New Skies Sat (NYSE:NSE)
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New Skies Satellites Holdings Ltd. (NYSE:NSE), the
global satellite communications company, today reported financial
results for the year ended December 31, 2005. Revenues for the year
were $240.5 million, up 14 percent over the prior year, net loss was
$1.4 million and Adjusted EBITDA(A) was $157.7 million, up 31 percent
over the same period in the prior year.
Commenting on the results, Dan Goldberg, CEO of New Skies, said:
"I am delighted to report that 2005 has been an extraordinary year
for New Skies. From a financial and operational standpoint, the
significant increase in the fill rate of our fleet (from 55 percent to
64 percent over the course of the year) combined with a stable pricing
environment allowed us to achieve record revenues of more than $240
million, a 14 percent increase over the prior year. Revenue growth was
driven by video and enterprise requirements in Central and South Asia,
the Middle East and Africa, by restoration services provided to
Intelsat following the failure of one of its satellites in the Pacific
Ocean Region, and by continued growth in government services across
the fleet.
"Our strong top line performance coupled with our continuing
efforts to improve our cost structure and enhance our operating
efficiencies resulted in a 31 percent annual increase in Adjusted
EBITDA and a year-on-year expansion of our Adjusted EBITDA margins
from 57 percent to 66 percent.
"I am also pleased that we were able last year to generate nearly
$20 million from the resolution of certain longstanding frequency
coordination matters in connection with orbital locations we were not
using as well as $10 million from the sale of our Australian
teleports, an activity that was not core to our business and was
diluting our margins. These amounts are excluded from the $240.5
million in revenues as well as the calculation of Adjusted EBITDA.
We also were able to create significant value for shareholders
through the re-negotiation of our NSS-8 contract with Boeing. A
substantial portion of the amounts that Boeing returned to the company
were used to reduce our outstanding long term indebtedness. These
amounts, combined with proceeds from our successful IPO in May of last
year and internally generated cash flow, enabled us to reduce our long
term indebtedness from 6.2x Adjusted EBITDA at the outset of the year
to 2.8x Adjusted EBITDA at year end.
"In addition to our strong operational and financial performance,
we took important steps last year to return value to shareholders. As
mentioned, in May we concluded our initial public offering, using a
substantial portion of the proceeds to strengthen our balance sheet by
delevering, and in December - seizing a unique opportunity to deliver
significant value and liquidity to shareholders - we announced the
sale of the company to SES Global, a transaction that received the
overwhelming approval of our shareholders just three weeks ago. We
strongly believe that the agreement with SES serves the best interests
of our shareholders, customers, lenders, employees and suppliers. It
is presently our expectation that the SES transaction will close early
in the second quarter of this year, although it is possible that it
could occur sooner or later than this.
"In sum, 2005 was a strong and exciting year for New Skies.
Heading into 2006 we remain focused on concluding our transaction with
SES Global at the earliest opportunity and to building upon the
performance we achieved last year."
(A) See definition of Adjusted EBITDA and the related
reconciliations in Note 2 of "Notes to the consolidated quarterly
financial information".
Financial highlights:
For the year and three-month period ended December 31, 2005, New
Skies achieved the following financial results:
-- Revenues for 2005 were $240.5 million, an increase of $29.8
million, or 14 percent, from $210.7 million in 2004. These
amounts exclude proceeds arising from the resolution of
certain orbital slot coordination matters in 2005 and 2004.
The revenue growth was primarily due to an increase in the
overall satellite fleet fill rate to 64 percent as of December
31, 2005 compared to 55 percent as of the end of 2004.
Revenues for the three-month period ended December 31, 2005 were
$61.4 million, an increase of $7.6 million, or 14 percent, compared to
$53.8 million for the same period in 2004.
-- Cost of Operations and Selling, General and Administrative
costs, decreased by $25.3 million, or 23 percent, in 2005
relative to last year. This resulted from several factors,
including reductions in third party teleport costs and
in-orbit insurance, the non-recurrence of certain one-time
costs incurred in 2004 associated with the termination of a
customer contract and the reduction in our staff levels, and
savings arising from careful management of discretionary
costs.
For the three month period, our Cost of Operations and Selling,
General and Administrative costs decreased by $17.3 million, or 47
percent, as compared to the same period in 2004, primarily due to the
non-recurrence of the previously mentioned one-time costs as well as
continuing reductions in discretionary costs.
-- Stock-based compensation recorded in accordance with Statement
of Financial Accounting Standards No. 123 was $20.5 million
and $1.8 million for 2005 and 2004, respectively.
-- The company received a one-time payment of $9.5 million in the
third quarter 2005 arising from the successful resolution of
certain frequency coordination matters. Coupled with the
frequency coordination payment received in the first quarter
2005, total amounts received were $19.5 million for 2005. In
2004, we received a one-time payment of $32.0 million relating
to frequency coordination matters.
-- Interest expense, net was $61.9 million and $11.2 million for
2005 and 2004, respectively. The net increase was due to the
full year effect of new debt issued in connection with the
purchase of the assets of New Skies Satellites N.V. by
affiliates of The Blackstone Group in November 2004. Also
included are non-cash charges of $15.0 million in 2005,
related to the accelerated amortization of debt issuance costs
associated with the early repayments of a portion of the term
loan facility. For the three month period, our Interest
expense, net increased by $3.3 million, or 32 percent.
-- In 2005, Adjusted EBITDA was $157.7 million, compared to
$120.6 million in 2004, reflecting an increase of $37.1
million, or 31 percent. Adjusted EBITDA margin increased to 66
percent for the year ended December 31, 2005 from 57 percent
in the previous year.
Adjusted EBITDA for the three months ended December 31, 2005
increased $11.1 million, or 36 percent, to $41.9 million, as compared
to $30.8 million for the same period in 2004.
-- Net loss for 2005 was $1.4 million compared to $6.3 million in
the prior year.
-- Backlog at the end of 2005 was $502 million, approximately two
times annual revenues, compared to $517 million at the
beginning of 2005.
-- Total long-term debt as of December 31, 2005 was $438.6
million, reflecting a total paydown of $306.4 million in 2005,
thus reducing long-term third party debt(B) to Adjusted
EBITDA(C) from 6.2x as of December 31, 2004 to 2.8x as of
December 31, 2005.
-- During the quarter ended December 31, 2005, New Skies also
declared a quarterly cash dividend for the fourth quarter of
2005, in the amount of $0.463125 per share.
-- On November 8, 2005, New Skies announced the completion of the
sale of its Australian subsidiary, New Skies Networks PTY
Limited, to Multiemedia Limited for $10.0 million. The company
used the net proceeds of the sale transaction to further
reduce outstanding borrowings under its term loan facility.
-- On May 10, 2005, New Skies completed the sale of 11.9 million
newly issued ordinary shares, equivalent to 37 percent of the
total currently issued and outstanding ordinary shares in an
initial public share offering that generated gross proceeds of
$196.4 million. The sale of an additional 1.8 million shares
was completed on May 27, 2005, thus bringing the total number
of issued and outstanding shares to 32.3 million.
(B) Long-term third party debt includes borrowings under the
senior secured credit facilities and amounts outstanding under the
senior floating rate notes and senior subordinated notes, amounting to
$745.0 million and $438.6 million as of December 31, 2004 and 2005,
respectively.
(C) Adjusted EBITDA for the twelve month periods ended December
31, 2004 and 2005 was $120.5 million and $157.7 million, respectively.
Recent developments:
On December 14, 2005, New Skies signed a definitive agreement
pursuant to which SES GLOBAL will acquire 100 percent of New Skies by
way of a merger under Bermudian law (an amalgamation). SES GLOBAL will
acquire New Skies for US$ 22.52 per share in cash.
-- On February 3, 2006, New Skies and SES Global S.A. received
early termination of the required waiting period under the
U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976 for
the acquisition of New Skies.
-- At a special general meeting of shareholders held on February
10, 2006, New Skies' shareholders overwhelmingly approved the
sale of the company, with 99 percent of shares in attendance
voting for the acquisition.
New Skies anticipates that the transaction will be completed early
in the second quarter 2006, subject to the receipt of the remaining
approvals and satisfaction of other customary closing conditions,
although it is possible that it could occur sooner or later than this.
About New Skies Satellites (NYSE:NSE)
New Skies is one of only four fixed satellite communications
companies with global satellite coverage, offering data, video,
Internet and voice communications services to a range of
telecommunications carriers, broadcasters, large corporations,
Internet service providers and government entities around the world.
New Skies has five satellites in orbit, one spacecraft under
construction (NSS-8) and ground facilities around the world. New Skies
is headquartered in Hamilton, Bermuda, and has subsidiaries with
offices in The Hague, Hong Kong, New Delhi, Sao Paulo, Singapore,
Sydney and Washington, D.C.
Conference call:
CEO Dan Goldberg and CFO Andrew Browne will host a conference call
today at 11:00 a.m. (EST). To listen in please dial +1 877 491 0064,
passcode "New Skies." International dial-in number is +1 334 323 6201.
The call will also be webcast live on the New Skies web site at:
http://www.newskies.com/investors.htm.
The conference call will be available for replay, 24 hours a day
for the subsequent 5 working days and will also be archived on New
Skies' website. The dial-in number for the replay is +1 888 365 0240
or +1 954 334 0342 for international callers. Passcode: 695542.
Safe Harbor
Section 27A of the U.S. Securities Act of 1933 and Section 21E of
the U.S. Securities Exchange Act of 1934 provide a "safe harbor" for
forward-looking statements made by an issuer of publicly traded
securities and persons acting on its behalf. New Skies Satellites
Holdings Ltd. ("New Skies") has made certain forward-looking
statements in this press release in reliance on those safe harbors. A
forward-looking statement concerns the company's or management's
intentions or expectations, or is a prediction of future performance.
These statements are identified by words such as "intends", "expects",
"anticipates", "believes", "estimates", "may", "will", "should" and
similar expressions. By their nature, forward-looking statements are
not a matter of historical fact and involve risks and uncertainties
that could cause New Skies' actual results to differ materially from
those expressed or implied by the forward-looking statements for a
number of reasons.
The parties may not be able to consummate the proposed transaction
on the terms on which the parties have agreed, or at all, due to a
number of factors, including, but not limited to, the failure to
obtain the requisite governmental approvals or the failure to satisfy
any of the other conditions to consummation of the transaction. Other
risks affecting New Skies' business are described in the company's
public filings with the U.S. Securities and Exchange Commission.
Copies of these filings may be obtained by contacting the SEC. New
Skies believes that all forward-looking statements are based upon
reasonable assumptions when made; however, New Skies cautions that it
is impossible to predict actual results or outcomes or the effects of
risks, uncertainties or other factors on anticipated results or
outcomes and that, accordingly, you should not place undue reliance on
these statements. Forward-looking statements speak only as of the date
when made, and New Skies disclaims any obligation to update the
forward-looking statements contained in this document.
New Skies Satellites Holdings Ltd. and Subsidiaries
Consolidated Balance Sheets
December 31, 2005 and 2004
(In thousands of U.S. Dollars, except share data)
-0-
*T
December December
31, 31,
2005 2004
--------- -----------
Assets
Current Assets
Cash and cash equivalents $ 16,156 $ 37,974
Trade receivables 29,053 36,371
Prepaid expenses and other assets 6,300 10,591
--------- -----------
Total Current Assets 51,509 84,936
Communications, plant and other property, net 608,370 895,906
Goodwill and other intangible asset, net 28,213 -
Deferred tax assets 17,231 17,362
Debt issuance costs, net 17,473 32,109
Restricted cash 30,000 -
--------- -----------
TOTAL $752,796 $1,030,313
========= ===========
Liabilities and Shareholders' Equity (Deficit)
Current Liabilities
Accounts payable and accrued liabilities $ 18,393 $ 28,381
Accrued interest 6,594 4,880
Dividends payable 15,048 -
Income taxes payable 20,153 20,480
Deferred tax liabilities 5,964 10,848
Deferred revenues and other liabilities 24,618 21,031
Satellite performance incentives 5,625 6,332
--------- -----------
Total Current Liabilities 96,395 91,952
Deferred revenues and other liabilities 11,534 10,224
Satellite performance incentives 29,097 30,597
Preferred equity securities subject to mandatory
redemption - 164,327
Long-term debt 438,560 745,000
--------- -----------
Total Liabilities 575,586 1,042,100
--------- -----------
Shareholders' Equity (Deficit)
Ordinary Shares(1) (57,142 shares authorized, par
value $35.00; 43,312 shares issued as of
December 31, 2004) - 1,516
Preferred Shares (250,000,000 shares authorized,
par value $0.01; none issued) - -
Ordinary Shares(D) (500,000,000 shares
authorized, par value $0.01; 32,491,235 shares
issued as of December 31, 2005) 325 -
Additional paid-in capital 301,309 -
Accumulated deficit (124,306) (13,973)
Accumulated other comprehensive income (loss) (118) 670
--------- -----------
Total Shareholders' Equity (Deficit) 177,210 (11,787)
--------- -----------
TOTAL $752,796 $1,030,313
========= ===========
See notes to the consolidated quarterly financial
information
*T
(D) At December 31, 2004, ordinary shares relate to New Skies
Investment S.a.r.l. As part of the reorganization that occurred on May
10, 2005, New Skies Satellites Holdings Ltd. indirectly acquired the
shares of New Skies Investments S.a.r.l. and became the Group's
ultimate parent company. At December 31, 2005, 32,491,235 shares were
issued and outstanding.
New Skies Satellites Holdings Ltd. and Subsidiaries
Consolidated Statements of Operations
Years ended December 31, 2005 and 2004
(In thousands of U.S. Dollars, except per share data)
-0-
*T
Successor(E) Successor(E) Predecessor(E)
------------ ------------ --------------
Pro forma
total
Year Ended Period
December November 2 Period
Year Ended 31, to December January 1 to
December 2004(F) 31, November 1,
31, 2005 (Unaudited) 2004 2004
------------ ----------- ------------ --------------
Revenues $240,488 $210,677 $35,295 $175,382
Operating
expenses:
Depreciation and
amortization 95,128 102,448 16,022 86,426
Cost of operations 42,238 56,067 10,906 45,161
Selling, general
and
administrative 40,530 51,959 17,685 34,274
Stock-based
compensation 20,485 1,828 - 1,828
Monitoring
agreement fees 6,938 247 247 -
Transaction
related expenses 2,932 26,367 - 26,367
------------ ----------- ------------ --------------
Total Operating
Expenses 208,251 238,916 44,860 194,056
Gain on frequency
coordination 19,500 32,000 - 32,000
Gain on sale of
subsidiary 7,011 - - -
------------ ----------- ------------ --------------
Operating Income
(Loss) 58,748 3,761 (9,565) 13,326
Interest expense,
net 61,943 11,150 9,777 1,373
------------ ----------- ------------ --------------
Income (Loss)
Before Income Tax
Expense (Benefit) (3,195) (7,389) (19,342) 11,953
Income tax expense
(benefit) (1,778) (1,072) (5,369) 4,297
------------ ----------- ------------ --------------
Net Income (Loss) $(1,417) (6,317) $(13,973) $7,656
============ =========== ============ ==============
Earnings (Loss)
Per Share(3)
-----------
Basic and diluted (0.05) (322.61) 0.06
----------------------------------------------------------------------
Weighted Average
Shares
Outstanding(3)
(in thousands of
shares)
Basic 27,349 n/a 43 118,099
Diluted 28,611 n/a 43 119,850
----------------------------------------------------------------------
*T
(E) New Skies Satellites Holdings Ltd. commenced operations on
May 10, 2005, the date upon which the Company successfully completed
its Initial Public Offering (the "IPO"). Immediately prior to the IPO,
the Company performed an internal restructuring pursuant to which
pre-existing shareholders indirectly contributed 100 percent of the
equity, preferred equity certificates and convertible preferred equity
certificates of New Skies Satellites S.a.r.l. to New Skies Satellites
Holdings Ltd. As New Skies Satellites Holdings Ltd. did not commence
operations until after the restructuring, the results for 2005
represent the combination of the results of New Skies Investments
S.a.r.l for the period up to and including the date of the
restructuring and those of New Skies Satellites Holdings Ltd. (the
"successor") for the periods thereafter.
On November 2, 2004, New Skies Investments S.a.r.l, through its
wholly owned subsidiaries New Skies Holding B.V. and New Skies
Satellites B.V., purchased substantially all of the assets and
liabilities of New Skies Satellites N.V. Prior to this transaction,
New Skies Investments S.a.r.l had not commenced operations.
Accordingly, the results for the period prior to November 1, 2004
represent the results of New Skies Satellites N.V. (the
"predecessor").
(F) The pro forma column reflects the summary total for the year
ended December 31, 2004, including results of the predecessor from
January 1, 2004 to November 1, 2004 and the successor from November 2,
2004 to December 31, 2004.
New Skies Satellites Holdings Ltd. and Subsidiaries
Consolidated Statements of Operations
Three-month periods ended December 31, 2005 and 2004 (Unaudited)
(In thousands of U.S. Dollars, except per share data)
-0-
*T
Successor(E) Successor(E) Predecessor(E)
------------ ------------ --------------
Pro forma
total
three-
Three month month Period
period period November 2
ended ended to Period
December December December October 1 to
31, 31, 31, November 1,
2005 2004(G) 2004 2004
------------ --------- ------------ --------------
Revenues $61,352 53,788 $35,295 $18,493
Operating expenses:
Depreciation and
amortization 23,811 24,829 16,022 8,807
Cost of operations 9,170 15,308 10,906 4,402
Selling, general and
administrative 10,325 21,507 17,685 3,822
Stock-based
compensation 2,904 234 - 234
Monitoring agreement
fees - 247 247 -
Transaction related
expenses 2,296 22,741 - 22,741
------------ --------- ------------ --------------
Total Operating
Expenses 48,506 84,866 44,860 40,006
Gain on sale of
subsidiary 7,011 - - -
------------ --------- ------------ --------------
Operating Income
(Loss) 19,857 (31,078) (9,565) (21,513)
Interest expense,
net 13,717 10,368 9,777 591
------------ --------- ------------ --------------
Income (Loss) Before
Income Tax Expense
(Benefit) 6,140 (41,446) (19,342) (22,104)
Income tax expense
(benefit) 883 (13,333) (5,369) (7,964)
------------ --------- ------------ --------------
Net Income (Loss) $5,257 (28,113) $(13,973) $(14,140)
============ ========= ============ ==============
Earnings (Loss) Per
Share(3)
---------
Basic and diluted 0.16 322.61 (0.12)
----------------------------------------------------------------------
Weighted Average
Shares
Outstanding(3)
(in thousands of
shares)
Basic 32,381 n/a 43 118,463
Diluted 33,655 n/a 43 120,311
----------------------------------------------------------------------
*T
(G) The pro forma column reflects the summary total for the
three-month period ended December 31, 2004, including results of the
predecessor from October 1, 2004 to November 1, 2004 and the successor
from November 2, 2004 to December 31, 2004.
New Skies Satellites Holdings Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
Years ended December 31, 2005 and 2004
(In thousands of U.S. Dollars)
-0-
*T
Successor Successor Predecessor
--------- --------- -----------
Period
Year November Period
Ended 2 to January 1
December December to
31, 31 November 1
2005 2004 2004
--------- --------- -----------
Cash flows from operating activities:
Net income (loss) $(1,417) $(13,973) $7,656
Adjustments for non-cash items:
Depreciation and amortization 95,128 16,022 86,426
Deferred taxes (3,515) (5,607) 1,698
Stock-based compensation expense 12,378 - 5,895
Non-cash interest on preferred equity
securities 4,417 2,827 -
Gain arising from sale of subsidiary (7,011) - -
Amortization of debt issuance costs 15,010 851 321
Changes in operating assets and
liabilities, net of effects of
acquisitions and disposals:
Trade receivables 6,840 8,036 (2,546)
Prepaid expenses and other assets 4,045 (3,881) 3,810
Accounts payable and accrued
liabilities (7,960) 5,838 6,480
Accrued interest 1,714 4,880 -
Income taxes payable (937) 226 1,036
Other liabilities 5,494 14,803 395
--------- --------- -----------
Net Cash Provided By Operating
Activities 124,186 30,022 111,171
--------- --------- -----------
Cash flows from investing activities:
Payments for communication, plant and
other property (6,671) (4,393) (7,690)
Acquisition of business, net of cash
acquired - (861,741) -
Sale of subsidiary, net of cash 8,997 - -
Reimbursement of NSS-8 construction
costs 168,000 - -
Increase in restricted cash (30,000) - -
--------- --------- -----------
Net Cash Provided by (Used In)
Investing Activities 140,326 (866,134) (7,690)
--------- --------- -----------
Cash flows from financing activities:
Repayment of long-term debt (306,440) - -
Proceeds from long-term debt - 745,000 -
Proceeds from Initial Public
Offering, net of expenses 202,313 - -
Issue of preferred equity
certificates 4,683 161,500 -
Repayment of preferred equity
securities (88,000) - -
Dividends paid (93,868) - (4,721)
Stock options exercised - - 3,139
Debt issuance costs - (32,959) -
Shareholder contribution - 1,500 -
Satellite performance incentives and
other (5,006) (1,384) (4,780)
--------- --------- -----------
Net Cash Provided By (Used In)
Financing Activities (286,318) 873,657 (6,362)
--------- --------- -----------
Effect of exchange rate differences (12) 413 642
--------- --------- -----------
Net change in cash and cash
equivalents (21,818) 37,958 97,761
Cash and cash equivalents, beginning
of period 37,974 16 23,253
--------- --------- -----------
Cash and cash equivalents, end of
period $16,156 $37,974 $121,014
========= ========= ===========
*T
Cash payments for interest (net of amounts capitalized) were $nil,
$3.0 million and $39.9 million for the period from January 1, 2004 to
November 1, 2004, November 2, 2004 to December 31, 2004 and the year
ended December 31, 2005, respectively. Income taxes paid amounted to
$1.6 million, $0.2 million and $2.8 million for the period from
January 1, 2004 to November 1, 2004, the period from November 2, 2004
to December 31, 2004, and the year ended December 31, 2005,
respectively.
See notes to the consolidated quarterly financial information.
New Skies Satellites Holdings Ltd. and Subsidiaries
Notes to the consolidated quarterly financial information
(in thousands of U.S. dollars)
Three-month periods and years ended December 31, 2005 and 2004
(1) Basis of presentation
New Skies Satellites Holdings Ltd. commenced operations on May 10,
2005, the date upon which the Company successfully completed its
Initial Public Offering (the "IPO"). Immediately prior to the IPO, the
Company performed an internal restructuring pursuant to which
pre-existing shareholders contributed 100 percent of the equity,
preferred equity certificates and convertible preferred equity
certificates of New Skies Satellites S.a.r.l. to New Skies Satellites
Holdings Ltd. As New Skies Satellites Holdings Ltd. did not commence
operations until after the restructuring, the results for the year
ended December 31, 2005 represent the combination of the results of
New Skies Investments S.a.r.l for the period up to and including the
date of the restructuring and those of New Skies Satellites Holdings
Ltd. for the periods thereafter (the "successor").
On November 2, 2004, New Skies Investments S.a.r.l, through its
wholly owned subsidiaries New Skies Holding B.V. and New Skies
Satellites B.V., purchased substantially all of the assets and
liabilities of New Skies Satellites N.V. Prior to this transaction,
New Skies Investments S.a.r.l had not commenced operations.
Accordingly, the results for the quarter and the period ended November
1, 2004 represent the results of New Skies Satellites N.V. (the
"predecessor").
(2) Adjusted EBITDA
Adjusted EBITDA is defined as EBITDA (i.e. earnings before
interest, taxes, depreciation and amortization), further adjusted to
give effect to adjustments required in calculating covenant ratios and
compliance under the indentures governing the notes and the senior
secured credit facilities. We use Adjusted EBITDA to give effect to
adjustments required in calculating covenant ratios and compliance
under the indentures governing the notes and the senior secured credit
facilities. For instance, both the indentures governing the notes and
the senior secured credit facilities contain financial ratios that are
calculated by reference to Adjusted EBITDA. Non-compliance with the
financial ratio maintenance covenants contained in the senior secured
credit facilities could result in the requirement to immediately repay
all amounts outstanding under such facilities, while non-compliance
with the debt incurrence ratio contained in the indentures governing
the notes would prohibit us from being able to incur additional
indebtedness other than pursuant to specified exceptions. Adjusted
EBITDA is not presented as an alternative measure of operating results
or cash flows provided by operating activities, as determined in
accordance with accounting principles generally accepted in the United
States. Adjusted EBITDA as presented in this release may not be
comparable to similarly titled measures reported by other companies.
The following table sets forth the reconciliation of net cash provided
by operating activities and net income (loss) to EBITDA and Adjusted
EBITDA for the periods indicated.
Reconciliation of Net Income (Loss) to EBITDA
-0-
*T
Three-month Year ended
periods ended December 31,
December 31,
---------------- -----------------
2005 2004 2005 2004
------- -------- -------- --------
Net income (loss) 5,257 (28,113) (1,417) (6,317)
Income tax expense (benefit) 883 (13,333) (1,778) (1,072)
Interest expense, net 13,717 10,368 61,943 11,150
Depreciation and amortization 23,811 24,829 95,128 102,448
------- -------- -------- --------
EBITDA 43,668 (6,249) 153,876 106,209
======= ======== ======== ========
*T
Reconciliation of EBITDA to Adjusted EBITDA
-0-
*T
Three-month Year ended
periods ended December 31,
December 31,
--------------- -----------------
2005 2004 2005 2004
------- ------- -------- --------
EBITDA 43,668 (6,249) 153,876 106,209
Gain arising on frequency
coordination(a) - - (19,500) (32,000)
Transaction related expenses(b) 2,296 22,741 2,932 26,367
Unused satellite capacity leased
from third party(c) - 711 - 4,830
One time customer settlements - 10,299 - 10,299
Expense incurred with respect to
employee severance - 2,760 - 2,760
Costs related to stock-based
compensation(d) 2,904 234 20,485 1,828
Monitoring fee paid to Blackstone
Management Partners IV L.L.C.(e) - 247 6,938 247
Gain arising on sale of
subsidiary(f) (7,011) - (7,011) -
------- ------- -------- --------
Adjusted EBITDA 41,857 30,743 157,720 120,540
======= ======= ======== ========
*T
(a) Reflects a one-time payment from Intelsat LLC of $32.0 million
in 2004 and payments from SES Global affiliates of $10.0 million in
the first quarter 2005 and $9.5 million in the third quarter 2005
following the successful resolution of certain frequency coordination
matters.
(b) Represents non-recurring costs incurred in connection with the
purchase of assets and liabilities of New Skies Satellites N.V. and
expenses associated with SES Global acquisition of New Skies
Satellites Holdings Ltd.
(c) Reflects costs related to unused capacity on leased
transponders, with the underlying contract expiring in November 2004.
(d) Stock-based compensation includes $8.1 million of cash
payments made for bonuses and tax withholdings.
(e) Reflects the monitoring fee paid to Blackstone Management
Partners IV L.L.C., of which $6.1 million represents a payment for the
termination of the monitoring agreement in connection with the
company's Initial Public Offering.
(f) Reflects the sale of New Skies Networks Pty Limited, a
wholly-owned subsidiary, on November 8, 2005 to Multimedia for cash
consideration of $10.0 million, resulting in a gain on sale of $7.0
million.
Reconciliation of Net Cash Provided by Operating Activities to Net
Income (Loss)
-0-
*T
Three-month Years ended
periods ended December 31,
December 31,
----------------- ------------------
2005 2004 2005 2004
-------- -------- -------- ---------
Net cash provided by operating
activities 20,549 19,337 124,186 141,193
Depreciation and amortization (23,811) (24,829) (95,128) (102,448)
Deferred taxes (1,071) 4,966 3,515 3,909
Stock-based compensation expense (252) (4,301) (12,378) (5,895)
Amortization of debt issuance
costs (2,483) (851) (15,010) (1,172)
Change in operating assets and
liabilities 5,314 (19,608) (9,196) (39,077)
Interest on preferred equity
securities - (2,827) (4,417) (2,827)
Gain arising from sale of
subsidiary 7,011 - 7,011 -
-------- -------- -------- ---------
Net Income (loss) 5,257 (28,113) (1,417) (6,317)
======== ======== ======== =========
*T
(3) Earnings (Loss) per share
Basic net earnings (loss) per share is computed by dividing net
income (loss) by the weighted average ordinary shares outstanding. For
the purpose of calculating the weighted average shares outstanding for
the year ended December 31, 2005, the effects of the internal
restructuring immediately prior to the Initial Public Offering are
deemed to have occurred at the beginning of the period, and reflect
18.5 million shares.
Diluted earnings (loss) per share reflects the potential dilution
that could occur if potential dilutive securities, such as stock
options, convertible securities and contracts that may be settled in
cash or stock, were converted to shares as of the beginning of the
period, if dilutive. For the purpose of calculating diluted loss per
share for the year ended December 31, 2005, approximately 1.5 million
potentially dilutive common shares relating to outstanding stock
options have been excluded from the calculation of adjusted weighted
average shares outstanding as their inclusion would have had an
anti-dilutive effect due to the net loss in that period.