New Skies Satellites Holdings Ltd. (NYSE:NSE), the global satellite
communications company, today reported financial results for the
year ended December 31, 2005. Revenues for the year were $240.5
million, up 14 percent over the prior year, net loss was $1.4
million and Adjusted EBITDA(A) was $157.7 million, up 31 percent
over the same period in the prior year. Commenting on the results,
Dan Goldberg, CEO of New Skies, said: "I am delighted to report
that 2005 has been an extraordinary year for New Skies. From a
financial and operational standpoint, the significant increase in
the fill rate of our fleet (from 55 percent to 64 percent over the
course of the year) combined with a stable pricing environment
allowed us to achieve record revenues of more than $240 million, a
14 percent increase over the prior year. Revenue growth was driven
by video and enterprise requirements in Central and South Asia, the
Middle East and Africa, by restoration services provided to
Intelsat following the failure of one of its satellites in the
Pacific Ocean Region, and by continued growth in government
services across the fleet. "Our strong top line performance coupled
with our continuing efforts to improve our cost structure and
enhance our operating efficiencies resulted in a 31 percent annual
increase in Adjusted EBITDA and a year-on-year expansion of our
Adjusted EBITDA margins from 57 percent to 66 percent. "I am also
pleased that we were able last year to generate nearly $20 million
from the resolution of certain longstanding frequency coordination
matters in connection with orbital locations we were not using as
well as $10 million from the sale of our Australian teleports, an
activity that was not core to our business and was diluting our
margins. These amounts are excluded from the $240.5 million in
revenues as well as the calculation of Adjusted EBITDA. We also
were able to create significant value for shareholders through the
re-negotiation of our NSS-8 contract with Boeing. A substantial
portion of the amounts that Boeing returned to the company were
used to reduce our outstanding long term indebtedness. These
amounts, combined with proceeds from our successful IPO in May of
last year and internally generated cash flow, enabled us to reduce
our long term indebtedness from 6.2x Adjusted EBITDA at the outset
of the year to 2.8x Adjusted EBITDA at year end. "In addition to
our strong operational and financial performance, we took important
steps last year to return value to shareholders. As mentioned, in
May we concluded our initial public offering, using a substantial
portion of the proceeds to strengthen our balance sheet by
delevering, and in December - seizing a unique opportunity to
deliver significant value and liquidity to shareholders - we
announced the sale of the company to SES Global, a transaction that
received the overwhelming approval of our shareholders just three
weeks ago. We strongly believe that the agreement with SES serves
the best interests of our shareholders, customers, lenders,
employees and suppliers. It is presently our expectation that the
SES transaction will close early in the second quarter of this
year, although it is possible that it could occur sooner or later
than this. "In sum, 2005 was a strong and exciting year for New
Skies. Heading into 2006 we remain focused on concluding our
transaction with SES Global at the earliest opportunity and to
building upon the performance we achieved last year." (A) See
definition of Adjusted EBITDA and the related reconciliations in
Note 2 of "Notes to the consolidated quarterly financial
information". Financial highlights: For the year and three-month
period ended December 31, 2005, New Skies achieved the following
financial results: -- Revenues for 2005 were $240.5 million, an
increase of $29.8 million, or 14 percent, from $210.7 million in
2004. These amounts exclude proceeds arising from the resolution of
certain orbital slot coordination matters in 2005 and 2004. The
revenue growth was primarily due to an increase in the overall
satellite fleet fill rate to 64 percent as of December 31, 2005
compared to 55 percent as of the end of 2004. Revenues for the
three-month period ended December 31, 2005 were $61.4 million, an
increase of $7.6 million, or 14 percent, compared to $53.8 million
for the same period in 2004. -- Cost of Operations and Selling,
General and Administrative costs, decreased by $25.3 million, or 23
percent, in 2005 relative to last year. This resulted from several
factors, including reductions in third party teleport costs and
in-orbit insurance, the non-recurrence of certain one-time costs
incurred in 2004 associated with the termination of a customer
contract and the reduction in our staff levels, and savings arising
from careful management of discretionary costs. For the three month
period, our Cost of Operations and Selling, General and
Administrative costs decreased by $17.3 million, or 47 percent, as
compared to the same period in 2004, primarily due to the
non-recurrence of the previously mentioned one-time costs as well
as continuing reductions in discretionary costs. -- Stock-based
compensation recorded in accordance with Statement of Financial
Accounting Standards No. 123 was $20.5 million and $1.8 million for
2005 and 2004, respectively. -- The company received a one-time
payment of $9.5 million in the third quarter 2005 arising from the
successful resolution of certain frequency coordination matters.
Coupled with the frequency coordination payment received in the
first quarter 2005, total amounts received were $19.5 million for
2005. In 2004, we received a one-time payment of $32.0 million
relating to frequency coordination matters. -- Interest expense,
net was $61.9 million and $11.2 million for 2005 and 2004,
respectively. The net increase was due to the full year effect of
new debt issued in connection with the purchase of the assets of
New Skies Satellites N.V. by affiliates of The Blackstone Group in
November 2004. Also included are non-cash charges of $15.0 million
in 2005, related to the accelerated amortization of debt issuance
costs associated with the early repayments of a portion of the term
loan facility. For the three month period, our Interest expense,
net increased by $3.3 million, or 32 percent. -- In 2005, Adjusted
EBITDA was $157.7 million, compared to $120.6 million in 2004,
reflecting an increase of $37.1 million, or 31 percent. Adjusted
EBITDA margin increased to 66 percent for the year ended December
31, 2005 from 57 percent in the previous year. Adjusted EBITDA for
the three months ended December 31, 2005 increased $11.1 million,
or 36 percent, to $41.9 million, as compared to $30.8 million for
the same period in 2004. -- Net loss for 2005 was $1.4 million
compared to $6.3 million in the prior year. -- Backlog at the end
of 2005 was $502 million, approximately two times annual revenues,
compared to $517 million at the beginning of 2005. -- Total
long-term debt as of December 31, 2005 was $438.6 million,
reflecting a total paydown of $306.4 million in 2005, thus reducing
long-term third party debt(B) to Adjusted EBITDA(C) from 6.2x as of
December 31, 2004 to 2.8x as of December 31, 2005. -- During the
quarter ended December 31, 2005, New Skies also declared a
quarterly cash dividend for the fourth quarter of 2005, in the
amount of $0.463125 per share. -- On November 8, 2005, New Skies
announced the completion of the sale of its Australian subsidiary,
New Skies Networks PTY Limited, to Multiemedia Limited for $10.0
million. The company used the net proceeds of the sale transaction
to further reduce outstanding borrowings under its term loan
facility. -- On May 10, 2005, New Skies completed the sale of 11.9
million newly issued ordinary shares, equivalent to 37 percent of
the total currently issued and outstanding ordinary shares in an
initial public share offering that generated gross proceeds of
$196.4 million. The sale of an additional 1.8 million shares was
completed on May 27, 2005, thus bringing the total number of issued
and outstanding shares to 32.3 million. (B) Long-term third party
debt includes borrowings under the senior secured credit facilities
and amounts outstanding under the senior floating rate notes and
senior subordinated notes, amounting to $745.0 million and $438.6
million as of December 31, 2004 and 2005, respectively. (C)
Adjusted EBITDA for the twelve month periods ended December 31,
2004 and 2005 was $120.5 million and $157.7 million, respectively.
Recent developments: On December 14, 2005, New Skies signed a
definitive agreement pursuant to which SES GLOBAL will acquire 100
percent of New Skies by way of a merger under Bermudian law (an
amalgamation). SES GLOBAL will acquire New Skies for US$ 22.52 per
share in cash. -- On February 3, 2006, New Skies and SES Global
S.A. received early termination of the required waiting period
under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976
for the acquisition of New Skies. -- At a special general meeting
of shareholders held on February 10, 2006, New Skies' shareholders
overwhelmingly approved the sale of the company, with 99 percent of
shares in attendance voting for the acquisition. New Skies
anticipates that the transaction will be completed early in the
second quarter 2006, subject to the receipt of the remaining
approvals and satisfaction of other customary closing conditions,
although it is possible that it could occur sooner or later than
this. About New Skies Satellites (NYSE:NSE) New Skies is one of
only four fixed satellite communications companies with global
satellite coverage, offering data, video, Internet and voice
communications services to a range of telecommunications carriers,
broadcasters, large corporations, Internet service providers and
government entities around the world. New Skies has five satellites
in orbit, one spacecraft under construction (NSS-8) and ground
facilities around the world. New Skies is headquartered in
Hamilton, Bermuda, and has subsidiaries with offices in The Hague,
Hong Kong, New Delhi, Sao Paulo, Singapore, Sydney and Washington,
D.C. Conference call: CEO Dan Goldberg and CFO Andrew Browne will
host a conference call today at 11:00 a.m. (EST). To listen in
please dial +1 877 491 0064, passcode "New Skies." International
dial-in number is +1 334 323 6201. The call will also be webcast
live on the New Skies web site at:
http://www.newskies.com/investors.htm. The conference call will be
available for replay, 24 hours a day for the subsequent 5 working
days and will also be archived on New Skies' website. The dial-in
number for the replay is +1 888 365 0240 or +1 954 334 0342 for
international callers. Passcode: 695542. Safe Harbor Section 27A of
the U.S. Securities Act of 1933 and Section 21E of the U.S.
Securities Exchange Act of 1934 provide a "safe harbor" for
forward-looking statements made by an issuer of publicly traded
securities and persons acting on its behalf. New Skies Satellites
Holdings Ltd. ("New Skies") has made certain forward-looking
statements in this press release in reliance on those safe harbors.
A forward-looking statement concerns the company's or management's
intentions or expectations, or is a prediction of future
performance. These statements are identified by words such as
"intends", "expects", "anticipates", "believes", "estimates",
"may", "will", "should" and similar expressions. By their nature,
forward-looking statements are not a matter of historical fact and
involve risks and uncertainties that could cause New Skies' actual
results to differ materially from those expressed or implied by the
forward-looking statements for a number of reasons. The parties may
not be able to consummate the proposed transaction on the terms on
which the parties have agreed, or at all, due to a number of
factors, including, but not limited to, the failure to obtain the
requisite governmental approvals or the failure to satisfy any of
the other conditions to consummation of the transaction. Other
risks affecting New Skies' business are described in the company's
public filings with the U.S. Securities and Exchange Commission.
Copies of these filings may be obtained by contacting the SEC. New
Skies believes that all forward-looking statements are based upon
reasonable assumptions when made; however, New Skies cautions that
it is impossible to predict actual results or outcomes or the
effects of risks, uncertainties or other factors on anticipated
results or outcomes and that, accordingly, you should not place
undue reliance on these statements. Forward-looking statements
speak only as of the date when made, and New Skies disclaims any
obligation to update the forward-looking statements contained in
this document. New Skies Satellites Holdings Ltd. and Subsidiaries
Consolidated Balance Sheets December 31, 2005 and 2004 (In
thousands of U.S. Dollars, except share data) -0- *T December
December 31, 31, 2005 2004 --------- ----------- Assets Current
Assets Cash and cash equivalents $ 16,156 $ 37,974 Trade
receivables 29,053 36,371 Prepaid expenses and other assets 6,300
10,591 --------- ----------- Total Current Assets 51,509 84,936
Communications, plant and other property, net 608,370 895,906
Goodwill and other intangible asset, net 28,213 - Deferred tax
assets 17,231 17,362 Debt issuance costs, net 17,473 32,109
Restricted cash 30,000 - --------- ----------- TOTAL $752,796
$1,030,313 ========= =========== Liabilities and Shareholders'
Equity (Deficit) Current Liabilities Accounts payable and accrued
liabilities $ 18,393 $ 28,381 Accrued interest 6,594 4,880
Dividends payable 15,048 - Income taxes payable 20,153 20,480
Deferred tax liabilities 5,964 10,848 Deferred revenues and other
liabilities 24,618 21,031 Satellite performance incentives 5,625
6,332 --------- ----------- Total Current Liabilities 96,395 91,952
Deferred revenues and other liabilities 11,534 10,224 Satellite
performance incentives 29,097 30,597 Preferred equity securities
subject to mandatory redemption - 164,327 Long-term debt 438,560
745,000 --------- ----------- Total Liabilities 575,586 1,042,100
--------- ----------- Shareholders' Equity (Deficit) Ordinary
Shares(1) (57,142 shares authorized, par value $35.00; 43,312
shares issued as of December 31, 2004) - 1,516 Preferred Shares
(250,000,000 shares authorized, par value $0.01; none issued) - -
Ordinary Shares(D) (500,000,000 shares authorized, par value $0.01;
32,491,235 shares issued as of December 31, 2005) 325 - Additional
paid-in capital 301,309 - Accumulated deficit (124,306) (13,973)
Accumulated other comprehensive income (loss) (118) 670 ---------
----------- Total Shareholders' Equity (Deficit) 177,210 (11,787)
--------- ----------- TOTAL $752,796 $1,030,313 =========
=========== See notes to the consolidated quarterly financial
information *T (D) At December 31, 2004, ordinary shares relate to
New Skies Investment S.a.r.l. As part of the reorganization that
occurred on May 10, 2005, New Skies Satellites Holdings Ltd.
indirectly acquired the shares of New Skies Investments S.a.r.l.
and became the Group's ultimate parent company. At December 31,
2005, 32,491,235 shares were issued and outstanding. New Skies
Satellites Holdings Ltd. and Subsidiaries Consolidated Statements
of Operations Years ended December 31, 2005 and 2004 (In thousands
of U.S. Dollars, except per share data) -0- *T Successor(E)
Successor(E) Predecessor(E) ------------ ------------
-------------- Pro forma total Year Ended Period December November
2 Period Year Ended 31, to December January 1 to December 2004(F)
31, November 1, 31, 2005 (Unaudited) 2004 2004 ------------
----------- ------------ -------------- Revenues $240,488 $210,677
$35,295 $175,382 Operating expenses: Depreciation and amortization
95,128 102,448 16,022 86,426 Cost of operations 42,238 56,067
10,906 45,161 Selling, general and administrative 40,530 51,959
17,685 34,274 Stock-based compensation 20,485 1,828 - 1,828
Monitoring agreement fees 6,938 247 247 - Transaction related
expenses 2,932 26,367 - 26,367 ------------ -----------
------------ -------------- Total Operating Expenses 208,251
238,916 44,860 194,056 Gain on frequency coordination 19,500 32,000
- 32,000 Gain on sale of subsidiary 7,011 - - - ------------
----------- ------------ -------------- Operating Income (Loss)
58,748 3,761 (9,565) 13,326 Interest expense, net 61,943 11,150
9,777 1,373 ------------ ----------- ------------ --------------
Income (Loss) Before Income Tax Expense (Benefit) (3,195) (7,389)
(19,342) 11,953 Income tax expense (benefit) (1,778) (1,072)
(5,369) 4,297 ------------ ----------- ------------ --------------
Net Income (Loss) $(1,417) (6,317) $(13,973) $7,656 ============
=========== ============ ============== Earnings (Loss) Per
Share(3) ----------- Basic and diluted (0.05) (322.61) 0.06
----------------------------------------------------------------------
Weighted Average Shares Outstanding(3) (in thousands of shares)
Basic 27,349 n/a 43 118,099 Diluted 28,611 n/a 43 119,850
----------------------------------------------------------------------
*T (E) New Skies Satellites Holdings Ltd. commenced operations on
May 10, 2005, the date upon which the Company successfully
completed its Initial Public Offering (the "IPO"). Immediately
prior to the IPO, the Company performed an internal restructuring
pursuant to which pre-existing shareholders indirectly contributed
100 percent of the equity, preferred equity certificates and
convertible preferred equity certificates of New Skies Satellites
S.a.r.l. to New Skies Satellites Holdings Ltd. As New Skies
Satellites Holdings Ltd. did not commence operations until after
the restructuring, the results for 2005 represent the combination
of the results of New Skies Investments S.a.r.l for the period up
to and including the date of the restructuring and those of New
Skies Satellites Holdings Ltd. (the "successor") for the periods
thereafter. On November 2, 2004, New Skies Investments S.a.r.l,
through its wholly owned subsidiaries New Skies Holding B.V. and
New Skies Satellites B.V., purchased substantially all of the
assets and liabilities of New Skies Satellites N.V. Prior to this
transaction, New Skies Investments S.a.r.l had not commenced
operations. Accordingly, the results for the period prior to
November 1, 2004 represent the results of New Skies Satellites N.V.
(the "predecessor"). (F) The pro forma column reflects the summary
total for the year ended December 31, 2004, including results of
the predecessor from January 1, 2004 to November 1, 2004 and the
successor from November 2, 2004 to December 31, 2004. New Skies
Satellites Holdings Ltd. and Subsidiaries Consolidated Statements
of Operations Three-month periods ended December 31, 2005 and 2004
(Unaudited) (In thousands of U.S. Dollars, except per share data)
-0- *T Successor(E) Successor(E) Predecessor(E) ------------
------------ -------------- Pro forma total three- Three month
month Period period period November 2 ended ended to Period
December December December October 1 to 31, 31, 31, November 1,
2005 2004(G) 2004 2004 ------------ --------- ------------
-------------- Revenues $61,352 53,788 $35,295 $18,493 Operating
expenses: Depreciation and amortization 23,811 24,829 16,022 8,807
Cost of operations 9,170 15,308 10,906 4,402 Selling, general and
administrative 10,325 21,507 17,685 3,822 Stock-based compensation
2,904 234 - 234 Monitoring agreement fees - 247 247 - Transaction
related expenses 2,296 22,741 - 22,741 ------------ ---------
------------ -------------- Total Operating Expenses 48,506 84,866
44,860 40,006 Gain on sale of subsidiary 7,011 - - - ------------
--------- ------------ -------------- Operating Income (Loss)
19,857 (31,078) (9,565) (21,513) Interest expense, net 13,717
10,368 9,777 591 ------------ --------- ------------ --------------
Income (Loss) Before Income Tax Expense (Benefit) 6,140 (41,446)
(19,342) (22,104) Income tax expense (benefit) 883 (13,333) (5,369)
(7,964) ------------ --------- ------------ -------------- Net
Income (Loss) $5,257 (28,113) $(13,973) $(14,140) ============
========= ============ ============== Earnings (Loss) Per Share(3)
--------- Basic and diluted 0.16 322.61 (0.12)
----------------------------------------------------------------------
Weighted Average Shares Outstanding(3) (in thousands of shares)
Basic 32,381 n/a 43 118,463 Diluted 33,655 n/a 43 120,311
----------------------------------------------------------------------
*T (G) The pro forma column reflects the summary total for the
three-month period ended December 31, 2004, including results of
the predecessor from October 1, 2004 to November 1, 2004 and the
successor from November 2, 2004 to December 31, 2004. New Skies
Satellites Holdings Ltd. and Subsidiaries Consolidated Statements
of Cash Flows Years ended December 31, 2005 and 2004 (In thousands
of U.S. Dollars) -0- *T Successor Successor Predecessor ---------
--------- ----------- Period Year November Period Ended 2 to
January 1 December December to 31, 31 November 1 2005 2004 2004
--------- --------- ----------- Cash flows from operating
activities: Net income (loss) $(1,417) $(13,973) $7,656 Adjustments
for non-cash items: Depreciation and amortization 95,128 16,022
86,426 Deferred taxes (3,515) (5,607) 1,698 Stock-based
compensation expense 12,378 - 5,895 Non-cash interest on preferred
equity securities 4,417 2,827 - Gain arising from sale of
subsidiary (7,011) - - Amortization of debt issuance costs 15,010
851 321 Changes in operating assets and liabilities, net of effects
of acquisitions and disposals: Trade receivables 6,840 8,036
(2,546) Prepaid expenses and other assets 4,045 (3,881) 3,810
Accounts payable and accrued liabilities (7,960) 5,838 6,480
Accrued interest 1,714 4,880 - Income taxes payable (937) 226 1,036
Other liabilities 5,494 14,803 395 --------- --------- -----------
Net Cash Provided By Operating Activities 124,186 30,022 111,171
--------- --------- ----------- Cash flows from investing
activities: Payments for communication, plant and other property
(6,671) (4,393) (7,690) Acquisition of business, net of cash
acquired - (861,741) - Sale of subsidiary, net of cash 8,997 - -
Reimbursement of NSS-8 construction costs 168,000 - - Increase in
restricted cash (30,000) - - --------- --------- ----------- Net
Cash Provided by (Used In) Investing Activities 140,326 (866,134)
(7,690) --------- --------- ----------- Cash flows from financing
activities: Repayment of long-term debt (306,440) - - Proceeds from
long-term debt - 745,000 - Proceeds from Initial Public Offering,
net of expenses 202,313 - - Issue of preferred equity certificates
4,683 161,500 - Repayment of preferred equity securities (88,000) -
- Dividends paid (93,868) - (4,721) Stock options exercised - -
3,139 Debt issuance costs - (32,959) - Shareholder contribution -
1,500 - Satellite performance incentives and other (5,006) (1,384)
(4,780) --------- --------- ----------- Net Cash Provided By (Used
In) Financing Activities (286,318) 873,657 (6,362) ---------
--------- ----------- Effect of exchange rate differences (12) 413
642 --------- --------- ----------- Net change in cash and cash
equivalents (21,818) 37,958 97,761 Cash and cash equivalents,
beginning of period 37,974 16 23,253 --------- ---------
----------- Cash and cash equivalents, end of period $16,156
$37,974 $121,014 ========= ========= =========== *T Cash payments
for interest (net of amounts capitalized) were $nil, $3.0 million
and $39.9 million for the period from January 1, 2004 to November
1, 2004, November 2, 2004 to December 31, 2004 and the year ended
December 31, 2005, respectively. Income taxes paid amounted to $1.6
million, $0.2 million and $2.8 million for the period from January
1, 2004 to November 1, 2004, the period from November 2, 2004 to
December 31, 2004, and the year ended December 31, 2005,
respectively. See notes to the consolidated quarterly financial
information. New Skies Satellites Holdings Ltd. and Subsidiaries
Notes to the consolidated quarterly financial information (in
thousands of U.S. dollars) Three-month periods and years ended
December 31, 2005 and 2004 (1) Basis of presentation New Skies
Satellites Holdings Ltd. commenced operations on May 10, 2005, the
date upon which the Company successfully completed its Initial
Public Offering (the "IPO"). Immediately prior to the IPO, the
Company performed an internal restructuring pursuant to which
pre-existing shareholders contributed 100 percent of the equity,
preferred equity certificates and convertible preferred equity
certificates of New Skies Satellites S.a.r.l. to New Skies
Satellites Holdings Ltd. As New Skies Satellites Holdings Ltd. did
not commence operations until after the restructuring, the results
for the year ended December 31, 2005 represent the combination of
the results of New Skies Investments S.a.r.l for the period up to
and including the date of the restructuring and those of New Skies
Satellites Holdings Ltd. for the periods thereafter (the
"successor"). On November 2, 2004, New Skies Investments S.a.r.l,
through its wholly owned subsidiaries New Skies Holding B.V. and
New Skies Satellites B.V., purchased substantially all of the
assets and liabilities of New Skies Satellites N.V. Prior to this
transaction, New Skies Investments S.a.r.l had not commenced
operations. Accordingly, the results for the quarter and the period
ended November 1, 2004 represent the results of New Skies
Satellites N.V. (the "predecessor"). (2) Adjusted EBITDA Adjusted
EBITDA is defined as EBITDA (i.e. earnings before interest, taxes,
depreciation and amortization), further adjusted to give effect to
adjustments required in calculating covenant ratios and compliance
under the indentures governing the notes and the senior secured
credit facilities. We use Adjusted EBITDA to give effect to
adjustments required in calculating covenant ratios and compliance
under the indentures governing the notes and the senior secured
credit facilities. For instance, both the indentures governing the
notes and the senior secured credit facilities contain financial
ratios that are calculated by reference to Adjusted EBITDA.
Non-compliance with the financial ratio maintenance covenants
contained in the senior secured credit facilities could result in
the requirement to immediately repay all amounts outstanding under
such facilities, while non-compliance with the debt incurrence
ratio contained in the indentures governing the notes would
prohibit us from being able to incur additional indebtedness other
than pursuant to specified exceptions. Adjusted EBITDA is not
presented as an alternative measure of operating results or cash
flows provided by operating activities, as determined in accordance
with accounting principles generally accepted in the United States.
Adjusted EBITDA as presented in this release may not be comparable
to similarly titled measures reported by other companies. The
following table sets forth the reconciliation of net cash provided
by operating activities and net income (loss) to EBITDA and
Adjusted EBITDA for the periods indicated. Reconciliation of Net
Income (Loss) to EBITDA -0- *T Three-month Year ended periods ended
December 31, December 31, ---------------- ----------------- 2005
2004 2005 2004 ------- -------- -------- -------- Net income (loss)
5,257 (28,113) (1,417) (6,317) Income tax expense (benefit) 883
(13,333) (1,778) (1,072) Interest expense, net 13,717 10,368 61,943
11,150 Depreciation and amortization 23,811 24,829 95,128 102,448
------- -------- -------- -------- EBITDA 43,668 (6,249) 153,876
106,209 ======= ======== ======== ======== *T Reconciliation of
EBITDA to Adjusted EBITDA -0- *T Three-month Year ended periods
ended December 31, December 31, --------------- -----------------
2005 2004 2005 2004 ------- ------- -------- -------- EBITDA 43,668
(6,249) 153,876 106,209 Gain arising on frequency coordination(a) -
- (19,500) (32,000) Transaction related expenses(b) 2,296 22,741
2,932 26,367 Unused satellite capacity leased from third party(c) -
711 - 4,830 One time customer settlements - 10,299 - 10,299 Expense
incurred with respect to employee severance - 2,760 - 2,760 Costs
related to stock-based compensation(d) 2,904 234 20,485 1,828
Monitoring fee paid to Blackstone Management Partners IV L.L.C.(e)
- 247 6,938 247 Gain arising on sale of subsidiary(f) (7,011) -
(7,011) - ------- ------- -------- -------- Adjusted EBITDA 41,857
30,743 157,720 120,540 ======= ======= ======== ======== *T (a)
Reflects a one-time payment from Intelsat LLC of $32.0 million in
2004 and payments from SES Global affiliates of $10.0 million in
the first quarter 2005 and $9.5 million in the third quarter 2005
following the successful resolution of certain frequency
coordination matters. (b) Represents non-recurring costs incurred
in connection with the purchase of assets and liabilities of New
Skies Satellites N.V. and expenses associated with SES Global
acquisition of New Skies Satellites Holdings Ltd. (c) Reflects
costs related to unused capacity on leased transponders, with the
underlying contract expiring in November 2004. (d) Stock-based
compensation includes $8.1 million of cash payments made for
bonuses and tax withholdings. (e) Reflects the monitoring fee paid
to Blackstone Management Partners IV L.L.C., of which $6.1 million
represents a payment for the termination of the monitoring
agreement in connection with the company's Initial Public Offering.
(f) Reflects the sale of New Skies Networks Pty Limited, a
wholly-owned subsidiary, on November 8, 2005 to Multimedia for cash
consideration of $10.0 million, resulting in a gain on sale of $7.0
million. Reconciliation of Net Cash Provided by Operating
Activities to Net Income (Loss) -0- *T Three-month Years ended
periods ended December 31, December 31, -----------------
------------------ 2005 2004 2005 2004 -------- -------- --------
--------- Net cash provided by operating activities 20,549 19,337
124,186 141,193 Depreciation and amortization (23,811) (24,829)
(95,128) (102,448) Deferred taxes (1,071) 4,966 3,515 3,909
Stock-based compensation expense (252) (4,301) (12,378) (5,895)
Amortization of debt issuance costs (2,483) (851) (15,010) (1,172)
Change in operating assets and liabilities 5,314 (19,608) (9,196)
(39,077) Interest on preferred equity securities - (2,827) (4,417)
(2,827) Gain arising from sale of subsidiary 7,011 - 7,011 -
-------- -------- -------- --------- Net Income (loss) 5,257
(28,113) (1,417) (6,317) ======== ======== ======== ========= *T
(3) Earnings (Loss) per share Basic net earnings (loss) per share
is computed by dividing net income (loss) by the weighted average
ordinary shares outstanding. For the purpose of calculating the
weighted average shares outstanding for the year ended December 31,
2005, the effects of the internal restructuring immediately prior
to the Initial Public Offering are deemed to have occurred at the
beginning of the period, and reflect 18.5 million shares. Diluted
earnings (loss) per share reflects the potential dilution that
could occur if potential dilutive securities, such as stock
options, convertible securities and contracts that may be settled
in cash or stock, were converted to shares as of the beginning of
the period, if dilutive. For the purpose of calculating diluted
loss per share for the year ended December 31, 2005, approximately
1.5 million potentially dilutive common shares relating to
outstanding stock options have been excluded from the calculation
of adjusted weighted average shares outstanding as their inclusion
would have had an anti-dilutive effect due to the net loss in that
period.
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