognition of deferred revenue on a straight-line basis for certain prepaid capacity service contracts.
|
(3)
|
Reflects a non-cash impairment charge recorded in connection with the Intelsat 29e satellite loss.
|
(4)
|
Reflects adjustments related to our interest in Horizons-3 Satellite LLC ("Horizons 3"). See Item 8, Note 9(b)—Investments—Horizons-3 Satellite LLC.
|
(5)
|
Adjusted EBITDA included $100.6 million and $102.2 million for the years ended December 31, 2018 and 2019, respectively, of revenue relating to the significant financing component identified in customer contracts in accordance with the adoption of ASC 606. These impacts are not permitted to be reflected in the applicable consolidated and Adjusted EBITDA definitions under our debt agreements.
|
(6)
|
For the year ended December 31, 2019, Intelsat S.A. Adjusted EBITDA reflected $12.5 million of Adjusted EBITDA attributable to Intelsat Horizons-3 LLC, its subsidiaries and its proportionate share of Horizons 3, with a nominal amount for the comparative period in 2018. These entities are considered to be unrestricted subsidiaries under the definitions set forth in our applicable debt agreements.
|
Liquidity and Capital Resources
|
|
Year Ended
December 31,
2017
|
|
Year Ended
December 31,
2018
|
|
Year Ended
December 31,
2019
|
||||||
Net cash provided by operating activities
|
$
|
464,246
|
|
|
$
|
344,173
|
|
|
$
|
255,539
|
|
Net cash used in investing activities
|
(468,297
|
)
|
|
(283,634
|
)
|
|
(292,733
|
)
|
|||
Net cash provided by (used in) financing activities
|
(121,698
|
)
|
|
(90,323
|
)
|
|
362,910
|
|
|||
Net change in cash, cash equivalents and restricted cash
|
(124,633
|
)
|
|
(34,234
|
)
|
|
323,707
|
|
Year
|
Satellite-Related
Capital Expenditures
|
|
Total Capital
Expenditures
|
||||
2015
|
$
|
657,656
|
|
|
$
|
724,362
|
|
2016
|
629,346
|
|
|
714,570
|
|
||
2017
|
355,675
|
|
|
461,627
|
|
||
2018
|
165,143
|
|
|
255,696
|
|
||
2019
|
134,597
|
|
|
229,818
|
|
||
Total
|
$
|
1,942,417
|
|
|
$
|
2,386,073
|
|
Off-Balance Sheet Arrangements
|
Tabular Disclosure of Contractual Obligations
|
|
|
Payments due by year
|
||||||||||||||||||||||||||||||
Contractual Obligations(1)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and
thereafter
|
|
Other
|
|
Total
|
||||||||||||||||
Long-Term debt obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Intelsat S.A. and subsidiary notes and credit facilities—principal payments
|
|
$
|
—
|
|
|
$
|
421,219
|
|
|
$
|
490,000
|
|
|
$
|
6,123,337
|
|
|
$
|
5,394,783
|
|
|
$
|
2,287,500
|
|
|
$
|
—
|
|
|
$
|
14,716,839
|
|
Intelsat S.A. and subsidiary notes and credit facilities—interest payments(2)
|
|
1,149,619
|
|
|
1,107,493
|
|
|
1,090,796
|
|
|
909,198
|
|
|
527,029
|
|
|
192,844
|
|
|
—
|
|
|
4,976,979
|
|
||||||||
Horizons-3 Satellite LLC capital contributions and purchase obligations(3)
|
|
28,586
|
|
|
32,358
|
|
|
33,600
|
|
|
33,723
|
|
|
34,314
|
|
|
192,618
|
|
|
—
|
|
|
355,199
|
|
||||||||
Purchase obligations(4)
|
|
276,255
|
|
|
221,533
|
|
|
174,487
|
|
|
56,940
|
|
|
46,405
|
|
|
102,318
|
|
|
—
|
|
|
877,938
|
|
||||||||
Satellite performance incentive obligations
|
|
65,301
|
|
|
51,685
|
|
|
36,816
|
|
|
25,366
|
|
|
24,726
|
|
|
104,084
|
|
|
—
|
|
|
307,978
|
|
||||||||
Operating lease obligations
|
|
20,136
|
|
|
16,329
|
|
|
15,508
|
|
|
15,122
|
|
|
15,006
|
|
|
71,633
|
|
|
—
|
|
|
153,734
|
|
||||||||
Sublease rental income
|
|
(775
|
)
|
|
(492
|
)
|
|
(236
|
)
|
|
(120
|
)
|
|
(56
|
)
|
|
(138
|
)
|
|
—
|
|
|
(1,817
|
)
|
||||||||
Income tax contingencies(5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,954
|
|
|
24,954
|
|
||||||||
Total contractual obligations
|
|
$
|
1,539,122
|
|
|
$
|
1,850,125
|
|
|
$
|
1,840,971
|
|
|
$
|
7,163,566
|
|
|
$
|
6,042,207
|
|
|
$
|
2,950,859
|
|
|
$
|
24,954
|
|
|
$
|
21,411,804
|
|
(1)
|
Obligations related to our pension and postretirement medical benefit obligations are excluded from the table. We maintain a noncontributory defined benefit retirement plan covering substantially all of our employees hired prior to July 19, 2001. We expect that our future contributions to the defined benefit retirement plan will be based on the minimum funding requirements of the Internal Revenue Code and on the plan’s funded status. The impact on the funded status is determined based upon market conditions in effect when we completed our annual valuation. In the first quarter of 2015, we amended the defined benefit retirement plan to cease the accrual of additional benefits for the remaining active participants effective March 31, 2015. We anticipate that our contributions to the defined benefit retirement plan in 2020 will be approximately $4.0 million. We fund the postretirement medical benefits throughout the year based on benefits paid. We anticipate that our contributions to fund postretirement medical benefits in 2020 will be approximately $2.9 million. See Note 7—Retirement Plans and Other Retiree Benefits to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this Annual Report.
|
(2)
|
Represents estimated interest payments to be made on our fixed and variable rate debt. Interest payments for variable rate debt and incentive obligations have been estimated based on the current interest rates.
|
(3)
|
This amount includes commitments to make capital contributions to and purchase satellite capacity from Horizons 3. See Note 9(b)—Investments—Horizons-3 Satellite LLC.
|
(4)
|
Includes obligations under satellite construction and launch contracts, estimated payments to be made on performance incentive obligations related to certain satellites that are currently under construction, and commitments under customer and vendor contracts.
|
(5)
|
The timing of future cash flows from income tax contingencies cannot be reasonably estimated and therefore is reflected in the other column. See Note 14—Income Taxes to our consolidated financial statements included in Item 8—Financial Statements and Supplementary Data of this Annual Report for further discussion of income tax contingencies.
|
•
|
satellite anomalies, such as a partial or full loss of power;
|
•
|
under-performance of an asset as compared to expectations; and
|
•
|
shortened useful lives due to changes in the way an asset is used or expected to be used.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
December 31, 2018
|
|
December 31, 2019
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
485,120
|
|
|
$
|
810,626
|
|
Restricted cash
|
22,037
|
|
|
20,238
|
|
||
Receivables, net of allowances of $28,542 in 2018 and $40,028 in 2019
|
271,393
|
|
|
255,722
|
|
||
Contract assets
|
45,034
|
|
|
47,721
|
|
||
Prepaid expenses and other current assets
|
24,075
|
|
|
39,230
|
|
||
Total current assets
|
847,659
|
|
|
1,173,537
|
|
||
Satellites and other property and equipment, net
|
5,511,702
|
|
|
4,702,063
|
|
||
Goodwill
|
2,620,627
|
|
|
2,620,627
|
|
||
Non-amortizable intangible assets
|
2,452,900
|
|
|
2,452,900
|
|
||
Amortizable intangible assets, net
|
311,103
|
|
|
276,752
|
|
||
Contract assets, net of current portion
|
96,108
|
|
|
74,109
|
|
||
Other assets
|
401,414
|
|
|
504,394
|
|
||
Total assets
|
$
|
12,241,513
|
|
|
$
|
11,804,382
|
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
108,101
|
|
|
$
|
88,107
|
|
Taxes payable
|
5,679
|
|
|
6,402
|
|
||
Employee related liabilities
|
29,696
|
|
|
44,648
|
|
||
Accrued interest payable
|
284,649
|
|
|
308,657
|
|
||
Contract liabilities
|
137,746
|
|
|
137,706
|
|
||
Deferred satellite performance incentives
|
35,261
|
|
|
42,835
|
|
||
Other current liabilities
|
59,080
|
|
|
62,446
|
|
||
Total current liabilities
|
660,212
|
|
|
690,801
|
|
||
Long-term debt, net of current portion
|
14,028,352
|
|
|
14,465,483
|
|
||
Contract liabilities, net of current portion
|
1,131,319
|
|
|
1,113,450
|
|
||
Deferred satellite performance incentives, net of current portion
|
210,346
|
|
|
175,837
|
|
||
Deferred income taxes
|
82,488
|
|
|
55,171
|
|
||
Accrued retirement benefits
|
133,735
|
|
|
125,511
|
|
||
Other long-term liabilities
|
77,670
|
|
|
166,977
|
|
||
Shareholders’ deficit:
|
|
|
|
||||
Common shares; nominal value $0.01 per share
|
1,380
|
|
|
1,411
|
|
||
Paid-in capital
|
2,551,471
|
|
|
2,565,696
|
|
||
Accumulated deficit
|
(6,606,426
|
)
|
|
(7,503,830
|
)
|
||
Accumulated other comprehensive loss
|
(43,430
|
)
|
|
(63,135
|
)
|
||
Total Intelsat S.A. shareholders’ deficit
|
(4,097,005
|
)
|
|
(4,999,858
|
)
|
||
Noncontrolling interest
|
14,396
|
|
|
11,010
|
|
||
Total liabilities and shareholders’ deficit
|
$
|
12,241,513
|
|
|
$
|
11,804,382
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2019
|
||||||
Revenue
|
$
|
2,148,612
|
|
|
$
|
2,161,190
|
|
|
$
|
2,061,465
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Direct costs of revenue (excluding depreciation and amortization)
|
324,232
|
|
|
330,874
|
|
|
406,153
|
|
|||
Selling, general and administrative
|
205,475
|
|
|
200,857
|
|
|
226,918
|
|
|||
Depreciation and amortization
|
707,824
|
|
|
687,589
|
|
|
658,233
|
|
|||
Satellite impairment loss
|
—
|
|
|
—
|
|
|
381,565
|
|
|||
Total operating expenses
|
1,237,531
|
|
|
1,219,320
|
|
|
1,672,869
|
|
|||
Income from operations
|
911,081
|
|
|
941,870
|
|
|
388,596
|
|
|||
Interest expense, net
|
1,020,770
|
|
|
1,212,374
|
|
|
1,273,112
|
|
|||
Loss on early extinguishment of debt
|
(4,109
|
)
|
|
(199,658
|
)
|
|
—
|
|
|||
Other income (expense), net
|
10,114
|
|
|
4,541
|
|
|
(34,078
|
)
|
|||
Loss before income taxes
|
(103,684
|
)
|
|
(465,621
|
)
|
|
(918,594
|
)
|
|||
Provision for (benefit from) income taxes
|
71,130
|
|
|
130,069
|
|
|
(7,384
|
)
|
|||
Net loss
|
(174,814
|
)
|
|
(595,690
|
)
|
|
(911,210
|
)
|
|||
Net income attributable to noncontrolling interest
|
(3,914
|
)
|
|
(3,915
|
)
|
|
(2,385
|
)
|
|||
Net loss attributable to Intelsat S.A.
|
$
|
(178,728
|
)
|
|
$
|
(599,605
|
)
|
|
$
|
(913,595
|
)
|
Net loss per common share attributable to Intelsat S.A.:
|
|
|
|
|
|
||||||
Basic
|
$
|
(1.50
|
)
|
|
$
|
(4.63
|
)
|
|
$
|
(6.51
|
)
|
Diluted
|
$
|
(1.50
|
)
|
|
$
|
(4.63
|
)
|
|
$
|
(6.51
|
)
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2019
|
||||||
Net loss
|
$
|
(174,814
|
)
|
|
$
|
(595,690
|
)
|
|
$
|
(911,210
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Defined benefit retirement plans:
|
|
|
|
|
|
||||||
Reclassification adjustment for amortization of unrecognized prior service credits, net of tax included in other income (expense), net
|
21
|
|
|
(839
|
)
|
|
(2,502
|
)
|
|||
Reclassification adjustment for amortization of unrecognized actuarial loss, net of tax included in other income (expense), net
|
2,074
|
|
|
4,064
|
|
|
2,943
|
|
|||
Actuarial gain (loss) arising during the year, net of tax
|
(13,896
|
)
|
|
2,960
|
|
|
(3,955
|
)
|
|||
Benefit plan amendment, net of tax of $0.7 million
|
—
|
|
|
38,510
|
|
|
—
|
|
|||
Adoption of ASU 2018-02 (see Note 14—Income Taxes)
|
—
|
|
|
—
|
|
|
(16,191
|
)
|
|||
Marketable securities:
|
|
|
|
|
|
||||||
Unrealized gains on investments, net of tax
|
567
|
|
|
—
|
|
|
—
|
|
|||
Reclassification adjustment for realized gain on investments, net of tax
|
(235
|
)
|
|
—
|
|
|
—
|
|
|||
Reclassification adjustment for pension assets' gains, net of tax included in other income (expense), net
|
—
|
|
|
(351
|
)
|
|
—
|
|
|||
Other comprehensive income (loss)
|
(11,469
|
)
|
|
44,344
|
|
|
(19,705
|
)
|
|||
Comprehensive loss
|
(186,283
|
)
|
|
(551,346
|
)
|
|
(930,915
|
)
|
|||
Comprehensive income attributable to noncontrolling interest
|
(3,914
|
)
|
|
(3,915
|
)
|
|
(2,385
|
)
|
|||
Comprehensive loss attributable to Intelsat S.A.
|
$
|
(190,197
|
)
|
|
$
|
(555,261
|
)
|
|
$
|
(933,300
|
)
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
Total
|
|
|
|||||||||||||
|
Common
|
|
|
|
|
|
Other
|
|
Intelsat S.A.
|
|
Noncontrolling
Interest
|
|||||||||||||||
|
Shares
(in millions)
|
|
Amount
|
|
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Comprehensive
Loss
|
|
Shareholders’
Deficit
|
|
||||||||||||||
Balance at December 31, 2016
|
118.0
|
|
|
$
|
1,180
|
|
|
$
|
2,156,911
|
|
|
$
|
(5,715,931
|
)
|
|
$
|
(76,305
|
)
|
|
$
|
(3,634,145
|
)
|
|
$
|
24,147
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(178,728
|
)
|
|
—
|
|
|
(178,728
|
)
|
|
3,914
|
|
||||||
Dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,755
|
)
|
||||||
Share-based compensation
|
1.6
|
|
|
16
|
|
|
16,456
|
|
|
—
|
|
|
—
|
|
|
16,472
|
|
|
—
|
|
||||||
Postretirement/pension liability adjustment, net of tax of ($3.1) million
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,801
|
)
|
|
(11,801
|
)
|
|
—
|
|
||||||
Other comprehensive income, net of tax of $0.2 million
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
332
|
|
|
332
|
|
|
—
|
|
||||||
Balance at December 31, 2017
|
119.6
|
|
|
$
|
1,196
|
|
|
$
|
2,173,367
|
|
|
$
|
(5,894,659
|
)
|
|
$
|
(87,774
|
)
|
|
$
|
(3,807,870
|
)
|
|
$
|
19,306
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(599,605
|
)
|
|
—
|
|
|
(599,605
|
)
|
|
3,915
|
|
||||||
Dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,825
|
)
|
||||||
Share-based compensation
|
2.9
|
|
|
29
|
|
|
10,006
|
|
|
—
|
|
|
—
|
|
|
10,035
|
|
|
—
|
|
||||||
Equity offering and 2025 Convertible Notes offering
|
15.5
|
|
|
155
|
|
|
368,098
|
|
|
—
|
|
|
—
|
|
|
368,253
|
|
|
—
|
|
||||||
Postretirement/pension liability adjustment, net of tax of $0.6 million
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,185
|
|
|
6,185
|
|
|
—
|
|
||||||
Benefit plan amendment, net of tax of $0.7 million
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,510
|
|
|
38,510
|
|
|
—
|
|
||||||
Other comprehensive income, net of tax of ($0.2) million
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(351
|
)
|
|
(351
|
)
|
|
—
|
|
||||||
Adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
—
|
|
|
(281,741
|
)
|
|
—
|
|
|
(281,741
|
)
|
|
—
|
|
||||||
Adoption of ASU 2016-16
|
—
|
|
|
—
|
|
|
—
|
|
|
169,579
|
|
|
—
|
|
|
169,579
|
|
|
—
|
|
||||||
Balance at December 31, 2018
|
138.0
|
|
|
$
|
1,380
|
|
|
$
|
2,551,471
|
|
|
$
|
(6,606,426
|
)
|
|
$
|
(43,430
|
)
|
|
$
|
(4,097,005
|
)
|
|
$
|
14,396
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(913,595
|
)
|
|
—
|
|
|
(913,595
|
)
|
|
2,385
|
|
||||||
Dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,771
|
)
|
||||||
Share-based compensation
|
3.1
|
|
|
31
|
|
|
14,225
|
|
|
—
|
|
|
—
|
|
|
14,256
|
|
|
—
|
|
||||||
Postretirement/pension liability adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,514
|
)
|
|
(3,514
|
)
|
|
—
|
|
||||||
Adoption of ASU 2018-02 (see Note 14—Income Taxes)
|
—
|
|
|
—
|
|
|
—
|
|
|
16,191
|
|
|
(16,191
|
)
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2019
|
141.1
|
|
|
$
|
1,411
|
|
|
$
|
2,565,696
|
|
|
$
|
(7,503,830
|
)
|
|
$
|
(63,135
|
)
|
|
$
|
(4,999,858
|
)
|
|
$
|
11,010
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2019
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(174,814
|
)
|
|
$
|
(595,690
|
)
|
|
$
|
(911,210
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
707,824
|
|
|
687,589
|
|
|
658,233
|
|
|||
Provision for (benefit from) doubtful accounts
|
(4,094
|
)
|
|
(836
|
)
|
|
17,190
|
|
|||
Foreign currency transaction (gain) loss
|
(876
|
)
|
|
6,736
|
|
|
2,128
|
|
|||
Loss on disposal of assets
|
45
|
|
|
46
|
|
|
402
|
|
|||
Satellite impairment loss
|
—
|
|
|
—
|
|
|
381,565
|
|
|||
Share-based compensation
|
15,995
|
|
|
6,824
|
|
|
13,189
|
|
|||
Deferred income taxes
|
43,931
|
|
|
79,160
|
|
|
(27,707
|
)
|
|||
Amortization of discount, premium, issuance costs and related costs
|
48,696
|
|
|
48,495
|
|
|
41,943
|
|
|||
Loss on early extinguishment of debt
|
4,109
|
|
|
199,658
|
|
|
—
|
|
|||
Amortization of actuarial loss and prior service credits for retirement benefits
|
3,287
|
|
|
3,823
|
|
|
(3,572
|
)
|
|||
Unrealized (gains) losses on derivative financial instruments
|
275
|
|
|
(15,093
|
)
|
|
27,018
|
|
|||
Unrealized net losses on investments and loans held-for-investment
|
—
|
|
|
408
|
|
|
39,695
|
|
|||
Sales-type lease
|
—
|
|
|
—
|
|
|
7,064
|
|
|||
Other non-cash items
|
(287
|
)
|
|
1,178
|
|
|
(205
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
(14,333
|
)
|
|
(63,814
|
)
|
|
(1,307
|
)
|
|||
Prepaid expenses, contract and other assets
|
(24,760
|
)
|
|
3,708
|
|
|
15,664
|
|
|||
Accounts payable and accrued liabilities
|
(42,337
|
)
|
|
7,291
|
|
|
10,908
|
|
|||
Accrued interest payable
|
58,367
|
|
|
21,442
|
|
|
24,008
|
|
|||
Deferred revenue and contract liabilities
|
(134,577
|
)
|
|
(39,763
|
)
|
|
(18,368
|
)
|
|||
Accrued retirement benefits
|
(13,422
|
)
|
|
(15,902
|
)
|
|
(8,224
|
)
|
|||
Other long-term liabilities
|
(8,783
|
)
|
|
8,913
|
|
|
(12,875
|
)
|
|||
Net cash provided by operating activities
|
464,246
|
|
|
344,173
|
|
|
255,539
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Payments for satellites and other property and equipment (including capitalized interest)
|
(461,627
|
)
|
|
(255,696
|
)
|
|
(229,818
|
)
|
|||
Purchase of investments and origination of loans held-for-investment
|
(25,744
|
)
|
|
(19,000
|
)
|
|
(70,751
|
)
|
|||
Capital contributions to unconsolidated affiliate (including capitalized interest)
|
(30,714
|
)
|
|
(48,097
|
)
|
|
(5,289
|
)
|
|||
Proceeds from insurance settlements
|
49,788
|
|
|
20,409
|
|
|
—
|
|
|||
Other proceeds from satellites
|
—
|
|
|
18,750
|
|
|
13,125
|
|
|||
Net cash used in investing activities
|
(468,297
|
)
|
|
(283,634
|
)
|
|
(292,733
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
1,500,000
|
|
|
4,585,875
|
|
|
400,000
|
|
|||
Repayments of long-term debt
|
(1,500,000
|
)
|
|
(4,782,451
|
)
|
|
—
|
|
|||
Debt issuance costs
|
(41,237
|
)
|
|
(49,436
|
)
|
|
(4,650
|
)
|
|||
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
|
)
|
|
—
|
|
|||
Payments on tender, debt exchange and consent
|
(14
|
)
|
|
—
|
|
|
—
|
|
|||
Other payments for satellites
|
(35,396
|
)
|
|
—
|
|
|
—
|
|
|||
Principal payments on deferred satellite performance incentives
|
(37,186
|
)
|
|
(25,488
|
)
|
|
(28,034
|
)
|
|||
Dividends paid to noncontrolling interest
|
(8,755
|
)
|
|
(8,825
|
)
|
|
(5,771
|
)
|
|||
Proceeds from exercise of employee stock options
|
476
|
|
|
3,211
|
|
|
1,067
|
|
|||
Other financing activities
|
414
|
|
|
385
|
|
|
298
|
|
|||
Net cash provided by (used in) financing activities
|
(121,698
|
)
|
|
(90,323
|
)
|
|
362,910
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
1,116
|
|
|
(4,450
|
)
|
|
(2,009
|
)
|
|||
Net change in cash, cash equivalents and restricted cash
|
(124,633
|
)
|
|
(34,234
|
)
|
|
323,707
|
|
|||
Cash, cash equivalents, and restricted cash, beginning of period
|
666,024
|
|
|
541,391
|
|
|
507,157
|
|
|||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
541,391
|
|
|
$
|
507,157
|
|
|
$
|
830,864
|
|
•
|
Level 1—unadjusted quoted prices for identical assets or liabilities in active markets;
|
•
|
Level 2—quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation; and
|
•
|
Level 3—unobservable inputs based upon the reporting entity’s internally developed assumptions which market participants would use in pricing the asset or liability.
|
|
|
As of December 31, 2018
|
|
As of December 31,
2019
|
||||
Cash and cash equivalents
|
|
$
|
485,120
|
|
|
$
|
810,626
|
|
Restricted cash
|
|
22,037
|
|
|
20,238
|
|
||
Cash, cash equivalents and restricted cash
|
|
$
|
507,157
|
|
|
$
|
830,864
|
|
|
Years
|
||
Buildings and improvements
|
10
|
-
|
40
|
Satellites and related costs
|
10
|
-
|
17
|
Ground segment equipment and software
|
4
|
-
|
15
|
Furniture and fixtures and computer hardware
|
4
|
-
|
12
|
Leasehold improvements(1)
|
2
|
-
|
12
|
(1)
|
Leasehold improvements are depreciated over the shorter of the useful life of the improvement or the remaining lease term.
|
•
|
satellite anomalies, such as a partial or full loss of power;
|
•
|
under-performance of an asset compared to expectations; and
|
•
|
shortened useful lives due to changes in the way an asset is used or expected to be used.
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2019
|
|||||||||||||||
North America
|
$
|
1,080,736
|
|
|
50
|
%
|
|
$
|
1,112,774
|
|
|
51
|
%
|
|
$
|
1,078,100
|
|
|
52
|
%
|
Europe
|
272,039
|
|
|
13
|
%
|
|
257,747
|
|
|
12
|
%
|
|
243,967
|
|
|
12
|
%
|
|||
Latin America and Caribbean
|
304,379
|
|
|
14
|
%
|
|
284,948
|
|
|
13
|
%
|
|
239,856
|
|
|
12
|
%
|
|||
Africa and Middle East
|
292,505
|
|
|
14
|
%
|
|
274,853
|
|
|
13
|
%
|
|
250,935
|
|
|
12
|
%
|
|||
Asia-Pacific
|
198,953
|
|
|
9
|
%
|
|
230,868
|
|
|
11
|
%
|
|
248,607
|
|
|
12
|
%
|
|||
Total
|
$
|
2,148,612
|
|
|
|
|
$
|
2,161,190
|
|
|
|
|
$
|
2,061,465
|
|
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2019
|
|||||||||||||||
On-Network Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Transponder services
|
$
|
1,543,384
|
|
|
72
|
%
|
|
$
|
1,570,278
|
|
|
73
|
%
|
|
$
|
1,468,791
|
|
|
71
|
%
|
Managed services
|
412,147
|
|
|
19
|
%
|
|
393,264
|
|
|
18
|
%
|
|
374,026
|
|
|
18
|
%
|
|||
Channel
|
5,405
|
|
|
—
|
%
|
|
4,250
|
|
|
—
|
%
|
|
2,400
|
|
|
—
|
%
|
|||
Total on-network revenues
|
1,960,936
|
|
|
91
|
%
|
|
1,967,792
|
|
|
91
|
%
|
|
1,845,217
|
|
|
89
|
%
|
|||
Off-Network and Other Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Transponder, MSS and other off-network services
|
141,845
|
|
|
7
|
%
|
|
150,186
|
|
|
7
|
%
|
|
175,602
|
|
|
9
|
%
|
|||
Satellite-related services
|
45,831
|
|
|
2
|
%
|
|
43,212
|
|
|
2
|
%
|
|
40,646
|
|
|
2
|
%
|
|||
Total off-network and other revenues
|
187,676
|
|
|
9
|
%
|
|
193,398
|
|
|
9
|
%
|
|
216,248
|
|
|
11
|
%
|
|||
Total
|
$
|
2,148,612
|
|
|
|
|
$
|
2,161,190
|
|
|
|
|
$
|
2,061,465
|
|
|
|
|
(in thousands, except per share data or where otherwise noted)
|
||||||||||
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2019
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net loss attributable to Intelsat S.A.
|
$
|
(178,728
|
)
|
|
$
|
(599,605
|
)
|
|
$
|
(913,595
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding (in millions)
|
118.9
|
|
|
129.6
|
|
|
140.4
|
|
|||
Diluted weighted average shares outstanding (in millions):
|
118.9
|
|
|
129.6
|
|
|
140.4
|
|
|||
Basic EPS
|
$
|
(1.50
|
)
|
|
$
|
(4.63
|
)
|
|
$
|
(6.51
|
)
|
Diluted EPS
|
$
|
(1.50
|
)
|
|
$
|
(4.63
|
)
|
|
$
|
(6.51
|
)
|
|
Number of stock options
(in thousands)
|
|
Weighted average
exercise price
|
|
Weighted average
remaining contractual
term
(in years)
|
|
Aggregate
intrinsic value
(in millions)
|
|||||
Outstanding at January 1, 2019
|
1,109
|
|
|
$
|
3.71
|
|
|
|
|
|
||
Granted
|
3
|
|
|
19.03
|
|
|
|
|
|
|||
Exercised
|
(309
|
)
|
|
3.45
|
|
|
|
|
|
|||
Expired
|
(1
|
)
|
|
19.50
|
|
|
|
|
|
|||
Outstanding and exercisable at December 31, 2019
|
802
|
|
|
3.86
|
|
|
4.2
|
|
$
|
2.6
|
|
|
Number of stock options
(in thousands)
|
|
Weighted average
exercise price
|
|
Weighted average
remaining contractual
term
(in years)
|
|
Aggregate
intrinsic value
(in millions)
|
|||||
Outstanding at January 1, 2019
|
1,610
|
|
|
$
|
11.98
|
|
|
|
|
|
||
Outstanding and exercisable at December 31, 2019
|
1,610
|
|
|
11.98
|
|
|
3.1
|
|
$
|
2.0
|
|
|
Number of RSUs
(in thousands)
|
|
Weighted average
grant date fair value
|
|
Weighted average
remaining
contractual term
(in years)
|
|
Aggregate
intrinsic value
(in millions)
|
|||||
Outstanding at January 1, 2019
|
2,602
|
|
|
$
|
5.93
|
|
|
|
|
|
||
Granted
|
897
|
|
|
21.28
|
|
|
|
|
|
|||
Vested
|
(1,296
|
)
|
|
5.59
|
|
|
|
|
|
|||
Forfeited
|
(147
|
)
|
|
6.88
|
|
|
|
|
|
|||
Outstanding at December 31, 2019
|
2,056
|
|
|
12.77
|
|
|
0.8
|
|
$
|
14.5
|
|
|
Number of RSUs
(in thousands)
|
|
Weighted
average grant
date fair value
|
|
Weighted average
remaining
contractual term
(in years)
|
|
Aggregate
intrinsic value
(in millions)
|
|||||
Outstanding at January 1, 2019
|
2,624
|
|
|
$
|
2.69
|
|
|
|
|
|
||
Granted
|
347
|
|
|
25.40
|
|
|
|
|
|
|||
Vested
|
(1,004
|
)
|
|
0.56
|
|
|
|
|
|
|||
Forfeited
|
(169
|
)
|
|
3.87
|
|
|
|
|
|
|||
Outstanding at December 31, 2019 (1)
|
1,798
|
|
|
7.94
|
|
|
1.0
|
|
$
|
12.6
|
|
|
|
|
Fair Value Measurements at December 31, 2018
|
||||||||||||
Description
|
As of
December 31, 2018 |
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Marketable securities(1)
|
$
|
4,700
|
|
|
$
|
4,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Undesignated interest rate cap contracts(2)
|
33,086
|
|
|
—
|
|
|
33,086
|
|
|
—
|
|
||||
Preferred stock warrant(3)
|
4,100
|
|
|
—
|
|
|
—
|
|
|
4,100
|
|
||||
Total assets
|
$
|
41,886
|
|
|
$
|
4,700
|
|
|
$
|
33,086
|
|
|
$
|
4,100
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Fair Value Measurements at December 31, 2019
|
||||||||||||
Description
|
As of
December 31, 2019 |
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Marketable securities(1)
|
$
|
5,145
|
|
|
$
|
5,145
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Undesignated interest rate cap contracts(2)
|
372
|
|
|
—
|
|
|
372
|
|
|
—
|
|
||||
Common stock warrant(3)
|
3,239
|
|
|
—
|
|
|
—
|
|
|
3,239
|
|
||||
Total assets
|
$
|
8,756
|
|
|
$
|
5,145
|
|
|
$
|
372
|
|
|
$
|
3,239
|
|
(1)
|
The valuation measurement inputs of these marketable securities represent unadjusted quoted prices in active markets and, accordingly, we have classified such investments within Level 1 of the fair value hierarchy. The cost basis of our marketable securities was $4.6 million and $4.3 million as of December 31, 2018 and 2019, respectively. We sold marketable securities with a cost basis of $0.7 million for each of the years ended December 31, 2018 and 2019, and recorded a nominal gain on the sale for the years ended December 31, 2018 and 2019, respectively, which is included within other income (expense), net in our consolidated statements of operations.
|
(2)
|
The valuation of our interest rate derivative instruments reflects the fair value of premiums paid, taking into account observable inputs including current interest rates, the market expectation for future interest rate volatility and current creditworthiness of the counterparties. As a result, we have determined that the valuation in its entirety is classified as Level 2 within the fair value hierarchy.
|
(3)
|
We valued the stock warrants using a valuation technique that reflects the risk-free interest rate, time to maturity and volatility of comparable companies. We identified the inputs used to calculate the fair value as Level 3 inputs and concluded that the valuation in its entirety is classified as Level 3 within the fair value hierarchy.
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2019
|
||||
Balance as of beginning of period
|
$
|
4,100
|
|
|
$
|
4,100
|
|
Purchase of investments
|
—
|
|
|
3,239
|
|
||
Unrealized loss included in other income (expense), net
|
—
|
|
|
(4,100
|
)
|
||
Balance as of end of period
|
$
|
4,100
|
|
|
$
|
3,239
|
|
|
Year Ended
December 31, 2018 |
|
Year Ended
December 31, 2019 |
||||||||||||
|
Pension
Benefits
|
|
Other Post-
retirement
Benefits
|
|
Pension
Benefits
|
|
Other Post-
retirement
Benefits
|
||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
447,222
|
|
|
$
|
82,587
|
|
|
$
|
394,082
|
|
|
$
|
40,526
|
|
Interest cost
|
14,428
|
|
|
2,314
|
|
|
15,390
|
|
|
1,532
|
|
||||
Employee contributions
|
—
|
|
|
390
|
|
|
—
|
|
|
181
|
|
||||
Plan amendments
|
—
|
|
|
(33,907
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(30,741
|
)
|
|
(3,600
|
)
|
|
(24,875
|
)
|
|
(1,787
|
)
|
||||
Actuarial net (gain) loss
|
(36,827
|
)
|
|
(7,258
|
)
|
|
38,939
|
|
|
(577
|
)
|
||||
Benefit obligation at end of year
|
$
|
394,082
|
|
|
$
|
40,526
|
|
|
$
|
423,536
|
|
|
$
|
39,875
|
|
Change in plan assets
|
|
|
|
|
|
|
|
||||||||
Plan assets at beginning of year
|
$
|
334,582
|
|
|
$
|
—
|
|
|
$
|
297,631
|
|
|
$
|
—
|
|
Employer contributions
|
5,115
|
|
|
3,210
|
|
|
4,232
|
|
|
1,606
|
|
||||
Employee contributions
|
—
|
|
|
390
|
|
|
—
|
|
|
181
|
|
||||
Actual return on plan assets
|
(11,325
|
)
|
|
—
|
|
|
57,833
|
|
|
—
|
|
||||
Benefits paid
|
(30,741
|
)
|
|
(3,600
|
)
|
|
(24,875
|
)
|
|
(1,787
|
)
|
||||
Plan assets at fair value at end of year
|
$
|
297,631
|
|
|
$
|
—
|
|
|
$
|
334,821
|
|
|
$
|
—
|
|
Accrued benefit costs and funded status of the plans
|
$
|
(96,451
|
)
|
|
$
|
(40,526
|
)
|
|
$
|
(88,715
|
)
|
|
$
|
(39,875
|
)
|
Accumulated benefit obligation
|
$
|
394,082
|
|
|
|
|
$
|
423,536
|
|
|
|
||||
Weighted average assumptions used to determine accumulated benefit obligation and accrued benefit costs
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
4.35
|
%
|
|
4.27
|
%
|
|
3.29
|
%
|
|
3.19
|
%
|
||||
Weighted average assumptions used to determine net periodic benefit costs
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
3.67
|
%
|
|
3.64%/4.18%
|
|
|
4.35
|
%
|
|
4.27
|
%
|
||||
Expected rate of return on plan assets
|
7.60
|
%
|
|
—
|
|
|
7.60
|
%
|
|
—
|
|
||||
Amounts in accumulated other comprehensive loss recognized in net periodic benefit cost
|
|
|
|
|
|
|
|
||||||||
Actuarial net (gain) loss, net of tax
|
$
|
4,640
|
|
|
$
|
(576
|
)
|
|
$
|
4,151
|
|
|
$
|
(1,208
|
)
|
Prior service credits, net of tax
|
(854
|
)
|
|
15
|
|
|
—
|
|
|
(2,502
|
)
|
||||
Total
|
$
|
3,786
|
|
|
$
|
(561
|
)
|
|
$
|
4,151
|
|
|
$
|
(3,710
|
)
|
Amounts in accumulated other comprehensive loss not yet recognized in net periodic benefit cost
|
|
|
|
|
|
|
|
||||||||
Actuarial net (gain) loss, net of tax
|
$
|
93,509
|
|
|
$
|
(15,377
|
)
|
|
$
|
111,637
|
|
|
$
|
(16,646
|
)
|
Prior service credits, net of tax
|
(343
|
)
|
|
(32,514
|
)
|
|
—
|
|
|
(30,011
|
)
|
||||
Total
|
$
|
93,166
|
|
|
$
|
(47,891
|
)
|
|
$
|
111,637
|
|
|
$
|
(46,657
|
)
|
Amounts in accumulated other comprehensive loss expected to be recognized in net periodic benefit cost in the subsequent year
|
|
|
|
|
|
|
|
||||||||
Actuarial net (gain) loss
|
$
|
4,222
|
|
|
$
|
(1,229
|
)
|
|
$
|
6,399
|
|
|
$
|
(1,219
|
)
|
Prior service credits
|
—
|
|
|
(2,544
|
)
|
|
—
|
|
|
(2,545
|
)
|
||||
Total
|
$
|
4,222
|
|
|
$
|
(3,773
|
)
|
|
$
|
6,399
|
|
|
$
|
(3,764
|
)
|
|
As of December 31, 2018
|
|
As of December 31, 2019
|
||||||||
|
Target
Allocation
|
|
Actual
Allocation
|
|
Target
Allocation
|
|
Actual
Allocation
|
||||
Asset Category
|
|
|
|
|
|
|
|
||||
Equity securities
|
49
|
%
|
|
45
|
%
|
|
49
|
%
|
|
48
|
%
|
Debt securities
|
36
|
%
|
|
36
|
%
|
|
36
|
%
|
|
34
|
%
|
Other securities
|
15
|
%
|
|
19
|
%
|
|
15
|
%
|
|
18
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Fair Value Measurements at December 31, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Asset Category
|
|
|
|
|
|
|
|
||||||||
Equity Securities
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap (1)
|
$
|
62,243
|
|
|
$
|
62,243
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. Small/Mid-Cap (2)
|
15,739
|
|
|
15,739
|
|
|
—
|
|
|
—
|
|
||||
World Equity Ex-U.S. (3)
|
54,994
|
|
|
54,994
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income Securities
|
|
|
|
|
|
|
|
||||||||
Long Duration Bonds (4)
|
91,278
|
|
|
91,278
|
|
|
—
|
|
|
—
|
|
||||
High Yield Bonds (5)
|
8,440
|
|
|
8,440
|
|
|
—
|
|
|
—
|
|
||||
Emerging Market Fixed Income (Non-U.S.) (6)
|
8,923
|
|
|
8,923
|
|
|
—
|
|
|
—
|
|
||||
Other Securities
|
|
|
$
|
241,617
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||
Hedge Funds (7)
|
18,062
|
|
|
|
|
|
|
|
|||||||
Core Property Fund (8)
|
37,559
|
|
|
|
|
|
|
|
|||||||
Income earned but not yet received
|
393
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
297,631
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Asset Category
|
|
|
|
|
|
|
|
||||||||
Equity Securities
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap (1)
|
$
|
75,380
|
|
|
$
|
75,380
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. Small/Mid-Cap (2)
|
19,566
|
|
|
19,566
|
|
|
—
|
|
|
—
|
|
||||
World Equity Ex-U.S. (3)
|
65,882
|
|
|
65,882
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income Securities
|
|
|
|
|
|
|
|
||||||||
Long Duration Bonds (4)
|
95,327
|
|
|
95,327
|
|
|
—
|
|
|
—
|
|
||||
High Yield Bonds (5)
|
9,610
|
|
|
9,610
|
|
|
—
|
|
|
—
|
|
||||
Emerging Market Fixed Income (Non-U.S.) (6)
|
9,720
|
|
|
9,720
|
|
|
—
|
|
|
—
|
|
||||
Other Securities
|
|
|
$
|
275,485
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||
Hedge Funds (7)
|
18,803
|
|
|
|
|
|
|
|
|||||||
Core Property Fund (8)
|
40,205
|
|
|
|
|
|
|
|
|||||||
Cash and income earned but not yet received
|
328
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
334,821
|
|
|
|
|
|
|
|
(1)
|
U.S. Large-Cap Equity includes investments in funds that invest primarily in a portfolio of common stocks included in the S&P 500 Index, as well as other equity securities and derivative instruments whose value is derived from the performance of the S&P 500.
|
(2)
|
U.S. Small/Mid-Cap includes investments in funds that (1) invest primarily in U.S. small- and mid-cap stocks with market capitalization ranges similar to those found in the FTSE Russell 2500 Index, or (2) aim to produce investment results that correspond to the performance of the FTSE/Russell Small Cap Completeness Index.
|
(3)
|
World Equity Ex-U.S. includes an investment in a fund that invests primarily in common stocks and other equity securities whose issuers comprise a broad range of capitalizations and that are located outside of the U.S. The fund invests primarily in developed countries but may also invest in emerging markets.
|
(4)
|
Long Duration Bonds includes an investment in a fund that invests primarily in long-duration government and corporate fixed income securities and uses derivative instruments (including interest rate swaps and U.S. Treasury futures contracts) for the purpose of managing the overall duration and yield curve exposure of the fund's portfolio.
|
(5)
|
High Yield Bonds includes an investment in a fund that seeks to maximize return by investing primarily in a diversified portfolio of higher yielding, lower rated fixed income securities. The fund will invest primarily in securities rated below investment grade, including corporate bonds, convertible and preferred securities and zero coupon obligations.
|
(6)
|
Emerging Markets Fixed Income (Non-U.S.) includes an investment in a fund that seeks to maximize return by investing in fixed income securities of emerging markets issuers. The fund will invest primarily in U.S. dollar denominated debt securities of government, government-related and corporate issuers in emerging market countries, as well as entities organized to restructure the outstanding debt of such issuers.
|
(7)
|
Hedge Funds includes an investment in a collective trust fund that seeks to provide returns that are different from (less correlated with) investments in more traditional asset classes. The fund will pursue its investment objective by investing substantially all of its assets in various hedge funds. The fund has semi-annual redemptions in June and December with a pre-notification period of 95 days, and a two year lock-up on all purchases which have expired.
|
(8)
|
The Core Property Fund is a collective trust fund that invests in direct commercial property funds primarily in the U.S. The fund is meant to provide current income-oriented returns, diversification, and modest inflation protection to an overall investment portfolio. Total returns are expected to be somewhere between stocks and bonds, with moderate volatility and low correlation to public markets. The fund has quarterly redemptions with a pre-notification period of 95 days, and no lock-up period.
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2019
|
||||||
Interest cost
|
$
|
14,778
|
|
|
$
|
14,428
|
|
|
$
|
15,390
|
|
Expected return on plan assets
|
(24,410
|
)
|
|
(24,482
|
)
|
|
(23,490
|
)
|
|||
Amortization of unrecognized net loss
|
3,751
|
|
|
5,307
|
|
|
4,221
|
|
|||
Total income
|
$
|
(5,881
|
)
|
|
$
|
(4,747
|
)
|
|
$
|
(3,879
|
)
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2019
|
||||||
Interest cost
|
$
|
2,869
|
|
|
$
|
2,314
|
|
|
$
|
1,532
|
|
Amortization of prior service credit
|
(8
|
)
|
|
(854
|
)
|
|
(2,544
|
)
|
|||
Amortization of unrecognized net gain
|
(455
|
)
|
|
(630
|
)
|
|
(1,229
|
)
|
|||
Total costs (income)
|
$
|
2,406
|
|
|
$
|
830
|
|
|
$
|
(2,241
|
)
|
|
Pension
Benefits
|
|
Other Post-
retirement Benefits
|
||||
2020
|
$
|
41,114
|
|
|
$
|
2,884
|
|
2021
|
28,167
|
|
|
2,901
|
|
||
2022
|
27,458
|
|
|
2,892
|
|
||
2023
|
27,473
|
|
|
2,852
|
|
||
2024
|
26,454
|
|
|
2,785
|
|
||
2025 to 2029
|
124,270
|
|
|
12,809
|
|
||
Total
|
$
|
274,936
|
|
|
$
|
27,123
|
|
|
As of
December 31, 2018 |
|
As of
December 31, 2019 |
||||
Satellites and launch vehicles
|
$
|
10,786,802
|
|
|
$
|
10,407,690
|
|
Information systems and ground segment
|
894,796
|
|
|
968,482
|
|
||
Buildings and other
|
273,155
|
|
|
280,109
|
|
||
Total cost
|
11,954,753
|
|
|
11,656,281
|
|
||
Less: accumulated depreciation
|
(6,443,051
|
)
|
|
(6,954,218
|
)
|
||
Total
|
$
|
5,511,702
|
|
|
$
|
4,702,063
|
|
|
As of
December 31, 2018 |
|
As of
December 31, 2019 |
||||
Goodwill
|
$
|
6,780,827
|
|
|
$
|
6,780,827
|
|
Accumulated impairment losses
|
(4,160,200
|
)
|
|
(4,160,200
|
)
|
||
Net carrying amount
|
$
|
2,620,627
|
|
|
$
|
2,620,627
|
|
|
As of
December 31, 2018 |
|
As of
December 31, 2019 |
||||
Orbital locations
|
$
|
2,387,700
|
|
|
$
|
2,387,700
|
|
Trade name
|
65,200
|
|
|
65,200
|
|
||
Total non-amortizable intangible assets
|
$
|
2,452,900
|
|
|
$
|
2,452,900
|
|
|
As of December 31, 2018
|
|
As of December 31, 2019
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Backlog and other
|
$
|
743,760
|
|
|
$
|
(701,445
|
)
|
|
$
|
42,315
|
|
|
$
|
743,760
|
|
|
$
|
(713,205
|
)
|
|
$
|
30,555
|
|
Customer relationships
|
534,030
|
|
|
(265,242
|
)
|
|
268,788
|
|
|
534,030
|
|
|
(287,833
|
)
|
|
246,197
|
|
||||||
Total
|
$
|
1,277,790
|
|
|
$
|
(966,687
|
)
|
|
$
|
311,103
|
|
|
$
|
1,277,790
|
|
|
$
|
(1,001,038
|
)
|
|
$
|
276,752
|
|
Year
|
Amount
|
||
2020
|
$
|
31,103
|
|
2021
|
28,635
|
|
|
2022
|
25,479
|
|
|
2023
|
21,353
|
|
|
2024
|
18,760
|
|
|
As of December 31, 2018
|
|
As of December 31, 2019
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Intelsat S.A.:
|
|
|
|
|
|
|
|
||||||||
4.5% Convertible Senior Notes due June 2025
|
$
|
402,500
|
|
|
$
|
590,427
|
|
|
$
|
402,500
|
|
|
$
|
265,231
|
|
Unamortized prepaid debt issuance costs and discount on 4.5% Convertible Senior Notes
|
(149,083
|
)
|
|
—
|
|
|
(133,310
|
)
|
|
—
|
|
||||
Total Intelsat S.A. obligations
|
253,417
|
|
|
590,427
|
|
|
269,190
|
|
|
265,231
|
|
||||
Intelsat Luxembourg:
|
|
|
|
|
|
|
|
||||||||
7.75% Senior Notes due June 2021
|
421,219
|
|
|
381,203
|
|
|
421,219
|
|
|
336,975
|
|
||||
Unamortized prepaid debt issuance costs on 7.75% Senior Notes
|
(2,062
|
)
|
|
—
|
|
|
(1,257
|
)
|
|
—
|
|
||||
8.125% Senior Notes due June 2023
|
1,000,000
|
|
|
765,000
|
|
|
1,000,000
|
|
|
590,000
|
|
||||
Unamortized prepaid debt issuance costs on 8.125% Senior Notes
|
(7,256
|
)
|
|
—
|
|
|
(5,838
|
)
|
|
—
|
|
||||
12.5% Senior Notes due November 2024
|
403,350
|
|
|
376,807
|
|
|
403,350
|
|
|
277,152
|
|
Unamortized prepaid debt issuance costs and discount on 12.5% Senior Notes
|
(198,620
|
)
|
|
—
|
|
|
(184,344
|
)
|
|
—
|
|
||||
Total Intelsat Luxembourg obligations
|
1,616,631
|
|
|
1,523,010
|
|
|
1,633,130
|
|
|
1,204,127
|
|
||||
Intelsat Connect Finance:
|
|
|
|
|
|
|
|
||||||||
9.5% Senior Notes due February 2023
|
1,250,000
|
|
|
1,062,500
|
|
|
1,250,000
|
|
|
865,625
|
|
||||
Unamortized prepaid debt issuance costs and discount on 9.5% Senior Notes
|
(34,904
|
)
|
|
—
|
|
|
(27,741
|
)
|
|
—
|
|
||||
Total Intelsat Connect Finance obligations
|
1,215,096
|
|
|
1,062,500
|
|
|
1,222,259
|
|
|
865,625
|
|
||||
Intelsat Jackson:
|
|
|
|
|
|
|
|
||||||||
9.5% Senior Secured Notes due September 2022
|
490,000
|
|
|
556,150
|
|
|
490,000
|
|
|
562,275
|
|
||||
Unamortized prepaid debt issuance costs and discount on 9.5% Senior Secured Notes
|
(14,545
|
)
|
|
—
|
|
|
(11,204
|
)
|
|
—
|
|
||||
8% Senior Secured Notes due February 2024
|
1,349,678
|
|
|
1,390,168
|
|
|
1,349,678
|
|
|
1,380,046
|
|
||||
Unamortized prepaid debt issuance costs and premium on 8% Senior Secured Notes
|
(4,671
|
)
|
|
—
|
|
|
(3,903
|
)
|
|
—
|
|
||||
5.5% Senior Notes due August 2023
|
1,985,000
|
|
|
1,717,025
|
|
|
1,985,000
|
|
|
1,687,250
|
|
||||
Unamortized prepaid debt issuance costs on 5.5% Senior Notes
|
(10,859
|
)
|
|
—
|
|
|
(8,723
|
)
|
|
—
|
|
||||
9.75% Senior Notes due July 2025
|
1,485,000
|
|
|
1,488,713
|
|
|
1,885,000
|
|
|
1,729,488
|
|
||||
Unamortized prepaid debt issuance costs on 9.75% Senior Notes
|
(18,230
|
)
|
|
—
|
|
|
(20,487
|
)
|
|
—
|
|
||||
8.5% Senior Notes due October 2024
|
2,950,000
|
|
|
2,832,000
|
|
|
2,950,000
|
|
|
2,669,750
|
|
||||
Unamortized prepaid debt issuance costs and premium on 8.5% Senior Notes
|
(15,310
|
)
|
|
—
|
|
|
(12,916
|
)
|
|
—
|
|
||||
Senior Secured Credit Facilities due November 2023
|
2,000,000
|
|
|
1,940,000
|
|
|
2,000,000
|
|
|
1,985,000
|
|
||||
Unamortized prepaid debt issuance costs and discount on Senior Secured Credit Facilities
|
(26,965
|
)
|
|
—
|
|
|
(22,149
|
)
|
|
—
|
|
||||
Senior Secured Credit Facilities due January 2024
|
395,000
|
|
|
395,988
|
|
|
395,000
|
|
|
398,950
|
|
||||
Unamortized prepaid debt issuance costs and discount on Senior Secured Credit Facilities
|
(1,933
|
)
|
|
—
|
|
|
(1,600
|
)
|
|
—
|
|
||||
6.625% Senior Secured Credit Facilities due January 2024
|
700,000
|
|
|
694,750
|
|
|
700,000
|
|
|
712,250
|
|
||||
Unamortized prepaid debt issuance costs and discount on Senior Secured Credit Facilities
|
(3,427
|
)
|
|
—
|
|
|
(2,832
|
)
|
|
—
|
|
||||
Total Intelsat Jackson obligations
|
11,258,738
|
|
|
11,014,794
|
|
|
11,670,864
|
|
|
11,125,009
|
|
||||
Eliminations:
|
|
|
|
|
|
|
|
||||||||
8.125% Senior Notes of Intelsat Luxembourg due June 2023 owned by Intelsat Jackson
|
(111,663
|
)
|
|
(85,422
|
)
|
|
(111,663
|
)
|
|
(65,881
|
)
|
||||
Unamortized prepaid debt issuance costs on 8.125% Senior Notes
|
810
|
|
|
—
|
|
|
652
|
|
|
—
|
|
||||
12.5% Senior Notes of Intelsat Luxembourg due November 2024 owned by Intelsat Connect Finance, Intelsat Jackson and Intelsat Envision
|
(403,245
|
)
|
|
(376,708
|
)
|
|
(403,245
|
)
|
|
(277,080
|
)
|
||||
Unamortized prepaid debt issuance costs and discount on 12.5% Senior Notes
|
198,568
|
|
|
—
|
|
|
184,296
|
|
|
—
|
|
||||
Total eliminations:
|
(315,530
|
)
|
|
(462,130
|
)
|
|
(329,960
|
)
|
|
(342,961
|
)
|
||||
Total Intelsat S.A. long-term debt
|
$
|
14,028,352
|
|
|
$
|
13,728,601
|
|
|
$
|
14,465,483
|
|
|
$
|
13,117,031
|
|
Year
|
Amount
|
||
2020
|
$
|
—
|
|
2021
|
421,219
|
|
|
2022
|
490,000
|
|
|
2023
|
6,123,337
|
|
|
2024
|
5,394,783
|
|
|
2025 and thereafter
|
2,287,500
|
|
|
Total principal repayments
|
14,716,839
|
|
|
Unamortized discounts, premiums and prepaid issuance costs
|
(251,356
|
)
|
|
Total Intelsat S.A. long-term debt
|
$
|
14,465,483
|
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2019
|
||||
Coupon interest
|
|
$
|
9,710
|
|
|
$
|
18,113
|
|
Amortization of discount and prepaid debt issuance costs
|
|
7,654
|
|
|
15,774
|
|
||
Total interest expense
|
|
$
|
17,364
|
|
|
$
|
33,887
|
|
Derivatives not designated as hedging instruments
|
|
Classification
|
|
As of
December 31, 2018 |
|
As of
December 31, 2019 |
||||
Interest rate cap contracts
|
|
Other assets
|
|
$
|
33,086
|
|
|
$
|
372
|
|
Preferred stock warrant
|
|
Other assets
|
|
4,100
|
|
|
—
|
|
||
Common stock warrant
|
|
Other assets
|
|
—
|
|
|
3,239
|
|
||
Total derivatives
|
|
|
|
$
|
37,186
|
|
|
$
|
3,611
|
|
Derivatives not designated as hedging instruments
|
|
Classification
|
|
Year Ended
December 31, 2017 |
|
Year Ended
December 31, 2018 |
|
Year Ended
December 31, 2019 |
||||||
Interest rate cap contracts
|
|
(Loss) gain included in interest expense, net
|
|
$
|
(1,006
|
)
|
|
$
|
14,435
|
|
|
$
|
(22,918
|
)
|
Preferred stock warrant
|
|
Loss included in other income (expense), net
|
|
—
|
|
|
—
|
|
|
(4,100
|
)
|
|||
Total (loss) gain on derivative financial instruments
|
|
|
|
$
|
(1,006
|
)
|
|
$
|
14,435
|
|
|
$
|
(27,018
|
)
|
|
|
Classification
|
|
As of
December 31, 2019 |
||
Assets
|
|
|
|
|
||
Operating
|
|
Other assets
|
|
$
|
86,780
|
|
Finance
|
|
Other assets(1)
|
|
10,084
|
|
|
Total leased assets
|
|
|
|
$
|
96,864
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
||
Current
|
|
|
|
|
||
Operating
|
|
Other current liabilities
|
|
$
|
12,744
|
|
Finance
|
|
Other current liabilities
|
|
2,215
|
|
|
Long-term
|
|
|
|
|
||
Operating
|
|
Other long-term liabilities
|
|
99,072
|
|
|
Finance
|
|
Other long-term liabilities
|
|
16,137
|
|
|
Total lease liabilities
|
|
|
|
$
|
130,168
|
|
|
(1)
|
Net of accumulated amortization of $542.
|
|
|
Classification
|
|
Year Ended December 31, 2019
|
||
Operating lease cost
|
|
Direct costs of revenue
|
|
$
|
14,210
|
|
Operating lease cost
|
|
Selling, general and administrative expenses
|
|
6,159
|
|
|
Finance lease cost
|
|
|
|
|
||
Amortization of leased assets
|
|
Depreciation and amortization
|
|
542
|
|
|
Interest on lease liabilities
|
|
Interest expense, net
|
|
813
|
|
|
Sublease income
|
|
Other income (expense), net
|
|
(1,206
|
)
|
|
Net lease cost
|
|
|
|
$
|
20,518
|
|
|
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
||||||
2020
|
|
$
|
20,136
|
|
|
$
|
3,423
|
|
|
$
|
23,559
|
|
2021
|
|
16,329
|
|
|
3,629
|
|
|
19,958
|
|
|||
2022
|
|
15,508
|
|
|
3,489
|
|
|
18,997
|
|
|||
2023
|
|
15,122
|
|
|
3,419
|
|
|
18,541
|
|
|||
2024
|
|
15,006
|
|
|
1,813
|
|
|
16,819
|
|
|||
2025 and thereafter
|
|
71,633
|
|
|
8,242
|
|
|
79,875
|
|
|||
Total lease payments
|
|
$
|
153,734
|
|
|
$
|
24,015
|
|
|
$
|
177,749
|
|
Less: Imputed interest(1)
|
|
41,918
|
|
|
5,663
|
|
|
47,581
|
|
|||
Present value of lease liabilities
|
|
$
|
111,816
|
|
|
$
|
18,352
|
|
|
$
|
130,168
|
|
(1)
|
Calculated using the incremental borrowing rate assessed for each lease.
|
|
|
Operating Leases
|
|
Sublease Rental Income
|
|
Total
|
||||||
2019
|
|
$
|
20,065
|
|
|
$
|
(826
|
)
|
|
$
|
19,239
|
|
2020
|
|
18,730
|
|
|
(745
|
)
|
|
17,985
|
|
|||
2021
|
|
14,832
|
|
|
(535
|
)
|
|
14,297
|
|
|||
2022
|
|
13,979
|
|
|
(372
|
)
|
|
13,607
|
|
|||
2023
|
|
13,600
|
|
|
(78
|
)
|
|
13,522
|
|
|||
2024 and thereafter
|
|
80,216
|
|
|
(150
|
)
|
|
80,066
|
|
|||
Total contractual commitments
|
|
$
|
161,422
|
|
|
$
|
(2,706
|
)
|
|
$
|
158,716
|
|
|
|
Year Ended December 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
20,919
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
|
98,621
|
|
|
Leased assets obtained in exchange for new finance lease liabilities
|
|
10,626
|
|
|
(1)
|
Discount rate is the incremental borrowing rate assessed for each lease.
|
|
Year Ended
December 31, 2017 |
|
Year Ended
December 31, 2018 |
|
Year Ended
December 31, 2019 |
||||||
Domestic income (loss) before income taxes
|
$
|
(18,149
|
)
|
|
$
|
(424,590
|
)
|
|
$
|
(869,247
|
)
|
Foreign income (loss) before income taxes
|
(85,535
|
)
|
|
(41,031
|
)
|
|
(49,347
|
)
|
|||
Total income (loss) before income taxes
|
$
|
(103,684
|
)
|
|
$
|
(465,621
|
)
|
|
$
|
(918,594
|
)
|
|
Year Ended
December 31, 2017 |
|
Year Ended
December 31, 2018 |
|
Year Ended
December 31, 2019 |
||||||
Current income tax provision (benefit)
|
|
|
|
|
|
||||||
Domestic
|
$
|
(125
|
)
|
|
$
|
792
|
|
|
$
|
—
|
|
Foreign
|
27,309
|
|
|
50,117
|
|
|
20,323
|
|
|||
Total
|
27,184
|
|
|
50,909
|
|
|
20,323
|
|
|||
Deferred income tax provision (benefit):
|
|
|
|
|
|
||||||
Domestic
|
72
|
|
|
—
|
|
|
—
|
|
|||
Foreign
|
43,874
|
|
|
79,160
|
|
|
(27,707
|
)
|
|||
Total
|
43,946
|
|
|
79,160
|
|
|
(27,707
|
)
|
|||
Total income tax provision (benefit):
|
$
|
71,130
|
|
|
$
|
130,069
|
|
|
$
|
(7,384
|
)
|
|
Year Ended
December 31, 2017 |
|
Year Ended
December 31, 2018 |
|
Year Ended
December 31, 2019 |
||||||
Expected tax provision (benefit) at Luxembourg statutory income tax rate
|
$
|
(28,078
|
)
|
|
$
|
(121,108
|
)
|
|
$
|
(229,097
|
)
|
Foreign income tax differential
|
66,242
|
|
|
2,216
|
|
|
(23,603
|
)
|
|||
Lux Financing Activities
|
30,232
|
|
|
51,250
|
|
|
(5,930
|
)
|
|||
Change in tax rate
|
(28,250
|
)
|
|
(684
|
)
|
|
163,831
|
|
|||
Changes in unrecognized tax benefits
|
(79
|
)
|
|
(2,205
|
)
|
|
(4,178
|
)
|
|||
Changes in valuation allowance
|
40,853
|
|
|
746,905
|
|
|
(166,683
|
)
|
|||
Tax effect of 2011 Intercompany Sale
|
(6,073
|
)
|
|
1,655
|
|
|
1,269
|
|
|||
Foreign tax credits
|
(3,107
|
)
|
|
138
|
|
|
—
|
|
|||
Research and development tax credits
|
(2,786
|
)
|
|
—
|
|
|
—
|
|
|||
2018 Internal Reorganization
|
—
|
|
|
(549,382
|
)
|
|
257,921
|
|
|||
Other
|
2,176
|
|
|
1,284
|
|
|
(914
|
)
|
|||
Total income tax provision (benefit)
|
$
|
71,130
|
|
|
$
|
130,069
|
|
|
$
|
(7,384
|
)
|
|
As of
December 31, 2018 |
|
As of
December 31, 2019 |
||||
Long-term deferred taxes, net
|
$
|
(82,488
|
)
|
|
$
|
(55,171
|
)
|
Other assets
|
20,969
|
|
|
21,417
|
|
||
Net deferred taxes
|
$
|
(61,519
|
)
|
|
$
|
(33,754
|
)
|
|
As of
December 31, 2018 |
|
As of
December 31, 2019 |
||||
Deferred tax assets:
|
|
|
|
||||
Accruals and advances
|
$
|
6,001
|
|
|
$
|
5,812
|
|
Amortizable intangible assets
|
1,133,702
|
|
|
788,134
|
|
||
Non-Amortizable intangible assets
|
42,265
|
|
|
40,527
|
|
||
Customer deposits
|
3,404
|
|
|
3,489
|
|
||
Bad debt reserve
|
1,350
|
|
|
4,468
|
|
||
Disallowed interest expense carryforward
|
74,825
|
|
|
109,229
|
|
||
Net operating loss carryforward
|
2,964,634
|
|
|
3,077,101
|
|
||
Tax credits
|
12,235
|
|
|
13,135
|
|
||
Tax basis differences in investments and affiliates
|
78,950
|
|
|
99,396
|
|
||
Other
|
2,346
|
|
|
3,287
|
|
||
Total deferred tax assets
|
4,319,712
|
|
|
4,144,578
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Satellites and other property and equipment
|
(80,376
|
)
|
|
(51,392
|
)
|
||
Amortizable intangible assets
|
(8,948
|
)
|
|
(7,299
|
)
|
||
Non-amortizable intangible assets
|
(31,359
|
)
|
|
(31,407
|
)
|
||
Tax basis differences in investments and affiliates
|
(51,645
|
)
|
|
(51,314
|
)
|
||
Other
|
(5,654
|
)
|
|
(354
|
)
|
||
Total deferred tax liabilities
|
(177,982
|
)
|
|
(141,766
|
)
|
||
Valuation allowance
|
(4,203,249
|
)
|
|
(4,036,566
|
)
|
||
Total net deferred tax liabilities
|
$
|
(61,519
|
)
|
|
$
|
(33,754
|
)
|
|
2018
|
|
2019
|
||||
Balance at January 1
|
$
|
31,380
|
|
|
$
|
29,144
|
|
Increases related to current year tax positions
|
928
|
|
|
70
|
|
||
Increases related to prior year tax positions
|
234
|
|
|
226
|
|
||
Decreases related to prior year tax positions
|
(81
|
)
|
|
(432
|
)
|
||
Expiration of statute of limitations for the assessment of taxes
|
(3,317
|
)
|
|
(4,054
|
)
|
||
Balance at December 31
|
$
|
29,144
|
|
|
$
|
24,954
|
|
|
Satellite
Construction
and Launch
Obligations
|
|
Satellite
Performance
Incentive
Obligations
|
|
Horizons-3
Satellite LLC
Contribution and Purchase
Obligations(1) |
|
Customer and
Vendor
Contracts
|
|
Sublease Rental Income
|
|
Total
|
||||||||||||
2020
|
$
|
137,370
|
|
|
$
|
65,301
|
|
|
$
|
28,586
|
|
|
$
|
138,885
|
|
|
$
|
(775
|
)
|
|
$
|
369,367
|
|
2021
|
163,325
|
|
|
51,685
|
|
|
32,358
|
|
|
58,208
|
|
|
(492
|
)
|
|
305,084
|
|
||||||
2022
|
122,621
|
|
|
36,816
|
|
|
33,600
|
|
|
51,866
|
|
|
(236
|
)
|
|
244,667
|
|
||||||
2023
|
9,442
|
|
|
25,366
|
|
|
33,723
|
|
|
47,498
|
|
|
(120
|
)
|
|
115,909
|
|
||||||
2024
|
7,832
|
|
|
24,726
|
|
|
34,314
|
|
|
38,573
|
|
|
(56
|
)
|
|
105,389
|
|
||||||
2025 and thereafter
|
20,956
|
|
|
104,084
|
|
|
192,618
|
|
|
81,362
|
|
|
(138
|
)
|
|
398,882
|
|
||||||
Total contractual commitments
|
$
|
461,546
|
|
|
$
|
307,978
|
|
|
$
|
355,199
|
|
|
$
|
416,392
|
|
|
$
|
(1,817
|
)
|
|
$
|
1,539,298
|
|
(1)
|
This amount includes commitments to make capital contributions to and purchase satellite capacity from Horizons 3. See Note 9(b)—Investments—Horizons-3 Satellite LLC.
|
|
Quarter Ended
|
|
||||||||||||||
2018
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
||||||||
Revenue(1)
|
$
|
543,782
|
|
|
$
|
537,714
|
|
|
$
|
536,922
|
|
|
$
|
542,771
|
|
|
Income from operations(1)
|
234,472
|
|
|
237,755
|
|
|
237,269
|
|
|
232,374
|
|
|
||||
Net loss
|
(65,849
|
)
|
|
(45,840
|
)
|
(3)
|
(373,642
|
)
|
(3)
|
(110,359
|
)
|
(3)
|
||||
Net loss attributable to Intelsat S.A.
|
(66,801
|
)
|
|
(46,828
|
)
|
(3)
|
(374,631
|
)
|
(3)
|
(111,346
|
)
|
(3)
|
||||
Net loss per share attributable to Intelsat S.A.:
|
|
|
|
|
|
|
|
|
||||||||
Basic(2)
|
$
|
(0.56
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
(2.74
|
)
|
|
$
|
(0.81
|
)
|
|
Diluted(2)
|
(0.56
|
)
|
|
(0.38
|
)
|
|
(2.74
|
)
|
|
(0.81
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Quarter Ended
|
|
||||||||||||||
2019
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
||||||||
Revenue(1)
|
$
|
528,449
|
|
|
$
|
509,407
|
|
|
$
|
506,658
|
|
|
$
|
516,951
|
|
|
Income (loss) from operations(1)
|
200,292
|
|
|
(187,268
|
)
|
(4)
|
179,629
|
|
|
195,943
|
|
|
||||
Net loss
|
(120,042
|
)
|
|
(529,112
|
)
|
(4)
|
(147,698
|
)
|
|
(114,358
|
)
|
|
||||
Net loss attributable to Intelsat S.A.
|
(120,622
|
)
|
|
(529,722
|
)
|
(4)
|
(148,292
|
)
|
|
(114,959
|
)
|
|
||||
Net loss per share attributable to Intelsat S.A.:
|
|
|
|
|
|
|
|
|
||||||||
Basic(2)
|
$
|
(0.87
|
)
|
|
$
|
(3.76
|
)
|
|
$
|
(1.05
|
)
|
|
$
|
(0.81
|
)
|
|
Diluted(2)
|
(0.87
|
)
|
|
(3.76
|
)
|
|
(1.05
|
)
|
|
(0.81
|
)
|
|
(1)
|
Our quarterly revenue and operating income (loss) are generally not impacted by seasonality, as customer contracts for satellite utilization are generally long-term.
|
(2)
|
Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share.
|
(3)
|
The quarter ended June 30, 2018 included a $22.1 million gain on early extinguishment of debt related to the repurchase of the 2021 Luxembourg Notes. The quarter ended September 30, 2018 included a $204.1 million loss on early extinguishment of debt related to the 2023 ICF Notes and the 2024 Jackson Senior Unsecured Notes. The quarter ended December 31, 2018 included a $17.8 million loss on early extinguishment of debt related to the repurchase of the 2024 Jackson Senior Unsecured Notes and the redemption of 2021 Jackson Notes (see Note 11—Long-Term Debt).
|
(4)
|
The quarter ended June 30, 2019 included an impairment charge of $381.6 million relating to the loss of Intelsat 29e (see Note 8—Satellites and Other Property and Equipment).
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
(a)(2) The following financial statement schedule is included in this Annual Report on Form 10-K:
|
|
|
|
|
|
|
Exhibit
No.
|
|
Document Description
|
|
|
|
3.1
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
Exhibit
No.
|
|
Document Description
|
4.10
|
|
|
|
|
|
4.11
|
|
|
|
|
|
4.12
|
|
|
|
|
|
4.13
|
|
|
|
|
|
4.14
|
|
|
|
|
|
4.15
|
|
|
|
|
|
4.16
|
|
|
|
|
|
4.17
|
|
|
|
|
|
4.18
|
|
|
|
|
|
4.19
|
|
|
|
|
|
4.20
|
|
|
|
|
|
4.21
|
|
|
|
|
|
4.22
|
|
|
|
|
|
4.23
|
|
|
|
|
|
4.24
|
|
|
|
|
|
4.25
|
|
|
|
|
|
4.26
|
|
Exhibit
No.
|
|
Document Description
|
|
|
|
4.27
|
|
|
|
|
|
4.28
|
|
|
|
|
|
4.29
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
Exhibit
No.
|
|
Document Description
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
Exhibit
No.
|
|
Document Description
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35
|
|
|
|
|
|
10.36
|
|
|
|
|
|
10.37
|
|
|
|
|
|
10.38
|
|
|
|
|
|
10.39
|
|
|
|
|
|
10.40
|
|
|
|
|
|
10.41
|
|
|
|
|
|
10.42
|
|
|
|
|
|
10.43
|
|
|
|
|
|
10.44
|
|
|
|
|
|
10.45
|
|
|
|
|
|
Exhibit
No.
|
|
Document Description
|
10.46
|
|
|
|
|
|
10.47
|
|
|
|
|
|
10.48
|
|
|
|
|
|
10.49
|
|
|
|
|
|
10.50
|
|
|
|
|
|
10.51
|
|
|
|
|
|
10.52
|
|
|
|
|
|
10.53
|
|
|
|
|
|
10.54
|
|
|
|
|
|
10.55
|
|
|
|
|
|
10.56
|
|
|
|
|
|
10.57
|
|
|
|
|
|
10.58
|
|
|
|
|
|
10.59
|
|
|
|
|
|
10.60
|
|
|
|
|
|
10.61
|
|
|
|
|
|
10.62
|
|
|
|
|
|
10.63
|
|
|
|
|
|
10.64
|
|
|
|
|
|
10.65
|
|
|
|
|
|
10.66
|
|
|
|
|
|
10.67
|
|
|
|
|
|
10.68
|
|
|
|
|
|
10.69
|
|
|
|
|
|
10.70
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
Exhibit
No.
|
|
Document Description
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101
|
|
The following financial information from the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets as of December 31, 2018 and 2019, (ii) Consolidated Statements of Operations for the years ended December 31, 2017, 2018 and 2019, (iii) Consolidated Statements of Comprehensive Loss for the years ended December 31, 2017, 2018 and 2019, (iv) Consolidated Statements of Changes in Shareholders' Deficit for the years ended December 31, 2016, 2017, 2018 and 2019, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2018 and 2019, and (vi) Notes to Consolidated Financial Statements.*
|
|
|
|
104
|
|
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
|
*
|
Filed herewith.
|
†
|
Management contract or compensatory plan or arrangement.
|
⁜
|
Certain confidential information contained in this exhibit was omitted by means of redacting a portion of the text.
|
Description
|
Balance at
Beginning of
Period
|
|
Charged to
Costs and
Expenses
|
|
Deductions(1)
|
|
Balance at
End of
Period
|
||||||||
|
(in thousands)
|
||||||||||||||
Year ended December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
54,744
|
|
|
$
|
(4,094
|
)
|
|
$
|
(20,981
|
)
|
|
$
|
29,669
|
|
Year ended December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
29,669
|
|
|
$
|
(836
|
)
|
|
$
|
(291
|
)
|
|
$
|
28,542
|
|
Year ended December 31, 2019:
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
28,542
|
|
|
$
|
17,190
|
|
|
$
|
(5,704
|
)
|
|
$
|
40,028
|
|
Item 16.
|
Form 10-K Summary
|
|
|
INTELSAT S.A.
|
||
|
|
|
|
|
Date:
|
February 20, 2020
|
By:
|
|
/s/ STEPHEN SPENGLER
|
|
|
|
|
Stephen Spengler
|
|
|
|
|
Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ STEPHEN SPENGLER
|
|
Chief Executive Officer and Director (Principal Executive Officer)
|
|
February 20, 2020
|
Stephen Spengler
|
|
|
|
|
|
|
|
|
|
/s/ DAVID TOLLEY
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
February 20, 2020
|
David Tolley
|
|
|
|
|
|
|
|
|
|
/s/ STEPHEN BACICA
|
|
Vice President and Controller, Intelsat US LLC (Principal Accounting Officer)
|
|
February 20, 2020
|
Stephen Bacica
|
|
|
|
|
|
|
|
|
|
/s/ DAVID McGLADE
|
|
Chairman and Director
|
|
February 20, 2020
|
David McGlade
|
|
|
|
|
|
|
|
|
|
/s/ JUSTIN BATEMAN
|
|
Director
|
|
February 20, 2020
|
Justin Bateman
|
|
|
|
|
|
|
|
|
|
/s/ ROBERT CALLAHAN
|
|
Director
|
|
February 20, 2020
|
Robert Callahan
|
|
|
|
|
|
|
|
|
|
/s/ JOHN DIERCKSEN
|
|
Director
|
|
February 20, 2020
|
John Diercksen
|
|
|
|
|
|
|
|
|
|
/s/ EDWARD KANGAS
|
|
Director
|
|
February 20, 2020
|
Edward Kangas
|
|
|
|
|
|
|
|
|
|
/s/ ELLEN PAWLIKOWSKI
|
|
Director
|
|
February 20, 2020
|
Ellen Pawlikowski
|
|
|
|
|
|
|
|
|
|
/s/ JACQUELINE RESES
|
|
Director
|
|
February 20, 2020
|
Jacqueline Reses
|
|
|
|
|
|
|
|
|
|
/s/ RAYMOND SVIDER
|
|
Director
|
|
February 20, 2020
|
Raymond Svider
|
|
|
|
|
1 Year Intelsat Chart |
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