AtTable September 30, 2012, Convergence Partners had at its option the ability to require us to buy its ownership interest at fair value subsequent to the operations of New Dawn’s assets for a period as defined in the New Dawn Project Agreement. As a result of this option, as of each balance sheet date, we have reflected within mezzanine equity the estimated amount that we would pay to Convergence Partners if the option was exercised. This amount reflects a fair value of $8.7 million, representing a year-to-date increase of $7.7 million in the fair value of the option. The $7.7 million change in fair value is shown as a decrease in our paid-in capital at September 30, 2012. Contents

ApproximatelyTable 4% of our revenue was derived from our largest customer during each of the nine months ended September 30, 2011 and 2012. Our ten largest customers accounted for approximately 27% and 26% of our revenue for the nine months ended September 30, 2011 and 2012, respectively. Contents

WeTable had receivables from our indirect parent entities as of December 31, 2011 and September 30, 2012 of $16.8 million and $33.9 million, respectively. Contents

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ApproximatelyTable 4% of our revenue was derived from our largest customer during each of the nine months ended September 30, 2011 and 2012. Our ten largest customers accounted for approximately 27% and 26% of our revenue for the nine months ended September 30, 2011 and 2012, respectively. Contents

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WeTable had receivables from our indirect parent entities as of December 31, 2011 and September 30, 2012 of $16.8 million and $33.9 million, respectively. Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~September~~March 3031, ~~2012~~2013

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

For the transition period from to

Commission file number 000-50262

INTELSAT INVESTMENTS S.A.

(Exact Name of Registrant as Specified in Its Charter)


Luxembourg		98-0346003
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

4, rue Albert Borschette Luxembourg		L-1246
(Address of Principal Executive Offices)		(Zip Code)

+352 27-84-1600

(Registrant’s Telephone Number, Including Area Code)

N/Intelsat S.A.

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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 ¨ No x *

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). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of ~~November~~May 1, ~~2012~~2013, 5,000,000 ordinary shares, par value $1.00 per share, were outstanding.

The registrant is not required to file this Quarterly Report on Form 10-Q pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, but has filed all reports during the preceding 12 months that would have been required pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

TABLE OF CONTENTS

		Page		~~Page~~
PART I. FINANCIAL INFORMATION
Item 1.	~~Item~~Financial 1.Statements:	~~Financial Statements:~~
		Condensed Consolidated Balance Sheets as of December 31, 2011 and September 30, 2012 (Unaudited)			5
	Condensed Consolidated Balance Sheets as of December 31, 2012 and March 31, 2013 (Unaudited)		3
		Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2011 and 2012			6
	Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2012 and 2013		4
		Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2011 and 2012			7
	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2012 and 2013		5
		Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2011 and 2012			8
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2013		6
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~	7		9
Item 2.	~~Item~~Management’s 2.Discussion and Analysis of Financial Condition and Results of Operations	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	34		44
Item 3.	~~Item~~Quantitative 3.and Qualitative Disclosures About Market Risk	~~Quantitative and Qualitative Disclosures About Market Risk~~	43		57
Item 4.	~~Item~~Controls 4.and Procedures	~~Controls and Procedures~~	44		58
PART II. OTHER INFORMATION
Item 1.	~~Item~~Legal 1.Proceedings	~~Legal Proceedings~~	45		59
Item 1A.	~~Item~~Risk ~~1A.~~Factors	~~Risk Factors~~	45		59
Item 2.	~~Item~~Unregistered 2.Sales of Equity Securities and Use of Proceeds	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	45		59
Item 3.	~~Item~~Defaults 3.upon Senior Securities	~~Defaults upon Senior Securities~~	45		59
Item 4.	~~Item~~Mine 4.Safety Disclosures	~~Mine Safety Disclosures~~	45		59
Item 5.	~~Item~~Other 5.Information	~~Other Information~~	45		59
Item 6.	~~Item 6.~~Exhibits	~~Exhibits~~	45		59
SIGNATURES			46		61

INTRODUCTION

In this Quarterly Report, unless otherwise indicated or the context otherwise requires, (1) the terms “we,” “us,” “our”, “the Company” and “Intelsat” Investments” refer to Intelsat Investments S.A. (formerly Intelsat S.A.) and its subsidiaries on a consolidated basis, (2) the term “Intelsat ~~Global Holdings~~” refers to Intelsat S.A. (formerly Intelsat Global Holdings S.A.), Intelsat Investments S.A.’s indirect parent, (3) the term “Intelsat Global” refers to Intelsat Global S.A., Intelsat Investments S.A.’s former indirect parent, (4) the term “Intelsat Holdings” refers to Intelsat Holdings S.A., Intelsat Investments S.A.’s direct parent, (5) the term “Intelsat Luxembourg” refers to Intelsat (Luxembourg) S.A., Intelsat Investments S.A.’s direct wholly-owned subsidiary, (6) the term “Intelsat Jackson” refers to Intelsat Jackson Holdings S.A., Intelsat Luxembourg’s direct wholly-owned subsidiary, (7) the term “~~Intermediate Holdco” refers to~~ Intelsat Intermediate Holding Company S.A., Intelsat Jackson’s former direct wholly-owned subsidiary, (8) the term “Intelsat Sub Holdco” refers to Intelsat Subsidiary Holding Company S.A., Intermediate Holdco’s former indirect wholly-owned subsidiary, (9) the term “Intelsat Corp” refers to Intelsat Corporation, Intelsat Jackson’s indirect wholly-owned subsidiary, and (108) the term “Intelsat General” refers to Intelsat General Corporation, our government business subsidiary.

In this Quarterly Report, unless the context otherwise requires, all references to transponder capacity or demand refer to transponder capacity or demand in the C-band and Ku-band frequencies only.

FINANCIAL AND OTHER INFORMATION

Unless otherwise indicated, all references to “dollars” and “$” in this Quarterly Report are to, and all monetary amounts in this Quarterly Report are presented in, U.S. dollars. Unless otherwise indicated, the financial information contained in this Quarterly Report has been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

Certain monetary amounts, percentages and other figures included in this Quarterly Report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

In this Quarterly Report, we refer to and rely on publicly available information regarding our industry and our competitors. Although we believe the information is reliable, we cannot guarantee the accuracy and completeness of the information and have not independently verified it.

FORWARD-LOOKING STATEMENTS

Some of the statements in this Quarterly Report constitute forward-looking statements that do not directly or exclusively relate to historical facts. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements as long as they are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements.

When used in this Quarterly Report, the words “may,” “will,” “might,” “should,” “expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,” “intend,” “potential,” “outlook” and “continue,” and the negative of these terms, and other similar expressions are intended to identify forward-looking statements and information.

The forward-looking statements made in this Quarterly Report reflect our intentions, plans, expectations, assumptions and beliefs about future events. These forward-looking statements speak only as of the date of this Quarterly Report and are not guarantees of future performance or results and are subject to risks, uncertainties and other factors, many of which are outside of our control. These factors could cause actual results or developments to differ materially from the expectations expressed or implied in the forward-looking statements and include known and unknown risks. Known risks include, among others, the risks discussed in Item 1A—Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2011~~2012, the political, economic and legal conditions in the markets we are targeting for communications services or in which we operate, and other risks and uncertainties inherent in the telecommunications business in general and the satellite communications business in particular.

The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:

•

risks associated with operating our in-orbit satellites;

•

satellite launch failures, satellite launch and construction delays and in-orbit failures or reduced performance;

•

potential changes in the number of companies offering commercial satellite launch services and the number of commercial satellite launch opportunities available in any given time period that could impact our ability to timely schedule future launches and the prices we pay for such launches;

•

our ability to obtain new satellite insurance policies with financially viable insurance carriers on commercially reasonable terms or at all, as well as the ability of our insurance carriers to fulfill their obligations;

•

possible future losses on satellites that are not adequately covered by insurance;

•

U.S. and other government regulation;

•

changes in our contracted backlog or expected contracted backlog for future services;

•

pricing pressure and overcapacity in the markets in which we compete;

•

inadequate access to capital markets;

•

the competitive environment in which we operate;

•

customer defaults on their obligations to us;

•

our international operations and other uncertainties associated with doing business internationally; and

•

litigation.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee our future results, level of activity, performance or achievements. Because actual results could differ materially from our intentions, plans, expectations, assumptions and beliefs about the future, you are urged not to rely on forward-looking statements in this Quarterly Report and to view all forward-looking statements made in this Quarterly Report with caution. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

INTELSAT INVESTMENTS S.A.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	As ofDecember 31,2011			As ofSeptember 30,2012
	As of			As of
	December 31,			March 31,
	2012			2013
				(unaudited)
ASSETS
Current assets:
Cash and cash equivalents, net of restricted cash	$	294,700		$	231,246
Cash and cash equivalents	$	187,446		$	328,746
Restricted cash		94,131			—
Receivables, net of allowance of $23,583 in 2012 and $30,305 in 2013		318,805			543,149
Receivables, net of allowance of $20,830 in 2011 and $24,406 in 2012		331,371			326,169
Deferred income taxes		94,779			94,662
Deferred income taxes		26,058			25,925
Prepaid expenses and other current assets		38,708			65,058
Prepaid expenses and other current assets		42,934			53,726
Total current assets		639,738			1,031,615
Total current assets		789,194			637,066
Satellites and other property and equipment, net		6,355,192			5,839,334
Satellites and other property and equipment, net		6,142,731			6,403,078
Goodwill		6,780,827			6,780,827
Non-amortizable intangible assets		2,458,100			2,458,100
Amortizable intangible assets, net		~~742~~651,~~868~~087			~~674~~630,~~032~~509
Other assets		~~447~~416,~~686~~777			~~410~~409,~~446~~372
Total assets	$	17,~~361~~301,~~406~~721		$	17,~~363~~149,~~549~~757
LIABILITIES AND SHAREHOLDER’S DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	~~143~~136,~~097~~863		$	~~113~~87,~~036~~957
Taxes payable		119,~~764~~244			—
Employee related liabilities		4346,~~315~~565			3626,~~124~~218
Accrued interest payable		~~359~~367,~~336~~676			~~336~~330,~~830~~176
Current portion of long-term debt		~~164~~56,~~818~~598			~~209~~924,~~716~~409
Deferred satellite performance incentives		1721,~~715~~479			1921,~~772~~849
Deferred revenue		6484,~~609~~066			8176,~~573~~655
Other current liabilities		7672,~~460~~715			7670,~~974~~972
Total current liabilities		~~881~~795,~~114~~206			~~874~~1,~~025~~538,236
Long-term debt, net of current portion		15,~~837~~846,~~512~~728			1514,~~875~~966,~~820~~035
Deferred satellite performance incentives, net of current portion		~~113~~172,~~974~~663			~~157~~168,~~992~~070
Deferred revenue, net of current portion		~~724~~834,~~413~~161			~~807~~844,~~164~~591
Deferred income taxes		~~265~~286,~~181~~673			~~274~~287,~~374~~946
Accrued retirement benefits		~~305~~299,~~902~~187			~~284~~291,~~450~~602
Other long-term liabilities		~~322~~300,~~735~~195			~~299~~290,~~785~~516
Redeemable noncontrolling interest		3,024			8,744
Commitments and contingencies (Notes 11)
Commitments and contingencies (Note 11)
Shareholder’s deficit:
Ordinary shares, $1.00 par value, 100,000,000 shares authorized and 5,000,000 shares issued and outstanding at December 31, 2011 and September 30, 2012		5,000			5,000
Ordinary shares, $1.00 par value, 100,000,000 shares authorized and 5,000,000 shares issued and outstanding at December 31, 2012 and March 31, 2013		5,000			5,000
Paid-in capital		1,~~571~~590,~~855~~011			1,589,~~582~~944
Accumulated deficit		(2,~~608~~755,~~702~~345	)		(2,~~751~~761,~~643~~841	)
Accumulated other comprehensive loss		(~~111~~118,~~528~~428	)		(~~108~~115,~~475~~177	)
Total Intelsat S.A. shareholder’s deficit		(1,143,375	)		(1,265,536	)
Total Intelsat Investments S.A. shareholder’s deficit		(1,278,762	)		(1,282,074	)
Noncontrolling interest		5045,~~926~~670			4644,~~731~~835
Total liabilities and shareholder’s deficit	$	17,~~361~~301,~~406~~721		$	17,~~363~~149,~~549~~757

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT INVESTMENTS S.A.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

	Three MonthsEndedSeptember 30,2011			Three MonthsEndedSeptember 30,2012			Nine MonthsEndedSeptember 30,2011			Nine MonthsEndedSeptember 30,2012
	Three Months			Three Months
Revenue	$	652,881		$	654,946		$	1,935,515		$	1,937,783
	Ended			Ended
Operating expenses:
	March 31, 2012			March 31, 2013
Direct costs of revenue (excluding depreciation and amortization)		110,668			102,908			316,749			307,224
Revenue	$	644,169		$	655,127
Selling, general and administrative		50,767			46,911			157,516			151,300
Operating expenses:
Depreciation and amortization		193,841			191,972			583,196			567,472
Direct costs of revenue (excluding depreciation and amortization)		105,010			97,646
Losses on derivative financial instruments		5,356			12,037			24,163			37,651
Selling, general and administrative		50,966			57,952
Total operating expenses		360,632			353,828			1,081,624			1,063,647
Depreciation and amortization		186,871			187,411
Income from operations		292,249			301,118			853,891			874,136
Losses on derivative financial instruments		9,858			1,865
Interest expense, net		317,433			311,951			992,084			950,073
Total operating expenses		352,705			344,874
Loss on early extinguishment of debt		—			(3,106	)		(326,183	)		(46,489	)
Income from operations		291,464			310,253
Loss from previously unconsolidated affiliates		(20,188	)		—			(24,658	)		—
Interest expense, net		311,431			317,249
Other income (expense), net		~~585~~2,903			(~~21,980~~650	)		~~7,753~~			~~(20,982~~	)
Loss before income taxes		(4417,~~787~~064	)		(357,~~919~~646	)		~~(481,281~~	)		~~(143,408~~	)
Benefit from income taxes		(42,678	)		(1,517	)		(48,931	)		(1,110	)
Provision for (benefit from) income taxes		7,204			(2,038	)
Net loss		(224,~~109~~268	)		(345,~~402~~608	)		~~(432,350~~	)		~~(142,298~~	)
Net (income) loss attributable to noncontrolling interest		1,667			(81	)		2,942			(643	)
Net income attributable to noncontrolling interest		(181	)		(888	)
Net loss attributable to Intelsat S.A.	$	(442	)	$	(34,483	)	$	(429,408	)	$	(142,941	)
Net loss attributable to Intelsat Investments S.A.	$	(24,449	)	$	(6,496	)

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT INVESTMENTS S.A.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

	Three MonthsEndedSeptember 30,2011			Three MonthsEndedSeptember 30,2012			Nine MonthsEndedSeptember 30,2011			Nine MonthsEndedSeptember 30,2012
	Three Months			Three Months
Net loss	$	(2,109	)	$	(34,402	)	$	(432,350	)	$	(142,298	)
	Ended March 31,			Ended March 31,
Other Comprehensive income (loss), net of tax:
	2012			2013
Defined benefit retirement plans:
Net loss	$	(24,268	)	$	(5,608	)
Reclassification adjustment for amortization of unrecognized prior service credits included in net periodic pension costs, net of tax of $0.02 million and $0.05 million for the three and nine months ended September 30, 2011, respectively, and $0.02 million and $0.05 million for the three and nine months ended September 30, 2012, respectively		(27	)		(27	)		(81	)		(83	)
Other Comprehensive income (loss), net of tax:
Reclassification adjustment for amortization of unrecognized actuarial loss included in net periodic pension costs, net of tax of ($0.6) million and ($1.9) million for the three and nine months ended September 30, 2011, respectively, and ($5.3) million and ($8.1) million for the three and nine months ended September 30, 2012, respectively		1,082			(1,611	)		3,246			2,947
Defined benefit retirement plans:
Gains (losses) on investments, net of tax of $0.3 million and $0.2 million for the three and nine months ended September 30, 2011, respectively, and $0.02 million and ($0.1) million for the three and nine months ended September 30, 2012, respectively		(426	)		(29	)		(227	)		189
Reclassification adjustment for amortization of unrecognized prior service credits included in net periodic pension costs, net of a tax provision of $0.02 million in 2012 and $0.02 million in 2013		(28	)		(27	)
Other comprehensive income (loss)		629			(1,667	)		2,938			3,053
Reclassification adjustment for amortization of unrecognized actuarial loss included in net periodic pension costs, net of a tax benefit of $1.4 million in 2012 and $1.9 million in 2013		2,279			3,079
Comprehensive loss		(1,480	)		(36,069	)		(429,412	)		(139,245	)
Marketable securities:
Comprehensive (income) loss attributable to noncontrolling interest		1,667			(81	)		2,942			(643	)
Unrealized gains on investments, net of a tax benefit of $0.2 million in 2012 and $0.1 million in 2013		304			222
Comprehensive income (loss) attributable to Intelsat S.A.	$	187		$	(36,150	)	$	(426,470	)	$	(139,888	)
Reclassification adjustment for realized gains on investments, net of a tax provision of $0.01 million in 2013		—			(23	)
Other comprehensive income		2,555			3,251
Comprehensive loss		(21,713	)		(2,357	)
Comprehensive income attributable to noncontrolling interest		(181	)		(888	)
Comprehensive loss attributable to Intelsat Investments S.A.	$	(21,894	)	$	(3,245	)

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT INVESTMENTS S.A.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine MonthsEndedSeptember 30,2011			Nine MonthsEndedSeptember 30,2012
	Three Months			Three Months
	Ended			Ended
	March 31, 2012			March 31, 2013
Cash flows from operating activities:
Net loss	$	(~~432~~24,~~350~~268	)	$	(~~142~~5,~~298~~608	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		~~583~~186,~~196~~871			~~567~~187,~~472~~411
Provision for doubtful accounts		51,~~315~~721			67,~~607~~792
Foreign currency transaction (gain) loss		(21,~~905~~044	)		41,~~743~~211
(Gain) loss on disposal of assets		829			(25	)
Loss on disposal of assets		46			32
Share-based compensation expense		3,956			4,390
Share-based compensation		1,062			(59	)
Deferred income taxes		~~(53~~2,~~026~~504	)		(104,~~752~~428	)
Amortization of discount, premium, issuance costs and other non-cash items		4914,~~238~~445			4214,~~715~~942
Interest paid-in-kind		~~23,130~~970			~~4,949~~—
Loss on early extinguishment of debt		326,183			46,489
Unrealized gains on derivative financial instruments		(1,935	)		(4,907	)
Share in loss from previously unconsolidated affiliates		24,658			—
Other non-cash items		(1,085	)		4,947
Unrealized (gains) losses on derivative financial instruments		(35,179	)		11
Termination of third-party commitment costs and expenses		—			21,000
Other non-cash items		5,178			6,457
Changes in operating assets and liabilities:
Receivables		~~(36,694~~124	)		(156,~~603~~735	)
Prepaid expenses and other assets		(1915,~~809~~359	)		2(20,~~904~~241	)
Accounts payable and accrued liabilities		(1360,~~481~~704	)		(5072,~~560~~936	)
Deferred revenue		~~267~~24,~~845~~308			951,~~346~~914
Accrued retirement benefits		(174,~~715~~924	)		(217,~~452~~585	)
Other long-term liabilities		(~~5,149~~651	)		(21,~~830~~351	)
Net cash provided by operating activities		~~673~~122,~~220~~081			~~559~~97,~~563~~101
Cash flows from investing activities:
Payments for satellites and other property and equipment (including capitalized interest)		(~~615~~260,~~113~~867	)		(~~715~~167,~~101~~154	)
Capital contributions to previously unconsolidated affiliates		(12,209	)		—
Proceeds from insurance settlements		—			252,911
Loan to affiliated party		—			(10,000	)
Payment on satellite performance incentives from insurance proceeds		—			(19,199	)
Other investing activities		~~6,710~~—			—(1,000	)
Net cash used in investing activities		(620,612	)		(725,101	)
Net cash provided by (used in) investing activities		(260,867	)		65,558
Cash flows from financing activities:
Repayments of long-term debt		(620,~~323,019~~334	)		(160,~~489,013~~254	)
Proceeds from issuance of long-term debt		6175,~~119,425~~000			140,~~661,~~000
Debt issuance costs		(69,339	)		(19,444	)
Capital contribution from noncontrolling interest		6,105			6,105
Payment of premium on early retirement of debt		(171,047	)		(39,477	)
Dividends paid to noncontrolling interest		(2,255	)		(1,723	)
Capital contribution from noncontrolling interest		—			12,209
Principal payments on deferred satellite performance incentives		(4,011	)		(4,276	)
Dividends paid to noncontrolling interest		—			(6,782	)
Net cash provided by (used in) financing activities		154,505			(20,148	)
Noncontrolling interest in New Dawn		1,734			—
Effect of exchange rate changes on cash and cash equivalents		1,044			(1,211	)
Principal payments on deferred satellite performance incentives		(10,776	)		(11,666	)
Net change in cash and cash equivalents		16,763			141,300
Net cash provided by (used in) financing activities		(453,022	)		106,827
Cash and cash equivalents, beginning of period		294,700			187,446
Effect of exchange rate changes on cash and cash equivalents		2,905			(4,743	)
Cash and cash equivalents, end of period	$	311,463		$	328,746
Net change in cash and cash equivalents		(397,509	)		(63,454	)
Cash and cash equivalents, beginning of period		692,930			294,700
Cash and cash equivalents, end of period	$	295,421		$	231,246
Supplemental cash flow information:
Interest paid, net of amounts capitalized	$	~~921~~325,~~812~~968		$	~~924~~336,~~977~~905
Income taxes paid, net of refunds		1914,~~454~~012			2515,~~838~~558
Supplemental disclosure of non-cash investing activities:
Accrued capital expenditures	$	3444,~~181~~624		$	5419,~~083~~349
Restricted cash received		—23,901			~~23,901~~—
Restricted cash paid		—			(118,032	)

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT INVESTMENTS S.A.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~September~~March 3031, ~~2012~~2013

Note 1 General

Basis of Presentation

The accompanying condensed consolidated financial statements of Intelsat Investments S.A. (formerly known as Intelsat S.A.) and its subsidiaries (“Intelsat Investments,” “we,” “us,” “our” or the “~~our~~Company”) have not been audited, but are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. References to U.S. GAAP issued by the Financial Accounting Standards Board (“FASB”) in these footnotes are to the FASB Accounting Standards Codification (“ASC” ~~or the “Codification”~~). The unaudited condensed consolidated financial statements include all adjustments (consisting only of normal and recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of these financial statements. The results of operations for the periods presented are not necessarily indicative of operating results for the full year or for any future period. The condensed consolidated balance sheet as of December 31, ~~2011~~2012 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2011~~2012 on file with the Securities and Exchange Commission.

On ~~March~~April 3011, ~~2012~~2013, ~~Intelsat Global S.A. (“Intelsat Global”), our former indirect parent,~~the ~~and~~name ~~certain~~ of ~~its~~the ~~subsidiaries~~Company ~~engaged~~was inchanged afrom ~~series of transactions that resulted in~~ Intelsat ~~Global Holdings~~ S.A. ~~(“Intelsat~~to ~~Global Holdings”), a new holding company, acquiring all of the outstanding shares of~~ Intelsat ~~Global.~~Investments As a result, Intelsat Global became a wholly owned subsidiary of Intelsat Global Holdings, and all of Intelsat Global Holdings’ equity is now beneficially owned by the former shareholders of Intelsat Global in the same proportions as such shareholders’ former ownership in Intelsat Global. Further, on May 31, 2012, Intelsat Global merged with and into Intelsat Investment Holdings S.~~à r~~A.l.

Initial Public Offering

On April 23, 2013, Intelsat S.A. (formerly known as Intelsat Global Holdings S.A.), our indirect parent company, completed its initial public offering, in which it issued 22,222,222 common shares and a concurrent public offering, in which it issued 3,450,000 5.75% Series A mandatory convertible junior non-voting preferred shares (the “Series A preferred shares”) at public offering prices of $18.00 per share and $50.00 per share, respectively (the initial public offering together with the concurrent public offering, the “IPO”). See Note 14—Subsequent Events for further discussion.

Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of these condensed consolidated financial statements, the reported amounts of revenues and expenses during the reporting periods, and the disclosures of contingent liabilities. Accordingly, ultimate results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the prior year’s financial statements to conform to the current year presentation. The reclassifications had no effect on previously reported results of operations, cash flows or retained earnings.

Recently Adopted Accounting Pronouncements

In ~~June~~February ~~2011~~2013, the FASB issued ASU ~~2011~~2013-0502, ~~Presentation~~Reporting of ~~Comprehensive~~Amounts ~~Income~~Reclassified ~~(“ASU~~Out ~~2011-05”)~~of Accumulated Other Comprehensive Income. Beginning in the first quarter of ~~2012~~2013, ~~ASU~~entities ~~2011-05~~are ~~eliminated~~required ~~the option that had~~to ~~previously~~disclose ~~allowed us to present~~ the ~~components~~effect of ~~other~~reclassification ~~comprehensive income as part~~ of ~~the~~items ~~statement~~out of ~~changes~~accumulated inother ~~shareholder’s equity. Beginning in the first quarter of 2012, we have included a separate condensed consolidated statement of~~ comprehensive ~~loss in our financial statements~~income. The majority of our other comprehensive loss and our accumulated other comprehensive loss is related to our defined benefit retirement plans. ~~ASU~~Beginning in ~~2011-05~~the ~~does~~first ~~not~~quarter ~~change~~of ~~whether~~2013, ~~items~~we ~~are~~have ~~reported~~disclosed in ~~net~~ ~~loss~~Note or4—Retirement inPlans ~~other comprehensive income~~ and ~~does~~Other ~~not~~Retiree ~~change~~Benefits ~~whether~~the ~~and~~effects ~~when~~of ~~items~~reclassifications out of ~~other~~accumulated comprehensive income ~~are~~on ~~reclassified~~line toitems ~~net~~in ~~loss.~~our condensed consolidated statement of operations.

Note 2 Fair Value Measurements

FASB ASC Topic 820, Fair Value Measurements and Disclosure (“FASB ASC 820”) defines fair value, establishes a market-based framework or hierarchy for measuring fair value and provides for certain required disclosures about fair value measurements. The guidance is applicable whenever another accounting pronouncement requires or permits assets and liabilities to be measured at fair value, but does not require any new fair value measurements.

The fair value hierarchy prioritizes the inputs used in valuation techniques into three levels as follows:

•

Level 1—unadjusted quoted prices for identical assets or liabilities in active markets;

•

Level 2—quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted market prices that are observable or that can be corroborated by observable market data by correlation; and

•

Level 3—unobservable inputs based upon the reporting entity’s internally developed assumptions which market participants would use in pricing the asset or liability.

We7 have identified investments in marketable securities, interest rate financial derivative instruments and a redeemable noncontrolling interest as those items that meet the criteria of the disclosure requirements and fair value framework of FASB ASC 820.

The following tables present assets and liabilities measured and recorded at fair value in our condensed consolidated balance sheets on a recurring basis and their level within the fair value hierarchy (in thousands), excluding long-term debt (see Note 8—Long-Term Debt). We did not have any transfers between Level 1 and Level 2 fair value measurements during the nine months ended September 30, 2012.

			Fair Value Measurements atDecember 31, 2011
	As of December 31, 2011		QuotedPrices inActiveMarketsforIdenticalAssets		SignificantOtherObservableInputs		SignificantUnobservableInputs
Description			(Level 1)		(Level 2)		(Level 3)
Assets
Marketable securities(1)	$	5,418	$	5,418	$	—	$	—
Total assets	$	5,418	$	5,418	$	—	$	—
Liabilities
Undesignated interest rate swaps(2)	$	95,518	$	—	$	95,518	$	—
Redeemable noncontrolling interest(3)		3,024		—		—		3,024
Total liabilities	$	98,542	$	—	$	95,518	$	3,024

			Fair Value Measurements atSeptember 30, 2012
	As ofSeptember 30,2012		QuotedPrices inActiveMarketsforIdenticalAssets		SignificantOtherObservableInputs		SignificantUnobservableInputs
Description			(Level 1)		(Level 2)		(Level 3)
Assets
Marketable securities(1)	$	5,351	$	5,351	$	—	$	—
Total assets	$	5,351	$	5,351	$	—	$	—
Liabilities
Undesignated interest rate swaps(2)	$	89,825	$	—	$	89,825	$	—
Redeemable noncontrolling interest(3)		8,744		—		—		8,744
Total liabilities	$	98,569	$	—	$	89,825	$	8,744

(1) The valuation measurement inputs of these marketable securities represent unadjusted quoted prices in active markets and, accordingly, we have classified such investments within Level 1 of the fair value hierarchy. The cost basis of our available-for-sale marketable securities was $5.9 million at December 31, 2011 and $5.5 million at September 30, 2012. We sold marketable securities with a cost basis of $0.4 million during the nine months ended September 30, 2012 and recorded a loss on the sale of $0.07 million, which was included within other income (expense), net in our condensed consolidated statement of operations.

(2) The fair value of our interest rate financial derivative instruments reflects the estimated amounts that we would pay or receive to terminate the agreement at the reporting date, taking into account current interest rates, the market expectation for future interest rates and current creditworthiness of both the counterparties and ourselves. Observable inputs utilized in the income approach valuation technique incorporate identical contractual notional amounts, fixed coupon rates, periodic terms for interest payments and contract maturity. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments, if any, associated with our derivatives utilize Level 3 inputs, such as the estimates of the current credit spread, to evaluate the likelihood of default by us or our counterparties. We also considered the existence of offset provisions and other credit enhancements that serve to reduce the credit exposure associated

~~with the asset or liability being valued.~~ We have ~~assessed~~identified ~~the~~investments ~~significance~~in ofmarketable ~~the~~securities ~~inputs~~and ofinterest ~~the~~rate ~~credit valuation adjustments to the overall valuation of our~~ financial derivative ~~positions~~instruments ~~and~~as ~~have~~those ~~determined~~items that ~~the~~meet ~~credit valuation adjustments are not significant to~~ the ~~valuation~~criteria of ~~our~~the ~~derivatives.~~disclosure Asrequirements aand ~~result,~~fair wevalue ~~have~~framework ~~determined that our derivative valuations in their entirety are classified in Level 2~~ of ~~the~~FASB ~~fair~~ASC ~~value hierarchy~~820.

~~(3)~~The Onfollowing ~~October~~tables 5,present ~~2012,~~assets weand ~~purchased~~liabilities ~~the~~measured ~~remaining~~and ~~noncontrolling~~recorded ~~ownership~~at ~~interest~~fair value in our ~~indirect~~condensed ~~subsidiary,~~consolidated ~~New~~balance ~~Dawn~~sheets ~~Satellite~~on ~~Company,~~a ~~Ltd.~~recurring ~~(“New~~basis ~~Dawn”),~~and ~~held~~their bylevel ~~our~~within ~~joint~~the ~~venture~~fair ~~partner,~~value ~~Convergence SPV Ltd~~ hierarchy (~~“Convergence~~in ~~Partners”~~thousands), ~~for~~excluding ~~$8.7~~long-term ~~million~~debt (see Note ~~6(b)~~8—~~Investments—New~~Long-Term ~~Dawn~~Debt). AtWe ~~September~~did ~~30,~~not ~~2012,~~have weany ~~valued~~transfers ~~our~~between ~~redeemable~~Level ~~noncontrolling~~1 ~~interest~~and atLevel ~~this~~2 ~~purchase~~fair ~~price,~~value asmeasurements ~~compared~~during to the ~~income~~three ~~approach~~months ~~valuation~~ended ~~technique~~March 31, ~~used in prior periods~~2013. ~~Both of these approaches to estimate fair value utilized Level 3 inputs.~~

The following tables present the activity for those items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as defined in FASB ASC 820 (in thousands):


			Fair Value Measurements at December 31, 2012
Description	As of December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets
Marketable securities⁽¹⁾	$	5,613	$	5,613	$	—

Total assets	$	5,613	$	5,613	$	—

Liabilities
Undesignated interest rate swaps⁽²⁾	$	74,564	$	—	$	74,564

Total liabilities	$	74,564	$	—	$	74,564

	Fair Value Measurements Using SignificantUnobservable Inputs (Level 3)
				Fair Value Measurements at March 31, 2013
	RedeemableNoncontrollingInterest(1)			EmbeddedDerivative			Total
Description	As ofMarch 31, 2013			Quoted Prices inActive Markets forIdentical Assets(Level 1)			Significant OtherObservable Inputs(Level 2)
Balance at December 31, 2010	$	18,621		$	4,295		$	22,916
Assets
Contributions		1,734			—			1,734
Marketable securities(1)	$	5,827		$	5,827		$	—
Mark to market valuation adjustment		(15,090	)		(4,295	)		(19,385	)
Total assets	$	5,827		$	5,827		$	—
Net loss attributable to noncontrolling interest		(2,241	)		—			(2,241	)
Liabilities
Balance at December 31, 2011	$	3,024		$	—		$	3,024
Undesignated interest rate swaps(2)	$	63,777		$	—		$	63,777
Total liabilities	$	63,777		$	—		$	63,777

	Fair Value Measurements Using SignificantUnobservable Inputs (Level 3)
	RedeemableNoncontrollingInterest(1)			EmbeddedDerivative		Total
Balance at December 31, 2011	$	3,024		$	—	$	3,024
Mark to market valuation adjustment		(268	)		—		(268	)
Net loss attributable to noncontrolling interest		(658	)		—		(658	)
Balance at March 31, 2012		2,098			—		2,098
Mark to market valuation adjustment		3,845			—		3,845
Net loss attributable to noncontrolling interest		(531	)		—		(531	)
Balance at June 30, 2012		5,412			—		5,412
Mark to market valuation adjustment		4,086			—		4,086
Net loss attributable to noncontrolling interest		(754	)		—		(754	)
Balance at September 30, 2012	$	8,744		$	—	$	8,744

(1)

The valuation measurement inputs of these marketable securities represent unadjusted quoted prices in active markets and, accordingly, we have classified such investments within Level 1 of the fair value hierarchy. The cost basis of our available-for-sale marketable securities was $5.5 million at December 31, 2012 and $5.4 million at March 31, 2013. We sold marketable securities with a cost basis of $0.1 million during the three months ended March 31, 2013 and recorded a gain on the sale of $0.04 million, which was included within other income (expense), net in our condensed consolidated statement of operations.

(12) InThe ~~accordance~~fair ~~with~~value ~~FASB~~of ~~ASC~~our ~~Topic~~interest ~~480,~~rate ~~Distinguishing~~financial ~~Liabilities~~derivative ~~from~~instruments ~~Equity~~reflects ~~(“FASB~~the ~~ASC~~estimated ~~480”)~~amounts that we would pay or receive to terminate the agreement at the reporting date, ~~regarding~~taking into account current interest rates, the ~~classification~~market expectation for future interest rates and ~~measurement~~current creditworthiness of ~~redeemable~~both ~~securities~~the counterparties and ourselves. Observable inputs utilized in the income approach valuation technique incorporate identical contractual notional amounts, fixed coupon rates, periodic terms for interest payments and contract maturity. Although we ~~marked~~have determined that the majority of the inputs used to ~~market~~value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments, if any, associated with our derivatives utilize Level 3 inputs, such as the estimates of the ~~noncontrolling~~current ~~interest~~credit inspread, to evaluate the likelihood of default by us or our ~~joint~~counterparties. ~~venture~~We ~~investment~~also considered the existence of offset provisions and other credit enhancements that serve to reduce the credit exposure associated with the asset or liability being valued. We have assessed the significance of the inputs of the credit valuation adjustments to the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the valuation of our derivatives. As a result, we have determined that our derivative valuations in ~~New~~their ~~Dawn~~entirety are classified in Level 2 of the fair value hierarchy.

Note 3 Share-Based and Other Compensation Plans

On ~~May~~March 630, ~~2009~~2012, the board of directors of Intelsat ~~Global~~S.A. adopted the amended and restated Intelsat Global, Ltd. 2008 Share Incentive Plan (the “2008 Share Plan”). The 2008 Share Plan ~~was adopted by our new parent holding company, Intelsat Global Holdings, by an amendment effective as of March 30, 2012. The 2008 Share Plan~~ provides for a variety of equity-based awards with respect to Class A common shares (the “Class A Shares”), and Class B common shares (the “Class B Shares” and, together with the Class A Shares, the “Common Shares”), including non-qualified share options, incentive share options (within the meaning of Section 422 of the United States Internal Revenue Service Tax Code), restricted share awards, restricted share unit awards, share appreciation rights, phantom share awards and performance-based awards.

~~Due~~8 to the expiration of certain repurchase features that are contained within the 2008 Share Plan, we changed the classification of certain executive officers’ awards from liability classified awards to equity classified awards in the first quarter of 2011. The change was accounted for in a manner similar to that of a modification in accordance with FASB ASC Topic 718, Compensation—Stock Compensation, and did not have a material impact on our condensed consolidated balance sheet.

~~During~~In connection with the ~~nine~~IPO, ~~months~~in ~~ended~~April ~~September 30~~2013, ~~2012,~~ Intelsat ~~Global~~S.A. ~~Holdings~~amended ~~repurchased~~the 2008 Share Plan to 14reflect the reclassification of its equity into one class of common shares,~~231~~ ~~vested~~and made certain grants of shares and options under the amended plan. Prior to the consummation of the IPO, each of the Class A ~~share~~Shares ~~options~~was reclassified into one common share and ~~16,482~~each ~~vested~~of the Class B Shares was reclassified into 0.0735 common shares. ~~Intelsat~~In ~~Global~~addition, ~~Holdings~~immediately ~~did~~prior ~~not~~to ~~grant~~the ~~equity-based~~consummation ~~awards~~of ~~under~~ the ~~2008~~IPO, ~~Share~~an ~~Plan~~equivalent ~~during~~of ~~the~~a ~~nine~~share ~~months~~split ~~ended~~was ~~September 30,~~effected ~~2012.~~by Wedistributing ~~recorded~~common ~~compensation expense~~shares pro rata to existing holders of the ~~$4.0~~common ~~million~~shares ~~and~~so $that each existing holder received an additional 4.46 ~~million~~common ~~during~~shares ~~the~~for ~~nine~~each ~~months~~common ~~ended~~share ~~September 30~~owned at that time. Also, ~~2011~~in ~~and~~connection ~~2012~~with the IPO, ~~respectively~~in April 2013, ~~related~~the toBoard ~~our~~of ~~share-based~~Directors ~~awards~~of Intelsat S.A. adopted the Intelsat S.A. 2013 Equity Incentive Plan (the “2013 Equity Plan”). See Note 14—Subsequent Events for further discussion.

During the three months ended March 31, 2013, Intelsat S.A. granted 8,400 Class A Share options and repurchased 1,771 vested Class B Shares, reflecting share-based compensation transactions prior to the impacts associated with the IPO as noted above. We recorded compensation expense of $1.1 million and a credit of $0.1 million during the three months ended March 31, 2012 and 2013, respectively, related to our share-based awards.

Note 4 Retirement Plans and Other Retiree Benefits

(a) Pension and Other Postretirement Benefits

We maintain a noncontributory defined benefit retirement plan covering substantially all of our employees hired prior to July 19, 2001. The cost of providing benefits to eligible participants under the defined benefit retirement plan is calculated using the plan’s benefit formulas, which take into account the participants’ remuneration, dates of hire, years of eligible service, and certain actuarial assumptions. In addition, as part of the overall medical plan, we provide postretirement medical benefits to certain current retirees who meet the criteria under the medical plan for postretirement benefit eligibility.

The defined benefit retirement plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. We expect that our future contributions to the defined benefit retirement plan will be based on the minimum funding requirements of the Internal Revenue Code and on the plan’s funded status. Any significant decline in the fair value of our defined benefit retirement plan assets or other adverse changes to the significant assumptions used to determine the plan’s funded status would negatively impact its funded status and could result in increased funding in future periods. The impact on the funded status as of October 1, the plan’s annual measurement date, is determined based upon market conditions in effect when we completed our annual valuation. During the ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013, we made cash contributions to the defined benefit retirement plan of $247.29 million. We anticipate that we will make additional contributions of approximately $524.90 million to the defined benefit retirement plan during the remainder of ~~2012~~2013. We fund the postretirement medical benefits throughout the year based on benefits paid. We anticipate that our contributions to fund postretirement medical benefits in ~~2012~~2013 will be approximately $4.53 million.

Included in accumulated other comprehensive loss at ~~September~~March 3031, ~~2012~~2013 is $~~169~~184.46 million ($~~105~~116.9 million, net of tax) that has not ~~yet~~ yet been recognized in net periodic pension cost, which includes the unrecognized prior service credits and unrecognized actuarial losses.

Prior service credits and actuarial losses are reclassified from accumulated other comprehensive loss to net periodic pension benefit costs, which are included in both direct costs of revenue and selling, general and administrative on our condensed consolidated statements of operations. The following table presents these reclassifications, net of tax, as well as the reclassification of the realized gain on investments, and the statement of operations line items that are impacted (in thousands):


	Three Months Ended March 31, 2013
Amortization of prior service credits reclassified from other comprehensive loss to net periodic pension benefit costs included in:
Direct costs of revenue (excluding depreciation and amortization)	$	(16	)
Selling, general and administrative		(11	)

Total		(27	)

Amortization of actuarial loss reclassified from other comprehensive loss to net periodic pension benefit costs included in:
Direct costs of revenue (excluding depreciation and amortization)		1,851
Selling, general and administrative		1,228

Total		3,079

Realized gains on investments included in:
Other income (expense), net		(23	)

Total	$	(23	)

Net periodic pension benefit costs included the following components (in thousands):

Three MonthsEndedSeptember 30,2011

Three MonthsEndedSeptember 30,2012

Nine MonthsEndedSeptember 30,2011

Nine MonthsEndedSeptember 30,2012

Three MonthsEndedMarch 31, 2012

Three MonthsEndedMarch 31, 2013

Service cost

~~775~~803

~~803~~829

~~2,326~~

~~2,408~~

Interest cost

54,~~015~~765

4,~~765~~561

~~15,044~~

~~14,296~~

Expected return on plan assets

(45,~~932~~141

)

(5,~~141~~316

)

~~(14,796~~

)

~~(15,422~~

)

Amortization of unrecognized prior service credit

(43

)

(43

)

~~(129~~

)

~~(129~~

)

Amortization of unrecognized net loss

13,~~715~~498

34,~~498~~856

~~5,146~~

~~10,493~~

Net periodic costs

23,~~530~~882

34,~~882~~887

~~7,591~~

~~11,646~~

Net periodic other postretirement benefit costs included the following components (in thousands):

Three MonthsEndedSeptember 30,2011

Three MonthsEndedSeptember 30,2012

Nine MonthsEndedSeptember 30,2011

Nine MonthsEndedSeptember 30,2012

Three MonthsEndedMarch 31, 2012

Three MonthsEndedMarch 31, 2013

Service cost

~~113~~89

8973

~~339~~

~~266~~

Interest cost

1,~~267~~240

1,~~240~~066

~~3,802~~

~~3,719~~

Amortization of unrecognized net loss

—172

~~172~~91

—

~~515~~

Total costs

1,~~380~~501

1,~~501~~230

~~4,141~~

~~4,500~~

1210

(b) Other Retirement Plans

We maintain two defined contribution retirement plans, qualified under the provisions of Section 401(k) of the Internal Revenue Code, for our employees in the United States. We recognized compensation expense for these plans of $51.48 million and $52.0 million during the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2012~~2013, respectively. We also maintain other defined contribution retirement plans in several non-U.S. jurisdictions, but such plans are not material to our financial position or results of operations.

Note 5 Satellites and Other Property and Equipment

(a) Satellites and Other Property and Equipment, net

Satellites and other property and equipment, net were comprised of the following (in thousands):

	As ofDecember 31,2011			As ofSeptember 30,2012
	As ofDecember 31,2012			As ofMarch 31,2013
Satellites and launch vehicles	$	78,~~825~~700,~~259~~926		$	8,~~517~~233,~~246~~627
Information systems and ground segment		~~480~~524,~~002~~285			~~517~~530,~~551~~623
Buildings and other		~~284~~195,~~742~~672			~~291~~196,~~875~~369
Total cost		89,~~590~~420,~~003~~883			98,~~326~~960,~~672~~619
Less: accumulated depreciation		(23,~~447~~065,~~272~~691	)		(23,~~923~~121,~~594~~285	)
Total	$	6,~~142~~355,~~731~~192		$	65,~~403~~839,~~078~~334

Satellites and other property and equipment are stated at historical cost, with the exception of satellites that have been impaired. Satellites and other property and equipment acquired as part of an acquisition are based on their fair value at the date of acquisition.

Satellites and other property and equipment, net as of December 31, ~~2011~~2012 and ~~September~~March 3031, ~~2012~~2013 included construction-in-progress of $10.57 billion and $10.14 billion, respectively. These amounts ~~relate~~ relate primarily to satellites under construction and related launch services. Interest costs of $9535.17 million and $~~102~~11.16 million were capitalized during the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2012~~2013, respectively.

We have entered into launch contracts for the launch of both specified and unspecified future satellites. Each of these launch contracts may be terminated at our option, subject to payment of a termination fee that increases as the applicable launch date approaches. In addition, in the event of a failure of any launch, we may exercise our right to obtain a replacement launch within a specified period following our request for re-launch.

(b) Satellite Launches

On ~~March~~February 251, ~~2012~~2013, wethe ~~successfully~~launch ~~launched~~vehicle for our IS-2227 satellite ~~into~~failed ~~orbit.~~shortly ~~This~~after liftoff and the satellite was ~~establishes~~completely ~~long-term~~destroyed. ~~capacity~~A atFailure Review Board has been established to determine the ~~72°~~ ~~east~~cause. ~~longitude~~The ~~orbit~~satellite ~~location~~and ~~most~~launch ~~recently~~vehicle ~~occupied~~were byfully ~~our~~insured, ~~IS-709~~and ~~satellite~~we filed a total loss claim of $406.2 ~~IS-22~~million ~~provides~~with ~~capacity~~our insurers. Accounting for ~~media,~~insured ~~government~~losses ~~and~~of fixed ~~network~~assets ~~services~~is ingoverned ~~Africa,~~by ~~Asia~~FASB ASC Topic 605-40, ~~Europe~~Revenue Recognition—Gains and ~~Middle~~Losses ~~East~~(“FASB ~~via~~ASC C605-~~band~~40”). In ~~and~~accordance Kuwith FASB ASC 605-~~band~~40, ~~platforms~~in the first quarter of 2013 we reclassified the $392.5 Inmillion ~~addition,~~book value of the IS-~~22 hosts~~27 asatellite ~~specialized~~and ~~UHF~~its ~~communications~~related ~~payload~~assets to receivables, net in anticipation of the expected insurance proceeds from the claim. ~~This~~We will recognize the expected surplus of insurance proceeds over the book value of the satellite ~~entered~~as ~~into~~a ~~service~~gain inupon receipt of any such excess. As of March 31, 2013, we had received $177.1 million of insurance proceeds related to our total loss claim. As of May 6, ~~2012~~2013, all $406.2 million of proceeds had been received. These proceeds will be used to redeem $366.4 million aggregate principal amount of Intelsat Luxembourg’s outstanding 11 1/4% Senior Notes due 2017 (the “2017 Senior Notes”). See Note 8—Long-Term Debt for further discussion.

On(c) ~~June 1, 2012, our~~ IS-19 ~~satellite~~Partial ~~was~~Loss ~~launched~~Claim into orbit. During launch operations, IS-19 experienced damage to its south solar array. Although both solar arrays are deployed, the power available to the satellite is less than is required to operate 100% of the payload capacity. Failure Review Boards were established to determine the cause of the anomaly. As of September 30, 2012, a final conclusion had not been reached as to the likely cause of the anomaly. We continue to participate in the on-going investigation. Additionally, we have filed a partial loss claim with our insurers relating to the solar array anomaly. This satellite replaces IS-8 at 166° east longitude and provides C- and Ku- band capacity for media, government and network services customers in the western United States and the Asia-Pacific region, including hosting video neighborhoods with global programmers. This satellite entered into service in August 2012.

InOn ~~accordance~~June 1, ~~with~~2012, our ~~policy~~IS-19 ~~and~~satellite ~~the~~experienced ~~guidance~~damage ~~provided~~to ~~for~~its ~~under~~south ~~FASB~~solar ~~ASC~~array ~~Topic~~during ~~360,~~launch ~~Property,~~operations. ~~Plant~~Although ~~and~~both ~~Equipment,~~solar wearrays ~~review~~are ~~our long-lived~~deployed, ~~assets for impairment whenever events and circumstances indicate that~~ the ~~carrying~~power ~~amount~~available ofto the ~~asset~~satellite oris ~~asset~~less ~~group may not be recoverable. The recoverability of an asset or asset group held and used~~ than is ~~measured~~required byto aoperate ~~comparison~~100% of the ~~carrying~~ ~~amount~~payload ofcapacity. ~~the~~While ~~asset or asset group to~~ the ~~estimated~~satellite ~~undiscounted~~is ~~future~~operational, ~~cash flows expected to be generated by~~ the ~~asset~~anomaly orresulted ~~asset~~in ~~group.~~structural ~~When~~and aelectrical ~~satellite~~damage ~~experiences~~to anone ~~anomaly~~solar orarray ~~other health related issues~~wing, wewhich ~~believe~~reduced the ~~lowest~~amount ~~level~~ of ~~identifiable~~ ~~cash~~power ~~flows~~available ~~exists~~for atpayload ~~the individual satellite level~~operation. ~~Accordingly,~~We infiled ~~the~~a partial ~~second~~loss ~~quarter~~claim ofwith ~~2012,~~our weinsurers ~~performed~~related anto ~~impairment~~the ~~review of our~~ IS-19 ~~satellite~~solar ~~and~~array ~~determined~~anomaly. ~~that~~As ~~there~~of ~~was~~March 31, no2013, ~~impairment~~we ofhad ~~the~~received ~~carrying~~$78.9 ~~amount~~million of ~~the~~insurance ~~asset due~~proceeds tofrom the ~~expected~~partial ~~cash~~loss ~~flows~~claim. toAs beof ~~generated~~May 6, by2013, ~~the~~all C-$84.8 ~~and~~million ~~Ku-band~~of ~~payload over~~ the ~~satellite’s~~total insurance ~~expected~~proceeds ~~useful~~had ~~life~~been received.

1311

On August 2, 2012, we successfully launched our IS-20 satellite into orbit. This satellite replaces IS-7 and IS-10 at 68.5° east longitude and provides capacity for direct-to-home television, cellular backhaul and VSAT services in Africa, Asia, Europe, Middle East and Russia via C-band and Ku-band platforms. IS-20 currently hosts the largest direct-to-home platform in Africa. This satellite entered into service in September 2012.

On August 19, 2012, we successfully launched our IS-21 satellite into orbit. This satellite will replace IS-9 at 302° east longitude and will serve the leading direct-to-home and cable programmers in Latin America. IS-21 entered into service in October 2012 and will provide long-term capacity for South America, North America and Europe via C-band platform and North America, the Caribbean, Brazil, Europe and Western Africa via Ku-band platform.

On October 14, 2012, we successfully launched our IS-23 satellite into orbit. This satellite will replace Intelsat 707 at 307° east longitude. The satellite will provide C-band services to customers in the Americas, Europe and Africa, and Ku-band coverage for Latin America. IS-23 is undergoing in-orbit testing and is expected to enter into service in the fourth quarter of 2012.

On October 5, 2012, Intelsat Global Service LLC, our indirect subsidiary, completed the sale of our U.S. administrative headquarters office building in Washington, D.C. (the “U.S. Administrative Headquarters Property”), and assigned our Amended and Restated Lease Agreement with the U.S. Government relating to the U.S. Administrative Headquarters Property, to the purchaser for a purchase price of $85.0 million in cash. The sale will result in a pre-tax gain to be recognized in the fourth quarter of 2012 of between $12.0 and $13.0 million. Upon the closing of the sale, we entered into an agreement under which we will temporarily lease from the purchaser a portion of the U.S. Administrative Headquarters Property. We are currently in the process of selecting a location for a new permanent U.S. administrative headquarters.

Note 6 Investments

We have ownership interests in atwo ~~number of~~ entities which met the criteria of a ~~Variable~~variable ~~Interest~~interest ~~Entity~~ entity (“VIE”), ~~including~~ Horizons Satellite Holdings, LLC (“Horizons Holdings”) and WP Com, S. de R.L. de C.V. (“WP Com”). We ~~have~~had a greater than 50% controlling ownership and voting interest in New Dawn ~~and~~Satellite ~~therefore~~Company, Ltd. (“New Dawn”) and ~~consolidate~~therefore consolidated the New Dawn joint venture. In October 2012, we purchased the remaining ownership interest in New Dawn. Horizons Holdings, as well as WP Com, are discussed in further detail below, including our analyses of the primary beneficiary determination as required under FASB ASC Topic 810, Consolidation (“FASB ASC 810”).

(a) Horizons Holdings

We have a joint venture with JSAT International, Inc. (“JSAT”), a leading satellite operator in the Asia-Pacific region. The joint venture is named Horizons Satellite Holdings, LLC, and consists of two investments: Horizons-1 Satellite LLC (“Horizons-1”) and Horizons-2 Satellite LLC (“Horizons-2”). Horizons Holdings borrowed from JSAT a portion of the funds necessary to finance the construction of the Horizons-2 satellite pursuant to a loan agreement (the “Horizons 2 Loan Agreement”). We provide certain services to the joint venture and utilize capacity from the joint venture.

We have determined that this joint venture meets the criteria of a VIE under FASB ASC 810~~. On September 30~~, ~~2011, Intelsat~~ and ~~JSAT~~we have ~~amended~~concluded ~~the~~that ~~joint venture agreement relating to their investment in Horizons Holdings (the “Horizons Amendment”), and as a result,~~ we ~~re-evaluated~~are the primary beneficiary ~~determination.~~because ~~Pursuant to the Horizons Amendment, the Horizons-2 satellite was relocated to 85° east longitude in early 2012 and~~ decisions relating to any future relocation of the Horizons-2 satellite, ~~will be effectively controlled by us. We believe satellite location is~~ the most significant ~~driver of Horizons Holdings’ economic performance. Additionally, the Horizons-1 satellite is the less significant~~ asset of the joint venture~~. As a result~~, weare ~~determined~~effectively ~~that~~controlled weby ~~became the primary beneficiary of Horizons Holdings as of September 30, 2011~~us. In accordance with FASB ASC 810, as the primary beneficiary, we ~~consolidated~~consolidate Horizons Holdings within our condensed consolidated financial statements~~, net of eliminating entries, beginning on September 30, 2011~~. Total assets and liabilities of Horizons Holdings were $~~171~~136.2 million and $7349.62 million as of December 31, ~~2011~~2012, respectively, and $~~138~~122.32 million and $4936.08 million as of ~~September~~March 3031, ~~2012~~2013, respectively.

InWe ~~accordance~~also ~~with~~have ~~FASB~~a ~~ASC~~revenue ~~810,~~sharing ~~the~~agreement ~~initial~~with ~~consolidation~~JSAT related ofto aservices ~~VIE~~sold ~~that~~on isthe aHorizons ~~business~~satellites. isWe ~~considered~~are aresponsible ~~business~~for ~~combination~~billing and ~~should~~collection ~~be accounted~~ for insuch ~~accordance~~services ~~with~~and we remit 50% of the ~~provisions~~revenue, inless ~~FASB~~applicable ~~ASC~~fees ~~Topic~~and ~~805~~commissions, ~~Business~~to ~~Combinations~~JSAT. ~~Determining~~Under the ~~fair~~Horizons ~~values~~Holdings ofjoint ~~the~~venture ~~net~~agreement, which ~~assets~~was ofamended ~~Horizons~~on ~~Holdings~~September 30, ~~required~~2011, uswe agreed to ~~make~~guarantee ~~significant~~to ~~estimates~~JSAT ~~and~~certain ~~assumptions~~minimum levels of annual gross revenues for a three-year period beginning in early 2012. InThis ~~order~~guarantee could require us to ~~develop~~pay JSAT a maximum potential amount ~~the~~ranging ~~fair~~from ~~value~~$7.8 ~~estimates,~~million weto ~~utilized~~$10.3 million per year over the ~~income~~three-year ~~approach~~period, less applicable fees and commissions. ~~Our~~We ~~estimates~~assess ~~included~~this ~~assumptions~~guarantee ~~about~~on ~~projected~~a ~~growth~~quarterly ~~rates~~basis, ~~cost~~and ofin ~~capital,~~the ~~effective~~first ~~tax~~quarter ~~rates~~of ~~and~~2013 ~~industry~~we ~~and~~recorded ~~economic~~an ~~trends.~~expense ~~While~~of we$1.2 ~~believe~~million ~~that~~related to the ~~estimates~~guarantee, ~~and~~in ~~assumptions underlying~~addition ~~the~~to ~~valuation~~$5.6 ~~methodology~~million ~~were~~previously ~~reasonable,~~accrued ~~different~~in ~~assumptions~~2012. ~~could~~The ~~have~~expense ~~resulted~~was included in ~~different~~direct ~~market~~costs ~~values.~~of Werevenue ~~recorded~~in our condensed consolidated statement of operations for the ~~assets~~three months ended March 31, ~~liabilities~~2013. ~~and~~Our current estimate of the ~~noncontrolling~~total ~~interest~~amount inwe ~~Horizons~~expect ~~Holdings~~to atpay ~~fair~~over ~~value~~the ~~upon~~period ~~consolidation~~of ~~at September 30,~~the ~~2011.~~guarantee ~~The~~(before applicable fees and commissions) is $496.38 million, ~~fair~~of ~~value~~which of$5.5 ~~the~~million ~~Horizons~~was ~~Holdings~~paid ~~noncontrolling~~in ~~interest~~March at2013. ~~the~~The ~~initial~~remaining ~~date~~liability of ~~consolidation~~$1.3 ismillion was included inwithin ~~the~~accounts ~~equity~~payable and ~~section~~accrued ofliabilities on our condensed consolidated balance sheet at ~~December~~March 31, ~~2011~~2013. Amounts payable to JSAT related to the revenue sharing agreement, net of applicable fees and commissions, from the Horizons-1 and Horizons-2 satellites were ~~September~~$3.6 million and $4.5 million as of December 3031, 2012 inand ~~accordance~~March 31, ~~with~~2013, ~~FASB ASC 810~~respectively.

14In connection with the Horizons Holdings investment in Horizons-2, we entered into a capital contribution and subscription agreement with JSAT in August 2005, which requires both us and JSAT to fund 50% of the amount due from Horizons Holdings under the Horizons 2 Loan Agreement. As of March 31, 2013, we had a receivable of $18.3 million from JSAT representing the total remaining future payments to be received from JSAT to fund their portion of the amount due under the Horizons 2 Loan Agreement, $12.2 million of which is included in receivables, net and the remainder of which is included in other assets on our condensed consolidated balance sheet as of March 31, 2013.

Prior to the consolidation of Horizons Holdings on September 30, 2011, under the equity method of accounting, our 50% share of the results of the joint venture was a loss of $4.5 million for the nine months ended September 30, 2011, which is included in loss from previously unconsolidated affiliates in the accompanying condensed consolidated statements of operations.

We also have a revenue sharing agreement with JSAT related to services sold on the Horizons satellites. We are responsible for billing and collection for such services and we remit 50% of the revenue, less applicable fees and commissions, to JSAT. Under the Horizons Amendment, we agreed to guarantee to JSAT certain minimum levels of annual gross revenues for a three-year period beginning on the date that the Horizons-2 satellite was relocated to 85° east longitude. This guarantee could require us to pay JSAT a maximum potential amount ranging from $7.8 million to $10.3 million per year over the three-year period, less applicable fees and commission. We currently do not expect to incur any losses under this guarantee, and we will continue to assess this on a quarterly basis. In addition, we guaranteed JSAT certain minimum levels of revenue on the Horizons-2 satellite prior to the arrival at 85° east longitude. Amounts payable to JSAT related to the revenue share, net of applicable fees and commissions, from the Horizons Satellites were $2.2 million and $3.4 million as of December 31, 2011 and September 30, 2012, respectively.

In connection with the Horizons Holdings investment in Horizons-2, we entered into a capital contribution and subscription agreement with JSAT in August 2005, which requires both us and JSAT to fund 50% of the amount due from Horizons Holdings under the Horizons 2 Loan Agreement. As of September 30, 2012, we had a receivable of $24.4 million from JSAT representing the total remaining future payments to be received from JSAT to fund their portion of the amount due under the Horizons 2 Loan Agreement, $12.2 million of which is included in receivables, net and the remainder of which is included in other assets on our condensed consolidated balance sheet as of September 30, 2012.

(b) New Dawn

In June 2008, we entered into a project and shareholders’ agreement (the “New Dawn Project Agreement”) with Convergence SPV, Ltd. (“Convergence Partners”) pursuant to which New Dawn, a Mauritius company in which we had a 74.9% indirect ownership interest and Convergence Partners had a 25.1% noncontrolling ownership interest, launched a satellite in April 2011 to provide satellite transponder services to customers in Africa. On October 5, 2012, we purchased from Convergence Partners the remaining ownership interest in New Dawn for $8.7 million, increasing our ownership from 74.9% to 100% (the “New Dawn Equity Purchase”). As a result, we consolidate New Dawn within our condensed consolidated financial statements, net of eliminating entries. Prior to the New Dawn Equity Purchase, we accounted for the percentage interest in New Dawn owned by Convergence Partners as a noncontrolling interest according to the guidance provided under FASB ASC 480 specifically related to the classification and measurement of redeemable securities. As a result of the New Dawn Equity Purchase, we eliminated the redeemable noncontrolling interest of $8.7 million in the fourth quarter of 2012 in accordance with FASB ASC 480.

We12 and Convergence Partners agreed to make certain capital contributions to New Dawn in proportion to our respective ownership interests in New Dawn to fund a portion of the cost of construction and launch of the New Dawn satellite. Total equity contributions during the nine months ended September 30, 2011 were $6.9 million, of which $5.2 million were attributable to us, with the remaining $1.7 million contributed by Convergence Partners. There were no equity contributions made during the nine months ended September 30, 2012. As of September 30, 2012, New Dawn and its subsidiaries were unrestricted subsidiaries for purposes of applicable indentures and credit agreements of ours and our wholly-owned subsidiaries.

On October 5, 2012, we purchased from Convergence Partners the remaining ownership interest in New Dawn for $8.7 million, increasing our ownership from 74.9% to 100% (the “New Dawn Equity Purchase”). In conjunction with the New Dawn Equity Purchase, we repaid $82.6 million of outstanding debt under New Dawn’s credit facilities. Additionally, we made $5.3 million of termination payments to counterparties on New Dawn’s interest rate swap agreement.

We consolidate New Dawn within our condensed consolidated financial statements, net of eliminating entries. Additionally, we accounted for the percentage interest in New Dawn owned by Convergence Partners as a noncontrolling interest according to the guidance provided under FASB ASC 480 specifically related to the classification and measurement of redeemable securities. As a result of the New Dawn Equity Purchase, we will eliminate the redeemable noncontrolling interest of $8.7 million in the fourth quarter of 2012 in accordance with FASB ASC 480.

(c) WP Com

We have formed a joint venture with Corporativo W. Com S. de R.L. de C.V. (“Corporativo”) named WP Com, S. de R.L. de C.V. We own 49% of the voting equity shares and 88% of the economic interest in WP Com and Corporativo owns the remaining 51% of the voting equity shares. PanAmSat de Mexico, S. de R.L. de C.V. (“PAS de Mexico”) is a subsidiary of WP Com, 99.9% of which is owned by WP Com, with the remainder of the equity interest split between us and Corporativo. We formed WP Com to enable us to operate in Mexico, and PAS de Mexico acts as a reseller of our satellite services to customers in Mexico and Ecuador. Profits and losses of WP Com are allocated to the joint venture partners based upon the voting equity shares.

We have determined that this joint venture meets the criteria of a VIE under FASB ASC 810. In accordance with FASB ASC 810, we evaluated this joint venture to determine the primary beneficiary. We have concluded that we are the primary beneficiary because we influence the underlying business drivers of PAS de Mexico, including by acting as the sole provider for satellite services that PAS de Mexico resells. Furthermore, we have modified our pricing for these services to ensure that PAS de Mexico continues to operate in the Mexican market. Corporativo does not fund any of the operating expenses of PAS de Mexico. Thus, we consolidate WP Com within our condensed consolidated financial statements and we account for the percentage interest in the voting equity of WP Com owned by Corporativo as a noncontrolling interest, which is included in the equity section of our condensed consolidated balance sheet in accordance with FASB ASC 810.

(d) Equity Attributable to Intelsat Investments and Noncontrolling Interests

The following tables present changes in equity attributable to ~~Intelsat~~ the Company and equity attributable to our noncontrolling interests, which is included in the equity section of our condensed consolidated balance sheet (in thousands):

	Intelsat S.A.Shareholder’sDeficit			Non-redeemableNoncontrollingInterest			TotalShareholder’sDeficit
	IntelsatInvestmentsShareholder’sDeficit			NoncontrollingInterest			TotalShareholder’sDeficit
Balance at January 1, 2011	$	(698,941	)	$	1,902		$	(697,039	)
Balance at January 1, 2012	$	(1,143,375	)	$	50,926		$	(1,092,449	)
Net income (loss)		(~~432~~146,~~888~~643	)		13,~~136~~582			(~~431~~143,~~752~~061	)
Liabilities assumed by parent and other contributed capital		825,~~385~~819			—			825,~~385~~819
Consolidation of Horizons Holdings		—			49,263			49,263
Dividends paid to noncontrolling interests		—			(8,838	)		(8,838	)
Dividends paid to noncontrolling interests		—			(1,375	)		(1,375	)
Mark to market adjustment for redeemable noncontrolling interest		(7,663	)		—			(7,663	)
Mark to market adjustment for redeemable noncontrolling interest		15,090			—			15,090
Pension/postretirement liability adjustment		(7,288	)		—			(7,288	)
Pension/postretirement liability adjustment		(35,080	)		—			(35,080	)
Other comprehensive income		388			—			388
Other comprehensive income		59			—			59
Balance at December 31, 2012	$	(1,278,762	)	$	45,670		$	(1,233,092	)
Balance at December 31, 2011	$	(1,143,375	)	$	50,926		$	(1,092,449	)

	Intelsat S.A.Shareholder’sDeficit			Non-redeemableNoncontrollingInterest			TotalShareholder’sDeficit
	IntelsatInvestmentsShareholder’sDeficit			NoncontrollingInterest			TotalShareholder’sDeficit
Balance at January 1, 2012	$	(1,143,375	)	$	50,926		$	(1,092,449	)
Balance at January 1, 2013	$	(1,278,762	)	$	45,670		$	(1,233,092	)
Net income (loss)		(246,~~449~~496	)		~~839~~888			(235,~~610~~608	)
Liabilities assumed by parent and other contributed capital		~~1,062~~(67	)		—			~~1,062~~(67	)
Dividends paid to noncontrolling interests		—			(21,~~255~~723	)		(21,~~255~~723	)
Mark to market adjustment for redeemable noncontrolling interest		268			—			268
Pension/postretirement liability adjustment		3,052			—			3,052
Pension/postretirement liability adjustment		2,251			—			2,251
Other comprehensive income		199			—			199
Other comprehensive income		304			—			304
Balance at March 31, 2013	$	(1,282,074	)	$	44,835		$	(1,237,239	)
Balance at March 31, 2012	$	(1,163,939	)	$	49,510		$	(1,114,429	)
Net income (loss)		(84,009	)		913			(83,096	)
Liabilities assumed by parent and other contributed capital		2,266			—			2,266
Dividends paid to noncontrolling interests		—			(2,418	)		(2,418	)
Mark to market adjustment for redeemable noncontrolling interest		(3,845	)		—			(3,845	)
Pension/postretirement liability adjustment		2,251			—			2,251
Other comprehensive loss		(86	)		—			(86	)
Balance at June 30, 2012	$	(1,247,362	)	$	48,005		$	(1,199,357	)
Net income (loss)		(34,483	)		835			(33,648	)
Liabilities assumed by parent and other contributed capital		1,062			—			1,062
Dividends paid to noncontrolling interests		—			(2,109	)		(2,109	)
Mark to market adjustment for redeemable noncontrolling interest		(4,086	)		—			(4,086	)
Pension/postretirement liability adjustment		(1,638	)		—			(1,638	)
Other comprehensive loss		(29	)		—			(29	)
Capital contribution from parent		21,000						21,000
Balance at September 30, 2012	$	(1,265,536	)	$	46,731		$	(1,218,805	)

Note 7 Goodwill and Other Intangible Assets

The carrying amounts of goodwill and acquired intangible assets not subject to amortization consist of the following (in thousands):

	As ofDecember 31,2011		As ofSeptember 30,2012
	As ofDecember 31,2012		As ofMarch 31,2013
Goodwill	$	6,780,827	$	6,780,827
Trade name		70,400		70,400
Orbital locations		2,387,700		2,387,700

We account for goodwill and other non-amortizable intangible assets in accordance with FASB ASC Topic 350, Intangibles—Goodwill and Other, and have deemed these assets to have indefinite lives. Therefore, these assets are not amortized but are tested on an annual basis for impairment during the fourth quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable.

~~The~~13 ~~carrying amount and accumulated amortization of acquired intangible assets subject to amortization consist of the following (in thousands):~~

	As of December 31, 2011							As of September 30, 2012
	GrossCarryingAmount		AccumulatedAmortization			NetCarryingAmount		GrossCarryingAmount		AccumulatedAmortization			NetCarryingAmount
Backlog and other	$	743,760	$	(456,604	)	$	287,156	$	743,760	$	(504,304	)	$	239,456
Customer relationships		534,030		(78,318	)		455,712		534,030		(99,454	)		434,576
Technology		2,700		(2,700	)		—		2,700		(2,700	)		—
Total	$	1,280,490	$	(537,622	)	$	742,868	$	1,280,490	$	(606,458	)	$	674,032

Intangible assets are amortized based on the expected pattern of consumption. We recorded amortization expense of $79.1 million and $68.8 million for the nine months ended September 30, 2011 and 2012, respectively.

The carrying amount and accumulated amortization of acquired intangible assets subject to amortization consist of the following (in thousands):


	As of December 31, 2012							As of March 31, 2013
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Backlog and other	$	743,760	$	(520,204	)	$	223,556	$	743,760	$	(533,914	)	$	209,846
Customer relationships		534,030		(106,499	)		427,531		534,030		(113,367	)		420,663
Technology		2,700		(2,700	)		—		2,700		(2,700	)		—

Total	$	1,280,490	$	(629,403	)	$	651,087	$	1,280,490	$	(649,981	)	$	630,509

Intangible assets are amortized based on the expected pattern of consumption. We recorded amortization expense of $22.9 million and $20.6 million for the three months ended March 31, 2012 and 2013, respectively.

Note 8 Long-Term Debt

The carrying values and fair values of our notes payable and long-term debt were as follows (in thousands):

	As of December 31, 2011					As of September 30, 2012
	As of December 31, 2012					As of March 31, 2013
	CarryingValue			Fair Value		CarryingValue			Fair Value
	Carrying Value			Fair Value		Carrying Value			Fair Value
Intelsat S.A.:
Intelsat Investments S.A.:
6.5% Senior Notes due November 2013	$	353,550		$	~~354~~367,~~434~~268	$	353,550		$	~~366~~362,~~808~~389
Unamortized discount on 6.5% Senior Notes		(5125,~~471~~312	)		—		(3218,~~257~~077	)		—
Total Intelsat S.A. obligations		302,079			354,434		321,293			366,808
Total Intelsat Investments S.A. obligations		328,238			367,268		335,473			362,389
Intelsat Luxembourg:
11.25% Senior Notes due February 2017		2,805,000			2,~~706~~966,~~825~~288		2,805,000			2,~~955~~983,~~909~~959
11.5% / 12.5% Senior PIK Election Notes due February 2017		2,502,986			2,~~340~~653,~~292~~165		2,502,986			2,~~656~~646,~~419~~907
Total Intelsat Luxembourg obligations		5,307,986			5,~~047~~619,~~117~~453		5,307,986			5,~~612~~630,~~328~~866
Intelsat Jackson:
11.25% Senior Notes due June 2016		1,048,220			1,103,251		603,220			630,063
8.5% Senior Notes due November 2019		500,000			561,250		500,000			561,900
Unamortized premium on 11.25% Senior Notes		4,286			—		2,132			—
Unamortized discount on 8.5% Senior Notes		(3,218	)		—		(3,132	)		—
9.5% Senior Notes due June 2016		701,913			733,499		—			—
7.25% Senior Notes due October 2020		2,200,000			2,392,500		2,200,000			2,422,860
8.5% Senior Notes due November 2019		500,000			527,500		500,000			563,750
Unamortized premium on 7.25% Senior Notes		19,745			—		19,269			—
Unamortized discount on 8.5% Senior Notes		(3,545	)		—		(3,303	)		—
7.25% Senior Notes due April 2019		1,500,000			1,614,450		1,500,000			1,636,950
7.25% Senior Notes due October 2020		1,000,000			1,011,300		2,200,000			2,360,060
7.5% Senior Notes due April 2021		1,150,000			1,267,875		1,150,000			1,280,870
Unamortized premium on 7.25% Senior Notes		—			—		20,213			—
6.625% Senior Notes due December 2022		640,000			660,800		640,000			679,232
7.25% Senior Notes due April 2019		1,500,000			1,530,000		1,500,000			1,614,450
Senior Unsecured Credit Facilities due February 2014		195,152			192,713		195,152			193,455
7.5% Senior Notes due April 2021		1,150,000			1,173,000		1,150,000			1,240,620
New Senior Unsecured Credit Facilities due February 2014		810,876			800,740		810,876			800,740
Senior Unsecured Credit Facilities due February 2014		195,152			182,468		195,152			190,039
Senior Secured Credit Facilities due April 2018		3,218,000			3,238,595		3,209,955			3,258,104
New Senior Unsecured Credit Facilities due February 2014		810,876			758,169		810,876			803,416
Unamortized discount on Senior Credit Facilities		(12,289	)		—		(11,762	)		—
Senior Secured Credit Facilities due April 2018		3,233,750			3,217,581		3,209,375			3,212,263
Total Intelsat Jackson obligations		10,218,266			10,728,923		10,210,358			10,834,111
Unamortized discount on Senior Credit Facilities		(14,349	)		—		(12,822	)		—
Senior Secured Revolving Credit Facility		—			—		150,000			150,000
Total Intelsat Jackson obligations		10,126,303			10,236,768		10,324,843			10,764,661
New Dawn:
Senior Secured Debt Facility due 2017		109,625			109,625		14,070			14,070
Mezzanine Secured Debt Facility due 2019		82,580			82,580		68,508			68,508
10.5% Note Payable to Convergence Partners		502			502		—			—
Total New Dawn obligations		192,707			192,707		82,578			82,578
Horizons Holdings:
Loan Payable to JSAT		7348,~~255~~836			7348,~~255~~836		4836,~~836~~627			4836,~~836~~627
Total Horizons Holdings obligations		73,255			73,255		48,836			48,836
Total Horizons Holdings obligation		48,836			48,836		36,627			36,627
Total Intelsat S.A. long-term debt		16,002,330		$	15,904,281		16,085,536		$	16,875,211
Total Intelsat Investments S.A. long-term debt		15,903,326		$	16,764,480		15,890,444		$	16,863,993
Less:
Current portion of long-term debt		~~164~~56,~~818~~598					~~209~~924,~~716~~409
Total long-term debt, excluding current portion	$	15,~~837~~846,~~512~~728				$	1514,~~875~~966,~~820~~035

The fair value for publicly traded instruments is determined using quoted market prices, and for non-publicly traded instruments, fair value is based upon composite pricing from a variety of sources, including market leading data providers, market makers, and leading brokerage firms. Substantially all of the inputs used to determine the fair value of our debt are classified as Level 1 inputs within the fair value hierarchy from FASB ASC 820, except our senior secured credit facilities, the inputs for which are classified as Level 2. The fair ~~values~~value of the ~~New Dawn obligations and the~~ Horizons Holdings ~~obligations~~obligation approximates ~~approximate~~its ~~their respective~~ book ~~values~~value.

1814

Senior Secured Credit Facilities

On January 12, 2011, Intelsat Jackson Holdings S.A. (“Intelsat Jackson”), a wholly-owned subsidiary of Intelsat ~~S.A.,~~ Investments, entered into a secured credit agreement (the “Intelsat Jackson Secured Credit Agreement”), which includes a $3.25 billion term loan facility maturing in April 2018 and a $500.0 million revolving credit facility with a five year maturity, and borrowed the full $3.25 billion under the term loan facility. The term loan facility requires regularly scheduled quarterly payments of principal equal to 0.25% of the original principal amount of the term loan beginning six months after January 12, 2011, with the remaining unpaid amount due and payable at maturity on April 2, 2018. Up to $350.0 million of the revolving credit facility is available for issuance of letters of credit. Additionally, up to $70.0 million of the revolving credit facility is available for swingline loans. Both the face amount of any outstanding letters of credit and any swingline loans reduce availability under the revolving credit facility on a dollar for dollar basis. Intelsat Jackson is required to pay a commitment fee for the unused commitments under the revolving credit facility, if any, at a rate per annum of 0.375%. As of ~~September~~March 3031, ~~2012~~2013, Intelsat Jackson had $~~150~~486.~~0 million outstanding under its revolving credit facility and $339.~~3 million (net of standby letters of credit) of availability remaining thereunder.

On October 3, 2012, Intelsat Jackson entered into an Amendment and Joinder Agreement (the “Jackson Credit Agreement Amendment”), which amended the Intelsat Jackson Secured Credit Agreement. As a result of the Jackson Credit Agreement Amendment, interest rates for borrowings under the term loan facility and the revolving credit facility ~~will~~are be (i) the London Inter-Bank Offered Rate (“LIBOR”) plus 3.25%, or (ii) the Above Bank Rate (“ABR”) plus 2.25%. ~~Following~~The ~~the~~ Jackson Credit Agreement Amendment, stipulates that the interest rate may decrease to LIBOR plus 3.00% or ABR plus 2.00% based on the corporate family rating of Intelsat Jackson from Moody’s Investors Service, Inc. LIBOR and the ABR, plus the applicable margins, ~~will be~~are determined as specified in the Intelsat Jackson Secured Credit Agreement, as amended by the Jackson Credit Agreement Amendment, and LIBOR will not be less than 1.25% per annum. In April 2013, our corporate family rating was upgraded by Moody’s, and as a result, the interest rate for borrowing under the term loan facility and revolving credit facility decreased to LIBOR plus 3.00% or ABR plus 2.00%.

The Intelsat Jackson Secured Credit Agreement includes two financial covenants. Intelsat Jackson must maintain a consolidated secured debt to consolidated EBITDA ratio equal to or less than 3.50 to 1.00 at the end of each fiscal quarter as well as a consolidated EBITDA to consolidated interest expense ratio equal to or greater than 1.75 to 1.00 at the end of each fiscal quarter, in each case as such financial measures are defined in the Intelsat Jackson Secured Credit Agreement. Intelsat Jackson was in compliance with these financial maintenance covenant ratios with a consolidated secured debt to consolidated EBITDA ratio of 1.5843 to 1.00 and a consolidated EBITDA to consolidated interest expense ratio of 2.8199 to 1.00 as of ~~September~~ March 3031, ~~2012~~2013.

~~New Dawn~~2013 ~~Credit~~Intelsat ~~Facilities~~Luxembourg Notes Offerings and Redemptions

On ~~December~~April 5, ~~2008,~~2013 ~~New~~Intelsat ~~Dawn~~Luxembourg ~~entered~~completed ~~into~~an aoffering of $~~215~~3.05 ~~million~~billion ~~secured financing~~aggregate ~~arrangement~~principal ~~with~~amount anof ~~eight-year~~Senior Notes, ~~maturity~~consisting ~~that consisted~~ of ~~senior and mezzanine term loan facilities~~$500.0 ~~The~~million ~~credit~~aggregate ~~facilities~~principal ~~were~~amount ~~non-recourse~~of to6 3/4% ~~New~~Senior ~~Dawn’s~~Notes ~~shareholders,~~due ~~including~~2018 us(the ~~and~~“2018 ~~our~~Luxembourg ~~wholly-owned subsidiaries~~Notes”), ~~beyond the shareholders’ scheduled capital contributions. The senior facility provided for a commitment of up to~~ $~~125~~2.0 ~~million.~~billion ~~The~~aggregate ~~interest~~principal ~~rate~~amount onof ~~term~~7 3/4% ~~loans~~Senior ~~under~~Notes ~~the~~due ~~senior facility was~~ 2021(the ~~aggregate~~“2021 ofLuxembourg ~~LIBOR~~Notes”) ~~plus an applicable margin between 3.0%~~ and 4$1.0% ~~and~~billion ~~certain~~aggregate ~~costs,~~principal ifamount ~~incurred.~~of 8 1/8% ~~The~~Senior ~~mezzanine~~Notes ~~facility~~due ~~provided~~2023 ~~for~~(the a“2023 ~~commitment~~Luxembourg ofNotes” upand tocollectively ~~$90.0~~with ~~million.~~the ~~The~~2018 ~~interest~~Luxembourg ~~rate~~Notes onand ~~term loans under~~ the ~~mezzanine~~2021 ~~facility~~Luxembourg ~~was~~Notes, the ~~aggregate~~“New ofLuxembourg ~~LIBOR~~Notes”). ~~plus~~The annet ~~applicable~~proceeds ~~margin between 5.3% and 6.3%~~from ~~and~~this ~~certain~~offering ~~costs,~~were ifused ~~incurred.~~by ~~New~~Intelsat ~~Dawn~~Luxembourg ~~was~~in ~~required~~April 2013 to ~~pay~~redeem aall ~~commitment~~$2.5 ~~fee~~billion ataggregate aprincipal ~~rate~~amount ~~per~~of ~~annum~~Intelsat ofLuxembourg’s ~~between~~outstanding 11 31/~~8% and~~2/12 1/2% onSenior ~~any~~PIK ~~unused~~Election ~~commitments~~Notes ~~under~~and ~~the credit facilities~~$754.8 ~~New~~million ~~Dawn had~~ aggregate ~~outstanding~~principal ~~borrowings~~amount of ~~$82.6~~the ~~million~~2017 ~~under~~Senior ~~its credit facilities as of September 30, 2012~~Notes.

~~Subsequent~~On ~~to the~~ April 23, ~~2011~~2013, ~~launch of the~~ Intelsat ~~New~~Luxembourg ~~Dawn~~issued ~~satellite,~~a ~~which~~notice ~~experienced~~of anredemption ~~anomaly~~pursuant ~~resulting in the failure~~ to ~~deploy~~ the indenture ~~C-band~~governing ~~antenna reflector, the New Dawn joint venture filed a partial loss claim with~~ its ~~insurer.~~2017 ~~The~~Senior ~~claim~~Notes ~~was~~that ~~finalized~~it ~~and~~intends ~~agreed~~ to ~~during~~redeem ~~2011,~~$366.4 ~~resulting~~million inaggregate ~~total~~principal ~~insurance~~amount ~~recoveries~~ of ~~$118.0~~the ~~million.~~2017 AsSenior ofNotes ~~December~~on May 3123, ~~2011, $94~~2013.~~1 million~~ ~~was~~The ~~received~~redemption ~~from~~of the ~~insurers~~2017 ~~and~~Senior ~~held~~Notes inwill abe ~~specific~~funded by insurance proceeds ~~account reflected as restricted cash in the accompanying condensed consolidated balance sheets. The remaining proceeds of $23.9 million were~~ received from ~~the insurers~~ inour ~~the~~total first quarter of 2012. In July 2012, a payment of $112.2 million was made out of restricted cash to prepay a portion of New Dawn’s outstanding borrowings under its credit facilities. In connection with this prepayment, we recognized a loss onclaim ~~early~~for ~~extinguishment of debt of $3.1 million during~~ the ~~third~~IS-27 ~~quarter~~satellite oflaunch ~~2012,~~failure ~~associated~~(see ~~with~~Note ~~the~~5(b)—Satellites ~~write-off~~and ofOther ~~unamortized~~Property ~~debt~~and ~~issuance~~Equipment—Satellite ~~costs~~Launches).

OnIn ~~October 5,~~connection ~~2012, in conjunction~~ with the ~~New~~pending ~~Dawn~~and ~~Equity~~completed ~~Purchase~~recent ~~(see~~redemptions ~~Note~~of ~~6(b)—Investments—New Dawn) we repaid~~ the ~~remaining~~Intelsat ~~$82.6~~Luxembourg ~~million~~notes, ~~outstanding~~we ~~under~~expect ~~New~~to ~~Dawn’s~~recognize ~~credit facilities~~a ~~and~~loss ~~designated~~on ~~the~~early ~~New~~extinguishment ~~Dawn entities as restricted subsidiaries for purposes~~ of ~~applicable~~debt ~~indentures and credit agreements~~ of ~~ours~~approximately ~~and our subsidiaries~~$232.0 Inmillion ~~connection~~in ~~with~~the second ~~this~~quarter ~~repayment~~of 2013, weconsisting ~~expect~~of tothe ~~recognize~~difference abetween ~~loss~~the oncarrying ~~early extinguishment~~value of ~~debt~~the ofaggregate ~~$2.7~~debt ~~million~~ultimately inredeemed and the ~~fourth~~total ~~quarter~~cash ofamount ~~2012,~~paid ~~associated~~(including ~~with~~related ~~the~~fees), and a write-off of unamortized debt issuance costs.

192013 Intelsat Investments Notes Pending Redemption

On April 12, 2012, we obtained agreements from affiliates of Goldman, Sachs & Co. and Morgan Stanley to provide unsecured term loan commitments sufficient to refinance in full the Intelsat Investments 6¹/₂% Senior Notes due 2013 (the “Intelsat Investments Notes”) on or immediately prior to their maturity date, in the event that Intelsat Investments did not otherwise refinance or retire the Intelsat Investments Notes. These term loans would have had a maturity of two years from funding, and the funding thereof was subject to various terms and conditions. Prior to the completion of the IPO, based on our ability and intent to refinance the Intelsat Investments Notes, these notes were reflected in long-term debt, net of current portion, on our condensed consolidated balance sheet at December 31, 2012 and March 31, 2013.

On April 23, 2013, upon completion of the IPO, Intelsat Investments issued a notice of redemption pursuant to the indenture governing the Intelsat Investments Notes that it intends to redeem all of the outstanding $353.6 million aggregate principal amount of the Intelsat Investments Notes on May 23, 2013. The redemption of the Intelsat Investments Notes will be funded by the proceeds of the IPO. In connection with the redemption of the Intelsat Investments Notes, we expect to recognize a loss on early extinguishment of debt of approximately $24.2 million in the second quarter of 2013, consisting of the difference between the carrying value of the debt ultimately redeemed and the total cash paid (including related fees), and a write-off of unamortized debt discount and debt issuance costs. Additionally, on April 23, 2013, in conjunction with the pending redemption of the Intelsat Investments Notes, the agreements to provide unsecured term loan commitments discussed above have been terminated. We expect to record a charge of $7.6 million related to this termination in the second quarter of 2013.

2013 Intelsat ~~Luxembourg~~Jackson New Senior ~~PIK~~Unsecured ~~Election~~Credit ~~Notes~~Facility ~~due~~Prepayment ~~2017~~

InOn ~~August~~April 23, ~~2012~~2013, weupon ~~made~~completion anof ~~election~~the toIPO, ~~pay~~Intelsat ~~interest~~Jackson onprepaid ~~the~~$138.2 ~~Intelsat~~million ~~Luxembourg~~of indebtedness outstanding under its Senior Unsecured ~~PIK~~Credit ~~Election~~Agreement, ~~Notes~~dated July 1, 2008, consisting of a senior unsecured term loan facility due ~~2017~~February ~~entirely~~2014 in(the ~~cash~~“New ~~for~~Senior Unsecured Credit Facility”). The partial prepayment of the New Senior Unsecured Credit Facility was ~~interest~~funded ~~period~~by ~~August 15~~the proceeds of the IPO. Therefore, ~~2012~~in ~~through~~accordance ~~February 15~~with FASB ASC Topic 470, ~~2013~~Debt, the $138.2 ~~For~~million of the ~~interest~~New ~~periods~~Senior ~~beginning~~Unsecured ~~February~~Credit Facility is included in long-term debt on our condensed consolidated balance sheet at March 1631, 2013. In connection with the partial prepayment of the New Senior Unsecured Credit Facility, we ~~are~~expect ~~required~~ to ~~make~~recognize ~~all~~a ~~interest~~loss ~~payments~~on early extinguishment of debt of $0.2 million in ~~cash~~the second quarter of 2013, consisting of a write-off of unamortized debt issuance costs.

2012 Intelsat Jackson Notes Offerings, Tender Offers and Redemptions

On April 26, 2012, Intelsat Jackson completed an offering of $1.2 billion aggregate principal amount of its 7 1/4% Senior Notes due 2020 (the “2020 Jackson Notes”). Intelsat Jackson had previously issued $1.0 billion aggregate principal amount of the 2020 Jackson Notes on September 30, 2010. The net proceeds from the April 2012 offering were used by Intelsat Jackson to repurchase or redeem all of the $49701.59 million aggregate principal amount of Intelsat Jackson’s outstanding 9 1/2% Senior Notes due 2016 ~~(the “2016 Jackson 9 1/2% Notes”)~~ and $10445.10 million aggregate principal amount of Intelsat Jackson’s 11 1/4% Senior Notes due 2016 (the “2016 Jackson 11 1/4% Notes”). inIn ~~tender~~connection ~~offers~~with ~~launched~~these onrepurchases ~~April 12~~and redemptions, ~~2012~~we recognized ~~and~~a ~~completed~~loss on ~~May 10,~~early ~~2012~~extinguishment of debt of $43.4 Onmillion ~~June 15,~~during the second quarter of 2012, ~~Intelsat~~ consisting ~~Jackson~~of ~~redeemed~~the difference between the ~~remaining~~carrying ~~$652.4~~value ~~million~~of the aggregate ~~principal~~debt ~~amount~~repurchased ~~outstanding~~or ofredeemed and the ~~2016~~total ~~Jackson~~cash ~~9 1/2%~~amount ~~Notes~~paid (including ~~and~~related anfees), ~~additional~~and ~~$434.9~~a ~~million~~write-off ~~aggregate~~of ~~principal~~unamortized ~~amount~~debt ofpremium ~~the~~and ~~2016~~debt ~~Jackson 11 1/4%~~issuance ~~Notes~~costs.

On October 3, 2012, Intelsat Jackson completed an offering of $640.0 million aggregate principal amount of 6 5/8% Senior Notes due 2022 (the “2022 Intelsat Jackson Notes”). The net proceeds from the October 2012 offering were used by Intelsat Jackson to repurchase or redeem all of its remaining outstanding $603.2 million principal amount of 2016 Jackson 11 1/4% Notes. In connection with these ~~tender~~repurchases ~~offers~~ and redemptions, we recognized a loss on early extinguishment of debt of $4324.43 million ~~during~~in the ~~second~~fourth quarter of 2012, consisting of the difference between the carrying value of the ~~aggregate~~ debt repurchased or redeemed and the total cash amount paid (including related fees), and a write-off of unamortized debt premium ~~and debt issuance costs~~.

On October 3, 2012, Intelsat Jackson completed an offering of $640.0 million aggregate principal amount of 6 5/8% Senior Notes due 2022. The net proceeds from the October 2012 offering were used by Intelsat Jackson to repurchase or redeem all of its outstanding $603.2 million principal amount of the 2016 Jackson 11 1/4% Notes. In connection with the tender offers and redemptions, we expect to recognize a loss on early extinguishment of debt of $23.6 million in the fourth quarter of 2012, consisting of the difference between the carrying value of the debt ultimately repurchased or redeemed and the total cash amount paid (including related fees), and a write-off of unamortized debt premium.

Financing Commitment for Intelsat S.A. Senior Notes due 2013

On April 12, 2012, Intelsat S.A. obtained agreements from affiliates of Goldman, Sachs & Co. and Morgan Stanley to provide unsecured term loan commitments sufficient to refinance in full its 6 1/2% Senior Notes due 2013 (the “Intelsat S.A. Notes”) on or immediately prior to their maturity date, in the event that Intelsat S.A. does not otherwise refinance or retire the Intelsat S.A. Notes. These term loans will have a maturity of two years from funding, and the funding thereof is subject to various terms and conditions.

2011 Reorganization and 2011 Secured Loan Refinancing

On January 12, 2011, certain of our subsidiaries completed a series of internal transactions and related steps that reorganized the ownership of our assets among our subsidiaries and effectively combined the legacy businesses of Intelsat Subsidiary Holding Company S.A. (“Intelsat Sub Holdco”) and Intelsat Corporation (“Intelsat Corp”) in order to simplify our operations and enhance our ability to transact business in an efficient manner (the “2011 Reorganization”). Also on January 12, 2011, Intelsat Jackson entered into the Intelsat Jackson Secured Credit Agreement as discussed above, and borrowed $3.25 billion under the term loan facility. Part of the net proceeds of the term loan, amounting to $2.4 billion, were contributed or loaned to Intelsat Corp, which used such funds to repay its existing indebtedness under Intelsat Corp’s senior secured facilities and to redeem Intelsat Corp’s 9 1/4% Senior Notes due 2016. Separately, Intelsat Corp also redeemed all of its 9 1/4% Senior Notes due 2014 and its 6 7/8% Senior Secured Debentures due 2028. In addition, Intelsat Jackson contributed approximately $330.2 million of the net proceeds of the new term loan to Intelsat Sub Holdco to repay all existing indebtedness under Intelsat Sub Holdco’s senior secured credit facilities. The entry into the Intelsat Jackson Secured Credit Agreement, the repayment of the existing indebtedness of Intelsat Corp and the repayment of all the secured existing indebtedness of Intelsat Sub Holdco are referred to collectively as the “2011 Secured Loan Refinancing”. In connection with the 2011 Secured Loan Refinancing, certain of our interest rate swaps were assigned by Intelsat Sub Holdco and Intelsat Corp to Intelsat Jackson, and are now secured by a first priority security interest in the collateral that also secures obligations under the Intelsat Jackson Secured Credit Agreement. Additionally, in connection with the 2011 Secured Loan Refinancing, we recognized a loss on early extinguishment of debt of $87.9 million during the first quarter of 2011, which consists of the difference between the carrying value of the Intelsat Corp and Intelsat Sub Holdco debt repaid and the total cash amount paid (including related fees), and a write-off of unamortized debt discounts and debt issuance costs.

2011 Notes Redemptions

On March 18, 2011, Intelsat S.A. redeemed all of the $485.8 million aggregate principal amount outstanding of its 7 5/8% Senior Notes due 2012. Additionally, on March 18, 2011, Intelsat Sub Holdco redeemed $225.0 million aggregate principal amount outstanding of its 8 1/2% Senior Notes due 2013 (the “2013 Sub Holdco Notes”). In connection with these redemptions, we recognized a loss on early extinguishment of $80.3 million during the first quarter of 2011, which consists of the difference between the carrying

value of the Intelsat S.A. and Intelsat Sub Holdco debt repaid and the total cash paid (including related fees), and a write-off of unamortized debt discounts and debt issuance costs. On April 8, 2011, Intermediate Holdco redeemed all of the $4.5 million aggregate principal amount outstanding of its 9 1/4% Senior Discount Notes due 2015.

2011 Intelsat Jackson Notes Offering, Tender Offers and Redemptions

On April 5, 2011, Intelsat Jackson completed an offering of $2.65 billion aggregate principal amount of senior notes (the “2011 Intelsat Jackson Notes Offering”), consisting of $1.5 billion aggregate principal amount of 7 1/4% Senior Notes due 2019 (the “7 1/4% 2019 Jackson Notes”) and $1.15 billion aggregate principal amount of 7 1/2% Senior Notes due 2021 (the “2021 Jackson Notes” and collectively, the “New Jackson Notes”). The net proceeds from the sale of the New Jackson Notes were primarily used to repurchase all of the following notes in tender offers launched on March 21, 2011 and completed on April 15, 2011, and to subsequently redeem the remaining outstanding amounts of such notes on May 5, 2011:

• $481.0 million aggregate principal amount outstanding of the Intermediate Holdco 9 1/2% Senior Discount Notes due 2015;

• $625.3 million aggregate principal amount outstanding of the 2013 Sub Holdco Notes, after giving effect to the March 2011 partial redemption of the 2013 Sub Holdco Notes, as discussed above;

• $681.0 million aggregate principal amount outstanding of the Intelsat Sub Holdco 8 7/8% Senior Notes due 2015;

• $400.0 million aggregate principal amount outstanding of the 2015 Intelsat Sub Holdco Notes, Series B;

• $55.0 million aggregate principal amount outstanding of the Intelsat Jackson 9 1/4% Senior Notes due 2016; and

• $284.6 million aggregate principal amount outstanding of the Intelsat Jackson 11 1/2% Senior Notes due 2016.

As a result, all of the above series of notes were paid off in full and no third party debt remained outstanding at Intermediate Holdco and Intelsat Sub Holdco as of May 5, 2011. Additionally, in connection with the above transactions, we recognized a loss on early extinguishment of debt of $158.0 million during the three months ended June 30, 2011, which consists of the difference between the carrying value of the debt repaid or redeemed and the total cash amount paid (including related fees), and a write-off of unamortized debt discounts and debt issuance costs.

Note 9 Derivative Instruments and Hedging Activities

Interest Rate Swaps

We are subject to interest rate risk primarily associated with our variable-rate borrowings. Interest rate risk is the risk that changes in interest rates could adversely affect earnings and cash flows. Specific interest rate risk includes: the risk of increasing interest rates on short-term debt; the risk of increasing interest rates for planned new fixed long-term financings; and the risk of increasing interest rates for planned refinancing using long-term fixed-rate debt. We have entered into interest rate swap agreements to reduce the impact of interest rate movements on future interest expense by converting substantially all of our floating-rate debt to a fixed rate.

InAs ~~connection~~of ~~with~~March 31, ~~the~~2013, ~~2011~~we ~~Secured~~held ~~Loan~~interest ~~Refinancing,~~rate ~~certain~~swaps with an aggregate notional amount of ~~our~~$1.6 ~~interest~~billion ~~rate~~which mature in January 2016. These swaps were ~~assigned~~entered byinto, ~~Intelsat~~as ~~Sub~~further ~~Holdco~~described below, to economically hedge the variability in cash flow on a portion of the floating-rate term loans under our senior secured and unsecured credit facilities, but have not been designated as ~~Intelsat~~hedges ~~Corp~~for toaccounting ~~Intelsat~~purposes. ~~Jackson~~On a quarterly basis, ~~and~~we ~~are~~receive ~~now~~a ~~secured~~floating byrate of interest equal to the three-month LIBOR and pay a ~~first~~fixed ~~priority~~rate ~~security~~of interest. inOn the ~~collateral~~interest ~~that~~rate ~~also~~reset ~~secures~~date ~~obligations~~of ~~under~~March 14, 2013, the ~~Intelsat~~interest ~~Jackson~~rate ~~Secured~~which ~~Credit~~the counterparties ~~Agreement~~utilized ~~(see~~to ~~Note~~compute ~~8—Long~~interest ~~Term~~due ~~Debt)~~to us was determined to be 0.28%. On March 14, 2013, our interest rate swap with an aggregate notional principal amount of $731.4 million expired.

On December 22, 2011, we amended our interest rate swap agreements with an aggregate notional amount of $448.5 million between Intelsat Jackson and respective counterparties to the interest rate swaps. These amendments resulted in a change to the maturity date, the applicable fixed rate of interest that we pay and certain termination events.

During the first quarter of 2012, we amended our interest rate swap agreements with an aggregate notional amount of $1.2 billion between Intelsat Jackson and respective counterparties to the interest rate swaps. These amendments resulted in a change to the maturity date, the applicable fixed rate of interest that we pay and certain termination events.

As of September 30, 2012, we held interest rate swaps with aggregate notional amounts of $731.4 million and $1.6 billion which mature in March 2013 and January 2016, respectively. These swaps were entered into, as further described below, to economically hedge the variability in cash flow on a portion of the floating-rate term loans under our senior secured and unsecured credit facilities, but have not been designated as hedges for accounting purposes. On a quarterly basis, we receive a floating rate of interest equal to the three-month LIBOR and pay a fixed rate of interest. On the interest rate reset date of September 14, 2012, the interest rate which the counterparties utilized to compute interest due to us was determined to be 0.39%.

Additionally, as of September 30, 2012, New Dawn had a floating-to-fixed interest rate swap to hedge future interest payments on its senior and mezzanine term loan facilities. The interest rate swap had an effective date of July 7, 2011, maturing on July 7, 2014,

with a notional amount of $65.5 million for the mezzanine loan and varying notional amounts for the senior loan. We received an interest rate of three-month LIBOR and paid a fixed coupon of 3.72%. On the interest rate reset date of July 5, 2012, the interest rate which the counterparties utilized to compute interest due to us was 0.46%. This swap was undesignated as a hedge for accounting purposes. In July 2012, in conjunction with the prepayment of $112.2 million of New Dawn debt made out of restricted cash, we settled $69.0 million notional amount under the New Dawn interest rate swap associated with the senior term loan facilities for $4.1 million (see Note 8—Long-Term Debt—New Dawn Credit Facilities). On October 5, 2012, in conjunction with the repayment of the remaining New Dawn debt related to the New Dawn Equity Purchase (see Note 6(b)—Investments—New Dawn), we made a $5.3 million termination payment to the respective counterparties on New Dawn’s interest rate swap agreement, effectively settling the remaining notional amount.

The counterparties to our interest rate swap agreements are highly rated financial institutions. In the unlikely event that the counterparties fail to meet the terms of the interest rate swaps, our exposure is limited to the interest rate differential on the notional amount at each quarterly settlement period over the life of the agreement. We do not anticipate non-performance by the counterparties.

All of our interest rate swaps were undesignated as of ~~September~~March 3031, ~~2012~~2013. The swaps are marked-to-market quarterly with any change in fair value recorded within losses on derivative financial instruments in our ~~condensed~~ consolidated statements of operations. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements of our derivatives. The fair value measurement of derivatives could result in either a net asset or a net liability position for us. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting arrangements as applicable and necessary. When the swaps are in a net liability position for us, the credit valuation adjustments are calculated by determining the total expected exposure of the derivatives, incorporating the current and potential future exposures and then applying an applicable credit spread to the exposure. The total ~~expected exposure of a derivative is derived using market-observable~~ inputs, such as yield curves and volatilities. The inputs utilized for our own credit spread are based on implied spreads from traded levels of our debt. Accordingly, as of September 30, 2012, we recorded a non-cash credit valuation adjustment of approximately $7.8 million as a reduction to our liability.

~~Put~~16 ~~Option Embedded Derivative Instrument~~

On the date of issuance of Intelsat Sub Holdco’s 8 7/8% Senior Notes due 2015 (the “2015 Intelsat Sub Holdco Notes, Series B”), we determined that these debt instruments contained a contingent put option clause within the host contract, which afforded the holders of the notes the option to require the issuer to repurchase such notes at 101% of their principal amount in the event of a change of control, as defined in the indenture governing the notes. In our evaluation of the financing arrangement, we concluded that the contingent put option required bifurcation in accordance with current accounting standards under FASB ASC Topic 815, Derivatives and Hedging. We therefore bifurcated the contingent put option and carried it as a derivative liability at fair value. We estimated the fair value of the derivative on the date of inception using a standard valuation technique, which places the most significant emphasis upon the estimated date and probability of a change of control and incorporated the issue price, maturity date and change of control put price. We subsequently revalued the derivative at the end of each reporting period, recognizing any change in fair value through earnings. The fair value of the embedded derivative was calculated as $4.3 million at December 31, 2010. As of May 5, 2011, we redeemed the entire $400 million aggregate principal amount outstanding of the 2015 Intelsat Sub Holdco Notes, Series B. Therefore, we derecognized the embedded derivative liability and the value at December 31, 2011 was $0. We recorded a gain of $4.3 million included in losses on derivative financial instruments in our condensed consolidated statement of operations during the nine months ended September 30, 2011 to adjust the fair market value of the put option embedded derivative to $0.

expected exposure of a derivative is derived using market-observable inputs, such as yield curves and volatilities. The inputs utilized for our own credit spread are based on implied spreads from traded levels of our debt. Accordingly, as of March 31, 2013 we recorded a non-cash credit valuation adjustment of approximately $4.4 million as a reduction to our liability.

The following table sets forth the fair value of our derivatives by category (in thousands):

		Liability Derivatives
Derivatives not designated as hedging instruments	Balance Sheet Location	December 31,~~2011~~2012		~~September~~March 3031,~~2012~~2013
Undesignated interest rate swaps	Other current liabilities	$	147,~~828~~246	$	131,~~340~~366
Undesignated interest rate swaps	Other long-term liabilities		8067,~~690~~318		7662,~~485~~411
Total derivatives		$	9574,~~518~~564	$	8963,~~825~~777

The following table sets forth the effect of the derivative instruments on the condensed consolidated statements of operations (in thousands):

Derivatives not designated as hedginginstruments	Presentation in Statements ofOperations	Three MonthsEndedSeptember 30,2011		Three MonthsEndedSeptember 30,2012		Nine MonthsEndedSeptember 30,2011			Nine MonthsEndedSeptember 30,2012
Derivatives not designated ashedging instruments	Presentation in Statements ofOperations	Three MonthsEndedMarch 31,2012		Three MonthsEndedMarch 31,2013
Undesignated interest rate swaps	Losses on derivative financial instruments	$	59,~~356~~858	$	121,~~037~~865	$	~~28,458~~		$	~~37,651~~
Put option embedded derivative	Losses on derivative financial instruments		—		—		(4,295	)		—
Total losses on derivative financial instruments		$	9,858	$	1,865
Total losses on derivative financial instruments		$	5,356	$	12,037	$	24,163		$	37,651

Note 10 Income Taxes

The majority of our operations are located in taxable jurisdictions, including Luxembourg, the United States and the United Kingdom. Our Luxembourg companies that file tax returns as a consolidated group generated a loss for the ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013. Due to our cumulative losses in recent years, and the inherent uncertainty associated with the realization of future taxable income in the foreseeable future, we recorded a full valuation allowance against the net operating losses generated in Luxembourg. The difference between tax expense (benefit) reported in the condensed consolidated statements of operations and tax computed at statutory rates is attributable to the valuation allowance on losses generated in Luxembourg, the provision for foreign taxes, which were principally in the United States and the United Kingdom, as well as withholding taxes on revenue earned in many of the foreign markets in which we operate.

As of December 31, ~~2011~~2012 and ~~September~~March 3031, ~~2012~~2013, our gross unrecognized tax benefits were $6467.80 million and $68.63 million, respectively (including interest and penalties), of which $4648.64 million and $49.64 million, respectively, if recognized, would affect our effective tax rate. As of December 31, ~~2011~~2012 and ~~September~~March 3031, ~~2012~~2013, we had recorded reserves for interest and penalties in the amount of $811.6 million and $1012.95 million, respectively. We continue to recognize interest and, to the extent applicable, penalties with respect to the unrecognized tax benefits as income tax expense. Since December 31, ~~2011~~2012, the change in the balance of unrecognized tax benefits consisted of an increase of $0.9 million related to prior period tax positions and an increase of $20.95 million related to current tax positions.

We operate in various taxable jurisdictions throughout the world and our tax returns are subject to audit and review from time to time. We consider Luxembourg, the United States and the United Kingdom to be our significant tax jurisdictions. Our Luxembourg, U.S. and U.K. subsidiaries are subject to income tax examination for periods after December 31, 2003. Within the next twelve months, we believe that there are no jurisdictions in which the outcome of unresolved tax issues or claims is likely to be material to our results of operations, financial position or cash flows.

On March 7, 2011, Intelsat Holding Corporation, the former parent of Intelsat Corporation (“Intelsat Corp”), was notified by the Internal Revenue Service of its intent to initiate an audit for the tax years ending December 31, 2008 and 2009. We do not currently expect the result of this audit to have a material impact on our provision for income taxes.

InOn ~~May~~March 7, ~~2012~~2013, ~~India~~Intelsat ~~enacted~~USA ~~new~~Sales ~~legislation~~Corporation ~~that~~(since ~~defines~~January ~~payments~~2011, ~~for~~Intelsat ~~satellite~~USA ~~services~~Sales LLC, asa ~~“royalties~~disregarded ~~for~~subsidiary ~~the~~of ~~use~~Intelsat ofCorp) ~~a process”.~~was ~~Due~~notified toby the ~~law’s~~U. ~~retroactive~~S. ~~application,~~Internal ~~and~~Revenue ~~because~~Service itof isits ~~contrary~~intent to ~~recent~~initiate ~~Delhi~~an ~~High~~audit ~~Court~~for ~~rulings~~the astax ~~well~~year asending ~~model~~on ~~commentaries issued by international tax bodies~~December 31, we2010. ~~are~~Intelsat ~~likely~~USA toSales ~~appeal~~LLC ~~any~~wholly ~~assessments~~owns weIntelsat ~~may~~General ~~receive as a~~Corporation, ~~result~~which ofprovides ~~the~~services ~~new~~to ~~law,~~U.S. government and weother ~~believe~~select ~~that~~military itorganizations isand ~~more~~their ~~likely~~contractors, ~~than~~as ~~not~~well ~~that~~as weother ~~would~~commercial becustomers. ~~successful~~At ~~with~~this ~~such~~point ~~appeals.~~in ~~As a result~~time, weit dois ~~not~~too ~~expect~~early ~~this new law~~ to ~~have~~assess athe ~~material~~probability ~~impact~~of onany ~~our~~adjustments ~~provision~~resulting ~~for~~from ~~income taxes~~this audit.

~~Prior~~17 to August 20, 2004, Intelsat Corp, joined with The DIRECTV Group and General Motors Corporation in filing a consolidated U.S. federal income tax return. In April 2004, Intelsat Corp entered into a tax separation agreement with The DIRECTV Group that superseded four earlier tax-related agreements among Intelsat Corp and its subsidiaries, The DIRECTV Group and certain of its affiliates. Pursuant to the tax separation agreement, The DIRECTV Group agreed to indemnify Intelsat Corp for all federal and consolidated state and local income taxes a taxing authority may attempt to collect from Intelsat Corp regarding any liability for the federal or consolidated state or local income taxes of General Motors Corporation and The DIRECTV Group, except those income

Prior to August 20, 2004, Intelsat Corp, joined with The DIRECTV Group and General Motors Corporation in filing a consolidated U.S. federal income tax return. In April 2004, Intelsat Corp entered into a tax separation agreement with The DIRECTV Group that superseded four earlier tax-related agreements among Intelsat Corp and its subsidiaries, The DIRECTV Group and certain of its affiliates. Pursuant to the tax separation agreement, The DIRECTV Group agreed to indemnify Intelsat Corp for all federal and consolidated state and local income taxes a taxing authority may attempt to collect from Intelsat Corp regarding any liability for the federal or consolidated state or local income taxes of General Motors Corporation and The DIRECTV Group, except those income taxes Intelsat Corp is required to pay under the tax separation agreement. In addition, The DIRECTV Group agreed to indemnify Intelsat Corp for any taxes (other than those taxes described in the preceding sentence) related to any periods or portions of such periods ending on, or prior to, the day of the closing of the PanAmSat Corporation recapitalization, which occurred on August 20, 2004, in amounts equal to 80% of the first $75.0 million of such other taxes and 100% of any other taxes in excess of the first $75.0 million. As a result, Intelsat Corp’s tax exposure after indemnification related to these periods is capped at $15.0 million, of which $4.0 million has been paid to date. The tax separation agreement with The DIRECTV Group is effective from August 20, 2004 until the expiration of the statute of limitations with respect to all taxes to which the tax separation agreement relates. As of December 31, ~~2011~~2012 and ~~September~~March 3031, ~~2012~~2013, we had a tax indemnification receivable of $2.3 million.

Note 11 Commitments and Contingencies

(a) Litigation and Claims

We are subject to litigation in the ordinary course of business. Management does not believe that the resolution of any pending proceedings would have a material adverse effect on our financial position or results of operations.

(b) LCO Protection

Most of the customer service commitments entered into prior to our privatization were transferred to us pursuant to novation agreements. Certain of these agreements contain provisions, including provisions for lifeline connectivity obligation (“LCO”) protection, which constrain our ability to price services in some circumstances. Our LCO contracts require us to provide customers with the right to renew their service commitments covered by LCO contracts at prices no higher than the prices charged for those services on the privatization date. Under some circumstances, we may also be required by an LCO contract to reduce the price for a service commitment covered by the contract. LCO protection may continue until July 18, 2013. As of ~~September~~March 3031, ~~2012~~2013, we had approximately $7153.89 million of backlog covered by LCO contracts and to date we have not been required to reduce prices for our LCO-protected ~~service~~ service commitments. There can be no assurance that we will not be required to reduce prices in the future under our LCO commitments.

Our indirect parent, Intelsat Global Holdings, entered into an agreement pursuant to which an independent third party made an investment commitment to us. This commitment was subject to certain terms and conditions and had a fixed duration. We previously loaned $10.0 million to Intelsat Global Holdings in connection with a fee paid to the third party under this agreement. The commitment expired on October 1, 2012 and the investment was not consummated. We recorded a $20.0 million pretax charge plus associated costs and expenses of $1.0 million in the third quarter of 2012 within other income (expense), net in the accompanying consolidated statement of operations. The charge consisted of the $10.0 million previously loaned to Intelsat Global Holdings, an additional $10.0 million that was loaned to Intelsat Global Holdings in the third quarter of 2012 and paid to the third party upon expiration of the commitment, and $1.0 million for related costs and expenses, the amount of which was loaned to Intelsat Global Holdings and paid to the third party in October 2012.

Note 12 Business and Geographic Segment Information

We operate in a single industry segment in which we provide satellite services to our communications customers around the world. Revenue by region is based on the locations of customers to which services are billed. Our satellites are in geosynchronous orbit, and consequently are not attributable to any geographic location. Of our remaining assets, substantially all are located in the United States.

The geographic distribution of our revenue based upon billing region of the customer was as follows:

	Three MonthsEndedSeptember 30,2011			Three MonthsEndedSeptember 30,2012
	Three MonthsEndedMarch 31,2012		Three MonthsEndedMarch 31,2013
North America	48%	48	46%		47	%
Europe	16%	16	16%		16	%
Africa and Middle East	16%	16	15%		15	%
Latin America and Caribbean	14%	14	16%		15	%
Asia Pacific	6%	6	7%		7	%

Approximately 5% and 4% of our revenue was derived from our largest customer during ~~each of~~ the three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2012~~2013, respectively. Our ten largest customers accounted for approximately ~~27% and~~ 26% of our revenue for each of the three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2012, respectively~~2013.

	Nine MonthsEndedSeptember 30,2011			Nine MonthsEndedSeptember 30,2012
North America		47	%		47	%
Europe		16	%		16	%
Africa and Middle East		17	%		16	%
Latin America and Caribbean		14	%		15	%
Asia Pacific		6	%		6	%

Our revenues were derived from the following services, with Off-Network and Other Revenues shown separately from On-Network Revenues (in thousands, except percentages):

	Three MonthsEndedSeptember 30,2011				Three MonthsEndedSeptember 30,2012				Nine Months EndedSeptember 30, 2011				Nine Months EndedSeptember 30, 2012
	Three Months EndedMarch 31, 2012				Three Months EndedMarch 31, 2013
On-Network Revenues
Transponder services	$	~~480~~479,~~159~~959	7475	%	$	~~487~~501,~~035~~807	7477	%	$	~~1,422,163~~	74	%	$	~~1,447,797~~	75	%
Managed services		7165,~~134~~972	1110	%		6972,~~751~~371	11	%		~~212,432~~	11	%		~~202,928~~	11	%
Channel		2623,~~358~~820	4	%		2219,~~744~~165	43	%		~~80,377~~	4	%		~~70,025~~	4	%
Total on-network revenues		~~577~~569,~~651~~751	8988	%		~~579~~593,~~530~~343	8991	%		~~1,714,972~~	89	%		~~1,720,750~~	89	%
Off-Network and Other Revenues
Transponder, MSS and other off-network services		6264,~~794~~434	10	%		6048,~~844~~977	97	%		~~178,942~~	9	%		~~180,665~~	9	%
Satellite-related services		129,~~436~~984	2	%		1412,~~572~~807	2	%		~~41,601~~	2	%		~~36,368~~	2	%
Total off-network and other revenues		7574,~~230~~418	12	%		7561,~~416~~784	129	%		~~220,543~~	11	%		~~217,033~~	11	%
Total	$	~~652~~644,~~881~~169	100	%	$	~~654~~655,~~946~~127	100	%	$	~~1,935,515~~	~~100~~	%	$	~~1,937,783~~	~~100~~	%

Note 13 Related Party Transactions

(a) Shareholders’ ~~Agreement~~Agreements

~~The~~Certain shareholders of Intelsat ~~Global~~S.A. entered into shareholders’ agreements on February 4, 2008. The shareholders’ agreements were assigned to Intelsat ~~Global~~S.A. ~~Holdings~~ by amendments effective as of March 30, 2012. The shareholders’ agreements and the articles of incorporation of Intelsat ~~Global~~S.A. ~~Holdings provide~~provided, among other things, for the governance of Intelsat ~~Global~~S.A. ~~Holdings~~ and its subsidiaries and ~~provide~~provided specific rights to and limitations upon the holders of Intelsat ~~Global Holdings~~S.A.’s share capital with respect to shares held by such holders. In connection with the IPO in April 2013, these articles of incorporation and shareholders’ agreements were amended.

(b) Monitoring Fee Agreement

Intelsat Luxembourg, our direct wholly-owned subsidiary, ~~has~~had a monitoring fee agreement dated February 4, 2008 (the “2008 MFA”) with BC Partners Limited and Silver Lake Management Company III, L.L.C., (together, the “2008 MFA Parties”), pursuant to which the 2008 MFA Parties ~~provide~~provided certain monitoring, advisory and consulting services to Intelsat Luxembourg. We recorded expense for services associated with the 2008 MFA of $186.73 million ~~and~~during ~~$18.8~~each ~~million~~of ~~during~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2012, respectively~~2013.

In connection with the IPO in April 2013, the 2008 MFA was assigned to Intelsat S.A. and terminated. Intelsat S.A. paid a fee of $39.1 million to the 2008 MFA Parties in connection with the termination of the 2008 MFA. During the first quarter of 2013, the 2008 MFA Parties received approximately $25.1 million for services that were performed, or expected to be performed, under the 2008 MFA in 2013. The $39.1 million payment made to terminate the 2008 MFA, together with a write-off of $17.2 million of prepaid fees relating to the balance of 2013, were expensed by Intelsat S.A. upon the consummation of the IPO.

(c) Ownership by Management

Certain directors, officers and key employees of Intelsat ~~Global~~S.A. ~~Holdings~~ and its subsidiaries hold restricted shares, options and ~~SCAs~~share-based compensation arrangements of Intelsat ~~Global~~S.A. ~~Holdings~~ (see Note 3—Share-~~Based~~based and Other Compensation Plans). In the aggregate, these shares and arrangements outstanding as of ~~September~~March 3031, ~~2012~~2013 provided for the issuance of approximately 12.30% of the voting equity of Intelsat ~~Global~~S.A. ~~Holdings~~ on a fully diluted basis. Upon completion of the IPO, in the aggregate, these shares and arrangements outstanding provided for the issuance of approximately 8.5% of the voting equity of Intelsat S.A. on a fully-diluted basis.

(d) Horizons Holdings

We have a 50% ownership interest in Horizons Holdings as a result of a joint venture with JSAT (see Note 6(a)—Investments—Horizons Holdings).

(e) New Dawn

~~As of September 30, 2012, we~~ We had a 74.9% ownership interest in New Dawn as a result of the New Dawn Project Agreement with Convergence Partners. On October 5, 2012, we purchased the remaining ownership interest from Convergence Partners (see Note 6(b)—Investments—New Dawn).

(f) WP Com

We have a 49% ownership interest in WP Com as a result of a joint venture with Corporativo (see Note 6(c)—Investments—WP Com).

~~(g)~~19 ~~Receivable from Parent~~

~~Note~~(g) 14Receivable ~~Supplemental~~from ~~Consolidating~~Parents ~~Financial Information~~

OnWe ~~February 4,~~had ~~2008,~~receivables ~~Intelsat~~from ~~Jackson~~our ~~issued~~indirect ~~approximately~~parent ~~$1.3 billion~~entities as of ~~the 2016 Jackson 11 1/4% Notes. The 2016 Jackson 11 1/4% Notes are fully and unconditionally guaranteed~~December 31, ~~jointly~~2012 and ~~severally~~March 31, by2013 ~~Intelsat~~of S$36.A.6 million and ~~Intelsat Luxembourg~~$38. ~~The 2016~~1 ~~Jackson~~million, ~~11 1/4% Notes are not guaranteed by any of Intelsat Jackson’s direct or indirect subsidiaries~~respectively.

InNote ~~addition,~~14 onSubsequent ~~June 27,~~Events ~~2008,~~associated ~~Intelsat~~with ~~Luxembourg~~the ~~issued~~IPO approximately $2.8 billion of 11 1/4% Senior Notes due 2017 and approximately $2.3 billion of 11 1/2% / 12 1/2% Senior PIK Election Notes due 2017, which are fully and unconditionally guaranteed, jointly and severally, by Intelsat S.A.

~~Separate~~On ~~financial~~April 23, ~~statements~~2013, of Intelsat S.A., ~~Intelsat~~our ~~Luxembourg~~indirect ~~and~~parent ~~Intelsat~~company, ~~Jackson~~completed ~~are~~its ~~not~~IPO, ~~presented~~receiving ~~because~~net ~~management~~proceeds ~~believes~~of ~~that~~approximately ~~such~~$550 ~~financial~~million ~~statements~~after ~~would~~underwriting ~~not~~discounts and commissions. The net proceeds from the IPO have been or will be ~~material~~primarily used to ~~investors.~~redeem ~~Investments~~all inof ~~Intelsat~~the ~~Jackson’s~~outstanding ~~subsidiaries~~$353.6 inmillion aggregate principal amount of the ~~following~~Intelsat ~~condensed~~Investments ~~consolidating~~Notes and ~~financial~~to ~~information~~prepay ~~are~~$138.2 ~~accounted~~million ~~for~~of indebtedness outstanding under the ~~equity~~New ~~method~~Senior ofUnsecured ~~accounting. Consolidating~~Credit ~~adjustments~~Facility ~~include~~(see ~~the~~Note ~~following:~~8—Long-Term Debt).

In connection with the IPO, certain repurchase rights upon employee separation that were included in various share-based compensation agreements of management contractually expired. This resulted in (i) certain awards becoming deemed granted under the provisions of FASB ASC Topic 718, Compensation—Stock Compensation (“FASB ASC 718”) and (ii) certain awards previously accounted for as liability awards becoming treated as equity awards under the provisions of FASB ASC 718. Also upon consummation of the IPO, options were granted to certain executives in accordance with the existing terms of their side letters to a management shareholders agreement, and cash payments were made to certain members of management. Based on awards outstanding at March 31, 2013, in connection with the IPO, the items described above are expected to result in a pre-tax charge of approximately $21.3 million, which will be recorded in the second quarter of 2013.

Also in connection with the IPO, the Board of Directors of Intelsat S.A. adopted the 2013 Equity Plan, effective April 18, 2013, to provide for equity incentive awards to management and members of the Intelsat S.A. Board of Directors. Under the 2013 Equity Plan, up to 10,000,000 equity incentive awards can be granted. Shortly after its adoption, the Compensation Committee approved the following awards: (i) 1,003,900 restricted stock units, of which 563,480 vest based on service in three annual installments, and 440,420 vest after three years based upon the achievement of certain long-term performance metrics; (ii) 500,000 restricted stock units vesting in four installments every six months; and (iii) 500,000 options, with an exercise price of $27.00 per share, vesting monthly over 24 months.

Additionally, in connection with the IPO, in April 2013, the 2008 MFA was terminated (see Note 13(b)—Related Party Transactions—Monitoring Fee Agreement).

Note 15 Supplemental Consolidating Financial Information

On June 27, 2008, Intelsat Luxembourg issued approximately $2.8 billion of 11¹/₄% Senior Notes due 2017 and approximately $2.3 billion of 11¹/₂% / 12¹/₂% Senior PIK Election Notes due 2017, which are fully and unconditionally guaranteed, jointly and severally, by Intelsat Investments.

Separate financial statements of Intelsat Investments, Intelsat Luxembourg and Intelsat Jackson 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; and

•

elimination of equity in earnings (losses) of subsidiaries.

Other comprehensive income for the three months ended ~~September~~March 3031, ~~2011~~2012 was $02.6 million compared to other comprehensive ~~loss~~income of $13.73 million for the three months ended ~~September~~March 3031, ~~2012~~2013. ~~Other~~ ~~comprehensive income for the nine months ended September 30, 2011 and 2012 was $2.9 million and $3.1 million, respectively.~~ Other comprehensive income is fully attributable to the subsidiaries of Intelsat Jackson.

2620

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

AS OF ~~SEPTEMBER~~MARCH 3031, ~~2012~~2013

(in thousands)

	Intelsat S.A.			IntelsatLuxembourg			IntelsatJackson		IntelsatJacksonSubsidiaries(Non-Guarantors)		ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson		Intelsat JacksonSubsidiaries (Non-Guarantors)		Consolidationand Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents, net of restricted cash	$	32		$	92		$	100,776	$	130,346	$	—		$	231,246
Cash and cash equivalents	$	536		$	1,577		$	110,152	$	216,481	$	—		$	328,746
Receivables, net of allowance		2325			47			~~371~~384		~~325~~542,~~771~~733		—			~~326~~543,~~169~~149
Deferred income taxes		—			—			—		2594,~~925~~662		—			2594,~~925~~662
Prepaid expenses and other current assets		~~804~~245			618,~~266~~854			~~153~~1,835		4644,~~635~~323		(~~132~~199	)		5365,~~726~~058
Intercompany receivables		—			~~6,853~~—			—76,518		2420,~~666,389~~741		(2497,~~673,242~~259	)		—
Total current assets		~~859~~806			1320,~~215~~438			~~101~~188,~~300~~889		31,~~195~~318,~~066~~940		(2497,~~673,374~~458	)		~~637~~1,~~066~~031,615
Satellites and other property and equipment, net		—			—			—		65,~~403~~839,~~078~~334		—			65,~~403~~839,~~078~~334
Goodwill		—			—			—		6,780,827		—			6,780,827
Non-amortizable intangible assets		—			—			—		2,458,100		—			2,458,100
Amortizable intangible assets, net		—			—			—		~~674~~630,~~032~~509		—			~~674~~630,~~032~~509
Investment in affiliates		(~~407~~404,~~360~~028	)		4,~~921~~922,~~442~~532			1715,~~563~~142,~~967~~915		1,~~010~~000		(2219,~~078~~661,~~049~~419	)		1,~~010~~000
Other assets		89,~~767~~758			8880,~~389~~299			~~100~~106,~~216~~579		~~212~~211,~~064~~736		—			~~409~~408,~~436~~372
Total assets	$	(~~397~~393,~~734~~464	)	$	5,023,~~046~~269		$	1715,~~765~~438,~~483~~383	$	1917,~~724~~240,~~177~~446	$	(2420,~~751~~158,~~423~~877	)	$	17,~~363~~149,~~549~~757
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,~~524~~536		$	—		$	~~612~~310	$	~~146~~111,~~156~~528	$	(~~132~~199	)	$	~~149~~114,~~160~~175
Accrued interest payable		9,575			77,102			~~248~~241,~~080~~408		2,~~073~~091		—			~~336~~330,~~830~~176
Current portion of long-term debt		—			—			~~182~~899,~~500~~991		2724,~~216~~418		—			~~209~~924,~~716~~409
Deferred satellite performance incentives		—			—			—		1921,~~772~~849		—			1921,~~772~~849
Other current liabilities		—			—			121,~~727~~365		~~145~~146,~~820~~262		—			~~158~~147,~~547~~627
Intercompany payables		~~487~~496,~~679~~191			—1,068			~~2,185,563~~—		—		(2497,~~673,242~~259	)		—
Total current liabilities		~~499~~508,~~778~~302			7778,~~102~~170			21,~~629~~143,~~482~~074		~~341~~306,~~037~~148		(2497,~~673,374~~458	)		~~874~~1,~~025~~538,236
Long-term debt, net of current portion		~~321~~335,~~293~~473			5,307,986			109,~~142~~310,~~343~~367		~~104~~12,~~198~~209		—			1514,~~875~~966,~~820~~035
Deferred satellite performance incentives, net of current portion		—			—			—		~~157~~168,~~992~~070		—			~~157~~168,~~992~~070
Deferred revenue, net of current portion		—			—			—		~~807~~844,~~164~~591		—			~~807~~844,~~164~~591
Deferred income taxes		—			—			—		~~274~~287,~~374~~946		—			~~274~~287,~~374~~946
Accrued retirement benefits		—			—			—		~~284~~291,~~450~~602		—			~~284~~291,~~450~~602
Other long-term liabilities		—			4339,~~809~~659			7262,~~216~~410		~~183~~188,~~760~~447		—			~~299~~290,~~785~~516
Noncontrolling interest		—			—			—		8,744		—			8,744
Shareholder’s equity (deficit):
Ordinary shares		5,000			669,036			4,322,473		89,~~773~~085,~~388~~852		(1314,~~764~~077,~~897~~361	)		5,000
Other shareholder’s equity (deficit)		(1,~~223~~242,~~805~~239	)		(1,~~074~~071,~~887~~582	)		~~598~~600,~~969~~059		86,~~789~~055,~~070~~581		(85,~~313~~584,~~152~~058	)		(1,~~223~~242,~~805~~239	)
Total liabilities and shareholder’s equity (deficit)	$	(397,734	)	$	5,023,046		$	17,765,483	$	19,724,177	$	(24,751,423	)	$	17,363,549
Total liabilities and shareholder’s equity	$	(393,464	)	$	5,023,269		$	15,438,383	$	17,240,446	$	(20,158,877	)	$	17,149,757

(Certain totals may not add due to the effects of rounding)

2721

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, ~~2011~~2012

(in thousands)

	Intelsat S.A.			IntelsatLuxembourg			IntelsatJackson		IntelsatJacksonSubsidiaries(Non-Guarantors)		ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson		Intelsat JacksonSubsidiaries (Non-Guarantors)		Consolidationand Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents, net of restricted cash	$	511		$	908		$	2,269	$	291,012	$	—		$	294,700
Cash and cash equivalents	$	42		$	91		$	2,271	$	185,042	$	—		$	187,446
Restricted cash		—			—			—		94,131		—			94,131
Receivables, net of allowance		23			4			369		318,409		—			318,805
Receivables, net of allowance		41			—			—		331,330		—			331,371
Deferred income taxes		—			—			—		94,779		—			94,779
Deferred income taxes		—			—			—		26,058		—			26,058
Prepaid expenses and other current assets		525			—			50		38,133		—			38,708
Prepaid expenses and other current assets		551			16			37		42,330		—			42,934
Intercompany receivables		—			6,838			—		3,064,146		(3,070,984	)		—
Intercompany receivables		—			6,249			—		897,410		(903,659	)		—
Total current assets		590			6,933			2,690		3,700,509		(3,070,984	)		639,738
Total current assets		1,103			7,173			2,306		1,682,271		(903,659	)		789,194
Satellites and other property and equipment, net		—			—			—		6,355,192		—			6,355,192
Satellites and other property and equipment, net		—			—			—		6,142,731		—			6,142,731
Goodwill		—			—			—		6,780,827		—			6,780,827
Non-amortizable intangible assets		—			—			—		2,458,100		—			2,458,100
Amortizable intangible assets, net		—			—			—		~~742~~651,~~868~~087		—			~~742~~651,~~868~~087
Investment in affiliates		(~~303~~403,~~483~~929	)		5,~~177~~085,~~192~~233			1517,~~832~~963,~~505~~969		1,010		(2022,~~706~~645,~~214~~273	)		1,010
Other assets		59,~~356~~064			9984,~~680~~402			95111,~~708~~836		~~246~~210,~~280~~465		~~(348~~—	)		~~446~~415,~~676~~767
Total assets	$	(~~297~~394,~~024~~275	)	$	5,~~284~~176,~~045~~568		$	1518,~~930~~078,~~519~~495	$	1820,~~054~~157,~~087~~190	$	(2125,~~610~~716,~~221~~257	)	$	17,~~361~~301,~~406~~721
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,~~484~~289		$	~~(10~~—	)	$	~~450~~575	$	~~195~~189,~~252~~808	$	—		$	~~198~~192,~~176~~672
Accrued interest payable		3,~~831~~830			227,953			~~125~~133,~~714~~335		12,~~838~~558		—			~~359~~367,~~336~~676
Current portion of long-term debt		—			—			32,~~500~~180		~~132~~24,~~318~~418		—			~~164~~56,~~818~~598
Deferred satellite performance incentives		—			—			—		1721,~~715~~479		—			1721,~~715~~479
Other current liabilities		—			—			37,~~195~~244		~~137~~149,~~874~~537		—			~~141~~156,~~069~~781
Intercompany payables		~~487~~504,~~031~~460			—			~~416~~2,~~628~~566,524		—		(~~903~~3,~~659~~070,984	)		—
Total current liabilities		~~493~~510,~~346~~579			227,~~943~~953			~~578~~2,~~487~~739,858		~~484~~387,~~997~~800		(~~903~~3,~~659~~070,984	)		~~881~~795,~~114~~206
Long-term debt, net of current portion		~~302~~328,~~079~~238			5,307,986			10,~~093~~186,~~802~~086		~~133~~24,~~645~~418		—			15,~~837~~846,~~512~~728
Deferred satellite performance incentives, net of current portion		—			—			—		~~113~~172,~~974~~663		—			~~113~~172,~~974~~663
Deferred revenue, net of current portion		—			—			—		~~724~~834,~~413~~161		—			~~724~~834,~~413~~161
Deferred income taxes		—			—			—		~~265~~286,~~181~~673		—			~~265~~286,~~181~~673
Accrued retirement benefits		—			—			—		~~305~~299,~~902~~187		—			~~305~~299,~~902~~187
Other long-term liabilities		—			4941,~~673~~760			8167,~~038~~318		~~192~~191,~~372~~117		~~(348~~—	)		~~322~~300,~~735~~195
Noncontrolling interest		—			—			—		3,024		—			3,024
Shareholder’s equity (deficit):
Ordinary shares		5,000			669,036			4,322,473		98,~~576~~773,~~008~~388		(1413,~~567~~764,~~517~~897	)		5,000
Other shareholder’s equity (deficit)		(1,~~097~~238,~~449~~092	)		(~~970~~1,~~593~~070,167	)		~~854~~762,~~719~~760		69,~~254~~187,~~571~~783		(68,~~138~~880,~~697~~376	)		(1,~~097~~238,~~449~~092	)
Total liabilities and shareholder’s equity (deficit)	$	(297,024	)	$	5,284,045		$	15,930,519	$	18,054,087	$	(21,610,221	)	$	17,361,406
Total liabilities and shareholder’s equity	$	(394,275	)	$	5,176,568		$	18,078,495	$	20,157,190	$	(25,716,257	)	$	17,301,721

(Certain totals may not add due to the effects of rounding)

2822

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2012~~2013

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			IntelsatJacksonSubsidiaries(Non-Guarantors)			ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson			IntelsatJacksonSubsidiaries (Non-Guarantors)			ConsolidationandEliminations			Consolidated
Revenue	$	—		$	—		$	—		$	~~654~~655,~~946~~127		$	—		$	~~654~~655,~~946~~127
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)		—			—			—			~~102~~97,~~908~~646			—			~~102~~97,~~908~~646
Selling, general and administrative		~~847~~763			6,~~287~~447			~~131~~634			3950,~~646~~108			—			4657,~~911~~952
Depreciation and amortization		—			—			—			~~191~~187,~~972~~411			—			~~191~~187,~~972~~411
Losses on derivative financial instruments		—			—			111,~~277~~865			~~760~~—			—			121,~~037~~865
Total operating expenses		~~847~~763			6,~~287~~447			112,~~408~~499			335,~~286~~165			—			~~353~~344,~~828~~874
Income (loss) from operations		(~~847~~763	)		(6,~~287~~447	)		(112,~~408~~499	)		319,~~660~~962			—			~~301~~310,~~118~~253
Interest (income) expense, net		1516,~~996~~399			152,~~724~~855			~~191~~184,~~022~~181			(4736,~~791~~186	)		—			~~311~~317,~~951~~249
Loss on early extinguishment of debt		—			—			(2	)		(3,104	)		—			(3,106	)
Subsidiary income		10,668			172,922			359,604			—			(543,194	)		—
Subsidiary income		3,372			164,782			367,212			—			(535,366	)		—
Other expense, net		(2	)		—			(2	)		(646	)		—			(650	)
Other income (expense), net		(12	)		—			2			(970	)		(21,000	)		(21,980	)
Income (loss) before income taxes		(6,496	)		13,620			172,922			355,502			(543,194	)		(7,646	)
Income (loss) before income taxes		(13,483	)		5,771			164,782			363,377			(556,366	)		(35,919	)
Benefit from income taxes		—			—			—			(2,038	)		—			(2,038	)
Benefit from income taxes		—			—			—			(1,517	)		—			(1,517	)
Net income (loss)		(6,496	)		13,620			172,922			357,540			(543,194	)		(5,608	)
Net income (loss)		(13,483	)		5,771			164,782			364,894			(556,366	)		(34,402	)
Net income attributable to noncontrolling interest		—			—			—			(888	)		—			(888	)
Net income attributable to noncontrolling interest		—			—			—			(81	)		—			(81	)
Net income (loss) attributable to Intelsat Investments S.A.	$	(6,496	)	$	13,620		$	172,922		$	356,652		$	(543,194	)	$	(6,496	)
Net income (loss) attributable to Intelsat S.A.	$	(13,483	)	$	5,771		$	164,782		$	364,813		$	(556,366	)	$	(34,483	)

(Certain totals may not add due to the effects of rounding)

2923

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			IntelsatJacksonSubsidiaries(Non-Guarantors)			ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson			IntelsatJacksonSubsidiaries (Non-Guarantors)			ConsolidationandEliminations			Consolidated
Revenue	$	—		$	—		$	—		$	~~652~~644,~~881~~169		$	—		$	~~652~~644,~~881~~169
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)		—			—			—			~~110~~105,~~668~~010			—			~~110~~105,~~668~~010
Selling, general and administrative		21,~~385~~049			6,~~203~~426			~~244~~461			4143,~~935~~030			—			50,~~767~~966
Depreciation and amortization		—			—			—			~~193~~186,~~841~~871			—			~~193~~186,~~841~~871
Losses on derivative financial instruments		—			—			3,379			1,977			—			5,356
Loss on derivative financial instruments		—			—			9,256			602			—			9,858
Total operating expenses		21,~~385~~049			6,~~203~~426			39,~~623~~717			~~348~~335,~~421~~513			—			~~360~~352,~~632~~705
Income (loss) from operations		(21,~~385~~049	)		(6,~~203~~426	)		(39,~~623~~717	)		~~304~~308,~~460~~656			—			~~292~~291,~~249~~464
Interest expense, net		14,387			152,636			149,505			905			—			317,433
Interest (income) expense, net		15,499			152,599			150,682			(7,349	)		—			311,431
Subsidiary income		16,330			175,347			328,474			—			(520,151	)		—
Subsidiary income (loss)		(7,899	)		154,013			314,414			—			(460,528	)		—
Loss from previously unconsolidated affiliates		—			—			—			(20,188	)		—			(20,188	)
Other income (expense), net		(2	)		(1	)		(2	)		2,908			—			2,903
Other income (expense), net		—			(1	)		1			585			—			585
Income (loss) before income taxes		(24,449	)		(5,013	)		154,013			318,913			(460,528	)		(17,064	)
Income (loss) before income taxes		(442	)		16,507			175,347			283,952			(520,151	)		(44,787	)
Provision for income taxes		—			—			—			7,204			—			7,204
Benefit from income taxes		—			—			—			(42,678	)		—			(42,678	)
Net income (loss)		(24,449	)		(5,013	)		154,013			311,709			(460,528	)		(24,268	)
Net income (loss)		(442	)		16,507			175,347			326,630			(520,151	)		(2,109	)
Net income attributable to noncontrolling interest		—			—			—			(181	)		—			(181	)
Net loss attributable to noncontrolling interest		—			—			—			1,667			—			1,667
Net income (loss) attributable to Intelsat Investments S.A.	$	(24,449	)	$	(5,013	)	$	154,013		$	311,528		$	(460,528	)	$	(24,449	)
Net income (loss) attributable to Intelsat S.A.	$	(442	)	$	16,507		$	175,347		$	328,297		$	(520,151	)	$	(442	)

(Certain totals may not add due to the effects of rounding)

3024

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			IntelsatJacksonSubsidiaries(Non-Guarantors)			ConsolidationandEliminations			Consolidated
Revenue	$	—		$	—		$	20,528		$	1,937,789		$	(20,534	)	$	1,937,783
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)		—			—			—			327,751			(20,527	)		307,224
Selling, general and administrative		2,902			18,992			1,105			128,308			(7	)		151,300
Depreciation and amortization		—			—			17,104			550,368			—			567,472
Losses on derivative financial instruments		—			—			36,053			1,598			—			37,651
Total operating expenses		2,902			18,992			54,262			1,008,025			(20,534	)		1,063,647
Income (loss) from operations		(2,902	)		(18,992	)		(33,734	)		929,764			—			874,136
Interest (income) expense, net		47,156			457,983			610,347			(165,413	)		—			950,073
Loss on early extinguishment of debt		—			—			(43,385	)		(3,104	)		—			(46,489	)
Subsidiary income (loss)		(71,870	)		412,763			1,100,236			—			(1,441,129	)		—
Other income (expense), net		(13	)		(1	)		(7	)		39			(21,000	)		(20,982	)
Income (loss) before income taxes		(121,941	)		(64,213	)		412,763			1,092,112			(1,462,129	)		(143,408	)
Benefit from income taxes		—			—			—			(1,110	)		—			(1,110	)
Net income (loss)		(121,941	)		(64,213	)		412,763			1,093,222			(1,462,129	)		(142,298	)
Net income attributable to noncontrolling interest		—			—			—			(643	)		—			(643	)
Net income (loss) attributable to Intelsat S.A.	$	(121,941	)	$	(64,213	)	$	412,763		$	1,092,579		$	(1,462,129	)	$	(142,941	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			IntelsatJacksonSubsidiaries(Non-Guarantors)			ConsolidationandEliminations			Consolidated
Revenue	$	—		$	—		$	—		$	1,935,515		$	—		$	1,935,515
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)		—			—			—			316,749			—			316,749
Selling, general and administrative		3,982			19,049			820			133,665			—			157,516
Depreciation and amortization		—			—			—			583,196			—			583,196
Losses on derivative financial instruments		—			—			23,716			447			—			24,163
Total operating expenses		3,982			19,049			24,536			1,034,057			—			1,081,624
Income (loss) from operations		(3,982	)		(19,049	)		(24,536	)		901,458			—			853,891
Interest expense, net		58,011			460,023			442,774			31,276			—			992,084
Loss on early extinguishment of debt		(78,960	)		—			(28,963	)		(218,260	)		—			(326,183	)
Subsidiary income (loss)		(288,455	)		197,706			693,978			—			(603,229	)		—
Loss from previously unconsolidated affiliates		—			—			—			(24,658	)		—			(24,658	)
Other income (expense), net		—			(1	)		1			7,753			—			7,753
Income (loss) before income taxes		(429,408	)		(281,367	)		197,706			635,017			(603,229	)		(481,281	)
Benefit from income taxes		—			—			—			(48,931	)		—			(48,931	)
Net income (loss)		(429,408	)		(281,367	)		197,706			683,948			(603,229	)		(432,350	)
Net loss attributable to noncontrolling interest		—			—			—			2,942			—			2,942
Net income (loss) attributable to Intelsat S.A.	$	(429,408	)	$	(281,367	)	$	197,706		$	686,890		$	(603,229	)	$	(429,408	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2012~~2013

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			IntelsatJacksonSubsidiaries(Non-Guarantors)			ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson			IntelsatJacksonSubsidiaries (Non-Guarantors)			ConsolidationandEliminations			Consolidated
Cash flows from operating activities:	$	(151,~~767~~579	)	$	(~~626~~326,~~643~~867	)	$	~~184~~41,~~445~~158		$	1384,~~017,528~~389		$	—		$	~~559~~97,~~563~~101
Cash flows from investing activities:
Payments for satellites and other property and equipment (including capitalized interest)		—			—			—			(~~715~~167,~~101~~154	)		—			(~~715~~167,~~101~~154	)
Disbursements for intercompany loans		—			—			—			(145,286	)		145,286			—
Proceeds from insurance settlements		—			—			—			252,911			—			252,911
Loan to affiliated party		—			—			—			(10,000	)		—			(10,000	)
Payment on satellite performance incentives from insurance proceeds		—			—			—			(19,199	)		—			(19,199	)
Investment in subsidiaries		(4,889	)		—			(42,491	)		—			47,380			—
Disbursements for intercompany loans		—			—			—			(75,176	)		75,176			—
Dividend from affiliates		18,390			644,218			316,500			—			(979,108	)		—
Investment in subsidiaries		(4,365	)		—			(11,613	)		—			15,978			—
Net cash provided by (used in) investing activities		13,501			644,218			274,009			(870,387	)		(786,442	)		(725,101	)
Dividend from affiliates		5,090			333,443			346,000			—			(684,533	)		—
Other investing activities		—			—			—			(1,000	)		—			(1,000	)
Net cash provided by investing activities		725			333,443			334,387			(9,618	)		(593,379	)		(65,558	)
Cash flows from financing activities:
Repayments of long-term debt		—			—			(148,~~461,288~~045	)		(2712,~~725~~209	)		—			(160,~~489,013~~254	)
Proceeds from issuance of long-term debt		—			—			140,~~661,~~000			—			—			140,~~661,~~000
Proceeds from intercompany borrowing		1,~~800~~350			—			~~143~~73,~~486~~826			—			(~~145~~75,~~286~~176	)		—
Debt issuance costs		—			—			(19,444	)		—			—			(19,444	)
Principal payments on deferred satellite performance incentives		—			—			—			(4,276	)		—			(4,276	)
Payment of premium on early retirement of debt		—			—			(39,477	)		—			—			(39,477	)
Capital contribution from parent		—			—			—			15,978			(15,978	)		—
Principal payments on deferred satellite performance incentives		—			—			—			(11,666	)		—			(11,666	)
Dividends to shareholders		—			(5,090	)		(333,443	)		(346,000	)		684,533			—
Capital contribution from parent		—			—			—			47,380			(47,380	)		—
Capital contribution from noncontrolling interest		—			—			—			6,105			—			6,105
Dividends to shareholders		—			(18,390	)		(644,218	)		(316,500	)		979,108			—
Dividends paid to noncontrolling interest		—			—			—			(1,723	)		—			(1,723	)
Capital contribution from noncontrolling interest		—			—			—			12,209			—			12,209
Net cash provided by (used in) financing activities		1,350			(5,090	)		(267,662	)		(342,125	)		593,379			(20,148	)
Dividends paid to noncontrolling interest		—			—			—			(6,782	)		—			(6,782	)
Effect of exchange rate changes on cash and cash equivalents		(2	)		—			(2	)		(1,207	)		—			(1,211	)
Net cash provided by (used in) financing activities		1,800			(18,390	)		(359,941	)		(303,084	)		786,442			106,827
Net change in cash and cash equivalents		494			1,486			107,881			31,439			—			141,300
Effect of exchange rate changes on cash and cash equivalents		(13	)		(1	)		(6	)		(4,723	)		—			(4,743	)
Cash and cash equivalents, beginning of period		42			91			2,271			185,042			—			187,446
Net change in cash and cash equivalents		(479	)		(816	)		98,507			(160,666	)		—			(63,454	)
Cash and cash equivalents, end of period	$	536		$	1,577		$	110,152		$	216,481		$	—		$	328,746
Cash and cash equivalents, beginning of period		511			908			2,269			291,012			—			294,700
Cash and cash equivalents, end of period	$	32		$	92		$	100,776		$	130,346		$	—		$	231,246

(Certain totals may not add due to the effects of rounding)

3325

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			IntelsatJacksonSubsidiaries(Non-Guarantors)			ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson			IntelsatJacksonSubsidiaries(Non-Guarantors)			ConsolidationandEliminations			Consolidated
Cash flows from operating activities:	$	~~(33~~1,~~898~~455	)	$	(~~557~~324,~~342~~777	)	$	(56141,~~163~~999	)	$	1587,~~320,623~~402		$	—		$	~~673~~122,~~220~~081
Cash flows from investing activities:
Payments for satellites and other property and equipment (including capitalized interest)		—			—			—			(~~615~~260,~~113~~867	)		—			(~~615~~260,~~113~~867	)
Disbursements for intercompany loans		—			—			~~(113,206~~—	)		(2123,~~841~~321	)		~~135~~23,~~047~~321			—
Capital contributions to previously unconsolidated affiliates		—			—			—			(12,209	)		—			(12,209	)
Investment in subsidiaries		(3,000	)		—			(35,690	)		—			38,690			—
Investment in subsidiaries		(3,100	)		—			(5,027,932	)		—			5,031,032			—
Dividend from affiliates		1,500			325,550			479,241			—			(806,291	)		—
Dividend from affiliates		559,801			1,108,034			781,374			—			(2,449,209	)		—
Net cash provided by (used in) investing activities		(1,500	)		325,550			443,551			(284,188	)		(744,280	)		(260,867	)
Other investing activities		—			—			—			6,710			—			6,710
Net cash provided by (used in) investing activities		556,701			1,108,034			(4,359,764	)		(642,453	)		2,716,870			(620,612	)
Cash flows from financing activities:
Repayments of long-term debt		~~(485,841~~—	)		—			(~~547~~8,~~755~~125	)		(512,~~289,423~~209	)		—			(620,~~323,019~~334	)
Proceeds from issuance of long-term debt		—			—			6175,~~083,750~~000			~~35,675~~—			—			6175,~~119,425~~000
Proceeds from intercompany borrowing		—			—			2123,~~841~~321			~~113,206~~—			(~~135~~23,~~047~~321	)		—
Debt issuance costs		—			—			(69,339	)		—			—			(69,339	)
Principal payments on deferred satellite performance incentives		—			—			—			(4,011	)		—			(4,011	)
Payment of premium on early retirement of debt		(36,770	)		—			(26,114	)		(108,163	)		—			(171,047	)
Capital contribution from parent		—			—			—			38,690			(38,690	)		—
Principal payments on deferred satellite performance incentives		—			—			—			(10,776	)		—			(10,776	)
Dividends to shareholders		—			(1,500	)		(325,550	)		(479,241	)		806,291			—
Capital contribution from parent		—			—			—			5,031,032			(5,031,032	)		—
Capital contribution from noncontrolling interest		—			—			—			6,105			—			6,105
Dividends to shareholders		—			(559,801	)		(1,108,034	)		(781,374	)		2,449,209			—
Dividends paid to noncontrolling interest		—			—			—			(2,255	)		—			(2,255	)
Noncontrolling interest in New Dawn		—			—			—			1,734			—			1,734
Net cash used in financing activities		—			(1,500	)		(135,354	)		(452,921	)		744,280			154,505
Net cash provided by (used in) financing activities		(522,611	)		(559,801	)		4,354,349			(1,008,089	)		(2,716,870	)		(453,022	)
Effect of exchange rate changes on cash and cash equivalents		(1	)		—			(2	)		1,047			—			1,044
Effect of exchange rate changes on cash and cash equivalents		—			—			—			2,905			—			2,905
Net change in cash and cash equivalents		(46	)		(727	)		166,196			(148,660	)		—			16,763
Net change in cash and cash equivalents		192			(9,109	)		(61,578	)		(327,014	)		—			(397,509	)
Cash and cash equivalents, beginning of period		511			908			2,269			291,012			—			294,700
Cash and cash equivalents, beginning of period		7,315			10,017			126,605			548,993			—			692,930
Cash and cash equivalents, end of period	$	465		$	181		$	168,465		$	142,352		$	—		$	311,463
Cash and cash equivalents, end of period	$	7,507		$	908		$	65,027		$	221,979		$	—		$	295,421

(Certain totals may not add due to the effects of rounding)

3426

On April 5, 2011, Intelsat Jackson completed an offering of $2.65 billion aggregate principal amount of senior notes, consisting of $1.5 billion aggregate principal amount of the 7 1/4% 2019 Jackson Notes and $1.15 billion aggregate principal amount of the 2021 Jackson Notes. The 7 1/4% 2019 Jackson Notes and the 2021 Jackson Notes are fully and unconditionally guaranteed, jointly and severally, by Intelsat ~~S.A.~~Investments, Intelsat Luxembourg and certain wholly-owned subsidiaries of Intelsat Jackson (the “Subsidiary Guarantors”).

~~Separate~~On ~~financial statements of Intelsat S.A.~~April 26, ~~Intelsat Luxembourg~~2012, Intelsat Jackson ~~and~~completed ~~the~~an ~~Subsidiary~~offering ~~Guarantors~~of ~~are~~$1.2 ~~not~~billion ~~presented~~aggregate ~~because~~principal ~~management~~amount ~~believes~~of ~~that~~the ~~such~~2020 ~~financial statements would not be material to investors. Investments in Intelsat~~ Jackson’s ~~subsidiaries in the following~~Notes, ~~condensed~~which ~~consolidating~~are ~~financial~~fully ~~information~~and ~~are~~unconditionally ~~accounted~~guaranteed, ~~for~~jointly ~~under~~and ~~the~~severally, ~~equity~~by ~~method~~Intelsat ofInvestments, ~~accounting.~~Intelsat ~~Consolidating~~Luxembourg ~~adjustments~~and ~~include~~ the ~~following:~~Subsidiary Guarantors.

Separate financial statements of Intelsat Investments, Intelsat Luxembourg, 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; ~~and~~

•

elimination of intercompany sales between guarantor and non-guarantor subsidiaries; and

•

elimination of equity in earnings (losses) of subsidiaries.

3527

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

AS OF ~~SEPTEMBER~~MARCH 3031, ~~2012~~2013

(in thousands)

	Intelsat S.A.			IntelsatLuxembourg			IntelsatJackson		JacksonSubsidiaryGuarantors		Non-GuarantorSubsidiaries		ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson		JacksonSubsidiaryGuarantors		Non-GuarantorSubsidiaries		Consolidationand Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents, net of restricted cash	$	32		$	92		$	175,412	$	74,635	$	55,710	$	(74,635	)	$	231,246
Cash and cash equivalents	$	536		$	1,577		$	287,209	$	177,057	$	39,424	$	(177,057	)	$	328,746
Receivables, net of allowance		2325			47			~~229~~459,~~450~~750		~~229~~459,~~079~~366		9683,~~692~~367		(~~229~~459,~~079~~366	)		~~326~~543,~~169~~149
Deferred income taxes		—			—			2392,~~829~~689		2392,~~829~~689		21,~~096~~973		(2392,~~829~~689	)		2594,~~925~~662
Prepaid expenses and other current assets		~~804~~245			618,~~266~~854			2932,~~828~~753		2930,~~675~~918		1713,~~175~~866		(3031,~~022~~578	)		5365,~~726~~058
Intercompany receivables		—			~~6,853~~			~~514~~453,~~235~~397		2376,~~699,798~~879		—43,862		(3874,~~220,886~~138	)		—
Total current assets		~~859~~806			1320,~~215~~438			~~972~~1,~~754~~325,798		31,~~057~~136,~~016~~909		~~171~~182,~~673~~492		(31,~~578~~634,~~451~~828	)		~~637~~1,~~066~~031,615
Satellites and other property and equipment, net		—			—			65,~~152~~717,~~026~~579		65,~~152~~717,~~026~~579		~~267~~165,~~584~~172		(65,~~168~~760,~~558~~996	)		65,~~403~~839,~~078~~334
Goodwill		—			—			6,780,827		6,780,827		—		(6,780,827	)		6,780,827
Non-amortizable intangible assets		—			—			2,458,100		2,458,100		—		(2,458,100	)		2,458,100
Amortizable intangible assets, net		—			—			~~674~~630,~~032~~509		~~674~~630,~~032~~509		—		(~~674~~630,~~032~~509	)		~~674~~630,~~032~~509
Investment in affiliates		(~~407~~360,~~188~~658	)		4,~~921~~965,~~614~~902			~~213~~259,~~159~~520		~~213~~259,~~159~~520		10—		(45,~~939~~123,~~744~~284	)		1,~~010~~000
Other assets		89,~~767~~758			8880,~~389~~299			~~282~~299,~~649~~057		~~182~~192,~~432~~477		2313,~~404~~506		(~~176~~186,~~205~~725	)		~~409~~408,~~436~~372
Total assets	$	(~~397~~350,~~562~~094	)	$	5,~~023~~066,~~218~~639		$	17,~~533~~471,~~547~~390	$	1917,~~517~~175,~~592~~921	$	~~462~~361,~~671~~170	$	(2422,~~775~~575,~~917~~269	)	$	17,~~363~~149,~~549~~757
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,~~524~~536		$	—		$	~~118~~87,~~587~~237	$	~~117~~86,~~976~~927	$	2825,~~396~~062	$	(~~118~~87,~~323~~587	)	$	~~149~~114,~~160~~175
Accrued interest payable		9,575			77,102			~~249~~243,~~874~~347		1,~~794~~939		~~279~~152		(1,~~794~~939	)		~~336~~330,~~830~~176
Current portion of long-term debt		—			—			~~182~~899,~~500~~991		—		2724,~~216~~418		—			~~209~~924,~~716~~409
Deferred satellite performance incentives		—			—			1820,~~542~~328		1820,~~542~~328		1,~~230~~521		(1820,~~542~~328	)		1921,~~772~~849
Other current liabilities		—			—			~~149~~144,~~338~~573		~~136~~143,~~609~~208		103,~~542~~054		(~~137~~143,~~942~~208	)		~~158~~147,~~547~~627
Intercompany payables		~~487~~496,~~679~~191			—1,068			—		—		~~33,409~~—		(~~521~~497,~~088~~259	)		—
Total current liabilities		~~499~~508,~~778~~302			7778,~~102~~170			~~718~~1,~~841~~395,476		~~274~~252,~~921~~402		~~101~~54,~~072~~207		(~~797~~750,~~689~~321	)		~~874~~1,~~025~~538,236
Long-term debt, net of current portion		~~321~~335,~~293~~473			5,307,986			109,~~142~~310,~~343~~367		—		~~104~~12,~~198~~209		—			1514,~~875~~966,~~820~~035
Deferred satellite performance incentives, net of current portion		—			—			~~155~~166,~~752~~357		~~155~~166,~~752~~357		21,~~240~~713		(~~155~~166,~~752~~357	)		~~157~~168,~~992~~070
Deferred revenue, net of current portion		—			—			~~814~~841,~~162~~382		~~814~~841,~~162~~382		73,~~999~~209		(~~829~~841,~~159~~382	)		~~807~~844,~~164~~591
Deferred income taxes		—			—			~~251~~264,~~962~~643		~~251~~264,~~962~~643		1617,~~215~~598		(~~245~~258,~~765~~938	)		~~274~~287,~~374~~946
Accrued retirement benefits		—			—			~~284~~291,~~450~~602		~~284~~291,~~450~~602		—		(~~284~~291,~~450~~602	)		~~284~~291,~~450~~602
Other long-term liabilities		—			4339,~~809~~659			~~244~~235,~~423~~661		~~172~~173,~~207~~250		1115,~~553~~196		(~~172~~173,~~207~~250	)		~~299~~290,~~785~~516
Noncontrolling interest		—			—			—		—		8,744		—			8,744
Shareholder’s equity (deficit):
Ordinary shares		5,000			669,036			4,322,518		89,~~773~~085,~~388~~852		24		(1314,~~764~~077,~~966~~430	)		5,000
Other shareholder’s equity (deficit)		(1,~~223~~198,~~633~~869	)		(1,~~074~~028,~~715~~212	)		~~599~~643,~~096~~384		86,~~790~~100,~~750~~433		~~210~~257,~~626~~014		(86,~~525~~015,~~929~~989	)		(1,~~223~~242,~~805~~239	)
Total liabilities and shareholder’s equity (deficit)	$	(397,562	)	$	5,023,218		$	17,533,547	$	19,517,592	$	462,671	$	(24,775,917	)	$	17,363,549
Total liabilities and shareholder’s equity	$	(350,094	)	$	5,066,639		$	17,471,390	$	17,175,921	$	361,170	$	(22,575,269	)	$	17,149,757

(Certain totals may not add due to the effects of rounding)

3628

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

~~UNAUDITED~~ CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, ~~2011~~2012

(in thousands)

	Intelsat S.A.			IntelsatLuxembourg			IntelsatJackson		JacksonSubsidiaryGuarantors		Non-GuarantorSubsidiaries		ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson		JacksonSubsidiaryGuarantors		Non-GuarantorSubsidiaries		ConsolidationandEliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents, net of restricted cash	$	511		$	908		$	240,175	$	237,906	$	53,106	$	(237,906	)	$	294,700
Cash and cash equivalents	$	42		$	91		$	133,379	$	131,107	$	53,934	$	(131,107	)	$	187,446
Restricted cash		—			—			—		—		94,131		—			94,131
Receivables, net of allowance		23			4			229,667		229,298		89,111		(229,298	)		318,805
Receivables, net of allowance		41			—			217,082		217,082		114,248		(217,082	)		331,371
Deferred income taxes		—			—			92,806		92,806		1,973		(92,806	)		94,779
Deferred income taxes		—			—			23,944		23,944		2,114		(23,944	)		26,058
Prepaid expenses and other current assets		525			—			27,871		27,821		12,923		(30,432	)		38,708
Prepaid expenses and other current assets		551			16			27,985		27,949		15,216		(28,783	)		42,934
Intercompany receivables		—			6,838			612,341		3,178,865		—		(3,798,044	)		—
Intercompany receivables		—			6,249			523,329		939,957		—		(1,469,535	)		—
Total current assets		590			6,933			1,096,064		3,659,897		157,941		(4,281,687	)		639,738
Total current assets		1,103			7,173			1,032,515		1,446,838		278,815		(1,977,250	)		789,194
Satellites and other property and equipment, net		—			—			6,111,636		6,111,636		259,650		(6,127,730	)		6,355,192
Satellites and other property and equipment, net		—			—			5,869,027		5,869,027		291,182		(5,886,505	)		6,142,731
Goodwill		—			—			6,780,827		6,780,827		—		(6,780,827	)		6,780,827
Non-amortizable intangible assets		—			—			2,458,100		2,458,100		—		(2,458,100	)		2,458,100
Amortizable intangible assets, net		—			—			~~742~~651,~~868~~087		~~742~~651,~~868~~087		—		(~~742~~651,~~868~~087	)		~~742~~651,~~868~~087
Investment in affiliates		(~~303~~403,~~383~~878	)		5,~~177~~085,~~292~~284			~~218~~213,~~048~~001		~~218~~213,~~048~~001		10		(5,~~309~~106,~~005~~408	)		1,010
Other assets		59,~~356~~064			9984,~~680~~402			~~293~~296,~~032~~410		~~197~~184,~~322~~574		4220,~~728~~138		(~~191~~178,~~442~~821	)		~~446~~415,~~676~~767
Total assets	$	(~~296~~394,~~924~~224	)	$	5,~~284~~176,~~145~~619		$	17,~~394~~607,~~417~~125	$	1720,~~713~~059,~~030~~122	$	~~612~~437,~~735~~739	$	(2325,~~345~~584,~~997~~660	)	$	17,~~361~~301,~~406~~721
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,~~484~~289		$	~~(10~~—	)	$	168,~~577~~823	$	168,~~126~~248	$	2724,~~960~~170	$	(~~168~~170,~~961~~858	)	$	~~198~~192,~~176~~672
Accrued interest payable		3,~~831~~830			227,953			~~126~~135,~~646~~623		~~932~~2,288		~~906~~270		(~~932~~2,288	)		~~359~~367,~~336~~676
Current portion of long-term debt		—			—			32,~~500~~180		—		~~132~~24,~~318~~418		—			~~164~~56,~~818~~598
Deferred satellite performance incentives		—			—			1620,~~339~~224		1620,~~339~~224		1,~~376~~255		(1620,~~339~~224	)		1721,~~715~~479
Other current liabilities		—			—			~~121~~153,~~327~~857		~~118~~146,~~131~~611		214,~~074~~257		(~~119~~147,~~463~~944	)		~~141~~156,~~069~~781
Intercompany payables		~~487~~504,~~031~~460			—			—		—		42114,~~547~~719		(~~529~~619,~~578~~179	)		—
Total current liabilities		~~493~~510,~~346~~579			227,~~943~~953			~~465~~510,~~389~~707		~~303~~337,~~528~~371		~~226~~169,~~181~~089		(~~835~~960,~~273~~493	)		~~881~~795,~~114~~206
Long-term debt, net of current portion		~~302~~328,~~079~~238			5,307,986			10,~~093~~186,~~802~~086		—		~~133~~24,~~645~~418		—			15,~~837~~846,~~512~~728
Deferred satellite performance incentives, net of current portion		—			—			~~110~~170,~~982~~684		~~110~~170,~~982~~684		21,~~992~~979		(~~110~~170,~~982~~684	)		~~113~~172,~~974~~663
Deferred revenue, net of current portion		—			—			~~731~~845,~~560~~327		~~731~~845,~~560~~327		83,~~850~~498		(~~747~~859,~~557~~991	)		~~724~~834,~~413~~161
Deferred income taxes		—			—			~~244~~266,~~216~~340		~~244~~266,~~216~~340		14,~~785~~627		(~~238~~260,~~036~~634	)		~~265~~286,~~181~~673
Accrued retirement benefits		—			—			~~305~~299,~~902~~187		~~305~~299,~~902~~187		—		(~~305~~299,~~902~~187	)		~~305~~299,~~902~~187
Other long-term liabilities		—			4941,~~673~~760			~~265~~243,~~274~~510		~~184~~176,~~237~~193		814,~~136~~925		(~~184~~176,~~585~~193	)		~~322~~300,~~735~~195
Noncontrolling interest		—			—			—		—		3,024		—			3,024
Shareholder’s equity (deficit):
Ordinary shares		5,000			669,036			4,322,518		98,~~576~~773,~~008~~388		24		(1413,~~567~~764,~~586~~966	)		5,000
Other shareholder’s equity (deficit)		(1,~~097~~238,~~349~~041	)		(~~970~~1,~~493~~070,116	)		~~854~~762,~~774~~766		69,~~256~~190,~~597~~632		~~215~~209,~~098~~179		(69,~~356~~092,~~076~~512	)		(1,~~097~~238,~~449~~092	)
Total liabilities and shareholder’s equity (deficit)	$	(296,924	)	$	5,284,145		$	17,394,417	$	17,713,030	$	612,735	$	(23,345,997	)	$	17,361,406
Total liabilities and shareholder’s equity	$	(394,224	)	$	5,176,619		$	17,607,125	$	20,059,122	$	437,739	$	(25,584,660	)	$	17,301,721

(Certain totals may not add due to the effects of rounding)

3729

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2012~~2013

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			JacksonSubsidiaryGuarantors			Non-GuarantorSubsidiaries			ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson			JacksonSubsidiaryGuarantors			Non-GuarantorSubsidiaries			ConsolidationandEliminations			Consolidated
Revenue	$	—		$	—		$	~~581~~594,~~615~~972		$	~~581~~594,~~615~~972		$	~~185~~173,~~113~~932		$	(~~693~~708,~~397~~749	)	$	~~654~~655,~~946~~127
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)		—			—			6368,~~294~~977			6368,~~294~~977			~~151~~96,~~396~~695			(~~175~~137,~~076~~003	)		~~102~~97,~~908~~646
Selling, general and administrative		~~847~~763			6,~~287~~447			2837,~~354~~519			2836,~~223~~887			1113,~~423~~223			(2836,~~223~~887	)		4657,~~911~~952
Depreciation and amortization		—			—			~~182~~178,~~263~~245			~~182~~178,~~263~~245			109,~~023~~487			(~~182~~178,~~577~~566	)		~~191~~187,~~972~~411
Losses on derivative financial instruments		—			—			111,~~277~~865			—			~~760~~—			—			121,~~037~~865
Total operating expenses		~~847~~763			6,~~287~~447			~~285~~286,~~188~~606			~~273~~284,~~780~~109			~~173~~119,~~602~~405			(~~385~~352,~~876~~456	)		~~353~~344,~~828~~874
Income (loss) from operations		(~~847~~763	)		(6,~~287~~447	)		~~296~~308,~~427~~366			~~307~~310,~~835~~863			1154,~~511~~527			(~~307~~356,~~521~~293	)		~~301~~310,~~118~~253
Interest (income) expense, net		1516,~~996~~399			152,~~724~~855			~~141~~148,~~152~~349			(4935,~~869~~832	)		~~2,079~~(354	)		4935,~~869~~832			~~311~~317,~~951~~249
Loss on early extinguishment of debt		—			—			(2	)		—			(3,104	)		—			(3,106	)
Subsidiary income		56,098			218,352			53,016			53,016			—			(380,482	)		—
Subsidiary income		3,391			164,801			12,860			12,860			—			(193,912	)		—
Other income (expense), net		(2	)		—			237			239			(885	)		(239	)		(650	)
Other income (expense), net		(12	)		—			1,740			1,740			(2,376	)		(23,072	)		(21,980	)
Income before income taxes		38,934			59,050			213,270			399,950			53,996			(772,846	)		(7,646	)
Income (loss) before income taxes		(13,464	)		5,790			169,873			372,304			3,952			(574,374	)		(35,919	)
Provision for (benefit from) income taxes		—			—			(5,082	)		(5,082	)		3,044			5,082			(2,038	)
Benefit from income taxes		—			—			5,072			5,072			(6,589	)		(5,072	)		(1,517	)
Net income		38,934			59,050			218,352			405,032			50,952			(777,928	)		(5,608	)
Net income (loss)		(13,464	)		5,790			164,801			367,232			10,541			(569,302	)		(34,402	)
Net income attributable to noncontrolling interest		—			—			—			—			(888	)		—			(888	)
Net income attributable to noncontrolling interest		—			—			—			—			(81	)		—			(81	)
Net income attributable to Intelsat Investments S.A.	$	38,934		$	59,050		$	218,352		$	405,032		$	50,064		$	(777,928	)	$	(6,496	)
Net income (loss) attributable to Intelsat, S.A.	$	(13,464	)	$	5,790		$	164,801		$	367,232		$	10,460		$	(569,302	)	$	(34,483	)

(Certain totals may not add due to the effects of rounding)

3830

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			JacksonSubsidiaryGuarantors			Non-GuarantorSubsidiaries			ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson			JacksonSubsidiaryGuarantors			Non-GuarantorSubsidiaries			ConsolidationandEliminations			Consolidated
Revenue	$	—		$	—		$	~~571~~565,~~985~~131		$	~~571~~565,~~985~~131		$	181,~~897~~658		$	(~~672~~667,~~986~~751	)	$	~~652~~644,~~881~~169
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)		—			—			6567,~~337~~510			6567,~~337~~510			~~146~~140,~~333~~119			(~~166~~170,~~339~~129	)		~~110~~105,~~668~~010
Selling, general and administrative		21,~~385~~049			6,~~203~~426			3330,~~691~~386			3329,~~447~~925			813,~~488~~106			(3329,~~447~~926	)		50,~~767~~966
Depreciation and amortization		—			—			~~183~~177,~~442~~229			~~183~~177,~~442~~229			109,~~714~~957			(~~183~~177,~~757~~544	)		~~193~~186,~~841~~871
Losses on derivative financial instruments		—			—			3,380			—			1,976			—			5,356
Loss on derivative financial instruments		—			—			9,257			—			601			—			9,858
Total operating expenses		21,~~385~~049			6,~~203~~426			~~285~~284,~~850~~382			~~282~~274,~~226~~664			~~167~~163,~~511~~783			(~~383~~377,~~543~~599	)		~~360~~352,~~632~~705
Income (loss) from operations		(21,~~385~~049	)		(6,~~203~~426	)		~~286~~280,~~135~~749			~~289~~290,~~759~~467			1417,~~386~~875			(~~289~~290,~~443~~152	)		~~292~~291,~~249~~464
Interest (income) expense, net		1415,~~387~~499			152,~~636~~599			~~146~~138,~~157~~771			(311,~~347~~911	)		4,~~253~~562			311,~~347~~911			~~317~~311,~~433~~431
Subsidiary income		16,359			175,376			13,050			13,050			—			(217,835	)		—
Subsidiary income (loss)		(7,864	)		154,048			5,610			5,610			—			(157,404	)		—
Loss from previously unconsolidated affiliates		—			—			(20,188	)		(20,188	)		—			20,188			(20,188	)
Other income (expense), net		(2	)		(1	)		2,296			2,296			944			(2,630	)		2,903
Other income (expense), net		—			(1	)		1,238			1,238			(307	)		(1,583	)		585
Income (loss) before income taxes		(24,414	)		(4,978	)		149,884			310,284			14,257			(462,097	)		(17,064	)
Income (loss) before income taxes		(413	)		16,536			134,078			287,206			9,826			(492,020	)		(44,787	)
Provision for (benefit from) income taxes		—			—			(4,164	)		(4,164	)		11,352			4,180			7,204
Benefit from income taxes		—			—			(41,298	)		(41,298	)		(1,380	)		41,298			(42,678	)
Net income (loss)		(24,414	)		(4,978	)		154,048			314,448			2,905			(466,277	)		(24,268	)
Net income (loss)		(413	)		16,536			175,376			328,504			11,206			(533,318	)		(2,109	)
Net income attributable to noncontrolling interest		—			—			—			—			(181	)		—			(181	)
Net loss attributable to noncontrolling interest		—			—			—			—			1,667			—			1,667
Net income (loss) attributable to Intelsat Investments S.A.	$	(24,414	)	$	(4,978	)	$	154,048		$	314,448		$	2,724		$	(466,277	)	$	(24,449	)
Net income (loss) attributable to Intelsat S.A.	$	(413	)	$	16,536		$	175,376		$	328,504		$	12,873		$	(533,318	)	$	(442	)

(Certain totals may not add due to the effects of rounding)

3931

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			JacksonSubsidiaryGuarantors			Non-GuarantorSubsidiaries			ConsolidationandEliminations			Consolidated
Revenue	$	—		$	—		$	1,718,186		$	1,718,190		$	543,803		$	(2,042,396	)	$	1,937,783
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)		—			—			194,870			215,397			436,559			(539,602	)		307,224
Selling, general and administrative		2,902			18,992			93,022			91,921			36,384			(91,921	)		151,300
Depreciation and amortization		—			—			538,371			521,267			30,046			(522,212	)		567,472
Losses on derivative financial instruments		—			—			36,053			—			1,598			—			37,651
Total operating expenses		2,902			18,992			862,316			828,585			504,587			(1,153,735	)		1,063,647
Income (loss) from operations		(2,902	)		(18,992	)		855,870			889,605			39,216			(888,661	)		874,136
Interest (income) expense, net		47,156			457,983			434,154			(176,193	)		10,780			176,193			950,073
Loss on early extinguishment of debt		—			—			(43,385	)		—			(3,104	)		—			(46,489	)
Subsidiary income (loss)		(71,798	)		412,835			24,538			24,538			—			(390,113	)		—
Other income (expense), net		(13	)		(1	)		5,328			5,334			(4,296	)		(27,334	)		(20,982	)
Income (loss) before income taxes		(121,869	)		(64,141	)		408,197			1,095,670			21,036			(1,482,301	)		(143,408	)
Provision for (benefit from) income taxes		—			—			(4,638	)		(4,638	)		3,512			4,654			(1,110	)
Net income (loss)		(121,869	)		(64,141	)		412,835			1,100,308			17,524			(1,486,955	)		(142,298	)
Net income attributable to noncontrolling interest		—			—			—			—			(643	)		—			(643	)
Net income (loss) attributable to Intelsat, S.A.	$	(121,869	)	$	(64,141	)	$	412,835		$	1,100,308		$	16,881		$	(1,486,955	)	$	(142,941	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			JacksonSubsidiaryGuarantors			Non-GuarantorSubsidiaries		ConsolidationandEliminations			Consolidated
Revenue	$	—		$	—		$	1,714,752		$	1,714,752		$	508,811	$	(2,002,800	)	$	1,935,515
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)		—			—			191,443			191,443			413,354		(479,491	)		316,749
Selling, general and administrative		3,982			19,049			100,456			99,637			34,029		(99,637	)		157,516
Depreciation and amortization		—			—			558,503			558,503			25,008		(558,818	)		583,196
(Gains) Losses on derivative financial instruments		—			—			19,255			(4,461	)		4,908		4,461			24,163
Total operating expenses		3,982			19,049			869,657			845,122			477,299		(1,133,485	)		1,081,624
Income (loss) from operations		(3,982	)		(19,049	)		845,095			869,630			31,512		(869,315	)		853,891
Interest expense, net		58,011			460,023			467,479			24,705			6,571		(24,705	)		992,084
Loss on early extinguishment of debt		(78,960	)		—			(247,223	)		(218,261	)		—		218,261			(326,183	)
Subsidiary income (loss)		(288,325	)		197,836			37,595			37,595			—		15,299			—
Loss from previously unconsolidated affiliates		—			—			(24,658	)		(24,658	)		—		24,658			(24,658	)
Other income (expense), net		—			(1	)		2,336			2,336			5,863		(2,781	)		7,753
Income (loss) before income taxes		(429,278	)		(281,237	)		145,666			641,937			30,804		(589,173	)		(481,281	)
Provision for (benefit from) income taxes		—			—			(52,170	)		(52,170	)		3,239		52,170			(48,931	)
Net income (loss)		(429,278	)		(281,237	)		197,836			694,107			27,565		(641,343	)		(432,350	)
Net loss attributable to noncontrolling interest		—			—			—			—			2,942		—			2,942
Net income (loss) attributable to Intelsat S.A.	$	(429,278	)	$	(281,237	)	$	197,836		$	694,107		$	30,507	$	(641,343	)	$	(429,408	)

(Certain totals may not add due to the effects of rounding)

INTELSAT S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2012~~2013

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			JacksonSubsidiaryGuarantors			Non-GuarantorSubsidiaries			ConsolidationandEliminations			Consolidated
	IntelsatInvestmentsS.A.			IntelsatLuxembourg			IntelsatJackson			JacksonSubsidiaryGuarantors			Non-GuarantorSubsidiaries			ConsolidationandEliminations			Consolidated
Cash flows from operating activities:	$	(151,~~767~~579	)	$	(~~626~~326,~~643~~867	)	$	1431,~~135,227~~214		$	~~846~~617,~~682~~169		$	66(5,~~746~~718	)	$	(~~846~~617,~~682~~118	)	$	~~559~~97,~~563~~101
Cash flows from investing activities:
Payments for satellites and other property and equipment (including capitalized interest)		—			—			(~~708~~165,~~494~~385	)		(~~708~~165,~~494~~385	)		(61,~~607~~769	)		~~708~~165,~~494~~385			(~~715~~167,~~101~~154	)
Repayment from (disbursements for) intercompany loans		—			—			15,562			(23,771	)		—			8,209			—
Proceeds from insurance settlements		—			—			252,911			252,911			—			(252,911	)		252,911
Loan to affiliated party								(10,000	)		(10,000	)					10,000			(10,000	)
Payment on satellite performance incentives from insurance proceeds		—			—			(19,199	)		(19,199	)		—			19,199			(19,199	)
Investment in subsidiaries		(4,889	)		—			261			261			—			4,367			—
Repayment from (disbursements for) intercompany loans		—			—			627			(231,259	)		—			230,632			—
Dividend from affiliates		18,390			644,218			17,307			17,307			—			(697,222	)		—
Investment in subsidiaries		(4,365	)		—			—			(51	)		—			4,416			—
Other investing activities		—			—			—			—			—			—			—
Dividend from affiliates		5,090			333,443			750			750			—			(340,033	)		—
Net cash provided by (used in) investing activities		13,501			644,218			(685,364	)		(724,697	)		(6,607	)		33,848			(725,101	)
Other investing activities		—			—			(1,000	)		(1,000	)		—			1,000			(1,000	)
Net cash provided by (used in) investing activities		725			333,443			68,704			(163,233	)		(1,769	)		(172,312	)		65,558
Cash flows from financing activities:
Repayments of long-term debt		—			—			(148,~~461,288~~045	)		—			(2712,~~725~~209	)		—			(160,~~489,013~~254	)
Proceeds from issuance of long-term debt		—			—			140,~~661,~~000			—			—			—			140,~~661,~~000
Proceeds from (repayment of) intercompany borrowing		1,~~800~~350			—			—			—(69,000	)		(171,~~362~~977	)		1569,~~562~~627			—
Debt issuance costs		—			—			(19,444	)		—			—			—			(19,444	)
Principal payments on deferred satellite performance incentives		—			—			(4,276	)		(4,276	)		—			4,276			(4,276	)
Payment of premium on early retirement of debt		—			—			(39,477	)		—			—			—			(39,477	)
Capital contribution from parent		—			—			—			11,613			4,416			(16,029	)		—
Principal payments on deferred satellite performance incentives		—			—			(10,767	)		(10,767	)		(899	)		10,767			(11,666	)
Dividends to shareholders		—			(5,090	)		(333,443	)		(346,000	)		(750	)		685,283			—
Capital contribution from parent		—			—			—			42,437			4,628			(47,065	)		—
Capital contribution from noncontrolling interest		—			—			—			—			6,105			—			6,105
Dividends to shareholders		—			(18,390	)		(644,218	)		(316,500	)		(17,307	)		996,415			—
Dividends paid to noncontrolling interest		—			—			—			—			(1,723	)		—			(1,723	)
Capital contribution from noncontrolling interest		—			—			—			—			12,209			—			12,209
Net cash provided by (used in) financing activities		1,350			(5,090	)		(345,764	)		(407,663	)		(6,138	)		743,157			(20,148	)
Dividends paid to noncontrolling interest		—			—			—			—			(6,782	)		—			(6,782	)
Effect of exchange rate changes on cash and cash equivalents		(2	)		—			(324	)		(323	)		(885	)		323			(1,211	)
Net cash provided by (used in) financing activities		1,800			(18,390	)		(514,194	)		(284,830	)		(53,238	)		975,679			106,827
Net change in cash and cash equivalents		494			1,486			153,830			45,950			(14,510	)		(45,950	)		141,300
Effect of exchange rate changes on cash and cash equivalents		(13	)		(1	)		(432	)		(426	)		(4,297	)		426			(4,743	)
Cash and cash equivalents, beginning of period		42			91			133,379			131,107			53,934			(131,107	)		187,446
Net change in cash and cash equivalents		(479	)		(816	)		(64,763	)		(163,271	)		2,604			163,271			(63,454	)
Cash and cash equivalents, end of period	$	536		$	1,577		$	287,209		$	177,057		$	39,424		$	(177,057	)	$	328,746
Cash and cash equivalents, beginning of period		511			908			240,175			237,906			53,106			(237,906	)		294,700
Cash and cash equivalents, end of period	$	32		$	92		$	175,412		$	74,635		$	55,710		$	(74,635	)	$	231,246

(Certain totals may not add due to the effects of rounding)

4232

INTELSAT INVESTMENTS S.A. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012

(in thousands)

	IntelsatS.A.			IntelsatLuxembourg			IntelsatJackson			SubsidiaryGuarantors			Non-GuarantorSubsidiaries			ConsolidationandEliminations			Consolidated
	Intelsat S.A.			IntelsatLuxembourg			IntelsatJackson			JacksonSubsidiaryGuarantors			Non-GuarantorSubsidiaries			ConsolidationandEliminations			Consolidated
Cash flows from operating activities:	$	~~(33~~1,~~898~~455	)	$	(~~557~~324,~~342~~777	)	$	1417,~~260,055~~929		$	1559,~~319,179~~928		$	627,~~782~~474		$	(1559,~~321,556~~928	)	$	~~673~~122,~~220~~081
Cash flows from investing activities:
Payments for satellites and other property and equipment (including capitalized interest)		—			—			(~~566~~258,~~434~~281	)		(~~566~~258,~~434~~281	)		(512,~~056~~586	)		~~568~~258,~~811~~281			(~~615~~260,~~113~~867	)
Repayment from (disbursements for) intercompany loans		—			—			154,~~767~~884			(718,~~554~~437	)		~~787~~—			(913,~~000~~553	)		—
Capital contributions to previously unconsolidated affiliates		—			—			(12,209	)		(12,209	)		—			12,209			(12,209	)
Investment in subsidiaries		(3,000	)		—			346			346			—			2,308			—
Investment in subsidiaries		(3,100	)		—			(6,671	)		(6,671	)		—			16,442			—
Dividend from affiliates		1,500			325,550			11,091			11,091			—			(349,232	)		—
Dividend from affiliates		559,801			1,108,034			17,267			17,267			—			(1,702,369	)		—
Net cash provided by (used in) investing activities		(1,500	)		325,550			(241,960	)		(265,281	)		(2,586	)		(75,090	)		(260,867	)
Other investing activities		—			—			6,710			6,710			—			(6,710	)		6,710
Net cash provided by (used in) investing activities		556,701			1,108,034			(545,570	)		(568,891	)		(50,269	)		(1,120,617	)		(620,612	)
Cash flows from financing activities:
Repayments of long-term debt		~~(485,841~~—	)		—			(58,~~837,178~~125	)		~~(5,289,423~~—	)		—(12,209	)		~~5,289,423~~—			(620,~~323,019~~334	)
Proceeds from issuance of long-term debt		—			—			6175,~~083,750~~000			—			~~35,675~~—			—			6175,~~119,425~~000
Proceeds from (repayment of) intercompany borrowing		—			—			~~(787~~—	)		~~110,940~~—			(154,~~767~~884	)		~~(94~~4,~~386~~884	)		—
Debt issuance costs		—			—			(69,339	)		—			—			—			(69,339	)
Principal payments on deferred satellite performance incentives		—			—			(3,570	)		(3,570	)		(441	)		3,570			(4,011	)
Payment of premium on early retirement of debt		(36,770	)		—			(134,277	)		(108,163	)		—			108,163			(171,047	)
Capital contribution from parent		—			—			—			35,690			2,654			(38,344	)		—
Principal payments on deferred satellite performance incentives		—			—			(10,361	)		(10,361	)		(415	)		10,361			(10,776	)
Dividends to shareholders		—			(1,500	)		(325,550	)		(479,241	)		(11,091	)		817,382			—
Capital contribution from parent		—			—			—			5,027,932			9,771			(5,037,703	)		—
Capital contribution from noncontrolling interest		—			—			—			—			6,105			—			6,105
Dividends to shareholders		—			(559,801	)		(1,108,034	)		(781,374	)		(17,267	)		2,466,476			—
Dividends paid to noncontrolling interest		—			—			—			—			(2,255	)		—			(2,255	)
Noncontrolling interest in New Dawn		—			—			—			—			1,734			—			1,734
Net cash used in financing activities		—			(1,500	)		(162,245	)		(447,121	)		(22,121	)		787,492			154,505
Net cash provided by (used in) financing activities		(522,611	)		(559,801	)		(1,076,226	)		(1,050,449	)		13,731			2,742,334			(453,022	)
Effect of exchange rate changes on cash and cash equivalents		(1	)		—			102			104			943			(104	)		1,044
Effect of exchange rate changes on cash and cash equivalents		—			—			(951	)		(953	)		3,856			953			2,905
Net change in cash and cash equivalents		(46	)		(727	)		13,826			(152,370	)		3,710			152,370			16,763
Net change in cash and cash equivalents		192			(9,109	)		(362,692	)		(301,114	)		(25,900	)		301,114			(397,509	)
Cash and cash equivalents, beginning of period		511			908			240,175			237,906			53,106			(237,906	)		294,700
Cash and cash equivalents, beginning of period		7,315			10,017			595,472			468,867			80,126			(468,867	)		692,930
Cash and cash equivalents, end of period	$	465		$	181		$	254,001		$	85,536		$	56,816		$	(85,536	)	$	311,463
Cash and cash equivalents, end of period	$	7,507		$	908		$	232,780		$	167,753		$	54,226		$	(167,753	)	$	295,421

(Certain totals may not add due to the effects of rounding)

4333

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and their notes included elsewhere in this Quarterly Report. See “Forward-Looking Statements” for a discussion of factors that could cause our future financial condition and results of operations to be different from those discussed below.

Overview

We operate the world’s largest satellite services business, providing a critical layer in the global communications infrastructure. We generate more revenue, operate more satellite capacity, hold more orbital location rights, contract more backlog, serve more commercial customers and deliver services in more countries than any other commercial satellite operator. We provide diversified communications services to the world’s leading media companies, fixed and wireless telecommunications operators, data networking service providers for enterprise and mobile applications, multinational corporations and ISPs. We are also the leading provider of commercial satellite capacity to the U.S. government and other select military organizations and their contractors.

Our network solutions are a critical component of our customers’ infrastructures and business models. Our customers use our global network for a broad range of applications, from global distribution of content for media companies to providing the transmission layer for unmanned aerial vehicles to enabling essential network backbones for telecommunications providers. In addition, our satellite solutions provide higher reliability than is available from local terrestrial telecommunications services in many regions and allow our customers to reach geographies that they would otherwise be unable to serve.

~~2012~~ Intelsat ~~Jackson~~S.A. ~~Notes~~Initial ~~Offerings,~~Public ~~Tender~~Offering ~~Offers~~ and ~~Redemptions~~Related Transactions

On April 2623, ~~2012~~2013, Intelsat ~~Jackson~~S.A. (formerly known as Intelsat Global Holdings S.A.), our indirect parent company, completed anits initial public offering of ~~$1.2~~common ~~billion~~shares ~~aggregate~~and ~~principal~~a ~~amount~~concurrent public offering of ~~its 7 1/4~~5.75% ~~Senior~~Series ~~Notes~~A ~~due~~mandatory ~~2020~~convertible junior non-voting preferred shares (the ~~“2020~~initial ~~Jackson~~public ~~Notes”).~~offering ~~Intelsat~~together ~~Jackson~~with ~~had~~the ~~previously~~concurrent ~~issued~~public ~~$1.0~~offering, ~~billion~~the “IPO”), ~~aggregate~~receiving ~~principal~~net ~~amount~~proceeds of ~~the~~approximately ~~2020~~$550 ~~Jackson~~million ~~Notes~~after onunderwriting ~~September 30,~~discounts ~~2010~~and commissions. The net proceeds from the ~~2012~~IPO ~~offering~~have ~~were~~been ~~used~~or bywill ~~Intelsat~~be ~~Jackson~~primarily used to ~~repurchase~~redeem all of the outstanding $49353.56 million aggregate principal amount of Intelsat ~~Jackson’s outstanding~~Investments 9 6 1/2% Senior Notes due ~~2016~~2013 (the “~~2016~~Intelsat ~~Jackson~~Investments ~~9 1/2%~~ Notes”) and to prepay $10138.12 million ~~aggregate~~of ~~principal~~indebtedness ~~amount~~outstanding ofunder the Intelsat Jackson’s ~~11 1/4%~~New Senior ~~Notes~~Unsecured Credit Agreement, dated July 1, 2008, consisting of a senior unsecured term loan facility due ~~2016~~February 2014 (the “~~2016~~New ~~Jackson~~Senior ~~11 1/4%~~Unsecured ~~Notes~~Credit Facility”). inIn ~~tender~~connection ~~offers~~with ~~launched~~the onpending ~~April 12~~redemption of the Intelsat Investments Notes, ~~2012~~we ~~and~~expect ~~completed~~to recognize a loss on ~~May 10,~~early ~~2012~~extinguishment of debt of approximately $24.2 Onmillion ~~June 15,~~in ~~2012~~the second quarter of 2013, ~~Intelsat~~ ~~Jackson~~consisting of the difference between the carrying value of the debt ultimately redeemed and the ~~remaining~~total ~~$652~~cash paid (including related fees), and a write-off of unamortized debt discount and debt issuance costs.4 ~~million~~In ~~aggregate~~connection ~~principal~~with ~~amount~~the ~~outstanding~~partial prepayment of the ~~2016~~New ~~Jackson~~Senior ~~9 1/2%~~Unsecured ~~Notes~~Credit ~~and~~Facility, anwe ~~additional~~expect to recognize a loss on early extinguishment of debt of $~~434~~0.92 million ~~aggregate~~in ~~principal~~the ~~amount~~second quarter of ~~the~~2013, ~~2016~~consisting ~~Jackson 11 1/4%~~of ~~Notes~~a write-off of unamortized debt issuance costs.

In connection with the IPO, certain ~~these~~repurchase ~~tender~~rights ~~offers~~upon ~~and~~employee ~~redemptions,~~separation wethat ~~recognized~~were aincluded ~~loss~~in onvarious ~~early~~share-based ~~extinguishment~~compensation agreements of ~~debt~~management ofcontractually ~~$43~~expired.4 ~~million~~Upon inconsummation of the ~~second~~IPO, ~~quarter~~options were also granted to certain executives in accordance with the existing terms of ~~2012~~their side letters to a management shareholders agreement, ~~consisting~~ ofand ~~the~~cash ~~difference~~payments ~~between~~were ~~the~~made ~~carrying~~to ~~value~~certain members of ~~the~~management. ~~aggregate~~Based ~~debt~~on ~~repurchased~~awards oroutstanding ~~redeemed~~at ~~and~~ March 31, 2013, in connection with the ~~total~~IPO, ~~cash~~the ~~amount~~items ~~paid~~described ~~(including~~above ~~related~~are expected ~~fees),~~to ~~and~~result in a ~~write~~pre-~~off~~tax charge of ~~unamortized~~approximately ~~debt~~$21.3 ~~premium~~million, ~~and~~which ~~debt~~will ~~issuance~~be ~~costs~~recorded in the second quarter of 2013.

OnAlso ~~October 3,~~in ~~2012,~~connection ~~Intelsat~~with ~~Jackson~~the ~~completed~~IPO, anin ~~offering~~April of2013 ~~$640.0~~the ~~million~~monitoring ~~aggregate~~fee ~~principal~~agreement ~~amount~~dated ofFebruary 4, 2008 (the “2008 MFA”) with ~~6 5/8%~~BC ~~Senior~~Partners ~~Notes~~Limited ~~due~~and ~~2022~~Silver Lake Management Company III, L.L.C. (together, the “~~6 5/8%~~2008 ~~Notes~~MFA Parties”). ~~The~~was ~~net~~terminated. ~~proceeds~~Intelsat ~~from~~S.A. ~~the~~paid ~~October~~a ~~2012~~fee ~~offering~~of ~~were~~$39.1 ~~used~~million byto ~~Intelsat~~the ~~Jackson~~2008 toMFA ~~repurchase~~Parties orin ~~redeem~~connection ~~all of~~with ~~its~~the ~~outstanding $603~~termination.2 ~~million~~During ~~principal~~the ~~amount~~first quarter of 2013, the ~~2016~~2008 ~~Jackson~~MFA ~~11 1/4%~~Parties ~~Notes.~~had Inpreviously ~~connection~~received ~~with~~approximately ~~the~~$25.1 ~~tender~~million ~~offers~~for ~~and~~services ~~redemptions~~that were performed, weor ~~expect~~expected to ~~recognize~~be aperformed, ~~loss~~under onthe ~~early~~2008 ~~extinguishment~~MFA ~~of debt~~in of2013. The $2339.61 million inpayment ~~the~~made ~~fourth~~to ~~quarter~~terminate ~~of 2012, consisting of~~ the ~~difference~~2008 ~~between~~MFA, ~~the~~together with ~~carrying~~a ~~value~~write-off of ~~the~~$17.2 ~~debt~~million ~~ultimately~~of ~~repurchased~~prepaid orfees ~~redeemed~~relating ~~and~~to the ~~total~~balance ~~cash~~of ~~amount~~2013, ~~paid~~were ~~(including~~expensed ~~related~~by ~~fees),~~Intelsat ~~and~~S.A. aupon ~~write-off~~the consummation of ~~unamortized~~the ~~debt premium~~IPO.

442013 Intelsat Luxembourg Notes Offering and Redemptions

On April 5, 2013 Intelsat Luxembourg completed an offering of $3.5 billion aggregate principal amount of Senior Notes, consisting of $500.0 million aggregate principal amount of 6 ³/₄% Senior Notes due 2018 (the “2018 Luxembourg Notes”), $2.0 billion aggregate principal amount of 7 ³/₄% Senior Notes due 2021 (the “2021 Luxembourg Notes”) and $1.0 billion aggregate principal amount of 8 ¹/₈% Senior Notes due 2023 (the “2023 Luxembourg Notes” and collectively with the 2018 Luxembourg Notes and the 2021 Luxembourg Notes, the “New Luxembourg Notes”). The net proceeds from this offering were used by Intelsat Luxembourg in April 2013 to redeem all $2.5 billion aggregate principal amount of Intelsat Luxembourg’s outstanding 11 ¹/₂/12 ¹/₂% Senior PIK Election Notes (the “2017 PIK Notes”) and $754.8 million aggregate principal amount of Intelsat Luxembourg’s outstanding 11 ¹/₄% Senior Notes due 2017 (the “2017 Senior Notes”).

On April 23, 2013, Intelsat Luxembourg issued a notice of redemption pursuant to the indenture governing its 2017 Senior Notes that it intends to redeem $366.4 million aggregate principal amount of the 2017 Senior Notes on May 23, 2013. The redemption of the 2017 Senior Notes will be funded by insurance proceeds received from our total loss claim for the IS-27 satellite launch failure.

In connection with the pending and completed recent redemptions of the Intelsat Luxembourg notes, we expect to recognize a loss on early extinguishment of debt of $232.0 million in the second quarter of 2013, consisting of the difference between the carrying value of the aggregate debt ultimately redeemed and the total cash amount paid (including related fees), and a write-off of unamortized debt issuance costs.

Results of Operations

Three Months Ended ~~September~~March 3031, ~~2011~~2012 and ~~2012~~2013

The following table sets forth our comparative statements of operations for the periods shown with the increase (decrease) and percentage changes, except those deemed not meaningful (“NM”), between the periods presented (in thousands, except percentages):

							Three Months EndedSeptember 30, 2011Compared to ThreeMonths EndedSeptember 30, 2012
							Three Months EndedMarch 31, 2012Compared toThree Months EndedMarch 31, 2013
	Three MonthsEndedSeptember 30,2011			Three MonthsEndedSeptember 30,2012			Increase(Decrease)			PercentageChange
	Three MonthsEndedMarch 31, 2012			Three MonthsEndedMarch 31, 2013			Increase(Decrease)			PercentageChange
Revenue	$	~~652~~644,~~881~~169		$	~~654~~655,~~946~~127		$	210,~~065~~958			02	%
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)		~~110~~105,~~668~~010			~~102~~97,~~908~~646			(7,~~760~~364	)		(7	)
Selling, general and administrative		50,~~767~~966			4657,~~911~~952			(36,~~856~~986	)		(814	)
Depreciation and amortization		~~193~~186,~~841~~871			~~191~~187,~~972~~411			~~(1,869~~540	)		(10	)
Losses on derivative financial instruments		59,~~356~~858			121,~~037~~865			6(7,~~681~~993	)		NM(81	)
Total operating expenses		~~360~~352,~~632~~705			~~353~~344,~~828~~874			(67,~~804~~831	)		(2	)
Income from operations		~~292~~291,~~249~~464			~~301~~310,~~118~~253			818,~~869~~789			36
Interest expense, net		~~317~~311,~~433~~431			~~311~~317,~~951~~249			(5,~~482~~818	)		(2	)
Loss on early extinguishment of debt		—			(3,106	)		(3,106	)		NM
Other income (expense), net		2,903			(650	)		(3,553	)		NM
Loss from previously unconsolidated affiliates		(20,188	)		—			20,188			NM
Loss before income taxes		(17,064	)		(7,646	)		9,418			55
Other income (expense), net		585			(21,980	)		(22,565	)		NM
Provision for (benefit from) income taxes		7,204			(2,038	)		(9,242	)		NM
Loss before income taxes		(44,787	)		(35,919	)		8,868			20
Net loss		(24,268	)		(5,608	)		18,660			77
Benefit from income taxes		(42,678	)		(1,517	)		41,161			(96	)
Net income attributable to noncontrolling interest		(181	)		(888	)		(707	)		NM
Net loss		(2,109	)		(34,402	)		(32,293	)		NM	%
Net loss attributable to Intelsat Investments S.A.	$	(24,449	)	$	(6,496	)	$	17,953			73	%
Net (income) loss attributable to noncontrolling interest		1,667			(81	)		(1,748	)		NM
Net loss attributable to Intelsat S.A.	$	(442	)	$	(34,483	)	$	(34,041	)		NM	%

Revenue

We earn revenue primarily by providing services over satellite transponder capacity to our customers. Our customers generally obtain satellite capacity from us by placing an order pursuant to one of several master customer service agreements. Our master customer service agreements offer different service types, including transponder services, managed services, and channel, which are all services that are provided on, or used to provide access to, our global network. We refer to these services as on-network services. Our customer agreements also cover services that we procure from third parties and resell, which we refer to as off-network services. These services can include transponder services and other satellite-based transmission services sourced from other operators, often in frequencies not available on our network. Under the category Off-Network and Other Revenues, we also include revenues from consulting and other services.

4535

The following table sets forth our comparative revenue by service type, with Off-Network and Other Revenues shown separately from On-Network Revenues, for the periods shown (in thousands, except percentages):

Three MonthsEndedSeptember 30,2011

Three MonthsEndedSeptember 30,2012

Increase(Decrease)

PercentageChange

ThreeMonthsEndedMarch 31,2012

ThreeMonthsEndedMarch 31,2013

Increase(Decrease)

PercentageChange

On-Network Revenues

Transponder services

~~480~~479,~~159~~959

~~487~~501,~~035~~807

621,~~876~~848

Managed services

7165,~~134~~972

6972,~~751~~371

(16,~~383~~399

)

(210

)

Channel

2623,~~358~~820

2219,~~744~~165

(34,~~614~~655

)

(1420

)

Total on-network revenues

~~577~~569,~~651~~751

~~579~~593,~~530~~343

123,~~879~~592

Off-Network and Other Revenues

Transponder, MSS and other off-network services

6264,~~794~~434

6048,~~844~~977

(115,~~950~~457

)

(324

)

Satellite-related services

129,~~436~~984

1412,~~572~~807

2,~~136~~823

1728

Total off-network and other revenues

7574,~~230~~418

7561,~~416~~784

~~186~~(12,634

)

0(17

)

Total

~~652~~644,~~881~~169

~~654~~655,~~946~~127

210,~~065~~958

Total revenue for the three months ended ~~September~~March 3031, ~~2012~~2013 increased by $211.10 million, asor 2%, as compared to the three months ended ~~September~~March 3031, ~~2011~~2012. By service type, our revenues increased or decreased due to the following:

On-Network Revenues:

• Transponder services—an aggregate increase of $621.98 million, primarily due to an $811.84 million increase in revenue from growth in capacity sold to media customers largely in the ~~Europe, the~~ Latin America and Caribbean and the Asia-Pacific regions, ~~partially~~a ~~offset by an aggregate~~ $25.74 million ~~decrease~~increase in revenue from ~~network~~capacity ~~services~~sold ~~customers, reflecting a decline in the Europe region~~ for ~~services~~government ~~provided~~applications inand ~~Africa~~a ~~and~~$5.1 anmillion increase in ~~the~~revenue ~~Latin~~from ~~America~~network ~~and~~services ~~Caribbean region~~customers.

• Managed services—an aggregate ~~decrease~~increase of $16.4 million, largely due to aan ~~decrease~~increase in revenue from ~~network~~new broadband services ~~customers~~ for ~~international~~mobility ~~trunking~~applications, primarily in ~~Africa,~~the aEurope ~~trend~~region, ~~which~~and wean ~~expect~~increase ~~will continue due to the migration of services~~ in ~~this~~revenue ~~region~~for toprivate ~~fiber~~line ~~optic~~solutions ~~cable,~~for ~~partially~~a ~~offset~~customer bybased ~~increases~~ in ~~broadband~~North ~~services for mobility applications~~America.

• Channel—an aggregate decrease of $34.67 million related to a continued decline ~~from~~due to the migration of international point-to-point satellite traffic to fiber optic cable, a trend which we expect will continue.

Off-Network and Other Revenues:

• Transponder, MSS and other off-network services—an aggregate decrease of $215.05 million, primarily due to declines in ~~off-network~~sales ~~transponder~~of ~~services~~customer premises equipment for network services and ~~media~~government ~~customers~~applications, and declines in the re-sale of mobile satellite services and off-network transponder services for government applications.

• Satellite-related services—an aggregate increase of $2.18 million, primarily due to higher ~~professional~~ fees ~~earned~~ for ~~providing~~ government professional services and flight operations support for third-party satellites ~~as compared to the third quarter of 2011~~.

Operating Expenses

Direct Costs of Revenue (Excluding Depreciation and Amortization)

Direct costs of revenue decreased by $7.84 million, or 7%, to $~~102~~97.96 million for the three months ended ~~September 30~~March 31, ~~2012~~2013 as compared to the three months ended ~~September 30~~March 31, ~~2011~~2012. The decrease was primarily due to $48.4 million of higher ~~service~~cost ~~costs~~of insales ~~2011~~for ~~associated~~customer ~~with~~premise ~~the~~equipment ~~accounting~~during ~~for~~the ~~our~~first ~~revenue~~quarter ~~and cost~~of ~~sharing arrangements~~2012 ~~with~~as ~~JSAT~~well ~~International,~~as ~~Inc~~a $4.6 ~~(“JSAT”)~~million ~~related~~decrease toin the ~~consolidation~~cost of ~~the~~MSS ~~Horizons~~and ~~Satellite~~off-network ~~Holdings,~~Fixed ~~LLC~~Satellite Services (“~~Horizons Holdings~~FSS”) ~~joint~~capacity ~~venture~~purchased related onto ~~September~~solutions ~~30,~~sold ~~2011~~to our government customer set. ~~Further,~~These indecreases ~~2012~~were ~~there~~offset ~~was~~by a $23.25 million ~~decline~~increase in other direct costs ~~attributable~~related to ~~purchases~~our delivery of ~~off-network~~professional ~~fixed satellite~~ services ~~(“FSS”) capacity~~ and ~~other~~costs ~~third-party~~related ~~services,~~to ~~as well as~~ a ~~$1.2~~joint ~~million decrease in office and operational expenses~~venture.

Selling, General and Administrative

Selling, general and administrative expenses ~~decreased~~increased by $37.90 million, or 814%, to $4658.90 million for the three months ended ~~September~~March 3031, ~~2012~~2013 as compared to the three months ended ~~September~~March 3031, ~~2011~~ 2012. This ~~The decrease~~ was primarily due to a $2.6.1 million ~~decrease~~increase in bad debt expense and $12.70 million ofin ~~lower~~higher professional fees, partially offset by ~~a net~~ $1.21 million ~~increase~~of inlower ~~staff related expenses largely due to~~ non-cash stock compensation costs associated with ~~the~~our amended and restated ~~Intelsat Global, Ltd.~~ 2008 Share Incentive Plan ~~(the “2008 Share Plan”)~~.

4636

Depreciation and Amortization

Depreciation and amortization expense ~~decreased~~increased by $10.95 million, ~~or 1%,~~ to $~~192~~187.04 million for the three months ended ~~September~~ March 3031, ~~2012~~2013 as compared to the three months ended ~~September~~March 3031, ~~2011~~2012. This ~~decrease~~increase was primarily due to the following:

• aan ~~net~~increase ~~decrease~~ of $1025.98 million in depreciation expense ~~due~~resulting tofrom the ~~timing~~impact of ~~certain~~ satellites ~~becoming~~placed ~~fully~~into ~~depreciated~~service ~~and~~during ~~changes~~2012; inpartially ~~estimated~~offset ~~remaining useful lives of certain satellites;~~by

• a net decrease of $323.42 million in ~~amortization~~depreciation expense ~~primarily~~ due to ~~changes in~~ the ~~expected~~timing ~~pattern~~ of ~~consumption~~certain ofsatellites ~~amortizable~~becoming ~~intangible~~fully ~~assets~~depreciated ~~as these assets primarily include acquired backlog, which relates to contracts covering varying periods that expire over time,~~ and ~~acquired~~changes ~~customer~~in ~~relationships~~estimated ~~for~~remaining ~~which~~useful ~~the~~lives ~~value~~of ~~diminishes~~certain ~~over time~~satellites; and

• a decrease of $2.64 million in ~~depreciation~~amortization expense primarily due to changes in the ~~timing~~expected pattern of ~~ground~~consumption ~~and~~of ~~other~~amortizable intangible assets ~~placed~~as inthese ~~service~~assets orprimarily ~~becoming~~include ~~fully~~acquired ~~depreciated;~~backlog, ~~partially~~which ~~offset~~relates byto contracts covering varying periods that expire over time, and acquired customer relationships, for which the value diminishes over time.

• an increase of $15.3 million in depreciation expense resulting from the impact of satellites placed into service during 2011 and 2012.

Losses on Derivative Financial Instruments

Losses on derivative financial instruments were $121.09 million for the three months ended ~~September~~March 3031, ~~2012~~2013 compared to $59.49 million for the three months ended ~~September~~March 3031, ~~2011~~2012. The losses on derivative financial instruments are related to the net loss on our interest rate swaps, which reflects interest expense accrued on the interest rate swaps as well as the change in fair value.

Interest Expense, Net

Interest expense, net consists of the gross interest expense we incur less the amount of interest we capitalize related to capital assets under construction and less interest income earned. As of ~~September~~March 3031, ~~2012~~2013, we also held interest rate swaps with an aggregate notional amount of $21.36 billion to economically hedge the variability in cash flow on a portion of the floating-rate term loans under our senior secured and unsecured credit facilities. The swaps have not been designated as hedges for accounting purposes. Interest expense, net ~~decreased~~increased by $5.48 million, or 2%, to $~~312~~317.02 million for the three months ended ~~September~~March 3031, ~~2012~~2013, as compared to $~~317~~311.4 million for ~~the~~ the three months ended ~~September~~March 3031, ~~2011~~2012. The ~~decrease~~increase in interest expense, net was principally due to the following:

• aan ~~net~~increase ~~decrease~~ of $724.71 million inresulting from lower capitalized interest ~~expense~~of as$11.6 amillion ~~result~~for ofthe ~~our~~three ~~notes~~months ~~offering~~ended March 31, ~~repurchases~~2013, ~~and~~as ~~redemptions~~compared into ~~the~~$35.7 ~~first~~million ~~half~~for ofthe ~~2012~~three ~~(see—Liquidity~~months ~~and~~ended ~~Capital~~March ~~Resources—Long-Term~~31, ~~Debt—~~2012, ~~Intelsat~~resulting ~~Jackson~~from ~~Notes~~decreased ~~Offerings,~~levels ~~Tender~~of ~~Offers~~satellites and ~~Redemptions)~~related assets under construction; partially offset by

• ana ~~increase~~net decrease of $320.01 million ~~from~~in ~~lower capitalized~~ interest ~~resulting~~expense ~~from~~as ~~decreased~~a ~~levels~~result of ~~satellites~~Intelsat Jackson’s offerings, redemptions and ~~related~~amendments ~~assets~~in ~~under~~2012 ~~construction~~(see—Liquidity and Capital Resources—Long-Term Debt—2012 Debt Transactions).

~~Non~~The non-cash portion ~~items~~of in total interest expense, net ~~were~~was $1314.79 million for the three months ended ~~September~~ March 3031, ~~2012,~~2013. ~~primarily~~The ~~for~~non-cash interest expense was due to the amortization of deferred financing fees incurred as a result of new or refinanced debt and the amortization and accretion of discounts and premiums.

Loss on Early Extinguishment of Debt

Loss on early extinguishment of debt was $3.1 million for the three months ended September 30, 2012, with no similar charge for the three months ended September 30, 2011. The 2012 loss was comprised of the write-off of unamortized debt issuance costs in connection with the prepayment of $112.2 million of New Dawn debt from restricted cash relating to proceeds received from an insurance claim (see—Liquidity and Capital Resources—Long-Term Debt— New Dawn Equity Purchase and Repayments of Credit Facilities).

Loss from Previously Unconsolidated Affiliates

Loss from previously unconsolidated affiliates was $20.2 million for the three months ended September 30, 2011 with no comparable amount for the three months ended September 30, 2012, due to the consolidation of the Horizons Holdings joint venture in September 2011 (see Note 6(a)—Investments—Horizons Holdings).

Other Income (Expense), Net

Other expense, net was $~~22.~~0.7 million for the three months ended ~~September~~March 3031, ~~2012~~2013 as compared to other income, net of $02.69 million for the three months ended ~~September~~March 3031, ~~2011~~2012. The difference of $223.6 million was primarily due to a $~~20.0 million pre-tax charge plus $~~1.02 million of ~~associated~~exchange ~~costs~~rate ~~and~~losses ~~expenses~~ in ~~connection with~~ the ~~expiration~~three ofmonths anended ~~unconsummated third-party investment commitment~~March 31, ~~together~~2013 ~~with~~compared ato $1.40 million ~~increase~~ inof exchange rate ~~losses~~gains in the three months ended March 31, 2012, primarily related to our business conducted in Brazilian reais and euros, and a $0.9 million decrease in rental income.

47Provision for (Benefit from) Income Taxes

~~Table~~Our benefit from income taxes was $2.0 million for the three months ended March 31, 2013 as compared to a provision of ~~Contents~~$7.2 million for the three months ended March 31, 2012. The difference was principally due to a 2012 internal subsidiary merger that caused a remeasurement of our deferred taxes in the three months ended March 31, 2012, and a benefit for research and development credits recorded in the three months ended March 31, 2013. The U.S. Congress extended the research and development credit on January 1, 2013.

~~Benefit~~Cash ~~from~~paid ~~Income~~for ~~Taxes~~income taxes, net of refunds, totaled $14.0 million and $15.6 million for the three months ended March 31, 2012 and 2013, respectively.

Our benefit from income taxes was $1.5 million for the three months ended September 30, 2012 as compared to a benefit of $42.7 million for the three months ended September 30, 2011. The difference was principally due to the tax benefit associated with the 2011 Horizons remeasurement charge and the release of certain valuation allowances on Intelsat Corporation’s deferred state tax assets relating to internal subsidiary mergers during the three months ended September 30, 2011.

Cash paid for income taxes, net of refunds, totaled $4.6 million and $7.6 million for the three months ended September 30, 2011 and 2012, respectively.

Nine Months Ended September 30, 2011 and 2012

							Nine Months EndedSeptember 30, 2011Compared to NineMonths EndedSeptember 30, 2012
	Nine MonthsEndedSeptember 30,2011			Nine MonthsEndedSeptember 30,2012			Increase(Decrease)			PercentageChange
Revenue	$	1,935,515		$	1,937,783		$	2,268			0	%
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)		316,749			307,224			(9,525	)		(3	)
Selling, general and administrative		157,516			151,300			(6,216	)		(4	)
Depreciation and amortization		583,196			567,472			(15,724	)		(3	)
Losses on derivative financial instruments		24,163			37,651			13,488			56
Total operating expenses		1,081,624			1,063,647			(17,977	)		(2	)
Income from operations		853,891			874,136			20,245			2
Interest expense, net		992,084			950,073			(42,011	)		(4	)
Loss on early extinguishment of debt		(326,183	)		(46,489	)		279,694			86
Loss from previously unconsolidated affiliates		(24,658	)		—			24,658			NM
Other income (expense), net		7,753			(20,982	)		(28,735	)		NM
Loss before income taxes		(481,281	)		(143,408	)		337,873			70
Benefit from income taxes		(48,931	)		(1,110	)		47,821			(98	)
Net loss		(432,350	)		(142,298	)		290,052			67	%
Net (income) loss attributable to noncontrolling interest		2,942			(643	)		(3,585	)		NM
Net loss attributable to Intelsat S.A.	$	(429,408	)	$	(142,941	)	$	286,467			67	%

Revenue

	Nine MonthsEndedSeptember 30,2011		Nine MonthsEndedSeptember 30,2012		Increase(Decrease)			PercentageChange
On-Network Revenues
Transponder services	$	1,422,163	$	1,447,797	$	25,634			2	%
Managed services		212,432		202,928		(9,504	)		(4	)
Channel		80,377		70,025		(10,352	)		(13	)
Total on-network revenues		1,714,972		1,720,750		5,778			0
Off-Network and Other Revenues
Transponder, MSS and other off-network services		178,942		180,665		1,723			1
Satellite-related services		41,601		36,368		(5,233	)		(13	)
Total off-network and other revenues		220,543		217,033		(3,510	)		(2	)
Total	$	1,935,515	$	1,937,783	$	2,268			0	%

Total revenue for the nine months ended September 30, 2012 increased by $2.3 million as compared to the nine months ended September 30, 2011. By service type, our revenues increased or decreased due to the following:

On-Network Revenues:

• Transponder services—an aggregate increase of $25.6 million, primarily due to a $31.3 million increase in revenue from growth in capacity sold to media customers mainly in the Latin America and Caribbean, the Europe, the Asia-Pacific and the North America regions, as well as a $5.8 million increase in revenue from capacity sold by our Intelsat General business, partially offset by an aggregate $11.5 million decrease in revenue from network services customers, reflecting a decline in the Europe region for services provided in Africa and an increase in the Latin America and Caribbean region.

• Managed services—an aggregate decrease of $9.5 million, largely due to a decrease in revenue from network services customers for international trunking primarily in Africa, a trend which we expect will continue due to the migration of services in this region to fiber optic cable, partially offset by increases in broadband services for mobility applications.

• Channel—an aggregate decrease of $10.4 million related to a continued decline from the migration of international point-to-point satellite traffic to fiber optic cable, a trend which we expect will continue.

Off-Network and Other Revenues:

• Transponder, MSS and other off-network services—an aggregate increase of $1.7 million, primarily due to an increase of $7.8 million in off-network transponder services revenue largely related to contracts being implemented by our Intelsat General business and a $5.4 million increase in customer premises equipment revenue, partially offset by a $6.7 million decline in off-network transponder and media services revenue and a $4.8 million decrease in mobile satellite services (“MSS”) revenue.

• Satellite-related services—an aggregate decrease of $5.2 million, primarily due to lower professional fees earned for providing government professional services and flight operations support for third-party satellites as compared to the nine months ended September 30, 2011.

Operating Expenses

Direct Costs of Revenue (Excluding Depreciation and Amortization)

Direct costs of revenue decreased by $9.5 million, or 3%, to $307.2 million for the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011. The decline was primarily due to an aggregate $10.0 million decrease in costs associated with purchases of off-network FSS capacity as well as the impact of accounting for our revenue and cost sharing arrangements with JSAT related to the consolidation of the Horizons Holdings joint venture at the end of the third quarter of 2011, and a $4.0 million decrease in the cost of MSS capacity purchased related to solutions sold by our Intelsat General business. These decreases were partially offset by a $4.7 million increase in costs relating to purchases of equipment.

Selling, General and Administrative

Selling, general and administrative expenses decreased by $6.2 million, or 4%, to $151.3 million for the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011. The decrease was primarily due to a $7.5 million decrease in professional fees, partially offset by a $1.3 million increase in bad debt expense.

Depreciation and Amortization

Depreciation and amortization expense decreased by $15.7 million, or 3%, to $567.5 million for the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011. This decrease was primarily due to the following:

• a net decrease of $25.0 million in depreciation expense due to the timing of certain satellites becoming fully depreciated and changes in estimated remaining useful lives of certain satellites;

• a decrease of $12.4 million in depreciation expense due to the timing of ground and other assets placed in service or becoming fully depreciated; and

• a decrease of $10.3 million in amortization expense primarily due to changes in the expected pattern of consumption of amortizable intangible assets as these assets primarily include acquired backlog, which relates to contracts covering varying periods that expire over time, and acquired customer relationships for which the value diminishes over time; partially offset by

• an increase of $32.4 million in depreciation expense resulting from the impact of satellites placed into service during 2011 and 2012.

Losses on Derivative Financial Instruments

Losses on derivative financial instruments were $37.7 million for the nine months ended September 30, 2012 as compared to $24.2 million for the nine months ended September 30, 2011. The losses on derivative financial instruments related to the net loss on our interest rate swaps, which reflects interest expense accrued on the interest rate swaps as well as the change in fair value.

Interest Expense, Net

Interest expense, net decreased by $42.0 million, or 4%, to $950.1 million for the nine months ended September 30, 2012 as compared to $992.1 million for the nine months ended September 30, 2011. The decrease in interest expense, net was principally due to the following:

• a net decrease of $35.0 million in interest expense resulting from our refinancing transactions, redemptions and offerings in 2011 (see—Liquidity and Capital Resources—Long-Term Debt—2011 Debt Transactions); and

• a decrease of $7.0 million from higher capitalized interest resulting from increased levels of satellites and related assets under construction.

Non-cash items in interest expense, net were $47.7 million for the nine months ended September 30, 2012 and included $5.0 million of payment-in-kind interest expense and $42.7 million primarily associated with the amortization of deferred financing fees incurred as a result of new or refinanced debt and the amortization and accretion of discounts and premiums.

Loss on Early Extinguishment of Debt

Loss on early extinguishment of debt was $46.5 million for the nine months ended September 30, 2012 as compared to $326.2 million for the nine months ended September 30, 2011. The 2012 loss primarily related to the repayment of debt in connection with the April 2012 Intelsat Jackson tender offers and redemptions (see Liquidity and Capital Resources—Long-Term Debt—2012 Intelsat Jackson Notes Offerings, Tender Offers and Redemptions). In the nine months ended September 30, 2012, Intelsat Jackson repurchased or redeemed $1,146.9 million of its debt for $1,186.2 million, excluding accrued and unpaid interest and related fees of $57.7 million. In addition, $112.2 million of New Dawn debt was prepaid from restricted cash relating to proceeds received from an insurance claim (see—Liquidity and Capital Resources—Long-Term Debt—New Dawn Equity Purchase and Repayments of Credit Facilities). The loss of $46.5 million was primarily driven by a $39.5 million difference between the carrying value of the Intelsat Jackson debt repurchased or redeemed and the total cash amount paid (including related fees), together with a write-off of $3.9 million of Intelsat Jackson unamortized debt premium and debt issuance costs and $3.1 million of New Dawn unamortized debt issuance costs.

The 2011 loss on early extinguishment of debt of $326.2 million related to the repayment of debt in connection with the 2011 refinancings, redemptions and tender offers (see Liquidity and Capital Resources—Long-Term Debt—2011 Debt Transactions). In January 2011, we repurchased $2,849.3 million of Intelsat Corp and Intelsat Sub Holdco debt for $2,906.1 million, excluding accrued and unpaid interest and related fees of $8.7 million. In March 2011, we redeemed $710.8 million of Intelsat S.A. and Intelsat Sub Holdco debt for $747.6 million, excluding $19.1 million of accrued and unpaid interest. In April and May 2011, we redeemed or repurchased $2,527.0 million of Intelsat Sub Holdco, Intelsat Jackson and Intermediate Holdco notes for $2,604.4 million, excluding accrued and unpaid interest of $58.1 million. The loss of $326.2 million was driven by a $171.1 million difference between the carrying value of the debt repurchased, redeemed or repaid and the total cash amount paid (including related fees), together with a write-off of $155.1 million of unamortized debt discounts and debt issuance costs.

Loss from Previously Unconsolidated Affiliates

Loss from previously unconsolidated affiliates was $24.7 million for the nine months ended September 30, 2011 with no comparable amount for the nine months ended September 30, 2012, due to the consolidation of the Horizons Holdings joint venture in September 2011 (see Note 6(a)—Investments—Horizons Holdings).

Other Income (Expense), Net

Other expense, net was $21.0 million for the nine months ended September 30, 2012 as compared to other income, net of $7.8 million for the nine months ended September 30, 2011. The difference of $28.8 million was primarily due to a $20.0 million pre-tax charge plus $1.0 million of associated costs and expenses in connection with the expiration of an unconsummated third-party investment commitment, together with a $7.6 million increase in exchange rate losses, primarily related to our business conducted in Brazilian reais and euros.

Benefit from Income Taxes

Our benefit from income taxes was $1.1 million for the nine months ended September 30, 2012 as compared to a benefit of $48.9 million for the nine months ended September 30, 2011. The difference was principally due to the 2011 tax benefits recorded in connection with the Horizons remeasurement charge, the September 2011 internal subsidiary mergers, a release of withholding tax liabilities resulting from certain customer transactions in the Asia-Pacific region and refinancing expenses and changes in the balance of deferred taxes as a result of a series of internal transactions and related steps completed on January 12, 2011, that reorganized the ownership of our assets among our subsidiaries and effectively combined the legacy businesses of Intelsat Sub Holdco and Intelsat Corp in order to simplify our operations and enhance our ability to transact business in an efficient manner (the “2011 Reorganization”).

Cash paid for income taxes, net of refunds, totaled $19.5 million and $25.8 million for the nine months ended September 30, 2011 and 2012, respectively.

EBITDA

EBITDA consists of earnings before net interest, ~~gain (loss) on early extinguishment of debt,~~ taxes and depreciation and amortization. Given our high level of leverage, refinancing activities are a frequent part of our efforts to manage our costs of borrowing. Accordingly, we consider (gain) loss on early extinguishment of debt an element of interest expense. EBITDA is a measure commonly used in the ~~fixed satellite services~~ FSS sector, and we present EBITDA to enhance the understanding of our operating performance. We use EBITDA as one criterion for evaluating our performance relative to that of our peers. We believe that EBITDA is an operating performance measure, and not a liquidity measure, that provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. However, EBITDA is not a measure of financial performance under U.S. GAAP, and our EBITDA may not be comparable to similarly titled measures of other companies. EBITDA should not be considered as an alternative to operating income (loss) or net income (loss), determined in accordance with U.S. GAAP, as an indicator of our operating performance, or as an alternative to cash flows from operating activities, determined in accordance with U.S. GAAP, as an indicator of cash flows, or as a measure of liquidity.

comparable companies. However, EBITDA is not a measure of financial performance under U.S. GAAP, and our EBITDA may not be comparable to similarly titled measures of other companies. EBITDA should not be considered as an alternative to operating income (loss) or net income (loss) determined in accordance with U.S. GAAP, as an indicator of our operating performance, or as an alternative to cash flows from operating activities determined in accordance with U.S. GAAP, as an indicator of cash flows, or as a measure of liquidity.

A reconciliation of net loss to EBITDA for the periods shown is as follows (in thousands):

	Three MonthsEndedSeptember 30,2011			Three MonthsEndedSeptember 30,2012			Nine MonthsEndedSeptember 30,2011			Nine MonthsEndedSeptember 30,2012
	Three MonthsEndedMarch 31,2012			Three MonthsEndedMarch 31,2013
Net loss	$	(224,~~109~~268	)	$	(345,~~402~~608	)	$	~~(432,350~~	)	$	~~(142,298~~	)
Add (Subtract):
Interest expense, net		~~317~~311,~~433~~431			~~311~~317,~~951~~249			~~992,084~~			~~950,073~~
Loss on early extinguishment of debt		—			3,106			326,183			46,489
Provision for (benefit from) income taxes		7,204			(2,038	)
Benefit from income taxes		(42,678	)		(1,517	)		(48,931	)		(1,110	)
Depreciation and amortization		186,871			187,411
Depreciation and amortization		193,841			191,972			583,196			567,472
EBITDA	$	481,238		$	497,014
EBITDA	$	466,487		$	471,110		$	1,420,182		$	1,420,626

Intelsat ~~S.A.~~Investments Adjusted EBITDA

In addition to EBITDA, we calculate a measure called Intelsat ~~S.A.~~Investments Adjusted EBITDA to assess the operating performance of Intelsat S Investments.A. Intelsat ~~S.A.~~Investments Adjusted EBITDA consists of EBITDA of Intelsat ~~S.A.~~Investments as adjusted to exclude or include certain unusual items, certain other operating expense items and certain other adjustments as described in the table and related footnotes below. Our management believes that the presentation of Intelsat Investments Adjusted EBITDA provides useful information to investors, lenders and financial analysts regarding our financial condition and results of operations because it permits clearer comparability of our operating performance between periods. By excluding the potential volatility related to the timing and extent of non-operating activities, such as impairments of asset value and gains (losses) on derivative financial instruments, our management believes that Intelsat Investments Adjusted EBITDA provides a useful means of evaluating the success of our operating activities. We also use Intelsat Investments Adjusted EBITDA, together with other appropriate metrics, to set goals for and measure the operating performance of our business, and it is one of the principal measures we use to evaluate our management’s performance in determining compensation under our incentive compensation plans. Adjusted EBITDA measures have been used historically by investors, lenders and financial analysts to estimate the value of a company, to make informed investment decisions and to evaluate performance. Our management believes that the inclusion of Intelsat Investments Adjusted EBITDA facilitates comparison of our results with those of companies having different capital structures.

51Intelsat Investments Adjusted EBITDA is not a measure of financial performance under U.S. GAAP and may not be comparable to similarly titled measures of other companies. Intelsat Investments Adjusted EBITDA should not be considered as an alternative to operating income (loss) or net income (loss) determined in accordance with U.S. GAAP, as an indicator of our operating performance, as an alternative to cash flows from operating activities determined in accordance with U.S. GAAP, as an indicator of cash flows, or as a measure of liquidity.

~~management believes that the presentation of Intelsat S.~~A. ~~Adjusted~~reconciliation ~~EBITDA provides useful information to investors, lenders and financial analysts regarding our financial condition and results~~ of ~~operations~~net ~~because~~loss ~~it permits clearer comparability of our operating performance between periods. By excluding the potential volatility related~~ to ~~the timing and extent of non-operating activities, such as impairments of asset value and gains (losses) on derivative financial instruments, our management believes that~~ Intelsat ~~S.A.~~Investments ~~Adjusted~~ EBITDA ~~provides~~and ~~a useful means of evaluating the success of our operating activities. We also use~~ Intelsat ~~S.A.~~Investments ~~Adjusted~~ EBITDA~~, together with other~~ ~~appropriate metrics,~~ to set goals for and measure the operating performance of our business, and it is one of the principal measures we use to evaluate our management’s performance in determining compensation under our incentive compensation plans. Adjusted EBITDA measures have been used historically by investors, lenders and financial analysts to estimate the value of a company, to make informed investment decisions and to evaluate performance. Our management believes that the inclusion of Intelsat ~~S.A.~~Investments Adjusted EBITDA ~~facilitates~~is ~~comparison~~as offollows ~~our~~(in ~~results~~thousands): ~~with those of companies having different capital structures.~~

Intelsat S.A. Adjusted EBITDA is not a measure of financial performance under U.S. GAAP and may not be comparable to similarly titled measures of other companies. Intelsat S.A. Adjusted EBITDA should not be considered as an alternative to operating income (loss) or net income (loss), determined in accordance with U.S. GAAP, as an indicator of our operating performance, as an alternative to cash flows from operating activities, determined in accordance with U.S. GAAP, as an indicator of cash flows, or as a measure of liquidity.


	Three Months Ended March 31, 2012			Three Months Ended March 31, 2013
Net loss	$	(24,268	)	$	(5,608	)

Add (Subtract):
Interest expense, net		311,431			317,249
Provision for (benefit from) income taxes		7,204			(2,038	)
Depreciation and amortization		186,871			187,411

Intelsat Investments EBITDA		481,238			497,014

Add (Subtract):
Compensation and benefits (1)		1,167			47
Management fees (2)		6,266			6,285
Loss on derivative financial instruments (3)		9,858			1,865
Non-recurring and other non-cash items (4)		(1,814	)		661

Intelsat Investments Adjusted EBITDA	$	496,715		$	505,872

A reconciliation of net loss to Intelsat S.A. EBITDA and Intelsat S.A. EBITDA to Intelsat S.A. Adjusted EBITDA is as follows (in thousands):

	Nine MonthsEndedSeptember 30,2011			Nine MonthsEndedSeptember 30,2012
Net loss	$	(432,350	)	$	(142,298	)
Add (Subtract):
Interest expense, net		992,084			950,073
Loss on early extinguishment of debt		326,183			46,489
Benefit from income taxes		(48,931	)		(1,110	)
Depreciation and amortization		583,196			567,472
Intelsat S.A. EBITDA		1,420,182			1,420,626
Add (Subtract):
Compensation and benefits (1)		4,275			4,705
Management fees (2)		18,650			18,797
Loss from previously unconsolidated affiliates (3)		24,658			—
Losses on derivative financial instruments (4)		24,163			37,651
Non-recurring and other non-cash items (5)		10,672			18,228
Intelsat S.A. Adjusted EBITDA (6)	$	1,502,600		$	1,500,007

(1)	Reflects non-cash expenses incurred relating to our equity compensation plans and a portion of the expenses related to our defined benefit retirement plan and other postretirement benefits.

(2) Reflects expenses incurred in connection with the ~~monitoring~~2008 ~~fee~~MFA. ~~agreement~~In connection with BCthe ~~Partners~~IPO ~~Limited~~in ~~and~~April ~~Silver Lake Management Company III~~2013, ~~L.L.C.~~the to2008 ~~provide~~MFA ~~certain~~was ~~monitoring, advisory and consulting services to our subsidiaries~~terminated.

(3) Represents ~~losses~~(i) ~~under~~the changes in the ~~equity~~fair ~~method~~value of ~~accounting~~the ~~relating~~undesignated tointerest ~~our~~rate ~~investment~~swaps inand ~~Horizons~~(ii) ~~Holdings~~the ~~prior~~difference tobetween the ~~consolidation~~amount of ~~Horizons~~floating ~~Holdings~~rate oninterest ~~September~~we 30receive and the amount of fixed rate interest we pay under such swaps, ~~2011~~both of which are recognized in operating income.

(4) ~~Represents~~Reflects ~~(i)~~certain ~~the~~non-recurring ~~changes~~gains inand ~~the~~losses ~~fair~~and ~~value~~non-cash ~~of the undesignated interest rate swaps~~items, ~~(ii)~~including the ~~difference~~following: ~~between~~non-cash ~~the~~income ~~amount~~related ofto ~~floating rate interest we receive and~~ the ~~amount~~recognition of ~~fixed~~deferred ~~rate~~revenue ~~interest~~on wea ~~pay~~straight-line ~~under~~basis ~~such~~for ~~swaps~~certain ~~and~~prepaid ~~(iii)~~capacity ~~the~~service ~~change~~contracts, inpartially ~~the~~offset ~~fair~~by ~~value~~expenses ~~of our put option embedded derivative in 2011~~ related to ~~Intelsat~~severance ~~Sub~~payments, ~~Holdco’s~~costs 8associated ~~7/8%~~with ~~Senior~~a ~~Notes~~2013 ~~due~~intercompany ~~2015,~~reorganization ~~Series~~and Bexpenses ~~(the~~associated ~~“2015~~with ~~Intelsat~~the ~~Sub~~relocation ~~Holdco~~of ~~Notes,~~our ~~Series~~administrative ~~B”),~~headquarters ~~all~~and ofprimary ~~which~~satellites ~~are~~operations ~~recognized in operating income~~center.

(5) Reflects certain non-recurring gains and losses and non-cash items, including charges related to costs and expenses in connection with an unconsummated third-party investment commitment and its expiration in 2012, the 2011 Reorganization and expense for services on the Galaxy13/Horizons-1 and Horizons-2 satellites prior to the consolidation of Horizons Holdings, partially offset by non-cash income related to the settlement of a dispute concerning our investment in WildBlue Communications, Inc. and non-cash income related to the recognition of deferred revenue on a straight-line basis of certain prepaid capacity contracts.

(6) Approximately $12.5 million of the Intelsat S.A. Adjusted EBITDA for the nine months ended September 30, 2012 was attributable to our New Dawn Satellite Company, Ltd. (“New Dawn”) subsidiary.

Liquidity and Capital Resources

Overview

We are a highly leveraged company and our contractual obligations, commitments and debt service requirements over the next several years are significant. At ~~September~~March 3031, ~~2012~~2013, our total indebtedness was $1615.19 billion. Our interest expense for the ~~nine~~ three months ended ~~September~~March 3031, ~~2012~~2013 was $~~950~~317.12 million, which included $4714.79 million of non-cash interest expense. We also expect to make significant capital expenditures in ~~2012~~2013 and future years, as set forth below in “—Capital Expenditures.” Our primary source of liquidity is and will continue to be cash generated from operations as well as existing cash. At September 30, 2012, cash and cash equivalents were approximately $231.2 million. In addition, Intelsat Jackson had $339.3 million of available borrowing capacity (net of $10.7 million of letters of credit outstanding) under its revolving credit facility at September 30, 2012.

WeOur ~~currently expect~~primary tosource ~~use~~of ~~cash~~liquidity onis ~~hand, cash flows from operations~~ and ~~borrowings~~will ~~under~~continue ~~our senior secured revolving credit facility~~ to ~~fund our most significant cash outlays, including debt service requirements and capital expenditures, in the next twelve months and beyond, and expect such sources to~~ be ~~sufficient to fund our requirements over that time and beyond. In past years, our~~ cash ~~flows~~generated from operations ~~and~~as ~~cash~~well onas existing ~~hand have been sufficient to fund our interest expense obligations ($1~~cash.~~38 billion~~ ~~and~~At ~~$1.~~March 31, ~~billion in 2010 and 2011~~2013, ~~respectively)~~cash and ~~significant~~cash ~~capital~~equivalents ~~expenditures~~were ~~($982.1~~approximately ~~million and~~ $~~844~~328.7 million ~~in 2010 and 2011, respectively)~~. Additionally, we have been able to refinance significant portions of our debt at favorable rates and on favorable terms. Total capital expenditures are expected to range from $775 million to $850 million in 2012, $550 million to $625 million in 2013 and $525 million to $600 million in 2014. In addition, weIntelsat ~~expect~~Jackson tohad ~~receive significant customer prepayments under our customer service contracts. Significant prepayments received in the first three quarters of 2012 totaled~~ $~~137~~486.93 million. Prepayments are currently expected to range from $150 million to $200 million in 2012, $150 million to $200 million in 2013 and $100 million to $150 million in 2014. However, an inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance our obligations on commercially reasonable terms, would have an adverse effect on our business, financial position, results of ~~operations~~available ~~and~~borrowing ~~cash~~capacity ~~flows,~~(net ~~as well as on our and our subsidiaries’ ability to satisfy their obligations in respect~~ of ~~their~~standby ~~respective~~letters ~~debt. We also continually evaluate ways to simplify our capital structure and opportunistically extend our maturities and reduce our costs~~ of ~~debt.~~credit Inoutstanding) ~~addition,~~under weits ~~may from time to time retain any future earnings to purchase, repay, redeem or retire any of our outstanding~~revolving ~~debt~~credit ~~securities~~facility inat ~~privately negotiated or open market transactions~~March 31, ~~by tender offer or otherwise~~2013.

OnWe ~~October 5,~~currently ~~2012~~expect to use cash on hand, ~~Intelsat~~ ~~Global~~cash ~~Service~~flows ~~LLC~~from operations, borrowings under our ~~indirect~~senior ~~subsidiary,~~secured ~~completed~~revolving ~~the~~credit ~~sale~~facility and refinancing of our ~~U.S.~~third ~~administrative~~party ~~headquarters~~debt ~~office~~to ~~building~~fund inour ~~Washington~~most significant cash outlays, ~~D.C.~~including (debt service requirements and capital expenditures, in the ~~“U.S.~~next ~~Administrative~~twelve ~~Headquarters~~months ~~Property”)~~and beyond, and ~~assigned~~expect such sources to be sufficient to fund our ~~Amended~~requirements over that time and ~~Restated Lease~~beyond. ~~Agreement~~In ~~with~~past ~~the~~years, ~~U.S.~~our ~~Government~~cash ~~relating~~flows from operations and cash on hand have been sufficient to ~~the~~fund Uour interest expense obligations ($1.S31 billion and $1.27 ~~Administrative~~billion ~~Headquarters~~in ~~Property~~2011 and 2012, torespectively) ~~the~~and ~~purchaser~~significant ~~for~~capital aexpenditures ~~purchase~~($844.7 ~~price~~million ofand $85866.0 million in ~~cash.~~2011 ~~The~~and ~~sale~~2012, ~~will~~respectively). ~~result~~Additionally, inwe ahave ~~pre-tax~~been ~~gain~~able to berefinance ~~recognized~~significant inportions ~~the~~of ~~fourth~~our ~~quarter~~debt ofat ~~2012~~favorable rates and on favorable terms, as discussed in “—Long-Term Debt—2013 Intelsat Luxembourg Notes Offerings and Redemptions”. As of ~~between~~May 6, 2013, we have also received insurance proceeds of $12406.02 million and $1384.08 million., ~~Upon~~related ~~the~~to ~~closing~~a oftotal loss claim for the IS-27 ~~sale,~~satellite welaunch ~~entered~~failure ~~into~~and ana ~~agreement~~partial ~~under~~loss ~~which~~claim wefor ~~will~~the ~~temporarily~~IS-19 ~~lease~~satellite ~~from~~solar ~~the~~array ~~purchaser~~anomaly, arespectively. ~~portion~~We ofexpect to use the ~~U.S.~~proceeds ~~Administrative~~from ~~Headquarters~~the ~~Property~~IS-27 total loss claim to redeem $366.4 Wemillion ~~are~~aggregate ~~currently~~principal inamount of the ~~process~~2017 ofSenior ~~selecting~~Notes, aas ~~location~~discussed ~~for~~in a“—Long-Term ~~new~~Debt—2013 ~~permanent~~Intelsat ~~U.S.~~Luxembourg ~~administrative~~Notes ~~headquarters~~Offerings and Redemptions”.

Total capital expenditures are expected to range from $600 million to $675 million in 2013, $575 million to $650 million in 2014 and $775 million to $850 million in 2015. We also expect to receive significant customer prepayments under our customer service contracts. Significant prepayments received during the three months ended March 31, 2013 totaled $22 million. Significant prepayments are currently expected to range from $150 million to $200 million in 2013, $100 million to $150 million in 2014 and $25 million to $50 million in 2015.

However, an inability to generate sufficient cash flow to satisfy our debt service obligations or to refinance our obligations on commercially reasonable terms would have an adverse effect on our business, financial position, results of operations and cash flows, as well as on our and our subsidiaries’ ability to satisfy their obligations in respect of their respective debt. We also continually evaluate ways to simplify our capital structure and opportunistically extend our maturities and reduce our costs of debt. In addition, we may from time to time retain any future earnings to purchase, repay, redeem or retire any of our outstanding debt securities in privately negotiated or open market transactions, by tender offer or otherwise.

On April 23, 2013, Intelsat S.A., our indirect parent company, completed its IPO, receiving net proceeds of approximately $550 million after underwriting discounts and commissions. The net proceeds from the IPO will be used primarily to redeem all of the outstanding $353.6 million principal amount of Intelsat Investments Notes, as discussed in “—Long-Term Debt —2013 Intelsat Investments Notes Pending Redemption”, and to prepay $138.2 million of indebtedness outstanding under the New Senior Unsecured Credit Facility as discussed in “—Long-Term Debt —2013 Intelsat Jackson New Senior Unsecured Credit Facility Prepayment.”

Cash Flow Items

Our cash flows consisted of the following for the periods shown (in thousands):

	Nine MonthsEndedSeptember 30,2011			Nine MonthsEndedSeptember 30,2012
	Three MonthsEndedMarch 31,2012			Three MonthsEndedMarch 31,2013
Net cash provided by operating activities	$	~~673~~122,~~220~~081		$	~~559~~97,~~563~~101
Net cash used in investing activities		(620,612	)		(725,101	)
Net cash provided by (used in) investing activities		(260,867	)		65,558
Net cash provided by (used in) financing activities		~~(453~~154,~~022~~505	)		~~106~~(20,~~827~~148	)
Net change in cash and cash equivalents		~~(397~~16,~~509~~763	)		~~(63~~141,~~454~~300	)

Net Cash Provided by Operating Activities

Net cash provided by operating activities decreased by $~~113~~25.70 million to $97.1 million during the ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013 as compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012. ~~During~~The primary drivers of the ~~nine months~~year-over-year ~~ended~~decrease ~~September 30,~~in ~~2012,~~net cash ~~flows~~provided ~~from~~by operating activities ~~reflected~~were alower ~~$95.3~~customer ~~million~~prepayments received under our long-term service contracts in 2013 as compared to 2012, and higher cash ~~inflow~~outflows related to ~~deferred~~the ~~revenue~~timing ~~for~~of interest ~~amounts~~payments. ~~received~~During ~~from~~the ~~customers~~three ~~for~~months ~~long-term~~ended ~~service~~March 31, ~~contracts~~2013, ~~offset~~cash byflows from operating activities reflected a $5072.69 million cash outflow related to accounts payable and accrued liabilities largely due to ~~tax and~~ the timing of interest payments, staff arelated ~~$21~~payments and taxes.5 ~~million~~Operating cash ~~outflow~~flows ~~related~~also toreflected ~~accrued~~a ~~retirement~~$20.2 ~~benefits~~million ~~due~~cash tooutflow ~~employer~~related ~~contributions~~ to ~~our~~prepaid ~~retirement plan~~ and aother ~~$15.6~~assets, ~~million cash~~primarily ~~outflow~~ due to the ~~timing~~customary prepayment of ~~cash~~the ~~collections~~annual onfees ~~receivables~~under the 2008 MFA.

53Net Cash Provided by (Used in) Investing Activities

~~Table~~Net cash from investing activities increased by $326.4 million during the three months ended March 31, 2013 as compared to the three months ended March 31, 2012, from a cash outflow of ~~Contents~~$260.9 million in 2012 to a cash inflow of $65.6 million in 2013. This increase in investing cash inflow was primarily due to $252.9 million of proceeds received in the three months ended March 31, 2013 from insurance claim settlements and a decrease in capital expenditures of $93.7 million in 2013 as compared to the three months ended March 31, 2012.

Net Cash Used in Investing Activities

Net cash used in investing activities increased by $104.5 million during the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011. This increase in investing cash outflow was primarily related to an increase in capital expenditures of $100.0 million in 2012.

Net Cash Provided by (Used in) Financing Activities

Net cash ~~provided~~from by financing activities ~~increased~~decreased by $~~559~~174.87 million during the ~~nine~~three months ended ~~September~~ March 3031, ~~2012~~2013 as compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, from a cash ~~outflow~~inflow of $~~453~~154.05 million in ~~2011~~2012 to a cash ~~inflow~~outflow of $~~106~~20.81 million in ~~2012~~ 2013. During the ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013, cash flows from financing activities primarily reflected ~~the 2012 Intelsat Jackson notes offering and the 2012 Intelsat Jackson tender offers and redemptions, as discussed in—2012 Intelsat Jackson Notes Offerings, Tender Offers and Redemptions below~~$60.3 ~~Net~~million ~~cash used~~ in ~~financing~~repayments ~~activities~~of ~~during~~long-term ~~the nine months ended September 30~~debt, ~~2012~~partially ~~also~~offset ~~included~~by a $3940.50 million ~~payment~~in ofproceeds areceived ~~premium~~from ~~related~~borrowing tounder the ~~debt~~Intelsat ~~transactions noted~~Jackson ~~above~~senior ~~and~~secured ~~$19.4~~credit ~~million~~facilities, ofas ~~debt~~discussed ~~issuance~~in ~~costs~~“—Long-Term Debt—Senior ~~related~~Secured toCredit ~~these debt transactions~~Facilities”.

Long-Term Debt

Senior Secured Credit Facilities

On January 12, 2011, Intelsat Jackson, a wholly-owned subsidiary of Intelsat ~~S.A.~~Investments, entered into the Intelsat Jackson Secured Credit Agreement, which includes a $3.25 billion term loan facility maturing in April 2018 and a $500.0 million revolving credit facility with a five year maturity, and borrowed the full $3.25 billion under the term loan facility. The term loan facility requires regularly scheduled quarterly payments of principal equal to 0.25% of the original principal amount of the term loan beginning six months after January 12, 2011, with the remaining unpaid amount due and payable at maturity on April 2, 2018. Up to $350.0 million of the revolving credit facility is available for issuance of letters of credit. Additionally, up to $70.0 million of the revolving credit facility is available for swingline loans. Both the face amount of any outstanding letters of credit and any swingline loans reduce availability under the revolving credit facility on a dollar for dollar basis. The revolving credit facility is available for five years on a revolving basis. Intelsat Jackson is required to pay a commitment fee for the unused commitments under the revolving credit facility, if any, at a rate per annum of 0.375%. As of September 30, 2012, Intelsat Jackson had $150.0 million outstanding under its revolving credit facility and $339.3 million (net of standby letters of credit) of availability remaining thereunder.

On40 October 3, 2012, Intelsat Jackson entered into an Amendment and Joinder Agreement (the “Jackson Credit Agreement Amendment”), which amended the Intelsat Jackson Secured Credit Agreement. As a result of the Jackson Credit Agreement Amendment, interest rates for borrowings under the term loan facility and the revolving credit facility will be (i) the London Inter-Bank Offered Rate (“LIBOR”) plus 3.25%, or (ii) the Above Bank Rate (“ABR”) plus 2.25%. Following the Jackson Credit Agreement Amendment, the interest rate may decrease to LIBOR plus 3.00% or ABR plus 2.00% based on the corporate family rating of Intelsat Jackson from Moody’s Investors Service, Inc. LIBOR and the ABR, plus the applicable margins, will be determined as specified in the Intelsat Jackson Secured Credit Agreement, as amended by the Jackson Credit Agreement Amendment, and LIBOR will not be less than 1.25% per annum.

The Intelsat Jackson Secured Credit Agreement includes two financial covenants. Intelsat Jackson must maintain a consolidated secured debt to consolidated EBITDA ratio of less than or equal to 3.50 to 1.00 at the end of each fiscal quarter as well as a consolidated EBITDA to consolidated interest expense ratio of greater than or equal to 1.75 to 1.00 at the end of each fiscal quarter, in each case as such financial measures are defined in the Intelsat Jackson Secured Credit Agreement. Intelsat Jackson was in compliance with these financial maintenance covenant ratios with a consolidated secured debt to consolidated EBITDA ratio of 1.58 to 1.00 and a consolidated EBITDA to consolidated interest expense ratio of 2.81 to 1.00 as of September 30, 2012. In the event Intelsat Jackson were to fail to comply with these financial maintenance covenant ratios and were unable to obtain waivers, Intelsat Jackson would default under the Intelsat Jackson Secured Credit Agreement, and the lenders under the Intelsat Jackson Secured Credit Agreement could accelerate our obligations thereunder, which would result in an event of default under our existing notes and the Intelsat Jackson senior unsecured credit agreements.

New Dawn Equity Purchase and Repayments of Credit Facilities

On December 5, 2008, New Dawn entered into a $215.0 million secured financing arrangement with an eight-year maturity that consisted of senior and mezzanine term loan facilities. The credit facilities were non-recourse to New Dawn’s shareholders, including us and our wholly-owned subsidiaries, beyond the shareholders’ scheduled capital contributions. In July 2012, a payment of $112.2 million was made out of restricted cash to prepay a portion of New Dawn’s outstanding borrowings. In connection with this prepayment, we recognized a loss on early extinguishment of debt of $3.1 million during the third quarter of 2012, associated with the write-off of unamortized debt issuance costs. As of September 30, 2012, New Dawn had aggregate outstanding borrowings of $82.6 million under its credit facilities. During the nine months ended September 30, 2012, New Dawn revenue was $23.7 million and approximately $12.5 million of the Intelsat S.A. Adjusted EBITDA was attributable to New Dawn.

On regularly ~~October 5,~~scheduled ~~2012,~~quarterly wepayments ~~purchased~~of ~~from~~principal ~~Convergence~~equal ~~SPV~~to ~~Ltd~~0.25% of the original principal amount of the term loan beginning six months after January 12, 2011, with the remaining ~~ownership~~unpaid ~~interest~~amount indue ~~New~~and ~~Dawn~~payable ~~for~~at maturity on April 2, 2018. Up to $8350.70 million, ~~increasing~~of ~~our~~the ~~ownership~~revolving ~~from~~credit ~~74.9%~~facility tois ~~100%~~available ~~(the~~for ~~“New~~issuance ~~Dawn~~of ~~Equity~~letters ~~Purchase”)~~of credit. InAdditionally, ~~conjunction~~up ~~with~~to $70.0 million of the ~~New~~revolving ~~Dawn~~credit ~~Equity~~facility ~~Purchase~~is weavailable ~~repaid~~for swingline loans. Both the ~~remaining~~face ~~$82.6~~amount ~~million~~of any outstanding ~~under~~letters ~~New~~of ~~Dawn’s~~ credit ~~facilities~~ and ~~designated~~any swingline loans reduce availability under the ~~New~~revolving ~~Dawn~~credit ~~entities~~facility ason ~~restricted~~a ~~subsidiaries~~dollar for ~~purposes~~dollar ofbasis. ~~applicable~~The ~~indentures~~revolving ~~and~~ credit ~~agreements~~facility ofis ~~ours~~available ~~and~~for ~~our~~five ~~subsidiaries.~~years Inon ~~connection~~a revolving ~~with~~basis. ~~this~~Intelsat ~~repayment,~~Jackson weis ~~expect~~required to ~~recognize~~pay a ~~loss~~commitment onfee ~~early extinguishment~~for ofthe ~~debt~~unused commitments under the revolving credit facility, if any, at a rate per annum of $20.7375%. ~~million~~As inof ~~the~~March 31, ~~fourth~~2013, ~~quarter~~Intelsat ofJackson ~~2012~~had ~~associated~~$486.3 ~~with~~million ~~the~~(net ~~write-off~~of standby letters of ~~unamortized~~credit) ~~debt~~of ~~issuance~~availability ~~costs~~remaining thereunder.

On October 3, 2012, Intelsat ~~Luxembourg~~Jackson ~~Senior~~entered ~~PIK~~into ~~Election~~an Amendment ~~Notes~~and ~~due~~Joinder ~~2017~~Agreement (the “Jackson Credit Agreement Amendment”), which amended the Intelsat Jackson Secured Credit Agreement. As a result of the Jackson Credit Agreement Amendment, interest rates for borrowings under the term loan facility and the revolving credit facility are (i) the London Inter-Bank Offered Rate (“LIBOR”) plus 3.25%, or (ii) the Above Bank Rate (“ABR”) plus 2.25%. The Jackson Credit Agreement Amendment stipulates that the interest rate may decrease to LIBOR plus 3.00% or ABR plus 2.00% based on the corporate family rating of Intelsat Jackson from Moody’s Investors Service, Inc. (“Moody’s”). LIBOR and the ABR, plus the applicable margins, are determined as specified in the Intelsat Jackson Secured Credit Agreement, as amended by the Jackson Credit Agreement Amendment, and LIBOR will not be less than 1.25% per annum. In April 2013, our corporate family rating was upgraded by Moody’s, and as a result, the interest rate for borrowing under the term loan facility and the revolving credit facility decreased to LIBOR plus 3.00% or ABR plus 2.00%.

InThe ~~August~~Intelsat ~~2012,~~Jackson weSecured ~~made~~Credit anAgreement ~~election~~includes two financial covenants. Intelsat Jackson must maintain a consolidated secured debt to ~~pay~~consolidated ~~interest~~EBITDA onratio of less than or equal to 3.50 to 1.00 at the ~~Intelsat~~end ~~Luxembourg~~of ~~Senior~~each ~~PIK~~fiscal ~~Election~~quarter ~~Notes~~as ~~due~~well ~~2017~~as ~~entirely~~a consolidated EBITDA to consolidated interest expense ratio of greater than or equal to 1.75 to 1.00 at the end of each fiscal quarter, in ~~cash~~each ~~for~~case as such financial measures are defined in the Intelsat Jackson Secured Credit Agreement. Intelsat Jackson was in compliance with these financial maintenance covenant ratios with a consolidated secured debt to consolidated EBITDA ratio of 1.43 to 1.00 and a consolidated EBITDA to consolidated interest ~~period~~expense ~~August 15,~~ratio ~~2012~~of ~~through~~2.99 ~~February~~to 1.00 as of March 1531, 2013. ~~For~~In the ~~interest~~event ~~periods~~Intelsat ~~beginning~~Jackson ~~February 16~~were to fail to comply with these financial maintenance covenant ratios and were unable to obtain waivers, ~~2013~~Intelsat Jackson would default under the Intelsat Jackson Secured Credit Agreement, weand ~~are~~the ~~required~~lenders tounder ~~make~~the ~~all~~Intelsat ~~interest~~Jackson ~~payments~~Secured Credit Agreement could accelerate our obligations thereunder, which would result in ~~cash~~an event of default under our existing notes and the Intelsat Jackson senior unsecured credit agreements.

~~2012~~2013 Intelsat ~~Jackson~~ ~~Notes~~Luxembourg Notes Offerings, ~~Tender Offers~~ and Redemptions

On April 265, ~~2012,~~2013 Intelsat ~~Jackson~~ Luxembourg completed an offering of $13.25 billion aggregate principal amount of ~~the~~Senior ~~2020 Jackson~~ Notes., ~~Intelsat~~consisting ~~Jackson~~of ~~had previously issued~~ $1500.0 ~~billion~~million aggregate principal amount of the ~~2020~~2018 ~~Jackson~~Luxembourg Notes ~~on September 30~~, ~~2010. The net proceeds from the April 2012 offering were used by Intelsat Jackson to repurchase~~ $492.50 ~~million~~billion aggregate principal amount of the ~~2016~~2021 ~~Jackson~~Luxembourg ~~9 1/2%~~ Notes and $~~10.~~1.0 ~~million~~billion aggregate principal amount of the ~~2016~~2023 Luxembourg ~~Jackson 11 1/4%~~ Notes. inThe ~~tender~~net ~~offers~~proceeds ~~launched~~from onthis ~~April 12,~~offering ~~2012~~were ~~and~~used ~~completed~~by onIntelsat ~~May 10,~~Luxembourg ~~2012.~~in OnApril ~~June 15,~~2013 ~~2012,~~to ~~Intelsat~~redeem ~~Jackson~~all ~~redeemed the remaining~~ $~~652~~2.45 ~~million~~billion aggregate principal amount ~~outstanding~~ of ~~the~~Intelsat ~~2016~~Luxembourg’s ~~Jackson 9 1/2%~~outstanding 2017 PIK Notes and ~~an additional~~ $~~434~~754.98 million aggregate principal amount of ~~the~~Intelsat ~~2016~~Luxembourg’s ~~Jackson~~outstanding ~~11 1/4%~~2017 Senior Notes.

InOn ~~connection~~April 23, ~~with~~2013, ~~these~~Intelsat ~~tender~~Luxembourg issued ~~offers~~a ~~and~~notice ~~redemptions,~~of weredemption ~~recognized~~pursuant ato ~~loss~~the onindenture ~~early~~governing ~~extinguishment~~its of2017 ~~debt~~Senior ofNotes that it intends to redeem $43366.4 million inaggregate ~~the second~~principal ~~quarter~~amount of ~~2012, consisting~~the of2017 ~~the~~Senior ~~difference~~Notes ~~between~~on ~~the~~May 23, ~~carrying~~2013. ~~value~~The redemption of the ~~aggregate~~2017 ~~debt~~Senior ~~repurchased~~Notes orwill be ~~redeemed~~funded ~~and~~by ~~the~~insurance ~~total~~proceeds ~~cash~~received ~~amount~~from ~~paid~~our ~~(including~~total ~~related~~loss ~~fees),~~claim ~~and~~for athe ~~write~~IS-~~off~~27 ofsatellite ~~unamortized~~launch ~~debt premium and debt issuance costs~~failure.

OnIn ~~October 3,~~connection ~~2012,~~with the ~~Intelsat~~pending ~~Jackson~~and completed anrecent ~~offering~~redemptions of ~~$640.0 million aggregate principal amount of~~ the ~~6 5/8% Notes. The net proceeds from the October 2012 offering were used by~~ Intelsat ~~Jackson~~Luxembourg ~~to repurchase or redeem all of Intelsat Jackson’s outstanding $603.2 million principal amount of the 2016 Jackson 11 1/4% Notes. In connection with the tender offers and redemptions~~notes, we expect to recognize a loss on early extinguishment of debt of $23232.60 million in the ~~fourth~~second quarter of ~~2012~~2013, consisting of the difference between the carrying value of the aggregate debt ultimately ~~repurchased or~~ redeemed and the total cash amount paid (including related fees), and a write-off of unamortized debt ~~premium~~issuance costs.

~~Financing~~2013 ~~Commitment for~~ Intelsat ~~S.A.~~Investments ~~Senior~~ Notes ~~due~~Pending ~~2013~~Redemption

On April 1223, ~~2012~~2013, ~~Intelsat~~upon ~~S.A.~~completion ~~obtained~~of ~~agreements~~the ~~from~~IPO, ~~affiliates~~Intelsat ofInvestments ~~Goldman,~~issued ~~Sachs &~~a ~~Co.~~notice ~~and~~of ~~Morgan~~redemption ~~Stanley~~pursuant to ~~provide~~the ~~unsecured~~indenture ~~term~~governing ~~loan~~the ~~commitments~~Intelsat ~~sufficient~~Investments Notes that it intends to ~~refinance~~redeem inall ~~full~~of ~~its~~ the outstanding $353.6 ~~1/2%~~ ~~Senior~~million ~~Notes~~aggregate principal ~~due~~amount ~~2013~~of (the “Intelsat ~~S.A.~~Investments Notes”) on orMay 23, ~~immediately~~2013. ~~prior~~The toredemption ~~their~~of ~~maturity~~the ~~date,~~Intelsat inInvestments Notes will be funded by the ~~event~~proceeds ~~that~~of ~~Intelsat~~the SIPO.A. ~~does~~In ~~not~~connection ~~otherwise~~with ~~refinance~~the orredemption ~~retire~~of the Intelsat ~~S.A.~~ Investments Notes., ~~These~~we ~~term~~expect ~~loans~~to recognize ~~will~~a ~~have~~loss aon ~~maturity~~early extinguishment of ~~two~~debt ~~years~~of ~~from~~approximately ~~funding~~$24.2 million in the second quarter of 2013, consisting of the difference between the carrying value of the debt ultimately redeemed and the ~~funding~~total ~~thereof~~cash ispaid ~~subject~~(including torelated ~~various~~fees), and ~~terms~~a write-off of unamortized debt discount and ~~conditions~~debt issuance costs.

~~2011~~2013 ~~Debt~~Intelsat ~~Transactions~~Jackson New Senior Unsecured Credit Facility Prepayment

~~2011~~On ~~Reorganization~~April ~~and~~23, ~~2011~~2013, ~~Secured~~upon ~~Loan~~completion ~~Refinancing~~of the IPO, Intelsat Jackson prepaid $138.2 million of indebtedness outstanding under the New Senior Unsecured Credit Facility. The partial prepayment of the New Senior Unsecured Credit Facility was funded by the proceeds of the IPO. In connection with the partial prepayment, we expect to recognize a loss on early extinguishment of debt of $0.2 million in the second quarter of 2013, consisting of a write-off of unamortized debt issuance costs.

On41 January 12, 2011, certain of our subsidiaries completed the 2011 Reorganization. Also on January 12, 2011, Intelsat Jackson entered into the Intelsat Jackson Secured Credit Agreement as discussed above, and borrowed $3.25 billion under the term loan facility. Part of the net proceeds of the term loan, amounting to $2.4 billion, were contributed or loaned to Intelsat Corp, which used such funds to repay its existing indebtedness under Intelsat Corp’s senior secured credit facilities and to redeem Intelsat Corp’s 9 1/4% Senior Notes due 2016. Separately, Intelsat Corp also redeemed all of its 9 1/4% Senior Notes due 2014 and its 6 7/8% Senior Secured Debentures due 2028. In addition, Intelsat Jackson contributed approximately $330.2 million of the net proceeds of the new term loan to Intelsat Sub Holdco to repay all existing indebtedness under Intelsat Sub Holdco’s senior secured credit facilities. The entry into the Intelsat Jackson Secured Credit Agreement, the repayment of the existing indebtedness of Intelsat Corp and the repayment of all of the secured existing indebtedness of Intelsat Sub Holdco are referred to collectively as the “2011 Secured Loan Refinancing”. In connection with the 2011 Secured Loan Refinancing, certain of our interest rate swaps were assigned by Intelsat Sub Holdco and Intelsat Corp to Intelsat Jackson, and are now secured by a first priority security interest in the collateral that also secures obligations under the Intelsat Jackson Secured Credit Agreement.

2011 Notes Redemptions

On March 18, 2011, Intelsat S.A. redeemed all of the $485.8 million aggregate principal amount outstanding of its 7 5/8% Senior Notes due 2012. Additionally, on March 18, 2011, Intelsat Sub Holdco redeemed $225.0 million aggregate principal amount outstanding of its 8 1/2% Senior Notes due 2013 (the “2013 Sub Holdco Notes”). On April 8, 2011, Intermediate Holdco redeemed all of the $4.5 million aggregate principal amount outstanding of its 9 1/4% Senior Discount Notes due 2015.

~~2011~~2012 ~~Intelsat~~Debt ~~Jackson~~Transactions ~~Notes Offering, Tender Offers and Redemptions~~

On2012 ~~April 5, 2011,~~ Intelsat Jackson ~~completed an offering of $2.65 billion aggregate principal amount of senior notes, consisting of $1.5 billion aggregate principal amount of 7 1/4% Senior~~ Notes ~~due 2019 and $1.15 billion aggregate principal amount of 7 1/2% Senior Notes due 2021 (collectively~~Offerings, ~~the~~Tender ~~“New~~Offers ~~Jackson Notes”). The net proceeds from the sale of the New Jackson Notes were primarily used to repurchase all of the following notes in tender offers launched on March 21, 2011~~ and ~~completed~~Redemptions ~~on April 15, 2011, and to subsequently redeem the remaining outstanding amounts of such notes on May 5, 2011:~~

•On April 26, 2012, Intelsat Jackson completed an offering of $~~481~~1.02 ~~million~~billion aggregate principal amount ~~outstanding~~of its 7 1/4% Senior Notes due 2020 (the “2020 Jackson Notes”). Intelsat Jackson had previously issued $1.0 billion aggregate principal amount of the ~~Intermediate~~2020 ~~Holdco~~Jackson Notes on September 30, 2010. The net proceeds from the April 2012 offering were used by Intelsat Jackson to repurchase or redeem all of the $701.9 million aggregate principal amount of Intelsat Jackson’s outstanding 9 1/2% Senior ~~Discount~~Notes due 2016 and $445.0 million aggregate principal amount of Intelsat Jackson’s 11 1/4% Senior Notes due ~~2015;~~2016 (the “2016 Jackson 11 1/4% Notes”). In connection with these repurchases and redemptions, we recognized a loss on early extinguishment of debt of $43.4 million during the second quarter of 2012, consisting of the difference between the carrying value of the aggregate debt repurchased or redeemed and the total cash amount paid (including related fees), and a write-off of unamortized debt premium and debt issuance costs.

•On October 3, 2012, Intelsat Jackson completed an offering of $~~625~~640.30 million aggregate principal amount ~~outstanding~~ of its 6 5/8% Senior Notes due 2022. The net proceeds from the ~~2013~~October ~~Sub~~2012 ~~Holdco~~offering were used by Intelsat Jackson to repurchase or redeem all of its remaining outstanding $603.2 million principal amount of 2016 Jackson 11 1/4% Notes. In connection with these repurchases and redemptions, ~~after~~we ~~giving~~recognized ~~effect~~a toloss on early extinguishment of debt of $24.3 million in the ~~March~~fourth ~~2011~~quarter ~~partial~~of ~~redemption~~2012, consisting of the ~~2013~~difference ~~Sub~~between ~~Holdco~~the ~~Notes~~carrying value of the debt repurchased or redeemed and the total cash amount paid (including related fees), asand ~~discussed~~a ~~above;~~write-off of unamortized debt premium.

• $681.0 million aggregate principal amount outstanding of the Intelsat Sub Holdco 8 7/8% Senior Notes due 2015;

• $400.0 million aggregate principal amount outstanding of the 2015 Intelsat Sub Holdco Notes, Series B;

• $55.0 million aggregate principal amount outstanding of the Intelsat Jackson 9 1/4% Senior Notes due 2016; and

• $284.6 million aggregate principal amount outstanding of the Intelsat Jackson 11 1/2% Senior Notes due 2016.

As a result, all of the above series of notes were paid off in full and no third party debt remained outstanding at Intermediate Holdco and Intelsat Sub Holdco as of May 5, 2011.

Contracted Backlog

We have historically had and currently have a substantial contracted backlog, which provides some assurance regarding our future revenue expectations. Contracted backlog is our expected future revenue under customer contracts, and includes both cancelable and non-cancelable contracts. Approximately 8586% of our total contracted backlog as of ~~September~~March 3031, ~~2012~~2013 related to contracts that were non-cancelable and approximately 11% related to contracts that were cancelable subject to substantial termination fees. In certain cases of breach for non-payment or customer bankruptcy, we may not be able to recover the full value of certain contracts or termination fees. Our contracted backlog includes 100% of the backlog of our consolidated ownership interests, which is consistent with the accounting for our ownership interests in these entities. Our contracted backlog was approximately $10.84 billion as of ~~September~~March 3031, ~~2012~~2013. This backlog reduces the volatility of our net cash provided by operating activities more than would be typical for a company outside our industry.

Capital Expenditures

Our capital expenditures depend on our business strategies and reflect our commercial responses to opportunities and trends in our industry. Our actual capital expenditures may differ from our expected capital expenditures if, among other things, we enter into any currently unplanned strategic transactions. Levels of capital spending from one year to the next are also influenced by the nature of the satellite life cycle and by the capital-intensive nature of the satellite industry. For example, we incur significant capital expenditures during the years in which satellites are under construction. We typically procure a new satellite within a timeframe that would allow the satellite to be deployed at least one year prior to the end of the service life of the satellite to be replaced. As a result, we frequently experience significant variances in our capital expenditures from year to year.

Payments for satellites and other property and equipment during the ~~nine~~three months ended ~~September~~ March 3031, ~~2012~~2013 were $~~715~~167.12 million. ~~In March 2012, IS-22 was successfully launched into orbit and entered into service in May 2012. On June 1, 2012, IS-19 was launched into orbit. During launch operations, IS-19 experienced damage to~~ its south solar array. Although both solar arrays are deployed, the power available to the satellite is less than is required to operate 100% of the payload capacity. Failure Review Boards were established to determine the cause of the anomaly. As of September 30, 2012, a final conclusion had not been reached as to the most likely cause of the anomaly. We continue to participate in the on-going investigation. We have filed a partial loss claim with our insurers relating to the solar array anomaly. This satellite entered into service in August 2012. Also in August 2012, IS-20 and IS-21 were successfully launched into orbit. IS-20, the first of the two August launches, entered into service in September 2012, while IS-21 entered into service in October 2012. Also in October 2012, IS-23 was successfully launched into orbit. IS-23 is expected to complete in-orbit testing and enter into service in the fourth quarter of 2012.

Our capital expenditure guidance for the periods ~~2012~~2013 through ~~2014~~2015 (the “Guidance Period”) forecasts capital ~~expenditures~~ expenditures during those periods for ~~ten~~nine satellites. OfWe finalized construction of the first of these, ~~five~~the ~~satellites~~IS-27 ~~were~~satellite, ~~launched~~in January 2013, ashowever, ~~discussed~~in ~~above~~February 2013, ~~four~~the ~~satellites~~satellite ~~are~~was ~~currently~~completely indestroyed ~~development~~when ~~and~~the ~~one~~launch ~~further~~vehicle failed shortly after liftoff. The satellite isand ~~expected~~launch towere befully ~~ordered~~insured, ~~during~~and ~~the~~we ~~Guidance~~have ~~Period~~filed a total loss claim of $406.2 Wemillion ~~expect~~with our ~~2012 total~~insurers, ~~capital~~of ~~expenditures~~which to$177.1 ~~range~~million ~~from~~was ~~approximately~~received as of March 31, 2013. As of May 6, 2013, all $~~775~~406.2 million of proceeds had been received. We expect to ~~$850~~launch ~~million~~four satellites during the Guidance Period. ~~Capital~~We ~~expenditures~~expect ~~are~~our ~~expected~~capital expenditures to range from $~~550~~600 million to $~~625~~675 million in 2013, and from $~~525~~575 million to $~~600~~650 million in 2014. ~~Our~~For ~~capital~~2015, ~~expenditures~~we ~~guidance~~anticipate capital ~~includes~~expenditures ~~capitalized~~to ~~interest.~~range ~~The~~from ~~annual~~$775 ~~classification~~million ofto ~~capital~~$850 ~~expenditure~~million, ~~payments~~which ~~could~~will beinclude ~~impacted~~expenditures byfor ~~the~~four ~~timing~~additional ofreplacement ~~achievement~~satellites ofthat ~~satellite~~will ~~manufacturing~~be ~~and~~launched ~~launch~~beyond ~~contract~~the ~~milestones~~Guidance Period. Our capital expenditures guidance includes capitalized interest.

56During the Guidance Period, we expect to receive significant customer prepayments under our existing customer service contracts. We also anticipate that prepayments will be received under customer contracts to be signed in the future. Significant prepayments received in the first quarter of 2013 totaled $22 million. Significant prepayments are currently expected to range from

~~During the Guidance Period, we expect to receive significant customer prepayments under our~~ ~~existing~~$150 ~~customer~~million ~~service contracts. We also anticipate that prepayments will be received under customer contracts~~ to be$200 ~~signed~~million in ~~the future. Significant prepayments received during the nine months ended September 30~~2013, ~~2012~~from ~~totaled~~ $~~137.9~~ 100 million. ~~Prepayments~~to ~~are~~$150 ~~currently~~million ~~expected~~in to2014 ~~range~~and from $~~150~~25 million to $~~200~~50 million in ~~2012~~2015, ~~all~~with ~~under~~the ~~existing~~majority ~~customer~~of ~~contracts.~~these ~~Prepayments~~prepayments ~~are~~coming ~~currently expected to range~~ from ~~$150~~existing ~~million~~customer contracts. toThe ~~$200~~annual ~~million~~classification inof ~~2013~~capital expenditures and ~~$100~~pre-payments ~~million~~could tobe ~~$150 million~~impacted inby ~~2014,~~the ~~with~~timing ~~the~~of ~~majority~~achievement of ~~these~~contract, ~~payments~~satellite ~~coming~~manufacturing, ~~from~~launch ~~existing~~and ~~customer~~other ~~contracts~~milestones. We intend to fund our capital expenditure requirements through cash on hand, cash provided from operating activities and, if necessary, borrowings under our senior secured revolving credit facility.

Off-Balance Sheet Arrangements

We have a revenue sharing agreement with JSAT International, Inc. (“JSAT”) related to services sold on the Horizons Holdings satellites. We are responsible for billing and collection for such services and we remit 50% of the revenue, less applicable fees and commissions, to JSAT. Under an amended joint venture agreement between us and JSAT, we agreed to guarantee to JSAT certain minimum levels of annual gross revenues for a three-year period beginning in the first quarter of 2012 (the date that the Horizons-2 satellite was relocated to 85° east longitude). (See Note 6(a)—Investments—Horizons Holdings). This guarantee could require us to pay JSAT a maximum potential amount ranging from $7.8 million to $10.3 million per year over the three-year period, less applicable fees and commissions. We assess this guarantee on a quarterly basis, and in the first quarter of 2013 we recorded an expense of $1.2 million related to the guarantee, in addition to $5.6 million previously accrued in 2012. Our current estimate of the total amount we expect to pay over the period of the guarantee (before applicable fees and commissions) is $6.8 million, of which $5.5 million (before applicable fees and commissions) was paid in March 2013. At March 31, 2013, the remaining off-balance sheet guarantee commitment is $19.0 million.

Disclosures about Market Risk

See Item 3—Quantitative and Qualitative Disclosures About Market Risk.

Recently Adopted Accounting Pronouncements

In ~~June~~February ~~2011~~2013, the ~~Financial Accounting Standards Board (“~~FASB”) issued ASU ~~2011~~2013-0502, ~~Presentation~~Reporting of ~~Comprehensive~~Amounts ~~Income~~Reclassified ~~(“ASU~~Out ~~2011-05”).~~of Accumulated Other Comprehensive Income. Beginning in the first quarter of ~~2012~~2013, ~~ASU~~entities ~~2011-05~~are ~~eliminates~~required ~~the option that had previously allowed us~~ to ~~present~~ disclose the ~~components~~effect of ~~other~~reclassification ~~comprehensive income as part~~ of ~~the~~items ~~statement~~out of ~~changes~~accumulated inother ~~shareholder’s equity. Beginning in the first quarter of 2012, we have included a separate condensed consolidated statement of~~ comprehensive ~~loss in our accompanying financial statements~~income. The majority of our other comprehensive loss and our accumulated other comprehensive loss is related to our defined benefit retirement plans. ~~ASU~~Beginning ~~2011-05~~in ~~does~~the ~~not~~first ~~change~~quarter ~~whether~~of ~~items~~2013, ~~are~~we ~~reported~~have inmade ~~net~~a ~~loss~~disclosure or in ~~other~~ ~~comprehensive~~the ~~income~~Retirement Plans and ~~does~~Other ~~not~~Retiree ~~change~~Benefits ~~whether~~footnote ~~and~~to ~~when~~our ~~items~~condensed ofconsolidated ~~other~~financial ~~comprehensive~~statements about the effects on net income ~~are~~of ~~reclassified~~reclassifications toout ~~net~~of ~~loss~~accumulated comprehensive income.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

We are primarily exposed to the market risk associated with unfavorable movements in interest rates and foreign currencies. The risk inherent in our market risk sensitive instruments and positions is the potential loss arising from adverse changes in those factors. In addition, with respect to our interest rate swaps as described below, we are exposed to counterparty credit risk, which we seek to minimize through credit support agreements and the review and monitoring of all counterparties. We do not purchase or hold any derivative financial instruments for speculative purposes.

Interest Rate Risk

The satellite communications industry is a capital intensive, technology driven business. We are subject to interest rate risk primarily associated with our borrowings. Interest rate risk is the risk that changes in interest rates could adversely affect earnings and cash flows. Specific interest rate risks include: the risk of increasing interest rates on short-term debt; the risk of increasing interest rates for planned new fixed-rate long-term financings; and the risk of increasing interest rates for planned refinancings using long-term fixed-rate debt.

Excluding the impact of our outstanding interest rate swaps, approximately 7273%, or $11.67 billion, of our debt as of ~~September~~March 3031, 2013 and December 31, 2012 was fixed-rate debt~~, compared to 72% as of December 31, 2011~~. Based on the level of fixed-rate debt outstanding at ~~September~~March 3031, ~~2012~~2013, a 100 basis point decrease in market rates would result in an increase in fair value of this fixed-rate debt of approximately $~~568~~592.62 million.

As of ~~September~~March 3031, ~~2012~~2013, we held interest rate swaps with an aggregate notional amount of $21.36 billion, ~~with~~which ~~maturities ranging~~mature ~~from~~in ~~2013 to~~ January 2016. These swaps were entered into to economically hedge the variability in cash flow on a portion of the floating rate term loans under our senior secured and unsecured credit facilities. On December 22, 2011, we amended our interest rate swap agreements with an aggregate notional amount of $448.5 million between Intelsat Jackson and respective counterparties to the interest rate swaps. These amendments resulted in a change to the maturity date, the applicable fixed rate of interest that we pay and certain termination events. During the nine months ended September 30, 2012, we amended our interest rate swap agreements with an aggregate notional amount of $1.2 billion between Intelsat Jackson and respective counterparties to the interest rate swaps. These amendments resulted in a change to the maturity date, the applicable fixed rate of interest that we pay and certain termination events. On a quarterly basis, we receive a floating rate of ~~interest~~ interest equal to the three-month ~~London~~LIBOR ~~Inter-Bank Offered Rate~~ and pay a fixed rate of interest. On ~~September~~March 3031, ~~2012~~2013, the rate we paid averaged 21.597% and the rate we received averaged 0.428%. In comparison, at December 31, ~~2011~~2012, the rate we paid averaged 32.347% and the rate we received averaged 0.531%. On March 14, 2013, our interest rate swap with an aggregate notional principal amount of $731.4 million expired.

These interest rate swaps have not been designated for hedge accounting treatment in accordance with the FASB Accounting Standards Codification Topic 815, Derivatives and Hedging, as amended and interpreted, and the changes in fair value of these instruments will be recognized in earnings during the period of change. Assuming a ~~one~~100 ~~hundred~~ basis point decrease in the prevailing forward yield curve (or less, to the extent that the points on the yield curve are less than one percent) the fair value of the interest rate swap liability, excluding accrued interest, would increase to a liability of approximately $~~110~~82.56 million from $8763.58 million.

5743

We perform interest rate sensitivity analyses on our variable-rate debt, including interest rate swaps, and cash and cash equivalents. These analyses indicate that a ~~one~~100 ~~hundred~~ basis point change in interest rates would have a minimal impact on our condensed consolidated statements of operations and cash flows as of ~~September~~March 3031, ~~2012~~ 2013. While our variable-rate debt may impact earnings and cash flows as interest rates change, it is not subject to changes in fair values.

Foreign Currency Risk

We do not currently use foreign currency derivatives to hedge our foreign currency exposures. There have been no material changes to our foreign currency exposures as discussed in our Annual Report on Form 10-K for the year ended December 31, ~~2011~~2012.

Item 4.

Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. We periodically review the design and effectiveness of our disclosure controls and procedures worldwide, including compliance with various laws and regulations that apply to our operations. We make modifications to improve the design and effectiveness of our disclosure controls and procedures, and may take other corrective action, if our reviews identify a need for such modifications or actions. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of ~~September~~March 3031, ~~2012~~2013. Based upon ~~that~~ that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of ~~September~~March 3031, ~~2012~~2013.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended ~~September~~March 3031, ~~2012~~2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

5844

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

We are subject to litigation in the ordinary course of business, but management does not believe that the resolution of any pending proceedings would have a material adverse effect on our financial position or results of operations.

Item 1A.

Risk Factors

No material changes in the risks related to our business have occurred since we filed our Annual Report on Form 10-K for the year ended December 31, ~~2011~~2012.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.

Defaults upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

None.

Item 5.

Other Information

None.

Item 6.

Exhibits

ExhibitNo.		Document Description
Exhibit No.		Document Description
4.1		Indenture for Intelsat Jackson Holdings S.A.’s 6 5/8% Senior Notes due 2022, dated as of October 3, 2012, among Intelsat Jackson Holdings S.A., as Issuer, Intelsat S.A. and Intelsat (Luxembourg) S.A., as Parent Guarantors, and Wells Fargo Bank, National Association, as Trustee (including the form of Notes) (incorporated by reference to Exhibit 4.1 of Intelsat S.A.’s Current Report on Form 8-K, File No. 000-50262, filed on October 3, 2012).
31.1		Certification of the Chief Executive Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. *
4.2		Registration Rights Agreement, dated as of October 3, 2012, by and among Intelsat Jackson Holdings S.A., as Issuer, Intelsat S.A. and Intelsat (Luxembourg) S.A., as Parent Guarantors, and Morgan Stanley & Co. LLC, as Representative of the several initial purchasers named on Schedule I thereto (incorporated by reference to Exhibit 4.2 of Intelsat S.A.’s Current Report on Form 8-K, File No. 000-50262, filed on October 3, 2012).
31.2		Certification of the Chief Financial Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. *
4.3		Third Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 11 1/4% Senior Notes due 2016, dated as of October 3, 2012, between Intelsat Jackson Holdings S.A. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.3 of Intelsat S.A.’s Current Report on Form 8-K, File No. 000-50262, filed on October 3, 2012).
32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350. *
4.4		Fifth Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 8 1/2% Senior Notes due 2019, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.à r.l. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.3 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350. *
4.5		Fifth Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 7 1/4% Senior Notes due 2020, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.à r.l. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.4 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
101.INS		XBRL Instance Document. **
4.6		Second Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 7 1/4% Senior Notes due 2019 and 7 1/2% Senior Notes due 2021, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.à r.l. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.5 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
101.SCH		XBRL Taxonomy Extension Schema Document. **
10.1		Purchase and Sale Agreement, dated July 18, 2012, between Intelsat Global Service LLC and SL 4000 Connecticut LLC (incorporated by reference to Exhibit 10.1 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document. **
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document. **
101.LAB		XBRL Taxonomy Extension Label Linkbase Document. **
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document. **

10.2		Supplement No. 2 to Guarantee, dated as of July 31, 2012, between Intelsat Luxembourg Investment S.à r.l. and Bank of America, N.A. (incorporated by reference to Exhibit 10.2 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
10.3		Agreement for the Adherence by Intelsat Luxembourg Investment S.à r.l. and Intelsat Corporation to the Luxembourg Shares and Beneficiary Certificates Pledge Agreement dated 12 January 2011 and for the Amendment of the Pledge Agreement, dated 31 July 2012 between the Pledgors listed therein and Wilmington Trust FSB, as Collateral Trustee (incorporated by reference to Exhibit 10.3 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
10.4		Supplement No. 2 to Security and Pledge Agreement, dated as of July 31, 2012, among Intelsat Luxembourg Investment S.à r.l., as New Guarantor, Bank of America, N.A., as Administrative Agent and Wilmington Trust FSB, as Collateral Trustee (incorporated by reference to Exhibit 10.4 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
10.5		Collateral Agency and Intercreditor Joinder, dated as of July 31, 2012, between Intelsat Luxembourg Investment S.à r.l. and Wilmington Trust FSB, as Collateral Trustee (incorporated by reference to Exhibit 10.5 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
10.6		Guarantee, dated as of July 31, 2012, made between Intelsat Luxembourg Investment S.à r.l., Intelsat Jackson Holdings S.A and Credit Suisse, Cayman Islands Branch, as Administrative Agent (incorporated by reference to Exhibit 10.6 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
10.7		Guarantee, dated as of July 31, 2012, made between Intelsat Luxembourg Investment S.à r.l., Intelsat Jackson Holdings S.A and Bank of America N.A., as Administrative Agent (incorporated by reference to Exhibit 10.7 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
10.8		Amendment and Joinder Agreement, dated as of October 3, 2012, by and among Intelsat Jackson Holdings S.A., as Borrower, Intelsat (Luxembourg) S.A., the Subsidiary Guarantors party thereto, Bank of America, N.A., as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.1 of Intelsat S.A.’s Current Report on Form 8-K, File No. 000-50262, filed on October 3, 2012).
10.9		Lease Agreement, dated October 3, 2012, between SL 4000 Connecticut LLC and Intelsat Global Service LLC. *
31.1		Certification of the Chief Executive Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. *
31.2		Certification of the Chief Financial Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. *
32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350. *
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350. *
101.INS		XBRL Instance Document. **
101.SCH		XBRL Taxonomy Extension Schema Document. **
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document. **
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document. **
101.LAB		XBRL Taxonomy Extension Label Linkbase Document. **
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document. **

*	Filed herewith.

Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following formatted in Extensible Business Reporting Language (“XBRL”): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Loss, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements. In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise this Exhibit 101 shall be deemed “furnished” not “filed”.

6045

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.

	INTELSAT S.A.
	INTELSAT INVESTMENTS S.A.
Date: November 5, 2012	By	/S/ DAVID MCGLADE
Date: May 9, 2013	By	/S/ DAVID MCGLADE
		David McGlade
		Deputy Chairman and Chief Executive Officer
		Chairman and Chief Executive Officer
	INTELSAT S.A.
Date: November 5, 2012	By	/S/ MICHAEL MCDONNELL
		Michael McDonnell
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

ExhibitNo.		Document Description
Exhibit No.		Document Description
4.1		Indenture for Intelsat Jackson Holdings S.A.’s 6 5/8% Senior Notes due 2022, dated as of October 3, 2012, among Intelsat Jackson Holdings S.A., as Issuer, Intelsat S.A. and Intelsat (Luxembourg) S.A., as Parent Guarantors, and Wells Fargo Bank, National Association, as Trustee (including the form of Notes) (incorporated by reference to Exhibit 4.1 of Intelsat S.A.’s Current Report on Form 8-K, File No. 000-50262, filed on October 3, 2012).
31.1		Certification of the Chief Executive Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. *
4.2		Registration Rights Agreement, dated as of October 3, 2012, by and among Intelsat Jackson Holdings S.A., as Issuer, Intelsat S.A. and Intelsat (Luxembourg) S.A., as Parent Guarantors, and Morgan Stanley & Co. LLC, as Representative of the several initial purchasers named on Schedule I thereto (incorporated by reference to Exhibit 4.2 of Intelsat S.A.’s Current Report on Form 8-K, File No. 000-50262, filed on October 3, 2012).
31.2		Certification of the Chief Financial Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. *
4.3		Third Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 11 1/4% Senior Notes due 2016, dated as of October 3, 2012, between Intelsat Jackson Holdings S.A. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.3 of Intelsat S.A.’s Current Report on Form 8-K, File No. 000-50262, filed on October 3, 2012).
32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350. *
4.4		Fifth Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 8 1/2% Senior Notes due 2019, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.à r.l. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.3 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350. *
4.5		Fifth Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 7 1/4% Senior Notes due 2020, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.à r.l. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.4 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
101.INS		XBRL Instance Document. **
4.6		Second Supplemental Indenture for Intelsat Jackson Holdings S.A.’s 7 1/4 % Senior Notes due 2019 and 7 1/2% Senior Notes due 2021, dated as of July 31, 2012, among Intelsat Jackson Holdings S.A., Intelsat Luxembourg Investment S.à r.l. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.5 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
101.SCH		XBRL Taxonomy Extension Schema Document. **
10.1		Purchase and Sale Agreement, dated July 18, 2012, between Intelsat Global Service LLC and SL 4000 Connecticut LLC (incorporated by reference to Exhibit 10.1 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document. **
10.2		Supplement No. 2 to Guarantee, dated as of July 31, 2012, between Intelsat Luxembourg Investment S.à r.l. and Bank of America, N.A. (incorporated by reference to Exhibit 10.2 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document. **
10.3		Agreement for the Adherence by Intelsat Luxembourg Investment S.à r.l. and Intelsat Corporation to the Luxembourg Shares and Beneficiary Certificates Pledge Agreement dated 12 January 2011 and for the Amendment of the Pledge Agreement, dated 31 July 2012 between the Pledgors listed therein and Wilmington Trust FSB, as Collateral Trustee (incorporated by reference to Exhibit 10.3 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
101.LAB		XBRL Taxonomy Extension Label Linkbase Document. **
10.4		Supplement No. 2 to Security and Pledge Agreement, dated as of July 31, 2012, among Intelsat Luxembourg Investment S.à r.l., as New Guarantor, Bank of America, N.A., as Administrative Agent and Wilmington Trust FSB, as Collateral Trustee (incorporated by reference to Exhibit 10.4 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document. **
10.5		Collateral Agency and Intercreditor Joinder, dated as of July 31, 2012, between Intelsat Luxembourg Investment S.à r.l. and Wilmington Trust FSB, as Collateral Trustee (incorporated by reference to Exhibit 10.5 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
10.6		Guarantee, dated as of July 31, 2012, made between Intelsat Luxembourg Investment S.à r.l., Intelsat Jackson Holdings S.A and Credit Suisse, Cayman Islands Branch, as Administrative Agent (incorporated by reference to Exhibit 10.6 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).
10.7		Guarantee, dated as of July 31, 2012, made between Intelsat Luxembourg Investment S.à r.l., Intelsat Jackson Holdings S.A and Bank of America N.A., as Administrative Agent (incorporated by reference to Exhibit 10.7 of Intelsat S.A.’s Quarterly Report on Form 10-Q, File No. 000-50262, filed on August 1, 2012).

10.8		Amendment and Joinder Agreement, dated as of October 3, 2012, by and among Intelsat Jackson Holdings S.A., as Borrower, Intelsat (Luxembourg) S.A., the Subsidiary Guarantors party thereto, Bank of America, N.A., as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.1 of Intelsat S.A.’s Current Report on Form 8-K, File No. 000-50262, filed on October 3, 2012).
10.9		Lease Agreement, dated October 3, 2012, between SL 4000 Connecticut LLC and Intelsat Global Service LLC. *
31.1		Certification of the Chief Executive Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. *
31.2		Certification of the Chief Financial Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. *
32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350. *
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350. *
101.INS		XBRL Instance Document. **
101.SCH		XBRL Taxonomy Extension Schema Document. **
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document. **
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document. **
101.LAB		XBRL Taxonomy Extension Label Linkbase Document. **
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document. **

*	Filed herewith.

6347

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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