Satelites Mexicanos Sa De CV 20-F 2013 FY Annual report (foreign)

As filed with the Securities and Exchange Commission on April 30, 2014

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
o	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 333-8880

Satélites Mexicanos, S.A. de C.V.

(Exact name of Registrant as specified in its charter)

Mexican Satellites, a Mexican Company of Variable Capital

(Translation of the Registrant’s name into English)

United Mexican States

(Jurisdiction of incorporation)

Avenida Paseo de la Reforma 222, Pisos 20 y 21, Colonia Juárez, 06600 México, D.F., México

(Address of principal executive offices)

Juan Crisostomo Antonio García Gayou Facha

Tel: (52) 55 2629 5800

Fax: (52) 55 2629 5865

Avenida Paseo de la Reforma 222, Pisos 20 y 21, Colonia Juárez, 06600 México, D.F., México

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

9.5% Senior Secured Notes due 2017, not registered on an exchange

The number of outstanding shares of capital stock as of December 31, 2013 was:

50,000 Fixed Class I Shares

136,754,114 Variable Class II Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes   x No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

o Yes   x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such a shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes   o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such  shorter period that the registrant was required to submit and post such files).

o Yes   x No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP x International Financial Reporting Standards as issued
by the International Accounting Standards Board o Other o

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

o Item 17   o Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes   x No

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distributions of securities under a plan confirmed by a court.

x Yes   o No

TABLE OF CONTENTS

PART I	1
ITEMS 1—2. Not Applicable	1
ITEM 3. Key Information	1
ITEM 4. Information on the Company	24
ITEM 4A. Unresolved Staff Comments	47
ITEM 5. Operating and Financial Review and Prospects	47
ITEM 6. Directors, Senior Management and Employees	69
ITEM 7. Major Shareholders and Related Party Transactions	71
ITEM 8. Financial Information	72
ITEM 9. Not Applicable	72
ITEM 10. Additional Information	72
ITEM 11. Quantitative and Qualitative Disclosures about Market Risk	86
ITEM 12. Not Applicable	86
PART II	87
ITEMS 13—14. Not Applicable	87
ITEM 15. Controls and Procedures	87
ITEM 16A. Audit Committee Financial Expert	87
ITEM 16B. Code of Ethics	88
ITEM 16C. Principal Accountant Fees and Services	88
ITEM 16D. Not Applicable	88
ITEM 16E. Not Applicable	88
ITEM 16F. Not Applicable	88
ITEM 16G. Not Applicable	88
ITEM 17. Financial Statements	88
PART III	89
ITEM 18. Financial Statements	89
ITEM 19. Exhibits	89

i

EXPLANATORY NOTE

To address future liquidity needs and enhance our long-term growth and competitive position, we entered into a series of agreements (the “Recapitalization Transactions”) pursuant to which the following actions have been taken:

·the voluntary filing, on April 6, 2011, by Satélites Mexicanos, S.A. de C.V. (“Satmex” or the “Company”, indistinctly) and all of its existing U.S. subsidiaries and all of its future material subsidiaries (excluding any such subsidiary formed after the issue date and solely to design, construct, launch and own one or more satellites) (“Guarantors”) for protection under Chapter 11 of the U.S. Bankruptcy Code and confirmation of the plan of reorganization (the “Plan”), which occurred on May 11, 2011;

·the consummation of the Plan, which occurred on May 26, 2011 (the “Plan Effective Date”);

·the conversion pursuant to the Plan of our then existing Second Priority Senior Secured Notes due 2013 (the “Second Priority Old Notes”) into direct or indirect equity interests in reorganized Satmex, which occurred on May 26, 2011;

·the offering to holders of the Second Priority Old Notes of rights to purchase direct or indirect equity interests in reorganized Satmex (the “Rights Offering”), which closed on May 26, 2011;

·the offering and sale of $325 million in principal amount of 9.5% Senior Secured Notes due 2017 (the “New Notes”), which were initially offered on May 2, 2011 to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended, or the Securities Act, and to persons outside of the United States of America (the “U.S.”) in compliance with Regulation S of the Securities Act, pursuant to an Indenture with Wilmington Trust FSB, as trustee (the “New Indenture”) dated as of May 5, 2011;

·the release of the net proceeds from the offering and sale of the New Notes with Satmex becoming a co-obligor for the obligations for the New Notes through the execution of a supplemental indenture (the “Supplemental Indenture” and together with the New Indenture, the “Indenture”), which occurred on May 26, 2011;

·the payment of distributions and reserves for distributions under the Plan, including the repayment of our then outstanding First Priority Senior Secured Notes due 2011 (the “First Priority Old Notes” and together with the Second Priority Old Notes, the “Old Notes”), which occurred on May 26, 2011;

·the exchange of the total $325 million of the New Notes for exchange notes issued under the Indenture registered under the Securities Act pursuant to a registration statement on Form F-4;

·the offering and sale of $35 million in principal amount of 9.5% Senior Secured Notes due 2017 (the “Additional Notes” and together with the New Notes, the “Notes”), which were initially offered on March 30, 2012 as additional debt securities and issued under our existing Indenture to qualified institutional buyers under Rule 144A of the Securities Act, and to persons outside of the U.S. in reliance upon Regulation S of the Securities Act;

·the exchange of approximately $34.7 million of the total $35 million in Additional Notes, representing 99.0% of the Additional Notes issued under the Indenture for exchange notes issued under the Indenture registered under the Securities Act pursuant to a registration statement on Form F-4; and

·the payment of fees and expenses related to the foregoing.

The Indenture requires us, in Section 4.03, to provide certain financial information to the holders of the Notes (or file such information with the Securities and Exchange Commission, or the SEC, for public availability), after the end of each fiscal year.

ii

PART I

ITEMS 1—2. Not Applicable

ITEM 3. Key Information

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

Our financial statements are published in U.S. dollars and prepared in conformity with accounting principles generally accepted in the United States of America, which we refer to as “U.S. GAAP.”

As of May 26, 2011, we adopted push-down accounting as a result of the Recapitalization Transactions. Accordingly, our consolidated financial information disclosed under the heading “Successor” for the period from May 26, 2011 through December 31, 2011, and for the years ended December 31, 2012 and 2013 is presented on a basis different from, and is therefore not comparable to, our financial information disclosed under the heading “Predecessor” for the period from January 1, 2011 through May 25, 2011 and for the years ended December 31, 2010, and 2009.

The following selected consolidated financial and other data should be read in conjunction with “Operating and Financial Review and Prospects,” “Risk Factors” and our audited consolidated financial statements (including the related notes) contained elsewhere in this annual report on Form 20-F. The consolidated statement of operations and statement of cash flow data for 2011, 2012 and 2013 and the consolidated balance sheet data for 2012 and 2013, have been derived from our audited consolidated financial statements prepared in accordance with U.S. GAAP, included elsewhere in this annual report on Form 20-F. All financial data as of and prior to the year ended December 31, 2010 has been derived from our audited consolidated financial statements prepared in accordance with U.S. GAAP that are not included in this annual report on Form 20-F. Historical results are not necessarily indicative of the results to be expected for future periods.

On October 25, 2013, Satmex entered into an equity interest purchase agreement (the “Enlaces Sale Agreement”) with Axesat S.A. (“Axesat”) with respect to the sale of our direct and indirect equity interests in our wholly-owned subsidiary Enlaces Integra, S. de R.L. de C.V. (“Enlaces”), through which we offer broadband satellite services.  The Enlaces transaction is expected to close by the second half of 2014, subject to government and regulatory approvals and other customary conditions included in the Enlaces Sale Agreement.  For a more detailed discussion on the operations of Enlaces and the Enlaces Sale Agreement, see “Item 4 — Information on the Company — Discontinued Operations.” This transaction meets the criteria of a discontinued operation.  Accordingly, the results of operations of Enlaces are included as discontinued operations within the statement of operations data and the assets and liabilities of Enlaces are presented as assets held for sale and liabilities directly associated with assets held for sale, respectively, in our statement of financial position. For these reasons, Enlaces’ operations are no longer included within each individual line item of our consolidated financial statements, but rather are presented in the statement of financial position.  The financial information included in this annual report on Form 20-F has been presented taking into account the retrospective effects of the above mentioned factors, and therefore the financial information included in this annual report on Form 20-F is not comparable with our annual reports on Form 20-F filed by us with respect to any period prior to the year ended December 31, 2013.  Enlaces previously comprised our Broadband satellite services segment.

1

	Predecessor									Successor
	Fiscal Year Ended December 31,						January 1 toMay 25			May 26 toDecember 31			Fiscal Year Ended December 31,
	2009			2010			2011			2011			2012			2013
Statement of Operations Data:
Revenues:
Satellite services	$	107,183		$	110,948		$	45,888		$	62,758		$	118,669		$	120,064
Programming distribution services	10,594			10,071			4,786			7,563			14,504			12,792
Total revenues	117,777			121,019			50,674			70,321			133,173			132,856
Costs and expenses:
Satellite services (1)	12,887			11,405			4,401			6,191			11,821			11,279
Programming distribution services (1)	5,331			5,387			2,625			4,393			8,440			7,911
Selling and administrative expenses(1)	14,266			14,485			5,483			11,638			18,383			84,890
Depreciation and amortization	46,804			42,501			16,682			45,824			64,130			59,253
Reorganization expenses (2)	3,324			16,443			28,766			—			—			—
Total costs and expenses	82,612			90,221			57,957			68,046			102,774			163,333
Operating income (loss)	35,165			30,798			(7,283		)	2,275			30,399			(30,477		)
Interest expenses	(43,696		)	(45,775		)	(19,494		)	(8,983		)	(4,430		)	(30,728		)
Interest income	373			232			69			182			197			194
Net foreign exchange gain (loss)	176			(27		)	127			(550		)	111			51
(Loss) Income from continuing operations before income tax	(7,982		)	(14,772		)	(26,581		)	(7,076		)	26,277			(60,960		)
Income tax expense (benefit)	12,846			588			2,610			11,400			(14,493		)	(66,050		)
Net (loss) income from continuing operations	(20,828		)	(15,360		)	(29,191		)	(18,476		)	40,770			5,090
Discontinued operations:(Loss) income from discontinued component broadband satellite services	1,080			1,472			431			(381		)	549			(7,093		)
Net (loss) income	(19,748		)	(13,888		)	(28,760		)	(18,857		)	41,319			(2,003		)
Less: Net income attributable to noncontrolling interest	406			444			3			25			103			—
Net (loss) income attributable to Satélites Mexicanos, S.A. de C.V	$	(20,154	)	$	(14,332	)	$	(28,763	)	$	(18,882	)	$	41,216		$	(2,003	)

2

	Predecessor									Successor
	Fiscal Year Ended December 31,						January 1 toMay 25			May 26 toDecember 31			Fiscal Year Ended December 31,
Statement of Cash Flow Data:	2009			2010			2011			2011			2012			2013
Depreciation and amortization	$	46,804		$	42,501		$	16,682		$	45,824		$	64,130		$	59,253
Net cash flows provided by operating activities	46,573			39,241			7,261			31,764			80,983			26,209
Capital expenditures	1,130			67,691			42,902			151,977			116,676			104,348
Net cash flows used in investing activities	(1,130		)	(67,691		)	(42,902		)	(151,977		)	(121,114		)	(104,348		)
Net cash flows provided by (used in) financing activities	—			—			306,753			(148,570		)	34,479			40,000
Cash flows of discontinued operations:
Net cash flows provided by (used in) operating activities	1,508			1,770			874			590			1,515			(1,457		)
Net cash flows used in investing activities	(605		)	(576		)	(67		)	(187		)	(462		)	(195		)
Net cash flows used in financing activities	—			—			—			—			—			(2,407		)
Balance Sheet Data (End of Period):
Cash and cash equivalents	$	94,663		$	66,878		$	337,995		$	69,433		$	63,815		$	29,796
Accounts receivable, net	6,831			10,262			17,154			9,652			10,555			16,570
Satellites and equipment	232,802			262,640			325,416			440,792			550,434			641,835
Concessions	37,650			36,336			35,789			40,819			39,239			39,020
Assets held for sale	16,807			17,537			18,097			20,869			21,656			7,444
Total assets	439,637			438,957			794,372			665,329			746,093			821,885
Deferred revenue	65,355			63,010			62,033			35,161			30,922			32,948
Liabilities associated with assets held for sale	2,323			1,669			1,812			2,995			3,272			2,680
Total debt	420,615			436,110			765,130			325,000			360,000			360,000
Total liabilities	511,783			524,990			909,165			405,038			444,483			484,685
Total shareholders’ equity (deficit)	(72,146		)	(86,033		)	(114,793		)	260,291			301,610			337,200
Other Financial Data:
EBITDA (3)	$	86,281		$	89,695		$	38,775		$	49,729		$	99,805		$	96,063
Adjusted EBITDA (3)	83,937			87,351			37,798			48,935			91,231			92,458
Maintenance capital expenditures (4)	1,130			4,003			568			1,440			1,536			2,016
Satellite capital expenditures (5)	—			63,113			42,334			150,537			114,678			100,971

(in thousands of U.S. dollars)

(1)Exclusive of depreciation and amortization shown separately.

(2)Reorganization expenses consist of costs incurred by Satmex as part of its capital restructuring activities (including principally financial advisory, professional and regulatory fees).

(3)We present EBITDA and Adjusted EBITDA because we consider them to be important supplemental measures of our operating performance. EBITDA and Adjusted EBITDA are each one of the measures reported to our Chief Executive Officer on a monthly basis and are used by our management to evaluate operational performance both against internal targets and the performance of our competitors. Compensation decisions are also based in part on Adjusted EBITDA. We consider EBITDA and Adjusted EBITDA to be operating performance measures, and not liquidity measures, that provide measures of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. The adjustments made to EBITDA to calculate Adjusted EBITDA are the amortization of the State Reserve (as defined herein), which management does not consider to reflect its core operating performance. Management considers our core operating performance to be that which can be affected by our managers in any particular period through their management of the resources that affect our underlying revenue and profit generating operations during that period.

EBITDA and Adjusted EBITDA are not recognized measurements under U.S. GAAP and, therefore, have limitations as analytical tools. Some of these limitations are:

·EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

·EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

·EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;

3

·although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;

·EBITDA and Adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and

·other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, when analyzing our operating performance, investors should use EBITDA and Adjusted EBITDA in addition to, and not as an alternative for, net income, operating income or any other performance measure presented in accordance with GAAP. Similarly, investors should not use EBITDA or Adjusted EBITDA as an alternative to cash flow from operating activities or as a measure of our liquidity.

EBITDA represents net income (loss) excluding income tax expense, interest expense, interest income and depreciation and amortization expense. Adjusted EBITDA represents EBITDA adjusted to exclude the effects of the amortization of the State Reserve, each as described below.   In 2013, we changed the methodology for calculating Adjusted EBITDA.  Previously, Adjusted EBITDA was calculated as EBITDA adjusted to exclude the effects of the orbital incentives settlement, restructuring expenses, amortization of the State Reserve and other income and expenses.  Adjusted EBITDA is now calculated by excluding the amortization of the State Reserve from EBITDA.  This change in methodology is a result of Eutelsat’s  acquisition of us.  Adjusted EBITDA has been restated to reflect the change in methodology and therefore the information on Adjusted EBITDA included in this annual report on Form 20-F is not comparable with previously filed annual reports on Form 20-F.

The following table reconciles net income (loss) to EBITDA, Adjusted EBITDA and Pro Forma EBITDA for the periods presented:

	Predecessor									Successor
	Fiscal Year Ended December 31,						January 1 to May 25,			May 26 to December 31,			Fiscal Year EndedDecember 31,
	2009			2010			2011			2011			2012			2013
Net income (loss)	$	(20,828	)	$	(15,360	)	$	(29,191	)	$	(18,476	)	$	40,770		$	5,090
Income tax expense / other expenses	17,159			16,984			31,986			13,030			(9,217		)	1,237
Interest expense	43,695			45,775			19,494			8,983			4,430			30,728
Interest income	(373		)	(232		)	(69		)	(182		)	(197		)	(194		)
Net foreign exchange (gain) loss	(176		)	27			(127		)	550			(111		)	(51		)
Depreciation and amortization	46,804			42,501			16,682			45,824			64,130			59,253
EBITDA	86,281			89,695			38,775			49,729			99,805			96,063
State Reserve Amortization(a)	(2,344		)	(2,344		)	(977		)	(794		)	(8,574		)	(3,605		)
Adjusted EBITDA	83,937			87,351			37,798			48,935			91,231			92,458

(a)Reduction of accrued income related to transponders provided to the Mexican government free of charge (“State Reserve”). These transponders are provided without cost to Satmex and have been eliminated based upon our belief that such exclusion provides a better comparison to the results of operation of our peers.

(4)Includes payments for the acquisition of electronic, data processing and other infrastructure type equipment and vehicles.

(5)Includes construction in process payments related to (i) Satmex 7 ($28.5 million in 2012 and $65.6 million in 2013), (ii) Satmex 8 ($63.1 million in 2010, $192.9 million in 2011, $82.4 million in 2012 and $19.3 million in 2013) and  (ii) the Satmex 9 satellite program ($3.8 million in 2012 and $16.1 million in 2013), capitalized interest, technical fees expenses provisioned and not yet paid and, expenses related to such construction.

4

EXCHANGE RATES

This annual report on Form 20-F contains conversions of Mexican peso amounts into U.S. dollars at specific rates solely for the convenience of the reader. Unless otherwise noted, all conversions from Mexican pesos to U.S. dollars and from U.S. dollars to Mexican pesos were made at a rate of 13.10 Mexican pesos to U.S. $1.00 dollar, the noon buying rate in effect as of December 31, 2013. The noon buying rate as of April 29, 2014 was 13.14 Mexican pesos per $1.00. We make no representation that any Mexican peso or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Mexican pesos, as the case may be, at any particular rate, the rates stated below or at all.

The following table sets forth information concerning exchange rates between Mexican pesos and U.S. dollars for the periods indicated. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this annual report on Form 20-F or will use in the preparation of our periodic reports or any other information to be provided to you.

	Noon Buying Rate(1)
Period Ended(1)	Period End	Average(2)	Low	High
	(Mexican pesos per $1.00)
December 31, 2009	13.06	13.51	12.60	15.37
December 31, 2010	12.38	12.64	12.16	13.18
December 31, 2011	13.95	12.43	11.50	14.24
December 31, 2012	12.96	13.17	12.63	14.39
December 31, 2013	13.08	12.77	11.98	13.44
2014 (through April 29, 2014)	13.14	13.20	12.96	13.49

(1)For all dates, exchange rates between Mexican pesos and U.S. dollars are presented at the noon buying rate as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.

(2)Annual averages are calculated using the average of the rates on the last business day of each month during the relevant year.

(1)   Satmex to provide exchange rate information.

5

MARKET AND INDUSTRY DATA

Market data and certain industry data and forecasts used throughout this annual report on Form 20-F were obtained from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications and surveys, including the following: Projection Model Satmex 2020; 17th Satellite Communications & Broadcasting Markets Survey Forecasts to 2012, by Euroconsult; Convergencia Latina Map 2013; Via Satellite’s 2012 Industry Directory; Company Profiles, Analysis of FSS Operators, dated 2013, by Euroconsult, by Satmex; Satmex Industry Analysis; Executive Summary of Satmex 8 Market Validation, dated January 2010, by Euroconsult; and Global Assessment of Satellite Supply and Demand 10th Edition, dated 2013, by Northern Sky Research. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. We have not independently verified any of the data from third-party sources, nor have we ascertained the underlying economic assumptions relied upon therein. Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable, based upon our management’s knowledge of the industry, have not been independently verified. Forecasts are particularly likely to be inaccurate, especially over long periods of time. In addition, we do not necessarily know what assumptions regarding general economic growth were used in preparing the forecasts we cite. We do not make any representation as to the accuracy of information contained in this annual report on Form 20-F based upon such market and industry data and forecasts. Statements as to our market position are based on the most currently available data. While we are not aware of any misstatements regarding the industry data presented in this annual report on Form 20-F, our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors” in this annual report on Form 20-F. Neither we nor the initial purchaser can guarantee the accuracy or completeness of any such information contained in this annual report on Form 20-F.

6

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

This annual report on Form 20-F contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act. In addition, from time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. They can be identified by the use of forward-looking words such as “believe,” “expect,” “intend,” “plan,” “may,” “should” or “anticipate” or their negatives or other variations of these words or other comparable words, or by discussion of strategy that involves risks and uncertainties. These forward-looking statements may be included in, but are not limited to, various filings made by us with the SEC, press releases or oral statements made by or with the approval of one of our authorized executive officers. Forward-looking statements are only predictions. Actual events or results could differ materially from those projected or suggested in any forward-looking statement as a result of a wide variety of factors and conditions, including, but not limited to, the factors summarized below. We undertake no obligation to update any forward-looking statement.

This annual report on Form 20-F identifies important factors which could cause our actual results to differ materially from those indicated by the forward-looking statements, particularly those set forth in the sections “Risk Factors.” The factors that could affect our actual results include the following:

·our history of significant net losses;

·our ability to pay the Notes in full at maturity;

·our significant debt service obligations;

·our inability to finance, build and successfully launch our currently intended Satmex 7 and Satmex 9 satellites;

·our in-orbit satellites are vulnerable to failure;

·our small number of customers accounts for a large portion of our revenue;

·competition for our services;

·our ability to incur more debt;

·restrictions and limitations imposed on us by the agreements and instruments governing the Notes;

·risks relating to our acquisition by Eutelsat SA (“Eutelsat”);

·our ability to maintain satellites in the orbital slots we currently use;

·our government concessions may be revoked under certain circumstances;

·the effects of changes to the current Mexican telecommunications laws and regulations;

·the effects of changes to the current Mexican tax laws and regulations;

·Mexican social, political and economic developments; and

·foreign currency exchange fluctuations relative to the U.S. dollar or the Mexican peso.

The risk factors included in this annual report on Form 20-F are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could also harm our future results. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this annual report on Form 20-F and are expressly qualified in their entirety by the cautionary statements included

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in this annual report on Form 20-F. We undertake no obligations to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. In evaluating forward-looking statements, you should consider these risks and uncertainties.

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RECENT DEVELOPMENTS

On July 31, 2013, Satmex announced that its then shareholders had signed a Securities Purchase Agreement under which Eutelsat, a fixed satellite services operator based in Paris, France, would acquire 100% of the share capital of Satmex in an all-cash transaction for US$831 million and the assumption of the company’s outstanding net debt (the “Eutelsat Acquisition”). On January 1, 2014, after having obtained all required government and regulatory approvals, 100% of the share capital of Satmex was successfully acquired by and transferred to Eutelsat.  For more information on the acquisition of Satmex by Eutelsat, see our reports filed on Form 6-K on July 29, 2013 and January 6, 2014.

On January 31, 2014, Satmex caused The Depository Trust Company, as holder of record of Satmex’s outstanding Notes, to be notified of Satmex’s offer to purchase for cash all or any portion of the Notes (the “Offer to Purchase”).  The Offer to Purchase was made as a result of the change of control that occurred in connection with the Eutelsat Acquisition in satisfaction of Satmex’s obligation under Section 4.15 of the Indenture (for more information on the Offer to Purchase, see our report filed on Form 6-K on February 4, 2014). In addition, on April 11, 2014, Satmex notified its note holders of its election to redeem any and all outstanding Notes on May 15, 2014 (the “Early Redemption”).

On October 25, 2013, Satmex entered into the Enlaces Sale Agreement with Axesat for the sale of our direct and indirect equity interests in our wholly-owned subsidiary Enlaces, through which we offered broadband satellite services.  The Enlaces transaction is expected to close by the second half of 2014, subject to government and regulatory approvals and other customary conditions included in the Enlaces Sale Agreement.  For a more detailed discussion on the operations of Enlaces and the Enlaces Sale Agreement, see “Item 4 — Information on the Company — Discontinued Operations.”

As part of our strategy to further expand our capacity to capitalize on growing demand, we initiated a program for the design and construction of a new satellite named Satmex 7. Satmex 7 is intended to occupy the orbital slot previously occupied by Solidaridad 2 and offer commercial C- and Ku-band services. On March 13, 2012, we entered into a definitive construction agreement (the “Satmex Procurement Agreement”) with Boeing Satellite Systems International, Inc. (“Boeing”), for the design, construction and delivery of Satmex 7, which will be based on Boeing’s 702 SP platform. The agreement provides for a 34-month construction schedule for Satmex 7. On February 3, 2012, we entered into a launch services agreement (the “Launch Services Agreement”) with Space Exploration Technologies, Corp. (“SpaceX”) for the launch of a dual-satellite payload consisting of Satmex 7 and another similar-model satellite to be owned by another satellite operator, Asia Broadcast Satellite Holdings Ltd. (“ABS”). The launch services agreement provides for a scheduled launch period for Satmex 7 between December 2014 and February 2015. The Launch Services Agreement is one among other agreements described in this annual report on Form 20-F involving the purchase of four C- and Ku-band satellites to be developed and manufactured by Boeing under a joint procurement program with Satmex and ABS (the “Program”). The Satmex Procurement Agreement also provides us the right to purchase an additional satellite based on Boeing’s 702 SP platform, and which was generically named F4.  On August 15, 2013, Satmex announced that it had elected to acquire F4 pursuant to the Master Procurement Agreement, and named such satellite Satmex 9, the latest communications satellite in its fleet.  The launch of Satmex 9 is scheduled for the fourth quarter of 2015.  On March 13, 2012, Satmex and ABS entered into a master procurement agreement with Boeing (the “Master Procurement Agreement”), which establishes the framework for the joint administration by Satmex and ABS of the Program. In connection with the Program, in addition to entering into the Satmex Procurement Agreement with Boeing, Satmex also entered into a bilateral agreement with ABS on March 13, 2012 (the “Bilateral Agreement”). The Master Procurement Agreement, the Launch Services Agreement, the Satmex Procurement Agreement and the Bilateral Agreement are collectively referred to as the “New Satellite Program Agreements.” In December 2013, we terminated an application to the Export-Import Bank of the United States for a long-term direct loan in the amount of approximately $255.4 million for the purpose of financing Satmex 7 and Satmex 9 and certain past payments made for Satmex 8, and now expect to finance these costs through capital provided by our parent Eutelsat through our issuance of equity to Eutelsat or its affiliates.  For a more detailed discussion of the Satmex 7 and Satmex 9 Programs, including the estimated cost and timing for the planned construction and launch of the satellite and our intended financing and related transactions related to the project, see “Item 4 — Information on the Company.”

We have insurance policies covering Satmex 6 and Satmex 8.  Satmex 6 is insured with coverage of $129.9  million and Satmex 8 is insured with coverage of $360.0 million. On December 5, 2013, we renewed our in-orbit

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insurance policy on Satmex 6 for a period of 3 months and 21 days, which period expired on March 26, 2014, to have the same renewal date as Satmex 8 insurance policy based on prevailing market terms and conditions. On March 26, 2014, we renewed the insurance policies covering Satmex 6 and Satmex 8, with coverage in the amount of $129.9 million and $360.0 million, respectively.  Each insurance policy will expire on June 30, 2014 and we intend to renew such coverage beginning on July 1, 2014.

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RISK FACTORS

Risks Related to Our Business

We have a history of significant net losses.

We incurred consolidated net losses attributable to Satmex of approximately $14.3 million and $47.6 million during 2010 and 2011, respectively. Improving our operating performance and attaining profitability depends on our ability to maintain operating discipline, improve our cost structure, encourage organic growth within our operating groups, capitalize on licensing and sublicensing opportunities and construct, launch and operate Satmex 7 and Satmex 9. Our failure to achieve any one or more of the foregoing could further adversely affect our operating performance and increase our net operating losses. If we cannot improve our operating performance and become profitable, our financial condition may deteriorate and we may be unable to achieve our business objectives or make payments on our debt obligations.

We depend on Eutelsat’s financing to redeem the Notes and to finance the construction and launch of Satmex 7 and Satmex 9.

The Notes mature in 2017.  On January 31, 2014, Satmex commenced the Offer to Purchase all or any portion of the Notes as a result of the change of control that occurred in connection with the Eutelsat Acquisition in satisfaction of Satmex’s obligations under the indenture governing the Notes.  The Offer to Purchase expired on March 3, 2014 and the total amount of outstanding Notes repurchased was $44,000.  On April 11, 2014, Satmex and Eutelsat issued a joint press release announcing Satmex’s election to redeem the  Notes on May 15, 2014.  We will need to raise funds to pay the Notes in connection with the announced redemption and finance the Satmex 7 program and the Satmex 9 program. This cash requirement significantly exceeds our available cash and cash equivalents, which was $29.8 million as of December 31, 2013. Eutelsat is expected to provide the funds required to redeem the Notes through an equity contribution to be made in Satmex using proceeds from the issuance made by Eutelsat in December, 2013 of 6-year senior unsecured bonds for a total of €930 million at a 2.625% coupon.

Construction of Satmex 8 was completed during the second half of 2012 and launch was completed in March 2013.  The total cost of construction and launch was $359.7 million. We will need additional funding to construct, launch and insure Satmex 7 and Satmex 9.  On June 28, 2012, we filed an application with the Export Import Bank of the United States (the “U.S. Ex-Im Bank”) for a long-term loan to finance the acquisition and construction of Satmex 7, and other payments, in an amount of approximately $255.4 million. Notwithstanding, as a result of the Eutelsat Acquisition, the application for the U.S. Ex-Im Bank loan has been terminated.

If our future cash flows from operations are not sufficient for the construction, launch and insurance of Satmex 7, and if we are unable to raise additional capital, Satmex will be required to make termination payments under each of the New Satellite Program Agreements, which are based, in part, on the timing of such termination and the amounts paid to the date of termination. If ABS defaults on its purchase obligation and, as a result, Boeing terminates ABS’ satellite procurement agreement, Boeing is entitled to increase the price of Satmex’s satellite to preserve its expected economic benefit of the joint procurement of the satellites pursuant to the program. If Boeing terminates the satellite procurement agreement with ABS as a result of a default by ABS, the purchase price of Satmex 7 will increase. Satmex will have a corresponding damages claim against ABS for the cost of the resulting increase, but there may be additional costs and timing delays in pursuing such claim for damages to recoup such increased costs.

In electing to pursue the construction of Satmex 9, we expect to have to raise additional funds in the future to cover our obligations under the Master Procurement Agreement for Satmex 9. In addition, if construction of Satmex 9 is terminated prior to the completion of such satellite, Satmex may be required to make additional termination payments under the Master Procurement Agreement, the Satmex Procurement Agreement and the Bilateral Agreement.

In the event Eutelsat does not provide us with funds required to redeem the Notes and finance the capital expenditures associated with the Satmex 7 and Satmex 9 programs on time, we  may not have sufficient cash from operations to cover such cash requirements.

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If we are unable to build and successfully launch our proposed Satmex 7 and Satmex 9 satellites, our ability to grow our business will be materially and adversely affected.

The capacity on Satmex 6 and Satmex 8 is nearly fully contracted and in order for us to increase our fixed satellite services (“FSS”) revenue, we will need to either increase the fees we charge our customers upon the renewal of existing contracts or obtain additional satellite capacity through the launch and operation of Satmex 7 and Satmex 9. If we are unable to build and successfully launch our proposed Satmex 7 and Satmex 9 satellites, our ability to grow our business will be materially and adversely affected.

New or proposed satellites are subject to construction and launch failures (including a failure to reach their intended orbit) and delays, the occurrence of which can materially and adversely affect our results of operations, business prospects, financial condition and cash flow.

Although we have entered into an agreement for the construction and launch of Satmex 7, there may still be delays in it concluding construction or becoming operational.  Delays in satellite deployment can result from delays in the construction of satellites, procurement of requisite components, unavailability of launch vehicles, the limited availability of appropriate launch windows, possible delays in obtaining regulatory approvals and launch failures. Failure to meet a satellite’s construction schedule could result in a significant delay in the future delivery of a satellite. Even after a satellite has been delivered and is ready for launch, an appropriate launch date may not be available for several months. These delays could adversely affect our marketing strategy for such satellite, as well as our results of operations and cash flow during the period of delay.

There are a limited number of companies that we are able to use to launch Satmex 7 and Satmex 9 and a limited number of commercial satellite launch opportunities available in any given time period. Adverse events with respect to SpaceX, our launch service provider, such as satellite launch failures, could result in increased delays in the launch of Satmex 7. In the event that our launch service provider is unable to fulfill its obligations, we may have difficulty procuring alternative services in a timely manner and may incur significant additional expenses as a result. Any such increased costs and delays could have a material adverse effect on our business, operating results and financial condition.

Launch vehicles may fail. Launch failures result in significant delays in the deployment of satellites because of the need to construct replacement satellites, which typically take up to 30 months or longer, and obtain another launch vehicle service. Launch vehicles may also underperform, in which case the satellite may be lost or unable to be placed into the desired orbital location. Such significant delays could have a material adverse effect on our results of operations, business prospects, financial condition and cash flow. Our contracts with customers that purchase or reserve satellite capacity may allow the customers to terminate their contracts in the event of delays, and in some cases, to impose on us certain penalties, termination fees or indemnification obligations.

Satellites have limited useful lives and are vulnerable to premature failure. The actual useful life may be shorter than we anticipate.

Satellites have limited useful lives. We estimate a satellite’s useful life, or its expected useful life, using a complex calculation involving an estimate of remaining propellant and the probabilities of failure of the satellite’s components from design or manufacturing defects, environmental stresses or other causes. A number of factors could adversely affect or result in damage to or loss of a satellite before the end of its expected useful life, including:

·the amount of propellant used in maintaining the satellite’s orbital location or relocating the satellite to a new orbital location (and, for newly-launched satellites, the amount of propellant used during orbit raising following launch);

·the performance, malfunction or failure of their components;

·conditions in space such as solar flares, space debris and solar and other astronomical events;

·the orbit in which the satellite is placed;

·operational considerations, including operational failures and other anomalies; and

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·changes in technology that may make all or a portion of our satellite fleet obsolete.

It is not feasible to repair a satellite in space. As a result, each satellite may not remain in operation for its expected economic life. We expect the performance of any satellite to decline gradually near the end of its expected economic life. If our satellites do not remain in operation for their expected economic life, our results of operations, business prospects, financial condition and cash flow could be adversely affected.

In 2000, we lost Solidaridad 1 in orbit. On January 27, 2010, we lost the primary Xenon Ion Propulsion System (“XIPS”) on Satmex 5.  XIPS is the electric propulsion system that maintains the satellite’s in-orbit position. The secondary XIPS on Satmex 5 previously failed and is no longer available. Consequently, Satmex 5 is currently operating on its backup bi-propellant propulsion system. Satmex 5 is operating in the orbital slot previously occupied by Solidaridad 2 in inclined orbit, with a remaining propellant life of 7.65 years as of December 31, 2013.  However, if the bi-propellant propulsion system on Satmex 5 fails, the satellite will be entirely lost. Satmex 5 started operations in inclined orbit on May 1, 2013.  As of September 30, 2012, the asset was fully depreciated for accounting purposes.

In addition, Satmex 6 has experienced temporary anomalies, which may result in the need to operate using back-up components or systems because of the failure of its primary components or systems. If the back-up components or systems fail in any of our satellites that operate on such back-up systems and we are unable to restore redundancy, these satellites could lose capacity or be total losses. Any single anomaly or series of anomalies or other failure could cause our revenues, cash flows and backlog to decline materially or require us to recognize an impairment loss or replace one or more of our satellites, each of which could materially affect our profitability and significantly increase our financing needs. Any such anomaly or failure could also result in a customer terminating its contract for service on the affected satellite and could require us to repay prepayments made by customers of the affected satellite. If the affected satellite serves one of our major customers, there could be a material adverse effect on our results of operations, business prospects, financial condition and cash flow. In addition, if any of our in-orbit satellites should fail and, as a result, cause damage or harmful interference to third parties, we may incur liability.

Our products and services could perform at suboptimal levels or fail to perform entirely due to technological malfunctions, satellite failures or other deficiencies outside of our control.

Our products and services are exposed to the risks inherent in large-scale, complex telecommunications satellite systems employing advanced technology. Any disruption to our services, information systems or communication networks could result in the inability of our customers to receive our services. This annual report on Form 20-F describes possible satellite failures or other technical and operational deficiencies which could result in system failure or reduced levels of service. Any such disruption would adversely impact our business and our reputation, and could cause us to lose customers or revenue, result in delays or cancellations of future implementations of our products and services, result in failure to attract customers or could result in litigation, customer service or repair work that could involve substantial costs and distract management from operating our business.

Our financial condition could be materially and adversely affected if we were to suffer a satellite loss that is not adequately covered by insurance.

Satmex 6 and Satmex 8 are currently insured. The satellite insurance policies for Satmex 6 and Satmex 8, respectively contain customary exclusions that could preclude recovery for certain types of loss, damage or failure, including (i) war, invasion, hostile or warlike action in time of peace or war, (ii) any anti-satellite device or device employing atomic or nuclear fission and/or fusion, or device employing laser of directed energy beams, (iii) insurrection, labor disturbance, strikes, revolution or any governmental action combating or defending against such action, (iv) confiscation, seizure or similar action by any government or government agent, (v) nuclear reaction, nuclear radiation or radioactive contamination of any nature, whether such loss or damage be direct or indirect, except for radiation naturally occurring in the space environment, (vi) electromagnetic or radio frequency interference, except for physical damage to the satellite directly resulting from such interference, (vii) willful or intentional acts of Satmex designed to cause loss or failure of the satellite, (viii) any act of one or more persons, whether or not agents of a sovereign power, for political or terrorist purposes and whether the loss, damage or failure resulting therefrom is accidental or intentional and (ix) any unlawful seizure or wrongful exercise of control of the satellite made by any person or person action for political or terrorist purposes. Our future insurance policies, to the

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extent we are able to renew our insurance, may also contain similar exclusions because the cost of insurance without such exclusions may be economically impractical or commercially unavailable. A partial or complete failure of a revenue-producing satellite, whether insured or not, could have a material adverse effect on our business, financial condition, cash flow and results of operations.

On December 5, 2013, we renewed our in-orbit insurance policy on Satmex 6 for a period of 3 months and 21 days, which period expired on March 26, 2014, to have the same renewal date as Satmex 8 insurance policy based on prevailing market terms and conditions.  On such date, Satmex 6 was insured with coverage of $129.9  million and Satmex 8 was insured with coverage of $360.0 million, which is the current coverage as of the date of this annual report on Form 20-F.  This coverage will expire on June 30, 2014 and we intend to renew such coverage beginning on July 1, 2014. There can be no assurance, however, that we will be able to renew these policies on satisfactory terms or at all. An uninsured loss of Satmex 6 or Satmex 8 would have a material adverse effect on our business, results of operations, cash flow and financial condition.

We have not renewed the in-orbit insurance for Satmex 5 following its expiration in December 2012 because it has been fully depreciated as of September 30, 2012. Additionally, the geostationary life of Satmex 5 has ended and the satellite began inclined orbit operations on May 1, 2013.

Our revenues and profitability may be adversely affected by the global financial downturn and negative global economic conditions may have a material adverse effect on our customers and suppliers.

Worldwide economic conditions have deteriorated and have caused, among other things:

·significant reductions in available capital and liquidity from banks and other providers of credit;

·substantial reductions in equity and currency values in financial markets;

·extreme volatility in credit, equity and fixed income markets; and

·general economic uncertainty.

Our business is dependent on economic growth and continuing adverse global economic conditions may have a material adverse effect on us due to the potential insolvency of suppliers and customers and our inability to finance our operations. Furthermore, as many of our customers finance their growth through cash flow from operations, the incurrence of debt or the issuance of equity, a reduction in cash flow and the limited availability of debt or equity financing could adversely affect their growth and ours. We cannot predict the potential effects of the current financial situation on our suppliers and customers, our operations or our business prospects.

A small number of customers accounts for a large portion of our revenues. The loss of one or more of these significant customers would adversely affect our revenues.

Our 10 largest customers represented approximately 48% and 43% of our total revenues for the years ended December, 2012 and 2013, respectively.  In addition, approximately 48.5% of our FSS revenues were derived from our 10 principal customers. Our largest customer is América Móvil Perú, S.A.C. (as a succesor of Telmex Perú, S.A.) (“América Móvil Perú”).  Revenue from América Móvil Perú represented 9.4% of our total revenue for each of the years 2012 and 2013.  Our second largest customer is Hughes Network Systems, LLC (“HNS”).  Revenue from HNS represented 11.5% and 8.7% of our total revenues in 2012 and 2013, respectively.  HNS’ contracted capacity of Satmex 5 and Satmex 6 was decreased through three amendments executed in 2009 reflecting a total decrease of 1.0% in total revenue from 2008. HNS is in the process of constructing its own satellites. Once completed, HNS’s use of those satellites could decrease its demand for our services. Other significant customers include Teléfonos de México, S.A.B. de C.V. (“Teléfonos de México”), Hunter Communications, Inc. (“Hunter Communications”), Comcast Cable Communications LLC (“Comcast Cable Communications”) and Telefónica del Perú, S.A.A. (“Telefónica del Perú”). The loss of any one of these customers could have a material adverse effect on our business, operating results and cash flow.

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We operate in a competitive environment.

We continue to face competition from satellite operators in markets such as the U.S., Mexico and Latin America. As of December 31, 2013, there were more than 70 satellites offering services similar to ours to the Americas.  Intelsat, Ltd. (“Intelsat”) has more than 50 satellites, of which more than 25 totally or partially serve the Americas market. SES, S.A. (“SES”) operates a fleet of 47 satellites, of which more than 20 totally or partially serve the Americas. The Mexican government has initiated the Mexsat satellite system project, which contemplates three satellites, the first one of which, Bicentenario (formerly Mexsat-3) with 12 active extended C- and Ku-band transponders, has already been launched. Bicentenario will provide communications services to Mexico and its surrounding waters from the 114.9° W.L. orbital slot. Other competitors include Telesat Holdings Inc. (“Telesat”), Grupo Hispasat, S.A., Hispamar Satélites S.A. and Star One, S.A. (owned by Empresa Brasileira de Telecomunicações S.A., an affiliate of América Móvil). We believe that approximately 270 36 MHz transponder equivalents in the C- and Ku-bands, will be launched in the period between 2014 and 2016 in our market. In addition, these or other operators could begin using the newly-available spectrum in the Ka-band to provide service to the Americas. For example, ViaSat, Inc. and HNS have deployed Ka band services, while Hispasat and Star One have already announced plans to launch service using such frequencies.

We also face competition from land-based telecommunications services. Fiber optic service providers can generally provide services at a lower cost than we can for point-to-point applications.

Our “Alterna’TV” digital distribution platform (“Alterna’TV”) also operates in highly competitive environments. Alterna’TV faces competition from large media companies such as News Corporation, Discovery Communications, Inc., Viacom, Inc., NBC Universal, Inc. and Univision Communications, Inc., as well as niche channels that target very specific Hispanic communities in the U.S., such as Sur Corporation.

Most of our competitors have larger fleets and significantly greater financial resources than we do. Moreover, if our competitors launch the eight new satellites discussed with coverage over the regions that we serve within the Americas, we may experience significant pricing pressure. This in turn could adversely affect our revenue and profitability projections and further impact our ability to service our debt obligations.

Our affiliation agreement with DirecTV, Inc. (“DirecTV”) to provide “Canal 22” to subscribers may be terminated at will. If such agreement is terminated, it could have a material adverse effect on our results of operations and profitability.

We entered into an affiliation agreement, dated as of February 4, 2004, with DirecTV by which we granted to DirecTV the non-exclusive right to distribute “Canal 22” in the U.S., its territories and possessions (including Puerto Rico) as well as Canada in exchange for a monthly license fee. The affiliation agreement expired on April 4, 2009. However, pursuant to a letter agreement, dated January 29, 2009, the parties agreed to reinstate the terms of the affiliation agreement except that the agreement would be terminable at will by either party upon giving not less than 30 days’ prior written notice. Since the expiration of the affiliation agreement, we have been negotiating its renewal, but have not reached an agreement with DirecTV. During the negotiations, the parties have continued to act and provide those services on the terms and conditions set forth therein. In the event that the affiliation agreement cannot be extended for a longer term or is terminated, we would no longer receive the monthly license fee, which could have a material adverse effect on our results of operations, profitability and cash flow.

We entered into an affiliation agreement, dated as of November 29, 2005, with DirecTV by which we granted to DirecTV the right to distribute “Latinoamérica Televisión” in the U.S., its territories and possessions (including Puerto Rico) as well as Canada in exchange for a monthly license fee. The affiliation agreement expired on January 10, 2012. However, pursuant to a letter agreement, dated November 30, 2011, the parties agreed to reinstate the terms of the affiliation agreement except that the agreement would be terminable at will by either party upon giving not less than 90 days’ prior written notice. Since the expiration of the affiliation agreement, we have been negotiating its renewal, but have not reached an agreement with DirecTV. During the negotiations, the parties have continued to act and provide those services on the terms and conditions set forth therein. In the event that the affiliation agreement cannot be extended for a longer term or is terminated, we would no longer receive the monthly license fee, which could have a material adverse effect on our results of operations, profitability and cash flow.

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Our future success depends on our ability to maintain a strong management team, retain our key employees and adapt to technological changes.

We are dependent on the services of our senior management team, our technical and commercial experts and specialists to remain competitive in the satellite service industry. Any losses of key members of our management team would have an adverse effect on us until qualified replacements are found. We may not be able to replace such individuals with persons of equal experience and capabilities quickly or at all. In the satellite industry, commercial, financial, regulatory, legal and technical expertise depends, to a significant extent, on the work of highly qualified employees. The market for experienced satellite services company managers is competitive. Demand for executive, managerial and skilled personnel in our industry is intense and properly qualified human resources are scarce.

Technological advances may require us to make significant expenditures to maintain and improve the competitiveness of our service offerings, and our ability to make such expenditures may be limited by our lack of funds.

The telecommunications industry is continuously subject to rapid and significant changes in technology and introduction of new products and services. We cannot predict the effect of technological changes on our business. New services and technological advances may offer additional opportunities for other service providers to compete with us on cost, quality or functionality bases. Responding to such changes may require us to devote substantial capital to the development, procurement or implementation of new technologies, and may depend upon the final cost of technology and our ability to obtain additional financing. We may not have sufficient funds or it may not be practical or cost-effective for us to replace or upgrade our technologies in response to competitors’ actions. In addition, the Indenture governing the Notes will significantly limit our capital expenditures. We cannot assure you that technological change will not have a material adverse effect on our business and results of operations.

Risks Related to the Eutelsat Acquisition

Satmex has incurred and expects to continue to incur significant costs and expenses in connection with the combination and integration of our business operations with those of Eutelsat.

On July 31, 2013, Satmex announced that its then shareholders had signed a Securities Purchase Agreement under which Eutelsat would acquire 100% of the share capital of Satmex, as described under the caption “Recent Developments.” Satmex incurred $65.6 million in non-recurring expenses in connection with the Eutelsat Acquisition in 2013.  Satmex expects to continue to incur significant costs and expenses in connection with the combination and the integration of business operations.  These costs included and will continue to include financial advisory, legal, accounting, consulting and other advisory fees, reorganization and restructuring costs, severance/employee benefit-related expenses, filing fees, printing expenses and other related charges.  There are also a large number of processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the combination.  Any delay in the integration of the business operations of Satmex and Eutelsat or factors beyond Satmex’s control could affect the total amount or the timing of the integration and implementation expenses.

If additional unanticipated significant costs are incurred in connection with the combination or integration of these businesses, such costs and expenses could, particularly in the near term, exceed the savings that Satmex expects to achieve from the elimination of duplicative expenses and the realization of economies of scale, other efficiencies and cost savings.  Although Satmex expects to achieve savings and economies of scale sufficient to offset these integration and implementation costs over time, this net benefit may not be achieved in the near term or at all.

Satmex faces challenges in integrating our computer, communications and other technology systems.

Among the principal risks of integrating Satmex’s business with Eutelsat are the risks relating to integrating various computer, communications and other technology systems in order to achieve cost synergies by eliminating redundancies in the businesses.  The implementation process to integrate these various systems will involve a number of risks that could adversely impact our business, results of operations and financial condition.

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As with any corporate acquisition, there will be many factors that may materially affect the schedule, cost and execution of the integration of our computer, communications and technology systems.  These factors include, among others: problems during the design, implementation and testing phases; the risk that suppliers and contractors will not perform as required under their contracts; the diversion of management attention from daily operations to the integration process; reworks due to unanticipated changes in business processes; difficulty in training employees in the operations of new systems; and other unexpected events beyond our control.

Risks Related to Our Regulatory Environment

Our business is regulated, causing uncertainty and additional costs.

Our business is regulated by the Mexican government and the Mexican law. In addition, the services we provide in countries outside of Mexico are governed by regulations in those countries. We are required to obtain landing rights in the countries where we seek to operate and our customers may need to obtain governmental consents in connection with the operation of their business in such countries. Regulatory authorities in the various jurisdictions in which we operate may alter the generally applicable regulations and policies that govern our operations, or can modify, withdraw or impose conditions upon the licenses and other authorizations that we require, thereby increasing our cost of doing business.

Our Concessions and other authorizations typically are granted for a fixed term or duration. Consequently, we are required to periodically renew the Concessions and other authorizations in order to maintain them in good standing. Typically, such renewals are granted, although we cannot assure you that this will continue to be the case.  In May 2011, the Mexican government extended the Orbital Concessions, effective as of the termination of the initial term of the existing Orbital Concessions, for a 20-year term until 2037 without payment to the Government and maintaining Satmex’s same conditions for continuing exclusive use of existing C- and Ku-bands by Satmex, but eliminating the right to request the future use of planned or extended C- and Ku-bands. As a result of the proceedings we initiated before the Secretaría de Comunicaiones y Transportes (“SCT”) either to recover such right to request or to replace it with the right to use a Ka-band in certain conditions. In November 2012, the SCT modified the orbital concessions granted to Satmex, including the expectation of right to use and commercialize Ka-band frequencies upon fulfillment of certain requirements stated in the concessions.

Our Orbital Concessions, granted by the Mexican government, require that we reserve 362.88 MHz in the aggregate in the C- and Ku-bands of our satellites for use by the Mexican government free of charge (Capacity Reserved). Consequently, approximately 6% of Satmex 8 and Satmex 6’s transponders are currently utilized by the Mexican government. In the case of any future satellites utilizing the orbital slots provided for under the Orbital Concessions, the capacity reserved to the Mexican government will be defined by the SCT according to the law, regulations and the corresponding concessions. Moreover, our concessions are subject to government regulations, which may modify the content of, or impose limitations on, our operations. If the Mexican government determines that we are a dominant carrier in our segment, it could impose informational, service, and pricing requirements on us, which would adversely affect our results of operations and financial condition.

In the future, a sale, refinancing or restructuring that would result in a subscription of shares that represent 10% or more of our capital stock with full voting rights, requires prior notice to be given to the Mexican government, which may object to it within a 90-day period after receipt of such notice in its role as a regulator. Subsequent transactions also may require the notification or approval of other government agencies, such as the Comisión Federal de Competencia (Federal Competition Commission of Mexico), or COFECO, among others.

In connection with providing satellite capacity, ground network uplinks, downlinks and other value-added services to our customers, we need to maintain regulatory approvals, and from time to time obtain new regulatory approvals from various countries. Obtaining and maintaining these approvals can involve significant time and expense, and we cannot assure you that we will be able to obtain and maintain such approvals.

Our operations may be limited or precluded by ITU rules or processes, and we are required to coordinate our operations with those of other satellite operators. Other operators may not comply with ITU rules requiring coordination of operations and failure of such other operators to comply could cause harmful interference to the signals that we or our customers transmit.

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The ITU facilitates the allocation of orbital locations, and associated radio frequencies, to different national administrations for use by geostationary satellites. The ITU also has established the Radio Regulations, which contain rules governing how a national administration may establish its priority, for ITU purposes, with respect to the use of a given orbital location and/or radio frequency assignment, and coordinate such use with other administrations.

The Mexican government has coordinated the operations of our current satellites with other administrations pursuant to the ITU’s established procedures. However, in the future we could be required to engage in additional coordination with respect to our existing or new satellites.  We can provide no assurance that this will be the case. This and other coordination (i.e., extended Ku and Ka-band) could require lengthy and costly negotiations with other operators. The failure to reach an appropriate arrangement with such satellite operators may result in substantial restrictions on the use and operation of our satellite at its orbital location. The coordination process may require us to modify our proposed coverage areas, or satellite design or transmission plans, in order to eliminate or minimize interference with other satellites or ground-based facilities. Those modifications may mean that our use of a particular orbital location is restricted, possibly to the extent that it may not be commercially desirable to place a new satellite in that location.

In certain countries, a failure to resolve coordination issues may be used by regulators as a justification to limit or condition market access by foreign satellite operators. While the ITU’s Radio Regulations require the operators of later-filed systems to coordinate their operations with us, we cannot guarantee that they will do so, or limit their operations so as to avoid transmitting any signals that would cause harmful interference to the signals that we, or our customers, transmit. This interference could require us to take steps, or pay or refund amounts to our customers that could have a material adverse effect on our results of operations, business prospects and financial condition. The ITU’s Radio Regulations do not contain mandatory dispute resolution or enforcement regulations and neither the ITU specifically, nor international law generally, provides clear remedies if the ITU coordination process fails. Failure to coordinate our satellites’ frequencies successfully or to resolve other required regulatory approvals could have an adverse effect on our financial condition, as well as on the value of our business. See “Item 4. Information on the Company —Regulation — U.S. Regulation and ITU Requirements” for additional information regarding ITU and coordination.

The ITU Radio Regulations are periodically reviewed and revised at World Radio Communication Conferences, which typically take place every three to four years. As a result, we can provide no assurances that the ITU will not change its allocation decisions and rules in the future in a way that could limit or preclude our use of some or all of our existing or future orbital locations or spectrum.

If we do not maintain satellites in the orbital slots we currently use, those orbital locations may become available for other satellite operators to use.

If we are unable to maintain satellites in the orbital slots that we currently use in a manner that satisfies the ITU or the Mexican government, we may lose our rights to use these orbital locations, or certain frequencies at these orbital locations, and the locations could become available for other satellite operators to use. Each Orbital Concession requires us to make continuous use of our orbital slot and to provide continuous services, but is silent as to termination if such orbital slot is vacant. The ITU’s Radio Regulations allow a national administration to “suspend” its use of a given orbital slot for up to three years, at which point the ITU or another administration could attempt to cancel Mexico’s ITU filings for that slot.

In November 2013, the useful life of Solidaridad 2 was terminated and the satellite was de-orbited.  We are currently constructing another satellite, Satmex 7, and placing it in geostationary orbit in the orbital position previously held by Solidaridad 2.  If we are unsuccessful in constructing and launching Satmex 7 or unable to timely place another satellite in the orbital slot previously occupied by Solidaridad 2, we could lose the right to use the 114.9° W.L. orbital slot for the reasons described in the previous paragraph.  In the interim, Satmex 5 currently occupies Solidaridad 2’s previous orbital spot in an inclined orbit.  Additionally, the expected remaining life of Satmex 5 has been reduced as a result of the failure of its XIPS system on January 27, 2010.  We cannot operate our satellites without a sufficient number of suitable orbital locations in which to place our satellites, and the loss of one or more of our orbital locations could adversely affect our plans and our ability to implement our business strategy.

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Our government concessions may be revoked under certain circumstances.

Our satellites are located in orbital slots allocated to Mexico, such that our business is subject to the oversight and regulation of the Mexican government. The Mexican government has granted to us four concessions, three Orbital Concessions (See “Item 4. Information on the Company — Business — Our Satellites”) and one Property Concession (See “Item 4. Information on the Company — Business — Satellite Control Centers and Property Concession”). Our Concessions are subject to termination prior to the expiration of their terms upon the occurrence of certain events. Under the Mexican Ley Federal de Telecomunicaciones (the Federal Telecommunications Law of Mexico or the Telecommunications Law, indistinctly), an Orbital Concession will terminate if:

·the term of any such Orbital Concession expires, without further extensions;

·we resign our rights under any such Orbital Concession;

·the SCT revokes such Orbital Concession;

·the Mexican government (through the SCT) terminates such Orbital Concession through a proceeding called “Rescate;” or

·we become subject to liquidation or bankruptcy (quiebra).

The SCT may revoke any of the Orbital Concessions upon the occurrence of certain events, among which are the following:

·unjustified or unauthorized interruption of our operations or the services that may be provided under such Orbital Concession, whether in whole or in part;

·taking any action or refraining from taking any action that affects the rights of other licensees or concessionaires;

·our failure to satisfy the terms or conditions set forth in the Orbital Concessions (including failure to deliver the free satellite capacity reserved for the Mexican government);

·our unjustified failure to interconnect other concessionaires or licensees that have the right to provide telecommunications services;

·change of our nationality; or

·our assignment, transfer or encumbrance of rights granted under the Orbital Concessions in contravention of the terms of applicable Mexican law.

In the event any of the Orbital Concessions is revoked by the SCT, no compensation shall be paid to us. Also, in this case, we would not be eligible to receive new telecommunication concessions or permits for a five-year period as of the date that the resolution of revocation becomes final and non-appealable.

The SCT also has the right to terminate any of our Orbital Concessions for reasons of public interest or national security pursuant to a “Rescate,” and we would be entitled to receive compensation pursuant to article 19 of the Mexican Ley General de Bienes Nacionales (the “General Law on National Assets”). As of the date of any such Rescate, the orbital slots and the assets used in connection with the Orbital Concessions would be subject to the ownership and operation of the Mexican government. In case of a Rescate, we would be entitled to keep our assets, equipment and installations used in connection with the Orbital Concession(s), as the case may be, only to the extent such assets, equipment and installations are not useful to the Mexican government. However, the value of such assets will not be included in any compensation we receive.

Pursuant to the terms of the Orbital Concessions, upon termination of the Orbital Concessions, the orbital slots revert to the Mexican government. In addition, pursuant to the Telecommunications Law, the Mexican government would have a preemptive right to purchase the facilities, equipment and other assets directly used by us to provide services under the Orbital Concessions. Alternatively, the Mexican government may lease these assets for

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up to five years at a rate determined by expert appraisers appointed by us and the SCT, or by a third appraiser jointly appointed by these appraisers in the event of a discrepancy between their appraisals.

The SCT may also effect a Requisa of the Orbital Concessions in the event of a natural disaster, war, substantial breach of the public peace and order, or imminent danger to national security, to internal peace or to the Mexican economy. In the past, the Mexican government has used this power in other industries to ensure continuity of service during labor disputes. Mexican law requires that the Mexican government must pay compensation to us if it effects a Requisa, except in the case of a temporary seizure due to war. If we were to become subject to a Requisa, the Mexican government would indemnify us in an amount equal to our damages and losses reflecting their real value. In the event of a dispute regarding such matters, losses would be determined by appraisers mutually appointed by us and the SCT and damages would be determined on the basis of the average net income generated by us in the year prior to the Requisa.

Under our Property Concession, we are required to use our Primary and Alternate Control Centers only to operate our satellites. Each of the Primary and Alternate Control Centers form part of a building complex that also houses equipment owned and used for the Mexican government’s teleport and mobile satellite services systems.  See “Item 4. Information on the Company — Business — Satellite Control Centers and Property Concession.”

On May 14, 2010, the SCT issued an amendment to the Property Concession granted on October 15, 1997, according to which we may, with the prior authorization from the SCT, lease or give under a commodatum agreement, segments of the Primary and Alternate Control Centers to third parties, as long as such segments are used for activities related to the subject matter of the Property Concession. This amendment allowed us, among other things, to provide control and satellite operation services to other operators, with the prior authorization of the SCT.

The auction of additional segment capacity in the 3.4 — 3.7 GHz frequency band in Mexico has not yet occurred, and if the auction proceeds, the use of this capacity could interfere with our satellite transmissions, which could affect our operations.

The use of this spectrum for terrestrial communications within our coverage area could cause harmful interference into our FSS operations, or limit our ability to expand the geographic scope or frequency ranges used by our satellites. It is possible that the Mexican government could require terrestrial operators to limit their operations or employ technical solutions so as to minimize the potential for harmful interference into adjacent FSS operations or at least to keep a 100 MHz guard band. However, we can provide no assurance that this can be the case, and the existence of harmful interference into our systems could adversely impact our ability to provide service to our customers.

The ITU continues to consider additional frequency bands for use by International Mobile Telecommunications (or “IMT — Advanced”) services. Frequency bands under consideration for such use include the 3.4 — 3.7 GHz band segment, which is used for FSS worldwide. This band segment is adjacent to the 3.7 — 4.2 GHz band segment, known as the C-band, in which we operate under our Orbital Concessions.

Decreases in market rates for telecommunication services could have a material adverse effect on our business, results of operation and our financial condition.

We expect the Mexican telecommunications market to continue to experience rate pressure, primarily as a result of:

·increased competition and focus by our competitors on increasing market share; and

·recent technological advances that permit substantial increases in the transmission capacity.

Continued rate pressure could have a material adverse effect on our business, financial condition and operating results if we are unable to generate sufficient traffic and increased revenues to offset the impact of the decreased rates on our operating margin.

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We are subject to different corporate disclosure requirements than U.S. companies, which may limit the information available to our investors.

A principal objective of the securities laws of the U.S., Mexico and other countries is to promote full and fair disclosure of all material corporate information, including accounting information. However, there may be different or less publicly available information about issuers of securities in Mexico than is regularly made available by public companies in countries with highly developed capital markets, including the U.S.

As a foreign private issuer, we are not required to comply with the notice and disclosure requirements under the Exchange Act relating to the solicitation of proxies for shareholder meetings. Although we are subject to the periodic reporting requirements of the Exchange Act, the periodic disclosure required of non-U.S. issuers under the Exchange Act is more limited than the periodic disclosure required of U.S. issuers. Therefore, there may be less publicly available information about us than is regularly published by or about other public companies in the U.S. As a result, potential investors may not be able to ascertain the risks of Satmex as easily as they would if we were a U.S. company.

Risks Related to Mexico

Any change to the current Mexican telecommunications laws, rules, regulations and policies could have a material adverse effect on our business.

The Mexican president or the Mexican Congress may introduce new, or amend existing, laws, rules, regulations and policies applicable to the telecommunications industry and/or the application thereof. Any change to Mexican telecommunications rules, regulations and policies could have a material adverse effect on our business, financial condition and result of operations, as well as market conditions and prices for our securities. Currently, the Mexican Congress is discussing a presidential constitutional reform initiative in the telecommunications sector that may have adverse effects on our business.

Social and economic developments in Mexico may adversely affect our business.

Most of our operations and assets are located in Mexico. For 2010, 2011, 2012, and 2013, approximately 32%, 32%, 35% and 33%, respectively, of our total revenue was from billings to Mexican customers. As a result, our financial condition, results of operations and business may be affected by the general condition of the Mexican economy, the devaluation of the Mexican peso as compared to the U.S. dollar, Mexican inflation, interest rates, taxation and other economic developments in or affecting Mexico over which we have no control.

Mexico has historically experienced uneven periods of economic growth and inflation. As the Mexican economy is in recession or if inflation and interest rates increase significantly, our business, financial condition and results of operations may be adversely affected. In addition, Mexico has experienced high rates of crime recently which may increase in the future. We cannot assume that such conditions will not have an adverse effect on our business, financial condition or results of operations.

Mexico had entered into a recession by the beginning of 2009, and GDP fell by approximately 6.1% in 2009, including a decline of approximately 3.6% in the fourth quarter. In 2010, GDP grew by 4.2% and inflation reached 4.4%. In 2011, GDP grew by 3.9% and inflation reached 3.8%. In 2012, GDP grew by approximately 3.2 % and inflation reached 3.6%. In 2013, GDP grew by approximately 1.1% and inflation reached 3.97%. We have increasingly been required to accept market disruption clauses, which, if invoked, typically require a borrower to pay increased funding costs when the interest rate of a financing no longer adequately reflects the actual cost for the lender to obtain funds.

The Mexican government does not currently restrict the ability of Mexican companies or individuals to convert Mexican pesos into U.S. dollars (except for certain restrictions related with cash transactions involving a U.S. dollar payment to a Mexican bank) or other currencies and Mexico has not had a fixed exchange rate policy since 1982. The Mexican peso has been subject to significant devaluations against the U.S. dollar in the past and may be subject to significant fluctuations in the future. Severe devaluations or depreciations of the Mexican peso may result in governmental intervention to institute restrictive exchange control policies, as has occurred before in

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Mexico and other Latin American countries. Accordingly, fluctuations in the value of the Mexican peso against other currencies may have an adverse effect on us and our value.

If the economy of Mexico continues to experience a recession or the existing recession becomes more severe, if inflation or interest rates increase significantly or if the Mexican economy is otherwise adversely impacted, our business, financial condition or results of operations could be materially and adversely affected.

The Mexican government has exercised, and continues to exercise, significant influence over the Mexican economy. Mexican governmental actions concerning the economy and state-owned enterprises could have a significant effect on Mexican private sector entities in general, and us in particular, as well as on market conditions, prices and returns on Mexican securities, including our securities. In the past, economic and other reforms have not been enacted because of strong congressional opposition to the president.

High interest rates in Mexico could increase our financing and operating costs.

Mexico has, and is expected to continue to have, high real and nominal interest rates as compared to the U.S. The annualized interest rates on 28-day Certificados de la Tesorería de la Federación (Mexican Federal Treasury Certificates), or Cetes, averaged approximately 4.40%, 4.24%, 4.24%, and 3.76% for 2010, 2011, 2012, and 2013, respectively. To the extent that we incur peso-denominated debt in the future, it could be at high interest rates.

High inflation rates in Mexico may decrease demand for our services while increasing our operating costs.

Mexico historically has experienced high levels of inflation, although the rates have been lower in recent years. The annual rate of inflation, as measured by changes in the Mexican National Consumer Price Index, or NCPI, was 4.4% in 2010, 3.8% in 2011, 3.6% in 2012, and 3.97% in 2013. An adverse change in the Mexican economy may have a negative impact on price stability and result in higher inflation than its main trading partners, including the U.S. High inflation rates can adversely affect our business and results of operations in the following ways:

·inflation can adversely affect consumer purchasing power, thereby adversely affecting consumer and advertiser demand for our services and products; and

·to the extent inflation exceeds our price increases, our prices and revenues will be adversely affected in “real” terms as our operating costs will increase.

Changes in Mexican tax laws may adversely affect us.

The Mexican government proposes amendments to tax laws from time to time. Most recently, in September 2013, the Mexican government presented a proposed reform package with significant tax law changes which became effective on January 1, 2014. Among other things, the tax reform package includes an increase in the general value added tax (“VAT”) rate that applied to transactions conducted along the border from 11% to 16%, thereby matching the general VAT rate applicable throughout Mexico; the elimination of the Impuesto Empresarial a Tasa Unica (Business Flat Tax; or “IETU”); and the confirmation of the corporate income tax rate for 2014 and thereafter at 30%. Changes to tax laws and regulations directly adversely affect our business, financial condition and results of operations, and could adversely affect the financial position of our current and potential customers, which could further adversely affect our business, financial condition and results of operations.

Political instability in Mexico could affect our operations.

Political events in Mexico may result in disruptions to our operations and a decrease in our revenues.

The Mexican government exercises significant influence over many aspects of the Mexican economy and, in particular, over the telecommunications sector. The actions of the Mexican government concerning the economy and regulating certain industries could have a significant effect on Mexican private sector entities (including Satmex) and Mexican securities’ market conditions, prices and returns.

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President Peña Nieto and the Mexican Congress may implement significant changes in laws, public policy and/or regulations that could affect Mexico’s political and economic situation, which could adversely affect our business. Social and political instability in Mexico or other adverse social or political developments in or affecting Mexico could affect us and our ability to obtain financing. It is also possible that political uncertainty may adversely affect Mexican financial markets.

The lack of an absolute majority in the Mexican Congress could result in deadlock and prevent the timely implementation of political and economic reforms that, in turn, could have a material adverse effect on Mexican policy and our business.

We cannot provide any assurances that political developments in Mexico will not have an adverse effect on our business, financial condition or results of operations.

Mexico has experienced a period of increasing criminal violence and such activities could affect our operations.

Recently, Mexico has experienced a period of increasing criminal violence, primarily due to the activities of drug cartels and related organized crime. In response, the Mexican government has implemented various security measures and has strengthened its military and police forces. Despite these efforts, drug-related crime continues to exist in Mexico. These activities, their possible escalation and the violence associated with them, in an extreme case, may have a negative impact on our financial condition and results of operations.

Developments in other countries could adversely affect the Mexican economy, our business, financial condition or results of operations and the market value of our securities.

The Mexican economy, the business, financial condition or results of operations of Mexican companies and the market value of securities of Mexican companies may be, to varying degrees, affected by economic and market conditions in other countries. Although economic conditions in other countries may differ significantly from economic conditions in Mexico, investors’ reactions to adverse developments in other countries may have an adverse effect on the market value of securities of Mexican issuers. In recent years, economic conditions in Mexico have become increasingly correlated with economic conditions in the U.S. as a result of NAFTA and increased economic activity between the two countries. Adverse economic conditions in the U.S., the termination of NAFTA or other related events could have a material adverse effect on the Mexican economy. The Mexican debt and equities markets also have been adversely affected by ongoing developments in the global credit markets. We cannot assure you that events in other emerging market countries, in the U.S. or elsewhere will not materially adversely affect our business, financial condition or results of operations.

Currency devaluations may impair our ability to service our debt.

Mexico has had no exchange control system in place since the dual exchange control system was abolished on November 11, 1991. The Mexican peso has floated freely in foreign exchange markets since December 1994, when the Mexican Central Bank (Banco de México) abandoned its prior policy of having an official devaluation band.

Since then, the peso has been subject to substantial fluctuations in value. The Mexican peso appreciated against the U.S. dollar by approximately 5.4% in 2010, depreciated against the U.S. dollar by approximately 13.1% in 2011, appreciated against the U.S. dollar by approximately 6.9% in 2012 and depreciated against the U.S. dollar by approximately 0.5% in 2013. Changes in the value of the Mexican peso relative to the U.S. dollar could adversely affect our financial condition and results of operations.

We bill our customers in U.S. dollars. As a result, a substantial portion of our revenue is paid in U.S. dollars. Certain customers may pay us in Mexican pesos, pursuant to the terms of our agreement. Customers who pay in Mexican pesos must purchase U.S. dollars at the then prevailing exchange rate on the date of payment. To the extent we receive Mexican pesos, we convert such Mexican pesos into U.S. dollars. At the same time, all of our debt obligations are denominated and paid in U.S. dollars. Future devaluations of the Mexican peso relative to the U.S. dollar could adversely affect some of our customers’ ability to pay U.S. dollar-denominated obligations and could increase the cost to us of our U.S. dollar-denominated obligations.

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In the event of a concurso mercantil, creditors of our U.S. dollar-denominated debt obligations (including the Noteholders) could be adversely affected by devaluations of the Mexican peso relative to the U.S. dollar because a Mexican court could determine that our debt obligations will be paid in Mexican pesos.

ITEM 4. Information on the Company

Our legal name is Satélites Mexicanos, S.A. de C.V. and our commercial name is “Eutelsat Americas.” We were incorporated in Mexico in 1997 as a Sociedad Anónima de Capital Variable (a Variable Capital Corporation). Our principal executive offices are located at Avenida Paseo de la Reforma 222, Pisos 20 y 21, Colonia Juárez, 06600, Mexico City, Mexico. Our telephone number is (52) 55-2629-5800.

Organizational Structure

Business

Satmex is a significant provider of FSS in the Americas, with coverage of more than 90% of the population of the region. As one of only two privately-managed FSS providers based in Latin America, we have designed, procured, launched and operated three generations of satellites. Our current fleet is comprised of three satellites in highly attractive, adjacent orbital slots that enable our customers to effectively serve our entire coverage footprint utilizing a single satellite connection.  One of our satellites (Satmex 5), was recently placed in inclined orbit, which allows us to continue to provide services while maintaining our orbital slot. We believe that our attractive orbital locations, long operating history, extensive customer relationships and experienced management team have resulted in high utilization rates, strong customer retention, significant Adjusted EBITDA margins and substantial backlog. For the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net (loss) income, see “Selected Consolidated Financial and Other Data.”

Our business provides mission-critical communication services to a diverse range of high-quality customers, including large telecommunications companies, private and state-owned broadcasting networks, cable and DTH television operators, and public and private telecommunications networks operated by financial, industrial, transportation, tourism, educational and media companies as well as governmental entities. Some of our significant

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customers include: HNS, América Móvil Perú, Teléfonos de México, Hunter Communications, Comcast Cable Communications and Telefónica del Perú, S.A.A.  Our contract renewal rate for the year ended December 31, 2013, measured on a capacity basis (i.e., the total amount of MHz expiring annually) was 98%.

We have experienced substantial growth in our revenue and Adjusted EBITDA over the last several years. Our revenue increased from $125 million for 2009 to $132.9 million for 2013, a compound annual growth rate, or CAGR, of 1.5%. Our Adjusted EBITDA grew from $86.4 million to $92.5 million over the same period, a CAGR of 1.7%, and we maintained an average combined capacity utilization rate for our Satmex 5 and Satmex 6 satellites in excess of  95%.  In 2013, our average combined capacity utilization rate for Satmex 6 and Satmex 8 was 85%. The stability of our revenue is supported by multi-year contracts with our non-governmental customers, which are typically three to five years in duration and denominated in U.S. dollars. Our FSS revenue backlog, which is our expected future revenue under existing customer contracts, was approximately $416.8 million for the year ended December 31, 2013.

Our FSS business serves a diverse group of customers in terms of the nature of their content, their ownership structure and their geographic location. We provide our services primarily to three types of customers who we believe will demand increasing transponder capacity and drive the expansion of the FSS industry in the Americas over the next decade:

·Network Services. Our network services include voice and data backhaul for telecommunication companies as well as the sale of satellite transmission capacity to broadband Internet service providers, public communications carriers, VSAT applications, government agencies and multinational corporations. Demand from private and public network providers in Latin America for broadband Internet services and cellular telephony backhaul is anticipated to be a strong source of future growth. Approximately 70% of our FSS revenue for the year ended December 31, 2013 was attributed to our data and voice-over IP network services.

·Video. Our video distribution services include providing FSS to television broadcast networks, cable and DTH television operators and broadcasters of special events. The increased transmission of high-definition television, or HDTV, signals requires greater transmission capacity than standard television signals. We also expect continued demand for bandwidth as a result of increased offerings of television services by non-traditional providers offering bundled services (i.e., “triple play”), such as telecommunication companies. A third source of video demand growth is the trend towards a greater number of television channel offerings, driven by consumer demands for more diverse and specialized content. Approximately 23% of our FSS revenue for the year ended December 31, 2013 was attributed to our video services.

·Government. Our government services include providing space segment capacity to the public sector, the sale of satellite transmission capacity to national security networks and government-sponsored connectivity programs to provide broadband Internet access to rural and often remote geographic areas. Governments have experienced an increased need for commercial satellite communications services driven, in part, by universal connectivity projects, disaster recovery, military, counterterrorism, anti-drug efforts and social programs. There has also been a trend of increased outsourcing of broadband services from government-owned to commercial satellite fleets. Approximately 7% of our FSS revenue for the year ended December 31, 2013 was attributed to our government services.

We provide FSS through our fleet of three satellites: Satmex 8, Satmex 6 and Satmex 5.

We primarily provide commercial FSS through Satmex 8, Satmex 6 and Satmex 5, which generate materially all of our FSS Adjusted EBITDA. Satmex 8, Satmex 6 and Satmex 5 have a total of 173.5 C- and Ku-band 36 MHz transponder equivalents. The construction of Satmex 8 was completed during the second half of 2012 and Satmex 8 was successfully launched on March 27, 2013, Baikonur, Kazakhstan time (March 26, 2013 GMT). After launch, the satellite successfully performed post-launch maneuvers and deployed its solar arrays on schedule and began firing its main thruster in order to start maneuvering into geosynchronous orbit. Satmex 8 is currently fully operational and substantially all of Satmex 5’s customers have been transferred to Satmex 8 in the second quarter of 2013. Satmex 8 has a design life of 15 years and provides approximately an additional 45% of commercial transponder capacity compared to that of Satmex 5.  As of December 31, 2013, we estimate the

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remaining economic life of Satmex 6 and Satmex 8 to be approximately 9.39 years and 21.93 years, respectively.  Satmex 5 is operating in the orbital slot previously occupied by Solidaridad 2 in inclined orbit, with a remaining propellant life of 7.65 years as of December 31, 2013. As of the date of this annual report on Form 20-F, Satmex 6 is insured with coverage of $129.9 million and Satmex 8 is insured with coverage of $360.0 million.

In November 2013, the useful life of Solidaridad 2 was terminated and the satellite was de-orbited.  Solidaridad 2 had occupied orbital slot 114.9°W.L. in inclined orbit.  It primarily provided L-band service to the Mexican government for national security and social services. Currently, we are constructing a new satellite, Satmex 7, which will occupy the previous orbital slot of Solidaridad 2 and offer both C- and Ku-band services. In the interim, we have transferred Satmex 5 to the orbital slot previously occupied by Solidaridad 2 in inclined orbit until the end of Satmex 5’s remaining useful life. See “Item 4. Information on the Company — Business — Our Satellites — Solidaridad 2.”

We operate and monitor our satellite fleet from two specialized earth stations, or satellite control centers, located in Iztapalapa, Mexico City, Mexico, and Hermosillo, Sonora, Mexico. The Mexican government granted us the Property Concession to use the land and buildings on which our satellite control centers are located for an initial term expiring in October 2037, at which time the Property Concession may be renewed. The Property Concession also allows us to locate our ground station equipment within telecommunications facilities that belong to the Mexican government. Operating two redundant satellite control centers in separate locations mitigates the risk of any service interruptions. The Property Concession does not cover any radiofrequency operations.

We have a proven track record for operational and engineering reliability, built on our experience of over 27 years in the FSS sector. For the year ended December 31, 2013, our Satmex 5 and Satmex 6 satellites, and, for part of the year ended on such date subsequent to the commencement of its operations, our Satmex 8 satellite, have been highly reliable, delivering nearly 100% availability to our customers on such station-kept satellites.

In addition to our core FSS business, which we report as our “Satellite services” segment, we also offer programming distribution services through our Alterna’TV digital distribution platform and broadband satellite services through our subsidiary Enlaces, which, pursuant to the Enlaces Sale Agreement, we have agreed to sell to Axesat pending the satisfaction of certain conditions. Due to our execution of the Enlaces Sale Agreement, the results of operations of Enlaces are no longer consolidated with our results of operations and Enlaces is considered as a customer, with revenues obtained from the services we provided to Enlaces representing 3.1% of our total revenue, for the year ended December 31, 2013.

Through Alterna’TV, we offer Latin American programming to the U.S.’ fast-growing Hispanic community via DTH satellite and cable TV systems. As part of the Alterna’TV platform, we hold exclusive distribution rights in the U.S. to a number of Spanish-language television channels from various Mexican and South American programmers. Our Alterna’TV operations generated $12.8 million of revenue for the year ended December 31, 2013, or 9.6 % of our total revenue.

We believe our desirable orbital locations, strong customer relationships and sizable backlog of contracted revenue underpin our established, predictable core business and position us to capitalize on the growing opportunities in the satellite industry.

Our Satellites

We currently hold orbital concessions granted by the Mexican government to occupy three orbital slots, including 113.0°W.L., currently occupied by Satmex 6, 116.8°W.L., currently occupied by Satmex 8, and 114.9°W.L., currently occupied by Satmex 5 in inclined orbit.

Our satellites are in adjacent orbital locations with 1.9° of separation, which requires our clients’ infrastructure to comply with international regulations to avoid harmful interference among adjacent satellites and allow for the efficient operation of satellite networks. In May 2000, the governments of Mexico and Canada entered into a coordination agreement specifying the operational parameters for Mexican and Canadian satellites in the C- and Ku- frequency bands in the geostationary orbit between the 107.3° W.L. and 118.7° W.L. orbital positions. The purpose of the coordination agreement was to establish a standard of reference for acceptable adjacent satellite

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frequency spectrum interference and to ensure the efficient operation of satellite networks licensed by both Mexico and Canada.

We are required to provide certain transponder capacity on our three satellites to the Mexican government free of charge under our Orbital Concessions. The Orbital Concessions require that we provide similar transponder capacity grants on Satmex 7 and Satmex 9. Set forth below are the current requirements by satellite and band.

Orbital Slot	Band	Total MHz
Orbital slot occupied by Satmex 6 (113.0° W)	C-	26.320
	Ku-	105.000
Orbital slot occupied by Satmex 8 (116.8° W)	C-	73.100
	Ku-	30.640
Orbital slot occupied by Satmex 5 (114.9° W)	C-	56.690
	Ku-	71.130
Total Satellite Capacity	C- and Ku-band	362.880

Satmex 6

Satmex 6 was launched on May 27, 2006 and initially placed into the 114.9° W.L. orbital location. On July 1, 2006, Satmex 6 completed its drift to its permanent orbital location at 113.0° W.L. Satmex 6 was manufactured by SSL and has a total of sixty 36 MHz transponder-equivalents, including 36 C-band and 24 Ku-band transponders. Satmex 6’s design life is 15 years and, as of December 31, 2013, Satmex 6’s estimated remaining useful life was approximately 9.39 years.

Satmex 6 is designed to provide broader coverage and higher power levels with approximately 50% more power than Satmex 5. Satmex 6 has hemispherical coverage in both C- and Ku-bands and provides coverage to over 90% of the population of the Americas.

On September 9, 2006, Satmex 6 experienced an unexpected resetting of its Attitude Control Electronics-1 (ACE-1) unit. The satellite is designed to tolerate such disruptions without any loss of service or operator intervention. However, in this instance, the satellite lost earth-pointing capability until corrective ground action was completed. The attitude of the satellite was corrected on the same day. An investigation determined that a software sequence timing problem caused the loss of earth-pointing capability. The satellite manufacturer developed and tested a software modification in an effort to prevent a recurrence of this problem, which was delivered to the Company and uploaded to the spacecraft on April 3, 2007.

On January 1, 2007, one of Satmex 6’s Ku-band amplifiers experienced a spontaneous shut-down. The Company followed manufacturer procedures and the affected channel was switched to a back-up amplifier to reestablish service. As a result, the redundancy in the Ku-1 region has decreased from 16 amplifiers for 12 channels to 15 amplifiers for 12 channels.

On December 1, 2007, Satmex 6 experienced a second unexpected reset of its Attitude Control Electronics-2 (ACE-2) unit, similar to the one experienced on September 9, 2006. However, due to the software modification uploaded to the spacecraft on April 3, 2007, in this instance, the satellite successfully executed an auto-swap to the ACE-1 unit and the satellite did not lose earth- pointing capability. On December 6, 2007, the ACE-2 unit was tested and it was confirmed that this unit is healthy and functional. The ACE-1 unit is now being used as the primary attitude control electronics unit and is performing normally.

On June 10, 2012, Satmex 6 registered an unexpected reset of its ACE-1 unit.  The satellite successfully executed an auto-swap to the ACE-2 unit and the satellite did not lose earth-pointing capability. Further evaluation of data of ACE-1 confirmed its functionality.  ACE-2 remains on line as primary computer.  On June 11, 2013, an autonomous ACE swap occurred and ACE-1 was placed on line. Further evaluation of ACE-2 confirmed its functionality.

A helium gas leakage was detected on February 26, 2008. Further analysis confirmed an intermittent small leakage into the fuel tank since the satellite was launched. A series of re-pressurizations to the oxidizer and fuel tanks were performed on April 29, 2008, January 8, 2010 and April 22, 2010 to improve the mixture ratio and reduce the residuals of propellant at the end of life of the satellite. A propellant budget, dated November 1, 2010,

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was received from SSL reflecting a reduction of 1.2 years in the propellant margin. As a result of the implementation of a thermal heating strategy to improve the mixture ratio in Satmex 6, an updated remaining economic life evaluation dated August 29, 2012, was received from SSL reflecting and increment of 0.22 additional years of economic life.  In June 2005, due in part to both the broader telecommunications industry downturn and our post-privatization debt structure, we filed a petition for a concurso mercantil (the “2005 Concurso Mercantil”), which is a Mexican reorganization proceeding. In 2006, we entered into a court-approved comprehensive restructuring agreement (the “Concurso Agreement”) with the holders of a majority of our then outstanding debt and a pre-negotiated plan of reorganization (the “2006 Plan”) voluntarily filed under Chapter 11 of the Bankruptcy Code. We successfully concluded our 2006 reorganization and emerged from our U.S. bankruptcy case on November 30, 2006. In connection with our 2006 Plan, we granted Loral Skynet a Mexican usufructo giving them the right to use two Ku-band and two C-band transponders on Satmex 6 through the end of Satmex 6’s remaining economic life. Due to the merger of Telesat and Loral on October 31, 2007, Telesat is now the beneficiary of this right.

Satmex 5

Satmex 5 was launched in December 1998 and occupies the 114.9°W.L. orbital location in inclined orbit. Satmex 5 was manufactured by Boeing and has a total of forty-eight 36 MHz transponder-equivalents, including 24 C-band and 24 Ku-band transponders.  Satmex 5 began inclined orbit operations on May 8, 2013, and has a three-sigma worst case remaining propellant life of 7.65 years as of December 31, 2013.

On September 18, 2007, in connection with our 2006 Plan, we granted Loral Skynet a Mexican usufructo that gives them the right to use three Ku-band transponders on Satmex 5 until the end of Satmex 5’s remaining life. Since the merger of Telesat and Loral on October 31, 2007, Telesat has become the beneficiary of the usufructo rights granted to Loral Skynet. The usufructo does not continue with respect to Satmex 8 since it replaced Satmex 5, because the usufructo rights granted to Loral Skynet specifically covered the Satmex 5 transponders.

On October 13, 2004, Satmex 5 suffered a pointing anomaly, due to an automatic switching from the main on-board computer to the back-up computer, which caused a temporary interruption in some of the satellite’s services. Services were restored on the same day. On February 23, 2005, the main on-board computer was switched back online and since then the main on-board computer has been operating normally.

On October 29, 2007, Satmex 5 suffered a sudden outage of channels 18K, 20K, 22K, and 24K due to the failure of their corresponding Ku-band receiver. A spare receiver was used to reestablish service on these channels. As a result, the redundancy in the Ku-band receivers has decreased from 6 for 4 receivers to 5 for 4 receivers.

Our Satmex 5 satellite was launched with a primary and a secondary XIPS, each designed to perform station-keeping activities that maintain the satellite’s position in orbit during its design life. Satmex 5 is also equipped with a redundant, independent chemical propulsion system that provides station-keeping operations to maintain its position in orbit.  The Primary XIPS system was used beginning in May 2005 due to the failure of the secondary XIPS. Due to thermal restrictions some biprop inclination maneuvers were executed to supplement the inclination correction. On January 27, 2010, the primary XIPS on Satmex 5 experienced an unexpected shutdown. In coordination with the manufacturer, a set of tests were applied to primary XIPS system and based on the test results, we concluded that the primary XIPS system was no longer available. On March 24, 2010, a process of Xenon gas expulsion was initiated to reduce the satellite weight. Satmex 5 is now using the independent chemical propulsion system.

In order to provide continuity of services following the end of the economic life of Satmex 5, we ordered the construction of the Satmex 8 satellite that has now replaced Satmex 5.  The construction of Satmex 8 was completed during the second half of 2012 and Satmex 8 was successfully launched on March 27, 2013, Baikonur, Kazakhstan time (March 26, 2013 GMT). After launch, the satellite successfully performed post-launch maneuvers and deployed its solar arrays on schedule and began firing its main thruster in order to start maneuvering into geosynchronous orbit. Satmex 8 is currently fully operational and substantially all of Satmex 5’s customers have been transferred to Satmex 8 in the second quarter of 2013.  Satmex 5 is continuing to operate in the orbital slot previously occupied by Solidaridad 2 in inclined orbit, which allows us to provide services while maintaining such orbital slot.

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Solidaridad 2

In November 2013, the useful life of Solidaridad 2 was terminated and the satellite was de-orbited on December 2013.  Solidaridad 2 had occupied orbital slot 114.9°W.L. in inclined orbit.  It primarily provided L-band service to the Mexican government for national security and social services.

As part of our strategy to provide our customers with additional capacity and improved capabilities and services, we entered into a contract with Boeing constructing a new satellite, Satmex 7, to occupy Solidaridad 2’s previous orbital location. See “Item 4. Information on the Company — Business — Future Satellites (Satmex 7 and Satmex 9).” Following the launch of Satmex 8, we have transferred Satmex 5 to the orbital slot previously occupied by Solidaridad 2, operating in inclined orbit, until the end of Satmex 5’s remaining life in order to avoid suspension of the use of such orbital slot under ITU Radio Regulations.

Satmex 8

On April 1, 2010, we initiated a program for the design and construction of a new satellite, named Satmex 8, by executing the Satmex 8 ATP with Space Systems/Loral, LLC (f/k/a Space Systems/Loral, Inc.) (“SSL”). Construction of Satmex 8 was completed during the second half of 2012 and launch was completed in March 2013.  Satmex 8 is a 64 C- and Ku-band transponder satellite which is replacing Satmex 5. The Satmex 8 program cost was $359.7 million, including construction, launch, insurance and capitalized interest).

The design life of Satmex 8 is 15 years. The satellite is based on the SSL LS-1300 platform, a space-proven platform for a wide range of satellite services and an industry leader in power, performance and reliability. The 1300 series was first introduced in the mid-1980s and has been in constant evolutionary development to deliver increasingly higher power, greater flexibility and longer mission life. The LS-1300 platform has been used in over 60 satellites currently in orbit or under construction. Satmex 8 has been designed to provide comparable power levels and coverage over the Americas to those of our existing satellites, Satmex 6 and Satmex 5.

Satmex 8 was successfully launched on March 27, 2013, Baikonur, Kazakhstan time (March 26, 2013 GMT). After launch, the satellite successfully performed post-launch maneuvers and deployed its solar arrays on schedule and began firing its main thruster in order to start maneuvering into geosynchronous orbit. Satmex 8 is currently fully operational and substantially all of Satmex 5’s customers have been transferred to Satmex 8 in the second quarter of 2013.

Future Satellites (Satmex 7 and Satmex 9)

As part of our strategy to further expand our capacity to capitalize on growing demand we initiated a program for the design and construction of a new satellite, to be named Satmex 7. Satmex 7 is intended to occupy the orbital slot of Solidaridad 2 and offer commercial C- and Ku-band services.

The Satmex 7 and Satmex 9 Programs

On March 13, 2012, we entered into a commercial satellite delivery contract with Boeing, for the design, construction and delivery of Satmex 7, and the right to purchase an additional Boeing 702 SP satellite, at the time to be generically named F2 (Satmex 7). Satmex 7 is a new generation Boeing 702 SP satellite that will occupy the 114.9° W.L. orbital slot. Satmex 7 presents attractive opportunities for C-band and Ku-band applications including data applications, enterprise data, cellular backhaul and commercial mobility.

On February 3, 2012, we entered into the Launch Services Agreement with SpaceX for the launch of a dual-satellite payload. The Satmex 7 construction program provides for a 34-month construction schedule, with a scheduled launch period between December 2014 and February 2015, and with operations expected to commence in October 2015. The design, construction, launch and insurance costs of Satmex 7 are expected to be approximately $165.0 million. We expect to finance Satmex 7 through a combination of financing provided by our parent Eutelsat through equity issuances and cash flow from operations.

On August 15, 2013, we entered into a CATP with Boeing, for the design, construction and delivery of Satmex 9, generically named F4. Satmex 9 is also a new generation Boeing 702 SP satellite, and is intended to

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occupy the 117.0° W.L. orbital slot. Satmex 9 presents attractive opportunities for Ku-Extended band applications including data applications, enterprise data, cellular backhaul and commercial mobility. Satmex 9 will have a WAAS Hosted Payload. In connection with work related to the addition of a hosted payload to Satmex 9, a subcontract between Raytheon Company Integrated Defense Systems (Raytheon) and Satmex was executed on August 23, 2013. A further subcontract agreement was signed on December 12, 2013, which superseded the original letter subcontract signed in August. The GEO Satellite Payload for the WAAS will work with C-Extended Band and L-Band.

New Satellite Program Agreements

Satmex entered into the Launch Services Agreement for the launch of a dual-satellite payload consisting of Satmex 7 and another similar-model satellite to be owned by another satellite operator, Asia Broadcast Satellite Holdings Ltd (“ABS”). The Launch Services Agreement is one among other agreements described below involving the purchase of four C- and Ku-band satellites to be developed and manufactured by Boeing under a joint procurement program with Satmex and ABS (the “Program”). On March 13, 2012, Satmex and ABS entered into a master procurement agreement with Boeing (the “Master Procurement Agreement”), which establishes the framework for the joint administration by Satmex and ABS of the Program.

In connection with the Program, in addition to entering into the Satmex Procurement Agreement with Boeing, Satmex also entered into a bilateral agreement with ABS on March 13, 2012 (the “Bilateral Agreement”), each as described below. The Master Procurement Agreement, the Launch Services Agreement, the Satmex Procurement Agreement and the Bilateral Agreement are collectively referred to as the “New Satellite Program Agreements.”

Master Procurement Agreement

Under the Master Procurement Agreement, Satmex committed to purchase one of the initial four satellites, designated Satmex 7, and agreed to enter into the Satmex Procurement Agreement pursuant to which Boeing will develop and manufacture Satmex 7. ABS committed to purchase two of the initial four satellites and agreed to enter into a separate satellite procurement agreement with Boeing for the development and manufacture of those satellites. The allocation of the fourth initial satellite (“F4”) as between Satmex and ABS was subject to determination at a later date, and on August 15, 2013, Satmex announced that it had elected to acquire F4 pursuant to the Master Procurement Agreement, and named such satellite Satmex 9.  The total costs of Satmex 9 are expected to be similar to those of Satmex 7. Satmex and ABS had each agreed to be responsible for 50% for the initial payment for F4.  After Satmex elected to acquire F4, Satmex reimbursed ABS the corresponding 50% of such initial payment. Satmex and ABS are severally and not jointly liable to Boeing for the purchase of their respective satellite or satellites under their respective satellite procurement agreements. However, if Satmex or ABS defaults on its purchase obligation and, as a result, Boeing terminates the defaulting party’s satellite procurement agreement, Boeing is entitled to increase the price of the non-defaulting party’s satellite to preserve its expected economic benefit of the joint procurement of the satellites pursuant to the Program. If Boeing terminates the satellite procurement agreement with ABS as a result of a default by ABS, the purchase price of Satmex 7 will increase. Satmex will have a corresponding damages claim against ABS for the cost of the resulting increase.

Under the Master Procurement Agreement, Boeing also granted to Satmex and ABS the right to purchase up to four additional satellites. The rights expire between April 13, 2014 and October 13, 2015, if not previously exercised. If such rights are exercised, the party exercising the right may either enter into an additional contract or an amendment to its existing satellite procurement agreement, on terms and conditions identical in all material respects to the terms and conditions of its satellite procurement agreement. Delivery of an additional satellite subject to this right shall occur no later than 24 months after the configuration authorization to proceed, which sets forth the final payload configuration for such satellite.

Satmex Procurement Agreement

Under the Satmex Procurement Agreement, Boeing will manufacture and deliver Satmex 7 and provide satellite simulator software, ground control system and training. Boeing is to deliver Satmex 7 34 months following the execution of this agreement. Satmex has the right to terminate the agreement at any time for any reason for its convenience, subject to making a required termination payment and paying to ABS the amount of any increased

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costs incurred by ABS that are attributable to a non-dual launch of satellites.  As a result of the exercise of our option to purchase Satmex 9, Boeing will also manufacture and deliver Satmex 9 and provide satellite simulator software, satellite control software and training. Boeing is to deliver Satmex 9 26 months following the execution of the CATP on August 15, 2013.  If Satmex elects to purchase any of the optional satellites thereafter, the cost of each satellite is expected to be substantially similar as Satmex 7 or Satmex 9.

On December 4, 2012, Boeing and Satmex entered into Amendment No. 1 to the Satmex Procurement Agreement to make certain administrative changes to modify certain terms and conditions, including certain technical specifications over the design of the satellite and a modification of the price.

On August 15, 2013, Boeing and Satmex entered into Amendment No. 2 to the Satmex Procurement Agreement to include Satmex 9 under the SPA.

Launch Services Agreement

Under the Launch Services Agreement, Satmex has contracted with SpaceX for launch services for Satmex 7 on a Falcon 9 launch vehicle. The launch is for a dual-satellite payload, which will include Satmex 7 and is expected to include one of the ABS satellites under the Program. Satmex 7 has a launch window between December 2014 and February 2015. However, Satmex or SpaceX have the right to request the postponement or advancement of the launch for a limited period of time, without any penalty. Satmex also has the right to terminate the Launch Services Agreement for any reason for its convenience with notice to SpaceX and the payment of an agreed termination fee (which fee escalates over time).

If Satmex terminates the Launch Services Agreement without the consent of ABS, Satmex would additionally be responsible to ABS for any increased costs incurred by ABS that are attributable to a non-dual launch of satellites or the termination of the Launch Services Agreement. Satmex has agreed with ABS that it will not terminate the Launch Services Agreement without the consent of ABS.

Bilateral Agreement

Under the Bilateral Agreement by Satmex and ABS, the parties agreed to share launch services, allocate common Program costs and cross-indemnify each other for any actions or changes to the Program made by Satmex or ABS that adversely affect the costs, timing, delivery or launch of the other party’s satellite or satellites.

Satmex has agreed to include one of the ABS satellites in the Program on a dual-satellite payload SpaceX launch under the Launch Services Agreement. In consideration thereof, ABS will pay Satmex 50% of the total price for launch services under the Launch Services Agreement. Considering that ABS will include Satmex 9 in its launch services agreement, Satmex has agreed with ABS that it will pay ABS for 25% of the total price for launch services under the ABS-SpaceX launch agreement. Upon electing to purchase Satmex 9, Satmex was required to reimburse ABS for the other 25% for an aggregate of 50% of the total price of the launch services under the ABS-SpaceX launch agreement. The terms and conditions for the launch services under the ABS-SpaceX launch agreement are substantially similar to the terms and price of the launch services under the Launch Services Agreement.

Services

We provide satellite capacity for the following major applications:

Telecommunications Transmission Services

We provide satellite capacity to public telecommunications carriers. Satellite capacity is an efficient way to complement such carriers’ data and voice-over IP networks. In addition, satellite capacity allows certain telecommunications carriers to comply with their concession requirement to provide coverage over specific areas of a country, including remote and rural areas where extending coverage of terrestrial networks is cost-prohibitive. Satellite capacity also permits such carriers to deploy and expand mobile cellular backhaul services and satellite broadband connectivity.

We provide satellite capacity for domestic and international telecommunications transmission services to public networks (i.e., carrier networks), fixed and cellular telecommunications companies and private

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telecommunications networks (typically used for private corporate communications). We believe the demand for cellular data services and the increased demand for bandwidth related thereto will continue to increase given the expansion of third generation (3G) wireless technology and other technologies in Latin America. These networks belong to companies across the spectrum, including energy, finance, industrial, commercial operations, governmental, educational, transportation, tourism and media. Satellite transponders can be shared among several users so companies may lease channels, circuits or fractions of a transponder.

We provide satellite capacity to carriers that use the capacity as part of their communications network on a domestic and international basis. Our services include the provision of satellite capacity to carriers that provide public and private networks for data, voice and corporate video communications. Network users utilize satellites rather than ground-based transmission media because satellite systems provide cost savings for large, geographically-dispersed networks, greater independence from telephone companies, predictability of costs over a long period, flexibility in changing or adding remote locations to a network, integrated network management and control of all remote locations, increased network availability and lower transmission error rates.

We also provide satellite capacity to domestic and regional communications centers in Latin America. Many businesses and organizations currently use satellite communications networks for certain of their communications needs. Retail chains use satellite business communications networks for rapid credit card authorization and inventory control. Banks use satellite networks to connect automated teller machines (ATMs) to processing computers. News agencies use satellite networks to distribute information continuously to numerous locations.

Integrators

We offer transponder capacity to integrators that offer end-to-end satellite services for two types of communications networks: (a) international digital service networks; and (b) Very Small Aperture Terminal (VSAT) networks. International digital service networks are used by customers that have bi-directional high speed and relatively steady flows of information to and/or from all of the points in the network. International digital service networks, however, require dedicated, permanent and robust communications links to each site due to their large transmission requirements. VSAT networks, on the other hand, use very small antennas that often are placed on rooftops and which are utilized by customers that need to send short bursts of data over the network for relatively short intervals of time. VSAT networks use sophisticated signal protocols, such as Time Division Multiple Access technology, to maximize the use of available spectrum capacity.

Broadband Internet Service Providers

We provide satellite capacity to deliver high-speed satellite-based Internet connectivity, offering a variety of configurations, throughout most of the Americas. Our fleet provides an efficient means by which Internet Service Providers, service integrators, infrastructure enablers, universities, governments and other corporations may utilize Internet-related applications. The benefits of satellite transmission include faster network deployment and configuration, high data throughput, ubiquitous coverage, low cost and highly reliable service. We believe that these benefits, together with Latin America’s limited infrastructure, geographic dispersion and low population density indicate that demand for Internet connectivity via satellite, in both the consumer and corporate markets, will stimulate steady growth in the future.

Broadcasting and Video Distribution Services

Satellite capacity is utilized for broadcasting transmission services by various domestic and international networks for both point-to-point and point-to-multipoint distribution of television programs, video signals and other services (including distance learning, business television, special events and satellite news gathering). Customers include private and state-owned broadcasting networks, cable television programmers, content distributors and DTH operators.

Broadcasting customers use satellite capacity to transmit coverage of live scheduled special events, such as the World Cup, to programmers on an ad hoc basis. We also provide broadcasting transmission services to relay live news coverage, short duration video feeds and syndicated programming for broadcasters on a scheduled or ad hoc basis.

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Broadcasting customers also use satellite capacity for “backhaul” operations, such as transporting programming from a broadcaster’s foreign news bureau to a broadcast center for simultaneous or later transmission. Our service in this area is focused on the transportation of video content and syndicated programming for broadcasters on a scheduled basis.

Video distribution is a natural application for satellite capacity, as it is a point-to-multipoint application. While the use of satellite DTH television systems is common, television channels also use satellites to distribute their content to cable operators that downlink their signals. In recent years, digital compression technology has optimized the efficiency of satellite capacity by compressing signals to operate within a smaller bandwidth. However, other recent developments have offset this impact, including services such as HDTV that require more bandwidth than regular television.

Alterna’TV (Programming Distribution Services)

Alterna’TV International Corporation (“Alterna’TV International”), a Delaware corporation, is a wholly owned subsidiary of ours formed in the State of Delaware on May 21, 2009.

Since January 1, 2010, Alterna’TV International has been carrying out the operations of Alterna’TV, our programming distribution services business unit with exclusive distribution rights of selected Spanish-language programming to diversify our revenue sources. Alterna’TV brings together Latin American programmers that have not previously accessed U.S. distribution channels for their programming. Alterna’TV distributes this programming to broadcast and pay-television operators, such as DirecTV, Inc., Comcast Cable Communications, LLC (“Comcast”), CSC Holdings, Inc. and Time Warner Cable, Inc., which would like to offer a more comprehensive and authentic product to their growing Hispanic audiences. Alterna’TV’s largest customers are DirecTV and Comcast, which represented a combined 50% and 47% of their revenue for the years ended December 31, 2012 and 2013, respectively.

We have secured exclusive distribution rights in the U.S., Puerto Rico and Canada for Spanish-language programming with 10 carefully selected Latin American channels. Programming includes professional and amateur sports from Mexico and Puerto Rico, arts, Mexican movies and general programming from Argentina, Bolivia, Chile, the Dominican Republic, Ecuador, Paraguay, Uruguay and Venezuela. Because this programming originates in Latin America, we believe that it is desirable to Hispanics emigrating from the region and currently living in the U.S.

Alterna’TV also offers these Latin American programmers the sales and marketing activities necessary to promote their channels throughout the U.S. to broadcast, cable and satellite television companies as well as the technical platform necessary to distribute the signals across the U.S.

We transmit the programming via satellite from the regional programmer to our teleport partner, Encompass Digital Media, Inc., which provides signal origination services (including signal multiplexing, conditional access and signal quality monitoring) that meet industry standards. Broadcast, cable and satellite television operators in the U.S. (including DirecTV, Charter Communications Holding Company LLC, Comcast and others) can choose to receive any of these channels, which are then added to the operators’ Hispanic-oriented programming packages.

Through Alterna’TV, we provide programmers from across Latin America with a fully-integrated solution to distribute their programming in the U.S. allowing them to take advantage of the growing opportunities in the U.S. Hispanic market with both cable and satellite operators. Alterna’TV’s choice of channels is geared to satisfy the preference for regionally-developed, Spanish-language programming among Hispanic audiences living in the U.S. Broadcast, cable and satellite TV operators can easily incorporate this regional programming into their current programming offering.

Alterna’TV has diversified its revenue sources by selling advertising space on our partners’ channels. In addition, Alterna’TV is trying to expand its services to Latin America.

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Orbital Coordination

Our satellites are adjacent to each other working at 1.9° of separation. Although each of our orbital slots is currently occupied by one satellite, additional satellites can occupy the positions upon approval of the SCT. Other satellites adjacent to our satellites are also working at 1.9° of separation. As a result of the positioning of our satellites, international coordination is required and it is important that our clients’ infrastructures comply with international regulations in order to avoid adjacent satellite interference.

Most of Mexico’s geostationary orbital slots are directly adjacent to those of Canada. To avoid interference, in May 2000, the governments of Mexico and Canada entered into a coordination agreement specifying the operational parameters for Mexican and Canadian satellites in the C- and Ku- frequency bands in the geostationary orbit between the 107.3° W.L. and 118.7° W.L. orbital positions. The purpose of the coordination agreement was to establish a standard of reference for acceptable adjacent satellite frequency spectrum interference and to ensure the efficient operation of satellite networks licensed by both Mexico and Canada. As a result, satellites licensed by either nation have a framework within which they may serve their domestic markets and at the same time provide competitive services to the markets of the U.S. and Latin America without interference (assuming they obtain all required regulatory approvals and coordinate with, or otherwise avoid harmful interference from, operators from other nations). In August 2003, we and the Mexican government favorably concluded a new revision of the coordination agreement with the Canadian government and its operator Telesat to include the radio frequency characteristics of Satmex 6. As a result of the negotiations between the Mexican and Canadian governments in 2003, we exchanged our right to the 109.2° W.L. orbital slot for the 114.9° W.L. orbital slot. In February 2005, the U.S., acting through the U.S. Federal Communications Commission, or the FCC, approved the trilateral (MEX-CAN-USA) agreement modification, which is subject to notification by the ITU, in order to implement the exchange of orbital positions. As part of these coordination discussions, the Mexican and Canadian governments also agreed to a new coordination agreement to reduce potential satellite signal interference and ensure that existing and future satellite networks licensed by either nation have sufficient room to expand their respective services to the markets of the U.S. and Latin America. This new coordination agreement has been implemented in accordance with the rules of the ITU.

We have coordination agreements with SES Americom, Inc., EchoStar, Telesat Canada, PanAmSat Corporation, Loral Skynet, SES Satellites (Gibraltar), Ltd. and Intelsat for the operation of our orbital positions.

Landing Rights

We are typically required to obtain landing rights to provide satellite services in countries in which we operate. We have secured landing rights to provide satellite services to more than 45 nations and territories in the western hemisphere.

In order to operate in the U.S., we must be authorized by the FCC to access the U.S. market. Currently, we maintain such authorization with respect to Satmex 5, Satmex 6 and Satmex 8. On March 22, 2013 we submitted a request of authorization to the FCC to remove Solidaridad 2 from the Permitted Space Station List of the FCC.  Any U.S.-licensed earth station with an “ALSAT” designation is permitted to access any space stations on the Permitted Space Station List — including our satellites — in specified frequencies that we use to provide FSS and DTH in the C- and Ku-bands.

In December 2004, Industry Canada (IC) added Solidaridad 2 and Satmex 5 to its list of foreign satellites approved to provide FSS in Canada. Subsequently, in May 2010, Satmex 6 was added, and in February 2013, Satmex 8 and Satmex 5 were added at 116.8°W and 114.9° W, respectively, to the list of satellites approved to provide FSS in Canada. In 2005, the Canadian Radio-Television and Telecommunications Commission, or CRTC, granted us a license to provide basic international telecommunications services in Canada. In November 2010, pursuant to changes in the Canadian telecommunications law, we initiated the application to amend the Basic International Telecommunications Services, or BITS, license with Industry Canada. Such license was granted on March 21, 2011, and shall remain in force until June 30, 2020.

In order to obtain landing rights in Brazil, we were required to establish a subsidiary in Brazil. Consequently, on July 2002, we created a subsidiary, Satmex do Brasil Ltda., and we are currently in the process of updating our landing rights to deliver services for Satmex 5 and Satmex 6 in Brazil, as well as obtaining landing rights for Satmex 8.

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In February 2007, we registered a branch in Argentina in order to request landing rights for Satmex 5 and Satmex 6 pursuant to a reciprocity agreement. On July 22, 2008, the Argentine Comisión Nacional de Comunicaciones returned our file and provided a favorable opinion to the Secretaría de Comunicaciones. However, the landing rights have not yet been granted and may not be granted to us. Currently, we operate in Argentina through a commercial agreement in effect with Empresa Argentina de Soluciones Satelitales (“ArSat”).

Satellite Control Centers and Property Concession

Once a satellite is placed in its orbital location, specialized earth stations monitor its function, control and positioning through the end of its in-orbit lifetime. Under the terms of our Property Concession, we operate our satellites through two satellite control centers covering an aggregate of 34,052 square meters. The first, or “Primary Control Center,” is located in Iztapalapa, Mexico City, Mexico and, the second, or “Alternate Control Center,” is located in Hermosillo, Sonora, Mexico. These centers are designed to monitor user frequencies and to ensure that our satellites are operating within established parameters and are correctly positioned to generate the anticipated footprint. By law, control centers must be located within Mexico.

Each of our Primary and Alternate Control Centers is composed of buildings that house:

·telemetry, tracking and control systems;

·an equipment maintenance area;

·a communications signal monitoring area;

·a dynamic simulator, which allows for the simulation of spacecraft dynamics and control maneuvers; and

·antennas for satellite control and carrier monitoring.

The Primary and Alternate Control Centers each form part of a building complex that also houses equipment owned and used for the Mexican government’s teleport and mobile satellite service systems. In addition, in Iztapalapa we are the only occupant of the buildings that house the Primary Control Center.

We own the equipment within the Primary and Alternate Control Centers and the Mexican government owns the land and buildings that house each center. The Property Concession granted to us by the Mexican government allows us to use these land and buildings. The term of the Property Concession, which was granted on October 15, 1997, is the longer of 40 years and the term of the Orbital Concessions. The Property Concession may be renewed. Under the terms of the Property Concession, we pay to the government an annual rental fee of 7.5% of the value of the property on which our Primary and Alternate Control Centers are located. The value of the property was originally determined in the Property Concession and that amount has been increased annually, consistent with changes in the Índice Nacional de Precios al Consumidor (Mexican Consumer Price Index). Pursuant to the terms of our Property Concession, a new appraisal of the value of the property must be performed every five years. Satmex requested an updated appraisal from the SCT in October 2012, which was delivered in June 2013. The appraisal must be based on the value of the property at the time of our privatization, without taking into account any subsequent improvements to the property after such delivery. For 2010, 2011, 2012, and 2013, our rental expense under our Property Concession was $480,434, $507,466, $496,335, and $528,388, respectively.

On May 14, 2010, the SCT issued an amendment to the Property Concession, according to which we may, with the prior authorization from the SCT, lease or give under a commodatum (i.e., rent-free lease) agreement, segments of the Primary and Alternate Control Centers to third parties, as long as such segments are used for activities related to the subject matter of the Property Concession. This amendment will allow us, among other things, to provide control and satellite operation services to other operators, with the prior authorization of the SCT.

Properties

We do not own any real property. As part of the Property Concession, we were granted the right to use the buildings and areas in which our two satellite control centers are located together with certain other related

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properties. See “Item 4. Information on the Company — Business — Satellite Control Centers and Property Concession” above.

We lease office space under an irrevocable operating lease that will expire in September 30, 2018. This office is located at Avenida Paseo de la Reforma 222, Pisos 20 and 21, Colonia Juárez, Mexico City, Federal District of Mexico, C.P. 06600 and consists of approximately 15,800 square feet.

In November 2012, Alterna’TV entered into a lease agreement for office space to carry out its operations, commencing once certain renovations are completed and for a period of 5 years and 4 months. Currently, Alterna’TV also has a lease for office space that will expire in May 2016 and will be sublet, as permitted under the agreement, shortly.

Insurance

The Indenture governing the Notes will require that we and our restricted subsidiaries maintain in-orbit insurance and launch insurance, as applicable.

Satmex 5’s insurance policy expired on December 5, 2012. We have not renewed the in-orbit insurance for Satmex 5 in December of 2012 because the satellite has been fully depreciated. Additionally, considering the fact that its remaining geostationary life is less than one year, it doesn’t meet the standard requirement from insurers of at least 12 month margin of fuel remaining life.

The in-orbit insurance for Satmex 6 is for the amount of $129.9 million and provides coverage for a total loss of Satmex 6 or the constructive total loss of 75% or more of the satellite’s capacity. It is based on prevailing market terms and conditions. On December 5, 2013, we renewed our in-orbit insurance policy on Satmex 6 for a period of 3 months and 21 days, expiring on March 26, 2014, to have the same renewal date as the Satmex 8 insurance policy.  On such date, Satmex 6 was insured with coverage of $129.9  million and Satmex 8 was insured with coverage of $360.0 million, which is the current coverage as of the date of this annual report on Form 20-F.  This coverage will expire on June 30, 2014 and we intend to renew such coverage beginning on July 1, 2014.

Our policy for Satmex 6, as is customary in the industry, takes into account the remaining useful life of the satellite to determine the maximum amount payable to us in connection with a partial loss claim.

The insurance policy covering Satmex 6 includes additional customary exclusions, including exclusions for losses related to:

·military or similar actions;

·anti-satellite devices;

·governmental actions;

·nuclear reaction or radiation contamination;

·willful or intentional acts by us or our contractors;

·loss of income, indirect and consequential damages; and

·third-party claims against us.

We obtained an in-orbit insurance policy for Satmex 8 for $360.0 million. This insurance policy expired on March 26, 2014 and was renewed on such date for a period of one-year. On such date, we renewed the insurance policy covering the Satmex 8 satellite with coverage of $360.0 million, which is the current coverage as of the date of this annual report on Form 20-F. We may, 24 months after Satmex 8 is operational, reduce the amount of insurance to the depreciated carrying value of Satmex 8.

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The Primary and Alternate Control Centers are covered by insurance policies against risks to the buildings and their contents, including the antennas and equipment. To date, no significant claim has been made against the insurance policies covering the control centers or the insurance policies covering our current fleet of satellites.

Customers

We have a broad customer base that includes private and state-owned broadcasting networks, cable television programmers, DTH operators and public and private telecommunications networks belonging to customers in the financial, industrial and commercial, government, transportation and tourism, educational and media industries. A large portion of our revenues are derived from a small number of customers.

Our 10 largest customers represented approximately 48% and 43% of our total revenues for the years ended December, 2012 and 2013, respectively. In addition, approximately 48.5% of our FSS revenues were derived from our 10 principal customers.  Our largest customer is América Móvil Perú.  Revenue from América Móvil Perú represented 9.4% of our total revenue for each of the years 2012 and 2013.  Our second largest customers is HNS which represented 11.5% and 8.7% of our total revenue for the years ended December 31, 2012 and 2013, respectively. In order to connect end user satellite dishes to a satellite, DTH operators are required to point each of their satellite dishes at a particular satellite. We believe HNS has tens of thousands of customers that point their satellite dishes at our satellites. If HNS were to switch satellite providers, re-pointing each of those satellites could be logistically difficult and costly. Other significant customers include, Teléfonos de México, Hunter Communications, Comcast Cable Communications LLC and Telefónica del Perú.

Approximately 32%, 35%, and 33% of our total revenue for the years ended December 31, 2011, 2012, and 2013 respectively, was generated from billings to customers in Mexico. For the years ended December 31, 2011, 2012 and 2013, approximately 38%, 33%, and 30%, respectively, of our total revenue was generated from billings to customers in the U.S. The remainder of our total revenue was generated primarily from billings to customers in South America.

The following table shows the total revenue generated by our U.S., Mexican and other customers for the years ended December 31, 2011, 2012, and 2013:

	Year Ended December 31,
	2011		2012		2013
U.S.	$	45,833	$	44,723	$	40,189
Mexico	42,055		46,661		43,825
Other	33,107		41,789		48,842
Total	$	120,995	$	133,173	$	132,856

(In thousands of U.S. dollars)

For Alterna’TV, two customers (DirecTV and Comcast) represented 59%, 50%, and 47% of its revenue for the years ended December 31, 2011, 2012, and 2013, respectively.  Revenue from the Mexican government represented approximately 6%, 12% and 8% of our total revenues for the years ended December 31, 2011, 2012 and 2013, respectively.

Sales and Marketing

Sales Force

Our sales force is divided into market segments and geographic markets. The division of our sales force along these lines results in a sales force that is highly knowledgeable about, and experienced in, a particular segment and geographic market. The majority of our sales force is fluent in Spanish and English, enabling them to communicate effectively with both domestic and English-speaking foreign customers. Because our satellites have broad international footprints and landing rights, our sales force is able to market our satellites’ capabilities effectively to the major broadcasting and telecommunications companies in various countries.

Alterna’TV’s service has a direct sales force to sell our programming to pay-television distributors.

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Pricing

We believe that our existing prices are competitive with those of other satellite operators and may vary depending on, among other things, the term of a contract and/or the amount of capacity involved.

Under the Telecommunications Law, entities that are not deemed by Mexican law to be a dominant service provider are permitted to establish rates, terms and conditions for services in Mexico except that prior to rates becoming effective they must be filed with COFETEL. If an entity is deemed a dominant service provider, the Mexican government may specify maximum prices, minimum service quality and certain informational requirements. We are not deemed to be a dominant service provider and believe our space segment prices throughout the region are comparable to those offered by other satellite operators across the region. In addition, we believe that our existing Alterna’TV prices are comparable to those of other niche channels that target the U.S. Hispanic market.

Contracts

The terms of our customer contracts range from one year to the end of the useful life of the applicable satellite. In most cases, early termination of a contract has a related penalty payment associated with it.

All of our customers have service contracts denominated in U.S. dollars that require payment during each month for which satellite service is provided except that our Mexican government customers may pay the Mexican peso equivalent of the U.S. dollar service amount calculated on the basis of the spot exchange rate at the time of payment. Any late payment is generally subject to an interest charge. Nearly all of our customers are required to make monthly payments in advance. Our U.S. dollar pricing mitigates the effect of potential devaluation in our Latin American markets. Nonetheless, in addition to any foreign exchange controls in the region, a significant devaluation of the Mexican peso or other Latin American currencies could adversely affect our customers’ demand for our services or their ability to pay for them.

The term of our current Alterna’TV contracts with programmers range from five to 10 years. Most contracts have an automatic three year extension. The term of our current Alterna’TV contracts with pay-television distributors range from five to 10 years. These customers pay per-subscriber between 45 and 60 days after the end of the billing period.

Competition and Markets

Competition

We face competition from satellite operators in the Americas. As of December 31, 2013, there were more than 70 satellites offering services similar to ours to the Americas.  The U.S. commercial satellite market is currently dominated by two major competitors:  Intelsat and SES. Intelsat has more than 50 satellites, of which more than 25 totally or partially serve the Americas market. SES operates a fleet of 47 satellites, of which more than 20 totally or partially serve the Americas. The Mexican government has initiated the Mexsat satellite system project, which contemplates three satellites, one of which, Bicentenario (formerly Mexsat-3) with 12 active extended C- and Ku-band transponders, has already been launched. Bicentenario will provide communications services to Mexico and its surrounding waters from the 114.9° W.L. orbital slot. Other competitors include Telesat, Grupo Hispasat, S.A., Hispamar Satélites S.A., and Star One, S.A. (owned by Empresa Brasileira de Telecomunicações S.A., an affiliate of América Móvil). We believe that approximately 270 36 MHz transponder equivalents in the C- and Ku-bands, will be launched in the period between 2014 and 2016 in our market. In addition, these or other operators could begin using the newly-available spectrum in the Ka-band to provide service to the Americas. For example, ViaSat, Inc. and HNS have deployed Ka band services, while Hispasat and Star One have already announced plans to launch service using such frequencies.

We also face competition from land-based telecommunications services providers who can generally provide fiber optic services at a lower cost for point-to-point applications.

Our Alterna’TV business division also operate in highly competitive environments. Alterna’TV faces competition from large media companies, such as News Corporation, Discovery Communications, Viacom, NBC Universal and Univisión, and from niche channels, such as Sur Corporation, that target very specific Hispanic

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communities in the U.S. The main competition is for available space within the pay-television distributors’ Spanish-language tiers.

Although we face competition from various satellite operators, we believe clients prefer to diversify their risk by contracting with more than one satellite operator. We believe our hemispheric coverage and high-powered satellites allow us to compete with other satellite operators in the segments and regions in which we operate.

Employees

We have two indirectly wholly-owned subsidiaries that we use to employ the persons providing services to Satmex. Our subsidiary SMVS Administración, S de R.L. de C.V. (“SMVS Administración”),  employs our management and administrative personnel while our subsidiary SMVS Servicios Técnicos, S. de R.L. de C.V., (“SMVS Servicios Técnicos” and collectively with SMVS Administración, the “Employee Subsidiaries”) employs our technical personnel whom are members of the Sindicato de Trabajadores de la Industria de la Radiofusión, Televisión, Similares y Conexos de la República Mexicana (the “Television and Radio Labor Union”). As of December 31, 2013, the Employee Subsidiaries directly employed 172 employees. We pay our employees’ salaries and certain benefits through the Employee Subsidiaries.

We have two collective bargaining agreements with the Television and Radio Labor Union. Each collective bargaining agreement has an indefinite term. Under Mexican law, however, the collective bargaining agreements may be reviewed yearly by the parties for adjustments to salaries and once every two years for adjustments to other provisions of the agreement. These collective bargaining agreements currently provide for, among other things, union exclusivity; a maximum workweek of 40 hours; company medical and union life insurance; statutory retirement-related severance payments of 14 days’ pay for each year worked (in addition to general statutory severance benefits guaranteed by Mexican Labor Law); a statutory Christmas bonus equal to 34 days of pay; employer-funded social security contributions and a Sunday pay rate premium of 35%. The collective bargaining agreements also provide for benefits in addition to those statutory minimum benefits provided for under Mexican Labor Law, such as vacation premiums, transportation bonuses, education subsidies and medical expenses. However, we believe that all benefits are within industry standards.

In SMVS Administración we have a Long Term Cash Incentive Plan entered with selected employees and certain services providers which consists on granting to such selected employee and certain services providers on the date of grant an award consisting of a certain percentage of “Equity Profits” for each tranche determined based on a certain formula determined in accordance with the Long Term Cash Incentive Plan related to future sale proceeds in the event of a direct or indirect sale of Satmex. The tranches consist on the following (i) Tranche I Award: means the portion of the award subject to the Time-Vesting Schedule and the Tranche I minimum rate of return; (ii) Tranche II Award: means the portion of the award subject to the performance hurdles and the other vesting conditions established in the Long Term Cash Incentive Plan; (iii) Tranche III Award: means the portion of the award subject Performance Hurdles and the other vesting conditions established in the Long Term Cash Incentive Plan; and (iv) Tranche IV Award: means the portion of the award subject Performance Hurdles and the other vesting conditions established in the Long Term Cash Incentive Plan.

Regulation

Regulatory Framework within Mexico

Providers of satellite services to or within Mexico and the use of orbital slots licensed by the Mexican government are subject to the requirements of the Telecommunications Law. Under the Telecommunications Law, a provider of satellite services, such as us, must operate under a concession granted by the SCT, pursuant to an auction process. Such a concession may only be granted to a Mexican corporation and may not be transferred or assigned without the approval of the SCT. Pursuant to a recent amendment to the Mexican Constitution, foreign investors are permitted by law to hold up to 100% of the full-voting stock of such a corporation.

In addition, our operations are subject to the regulations of the Mexican (a) Ley General de Bienes Nacionales (the “General Law on National Assets”), which regulates all assets that fall within the public domain, as well as the terms of the Rescate contained in our Property Concession; (b)  Ley General del Equilibrio Ecológico y Protección al Ambiente (the “General Law on Ecology and Protection of the Environment”) together with other

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Mexican environmental laws; (c)  Ley Federal de Competencia Económica (the “Federal Economic Competition Law”); (d)  Ley de Vías Generales de Comunicación (the “Law of General Means of Communication”) and (e) other international treaties, laws, rules, regulations and decrees.

Under the Telecommunications Law, the SCT is, among other things, responsible for issuing concessions and permits related to telecommunications and for formulating policies in the telecommunications area and otherwise taking all other actions on behalf of the Mexican government in connection with telecommunications. COFETEL is the telecommunications regulator responsible for, among other things, most day-to-day regulation of satellite communications services in Mexico.

The rules promulgated pursuant to the Telecommunications Law require licensees of satellites intending to provide telecommunications services through one or more transmitting earth stations of their own to obtain a separate license to construct and operate a public telecommunications network. Where the satellite operator intends to provide telecommunication services to any person not holding a public telecommunications network concession or permit, it must provide such services only through an affiliate or subsidiary that holds a separate concession or permit.

Mexican laws currently allow competition in the provision of (a) Mexican FSS by any duly licensed Mexican satellite operators and (b) any foreign licensed satellite operators in the provision of international FSS, DTH FSS and broadcast satellite services. The Mexican government has liberalized its regulatory environment to allow non-Mexican satellite companies to provide satellite services in Mexico.

The Orbital and Property Concessions

The Mexican government has awarded us the following concessions:

·the Orbital Concessions providing the right to occupy each of three orbital slots (one concession per orbital slot) and the use of the associated C- and Ku-radio-frequency bands; and

·the Property Concession providing the right to use the buildings and areas where the control centers are located.

The Orbital Concessions currently include the right to use the 113.0°W.L., 114.9°W.L. and 116.8°W.L. orbital slots and associated C- and Ku-radio-frequency bands, and the right to use a Ka-band upon fulfillment of certain requirements before the SCT. At the time of our privatization, we were granted a concession to use the 109.2°W.L. orbital slot and as a result of the negotiations between the Mexican and Canadian governments in 2003 we exchanged our right to the 109.2° W.L. orbital slot for the 114.9°W.L. orbital slot. As part of the Orbital Concessions, we may establish rates and terms for our services, which must be registered in order to become effective. However, if upon a specific procedure and upon a non-appealable final resolution COFECO determines that we have substantial power in the relevant market, COFETEL may determine tariffs and specify conditions relating to service quality and information requirements. Additionally, we are prohibited from establishing cross-subsidies and engaging in discriminatory practices.

As part of the three Orbital Concessions, we are required by the SCT to allocate 362.88 MHz (156.11 MHz in C-band and 206.77 MHz in Ku-band) of capacity to the Mexican government, free of charge, for national security and certain social services. In the case of future satellites, the capacity reserved to the Mexican government will be defined by the SCT according to applicable law and regulations.

Solidaridad 2 had been operating in inclined orbit since March 1, 2008 in order to extend its life until it was de-orbited in December 2013. Prior to the de-orbiting of Solidaridad, we had been required to operate the L-band sub system owned by the Mexican government (through Telecomunicaciones de México, or Telecomm) until the end of its life. As of the date of this annual report on Form 20-F, the Mexican government has confirmed that no L-band payload in Satmex 7 will be required. In addition, the SCT did not require the L-band payload to be included in the concession extension granted until 2037.

Under the Orbital Concessions, we are required to, among other things:

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·carry out research and development in Mexico;

·maintain satellite control centers within Mexico and preferentially staff them with Mexican nationals; and

·maintain satellite services continuously and efficiently.

As security for the performance of our obligations under each Orbital Concession, we were required to post and must maintain a surety bond payable to the Federal Treasury of Mexico with respect to each Orbital Concession. The amount of this surety bond is adjusted each year to reflect inflation in Mexico.

In May 2011, the Mexican government extended the Orbital Concessions, effective as of the termination of the initial term of the existing Orbital Concessions, for a 20-year term until 2037 without payment to the Government and maintaining Satmex’s same conditions for continuing exclusive use of existing C- and Ku-bands by Satmex, but eliminating the right to request the future use of planned or extended C- and Ku-bands. As a result of the process we initiated before the SCT either to recover such right to request or to replace it with the right to use a Ka-band in certain conditions.  In November 2012 the SCT modified the orbital concessions granted to Satmex, including the expectation of the right to use and commercialize Ka band frequencies upon fulfillment of certain requirements stated in the concessions.

Except in limited circumstances, we must notify the SCT prior to issuing and selling any shares that represent 10% or more of our outstanding common stock and must identify the potential purchaser. Within 30 days of receipt of such notification, the SCT may object to the issuance or sale.

Under the Telecommunications Law, an Orbital Concession will terminate if:

·the term of any such Orbital Concession expires;

·we resign our rights under any such Orbital Concession;

·the SCT revokes any such Orbital Concession;

·the Mexican government, through the SCT, terminates any such Orbital Concession through a proceeding called “Rescate;” or

·we become subject to liquidation or bankruptcy (quiebra).

The SCT may revoke any of the Orbital Concessions upon the occurrence of certain events, including:

·unjustified or unauthorized interruption of our operations or the services that may be provided under such Orbital Concession, whether in whole or in part;

·taking any action or refraining from taking any action that affects the rights of other licensees or concessionaires;

·our failure to satisfy the terms or conditions set forth in the Orbital Concessions (including the failure to deliver the free satellite capacity reserved to the Mexican government);

·our unjustified failure to interconnect other concessionaires or licensees that have the right to provide telecommunications services;

·a change of our jurisdiction of incorporation to a jurisdiction outside of Mexico;

·our assignment, transfer or encumbrance of rights granted under the Orbital Concessions in contravention of the terms of applicable Mexican law;

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·our failure to exercise the rights conferred in the Orbital Concessions, within the following 180 days as of the date they were granted; or

·our failure to pay the Mexican Federal Government the consideration established in the Orbital Concessions.

In the event any of the Orbital Concessions is revoked by the SCT, no compensation will be paid to us. In addition, we would not be eligible to receive new telecommunications concessions or permits for a five-year period from the date the resolution of revocation becomes final and non-appealable.

The Mexican government also has the right to terminate any of the Orbital Concessions for reasons of public interest or national security pursuant to a “Rescate,” in which case we would be entitled to receive compensation pursuant to article 19 of the General Law on National Assets. As of the date of any such Rescate, the orbital slots and the assets used in connection with the Orbital Concessions would be subject to the ownership and operation of the Mexican government. In the event of a Rescate, we would be entitled to keep our assets, equipment and installations used in connection with the Orbital Concessions only to the extent such assets, equipment and installations are not useful to the Mexican government; however, the value of such assets, equipment and installations would not be included in the compensation.

Pursuant to the terms of the Orbital Concessions, upon the termination of such concessions, the orbital slots revert to the Mexican government. In addition, pursuant to the Telecommunications Law, the Mexican government has a preemptive right to purchase the facilities, equipment and other assets directly used by us to provide services under the Orbital Concessions. Alternatively, upon termination of the Orbital Concessions, the Mexican government may lease such assets for up to five years at a rate to be determined by expert appraisers appointed by the SCT and us, or by a third appraiser jointly appointed by these appraisers in the event of a discrepancy between their appraisals.

The Mexican government may also effect a Requisa of the Orbital Concessions in the event of (a) a natural disaster, (b) a war, (c) the substantial breach of the public peace and order or (d) the imminent danger to national security, internal peace or the Mexican economy. In the past, the Mexican government has used this power to ensure continued service during labor disputes. Mexican law requires that the Mexican government must pay compensation to us if it effects a Requisa, except in the case of a temporary seizure due to war. If we were to become subject to a Requisa, the Mexican government would indemnify us in an amount equal to our damages and losses reflecting their real value. In the event of a dispute regarding such damages and losses, the amount of losses would be determined by appraisers mutually appointed by us and the SCT and the amount of damages would be determined on the basis of the average net income generated by us in the year prior to the Requisa.

The Property Concession was granted on October 15, 1997 and includes two plots of land, buildings and fixtures built thereon, together with the right to use the property in connection with the operation of our satellites at the assigned orbital slots and the associated C- and Ku-radio frequency bands.

Under the Property Concession, we are required to:

·pay an annual fee in an amount equal to 7.5% of the assessed property value; and

·maintain the premises in good condition.

The value of the property was originally determined in the Property Concession and it has subsequently appreciated in increments consistent with changes in the Índice Nacional de Precios al Consumidor (the Mexican Consumer Price Index). Pursuant to current regulations, a new appraisal of the value of the property must be performed every five years. The latest appraisal was performed in June, 2013 by the Instituto de Administración y Avalúos de Bienes Nacionales (the Mexican Institute of Administration and National Property Appraisal) (“INDAABIN”). The appraisal must consider the value of the property as it was originally delivered to us, without taking into account any work performed on the property after such delivery. For the years ended December 31, 2011, 2012, and 2013, our rental expense under our Property Concession was $507,466, $496,335, and $528,388, respectively.

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The duration of the Property Concession is either 40 years or the length of the Orbital Concessions. The Property Concession duration may be extended at the discretion of the SCT.

Under our Property Concession, we are required to use our Primary and Alternate Control Centers only to operate our satellites. Each of the Primary and Alternate Control Centers forms part of a building complex that also houses equipment owned and used by the Mexican government’s teleport and mobile satellite services systems.

On May 14, 2010, the SCT issued an amendment to the Property Concession under which we may, with prior authorization from the SCT, lease or give under a commodatum (i.e., rent-free lease) agreement certain segments of the Primary and Alternate Control Centers to third parties as long as such segments are used for activities related to the subject matter of the Property Concession. This amendment will allow us, among other things, to provide control and satellite operation services to other operators, with prior authorization of the SCT.

The Property Concession will terminate if:

·the Property Concession term expires;

·we resign our rights to any of the Orbital Concessions or the Property Concession;

·its purpose or the object of the Property Concession disappears;

·the Property Concession is nullified or revoked;

·the Mexican government decrees a Rescate on the Property Concession for reasons of public interest;

·the Orbital Concessions are terminated;

·the property and the buildings on it are inadequately maintained or are used for a different purpose than the purpose for which the Property Concession was granted; or

·terminated pursuant to terms and conditions generally applicable to property concessions of this type under applicable Mexican law.

The Mexican government may revoke the Property Concession for various reasons, including, without limitation, the following:

·failure to use the Property Concession for the purpose for which it was granted;

·failure to comply with the terms of the Property Concession;

·to carry out any construction, without the previous approval of the Mexican Federal Telecommunications Commission, that could affect, directly or indirectly, the provision of satellite services; or

·pursuant to terms and conditions generally applicable to property concessions of this type under applicable Mexican law.

Discontinued Operations

Execution of an Equity Interests Purchase Agreement for the sale of Enlaces

Prior to the execution of the Enlaces Sale Agreement, we offered broadband satellite services through our 99.9%-owned subsidiary Enlaces. Enlaces offers private networks for voice, video and data, as well as other value-added satellite services to a number of leading retailers and financial institutions as well as other commercial, governmental, educational and nonprofit organizations, primarily throughout Mexico. In order to provide these services, on January 20, 2000, Enlaces was granted the Networks Concession to install and operate a public telecommunications network and the Value-Added Services Certificate. The Networks Concession is for a term of 30 years, subject to renewal pursuant to the Telecommunications Law. In 2012 Enlaces started the provision of

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services in Central America, beginning with Costa Rica and following with Guatemala, Honduras, El Salvador, and Nicaragua. These services are provided through a local supplier to cover all regulatory requirements and to provide installation and maintenance services.

On October 25, 2013, Satmex entered into the Enlaces Sale Agreement with Axesat with respect to the sale of our direct and indirect equity interests in our wholly-owned subsidiary Enlaces, through which we offered broadband satellite services.  The Enlaces transaction is expected to close by the second half of 2014, subject to government and regulatory approvals and other customary conditions included in the Enlaces Sale Agreement.  Following the execution of the Enlaces Sale Agreement, we include the Enlaces results of operations as discontinued operations and the assets and liabilities associated with Enlaces as available for sale in our consolidated financial statements.

U.S. Regulation and ITU Requirements

FCC Regulation of Satellite Services and Foreign Ownership of FCC Licenses

As of December 31, 2013, all of our satellites have been included on the U.S. Permitted Space Station List.

The U.S. satellite and telecommunications industries are highly regulated. The FCC regulates satellite operators in the U.S. as well as the provision of satellite services to, from and within the U.S. market by U.S. and non-U.S. licensed satellite systems.

Any satellite operator wishing to provide services to or within the U.S. via a non-U.S. licensed satellite generally must obtain the prior approval of the FCC. In considering applications for the provision of service-specific or blanket satellite landing rights within the U.S. market, the FCC will consider various factors such as the effect on competition in the U.S. market, spectrum availability, eligibility requirements (such as foreign ownership, legal, technical and financial qualifications), operating requirements and national security, law enforcement, foreign policy and trade concerns, as appropriate. Depending on the nature of the services to be offered in the U.S., foreign-licensed satellites may be subject to a variety of additional regulatory requirements.

If approved by the FCC, a non-U.S. licensed satellite system serving the U.S. will be subject to the same ongoing requirements that apply to U.S.-licensed satellites. For instance, the FCC rules prohibit an international satellite provider from entering into exclusionary arrangements with other countries for satellite capacity for a particular service. The FCC regulations also provide that in order for non-U.S. satellite operators to serve the U.S. market they must obtain the FCC authorization by:

·obtaining a satellite license by participating in a U.S. space station processing round or filing an application in accordance with the FCC’s “first-come, first-served” filing procedures;

·having a U.S. earth station operator apply for authority to communicate with the non-U.S. satellite; or

·otherwise petitioning the FCC to reserve spectrum rights for, or provide market access for, the foreign satellite (e.g., by listing the satellite on the “Permitted Space Station List” of non-U.S. licensed satellites that any U.S.-authorized earth station with an “ALSAT” designation may communicate with, subject to any condition the FCC may impose).

International Telecommunication Union Coordination and Registration Requirements

Our use of orbital slots and associated C- and Ku-radio frequency bands is subject to the frequency coordination and registration process of the ITU, an international treaty organization established under the sponsorship of the United Nations. The ITU is responsible for allocating the use by different countries of a limited number of orbital locations and radio frequency spectrum available for use by commercial communication satellites. The ITU’s Radio Regulations set forth the processes that governments must follow to establish their priority to use specific orbital locations, and the obligations and restrictions that govern such use. Countries establish their priority with respect to many orbital locations and associated radio frequencies through a “first in time, first in right” system, which establishes time limits for bringing orbital locations into use. Representation at the ITU for satellite system coordination and registration purposes is limited to national governmental agencies; private companies are not

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entitled to participate in their own right in coordination and registration activities. Consequently, we must rely on the government administration of Mexico to represent our interests there, including filing and coordinating our orbital locations within the ITU process, obtaining new orbital locations and revolving disputes.

All ITU filings are made through ITU member states, also referred to as “notifying administrations.” Therefore, companies must work within the constraints established by the notifying administration representing their interests. Factors such as national interests and foreign relations concerns often affect positions that a notifying administration is willing to take on behalf of commercial entities.

Nations are required by treaty to give notice of their proposed use of satellite orbital slots and frequencies to the ITU Radiocommunication Bureau (the “ITU-BR”). After such notification is received by the ITU-BR, other nations are afforded the opportunity to apprise the ITU-BR of any potential harmful interference with their existing or planned satellite systems. When potential harmful interference is noted, nations are obligated to negotiate in an effort to coordinate the proposed uses and resolve any interference concerns. The ITU, however, has no power to resolve disputes formally.

The process is ultimately subject to enforcement by national regulatory authorities acting pursuant to international treaty obligations. The ITU has limited power to enforce or police its rules; it relies on the goodwill and cooperation of the notifying administrations.

The ITU’s Radio Regulations also govern the process used by satellite operators to coordinate their operations with those of other satellites, so as to avoid harmful interference. Under current international practice, satellite systems are entitled to protection from harmful radio frequency interference from later-filed satellite systems and other transmitters if the operator’s authorizing state government registers the orbital location, frequency and use of the satellite system in the ITU’s Master International Frequency Register, or MIFR, in accordance with the ITU’s rules. Each member state is required to give notice of, coordinate and register its proposed use of radiofrequency assignments and associated orbital locations with the ITU-BR.

Once a member state has advised the ITU-BR that it desires to use a given frequency at a given orbital location, other member states notify that state and the ITU-BR of any use or intended use that would conflict with the original proposal. These nations are then obligated to negotiate with each other in an effort to coordinate the proposed uses and resolve interference concerns. If all outstanding issues are resolved, the member state governments so notify the ITU-BR and the frequency use is registered in the MIFR. Following this notification, the registered satellite networks are entitled under international law to interference protection from subsequent or nonconforming uses. A state is not entitled to invoke the protections in the ITU Radio Regulations against harmful interference if that state decided to operate a satellite at the relevant orbital location without completing the coordination process.

The SCT and COFETEL are responsible for fulfilling and coordinating requests by Mexican companies to coordinate orbital slots and frequency assignments with the ITU-BR and for resolving interference concerns. Use of our orbital slots remains subject to the continuing oversight of the SCT and to a variety of regulations generally applicable to all satellite and radio licensees, including the ITU Radio Regulations.

We have been a member of the Radio Communications and Development sectors of the ITU since 1997.

Status of Our Satellites

Satmex 5 was added to the MIFR on August 23, 2005, Satmex 6 on November 30, 2010, Satmex 8 on April 17, 2012, and Satmex 7 on May 15, 2012. Construction of the Satmex 7 satellite is expected to be completed in 2015. Satmex 9 is currently in the Coordination Request (CR) process.

Most of Mexico’s geostationary orbital slots are directly adjacent to those of Canada. To avoid interference, in May 2000, the governments of Mexico and Canada entered into a coordination agreement specifying the operational parameters for Mexican and Canadian satellites in the C- and Ku-frequency bands in the geostationary orbits between the 107.3° W.L. and 118.7° W.L. orbital positions. The purpose of the coordination agreement was to establish a standard of reference for acceptable adjacent satellite frequency spectrum interference and ensure the efficient operation of satellite networks licensed by both Mexico and Canada. As a result, satellites licensed by

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either nation have a framework within which they may serve their domestic markets and, at the same time, provide competitive services to the markets of Mexico, the U.S. and South and Central America without interference (assuming they obtain all required regulatory approvals, and coordinate with, or otherwise avoid harmful interference from, operators from other nations).

In August 2003, the Mexican government and Satmex favorably concluded coordination negotiations with the Canadian government and Telesat, with respect to the radio-frequency spectrum characteristics of Satmex 6. As part of these negotiations, the Mexican and Canadian governments agreed to a new coordination agreement to reduce potential satellite frequency harmful interference and ensure that existing and future satellite networks licensed by either nation have sufficient space to expand their respective services to the Mexican, U.S. and South and Central American markets. We have had discussions with Telesat concerning an amendment to this coordination agreement.

Treaties and International Accords

Reciprocity Agreement between the U.S. and Mexico

In April 1996, Mexico and the U.S. entered into an agreement concerning the provision of satellite services to users in Mexico and the U.S. (the “Reciprocity Agreement”). Among other things, the Reciprocity Agreement provides that Mexican and U.S. satellites are permitted to provide services to, from and within the U.S. and Mexico, subject to applicable laws and regulations, and neither Mexico nor the U.S. may require a satellite licensed by the other government to obtain an additional license in order to provide the satellite services described in the protocols to the agreement (as described below).

Direct-to-Home Protocol

In November 1996, Mexico and the U.S. signed a protocol (the “DTH Protocol”) to the Reciprocity Agreement for the provision of DTH satellite services. DTH satellite services are defined to include DTH fixed satellite service and broadcasting satellite service, which include one-way, encrypted video or video/audio broadcast services for direct reception by subscribers who pay a periodic fee, distribution of video/audio to cable television head-ends and multipoint distribution service (“MDS”) or wireless cable facilities. The U.S. and Mexico have each agreed to permit satellites licensed by the other government to provide DTH FSS and broadcasting satellite services to, from and within the other country’s territory. Entities seeking to transmit or receive DTH FSS or broadcasting satellite services signals via a satellite licensed by the other administration (e.g., through an earth station in the non-licensing jurisdiction) must still comply with the non-licensing jurisdiction’s other applicable laws (e.g., the earth station licensing process).

Fixed Satellite Services Protocol

In October 1997, Mexico and the U.S. signed another protocol (the “FSS Protocol”) to the Reciprocity Agreement for the provision of international and domestic FSS. The definition of FSS includes, but is not limited to, signals carrying video or video/audio distributed to cable television head-end and multipoint distribution service (restricted microwave television service) facilities and excludes the DTH FSS and broadcasting satellite services governed by the DTH Protocol. Subject to the terms of the FSS Protocol, each of the U.S. and Mexico has agreed to permit satellites licensed by the other to provide domestic and international FSS to, from and within the other country’s territory.

Reciprocity Agreement between Canada and Mexico

In April 1999, Mexico and Canada entered into an agreement similar to the Reciprocity Agreement between Mexico and the U.S. In January 2001, the two countries signed the FSS Protocol.

In May 2010, Industry Canada added Satmex 6, in the orbital slot at 113.0°W, to the list of foreign satellites approved to provide FSS in Canada , while Satmex 5, in the orbital slot at 114.9°W, and Satmex 8, in the orbital slot at 116.8°W, were both added to the list in February 2013.

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Brazilian Agreement

At present, no treaties exist between Mexico and Brazil related to ensuring open skies concerning satellite systems in both countries. In order for us to obtain landing rights in Brazil, we are required to establish a subsidiary in Brazil. Consequently, on June 17, 2002, we created a subsidiary named Satmex do Brasil Ltda. Satmex do Brasil was created in order to obtain landing rights in Brazil and commercialize the capacity of our satellites in Brazil.

Presently, we have not entered into any agreements for our services in Brazil due to our limited available capacity on Satmex 6. We believe the potential exists to obtain customers for our services in Brazil.

Argentine Agreement

In November 1997, the Mexican and Argentine governments entered into a bilateral agreement to afford reciprocal treatment for satellite service providers licensed under the laws of each government. The agreement provides that satellite service providers licensed in Mexico may transmit certain DTH FSS, broadcasting satellite services and other fixed satellite service signals to satellite customers in Argentina, and vice versa. The Mexican and Argentine governments each further agreed to cooperate in assuring compliance with each of the two countries’ applicable laws and regulations.

In February 2007, we registered a branch in Argentina in order to request landing rights for Satmex 5 and Satmex 6 satellites pursuant to the reciprocity agreement. On July 22 2008, the Comisión Nacional de Comunicaciones (“CNC”) returned the Satmex file and provided a favorable opinion to the Secretaría de Comunicaciones (“SECOM”). However, the landing rights have not yet been granted, and may not be granted to us. Currently, we operate in Argentina through a distribution agreement in effect with ArSat.

ITEM 4A. Unresolved Staff Comments

Not Applicable.

ITEM 5. Operating and Financial Review and Prospects

The information in this section should be read in conjunction with our consolidated financial statements and related notes beginning on page F-1 and the related information included elsewhere in this annual report on Form 20-F. Our financial statements are published in U.S. dollars and prepared in conformity with accounting principles generally accepted in the United States of America, which we refer to as “U.S. GAAP.” We maintain our accounting books and records in both Mexican pesos and U.S. dollars. Our functional currency is the U.S. dollar. Monetary assets and liabilities denominated in Mexican pesos are translated into U.S. dollars using current exchange rates. The exchange gain or loss is reflected in results of operations as a component of net income. Non- monetary assets and liabilities originally denominated in Mexican pesos are translated into U.S. dollars using the historical exchange rate at the date of the transaction. Common stock is translated at historical exchange rates in effect at the date of contribution or on the date of change to common stock. Certain amounts presented herein may not sum due to rounding.

Overview

Satmex is a significant provider of FSS in the Americas, with coverage of more than 90% of the population of the region. As one of only two privately-managed FSS providers based in Latin America, we have designed, procured, launched and operated three generations of satellites during a period of 27 years. Our current fleet is comprised of three satellites in highly attractive, adjacent orbital slots that enable our customers to effectively serve our entire coverage footprint utilizing a single satellite connection. One of our satellites (Satmex 5), was recently placed in inclined orbit, which allows us to continue to provide services while maintaining our orbital slot.  We believe that our attractive orbital locations, long operating history, extensive customer relationships and experienced management team have resulted in high utilization rates, strong customer retention, significant Adjusted EBITDA margins and substantial backlog.

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On July 31, 2013, Satmex announced that its then shareholders had signed a Securities Purchase Agreement under which Eutelsat would acquire 100% of the share capital of Satmex in an all-cash transaction for US$831 million and the assumption of the company’s outstanding net debt. On January 1, 2014, after having obtained all required government and regulatory approvals, 100% of the share capital of Satmex was successfully acquired and transferred to Eutelsat.  For more information on the acquisition of Satmex by Eutelsat, see our reports filed on Form 6-K on July 29, 2013 and January 6, 2014.

We hold orbital concessions to operate satellites on certain frequencies in the C- and Ku-band spectrum at three adjacent orbital slots. These orbital slots are located at 113.0° W, 114.9° W and 116.8°W. In December 2013, the useful life of Solidaridad 2 was terminated and the satellite was de-orbited. On May 8, 2013, Satmex 5 was placed in, and continues to be in, inclined orbit at 114.9° W.L, the orbital slot previously occupied by Solidaridad 2. In order to provide continuity of services following the end of the economic life of Satmex 5, we ordered the construction of the Satmex 8 satellite that has now replaced Satmex 5 in its previously occupied orbital slot at 116.8°W. The construction of Satmex 8 was completed during the second half of 2012 and Satmex 8 was successfully launched on March 27, 2013, Baikonur, Kazakhstan time (March 26, 2013 GMT). After launch, the satellite successfully performed post-launch maneuvers and deployed its solar arrays on schedule and began firing its main thruster in order to start maneuvering into geosynchronous orbit. Satmex 8 is currently fully operational and substantially all of Satmex 5’s customers have been transferred to Satmex 8 in the second quarter of 2013.

Satmex 7 is intended to occupy the orbital slot, previously occupied by Solidaridad 2 and currently occupied by Satmex 5, and offer commercial C- and Ku-band services. On March 13, 2012, we entered into the Satmex Procurement Agreement with Boeing, for the design, construction and delivery of the satellite, to be named Satmex 7 which will be based on Boeing’s 702 SP platform. The agreement provides for a 34-month construction schedule for Satmex 7. On February 3, 2012, we entered into the Launch Services Agreement with SpaceX to launch Satmex 7. The launch services agreement provides for a scheduled launch period for Satmex 7 between December 2014 and February 2015. For a more detailed discussion of the Satmex 7 program, including our current plans for the construction and launch of the satellite and related transactions related to Satmex 7, see “Item 4. Information on the Company — Business — The Satmex 7 and Satmex 9 Programs.” The Satmex Procurement Agreement also provides for an option to purchase an additional satellite based on Boeing’s 702 SP platform, at the time generically named F4. On August 15, 2013, Satmex announced that it had elected to acquire F4 pursuant to the Master Procurement Agreement, and named such satellite Satmex 9, the latest communications satellite in its fleet.  The launch of Satmex 9 is scheduled for the fourth quarter of 2015.

We previously identified our reportable segments as follows, based on the information used by our chief operating decision maker with respect to resource allocation and evaluation of performance:  satellite services; broadband satellite services; and programming distribution services. Due to the execution of the Enlaces Sale Agreement, our reportable segments will no longer include information related to Broadband satellite services.

Satmex’s satellites are in geosynchronous orbit and consequently are not attributable to any geographic location. Substantially all of Satmex’s assets are located in Mexico and the U.S.

Our revenue is generated from our two reportable segments, of which FSS is the most important, generating 90% of our consolidated revenues in 2013. Our FSS revenues are earned by providing data and voice-over IP network services using our satellite transponder capacity. Our customers generally obtain satellite capacity from us by placing an order under a master agreement, which agreement specifies, among other things, the transponder capacity to be provided by us, the terms of the service and whether the service will be pre-emptible. Revenues are recognized as capacity is provided under our service agreements. These service agreements are accounted for either as operating or sales-type leases. Revenues under operating leases are recognized on a straight-line basis over the term of the lease.

We also generate revenues from end-of-life leases for transponders. These revenues are usually collected in advance and are accounted for as sales-type leases with revenues and expenses recognized when the risks and rewards of the transponders are transferred to the customer in accordance with the applicable agreements. We generate revenues from the sale and installation of equipment. Revenues from sales of antennas and installation services are generally recognized in the period in which risk and reward are transferred to the customer, which generally coincides with the completion of installation and the customer accepting the equipment. Revenue from purchasers of Alterna’TV programming distribution services is recognized based on an estimated number of

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subscribers by applying a contractual rate reconciled to actual numbers. See “Item 5. Operating and Financial Review and Prospects — Revenue Recognition — ‘Alterna’TV’.”

Our expenses are related to the costs associated with providing these services. The most significant costs relate to the provision of satellite services, which include the costs related to the operation and control of our satellites, our control center facilities, our communications network and our engineering support personnel. Selling and administrative expenses are also a significant component of our cost and include salaries and benefits for employees and professional fees as well as travel costs, office rental expenses and provisions for uncollectible accounts. In general, most of our costs, such as labor are relatively stable and we believe that we can increase revenue with relatively smaller increases in such expenses. A third part of our costs have, through 2011, typically related to restructuring expenses incurred in connection with our efforts to modify our financial arrangements.

Our need to consummate the Recapitalization Transactions resulted from a combination of factors. First, the First Priority Old Notes matured in 2011 and the Second Priority Old Notes would have matured in 2013. The terms of these notes materially restricted our ability to borrow additional funds. Second, we accrued approximately $359.7 million in total costs to launch and insure our Satmex 8 satellite, which was successfully launched in 2013. We also require additional funds to construct, launch and insure our Satmex 7 and Satmex 9 satellites.  Satmex 7 is intended to replace Solidaridad 2. As a consequence of the Eutelsat Acquisition, we expect to meet those cash requirements through financing obtained from Eutelsat.

The sale of all of our shares of capital stock as part of the Recapitalization Transactions resulted in a change in control of Satmex, such that it was substantially wholly-owned by Holdsat México and Investment Holdings BV (together the “investors”) until the acquisition of Satmex by Eutelsat. Accordingly, Satmex has applied push-down accounting for the effects of its acquisition by the collaborative investors on May 26, 2011.

Discontinued Operations

On October 25, 2013, Satmex entered into the Enlaces Sale Agreement with Axesat with respect to the sale of our direct and indirect equity interests in our wholly-owned subsidiary Enlaces, through which we offered broadband satellite services.  The Enlaces transaction is expected to close by the second half of 2014, subject to government and regulatory approvals and other customary conditions included in the Enlaces Sale Agreement.  Following the execution of the Enlaces Sale Agreement, we include the Enlaces results of operations as discontinued operations and the assets and liabilities associated with Enlaces as available for sale in our consolidated financial statements. For these reasons, Enlaces’ operations are no longer included within each individual line item of our consolidated financial information, but rather are presented in the statement of financial position.

Results of Operations for the Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

The following discussions provide an analysis of our results of operations for the years ended December 31, 2013 and December 31, 2012.  The results for the year ended December 31, 2012 have been adjusted to remove the operations of Enlaces and to present such amounts within our discontinued operations.

Revenue

Revenue for 2013 was $132.9 million, compared to $133.2 million for 2012. The amount of revenue does not consider broadband satellite services previously provided by Enlaces for such period, due to the execution of the Enlaces Sale Agreement.  The net decrease was due to a decrease of $1.7 million in programming distribution services, which was partially offset by an increase of $1.4 million in fixed satellite services.

	Year ended December 31,
	2013		2012		Difference
Satellite services	$	120,064	$	118,669	$	1,395
Programming distribution services	12,792		14,504		(1,712		)
Total revenue	$	132,856	$	133,173	$	(317	)

(In thousands of U.S. dollars)

The net increase of $1.4 million in Satellite services was due to an increase of $9.5 million in new contracts, which was partially offset by a decrease of $2.0 million of net capacity contracted by existing customers, a

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decrease of $5.0 million in the amortization of the State Reserve due to changes in the fair value of the State Reserve given by push-down acquisition accounting and a net decrease of $1.1 million in expired contracts.

The decrease of $1.7 million in programming distribution services was due to a decrease of $2.2 million in revenues from existing customers (Comcast, Direct TV, Time Warner and CSC Holdings), which was partially offset by an increase of $0.5 million from Dish Networks customers.

Operating Costs and Expenses

Operating costs and expenses increased $60.6 million to $163.3 million in 2013 (123% of revenues), from $102.8 million for the same period in 2012 (77% of revenues). The table below sets forth the components of our operating expenses.

	Year ended December 31,
	2013		2012		Difference
Operating costs	$	19,190	$	20,261	$	(1,071	)
Selling and administrative expenses	84,890		18,383		66,507
Depreciation and amortization	59,253		64,130		(4,877		)
Total operating expenses	$	163,333	$	102,774	$	60,559

(In thousands of U.S. dollars)

Operating Costs

Operating costs for 2013 decreased $1.1 million to $19.2 million (14% of revenues) compared to $20.3 million in 2012 (15% of revenues). The table below sets forth the components of our operating costs

	Year ended December 31,
	2013		2012		Difference
Satellite services	$	11,279	$	11,821	$	(542	)
Programming distribution services	7,911		8,440		(529		)
Total operating cost	$	19,190	$	20,261	$	(1,071	)

(In thousands of U.S. dollars)

Satellite services costs decreased $0.5 million to $11.3 million in 2013, from costs of $11.8 million in 2012, mainly due to a write-off in an amount of $2.6 million related to the ATP-S7 payment made to Loral in 2012 for the construction of the related satellite, which was partially offset by an increase of $1.6 million in satellite insurance costs in 2013.  The contract with Loral expired and the Satmex 7 satellite was manufactured by Boeing. The advance payment to Loral had been written-off and included as operating expenses in 2012.

Programming distribution services costs decreased $0.5 million to $7.9 million in 2013, from costs of $8.4 million in 2012, mainly due to a decrease of costs of programming of $0.7 million, which was partially offset by an increase in the cost of transmission of $0.2 million.

Selling and Administrative Expenses

Selling and administrative expenses, which consist primarily of salaries and other employee compensation, professional fees, allowance for doubtful accounts and other expenses increased $66.5 million for a total of $84.9 million in 2013 (64 % of revenues), as compared to $18.4 million in 2012 (14% of revenues).

The increase in selling and administrative expenses can be attributable to the following:

·A significant increase due to the payment of bonuses during 2013, as well as the incurrence of transactions expenses as result of the sale of shares of Satmex to Eutelsat in an amount of $65.6 million, including professional fees and incentive bonuses;

·A decrease in professional fees of $1.1 million for matters other than the sale of shares of Satmex to Eutelsat;

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·An increase in personnel costs of $1.0 million, due to an increase in salaries, severance, wage taxes and other benefits, mainly as a consequence of certain personnel restructuring in Satmex during 2013 and new hires in Alterna;

·An increase of $0.4 million in allowance for doubtful accounts in Satmex, due to the application of our internal policy relative to the allowance for doubtful accounts related to contracts regarding services; and

·An increase of $0.6 million in other expenses which include rent, travel expenses, maintenance, commercial agent fees and communications.

Depreciation and Amortization

Depreciation and amortization expense decreased $4.9 million, for a total of $59.2 million in 2013 (45% of revenues) compared to $64.1 million in 2012 (48% of revenues). The table below sets forth the components of our depreciation and amortization expense:

	Year ended December 31,
	2013		2012		Difference
Contract backlog	$	22,467	$	30,835	$	(8,368	)
Satmex 8	15,989		—		15,989
Satmex 6	17,320		17,320		—
Satmex 5	—		12,256		(12,256		)
Concessions	1,580		1,580		—
Equipment for satellite, furniture and equipment and other	1,897		2,139		(242		)
Total depreciation and amortization	$	59,253	$	64,130	$	(4,877	)

(In thousands of U.S. dollars)

The decrease in amortization of Contract backlog in 2013 was due to the maturity dates of contracts. Contract backlog is depreciated based on the life of the respective contracts rather than on a straight-line method. Therefore, yearly variances on amortization of Contract backlog will depend on the number of contracts in existence each year.

Operating Income (loss)

Our operating loss was $30.5 million in 2013, compared to operating income of $30.4 million in 2012.

Interest Expense, net and other

Total interest cost, net and other for the year ended in 2013 was $30.5 million, compared to $4.1 million in 2012. The table below set forth the components of our interest expense, net and other:

	Year ended December 31,
	2013			2012			Difference
Existing Notes interest	$	35,962		$	35,001		$	961
Capitalized interest in Satmex 7	(7,468		)	(1,175		)	(6,293		)
Capitalized interest in Satmex 8	—			(32,654		)	32,654
Capitalized interest in Satmex 9	(1,889		)	—			(1,889		)
Amortization of deferred financing costs	3,199			3,171			28
Interest income	(194		)	(197		)	3
Net foreign exchange loss (gain)	(51		)	(111		)	60
Other commissions	924			89			835
Total interest expenses, net	$	30,483		$	4,124		$	26,359

The increase of $26.3million in total interest expenses, net, was mainly due to Satmex’s ability to capitalize $33.8 million of interest costs incurred in 2012 as a result of the construction of Satmex 8, together with a higher interest expense incurred on the existing Notes. While we were able to capitalize interest costs incurred in connection with the construction of the Satmex 7 and Satmex 9 satellites, the amounts were not as significant as the amounts capitalized in connection with the Satmex 8 satellite.

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Net Foreign Exchange Gain (Loss)

We recorded a foreign exchange gain of $0.05 million and of $0.1 million for the years ended 2013 and 2012, respectively. Foreign exchange losses and gains are calculated based on outstanding balances of Mexican peso-dominated assets and liabilities relative to the prevailing U.S. dollar/Mexican peso exchange rate.

Income Tax

In the past, Satmex has applied different income tax rates according to the estimated date of reversal of each of the temporary items due to rate differences for each year as a result of the Mexican laws enacted on December 31, 2009.  Additionally, through December 31, 2013, Satmex and its subsidiaries paid the higher of (i) the IETU, since 2008 and (ii) the income tax known as Impuesto sobre la Renta or ISR. In 2013, however, the Mexican government presented a proposed revenue package with significant tax law changes which became effective on January 1, 2014.  These changes included the elimination of the IETU and the confirmation of the corporate income tax rate for 2014 and thereafter at 30%.  As a result, Satmex determined its deferred income taxes at a rate of 30%. For the year ended in 2013, we recorded benefit income tax of $66.1 million on a loss before income taxes of $61.0 million, while for the same period in 2012 we recorded benefit income tax benefit of $14.5 million on an income before income taxes of $26.3 million. The increase in benefits during 2013 was mainly due to the elimination of the IETU. We believe the elimination of the IETU will allow us to recover certain income tax loss carry-forwards in the future.

Discontinued operations

Satmex recorded losses for discontinued operation for an amount of $7.1 million for the year 2013 compared to a gain of $0.6 million in 2012.  This was mainly due to a write-down of the net assets of Enlaces using a fair value of $5.8 million, as a result of recording a reduction on revenues mainly as a consequence of the termination of certain service contracts with Central American customers and with Globalstar.

Net Loss Attributable to Satélites Mexicanos, S.A. de C.V.

As a result of the aforementioned factors, the net loss attributable to Satmex for the year of 2013 was $2.0 million, as compared to net income of $41.2 million for the same period in 2012.

Discussion of Historical Results of Operations

The following discussion provides an analysis of our results of operations for the year ended December 31, 2012 compared to the period from May 26, 2011 through December 31, 2011, both comprising the operations of the Successor Registrant. Given that the 2012 period is not comparable to the 2011 period as a result of our push-down accounting on May 26, 2011, we supplement this discussion with an analysis of our results of operations for the year ended December 31, 2012 compared to the results of operations on a pro forma basis for the year ended December 31, 2011, which immediately follows the historical analysis below.  Both discussions have been adjusted to consider the discontinued operations of Enlaces.

Historical results

During the period from May 26 to December 31, 2011, our satellite services revenues were $62,758 while our programming distribution services revenues were $7,563, which represented a decrease as a result of lower net capacity contracted by existing customers and expired contracts.

However, trends in our satellite revenues began to increase in 2012, as a result of new contracts and additional capacity contracted by existing customers, further enhanced by an increase in the state revenue amortization as a result of the change in its fair value from push-down accounting applied on May 26, 2011. During 2012, revenues from our satellite services were $118,669.

We also experienced slightly upward trends in our programming distribution revenues as a result of renewed services and the addition of new customers during the year more than offsetting expired contracts. For the year ended December 31, 2012, revenues from programming distribution services were $14,504.

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During the period from May 26 to December 31, 2011, costs related to our satellite were $6,191 and costs related to our programming distribution services were $4,393.

During 2012, satellite services costs were trending downwards mainly due to a reduction in satellite insurance costs. However, this downward trend was offset in 2012 as a result of a write-off of the ATP-S7 payment made with Loral in prior years for the construction of Satmex 7, which expired during 2012. Satellite service costs amounted to $11,821 in 2012.

Costs related to programming distribution services revenues were trending upwards during 2012 due to increases costs of receivers, programming and fiber optic costs. Costs for programming distribution services were $8,440 for the year ended December 31, 2012.

Depreciation and amortization for the period from May 26 to December 31, 2011 was $45,824 and reflected our depreciation and amortization rates based on the fair values of assets and liabilities recognized as a result of push-down accounting. Depreciation and amortization was based on those same values during 2012. However, during 2012, Satmex 5 was fully depreciation through September 2012, resulting in proportionately slightly lower depreciation during 2012. This was partially offset by an increase in amortization of backlog directly as a result of the number of contracts in effect during the year. Depreciation and amortization was $64,130 during 2012.

Interest expenses during the period from May 26 to December 31, 2011 was $9,351 reflecting interest incurred on our New Notes, which significantly decreased our interest expense. In addition to a decreased contractual interest rate, we were able to capitalize our interest cost during that period, as well as during the full year ended December 31, 2012, to the construction costs of our Satmex 8 satellite. Interest expense for the full year ended December 31, 2012 was $4,122.

During 2012, we also recognized an income tax benefit, mainly stemming from the recognition of additional net operating losses during 2012, as a result of projections of future taxable income under the tax regimes to which we expect to be subject.

During the period from May 26 to December 31, 2011 the operations from our broadband satellite services component presented as a discontinued operation generate a loss of $381.. During 2012 the  operations of  this component generated an  income of $549.Broadband satellite service revenues were $7,433 in the period from May 26 to December 31,2011 and $10,945 for the year ended December 31, 2012 demonstrating a decrease in revenues as a result of expiring contracts in 2012.  Costs of broadband satellite services did not experience significant overall fluctuations during 2012, as such costs are directly associated with existing customers from prior years, and more importantly, the maintenance of the teleport and antennas, which did not fluctuate significantly during 2012. Broadband satellite services costs amounted to $1,388 from May 26 to December 31, 2011 and $3,151 during 2012.

Consolidated net loss during the period from May 26 to December 31, 2011 was $18,857 affected predominantly by reorganization expenses and interest on outstanding debt. Net income during the full year ended December 31, 2012 was $41.3 million, due to a decrease in our interest expense, the income tax benefit due to capitalize additional tax loss carryforwards and the increase in revenues, reduction in costs and expenses as described above.

Results of Operations for the Year Ended December 31, 2012 compared to the Pro Forma Results of Operations for the Year Ended December 31, 2011

The following discussion and analysis presents our results of operations for the year ended December 31, 2012 as compared to the pro forma results of operations for the year ended December 31, 2011.  We are presenting our discussion and analysis on a pro form basis to provide a more useful comparison of 2012 to 2011, which such years are currently not comparable, given the change in basis of accounting stemming from the push-down of acquisition accounting as a result of the Recapitalization Transactions. Our unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2011, which have been adjusted to consider

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the discontinued operations of Enlaces and includes a description of the related pro forma adjustments, are as follows:

Purchase Accounting Adjustments:

	Predecessor									Successor
	Period fromJanuary 1,through May 25, 2011			PurchaseAccountingAdjustments			Pro Forma forPeriod fromJanuary 1throughMay 25, 2011			Period fromMay 26, 2011throughDecember 31, 2011			Pro Formafor the YearEndedDecember 31, 2011
Revenues
Satellite services net	$	45,888		$	(410	)(a)	$	45,478		$	62,758		$	108,236
Programming distribution services	4,786			—			4,786			7,563			12,349
Total revenues	50,674			(410		)	50,264			70,321			120,585
Costs and expenses:
Cost of satellite services	4,401			—			4,401			6,191			10,592
Cost of programming distribution services	2,625			—			2,625			4,393			7,018
Selling and administrative expenses	5,483			—			5,483			11,471			16,954
Depreciation and amortization	16,682			(1,699		)(b)	14,983			45,991			60,974
Recapitalization transaction	28,766			(28,766		)(c)	—			—			—
Total costs and expenses	57,957			(30,465		)	27,492			68,046			95,538
Operating (loss) income	(7,283		)	30,055			22,772			2,275			25,047
Interest expense, net and other	(19,298		)	6,116		(e)	(13,182		)	(9,351		)	(22,533		)
(Loss) income before income tax	(26,581		)	36,171			9,590			(7,076		)	2,514
Income tax expense	2,610			387		(d)	2,997			11,400			14,397
Net (loss) income before discontinued operations	(29,191		)	35,784			6,593			(18,476		)	(11,883		)
Discontinued operations	431			(166		)	265			(381		)	(116		)
Net (loss) income after discontinued operations	$	(28,760	)	$	35,618		$	6,858		$	(18,857	)	$	(11,999	)
Less: Net income attributable to non-controlling interest	3						3			25			28
Less: Net (loss) income attributable to Satélites Mexicanos S.A de C.V.	$	(28,763	)	$	35,618		$	6,855		$	(18,882	)	$	(12,027	)

(In thousands of U.S. dollars)

(a)Adjustment to recognize the additional amortization of deferred revenue, based on its fair value as a result of the application of push-down accounting of the acquisition of Satmex. Deferred revenue corresponds to the obligation of Satmex to provide the Mexican federal government, at no charge, approximately 362.88 MHz of its available transponder capacity for the duration of the Concessions. Deferred revenue is amortized to fixed satellite service revenue based on the expected consumption pattern.

(b)Adjustment to recognize the additional depreciation and amortization of identified assets and liabilities at their new fair values, as a result of the application of push-down accounting. Depreciation is calculated using the straight-line method for satellites, related equipment and other owned assets over the estimated useful lives of the related assets (approximately 15 years for satellites, and between three and ten years for related equipment and other owned assets). Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements. The Orbital Concessions are amortized over 40 years using the straight-line method. The concession to operate a telecommunications public network is amortized over 23 years, which was the remaining useful life at the date of grant to Satmex. Other identifiable intangible assets with finite useful lives are amortized on a straight-line basis over the estimated useful lives of the assets, except for contract backlog and customer relationships, which are amortized based on the maturity of the related

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agreements, which varies between one to ten years.

Pro forma adjustments to this line item do not include amortization related to certain contracted backlog that will expire within twelve months following the acquisition date of Satmex. Upon acquisition of Satmex, intangible assets related to contracted backlog were identified and pushed-down to Satmex’s consolidated balance sheet as of May 26, 2011. This backlog consists of multiple contracts with varying maturity dates, several of which mature within twelve months from the acquisition date of Satmex. Satmex has considered the amortization of these specific contracts as nonrecurring charges resulting directly from its acquisition. Given that the amortization of these contracts will be included in Satmex’s actual results within twelve months or less following the acquisition date, it has excluded such amortization from pro forma adjustments. Amortization related to these contracts, totaling $4,405 has been included in Satmex’s unaudited condensed consolidated statement of operations for the period from May 26, 2011 to December 31, 2011 (Successor Registrant), included within this annual report on Form 20-F. Likewise, amortization related to these contracts, totaling $1,175, was included in the historical results of Satmex for the period from January 1, 2011 to May 25, 2011 (Predecessor Registrant).

(c)Adjustment to reverse the recapitalization transaction expenses as they are considered material non-recurring charges. Recapitalization transaction expenses include legal, financial and regulatory expenses and fees in connection with various attempts made by Satmex to carry out a restructuring reorganization or sale transaction and/or recapitalization of its outstanding indebtedness.

(d)Adjustment to recognize the deferred income tax effects of the adjustments in (a) and (b) above, determined based on temporary difference between the financial statement carrying amounts of the assets and liabilities and their respective income tax bases, measured using corresponding enacted tax rates.

(e)The Recapitalization Transactions also contemplated the offering and sale of $325 million of notes, the proceeds of which were used to pay the Company’s First Priority Old Notes; additionally, the Company’s Second Priority Old Notes were converted into common stock of the Successor. As these transactions were concurrent with the push-down accounting and part of the Recapitalization Transactions, they were contemplated as part of the pro forma information included herein. Accordingly, this adjustment represents the incurrence of interest on the $325 million notes and the elimination of the interest expense on the First Priority and Second Priority Old Notes as if the transactions had taken place on January 1, 2011.

Revenue

Revenue for 2012 was $133.2 million, compared to pro forma revenue $120.6 million for 2011. The net increase was due to an increase in fixed satellite services of $10.4 million and an increase of $2.2 million in programming distribution services.

	Year ended December 31,
	2012		2011 (Pro forma)		Difference
Satellite services	$	118,669	$	108,236	$	10,433
Programming distribution services	14,504		12,349		2,155
Total revenue	$	133,173	$	120,585	$	12,588
	(In thousands of U.S. dollars)

The net increase of $10.4 million in Satellite services was due to an increase of $1.8 million in new contracts, an increase of $4.1 million of net capacity contracted by existing customers and an increase of $6.9 million in the amortization of the State Reserve due to the change in its fair value given the push-down of acquisition accounting, net of a decrease of $2.4 million in expired contracts.

The increase of $2.2 million in programming distribution services was due to an increase of $2.4 million in revenues from existing customers (Verizon, Dish Network, AT&T, and Comcast), partially offset by a decrease of $0.2 million from Direct TV customers.

Operating Costs and Expenses

Operating costs and expenses increased $7.2 million to $102.8 million in 2012 (77% of revenues) from pro forma operating cost and expenses $95.5 million for the same period in 2011 (79% of revenues). The table below sets forth the components of our operating expenses.

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	Year ended December 31,
	2012		2011 (Pro forma)		Difference
Operating costs	$	20,261	$	17,610	$	2,651
Selling and administrative expenses	18,383		16,952		1,431
Depreciation and amortization	64,130		60,973		3,157
Total operating expenses	$	102,774	$	95,535	$	7,239
	(In thousands of U.S. dollars)

Operating Costs

Operating costs for 2012 increased $2.7 million to $20.3 million (15% of revenues) compared to pro forma operating costs $17.6 million in 2011 (15% of revenues). The table below sets forth the components of our operating costs:

	Year ended December 31,
	2012		2011 (Pro forma)		Difference
Satellite services	$	11,821	$	10,592	$	1,229
Programming distribution services	8,440		7,018		1,422
Total operating costs	$	20,261	$	17,610	$	2,651
	(In thousands of U.S. dollars)

Satellite services costs increased $1.2 million to $11.8 million in 2012, from pro forma costs of $10.6 million in 2011, mainly due to the write-off of the $2.6 million of ATP-S7 payment made to Loral in prior years for the construction of Satmex 7.  The ATP-S7 expired on December 31, 2012.  Additionally, the Company changed providers with respect to the construction of the related satellite, for which reason, the advanced payment was written-off and included as operating expenses in 2012.  This was partially offset by a reduction of $1.4 million in satellite insurance costs.

Programming distribution services costs increased $1.4 million to $8.4 million in 2012, from pro forma costs of $7.0 million in 2011, mainly due to an increase in the costs of receivers, programming, fiber optics and other costs.

Selling and Administrative Expenses

Selling and administrative expenses, which consist primarily of salaries and other employee compensation, professional fees, allowance for doubtful accounts and other expenses increased $1.4million, for a total of $18.4 million in 2012 (14% of revenues), as compared to pro forma costs of $17 million in 2011 (14% of revenues).

The increase in selling and administrative expenses can be attributable to the following:

·An increase in personnel costs and the 2012 performance bonus of $0.5 million, due to an increase of $0.6 million in salaries, severance, wage taxes and other benefits, due to the new executive hires in Alterna.

·An increase in legal and professional fees of $1.7 million due to normal course of business.

·A net decrease of $0.2 million in allowance for doubtful accounts, by the cancellation of the provision recognized in 2011, derived from the collection of the amount in December 2012 in Satmex.

·A net decrease of $0.7 million in other expenses which include commercial agent fees, travel expenses and lease payments.

Depreciation and Amortization

Depreciation and amortization expense increased $3.2million, for a total of $64.1 million in 2012 (48% of revenues) compared to pro forma depreciation and amortization of $61 million in 2011 (51% of revenues). The table below sets forth the components of our depreciation and amortization expense:

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	Year Ended December 31
	2012		2011 (Pro forma)		Difference
Contract backlog	$	30,835	$	24,358	$	6,477
Satmex 6	17,320		17,557		(237		)
Satmex 5	12,256		16,130		(3,874		)
Concessions	1,580		1,580		—
Equipment for satellite, furniture and equipment and other	2,139		1,348		791
Total depreciation and amortization	$	64,130	$	60,973	$	3,157
	(In thousands of U.S. dollars)

The increase in amortization of backlog in 2012 is due to the maturity dates of contracts.  Backlog is depreciated based on the life of the respective contracts rather than based on a straight-line method.  Accordingly, depending on the number of contracts in existence in each year, amortization of backlog will vary from year to year.  The increase in the current year represents a larger amount of contracts in 2012, as well as an increase in the fair value of the intangible, based on the effects of push-down accounting applied in May 2011.  The decrease in depreciation of Satmex 5 was due to the fact that the satellite was depreciated in full 12 months in 2011, compared to nine in 2011.

Operating Income (Loss)

Our operating income was $30.4 million in 2012, compared to pro forma operating income of $20.1 million in 2011.

Interest Expense

Total interest cost for the year ended in 2012 was $4.1 million, compared to pro forma interest cost of $22.5 million in 2011. The table below set forth the components of our interest expense:

	Year Ended December 31
	2012			2011 (Pro forma)			Difference
Existing Notes interest	$	35,001		$	30,875		$	4,126
Capitalized interest in Satmex 8	(32.654		)	(10,391		)	(22,263		)
Capitalized interest in Satmex 7	(1,175		)	—			(1,175		)
Amortization of deferred financing costs	3,171			1,806			1,365
Interest income	(197		)	(251		)	54
Net foreign loss (gain)	(111		)	423			(534		)
Other commissions	87			71			16
Total interest expense, net	$	4,122		$	22,533		$	(18,411	)
	(In thousands of U.S. dollars)

The decrease of $18.4 million was mainly due to the ability of Satmex to capitalize $33.8 million of interest costs incurred in 2012 as a result of the construction of Satmex 8 and Satmex 7 together with a lower interest rate incurred on the existing Notes as compared to the First Priority Old Notes and the Second Priority Old Notes.

Net Foreign Exchange Gain (Loss)

We recorded a foreign exchange gain for the year of 2012 of $0.1 million, and a pro forma foreign exchange loss of $.4 million in the same period of 2011. Foreign exchange gains and losses are calculated based on outstanding balances of Mexican peso-dominated assets and liabilities relative to the prevailing U.S. dollar/Mexican peso exchange rate.

Income Tax

Satmex applied different income tax rates according to the estimated date of reversal of each of the temporary items due to rate differences for each year as a result of the Mexican laws enacted on December 17, 2012. Satmex and its subsidiaries pay both (i) the business flat tax known as IETU, since 2008 and (ii) the income tax known as Impuesto sobre la Renta or ISR. Our future projections indicate that we will continue to pay both taxes during the life of the Concessions. Accordingly, deferred taxes are calculated based on a hybrid approach, which

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considers a mix of both tax regimens. For the year ended in 2012, we recorded deferred income tax benefit of $14.8 million on an income before income taxes of $26.5 million, while for the same pro forma period of 2011 we recorded a pro forma deferred income tax expense of $14.6 million on a pro forma income before income taxes of $2.6 million.  2012 yielded a negative “effective” income tax rate, principally arising from the fact that interest expense, depreciation and amortization are not deductible for IETU purposes, which results in taxable income for those entities that pay IETU.

Based on tax projections, Satmex determined that in certain fiscal years it will pay ISR, while in others, it will pay IETU. Accordingly, Satmex scheduled the reversal of the temporary differences for both ISR and IETU purposes, determined by year, and applied the respective rates to temporary differences.

Satmex recognized a benefit in 2012 mainly related to its ability to capitalize additional tax loss carry forwards in 2012 based on the hybrid method of calculating its income taxes, as a result of its future income tax projections.  In determining the appropriate valuation allowance, management considers the fact that the Company’s deferred taxes are prepared on the hybrid method, given that in certain years it projects payment of ISR while in others, it projects payment of IETU.  Accordingly, due to the use of this method, certain tax loss carry forwards and credits on IETU losses may be excluded from or included in the deferred tax computation during those years in which the Company expects to pay IETU or ISR, respectively; the related allowance on deferred tax assets is also excluded from or included in the deferred tax computation.

Discontinued Operations

As previously discussed, due to the execution of the Enlaces Sale Agreement, our results of operations related to Enlaces’ broadband services are presented as discontinued operations. On a pro-forma basis, we recorded a decrease in revenue in an amount of $1.7 million in 2012 compared to the same period in 2011, mainly due to the termination of contracts with three customers for an amount of $2.9 million, which was partially offset by a new project which consists on sale of antennas to Wal Mart Centro América for $1.2 million.

Costs of Enlaces’ broadband services increased by $1.1 million during 2012, compared to 2011 pro-forma, mainly due to the cost of antennas and maintenance of teleport and installations during the year 2012.

Net Income Attributable to Satmex

As a result of the aforementioned factors, the net income attributable to Satmex for the year of 2012 was $41.2 million, as compared to a pro forma loss of $12.0 million for the same period in 2011.

Inflation and Foreign Exchange Fluctuations

During the years ended December 31, 2013, 2012 and 2011, the annual rates of inflation in Mexico, as measured by changes in the National Consumer Price Index as provided by Banco de México, were 3.97%, 3.6 %, and 3.8%, respectively. A portion of our expenditures, including capital expenses and satellite insurance, and our customer contracts are not directly affected by Mexican inflation because they are denominated in U.S. dollars. However, high inflation rates would affect Mexican peso-denominated expenses, such as payroll and rent. To the extent that the Mexican peso’s devaluation against the U.S. dollar is less than the inflation rate in Mexico, we will be adversely affected by the effect of inflation in Mexico with respect to our Mexican peso-denominated expenses. We do not use foreign currency hedges.

The Mexican peso depreciated against the U.S. dollar by approximately 13.1% in 2011, appreciated against the U.S. dollar by approximately 6.9% in 2012, and depreciated against the U.S. dollar by approximately 0.5% in 2013. A substantial majority of our revenues are in U.S. dollars. As noted above, although many of our costs and expenses are also denominated in U.S. dollars, approximately 46% of our costs are in pesos. As a result, an appreciation of the peso against the U.S. dollar results in an increase in our expenses as reflected in dollars in our financial statements.

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Backlog

The stability of our revenue and cash flows is supported by our multi-year contracts with non-governmental customers, which are typically three to five years in duration and U.S. dollar-denominated. Our backlog represents our expected future revenues from existing contracts (without discounts for present value). The value of our backlog represents the full service charge for the duration of the contract and does not include any termination fees or assume that any contract will be renewed beyond its stated expiration date. At December 31, 2013, our contracted FSS revenue backlog was approximately $416.8  million, or a multiple of approximately three times our FSS revenue for the year ended December 31, 2013. Of the approximate $416.8 million of backlog, we anticipate realizing approximately $96.3 million during 2014 and the remaining $320.2  million during 2015 and thereafter.

Liquidity and Capital Resources

We generally rely on cash generated from our operations, capital increases and long-term debt to fund our working capital needs, capital expenditures, interest payments and debt repayments. As a consequence of our operating activities, cash flow from operations improved from 2010 through December 31, 2013. As of December 31, 2013, we had cash and cash equivalents of approximately $29.8 million. However, our business is very capital intensive. We may continue to face liquidity constraints as our capital expenditures increase in connection with the construction, launch and insurance of new satellites and the expansion and upgrade of our satellite network.

Substantially all of our capital expenditures are denominated in U.S. dollars. Our total capital expenditures, including capitalized interest for the continued development and construction of Satmex 8, Satmex 7 and Satmex 9 satellite programs were $103.0 million, $114.7 million, and $192.9 million for the years ended December 31, 2013, 2012, and 2011, respectively. Capital expenditures payments related to Satmex 8 were $19.3 million, $82.4 million and $192.9 million in 2013, 2012 and 2011, respectively. Capital expenditures for Satmex 7 were $65.6 million and $28.5 million in 2013 and 2012, respectively. Capital expenditures for Satmex 9 were $16.1 million and $3.8 million in 2013 and 2012, respectively.  The amounts incurred for all three satellites included $9.4 million and $33.8 million of capitalized interest costs in 2013 and 2012, respectively.  During the years ended December 31, 2013, 2012 and 2011, we invested $2.0 million, $1.5 million and $2.0 million, respectively, in electronic, data and processing equipment, infrastructure and vehicles. The table below sets forth our capital expenditures for the periods indicated:

	Year Ended December 31,
	2013		2012		2011
Acquisition of property, furniture and equipment	$	2.0	$	1.5	$	2.0
Construction of Satmex 7	65.6		28.5		—
Construction of Satmex 8	19.3		82.4		192.9
Satmex 9 satellite program	16.1		3.8		—
Total	$	103.0	$	116.2	$	194.9
	(In millions of U.S. dollars)

We anticipate funding any future capital requirements, including the redemption of the outstanding Notes and the construction, launch and insurance of Satmex 7 and Satmex 9, from financing provided by our parent Eutelsat through equity issuances and, to a lesser extent, cash flow from operations.  See “Item 3. Key Information —Risk Factors — We depend on Eutelsat’s financing to redeem the Notes and to finance the construction and launch of Satmex 7 and Satmex 9.”

We had $4.9 million in restricted cash at the end of 2012, which was released in 2013.

Sources and Uses of Cash

The following table sets forth our major sources and (uses) of cash for each period as set forth below:

				Year Ended December 31,
	Year Ended			Year Ended			May 26 –			January 1, -
	December 31,			December 31,			December 31,			May 25,
	2013Successor			2012Successor			2011Successor			2011 Predecessor
Cash flows of continued operations:
Net cash provided by (used in) operating activities	$	26.2		$	80.9		$	31.7		$	7.2
Net cash used in investing activities	(104.3		)	(121.1		)	(151.9		)	(42.9		)
Net cash provided by (used in) financing activities	40.0			34.4			(148.5		)	306.7
Cash flows of discontinued operations:
Net cash provided by (used in) operating activities	$	(1.4	)	$	1.5		$	—		$	—
Net cash used in investing activities	(0.2		)	(0.5		)	(0.2		)	(0.1		)
Net cash provided by (used in) financing activities	(2.4		)	—			—			—
	(In millions of U.S. dollars)

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Operating Activities

Operations for year 2013 generated $26.2 million in positive cash flow. This was driven by an income of continuing operations of $5.1 million, which includes certain significant non-cash expenses, mainly $59.3 million of depreciation and amortization. Changes in operating assets and liabilities also resulted in positive cash flows of $40.6 million.

Our operations for the year ended December 31, 2012 generated $80.9 million in positive cash flow. This is principally given that our net income is comprised of certain significant non-cash expenses, including $65.0 million of depreciation and amortization, net of a deferred IETU/ISR benefit of $14.8 million as a result of additional tax loss carry forwards recognized in 2012 as a result of tax projections that will permit the Company to recover the benefit of such losses in the future.

Notwithstanding our net loss, our operations for the period from January 1, 2011 to May 25, 2011 generated $7.3 million in positive cash flow while our operations for the period from May 26, 2011 to December 31, 2011 generated $31.7 million in positive cash flow. This is due to the fact that our net loss is comprised of certain significant non-cash expenses, principally $17.0 million and $46.5 million of depreciation and amortization for the periods from January 1, 2011 to May 25, 2011 and May 26, 2011 to December 31, 2011, respectively.

Investing Activities

Our net cash used in investing activities for the year ended December 31, 2013 primarily resulted from the payments associated with the construction program for satellites Satmex 7, Satmex 8 and Satmex 9, and from our capital investments in infrastructure, vehicles, and electronic, data and processing equipment.

Our net cash used in investing activities for the year ended December 31, 2012 primarily resulted from the payments associated with the construction program for satellites Satmex 7, Satmex 8 and F4, and our investments made in infrastructure, vehicles, and electronic, data and processing equipment.

Our net cash used in investing activities for the period from January 1, 2011 to May 25, 2011 and from May 26, 2011 to December 2011, primarily resulted from the payments associated with the construction of Satmex 8 and our investment in infrastructure, vehicles and electronic, data and processing equipment. Our net cash used in investing activities for the years ended 2010 and 2009 resulted from payment associated with the execution of an ATP for the future construction of Satmex 8 and our investment in infrastructure, vehicles and electronic, data and processing equipment.

Financing Activities

Our net cash provided by (used in) financing activities for the year ended December 31, 2013 was $44.1 million, which were primarily due to equity contributions by Eutelsat.

Our net cash provided by (used in) financing activities for the year ended December 31, 2012 was $34.5 million and reflects the issuance of senior secured notes in the amount of $35.0 million, net of payment of deferred financing costs of $1.2 million.

Our net cash provided by financing activities for the period from January 1, 2011 to May 25, 2011 consisted of this issuance of the Notes for $325 million net of the payment of debt issuance cost of $18.2 million. Our net cash used in financing activities for the period from May 26, 2011 to December 31, 2011 consisted principally of the repayment of the First Priority Old Notes of $238.2 million, partially offset by the proceeds received from the issuance of the equity of $90.0 million.

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We believe that the equity contributions to be made by Eutelsat, together with the funds from operations and short term financing, will be enough to meet our cash requirements for 2014, including for the redemption of the Notes and the completion of the construction of the Satmex 7 and Satmex 9 satellites.

Financing Agreements

New Notes

Background.  On May 5, 2011, Satmex Escrow, our then wholly-owned subsidiary which was merged into us on May 26, 2011, issued the New Notes in a private placement.  On May 26, 2011, we and certain of our subsidiaries entered into an Assumption Indenture under which we assumed all of the obligations of Satmex Escrow under the New Notes and the Indenture pursuant to which they were issued.  In connection with that issuance, Satmex Escrow entered into a registration rights agreement in which we agreed, among other things, to exchange the New Notes for new registered notes, identical in all material respects to the New Notes.  On October 28, 2011, we completed the exchange offer.

On January 31, 2014, Satmex caused The Depository Trust Company, as holder of record of the Notes, to be notified of Satmex’s Offer to Purchase.  The offer is being made as a result of the change of control that occurred in connection with the Eutelsat Acquisition in satisfaction of Satmex’s obligation under Section 4.15 of the indenture governing the notes, dated as of May 5, 2011 by and between Satmex and Wilmington Trust, National Association.  For more information on the Offer to Purchase, see our report filed on Form 6-K on February 4, 2014.  The Offer to Purchase expired on March 3, 2014 and the total amount of outstanding Notes repurchased was $44,000.

On April 11, 2014, Satmex notified its note holders of the Early Redemption. Eutelsat is expected to provide the funds required to redeem the Notes through an equity contribution to be made in Satmex using proceeds from the issuance made by Eutelsat in December, 2013, of 6-year senior unsecured bonds for a total of €930 million at a 2.625% coupon (for more information regarding the Early Redemption, please see “Recent Developments” and our report filed on Form 6-K on April 11, 2014). We expect that no New Notes will remain outstanding upon completion of the Early Redemption.

The principal characteristics of the New Notes are as follows:

·Maturity is on May 15, 2017.

·Fixed annual interest of 9.5%, payable semi-annually in arrears on May 15 and November 15 of each year.

·Fully and unconditionally guaranteed, jointly and severally, on a first priority senior secured basis by all of the existing U.S. subsidiaries and all future material subsidiaries of Satmex, subject to certain exceptions.

·Optional redemption at any time prior to May 15, 2014 pursuant to which Satmex may redeem up to 35% of the aggregate principal amount of the New Notes at a redemption price equal to 109.5% of the principal amount of the Notes to redeem, plus accrued and unpaid interest, with the net cash proceeds of certain equity offerings by Satmex.

·Optional redemption at any time prior to May 15, 2014 pursuant to which Satmex may redeem all or part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed plus an “make-whole” premium and accrued and unpaid interest and a special interest as provided therein.

·Optional redemption at any time prior to the second business day following the Escrow End Date pursuant to which Satmex may redeem all or part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest, if certain conditions related to the escrow are not met.

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·Optional redemption at any time on or after May 15, 2014 pursuant to which Satmex may redeem all or part of the Notes at a redemption price of 104.750% until May 14, 2015, decreasing to 102.375% until May 14, 2016 and 100% thereafter of the principal amount redeemed, plus, in each case, accrued and unpaid interest and a special interest as provided therein.

·In the event of a change of control, the holders of Notes have the right to require Satmex to repurchase the New Notes at 101% of their issue price, plus accrued and unpaid interest.

·If Satmex consummates an asset disposition and does not use the proceeds for the purposes specified in the indenture or receives insurance proceeds as a result of certain events, Satmex is required to use such proceeds to offer to repurchase a portion of the New Notes at 100% of their issue price plus accrued and unpaid interest.

Guarantees.  The New Notes are fully and unconditionally guaranteed, jointly and severally, on a first priority senior secured basis by all of our existing U.S. subsidiaries and all of our future material subsidiaries (excluding any such subsidiary formed after the issue date and solely to design, construct, launch and own one or more satellites, including Satmex 7).

Security.  The New Notes and the guarantees are secured, equally and ratably with all of our and the guarantors’ other first lien obligations, by a first priority lien on substantially all of the Guarantors’ assets, including the pledge of 100% of all outstanding equity interests of each Guarantor, subject to certain exceptions and permitted liens.  Upon the successful launch of Satmex 7 and its placement in the orbital slot previously occupied by Solidaridad 2 and currently occupied by Satmex 5, the lien on the concession for such orbital slot shall be released.

Ranking.  The New Notes are:

·our general obligations;

·effectively junior to all of our other indebtedness that is secured by liens on our other assets that do not constitute collateral to the extent of the value of those other assets;

·pari passu in right of payment with all of our existing and future senior indebtedness and effectively senior to any of our future senior unsecured obligations or junior lien obligations to the extent of the value of the collateral;

·structurally subordinated to any existing and future indebtedness and other liabilities of our non-Guarantor subsidiaries; and

·senior in right of payment to any of our future subordinated indebtedness.

Each guarantee is:

·a general obligation of that Guarantor;

·pari passu in right of payment with all of our existing and future senior indebtedness of the Guarantor and effectively senior to any of our future senior unsecured obligations or junior lien obligations to the extent of the value of the collateral; and

·senior in right of payment to any future subordinated indebtedness of that guarantee.

Optional redemption.  Prior to May 15, 2014, we may redeem up to 35% of the aggregate principal amount of the New Notes at 109.50% of the principal amount redeemed, plus accrued and unpaid interest, with the net cash proceeds of certain equity offerings.  Prior to May 15, 2014, we may also redeem some or all of the New Notes at a “make-whole” premium plus accrued and unpaid interest.  On or after May 15, 2014, we may redeem some or all of the New Notes for 104.750% until May 14, 2015, decreasing to 102.375% until May 14, 2016 and 100% thereafter of the principal amount redeemed, plus, in each case, accrued and unpaid interest.

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Change of control.  Upon occurrence of a change of control, we will be required to commence and consummate an offer to purchase all of the New Notes then outstanding at a purchase price equal to 101% of their principal amount, together with accrued and unpaid interest, if any, to the date of repurchase.  In connection with the Eutelsat Acquisition, Satmex has commenced an offer to purchase all of the outstanding New Notes. The Offer to Purchase expired on March 3, 2014 and the total amount of outstanding Notes repurchased was $44,000.

Certain covenants.  The Indenture limits our ability and the ability of our restricted subsidiaries to, among other things:

·incur or guarantee additional indebtedness or issue certain preferred equity;

·pay dividends on and make certain distributions or issue certain preferred equity;

·pay dividends on and make certain distributions in respect of capital stock or make other restricted payments;

·create or incur certain liens;

·make certain investments;

·sell certain assets;

·enter into certain transactions with affiliates;

·agree to certain restrictions on the ability of restricted subsidiaries to make payments to us; and

·merge, consolidate, sell all or otherwise dispose of all or substantially all of our assets.

The Indenture also requires that we and our restricted subsidiaries, among other things, keep in effect in-orbit insurance and launch insurance, as applicable in specified amounts.

The Indenture related to the debt obligations issued by Satmex establishes other affirmative and negative covenants, common for this type of transaction.

Additional Notes

On March 30, 2012, we issued $35 million in aggregate principal amount of 9.50% Senior Secured Notes due 2017 (the “Additional Notes”). The Additional Notes were issued as additional debt securities under our existing Indenture to qualified institutional buyers under Rule 144A of the Securities Act, and to persons outside of the U.S. in compliance with Regulation S of the Securities Act. The Additional Notes offered and the New Notes will be treated as a single class of debt securities under the indenture. The Additional Notes have substantially identical terms as the New Notes, except with respect to their date of issuance and issue price, and except that the Additional Notes will be subject to transfer restrictions until we register the Additional Notes.

In connection with that offering, Satmex entered into a registration rights agreement in which we agreed, among other things, to exchange the Additional Notes for new registered notes, identical in all material respects to the New Notes.

On January 31, 2014, Satmex commenced the Offer to Purchase.  See “—New Notes”. The Offer to Purchase expired on March 3, 2014 and the total amount of outstanding Notes repurchased was $44,000.

As part of the Early Redemption, the outstanding Additional Notes not repurchased by us pursuant to the Offer to Purchase will also be redeemed on May 15, 2014.

Contractual Obligations

The following table shows our aggregate contractual obligations as of December 31, 2013:

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	Payments Due By Period
	Total		Less than 1 Year		1-3 Years		4-5 Years		After 5 Years
Contractual Obligations:
Debt and related interest accrued as of December 31, 2013(1)	$	479,700	$	34,200	$	68,400	$	377,100	$	—
Construction, launch and insurance Satmex 7	79,580		79,580		—		—		—
Construction, launch and insurance Satmex 9	177,234		112,553		64,681		—		—
Operating leases(2)	3,254		719		1,359		1,176		—
Other long-term obligations(3)	5,140		514		1,028		1,028		2,570
Other commercial commitments(4)	3,372		2,353		734		285		—
Total contractual cash obligations	$	748,280	$	229,919	$	136,202	$	379,589	$	2,570

(in thousands of U.S. dollars)

(1)Interest of the New Notes and the Additional Notes is calculated using a fixed interest rate of 9.5% over the remaining life of the New Notes.

(2)Represents future minimum payments under non-cancelable operating leases with initial or remaining terms of one year or more.

(3)Represents payments to the Mexican government under the Property Concession.

(4)Represents future payments under services and maintenance contracts.

In addition to the contractual obligations discussed in the table above, other obligations may result from decisions taken under the Satmex 7 Program Agreements with Boeing and ABS, as discussed in Our Satellites — Future Satellites (Satmex 7 and Satmex 9).  As these are contingent upon the occurrence of certain events or actions taken by any of the parties to the agreements, we have not included any amounts within the table above.

Off-Balance Sheet Arrangements

We do not engage in any off-balance sheet arrangements that have or that we believe are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from these estimates. Accounting policies that are critical to understanding our financial statements and that require significant judgment by management include the estimated useful lives of our satellites, the valuation of long-lived assets, goodwill, other intangible assets, the valuation allowance related to income tax, revenue recognition and the allowance for doubtful accounts.

Fair Value of Net Assets

On May 26, 2011, as a result of the Recapitalization Transactions, Satmex applied push-down accounting and recognized the fair value of its net assets acquired by Holdsat México and Investment Holdings, B.V., as new shareholders of Satmex.

Accounting guidance establishes a fair value hierarchy based on the level of independent and objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The inputs used to measure the fair value of the satellites, concessions, intangible assets and State Reserves fell into one of the following three levels:

·Level 1 — applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities

·Level 2 — applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability

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·Level 3 — applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities

The fair value of our satellites was determined using the cost approach. The cost approach estimates fair value based on the amount that would currently be required to replace the service capacity of an asset, including market prices regarding replacement assets and comparable market transactions.

We determined the fair value of our orbital concessions and the public telecommunications network concession using the market approach and the income approach methods, respectively. Under the market approach, we utilized values for similar assets in similar markets in which we operate. Under the income approach, we utilized a discounted cash flow model in which we considered assumptions such as projections of future cash flows, discount rates and industry indexes.

Other intangible assets identified as part of the push-down of acquisition accounting consisted primarily of contract backlog and customer relationships. The fair values of these intangible assets were calculated using the income approach. We utilized a discounted cash flow model in which we considered assumptions such as projections of future cash flows, discount rates and industry indexes. The income approach, more commonly known as the discounted cash flow approach, estimates fair value based on the cash flows that an asset can be expected to generate over its useful life.

Design and Useful Lives of Satellites

Upon adoption of push-down accounting on May 26, 2011, our satellites were valued at fair value as discussed above. Estimated remaining useful lives were also adjusted as of such date.

Depreciation expense is calculated using the straight-line method over the estimated life of the satellites. The estimated life is based on the satellites’ design life, which may differ slightly from the satellites useful economic life.

The design lives of our in-orbit satellites were:

Satellite	Design Life
Satmex 8	15.0 years
Satmex 6	15.0 years
Satmex 5	15.0 years

The estimated remaining economic lives of our in-orbit satellites, as of December 31, 2013, were:

Satellite	Remaining Economic Life
Satmex 8	21.93 years
Satmex 6	9.39 years
Satmex 5	7.65 years(1)

(1)In December 2012, the remaining economic life was updated by Satmex based on the Propellant Gauging System study conducted by COMSAT Technical Services.  As result of the analyses, the remaining economic life of Satmex 5 was 0.76 years from December 31, 2012. On May 8, 2013 Satmex 5 began operations in inclined orbit at orbital slot 114.9° W.L, and, as of December 31, 2013, has a three-sigma worst case remaining propellant life of 7.65 years.

Satmex 6 and Satmex 8 are being depreciated over their estimated useful lives commencing on their in-orbit service dates of July 1, 2006 and November 30, 2013, respectively. On January 27, 2010 satellite Satmex 5 experienced the total failure of its XIPS and consequently its expected economic life was reduced. The net effect of the Satmex 5 depreciation adjustment in 2010 was $6.4 million. In November 2013, Satmex 5 was placed in inclined orbit at orbital slot 114.9° W.L. Satmex 5 was fully depreciated for accounting purposes in 2012. The satellite manufacturers provide the propellant mass and estimated lifetime when the satellites are handed over at the end of the orbit testing. To estimate the remaining fuel, the bookkeeping method is used, which consists of subtracting from the propellant mass the fuel used after each maneuver executed.

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Costs incurred in connection with the construction and successful deployment of our satellites and related equipment are capitalized. Such costs include direct contract costs, allocated indirect costs, launch costs, launch insurance, construction period interest and the estimated value of satellite incentive payments. All capitalized satellite costs are amortized over the estimated useful life of the related satellite. Losses from unsuccessful launches and in-orbit failures of our satellites, net of insurance proceeds, are recorded in the period in which they occur.

Valuation of Long-Lived Assets

The carrying value of the satellites, amortizable intangible assets and other long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the expected undiscounted future cash flows are less than the carrying value of the long-lived assets, an impairment charge is recorded based on such asset’s estimated fair value. Changes in estimates of future cash flows could result in a write-down of the asset in a future period. Estimated future cash flows from our satellites could be impacted by, among other things:

·changes in estimates of the useful life of the satellite;

·changes in estimates of our ability to operate the satellite at expected levels;

·changes in the manner in which the satellite is to be used; and

·the loss of one or several significant customer contracts on the satellite.

The significant assumptions we used in our undiscounted cash flow model with respect to our intangible concession assets consider the operation of three satellites. In order for that to occur we must successfully complete the construction, launch, operation and insurance of Satmex 7. Satmex 7 will occupy the orbital slot previously occupied by Solidaridad 2 and currently occupied by Satmex 5. Our analysis did not result in the impairment of any of our satellites or long-lived assets.

Income Tax

We recognize deferred income tax assets and liabilities for the future consequences of temporary differences between the financial statement carrying amounts of assets and liabilities and their respective income tax bases, measured using enacted rates. For statutory purposes, books and records are maintained in Mexican pesos, the Spanish language and Mexican Financial Reporting Standards. The IETU previously required our management to project the estimated taxable income applicable to future fiscal years in order to determine the appropriate tax rate to measure deferred tax assets and liabilities. As a result of the Mexican tax reform that took place in 2013, the IETU was eliminated. Deferred income tax assets are also recognized for the estimated future effects of tax loss carry forwards and asset tax credit carry forwards. A valuation allowance is applied to reduce deferred income tax assets to the amount of future net benefits that are more likely than not to be realized, which is computed based on projected tax results. Such financial forecasts were based on our management’s best estimate of the taxable income of Satmex and its subsidiaries. The forecasts and projections are sensitive to operational and financial changes that Satmex and its subsidiaries might experience in the future. If, as a result of unforeseen circumstances during a certain period, Satmex or any of its subsidiaries incur a tax different than forecasted and such circumstances are considered temporary or circumstantial, we shall continue to recognize the deferred tax based only on its original forecast. Based on our projections of anticipated tax liability, we estimate that the tax loss carry forwards will not be fully utilized before their expiration.

As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regards to future realization of deferred tax assets. The Company assesses the recoverability of its tax loss carryforwards and other deferred tax assets and based upon this analysis records a valuation allowance to the extent recoverability does not satisfy the “more likely than not” recognition criteria. The Company continues to maintain the valuation allowance until sufficient positive evidence exists to support full or partial reversal. As of December 31, 2013 and 2012, Satmex had a valuation allowance of an amount of $87.4 million and $50.1 million, respectively, against deferred tax assets and tax loss carryforwards due to the limited carryforward periods.  As a result of the elimination of the IETU in the Mexican tax reform that took place in 2013, deferred IETU was eliminated, which would now allow us to benefit from tax loss carryforwards and other

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deferred tax assets that were considered unrecoverable. Accordingly, deferred income taxes reflect the recognition of those future benefits from tax loss carryforwards and other assets.

Revenue Recognition

“Alterna’TV”

To calculate the monthly revenue attributable to purchasers of Alterna’TV programming distribution services, we estimate, on a monthly basis, the number of Alterna’TV subscribers per purchaser according to the contractual value of each subscriber. Approximately 45 to 60 days after the end of each month, we receive a definitive report from each purchaser and reconcile the definitive revenue with the estimated amount, issuing an invoice to such purchaser based on the definitive report. Variations between the estimated and actual revenue amounts are not material and we believe our estimates of revenues are appropriate.

Sales of Antennas and Installation Services

Public and private net signal and value-added services are recognized when rendered. The sale of antennas and installation services are recognized in the period in which risk and rewards are transferred to the customers, which generally coincides with the completion of the installation of the antennas and acceptance by the customer.

Allowance for Doubtful Accounts

We evaluate our allowance for doubtful accounts receivable on a regular basis. Such analysis involves a review of the payment and credit history of specific accounts. Where we determine an allowance is required, such allowance is created in the period for which we believe that collection of the account has become doubtful. After an allowance is applied, the reversal of such allowance only occurs in the period of payment or in the period in which a change in circumstance has occurred that provides strong evidence to support the collectability of the receivable.

Accounting Pronouncements

a.Recently adopted accounting pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11, Balance Sheet: Disclosures about Offsetting Assets and Liabilities. This ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards (“IFRS”). Satmex adopted this ASU in 2013, and the adoption of this guidance did not have an impact on the Company’s consolidated financial statements and related disclosure.

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This update amends ASU 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test.  The adoption of this guidance did not have an impact on the Company’s consolidated financial statements and related disclosure.

b.Recently issued accounting pending adoption

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The amendments in this Update supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASUs 2011-05 (issued in June 2011) and 2011-12 (issued in December 2011) for all public and private organizations.

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The amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The amended guidance is effective prospectively for reporting periods beginning after December 15, 2013. This ASU will be adopted in the 2014 fiscal year.

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Arising from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date. The amendments in this ASU require an entity to measure joint and several obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The amendments in this guidance are effective for fiscal years beginning after December 15, 2014.  The Company is currently evaluating the effects of adopting this ASU.

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830) Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.  This ASU offers guidance on a parent’s accounting for the cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. This new guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The Company will adopt this ASU prospectively in the 2015 fiscal year.

In April 2013, the FASB issued ASU No. 2013-7, Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting. The amendments of this ASU require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. In addition, this ASU provides guidance for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The Company is currently evaluating the effects of adopting this ASU.

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The guidance states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward to the extent that, among others, the tax law of the applicable jurisdiction allows for the use of such tax assets to settle any additional income taxes that would result from the disallowance of a tax position. For nonpublic entities, the amendments are effective for fiscal years beginning after December 15, 2014. Early adoption is permitted. The Company is currently evaluating the effects of adopting this ASU.

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ITEM 6. Directors, Senior Management and Employees

Directors of Satmex

Management of our business is vested in our board of directors. On July 31, 2013, Satmex announced that its then shareholders had signed a Securities Purchase Agreement under which Eutelsat would acquire 100% of the share capital of Satmex in an all-cash transaction for US$831 million and the assumption of the company’s outstanding net debt. On January 1, 2014, after having obtained all required government and regulatory approvals, 100% of the share capital of Satmex was successfully acquired and transferred to Eutelsat.  Our bylaws were amended and restated as of December 30, 2013. Our bylaws, effective from January 1, 2014, provide for a four member board of directors.

Directors are elected and ratified at each annual ordinary general meeting of shareholders and each services until a successor is elected and takes office.  The main duties of our board of directors include the approval of our business strategy.

The shares of the capital stock of Satmex may be freely subscribed or acquired by any individual or entity, including foreign investors. All shares confer the same rights and obligations to their holders (except for those that may be issued pursuant to the resolution of the General Extraordinary Shareholders’ Meeting). Satmex may not issue non-voting shares. The General Extraordinary Shareholders’ Meeting may resolve, among other things, on the issuance of series of shares and the rights and/or obligations that such shares will confer or require from its holders.

Since January 1, 2014, and in connection with Eutelsat acquisition, our board of directors has been chaired by Mr. Michael de Rosen and consists of four directors appointed by Eutelsat. The members and non-members of our board of directors are as follows:

Members of Satmex Board

Proprietary Member	Position	Age
Michael de Rosen	Member	63
Michel Azibert	Director	58
Antoine Castarède	Director	52
Patricio Northland	Director	58
Iris Sánchez Gutiérrez Gómez	Secretary non-member	32

Senior Management of Satmex

Name	Position	Age	Period of Service
Patricio E. Northland	Chief Executive Officer	58	Since April 2008
Dionisio Manuel Tun Molina	Vice President of Engineering and Satellite Operations	51	Since May 2006
Juan Crisostomo Antonio García-Gayou Facha	Chief Financial Officer	43	Since September 2012
Javier A. Recio	Vice President of Sales and Marketing	41	Since October 2011
José Ignacio González Núñez	Vice President Business Development	47	Since March 2014
Alejandro Camberos Chacón	Director Strategic Planning	44	Since July 2007
Verónica Calvillo Álvarez	Director Human Resources	36	Since June 2012

Patricio E. Northland. Mr. Northland was appointed Chief Executive Officer on April 14, 2008. Prior to joining Satmex, for five years Mr. Northland was the Chief Operating Officer and Managing Director of AgCert International, a company that produces and sells greenhouse gas emission credits. Mr. Northland was the founder, CEO, and Chairman of Firstcom Corporation for over eight years, a company that was merged with AT&T Latin America, Corp. He held the position of Chairman, President and Chief Executive Officer of AT&T Latin America, Corp. between 2000 and 2003. AT&T Latin America voluntary filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code in April 2003. Mr. Northland was responsible for founding the telecommunications firm Americatel Corporation/Northland Communications, as well as the Northland Capital Group, which provides expertise on strategic and operational matters to international clients. Mr. Northland has extensive experience in the telecommunications and satellite industries, having served as Vice President of PanAmSat from 1988 through 1991, a director of Intelsat from 1983 through 1987, and a Systems Engineer at Comsat from 1981 to 1983. He holds a B.A. degree in Electrical Engineering from the University of Chile, an M.S. degree in Science Communications from George Washington University, and an M.B.A. from the University of Chicago.

Dionisio Manuel Tun Molina. Mr. Tun has been our Vice President of Engineering and Satellite Operations since May 1, 2006. He is responsible for the operation of our satellites and for our control centers. Mr. Tun joined Satmex in June 1997 as Assistant Director of Satellite Control. Between 1997 and 2006, he held the

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positions of Director of Satellite Operations and Executive Director of Engineering and Satellite Operations. From 1984 to 1997, he held various positions at Telecomunicaciones de México (Telecomm), including Manager of Satellite Control, Orbital Dynamics Department Chief and Orbital Dynamics Analyst. Mr. Tun has a Ph.D. in Science, with a specialization in Physics and Master Degree in Finances. Mr. Tun has received various awards including the Justo Sierra Medal for his contribution to science in Mexico and the Lázaro Cárdenas Award for best average in the Bachelor’s Degree in Physics and Mathematics (Class of 1984). Mr. Tun has published many research articles in magazines of international circulation and was member of the National System of Researchers from 1988 through 1995. From 1983 to 1992 he was also professor at the Instituto Politécnico Nacional in Physics and Mathematics.

Juan Crisostomo Antonio García-Gayou Facha. Mr. García-Gayou was named Chief Financial Officer in September 2012. Prior to joining Satmex, Mr. García-Gayou served as Chief Financial Officer for ICA Infraestructura, which is the long term investments division at Empresas ICA, a major construction and engineering holding in Mexico. Mr. García-Gayou also served as Director of Finance at Thomson Reuters. Mr. García-Gayou holds a B.S. in Industrial Engineering from Universidad Nacional Autónoma de México, a B.S. in Economics from Instituto Tecnólogico Autónomo de México, and an M.B.A. from MIT Sloan School of Management.

Javier A. Recio. Mr. Recio joined Satmex as its Sales and Marketing Vice President. Mr. Recio has more than 18 years of experience in the Latin American telecommunications market and year-over-year portfolio of business development success with international and domestic experience in engineering, operations, sales management, project development and customer relations. Mr. Recio has developed his professional career with Americatel Corporation, PanAmSat Corporation, as well as with Intelsat Corporation (which acquired PanAmSat Corporation) and, since 2006, served as its Managing Sales Director for Latin America.

José Ignacio González Núñez. Mr. González Núñez is Vice President Business Development and International Regulation at Satmex since March 2014. He has twenty years of managerial experience in the telecommunications and space sectors, completed in international contexts filling from technical, commercial and business development positions. He joined Eutelsat in 1997 and was in charge of Business Development and Marketing as well as for sales in Spain and Latin America. Following the Eutelsat strategic investment in Hispasat, between 2001 and 2003, he was appointed Deputy CEO and Commercial and Marketing Director at Hispasat, where his main achievement was the expansion of Hispasat’s business towards the America with the implementation of the so-called Amazonas project. Since 2008, he has served as the Chief Risk Officer and Member of the Management Committee of the group. Prior to this position, he was the Regional Director for Spain and Latin America and Advisor to the CEO. He graduated in Telecommunications Engineering at the Universidad Politécnica de Madrid (Spain, 1990), and achieved a Master of Science with Honors in Aerospace Technology and Satellite Communications from the University College of London (UK, 1991). He also holds a Master of Business Administration from the IE Business School in Madrid (Spain, 1997) and in Marketing from INSEAD (France, 1999).

Alejandro Camberos Chacón. Mr. Camberos joined Satmex in December 1992 as Statistical Market Analyst. He is in charge of Strategic Planning and manages the offices of the CEO for Strategic Planning purposes. From 1996 to 1998, he participated in the task force charged with supervising the Satmex 5 construction and launch process. Mr. Camberos was a part of the team that developed, launched and operated our business unit Alterna’TV and developed a marketing plan by region and application, which is currently used by our sales force to address different markets. Mr. Camberos holds a bachelor’s degree in Physics and a PhD in Science, both from the UNAM.

Verónica Calvillo Álvarez. Ms. Calvillo joined Satmex in June 2012 as Human Resources Director. Prior to joining Satmex, she served as Human Resources Manager at Wal-Mart de México, S.A.B. de C.V.(WALMEX). She has more than 10 years of experience in various areas of Human Resources, such as personnel, payroll, organizational development, and compensation. Ms. Calvillo holds a B.S. in Finance and MSC in Project Management by the Universidad Tecnológica de México.

As of the date of this annual report on Form 20-F, we do not have a General Counsel.

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Audit and Compensation Committee

In connection with the restructuring of our governance subsequent to the Eutelsat Acquisition, we dissolved our Compensation and Audit Committees.

Compensation

Generally, the salary of our personnel, including senior management, consists of a base salary as well as a performance bonus paid annually to personnel active as of the date of payment or that has worked for Satmex at least six months of the corresponding year, and based on the fulfillment of certain objectives which are reviewed by their supervisors annually.

Our compensation arrangements with our management team, provide for a base salary, and a performance-based annual bonus, which is determined by our board of directors.

For the year ended December 31, 2013, the aggregate senior management compensation for services in all capacities, including performance bonuses and severance payments to executives, was approximately $3.2 million.

Our sales personnel’s performance bonuses, including that of our Vice President of Sales, are based on certain sales objectives and are reviewed and paid three times a year to personnel active as of the date of payment. As of December 31, 2013, we paid or accrued $0.5 million for the performance bonuses of our sales personnel.

During 2013, we paid members of our board of directors for their attendance at board of directors meetings an aggregate amount of $0.2 million.

ITEM 7. Major Shareholders and Related Party Transactions

Since January 1st, 2014, the capital stock of Satmex has been held as follows:

Shareholders	Minimum Fixed Capital Stock Class I	Variable Capital Stock Class II	Total	%
Holdsat México S.A.P.I de C.V.	50,000	6,580,000	6,630,000	4.846	%
Satmex International B.V.		123,240,990	123,240,990	90.09	%
Eutelsat SA		6,933,124	6,933,124	5.068	%
Subtotal	50,000	136,754,114
TOTAL		136,804,114		100	%

Related Party Transactions

Prior to the completion of the Recapitalization Transactions, the Mexican Government and Loral Skynet Corporation were shareholders of Satmex.  After the completion of the Recapitalization Transactions, these entities are no longer considered related parties.

Mexican Government

As part of the Orbital Concessions, we are required by the SCT to allocate 362.88 MHz (156.11 MHz in C-band and 206.77 MHz in Ku-band) of capacity to the Mexican government, free of charge, for national security and certain social services. In the case of future satellites, the capacity reserved for the Mexican government will be defined according to applicable law and regulations. Under the terms of the Property Concession, we pay to the government an annual rental fee of 7.5% of the value of the property on which our Primary and Alternate Control Centers are located. The value of the property was originally determined in the Property Concession and that amount has been increased annually consistent with changes in the Consumer Price Index. Pursuant to the terms of our Property Concession, a new appraisal of the value of the property must be performed every five years. The appraisal is performed by the Ministry of Internal Control. The appraisal must be based on the value of the property at the time of our privatization, without taking into account any subsequent improvements to the property after such delivery. For 2010, 2011, 2012, and 2013, our rental expense under our Property Concession was $480,434, $507,466, $496,335, and $528,388 respectively.

For 2011, 2012, and 2013 service revenue from related parties and the Mexican government amounted to $7.2 million, $16.3 million, and $10.8 million respectively.

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Loral Usufructo

Loral Skynet Corporation has a Mexican usufructo with respect to seven transponders. Pursuant to Mexican law, the usufructo grants to Loral Skynet the right to use and enjoy only three transponders until the end of life of the Satmex 5 and the right to use and enjoy four transponders until the end of life of Satmex 6, for a total of seven transponders. This right will not to be affected by, and will survive, any future transfer of ownership of Satmex 5 or Satmex 6 to a third party.

ITEM 8. Financial Information

Consolidated Financial Statements and Other Financial Information

See “Item 18. Financial Statements” for a list of all financial statements filed as part of this annual report on Form 20-F.

Significant Changes

As of May 26, 2011, the Recapitalization Transactions were given effect. See “Explanatory Note” on page ii of this annual report on Form 20-F.

Legal Matters

On January 2, 2012, Enlaces filed an executive commercial lawsuit (Juicio Ejecutivo Mercantil) against Globalstar for the payment of an outstanding amount equal to US$863,690.55 resulting from services provided by Enlaces to Globalstar in connection with a Broadband and Internet Connectivity Services Agreement entered into by the parties on May 5, 2006. The trial was admitted by the Sixteenth Civil Court of the Federal District under docket 9/2012. On January 17, 2012, the court summoned Globalstar and ordered the seizure of certain of Globalstar’s assets to potentially satisfy the amount owed by Globalstar to Enlaces. On March 30, 2012, the court requested each party to present their closing arguments (final positions) so that the court could issue its judgment in the first instance judgment. On April 26, 2012 the court in the first instance required Globalstar to pay Enlaces the amount of (i) USD $863,690.55 (ii) moratorium interest to a 6% annual rate and (iii) costs and expenses incurred (“First Instance Judgment”). On May 10, 2012 Enlaces presented an appeal to such First Instance Judgment requesting Globalstar to pay interest to the mutually agreed rate. Also, on May 15, 2012, Globalstar presented an appeal to the First Instance Judgment. This case was settled with Globalstar on April 29, 2013.

In the ordinary course of our business, we are from time to time named as a defendant in legal proceedings brought by former employees claiming they were terminated without cause, justification or other similar claims. We believe that these actions are not material, individually or in the aggregate, and therefore no reserves have been established in connection therewith.

Dividend Policy

We will not pay cash dividends unless we are permitted to do so under the terms of the Indenture relating to the Notes.

ITEM 9. Not Applicable

ITEM 10. Additional Information

Share Capital

The shares of the capital stock of Satmex may be freely subscribed or acquired by any individual or entity, including foreign investors. All shares confer the same rights and obligations to their holders (except for those that may be issued pursuant to the resolution of the General Extraordinary Shareholders’ Meeting). Satmex may not issue non-voting shares. The General Extraordinary Shareholders’ Meeting may resolve, among other things, on the issuance of series of shares and the rights and/or obligations that such shares will confer or require from its holders.

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Articles of Incorporation

Set forth below is a summary of our Bylaws. This may not contain all of the information that is important to you. We refer you to an English translation of our Bylaws, effective January 1, 2014. Our Bylaws were amended on September 30, 2011, and further amended on January 1, 2014.

Corporate Purpose

Under our bylaws, the main corporate purposes of Satmex are:

·the installation, operation, control and exploitation of artificial satellites, through the occupation and exploitation of geostationary orbital slots and satellite orbits assigned to Mexico, with their corresponding frequency bands and emission rights and signal reception under the terms of the Federal Telecommunications Law and pursuant to the concessions granted to Satmex by the Mexican Government;

·the construction, operation and exploitation of control centers associated with its satellite system;

·the rendering of all types of national and international telecommunication satellite services including, without limitation, the rendering of television (including the television direct diffusion services (DTH/DBS), telephone and data signal conduction and distribution, among others that are technically viable, in accordance with the authorizations, concessions, permits, licenses and any other document that is necessary to provide such services; and

·the exploitation of rights to transmission and reception of signals from frequency bands associated with foreign satellite systems, granted through a concession issued, as the case may be, by the appropriate authority.

Domicile

The domicile of the Corporation is Mexico City, Federal District; however, the Corporation may establish agencies, branches, warehouses and/or offices elsewhere within or outside Mexico, and submit to conventional domiciles, without the Corporation’s domicile being changed thereby.

Corporate Capital

Our corporate capital is variable. The minimum fixed portion of the corporate capital, without right of withdrawal, is the amount of Mx$50,000.00 (fifty thousand Mexican pesos), and is represented by common, nominative Class I shares, without par value, all of which are fully subscribed and paid. The variable portion of our corporate capital is for an unlimited amount and is represented by common, nominative Class II shares, without par value. Each share entitles the holder to cast one vote at Shareholders Meetings.

Shares

The common shares of the corporate capital are divided into three series, as follows:

The shares of the capital stock of the Corporation may be freely subscribed or acquired by any individual or entity, including foreign investors.

The Extraordinary General Shareholders’ Meeting may adopt resolutions on the issuance of series of shares, which may confer to their holders the rights and/or obligations determined by such Extraordinary Shareholders’ Meeting.

All shares shall confer the same rights and obligations to their holders (except for those that may be issued pursuant to the resolution of the Extraordinary General Shareholders’ Meeting in terms of the previous paragraph). The Corporation shall not issue non-voting shares.

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Share Certificates

The shares are indivisible and shall be represented by provisional or permanent certificates, covering one or more shares.

Increases and Decreases in Corporate Capital

The corporate capital of Satmex may be increased or decreased pursuant to the following rules:

Increases.  Subject to the provisions of paragraph 2 below, the General Extraordinary Shareholders’ Meeting shall discuss and resolve any increases to the capital stock of the Corporation, whether in the fixed portion (Shares Class “I”) or the variable portion (Shares Class “II”), and the manner and terms in which the issuance, subscription and payment of shares shall be made.  Any increase in the fixed portion of the capital stock shall require an amendment of Article Sixth of these By-laws.  In the event of an increase of the variable portion of the capital stock, it will not be necessary to notarize or register the minutes of the corresponding Meeting.

Increases of the capital stock shall be recorded in the Book of Capital Variations which shall be maintained by the Corporation in accordance with the provisions of the General Corporation and Partnership Law.

In the case of an increase of the capital stock, the shareholders shall have a preemptive right to subscribe shares issued as a result of such increase, in proportion to the number of shares held by each shareholder at that time of the corresponding increase pursuant to the provisions of Article 132 (one hundred and thirty two) of the General Corporation and Partnership Law.  The shareholders shall exercise such right within a period of 15 (fifteen) calendar days following the date of publication of the corresponding call to the shareholders in the Official Gazette of the Federation (Diario Oficial de la Federación) or in one of the newspapers with the greatest circulation in the corporate domicile of the Corporation; provided, however, that if at the corresponding Shareholders’ Meeting is present or duly represented the totality of the capital stock of the Corporation, the publication of the aforementioned call will not be necessary and, therefore, the 15 (fifteen) calendar-day period will commence from the date of the corresponding Meeting.

Considering that the shares of the Corporation do not have par value, it will not be necessary to issue new share certificates as a result of an increase of the capital stock for capitalization of premiums on shares, capitalization of withheld profits or capitalization of reserves for valuation or revaluation, unless so required by the General Extraordinary Shareholders’ Meeting approving the relevant increase or as required pursuant to the provisions of Article 210-Bis of the General Law of Negotiable Instruments and Credit Operations.

No new shares may be issued until all the shares previously issued shall have been fully subscribed and paid.

SCT Approval. Any subscription for shares of the corporate capital of Satmex that, in any transaction or series of transactions, represents 10% or more of the corporate capital existing at that time, is subject to the following rules:

a.The Corporation shall provide notice to the Ministry of Communications and Transportation (Secretaría de Comunicaciones y Transportes) of the persons (each an “Interested Person”) interested in subscribing the shares being issued as a result of the relevant increase.  Such notice shall be in writing and shall include information on each Interested Person, provided that, if any Interested Person is not an individual, sufficient information shall be provided to the Ministry to identify the person or persons that, direct or indirectly, hold 10% (ten percent) or more of such Interested Person except if such Interested Person is a retirement fund manager or an investment fund;

b.The Ministry of Communications and Transportation shall have the right to object the relevant transaction, for justified cause, provided that such objection shall be made within a period of 30 (thirty) calendar days from the date of receipt of the relevant notice from the Corporation;

c.If the Ministry of Communications and Transportation does not object the relevant transaction within the aforementioned 30 (thirty) calendar-day period, the transaction shall be deemed authorized; and

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d.Only those transactions referred that are not objected by the Ministry of Communications and Transportation may be recorded in the Shares Registry Book of the Corporation.

The notice and authorization requirements mentioned in the preceding paragraphs shall not apply to the subscription of limited-voting shares issued pursuant to the provisions of Article 113 (one hundred and thirteen) of the General Corporation and Partnership Law, or in the event of subscription of shares by the shareholders of the Corporation when the proportion of the participation of such shareholders in the capital stock of the Corporation is not modified.

Decreases.  The General Extraordinary Shareholders’ Meeting shall discuss and resolve decreases to the capital stock of the Corporation in the minimum fixed portion (Shares Class “I”), and the General Ordinary Shareholders’ Meeting shall discuss and resolve decreases to the capital stock in the variable portion (Shares Class “II”).  Any decrease in the minimum fixed portion of the capital stock shall require an amendment of Article Sixth of these By-laws.  In the case of a decrease in the variable portion of the capital stock, it will not be necessary to notarize or register the minutes of the corresponding Meeting.

Decreases of the capital stock shall be recorded in the Book of Capital Variations which shall be maintained by the Corporation in accordance with the provisions of the General Corporation and Partnership Law.

The capital stock of the Corporation may be decreased to absorb losses, reimburse shareholders for their equity contributions, to release shareholders from payments not effected or upon exercise of the separation rights of the shareholders provided in Article 206 (two hundred and six) of the General Corporation and Partnership Law.

In the event of a decrease in the minimum fixed portion of the capital stock, the provisions of Article 9 (nine) of the General Corporation and Partnership Law shall be followed, unless the relevant decrease is made through the absorption of losses.

In no event may the capital stock be decreased to less than the minimum required by law.

Right of Withdrawal and Transfer of Shares

The shareholders of the Corporation may not sell, transfer, assign, grant in collateral or grant guarantee of any kind, or dispose in any other manner of (whether by mandate of law or in any other way, including as a result of a merger or acquisition (each one, individually, a “Transfer”)) any share property of the respective shareholders, except for (i) when such Transfer is previously approved, to the extent that is required, by the competent authorities that govern the activities of the Corporation, including, but not limited to, the Ministry of Communications and Transports, in terms of the applicable provisions of the Federal Telecommunications Law, and other competent authorities, in Mexico and/or abroad; and (ii) when such Transfer does not cause a breach by the Corporation, or its subsidiaries, of their contractual obligations under debt instruments issued by the Corporation or any other agreement or instrument entered by the shareholders of the Corporation or with third parties. Any attempt of Transfer of shares issued by the Corporation, in contravention of the provisions of this clause shall be deemed void and without any legal effect, and the Corporation shall not register such Transfer in the Shares Registry Book of the Corporation. All authorized acquirers in terms of paragraphs (i) and (ii) above shall execute any agreement among shareholders (or similar) which has been subscribed by the shareholders of the Corporation, where appropriate, to the effects herein described and will be subject to the same terms and conditions as the transferring shareholders.

Shareholders’ Meetings

Authority.  The Shareholders’ Meeting shall be the supreme authority of the Corporation and shall have the broadest powers to determine and ratify all kinds of acts and operations of the Corporation.  Resolutions taken by the Shareholders’ Meeting shall be carried out by the persons designated by it, and such resolutions shall bind all shareholders, even those absent from the Shareholders’ Meeting or casting a dissenting vote thereat.  In any case, dissenting shareholders shall have the rights of opposition conferred upon them under the General Corporation and Partnership Law.

Ordinary, Extraordinary and Special Meetings.  Shareholders’ Meetings shall be General Ordinary, Extraordinary, and Special.

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1.A General Ordinary Shareholders’ Meeting shall be held within 4 (four) months following the end of each of the Corporation’s fiscal years to consider the following matters:

aDiscuss, approve or amend the report rendered by the Board of Directors pursuant to the provisions of Article 172 (one hundred and seventy two) of the General Corporation and Partnership Law, taking into consideration the report of the Statutory Auditors;

bDiscuss, approve or amend the annual report rendered by the Audit and Compensations Committees, as applicable;

cIf necessary, appoint the members of the Board of Directors and Statutory Auditors and their respective alternates, if any; and

dDetermine the compensations payable to the members of the Board of Directors and the Statutory Auditors and their respective alternates, if any, taking into account the proposal of the Compensations Committee, if it exists.

2.General Ordinary Shareholders’ Meetings may be convened at any time to discuss any matter not reserved to the General Extraordinary Shareholders’ Meeting pursuant to Article 182 (one hundred and eighty two) of the General Corporation and Partnership Law or these By-laws.

3.Matters reserved to the General Extraordinary Shareholders’ Meetings are:

aExtension of the term of the Corporation;

bVoluntary dissolution and liquidation of the Corporation;

cIncreases and decreases of the fixed capital stock of the Corporation;

dChange in the corporate purpose of the Corporation;

eChange of the Corporation’s nationality or restructure modifying its nationality (including establishing its domicile abroad);

fTransformation of the Corporation;

gMerger of the Corporation with another entity;

hSpin-off of the Corporation;

iIssuance of preferred stock or different classes of series or sub-series of shares;

jRedemption by the Corporation of its own shares and issuance of dividend certificates;

kIssuance of bonds;

lAny amendment to the By-laws of the Corporation;

mRedemption of shares or other securities; and

nAny other matters for which applicable Mexican laws or these By-laws specifically require it.

4.Shareholders’ Meetings called to discuss any matter affecting one series of shares in particular shall be considered a Special Meeting.

Calls for Shareholders’ Meetings.  Shareholders’ Meetings shall be held at the corporate domicile of the Corporation, except in case of acts of God or force majeure.  Both General Ordinary and Extraordinary

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Shareholders’ Meetings shall be held whenever they are called by (i) the Board of Directors, (ii) the Secretary of the Board of Directors, (iii) two members of the Board of Directors, or (iv) by any Statutory Auditor of the Corporation.

Any shareholder or group of shareholders holding at least 33% (thirty three percent) of the fully paid issued shares of the Corporation having a right to vote, may request in writing at any time to the Board of Directors or the Statutory Auditors to call a Shareholders’ Meeting to discuss the matters specified in the relevant request.  Any shareholder shall have the same right in any of the cases provided for in Article 185 (one hundred and eighty five) of the General Corporation and Partnership Law.  If (i) the Board of Directors, (ii) the Secretary of the Board of Directors, (iii) two members of the Board of Directors, or (iv) any Statutory Auditor, as the case may be, refuses to make the call or otherwise fails to make such call within 15 (fifteen) calendar days after receipt of the relevant request, the shareholder requesting the call shall have the power to request the competent judicial authority of the corporate domicile of the Corporation to make such call pursuant to the provisions of Article 184 (one hundred and eighty four) of the General Corporation and Partnership Law.

The calls for both General Ordinary and Extraordinary Shareholders’ Meetings shall be signed by the person making the call, in the understanding that, if made by the Board of Directors, it shall contain the signature of the Secretary (or its alternate, if any).  Calls shall specify the place, date and hour of the Shareholders’ Meeting, shall include the agenda, shall clarify if it is held pursuant to first or subsequent call, and shall be published in the Official Gazette of the Federation (Diario Oficial de la Federación) and in one of the daily newspapers of greatest circulation in the corporate domicile of the Corporation, at least 15 (fifteen) calendar days before the date scheduled for the Meeting.  Shareholders’ Meetings may be validly held without the need of a prior call or publication whenever all the shares having a right to vote on the relevant matter are present or represented thereat.

Quorum Requirements.  (a) To be valid, General Ordinary Shareholders’ Meetings shall be regarded as legally convened pursuant to a first call when the simple majority of the shares of the corporate capital having a right to vote on the relevant matter are present or duly represented thereat.  Resolutions taken at General Ordinary Shareholders’ Meetings shall be valid when adopted by the favorable vote of at least the majority of the shares present or represented thereat.

(b)General Extraordinary Shareholders’ Meetings shall be regarded as legally convened pursuant to a first call when at least 75% (seventy five percent) of the shares of the corporate capital having a right to vote on the relevant matter are present or duly represented thereat.  General Extraordinary Shareholders’ Meetings held pursuant to a second or subsequent call shall be regarded as legally convened if at least 50% (fifty percent) of the shares of the corporate capital having a right to vote on the relevant matter are present or duly represented thereat.  Resolutions taken at General Extraordinary Shareholders’ Meetings shall be valid when taken by the favorable vote of, at least, half of the capital stock of the Corporation.

Article Sixteenth.  Admission to Shareholders’ Meetings. Only those shareholders recorded in the Shares Registry Book of the Corporation shall be admitted at Shareholders’ Meetings.

Shareholders may be represented at Shareholders’ Meetings by one or more persons appointed by means of a proxy letter, signed before two witnesses, or having sufficient authority pursuant to a power of attorney granted in accordance with applicable law.  The members of the Board of Directors and the Statutory Auditors may not represent the shareholders at Shareholders’ Meetings.

Shareholders who, in addition to having complied with the requirements for depositing or handing over their shares, established in the call corresponding to the Shareholders’ Meeting, are registered as such in the Shares Registry Book handled by the Corporation in terms of these By-laws, will be admitted to the Shareholders’ Meeting.

Article Seventeenth.  Chairman and Secretary; Tellers.  The Chairman of the Board of Directors shall preside over Shareholders’ Meetings. The Secretary of the Board of Directors shall act as Secretary in Shareholders’ Meetings.  In the absence of any of these persons, the Shareholders’ Meeting shall appoint, by majority of votes of those shareholders present or duly represented thereat, the persons who are to act as Chairman and Secretary, respectively, of the corresponding Shareholders’ Meeting.

One Teller shall be appointed by such Shareholders’ Meeting from among those present thereat to certify the number of shareholders present at the corresponding Shareholders’ Meeting.

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Article Eighteenth.  Minutes.  Minutes of all Shareholders’ Meetings shall be prepared, including those not convened for lack of quorum, and recorded in the Shareholders’ Meetings Minute Book of the Corporation.  Minutes of Shareholders’ Meetings shall be signed by those persons who acted as Chairman and Secretary thereof, and also by the Statutory Auditors attending, if any.  There shall be attached to each minute of all Shareholders’ Meetings, as the case may be, copies of the publications of the call, any documents submitted to the shareholders and an attendance list duly signed by those shareholders present or duly represented thereat, and by the Teller.  Whenever for any reason the minutes of a Shareholders’ Meeting cannot be recorded in the Shareholders’ Meetings Minute Book of the Corporation, such minutes shall be notarized.

Except in the event of resolutions regarding an increase in, or decrease of, the variable portion of the capital stock referred to in Article Tenth of these By-laws, the Minutes of all General Extraordinary Shareholders’ Meetings shall always be notarized and recorded in the Public Registry of Commerce of the corporate domicile of the Corporation.

Unanimous Written Resolutions.  Notwithstanding anything to the contrary set forth in these By-laws, resolutions taken by the shareholders may be validly taken without the need of holding a formal meeting, provided that the relevant resolutions are taken by unanimous consent of all the shareholders entitled to vote on the relevant matter.  Resolutions adopted in the manner described herein shall produce the same effects and have the same legal consequences than resolutions taken at duly convened and held Shareholders’ Meetings.  Whenever the resolutions of the shareholders are taken by means of their unanimous written consent, no call or any other formality shall be necessary, other than the signature of all the shareholders entitled to vote in the relevant matter (or their duly appointed representatives) on the document evidencing the adoption of the relevant resolutions. All those documents shall be attached to the minutes of the resolutions and the resolutions themselves shall be recorded in the Shareholders Meetings Minute Book.

The management of the Corporation shall be entrusted to a Board of Directors comprised of 3 (three) or more members, and their corresponding alternates, as determined by the General Ordinary Shareholders’ Meeting.  Alternates may so act for one or more principal members of the Board of Directors.

Shareholders shall be entitled to remove and replace the Directors, at any moment and for whatever reason, as well as to appoint other director for the vacancies created for any other reason.

The members of the Board of Directors and their alternates, as the case may be, shall hold office for such period as the General Ordinary Shareholders’ Meeting shall determine, subject to earlier removal by the Series of shares that appointed them, and may be reelected any number of times consider convenient but, in any case, they shall hold office until a person or persons replacing them is appointed and takes office (subject to early removal). Their remuneration shall be determined by the General Ordinary Shareholders’ Meeting, considering the proposal of the Compensation Committee, if it exists.

Unless otherwise determined by the General Ordinary Shareholders’ Meeting that appointed them, the members of the Board of Directors and their alternates shall secure the performance of their duties with a guaranty for the amount proposed by the Compensation Committee, ratified by the General Ordinary Shareholders’ Meeting that approved their appointment.

Chairman and Secretary.  The Chairman, Secretary and Alternate Secretary of the Board of Directors, if applicable, shall be appointed by each General Annual Ordinary Shareholders’ Meeting from any of the directors appointed by the shareholders.

Board Meetings.  The Board of Directors shall meet whenever duly called, but shall meet at least 4 (four) times a year.  Meetings of the Board of Directors shall take place at the corporate domicile or at any other place within Mexico or abroad as determined in the relevant call.

If the Chairman is absent at the meeting, the same shall be presided over by the director appointed by majority of the present members, whether physically, by telephone, through conference call or videoconference.  If the Secretary or his alternate, if any, are absent from the Meeting, then the person appointed by majority vote of the present members of the Board shall act as such.

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Calls.  Calls to Meetings of the Board of Directors shall be made in writing by (i) the Chairman of the Board of Directors, (ii) the Secretary of the Board of Directors, or (iii)  by 2 (two) members of such Board but, in any event, shall be signed by the person making the call.  Calls shall be physically delivered to each of the principal Members of the Board of Directors at the address previously notified in writing by the Director to the Secretary of the Board of Directors from time to time, at least 7 (seven) days prior to the date fixed for the relevant meeting.  Calls shall specify the place, date and hour of the meeting, shall include the agenda and shall clarify if it is held pursuant to first or subsequent call.  Calls shall not be necessary if all the members of the Board of Directors, or their alternates, are present at the meeting whether physically, by telephone, through conference call or videoconference.

Minutes.  Minutes of all meetings of the Board of Directors shall be prepared, including those not convened for lack of quorum, and recorded in the Board of Directors’ Meetings Minute Book of the Corporation.  Minutes of meetings of the Board of Directors shall be signed by those persons who acted as Chairman and Secretary thereof, and also by the Statutory Auditor(s) attending, whether physically, by telephone, through conference call or videoconference.  There shall be attached to the file of the minutes of all meetings of the Board of Directors, as the case may be, evidence of delivery of the call to its members, any documents submitted to the Board of Directors and an Attendance List duly signed by those members present whether physically, by telephone, through conference call or videoconference.  Whenever for any reason the minutes of a meeting of the Board of Directors cannot be entered in the Board of Directors’ Meetings Minute Book, such minutes shall be notarized.

The copies or certificates of the minutes of Board of Directors Meetings and Shareholders’ Meetings, as well as the entries contained in the corporate books and, in general, of any document in the file of the Corporation, may be authorized and certified by the Secretary of the Board of Directors or his alternate, if any.

Quorum Requirements.  Meetings of the Board of Directors shall be regarded as legally convened pursuant to a first call when the majority of its members are present at the meeting whether physically, by telephone, through conference call or videoconference.  In the case of a second or subsequent call, meetings of the Board of Directors shall be regarded as legally convened with the presence of the majority of its members whether physically, by telephone, through conference call or videoconference. Resolutions taken at meetings of the Board of Directors shall be valid if approved by the affirmative vote of the majority of the members present at the relevant meeting whether physically, by telephone, through conference call or videoconference.

Unanimous Written Resolutions.  Notwithstanding anything to the contrary set forth in these By-laws, resolutions by the Board of Directors may be validly taken without the need of holding a formal meeting, provided that the relevant resolutions are taken by unanimous written consent of all the members of the Board of Directors.  Resolutions adopted in the manner described herein shall produce the same effects and have the same legal consequences as resolutions taken at formal meetings of the Board of Directors.  Whenever the resolutions of the Board of Directors are taken by unanimous written consent of its members, no call or any other formality shall be necessary, other than the signature of all, and not less than all of, the members of the Board of Directors of a document evidencing the adoption of the relevant resolutions, which shall be recorded in the Board of Directors’ Meetings Minute Book of the Corporation and certified by the Secretary of the Board of Directors.

Authority. The Board of Directors shall have the legal representation of the Corporation and, therefore, in addition to the powers and authorities specified elsewhere in these By-laws or under applicable law, shall have the following powers and authorities:

1.The authority for lawsuits and collections granted with all the general powers and the special powers that require a special clause in accordance with the law. Consequently, it is conferred without limitation pursuant to the provisions of the first paragraph of Article 2,554 (two thousand five hundred and fifty four) and of Article 2,587 (two thousand five hundred and eighty seven)  of the Civil Code for the Federal District and the correlative provisions of the Civil Codes for other States of Mexico, being consequently, empowered to promote or withdraw from amparo proceedings; to file or withdraw criminal claims; become the assistant to the Public Prosecutor and grant pardons, if appropriate in accordance with the Law; to compromise, to submit to arbitration; to prepare and answer depositions; to challenge judges, receive payments and carry out all acts expressly determined by the law, including representing the Corporation before criminal, civil, administrative and labor courts and authorities.

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2.The authority for acts of administration in accordance with the provisions of the second paragraph of Article 2,554 (two thousand five hundred and fifty four) of the Civil Code for the Federal District and the correlative provisions of the Civil Codes for the other States of Mexico, to carry out the corporate purpose of the Corporation.

3.General power for lawsuits and collections for labor matters, in accordance with the provisions of Articles 2,554 (two thousand five hundred and fifty four)  and 2,587 (two thousand five hundred and eighty seven) of the Civil Code applicable in common matters for the Federal District and in federal matters for all Mexico, so that in an enunciative and not limitative manner, the Board may represent the Corporation before local or federal authorities and courts, particularly before Boards of Conciliation and Boards of Conciliation and Arbitration, as well as before the Ministry of Labor and any other labor and administrative authorities, criminal, administrative and civil courts, being expressly authorized to participate in proceedings in connection with labor claims and ‘amparo’ proceedings, to make, settle and answer depositions and carry out all necessary acts as the legal representative of the Corporation.

4.General power of attorney for acts of administration for labor matters as established by Articles 692 (six hundred and ninety two), 786 (seven hundred and eighty six), 866 (eight hundred and sixty six) and other applicable provisions, as well as by Article 870 (eight hundred and seventy) of the Federal Labor Law, to appear before labor authorities for labor matters where the Corporation may be a party or a third interested party, both at the initial or at any other subsequent stages, expressly excluding the authority to formulate and answer depositions.

5.The authority for acts of ownership, in accordance with the provisions of the third paragraph of Article 2,554 (two thousand five hundred and fifty four)  of the Civil Code for the Federal District and the correlative provisions of the Civil Codes for the other States of Mexico.

6.Power to issue, endorse and subscribe credit instruments on terms of Article 9 (nine) of the General Law of Negotiable Instruments and Credit Operations.

7.Power to open and operate bank accounts on the name of the Corporation, draw against them and appoint persons to draw against the same.

8.Power to monitor the compliance by the Corporation with the corporate practices established by the General Corporation and Partnership Law or any legal statute substituting it, as well as by these By-laws and protection of the minorities’ rights established thereby.

9.Power to carry out the resolutions taken by the Shareholders’ Meeting of the Corporation.

10.Power to grant general or special powers of attorney in terms of this Article, with or without authority for delegating, as well as to revoke any powers granted.

11.Power to establish special committees deemed necessary for the development of the transactions of the Corporation, establishing the authority and obligations of such committees; provided that such committees shall not have any authorities which, in accordance with the Law or these By-laws, correspond exclusively to the General Shareholders Meeting or to the Board of Directors.

12.Power to approve the annual budget and business plan of the Corporation and its subsidiaries.

13.The power to appoint officers of the Corporation to manage the day-to-day business affairs including, to appoint the Chief Executive Officer and the Chief Financial Officer as provided in Article Twenty-Eighth, and other officers as may be necessary or advisable.

14.Appointment of the members of the Audit and Compensation Committees and their alternates, as provided in Article Twenty-Ninth.

15.In general, power for carrying out all acts authorized by these By-laws or which may be the consequence of the same.

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Officers.  The Chief Executive Officer, the Chief Financial Officer (or its equivalent) and the Chief Operating Officer (or its equivalent) of the Corporation, if applicable, shall be named by the Board of Directors from a list of candidates presented by the majority of Directors.

The Committees.  The Corporation may have a Compensations Committee and an Audit Committee as determined by the Board of Directors.

The members of the Audit and Compensations Committees, in its case, will hold office for 1 (one) year or until the persons designated to replace them take office.  The Chairman and Secretary shall be appointed by the majority vote of its members, and the Chairman shall have no casting vote in the event of a tie.  The Secretary may act as such without being a member of the corresponding Committee.

Audit Committee.  The Audit Committee, if appointed by the Board of Directors, shall have the following powers and authorities:

1.             Be directly responsible for the appointment, compensation and oversight of the work of the auditor of the Corporation;

2.             Establish procedures for (i) the receipt, attention, and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, or auditing matters; and (ii) the confidential and anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters;

3.             Engage independent counsel and other advisors as it deems necessary to perform its duties and request the Corporation to provide appropriate funding for the payment of compensation to such counsel and advisors;

4.             Be directly responsible for the oversight of the compliance by the members of the Board of Directors and the first level officers of the Corporation and its subsidiaries of the provisions of these By-laws, the By-laws of any subsidiaries, applicable law and any guidelines issued in connection herewith or therewith;

5.             Be directly responsible for the oversight of the compliance of the corporate practices set forth in these By-laws and the By-laws of any subsidiaries of the Corporation, and the protection of the minority rights herein or therein established;

6.             Submit recommendations to the General Shareholders’ Meeting or to the Board of Directors, as applicable, with respect to the removal of members of the Board of Directors, Statutory Auditor(s) and officers of the Corporation and its subsidiaries for any violations to the provisions of applicable law, these By-laws, the By-laws of any subsidiaries, any guidelines issued in connection herewith or therewith, the corporate practices and minority rights protection provisions set forth in the applicable law, these By-laws, the By-Laws of any subsidiary or the guidelines issued in connection herewith or therewith as it deems appropriate;

7.             Approve internal control regulations and administrative procedures of the Corporation and its subsidiaries;

8.             Be directly responsible for the oversight of transactions by the Corporation or its subsidiaries with Affiliates, and assure that such transactions follow market conditions and healthy business practices;

9.             Submit a report on its activities to the General Ordinary Shareholders’ Meeting and at least once every year to the Board of Directors, or whenever requested by the General Shareholders’ Meeting or the Board of Directors or whenever, in its opinion, the Board of Directors or the General Shareholders Meeting should be made aware of its activities; and

10.          Request from the Board of Directors and from the first level officers of the Corporation and its subsidiaries reports regarding their activities as may be necessary to evaluate their performance and to submit its report to the General Shareholders’ Meeting and to the Board of Directors.

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Compensations Committee.  The Compensations Committee, if appointed by the Board of Directors, shall have the following powers and authorities:

1.Provide the Board of Directors with the necessary recommendations in connection with the incentive and recruiting program for officers of the Corporation;

2.Propose to the Shareholders’ Meeting or to the Board of Directors, as the case may be, the compensation for the members of the Board of Directors, the Statutory Auditors and officers of the Corporation;

3.Carry out consultations with expert third parties in aid of compensation, in order to adopt any decisions that may be required;

4.Submit a report on its activities to the General Ordinary Shareholders’ Meeting and at least once every year to the Board of Directors, or whenever requested by the General Shareholders’ Meeting or the Board of Directors or whenever, in its opinion, the Board of Directors or the General Shareholders Meeting should be made aware of its activities; and

5.Request from the Board of Directors and from the first level officers of the Corporation and its subsidiaries reports regarding their activities as may be necessary to evaluate their performance and to submit its report to the General Shareholders’ Meeting and to the Board of Directors.

Statutory Auditors

The surveillance of the Corporation shall be entrusted to one or more Statutory Auditors, appointed by the General Ordinary Shareholders’ Meeting. The Statutory Auditors may have alternates as determined by the General Ordinary Shareholders’ Meeting. The Statutory Auditors may or may not be shareholders, may be reelected and shall perform as such until the person or persons appointed to substitute them take office.

Authority

The Statutory Auditors shall have the authority and obligations provided for in Articles 166 and 169 of the General Corporation and Partnership Law.

Fiscal Years

The Corporation’s fiscal years shall never exceed 12 (twelve) months and will run from January 1 through December 31 of each year, with the exception of the first fiscal year which will run from the date of incorporation of the Corporation until December 31 of that same year.

Report of the Board of Directors

At the end of each fiscal year, the Board of Directors shall be responsible for ensuring that the information required by Article 172 of the General Corporation and Partnership Law shall be prepared for its presentation to the General Ordinary Shareholders’ Meeting and the procedures prescribed in Articles 173 and 177 of said Law are followed.

Profits

Any net profits realized in each fiscal year after the Corporation’s balance sheet and financial statements are approved by the General Ordinary Shareholders’ Meeting shall be applied, as follows:

1.             A minimum of 5% (five percent) shall be set aside as a reserve fund pursuant to Article 20 of the General Corporation and Partnership Law, until such fund is equal to one-fifth of the Corporation’s capital stock;

2.             The amount considered necessary or convenient to constitute the reserve funds necessary or advisable shall also be set aside; and

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3.             The remaining profits, if any, may be distributed as dividends to the shareholders of the Corporation as determined by the General Ordinary Shareholders’ Meeting.

Founding Shareholders.  The founding shareholders do not reserve for themselves any special participation in the profits of the Corporation.

Losses.  Should there exist any losses, the shareholders shall bear them in proportion to the number of their shares, and said liability shall be limited only to the amount of their capital contributions.

Dissolution.  The Corporation shall be dissolved:

1.             Due to expiration of the term fixed in these By-laws;

2.             Due to the impossibility of achieving its principal purpose;

3.             By resolution adopted at a General Extraordinary Shareholders’ Meeting taken in accordance with these By-laws;

4.             If the number of shareholders is less than 2 (two);

5.             Due to the loss of two-thirds of its capital stock; and

6.             In any other case provided by applicable Mexican laws.

Liquidation.  Upon dissolution, the Corporation shall be placed in liquidation. For that purpose, the shareholders at the same General Extraordinary Shareholders’ Meeting in which the dissolution is determined or recognized, shall appoint a liquidator or liquidators, specify the powers of such liquidator or liquidators, the compensation due to them, set the period for performance of their duties and establish the general basis of their actions.

Shareholders’ Meetings.  During the period of liquidation, Shareholders’ Meetings shall be convened and held as provided for in these By-laws.  The Corporation’s liquidator or liquidators shall assume the functions vested in the Board of Directors during the normal life of the Corporation, with the special requirements imposed by the state of liquidation.  The Corporation’s Statutory Auditors shall continue performing the same functions and duties and shall maintain, with respect to the liquidator or liquidators, the identical relation maintained with respect to the Corporation’s Board of Directors.

Until the appointment of the liquidator or liquidators is recorded in the Public Registry of Commerce of the corporate domicile, and the liquidators have begun to discharge their duties, the Board of Directors shall continue to perform its functions, but it shall not initiate new operations.

Article Forty-Second.  In all matters not provided for expressly in these By-laws, the provisions of the General Corporation and Partnership Law shall govern.

Material Contracts

Documents concerning us referred to in this annual report on Form 20-F may be inspected at our corporate offices at Avenida Paseo de la Reforma No. 222, Pisos 20 y 21, Colonia Juárez; 06600 Mexico City, Mexico.

See “Item 4. Information on the Company,” “Item 5. Operating and Financial Review and Prospects” and “Item 7. Major Shareholders and Related Party Transactions” for a description of our material contracts.

Exchange Controls

The Mexican economy has in the past experienced a balance of payment deficits and shortages in foreign exchange reserves. While the Mexican government does not currently restrict the ability of Mexican or foreign persons or entities to convert pesos to foreign currencies generally, and U.S. dollars in particular, it has done so in the past and no assurance can be given that the Mexican government will not institute a restrictive exchange control

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policy in the future. In addition, while all of our customer contracts are dollar-denominated, we require our Mexican customers that choose to pay us in pesos to deliver an amount of pesos equal to the current exchange rate for the purchase of dollars prevailing on the date of payment. If we were unable to exchange such pesos into dollars or were unable to obtain sufficient dollars, we would have difficulty meeting our U.S. dollar payment obligations. The effect of any such exchange control measures adopted by the Mexican government on the Mexican economy cannot be accurately predicted.

Certain Mexican Tax Considerations

The following summary contains a description of the principal Mexican tax consequences of the purchase, ownership and disposition of the Notes.  This summary is based on the tax laws in force as of the date hereof and does not describe any tax consequences arising under the laws of any state, locality or taxing jurisdiction other than Mexico.

The below discussion does not address all Mexican tax considerations that may be relevant to particular investors, nor does it address the special tax rules applicable to certain categories of investors or any tax consequences under the tax laws of any state or municipality of Mexico.

The U.S. and Mexico have entered into a Convention for the Avoidance of Double Taxation (the “Tax Treaty”).  Provisions of the Tax Treaty that may affect the taxation of certain U.S. Noteholders are summarized below.  The U.S. and Mexico have also entered into an agreement that covers the exchange of information with respect to tax matters.  Mexico has also entered into, and is negotiating, several other tax treaties that may reduce the amount of Mexican withholding tax to which payments of interest on the Notes may be subject.

This summary of certain Mexican tax considerations deals with Noteholders that (a) are not residents of Mexico for Mexican tax purposes and (b) do not conduct a trade or business through a permanent establishment in Mexico (each, a “Foreign Holder”).  For purposes of Mexican Taxation, tax residency is a highly technical definition which involves several factual situations.

In general terms, an individual is a resident of Mexico if he or she has established his or her home in Mexico.  When such person also has a home in another country different from Mexico, the individual will be considered a resident of Mexico for tax purposes if his/her center of vital interests is located in Mexico, which is deemed to occur if (i) more than 50% of such individual’s total income, in any calendar year, is from Mexican sources, or (ii) such individual’s principal center of professional activities is located in Mexico. Mexican nationals who filed a change of tax residence to a country or jurisdiction that does not have a comprehensive exchange of information agreement with Mexico in which his/her income is considered as subject to a preferential tax regime pursuant to the provisions of the Mexican Income Tax Law, will be considered Mexican residents for tax purposes during the year of filing of the notice of such residence change and during the following three years. Unless proven otherwise, a Mexican national is deemed a resident of Mexico for tax purposes.

A corporation is considered a resident of Mexico for tax purposes if it maintains the principal administration of its business or the effective location of its management in Mexico, regardless of the country in which such entity was incorporated.

A permanent establishment in Mexico of a non-resident person will be treated under the same rules applicable to a resident of Mexico for tax purposes, and will be required to pay taxes in Mexico in accordance with applicable tax laws with respect to income attributable to such permanent establishment.

However, any determination of residence should be made considering the particular situation of each person or legal entity.

The tax implications described herein may vary depending on the applicability of a treaty for the avoidance of double taxation in effect.  Mexico has entered into or is negotiating several treaties regarding the avoidance of double taxation with various countries that may have an impact on the tax treatment of the purchase, ownership and holding or disposition of Notes.

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Taxation of Interest and Principal

Under the Mexican Income Tax Law, interest, regardless of the name used is subject to Mexican withholding tax.

Among others, interest for Mexican tax purposes refers to yields of credit of any nature, with or without mortgage guarantee and whether entitled or not to participate in the benefits; yields from public debt, bonds and debentures (including premiums and prizes assimilated to such yields), premiums paid on loans of securities, discounts for placement of negotiable securities, bonds or debentures, commissions or payments for the opening or guarantee of credits (regardless of whether such credits are contingent), payments to a third party for opening or guaranteeing a credit (regardless of whether such credits are contingent), payments to a third party for accepting to guarantee negotiable instruments or to furnish a guarantee or accept a liability of any other nature, gain from the transfer of publicly traded securities pursuant to Article 9th of the Mexican Income Tax Law, as well as gain realized by a foreign resident from the transfer of credits due from a Mexican resident or a foreign resident with a permanent establishment in Mexico, when acquired by a Mexican resident or by a foreign resident with a permanent establishment in this country.

Under the Mexican Income Tax Law, payments of interest made in respect of the Notes (including payments of principal in excess of the issue price of such Notes, which, under Mexican law, are deemed to be interest) to a Foreign Holder, will generally be subject to a Mexican withholding tax assessed at a rate of 4.9% if (a) the Notes are placed through banks or brokerage houses (casas de bolsa) in a country with which Mexico has entered into a tax treaty for the avoidance of double taxation and such tax treaty is in effect; (b) with respect to the Notes, the notice referred in the second paragraph of article 7 of the Mexican Securities Law (Ley del Mercado de Valores) is filed with the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) and (c) the information requirements specified by the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) (the “SHCP”) under its general rules are satisfied. If such requirements are not met, the applicable withholding tax rate will be 10%.

As of the date of this annual report on Form 20-F, neither the Tax Treaty nor any other tax treaty currently in force, provides for a lower withholding tax rate than the 4.9% imposed on interest income earned by foreign residents under the Mexican Income Tax Law.  Therefore, neither the Tax Treaty nor other treaties are expected to have any effect on the Mexican tax consequences described in this summary.

A higher income tax withholding rate (30% for 2012, 30% for 2013, 29% for 2014 and 28% for 2015 and thereafter) will be applicable when the beneficial owners of payments treated as interest, whether directly or indirectly, individually or collectively with related persons, receive more than 5% of the aggregate amount of such payments on the Notes and such beneficiaries are (a) shareholders of Satmex who own, directly or indirectly, individually or collectively with related persons, more than 10% of Satmex’s voting stock or (b) entities more than 20% the stock of which is owned, directly or indirectly, individually or collectively with related persons, by Satmex or by persons related to Satmex. For such purposes, under the Mexican Income Tax Law, persons are considered related if one possesses an interest in the business of the other, common interests exist between them or a third person holds an interest in the business or property of both persons.

Payments of interest made with respect to the Notes to non-Mexican pension or retirement funds will be exempt from Mexican withholding taxes, provided, that any such fund is (a) the beneficial owner of the interest payment with respect to the Notes, (b) duly incorporated pursuant to the laws of its country of origin, (c) exempt from income tax in such country, (d) registered with the Ministry of Finance for that purpose and (e) the relevant interest income is exempt from taxes in such country.

Noteholders may be requested to, subject to specified exceptions and limitations, provide certain information or documentation necessary to enable us to apply the appropriate Mexican withholding tax rate on interest payments under the Notes made by us to such Noteholders.  In the event that the specified information or documentation concerning the Noteholder, if requested, is not timely provided, we may withhold Mexican tax from interest payments on the Notes to that Noteholder at the maximum applicable rate.

Gross-Up of Interest Withholding

Satmex is required under current Mexican law to deduct Mexican withholding taxes at the rate of 4.9% from interest payments made to Noteholders who are not residents of Mexico and pay such taxes to the Mexican tax

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authorities.  Satmex will pay such additional amounts (the “Additional Amounts”) as may be necessary in order that the net amounts received in respect of interest by each Noteholder after the applicable Mexican withholding (including any withholding imposed on the Additional Amounts) will equal the amount of interest that would have been received in the absence of such withholding; provided, however, that no Additional Amounts will be payable with respect to any incremental taxes that would not have been imposed but for the Noteholder being a more than 10% owner, directly or indirectly, individually or collectively with related persons of the voting stock in Satmex and being a beneficial owner, directly or indirectly, individually or collectively with related persons of more than 5% of the interest arising from the Notes; provided that notwithstanding the foregoing, such Noteholder shall continue to be entitled to any Additional Amounts that otherwise would have been payable to such Noteholder had such Noteholder’s direct or indirect ownership remained below the ownership levels specified in this paragraph.

Payments of Principal

Under the Mexican Income Tax Law, principal paid to Noteholders who are non-resident of Mexico for tax purposes is not subject Mexican withholding taxes or any other similar taxes.

Taxation of Acquisitions and Dispositions

Pursuant to the Mexican Income Tax Law, a tax is imposed upon the acquisition at a discount of a Note by a purchaser that is a non-resident of Mexico for tax purposes, to the extent that the seller is a resident of Mexico or a non-resident with a permanent establishment in Mexico. In such case, the difference between the sale price and the aggregate face value and accrued but unpaid interest not previously subject to withholding tax will be deemed interest for Mexican tax purposes and thereby subject to 10% tax.  The seller resident of Mexico or a non-resident with a permanent establishment in Mexico will be required to withhold the 10% tax relating to deemed interest income from the purchaser and remit it to the Tax Administration Service.

Gains resulting from the sale or other disposition of the Notes by a Foreign Holder when the purchaser is a resident of Mexico or a non-resident with a permanent establishment in Mexico will be characterized as interest for Mexican tax purposes and thus subject to income tax in Mexico. As a result, the purchaser resident of Mexico or a non-resident with a permanent establishment in Mexico shall withhold the tax at the applicable rates mentioned above.  In any case, the difference between the sales price over the face value of the Notes will be considered as interest.

Transfer and Other Taxes

There are no Mexican stamp, registration, or similar taxes payable by a Foreign Holder in connection with the purchase, ownership or disposition of the Notes. A Foreign Noteholders will not be liable for Mexican estate, gift, inheritance or any similar tax with respect to the Notes.

ITEM 11. Quantitative and Qualitative Disclosures about Market Risk

During the years ended December 31, 2013, 2012, and 2011 the annual rates of inflation in Mexico, as measured by changes in the National Consumer Price Index as provided by Banco de México, were 3.9%, 3.6%, and 3.8%, respectively. A portion of our expenditures, including capital expenses and satellite insurance, and our customer contracts are not directly affected by Mexican inflation because they are denominated in U.S. dollars. However, high inflation rates would affect Mexican peso-denominated expenses, such as payroll and rent. To the extent that the Mexican peso’s devaluation against the U.S. dollar is less than the inflation rate in Mexico, we will be adversely affected by the effect of inflation in Mexico with respect to our Mexican peso-denominated expenses. We do not use foreign currency hedges.

The Mexican peso depreciated against the U.S. dollar by approximately 13.1% in 2011, appreciated against the U.S. dollar by approximately 6.9% in 2012 and depreciated against the U.S. dollar by approximately 0.5% in 2013.  A substantial majority of our revenues are in U.S. dollars. As noted above, although many of our costs and expenses are also denominated in U.S. dollars, approximately 46% are in pesos. As a result, the appreciation of the peso against the U.S. dollar results in an increase in our expenses as reflected in dollars in our financial statements.

ITEM 12. Not Applicable

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PART II

ITEMS 13—14. Not Applicable

ITEM 15. Controls and Procedures

Disclosure Controls and Procedures

We have evaluated, with the participation of our Chief Executive Officer and the Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of December 31, 2013. Based upon review, our Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our “Principal Executive Officer” and “Principal Financial Officer,” we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our review under such criteria, our management concluded that our internal control over financial reporting was effective as of December 31, 2013.

This annual report on Form 20-F does not include an attestation report of Satmex’s registered public accounting firm regarding internal control over financial reporting. Internal controls on financial reporting are not subject to attestation by Satmex’s independent registered public accounting firm pursuant to rules of the SEC that permit Satmex to provide only management’s report.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting in 2013 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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ITEM 16A. Audit Committee Financial Expert

We had an audit committee since August 4, 2004. On November 30, 2006, we merged the audit and the compensation committees and created the CUAC. As of May 26, 2011, a separate audit committee was created, composed of four (4) members, one of which was an independent member.  As of January 1, 2014, and as a consequence of the Eutelsat Acquisition, we no longer have an audit committee.

ITEM 16B. Code of Ethics

In 2009, we implemented a board-approved code of ethics that applies to all employees, directors, and officers of the Company. To strengthen the code of ethics, Satmex and Enlaces implemented a Whistle Blowing System through a third-party provider.

In the year ended December 31, 2013,  two reports were received and investigated, neither of which was classified as relevant upon completion of the investigation. An English translation of the code of conduct is posted on our website www.satmex.com and a copy will be provided to any person upon request.

ITEM 16C. Principal Accountant Fees and Services

The aggregate fees billed by Galaz, Yamazaki, Ruiz Urquiza, S.C. (“GYRU”), a member firm of Deloitte Touche Tohmatsu, our independent registered public accounting firm, in connection with professional services rendered to us in 2013, 2012, and 2011, respectively, were as follows:

	2013		2012		2011
Audit fees(1)	$	559	$	479	$	537
Audi-related services(2)	18		121		205
Tax fees(3)	69		48		112
Total fees	$	646	$	648	$	854

(In thousands of U.S. dollars)

(1)Audit fees: In addition to the aggregate fees billed for each of the last two fiscal years for professional services rendered by GYRU for the audit of the registrant’s annual financial statements, review of financial statements included in the registrant’s annual report on Form 20-F and statutory and regulatory audits prepared under Mexican NIF (Normas de Información Financiera).

(2)Audit-related services: This category includes services related to comfort letters, consents and assistance with and review of certain documents filed with the SEC.

(3)Tax fees: Tax fees in the above table are fees billed by GYRU in connection with financial statements for tax purposes.

In the past, our audit committee (formerly the CUAC) was required to pre-approve any services provided by GYRU prior to any engagement that was not specifically included in the scope of the audit.  In 2013, none of the non-audit fees paid to GYRU were approved pursuant to a de minimis exemption. The de minimis exception to pre-approval requirements applied to permitted non-audit services not at first recognized to be non-audit services so long as (a) the aggregate amount of all such non-audit services constituted 5.0% or less of the total revenues paid by the Company to the accountant during the fiscal year; (b) such services were not recognized at the time of engagement as non-audit services; and (c) such services were promptly brought to the attention of the audit committee (formerly the CUAC) and approved by the audit committee (formerly the CUAC) prior to completion of the audit.  As of January 1st, 2014, and as a consequence of the Eutelsat acquisition, we no longer have an audit committee.

ITEM 16D. Not Applicable

ITEM 16E. Not Applicable

ITEM 16F. Not Applicable

ITEM 16G. Not Applicable

ITEM 17. Financial Statements

We have responded to Item 18 in lieu of responding to this item.

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PART III

ITEM 18. Financial Statements

Please refer to Item 19.

ITEM 19. Exhibits

(a) Index to Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Balance Sheets as of December 31, 2013 and 2012	F-5
Consolidated Statements of (Loss) Income for the Years Ended December 31, 2013 and 2012, and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)	F-6
Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Years Ended December 31, 2013 and 2012 and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)	F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2013 and 2012 and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)	F-8
Notes to Consolidated Financial Statements	F-10
Schedule of Valuation and Qualifying Accounts	F-47

(b) Index to Exhibits

Exhibit No.	Description
1.1	Estatutos Sociales (bylaws) of Satélites Mexicanos, S.A. de C.V. (1)
1.2	Estatutos Sociales (bylaws) of Satélites Mexicanos, S.A. de C.V. (English translation) (9)
1.3	Amendment to Estatutos Sociales (bylaws) of Satélites Mexicanos, S.A. de C.V. (11)
1.4	Amendment to Estatutos Sociales (bylaws) of Satélites Mexicanos, S.A. de C.V. (English translation) (11)
1.5	Amendment to Estatutos Sociales (bylaws) of Satélites Mexicanos, S.A. de C.V. (14)
1.6	Amendment to Estatutos Sociales (bylaws) of Satélites Mexicanos, S.A. de C.V. (English translation) (14)
2.1	Indenture, dated as of November 30, 2006, between Satélites Mexicanos, S.A. de C.V., each of the First Priority Guarantors named there in, as first priority guarantors, and HSBC Bank USA, National Association, as first priority indenture trustee (4)
2.2	First Priority Collateral Trust Agreement among Satélites Mexicanos, S.A. de C.V., each of the First Priority Guarantors named therein, HSBC Bank USA, National Association, as indenture trustee, and HSBC Bank USA, National Association, as collateral trustee, dated as of November 30, 2006 (4)
2.3	Intercreditor Agreement, dated as of November 30, 2006, by and among Satélites Mexicanos, S.A. de C.V., as the Company, HSBC Bank USA, National Association, as the first priority collateral trustee and as the first priority indenture trustee, and Wells Fargo Bank, National Association, as the second priority collateral trustee and as the second priority indenture trustee (4)
2.4	Registration Rights Agreement, dated as of November 30, 2006, by Satélites Mexicanos, S.A. de C.V., for the benefit of certain holders of its First Priority Senior Secured Notes due 2011 (4)
2.5	First Priority Mortgage in and over the Mortgaged Assets to secure the First Priority Obligations granted by the Company in favor of, and/or for the benefit of, HSBC Bank USA, National Association, in its capacity as first priority collateral trustee under the First Priority Collateral Trust Agreement for the benefit of the beneficiaries of the First Priority Collateral Trust Agreement (4)
2.6	Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A. de C.V. as Pledgor, HSBC Bank USA, National Association, as First Priority Collateral Trustee, for itself and for the benefit of the First Priority Holders pursuant to the Collateral Trust Agreement, as Pledgee, and Enlaces Integra S. de R.L. de C.V., as the Company (4)
2.7	Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A. de C.V. as pledgor, HSBC Bank USA, National Association, as first priority collateral trustee, for itself and for the benefit of the First Priority Holders pursuant to the Collateral Trust Agreement, as pledgee, and SMVS-Servicios Tecnicos, S. de R.L. de C.V., as the Company (4)
2.8	Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A. de C.V., as pledgor, HSBC Bank USA, National Association, as first priority collateral trustee, for itself and for the benefit of the First Priority Holders pursuant to the Collateral Trust Agreement, as pledgee, and SMVS-Administración, S. de R.L. de C.V., as the Company (4)
2.9	Floating Lien Pledge Agreement, as of November 30,2006, by and between SMVS-Servicios Tecnicos, S. de R.L. de C.V., as pledgor, and HSBC Bank USA, National Association, as first priority collateral trustee for itself and for the benefit of the First Priority Holders, as the pledgee (4)
2.10	Floating Lien Pledge Agreement, as of November 30,2006, by and between SMVS-Administración, S. de R.L. de C.V., as pledgor, and HSBC Bank USA, National Association, as first priority collateral trustee for itself and for the benefit of the First Priority Holders, as the pledgee (4)
2.11	Indenture, dated as of November 30, 2006, between Satélites Mexicanos, S.A. de C.V., as issuer, each of the Second Priority Guarantors named therein as second priority guarantors, and Wells Fargo Bank, National Association, as trustee (4)

89

Exhibit No.	Description
2.12	Second Priority Collateral Trust Agreement, among Satélites Mexicanos, S.A. de C.V., each of the Second Priority Guarantors named therein, Wells Fargo Bank, National Association, as indenture trustee, and Wells Fargo Bank, National Association, as collateral trustee, dated as of November 30, 2006 (4)
2.13	Registration Rights Agreement, dated as of November 30, 2006, by Satélites Mexicanos, S.A. de C.V., for the benefit of certain holders of its Second Priority Senior Secured Notes due 2013 (4)
2.14	Second Priority Mortgage in and over the Mortgaged Assets of Satélites Mexicanos, S.A. de C.V. to secure the Second Priority Obligations granted by the Company in favor of, and/or for the benefit of, Wells Fargo Bank, National Association, in its capacity as second priority collateral trustee under the second priority collateral trust agreement for the benefit of the beneficiaries of the Second Priority Collateral Trust Agreement (4)
2.15	Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A. de C.V., as the pledgor, and Wells Fargo Bank, N.A., as second priority collateral trustee and for the benefit of the second priority holders pursuant to the Second Collateral Trust Agreement, as the pledgee, and Enlaces Integra, S. de R.L. de C.V., as the Company (4)
2.16	Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A. de C.V., as the pledgor, and Wells Fargo Bank, N.A., as second priority collateral trustee and for the benefit of the second priority holders pursuant to the Second Collateral Trust Agreement, as the pledgee, and SMVS Administración, S. de R.L. de C.V., as the Company (4)
2.17	Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A. de C.V., as the pledgor, and Wells Fargo Bank, N.A., as second priority collateral trustee and for the benefit of the second priority holders pursuant to the Second Collateral Trust Agreement, as the pledgee, and SMVS-Servicios Técnicos, S. de R.L. de C.V., as the Company (4)
2.18	Floating Lien Pledge Agreement, as of November 30, 2006, by and between SMVS-Administración, S. de R.L. de C.V., as pledgor, and Wells Fargo Bank, N.A., as second priority collateral trustee for itself and for the benefit of the second priority holders, as the pledgee (4)
2.19	Floating Lien Pledge Agreement, as of November 30, 2006, by and between SMVS-Servicios Técnicos, S. de R.L. de C.V., as pledgor, and Wells Fargo Bank, N.A., as second priority collateral trustee for itself and for the benefit of the second priority holders, as the pledgee (4)
2.20	Irrevocable Administration Trust Agreement No. F/589, dated as of November 28, 2006, by and between Satélites Mexicanos, S.A. de C.V. as the Company, in its capacity as settlor and beneficiary, and Deutsche Bank Mexico, S.A., Institution de Banca Multiple, Division Fiduciaria, in its capacity as trustee (4)
2.21	Agency Agreement, dated as of November 30, 2006, between Satélites Mexicanos, S.A. de C.V. and The Bank of New York, as Agent, for the benefit of holders of Trust Interests (4)
2.22	Registration Rights Agreement, dated as of November 30, 2006, by Satélites Mexicanos, S.A. de C.V. for the benefit of certain holders of Beneficial Interests in the Irrevocable Administrative Trust Agreement No. F/0 598, dated November 28, 2006 (4)
2.23	Supplemental Indenture, dated as of December 30, 2008, among Satélites Mexicanos, S.A. de C.V., as issuer, Alterna’TV Corporation, as new first priority guarantor, and HSBC Bank USA, National Association, as trustee (6)
2.24	Supplemental Indenture, dated as of January 20, 2009, among Satélites Mexicanos, S.A. de C.V., as issuer, Alterna’TV Corporation, as new second priority guarantor, and Wells Fargo Bank, National Association, as trustee (6)
2.25	Additional Guarantee Designation, dated December 30, 2008, delivered to HSBC Bank USA, National Association, as trustee, by Alterna’TV Corporation, as new first priority guarantor (6)
2.26	Additional Guarantee Designation, dated January 20, 2009, delivered to Wells Fargo Bank, National Association, as trustee, by Alterna’TV Corporation, as new second priority guarantor (6)
2.27	Joinder, dated January 20, 2009, by Alterna’TV Corporation (6)
2.28	Pledge Agreement, dated as of December 30, 2008, by and between Satélites Mexicanos, S.A. de C.V., as pledgor, and HSBC Bank USA, National Association, as trustee (6)
2.29	Pledge Agreement, dated as of January 20, 2009, by and between Satélites Mexicanos, S.A. de C.V., as pledgor, and Wells Fargo Bank, National Association, as trustee (6)
2.30	Supplemental Indenture, dated as of May 21,2009, among Satélites Mexicanos, S.A. de C.V. as Issuer, Alterna’TV International Corporation, as New First Priority Guarantor, and HSBC Bank USA, National Association, as Trustee (6)
2.31	Supplemental Indenture, dated as of May 21,2009, among Satélites Mexicanos, S.A. de C.V., as issuer, Alterna’TV International Corporation, as new second priority guarantor, and Wells Fargo Bank, National Association, as trustee(6)
2.32	Additional Guarantee Designation, dated May 21, 2009, delivered to HSBC Bank USA, National Association, as trustee, by Alterna’TV International Corporation, as new first priority guarantor (6)
2.33	Additional Guarantee Designation, dated May 21, 2009, delivered to Wells Fargo Bank, National Association, as trustee, by Alterna’TV International Corporation, as new second priority guarantor (6)
2.34	Joinder, dated May 21, 2009, by Alterna’TV International Corporation (6)
2.35	Pledge Agreement, dated as of May 21, 2009, by and between Satélites Mexicanos, S.A. de C.V., as Pledgor, and HSBC Bank USA, National Association, as trustee (6)

90

Exhibit No.	Description
2.36	Pledge Agreement, dated as of May 21, 2009, by and between Satélites Mexicanos, S.A. de C.V., as Pledgor, and Wells Fargo Bank, National Association, as trustee (6)
2.37	Agreement and Plan of Merger, dated as of May 26, 2011, by and between Satélites Mexicanos, S.A. de C.V. and Satmex Escrow, S.A. de C.V. (9)
2.38	Indenture, dated as of May 5, 2011, by and between Satmex Escrow, S.A. de C.V. and Wilmington Trust FSB, as trustee (9)
2.39	Collateral Trust Agreement, dated as of May 26, 2011, by and among Satélites Mexicanos, S.A. de C.V., the Guarantors from time to time party thereto, Wilmington Trust, FSB, as trustee, and Wells Fargo National Association, as collateral trustee (9)
2.40	Registration Rights Agreement, dated as of May 5, 2011, by and among Satélites Mexicanos, S.A. de C.V., Satmex Escrow, S.A. de C.V., Alterna’TV Corporation, Alterna’TV International Corporation and Jefferies & Company, Inc. (9)
2.41	Security Agreement, dated as of May 26, 2011, by and among Alterna’TV Corporation, Alterna’TV International Corporation, the other grantors from time to time party thereto and Wells Fargo Bank, National Association, as collateral trustee (9)
2.42	Pledge Agreement, dated as of May 26, 2011, among Satélites Mexicanos, S.A. de C.V., the other pledgors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral trustee (9)
2.43	Mortgage, dated as of May 26, 2011, granted by Satélites Mexicanos, S.A. de C.V. in favor of Wells Fargo Bank, National Association, as collateral trustee (English Translation) (9)
2.44	Floating Lien Pledge Agreement, dated as of May 26, 2011, by and between Satélites Mexicanos, S.A. de C.V. and Wells Fargo Bank, National Association, as collateral trustee (English Translation) (9)
2.45	Equity Interest Pledge Agreement, dated as of May 26, 2011, by and between Satélites Mexicanos, S.A. de C.V. and Wells Fargo Bank, National Association, as collateral trustee (English Translation) (9)
2.46	Guarantee of Alterna’TV Corporation (9)
2.47	Guarantee of Alterna’TV International Corporation (9)
4.1	Satellite Concession 116.8 degrees W. L. (1)
4.2	Satellite Concession 116.8 degrees W. L. (English Translation) (1)
4.3	Satellite Concession 113.0 degrees W. L. (1)
4.4	Satellite Concession 113.0 degrees W. L. (English Translation) (1)
4.5	Satellite Concession 109.2 degrees W. L. (1)
4.6	Satellite Concession 109.2 degrees W. L. (English Translation) (1)
4.7	Extension of Satellite Concession 116.8 degrees W.L. effective at the expiration of the current Satellite Concession 116.8 degrees W.L. (11)
4.8	Extension of Satellite Concession 116.8 degrees W.L. effective at the expiration of the current Satellite Concession 116.8 degrees W.L. (English Translation) (11)
4.9	Extension of Satellite Concession 113.0 degrees W.L. effective at the expiration of the current Satellite Concession 113.0 degrees W.L. (11)
4.10	Extension of Satellite Concession 113.0 degrees W.L. effective at the expiration of the current Satellite Concession 113.0 degrees W.L. (English Translation) (11)
4.11	Extension of Satellite Concession 114.9 degrees W.L. (exchanged for 109.2 degrees W.L.) effective at the expiration of the current Satellite Concession 114.9 degrees W.L. (11)
4.12	Extension of Satellite Concession 114.9 degrees W.L. (exchanged for 109.2 degrees W.L.) effective at the expiration of the current Satellite Concession 114.9 degrees W.L. (English Translation) (11)
4.13	Property Concession (1)
4.14	Property Concession (English Translation) (1)
4.15	Amended and Restated Membership Agreement, dated as of August 21, 1998 among Loral SatMex Ltd., Ediciones Enigma, S.A. de C.V. and Firmamento Mexicano, S. de R. L. de C.V. (1)
4.16	Agreement between Hughes Electronics Corporation, through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000, the Tenth Amendment thereto, dated December 1, 2005 and the Twelfth Amendment thereto, dated February 1, 2006 (2)
4.17	Thirteenth Amendment, dated September 15, 2006, to Agreement between Hughes Electronics Corporation, through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (5)
4.18	Fourteenth Amendment, dated August 1, 2008, to Agreement between Hughes Electronics Corporation, through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (6)

91

Exhibit No.	Description
4.19	Fifteenth Amendment, dated February 1, 2009, to Agreement between Hughes Electronics Corporation, through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (6)
4.20	Sixteenth Amendment, dated September 1, 2009, to Agreement between Hughes Electronics Corporation, through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (1), (7)
4.21	Seventeenth Amendment, dated October 1, 2009, to Agreement between Hughes Electronics Corporation, through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (1), (8)
4.22	Stock Purchase Agreement, dated February 26, 2010, between EchoStar Satellite Acquisition L.L.C. and Satélites Mexicanos, S.A. de C.V. (2), (8)
4.23	Contract between Space Systems/Loral, LLC (f/k/a Space Systems/Loral, Inc.) and Satélites Mexicanos, S.A. de C.V. (executed on May 7, 2010 and effective as of April 1, 2010) for the design and construction of a new, 64 transponder, C- and Ku-band satellite, Satmex 8 (1), (8)
4.24	Eighteenth Amendment, dated July 1, 2010, to Agreement between Hughes Electronics Corporation, through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of January 20,2000 (10)
4.25	Nineteenth Amendment, dated June 30, 2011 (effective as of August 1, 2010), to Agreement between Hughes Network Systems, a division of Hughes Electronics Corporation, and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (11)
4.26	Launch Services Agreement, dated December 23, 2010, between Satélites Mexicanos, S.A. de C.V. and ILS International Launch Services, Inc. for the launch of its C- and Ku-band satellite, Satmex 8 together with Amendment No. 1 dated January 19, 2011 (10)
4.27	Amendment No. 1, dated January 19, 2011, to Contract No. ILSB-1006-4488 for Launch Services between ILS International Launch Services, Inc. and Satélites Mexicanos, S.A. de C.V. (10)
4.28	Amendment No. 1, dated February 24, 2011, to the Contract between Space Systems/Loral, LLC (f/k/a Space Systems/Loral, Inc.). and Satélites Mexicanos, S.A. de C.V. for the Satmex 8 Satellite Program (10)
4.29	Twentieth Amendment, dated March 1, 2011, to Agreement between Hughes Network Systems, a division of Hughes Electronics Corporation, and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (11)
4.30	Satellite Capacity Provision Agreement, dated as of August 12, 2011 (effective as of July 1, 2011), between Satélites Mexicanos, S.A. de C.V. and Media Networks Latin America for broadband data services throughout Latin America (11)
4.31	Amendment No. 2, dated November 15, 2011, to Contract No. ILSB-1006-4488 for Launch Services between ILS International Launch Services, Inc. and Satélites Mexicanos, S.A. de C.V. (11)
4.32	Amendment No. 2, dated January 16, 2012, to the Contract between Space Systems/Loral, LLC (f/k/a Space Systems/Loral, Inc.) and Satélites Mexicanos, S.A. de C.V. for the Satmex 8 Satellite Program (11)
4.33	Launch Services Agreement, dated February 3, 2012, between Space Exploration Technologies Corp. and Satélites Mexicanos, S.A. de C.V. for launch services for Satmex 7 on a Falcon 9 launch vehicle. (11)
4.34	Amendment No. 1, dated March 2, 2012, to Launch Services Agreement for launch services for Satmex 7 on a Falcon 9 launch vehicle. (11)
4.35	Amendment No. 2, dated March 9, 2012, to Launch Services Agreement for launch services for Satmex 7 on a Falcon 9 launch vehicle. (11)
4.36	Amendment No.3, dated September 26, 2012, to Launch Services Agreement for launch services for Satmex 7 on a Falcon 9 launch vehicle. (14)(15)
4.37	Amendment No.4, dated November 15, 2013, to Launch Services Agreement for launch services for Satmex 7 on a Falcon 9 launch vehicle. (14)(15)
4.38	Master Procurement Agreement dated March 13, 2012, among Satélites Mexicanos, S.A. de C.V., Boeing Satellite Systems International, Inc. and Asia Broadcast Satellite Holdings Ltd. Under which Satmex committed to purchase one of the initial four satellites, designated Satmex 7, and agreed to enter into the Satmex Procurement Agreement pursuant to which Boeing will develop and manufacture Satmex 7. (11)
	Commercial Satellite Delivery Contract (Contract No. BSS-SATMEX-12-001B), dated March 13, 2012, for the manufacture and delivery of Satmex 7 and satellite simulator software, satellite control software and training. (11)
4.39	Amendment No. 1, dated December 18, 2012, between Satélites Mexicanos, S.A. de C.V. and Boeing Satellite Systems International, Inc., to the Commercial Satellite Delivery Contract dated March 13, 2012 (12)
4.40	Amendment No. 2, dated August 15, 2013, between Satélites Mexicanos, S.A. de C.V. and Boeing Satellite Systems International, Inc., to the Commercial Satellite Delivery Contract dated March 13, 2012 (14)(15)
4.41	Bilateral Agreement, dated March 13, 2012, between Satélites Mexicanos, S.A. de C.V. and Asia Broadcast Satellite Holdings Ltd. To share launch services, allocate common costs and cross-indemnify each other for any actions or changes to under a joint procurement program for four C- and Ku-band satellites. (11)

92

Exhibit No.	Description
4.42	Amendment Agreement, dated November 29, 2012, between Satélites Mexicanos, S.A. de C.V. and Asia Broadcast Satellite Holdings Ltd to the Bilateral Agreement dated March 13, 2012 (12)
4.43	Agreement dated June 8, 2006 between América Móvil Perú, S.A.C. (successor of Telmex Perú, S.A.) and Satmex to provide broadband data services capacity using the Solidaridad 2 and Satmex 6 satellites. (12)
4.44	First Amendment Agreement dated October 1, 2007, between América Móvil Perú, S.A.C. (successor of Telmex Perú, S.A.) and Satmex to the Agreement dated June 8, 2006.(12)
4.45	Second Amendment Agreement dated November 29, 2007, between América Móvil Perú, S.A.C. (successor of Telmex Perú, S.A.) and Satmex to the Agreement dated June 8, 2006.(12)
4.46	Third Amendment Agreement dated February 15, 2008, between América Móvil Perú, S.A.C. (successor of Telmex Perú, S.A.) and Satmex to the Agreement dated June 8, 2006.(12)
4.47	Fourth Amendment Agreement dated April 15, 2008, between América Móvil Perú, S.A.C. (successor of Telmex Perú, S.A.) and Satmex to the Agreement dated June 8, 2006.(12)
4.48	Fifth Amendment Agreement dated September 1, 2008, between América Móvil Perú, S.A.C. (successor of Telmex Perú, S.A.) and Satmex to the Agreement dated June 8, 2006.(12)
4.49	Sixth Amendment Agreement dated January 19, 2009, between América Móvil Perú, S.A.C. (successor of Telmex Perú, S.A.) and Satmex to the Agreement dated June 8, 2006.(12)
4.50	Satellite Services Master Agreement through the Mexican Satellite System No. 006/14 entered by and between Satélites Mexicanos, S.A. de C.V. and América Móvil Perú, S.A.C, dated as January 19, 2014. (14)(15)
4.51	Twentieth First Amendment, dated March 1, 2012, to Agreement between Hughes Network Systems, a division of Hughes Electronics Corporation, and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000.(12)
4.52	Twentieth Second Amendment, dated March 1, 2012, to Agreement between Hughes Network Systems, a division of Hughes Electronics Corporation, and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (12)
4.53	Twenty-Third Amendment, dated September 15, 2012, to Agreement between Hughes Network Systems, a division of Hughes Electronics Corporation, and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (12)
4.54	Twenty-Fourth Amendment, dated August 8, 2012, to Agreement between Hughes Network Systems, a division of Hughes Electronics Corporation, and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (12)
4.55	Twenty-Fifth Amendment, dated January 8, 2013, to Agreement between Hughes Network Systems, a division of Hughes Electronics Corporation, and Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000 (12)
4.56	Securities Purchase Agreement, dated as of July 30, 2013, among Satmex International Coöperatieve U.A., Intenal Mexicana, S.A.P.I. de C.V. and the other stockholders signatories thereto, Satélites Mexicanos, S.A. de C.V., and Eutelsat SA. (13)
4.57	Purchase and sale contract of partnership shares, dated as of October 25, 2013, by and between, Satélites Mexicanos, S.A. de C.V. represented, Holdsat Mexico, S.A.P.I. de C.V., and SMVS-Administración, S. de R.L. de C.V., and AXESAT, S. A., and Ingux, S.A. (14)(15)
12.1	Section 302 Certification of Patricio Ernesto Northland, Chief Executive Officer (14)
12.2	Section 302 Certification of Juan Crisostomo Antonio García-Gayou Facha, Chief Financial Officer (14)
13.1	Section 906 Certification of Patricio Ernesto Northland, Chief Executive Officer (14)
13.2	Section 906 Certification of Juan Crisostomo Antonio García-Gayou Facha, Chief Financial Officer (14)

(1)Incorporated by reference from the registrant’s Registration Statement on Form F-4 filed on November 9, 1998 (File No. 333-8880).

(2)Incorporated by reference to the registrant’s Form 20-F for the fiscal year ended December 31, 2005.

(3)Incorporated by reference from the registration’s Amendment to Form T-3 filed on November 22, 2006 (File No. 022-28822).

(4)Incorporated by reference from the registrant’s Form 6-K for the month of December, 2006.

(5)Incorporated by reference to the registrant’s Form 20-F for the fiscal year ended December 31, 2006.

(6)Incorporated by reference to the registrant’s Form 20-F for the fiscal year ended December 31, 2008.

(7)Incorporated by reference to the registrant’s Form 20-F for the fiscal year ended December 31, 2009.

(8)Incorporated by reference from the registrant’s Form 6-K filed November 22, 2010.

(9)Incorporated by reference from the registrant’s Form 6-K filed June 10, 2011.

(10)Incorporated by reference from the registrant’s Form 20-F for the fiscal year ended December 31, 2010.

(11)Incorporated by reference from the registrant’s Form 20-F for the fiscal year ended December 31, 2011.

93

(12) Incorporated by reference from the registrant’s Form 20-F for the fiscal year ended December 31, 2012.

(13)Incorporated by reference from the registrant’s Form 6-K filed August 1, 2013.

(14)Filed herewith.

(15) Portions of exhibit have been omitted pursuant to Satmex’s Confidential Treatment Request, submitted to the SEC on the date of the filing of this Form 20-F.

94

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this annual report on Form 20-F to be signed on its behalf by the undersigned, thereunto duly authorized.

	SATÉLITES MEXICANOS, S.A. DE C.V.
	By:	/s/ Juan Crisostomo Antonio García Gayou Facha
		Juan Crisostomo Antonio García Gayou Facha
		Chief Financial Officer
Date: April 30, 2014

95

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

	Page
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Balance Sheets as of December 31, 2013 and 2012	F-5
Consolidated Statements of (Loss) Income for the Years Ended December 31, 2013 and 2012, and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)	F-6
Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Years Ended December 31, 2013 and 2012 and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)	F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2013 and 2012 and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)	F-8
Notes to Consolidated Financial Statements	F-10
Schedule of Valuation and Qualifying Accounts	F-47

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2013 and 2012, and Report of Independent Registered Public Accounting Firm Dated April 25, 2014

F-1

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Report of Independent Registered Public Accounting Firm and Consolidated Financial Statements

Table of contents

	Page
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Balance Sheets as of December 31, 2013 and 2012	F-5
Consolidated Statements of (Loss) Income for the Years Ended December 31, 2013 and 2012, and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011(Predecessor Registrant)	F-6
Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Years Ended December 31, 2013 and 2012 and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)	F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2013 and 2012 and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)	F-8
Notes to Consolidated Financial Statements	F-10
Schedules of Valuation and Qualifying Accounts	F-47

F-2

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Satélites Mexicanos, S. A. de C. V. and Subsidiaries
Mexico City, Mexico

We have audited the accompanying consolidated balance sheets of Satélites Mexicanos, S. A. de C. V. and subsidiaries (“Satmex”) as of December 31, 2013 and 2012 (Successor Registrant balance sheets), and the related consolidated statements of (loss) income, shareholders’ equity (deficit) and cash flows for the years then and for the period from May 26, 2011 through December 31, 2011 (Successor Registrant operations) and for the period from January 1, 2011 through May 25, 2011, (Predecessor Registrant operations). Our audits also included the financial statement schedule of the Successor Registrant for the years ended December 31, 2013 and 2012 and for the period from May 26, 2011 through December 31, 2011 and of the Predecessor Registrant for the period from January 1, 2011 through May 25, 2011, as listed in the table of contents. These consolidated financial statements and financial statement schedule are the responsibility of Satmex’s management. Our responsibility is to express an opinion on the consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Satmex is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Satmex’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the Successor Registrant consolidated financial statements present fairly, in all material respects, the financial position of Satélites Mexicanos, S. A. de C. V. and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for the years ended December 31, 2013 and 2012, and from the period from May 26, 2011 through December 31, 2011, in conformity with accounting principles generally accepted in the United States of America. Further, in our opinion, the Predecessor Registrant consolidated financial statements present fairly, in all material respects, the results of their operations and their cash flows for the period from January 1, 2011 through May 25, 2011, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such Successor and Predecessor Registrant financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.

F-3

As discussed in Note 1 to the consolidated financial statements, on July 31, 2013, Satmex and its shareholders entered into an agreement with Eutelsat Communications (“Eutelsat”), a public entity located in France, pursuant to which Eutelsat indirectly acquired 100% of Satmex’s outstanding voting equity interest. The acquisition closed on January 1, 2014.

As discussed in Note 2 to the consolidated financial statements, as a result of the recapitalization transactions described therein, effective May 26, 2011, a change in control occurred. As a result, the Successor Registrant applied push-down accounting in its consolidated financial statements to reflect its acquisition by the Group of Investors.  Therefore, the consolidated financial statements of the Successor Registrant are presented on a different basis than those of the Predecessor Registrant and are not comparable.

Galaz, Yamazaki, Ruiz Urquiza, S. C.

Member of Deloitte Touche Tohmatsu Limited

/s/ Fernando Ramírez Muñoz

C. P. C. Fernando Ramírez Muñoz

Mexico City, Mexico

April 25, 2014

F-4

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Consolidated Balance Sheets

As of December 31, 2013 and 2012

(In thousands of U. S. dollars)

	2013		2012
Assets
Current assets:
Cash and cash equivalents	$	29,796	$	63,815
Restricted cash	—		4,900
Accounts receivable, net	16,570		10,555
Prepaid insurance and other assets	5,207		8,689
Deferred tax assets	79		2,475
Total current assets	51,652		90,434
Satellites and equipment, net	641,835		550,434
Concessions, net	39,020		39,239
Intangible assets	9,457		31,924
Deferred financing cost	8,054		11,390
Guarantee deposits and other assets	3,072		1,016
Deferred tax assets	61,351		—
Non-current assets held for sale	7,444		21,656
Total	$	821,885	$	746,093
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	89,022	$	42,912
Deferred revenue	3,467		3,605
Income tax payable	35		11
Total current liabilities	92,524		46,528
Debt obligations	360,000		360,000
Deferred revenue and other liabilities	29,481		27,317
Non-current liabilities held for sale	2,680		3,272
Deferred tax liabilities	—		7,366
Total liabilities	484,685		444,483
Contingencies and commitments (Note 18)
Shareholders’ equity:
Paid-in capital	315,662		275,662
Common stock, class I, no par value, 50,000 shares authorized, issued and outstanding	—		—
Common stock, class II, no par value, 136,754,114 and 129,950,000 shares authorized, issued and outstanding in 2013 and 2012, respectively	—		—
Additional paid-in capital	1,207		—
Retained earnings	20,331		22,334
Total Satélites Mexicanos, S. A. de C. V. shareholders’ equity	337,200		297,996
Noncontrolling interest	—		3,614
Total shareholders’ equity	337,200		301,610
Total	$	821,885	$	746,093

See accompanying notes to these consolidated financial statements.

F-5

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Consolidated Statements of (Loss) Income

For the Years Ended December 31, 2013 and 2012 and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant) and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)

(In thousands of U. S. dollars)

	Successor Registrant									Predecessor Registrant
	2013			2012			Period fromMay 26, 2011 throughDecember 31, 2011			Period fromJanuary 1, 2011 throughMay 25, 2011
Continuing operations:
Revenues:
Satellite services	$	120,064		$	118,669		$	62,758		$	45,888
Programming distribution services	12,792			14,504			7,563			4,786
	132,856			133,173			70,321			50,674
Cost of satellite services(1)	11,279			11,821			6,191			4,401
Cost of programming distribution services(1)	7,911			8,440			4,393			2,625
Selling and administrative expenses(1)	84,890			18,383			11,638			5,483
Depreciation and amortization	59,253			64,130			45,824			16,682
Reorganization expenses	—			—			—			28,766
	163,333			102,774			68,046			57,957
Operating (loss) income	(30,477		)	30,399			2,275			(7,283		)
Other (expenses) income:
Interest expense	(30,728		)	(4,430		)	(8,983		)	(19,494		)
Interest income	194			197			182			69
Foreign exchange gain (loss) — net	51			111			(550		)	127
(Loss) income from continuing operations before income tax	(60,960		)	26,277			(7,076		)	(26,581		)
Income tax (benefit) expense	(66,050		)	(14,493		)	11,400			2,610
Net income (loss) from continuing operations	5,090			40,770			(18,476		)	(29,191		)
Discontinued operations: (Loss) income from operations of discontinued component broadband satellite services	(7,093		)	549			(381		)	431
Net (loss) income	(2,003		)	41,319			(18,857		)	(28,760		)
Less: Net (loss) income attributable to noncontrolling interest	—			103			25			3
Net (loss) income attributable to Satélites Mexicanos, S. A. de C. V.	$	(2,003	)	$	41,216		$	(18,882	)	$	(28,763	)

(1)Exclusive of depreciation and amortization shown separately below.

See accompanying notes to these consolidated financial statements.

F-6

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity (Deficit)

For the Years Ended December 31, 2013 and 2012 and for the Period From May 26, 2011 Through December31, 2011 (Successor Registrant) and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)

(In thousands of U. S. dollars, except share data)

	Shares Issued		Paid-in capital			Additional paid-in capital		(Accumulated deficit) retainedearnings			Noncontrollinginterest			Total shareholders’(deficit) equity
Balance, January 1, 2011	4,687,500		$	46,764		$	—	$	(136,320	)	$	3,523		$	(86,033	)
Net loss from January 1, 2011 through May 25, 2011	—		—			—		(28,763		)	3			(28,760		)
Balance, May 25, 2011 (Predecessor Registrant)	4,687,500		46,764			—		(165,083		)	3,526			(114,793		)
Push-down accounting adjustments:
Valuation adjustments, net	—		225,363			—		—			(40		)	225,323
Elimination of Predecessor accumulated deficit	—		(165,083		)	—		165,083			—			—
Issuance of common stock	116,022,700		90,000			—		—			—			90,000
Capitalization of debt into common stock	9,289,800		78,618			—		—			—			78,618
Net loss from May 26, 2011 through December 31, 2011	—		—			—		(18,882		)	25			(18,857		)
Balance, December 31, 2011 (Successor Registrant)	130,000,000		275,662			—		(18,882		)	3,511			260,291
Net income for the year	—		—			—		41,216			103			41,319
Balance, December 31, 2012	130,000,000		275,662			—		22,334			3,614			301,610
Cancellation of shares in treasury	(28,405	)	—			—		—			—			—
Acquisition of noncontrolling interest	—		—			1,207		—			(3,614		)	(2,407		)
Issuance of common stock	6,832,519		40,000			—		—			—			40,000
Net loss for the year	—		—			—		(2,003		)	—			(2,003		)
Balance, December 31, 2013	136,804,114		$	315,662		$	1,207	$	20,331		$	—		$	337,200

See accompanying notes to these consolidated financial statements.

F-7

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2013 and 2012 and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)

(In thousands of U.S. dollars)

	Successor Registrant									Predecessor Registrant
	2013			2012			Period fromMay 26, 2011 throughDecember 31, 2011			Period fromJanuary 1, 2011 throughMay 25, 2011
Cash flows from operating activities:
Net income (loss)	$	(2,003	)	$	41,319		$	(18,857	)	$	(28,760	)
Discontinued operations, net of tax	7,093			(549		)	381			(431		)
Income (loss) from continuing operations	5,090			40,770			(18,476		)	(29,191		)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	59,253			64,130			45,824			16,682
Deferred income taxes	(66,321		)	(15,571		)	10,814			2,157
Net periodic pension cost	388			181			(24		)	—
Deferred revenue	(3,605		)	(8,574		)	(795		)	(977		)
Deferred financing costs	3,198			3,172			1,806			—
Provision for (reversal of) allowance for doubtful accounts	406			(119		)	384			—
Write-off of advance payment	—			2,600			—			—
Interest accrued to principal on debt obligations	—			—			—			4,020
Changes in operating assets and liabilities:
Accounts receivable	(6,421		)	(784		)	7,118			(6,892		)
Prepaid insurance	3,482			(1,830		)	(578		)	1,887
Guarantee deposits and other assets	(2,056		)	(309		)	213			(128		)
Accounts payable, accrued expenses and income tax	27,026			(3,154		)	(13,995		)	18,201
Due from related parties	—			—			—			837
Guarantee deposits and accrued expenses	5,769			471			(527		)	665
Net cash provided by operating activities	26,209			80,983			31,764			7,261
Cash flows from investing activities:
Construction in progress - satellites (including capitalized interest)	(100,971		)	(114,678		)	(150,537		)	(42,334		)
Orbital position Satmex 9	(1,361		)	—			—			—
Restricted cash-satellite Satmex 8	—			(4,900		)	—			—
Acquisition of equipment	(2,016		)	(1,536		)	(1,440		)	(568		)
Net cash used in investing activities	(104,348		)	(121,114		)	(151,977		)	(42,902		)

Continue

F-8

	Successor Registrant									Predecessor Registrant
	2013			2012			Period fromMay 26, 2011 throughDecember 31, 2011			Period fromJanuary 1, 2011 throughMay 25, 2011
Cash flows from financing activities:
Proceeds from equity interest	40,000			—			90,000			—
Repayment of First Priority Old Notes	—			—			(238,237		)	—
Issuance of Senior Secured Notes	—			35,700			—			325,000
Deferred financing costs	—			(1,221		)	(333		)	(18,247		)
Net cash provided by (used in) financing activities	40,000			34,479			(148,570		)	306,753
Cash flows of discontinued operation:
Net cash provided by (used in) operating activities	(1,457		)	1,515			590			874
Net cash used in investing activities	(195		)	(462		)	(187		)	(67		)
Net cash used in financing activities	(2,407		)	—			—			—
Cash and cash equivalents:
Net change in cash and equivalents	(42,198		)	(4,599		)	(268,380		)	271,919
Cash and equivalents at beginning of period	74,652			79,251			347,631			75,712
Cash and equivalents at end of period	$	32,454		$	74,652		$	79,251		$	347,631
Less: Cash and equivalents at end of period from discontinued operations	2,658			10,837			9,818			9,636
Cash and equivalents at end of period from continuing operations	$	29,796		$	63,815		$	69,433		$	337,995
Supplemental cash flow information:
Cash paid during the year:
Interest paid	$	34,200		$	32,870		$	16,295		$	40,196
Capitalized interest	$	9,357		$	33,830		$	11,715		$	3,801
Income taxes paid	$	666		$	1,977		$	1,172		$	—
Non-cash investing activities:
Capital expenditures incurred not yet paid	$	45,326		$	27,744		$	3,674		$	35,678
Non-cash financing activities:
Capitalization of debt into common stock	$	—		$	—		$	206,890		$	—

See accompanying notes to these consolidated financial statements.

F-9

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2013 and 2012 and for the Period From May 26, 2011 Through December 31, 2011 (Successor Registrant), and for the Period From January 1, 2011 Through May 25, 2011 (Predecessor Registrant)

(In thousands of U.S. dollars, unless otherwise stated)

1.Nature of business and significant events

Nature of business

Satélites Mexicanos, S. A. de C. V. and subsidiaries (“Satmex” and together with its subsidiaries, the “Company”) is a provider of fixed satellite services (“FSS”) in the Americas. As of December 31, 2013, Satmex’s fleet was comprised of three satellites, Satmex 8, Satmex 6 and Satmex 5 in contiguous orbital slots that enable its customers to serve its entire coverage footprint utilizing a single satellite connection. In May 2013, satellite Satmex 5 was placed in inclined orbit, which prolongs the lifetime of the satellite as it consumes less fuel over time, however the satellite can then only be used by ground antennae capable of tracking the north-south movement or by small dishes with wider beamwidth. Therefore its ability to generate revenues was significantly reduced. In November 2013, satellite Solidaridad 2, was taken out of orbit.

Satmex provides its commercial services through satellites Satmex 8 and Satmex 6, which have a total of 55 C- and 60 Ku-band 36 MHz transponder equivalents. Satmex’s business provides communication services to a diverse range of customers, including telecommunications companies, private and state-owned broadcasting networks, direct-to-home satellite television operators, and public and private telecommunications networks operated by financial, educational and media companies as well as governmental entities.

In addition to the core FSS business, which is reported as “Satellite services” segment, Satmex also provides the programming distribution services segment to offer TV programs in Spanish targeted at Hispanic communities living in the United States of America (“USA”).

The Company also provided broadband satellite services for various applications, such as internet access via satellite, telecommunication transmission and broadcasting, through its 100% owned subsidiary, Enlaces Integra S. de R.L. de C.V. (“Enlaces”).  In October 2013, Satmex entered into a purchase-sale agreement with respect to its investment in Enlaces, for which reason such operations are presented within assets and liabilities held for sale in the accompanying consolidated balance sheets and discontinued operations in the consolidated statements of operations. See further discussion below and in Note 4.

Telecommunications Law Reform and Change in Ownership

On March 11, 2013, the Mexican President submitted a telecommunications reform bill whose purpose is to encourage economic competition and increase the technological development of the sector. The previous Foreign Investment Law and Federal Telecommunications Law in effect at that time, permitted foreign investment in concessionaire companies, such as Satmex, only up to 49%.

On June 11, 2013, the reform bill was passed and the constitution was modified such that it now allows for direct foreign investment up to 100% in telecommunications and satellite communications companies. The terms of the modifications to the constitution were effective on June 12, 2013.

As a result of the aforementioned, on July 31, 2013, Satmex and its shareholders entered into an agreement with Eutelsat Communications (“Eutelsat”), a public entity located in France, pursuant to which Eutelsat indirectly acquired 100% of Satmex’s outstanding voting equity interest. The acquisition closed on January 1, 2014.

F-10

Satellite Satmex 8

On April 1, 2010, Satmex initiated a program for the design and construction of the satellite Satmex 8, through the execution of the Satmex 8 ATP with Space Systems/Loral, LLC (“SSL”). Construction of the Satmex 8 satellite was completed during the second half of 2012. Satmex 8 is a 64 C- and Ku-band transponder satellite which has replaced Satmex 5. The design life of Satmex 8 is 15 years. Satmex 8 has been designed to provide comparable power levels and coverage over the Americas to those of Satmex’s existing satellites, Satmex 6 and Satmex 5.

Satmex 8 satellite was successfully launched on March 27, 2013, from the Baikonur, Kazakhstan cosmodrome. On April 26, 2013, after the successful completion of the in-orbit testing, Satmex achieved full control of the Satmex 8 satellite in its orbit. The migration of customers from Satmex 5 to Satmex 8 was carried out and concluded successfully on April 29, 2013.

Satellite Satmex 7

On March 13, 2012, Satmex and Asia Broadcast Satellite Holdings Ltd (“ABS”) entered into a master procurement agreement with Boeing Satellite Systems International, Inc. (“Boeing”) (the “Master Procurement Agreement”), which establishes the framework for the joint administration by Satmex and ABS for the purchase of four C- and Ku-band satellites to be developed and manufactured by Boeing (the “Program”). In the event ABS fails to perform its obligations under its own satellite procurement agreement, Boeing will be entitled to increase the price of each satellite of Satmex up to maximum of $10.5 million. Also, on this date, Satmex entered into a construction agreement (the “Satmex Procurement Agreement”) with Boeing, for the design, construction and delivery of the satellite Satmex 7, for a 34-month construction schedule. The Satmex Procurement Agreement also provides for a right to purchase an additional satellite.

Satmex also entered into a bilateral agreement with ABS on March 13, 2012 (the “Bilateral Agreement”), whereby Satmex and ABS agreed to share launch services, allocate common Program costs and cross- indemnify each other for any actions or changes to the Program made by Satmex or ABS that adversely affect the costs, timing, delivery or launch of the other party’s satellite or satellites.

Finally, Satmex entered into a launch services agreement (the “Launch Services Agreement”) with Space Exploration Technologies, Corp. (“SpaceX”) to launch satellite Satmex 7. The launch services agreement provides for a scheduled launch period for Satmex 7 between December 2014 and February 2015 and with operations expected to commence in October 2015.

The design, construction, launch and insurance costs of Satmex 7 are expected to be approximately $165.0 million.

Through December 31, 2013, investment in Satmex 7 has totaled $107.3 million, which includes $8.6 million of capitalized interest.

Satellite Satmex 9

On July 15, 2013, Satmex entered into an agreement with Boeing for the design, construction and delivery of Satmex 9, the latest communications satellite in its fleet. Satmex 9 will be launched from Cape Canaveral, Florida and will use SpaceX’s Falcon 9 rocket. The launch is scheduled for the fourth quarter of 2015. Satmex 9 is a satellite with 48 Ku band 36 MHz equivalent transponders, which will be based on Boeing’s 702 SP platforms, for a 24-month construction schedule. The procurement of Satmex 9 is part of a global cooperation agreement with ABS, under the Master Procurement Agreement and the Bilateral Agreement.

On August 15, 2013, Satmex entered into a Configuration Authorization to Proceed (“CATP”) with Boeing, for the design, construction and delivery of Satmex 9. Satmex 9 will have a WAAS Hosted Payload. In connection with work related to the addition of a hosted payload to Satmex 9, a subcontract between Raytheon Company Integrated Defense Systems (“Raytheon”) and Satmex was executed on August 23, 2013.

A further subcontract agreement was signed on December 12, 2013, which superseded the original letter subcontract signed in August. The GEO Satellite Payload for the WAAS will work with C-Extended Band and L-Band. The design, construction, launch and insurance costs of Satmex 9 are expected to be approximately $195.2 million.

F-11

Through December 31, 2013, investment in Satmex 9 has totaled $52.3 million, which includes $1.9 million of capitalized interest.

2.Reorganization in 2011

In order to address its liquidity needs, Satmex carried out a comprehensive recapitalization of the Company through various transactions pursuant to which the following actions were taken (which are referred to, collectively, as the “Recapitalization Transactions”):

On December 22, 2010, Nacional Financiera, S. N. C., Institución de Banca de Desarrollo, Dirección Fiduciaria, as trustee (the “NAFIN Trust”) and Deutsche Bank Mexico, S. A., Institución de Banca Múltiple, División Fiduciaria, as trustee (the “Deutsche Trust”) (collectively the “Sellers”), former shareholders of Satmex, entered into a Share Purchase Agreement (the “SPA”) with Holdsat Mexico, S. A. P. I. de C. V. (“Holdsat Mexico”), as buyer, for the acquisition of the 100% of the outstanding voting equity interests of Satmex. On March 10, 2011, Holdsat Mexico ceded and assigned a portion of its rights under the SPA to acquire all existing Series “B” and “N” shares of Satmex to Satmex International B.V. (“Investment Holdings BV”), which owns 49% of the common stock of Holdsat Mexico. Investment Holdings BV is beneficially and indirectly owned by holders of the previous Second Priority Secured Notes (the “Second Priority Old Notes”).

The assignment of these rights by Holdsat Mexico to Investment Holdings resulted in both entities forming a collective group of investors (the “Group of Investors” or the “Buyers”) to acquire control in Satmex upon the effectiveness of the SPA, which occurred after the fulfillment of the following transactions:

·Payment by the Buyers of $6,250 to the Sellers for 100% of the outstanding common stock of Satmex, which occurred on May 26, 2011;

·The offering and sale of new Senior Secured Notes (“Senior Secured Notes”), due 2017, for $325,000, which were initially offered on May 5, 2011 to qualified institutional buyers under Rule 144A of the Securities Act and to persons outside of the U.S. in compliance with Regulation S of the Securities Act. The Senior Secured Notes were subsequently exchanged for new exchange notes, due 2017, for a like principal amount, registered with the U.S. Securities and Exchange Commission (the “SEC”), effective September 26, 2011. The proceeds received from the Senior Secured Notes were used to repay the First Priority Senior Secured Notes due 2011 (the “First Priority Old Notes”) on May 26, 2011; and

The voluntary filing by Satmex, Alterna’TV Corporation and Alterna’TV International Corporation for protection under Chapter 11 of the U.S. Bankruptcy Code and confirmation of a prepackaged plan of reorganization filed in the United States Bankruptcy Court (the “Plan”), which such confirmation occurred on May 11, 2011. Consummation of the Plan occurred on May 26, 2011 (the “Plan Effective Date”). The Plan contemplated the following transactions:

·The conversion of the Second Priority Old Notes, which were to mature in 2013, into direct or indirect equity interests representing 7.146% of the economic interests in the emerging entity (“Reorganized Satmex”) (the “Conversion Rights”, subject to dilution by any equity issued under any management incentive plan, as determined, adopted and approved by the Board of Directors of Reorganized Satmex on the Plan Effective Date, and any future issuance of equity, including certain primary rights and follow-on rights (the “Primary Rights” and the “Follow-On Rights”, respectively) of the holders of the Second Priority Old Notes as discussed below). In lieu of the Conversion Rights, the Primary Rights and the Follow-On Rights, holders of the Second Priority Old Notes could have elected to receive a cash payment of 38 cents per U.S. dollar in principal amount of the Second Priority Old Notes (including accrued and paid-in kind interest). All interested holders of Second Priority Old Notes elected the Conversion Rights, which such conversion occurred on May 26, 2011;

·The offering of the Primary Rights to holders of the Second Priority Old Notes, which comprised the rights to purchase direct or indirect equity interests representing up to 85.753% of the economic interests in Reorganized Satmex for up to $96,250 (subject to dilution by any equity issued under any management incentive plan, as determined, adopted and approved by the Board of Directors of Reorganized Satmex on the Plan Effective Date, and any future issuance of equity, including the Follow-On Rights, as discussed below).

F-12

The Primary Rights were exercised for $90,000, effective on May 26, 2011, representing 83.254% of the outstanding capital of Reorganized Satmex. Eligible holders of the Second Priority Old Notes also had the right to the Follow-On Rights, comprising the right to invest in their pro rata share of a follow-on issuance of equity securities in an aggregate amount of up to $40,000; this option has expired unexercised;

·Aside from holders of the First Priority Old Notes and the Second Priority Old Notes which received the treatment described above, all holders of allowed claims against the debtors, including employees, trade creditors and other priority and non-priority creditors, were paid in the ordinary course during the resolution of the bankruptcy or in full on, or shortly after, the Plan Effective Date.

Paid-in capital of Reorganized Satmex as a result of the SPA and the Plan is presented in Note 13 to the accompanying consolidated financial statements.

New Basis of Accounting (Push-down accounting)

The SPA became legally effective on May 26, 2011, and resulted in a change in control among the Sellers and the Group of Investors. Given these facts and as a result of becoming substantially wholly-owned by the Group of Investors, Satmex applied push-down accounting in its consolidated financial statements to reflect its acquisition by the Group of Investors. The acquisition method of accounting was applied, resulting in a new basis of accounting for the “successor period” beginning on May 26, 2011 (the “Acquisition Date”).

As a result, the Company recognized and measured, at their fair values, the identifiable assets acquired, liabilities assumed and the related noncontrolling interests. In order to determine fair values, Satmex considered the following generally accepted valuation approaches: the cost approach, the income approach and the market approach. Significant assumptions used in the determination of fair values include cash flow projections and related discount rates, industry indices, market prices regarding replacement cost and comparable market transactions. While Satmex believes that the estimates and assumptions underlying the valuation methodologies were reasonable, different assumptions could have resulted in different fair values.

a.The total estimated consideration transferred, at fair value, for the acquisition of 100% of Satmex’s common stock was as follows:

Consideration at fair value:	As of May 26,2011
Cash paid	$	1,000
Executive bonuses	6,303
Cash consideration paid upon completion of the share purchase agreement	5,250
Rights offering	90,000
Capitalization of Second Priority Old Notes	78,618
Fair value of total consideration transferred	$	181,171

b.Supplementary Pro Forma Information (Unaudited)

The following table presents the revenues and net (loss) income of Satmex as if the acquisition had occurred as of January 1, 2011:

	Revenues	Net loss
	Unaudited
Actual from May 26, 2011 to December 31, 2011 (Successor Registrant)	70,321	(18,882	)
Supplemental pro forma from January 1, 2011 to December 31, 2011	120,585	(12,027	)

F-13

Supplemental pro forma from January 1, 2011 to December 31, 2011 was adjusted to exclude $28,766, of recapitalization transaction expenses incurred in such period, as they are considered non-recurring charges.

Acquisition-related costs were $47,013, of which $18,247 represent the cost of issuing the Senior Secured Notes, which was capitalized within other assets (see Note 5h) on May 5, 2011 (date of issuance of the Senior Secured Notes) and $28,766 were included in the Predecessor statement of operations within recapitalization transactions expenses.

c.The following table summarizes the recognized amounts of identifiable assets, assumed liabilities and
non-controlling interest, pushed-down and reflected in Satmex’s financial information as of the Acquisition Date:

Recognized amounts of identifiable assets acquired and liabilities assumed:	As of May 26,2011
Satellite and equipment	$	341,645
Intangible assets	86,835
Concessions	41,740
Deferred financing cost	18,247
Financial assets, net of financial liabilities	56,159
Deferred income taxes	(10,346		)
Deferred revenue	(35,956		)
First Priority Old Notes	(238,237		)
Assets held for sale, net	19,058
Total identifiable net assets	279,145
Non-controlling interest (1)	(3,486		)
Bargain purchase	(94,488		)
	$	181,171

All assets and liabilities acquired have been measured at fair value.

(1)The fair value of the non-controlling interest in Enlaces, a private entity, was estimated by applying the income approach. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. Key assumptions include a discount rate of 12.30%, a terminal value based on terminal earnings before interest, taxes, depreciation, and amortization, and financial multiples of entities deemed to be similar to Enlaces between 5x and 6x.

As a result of the acquisition, the Company recorded a bargain purchase of $94,488, representing the amount of the fair value of the net assets acquired in excess of the purchase price. The bargain purchase gain represented the purchase of Satmex by the Group of Investors at less than fair value of Satmex’s net assets and stemmed from the restructuring of Satmex. At the end of 2010, the existing debt of Satmex was set to mature within the following twelve months; additionally, Satmex required additional financing for its future satellites. Its current stockholder at that time did not actively administer or operate Satmex and had not provided further financing for Satmex to carry out its plans with respect to future operations. Accordingly, Satmex decided to carry out a restructuring, which included the entrance of new active investors, willing and able to contribute the financing necessary for Satmex to continue with its future operating plans, and thus, purchase Satmex from the Sellers at a bargain purchase.

As the bargain purchase gain did not result from the operations of Satmex, it was recognized as part of Reorganized Satmex’s common stock rather than within its consolidated statement of operations.

F-14

3.Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

a.Factors affecting the comparability of the consolidated financial statements - push-down accounting - The Company has accounted for the Recapitalization Transactions using push-down accounting for the acquisition of the Company by the Group of Investors. This resulted in the adjustment of all net assets to their respective fair values as of the Acquisition Date.

Although Satmex continued as the same legal entity after the Recapitalization Transactions, the application of push-down accounting represented the termination of the old accounting entity and the creation of a new one. As a result, the accompanying consolidated balance sheets, statements of operations, stockholders’ equity and cash flows are presented for two periods: Predecessor and Successor, which relate to the period preceding and succeeding the Recapitalization Transactions, respectively. The Company refers to the operations of Satmex and subsidiaries for both the Predecessor and Successor periods.

Accordingly, the Successor Company presentation is not comparable to the Predecessor Company presentation due to the different basis of accounting.

b.Consolidation of financial statements - The consolidated financial statements include the financial statements of Satmex and those of its subsidiaries. The financial statements of the subsidiaries are consolidated from their respective dates of acquisition or incorporation. All intercompany transactions and balances have been eliminated in consolidation.

The activities of the entities in the consolidated group are described below:

Company	Ownership percentage		Activity
Alterna’TV International Corporation (“Alterna’TV Int.”)	100.00	%	Incorporated on May 21, 2009. Engaged in programming distribution services, primarily in the United States of America.
Alterna’TV Corporation (“Alterna’TV Corp.”)	100.00	%	Incorporated on December 19, 2008, to be a vehicle to contract the procurement of the Satmex 7 satellite.
SMVS Administración, S. de R. L. de C. V., SMVS Servicios Técnicos, S. de R. L. de C. V. and HPS Corporativo S. de R. L. de C. V. (“Service Companies”)	100.00	%	Provide administrative and operating services exclusively to Satmex and Enlaces.
Satmex U.S.A., LLC (“Satmex USA”)	100.00	%	Incorporated on August 4, 2011. This entity holds the 0.03% interests related to the Service Companies.
Satmex Do Brasil	100.00	%	This entity has not initiated operations.

Enlaces, a subsidiary of the Company which provides private networks for voice, video and data as well as other data services, was consolidated as of December 31, 2012, with a 75% participation by Satmex.

On April 29, 2013, at a General Partners’ Meeting of Enlaces, its partners, through a unanimous resolution, approved a decrease in the equity capital of Enlaces by $2.3 million, through a cash distribution to the non-controlling interest, as a result of which Satmex held a 100.00% in Enlaces as of such date.

F-15

Subsequently, Satmex entered into an equity sale agreement with respect to 100% of its equity in Enlaces. Accordingly, Enlaces has been presented as a discontinued operation. Prior periods have been retroactively adjusted for comparative purposes. (See Note 4)

c.Foreign currency transactions - For U.S. GAAP reporting purposes, the Company maintains separate accounting records in its functional currency, the U.S. dollar. Transactions denominated in Mexican pesos and other foreign currencies are recorded at the rate of exchange in effect at the date of the transactions. Monetary assets and liabilities denominated in Mexican pesos and other foreign currencies are converted into the Company’s functional currency at the rate of exchange in effect at the balance sheet date (Mexican pesos per one U.S. dollar as of December 31, 2013 and 2012, were $13.0765 and $13.0101, respectively), with the resulting effect included in other (expense) income within results of operations.

4.Assets Held for Sale and Discontinued Operation

Satmex classifies assets as held for sale when such assets meet the accounting criteria to be classified as such:  (i) management commits to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such assets, (iii) an active program to locate a buyer and other actions to complete the plan to sell the asset have been initiated; (iv) the sale of the asset is probable and is expected to occur within one year, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made.  When these criteria are met, the assets held for sale are presented together within one line item within asset in the balance sheet, valued at the lower of their carrying amount or fair value less costs to sell.  Liabilities directly associated with such assets are also presented within a single line item within liabilities within the balance sheet.

Satmex classifies operations as discontinued when such operations represent a component of the entity, and such component either has been disposed of or is held for sale, when the operations and cash flows of the component will be eliminated from the ongoing operations and when it does not expect to retain any significant continuing involvement in the operations of the component after the respective sale transaction.

For all periods presented, the operating results for discontinued operations are removed from continuing operations and presented separately as discontinued operations, net of tax, in the consolidated statement of operation. Additionally, the Company has elected to retroactively present assets and liabilities held for sale for all periods presented.

On October 25, 2013, Satmex entered into an Equity Interest Purchase Agreement (the “Securities Purchase Agreement”) with Axesat S. A., subject to which Satmex will sell its direct and indirect interests in Enlaces, subject to the terms and conditions described therein. The transaction is expected to close during 2014, subject to government and regulatory approvals and other customary conditions. This transaction meets the criteria of a discontinued operation, for which reason the accompanying consolidated balance sheet presents the assets and liabilities of Enlaces as assets and liabilities held for sale and the accompanying consolidated statement of operations presents the operations of Enlaces as discontinued operations. These assets and liabilities are presented as non-current because recovery of the related account receivable will occur over more than one year. Enlaces previously comprised the Broadband satellite services segment.

For the years ended December 31, 2013 and December 31, 2012 and for the periods from May 26, 2011 to December 31, 2011 and January 1, 2011 to May 26, 2011, revenue of Enlaces was $8,969, $10,980, $12,646 and $5,198, respectively and (loss) income before taxes totaled ($1,734), $222, $372 and $17, respectively.

The carrying amounts of the major classes of assets and liabilities of discontinued operations in the consolidated balance sheet were as follows:

	2013		2012
Cash and cash equivalents	$	2,658	$	10,837
Other current assets	4,110		4,117
Other non-current assets, mainly customer relationships	676		6,702
Total assets held for sale	$	7,444	$	21,656

F-16

	2013		2012
Current liabilities	$	1,570	$	1,945
Non-current liabilities	1,110		1,327
Total liabilities held for sale	$	2,680	$	3,272

As a result of the classification of the net assets of Enlaces as held for sale in the accompanying balance sheet, such net assets were valued at their fair value less costs to sell, which resulted in the recognition of a loss of $5,842, presented within the discontinued operations line item in the accompanying statement of income (loss).

5.Significant accounting policies

A summary of the significant accounting policies used in the preparation of the accompanying consolidated financial statements follows:

a.Cash and cash equivalents - This line item consists mainly of bank deposits in checking accounts and readily available daily investments of cash surpluses. Cash equivalents are composed of highly liquid investments with original maturities of three months or less. This line item is stated at nominal value plus accrued yields, which are recognized in results as they accrue.

b.Restricted cash - On July 3, 2012, Satmex and ILS entered into an Escrow Agreement, in which Satmex deposited with the Escrow Agent $4,900 representing 5% of the launch service price for the Satmex 8 satellite. The Escrow Agent held the escrow deposit in an interest bearing account. On the Satmex 8 launch date, the Escrow Agent released the escrow deposit plus accumulated interest from the escrow account upon receipt of the irrevocable escrow instructions jointly provided by Satmex and ILS. At December 31, 2012, Satmex classified the $4,900 as restricted cash. On March 26, 2013, the restricted cash was released.

c.Concentrations of credit risk - Financial assets, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and accounts receivable. Cash and cash equivalents are maintained with high-credit quality financial institutions.

Accounts receivable are comprised of several companies in the private domestic sector and certain foreign companies. Management considers that its credit evaluation, approval and monitoring processes combined with advance billing arrangements and guarantee deposits from customers mitigate potential credit risks with regard to its current customer base.

d.Prepaid insurance - The insurance premium paid to renew in-orbit coverage of is recorded as a prepaid insurance and amortized over the related insurance policy period.

e.Satellites and equipment - As of May 26, 2011, Satmex adopted push-down accounting, under which its satellites and equipment were recorded at fair values based upon the appraised values of such assets. Satmex determined the fair value of the satellites and equipment using the cost approach. The cost approach, often referred to as current replacement cost, estimates fair value based on the amount that currently would be required to replace the service capacity of an asset. Assets acquired after the adoption of push-down accounting are recorded at acquisition cost.

Costs incurred in connection with the construction and successful deployment of the satellites and related equipment are capitalized. Such costs consist primarily of the costs of satellite construction and launch, including launch insurance and insurance during the period of in-orbit testing, the value of performance incentives incurred to the satellite manufacturers, costs directly associated with the monitoring and support of satellite construction, and interest costs incurred during the period of satellite construction.

Satellite construction and launch services are generally procured under long-term contracts that provide for payments over the contract periods. Satellite construction and launch services costs are capitalized to reflect progress toward completion. Capitalizing these costs typically coincides with contract milestone payment schedules.

F-17

Depreciation is calculated using the straight-line method for satellites, related equipment and other owned assets over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements.

The estimated useful lives of the satellites are as follows:

	Originaluseful life(Years)	Remaining economiclife at December31, 2013(Years)
Satellites in-orbit - are as follows:
Satmex 8	15	21.93
Satmex 6	15	9.39
Satmex 5	15	7.65

Depreciation of satellites commences on the date on which the satellite is placed in orbit. Satmex 8 was launched on March 27, 2013 and commenced its operations in May 2013. Satmex 6 was launched on May 27, 2006 and commenced operations in July 2006. Satmex 5 was launched on December 5, 1998 and commenced operations in January 1999.  As discussed in Note 1, the Company decided to place Satmex 5 into inclined orbit, which occurred in May 2013.

The estimated useful lives of equipment are as follows:

	Original useful life(Years)
Equipment:
Satellite equipment	15
Furniture and fixtures	10
Leasehold improvements	5
Equipment and antennas	10

f.Concessions - As of May 26, 2011, Satmex adopted push-down accounting, under which its concessions were recorded at fair values based upon the appraised values of such assets. Satmex determined the fair value of the orbital concessions using market approach. Orbital concessions are amortized over 40 years using the straight-line method; their remaining useful life as of the Acquisition Date was 26 years. Concessions acquired after the adoption of push down accounting are recorded at acquisition cost.

g.Valuation of satellites and long-lived assets - The carrying value of the satellites, amortizable intangible assets and other long-lived assets is reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the expected undiscounted future cash flows are less than the carrying value of the long-lived assets, an impairment charge is recorded based on such asset’s estimated fair value. Changes in estimates of future cash flows could result in a write-down of the asset in a future period.

Estimated future cash flows from the Company’s satellites could be impacted by changes in estimates of its ability to operate the satellite at expected levels, changes in the manner in which the satellite is to be used and the loss of one or several significant customer contracts on the satellite.

h.Deferred financing costs - Deferred financing costs related to the issuance of Senior Secured Notes were capitalized and reported as an asset. These costs are amortized to interest expense using the effective rate interest method.

i.Other intangible assets - Intangible assets is comprised of contract backlog, which was identified as part of the push-down of acquisition accounting, initially recorded at fair value using the income approach method. The Company reviews intangible assets for impairment whenever facts and circumstances indicate that the carrying amounts may not be recoverable. An intangible asset with a determinable useful life is considered to have been impaired when its carrying amount exceeds its fair value; however, an impairment loss shall only be recognized when the estimated future undiscounted cash flows expected to result from the use and eventual disposition of the asset are less than the carrying value of the asset. The Company measures an impairment loss as the difference between the carrying value of the asset and its fair value.

F-18

j.Contract backlog is amortized to reflect the pattern of consumption, over the estimated useful lives of the assets, which is up to an estimated 10 years.

k.Labor obligations - In accordance with Mexican Labor Law, Satmex provides seniority premiums benefits to its employees under certain circumstances.

These benefits consist of a one-time payment equivalent to 12 days wages for each year of service (at the employee’s most recent salary, but not to exceed twice the legal minimum wage), payable to all employees with 15 or more years of service, as well as to certain employees terminated involuntarily prior to the vesting of their seniority premium benefit. Satmex also provides statutorily mandated severance benefits to its employees terminated under certain circumstances. Such benefits consist of a one-time payment of three months wages plus 20 days wages for each year of service payable upon involuntary termination without just cause. Costs associated with these benefits are provided for based on actuarial computations using the projected unit credit method. Other disclosures required by U.S. GAAP are not material.

l.Fair value of financial instruments and fair value measurements - An entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Accounting guidance establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Inputs used to measure fair value may fall into one of three levels:

Level 1- applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, restricted cash, accounts receivable, debt, accounts payable and accrued expenses. The Company believes that the recorded values of cash, restricted cash, accounts receivable, accounts payable and accrued expenses approximate their current fair values because of their nature and respective maturity dates or durations. The fair value of debt is disclosed in Note 12.

m.Provisions - Are recognized for current obligations that result of a past event, are probable to result in the use of economic resources and can be reasonably estimated.

n.Income taxes - Income taxes are recorded in the result of year in which they are incurred. Through December 31, 2013, the Company paid the higher of regular income tax (“ISR”) and the Mexican Business Flat Tax (“IETU”); as a result of fiscal reforms enacted in 2013, IETU was eliminated from the tax code. Satmex accounts for deferred income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. See Note 15 for a discussion of changes to Mexican tax laws enacted during 2013. Deferred income tax assets are also recognized for the estimated future effects of tax loss carryforwards. Prior to December 31, 2013, the determination of deferred income taxes also included the effects of IETU; such effects were eliminated in 2013 as a result of the fiscal reforms previously mentioned.

F-19

Satmex recognizes net deferred tax assets to the extent that management believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

o.Statutory employee profit sharing - Statutory employee profit sharing (“PTU”) is recorded in the results of the year in which it is incurred and presented within operating expenses in the accompanying consolidated statements of operations. Deferred PTU liabilities are derived from temporary differences that result from comparing the accounting and PTU values of assets and liabilities.

p.Revenue recognition - Fixed satellite service revenues are recognized as the satellite capacity is provided according to service lease agreements. Satellite transmission capacity is sold through permanent and temporary contracts, which stipulate the agreed capacity. Lease agreements are accounted for either as operating or sales-type leases.

Operating lease revenues are recognized on a straight-line basis over the lease term. Revenues for temporary services are recognized as services are performed.

Revenues from end-of-life leases for transponders are usually collected in advance. The Company does not provide insurance and/or guarantees of any kind for the related transponders to these customers. Total revenues and related costs are accounted as sales-type leases and recognized in income when the risk and rewards of the transponders are transferred to the customer in accordance with the agreements.

To calculate the monthly revenue attributable to purchasers of programming distribution services, the Company estimates, on a monthly basis, the number of subscribers per purchaser according to the contractual value of each subscriber. Approximately 45 to 60 days after the end of each month, the Company receives a definitive report from each purchaser and reconciles the definitive revenue with the estimated amount, issuing an invoice to such purchaser based on the definitive report. Variations between the estimated and actual revenue amounts are not material.

The public and private network signal and value-added services (“Broadband satellite services”) are recognized when services are rendered. The sale of antennas and installation services are recognized in the period in which risk and rewards are transferred to the customers, which generally coincides with the completion of the installation of the antennas and acceptance by the customer.  These revenues are presented within discontinued operations, as a result of the discontinuation of the operations of Enlaces in 2013 as mentioned in Notes 1 and 4.

q.         Deferred revenue - Satmex is required to provide the Mexican federal government, at no charge, approximately 362.88 MHz of its available transponder capacity for the duration of the orbital concessions (“State Reserve”). As of May 26, 2011, as a result of the adoption of push-down accounting, this obligation was recorded at its fair value, using the income approach method, and recognized as deferred revenue with a corresponding increase in the value of the related assets. Deferred revenue is amortized to fixed satellite services revenue based on the expected consumption pattern.

r.Use of estimates - The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amounts of revenues and expenses reported during the periods reported. Such estimates include the allowance for doubtful accounts, the revenue recognition of programming distribution services, the valuation of long-lived assets, the valuation allowance on deferred income tax assets, the scheduling of reversal of the temporary differences under different tax regimes, the estimated useful lives of each satellite and estimates of fair values. Although management believes the estimates and assumptions used in the preparation of these consolidated financial statements were appropriate in the circumstances, actual results could differ from those estimates and assumptions.

F-20

s.Recently adopted accounting pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11, Balance Sheet: Disclosures about Offsetting Assets and Liabilities. This ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards (“IFRS”). The adoption of this guidance did not have an impact on the Company’s consolidated financial statements and related disclosure.

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This update amends ASU 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements and related disclosure.

t.Recently issued accounting pending adoption

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The amendments in this Update supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASUs 2011-05 (issued in June 2011) and 2011-12 (issued in December 2011) for all public and private organizations.  The amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period.

For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts.  The amended guidance is effective prospectively for reporting periods beginning after December 15, 2013. This ASU will be adopted in the 2014 fiscal year.

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Arising from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date. The amendments in this ASU require an entity to measure joint and several obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The amendments in this guidance are effective for fiscal years beginning after December 15, 2014.  The Company is currently evaluating the effects of adopting this ASU.

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830) Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.  This ASU offers guidance on a parent’s accounting for the cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. This new guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The Company will adopt this ASU prospectively in the 2015 fiscal year.

F-21

In April 2013, the FASB issued ASU No. 2013-7, Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting. The amendments of this ASU require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. In addition, this ASU provides guidance for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The Company is currently evaluating the effects of adopting this ASU.

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The guidance states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward to the extent that, among others, the tax law of the applicable jurisdiction allows for the use of such tax assets to settle any additional income taxes that would result from the disallowance of a tax position. For nonpublic entities, the amendments are effective for fiscal years beginning after December 15, 2014. Early adoption is permitted. The Company is currently evaluating the effects of adopting this ASU.

6.Cash and cash equivalents

As of December 31, cash and cash equivalents consist of:

	2013		2012
Cash	$	9,064	$	5,737
Cash equivalents (1)	20,732		58,078
	$	29,796	$	63,815

(1)The Company’s cash equivalents consist mainly of treasury bills with original maturities less than 20 days.

7.Accounts receivable

As of December 31, accounts receivable consist of:

	2013			2012
Customers	$	15,723		$	9,640
Allowance for doubtful accounts	(671		)	(265		)
	15,052			9,375
Recoverable income taxes	220			35
Recoverable value-added tax and tax withholdings	1,136			533
Other	162			612
	$	16,570		$	10,555

F-22

The principal customers of the Company are as follows:

·For fixed satellite services:

·Broadcasting: Grupo Televisa and Productora y Comercializadora de Televisión, S.A. de C.V.

·Telecommunications: América Movil Perú, S.A.C., Teléfonos de México, S.A.B. de C.V. (“Telmex”) and Telefónica del Perú, S.A.A.

·Data transmission and internet: Hughes Network Systems and Hunter Communications, Inc.

·For programming distribution services: Comcast Cable Communications, LLC and Direct TV Inc.

For the years ended December 31, 2013, 2012 and 2011, revenues from Fixed satellite services and Programming distribution services were obtained from:

	2013	2012	2011
	%	%	%
Hughes Networks Systems	9	11	15
América Móvil Perú, S.A.C.	9	9	10
Telmex	4	5	5
Other foreign customers	49	45	43
Other domestic customers	29	30	27

8.Satellites and equipment

As of December 31, satellites and equipment consist of:

	2013			2012
Satellites in-orbit	$	556,171		$	196,425
Satellite equipment and antennas	7,044			5,771
Furniture and fixtures	4,749			3,539
Leasehold improvements	801			782
	568,765			206,517
Accumulated depreciation and amortization	(87,841		)	(52,549		)
	480,924			153,968
Construction in-progress for Satmex 7	107,342			32,750
Construction in-progress for Satmex 9	52,345			3,764
Construction in-progress for Satmex 8	—			358,289
Other construction in-progress	1,224			1,663
	$	641,835		$	550,434

For the years ended December 31, 2013 and 2012 and for the periods from May 26, 2011 to December 31, 2011 (Successor Registrant) and from January 1, 2011 to May 25, 2011 (Predecessor Registrant), depreciation and amortization expense related to satellites and equipment was $35,206, $31,715, $20,825 and $14,957, respectively.

For the years ended December 31, 2013 and 2012, and for the periods from May 26, 2011 to December 31, 2011 (Successor Registrant) and from January 1, 2011 to May 25, 2011 (Predecessor Registrant), interest costs of $9,357, $33,830, $11,715 and $3,801, respectively, were capitalized.

9.Concessions

As of December 31, concessions consist of:

	2013			2012
Orbital concessions	$	41,740		$	41,740
Accumulated amortization	(4,081		)	(2,501		)
	37,659			39,239
Advance payment for orbital position	1,361			—
	$	39,020		$	39,239

F-23

For the years ended December 31, 2013 and 2012 and for the periods from May 26, 2011 to December 31, 2011 (Successor Registrant) and from January 1, 2011 to May 25 (Predecessor Registrant), amortization of concessions was $1,580, $1,580, $922 and $547, respectively.

a.Orbital Concessions and Facilities

In October 1997, the Mexican federal government granted to Satmex the rights to three concessions (the “Concessions”) for an initial 20-year term to operate in the orbital slots 113.0° W.L., 116.8° W.L., and 114.9° W.L. In May 2011, extension of the Orbital Concessions was granted by the Mexican federal government for an additional term until 2037, without payment of any additional consideration. Satmex has the right to an additional 20-year extension, at a certain cost to Satmex, to be determined by the Mexican government, as long as Satmex meets certain conditions, as discussed below.

In order to extend the orbital concession term, Satmex must comply with all obligations established by the concession documents, solicit extension of the concession before the beginning of the fifth term of the concession, must obtain approval from the Mexican Secretary of Communication and Transportation (“SCT”) of the technical and operating characteristics of any new satellites, and must guarantee the occupation and use of the orbital slots during the concession’s original and extended terms.

In accordance with the Ley Federal de Telecomunicaciones (Federal Law of Telecommunications or “LFT”), concessionaries are required to maintain the satellite control centers within Mexican territory.

The satellites are monitored, controlled and operated through two control centers, one of them is located in the east side of Mexico City, and the other one is located in Hermosillo, Sonora. The land and related facilities of the first control center and the land of the second control center are the property of the Mexican federal government.

Use of the land and facilities where the control centers are located that are property of the Mexican federal government was granted to the Company through a concession for a 40-year term, for which the Company pays a fee, which is adjusted every five years by the Secretaría de la Función Pública (The Ministry of Public Administration) (see Note 18g).

The terms of the concessions are subject to certain legal provisions regarding assignment or transfer of rights. According to Mexican Law, Satmex is not allowed to transfer the concessions to any foreign country or state. If the Mexican federal government expropriates them, the Company is entitled to liquidation or resignation of their rights. As of December 31, 2013, the Company has complied with the obligations established in the concession titles.

10.Intangible assets - Intangible assets are comprised of contract backlog, which was recognized in connection with the adoption of push-down accounting. Detail is as follows:

	Average remaining
	contractual	2013				2012
	life			Accumulated				Accumulated
	(years)	Gross amount		amortization		Gross amount		amortization
Contract backlog (1)	1-8	$	86,835	$	77,378	$	86,835	$	54,911

(1)Using the income approach to determine fair values as of May 26, 2011, as a result of the adoption of push-down accounting.

F-24

For the years ended December 31, 2013 and 2012, and for the periods from May 26, 2011 to December 31, 2011 (Successor Registrant) and from January 1, 2011 to May 25, 2011 (Predecessor Registrant), amortization expense for this intangible asset was $22,467, $30,835, $24,075 and $1,178, respectively.

Future annual amortization expense for contract backlog is estimated to be as follows:

2014	$	5,049
2015	2,658
2016	898
2017	346
2018	225
Thereafter	281
	$	9,457

11.Accounts payable and accrued expenses

As of December 31, accounts payable and accrued expenses consist of:

	2013		2012
Suppliers	$	46,266	$	27,790
Taxes payable, other than income taxes	18,118		1,781
Professional fees	12,143		971
Accrued interest	5,106		4,275
Performance and sale bonuses	2,332		2,309
Guarantee deposits and customer advances	1,880		2,395
Programming provisions	1,887		1,707
Sundry creditors	1,290		1,684
	$	89,022	$	42,912

12.Debt obligations

As of December 31, debt obligations are:

	2013				2012
	Amount		Fair Value		Amount		Fair Value
Senior Secured Notes at annual fixed rate of 9.5%, due in 2017	$	325,000	$	351,205	$	325,000	$	338,000
Tack-on Senior Secured Notes at annual fixed rate of 9.5%, due in 2017	35,000		37,822		35,000		36,400
	$	360,000	$	389,027	$	360,000	$	374,400

The fair value for debt obligations is determined using quoted market prices. Fair value is based upon pricing information with respect to the trading of the bonds in a secondary market, obtained from several market data providers and brokerage firms. Inputs used to determine the fair value are classified as Level 2 within the fair value hierarchy from FASB ASC 820, Fair Value Measurements.

F-25

The principal characteristics of the Senior Secured Notes, including the Tack-on, are as follows:

·Maturity is on May 15, 2017.

·Fixed annual interest of 9.5%, payable semi-annually in arrears on May 15 and November 15 of each year.

·Fully and unconditionally guaranteed, jointly and severally, on a first priority senior secured basis by all of the existing U.S. subsidiaries and all future material subsidiaries of Satmex, subject to certain exceptions (see Note 19).

·Optional redemption at any time prior to May 15, 2014, pursuant to which Satmex may redeem up to 35% of the aggregate principal amount of the Notes, plus accrued and unpaid interest.

·In the event of a change of control, the holders have the right to require Satmex to repurchase the Senior Secured Notes at 101% of their issue price, plus accrued and unpaid interest. Attending this commitment Satmex offered to repurchase the Notes. The offer expired on March 3, 2014 and the total amount repurchased was $44 - See note 17.

The indenture related to the Senior Secured Notes issued by Satmex establishes certain covenants. Principal covenants are as follows:

·The Company should pay the notes on the dates and in the manner provided by the indenture.

·The Company should maintain an office or agency where the notes may be surrendered for registration.

·The Company should furnish to the holders of the notes and the Trustee all annual reports on Form 20-F, within 120 days after the end of the financial year.

·The Company and each guarantor should deliver to each of the Trustee and the Collateral Trustee and officers’ certificate stating that such officers have reviewed the activities of the companies during the preceding fiscal year and has kept, observed, performed and fulfilled its obligations under this Indenture and the Security Documents.

·The Company should not permit any of its restricted subsidiaries to declare or pay any dividends, purchase or redeem any equity interest of the Company or make any restricted investment as defined in the indenture.

·The Company should not incur any additional indebtedness or issue preferred stock unless permitted by the indenture.

·The Company should not permit any of its restricted subsidiaries to consummate any asset disposition, unless permitted by the indenture.

As of December 31, 2013, Satmex has complied with these obligations.

13.Shareholders’ equity

Successor Registrant:

a.As of December 31, 2013, the authorized, issued and outstanding common stock is as follows:

Shares			Rights %
Fixed / Class I	Variable / Class II	Total	Voting	Economic
50,000	6,580,000	6,630,000	4.85	4.85
—	123,240,990	123,240,990	90.08	90.08
—	6,933,124	6,933,124	5.07	5.07
50,000	136,754,114	136,804,114	100.00	100.00

On December 30, 2013, the shareholders approved and increase to the variable common stock of the Company in the amount of $40,000 for Eutelsat by subscribing 6,832,519 Class II shares of the capital stock. The shareholders Holdsat México and Satmex International, BV waived their preemptive right to subscribe to and pay the capital increase.  In a second resolution the shareholders approved the cancellation of 28,405 shares from the Company’s treasury.

F-26

On December 30, 2013, the 21,561, and 79,044 Class II shares were transferred from Eja Holdings Ltd. and Centerbridge Capital Partners SBS, L. P., respectively to Eutelsat, S. A.

b.As of December 31, 2012, the authorized, issued and outstanding common stock is as follows:

Fixed	Variable Capital Class II				Rights %
Class I Series A	Series A	Series B	Series N	Total	Voting	Economic
50,000	6,580,000	—	—	6,630,000	51.000	5.10000
—	—	6,363,339	116,877,651	123,240,990	48.950	94.80076
—	—	1,113	20,448	21,561	0.008	0.01659
—	—	4,081	74,963	79,044	0.031	0.06080
—	—	1,467	26,938	28,405	0.011	0.02185
50,000	6,580,000	6,370,000	117,000,000	130,000,000	100.000	100.00000

After giving effect to the Recapitalization Transactions and the application of the proceeds therefrom, Satmex was owned principally by Holdsat Mexico and Investment Holdings BV. Investment Holdings BV equity interests are owned indirectly by Satmex Investment Holdings L.P., an exempted limited partnership organized under the laws of the Cayman Islands (“Investment Holdings LP”), which owns 99.99% of such equity interests, and Satmex Investment Holdings GP Ltd., an exempted limited company organized under the laws of the Cayman Islands (“Investment Holdings GP” and together with Investment Holdings LP, “Investment Holdings”), which is the general partner of Investment Holdings LP and owns 0.01% of such equity interests. Eligible former holders of the Second Priority Old Notes own 100.00% of the interests in Investment Holdings. Holders that were not eligible to hold their interests through Investment Holdings held shares of reorganized Satmex directly.

Satmex is authorized to issue three types of shares: Series A shares, Series B shares, and Series N shares.

All Series A shares of Satmex were owned by Holdsat Mexico. The Series A shares entitle holders to 51.0% of Satmex’s voting rights and 5.1% of its economic rights of all shares. The Series A shares may be owned only by Mexican individuals, Mexican entities that are owned only by Mexican individuals or entities or Mexican entities in which 51.0% of the capital is owned by Mexican individuals or entities.

Series B shares entitle holders to 49.0% of Satmex’s voting rights and 4.9% of the economic rights. The Series B shares may be owned by any person including foreign investors. Over 99% of the Series B shares were owned by Investment Holdings BV. Less than 1% of the Series B Shares were owned by certain holders of the Second Priority Old Notes who were not eligible to invest in Satmex through Investment Holding BV. Less than 0.03% of Series B shares were deposited in Satmex’s treasury for those non-qualified holders of the Second Priority Old Notes who failed to respond to the solicitation under the Plan.

Series N shares entitle holders to 90.0% of the economic rights and limited voting rights. The holders of Series N shares may vote only on the following matters: (i) extension of Satmex’s corporate existence; (ii) dissolution; (iii) change of corporate purpose; (iv) change of nationality; (v) transformation of Satmex from one type of entity to another; and (vi) merger of Satmex with and into another entity. The Series N shares may be owned by any person, including foreign investors.

As mentioned in Note 1, under previous Mexican law, foreign investment in Satmex’s capital, represented by full voting rights shares, was not allowed to exceed 49.0%. The Series N shares, however, were not taken into account in determining the level of foreign investment. Over 99% of the Series N shares were owned by Investment Holdings BV. Less than 1% of the Series N shares were owned by certain holders of the Second Priority Old Notes who were not eligible to invest in Satmex through Investment Holding BV. Less than 0.03% of Series N shares were deposited in Satmex’s treasury for those non-qualified holders of the Second Priority Old Notes who failed to respond to the solicitation under the Plan.

F-27

c.Pursuant to a unanimous resolutions adopted by the shareholders at a meeting held on May 26, 2011, the following resolutions were authorized:

·The outstanding shares formerly held by the NAFIN Trust and the Deutsche Trust, representing the total common stock of the Company as of May 26, 2011, were exchanged through a reverse stock split with a ratio of 10 to 1, resulting in 4,687,500 shares.

·Variable common stock was increased by the issuance of 5,713,333 common, nominative, Class II, Series “A” shares, without par value, through cash contributions of $7,680 in exchange of 5.1% of the economic interest in the Company.

·Variable common stock was increased by the issuance of 104,459,367 Class II ordinary shares, without par value, of which (i) 5,620,000 are Series “B” shares and (ii) 98,839,367 are Series “N” shares, through cash contributions of $82,320 in exchange for 83.254% of the economic interests in the Company.

·Pursuant to the Plan, effective on May 26, 2011, 100% of the Second Priority Old Notes were cancelled and converted into the right to receive equity interest (the “Conversion Interest” described in Note 2), directly or indirectly, in the aggregate of 7.146% of the capital stock of the Company. The capitalization of the Conversion Rights and the cancellation of the Second Priority Old Notes were made at the face amount of the Second Priority Old Notes of $206,890, as follows:

·Variable common stock was increased by the issuance of 9,289,800 Series “N” Class II, shares, without par value, for the capitalization of the Conversion Rights and the cancellation of the Second Priority Old Notes, through the capitalization of liabilities for $70,457.

·A paid-in capital premium was recognized of $136,433 for the shares subscription in consideration of the Conversion Rights and the cancellation of the Second Priority Old Notes; the amount of such premium was capitalized pro rata between the shareholders of the Company in the proportion of their participation percentage in the capital stock of the Company without issuance of new shares.

·A put premium was capitalized in the amount of $7,855, in exchange of 4.5% of the economic interests in the Company. The amount of shares issued in exchange for the capitalization of the put premium was 5,850,000 Series “N” Class II, shares, without par value.

d.Shareholders’ equity, except restated tax contributed capital and tax-retained earnings, will be subject to income tax at the rate in effect upon distribution of such equity. Any tax paid on this distribution may be credited against annual and estimated income taxes of the year in which the tax on dividends is paid and the following two fiscal years.

e.As of December 31, 2013 and 2012, the balance of the tax contributed capital account is $2,332,549 and $2,216,328 respectively.

F-28

Predecessor Registrant:

f.Until May 25, 2011, the authorized, issued and outstanding common stock was as follows:

Common Stock — Shares
Fixed Capital Class I			Variable Capital Class II				Fixed Capital Class I
Series A	Series B	Series N	Series A	Series B	Total	Voting	Economic
7,500,000	—	—	—	—	7,500,000	45.00	16.00
—	221,667	401,770	—	—	623,437	1.33	1.33
—	111,667	202,395	—	—	314,062	0.67	0.67
—	—	—	7,166,667	29,395,833	36,562,500	43.00	78.00
1,666,667	—	208,333	—	—	1,875,000	10.00	4.00
9,166,667	333,334	812,498	7,166,667	29,395,833	46,874,999	100.00	100.00

g.The shareholding structure of Satmex consisted of ordinary, nominative Class I and Class II shares at no-par value, which are fully subscribed and paid in. The shares were divided into three series: Series A, which could only be subscribed or acquired by Mexican nationals under certain mechanisms established in Satmex’s bylaws; Series B and Series N, which could be freely subscribed, including by foreign investors.

h.Prior to May 26, 2011, the Deutsche Trust was the owner and holder of shares representing 96% of common stock with economic rights (including neutral investment shares) and 90% of the ordinary voting stock of Satmex.

i.Prior to May 26, 2011, the NAFIN Trust, was the registered owner and holder of shares representing 4% of the common stock with economic rights (including neutral investment shares) and 10% of the ordinary voting stock of Satmex

14.Related party balance and transactions

Related party transactions performed in the normal course of operations were as follows:

							Predecessor
	Successor Registrant						Registrant
					Period from May		Period from January
					26, 2011 through		1, 2011 through
	2013		2012		December 31, 2011		May 25, 2011
Revenues from:
Satellite services - Mexican federal government	$	—	$	—	$	—	$	2,225
Enlaces (Discontinued operation)	4,178		4,715		3,044		2,153
Satellite capacity to Mexican federal government	—		—		—		977
Loral	—		—		—		119
Expenses from:
Rent of control centers - Mexican government	—		—		—		225
Professional fees - Intenal Mexican	372		144		—		—
Capital expenditures for:
Construction Satmex 8 — Loral	—		—		—		148,932

F-29

15.Income taxes

a.Income tax (benefit) expense was comprised as follows:

										Predecessor
	Successor Registrant									Registrant
							Period from			Period from
							May 26, 2011			January 1, 2011
							through			through
							December 31,			May 25,
	2013			2012			2011			2011
Current:
ISR	$	271		$	1,037		$	543		$	97
IETU	—			41			43			356
Total current	271			1,078			586			453
Deferred:
ISR	(78,214		)	(26,435		)	6,075			(10,394		)
IETU	(25,382		)	(4,812		)	5,612			2,157
Change in valuation allowance	37,275			15,676			(873		)	10,394
Total deferred	(66,321		)	(15,571		)	10,814			2,157
Total income tax (benefit) expense	$	(66,050	)	$	(14,493	)	$	11,400		$	2,610

b.The provision (benefit) for income taxes differs from the amount computed by applying the Mexican statutory income tax rate of 30 percent on the income (loss) from continuing operations before income taxes as a result of the following items:

	2013			2012			2011
Expected income tax expense (benefit) at statutory rate	$	(18,288	)	$	7,884		$	(10,097	)
Tax inflation and statutory foreign exchange effects	(4,542		)	3,638			4,787
Nondeductible expenses	254			1,568			1,953
ISR and IETU hybrid method	—			(21,714		)	7,846
Use of previously reserved tax loss carryforwards	(11,839		)	(21,545		)	—
Application of the initial cumulative effect of deferred tax for change in Tax Law	(68,910		)	—			—
Change in valuation allowance	37,275			15,676			9,521
Total income tax (benefit) expense	$	(66,050	)	$	(14,493	)	$	14,010

c.The significant components of the net deferred tax asset (liability) are:

	2013			2012
Deferred tax assets:
Tax loss carryforwards	$	115,026		$	58,670
Concessions, net	67,593			35,371
Credits on IETU losses	—			6,998
Deferred revenue	7,225			7,071
Accrued expenses and other	4,144			2,016
Total deferred tax assets before valuation allowance	193,988			110,126
Valuation allowance for deferred tax assets	(87,448		)	(50,173		)
Net deferred tax assets	106,540			59,953
Deferred tax liabilities:
Satellites and equipment, net	(43,453		)	(54,656		)
Intangibles, net	(1,228		)	(7,823		)
Prepaid insurance and other	(429		)	(1,621		)
Deferred financing cost	—			(744		)
Total deferred tax liabilities	(45,110		)	(64,844		)
Net deferred tax asset (liability)	$	61,430		$	(4,891	)
Classification on consolidated balance sheets:
Current deferred tax assets	$	79		$	2,475
Long-term deferred tax assets	61,351			—
Long-term deferred tax liabilities	—			(7,366		)
Net deferred tax assets (liabilities)	$	61,430		$	(4,891	)

F-30

As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regards to future realization of deferred tax assets. The Company assesses the recoverability of its tax loss carryforwards and other deferred tax assets and based upon this analysis records a valuation allowance to the extent recoverability does not satisfy the “more likely than not” recognition criteria. The Company continues to maintain the valuation allowance until sufficient positive evidence exists to support full or partial reversal. As of December 31, 2013 and 2012, Satmex had a valuation allowance totaling $87.4 million and $50.1 million against deferred tax assets and tax loss carryforwards due to the limited carryforward periods, respectively. As a result of the elimination of IETU in the Mexican fiscal reform enacted in 2013, deferred IETU was eliminated, subsequent to which the Company determined that it would now benefit from tax loss carryforwards and other deferred tax assets that were previously considered unrecoverable.  Accordingly, deferred income taxes reflect the recognition of those future benefits from tax loss carryforwards and other assets.

As of December 31, 2013, Satmex has tax loss carryforwards, which are available to offset future taxable income, as follows:

	Amounts (1)
ExpirationDate	Tax losscarryforwards
2014	$	31,566
2016	235,611
2017	25,502
2018	82,183
2021	8,557
	$	383,419

(1)The amounts presented above have been adjusted for Mexican inflation as permitted by Mexican tax law.

In 2013 and 2012, the Company used $44.1 million and $72.6 million of tax loss carryforwards, respectively. In 2013 and 2011, $38.1 million and $69 million of tax loss carryforwards expired, respectively.

d.Statutory income tax rates - Mexican companies are subject to ISR and through December 31, 2013, IETU, of which they were required to pay the greater of the two taxes. Accordingly, deferred income taxes prior to that date were prepared based on the tax regime expected to be paid in the future.  Deferred IETU was eliminated in 2013 as a result of the 2013 fiscal reforms.

The ISR rate in 2013, 2012 and 2011 was 30%. In accordance with the Mexican Federal Income Tax Law for 2014, which was enacted in 2013, the ISR rate applicable to companies will remain at 30%.

F-31

e.Uncertain tax positions - The Company has not taken any uncertain tax positions for which it believes it is more likely than not, based on technical merits, that it will not receive benefits taken for its tax positions. The tax years that remain subject to examination by the tax authorities include 2009 — 2013.

16.Reorganization expenses

This caption includes legal, financial and regulatory expenses and fees in connection with various attempts made by Satmex in each year to carry out a restructuring, reorganization or sale transaction and/or recapitalization of its outstanding indebtedness.

17.Subsequent events

a.On January 31, 2014, Satmex caused The Depository Trust Company, as holder of record of Satmex’s outstanding  9.50% Senior Secured Notes due 2017 (the “Notes”), to be notified of Satmex’s offer to purchase for cash all or any portion of the Notes (the “Offer to Purchase”).  The offer is being made as a result of the change of control that occurred in connection with the Eutelsat Acquisition in satisfaction of Satmex’s obligation under Section 4.15 of the indenture governing the notes, dated as of May 5, 2011 by and between Satmex and Wilmington Trust, National Association. For more information on the offer to purchase, see the report filed on Form 6-K on February 4, 2014.

b.On April 11, 2014, Eutelsat and its wholly owned subsidiary, Satmex, announce that the noteholders of Satmex were notified of the early redemption, on May 15, 2014, of all the notes issued on May 5, 2011 and March 30, 2012, initially maturing on 15 May 2017. Satmex will be redeemed at 104.75% of their principal amount, plus accrued and unpaid interest to the redemption date.

18.Contingencies and commitments

Insurance matters

a.Satmex 8 is insured with coverage of $360 million the current policy expired on March 26, 2014. After such date Satmex 8 will be insured by the global Eutelsat policy and its cost will be reflected as an intercompany charge.

b.On December 5, 2013, Satmex renewed the in-orbit insurance policy for satellite Satmex 6, which expires on March 26, 2014 and provides coverage for $129.9 million. After such date, Satmex 6 will also be covered by the Eutelsat global policy and its cost will be reflected as an intercompany charge.

c.Satmex did not renew the in-orbit insurance policy for satellite Satmex 5 primarily because the satellite’s geostationary life ended in September 2013, and the condition of the satellite does not comply with the industry standards required by the terms and conditions of the insurance policy. Any uninsured loss of satellite Satmex 5 would not have a material adverse effect on Satmex’s results of operations and financial condition.

Legal matters

d.The management of the Company is not aware of any material pending litigation against Satmex, nor are its assets subject to any legal action.

Commitments

e.Satmex entered into a contract with Space Systems/Loral, Inc. (“SS/L”) and granted to SS/L a usufruct right (a Mexican law concept that grants another person the right to use and benefit from another person’s property) over certain transponders on the Satmex 5 and Satmex 6 satellites, until the end of the life of such satellites. SS/L was not required to post a bond related to the usufruct arrangement. In the event that Satmex or a new shareholder decides not to continue with the usufruct arrangement, SS/L has the right to receive the higher of a percentage of the net sale value of Satmex 6 and Satmex 5 or an amount equal to the market value related to the transponders granted under the usufruct arrangement.

F-32

f.State Reserve - Under the orbital concessions granted by the Mexican federal government, Satmex must provide, at no charge, satellite capacity of approximately 362.88 MHz to the Mexican federal government in C- and Ku- bands.

g.On October 15, 1997, the Mexican government granted a property concession that relates to Satmex’s use of the land and buildings on which its satellite control centers are located and allows Satmex to base its ground station equipment within telecommunication facilities that belong to the Mexican government. Under such concession, Satmex is obligated to pay an annual fee, equivalent to 7.5% of the total value of the land, which is determined by appraisal experts assigned by the Mexican federal government.

For the years ended December 31, 2013 and 2012 and for the periods from May 26, 2011 to December 31, 2011 (Successor Registrant) and from January 1, 2011 to May 25, 2011 (Predecessor Registrant), the fees paid were $528, $496, $283 and $224, respectively.

h.Satmex leases two floors in the building where its headquarters are located. The corresponding lease agreement establishes a mandatory period of five years as of October 1, 2013 and ending in September 30, 2018. For the years ended December 31, 2013 and 2012 and for the periods from May 26, 2011 to December 31, 2011 (Successor Registrant) and from January 1, 2011 to May 25, 2011 (Predecessor Registrant), rent expense was $527, $520, $378 and $125, respectively. The minimum future payments for the period ended September 30, 2018 is $2.5 million per year.

i.Future minimum revenues (“Contract Backlog”) due from customers under non-cancelable operating lease contracts, which include a penalty clause against customers in case of early termination, for transponder capacity on satellites in-orbit as of December 31, 2013, are as follows:

Years	Amounts
2014	$	96,600
2015	75,587
2016	61,207
2017	43,223
2018	38,730
Until 2030	101,476
	$	416,823

19.Business segment information

The Company previously identified its reportable segments as the following three operating segments, based on the information used by its chief operating decision maker with respect to resource allocation and performance of the Company: Satellite services, Programming distribution services and Broadband satellite services. As a result of the intended sale of Enlaces, discussed in Notes and 4, the Company’s internal reports no longer include information related to Broadband satellite services. Accordingly, the Company has concluded that it is no longer an operating segment and only reports two reportable segments; prior years have been restructured to reflect the change in segments. Satmex’s satellites are in geosynchronous orbit, and consequently are not attributable to any geographic location. Except for the satellites, the Company’s assets are substantially all located in Mexico.

The following table presents the operating income (loss) items and assets information by reportable segment:

F-33

	Successor Registrant
	For the year ended December 31, 2013
	Satellite services			Programming  distribution  services			Eliminations upon  consolidation			Total
Revenues	$	122,258		$	12,792		$	—		$	135,050
Eliminations	(2,194		)	—			—			(2,194		)
Operating revenues	120,064			12,792						132,856
Cost and expenses	109,478			12,456			—			121,934
Eliminations	(15,582		)	(2,272		)	—			(17,854		)
	93,896			10,184			—			104,080
Depreciation and amortization	58,459			794			—			59,253
Operating (loss) income	(32,291		)	1,814			—			(30,477		)
Interest expense	—			—			—			(30,728		)
Interest income	—			—			—			194
Foreign exchange gain — net	—			—			—			51
Loss from continuing operations before income tax	—			—			—			(60,960		)
Income tax benefit	—			—			—			(66,050		)
Discontinued operations	—			—			—			(7,093		)
Net loss	—			—			—			$	(2,003	)
Capital expenditures (includes paid and not yet paid)	$	149,672		$	2		$	—		$	149,674
Total assets	$	816,253		$	7,091		$	(1,459	)	$	821,885

	Successor Registrant
	For the year ended December 31, 2012
	Satellite services			Programming  distribution  services			Eliminations upon  consolidation			Total
Revenues	$	120,358		$	14,504		$	—		$	134,862
Eliminations	(1,689		)	—			—			(1,689		)
Operating revenues	118,669			14,504			—			133,173
Cost and expenses	42,031			12,412			—			54,443
Eliminations	(13,624		)	(2,175		)	—			(15,799		)
	28,407			10,237			—			38,644
Depreciation and amortization	63,237			893			—			64,130
Operating income	27,025			3,374			—			30,399
Interest expense	—			—			—			(4,430		)
Interest income	—			—			—			197
Foreign exchange gain — net	—			—			—			111
Income from continuing operations before income tax	—			—			—			26,277
Income tax benefit	—			—			—			(14,493		)
Discontinued operations	—			—			—			549
Net income	—			—			—			$	41,319
Capital expenditures (includes paid and not yet paid)	$	148,846		$	12		$	—		$	148,858
Total assets	$	740,719		$	7,216		$	(1,842	)	$	746,093

F-34

	Successor Registrant
	For the Period From May 26, 2011 through December 31, 2011
	Satellite services			Programming  distribution  services			Eliminations upon  consolidation			Total
Revenues	$	63,505		$	7,576		$	—		$	71,081
Eliminations	(747		)	(13		)	—			(760		)
Operating revenues	62,758			7,563			—			70,321
Cost and expenses	25,627			6,240			—			31,867
Eliminations	(8,627		)	(1,018		)	—			(9,645		)
	17,000			5,222			—			22,222
Depreciation and amortization	45,110			714			—			45,824
Operating income	648			1,627			—			2,275
Interest expense	—			—			—			(8,983		)
Interest income	—			—			—			182
Foreign exchange loss — net	—			—			—			(550		)
Loss from continuing operations before income tax	—			—			—			(7,076		)
Income tax expense	—			—			—			11,400
Discontinued operations	—			—			—			(381		)
Net loss	—			—			—			$	(18,857	)
Capital expenditures (includes paid and not yet paid)	$	155,470		$	187		$	—		$	155,657
Total assets	$	660,867		$	7,028		$	(2,566	)	$	665,329

	Predecessor Registrant
	For the Period From January 1, 2011 through May 25, 2011
	Satellite services			Programming  distribution  services			Eliminations upon consolidation			Total
Revenues	$	46,577		$	4,801		$	—		$	51,378
Eliminations	(689		)	(15		)	—			(704		)
Operating revenues	45,888			4,786			—			50,674
Cost and expenses	22,209			3,748			—			25,957
Eliminations	(12,503		)	(945		)	—			(13,448		)
	9,706			2,803			—			12,509
Depreciation and amortization	16,682			167			(167		)	16,682
Reorganization expenses	28,766			—			—			28,766
Operating (loss) income	(9,266		)	1,816			167			(7,283		)
Interest expense	—			—			—			(19,494		)
Interest income	—			—			—			69
Foreign exchange gain — net	—			—			—			127
Loss from continuing operations before income tax	—			—			—			(26,581		)
Income tax expense	—			—			—			2,610
Discontinued operations	—			—			—			431
Net loss	—			—			—			$	(28,760	)
Capital expenditures (includes paid and not yet paid)	$	78,510		$	69		$	—		$	78,579
Total assets	$	797,586		$	12,785		$	(15,999	)	$	794,372

F-35

20.Supplemental Guarantor Condensed Consolidating Financial Statements

On May 5, 2011 Satmex offered $325,000 in aggregate principal amount of Senior Secured Notes. Satmex exchanged the Senior Secured Notes for $325.0 million of registered 9.5% Senior Secured Notes due 2017 (the “Exchange Notes”).

On April 9, 2012, Satmex offered an additional $35,000 aggregate principal amount of Senior Secured Notes as a tack-on to the Senior Secured Notes (the “Tack-on Notes”) due in 2017, issued in a private placement under Rule 144A and Regulation S of the U.S. Securities Act of 1933, as amended. The Tack-on Notes were exchanged for registered notes on September 28, 2012. The additional Tack-on Notes were priced at 102.00% and will bear interest at an annual fixed rate of 9.50%.

Both the Exchange Notes and the Tack-on Notes are guaranteed by all of Satmex’s U.S. domiciled subsidiaries existing on the issue date (which as of the date of the accompanying consolidated financial statements includes Alterna’TV Corp. and Alterna’TV Int. (the “Guarantors”). Future guarantor subsidiaries are contemplated in the indentures. The guarantees are full and unconditional and are joint and several obligations of the guarantors and are secured by first priority liens on the collateral securing the notes, subject to certain permitted liens. Accordingly, supplemental guarantor condensed consolidating financial statements are included hereon.

The following tables have been prepared in accordance with Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered, in order to present the (i) condensed consolidating balance sheets as of December 31, 2013 and 2012 (Successor registrant), (ii) condensed consolidating statements of operations and condensed statements of cash flows for (a) the years ended December 31, 2013 and 2012 and for the period from May 26, 2011 through December 31, 2011 (Successor registrant) and (b) the period from January 1, 2011 through May 25, 2011 (Predecessor Registrant), of Satmex, which is the issuer of the Senior Secured Notes and the Tack-on Notes, and of the Guarantors (which are combined for this purpose), the Non-Guarantors, and the elimination entries necessary to consolidate the issuer with the Guarantor and Non-Guarantor subsidiaries. Satmex’s investments in subsidiaries in the accompanying guarantor information are accounted for under the equity method, representing acquisition cost adjusted for Satmex’s share of the subsidiary’s cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions.

F-36

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Condensed Consolidating Balance Sheets

As of December 31, 2013

(In thousands of U. S. dollars)

	Successor Registrant
	Satmex		Guarantor			Non Guarantor			Eliminations upon
	Issuer		Subsidiaries			Subsidiaries			consolidation			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	25,244	$	879		$	3,673		$	—		$	29,796
Accounts receivable, net	14,936		3,343			5,539			(7,248		)	16,570
Prepaid insurance and other assets	4,985		221			1			—			5,207
Deferred tax assets	—		—			79			—			79
Total current assets	45,165		4,443			9,292			(7,248		)	51,652
Satellites and equipment, net	641,772		63			—			—			641,835
Concessions, net	39,020		—			—			—			39,020
Due from related parties	3,503		—			896			(4,399		)	—
Intangible assets and other assets	8,127		1,330			—			—			9,457
Deferred financing cost	8,054		—			—			—			8,054
Guarantee deposits and other assets	2,884		188			—			—			3,072
Deferred tax assets	60,284		1,067			—			—			61,351
Non-current assets held for sale	7,444		—			—			—			7,444
Total	$	816,253	$	7,091		$	10,188		$	(11,647	)	$	821,885
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable, accrued expenses and other	$	72,821	$	3,684		$	19,765		$	(7,248	)	$	89,022
Deferred revenue	3,467		—			—			—			3,467
Income tax payable	—		—			35			—			35
Total current liabilities	76,288		3,684			19,800			(7,248		)	92,524
Debt obligations	360,000		—			—			—			360,000
Deferred revenue and other liabilities	29,339		3,645			896			(4,399		)	29,481
Investment in subsidiaries	10,746		—			14			(10,760		)	—
Non-current liabilities held for sale	2,680		—			—			—			2,680
Total liabilities	479,053		7,329			20,710			(22,407		)	484,685
Shareholders’ equity:
Paid-in capital	315,662		100			36,000			(36,100		)	315,662
Retained earnings	20,331		(338		)	(46,522		)	46,860			20,331
Additional paid-in capital	1,207		—			—			—			1,207
Total shareholders’ equity	337,200		(238		)	(10,522		)	10,760			337,200
Total	$	816,253	$	7,091		$	10,188		$	(11,647	)	$	821,885

F-37

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Condensed Consolidating Balance Sheets

As of December 31, 2012

(In thousands of U. S. dollars)

	Successor Registrant
						Non
	Satmex		Guarantor			Guarantor		Eliminations upon
	Issuer		Subsidiaries			Subsidiaries		Consolidation			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	58,873	$	921		$	4,021	$	—		$	63,815
Restricted cash	4,900		—			—		—			4,900
Accounts receivable, net	8,760		3,006			3,532		(4,743		)	10,555
Prepaid insurance and other assets	8,552		129			8		—			8,689
Deferred tax assets	1,566		909			—		—			2,475
Total current assets	82,651		4,965			7,561		(4,743		)	90,434
Satellites and equipment, net	550,351		83			—		—			550,434
Concessions, net	39,239		—			—		—			39,239
Due from related parties	4,003		—			960		(4,963		)	—
Intangible assets and other assets	30,772		2,168			—		—			32,940
Investment in subsidiaries	4,271		—			—		(4,271		)	—
Deferred financing cost	11,390		—			—		—			11,390
Non-current assets held for sale	18,042		—			—		3,614			21,656
Total	$	740,719	$	7,216		$	8,521	$	(10,363	)	$	746,093
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable, accrued expenses and other	$	41,286	$	3,240		$	3,128	$	(4,742	)	$	42,912
Deferred revenue	3,605		—			—		—			3,605
Income tax payable	—		—			11		—			11
Total current liabilities	44,891		3,240			3,139		(4,742		)	46,528
Debt obligations	360,000		—			—		—			360,000
Other long-term liabilities	27,317		4,003			960		(4,963		)	27,317
Non-current liabilities held for sale	3,272		—			—		—			3,272
Long-term deferred tax liabilities	7,243		15			108		—			7,366
Total liabilities	442,723		7,258			4,207		(9,705		)	444,483
Shareholders’ equity:
Paid-in capital	275,662		100			—		(100		)	275,662
Retained earnings	22,334		(142		)	4,314		(4,172		)	22,334
Noncontrolling interest	—		—			—		3,614			3,614
Total shareholders’ equity	297,996		(42		)	4,314		(658		)	301,610
Total	$	740,719	$	7,216		$	8,521	$	(10,363	)	$	746,093

F-38

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Condensed Consolidating Statements of Loss

For the year ended December 31, 2013

(In thousands of U. S. dollars)

	Successor Registrant
	SatmexIssuer			GuarantorSubsidiaries			Non -GuarantorSubsidiaries			Eliminations upon consolidation			Consolidated
Continuing operations:
Revenues:
Satellite services	$	122,258		$	—		$	—		$	(2,194	)	$	120,064
Programming distribution services	—			12,792			—			—			12,792
Services companies	—			—			15,660			(15,660		)	—
	122,258			12,792			15,660			(17,854		)	132,856
Cost of satellite services	11,494			—			4,593			(4,808		)	11,279
Cost of programming distribution services	—			10,105			—			(2,194		)	7,911
Selling and administrative expenses	31,845			1,861			62,036			(10,852		)	84,890
Depreciation and amortization	58,459			794			—			—			59,253
	101,798			12,760			66,629			(17,854		)	163,333
Operating income (loss)	20,460			32			(50,969		)	—			(30,477		)
Interest (expense) income, net and other	(81,331		)	(300		)	118			51,030			(30,483		)
Loss from continuing operations before income tax	(60,871		)	(268		)	(50,851		)	51,030			(60,960		)
Income tax benefit	(65,961		)	(72		)	(17		)	—			(66,050		)
Net income (loss) from continuing operations	5,090			(196		)	(50,834		)	51,030			5,090
Discontinued operations:
Loss from operations of discontinued component broadband satellite services	(7,093		)	—			—			—			(7,093		)
Net loss attributable to Satélites Mexicanos, S. A. de C. V.	$	(2,003	)	$	(196	)	$	(50,834	)	$	51,030		$	(2,003	)

F-39

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Condensed Consolidating Statements of Income

For the year ended December 31, 2012

(In thousands of U. S. dollars)

	Successor Registrant
	SatmexIssuer			GuarantorSubsidiaries			Non -GuarantorSubsidiaries		Eliminations upon consolidation			Consolidated
Continuing operations:
Revenues:
Satellite services	$	120,358		$	—		$	—	$	(1,689	)	$	118,669
Programming distribution services	—			14,504			—		—			14,504
Services companies	—			—			14,109		(14,109		)	—
	120,358			14,504			14,109		(15,798		)	133,173
Cost of satellite services	12,305			—			4,032		(4,516		)	11,821
Cost of programming distribution services	—			10,129			—		(1,689		)	8,440
Selling and administrative expenses	17,124			1,756			9,096		(9,593		)	18,383
Depreciation and amortization	63,237			893			—		—			64,130
	92,666			12,778			13,128		(15,798		)	102,774
Operating income	27,692			1,726			981		—			30,399
Interest (expense) income, net and other	(1,854		)	(251		)	336		(2,353		)	(4,122		)
Income from continuing operations before income tax	25,838			1,475			1,317		(2,353		)	26,277
Income tax (benefit) expense	(15,378		)	548			337		—			(14,493		)
Net income from continuing operations	41,216			927			980		(2,353		)	40,770
Discontinued operations:
Income from operations of discontinued component broadband satellite services	549			—			—		—			549
Net income	41,765			927			980		(2,353		)	41,319
Less: Net income attributable to noncontrolling interest	—			—			—		103			103
Net income attributable to Satélites Mexicanos, S. A. de C. V.	$	41,765		$	927		$	980	$	(2,456	)	$	41,216

F-40

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Condensed Consolidating Statements of (Loss) Income

For the period from May 26, 2011 through December 31, 2011

(In thousands of U. S. dollars)

	Successor Registrant
	SatmexIssuer			GuarantorSubsidiaries			Non -GuarantorSubsidiaries			Eliminations upon consolidation			Consolidated
Continuing operations:
Revenues:
Satellite services	$	63,505		$	—		$	—		$	(747	)	$	62,758
Programming distribution services	1,063			6,513			—			(13		)	7,563
Services companies	—			—			9,050			(9,050		)	—
	64,568			6,513			9,050			(9,810		)	70,321
Cost of satellite services	6,533			—			2,549			(2,891		)	6,191
Cost of programming distribution services	636			4,489			—			(732		)	4,393
Selling and administrative expenses	10,465			1,332			5,861			(6,020		)	11,638
Depreciation and amortization	45,110			714			—			—			45,824
	62,744			6,535			8,410			(9,643		)	68,046
Operating income (loss)	1,824			(22		)	640			(167		)	2,275
Interest expense, net and other	(9,059		)	(121		)	(472		)	301			(9,351		)
(Loss) income from continuing operations before income tax	(7,235		)	(143		)	168			134			(7,076		)
Income tax expense (benefit)	11,647			(347		)	100			—			11,400
Net (loss) income from continuing operations	(18,882		)	204			68			134			(18,476		)
Discontinued operations:
Loss from operations of discontinued component broadband satellite services	(381		)	—			—			—			(381		)
Net (loss) income	(19,263		)	204			68			134			(18,857		)
Less: Net income attributable to noncontrolling interest	—			—			—			25			25
Net income (loss) attributable to Satélites Mexicanos, S.A. de C. V.	$	(19,263	)	$	204		$	68		$	109		$	(18,882	)

F-41

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Condensed Consolidating Statements of Loss (Income)

For the period from January 1, 2011 through May 25, 2011

(In thousands of U. S. dollars)

	Predecessor Registrant
	SatmexIssuer			GuarantorSubsidiaries			Non -GuarantorSubsidiaries		Eliminations upon consolidation			Consolidated
Continuing operations:
Revenues:
Satellite services	$	46,577		$	—		$	—	$	(689	)	$	45,888
Programming distribution services	761			4,040			—		(15		)	4,786
Services companies	—			—			12,739		(12,739		)	—
	47,338			4,040			12,739		(13,443		)	50,674
Cost of satellite services	4,586			—			1,960		(2,145		)	4,401
Cost of programming distribution services	454			2,875			—		(704		)	2,625
Selling and administrative expenses	5,535			595			9,947		(10,594		)	5,483
Depreciation and amortization	16,682			167			—		(167		)	16,682
Reorganization expenses	28,766			—			—		—			28,766
	56,023			3,637			11,907		(13,610		)	57,957
Operating (loss) income	(8,685		)	403			832		167			(7,283		)
Interest expense, net and other	(17,761		)	(93		)	175		(1,619		)	(19,298		)
(Loss) income from continuing operations before income tax	(26,446		)	310			1,007		(1,452		)	(26,581		)
Income tax expense	2,317			1			292		—			2,610
Net (loss) income from continuing operations	(28,763		)	309			715		(1,452		)	(29,191		)
Discontinued operations:
Income from operations of discontinued component broadband satellite services	431			—			—		—			431
Net (loss) income	(28,332		)	309			715		(1,452		)	(28,760		)
Less: Net income attributable to noncontrolling interest	—			—			—		3			3
Net (loss) income attributable to Satélites Mexicanos, S. A. de C. V.	$	(28,332	)	$	309		$	715	$	(1,455	)	$	(28,763	)

F-42

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2013

(In thousands of U.S. dollars)

	Successor Registrant
	SatmexIssuer			GuarantorSubsidiaries			Non -GuarantorSubsidiaries			Eliminations upon consolidation			Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	62,597		$	(40	)	$	(36,348	)	$	—		$	26,209
Cash flows from investing activities:
Investment in shares	(36,000		)	—			—			36,000			—
Construction in progress - satellites (including capitalized interest)	(100,971		)	—			—			—			(100,971		)
Orbital position Satmex 9	(1,361		)	—			—			—			(1,361		)
Acquisition of equipment	(2,014		)	(2		)	—			—			(2,016		)
Net cash used in investing activities	(140,346		)	(2		)	—			36,000			(104,348		)
Cash flows from financing activities:
Proceeds from equity interest	40,000			—			36,000			(36,000		)	40,000
Net cash provided by (used in) financing activities	40,000			—			36,000			(36,000		)	40,000
Cash flows of discontinued operation:
Net cash used in operating activities	(1,457		)	—			—			—			(1,457		)
Net cash used in investing activities	(195		)	—			—			—			(195		)
Net cash used in financing activities	(2,407		)	—			—			—			(2,407		)
Cash and cash equivalents:
Net change in cash and equivalents	(41,808		)	(42		)	(348		)	—			(42,198		)
Cash and equivalents at beginning of year	69,710			921			4,021			—			74,652
Cash and equivalents at end of year	$	27,902		$	879		$	3,673		$	—		$	32,454
Less: Cash and equivalents at end of year from discontinued operations	2,658			—			—			—			2,658
Cash and equivalents at end of year from continuing operations	$	25,244		$	879		$	3,673		$	—		$	29,796

F-43

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2012

(In thousands of U.S. dollars)

	Successor Registrant
	SatmexIssuer			GuarantorSubsidiaries			Non -GuarantorSubsidiaries		Eliminations upon consolidation		Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	80,069		$	(56	)	$	970	$	—	$	80,983
Cash flows from investing activities:
Investment in shares
Construction in progress - satellites (including capitalized interest)	(114,678		)	—			—		—		(114,678		)
Restricted cash-satellite Satmex 8	(4,900		)	—			—		—		(4,900		)
Acquisition of equipment	(1,524		)	(12		)	—		—		(1,536		)
Net cash used in investing activities	(121,102		)	(12		)	—		—		(121,114		)
Cash flows from financing activities:
Issuance of Notes and expenses	35,700			—			—		—		35,700
Deferred financing costs	(1,221		)	—			—		—		(1,221		)
Net cash provided by financing activities	34,479			—			—		—		34,479
Cash flows of discontinued operation:
Net cash provided by operating activities	1,515			—			—		—		1,515
Net cash used in investing activities	(462		)	—			—		—		(462		)
Cash and cash equivalents:
Net change in cash and equivalents	(5,501		)	(68		)	970		—		(4,599		)
Cash and equivalents at beginning of year	75,211			989			3,051		—		79,251
Cash and equivalents at end of year	$	69,710		$	921		$	4,021	$	—	$	74,652
Less: Cash and equivalents at end of year from discontinued operations	10,837			—			—		—		10,837
Cash and equivalents at end of year from continuing operations	$	58,873		$	921		$	4,021	$	—	$	63,815

F-44

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the period from May 26, 2011 through December 31, 2011

(In thousands of U.S. dollars)

	Successor Registrant
	SatmexIssuer			GuarantorSubsidiaries			Non -GuarantorSubsidiaries		Eliminations upon consolidation		Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	33,165		$	(3,806	)	$	2,405	$	—	$	31,764
Cash flows from investing activities:
Construction in progress - satellites (including capitalized interest)	(150,537		)	—			—		—		(150,537		)
Acquisition of equipment	(1,393		)	(47		)	—		—		(1,440		)
Net cash used in investing activities	(151,930		)	(47		)	—		—		(151,977		)
Cash flows from financing activities:
Proceeds from equity interest	90,000			—			—		—		90,000
Repayment of First Priority Old Notes	(238,237		)	—			—		—		(238,237		)
Deferred financing costs	(333		)	—			—		—		(333		)
Net cash used in financing activities	(148,570		)	—			—		—		(148,570		)
Cash flows of discontinued operation:
Net cash provided by operating activities	590			—			—		—		590
Net cash used in investing activities	(187		)	—			—		—		(187		)
Cash and cash equivalents:
Net change in cash and equivalents	(266,932		)	(3,853		)	2,405		—		(268,380		)
Cash and equivalents at beginning of period	342,143			4,842			646		—		347,631
Cash and equivalents at end of period	$	75,211		$	989		$	3,051	$	—	$	79,251
Less: Cash and equivalents at end of period from discontinued operations	9,818			—			—		—		9,818
Cash and equivalents at end of period from continuing operations	$	65,393		$	989		$	3,051	$	—	$	69,433

F-45

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the period from January 1, 2011 through May 25, 2011

(In thousands of U.S. dollars)

	Predecessor Registrant
	SatmexIssuer			GuarantorSubsidiaries			Non -GuarantorSubsidiaries			Eliminations upon consolidation		Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	43,594			(35,570		)	(763		)	—		7,261
Cash flows from investing activities:
Construction in progress - satellites (including capitalized interest)	(42,334		)	—			—			—		(42,334		)
Acquisition of equipment	(511		)	(57		)	—			—		(568		)
Net cash used in investing activities	(42,845		)	(57		)	—			—		(42,902		)
Cash flows from financing activities:
Insurance of senior secured notes	325,000			—			—			—		325,000
Deferred financing costs	(18,247		)	—			—			—		(18,247		)
Net cash provided by financing activities	306,753			—			—			—		306,753
Cash flows of discontinued operation:
Net cash provided by operating activities	874			—			—			—		874
Net cash used in investing activities	(67		)	—			—			—		(67		)
Cash and cash equivalents:
Net change in cash and equivalents	308,309			(35,627		)	(763		)	—		271,919
Cash and equivalents at beginning of period	33,834			40,469			1,409			—		75,712
Cash and equivalents at end of period	$	342,143		$	4,842		$	646		$	—	$	347,631
Less: Cash and equivalents at end of period from discontinued operations	9,636			—			—			—		9,636
Cash and equivalents at end of period from continuing operations	$	332,507		$	4,842		$	646		$	—	$	337,995

F-46

Satélites Mexicanos, S. A. de C. V. and Subsidiaries

Schedules of Valuation and Qualifying Accounts

(In thousands of U.S. dollars)

Description	Balance at beginning of period			Charged tocost andexpenses			Deductionsfrom reserves andother effects			Balance at end of period
Year ended December 31, 2013 (Successor Registrant)
Allowance for doubtful accounts	$	265		$	474		$	(68	)	$	671
Valuation allowance on deferred tax assets	$	50,173		$	37,275		$			$	87,448
Year ended 2012 (Successor Registrant)
Allowance for doubtful accounts	$	384		$	(49	)	$	(70	)	$	265
Valuation allowance on deferred tax assets	$	34,497		$	15,676		$	—		$	50,173
For the period from May 26, 2011 through December 31, 2011 (Successor Registrant)
Allowance for doubtful accounts	$	—		$	384		$	—		$	384
Valuation allowance on deferred tax assets	$	135,291	(1)	$	(873	)	$	(99,921	)(2)	$	34,497
For the period from January 1, 2011 through May 25, 2011 (Predecessor Registrant)
Allowance for doubtful accounts	$	470		$	—		$	(470	)(3)	$	—
Valuation allowance on deferred tax assets	$	146,562		$	10,394		$	—		$	156,956	(1)

(1)Ending balance for the Predecessor Registrant does not match the beginning balance for the Successor Registrant due to the application of push-down accounting.

(2)Due to the use of the hybrid method, certain tax loss carryforwards and credits on IETU losses were excluded from or included in the deferred tax computation during those years in which the Company expected to pay IETU or ISR, respectively; accordingly, the related allowance on deferred tax assets is also excluded from or included in the deferred tax computation.

(3)Write-offs of uncollectible accounts due to the application of push-down accounting.

* * * * * *

F-47