Supplemental Consolidating Financial Information | Note 20 Supplemental Consolidating Financial Information On April 5, 2011, Intelsat Jackson completed an offering of $2.65 billion aggregate principal amount of the New Jackson Notes. The New Jackson Notes are fully and unconditionally guaranteed, jointly and severally, by Intelsat S.A., Intelsat Holdings, Intelsat Investment Holdings S.à r.l. and Intelsat Investments (collectively, the “Parent Guarantors”); Intelsat Luxembourg and certain wholly-owned subsidiaries of Intelsat Jackson (the “Subsidiary Guarantors”). On April 26, 2012, Intelsat Jackson completed an offering of $1.2 billion aggregate principal amount of the 2020 Jackson Notes, which are fully and unconditionally guaranteed, jointly and severally, by the Parent Guarantors, Intelsat Luxembourg, ICF and the Subsidiary Guarantors. Separate financial statements of the Parent Guarantors, Intelsat Luxembourg, ICF, Intelsat Jackson and the Subsidiary Guarantors are not presented because management believes that such financial statements would not be material to investors. Investments in Intelsat Jackson’s subsidiaries in the following condensed consolidating financial information are accounted for under the equity method of accounting. Consolidating adjustments include the following: • elimination of investment in subsidiaries; • elimination of intercompany accounts; • elimination of intercompany sales between guarantor and non-guarantor subsidiaries; and • elimination of equity in earnings (losses) of subsidiaries. We had other comprehensive loss of $52.1 million for the year ended December 31, 2014, and other comprehensive income of $34.1 million and $2.1 million for the years ended December 31, 2015 and 2016, respectively. Other comprehensive income (loss) is fully attributable to the Subsidiary Guarantors, which are also consolidated within Intelsat Jackson. INTELSAT S.A. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2016 (in thousands) Intelsat S.A. Intelsat Intelsat Intelsat Jackson Non- Guarantor Consolidation Consolidated ASSETS Current assets: Cash and cash equivalents $ 552 $ 59,752 $ 29,985 $ 495,225 $ 414,339 $ 80,510 $ (414,339 ) $ 666,024 Receivables, net of allowance 2 — — 151,345 151,322 51,689 (151,322 ) 203,036 Prepaid expenses and other current assets 882 3 — 48,320 48,263 6,703 (48,263 ) 55,908 Intercompany receivables — — 8,867 557,959 — 302,118 (868,944 ) — Total current assets $ 1,436 $ 59,755 $ 38,852 $ 1,252,849 $ 613,924 $ 441,020 $ (1,482,868 ) $ 924,968 Satellites and other property and equipment, net — — — 6,096,459 6,096,459 89,383 (6,096,459 ) 6,185,842 Goodwill — — — 2,620,627 2,620,627 — (2,620,627 ) 2,620,627 Non-amortizable intangible assets — — — 2,452,900 2,452,900 — (2,452,900 ) 2,452,900 Amortizable intangible assets, net — — — 391,838 391,838 — (391,838 ) 391,838 Investment in affiliates (3,086,095 ) (23,113 ) (651,909 ) 184,804 184,804 — 3,391,509 — Other assets 169 — 681,910 303,623 303,623 62,123 (985,614 ) 365,834 Total assets $ (3,084,490 ) $ 36,642 $ 68,853 $ 13,303,100 $ 12,664,175 $ 592,526 $ (10,638,797 ) $ 12,942,009 LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued liabilities $ 23,153 $ — $ 10,830 $ 221,564 $ 218,897 $ 27,351 $ (218,897 ) $ 282,898 Accrued interest payable — 13,158 2,287 189,395 3,146 — (3,146 ) 204,840 Deferred satellite performance incentives — — — 23,455 23,455 — (23,455 ) 23,455 Other current liabilities — — — 219,389 219,389 3,081 (219,389 ) 222,470 Intercompany payables 502,355 366,589 — — 2,183,616 — (3,052,560 ) — Total current liabilities 525,508 379,747 13,117 653,803 2,648,503 30,432 (3,517,447 ) 733,663 Long-term debt, net of current portion — 3,467,902 434,627 11,702,378 — — (1,406,823 ) 14,198,084 Deferred satellite performance incentives, net of current portion — — — 210,706 210,706 — (210,706 ) 210,706 Deferred revenue, net of current portion — — — 906,521 906,521 223 (906,521 ) 906,744 Deferred income taxes — — — 156,081 156,081 12,444 (156,161 ) 168,445 Accrued retirement benefits — — — 186,086 186,086 198 (186,086 ) 186,284 Other long-term liabilities — — 1,554 139,434 139,434 7,093 (139,434 ) 148,081 Shareholders’ equity (deficit): Common shares 1,180 7,202 — 200 5,558,066 24 (5,565,492 ) 1,180 Other shareholders’ equity (deficit) (3,611,178 ) (3,818,209 ) (380,445 ) (652,109 ) 2,858,778 542,112 1,449,873 (3,611,178 ) Total liabilities and shareholders’ equity $ (3,084,490 ) $ 36,642 $ 68,853 $ 13,303,100 $ 12,664,175 $ 592,526 $ (10,638,797 ) $ 12,942,009 (Certain totals may not add due to the effects of rounding) INTELSAT S.A. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2015 (in thousands) Intelsat S.A. Intelsat Intelsat Jackson Non- Consolidation and Consolidated ASSETS Current assets: Cash and cash equivalents $ 16,941 $ 760 $ 109,959 $ 89,641 $ 43,881 $ (89,641 ) $ 171,541 Receivables, net of allowance — — 173,869 173,638 58,906 (173,638 ) 232,775 Prepaid expenses and other current assets 919 — 28,633 28,593 6,680 (29,041 ) 35,784 Intercompany receivables — 116,396 49,539 — 323,173 (489,108 ) — Total current assets 17,860 117,156 362,000 291,872 432,640 (781,428 ) 440,100 Satellites and other property and equipment, net — — 5,897,103 5,897,103 91,214 (5,897,103 ) 5,988,317 Goodwill — — 2,620,627 2,620,627 — (2,620,627 ) 2,620,627 Non-amortizable intangible assets — — 2,452,900 2,452,900 — (2,452,900 ) 2,452,900 Amortizable intangible assets, net — — 440,330 440,330 — (440,330 ) 440,330 Investment in affiliates (4,120,570 ) (769,452 ) 139,983 139,983 — 4,610,056 — Other assets 87 — 278,771 278,771 32,458 (278,771 ) 311,316 Total assets $ (4,102,623 ) $ (652,296 ) $ 12,191,714 $ 12,121,586 $ 556,312 $ (7,861,103 ) $ 12,253,590 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 28,622 $ 10 $ 154,247 $ 154,861 $ 29,053 $ (155,309 ) $ 211,484 Accrued interest payable — 22,360 139,133 1,964 — (1,964 ) 161,493 Deferred satellite performance incentives — — 19,411 19,411 — (19,411 ) 19,411 Other current liabilities — — 168,261 166,248 3,793 (166,248 ) 172,054 Intercompany payables 489,108 — — 2,038,908 — (2,528,016 ) — Total current liabilities 517,730 22,370 481,052 2,381,392 32,846 (2,870,948 ) 564,442 Long-term debt, net of current portion — 3,442,462 11,168,917 — — — 14,611,379 Deferred satellite performance incentives, net of current portion — — 162,177 162,177 — (162,177 ) 162,177 Deferred revenue, net of current portion — — 1,010,019 1,010,019 223 (1,010,019 ) 1,010,242 Deferred income taxes — — 150,283 150,283 10,519 (150,283 ) 160,802 Accrued retirement benefits — — 195,170 195,170 215 (195,170 ) 195,385 Other long-term liabilities — — 161,420 161,420 8,096 (161,420 ) 169,516 Shareholders’ equity (deficit): Common shares 1,076 7,202 3,114,981 5,558,066 24 (8,680,273 ) 1,076 Preferred shares 35 — — — — — 35 Other shareholders’ equity (deficit) (4,621,464 ) (4,124,330 ) (4,252,305 ) 2,503,059 504,389 5,369,187 (4,621,464 ) Total liabilities and shareholders’ equity $ (4,102,623 ) $ (652,296 ) $ 12,191,714 $ 12,121,586 $ 556,312 $ (7,861,103 ) $ 12,253,590 (Certain totals may not add due to the effects of rounding) INTELSAT S.A. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2016 (in thousands) Intelsat S.A. and Intelsat Intelsat Intelsat Jackson Subsidiary Non- Guarantor Consolidation Consolidated Revenue $ 2,952 $ — $ — $ 1,999,114 $ 1,999,129 $ 562,372 $ (2,375,520 ) $ 2,188,047 Operating expenses: Direct costs of revenue (excluding depreciation and amortization) — — — 264,587 264,587 452,899 (640,926 ) 341,147 Selling, general and administrative 7,884 168 61 140,952 137,488 79,083 (134,239 ) 231,397 Depreciation and amortization — — — 676,542 676,542 18,349 (676,542 ) 694,891 Total operating expenses 7,884 168 61 1,082,081 1,078,617 550,331 (1,451,707 ) 1,267,435 Income (loss) from operations (4,932 ) (168 ) (61 ) 917,033 920,512 12,041 (923,813 ) 920,612 Interest expense (income), net 13,596 272,791 8 661,671 183,931 (9,505 ) (183,991 ) 938,501 Gain on early extinguishment of debt — — — 350,962 — — 679,130 1,030,092 Subsidiary income 1,008,614 605,685 597,995 9,869 9,869 — (2,232,032 ) — Other income (expense), net (4 ) — — (5,909 ) 1,812 3,808 (1,812 ) (2,105 ) Income before income taxes 990,082 332,726 597,926 610,284 748,262 25,354 (2,294,536 ) 1,010,098 Provision for (benefit from) income taxes (115 ) — — 12,290 12,290 3,811 (12,290 ) 15,986 Net income 990,197 332,726 597,926 597,994 735,972 21,543 (2,282,246 ) 994,112 Net income attributable to noncontrolling interest — — — — — (3,915 ) — (3,915 ) Net income attributable to Intelsat S.A. $ 990,197 $ 332,726 $ 597,926 $ 597,994 $ 735,972 $ 17,628 $ (2,282,246 ) $ 990,197 (Certain totals may not add due to the effects of rounding) INTELSAT S.A. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2015 (in thousands) Intelsat S.A. Intelsat Intelsat Jackson Non- Consolidation Consolidated Revenue $ — $ — $ 2,160,235 $ 2,160,251 $ 554,831 $ (2,522,796 ) $ 2,352,521 Operating expenses: Direct costs of revenue (exclusive of depreciation and amortization) — — 241,603 241,603 449,274 (603,979 ) 328,501 Selling, general and administrative 7,912 193 126,331 125,494 65,143 (125,661 ) 199,412 Impairment of goodwill and other intangibles — — 4,165,400 4,165,400 — (4,165,400 ) 4,165,400 Depreciation and amortization — — 654,784 654,784 32,945 (654,784 ) 687,729 Total operating expenses 7,912 193 5,188,118 5,187,281 547,362 (5,549,824 ) 5,381,042 Income (loss) from operations (7,912 ) (193 ) (3,027,883 ) (3,027,030 ) 7,469 3,027,028 (3,028,521 ) Interest expense (income), net 10,723 274,451 613,162 36,059 (8,057 ) (36,059 ) 890,279 Gain on early extinguishment of debt — 7,061 — — — — 7,061 Subsidiary income (loss) (3,904,747 ) (3,614,952 ) 11,983 11,983 — 7,495,733 — Other income (expense), net — — 4,367 (5,136 ) (10,568 ) 5,136 (6,201 ) Income (loss) before income taxes (3,923,382 ) (3,882,535 ) (3,624,695 ) (3,056,242 ) 4,958 10,563,956 (3,917,940 ) Provision for (benefit from) income taxes 3 — (1,871 ) (1,885 ) 3,381 1,885 1,513 Net income (loss) (3,923,385 ) (3,882,535 ) (3,622,824 ) (3,054,357 ) 1,577 10,562,071 (3,919,453 ) Net income attributable to noncontrolling interest — — — — (3,934 ) — (3,934 ) Net income (loss) attributable to Intelsat S.A. (3,923,385 ) (3,882,535 ) (3,622,824 ) (3,054,357 ) (2,357 ) 10,562,071 (3,923,387 ) Cumulative preferred dividends (9,919 ) — — — — — (9,919 ) Net income (loss) attributable to common shareholders $ (3,933,304 ) $ (3,882,535 ) $ (3,622,824 ) $ (3,054,357 ) $ (2,357 ) $ 10,562,071 $ (3,933,306 ) (Certain totals may not add due to the effects of rounding) INTELSAT S.A. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2014 (in thousands) Intelsat S.A. Intelsat Intelsat Jackson Non- Consolidation Consolidated Revenue $ — $ — $ 2,281,331 $ 2,281,348 $ 592,317 $ (2,682,610 ) $ 2,472,386 Operating expenses: Direct costs of revenue (exclusive of depreciation and amortization) — — 257,999 257,999 491,460 (659,110 ) 348,348 Selling, general and administrative 7,547 139 132,379 131,874 57,493 (132,025 ) 197,407 Depreciation and amortization — — 644,597 644,597 34,754 (644,597 ) 679,351 Total operating expenses 7,547 139 1,034,975 1,034,470 583,707 (1,435,732 ) 1,225,106 Income (loss) from operations (7,547 ) (139 ) 1,246,356 1,246,878 8,610 (1,246,878 ) 1,247,280 Interest expense, net 10,153 274,253 660,763 6,605 (382 ) (6,605 ) 944,787 Loss on early extinguishment of debt — — (40,423 ) — — — (40,423 ) Subsidiary income 250,281 545,402 14,729 14,729 — (825,141 ) — Other income (expense), net 2 — 2,864 2,770 (5,461 ) (2,768 ) (2,593 ) Income before income taxes 232,583 271,010 562,763 1,257,772 3,531 (2,068,182 ) 259,477 Provision for income taxes 53 — 17,361 17,268 5,557 (17,268 ) 22,971 Net income (loss) 232,530 271,010 545,402 1,240,504 (2,026 ) (2,050,914 ) 236,506 Net income attributable to noncontrolling interest — — — — (3,974 ) — (3,974 ) Net income (loss) attributable to Intelsat S.A. 232,530 271,010 545,402 1,240,504 (6,000 ) (2,050,914 ) 232,532 Cumulative preferred dividends (9,917 ) — — — — — (9,917 ) Net income (loss) attributable to common shareholders $ 222,613 $ 271,010 $ 545,402 $ 1,240,504 $ (6,000 ) $ (2,050,914 ) $ 222,615 (Certain totals may not add due to the effects of rounding) INTELSAT S.A. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2016 (in thousands) Intelsat S.A. Intelsat Intelsat Connect Intelsat Jackson Non- Guarantor Consolidation Consolidated Cash flows from operating activities: $ (10,234 ) $ 89,342 $ 4,764 $ 917,923 $ 1,506,746 $ (314,986 ) $ (1,510,049 ) $ 683,506 Cash flows from investing activities: Payments for satellites and other property and equipment (including capitalized interest) — — — (699,213 ) (699,213 ) (15,357 ) 699,213 (714,570 ) Repayment from intercompany loans 4,895 — — — — 359,237 (364,132 ) — Investment in subsidiaries (6,087 ) (300,050 ) — (30,655 ) (10,955 ) — 347,747 — Dividend from affiliates — 269,700 — 8,980 8,980 — (287,660 ) — Purchase of cost method investment — — — (4,000 ) (4,000 ) — 4,000 (4,000 ) Capital contributions to unconsolidated affiliates — — — — — (10,340 ) — (10,340 ) Other investing activities — — — — — (1,679 ) — (1,679 ) Net cash provided by (used in) investing activities (1,192 ) (30,350 ) — (724,888 ) (705,188 ) 331,861 399,168 (730,589 ) Cash flows from financing activities: Proceeds from issuance of long-term debt — — — 1,250,000 — — — 1,250,000 Repayments of long-term debt — — — (328,944 ) — — — (328,944 ) Disbursements for intercompany loans — — — (364,132 ) (12,438 ) — 376,570 — Payment of premium on early extinguishment of debt — — — (32 ) — — — (32 ) Debt issuance costs — — (15,562 ) (26,133 ) — — 3,302 (38,393 ) Payments on tender, debt exchange and consent transaction — — (259,267 ) (34,009 ) — — — (293,276 ) Dividends paid to preferred shareholders (4,959 ) — — — — — — (4,959 ) Other payments for satellites — — — (18,333 ) (18,333 ) — 18,333 (18,333 ) Capital contribution from parent — — 300,050 — 96,658 36,742 (433,450 ) — Dividends to shareholders — — — (269,700 ) (524,327 ) (8,980 ) 803,007 — Principal payments on deferred satellite performance incentives — — — (17,429 ) (17,429 ) — 17,429 (17,429 ) Dividends paid to noncontrolling interest — — — — — (8,980 ) — (8,980 ) Other financing activities — — — 1,942 — — — 1,942 Net cash provided by (used in) financing activities (4,959 ) — 25,221 193,230 (475,869 ) 18,782 785,191 541,596 Effect of exchange rate changes on cash and cash equivalents (4 ) — — (999 ) (991 ) 972 992 (30 ) Net change in cash and cash equivalents (16,389 ) 58,992 29,985 385,266 324,698 36,629 (324,698 ) 494,483 Cash and cash equivalents, beginning of period 16,941 760 — 109,959 89,641 43,881 (89,641 ) 171,541 Cash and cash equivalents, end of period $ 552 $ 59,752 $ 29,985 $ 495,225 $ 414,339 $ 80,510 $ (414,339 ) $ 666,024 (Certain totals may not add due to the effects of rounding) INTELSAT S.A. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2015 (in thousands) Intelsat S.A. Intelsat Intelsat Jackson Non- Guarantor Consolidation and Consolidated Cash flows from operating activities: $ 724 $ (251,879 ) $ 1,138,747 $ 1,629,412 $ 22,438 $ (1,629,411 ) $ 910,031 Cash flows from investing activities: Payments for satellites and other property and equipment (including capitalized interest) — — (720,273 ) (720,273 ) (4,089 ) 720,273 (724,362 ) Repayment from (disbursements for) intercompany loans 9,538 — 2,064 2,064 (346,799 ) 333,133 — Investment in subsidiaries (7,355 ) (610,000 ) (198 ) (40,444 ) — 657,997 — Dividend from affiliates 19,000 898,400 28,423 28,423 — (974,246 ) — Purchase of cost method investment — — (25,000 ) (25,000 ) — 25,000 (25,000 ) Other investing activities — — 432 432 (424 ) (432 ) 8 Net cash provided by (used in) investing activities 21,183 288,400 (714,552 ) (754,798 ) (351,312 ) 761,725 (749,354 ) Cash flows from financing activities: Repayments of long-term debt — (17,829 ) (479,000 ) — — — (496,829 ) Proceeds from drawdown of long-term debt — — 430,000 — — — 430,000 Proceeds from (repayment of) intercompany borrowing (1,430 ) — 337,261 — (634 ) (335,197 ) — Dividends paid to preferred shareholders (9,919 ) — — — — — (9,919 ) Capital contribution from parent — — 250,000 86,316 367,553 (703,869 ) — Dividends to shareholders — (19,000 ) (898,400 ) (916,697 ) (28,423 ) 1,862,520 — Principal payments on deferred satellite performance incentives — — (18,405 ) (18,405 ) (1,163 ) 18,405 (19,568 ) Dividends paid to noncontrolling interest — — — — (8,423 ) — (8,423 ) Other financing activities 154 — 1,600 1,600 — (1,601 ) 1,753 Net cash provided by (used in) financing activities (11,195 ) (36,829 ) (376,944 ) (847,186 ) 328,910 840,258 (102,986 ) Effect of exchange rate changes on cash and cash equivalents — — (925 ) (931 ) (8,372 ) 931 (9,297 ) Net change in cash and cash equivalents 10,712 (308 ) 46,326 26,497 (8,336 ) (26,497 ) 48,394 Cash and cash equivalents, beginning of period 6,229 1,068 63,633 63,144 52,217 (63,144 ) 123,147 Cash and cash equivalents, end of period $ 16,941 $ 760 $ 109,959 $ 89,641 $ 43,881 $ (89,641 ) $ 171,541 (Certain totals may not add due to the effects of rounding) INTELSAT S.A. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2014 (in thousands) Intelsat S.A. Intelsat Intelsat Jackson Non- Guarantor Consolidation Eliminations Consolidated Cash flows from operating activities: $ (1,366 ) $ (270,171 ) $ 1,253,342 $ 1,887,340 $ 64,363 $ (1,887,338 ) $ 1,046,170 Cash flows from investing activities: Payments for satellites and other property and equipment (including capitalized interest) — — (639,603 ) (639,603 ) (5,821 ) 639,603 (645,424 ) Repayment from (disbursements for) intercompany loans 9,214 — 3,873 3,873 — (16,960 ) — Investment in subsidiaries (3,790 ) — (194 ) (194 ) — 4,178 — Dividend from affiliates 8,300 279,400 33,943 33,943 — (355,586 ) — Other investing activities — — 174 174 — (174 ) 174 Net cash provided by (used in)investing activities 13,724 279,400 (601,807 ) (601,807 ) (5,821 ) 271,061 (645,250 ) Cash flows from financing activities: Repayments of long-term debt — — (586,000 ) — (24,418 ) — (610,418 ) Payment of premium on early extinguishment of debt — — (21,250 ) — — — (21,250 ) Proceeds from issuance of long-term debt — — 135,000 — — — 135,000 Proceeds from (repayment of) intercompany borrowing (4,233 ) — (9,214 ) — 360 13,087 — Dividends paid to preferred shareholders (9,919 ) — — — — — (9,919 ) Capital contribution from parent — — 103,698 3,984 (107,682 ) — Dividends to shareholders — (8,300 ) (279,400 ) (1,473,781 ) (33,943 ) 1,795,424 — Principal payments on deferred satellite performance incentives — — (18,705 ) (18,705 ) (1,069 ) 18,705 (19,774 ) Capital contribution from noncontrolling interest — — — — 12,209 — 12,209 Dividends paid to noncontrolling interest — — — — (8,744 ) — (8,744 ) Other financing activities 4,231 — (338 ) (338 ) — 338 3,893 Net cash provided by (used in) financing activities (9,921 ) (8,300 ) (779,907 ) (1,389,126 ) (51,621 ) 1,719,872 (519,003 ) Effect of exchange rate changes on cash and cash equivalents — — (1,085 ) (1,063 ) (5,473 ) 1,061 (6,560 ) Net change in cash and cash equivalents 2,437 929 (129,457 ) (104,656 ) 1,448 104,656 (124,643 ) Cash and cash equivalents, beginning of period 3,792 139 193,090 167,800 50,769 (167,800 ) 247,790 Cash and cash equivalents, end of period $ 6,229 $ 1,068 $ 63,633 $ 63,144 $ 52,217 $ (63,144 ) $ 123,147 (Certain totals may not add due to the effects of rounding) |