UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

 

COMMISSION FILE NO. 0-22531

 

PANAMSAT CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

DELAWARE		95-4607698
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)		(I.R.S. EMPLOYER IDENTIFICATION NO.)

 

20 WESTPORT ROAD, WILTON, CT 06897

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

 

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: 203-210-8000

 

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 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.

 

Yes ý No o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

 

Yes ý No o

 

As of July 26, 2004, an aggregate of 150,299,954 shares of our common stock were outstanding.

 

 

 

Unless the context otherwise requires, in this Quarterly Report on Form 10-Q, the terms “we,” “our,” the “company” and “PanAmSat” refer to PanAmSat Corporation and its subsidiaries.

 

CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

 

This Quarterly Report on Form 10-Q contains certain forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements so long as such information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information. When used in this Quarterly Report on Form 10-Q, the words “estimate,” “project,” “plan,” “anticipate,” “expect,” “intend,” “outlook,” “believe” and other similar expressions are intended to identify forward-looking statements and information. Actual results may differ materially from any results which might be projected, forecasted, estimated or budgeted due to certain risks and uncertainties, including without limitation: (i) risks associated with operating our in-orbit satellites (ii) risks of launch failures, launch and construction delays and in-orbit failures or reduced performance, (iii) risk that we may not be able to obtain new or renewal satellite insurance policies on commercially reasonable terms or at all, (iv) risks related to possible future losses on satellites that are not adequately covered by insurance, (v) risks related to domestic and international government regulation, (vi) risks related to the Company’s contracted backlog for future services, (vii) risks of doing business internationally, (viii) risks of inadequate access to capital for growth, (ix) risks related to competition, (x) risks related to customer defaults, (xi) risks relating to pricing pressure and overcapacity in markets in which we operate, (xii) risks associated with the Company’s indebtedness, (xiii) risks related to control by our majority stockholder and (xiv) litigation.  PanAmSat cautions that the foregoing list of important factors is not exclusive, and PanAmSat undertakes no obligation to publicly update any forward-looking statement.   Such risks are more fully described under the caption “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2003. Reference is also made to such other risks and uncertainties detailed from time to time in our filings with the United States Securities and Exchange Commission.

 

WEBSITE ACCESS TO COMPANY’S REPORTS

 

PanAmSat’s Internet website address is WWW.PANAMSAT.COM. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission.

 

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PART I. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

PANAMSAT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

FOR THE THREE MONTHS ENDED JUNE 30, 2004 AND 2003

(IN THOUSANDS, EXCEPT SHARE DATA)

 

		June 30, 2004			June 30, 2003
REVENUES
Operating leases, satellite services and other		$	202,732		$	199,400
Outright sales and sales-type leases		4,093			4,193
Total revenues		206,825			203,593
OPERATING COSTS AND EXPENSES:
Depreciation and amortization		71,312			74,909
Direct operating costs (exclusive of depreciation and amortization)		40,167			32,232
Selling, general and administrative expenses		50,256			21,338
Facilities restructuring and severance costs		573			663
Total operating costs and expenses		162,308			129,142
INCOME FROM OPERATIONS		44,517			74,451
INTEREST EXPENSE - NET		33,623			33,132
INCOME BEFORE INCOME TAXES		10,894			41,319
INCOME TAX EXPENSE		228			11,021
NET INCOME		$	10,666		$	30,298
NET INCOME PER COMMON SHARE - basic and diluted		$	0.07		$	0.20
Weighted average common shares outstanding		150,256,000			150,054,000

 

The accompanying notes are an integral part of these consolidated financial statements.

 

3

 

PANAMSAT CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

(IN THOUSANDS, EXCEPT SHARE DATA)

 

		June 30, 2004			June 30, 2003
REVENUES
Operating leases, satellite services and other		$	403,897		$	394,820
Outright sales and sales-type leases		8,358			8,529
Total revenues		412,255			403,349
OPERATING COSTS AND EXPENSES:
Depreciation and amortization		146,647			147,176
Direct operating costs (exclusive of depreciation and amortization)		79,835			65,420
Selling, general and administrative expenses		67,805			39,364
PAS-6 impairment loss		99,946			––
Facilities restructuring and severance costs		2,428			663
Total operating costs and expenses		396,661			252,623
INCOME FROM OPERATIONS		15,594			150,726
INTEREST EXPENSE - NET		64,709			67,407
INCOME (LOSS) BEFORE INCOME TAXES		(49,115		)	83,319
INCOME TAX EXPENSE (BENEFIT)		(27,852		)	22,163
NET INCOME (LOSS)		$	(21,263	)	$	61,156
NET INCOME (LOSS) PER COMMON SHARE - basic and diluted		$	(0.14	)	$	0.41
Weighted average common shares outstanding		150,215,000			150,027,000

 

The accompanying notes are an integral part of these consolidated financial statements.

 

4

 

PANAMSAT CORPORATION

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE DATA)

 

		June 30, 2004			December 31, 2003
		(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	627,751		$	511,248
Short-term investments		9,957			38,936
Accounts receivable-net		72,206			77,006
Net investment in sales-type leases		24,332			23,068
Prepaid expenses and other current assets		29,911			20,428
Insurance claim receivable		—			260,000
Deferred income taxes		6,933			7,688
Assets held for sale		3,257			––
Total current assets		774,347			938,374
SATELLITES AND OTHER PROPERTY AND EQUIPMENT-Net		2,092,797			2,306,705
NET INVESTMENT IN SALES-TYPE LEASES		100,572			116,653
GOODWILL		2,244,553			2,243,611
DEFERRED CHARGES AND OTHER ASSETS-Net		137,887			129,534
TOTAL ASSETS		$	5,350,156		$	5,734,877
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities		$	63,607		$	71,794
Current portion of long-term debt		275,000			3,500
Current portion of satellite incentive obligations		13,413