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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF MAY 2001
COMMISSION FILE NO. 333-8880
SATELITES MEXICANOS, S.A. DE C.V.
BLVD. M. AVILA CAMACHO NO. 40
COL. LOMAS DE CHAPULTEPEC
11000 MEXICO, D.F.
MEXICO
(525) 201-0800
The registrant files annual reports under cover of Form 20-F.
The registrant is not furnishing the information contained in this form to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
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SATELITES MEXICANOS, S.A. de C.V.
FINANCIAL INFORMATION
INDEX
PAGE
----
Financial Statements (Unaudited):
Condensed Balance Sheets as of March 31, 2001 and December
31, 2000............................................... 2
Condensed Statements of Operations for the three months
ended March 31, 2001 and 2000.......................... 3
Condensed Statements of Cash Flows for the three months
ended March 31, 2001 and 2000.......................... 4
Notes to Unaudited Condensed Financial Statements......... 5
Operating and Financial Review and Prospects................ 8
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SATELITES MEXICANOS, S.A. DE C.V.
(SUBSIDIARY OF SERVICIOS CORPORATIVOS SATELITALES, S.A. DE C.V.)
CONDENSED BALANCE SHEETS
(Amounts in thousands of U.S. dollars )
MARCH 31, DECEMBER 31,
2001 2000
----------- ------------
(UNAUDITED) (NOTE)
ASSETS
Current assets:
Cash and cash equivalents................................. $ 8,409 $ 24,625
Restricted and segregated cash............................ 230,368
Insurance proceeds receivable (Note 1).................... 235,338
Accounts receivable....................................... 5,423 7,902
Prepaid insurance......................................... 6,290 7,312
Due from related parties.................................. 3,174 2,525
Deferred income taxes..................................... 3,056
---------- ----------
Total current assets.............................. 256,720 277,702
Satellites and equipment, net............................... 355,118 354,422
Concessions, net............................................ 473,200 476,426
Prepaid insurance, non current.............................. 5,752 6,597
Deferred financing costs, net............................... 7,656 8,195
Other assets................................................ 307 235
---------- ----------
Total assets...................................... $1,098,753 $1,123,577
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt...................... $ 1,000 $ 1,000
Accounts payable.......................................... 4,645 4,919
Accrued expenses.......................................... 11,017 11,332
Due to related parties.................................... 5,774 9,928
Interest payable.......................................... 5,883 14,610
Deferred revenue -- customers............................. 2,978 3,957
Deferred revenue -- Mexican government.................... 2,200 2,200
Deferred income taxes..................................... 8,590
---------- ----------
Total current liabilities......................... 33,497 56,536
Accrued expenses, non current............................... 15,181 15,181
Deferred revenue -- Mexican government...................... 78,385 78,935
Deferred income taxes....................................... 20,258 10,205
Long-term debt.............................................. 560,750 571,000
---------- ----------
Total liabilities................................. 708,071 731,857
---------- ----------
Commitments and contingencies (Note 6)
Stockholders' equity:
Common stock.............................................. 382,417 382,040
Preferred stock........................................... 31,886 31,886
Accumulated deficit....................................... (23,621) (22,206)
---------- ----------
Total stockholders' equity........................ 390,682 391,720
---------- ----------
Total liabilities and stockholders' equity........ $1,098,753 $1,123,577
========== ==========
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Note: The December 31, 2000 balance sheet has been derived from the audited
financial statements at that date.
See notes to unaudited condensed financial statements.
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SATELITES MEXICANOS, S.A. DE C.V.
(SUBSIDIARY OF SERVICIOS CORPORATIVOS SATELITALES, S.A. DE C.V.)
CONDENSED STATEMENTS OF OPERATIONS
(Amounts in thousands of U.S. dollars)
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
--------------------
2001 2000
-------- --------
Service revenue............................................. $ 33,857 $ 32,315
-------- --------
Operating expenses:
Satellite operations...................................... 4,995 4,649
Selling and administrative expenses....................... 5,474 4,988
License and management fees............................... 1,112 1,026
Depreciation expense and amortization of concessions...... 11,743 15,370
-------- --------
23,324 26,033
-------- --------
Operating income............................................ 10,533 6,282
Interest income............................................. 3,084 181
Interest expense and amortization of deferred financing
costs..................................................... (16,277) (16,581)
Net foreign exchange gain................................... 29 18
-------- --------
Loss before income taxes.................................... (2,631) (10,100)
Deferred income tax benefit (provision)..................... 1,593 (3,002)
-------- --------
Net loss.................................................... (1,038) (13,102)
Preferred stock dividend requirement........................ (377) (377)
-------- --------
Net loss applicable to common stockholders.................. $ (1,415) $(13,479)
======== ========
See notes to unaudited condensed financial statements.
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SATELITES MEXICANOS, S.A. DE C.V.
(SUBSIDIARY OF SERVICIOS CORPORATIVOS SATELITALES, S.A. DE C.V.)
CONDENSED STATEMENTS OF CASH FLOWS
(Amounts in thousands of U.S. dollars)
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
--------------------
2001 2000
-------- --------
OPERATING ACTIVITIES
Net loss.................................................... $ (1,038) $(13,102)
Adjustments to reconcile net loss to operating cash flow:
Depreciation expense and amortization of concessions...... 11,743 15,370
Amortization of deferred financing costs.................. 575 526
Deferred revenue -- customers............................. (979) (982)
Deferred revenue -- Mexican Government.................... (550) (550)
Deferred income taxes..................................... (1,593) 3,002
Interest income from restricted and segregated cash....... (2,030)
Changes in assets and liabilities:
Accounts receivable....................................... 2,479 1,849
Prepaid insurance......................................... 1,867 3,430
Accounts payable and accrued expenses..................... (589) 880
Interest payable.......................................... (8,727) (7,912)
Due from/to related parties............................... (4,803) 1,376
Deferred financing costs and other assets................. (108) (591)
-------- --------
Cash flow provided by (used in) operating activities........ (3,753) 3,296
-------- --------
INVESTING ACTIVITIES
Use of restricted and segregated cash....................... 7,000
Construction in progress -- Satmex 6........................ (9,120)
Acquisition of equipment, net............................... (93) (841)
-------- --------
Cash flow used in investing activities...................... (2,213) (841)
-------- --------
FINANCING ACTIVITIES
Repayment of senior secured notes........................... (250) (250)
Repayment of revolving credit facility...................... (10,000)
-------- --------
Cash flow used in financing activities...................... (10,250) (250)
-------- --------
Increase (decrease) in cash and cash equivalents............ (16,216) 2,205
Cash and cash equivalents -- beginning of period............ 24,625 6,450
-------- --------
Cash and cash equivalents -- end of period.................. $ 8,409 $ 8,655
======== ========
SUPPLEMENTAL DISCLOSURE
Interest paid............................................... $ 24,390 $ 23,118
======== ========
See notes to unaudited condensed financial statements.
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SATELITES MEXICANOS, S.A. DE C.V.
(SUBSIDIARY OF SERVICIOS CORPORATIVOS SATELITALES, S.A. DE C.V.)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Amounts in U.S. dollars)
1. THE COMPANY
Satelites Mexicanos, S.A. de C.V. ("Satmex" or the "Company") owns and
operates two geosynchronous communications satellites, Solidaridad 2 and Satmex
5. Satmex also owns another satellite, Morelos 2, which is in an inclined orbit.
Satmex operates in one business segment and is the leading provider of fixed
satellite services ("FSS") to broadcasting and telecommunications customers in
Mexico. Satmex has landing rights to provide broadcasting and telecommunications
transmission capacity in Mexico, the United States, Canada and 29 nations and
territories in the Latin American region.
On November 17, 1997, Loral Space & Communications Ltd. (together with its
subsidiaries "Loral") and Principia, S.A. de C.V., ("Principia") acquired 75% of
the issued and outstanding capital stock of Satmex from the government of Mexico
for $647 million through Firmamento Mexicano, S. de R. L. de C.V.
("Firmamento"). Loral owns 65% of Firmamento and Principia owns 35%. Principia
holds 51% of Firmamento's voting interests. The remaining 25% of the capital
stock of Satmex was retained by the Mexican government.
On August 29, 2000, the Company's Solidaridad 1 satellite ceased operating
and was considered irretrievably lost. The loss was caused by the failure of the
back-up control processor on board the satellite. Solidaridad 1, which was built
by Hughes Space and Communications and commenced service in January 1994,
experienced a failure of its primary control processor in April 1999, and the
satellite had been operating on its back-up processor since that time.
Solidaridad 1 was insured for $250 million. At the date of the loss, Solidaridad
1 had a net book value of approximately $109.6 million. After deducting prepaid
insurance of $1.6 million, the unpaid insurance premiums of $12.5 million and
on-going monitoring costs and the excess of the estimated cost over revenue for
the currently committed transponder capacity to be provided to customers of
$23.2 million, the net gain on the in-orbit failure of Solidaridad 1 was
approximately $103.1 million. In January 2001, Satmex received insurance
proceeds of approximately $235.3 million, net of the unpaid insurance premiums
and related value added tax. Satmex intends to use the net insurance proceeds
towards the construction, launch and insurance of a replacement satellite as
well as for debt service and Satmex has contracted with Space Systems/Loral,
Inc., a wholly owned subsidiary of Loral, to build the replacement satellite.
This satellite, known as Satmex 6, is scheduled to be launched in January 2003,
and is designed to provide broader coverage and higher power levels than any
other satellite currently in the Satmex fleet.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared pursuant to the rules of the Securities and Exchange Commission ("SEC")
and, in the opinion of the Company, include all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of results of
operations, financial position and cash flows. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States have been
condensed as permitted pursuant to such SEC rules. The Company believes that the
disclosures made are adequate to keep the information presented from being
misleading. The results of operations for the three months ended March 31, 2001,
are not necessarily indicative of the results to be expected for the year. It is
suggested that these financial statements be read in conjunction with the
audited financial statements and notes thereto of Satmex, included in Satmex's
Annual Report on Form 20-F.
3. SIGNIFICANT ACCOUNTING POLICIES
Restricted and segregated cash
In accordance with the Company's debt agreements, the insurance proceeds
from the failure of Solidaridad 1 are restricted to use for debt service on the
Company's senior secured notes and revolving credit facility and for payments
toward the construction and launch of Satmex 6. Upon receipt of the net
insurance
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SATELITES MEXICANOS, S.A. DE C.V.
(SUBSIDIARY OF SERVICIOS CORPORATIVOS SATELITALES, S.A. DE C.V.)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS--(CONTINUED)
proceeds of $235.3 million, Satmex allocated $50.0 million of the proceeds for
debt service and the remainder of the proceeds towards the construction and
launch of Satmex 6.
4. ACCOUNTS RECEIVABLE
MARCH 31, DECEMBER 31,
2001 2000
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(IN THOUSANDS)
Customers................................................... $ 6,386 $ 6,243
Value added tax recoverable................................. 306 1,853
Other....................................................... 739 1,514
Allowance for uncollectible accounts........................ (2,008) (1,708)
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$ 5,423 $ 7,902
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5. SATELLITES AND EQUIPMENT
MARCH 31, DECEMBER 31,
2001 2000
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(IN THOUSANDS)
Satellites.................................................. $ 409,119 $409,119
Equipment................................................... 24,627 24,627
Furniture and fixtures...................................... 5,722 5,817
Leasehold improvements...................................... 2,763 2,763
Construction in progress.................................... 2,257 2,187
Construction in progress -- Satmex 6........................ 12,292 3,172
--------- --------
456,780 447,685
Accumulated depreciation.................................... (101,662) (93,263)
--------- --------
$ 355,118 $354,422
========= ========
6. BALANCES AND TRANSACTIONS WITH RELATED PARTIES
MARCH 31, DECEMBER 31,
2001 2000
--------- ------------
(IN THOUSANDS)
AMOUNTS RECEIVABLE:
Principia................................................... $ 671 $ 605
Loral....................................................... 232 583
Service companies........................................... 17
Mexican government agencies................................. 2,271 1,320
-------- --------
$ 3,174 $ 2,525
======== ========
AMOUNTS PAYABLE:
Loral....................................................... $ 1,493 $ 6,275
Principia................................................... 926 380
Service companies........................................... 3,355 3,255
Firmamento.................................................. 18
-------- --------
$ 5,774 $ 9,928
======== ========
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SATELITES MEXICANOS, S.A. DE C.V.
(SUBSIDIARY OF SERVICIOS CORPORATIVOS SATELITALES, S.A. DE C.V.)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS--(CONTINUED)
Transactions with related parties, not otherwise disclosed, are as follows:
Revenue
Revenue from related parties, primarily the Mexican government, was $4.6
million and $3.2 million for the three months ended March 31, 2001 and 2000,
respectively.
Replacement Capacity
Loral Skynet, a wholly owned subsidiary of Loral, billed Satmex $1.7
million, for the three months ended March 31, 2001, for providing capacity on
its satellites for customers that were on Solidaridad 1.
Management fee
Loral and Principia are responsible for managing the Company. Loral and
Principia receive a management fee, based on a sliding scale, up to a maximum of
3.75% of the Company's quarterly gross revenue, as defined. For the three months
ended March 31, 2001 and 2000, the management fee was $641,000 and $566,000,
respectively.
License fee
Loral has licensed certain intellectual property to the Company for an
annual fee of 1.5% of the Company's gross revenue, as defined. For the three
months ended March 31, 2001 and 2000, the fee was $471,000 and $460,000,
respectively.
Rent
The equipment in the satellite control centers is owned by the Company,
while the buildings and land that house these centers are property of the
Mexican government. The Company pays rent to the Mexican government for the use
of the buildings and land. The rent expense under this agreement was $75,000 and
$71,000 for the three months ended March 31, 2001 and 2000, respectively.
Service companies
Satmex uses external services from affiliated companies to perform its
activities. Satmex pays these companies for the actual personnel costs incurred
plus a fee. For the three months ended March 31, 2001 and 2000, the fee was
$304,000 and $162,000, respectively.
Guarantee arrangements
In connection with the loan agreements certain related parties have
provided and continue to provide guarantees on behalf of the Company.
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OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Except for the historical information contained herein, the matters
discussed in the following Operating and Financial Review and Prospects of
Satelites Mexicanos, S.A. de C.V. ("Satmex" or the "Company") are not historical
facts, but are "forward-looking statements," as that term is defined in the
Private Securities Litigation Reform Act of 1995. In addition, the Company or
its representatives have made and may continue to make forward-looking
statements, orally or in writing, in other contexts, such as in reports filed
with the SEC, press releases or statements made with the approval of an
authorized executive officer of the Company. These forward-looking statements
can be identified by the use of forward-looking terminology such as "believes,"
"expects," "plans," "may," "will," "would," "could," "should," "anticipates,"
"estimates," "projects," "intend," or "outlook" or the negative of these words
or other variations of these words or other comparable words, or by discussion
of strategy that involve risks and uncertainties. These forward-looking
statements are only predictions, and actual events or results may differ
materially as a result of a wide variety of factors and conditions, many of
which are beyond the Company's control. Some of these factors and conditions
include: partial or total failure of the Company's in-orbit satellites; the
Company's reliance on certain customers; the Company's operations are located in
Mexico; competition in the Company's industry; and the Company owes significant
amounts of money. For a detailed discussion of these factors and conditions,
please refer to the periodic reports filed by the Company with the SEC. In
addition, the Company operates in an industry sector where securities values may
be volatile and may be influenced by economic and other factors beyond the
Company's control. The Company undertakes no obligation to update any forward-
looking statement.
The following should be read in conjunction with the financial statements
of the Company for the three months ended March 31, 2001 and 2000 and the
audited financial statements and notes thereto of Satmex, included in Satmex's
Annual Report on Form 20-F.
OVERVIEW
Satmex owns and operates two geosynchronous communications satellites,
Solidaridad 2 and Satmex 5. Satmex also owns another satellite, Morelos 2, which
is in an inclined orbit. Satmex operates in one business segment and is the
leading provider of fixed satellite services ("FSS") to broadcasting and
telecommunications customers in Mexico. Satmex has landing rights to provide
broadcasting and telecommunications transmission capacity in Mexico, the United
States, Canada and 29 nations and territories in the Latin American region.
On August 29, 2000, the Company's Solidaridad 1 satellite ceased operating
and was considered irretrievably lost. The loss was caused by the failure of the
back-up control processor on board the satellite. Solidaridad 1, which was built
by Hughes Space and Communications and commenced service in January 1994,
experienced a failure of its primary control processor in April 1999, and the
satellite had been operating on its back-up processor since that time.
Solidaridad 1 was insured for $250 million. At the date of the loss, Solidaridad
1 had a net book value of approximately $109.6 million. After deducting prepaid
insurance of $1.6 million, the unpaid insurance premiums of $12.5 million and
on-going monitoring costs and the excess of the estimated cost over revenue for
the currently committed transponder capacity to be provided to customers of
$23.2 million, the net gain on the in-orbit failure of Solidaridad 1 was
approximately $103.1 million. In January 2001, Satmex received insurance
proceeds of approximately $235.3 million, net of the unpaid insurance premiums
and related value added tax. Satmex intends to use the net insurance proceeds
towards the construction, launch and insurance of a replacement satellite as
well as for debt service and Satmex has contracted with Space Systems/Loral,
Inc., a wholly owned subsidiary of Loral, to build the replacement satellite.
This satellite, known as Satmex 6, is scheduled to be launched in January 2003,
and is designed to provide broader coverage and higher power levels than any
other satellite currently in the Satmex fleet.
In April 2001, Satmex 5 experienced temporary difficulties starting the
back-up propulsion subsystem of the Xenon Ion Propulsion System ("XIPS"). The
XIPS provides station-keeping capability for the satellite. Using procedures
provided by the satellite manufacturer, the Company was able to start the
back-up
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propulsion subsystem, and at no time was service on Satmex 5 interrupted. Both
the primary and the back-up subsystems are currently operating normally.
RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO MARCH 31,
2000
Revenue
Revenue for the first quarter of 2001 was $33.9 million, as compared to
$32.3 million for the first quarter of 2000. The increase is due to higher
utilization of Solidaridad 2 and Satmex 5. The failure of Solidaridad 1 did not
have a significant effect on revenue for the first quarter of 2001 because most
of its customers were provided with alternative capacity on Solidaridad 2,
Satmex 5 or on other satellites operated by Loral Skynet.
Operating expenses
Operating expenses decreased to $23.3 million in the first quarter of 2001,
from $26.0 million in the first quarter of 2000, as described below.
Satellite operations. Satellite operations costs, which consist primarily
of satellite insurance and the personnel costs related to the operation of the
satellites, were $5.0 million for the first quarter of 2001, as compared to $4.6
million in the first quarter of 2000. The increase is primarily due to the cost
of replacement capacity on other satellites for customers on Solidaridad 1 of
$1.7 million and increased salary expense, offset by a reduction in insurance
expense related to Solidaridad 1.
Selling and administrative expenses. Selling and administrative expenses
in the first quarter of 2001 were $5.5 million as compared to $5.0 million in
the first quarter of 2000. The increase is primarily due to higher compensation
and increased professional fees.
License and management fees. Loral and Principia are responsible for
managing the Company. Loral and Principia receive a management fee, based on a
sliding scale, up to a maximum of 3.75% of the Company's quarterly gross
revenue, as defined. For the three months ended March 31, 2001 and 2000, the
management fee was $641,000 and $566,000, respectively. Loral has licensed
certain intellectual property to the Company for an annual fee of 1.5% of the
Company's gross revenue, as defined. For the three months ended March 31, 2001
and 2000, the fee was $471,000 and $460,000, respectively. License and
management fees increased due to the Company's increased revenue.
Depreciation and amortization. Depreciation expense for the first quarter
of 2001 was $8.5 million as compared to $12.2 million during the first quarter
of 2000. The decrease in depreciation expense is due to the write-off of
Solidaridad 1 after it ceased operating in August 2000. Amortization expense
relating to the concessions was $3.2 million in each quarter.
Interest
Total interest cost was $16.3 million in the first quarter of 2001 as
compared to $16.6 million in 2000. Total interest cost decreased due to lower
average outstanding debt in the first quarter of 2001, partially offset by
higher interest rates on the Company's variable rate debt.
Net foreign exchange gain
The Company recorded a net foreign exchange gain of $29,000 and $18,000 in
the first quarter of 2001 and 2000, respectively. The peso remained stable
against the dollar in each quarter.
Deferred income tax benefit (provision)
Income tax is determined following interperiod allocation procedures under
the liability method. Under this method, deferred income taxes are recognized
for the estimated future tax effects attributable to temporary differences and
tax loss and tax credit carryforwards. For the three months ended March 31,
2001, the Company recorded a deferred income tax benefit of $1.6 million on a
loss before income taxes of $2.6 million as compared to an expense of $3.0
million on a loss of $10.1 million for 2000. The change is primarily
attributable to a higher amount of gain recognized for Mexican income tax
purposes in 2000 as compared to the current period for the effect of remeasuring
dollar denominated assets and liabilities into
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pesos and the inflationary component of the Company's monetary assets and
liabilities as well as a reduction recorded during the current period for the
valuation allowance against the tax loss carryforwards.
Preferred stock dividend requirement
The preferred stock dividend requirement was $377,000 in each quarter.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2001, the Company had total debt of $561.8 million, and the
Company was in compliance with all covenants governing its debt agreements. The
Company's primary source of liquidity for working capital purposes is cash flow
from operations. At March 31, 2001, the Company had cash and cash equivalents of
$8.4 million. The Company believes that its cash flow from operations and the
availability of its revolving credit facility will be adequate to service its
interest and debt repayment requirements and ensure compliance with the
covenants of its debt agreements. At March 31, 2001, Satmex had $230.4 million
of restricted and segregated cash of which $50.0 million is available for debt
service on the senior secured notes and revolving credit facility and $180.4
million is available for the construction and launch of Satmex 6.
Cash used and provided. Net cash used in operating activities for the
quarter ended March 31, 2001 of $3.8 million, consisted primarily of a decrease
in interest payable of $8.7 million, a net decrease in amounts due from/to
related parties of $4.8 million, a decrease in accounts payable and accrued
expenses of $0.6 million and an increase in deferred financing costs and other
assets of $0.1 million, offset by $6.1 million of funds generated by earnings
before non-cash items and interest income on the restricted and segregated cash,
a decrease in accounts receivable of $2.5 million and a decrease in prepaid
insurance of $1.9 million.
Cash used in investing activities for the first quarter of 2001 was $2.2
million. Capital expenditures in the first quarter of 2001 were $9.2 million as
compared to $841,000, in the first quarter of 2000. Capital expenditures for the
quarter ended March 31, 2001 primarily related to the construction of Satmex 6,
of which $7.0 million was funded through the use of the restricted and
segregated cash account. Satmex believes that the funds available in the
restricted and segregated cash account allocated for the construction and launch
of Satmex 6 of $180.4 million and cash flow from operations will be sufficient
to fund the on-orbit delivery of Satmex 6. Substantially all capital
expenditures are denominated in U.S. dollars.
Cash used in financing activities for 2001 was $10.3 million and reflects
the scheduled repayment of the Company's senior secured notes of $250,000 and
repayment of borrowings under the Company's revolving credit facility of $10
million.
ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"), which requires that all derivative instruments be
recorded on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. The Company adopted
SFAS 133, as amended, on January 1, 2001. The adoption of SFAS 133 did not have
an effect on its earnings or financial position.
In September 2000, the FASB issued Statement No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities"
("SFAS 140"), which replaces Statement No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS 125").
SFAS 140 revises the standards for accounting for securitizations and other
transfers of financial assets and collateral and requirements certain
disclosures, but it carries over most of SFAS 125's provisions without
reconsideration. The Company is currently evaluating the impact of adopting SFAS
140, which is effective for transactions entered into after March 31, 2001.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SATELITES MEXICANOS, S.A. de C.V.
By: Cynthia Pelini
-------------------------------------
Cynthia Pelini
Chief Financial Officer
Date: May 14, 2001