Intelsat Posts US$ 374.6 Million Loss in 3Q 2018 Due to Taxes and Retirement of Debt

Luxembourg, Nov. 1 , 2018 — Intelsat S.A. (NYSE: I) today reported total revenue of US$ 536.9 million and net loss attributable to Intelsat S.A. of US$ 374.6 million for the three months ended September 30, 2018.

In the first quarter of 2018, Intelsat said it adopted the provisions of the Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers. As a result of the adoption of ASC 606, the company said total revenue for the three months ended September 30, 2018 reflects US$ 25.1 million primarily related to the significant financing component identified in its customer contracts.

Intelsat said total revenue, excluding the effects of ASC 606, was US$ 511.9 million for the three months ended September 30, 2018.

Intelsat reported EBITDA, or earnings before net interest, gain on early extinguishment of debt, taxes and depreciation and amortization, of US$ 411.5 million and Adjusted EBITDA of US$ 416.3 million, or 78 percent of revenue, for the three months ended September 30, 2018. Total Adjusted EBITDA excluding the effects of ASC 606 was $390.0 million, or 76 percent of revenue, for the three months ended September 30, 2018. Free cash flow used in operations1 was US$ 15.7 million.

Intelsat’s Chief Executive Officer, Stephen Spengler, said, “During the third quarter, Intelsat made important progress on its operational and financial goals. Our stable financial results reflect a continuation of recent trends. Operationally, a major milestone was the successful launch of Horizons 3e, completing the global footprint of our high-throughput satellite fleet. The Intelsat EpicNG fleet powers new services in wireless network extensions, in-flight passenger broadband connectivity, broadband services for maritime fleets and high definition video from small aeronautical surveillance platforms. In the past weeks, we introduced the Intelsat FlexExecSM managed service for the business jet segment, complementing our previously announced government and maritime managed service platforms that leverage the Intelsat EpicNG network.

“Further, since July 1 we completed US$ 4.2 billion in capital markets transactions, achieving an improved maturity profile for our capital structure. This, combined with our operational progress, allows us to advance our business goals.

Network Services

Intelsat Network services revenue was US$ 199.0 million (or 37 percent of Intelsat’s total revenue) for the three months ended September 30, 2018, a decrease of 6 percent compared to the three months ended September 30, 2017. There was an immaterial effect from ASC 606 on our network services revenue.

Media

Media revenue was US$ 233.1 million (or 44 percent of Intelsat’s total revenue) for the three months ended September 30, 2018, a decrease of 2 percent compared to the three months ended September 30, 2017. Excluding the effects of ASC 606, media revenue was US$ 216.4 million for the three months ended September 30, 2018, a decrease of 9 percent compared to the three months ended September 30, 2017, a period which benefitted from US$ 13.5 million in revenue related to the partial termination of a contract.

Government

Government revenue was US$ 98.4 million (or 18 percent of Intelsat’s total revenue) for the three months ended September 30, 2018, an increase of 16 percent compared to the three months ended September 30, 2017. Excluding the effects of ASC 606, government revenue was US$ 90.1 million for the three months ended September 30, 2018, an increase of 7 percent compared to the three months ended September 30, 2017.

Average Fill Rate

Intelsat’s average fill rate on our approximately 1,825 36 MHz station-kept wide-beam transponders was 79 percent at September 30, 2018, compared to 80 percent as of June 30, 2018. In addition, at September 30, 2018 our fleet included approximately 1,150 36 MHz units of high-throughput Intelsat EpicNG capacity, stable as compared to June 30, 2018.

Satellite Launches

Intelsat successfully launched two satellites on September 25, 2018. Intelsat 38, a satellite jointly built with Azerbaijan’s commercial satellite operator, Azercosmos, will provide media and broadband services in Central and Eastern Europe, Africa, and Asia. The Horizons 3e satellite, Intelsat’s joint venture satellite with Japan’s leading satellite operator, SKY Perfect JSAT Corporation, completes the initial buildout of the Intelsat EpicNG global high-throughput network, providing service coverage in the Asia-Pacific region. Both satellites are expected to enter service in the first quarter of 2019.

Contracted Backlog

At September 30, 2018, Intelsat said its contracted backlog, representing expected future revenue under existing contracts with customers, was US$ 8.4 billion, including approximately $1.1 billion attributable to ASC 606.  Excluding the effects of ASC 606, contracted backlog was US$ 7.3 billion, as compared to US$ 7.5 billion at June 30, 2018.