PanAmSat Holding Corporation Reports First Quarter 2006 Results

Company Builds Cash Position; Enhances Global Fleet; Ready to Provide Mobile Communications for Hurricane Season 


WILTON, Conn., May 11  /PRNewswire-FirstCall/ -- PanAmSat Holding Corporation (NYSE:PA), the satellite-based communications company, delivering the largest number of TV channels in the world by satellite and providing network distribution services globally to enterprise and government customers, reported financial results for the first quarter ended March 31, 2006.

  Financial highlights for the first quarter include:

   *  Total revenues of $213.2 million increased 2.1% from Q1 2005, while
      video services revenues, the "core" portion of PanAmSat's business
      representing 65.3% of total revenues, grew 3.4% over Q1 2005
   *  Adjusted EBITDA(1) was $169.5 million, up 3.7% over Q1 2005
   *  Adjusted EBITDA Margin(1) was 78%, up from 76% a year earlier
   *  Net income was $27.8 million, or $0.22 per share on a diluted basis,
      up from $1.1 million or $0.01 per share on a diluted basis for Q1 2005
   *  The Company increased its cash and cash equivalents balance to $152.2
      million as of March 31, 2006 from $126.3 million as of December 31,
      2005, an increase of $25.9 million
   *  In April 2006, the Company paid $52.3 million in dividends for the
      first quarter of 2006 based upon strong financial results



Joe Wright, CEO of PanAmSat said, "Once again, we continued with our strong financial performance with healthy revenue growth and increasing margins, resulting in strong cash flows.  There were also some important operating and marketing achievements during the quarter, including:

      *We maintained our fleet reliability at an industry high level of
      99.999982% which translated into extraordinary customer service.

      *In North America video we launched our Vis-a-TV ethnic programming
      platform marking the first time a FSS operator is offering U.S. cable
      systems, DTH, IPTV and broadband network distributors a portfolio of
      international programming for their subscribers.

      *We continued to expand connectivity/network services in developing
      markets.  For example, we are providing satellite services to Mexico's
      Enciclomedia initiative, a government sponsored program to bring IP
      connectivity to elementary schools across the country.  In the first
      phase of the program, we are delivering the satellite-based service to
      over 13,000 schools with the goal of reaching thousands more through
      the continued rollout of the initiative.

      *Our HD neighborhood in the U.S. continues to grow and we are
      expanding our Pan Global DTH platform in Australia.  Today, we have 20
      channels in our North American HD neighborhood and over 25 channels on
      our Pan Global DTH platform, with plans to launch similar platforms in
      New Zealand, New Caledonia and Fiji which would bring our total number
      of DTH platforms to over 20 worldwide.

      *And, we are taking steps to prepare for the upcoming hurricane season
      by providing critical mobile communications services that can be moved
      in immediately during and following a disaster including: our
      bandwidth-on-demand product, "QuickSPOT", packaged with truck-mounted
      flyaway antennas, an inflatable antenna that fits into a 55 pound
      backpack, a deployable first responder hardened network pak that
      supports up to 100 people and can be easily airdropped  and point to
      point trunking capability for terrestrial or cellular nodes.  Each of
      these services are ready-to-go today and can be quickly and easily
      deployed in the event of either a natural or man-made disaster.  In
      addition, we continue to work closely with officials within the U.S.
      Government, as well at the state and local levels, to help them
      understand the important role satellites can play when such tragedies
      strike.



For the rest of 2006, we are aggressively looking to expand our HD neighborhood and ethnic programming in the U.S., our DTH platforms internationally, our connectivity services to developing countries and our support to the U.S. Government for disaster recovery, military and other communication requirements. We are not skipping a beat as we plan to merge with Intelsat later this year."

Merger with Intelsat

On August 29, 2005, PanAmSat and Intelsat, Ltd. ("Intelsat") announced that the two companies signed a definitive merger agreement under which Intelsat will acquire PanAmSat for $25 per share in cash, or $3.2 billion. Consummation of the merger remains subject to various conditions, including satisfaction of the Hart-Scott-Rodino waiting period, receipt of Federal Communications Commission approvals, receipt of financing and other conditions.  If the conditions to the merger are satisfied or waived (to the extent permitted by applicable law), PanAmSat expects the merger to be consummated in the second or third quarter of 2006.

Business Highlights

Total revenues for the first quarter of 2006 were $213.2 million, compared to revenues of $208.8 million for the same quarter last year, an increase of 2.1%.  Adjusted EBITDA(1) was $169.5 million for the first quarter of 2006, as compared to $163.4 million for the same period in 2005, an increase of 3.7%. Net income for the quarter was $27.8 million, compared to net income of $1.1 million for the same period in 2005, an increase of $26.7 million.  Net income for the first quarter of 2005 was negatively impacted by the $10.4 million of sponsor management fees recorded during the period. Net income for the first quarter of 2006 was positively impacted by the $13.2 million gain on an undesignated interest rate swap recorded during the period.

Fixed Satellite Services ("FSS")

Through FSS, PanAmSat leases transponder capacity to customers for various applications, including broadcasting, news gathering, Internet access and transmission, private voice and data networks, business television, distance learning and DTH, in addition to providing consulting and technical services and network services to customers.

FSS revenues for the first quarter of 2006 increased $6.2 million, or 3.2%, to $200.1 million, as compared to $193.9 million in the same period in 2005. This increase was primarily attributable to higher video services revenues of $4.5 million, higher government services revenues of $1.2 million and higher consulting/technical services revenues of $1.0 million, offset partially by a $0.5 million reduction in network services revenues.  The increase in video services revenues was primarily due to higher program distribution and DTH services revenues of approximately $2.8 million and higher occasional use services revenues of $2.2 million, as compared to the same period in 2005. The increase in occasional use services was primarily related to the 2006 Winter Olympics.

FSS income from operations for the first quarter of 2006 increased by $32.8 million, or 47.2%, to $102.3 million, compared to $69.5 million for the same period in 2005. This increase was primarily due to several items that impacted the first quarter of 2005, including $10.4 million of sponsor management fees, $3.2 million of facilities restructuring and severance costs and a $2.3 million loss on the termination of sales-type leases which were recorded during the three months ended March 31, 2005.  Additionally, during the three months ended March 31, 2006, FSS income from operations increased by $13.2 million as a result of a gain on an undesignated interest rate swap.

FSS Segment EBITDA(2) for the first quarter of 2006 increased by $6.1 million, or 3.8%, to $166.1 million as compared to $160.0 million for the same period in 2005. This increase was driven by the increased FSS revenues of $6.2 million, partially offset by higher operating costs and expenses of $0.1 million.

Government Services ("G2")

Through G2, PanAmSat provides global satellite and related telecommunications services to the U.S. government, international government entities and their contractors.

G2 revenues were $19.8 million for the three months ended March 31, 2006, a decrease of $0.6 million compared to $20.4 million for the same period in 2005. G2 revenues increased by $0.2 million for the quarter, after excluding first quarter 2005 revenues related to the construction of an L-band payload on Galaxy 15(3). Revenues from managed network services increased by $2.0 million and revenues from the lease of additional PanAmSat FSS capacity increased by $0.5 million.  These increases were substantially offset by a decrease in sales of equipment and other non-satellite products of $2.3 million.  There were no revenues related to the L-band payload project in Q1 2006 compared to $0.8 million in Q1 2005, due to the timing of completion of certain milestones on this construction project.

For the three months ended March 31, 2006, G2 income from operations of $3.3 million increased by $0.3 million, or 9.4%, and Segment EBITDA(2)  of $3.7 million increased by $0.2 million, or 7.2%, as compared to the same period in 2005, as a result of a shift to higher margin products and services.

Investors' Conference Call

PanAmSat will host a conference call on May 11, 2006 at 11 a.m. ET to discuss the Company's first quarter ended March 31, 2006. Investors can participate in the conference call by dialing [phone] (U.S. and Canada) or [phone] (International).

For your convenience, the conference call can be replayed in its entirety beginning at 2 p.m. ET on May 11, 2006 through May 18, 2006. If you wish to listen to the replay of this conference call, please dial [phone] or [phone] and enter passcode 8234434.

The conference call will also be broadcast live through a link on the Investor Relations page on the PanAmSat Web site at http://www.panamsat.com/. Please go to the Web site at least 15 minutes prior to the call to register, download and install any necessary audio software.

About PanAmSat

Through its owned and operated fleet of 23 satellites, PanAmSat (NYSE:PA) is a leading global provider of video, broadcasting and network distribution and delivery services. It transmits nearly 2,000 television channels worldwide and, as such, is the leading carrier of standard and high-definition signals. In total, the Company's in-orbit fleet is capable of reaching over 98% of the world's population through cable television systems, broadcast affiliates, direct-to-home operators, Internet service providers and telecommunications companies. In addition, PanAmSat supports the largest concentration of satellite-based business networks in the U.S., as well as specialized communications services in remote areas throughout the world. For more information, visit the Company's Web site at http://www.panamsat.com/.

NOTE: The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements so long as such information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.  When used in this press release, the words "may", "might", "should", "estimate", "project", "plan", "anticipate", "expect", "intend", "outlook", "believe" and other similar expressions are intended to identify forward-looking statements and information.  Actual results may differ materially from anticipated results due to certain risks and uncertainties, which are more specifically set forth in the "Financial Guidance/Recent Presentations" page of the Investor Relations section of our Web site and within our Annual Report on Form 10-K for the year ended December 31, 2005 filed with the Securities and Exchange Commission ("SEC") on March 10, 2006, and all of our other filings with the SEC from March 10, 2006 through the current date pursuant to the Securities Exchange Act of 1934. These risks and uncertainties include but are not limited to: (i) the ability of our subsidiaries to make distributions to us in amounts sufficient to make required interest and principal payments on our outstanding indebtedness and future dividend payments to our stockholders; (ii) failure to complete our pending merger with Intelsat and the resulting impact on our business and financial results; (iii) risks associated with operating our in-orbit satellites; (iv) satellite launch failures, satellite launch and construction delays and in-orbit failures or reduced performance; (v) our ability to obtain new or renewal satellite insurance policies on commercially reasonable terms or at all; (vi) possible future losses on satellites that are not adequately covered by insurance; (vii) domestic and international government regulation; (viii) changes in our contracted backlog or expected contracted backlog for future services; (ix) pricing pressure and overcapacity in the markets in which we compete; (x) inadequate access to capital markets; (xi) competition; (xii) customer defaults on their obligations owed to us; (xiii) our international operations and other uncertainties associated with doing business internationally; (xiv) our high level of indebtedness; (xv) limitations on our ability to pursue growth opportunities as a result of our dividend policy; and (xvi) litigation. PanAmSat Holding Corporation cautions that the foregoing list of important factors is not exclusive.  Further, the Company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the Company's control.

  Notes:

  (1) See Adjusted EBITDA Reconciliation and Adjusted EBITDA Margin
      Reconciliation on pages 9, 10 and 11.
  (2) See Reconciliation of Income From Operations to Segment EBITDA on
      pages 12 and 13.
  (3) See G2 Revenue Reconciliation Table on page 8.



  PanAmSat Holding Corporation
  Summary of Operating Results (Unaudited)
  (Amounts in thousands, except share data)

                                              Three Months Ended
                                          March 31,        March 31,
                                            2005             2006

  Revenues
  Operating leases, satellite services
   and other                              $205,201         $210,237
  Outright sales and sales-type leases       3,607            2,992
    Total Revenues                         208,808          213,229

  Costs and Expenses
  Cost of outright sales and
   sales-type leases                        (2,853)             -
  Depreciation and amortization             69,765           69,758
  Direct operating costs (exclusive
   of depreciation and amortization)        34,947           33,211
  Selling, general & administrative
   expenses                                 18,754           25,114
  Sponsor management fees                   10,444              -
  Facilities restructuring and
   severance costs                           3,349              -
  Loss on termination of sales-type lease    2,307              -
  Gain on undesignated interest rate swap      -            (13,240)
  Total operating costs and expenses       136,713          114,843

  Income from operations                    72,095           98,386
  Interest expense, net                     75,526           60,557

  Income (loss) before income taxes         (3,431)          37,829
  Income tax expense (benefit)              (4,532)          10,045

  Net income                              $  1,101         $ 27,784

  Net income per share - basic            $   0.01         $   0.23

  Net income per share - diluted          $   0.01         $   0.22

  Weighted average common shares
   outstanding - basic                  78,136,000      122,598,093

  Weighted average common shares
   outstanding - diluted                80,809,000      125,377,834



  PanAmSat Holding Corporation
  Summarized Balance Sheets (Unaudited)
  (Amounts in thousands)

                                       December 31,         March 31,
                                          2005                2006
  ASSETS

  CURRENT ASSETS:
   Cash and cash equivalents          $  126,307          $  152,165
   Accounts receivable, net               66,418              76,341
   Net investment in sales-type leases    12,260               9,959
   Prepaid expenses and other
    current assets                        20,306              13,720
   Deferred income taxes                  16,711              16,711

  Total current assets                   242,002             268,896

  SATELLITES AND OTHER PROPERTY AND
   EQUIPMENT - NET                     1,949,560           1,950,862
  NET INVESTMENT IN SALES-TYPE LEASES     64,913              64,785
  GOODWILL                             2,244,131           2,244,131
  DEFERRED CHARGES AND OTHER
   ASSETS - NET                          333,942             341,398

  TOTAL ASSETS                        $4,834,548          $4,870,072

  LIABILITIES AND STOCKHOLDERS' EQUITY

  CURRENT LIABILITIES:
  Accounts payable and accrued
   liabilities                        $   88,349          $  119,257
  Current portion of long-term debt       16,600              16,600
  Current portion of satellite
   incentive obligations                  13,240              12,638
  Accrued interest payable                37,103              17,930
  Dividends payable                       47,507              52,257
  Deferred gains and revenues             24,514              34,012
    Total current liabilities            227,313             252,694

  LONG-TERM DEBT                       3,197,695           3,200,775
  DEFERRED INCOME TAXES                    9,816              19,212
  DEFERRED CREDITS AND OTHER             348,888             370,164

  TOTAL LIABILITIES                    3,783,712           3,842,845

  COMMITMENTS AND CONTINGENCIES

  STOCKHOLDERS' EQUITY                 1,050,836           1,027,227

  TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY               $4,834,548          $4,870,072



  PanAmSat Holding Corporation
  Summarized Statements of Cash Flows (Unaudited)
  (Amounts in thousands)

                                              Three Months Ended
                                          March 31,        March 31,
                                            2005             2006
  CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                             $  1,101         $ 27,784
   Depreciation and amortization expense    69,765           69,758
   Deferred income taxes                    (7,615)           9,394
   Amortization of debt issuance costs
    and other deferred charges               5,312            5,389
   Accretion on senior discount notes        6,534            7,230
   Loss on early extinguishment of debt      9,521              -
   Provision for uncollectible receivables      90           (2,119)
   Facilities restructuring and
    severance costs                          3,349              -
   Gain on undesignated interest rate swap     -            (12,268)
   Loss on termination of sales-type lease   2,307              -
   Reversal of sales-type lease
    liabilities                             (2,853)             -
   Other non-cash items                       (242)            (152)
   Changes in working capital and
    other accounts                         (30,942)            (302)

      NET CASH PROVIDED BY
       OPERATING ACTIVITIES                 56,327          104,714

  CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures (including
    capitalized interest (a))              (15,050)         (49,471)
   Distribution from equity investment         -                902
   Acquisitions, net of cash acquired          -               (377)
      NET CASH USED IN
      INVESTING ACTIVITIES                 (15,050)         (48,946)

  CASH FLOWS FROM FINANCING ACTIVITIES:
   Issuance of common stock                900,000              -
   Repayments of long-term debt           (290,000)          (4,150)
   Dividends to stockholders              (200,000)         (47,508)
   Capitalized costs of initial
    public offering                        (37,385)             -
   Capitalized debt issuance costs            (634)             -
   Repayments of incentive obligations      (3,061)          (2,824)
   Funding of capital expenditures
    by customer                                -             24,446
   Other equity related transactions            19                3

     NET CASH PROVIDED BY (USED IN)
     FINANCING ACTIVITIES                  368,939          (30,033)

  EFFECT OF EXCHANGE RATE CHANGES ON CASH       47              123

  NET INCREASE IN CASH AND
   CASH EQUIVALENTS                        410,263           25,858
  CASH AND CASH EQUIVALENTS,
   beginning of period                      38,982          126,307
  CASH AND CASH EQUIVALENTS,
   end of period                          $449,245         $152,165

  (a)  Includes Capitalized Interest of $4.7 million and $5.9 million for
       the quarters ended March 31, 2005 and 2006, respectively.



  PanAmSat Holding Corporation
  Selected Segment Data (Unaudited)
  (Amounts in thousands)

                                              Three Months Ended
                                          March 31,        March 31,
                                            2005             2006

  FSS
  Revenue                                 $193,869         $200,083
  Depreciation and Amortization Expense     69,454           69,342
  Income from operations                    69,513          102,297
  Segment EBITDA*                          160,049          166,158
  Capital Expenditures                      14,286           48,707

  G2
  Revenue                                 $ 20,459         $ 19,845
  Depreciation and Amortization Expense        311              416
  Income from operations                     2,981            3,262
  Segment EBITDA*                            3,422            3,668
  Capital Expenditures                         764              764

  Eliminations
  Revenue                                 $ (5,520)        $ (6,699)

  Parent
  Loss from operations                    $   (399)        $ (7,173)

  Total
  Revenue                                 $208,808         $213,229
  Depreciation and Amortization Expense     69,765           69,758
  Income from operations                    72,095           98,386
  Capital Expenditures                      15,050           49,471


                      NON-GAAP RECONCILIATION TABLES

  PanAmSat Holding Corporation
  G2 Operating Segment
  Non-GAAP Revenue Reconciliation (Unaudited)
  (Amounts in thousands)

  G2 Revenues

  As reported                              $20,459          $19,845
  Less: L-Band payload revenues               (842)             -

  Adjusted G2 Revenues                     $19,617          $19,845



Adjusted G2 revenues is not a presentation made in accordance with GAAP and does not purport to be an alternative to G2 revenues determined in accordance with GAAP. Because not all companies use identical calculations, this presentation of Adjusted G2 revenues may not be comparable to other similarly titled measures of other companies. The table above sets forth a reconciliation of G2 revenues to Adjusted G2 revenues for the periods indicated.

Adjusted G2 revenues is defined as G2 revenues as reported less L-Band payload revenues recognized during each respective period. L-Band payload revenues represent revenues recognized on a long-term construction contract with a customer to construct an L-Band navigational payload on our Galaxy 15 satellite. This construction contract has had a substantial impact on G2's business but is very different from G2's core business of selling satellite and non-satellite bandwidth, selling equipment and performing consulting and managed network services. Management therefore analyzes G2's results with and without these L-Band payload revenues in order to evaluate G2's core business elements.

* See Reconciliation of Income From Operations to Segment EBITDA on the pages 12 and 13.

  PanAmSat Holding Corporation
  Adjusted EBITDA Reconciliation (Unaudited)
  (Amounts in thousands)

                                              Three Months Ended
                                                   March 31,
                                              2005         2006

  Reconciliation of Net Cash Provided
   by Operating Activities to Net Income:
  Net cash provided by operating
   activities                              $ 56,327     $104,714
  Depreciation and amortization             (69,765)     (69,758)
  Deferred income taxes                       7,615       (9,394)
  Amortization of debt issuance
   costs and other deferred charges          (5,312)      (5,389)
  Accretion on senior discount notes         (6,534)      (7,230)
  Loss on early extinguishment of debt       (9,521)         -
  Provision for uncollectible receivables       (90)       2,119
  Facilities restructuring and
   severance costs                           (3,349)         -
  Gain on undesignated interest rate swap       -         12,268
  Loss on termination of sales-type lease    (2,307)         -
  Reversal of sales-type lease liabilities    2,853          -
  Other non-cash items                          242          152
  Changes in assets and liabilities,
   net of acquired assets and liabilities    30,942          302
  Net income                               $  1,101     $ 27,784

  Reconciliation of Net Income to EBITDA:
  Net income                               $  1,101     $ 27,784
  Interest expense, net                      75,526       60,557
  Income tax expense (benefit)               (4,532)      10,045
  Depreciation and amortization              69,765       69,758
  EBITDA                                   $141,860     $168,144

  Reconciliation of EBITDA to
   Adjusted EBITDA:
  EBITDA                                   $141,860     $168,144
  Adjustment of sales-type leases to
   operating leases(a)                        6,533        5,501
  Loss on termination of sales-type
   leases(b)                                  2,307          -
  Restructuring charges(c)                    3,349          (24)
  Reserves for long-term receivables(d)      (2,853)         -
  Transaction-related costs(e)               10,648        8,514
  Gain on undesignated interest rate
   swap(f)                                      -        (13,240)
  Other items(g)                              1,594          652
  Adjusted EBITDA                          $163,438     $169,547



                                              Three Months Ended
                                                   March 31,
                                              2005         2006
                                                (In thousands)
  Adjusted EBITDA Margin Reconciliation:
  Revenues                                $ 208,808    $ 213,229
  Adjustment of sales-type leases to
   operating leases(a)                        6,533        5,501
  Adjusted Revenues                       $ 215,341    $ 218,730
  Adjusted EBITDA                         $ 163,438    $ 169,547
  Adjusted EBITDA Margin(h)                      76%          78%




Adjusted EBITDA is not a presentation made in accordance with GAAP, and does not purport to be an alternative to net income (loss) determined in accordance with GAAP or as a measure of operating performance or to cash flows from operating activities determined in accordance with GAAP as a measure of liquidity. Additionally, Adjusted EBITDA is not intended to be a measure of cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Because not all companies use identical calculations, this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The table above sets forth a reconciliation of Adjusted EBITDA and EBITDA to net income and to net cash provided by operating activities for the periods indicated.

The indenture governing the Company's 10 3/8% senior discount notes, the indenture governing PanAmSat Corporation's 9% senior notes and PanAmSat Corporation's senior secured credit facilities contain financial covenant ratios, specifically total leverage and interest coverage ratios, that are calculated by reference to Adjusted EBITDA. Adjusted EBITDA is defined as net income (loss) plus net interest expense, income tax expense (benefit) and depreciation and amortization, further adjusted to give effect to unusual items, non-cash items and other adjustments specifically required in calculating covenant ratios and compliance under the indenture governing the Company's 10 3/8% senior discount notes, the indenture governing PanAmSat Corporation's 9% senior notes and PanAmSat Corporation's senior secured credit facilities. These adjustments include unusual items such as severance, relocation costs and one-time compensation charges, non-cash charges such as non-cash compensation expense and the other adjustments shown below. Adjusted EBITDA is a material component of these covenants. For instance, non- compliance with the financial ratio maintenance covenants contained in the senior secured credit facilities could result in the requirement that PanAmSat immediately repay all amounts outstanding under such facilities and a prohibition on PanAmSat paying dividends to the Company, and non-compliance with the debt incurrence ratios contained in the Company's 10 3/8% senior discount notes and PanAmSat Corporation's 9% senior notes prohibit us from being able to incur additional indebtedness or make restricted payments, including payments of dividends on our common stock, other than pursuant to specified exceptions. In addition, under the restricted payments covenants contained in the indentures, the ability of the Company and PanAmSat Corporation, as applicable, to pay dividends is restricted by a formula based on the amount of Adjusted EBITDA. We believe the adjustments listed below are in accordance with the covenants discussed above.

   (a)  For all periods presented, adjustment of sales-type leases to
        operating leases represents the principal portion of the periodic
        sales-type lease payments that are recorded against the principal
        balance outstanding. These amounts would have been recorded as
        operating lease revenues if these agreements had been accounted for
        as operating leases instead of sales-type leases. These adjustments
        have the effect of including the principal portion of our sales-type
        lease payments in the period during which cash is collected.

   (b)  For the three months ended March 31, 2005, loss on termination of
        sales-type lease represents the non-cash loss of $2.3 million
        incurred upon the conversion of one of our customer's sales-type
        lease agreements to an operating lease agreement.

   (c)  Restructuring charges represent severance costs, leasehold
        termination costs and/or other facility closure costs.

   (d)  For the three months ended March 31, 2005, amount represents the
        reversal of approximately $2.9 million of in-orbit insurance
        liabilities related to sales-type leases on our Galaxy 10R satellite
        that are no longer insured. In January 2005, the insurance policy
        covering our Galaxy 10R satellite expired, was not replaced and as a
        result, this satellite and its related assets are no longer insured.

   (e)  For the three months ended March 31, 2005, amount represents (i)
        $10.0 million paid to the Sponsors on March 22, 2005, in relation to
        the termination of their respective management services agreement
        with us and (ii) third party costs incurred in relation to the
        amendment of our senior secured credit facility which was effective
        in March 2005. For the three months ended March 31, 2006, amount
        represents costs associated with the Intelsat Merger.

   (f)  For the three months ended March 31, 2006, amount represents the
        change in the fair value of the interest rate swap and swap interest
        earned. During the first quarter of 2006, the interest rate swap was
        undesignated and therefore did not qualify for hedge accounting
        treatment under Generally Accepted Accounting Principles.

   (g)  For the three months ended March 31, 2005, other items consist of
        (i) $0.5 million of expenses for management advisory services from
        the Sponsors for the period from January 1, 2005 through March 22,
        2005, (ii) $0.3 million loss on disposal of fixed assets and (iii)
        $0.8 million of non-cash stock compensation expense.  For the three
        months ended March 31, 2006, other items consist of (i) $0.4 million
        of non-cash amortization of acquisition-related costs, (ii) $0.3
        million of non-cash stock compensation expense, (iii) $0.1 million
        loss on disposal of fixed assets, partially offset by $0.1 million
        of non-cash amortization related to a customer guarantee.

   (h)  Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by
        Adjusted Revenues (recorded revenue plus the principal portion of
        periodic sales-type lease payments made during the period that are
        recorded against the principal balance outstanding). See note (a)
        above. Adjusted EBITDA Margin is not a presentation made in
        accordance with GAAP and does not purport to be an alternative to
        net income (loss) determined in accordance with GAAP or as a measure
        of operating performance determined in accordance with GAAP.  The
        company utilizes Adjusted EBITDA margin as a measure of internal
        operating performance and to track the company's operating
        performance against its competitors.



  PanAmSat Holding Corporation
  FSS and G2 Operating Segments
  Reconciliation of Income From Operations To Segment EBITDA (Unaudited)
  (Amounts in thousands)

                                             Three Months Ended
                                                  March 31,
                                             2005          2006

  FSS Operating Segment:
  Reconciliation of income from operations
   to Segment EBITDA:
  Income from operations                  $ 69,513       $102,297
  Depreciation and amortization             69,454         69,342
  EBITDA                                   138,967        171,639
  Adjustment of sales-type leases to
   operating leases (a)                      6,533          5,501
  Loss on termination of sales-type
   lease (b)                                 2,307            -
  Restructuring charges (c)                  3,219            (14)
  Reserves for long-term receivables (d)    (2,853)           -
  Transaction-related costs (e)             10,533          1,880
  Gain on undesignated interest
   rate swap (f)                               -          (13,240)
  Other items (g)                            1,343            392
  Segment EBITDA                          $160,049       $166,158

  G2 Operating Segment:
  Reconciliation of income from
   operations to Segment EBITDA:
  Income from operations                  $  2,981       $  3,262
  Depreciation and amortization                311            416
  EBITDA                                     3,292          3,678
  Restructuring charges (c)                    130            (10)
  Segment EBITDA                          $  3,422       $  3,668




We evaluate the performance of our operating segments based on several factors, of which the primary financial measure is segment net income (loss) plus net interest expense, income tax expense (benefit) and depreciation and amortization, further adjusted to exclude non-recurring items and other non-cash adjustments largely outside of the segment operating managers' control ("Segment EBITDA"). Segment EBITDA is presented herein because our chief operating decision maker evaluates and measures each business unit's performance based on its Segment EBITDA results.

   (a)  For all periods presented, adjustment of sales-type leases to
        operating leases represents the principal portion of the periodic
        sales-type lease payments that are recorded against the principal
        balance outstanding. These amounts would have been recorded as
        operating lease revenues if these agreements had been accounted for
        as operating leases instead of sales-type leases. These adjustments
        have the effect of including the principal portion of our sales-type
        lease payments in the period during which cash is collected.

   (b)  For the three months ended March 31, 2005, loss on termination of
        sales-type lease represents the non-cash loss of $2.3 million
        incurred upon the conversion of one of our customer's sales-type
        lease agreements to an operating lease agreement.

   (c)  Restructuring charges represent severance costs, leasehold
        termination costs and/or other facility closure costs.

   (d)  For the three months ended March 31, 2005, amount represents the
        reversal of approximately $2.9 million of in-orbit insurance
        liabilities related to sales-type leases on our Galaxy 10R satellite
        that are no longer insured. In January 2005, the insurance policy
        covering our Galaxy 10R satellite expired, was not replaced and as a
        result, this satellite and its related assets are no longer insured.

   (e)  For the three months ended March 31, 2005, amount represents (i)
        $10.0 million paid to the Sponsors on March 22, 2005 in relation to
        the termination of their respective management services agreement
        with us and (ii) third party costs incurred in relation to the
        amendment of our senior secured credit facility which was effective
        in March 2005.  For the three months ended March 31, 2006, amount
        represents costs associated with the Intelsat Merger.

   (f)  For the three months ended March 31, 2006, amount represents the
        change in the fair value of the interest rate swap and swap interest
        earned. During the first quarter of 2006, the interest rate swap was
        undesignated and therefore did not qualify for hedge accounting
        treatment under Generally Accepted Accounting Principles.

   (g)  For the three months ended March 31, 2005, other items consist of
        (i) $0.5 million of expenses for management advisory services from
        the Sponsors (ii) $0.3 million loss on disposal of fixed assets and
        (iii) $0.5 million of non-cash stock compensation expense. For the
        three months ended March 31, 2006, other items consist of (i) $0.4
        million of non-cash amortization of acquisition-related costs, (ii)
        $0.1 million of non-cash stock compensation expense, (iii) $0.1
        million loss on disposal of fixed assets, partially offset by $0.1
        million of non-cash amortization related to a customer guarantee.


DATASOURCE: PanAmSat Holding Corporation



CONTACT:  Kathryn Lancioni, VP, Corporate Communications of PanAmSat

Corporation, [phone] 



Web site:  http://www.panamsat.com/ 

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