6Table of Contents

7Table of Contents

9Table of Contents

OnTable November 9, 2000, Enlaces obtained from the SCT a registration of value-added services certificate, which allows it to offer internet access services, electronic data transfer and multimedia services (content delivery to private television channels). Contents

TheTable indentureof related to the Senior Secured Notes issued by Satmex establishes certain covenants. Principal covenants are as follows: Contents

SatmexTable is authorized to issue three types of shares: Series A shares, Series B shares, and Series N shares. Contents

•Table Pursuant to the Plan, effective on May 26, 2011, 100% of the Second Priority Old Notes were cancelled and converted into the right to receive equity interest, directly or indirectly, in the aggregate of 7.146% of the capital stock of the Company. The capitalization of the Conversion Rights and the cancellation of the Second Priority Old Notes were made at the face amount of the Second Priority Old Notes of $206,890, as follows:Contents

c.Table The insurance companies have the right to review the terms and conditions of the insurance policies, including the right to terminate the insurance coverage. Any uninsured loss of satellite Satmex 6 and Satmex 8 would have a material adverse effect on Satmex’s results of operations and financial position.Contents

k.Table Future minimum revenues (“Contract Backlog”) due from customers under non-cancelable operating lease contracts, which include a penalty clause against customers in case of early termination, for transponder capacity on satellites in-orbit as of June 30, 2013, are as follows:Contents

25Table of Contents

26Table of Contents

27Table of Contents

RevenueTable of Contents

BroadbandTable satellite services cost decreased due to a decrease of antennas cost, installation partially offset by an increase in antennas maintenance. Contents

OperatingTable Incomeof Contents

AsTable a result of the aforementioned factors, the net income attributable to Satmex for the six months ended June 30, 2013 was $1.6 million, as compared to $7.2 million for the same period in 2012. Contents

OperatingTable costs for the three months ended June 30, 2013 increased $0.9 million to $5.6 million (17% of revenues) compared to $4.7 million for the same period in 2012 (13% of revenues). The table below sets forth the components of our operating costs: Contents

OperatingTable Incomeof Contents

AsTable a result of the aforementioned factors, the net loss attributable to Satmex for the three months ended June 30, 2013 was $3.9 million, as compared to net income of $7.4 million for the same period in 2012. Contents

SourcesTable and Uses of Cash Contents

OurTable net cash used in investing activities for the six months ended June 30, 2013 primarily resulted from the payments associated with the construction of Satmex 8, Satmex 7 and Satmex 9 and our investment in infrastructure, electronic, data and processing equipment. Contents

37Table of Contents

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of ~~August~~November 2013.

Commission File No. 333-8880

Satélites Mexicanos, S.A. de C.V.

(Exact name of Registrant as specified in its charter)

Mexican Satellites, a Mexican Company of Variable Capital

(Translation of the Registrant’s name into English)

United Mexican States

(Jurisdiction of incorporation)

Avenida Paseo de la Reforma 222 Pisos 20 y 21, Colonia Juárez, 06600 México, D.F., México

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F Form

~~Form~~ 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(1):

Yes ¨ No x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(7):

Yes ¨ No x

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also hereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

QUARTERLY REPORT ON FORM 6-K

INDEX TO UNAUDITED FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

		Page
Item 1.	Basis of presentation of quarterly information		2
Item 2.	Unaudited Consolidated Financial Statements:
	Consolidated Balance Sheets as of June 30, 2013 (unaudited) and December 31, 2012		3
	Consolidated Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012		3
	Unaudited Consolidated Statements of Operations for the six months ended June 30, 2013 and three months ended June 30, 2013 and 2012		4
	Unaudited Consolidated Statements of Operations for the nine months ended September 30, 2013 and 2012, and three months ended September 30, 2013 and 2012		4
	Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and three months ended June 30, 2013 and 2012		5
	Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012, and three months ended September 30, 2013 and 2012		5
	Notes to the Unaudited Consolidated Financial Statements		6
Item 3.	Management’s Discussion and Analysis of Financial Condition and Results of Operations:		28
	Results of Operations for the six months ended June 30, 2013 and 2012		28
	Results of Operations for the nine months ended September 30, 2013 and 2012		28
	Results of Operations for the three months ended June 30, 2013 and 2012		31
	Results of Operations for the three months ended September 30, 2013 and 2012		31
PART II – OTHER INFORMATION
Item 1.	Legal Matters		34
Item 2.	Other Matters		34
Item 3.	Exhibits		36
Item 4.	Signatures		37

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

Item 1. Basis of Presentation of Quarterly Periods Information

On May 5, 2011, Satélites Mexicanos, S.A. de C.V. (“Satmex”), entered into an Indenture with Wilmington Trust, National Association, as as successor by merger to Wilmington Trust FSB, as trustee, (the “Indenture”) pursuant to which we issued $325.0 million aggregate principal amount of 9.5% Senior Secured Notes due 2017 (the “ Notes”). On March 30, 2012, ~~Satmex~~ Satmex issued $35.0 million aggregate principal amount of additional 9.5% Senior Secured Notes (“SSN”) due in 2017, to be issued in a private placement under rule 144A and Regulation S of the U.S. Securities Act of 1933, as amended, with ~~rights~~ rights to either offer to exchange the additional SSN for substantially similar notes that are registered under the U.S. Securities Act of 1933, as amended, or register the resale of the additional SSN. The additional SSN were priced at 102.00% and ~~will~~ will bear interest at an annual fixed rate of 9.5%. The additional SSN offering closed on April 9, 2012. Section 4.03 of the Indenture requires Satmex to furnish to the holders of the Notes and the trustee (or file with the SEC for public availability) reports on Form 6-K after the occurrence of an event required to be reported on Form 8-K if Satmex was required to file such reports. As such, Satmex is furnishing this Form 6-K to disclose material non-public information regarding a completed quarter pursuant to Item 2.02 of Form 8-K.

The presentation in this Form 6-K gives effect to the issuance of the Notes pursuant to the Indenture and the related transactions including, but not limited to, our voluntary filing for protection under Chapter 11 of the U.S. Bankruptcy Code on April 6, 2011 and the confirmation of our plan of reorganization on May 11, 2011, which plan became effective on May 26, 2011 (the “Transactions”). See Notes 14 of the Notes to the Unaudited Consolidated Financial Statements herein for a description of the Transactions.

The accompanying quarterly consolidated financial statements have not been audited, but are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). They do not include all of the information and footnotes required by U.S. GAAP for a complete set of unaudited consolidated 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 (the “Codification”).

This periodic report on Form 6-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, from time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. They can be identified by the use of forward-looking words such as “believe”, “expect”, “plan”, “may”, “should”, or “anticipate” or their negatives or other variations of these words or other comparable words, or by discussion of strategy that involves risks and uncertainties. These forward-looking statements may be included in, but are not limited to, various filings made by us with the Securities and Exchange Commission (the “Commission”), press releases or oral statements made by or with the approval of one of our authorized executive officers. Forward-looking statements are only predictions. Actual events or results could differ materially from those projected or suggested in any forward-looking statement as a result of a wide variety of factors and conditions. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. In any event the accompanying statements are applicable only as of the date of this Form 6-K and we undertake no obligation to update or revise any of them.

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

PART 1 – FINANCIAL INFORMATION

Consolidated Balance Sheets

(In thousands of U. S. dollars)

	June 30,2013		December 31,2012
	September 30, 2013		December 31, 2012
	(unaudited)		(audited)
Assets
Current assets:
Cash and cash equivalents	$	3334,~~659~~860	$	74,652
Restricted cash		—		4,900
Accounts receivable, net		2123,~~844~~217		13,521
Inventories, net of allowance for obsolescence		~~984~~845		413
Prepaid insurance and other assets		76,~~605~~402		8,725
Deferred tax assets		12,~~686~~306		3,059
Total current assets		6567,~~778~~630		105,270
Satellites and equipment, net		~~579~~607,~~857~~341		552,562
Concessions, net		41,~~942~~495		42,837
Intangible assets		2115,~~465~~736		32,923
Deferred financing cost		98,~~722~~888		11,390
Guarantee deposits and other assets		1,~~144~~117		1,032
Total	$	~~719~~742,~~908~~207	$	746,014
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	2243,~~490~~357	$	44,886
Deferred revenue		3,~~536~~502		3,605
Income tax payable		331		13
Total current liabilities		2646,~~029~~890		48,504
Debt obligations		360,000		360,000
Deferred revenue		2120,~~248~~382		22,982
Guarantee deposits and accrued expenses		4,~~021~~957		3,375
Labor obligations		~~794~~803		1,060
Long-term deferred tax liabilities		67,~~909~~826		8,483
Total liabilities		~~419~~440,~~001~~858		444,404
Contingencies and commitments (Note 13)
Shareholders’ equity:
Paid-in capital		275,662		275,662
Gain in adquisition of shares		1,~~346~~207		—
Common stock, class I, no par value, 50,000 shares authorized, issued and outstanding		—		—
Common stock, class II, no par value, 129,950,000 shares authorized, issued and outstanding		—		—
Retained earnings		2324,~~899~~480		22,334
Total Satélites Mexicanos, S. A. de C. V. shareholders’ equity		~~300~~301,~~907~~349		297,996
Noncontrolling interest		—		3,614
Total shareholders’ equity		~~300~~301,~~907~~349		301,610
Total	$	~~719~~742,~~908~~207	$	746,014

See accompanying notes to these consolidated financial statements.

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

(In thousands of U. S. dollars)

	Six months ended June 30,						Three months ended June 30,
	Nine months endedSeptember 30,						Three months endedSeptember 30,
	2013			2012			2013			2012
Revenues:
Satellite services	$	5585,~~883~~657		$	5785,~~245~~310		$	2829,~~387~~774		$	3128,~~418~~065
Broadband satellite services		46,~~163~~417			47,~~795~~093			2,~~123~~254			2,~~475~~298
Programming distribution services		69,~~384~~563			711,~~383~~202			3,~~199~~179			3,~~693~~819
Total revenues		66101,~~430~~637			69103,~~423~~605			3335,~~709~~207			3734,~~586~~182
Costs and expenses
Satellite services (1)		58,~~347~~308			46,~~234~~948			32,~~141~~961			2,~~120~~714
Broadband satellite services (1)		~~962~~1,726			1,~~031~~460			~~574~~764			~~610~~429
Programming distribution services (1)		35,~~826~~814			35,~~832~~958			1,~~933~~988			12,~~984~~126
Selling and administrative expenses (1)		1116,~~332~~367			1015,~~125~~434			65,~~075~~035			5,~~465~~309
Depreciation and amortization		2643,~~354~~305			3451,~~526~~784			1516,~~175~~951			17,~~268~~258
Total costs and expenses		4775,~~821~~520			5381,~~748~~584			2627,~~898~~699			27,~~447~~836
Operating income		1826,~~609~~117			1522,~~675~~021			67,~~811~~508			106,~~139~~346
Other (expenses) income:
Interest expense		(1723,~~087~~912	)		(58,~~464~~059	)		(86,~~136~~825	)		(2,~~966~~595	)
Interest income		~~273~~366			~~227~~361			~~146~~93			~~120~~134
Net foreign exchange gain (loss) – net		20218			57621			~~(376~~198	)		~~(516~~564	)
Income (loss) before income tax		1,815			10,495			(1,555	)		6,777
Income before income tax		2,789			14,944			974			4,449
Income tax expense (benefit)		294			3,419			2,296			(463	)
Income tax expense		588			7,043			294			3,624
Net income (loss)		1,521			7,076			(3,851	)		7,240
Net income		2,201			7,901			680			825
Less: Net income (loss) attributable to noncontrolling interest		(44	)		(83	)		33			(195	)
Less: Net income attributable to noncontrolling interest		55			22			99			105
Net income (loss) attributable to Satélites Mexicanos, S. A. de C. V.	$	1,565		$	7,159		$	(3,884	)	$	7,435
Net income attributable to Satélites Mexicanos, S. A. de C. V.	$	2,146		$	7,879		$	581		$	720

⁽¹⁾	Exclusive of depreciation and amortization shown separately below.

See accompanying notes to these unaudited consolidated financial statements.

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

(In thousands of U. S. dollars)

	Six months ended June 30,						Three months ended June 30,
	Nine months endedSeptember 30,						Three months endedSeptember 30,
	2013			2012			2013			2012
Cash flows from operating activities:
Net income (loss)	$	1,521		$	7,076		$	(3,851	)	$	7,240
Net income	$	2,201		$	7,901		$	680		$	825
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Net periodic pension cost		~~238~~360			(~~147~~185	)		~~189~~32			(~~192~~38	)
Depreciation and amortization		2643,~~354~~305			3451,~~526~~784			1516,~~175~~951			17,~~268~~258
Deferred income taxes		~~(199~~97	)		36,~~141~~056			~~2,015~~295			~~(658~~2,915	)
Deferred revenue		(12,~~803~~703	)		(57,~~731~~153	)		(~~902~~900	)		(51,~~391~~422	)
Amortization of deferred financing costs		12,~~599~~399			12,~~571~~372			~~765~~800			~~797~~801
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable		(89,~~323~~696	)		(67,~~768~~740	)		(1,~~545~~373	)		(~~2,181~~972	)
Inventories		(~~571~~432	)		13(92	)		~~(474~~139	)		(83105	)
Prepaid insurance		12,~~120~~323			12,~~441~~478			1,~~280~~203			~~856~~1,037
Guarantee deposits and other assets		(~~112~~85	)		(69307	)		~~221~~27			(8238	)
Accounts payable, accrued expenses and income tax		(89,~~372~~466	)		(36,~~595~~954	)		~~(11~~10,~~322~~564	)		~~(11~~10,~~903~~549	)
Guarantee deposits and accrued expenses		~~715~~1,685			~~448~~690			~~(29~~936	)		~~605~~242
Net cash provided by operating activities		1248,~~167~~920			3162,~~906~~758			129,~~522~~354			630,~~350~~852
Cash flows from investing activities:
Restricted cash - satellite Satmex 8		4,900			—			—			—
Construction in progress – net satellites (including capitalized interest)		(84,651	)		(62,948	)		(27,558	)		(19,814	)
Construction in progress – net satellites (including capitalized interest)		(57,093	)		(43,134	)		(29,384	)		(16,171	)
Acquisition of equipment		(1,561	)		(788	)		(595	)		(372	)
Acquisition of equipment		(967	)		(416	)		(301	)		(199	)
Net cash used in investing activities		(86,212	)		(63,736	)		(28,153	)		(20,186	)
Net cash used in investing activities		(53,160	)		(43,550	)		(29,685	)		(16,370	)
Cash flows from financing activities:
Issuance of Senior Secured Notes		—			35,700			—			35,700
Shareholders’ minoritary payment		(2,500	)		—			—			—
Deferred financing costs		—			(1,221	)		—			(1,221	)
Issuance of Senior Secured Notes		—			35,700			—			—
Net cash used in financing activities		—			34,479			—			34,479
Deferred financing costs		—			(1,221	)		—			—
Net cash (used in) provided by financing activities		(2,500	)		34,479			—			—
Cash and cash equivalents:
Net (decrease) increase for the period		(4039,~~993~~792	)		2233,~~835~~501			~~(28~~1,~~163~~201	)		2410,~~459~~666
Beginning of year		74,652			79,251			6133,~~822~~659			77102,~~627~~086
End of period	$	3334,~~659~~860		$	~~102~~112,~~086~~752		$	3334,~~659~~860		$	~~102~~112,~~086~~752
Supplemental disclosures of cash flow information:
Supplemental disclousure of cash flow information:
Cash paid during the period:
Capitalized interest:	$	5,532		$	20,392		$	2,990		$	7,219
Capitalized interest:	$	2,542		$	13,173		$	1,680		$	6,756
Income taxes paid:	$	664		$	1,383		$	93		$	335
Income taxes paid:	$	571		$	1,048		$	307		$	716
Non-cash investing activities:
Capital expenditures incurred not yet paid:	$	616,~~226~~332		$	~~502~~2,553		$	616,~~226~~332		$	~~502~~2,553

See accompanying notes to these unaudited consolidated financial statements.

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

Notes to the Unaudited Consolidated Financial Statements

(In thousands of U.S. dollars, unless otherwise stated)

1.	Nature of business and significant events

Satélites Mexicanos, S. A. de C. V. and subsidiaries (“Satmex” and together with its subsidiaries, the “Company”) is a provider of fixed satellite services (“FSS”) in the Americas. As of ~~June~~September 30, 2013, Satmex’s fleet was comprised of four satellites, Satmex 8, Satmex 6, Satmex 5, and Solidaridad 2 in contiguous orbital slots that enable its customers to serve its entire coverage footprint utilizing a single satellite connection. The satellites are operated and monitored from two satellite control centers, located in Iztapalapa, Mexico, and Hermosillo, Mexico. In March 2008, Solidaridad 2 was placed in inclined orbit; currently it only provides L-band service to the Mexican government. InOn May 2013, Satmex 5 was placed in 114.9º°W orbital slot in inclined orbit.

In addition to the core FSS business, which is reported as “Satellite services” segment, Satmex also provides the programming distribution services segment to offer TV programs in Spanish for Hispanic communities living in the United States of America (“USA”). The Company also provides broadband satellite transmission capacity services for various applications, such as internet access via satellite, telecommunication transmission and broadcasting.

Up to ~~June~~September 30, 2013, Satmex provided its commercial services through Satmex 86, Satmex 6 8 and Satmex 5, which have a total of 84 C- and 89.5 Ku-band 36 MHz transponder equivalents. Satmex’s business provides communication services to a diverse range of customers, including telecommunications companies, private and state-owned broadcasting networks, direct-to-home satellite television operators, and public and private telecommunications networks operated by financial, educational and media companies as well as governmental entities.

On April 26, 2013, after the successful completion of the In-Orbit Test, Satmex got the full control of the Satmex 8 satellite. The migration of customers from Satmex 5 to Satmex 8 was performed and concluded successfully on April 29, 2013.

On March 11, 2013, the Mexican President submitted a telecommunications reform bill ~~to amend the Mexican Constitutuion~~ whose purpose is to encourage economic competition and speed up the technological development of the sector. The current Foreign Investment Law establishes that radio broadcast and other radio and television services are reserved exclusively for Mexicans or Mexican companies with a foreigner exclusion clause. In the case of concessionaire companies, as established in articles 11 and 12 of the Federal Telecommunications Law, the foreign investment may be up to 49%. This reform bill establishes that it is essential to promote investment structures in the radiobroadcast and telecommunications sectors. On June 11, 2013, the constitutional modification decree was passed and issued. The transitory article fifth of the Decree establishes that upon the legal effectiveness of the constitutional reform, direct foreign investment up to 100% in telecommunications and satellite communications, and up to 49% in radio broadcasting (subject to reciprocity) will be permitted. Pursuant first transitory article of the decree, the Constitutional modification will be enforced at the immediate following day as from its publication, it means on June 12, 2013.

~~On June 11~~Notwithstanding, ~~2013,~~according to the ~~constitutional modification~~ decree, ~~was~~the ~~passed~~Congressmen ~~and~~shall ~~issued~~have ~~(the~~180 ~~“Decree”).~~days ~~The~~following ~~transitory~~the ~~article~~day ~~five~~ of the ~~Decree~~publication ~~establishes~~to ~~that~~draft, ~~upon~~amend and/or enact the ~~legal~~secondary ~~effectiveness~~legislation of(Foreign ~~the~~Investment ~~constitutional~~Law, ~~reform~~Telecommunications law, ~~direct~~etc.) ~~foreign~~However ~~investment~~the upfinal toreform ~~100%~~and inthe ~~telecommunications~~time ~~and~~that ~~satellite~~will ~~communications,~~be ~~and~~approved upis tonot ~~49%~~certain. inOther ~~radio~~potential ~~broadcasting~~effects ~~(subject~~of tothe ~~reciprocity)~~reform ~~will~~are ~~be permitted~~still unknown. ~~Pursuant~~Consequently, ~~first~~at ~~transitory~~the ~~article~~date of ~~the~~this financial ~~decree,~~information the ~~Decree~~Company’s ~~will~~management behas ~~enforced~~not atconcluded the ~~immediate~~impact ~~following~~on ~~day~~the asconsolidated ~~from~~financial ~~its publication, June 12, 2013~~statements.

~~Notwithstanding~~On July 31, ~~according to the Decree~~2013, ~~the~~Satmex ~~Congress~~entered ~~shall~~into ~~have~~a ~~180~~definitive ~~days~~agreement ~~following~~with ~~the~~Eutelsat ~~day~~Communications ~~of the publication to draft~~(Eutelsat), ~~amend~~pursuant ~~and/or enact the secondary legislation, incluiding any bills~~ to ~~modify~~which ~~the Foreign~~Eutelsat ~~Investment Law, Telecommunications Law or others. However the final reform and the time that~~ will beacquire ~~approved~~100% isof ~~not~~Satmex´s ~~certain.~~shares ~~Other~~at ~~potential~~closing ~~effects~~ of the ~~reform are still unknown~~deal. ~~Consequently,~~Transaction atclosing ~~the~~is ~~date~~only ofpending ~~this financial information~~government ~~the~~authorizations, ~~Company’s~~expected ~~management~~to ~~has~~take ~~not~~place ~~concluded~~by the ~~impact~~end onof the ~~consolidated financial statements~~year.

On6 July 31, 2013, Satmex entered into a definitive agreement with Eutelsat Communications (“Eutelsat”), pursuant to which Eutelsat will acquire 100% of Satmex´s shares at closing of the deal. The closing of the Transaction is pending government authorization, and it is expected to take place by the end of the year.

~~Table~~SATÉLITES ofMEXICANOS, ~~Contents~~S.A. DE C.V. AND SUBSIDIARIES

~~SATÉLITES~~Satmex ~~MEXICANOS,~~8 ~~S.A. DE C.V. AND SUBSIDIARIES~~

On April 1, 2010, we initiated a program for the design and construction of a new satellite, named Satmex 8, by executing the Satmex 8 ATP with Space Systems/Loral, LLC (f/k/a Space Systems/Loral, Inc.) (“SSL”). Construction of the Satmex 8 satellite was completed during the second half of 2012. Satmex 8 is a 64 C- and Ku-band transponder satellite which has replaced Satmex 5. The Satmex 8 program cost was estimated at approximately $321.0 million, including construction, launch and insurance (which does not include capitalized interest). As of September 30, 2013, we had spent approximately $359.7 million in connection with the Satmex 8 program which includes $44.4 million of capitalized interest.

OnThe ~~April 1,~~design ~~2010,~~life weof ~~initiated~~Satmex a8 ~~program~~is ~~for~~15 ~~the~~years. ~~design~~The satellite ~~and~~is ~~construction~~based ofon athe ~~new~~SSL ~~satellite~~LS-1300 platform, ~~named~~a ~~Satmex~~space-proven 8,platform byfor ~~executing~~a ~~the~~wide ~~Satmex 8~~range ~~ATP~~of ~~with~~satellite ~~Space~~services ~~Systems/Loral,~~and ~~LLC~~an ~~(f/k/a~~industry ~~Space~~leader ~~Systems/Loral~~in power, ~~Inc.)~~performance ~~(“SSL”)~~and reliability. ~~Construction~~The of1300 ~~the~~series ~~Satmex 8 satellite~~ was ~~completed~~first ~~during~~introduced in the ~~second~~mid-1980s ~~half~~and ofhas ~~2012.~~been ~~Satmex~~in constant 8evolutionary isdevelopment ato 64deliver C-increasingly ~~and~~higher ~~Ku-band~~power, ~~transponder~~greater ~~satellite~~flexibility ~~which~~and ~~has~~longer ~~replaced Satmex~~mission 5life. The ~~Satmex~~LS-1300 8platform ~~program~~has ~~cost~~been ~~was~~used ~~estimated~~in atover ~~approximately~~60 ~~$321.0~~satellites ~~million,~~currently ~~including~~in ~~construction,~~orbit ~~launch~~or ~~and~~under ~~insurance~~construction. ~~(which~~Satmex ~~does~~8 ~~not~~has ~~include~~been ~~capitalized~~designed ~~interest).~~to provide Ascomparable ofpower ~~June 30,~~levels ~~2013,~~and wecoverage ~~had~~over ~~spent~~the ~~approximately~~Americas ~~$359.7~~to ~~million~~those ~~in connection~~of ~~with~~our ~~the~~existing satellites, Satmex 86 ~~program~~and ~~which~~Satmex ~~includes $44~~5.4 ~~million of capitalized interest.~~

~~The design life of~~ Satmex 8 ~~is 15~~ ~~years. The~~ satellite iswas ~~based~~successfully launched on ~~the~~March 27, ~~SSL~~2013, ~~LS-1300 platform~~Baikonur, aKazakhstan ~~space-proven~~time ~~platform~~(March ~~for a wide range of satellite services and an industry leader in power~~26, ~~performance~~2013 ~~and reliability~~UTC). ~~The~~On ~~1300~~April 26, ~~series~~2013, ~~was~~after ~~first~~the ~~introduced~~successful incompletion of the ~~mid~~In-~~1980s~~Orbit ~~and~~Test, ~~has been~~Satmex ingot ~~constant~~the ~~evolutionary~~full ~~development~~control toof ~~deliver~~the ~~increasingly~~Satmex ~~higher~~8 ~~power, greater flexibility and longer mission life~~satellite. The migration ~~LS-1300~~of ~~platform~~customers ~~has~~from ~~been~~Satmex ~~used~~5 into ~~over 60 satellites currently in orbit or under construction.~~ Satmex 8 ~~has~~was ~~been designed~~performed ~~to provide comparable power levels~~ and ~~coverage~~concluded ~~over~~successfully ~~the~~on ~~Americas to those of our existing satellites~~April 29, ~~Satmex 6 and Satmex 5~~2013.

Satmex ~~8 satellite was successfully launched on March 27, 2013, Baikonur, Kazakhstan time (March 26, 2013 UTC). On April 26, 2013, after the successful completion of the In-Orbit Test, Satmex~~7 ~~got the full control of the Satmex 8 satellite. The migration of customers from Satmex 5 to Satmex 8 was performed and concluded successfully on April 29, 2013.~~

On March 13, 2012, Satmex and Asia Broadcast Satellite Holdings Ltd (“ABS”) entered into a master procurement agreement with Boeing Satellite Systems International, Inc. (“Boeing”) (the “Master Procurement Agreement”), which establishes the framework for the joint administration by Satmex and ABS for the purchase of four C- and Ku-band satellites to be developed and manufactured by Boeing (the “Program”). In the event ABS fails to perform its obligations under its own satellite procurement agreement, Boeing will be entitled to increase the price of each satellite of Satmex up to maximum of $10.5 million. Also, on this date, Satmex entered into a construction agreement (the “Satmex Procurement Agreement”) with Boeing, for the design, construction and delivery of the satellite Satmex 7, which will be based on Boeing’s 702 SP platforms, for a 34-month construction schedule. The Satmex Procurement Agreement also provides for a right to purchase an additional satellite based on Boeing’s 702 SP platforms.

~~On March 13, 2012,~~ Satmex ~~and~~also ~~Asia Broadcast Satellite Holdings Ltd (“ABS”)~~ entered into a ~~master~~bilateral ~~procurement~~ agreement with ~~Boeing~~ABS ~~Satellite~~on ~~Systems International~~March 13, ~~Inc.~~2012 (~~“Boeing”) (~~the “~~Master~~Bilateral ~~Procurement~~ Agreement”), ~~which~~whereby ~~establishes the framework for the joint administration by~~ Satmex and ABS agreed ~~for the purchase of four C- and Ku-band satellites~~ to beshare ~~developed~~launch ~~and~~services, ~~manufactured~~allocate bycommon ~~Boeing (the “~~Program~~”).~~ Incosts ~~the~~and ~~event~~cross- ~~ABS~~indemnify ~~fails~~each toother ~~perform~~for ~~its~~any ~~obligations~~actions ~~under~~or ~~its~~changes ~~own satellite procurement agreement, Boeing will be entitled~~ to ~~increase~~ the ~~price~~Program ofmade ~~each~~by ~~satellite of~~ Satmex upor toABS ~~maximum~~that ofadversely ~~$10.5~~affect ~~million. Also, on this date, Satmex entered into a construction agreement (~~the ~~“Satmex Procurement Agreement”) with Boeing~~costs, ~~for the design~~timing, ~~construction~~delivery ~~and~~or ~~delivery~~launch of the ~~satellite~~other ~~Satmex 7, which will be based on Boeing~~party’s ~~702 SP platforms, for a 34-month construction schedule. The Satmex Procurement Agreement also provides for a right to purchase an additional satellite~~ ~~based~~satellite onor ~~Boeing’s 702 SP platforms~~satellites.

Finally, Satmex ~~also~~ entered into a ~~bilateral~~launch services agreement ~~with ABS on March 13, 2012~~ (the “~~Bilateral~~Launch Services Agreement”), ~~whereby~~with ~~Satmex~~Space Exploration ~~and~~Technologies, ~~ABS~~Corp. ~~agreed~~(“SpaceX”) to ~~share~~ launch ~~services,~~satellite ~~allocate~~Satmex ~~common~~7. ~~Program~~The ~~costs~~launch ~~and~~services ~~cross-~~agreement ~~indemnify~~provides ~~each other~~ for ~~any~~a ~~actions~~scheduled orlaunch ~~changes~~period tofor ~~the Program made by~~ Satmex or7 ~~ABS~~between ~~that~~December ~~adversely~~2014 ~~affect~~and ~~the~~February ~~costs, timing,~~2015 ~~delivery~~and orwith ~~launch~~operations ofexpected ~~the~~to ~~other~~commence ~~party’s~~in October ~~satellite or satellites~~2015.

~~Finally,~~Satellite Satmex ~~entered~~7 ~~into~~will areplace ~~launch~~satellite ~~services agreement~~Solidaridad ~~(the~~2. ~~“Launch~~The ~~Services~~design, ~~Agreement”) with Space Exploration Technologies~~construction, ~~Corp.~~launch ~~(“SpaceX”)~~and toinsurance ~~launch~~costs ~~satellite~~of Satmex 7. are ~~The~~expected ~~launch~~to ~~services~~be ~~agreement~~approximately ~~provides~~$165.0 ~~for~~million. aAt ~~scheduled~~September 30, ~~launch~~2013, ~~period~~the ~~for~~amount ~~Satmex~~incurred 7has ~~between~~been ~~December 2014~~$82.4 ~~and~~million, ~~February~~which ~~2015~~includes ~~and~~$5.9 ~~with~~million ~~operations~~of ~~expected~~capitalized ~~to commence in October 2015~~interest.

~~Satellite~~ Satmex 79 will replace satellite Solidaridad 2. The design, construction, launch and insurance costs of Satmex 7 are expected to be approximately $165.0 million. At June 30, 2013, the amount incurred has been $70.4, which includes $2.5 million of capitalized interest.

On July 15, 2013, Satmex entered into an agreement with Boeing for the design, construction and delivery of Satmex 9, the latest communications satellite in its fleet. Satmex 9 will be launched from Cape Canaveral, Florida and will use SpaceX’s Falcon 9 rocket. The launch is scheduled for the fourth quarter of 2015.

~~On July 15, 2013,~~ Satmex ~~entered~~9 ~~into~~is ana ~~agreement~~satellite with ~~Boeing~~48 ~~for~~Ku ~~the~~band ~~design,~~36 ~~construction~~MHz equivalent ~~and delivery of Satmex 9~~transponders, ~~the~~which ~~latest communications satellite in its fleet. Satmex 9~~ will be ~~launched~~based ~~from Cape~~on ~~Canaveral, Florida and will use SpaceX~~Boeing’s ~~Falcon~~702 9SP ~~rocket.~~SP ~~The~~platforms, ~~launch is scheduled~~ for ~~the~~a ~~fourth~~24-month ~~quarter~~construction ~~of 2015~~schedule.

~~Satmex~~7 ~~9 is a satellite with 48 Ku band 36 MHz equivalent transponders, which will be based on Boeing’s 702 SP SP platforms, for a 24-month construction schedule.~~

~~Table~~SATÉLITES ofMEXICANOS, ~~Contents~~S.A. DE C.V. AND SUBSIDIARIES

~~SATÉLITES~~The ~~MEXICANOS~~procurement of Satmex 9 is part of a global cooperation agreement with ABS, ~~S.A.~~under DEthe Master ~~C.V.~~Procurement ~~AND~~Agreement ~~SUBSIDIARIES~~and the Bilateral Agreement.

~~The~~At ~~procurement~~September 30, of2013, ~~Satmex~~the 9amount isincurred ~~part~~has ofbeen ~~a global cooperation agreement with ABS~~$31.5million, ~~under~~which ~~the~~includes ~~Master~~$0.7 ~~Procurement~~million ~~Agreement~~of ~~and~~capitalized ~~the Bilateral Agreement~~interest.

2.	Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

a. Consolidation of financial statements - —The consolidated financial statements include the financial statements of Satmex and those of its subsidiaries. The financial statements of the subsidiaries are consolidated from their respective dates of acquisition or incorporation. All intercompany transactions and balances have been eliminated in consolidation.

The activities of the entities in the consolidated group are described below:

Company	Ownership percentage		Activity	~~Activity~~
Enlaces Integra, S. de R.L. de C.V. (“Enlaces”)	99.99%(1)	~~99.99~~	%Acquired on November 30, 2006. Offers private networks for voice, video and data as well as other value-added satellite services in Mexico.	Acquired on November 30, 2006. Offers private networks for voice, video and data as well as other value-added satellite services in Mexico. On Apil 29, 2013, Satmex increased its ownership percentage in Enlaces from 75.00% to 99.99%.
Alterna’TV International Corporation (“Alterna’TV Int.”)	100.00%	~~100.00~~	%Incorporated on May 21, 2009. Engaged in programming distribution services, primarily in the United States of America.	~~Incorporated on May 21, 2009. Engaged in programming distribution services, primarily in the United States of America.~~
Alterna’TV Corporation(“Alterna’TV Corp.”)		100.00	%	Incorporated on December 19, 2008, to be a vehicle to contract the procurement of the Satmex 7 satellite.
Alterna’TV Corporation (“Alterna’TV Corp.”)	100.00%		Incorporated on December 19, 2008, to be a vehicle to contract the procurement of the Satmex 7 satellite.
SMVS Administración, S. de R. L. de C. V., SMVS Servicios Técnicos, S. de R. L. de C. V. and HPS Corporativo S. de R. L. de C. V.(“Service Companies”)		100.00	%	Provide administrative and operating services exclusively to Satmex and Enlaces.
SMVS Administración, S. de R. L. de C. V., SMVS Servicios Técnicos, S. de R. L. de C. V. and HPS Corporativo S. de R. L. de C. V. (“Service Companies”)	100.00%		Provide administrative and operating services exclusively to Satmex and Enlaces.
Satmex U.S.A., LLC (“Satmex USA”)	100.00%	~~100.00~~	Incorporated on August 4, 2011. This entity holds the 0.03% interests related to the Service Companies.	~~Incorporated on August 4, 2011. This entity holds the 0.03% interests related to the Service Companies.~~
Satmex Do Brasil	100.00%	~~100.00~~	%This entity has not initiated operations.	~~This entity has not initiated operations.~~

b.(1) ~~Foreign~~On ~~currency~~October ~~transactions~~25, -2013, ~~For~~Satélites U.Mexicanos S.A. ~~GAAP~~de ~~reporting~~C.V. ~~purposes,~~(“Satmex”) ~~the~~has ~~Company~~entered ~~maintains~~into ~~separate~~an ~~accounting~~Equity ~~records~~Interests inPurchase ~~its~~Agreement ~~functional currency,~~ (the ~~U.S.~~“Securities ~~dollar.~~Purchase ~~Transactions~~Agreement”) ~~denominated~~with inAxesat ~~Mexican~~(“Axesat”) ~~pesos~~with ~~and~~respect ~~other~~to ~~foreign currencies are recorded at~~ the ~~rate~~sale of ~~exchange~~the indirect ~~effect~~or atindirect ~~the~~capital ~~date~~stock of ~~the~~Enlaces ~~transactions~~Integra S. ~~Monetary~~de ~~assets~~R.L. ~~and~~de ~~liabilities~~C.V. ~~denominated~~(“Enlaces”), insubject ~~Mexican~~the ~~pesos~~terms and ~~other~~conditions ~~foreign~~described ~~currencies~~therein. ~~are~~The ~~converted~~transaction ~~into~~is ~~the~~expected ~~Company’s~~to ~~functional~~close ~~currency~~by at the ~~rate~~end of ~~exchange in effect at the balance sheet date (Mexican pesos per one U.S. dollar as of June 30,~~ 2013 ~~and December 31~~, ~~2012,~~subject ~~were~~to ~~$13.4015~~government and ~~13.0101,~~regulatory ~~respectively),~~approvals ~~with~~and ~~the resulting effect included in~~ other ~~(expense)~~customary ~~income within results of operations~~conditions.

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

3b. ~~Significant~~Foreign currency transactions - For U.S. GAAP reporting purposes, the Company maintains separate accounting ~~policies~~records in its functional currency, the U.S. dollar. Transactions denominated in Mexican pesos and other foreign currencies are recorded at the rate of exchange in effect at the date of the transactions. Monetary assets and liabilities denominated in Mexican pesos and other foreign currencies are converted into the Company’s functional currency at the rate of exchange in effect at the balance sheet date (Mexican pesos per one U.S. dollar as of September 30, 2013 and December 31, 2012, were $12.7179 and 13.0101, respectively), with the resulting effect included in other (expense) income within results of operations.

A3. ~~summary~~Significant ~~of the significant~~ accounting policies ~~used in the preparation of the accompanying consolidated financial statements follows:~~

a.A ~~Cash~~summary ~~and~~of ~~cash~~the ~~equivalents~~significant -accounting ~~This~~policies ~~line item consists mainly of bank deposits~~ used in ~~checking~~the ~~accounts~~preparation ~~and readily available daily investments~~ of ~~cash~~the ~~surpluses.~~accompanying ~~Cash~~consolidated ~~equivalents~~financial ~~are~~statements ~~composed~~follows: ~~of highly liquid investments with original maturities of three months or less. This line item is stated at nominal value plus accrued yields, which are recognized in results as they accrue.~~

ba. ~~Restricted~~Cash and cash -equivalents—This Online ~~July~~item 3,consists ~~2012,~~mainly ~~Satmex~~of ~~and~~bank ~~ILS~~deposits ~~entered into an Escrow Agreement,~~ in ~~which~~checking ~~Satmex~~accounts ~~deposited~~and ~~with~~readily ~~the~~available ~~Escrow~~daily ~~Agent~~investments ~~$4,900 representing 5%~~ of ~~the~~cash ~~launch service price~~surpluses. ~~The~~Cash ~~Escrow~~equivalents ~~Agent~~are ~~shall~~composed ~~hold~~of ~~the~~highly ~~escrow~~liquid ~~deposit~~investments inwith anoriginal ~~interest~~maturities ~~bearing~~of ~~account.~~three Onmonths ~~the~~or ~~Satmex~~less. 8This ~~launch~~line ~~date~~item ~~March~~is ~~27,~~stated ~~2013,~~at ~~Baikonur,~~nominal ~~Kazakhstan~~value ~~time~~plus ~~(March~~accrued 26yields, ~~2013~~which ~~UTC),~~are ~~the~~recognized ~~Escrow~~in ~~Agent~~results ~~released~~as ~~the~~they ~~escrow deposit plus accumulated interest from the escrow account upon receipt of the irrevocable escrow instructions jointly provided by Satmex and ILS~~accrue.

cb. ~~Concentrations~~Restricted ofcash—On ~~credit~~July ~~risk~~3, -2012, ~~Financial~~Satmex ~~assets~~and ILS entered into an Escrow Agreement, in which ~~potentially~~Satmex ~~subject~~deposited with the ~~Company~~Escrow toAgent ~~concentrations~~$4,900 representing 5% of ~~credit~~the ~~risk~~launch service price. The Escrow Agent shall hold the escrow deposit in an interest bearing account. On the Satmex 8 launch date March 27, ~~consist~~2013, ~~principally~~Baikonur, Kazakhstan time (March 26, 2013 UTC), the Escrow Agent released the escrow deposit plus accumulated interest from the escrow account upon receipt of ~~cash~~the ~~and~~irrevocable ~~cash~~escrow ~~equivalents~~instructions ~~and~~jointly ~~accounts~~provided ~~receivable~~by Satmex and ILS.

c. Concentrations of credit risk—Financial assets, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and accounts receivable. Cash and cash equivalents are maintained with high-credit quality financial institutions.

Accounts receivable are comprised of several companies in the private domestic sector and certain foreign companies. Management considers that its credit evaluation, approval and monitoring processes combined with advance billing arrangements and guarantee deposits from customers mitigate potential credit risks with regard to its current customer base.

d. Inventories - —Inventories consist mainly of antennas and are stated at the lower of cost or market value. Cost is determined using the average cost method.

e. Prepaid insurance - —The insurance premium paid to renew in-orbit coverage of is recorded as a prepaid insurance and amortized over the related insurance policy period.

f. Satellites and equipment - —As of May 26, 2011, Satmex adopted push-down accounting, under which its satellites and equipment were recorded at fair values based upon the appraised values of such assets. Satmex determined the fair value of the satellites and equipment using the cost approach. The cost approach, often referred to as current replacement cost, estimates fair value based on the amount that currently would be required to replace the service capacity of an asset. Assets acquired after the adoption of push-down accounting are recorded at acquisition cost.

Costs incurred in connection with the construction and successful deployment of the satellites and related equipment are capitalized. Such costs consist primarily of the costs of satellite construction and launch, including launch insurance and insurance during the period of in-orbit testing, the value of performance incentives incurred to the satellite manufacturers, costs directly associated with the monitoring and support of satellite construction, and interest costs incurred during the period of satellite construction.

~~Satellite~~9 construction and launch services are generally procured under long-term contracts that provide for payments over the contract periods. Satellite construction and launch services costs are capitalized to reflect progress toward completion. Capitalizing these costs typically coincides with contract milestone payment schedules.

~~Table~~SATÉLITES ofMEXICANOS, ~~Contents~~S.A. DE C.V. AND SUBSIDIARIES

~~SATÉLITES~~Satellite ~~MEXICANOS,~~construction Sand launch services are generally procured under long-term contracts that provide for payments over the contract periods.A. DESatellite Cconstruction and launch services costs are capitalized to reflect progress toward completion.V. ~~AND~~Capitalizing ~~SUBSIDIARIES~~these costs typically coincides with contract milestone payment schedules.

Depreciation is calculated using the straight-line method for satellites, related equipment and other owned assets over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements.

The estimated useful and economic lives of the satellites are as follows:

	Original useful life (Years)		Remaining economic life at June 30, 2013 (Years)
	Original usefullife (Years)		Remaining economic life at September 30,2013 (Years)
Satellites in-orbit - are as follows:
Satmex 8		15		22.4318
Satmex 6		15		9.8964
Satmex 5 (1)		15		8.15
Satmex 5 (2)		15		7.90
Solidaridad 2		14.5		—

Depreciation of satellites commences on the date on which the satellite is placed in orbit. Satmex 6 was launched on May 27, 2006 and commenced operations in July 2006. Satmex 5 was launched on December 5, 1998 and commenced operations in January 1999. Solidaridad 2 and Satmex 5 concluded their depreciation period based upon its estimated useful life during 2009 and 2012, respectively. Satmex 8 was launched on March 26, 2013 UTC and commenced operations onin April 26, 2013.

The estimated useful lives of equipment are as follows:

	Original useful life (Years)
Equipment:
Satellite equipment		15
Furniture and fixtures		10
Leasehold improvements		5
Teleport, equipment and antennas		10

Concessions - As of May 26, 2011, Satmex adopted push-down accounting, under which its concessions were recorded at fair values based upon the appraised values of such assets. Satmex determined the fair value of the orbital concessions and the public telecommunications network concession using market approach and income approach methods, respectively. Orbital concessions are amortized over 40 years using the straight-line method; their remaining useful life as of the Acquisition Date was 26 years. The public telecommunications network concession is amortized over 30 years using the straight-line method; its remaining useful life as of the Acquisition Date was 19 years.

Valuation of satellites and long-lived assets - The carrying value of the satellites, amortizable intangible assets and other long-lived assets is reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the expected undiscounted future cash flows are less than the carrying value of the long-lived assets, an impairment charge is recorded based on such asset’s estimated fair value. Changes in estimates of future cash flows could result in a write-down of the asset in a future period.

(12) Inclined orbit.

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

Estimated future cash flows from the Company’s satellites could be impacted by ~~changes~~ changes in estimates of its ability to operate the satellite at expected levels, changes in the manner in which the satellite is to be used and the loss of one or several significant customer contracts on the satellite.

Deferred financing costs - Deferred financing costs related to the issuance of Senior Secured Notes were capitalized and reported as an asset. These costs are amortized to interest expense using the effective rate interest method.

j. Other intangible assets - —Intangible assets arising from push-down accounting are initially recorded at fair value using the income approach method. Intangible assets identified as part of the push-down of acquisition accounting consisted primarily of contract backlog and customer relationships. The Company reviews intangible assets for impairment whenever facts and circumstances indicate that the carrying amounts may not be recoverable. An intangible asset with a determinable useful life is considered to have been impaired when its carrying amount exceeds its fair value; however, an impairment loss shall only be recognized when the estimated future undiscounted cash flows expected to result from the use and eventual disposition of the asset are less than the carrying value of the asset. The Company measures an impairment loss as the difference between the carrying value of the asset and its fair value.

The costs of intangible assets with finite and determinable useful lives are amortized to reflect the pattern of consumption, over the estimated useful lives of the assets, as follows:

	Original useful life (Years)
Contract backlog		10
Customer relationships		4

Labor obligations - In accordance with Mexican Labor Law, Satmex provides seniority premiums benefits to its employees under certain circumstances. These benefits consist of a one-time payment equivalent to 12 days wages for each year of service (at the employee’s most recent salary, but not to exceed twice the legal minimum wage), payable to all employees with 15 or more years of service, as well as to certain employees terminated involuntarily prior to the vesting of their seniority premium benefit. Satmex also provides statutorily mandated severance benefits to its employees terminated under certain circumstances. Such benefits consist of a one-time payment of three months wages plus 20 days wages for each year of service payable upon involuntary termination without just cause. Costs associated with these benefits are provided for based on actuarial computations using the projected unit credit method. Other disclosures required by U.S. GAAP are not material.

l. Fair value of financial instruments and fair value measurements - —An entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Accounting guidance establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Inputs used to measure fair value may fall into one of three levels:

Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

Level 3 - —applies to assets or liabilities for which there are unobservable inputs to ~~the~~ the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, restricted cash, accounts receivable, debt, accounts payable and accrued expenses. The Company believes that the recorded values of cash, restricted cash, accounts receivable, accounts payable and accrued expenses approximate their current fair values because of their nature and respective maturity dates or durations.

m. Provisions - —Are recognized for current obligations that result of a past event, are probable to result in the use of economic resources and can be reasonably estimated.

n. Income taxes - —Current income taxes, calculated as the higher of the regular Mexican income tax (“ISR”) or the Business Flat Tax (“IETU”), are recorded in the results of the year in which they are incurred. Satmex accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

To determine tax bases of assets and liabilities, the Company evaluates whether it expects to be principally subject to ISR or IETU in the future and uses such tax base accordingly. If the Company is unable to conclude that it will be principally subject to either tax regime, a hybrid calculation is utilized. Based on ~~the~~ Company’s projections, it determined that in certain fiscal years it will pay ISR, while in others, it will pay IETU. Accordingly, the Company scheduled the reversal of the temporary differences for both ISR and IETU purposes, determined by year whether the applicable temporary differences should be those under ISR or those under IETU, and applied the corresponding rates.

Satmex recognizes net deferred tax assets to the extent that management believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

o. Statutory employee profit sharing - —Statutory employee profit sharing (“PTU”) is recorded in the results of the year in which it is incurred and presented within operating expenses in the accompanying consolidated statements of operations. Deferred PTU liabilities are derived from temporary differences that result from comparing the accounting and PTU values of assets and liabilities.

p. Revenue recognition - —Fixed satellite service revenues are recognized as the satellite capacity is provided according to service lease agreements. Satellite transmission capacity is sold through permanent and temporary contracts, which stipulate the agreed capacity. Lease agreements are accounted for either as operating or sales-type leases.

Operating lease revenues are recognized on a straight-line basis over the lease term. Revenues for temporary services are recognized as services are performed.

Revenues from end-of-life leases for transponders are usually collected in advance. The Company does not provide insurance and/or guarantees of any kind for the related transponders to these customers. Total revenues and related costs are accounted as sales-type leases and recognized in income when the risk and rewards of the transponders are transferred to the customer in accordance with the agreements.

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

The public and private network signal and value-added services (“Broadband ~~satellite~~ satellite services”) are recognized when services are rendered. The sale of antennas and installation services are recognized in the period in which risk and rewards are transferred to the customers, which generally coincides with the completion of the installation of the antennas and acceptance by the customer.

To calculate the monthly revenue attributable to purchasers of programming distribution services, the Company estimates, on a monthly basis, the number of subscribers per purchaser according to the contractual value of each subscriber. Approximately 45 to 60 days after the end of each month, the Company receives a definitive report from each purchaser and reconciles the definitive revenue with the estimated amount, issuing an invoice to such purchaser based on the definitive report. Variations between the estimated and actual revenue amounts are not material.

Deferred revenue - Satmex is required to provide the Mexican federal government, at no charge, approximately 362.88 MHz of its available transponder capacity for the duration of the orbital concessions (“State Reserve”). As of May 26, 2011, as a result of the adoption of push-down accounting, this obligation was recorded at its fair value, using the income approach method, and recognized as deferred revenue with a corresponding increase in the value of the related assets. Deferred revenue is amortized to fixed satellite services revenue based on the expected consumption pattern.

Use of estimates - The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amounts of revenues and expenses reported during the periods reported. Such estimates include the allowance for doubtful accounts, the revenue recognition of programming distribution services, the valuation of long-lived assets, the valuation allowance on deferred income tax assets, the scheduling of reversal of the temporary differences under different tax regimes, the estimated useful lives of each satellite and estimates of fair values. Although management believes the estimates and assumptions used in the preparation of these consolidated financial statements were appropriate in the circumstances, actual results could differ from those estimates and assumptions.

Recently issued accounting pending adoption

In December 2011, the FASB issued ASU No. 2011-11, Balance Sheet: Disclosures about Offsetting Assets and Liabilities. This ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards (“IFRS”). The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company will adopt this ASU ~~for~~in ~~the~~ 2013 ~~financial year~~.

In July 2012, the FASB issued ASU 2012-02, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - —Goodwill and Other - —General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on the Company’s financial position or results of operations.

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements in in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on the Company’s financial position or results of operations.

In February 2013, the FASB issued ASU 2013-02, ~~Comprehensive~~ Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The amendments in this Update supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASUs 2011-05 (issued in ~~June~~September 2011) and 2011-12 (issued in December 2011) for all public and private organizations. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements.

However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The amended guidance is effective prospectively for reporting periods beginning after December 15, 2013. Early adoption is permitted. The Company will adopt this ASU in 2013, but does not anticipate that it will have a material effect on its financial position or results of operations.

4.	Cash and cash equivalents

	June 30, 2013		December 31, 2012
	September 30,2013		December 31,2012
Cash	$	36,~~100~~262	$	6,912
Cash equivalents (1)		3028,~~559~~598		67,740
	$	3334,~~659~~860	$	74,652

(1)	The Company’s cash equivalents consist mainly of treasury bills with original maturities less than 20 days.

5.	Accounts receivable

	June 30, 2013			December 31, 2012
	September 30,2013			December 31,2012
Customers	$	2021,~~687~~283		$	12,787
Allowance for doubtful accounts		(~~740~~610	)		(1,202	)
		19,947			11,585
		20,673			11,585
Recoverable income taxes		~~270~~238			140
Recoverable value-added tax and tax withholdings		1,~~483~~979			1,146
Other		~~144~~327			650
	$	2123,~~844~~217		$	13,521

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

The principal customers of the Company are as follows:

•

For fixed satellite services:

•

Broadcasting: Grupo Televisa and Productora y Comercializadora de Televisión, S.A. de C.V.

•

Telecommunications: América Movil Perú, S.A.C., Teléfonos de México, S.A.B. de C.V. (“Telmex”) and Telefónica del Perú, S.A.A.

•

Data transmission and internet: Hughes Network Systems and Hunter Communications, Inc.

•

For programming distribution services: Comcast Cable Communications, LLC and Direct TV Inc.

•

For broadband satellite services: Grupo Wal-Mart de México and Grupo Oxxo.

Revenues from Fixed satellite services, Programming distribution services and Broadband satellite services were obtained from:

	Six months ended June 30, 2013		Year ended December 31, 2012
	Nine months ended September 30, 2013		Year ended December 31, 2012
	%		%
Hughes Networks Systems		109		11
América Móvil Perú, S.A.C.		9		9
Teléfonica del Perú, S.A.A.		5		3
Telmex		4		5
Other foreign customers		4742		4340
Other domestic customers		3031		32

6.	Satellites and equipment

	June 30, 2013			December 31, 2012
	September 30, 2013			December 31, 2012
Satellites in-orbit	$	556,~~118~~171		$	196,425
Satellite equipment, teleport and antennas		89,~~769~~274			8,061
Furniture and fixtures		4,~~481~~738			4,107
Leasehold improvements		~~946~~1,037			922
		570,314			209,515
		571,220			209,515
Accumulated depreciation and amortization		(6778,~~425~~284	)		(53,418	)
		502,889			156,097
		492,936			156,097
Construction in-progress for Satmex 8		—			358,289
Construction in-progress for Satmex 7		7082,~~433~~416			32,750
Construction in-progress for Satmex 9		531,~~350~~538			3,764
Other construction in-progress		~~1,185~~451			1,662
	$	~~579~~607,~~857~~341		$	552,562

For the ~~six~~nine months ended ~~June~~September 30, 2013 and 2012, depreciation and amortization expense related to satellites and equipment was $1424,~~001~~776 and $1827,~~188~~275, respectively.

~~For~~Capitalized ~~the~~interest ~~six~~costs ~~months~~as ~~ended~~of ~~June~~September 30, 2013 ~~and~~was ~~2012~~$4,860, we$672 ~~capitalized~~for ~~interest~~satellite ~~costs~~Satmex of7and ~~$2,542~~Satmex 9; for ~~satellite~~the ~~Satmex~~same 7period ~~and~~2012 was $1320,~~173~~392 for satellite Satmex 8~~, respectively~~.

157. Concessions


	September 30, 2013			December 31, 2012
Orbital concessions	$	41,740		$	41,740
Public telecommunications network		3,932			3,932

		45,672			45,672
Accumulated amortization		(4,177	)		(2,835	)

	$	41,495		$	42,837

~~SATÉLITES~~For ~~MEXICANOS~~the nine months ended September 30, ~~S.A.~~2013 DEand ~~C.V.~~2012, ~~AND~~amortization ~~SUBSIDIARIES~~of concessions was $1,342 and $1,343, respectively.

7.15 ~~Concessions~~

	June 30, 2013			December 31, 2012
Orbital concessions	$	41,740		$	41,740
Public telecommunications network		3,932			3,932
		45,672			45,672
Accumulated amortization		(3,730	)		(2,835	)
	$	41,942		$	42,837

~~For~~SATÉLITES ~~the six months ended June 30~~MEXICANOS, ~~2013~~S.A. ~~and~~DE ~~2012,~~C.V. ~~amortization~~AND ofSUBSIDIARIES ~~concessions was $895, respectively.~~

Orbital Concessions and Facilities

In October 1997, the Mexican federal government granted to Satmex the rights to three concessions (the “Concessions”) for an initial 20-year term to operate in the orbital slots 113.0° W.L., 116.8° W.L., and 114.9° W.L. In May 2011, extension of the Orbital Concessions was granted by the Mexican federal government for an additional term until 2037, without payment of any additional consideration. Satmex has the right to an additional 20-year extension, at a certain cost to Satmex, to be determined by the Mexican government, as long as Satmex meets certain conditions, as discussed below.

In order to extend the orbital concession term, Satmex must comply with all obligations established by the concession documents, solicit extension of the concession before the beginning of the fifth term of the concession, must obtain approval from the Mexican Secretary of Communication and Transportation (“SCT”) of the technical and operating characteristics of any new satellites, and must guarantee the occupation and use of the orbital slots during the concession’s original and extended terms.

In accordance with the Ley Federal de Telecomunicaciones (Federal Law of Telecommunications or “LFT”), concessionaries are required to maintain the satellite control centers within Mexican territory.

The satellites are controlled and operated through two control centers, one of them is located in the east side of Mexico City, and the other one is located in Hermosillo, Sonora. The land and related facilities of the first control center and the land of the second control center are the property of the Mexican federal government.

Use of the land and facilities where the control centers are located that are property of the Mexican federal government was granted to the Company through a concession for a 40-year term, for which the Company pays a fee, which is adjusted every five years by the Secretaría de la Función Pública (The Ministry of Public Administration) (see Note 13h).

Concessions for the Use and Exploitation of a Telecommunications Public Network

On January 20, 2000, the Mexican federal government granted to Enlaces a “Concession to Operate, Install, Exploit and Use a ~~Public~~ Public Telecommunications Network within Mexican Territory” at no charge, in order to provide services for private and public networks, and to provide value-added services. The concession term is for 30 years, with the possibility for an ~~extension~~ extension under certain conditions.

16On November 9, 2000, Enlaces obtained from the SCT a registration of value-added services certificate, which allows it to offer internet access services, electronic data transfer and multimedia services (content delivery to private television channels).

~~Table~~The terms of ~~Contents~~both concessions are subject to certain legal provisions regarding assignment or transfer of rights. According to Mexican Law, Satmex is not allowed to transfer the concessions to any foreign country or state. If the Mexican federal government expropriates them, the companies are entitled to liquidation or resignation of their rights. As of September 30, 2013, the Company has complied with the obligations established in the concession titles.

~~SATÉLITES~~16 ~~MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES~~

~~The~~SATÉLITES ~~terms of both concessions are subject to certain legal provisions regarding assignment or transfer of rights. According to Mexican Law~~MEXICANOS, ~~Satmex is not allowed to transfer the concessions to any foreign country or state~~S.A. IfDE ~~the Mexican federal government expropriates them, the companies are entitled to liquidation or resignation of their rights~~C.V. AsAND ofSUBSIDIARIES ~~June 30, 2013, the Company has complied with the obligations established in the concession titles.~~

8.	Intangible assets

Intangible assets, which were recognized in connection with the adoption of push-down accounting, are as follows:

	Weightedaverageremaining amortizationperiod(years)		~~June 30, 2013~~		September 30, 2013						~~December 31, 2012~~		December 31, 2012
			~~Gross amount~~		Gross amount		~~Accumulatedamortization~~		Accumulatedamortization		~~Gross amount~~		Gross amount		~~Accumulatedamortization~~		Accumulatedamortization
Contract backlog (1)	8	8	$	~~86,835~~	$	86,835	$	~~66,145~~	$	71,762	$	~~86,835~~	$	86,835	$	~~54,911~~	$	54,911
Customer relationships (1)	2	2		~~1,333~~		1,333		~~558~~		670		~~1,333~~		1,333		~~334~~		334
			$	~~88,168~~	$	88,168	$	~~66,703~~	$	72,432	$	~~88,168~~	$	88,168	$	~~55,245~~	$	55,245

⁽¹⁾	Using the income approach to determine fair values as of May 26, 2011, as a result of the adoption of push-down accounting.

For the ~~six~~nine months ended ~~June~~September 30, 2013 and 2012, amortization expense for these intangible assets was $1117,~~458~~187 and $1523,~~443~~166, respectively. Future annual amortization expense for intangible assets is estimated to be as follows:

2013 six months	$	11,457
2013 three months	$	5,728
2014		5,600
2015		2,658
2016		898
2017		346
Thereafter		506
	$	2115,~~465~~736

9.	Debt obligations

The balance of the Senior Secured Notes as of ~~June~~September 30, 2013 and December 31, 2012 is $360,000.

The principal characteristics of the Senior Secured Notes, including the Tack-on, are as follows:

•

Maturity is on May 15, 2017.

17• Fixed annual interest of 9.5%, payable semi-annually in arrears on May 15 and November 15 of each year.

~~Table~~• Fully and unconditionally guaranteed, jointly and severally, on a first priority senior secured basis by all of ~~Contents~~the existing U.S. subsidiaries and all future material subsidiaries of Satmex, subject to certain exceptions (see Note 14).

~~SATÉLITES~~• ~~MEXICANOS~~Optional redemption at any time prior to May 15, ~~S.A.~~2014, DEpursuant ~~C.V.~~to ~~AND~~which ~~SUBSIDIARIES~~Satmex may redeem up to 35% of the aggregate principal amount of the Notes, plus accrued and unpaid interest.

• ~~Fixed~~In ~~annual~~the ~~interest~~event of ~~9.5%~~a change of control, ~~payable~~the ~~semi-annually~~holders inhave ~~arrears~~the onright ~~May~~to 15require ~~and~~Satmex ~~November~~to 15repurchase the Senior Secured Notes at 101% of ~~each~~their ~~year~~issue price, plus accrued and unpaid interest.

•The ~~Fully~~indenture ~~and~~related ~~unconditionally~~to ~~guaranteed,~~the ~~jointly~~Senior ~~and~~Secured ~~severally,~~Notes onissued ~~a first priority senior secured basis~~ by ~~all~~Satmex ofestablishes ~~the~~certain ~~existing U~~covenants.S. ~~subsidiaries~~Principal ~~and~~covenants ~~all~~are ~~future~~as ~~material~~follows: ~~subsidiaries of Satmex, subject to certain exceptions (see Note 14).~~

• ~~Optional~~The ~~redemption~~Company atshould ~~any~~pay ~~time~~the ~~prior~~notes toon ~~May~~the ~~15,~~dates ~~2014,~~and ~~pursuant~~in ~~to which Satmex may redeem up to 35% of~~ the ~~aggregate~~manner ~~principal~~provided ~~amount~~by of the ~~Notes, plus accrued and unpaid interest~~indenture.

•17 ~~In the event of a change of control, the holders have the right to require Satmex to repurchase the Senior Secured Notes at 101% of their issue price, plus accrued and unpaid interest.~~

•SATÉLITES ~~The~~MEXICANOS, ~~Company~~S.A. ~~should~~DE ~~pay~~C.V. ~~the~~AND ~~notes~~SUBSIDIARIES ~~on the dates and in the manner provided by the indenture.~~

•

The Company should maintain an office or agency where the notes may be surrendered for registration.

•

The Company should furnish to the holders of the notes and the Trustee all annual reports on Form 20-F, within 180 days after the end of the financial year.

•

The Company and each guarantor should deliver to each of the Trustee and the Collateral Trustee and officers’ certificate stating that such officers have reviewed the activities of the companies during the preceding fiscal year and has kept, observed, performed and fulfilled its obligations under this Indenture and the Security Documents.

•

The Company should not permit any of its restricted subsidiaries to declare or pay any dividends, purchase or redeem any equity interest of the Company or make any restricted investment as defined in the indenture.

•

The Company should not incur any additional indebtedness or issue preferred stock unless permitted by the indenture.

•

The Company should not permit any of its restricted subsidiaries to consummate any asset disposition, unless permitted by the indenture.

As of ~~June~~September 30, 2013, Satmex has complied with these obligations.

10.

Labor obligations

Other disclosures required by US GAAP are not considered material.

11.

Shareholders’ equity

a. As of ~~June~~September 30, 2013 and December 31, 2012, the authorized, issued and outstanding common stock was as follows.


	Variable Capital Class II				Rights %
Fixed Class I Series A	Series A	Series B	Series N	Total	Voting	Economic
50,000	6,580,000	—	—	6,630,000	51.000	5.10000
—	—	6,363,339	116,877,651	123,240,990	48.950	94.80076
—	—	1,113	20,448	21,561	0.008	0.01659
—	—	4,081	74,963	79,044	0.031	0.06080
—	—	1,467	26,938	28,405	0.011	0.02185

50,000	6,580,000	6,370,000	117,000,000	130,000,000	100.000	100.00000

~~Table~~Satmex is authorized to issue three types of ~~Contents~~shares: Series A shares, Series B shares, and Series N shares.

~~SATÉLITES~~All ~~MEXICANOS,~~Series A Sshares of Satmex are owned by Holdsat Mexico. The Series A shares entitle holders to 51.0% DEof Satmex’s Cvoting rights and 5.V1% of its economic rights of all shares. ~~AND~~The ~~SUBSIDIARIES~~Series A shares may be owned only by Mexican individuals, Mexican entities that are owned only by Mexican individuals or entities or Mexican entities in which 51.0% of the capital is owned by Mexican individuals or entities.

		Variable Capital Class II								Rights %
FixedClass I Series A		Series A		Series B		Series N		Total		Voting		Economic
	50,000		6,580,000		—		—		6,630,000		51.000		5.10000
	—		—		6,363,339		116,877,651		123,240,990		48.950		94.80076
	—		—		1,113		20,448		21,561		0.008		0.01659
	—		—		4,081		74,963		79,044		0.031		0.06080
	—		—		1,467		26,938		28,405		0.011		0.02185
	50,000		6,580,000		6,370,000		117,000,000		130,000,000		100.000		100.00000

~~All~~SATÉLITES ~~Series A~~MEXICANOS, ~~shares of Satmex are owned by Holdsat Mexico~~S. ~~The Series~~ A ~~shares entitle holders to 51~~.0% ofDE ~~Satmex’s voting rights and 5~~C.~~1% of its economic rights of all shares~~V. ~~The~~AND ~~Series A~~SUBSIDIARIES shares may be owned only by Mexican individuals, Mexican entities that are owned only by Mexican individuals or entities or Mexican entities in which 51.0% of the capital is owned by Mexican individuals or entities.

Series B shares entitle holders to 49.0% of Satmex’s voting rights and 4.9% of the economic rights. The Series B shares may be owned by any person including foreign investors. Over 99% of the Series B shares are owned by Investment Holdings BV. Less than 1% of the Series B Shares are owned by certain holders of the Second Priority Old Notes who were not eligible to invest in Satmex through Investment Holding BV. Less than 0.03% of Series B shares are deposited in Satmex’s treasury for those non-qualified holders of the Second Priority Old Notes who failed to respond to the solicitation under the Plan.

Series N shares entitle holders to 90.0% of the economic rights and limited voting rights. The holders of Series N shares may vote only on the following matters: (i) extension of Satmex’s corporate existence; (ii) dissolution; (iii) change of corporate purpose; (iv) change of nationality; (v) transformation of Satmex from one type of entity to another; and (vi) merger of Satmex with and into another entity. The Series N shares may be owned by any person, including foreign investors.

Under Mexican law, foreign investment in Satmex’s capital, represented by full voting rights shares, may not exceed 49.0%. The Series N shares, however, are not taken into account in determining the level of foreign investment. Over 99% of the Series N shares are owned by Investment Holdings BV. Less than 1% of the Series N shares are owned by certain holders of the Second Priority Old Notes who were not eligible to invest in Satmex through Investment Holding BV. Less than 0.03% of Series N shares are deposited in Satmex’s treasury for those non-qualified holders of the Second Priority Old Notes who failed to respond to the solicitation under the Plan.

Pursuant to a unanimous resolutions adopted by the shareholders at a meeting held on May 26, 2011, the following resolutions were authorized:

•

The outstanding shares formerly held by the NAFIN Trust and the Deutsche Trust, representing the total common stock of the Company as of May 26, 2011, were exchanged through a reverse stock split with a ratio of 10 to 1, resulting in 4,687,500 shares. The stock split has been reflected retrospectively in the accompanying consolidated financial statements.

19• Variable common stock was increased by the issuance of 5,713,333 common, nominative, Class II, Series “A” shares, without par value, through cash contributions of $7,680 in exchange of 5.1% of the economic interest in the Company.

~~Table~~• Variable common stock was increased by the issuance of ~~Contents~~104,459,367 Class II ordinary shares, without par value, of which (i) 5,620,000 are Series “B” shares and (ii) 98,839,367 are Series “N” shares, through cash contributions of $82,320 in exchange for 83.254% of the economic interests in the Company.

~~SATÉLITES~~• ~~MEXICANOS~~Pursuant to the Plan, Seffective on May 26, 2011, 100% of the Second Priority Old Notes were cancelled and converted into the right to receive equity interest, directly or indirectly, in the aggregate of 7.A.146% DEof Cthe capital stock of the Company.V. ~~AND~~The ~~SUBSIDIARIES~~capitalization of the Conversion Rights and the cancellation of the Second Priority Old Notes were made at the face amount of the Second Priority Old Notes of $206,890, as follows:

• Variable common stock was increased by the issuance of 59,~~713~~289,~~333~~800 ~~common,~~Series ~~nominative,~~“N” Class II, ~~Series “A”~~ shares, without par value, ~~through~~for ~~cash~~the ~~contributions~~capitalization of ~~$7,680~~the inConversion ~~exchange~~Rights ofand ~~5.1%~~the cancellation of the ~~economic~~Second ~~interest~~Priority inOld Notes, through the ~~Company~~capitalization of liabilities for $70,457.

•19 Variable common stock was increased by the issuance of 104,459,367 Class II ordinary shares, without par value, of which (i) 5,620,000 are Series “B” shares and (ii) 98,839,367 are Series “N” shares, through cash contributions of $82,320 in exchange for 83.254% of the economic interests in the Company.

•SATÉLITES ~~Variable common stock was increased by the issuance of 9~~MEXICANOS,~~289,800~~ ~~Series~~S.A. ~~“N”~~DE ~~Class~~C.V. ~~II,~~AND ~~shares,~~SUBSIDIARIES ~~without par value, for the capitalization of the Conversion Rights and the cancellation of the Second Priority Old Notes, through the capitalization of liabilities for $70,457.~~

•

A paid-in capital premium was recognized of $136,433 for the shares subscription in consideration of the Conversion Rights and the cancellation of the Second Priority Old Notes; the amount of such premium was capitalized pro rata between the shareholders of the Company in the proportion of their participation percentage in the capital stock of the Company without issuance of new shares.

•

A put premium was capitalized in the amount of $7,855, in exchange of 4.5% of the economic interests in the Company. The amount of shares issued in exchange for the capitalization of the put premium was 5,850,000 Series “N” Class II, shares, without par value.

c. As of ~~June~~September 30, ~~2012~~2013 the common stock of Satmex amounted to $275,662.

Shareholders’ equity, except restated tax contributed capital and tax-retained earnings, will be subject to income tax at the rate in effect upon distribution of such equity. Any tax paid on this distribution may be credited against annual and estimated income taxes of the year in which the tax on dividends is paid and the following two fiscal years.

As of December 31, 2012, the balance of the tax contributed capital account is $2,219,573.

12.

Income taxes

a. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regards to future realization of deferred tax assets. The Company assesses the recoverability of its tax loss carryforwards and other deferred tax assets and based upon this analysis and records a valuation allowance to the extent recoverability does not satisfy the “more likely than not” recognition criteria. The Company continues to maintain the valuation allowance until sufficient positive evidence exists to support full or partial reversal. As of ~~June~~September 30, 2013 and December 31, 2012, Satmex had a valuation allowance totaling $4640.79 million and $50.1 million against deferred tax assets and tax loss carryforwards due to the limited carryforward periods.

In determining the appropriate valuation allowance, management considers the fact that the Company’s deferred taxes are prepared on ~~the~~ the hybrid method, given that in certain years it projects payment of ISR while in others, it projects payment of IETU. Accordingly, due to the use of this method, certain tax loss carryforwards and credits on IETU losses may be excluded from or included in the deferred tax computation during those years in which the Company expects to pay IETU or ISR, respectively; the related allowance on deferred tax assets is also excluded from or included in the deferred tax computation.

20As of December 31, 2012, Satmex has tax loss carryforwards and credits on IETU losses, which are available to offset future taxable income, as follows:


	Amounts ⁽¹⁾
Expiration Date	Tax loss Carryforwards		Credits on IETU losses
2013	$	82,827	$	—
2014		30,517		—
2016		227,784		—
2017		24,655		—
2018		79,453		—
2021		8,272		17,623
2022		—		1,261

	$	453,508	$	18,884

~~SATÉLITES~~(1) ~~MEXICANOS,~~The ~~S.A.~~amounts DEpresented ~~C.V.~~above ~~AND~~have ~~SUBSIDIARIES~~been adjusted for Mexican inflation as permitted by Mexican tax law.

As20 ~~of December 31, 2012, Satmex has tax loss carryforwards and credits on IETU losses, which are available to offset future taxable income, as follows:~~

	Amounts (1)
Expiration Date	Tax loss Carryforwards		Credits on IETU losses
2013	$	82,827	$	—
2014		30,517		—
2016		227,784		—
2017		24,655		—
2018		79,453		—
2021		8,272		17,623
2022		—		1,261
	$	453,508	$	18,884

~~(1)~~SATÉLITES ~~The~~MEXICANOS, ~~amounts~~S.A. ~~presented~~DE ~~above~~C.V. ~~have~~AND ~~been~~SUBSIDIARIES ~~adjusted for Mexican inflation as permitted by Mexican tax law.~~

Inb. ~~2012~~Statutory ~~and~~income ~~2010,~~tax ~~the~~rates ~~Company~~- ~~used~~Mexican ~~$72.6~~companies ~~million~~are subject to a dual tax system comprised of ISR and ~~$50~~IETU.9 ~~million~~Mexican entities pay the greater of ~~tax~~the ~~loss~~corporate ~~carryforwards,~~flat ~~respectively.~~tax Inor ~~2011~~regular income tax and ~~2010,~~therefore ~~$69.0 million~~determine ~~and~~their ~~$56.7~~deferred ~~million~~income oftaxes based on the tax ~~loss~~regime ~~carryforwards~~expected ~~expired,~~to ~~respectively.~~be paid to in the future.

b.The ~~Statutory~~ISR ~~income~~rate ~~tax~~in ~~rates~~2012 -and 2011 ~~Mexican~~was ~~companies~~30%. ~~are~~In ~~subject~~accordance towith athe ~~dual~~Mexican ~~tax~~Federal ~~system~~Income ~~comprised~~Tax ofLaw ~~ISR~~for ~~and~~2013, ~~IETU.~~which ~~Mexican~~was ~~entities~~enacted ~~pay~~in 2012, the ~~greater~~ISR ofrate ~~the~~applicable ~~corporate~~to ~~flat~~companies ~~tax~~is or30% ~~regular~~in ~~income~~2013 ~~tax~~ and ~~therefore~~will ~~determine~~decrease ~~their~~to ~~deferred~~29% ~~income~~in ~~taxes~~2014 ~~based~~and on28% ~~the tax regime expected to be paid to~~ in ~~the~~2015 ~~future~~and thereafter.

~~The~~IETU ~~ISR~~- ~~rate~~Revenues, inas ~~2012~~well ~~and~~as ~~2011~~deductions ~~was~~and ~~30%.~~certain Intax ~~accordance~~credits, ~~with~~are ~~the~~determined ~~Mexican~~based ~~Federal~~on ~~Income~~cash ~~Tax~~flows ~~Law~~of ~~for~~each ~~2013,~~fiscal ~~which~~year. ~~was~~Beginning ~~enacted~~ in ~~2012~~2010, the IETU ~~ISR~~ rate ~~applicable~~is ~~to companies will be 30~~17.5% ~~in 2013 and will decrease to 29% in 2014 and 28% in 2015 and thereafter~~.

~~IETU~~Current -income ~~Revenues,~~taxes ~~as well as deductions and certain tax credits,~~ are ~~determined based~~the ongreater ~~cash flows~~ of ~~each~~ISR ~~fiscal~~and ~~year. Beginning in 2010, the~~ IETU ~~rate is 17~~.~~5%.~~

~~Current~~c. ~~income~~AUncertain ~~taxes~~tax ~~are~~positions ~~the~~- ~~greater~~The ~~of ISR~~Company ~~and~~has ~~IETU~~not taken any uncertain tax positions for which it believes it is more likely than not, based on technical merits, that it will not receive benefits taken for its tax positions. The tax years that remain subject to examination by the tax authorities include 2008 – 2012.

c13. ~~Uncertain~~Contingencies ~~tax~~and positions - The Company has not taken any uncertain tax positions for which it believes it is more likely than not, based on technical merits, that it will not receive benefits taken for its tax positions. The tax years that remain subject to examination by the tax authorities include 2008 – 2012.commitments

~~13.~~Insurance ~~Contingencies~~matters ~~and commitments~~

~~Insurance~~a. ~~matters~~We obtained in-orbit insurance for Satmex 8 for $360.0 million. We may, 24 months after Satmex 8 is operational, reduce the amount of insurance to the depreciated carrying value of Satmex.

ab. WeOn ~~obtained~~December 5, 2012, Satmex renewed the in-orbit insurance policy for satellite Satmex 86, ~~for~~which ~~$360.0~~expires ~~million.~~on WeDecember ~~may~~5, 242013, ~~months~~and ~~after~~provides ~~Satmex~~coverage 8for is$134.2 ~~operational~~million as of September 30, ~~reduce~~2013 ~~the~~(such amount of insurance todecreases ~~the~~monthly ~~depreciated~~to carrying ~~value~~values ofas ~~Satmex~~established in the debt indenture).

21c. The insurance companies have the right to review the terms and conditions of the insurance policies, including the right to terminate the insurance coverage. Any uninsured loss of satellite Satmex 6 and Satmex 8 would have a material adverse effect on Satmex’s results of operations and financial position.

~~Table~~d. Satmex did not renew the in-orbit insurance policy for satellite Satmex 5 primarily because the satellites geostationary life ended in September 2013, and the condition of ~~Contents~~the satellite does not comply with the industry standards required by the terms and conditions of the insurance policy. Any uninsured loss of satellite Satmex 5 would have a material adverse effect on Satmex’s results of operations and financial condition.

~~SATÉLITES~~e. ~~MEXICANOS,~~The ~~S.A.~~in-orbit DEinsurance Cfor satellite Solidaridad 2 was not renewed primarily because the satellite’s geostationary life ended in 2009.V. ~~AND~~Any ~~SUBSIDIARIES~~uninsured loss of satellite Solidaridad 2 would not have a material adverse effect on Satmex’s results of operations and financial condition.

b.21 On December 5, 2012, Satmex renewed the in-orbit insurance policy for satellite Satmex 6, which expires on December 5, 2013, and provides coverage for $135.5 million as of June 2013 (such amount of insurance decreases monthly to carrying values as established in the debt indenture).

d.SATÉLITES ~~Satmex did not renew the in-orbit insurance policy for satellite Satmex 5 primarily because the satellites geostationary life will end in September 2013~~MEXICANOS, ~~and~~S.A. ~~the~~DE ~~condition of the satellite does not comply with the industry standards required by the terms and conditions of the insurance policy~~C.V. ~~Any~~AND ~~uninsured~~SUBSIDIARIES ~~loss of satellite Satmex 5 would have a material adverse effect on Satmex’s results of operations and financial condition.~~

e.Commitments The in-orbit insurance for satellite Solidaridad 2 was not renewed primarily because the satellite’s geostationary life ended in 2009. Any uninsured loss of satellite Solidaridad 2 would not have a material adverse effect on Satmex’s results of operations and financial condition.

~~Commitments~~f. Satmex entered into a contract with Space Systems/Loral, Inc. (“SS/L”) and granted to SS/L a usufruct right (a Mexican law concept that grants another person the right to use and benefit from another person’s property) over certain transponders on the satellite Satmex 5 and satellite Satmex 6 satellites, until the end of the life of such satellites. SS/L was not required to post a bond related to the usufruct arrangement. In the event that Satmex or a new shareholder decides not to continue with the usufruct arrangement, SS/L has the right to receive the higher of a percentage of the net sale value of Satmex 6 and Satmex 5 or an amount equal to the market value related to the transponders granted under the usufruct arrangement.

fg. ~~Satmex~~State ~~entered~~Reserve ~~into~~- aUnder ~~contract~~the ~~with~~orbital ~~Space~~concessions ~~Systems/Loral, Inc. (“SS/L”) and~~ granted toby ~~SS/L~~the ~~a usufruct right (a~~ Mexican ~~law~~federal ~~concept~~government, ~~that grants another person the right to use and benefit from another person’s property) over certain transponders on the satellite~~ Satmex 5must ~~and~~provide, ~~satellite~~at ~~Satmex~~no ~~6 satellites~~charge, ~~until~~satellite ~~the~~capacity ~~end~~ of ~~the~~approximately ~~life of such satellites~~362.88 ~~SS/L~~MHz ~~was not required~~ to ~~post a bond related to~~ the ~~usufruct~~Mexican ~~arrangement.~~federal Ingovernment ~~the~~in ~~event~~C- ~~that Satmex or a new shareholder decides not to continue with the usufruct arrangement, SS/L has the right to receive the higher of a percentage of the net sale value of Satmex 6~~ and ~~Satmex~~Ku- ~~5 or an amount equal to the market value related to the transponders granted under the usufruct arrangement~~bands.

gh. ~~State~~On ~~Reserve~~October -15, ~~Under~~1997, the ~~orbital~~Mexican ~~concessions~~government granted bya property concession that relates to Satmex’s use of the ~~Mexican~~land ~~federal~~and buildings on which its satellite control centers are located and allows Satmex to base its ground station equipment within telecommunication facilities that belong to the Mexican government. Under such concession, Satmex ~~must~~is ~~provide,~~obligated atto nopay ~~charge~~an annual fee, ~~satellite~~equivalent ~~capacity~~to 7.5% of ~~approximately~~the ~~362.88~~total ~~MHz~~value toof the ~~Mexican~~land, ~~federal~~which ~~government~~is indetermined C-by ~~and~~appraisal ~~Ku-~~experts ~~bands~~assigned by the Mexican federal government.

h.For ~~On October 15, 1997,~~ the ~~Mexican~~nine ~~government~~months ~~granted~~ended aSeptember 30, ~~property~~2013 ~~concession~~and ~~that~~2012, ~~relates~~the tofees paid ~~Satmex’s~~for the use of ~~the~~these ~~land and buildings on which its satellite~~ control centers ~~are~~were ~~located~~$401 and ~~allows~~$371 ~~Satmex to base its ground station equipment within telecommunication facilities that belong to the Mexican government~~respectively. ~~Under such concession, Satmex is obligated to pay an annual fee, equivalent to 7.5% of the total value of the land, which is determined by appraisal experts assigned by the Mexican federal government.~~

i. Satmex leases two floors in the building where its headquarters are located. The corresponding lease agreement establishes a mandatory period of five years as of October 1, 2013 and ending in September 30, 2018. For the ~~six~~nine months ended ~~June~~ September 30, 2013 and 2012, ~~the~~rent ~~fees~~expense ~~paid~~was ~~for~~$396 ~~the~~and ~~use~~$388, ofrespectively. ~~these~~The ~~control~~minimum ~~centers~~future ~~were~~payments ~~$287~~for ~~and~~this agreement are $~~246~~1,583 ~~respectively~~million.

ij. ~~Satmex~~On ~~leases~~July ~~two~~31, ~~floors~~2013, inSatmex ~~the~~entered ~~building~~into ~~where~~a ~~its~~definitive ~~headquarters are located. The corresponding lease~~ agreement ~~establishes~~with aEutelsat ~~mandatory~~Communications ~~period~~(Eutelsat), ofpursuant ~~five~~to ~~years~~which ~~and~~Eutelsat ~~three~~will ~~months~~acquire as100% of ~~July~~Satmex´s ~~2008~~shares ~~and~~at ~~ending~~closing inof ~~September~~the ~~2013~~deal. ~~For~~Transaction ~~the~~closing ~~six~~is ~~months~~only ~~ended~~pending ~~June~~government 30authorizations, ~~2013~~expected ~~and~~to ~~2012,~~take ~~rent~~place ~~expense~~by ~~was~~the ~~$264~~end ~~and~~of ~~$259, respectively. The minimum future payments for~~ the ~~period ended September 30, 2013 is $132~~year.

jk. On ~~July~~October 3125, 2013, Satmex has entered into aan ~~definitive~~Equity ~~agreement~~Interests ~~with~~Purchase ~~Eutelsat~~Agreement ~~Communications~~ (~~Eutelsat),~~the ~~pursuant~~“Securities toPurchase ~~which~~Agreement”) ~~Eutelsat~~with ~~will~~Axesat ~~acquire~~(“Axesat”) ~~100%~~with ofrespect ~~Satmex´s~~to ~~shares~~the atsale ~~closing~~ of the ~~deal.~~direct ~~The~~or ~~closing~~indirect capital stock of Enlaces, subject to the ~~Transaction~~terms isand ~~pending~~conditions ~~government~~described ~~authorization,~~therein. ~~and~~The ittransaction is expected to ~~take~~close ~~place~~ by the end of ~~the~~2013, ~~year~~subject to government and regulatory approvals and other customary conditions.

22l. Future minimum revenues (“Contract Backlog”) due from customers under non-cancelable operating lease contracts, which include a penalty clause against customers in case of early termination, for transponder capacity on satellites in-orbit as of September 30, 2013, are as follows:


Years	Amounts
2013 three months	$	30.621
2014		82,204
2015		53,731
2016		33,297
2017		20.933
Thereafter		58,112

	$	278,898

~~SATÉLITES~~22 ~~MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES~~

Years	Amounts
2013 six months	$	55,010
2014		63,718
2015		38,902
2016		19,173
2017		13,514
Thereafter		51,682
	$	241,999

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

Other matters

lm. The teleport of Enlaces is housed at the primary control center of Satmex, which form part of a building complex that also houses equipment owned and used by the Mexican federal government’s teleport and mobile satellite services systems. On May 14, 2010, the SCT issued an amendment to the property concession granted on October 15, 1997, under which the Company may, with prior authorization from the SCT, lease or give under a commodatum (i.e., a rent-free lease) agreement, segments of the primary and alternate control centers to third parties as long as such segments are used for activities related to the subject matter of the property concession. This amendment allows the Company, among other things, to provide control and satellite operation services to other operators, with the prior authorization of the SCT; the Company filed an authorization request for Enlaces’ teleport to be housed at Satmex’s primary control center on May 17, 2010. Such authorization is pending as of the date of the accompanying consolidated financial statements. The teleport’s relocation would have an estimated cost of $6.8 million and would take approximately nine months.

m. On ~~April 29~~September 6, 2013, ~~the~~Satmex ~~General~~received ~~Partners’~~authorization ~~Meeting~~from ofSCT ~~Enlaces~~to ~~Integra~~lease ~~adopted~~part ~~by unanimous resolutions a decrease in the equity capital (represented by series “C”~~ of the ~~variable~~facility ~~portion~~to ofEnlaces ~~the~~Integra. ~~equity~~This ~~capital);~~is incorporated in anthe ~~amount~~negotiations ~~that~~for ~~did~~sale ~~not exceed $4.5 million, which was paid at this date; consequently Satmex has a 99.99%~~ of ~~the~~Enlaces ~~ownership~~Integra ~~percentage of Enlaces~~ownership.

14n. ~~Supplemental~~On ~~Guarantor~~April ~~Unaudited~~29, ~~Condensed~~2013, ~~Consolidating~~the ~~Financial~~General ~~Statements~~Partners’ Meeting of Enlaces Integra adopted by unanimous resolutions a decrease in the equity capital (represented by series “C” of the variable portion of the equity capital); in $2.3 million, which was paid at this date; consequently Satmex has a 99.99% of the ownership percentage of Enlaces.

o. On ~~May 5~~September 23, ~~2011~~2013 ~~Satmex~~the ~~offered~~General ~~$325.0~~Partners’ ~~million~~Meeting inof ~~aggregate~~Enlaces ~~principal~~Integra ~~amount~~adopted ofby ~~Senior~~unanimous ~~Secured~~resolutions ~~Notes.~~a ~~Satmex~~decrease ~~exchanged~~in the ~~Senior Secured~~equity ~~Notes~~capital ~~for~~in $~~325~~4.01 million of(represented ~~registered~~by ~~9.5%~~series ~~Senior~~“A” ~~Secured~~and ~~Notes~~“B” ~~due~~of ~~2017~~the (variable portion of the ~~“Notes”~~equity capital).

~~On April 9, 2012, Satmex offered an additional $35~~p.0 ~~million~~The ~~aggregate~~Bill ~~principal amount~~ of ~~Senior~~Tax ~~Secured~~Amendments ~~Notes~~submitted asby ~~a tack-on to~~ the ~~Senior~~Executive ~~Secured~~Branch ~~Notes~~to (the ~~“Tack-on~~Mexican ~~Notes”)~~Congress ~~due~~was inapproved ~~2017,~~by ~~issued~~the inLower aHouse ~~private placement under Rule 144A and Regulation S~~ of the ~~U.S.~~Mexican ~~Securities~~Congress ~~Act~~with ofsome ~~1933,~~relevant aschanges ~~amended.~~that ~~The Tack-on Notes~~ were ~~exchanged~~included ~~for~~to ~~registered~~the ~~notes~~original ~~on September 28, 2012~~bill. ~~The additional Tack-on Notes were priced at 102.00% and will bear interest at an annual fixed rate of 9.50%.~~

~~Both~~According ~~the~~to ~~Exchange Notes and~~ the ~~Tack-on~~proposal, ~~Notes~~Business ~~are~~Flat ~~guaranteed~~Tax ~~by all of Satmex’s U.S. domiciled subsidiaries existing on the issue date~~ (~~which~~commonly known as ~~of the date of the accompanying consolidated financial statements includes Alterna’TV Corp. and Alterna’TV Int. (the “Guarantors”~~IETU). ~~Future~~would ~~guarantor~~be ~~subsidiaries~~eliminated ~~are~~commencing contemplated in the indentures. The guarantees are full and unconditional and are joint and several obligations of the guarantors and are secured by first priority liens on the collateral securing the notesJanuary 1st, ~~subject to certain permitted liens~~2014. ~~Accordingly, supplemental guarantor condensed consolidating financial statements are included hereon.~~

23The aforementioned will mean a change on the current and deferred tax calculations, considering that the company will be subject only to income tax in the next years.

~~Table~~Under the 2014 Tax Reform package, presented to the Congress by the Executive Branch of ~~Contents~~the Mexican government, the current 30 % corporate income tax rate will be maintained, repealing the scheduled reduction to 28%.

~~SATÉLITES~~14. ~~MEXICANOS,~~Supplemental ~~S.A.~~Guarantor DEUnaudited ~~C.V.~~Condensed ~~AND~~Consolidating ~~SUBSIDIARIES~~Financial Statements

On May 5, 2011 Satmex’s ~~investments~~offered in$325.0 ~~subsidiaries~~million in ~~the~~aggregate ~~accompanying~~principal ~~guarantor~~amount ~~information~~of ~~are accounted~~Senior ~~for~~Secured ~~under~~Notes. ~~the~~Satmex ~~equity~~exchanged ~~method,~~the ~~representing~~Senior ~~acquisition~~Secured ~~cost~~Notes ~~adjusted~~ for ~~Satmex’s~~$325.0 ~~share~~million of ~~the~~registered ~~subsidiary’s cumulative results of operations, capital contributions, distributions and other equity changes~~9.5% ~~The~~Senior ~~principal~~Secured ~~elimination entries~~Notes ~~relate~~due to2017 ~~investments~~(the ~~in subsidiaries and intercompany balances and transactions~~“Notes”).

~~The~~On ~~following~~April 9, ~~tables~~2012, ~~have~~Satmex ~~been prepared~~offered inan ~~accordance~~additional ~~with~~$35.0 ~~Regulation S-X~~million ~~Rule 3-10,~~aggregate ~~Financial~~principal ~~Statements~~amount of ~~Guarantors~~Senior ~~and~~Secured ~~Issuers~~Notes ofas ~~Guaranteed~~a ~~Securities~~tack-on ~~Registered~~to orthe ~~Being~~Senior Secured ~~Registered,~~Notes ~~in order to present~~ (the (i“Tack-on Notes”) ~~condensed~~ ~~consolidating~~due ~~balance~~in ~~sheets~~2017, ~~as of~~issued ~~June 30,~~in ~~2013,~~a ~~(ii) condensed~~private ~~consolidating~~placement ~~statements~~under ofRule ~~operations~~144A and ~~condensed~~Regulation ~~statements~~S of ~~cash flows for~~ the ~~six~~U.S. ~~months~~Securities ~~ended~~Act ~~June 30, 2013,~~ of ~~Satmex~~1933, ~~which~~as isamended. ~~the~~The ~~issuer of the Senior Secured Notes and the~~ Tack-on Notes~~, and~~ ~~of,~~were ~~the~~exchanged ~~Guarantors~~for ~~(which~~registered ~~are~~notes ~~combined~~on ~~for this purpose)~~September 28, 2012. ~~the~~The ~~Non~~additional Tack-~~Guarantors,~~on ~~and~~Notes ~~the~~were ~~elimination~~priced ~~entries~~at ~~necessary~~102.00% toand ~~consolidate~~will ~~the~~bear ~~issuer~~interest ~~with~~at ~~the~~an ~~Guarantor~~annual ~~and~~fixed ~~Non-Guarantor~~rate ~~subsidiaries~~of 9.50%.

2423

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

~~Unaudited~~Both ~~Condensed~~the ~~Consolidating~~Exchange ~~Balance~~Notes ~~Sheet~~and the Tack-on Notes are guaranteed by all of Satmex’s U.S. domiciled subsidiaries existing on the issue date (which as of the date of the accompanying consolidated financial statements includes Alterna’TV Corp. and Alterna’TV Int. (the “Guarantors”). Future guarantor subsidiaries are contemplated in the indentures. The guarantees are full and unconditional and are joint and several obligations of the guarantors and are secured by first priority liens on the collateral securing the notes, subject to certain permitted liens. Accordingly, supplemental guarantor condensed consolidating financial statements are included hereon.

AsSatmex’s investments in subsidiaries in the accompanying guarantor information are accounted for under the equity method, representing acquisition cost adjusted for Satmex’s share of ~~June 30~~the subsidiary’s cumulative results of operations, ~~2013~~capital contributions, distributions and other equity changes. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions.

The following tables have been prepared in accordance with Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered, in order to present the (Ini) condensed consolidating balance sheets as of September 30, 2013, (ii) condensed consolidating statements of operations and condensed ~~thousands~~statements of U.cash S.flows ~~dollars~~for the six months ended September 30, 2013, of Satmex, which is the issuer of the Senior Secured Notes and the Tack-on Notes, and of, the Guarantors (which are combined for this purpose), the Non-Guarantors, and the elimination entries necessary to consolidate the issuer with the Guarantor and Non-Guarantor subsidiaries.

	Satmex		Guarantor			Non Guarantor		Eliminations upon
	Issuer		Subsidiaries			Subsidiaries		consolidation			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	22,536	$	717		$	10,406	$	—		$	33,659
Accounts receivable, net		17,414		3,176			6,580		(5,326	)		21,844
Inventories, net of allowance for obsolescence		—		—			984		—			984
Prepaid insurance and other assets		7,144		263			198		—			7,605
Deferred tax assets		1,137		—			549		—			1,686
Total current assets		48,231		4,156			18,717		(5,326	)		65,778
Satellites and equipment, net		577,801		81			1,975		—			579,857
Concessions, net		38,449		—			3,493		—			41,942
Due from related parties		3,502		—			757		(4,259	)		—
Intangible assets and other assets		20,035		1,782			792		—			22,609
Investment in subsidiaries		19,171		—			—		(19,171	)		—
Deferred financing cost		9,722		—			—		—			9,722
Deferred income taxes		—		938			—		(938	)		—
Total	$	716,911	$	6,957		$	25,734	$	(29,694	)	$	719,908
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	20,079	$	3,563		$	4,174	$	(5,326	)	$	22,490
Deferred revenue		3,536		—			—		—			3,536
Income tax payable		—		—			3		—			3
Total current liabilities		23,615		3,563			4,177		(5,326	)		26,029
Debt obligations		360,000		—			—		—			360,000
Other long-term liabilities		26,025		3,503			794		(4,259	)		26,063
Long-term deferred tax liabilities		6,364		—			1,483		(938	)		6,909
Total liabilities		416,004		7,066			6,454		(10,523	)		419,001
Shareholders’ equity:
Paid-in capital		275,662		(1,173	)		19,258		(18,085	)		275,662
Gain in adquisition of shares		1,346		—			—		—			1,346
Retained earnings		23,899		1,064			22		(1,086	)		23,899
Total shareholders’ equity		300,907		(109	)		19,280		(19,171	)		300,907
Total	$	716,911	$	6,957		$	25,734	$	(29,694	)	$	719,908

~~Table~~SATÉLITES ofMEXICANOS, ~~Contents~~S.A. DE C.V. AND SUBSIDIARIES

~~SATÉLITES~~Unaudited ~~MEXICANOS,~~Condensed ~~S.A.~~Consolidating DEBalance ~~C.V.~~Sheet ~~AND SUBSIDIARIES~~

~~Condensed~~As ~~Consolidating Statements~~ of ~~Income~~September 30, 2013

~~For~~(In ~~the~~thousands ~~six~~of ~~months~~U. ~~ended~~S. dollars) ~~June 30, 2013~~

(In thousands of U. S. dollars)


	Satmex Issuer		Guarantor Subsidiaries			Non Guarantor Subsidiaries		Eliminations upon Consolidation			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	28,971	$	1,133		$	4,756	$	—		$	34,860
Accounts receivable, net		18,759		3,290			9,223		(8,055	)		23,217
Inventories, net of allowance for obsolescence		—		—			845		—			845
Prepaid insurance and other assets		5,992		310			100		—			6,402
Deferred tax assets		1,790		—			516		—			2,306

Total current assets		55,512		4,733			15,440		(8,055	)		67,630
Satellites and equipment, net		605,358		76			1,907		—			607,341
Concessions, net		38,054		—			3,441		—			41,495
Due from related parties		3,503		—			760		(4,263	)		—
Intangible assets and other assets		14,584		1,589			680		—			16,853
Investment in subsidiaries		15,312		—			—		(15,312	)		—
Deferred financing cost		8,888		—			—		—			8,888
Deferred income taxes		—		971			—		(971	)		—

Total	$	741,211	$	7,369		$	22,228	$	(28,601	)	$	742,207

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	43,156	$	3,822		$	4,465	$	(8,055	)	$	43,388
Deferred revenue		3,502		—			—		—			3,502

Total current liabilities		46,658		3,822			4,465		(8,055	)		46,890
Debt obligations		360,000		—			—		—			360,000
Other long-term liabilities		26,099		3,503			803		(4,263	)		26,142
Long-term deferred tax liabilities		7,105		—			1,692		(971	)		7,826

Total liabilities		439,862		7,325			6,960		(13,289	)		440,858
Shareholders’ equity:
Paid-in capital		275,662		100			4,666		(4,766	)		275,662
Gain in adquisition of shares		1,207		—			—		—			1,207
Retained earnings		24,480		(56	)		10,602		(10,546	)		24,480

Total shareholders’ equity		301,349		44			15,268		(15,312	)		301,349

Total	$	741,211	$	7,369		$	22,228	$	(28,601	)	$	742,207

	SatmexIssuer			GuarantorSubsidiaries			Non -GuarantorSubsidiaries			Eliminationsuponconsolidation			Consolidated
Revenues:
Satellite services	$	59,012		$	—		$	—		$	(3,129	)	$	55,883
Broadband satellite services		—			—			4,181			(18	)		4,163
Programming distribution services		—			6,384			—			—			6,384
Services companies		—			—			7,667			(7,667	)		—
		59,012			6,384			11,848			(10,814	)		66,430
Cost of satellite services		5,480			—			2,189			(2,322	)		5,347
Cost of broadband satellite services		—			—			3,051			(2,089	)		962
Cost of programming distribution services		—			4,866			—			(1,040	)		3,826
Selling and administrative expenses		9,169			817			6,709			(5,363	)		11,332
Depreciation and amortization		25,347			399			608			—			26,354
		39,996			6,082			12,557			(10,814	)		47,821
Operating income (loss)		19,016			302			(709	)		—			18,609
Interest (expense) income, net and other		(17,898	)		(150	)		37			1,217			(16,794	)
Income before income tax		1,118			152			(672	)		1,217			1,815
Income tax (benefit) expense		(447	)		219			522			—			294
Net income (loss)		1,565			(67	)		(1,194	)		1,217			1,521
Less: Net income attributable to noncontrolling interest		—			—			—			(44	)		(44	)
Net income (loss) attributable to Satélites Mexicanos, S. A. de C. V.	$	1,565		$	(67	)	$	(1,194	)	$	1,261		$	1,565

~~Table~~SATÉLITES ofMEXICANOS, ~~Contents~~S.A. DE C.V. AND SUBSIDIARIES

~~SATÉLITES~~Condensed ~~MEXICANOS,~~Consolidating ~~S.A.~~Statements DEof ~~C.V.~~Income ~~AND SUBSIDIARIES~~

~~Condensed~~For ~~Consolidating~~the ~~Statements~~nine ofmonths ~~Cash~~ended ~~Flows~~September 30, 2013

~~For~~(In thousands ~~the~~of ~~six~~U. ~~months~~S. ~~ended~~dollars) ~~June 30, 2013~~

(In thousands of U.S. dollars)


	Satmex Issuer			Guarantor Subsidiaries			Non - Guarantor Subsidiaries			Eliminations upon consolidation			Consolidated
Revenues:
Satellite services	$	90,382		$	—		$	—		$	(4,725	)	$	85,657
Broadband satellite services		—			—			6,444			(27	)		6,417
Programming distribution services		—			9,563			—			—			9,563
Services companies		—			—			11,402			(11,402	)		—

		90,382			9,563			17,846			(16,154	)		101,637
Cost of satellite services		8,516			—			3,385			(3,593	)		8,308
Cost of broadband satellite services		—			—			4,860			(3,134	)		1,726
Cost of programming distribution services		—			7,405			—			(1,591	)		5,814
Selling and administrative expenses		13,779			1,209			9,215			(7,836	)		16,367
Depreciation and amortization		41,804			596			905			—			43,305

		64,099			9,210			18,365			(16,154	)		75,520
Operating income (loss)		26,283			353			(519	)		—			26,117
Interest (expense) income, net and other		(24,499	)		(221	)		555			837			(23,328	)
Income before income tax		1,784			132			36			837			2,789
Income tax (benefit) expense		(362	)		46			904			—			588

Net income (loss)		2,146			86			(868	)		837			2,201
Less: Net income attributable to noncontrolling interest		—			—			—			55			55

Net income (loss) attributable to Satélites Mexicanos, S. A. de C. V.	$	2,146		$	86		$	(868	)	$	782		$	2,146

	Satmex Issuer			GuarantorSubsidiaries			Non -GuarantorSubsidiaries			Eliminationsuponconsolidation		Consolidated
Cash flows from operating activities	$	16,684		$	(192	)	$	(4,325	)	$	—	$	12,167
Cash flows from investing activities:
Restricted cash-Satmex 8		4,900			—			—			—		4,900
Construction in progress - satellites (including capitalized interest)		(57,093	)		—			—			—		(57,093	)
Acquisition of equipment		(828	)		(12	)		(127	)		—		(967	)
Net cash used in investing activities		(53,021	)		(12	)		(127	)		—		(53,160	)
Cash and cash equivalents:
Net decrease for the period		(36,337	)		(204	)		(4,452	)		—		(40,993	)
Beginning of year		58,873			921			14,858			—		74,652
End of period	$	22,536		$	717		$	10,406		$	—	$	33,659

~~Table~~SATÉLITES ofMEXICANOS, ~~Contents~~S.A. DE C.V. AND SUBSIDIARIES

~~SATÉLITES~~Condensed ~~MEXICANOS,~~Consolidating ~~S.A.~~Statements DEof ~~C.V.~~Cash ~~AND~~Flows ~~SUBSIDIARIES~~

~~Item~~For the nine months ended September 3.30, 2013

~~Management’s~~(In thousands ~~Discussion and Analysis~~ of ~~Financial~~U.S. ~~Condition~~dollars) ~~and Results of Operations~~

(In thousands of U.S. dollars)


	Satmex Issuer			Guarantor Subsidiaries			Non - Guarantor Subsidiaries			Eliminations upon consolidation		Consolidated
Cash flows from operating activities	$	52,009		$	222		$	(3,311	)	$	—	$	48,920
Cash flows from investing activities:
Construction in progress - satellites (including capitalized interest)		(84,651	)		—			—			—		(84,651	)
Acquisition of equipment		(1,360	)		(10	)		(191	)		—		(1,561	)

Net cash used in investing activities		(86,011	)		(10	)		(191	)		—		(86,212	)

Cash flow from financing activities:
Shareholders’ minoritary payments		4,100			—			(6,600	)		—		(2,500	)

Net cash provided by (used in) investing activities		4,100			—			(6,600	)		—		(2,500	)

Cash and cash equivalents:
Net (decrease) increase for the period		(29,902	)		212			(10,102	)		—		(39,792	)
Beginning of year		58,873			921			14,858			—		74,652

End of period	$	28,971		$	1,133		$	4,756		$	—	$	34,860

~~Results~~27 ~~of operations for the six months ended June 30, 2013 compared to June 30, 2012.~~

~~Revenue~~SATÉLITES ~~for the six months ended June 30~~MEXICANOS, ~~2013 was $66~~S.~~4 million, compared to $69~~A.4 ~~million~~DE ~~for the same period in 2012~~C. ~~The net decrease was due to a decrease in fixed satellite services of $1~~V.4 ~~million,~~AND aSUBSIDIARIES ~~decrease of $0.6 million in broadband satellite services provided by Enlaces, and a decrease of $1.0 million in programming distribution services.~~

	For the six months endedJune 30,
	2013		2012		Difference
Satellite services	$	55,883	$	57,245	$	(1,362	)
Broadband satellite services		4,163		4,795		(632	)
Programming distribution services		6,384		7,383		(999	)
Total revenue	$	66,430	$	69,423	$	(2,993	)
				(In thousands of U.S. dollars)

Item 3.

~~The~~Management’s ~~net~~Discussion ~~decrease of $1.4 million in Satellite services was due to an increase of $3.2 million in new contracts, an increase of $0.4 million of net capacity contracted by existing customers~~ and aAnalysis ~~decrease~~ of ~~$4.0~~Financial ~~million~~Condition ~~in the state reserve amortization due to the change in its fair value of the state reserve given the push-down of acquisition accounting,~~ and aResults ~~decrease~~ of ~~$1.0~~Operations ~~million in expired contracts.~~

~~The~~(In ~~decrease~~thousands of $0U.6S. million in broadband satellite services was due to the decrease of broadband satellite transmission capacity, additionally lower revenues from cancellation services of several national customers (Axtel, Link Grupo Satelital, Monte de Mexico, etcdollars).

~~The~~ Results ~~decrease~~ of ~~$1.0~~operations ~~million~~for inthe ~~programming~~nine ~~distribution~~months ~~services~~ended ~~was~~September 30, ~~due~~2013 compared to ~~a net decrease from existing customers (Comcast~~September 30, ~~Directv, Time Warner AT&T)~~2012.

~~Operating Costs and Expenses~~ Revenue

~~Operating~~Revenue ~~costs~~for ~~and~~the ~~expenses~~nine ~~decreased~~months ended September 30, 2013 was $5101.96 million, compared to $47103.86 million for the ~~six~~same ~~months~~period ~~ended~~in ~~June 30,~~2012. The ~~2013~~net ~~(72%~~decrease ofwas ~~revenues),~~due ~~from operating~~to ~~cost~~an ~~and~~increase ~~expenses~~in fixed satellite services of $530.73 million, ~~for~~a ~~the~~decrease ~~same~~of ~~period~~$0.7 million in ~~2012~~broadband ~~(77%~~satellite ofservices ~~revenues).~~provided ~~The~~by ~~table~~Enlaces, ~~below~~and ~~sets~~a ~~forth~~decrease ~~the components~~ of ~~our~~$1.6 ~~operating~~million ~~cost~~in ~~and~~programming ~~expenses:~~distribution services.

	For the six months endedJune 30,
	For the nine months endedSeptember 30,
	2013		2012		Difference
Operating costs	$	10,135	$	9,097	$	1,038
Satellite services	$	85,657	$	85,310	$	347
Selling and administrative expenses		11,332		10,125		1,207
Broadband satellite services		6,417		7,093		(676	)
Depreciation and amortization		26,354		34,526		(8,172	)
Programming distribution services		9,563		11,202		(1,639	)
Total operating costs and expenses	$	47,821	$	53,748	$	(5,927	)
Total revenue	$	101,637	$	103,605	$	(1,968	)
		(In thousands of U.S. dollars)		~~(In thousands of U.S. dollars)~~

28The net increase of $0.3 million in satellite services was due to an increase of $7.2 million in new contracts, a decrease of $1.4 million of net capacity contracted by existing customers and a decrease of $4.4 million in the state reserve amortization due to the change in its fair value of the state reserve given the push-down of acquisition accounting, and a decrease of $1.1 million in expired contracts.

~~Table~~The decrease of ~~Contents~~$0.7 million in broadband satellite services was due to the decrease of broadband satellite transmission capacity, additionally lower revenues from cancellation services of several national customers (Axtel, Link Grupo Satelital, Monte de Mexico, etc).

~~SATÉLITES~~The ~~MEXICANOS,~~decrease Sof $1.A.6 DEmillion ~~C.V.~~in ~~AND~~programming ~~SUBSIDIARIES~~distribution services was due to a net decrease from existing customers (Comcast, Directv, Time Warner, AT&T).

Operating Costs and Expenses

Operating costs ~~for~~and ~~the~~expenses ~~six~~decreased ~~months ended June 30, 2013 increased~~ $16.01 million to $1075.15 million for the nine months ended September 30, 2013 (1574% of revenues), ~~compared~~from operating tocost and expenses of $981.1 6 million for the same period in 2012 (1379% of revenues). The table below sets forth the components of our operating ~~costs~~cost and expenses:

	For the six months endedJune 30,
	For the nine months endedSeptember 30,
	2013		2012		Difference
Satellite services	$	5,347	$	4,234	$	1,113
Operating costs	$	15,848	$	14,366	$	1,482
Broadband satellite services		962		1,031		(69	)
Selling and administrative expenses		16,367		15,434		933
Programming distribution services		3,826		3,832		(6	)
Depreciation and amortization		43,305		51,784		(8,479	)
Total operating costs	$	10,135	$	9,097	$	1,038
Total operating costs and expenses	$	75,520	$	81,584	$	(6,064	)
		(In thousands of U.S. dollars)		~~(In thousands of U.S. dollars)~~

~~Satellite~~28 ~~services costs increased due mainly to insurance’s Satmex 8 satellite partially offset by the decrease of Satmex 6 satellite insurance premium.~~

~~Programming~~SATÉLITES ~~distribution~~MEXICANOS, ~~services~~S.A. ~~cost decreased~~DE ~~mainly~~C.V. ~~due~~AND toSUBSIDIARIES ~~the reduction of national programming and integrating cost partially offset by an increase in transfer cost LAS and transmission voley-ball and basketball league at Puerto Rico in 2013.~~

~~Selling~~Operating ~~and~~Costs ~~Administrative Expenses~~

~~Selling~~Operating ~~and~~costs ~~administrative~~for ~~expenses,~~the ~~which~~nine ~~consist~~months ~~primarily~~ended ~~of salaries and other employee compensation~~September 30, ~~professional~~2013 ~~fees, allowance for doubtful accounts and other expenses~~ increased $1.25 million, ~~for a~~to ~~total of~~ $1115.39 million ~~for the six months ended June 30, 2013~~ (1716% of revenues), as compared to $1014.1 4 million for the same period in 2012 (1514% of revenues). The table below sets forth the components of our operating costs:

The increase in selling and administrative expenses can be attributable to the following:


	For the nine months ended September 30,
	2013		2012		Difference
Satellite services	$	8,308	$	6,948	$	1,360
Broadband satellite services		1,726		1,460		266
Programming distribution services		5,814		5,958		(144	)

Total operating costs	$	15,848	$	14,366	$	1,482

		(In thousands of U.S. dollars)

•Satellite Anservice ~~increase in personnel~~ costs ~~and~~increased ~~sales~~mainly ~~bonuses of $1.0 million,~~ due to ansatellite ~~increase~~Satmex in8 ~~salaries,~~insurance ~~severances,~~cost ~~wage~~partially ~~taxes~~offset ~~and~~by ~~other benefits, and~~ the decrease ~~new~~of ~~executive~~Satmex ~~hires~~6 insatellite ~~Alterna~~insurance premium.

•Broadband Asatellite ~~net~~services cost increase ofdue ~~$0.2 million in allowance for doubtful accounts, related~~ to ~~contracts~~an ~~regarding~~increase ~~services to the Wal-Mart Centroamerica project and the cancellation~~ of ~~allowance~~antennas ~~for~~cost installation ~~doubtful~~partially ~~accounts~~offset toby ~~the~~a ~~Mexican~~decrease ~~government~~ in ~~Enlaces~~antennas maintenance.

•Programming Adistribution ~~decrease~~services cost decreased mainly due to the reduction of national programming and integrating cost partially offset by an increase in ~~legal~~transfer cost LAS and ~~professional~~Puerto ~~fees~~Rico ofvoley-ball ~~$0.3~~and ~~million~~basketball league transmission in 2013.

•Selling ~~A net increase of $0.3 million in other expenses which includes, travel expenses, commercial agent fee, non deductible advertising,~~ and ~~other~~Administrative ~~expenses.~~Expenses

29Selling and administrative expenses, which consist primarily of salaries and other employee compensation, professional fees, allowance for doubtful accounts and other expenses increased $1.0 million, for a total of $16.4 million for the nine months ended September 30, 2013 (16 % of revenues), as compared to $15.4 million for the same period in 2012 (15% of revenues).

~~Table~~The ofincrease ~~Contents~~in selling and administrative expenses can be attributed to the following:

~~SATÉLITES~~• ~~MEXICANOS,~~An ~~S.A.~~increase DEin Cpersonnel costs and sales bonuses of $1.V.4 ~~AND~~million, ~~SUBSIDIARIES~~due to an increase in salaries, severances, wage taxes and other benefits, and the new executive hires in Alterna.

~~Depreciation~~• A net decrease of $0.7 million in allowance for doubtful accounts, related to contracts regarding services to the Wal-Mart Centroamerica project and ~~Amortization~~the cancellation of allowance for doubtful accounts to the Mexican government in Enlaces.

~~Depreciation~~• ~~and~~A ~~amortization~~decrease ~~expense~~in ~~decreased~~legal ~~$8.2~~and ~~million,~~professional ~~for~~fees ~~a total~~ of $260.3 million ~~for the six months ended June 30, 2013 (40% of revenues) compared to $34~~.~~5 million in the same period in 2012 (50% of revenues). The table below sets forth the components of our depreciation and amortization expense:~~

	For the six months endedJune 30,
	2013		2012		Difference
Contract backlog	$	11,234	$	15,417	$	(4,183	)
Satmex 8		3,984		—		3,984
Satmex 6		8,660		8,660		—
Satmex 5		—		8,171		(8,171	)
Concessions		895		895		—
Equipment for satellite, furniture and equipment and other		1,581		1,383		198
Total depreciation and amortization	$	26,354	$	34,526	$	(8,172	)
				(In thousands of U.S. dollars)

•

A net increase of $0.6 million in other expenses which includes, travel expenses, commercial agent fee, non deductible advertising, and other expenses.

~~The~~29 decrease in amortization of backlog in 2013 is due to the maturity dates of contracts. Backlog is depreciated based on the life of the respective contracts rather than based on a straight-line method. Accordingly, depending on the number of contracts in existence in each year, amortization of backlog will vary from year to year. The decrease in the current year represents a lower amount of contracts in 2013, as well as an increase in the fair value of the intangible, based on the effects of push-down accounting applied in May 2011. The satellite Satmex 8 started the depreciation expense in May 2013.

~~For~~SATÉLITES ~~the six months end June 30~~MEXICANOS, ~~2013 and 2012, the operating income was $18~~S.6A. ~~million~~DE ~~and $15~~C.7V. ~~million,~~AND ~~respectively,~~SUBSIDIARIES ~~due to the reasons mentioned above.~~

~~Interest~~Depreciation ~~Expense~~and Amortization

~~Total~~Depreciation ~~interest~~and amortization expense decreased $8.5 million, for a total of $43.3 million for the ~~six~~nine months ended ~~in June~~September 30, 2013 (43% ~~was~~of ~~$17.1~~revenues) ~~million,~~ compared to $551.58 million in the same period in 2012 (50% of revenues). The table below ~~set~~sets forth the components of our ~~interest~~ depreciation and amortization expense:

	For the six months endedJune 30,
	For the nine months endedSeptember 30,
	2013			2012			Difference
Notes interest	$	17,981		$	17,020		$	961
Contract backlog	$	16,851		$	23,127		$	(6,276	)
Capitalized interest in Satmex 8		—			(13,173	)		13,173
Satmex 8		9,993			—			9.993
Capitalized interest in Satmex 7		(2,542	)		—			(2,542	)
Satmex 6		12,990			12,990			—
Amortization of deferred financing costs		1,599			1,571			28
Satmex 5		—			12,256			(12,256	)
Other commissions		49			46			3
Concessions		1,342			1,343			(1	)
Total interest expense, net	$	17,087		$	5,464		$	11,623
Equipment for satellite, furniture and equipment and other		2,129			2,068			61
					(In thousands of U.S.dollars)
Total depreciation and amortization	$	43,305		$	51,784		$	(8,479	)
(In thousands of U.S. dollars)

The ~~net~~decrease ~~increase~~in amortization of ~~$11.6~~backlog ~~million~~in ~~was~~2013 ~~mainly~~is due to the ~~ability~~maturity dates of ~~Satmex to~~contracts. ~~capitalize~~Backlog ~~in 2012~~is ~~$13.2~~depreciated ~~million~~based on the life of ~~interest~~the ~~and~~respective $2contracts rather than based on a straight-line method.5 ~~million~~Accordingly, depending on the number of ~~interest~~contracts ~~cost~~in ~~incurred~~existence in each year, amortization of backlog will vary from year to year. The decrease in the current year represents a lower amount of contracts in 2013, as awell ~~result~~as an increase in the fair value of the ~~construction~~intangible, based on the effects of push-down accounting applied in May 2011. The satellite Satmex 8 ~~and~~depreciation ~~Satmex~~expense 7,began ~~respectively~~in May 2013.

~~Net~~Operating ~~Foreign~~Income ~~Exchange Gain (Loss)~~

WeFor ~~recorded a minimum foreign exchange gain for~~ the ~~six~~nine months ended ~~June~~September 30, 2013 and 2012., ~~Foreign~~the ~~exchange~~operating ~~gains~~income ~~and~~was ~~losses~~$26.1 ~~are~~million ~~calculated~~and ~~based~~$22.0 onmillion, ~~outstanding~~respectively, ~~balances~~due ~~of Mexican peso-dominated assets and liabilities relative~~ to the reasons ~~prevailing~~mentioned Uabove.S. ~~dollar/Mexican peso exchange rate.~~

30Interest Expense

~~Table~~Total interest expense for the nine months ended in September 30, 2013 was $23.9 million, compared to $8.1 million in the same period in 2012. The table below set forth the components of ~~Contents~~our interest expense:

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES


	For the nine months ended September 30,
	2013			2012			Difference
Notes interest	$	26,972		$	26,010		$	962
Capitalized interest in Satmex 7		(4,860	)		—			(4,860	)
Capitalized interest in Satmex 9		(672	)		—			(672	)
Capitalized interest in Satmex 8		—			(20,392	)		20,392
Amortization of deferred financing costs		2,399			2,372			27
Other commissions		73			69			4

Total interest expense, net	$	23.912		$	8,059		$	15,853

(In thousands of U.S.dollars)

~~Income~~The ~~Tax~~net increase of $15.9 million was mainly due to the ability of Satmex to capitalize in 2012 $20.4 million of interest and $5.5 million of interest cost incurred in 2013, as a result of the construction of Satmex 8 and Satmex 7, respectively.

~~Satmex applied~~Net ~~different~~Foreign ~~income~~Exchange ~~tax~~Gain rates according to the estimated date of reversal of each of the temporary items due to rate differences for each year as a result of the Mexican laws enacted on December 17, 2012. Satmex and its subsidiaries pay both (iLoss) ~~the~~ business flat tax known as Impuesto Empresarial a Tasa Única, or IETU, since 2008 and (ii) the income tax known as Impuesto sobre la Renta or ISR. Our future projections indicate that we will continue to pay both taxes during the life of the Concessions. Accordingly, deferred taxes are calculated based on a hybrid approach, which considers a mix of both tax regimens. For the six months ended June 30, 2013, we recorded income tax expense of $0.2 million on an income before income taxes of $1.8 million, while for the same period of 2012 we recorded a deferred income tax expense of $3.1 million on an income before income taxes of $10.5 million, yielded a positive “effective” income tax rate, principally arising from the fact that interest expense, depreciation and amortization are not deductible for IETU purposes, which results in taxable income for those entities that pay IETU.

~~Based~~We onrecorded ~~tax projections,~~a ~~Satmex~~foreign ~~determined~~exchange ~~that~~gain infor ~~certain~~the ~~fiscal~~nine ~~years~~months itended ~~will pay ISR~~September 30, ~~while~~2013 inand ~~others,~~2012 itof ~~will~~$0.2 ~~pay~~million ~~IETU~~and $0.6 ~~Accordingly~~million, ~~Satmex~~respectively. Foreign ~~scheduled~~exchange ~~the~~gains ~~reversal~~and oflosses ~~the~~are ~~temporary~~calculated ~~differences~~based ~~for~~on ~~both~~outstanding ~~ISR~~balances ~~and~~of ~~IETU~~Mexican ~~purposes,~~peso-dominated ~~determined~~assets byand ~~year,~~liabilities ~~and~~relative ~~applied~~ to the ~~respective~~prevailing ~~rates~~U.S. todollar/Mexican ~~temporary~~peso ~~differences~~exchange rate.

~~Net~~30 ~~Income Attributable to Satmex~~

~~Results~~SATÉLITES ~~of operations for the three months ended June 30~~MEXICANOS, ~~2013~~S.A. ~~compared~~DE toC.V. ~~June 30,~~AND ~~2012.~~SUBSIDIARIES

~~Revenue~~Income Tax

~~Revenue~~Satmex applied different income tax rates according to the estimated date of reversal of each of the temporary items due to rate differences for each year as a result of the ~~three~~Mexican ~~months~~laws ~~ended~~enacted ~~June~~on December 3017, ~~2013~~2012. ~~was~~Satmex and ~~$33.7~~its ~~million~~subsidiaries pay both (i) the business flat tax known as Impuesto Empresarial a Tasa Única, ~~compared~~or toIETU, ~~$37~~since 2008 and (ii) the income tax known as Impuesto sobre la Renta or ISR.6 ~~million~~Our ~~for~~December 2012 projections indicate that we will continue to pay both taxes during the ~~same~~life ~~period~~of inthe ~~2012~~Concessions. ~~The~~Accordingly, ~~net decrease~~deferred ~~was~~taxes ~~due~~are tocalculated based on a ~~decrease~~hybrid approach, inwhich ~~fixed~~considers ~~satellite~~a ~~services~~mix of $3both tax regimens.9 ~~million~~For the nine months ended September 30, ~~decrease~~2013 and 2012 we recorded income tax expense of $0.56 million inand ~~programming~~$7.0 ~~distribution~~million ~~services,~~on ~~and~~an aincome ~~decrease~~before income taxes of $02.38 million and $15.0 million, respectively, yielding a positive “effective” income tax rate, principally arising from the fact that interest expense, depreciation and amortization are not deductible for IETU purposes, which results in ~~broadband~~taxable ~~satellite~~income ~~services~~for ~~provided~~those byentities that ~~Enlaces.~~pay IETU.

	For the three months endedJune 30,
	2013		2012		Difference
Satellite services	$	28,387	$	31,418	$	(3,031	)
Broadband satellite services		2,123		2,475		(352	)
Programming distribution services		3,199		3,693		(494	)
Total revenue	$	33,709	$	37,586	$	(3,877	)
				(In thousands of U.S. dollars)

Based on tax projections, Satmex determined that in certain fiscal years it will pay ISR, while in others, it will pay IETU. Accordingly, Satmex scheduled the reversal of the temporary differences for both ISR and IETU purposes, determined by year, and applied the respective rates to temporary differences.

~~The~~Net ~~net~~Income ~~decrease~~Attributable ~~of $3.0 million in Satellite services was due~~ to anSatmex increase of $2.6 million in new contracts, a decrease of $0.5 million of net capacity contracted by existing customers and a decrease of $4.5 million in the state reserve amortization due to the change in its fair value of the state reserve given the push-down of acquisition accounting, a decrease of $0.6 million in expired contracts.

~~The~~As ~~decrease~~a result of ~~$0.3~~the ~~million~~aforementioned infactors, ~~broadband~~the ~~satellite~~net ~~services~~income ~~was mainly~~attributable ~~due~~ to Satmex for the ~~decrease~~nine ofmonths ~~equipment~~ended ~~sales~~September 30, of2013 ~~several~~was $2.1 ~~national~~million, ~~customers~~as ~~(Link~~compared ~~Grupo~~to ~~Satelital,~~$7.9 ~~Inteligencia~~million yfor ~~Tecnología~~the ~~Informatica,~~same ~~Grupo~~period ~~Wal~~in ~~Mart, etc)~~2012.

~~The~~Results ~~decrease~~ of ~~$0.5~~operations ~~million~~for inthe ~~programming~~three ~~distribution~~months ~~services~~ended September 30, ~~was~~2013 ~~due~~compared to ~~a net decrease from existing customers (Comcast~~September 30, ~~Dish Network, AT&T)~~2012.

31Revenue

~~Table~~Revenue for the three months ended September 30, 2013 was $35.2 million, compared to $34.2 million for the same period in 2012. The net increase was due to higher fixed satellite services of ~~Contents~~$1.7 million, decrease of $0.1 million in broadband satellite services, and a decrease of $0.6 million in programming distribution services.

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES


	For the three months ended September 30,
	2013		2012		Difference
Satellite services	$	29,774	$	28,065	$	1,709
Broadband satellite services		2,254		2,298		(44	)
Programming distribution services		3,179		3,819		(640	)

Total revenue	$	35,207	$	34,182	$	1,025

(In thousands of U.S. dollars)

~~Operating~~The ~~Costs~~net increase of $1.7 million in satellite services was due to an increase of $4.4 million in new contracts, a decrease of $0.8 million of net capacity contracted by existing customers and ~~Expenses~~a decrease of $0.5 million in the state reserve amortization due to the change in its fair value of the state reserve given the push-down of acquisition accounting, a decrease of $1.4 million in expired contracts.

~~Operating~~The ~~costs~~decrease ~~and~~of ~~expenses decreased~~ $0.51 million toin ~~$26.9~~broadband ~~million~~satellite ~~for~~services ~~the~~was ~~three~~mainly ~~months ended June 30, 2013 (80% of revenues), from~~due ~~operating~~to ~~cost and expenses $27.4 million for~~ the ~~same~~decrease ~~period~~of inequipment ~~2012~~sales ~~(73%~~ of ~~revenues).~~several ~~The~~national ~~table~~customers ~~below~~(Link ~~sets~~Grupo ~~forth~~Satelital, ~~the~~Inteligencia ~~components~~y ofTecnología ~~our~~Informatica, ~~operating~~Grupo ~~costs~~Wal ~~and~~Mart, ~~expenses:~~etc).

	For the three months endedJune 30,
	2013		2012		Difference
Operating costs	$	5,648	$	4,714	$	934
Selling and administrative expenses		6,075		5,465		610
Depreciation and amortization		15,175		17,268		(2,093	)
Total operating costs and expenses	$	26,898	$	27,447	$	(549	)
				(In thousands of U.S. dollars)

The decrease of $0.6 million in programming distribution services was due to a net decrease from existing customers (Comcast, Dish Network, AT&T).

~~Operating~~31 ~~Costs~~

	For the three months endedJune 30,
	2013		2012		Difference
Satellite services	$	3,141	$	2,120	$	1,021
Broadband satellite services		574		610		(36	)
Programming distribution services		1,933		1,984		(51	)
Total operating costs	$	5,648	$	4,714	$	934
				(In thousands of U.S. dollars)

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

~~Satellite~~Operating ~~services~~Costs ~~costs increased due mainly to insurance’s Satmex 8 satellite~~ and anExpenses ~~increase of personnel cost.~~

~~Broadband~~Operating ~~satellite~~costs ~~services~~and ~~cost~~expenses decreased ~~due~~$0.1 million to a$27.7million ~~decrease~~for ofthe ~~antennas~~three ~~cost~~months ended September 30, ~~installation~~2013 (79 % of revenues), from operating cost and ~~maintenance~~expenses $27. 8 million for the same period in 2012 (81% of revenues). The table below sets forth the components of our operating costs and expenses:

Programming distribution services cost decreased mainly due to the reduction of national programming cost partially offset by an increase in transfer cost LAS and transmission voley-ball and basketball league at Puerto Rico.


	For the three months ended September 30,
	2013		2012		Difference
Operating costs	$	5,713	$	5,269	$	444
Selling and administrative expenses		5,035		5,309		(274	)
Depreciation and amortization		16,951		17,258		(307	)

Total operating costs and expenses	$	27,699	$	27,836	$	(137	)

		(In thousands of U.S. dollars)

~~Selling~~Operating ~~and Administrative~~Costs ~~Expenses~~

~~Selling~~Operating ~~and~~costs ~~administrative~~for ~~expenses,~~the ~~which~~three ~~consist~~months ~~primarily~~ended ~~of salaries and other employee compensation~~September 30, ~~professional~~2013 ~~fees, allowance for doubtful accounts and other expenses~~ increased $0.64 million, ~~for~~to ~~a total of~~ $65.17 million ~~for the three months ended June 30, 2013~~ (1816% of revenues), as compared to $5.5 3 million for the same period in 2012 (15% of revenues). The table below sets forth the components of our operating costs:

The increase in selling and administrative expenses can be attributable to the following:


	For the three months ended September 30,
	2013		2012		Difference
Satellite services	$	2,961	$	2,714	$	247
Broadband satellite services		764		429		335
Programming distribution services		1,988		2,126		(138	)

Total operating costs	$	5,713	$	5,269	$	444

		(In thousands of U.S. dollars)

•Satellite Anservices ~~increase~~costs inincreased ~~personnel~~mainly ~~costs~~due ~~and~~to ~~sales~~Satmex ~~bonuses~~8 ofsatellite ~~$0.4~~insurance ~~million~~premium, ~~due~~partially tooffset anby ~~increase~~the decrease inof ~~salaries,~~Satmex ~~severances,~~6 ~~wage~~satellite ~~taxes~~insurance ~~and~~premium ~~other benefits,~~ and ~~the~~an ~~new~~increase ~~executive~~of ~~hires~~personnel ~~in Alterna~~cost.

•Broadband Asatellite ~~net~~services ~~decrease~~cost ofincreased ~~$0.2~~due ~~million~~to higher inantennas ~~allowance for doubtful accounts~~cost, ~~related~~installation ~~to contracts regarding services to the Wal-Mart Centroamerica project~~ and ~~the cancellation of allowance for doubtful accounts to the Mexican government in Enlaces~~maintenance.

•Programming Adistribution ~~decrease~~services cost decreased mainly due to the reduction of national programming cost partially offset by an increase in ~~legal~~transfer cost LAS and ~~professional~~Puerto ~~fees~~Rico ofvoley-ball ~~$0.1~~and ~~million~~basketball league transmission.

•Selling ~~A net increase of $0.5 million in other expenses which includes, travel expenses, commercial agent fee, non deductible advertising,~~ and ~~other~~Administrative ~~expenses.~~Expenses

32Selling and administrative expenses, which consist primarily of salaries and other employee compensation, professional fees, allowance for doubtful accounts and other expenses decreased $0.3 million, for a total of $5.0 million for the three months ended September 30, 2013 (14% of revenues), as compared to $5.3 million for the same period in 2012 (16% of revenues).

~~Table~~The ofincrease ~~Contents~~in selling and administrative expenses can be attributed to the following:

~~SATÉLITES~~• ~~MEXICANOS,~~An ~~S.A.~~increase DEin Cpersonnel costs and sales bonuses of $0.V.3 ~~AND~~million, ~~SUBSIDIARIES~~due to an increase in salaries, severances, wage taxes and other benefits.

~~Depreciation~~• A net decrease of $0.3 million in allowance for doubtful accounts, related to contracts regarding services to the Wal-Mart Centroamerica project and ~~Amortization~~the cancellation of allowance for doubtful accounts to the Mexican government in Enlaces.

~~Depreciation~~• ~~and~~A ~~amortization~~decrease ~~expense~~in ~~decreased~~legal ~~$2.1~~and ~~million,~~professional ~~for~~fees ~~a total~~ of $150.21 million ~~for the three months ended June 30, 2013 (45% of revenues) compared to $17~~.~~3 million in the same period in 2012 (46% of revenues). The table below sets forth the components of our depreciation and amortization expense:~~

	For the three monthsended June 30,
	2013		2012		Difference
Contract backlog	$	5,617	$	7,492	$	(1,875	)
Satmex 8		3,984		—		3,984
Satmex 6		4,330		4,330		—
Satmex 5		—		4,085		(4,085	)
Concessions		448		448		—
Equipment for satellite, furniture and equipment and other		796		913		(117	)
Total depreciation and amortization	$	15,175	$	17,268	$	(2,093	)
				(In thousands of U.S. dollars)

•

A net decrease of $0.2 million in other expenses which includes, travel expenses, commercial agent fee, non deductible advertising, and other expenses.

~~The~~32 decrease in amortization of backlog in 2013 is due to the maturity dates of contracts. Backlog is depreciated based on the life of the respective contracts rather than based on a straight-line method. Accordingly, depending on the number of contracts in existence in each year, amortization of backlog will vary from year to year. The decrease in the current year represents a lower amount of contracts in 2013, as well as an increase in the fair value of the intangible, based on the effects of push-down accounting applied in May 2011. The satellite Satmex 8 started the depreciation expense in May 2013.

~~For~~SATÉLITES ~~the three months end June 30~~MEXICANOS, ~~2013 and 2012, the operating income was $6~~S.8A. ~~million~~DE ~~and $10~~C.1V. ~~million,~~AND ~~respectively,~~SUBSIDIARIES ~~due to the reasons mentioned above.~~

~~Interest~~Depreciation ~~Expense~~and Amortization

~~Total~~Depreciation ~~interest~~and amortization expense decreased $0.3 million, for a total of $17.0 million for the three months ended ~~in June~~September 30, 2013 (48% ~~was~~of ~~$8.1~~revenues) ~~million,~~ compared to $317.03 million in the same period in 2012 (50% of revenues). The table below ~~set~~sets forth the components of our ~~interest~~ depreciation and amortization expense:

	For the three months endedJune 30,
	For the three months endedSeptember 30,
	2013			2012			Difference
Notes interest	$	8,991		$	8,903		$	88
Contract backlog	$	5,617		$	7,709		$	(2,092	)
Capitalized interest in Satmex 8		—			(6,756	)		6,756
Satmex 8		6,009			—			6,009
Capitalized interest in Satmex 7		(1,680	)		—			(1,680	)
Satmex 6		4,330			4,330			—
Amortization of deferred financing costs		800			797			3
Satmex 5		—			4,085			(4,085	)
Other commissions		25			22			3
Concessions		448			448			—
Total interest expense, net	$	8,136		$	2,966		$	5,170
Equipment for satellite, furniture and equipment and other		547			686			(139	)
					(In thousands of U.S.dollars)
Total depreciation and amortization	$	16,951		$	17,258		$	(307	)
		(In thousands of U.S. dollars)

The ~~net~~decrease ~~increase~~in amortization of ~~$5.2~~backlog ~~million~~in ~~was~~2013 ~~mainly~~is due to the ~~ability~~maturity dates of ~~Satmex to~~contracts. ~~capitalize~~Backlog inis depreciated ~~2012~~based ~~$6.8 million~~on the life of ~~interest~~the ~~and~~respective $1contracts rather than based on a straight-line method.7 ~~million~~Accordingly, depending on the number of ~~interest~~contracts ~~cost~~in ~~incurred~~existence in each year, amortization of backlog will vary from year to year. The decrease in the current year represents a lower amount of contracts in 2013, as awell ~~result~~as an increase in the fair value of the ~~construction~~intangible, based on the effects of push-down accounting applied in May 2011. The satellite Satmex 8 ~~and~~started ~~Satmex~~the 7,depreciation ~~respectively~~expense in May 2013.

~~Net~~Operating ~~Foreign~~Income ~~Exchange Gain (Loss)~~

WeFor ~~recorded a foreign exchange loss for~~ the three months ~~ended~~end ~~June~~September 30, 2013 and 2012, ofthe operating income was $07.45 million, and $06.53 million, respectively., ~~Foreign~~due ~~exchange gains and losses are calculated based on outstanding balances of Mexican peso-dominated assets and liabilities relative~~ to the ~~prevailing~~reasons ~~U.S.~~mentioned ~~dollar/Mexican peso exchange rate~~above.

33Interest Expense

~~Table~~Total interest expense for the three months ended in September 30, 2013 was $6.8 million, compared to $2.6 million in the same period in 2012. The table below set forth the components of ~~Contents~~our interest expense:

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES


	For the three months ended September 30,
	2013			2012			Difference
Notes interest	$	8,991		$	8,991		$	—
Capitalized interest in Satmex 7		(2,318	)		—			(2,318	)
Capitalized interest in Satmex 9		(672	)		—			(672	)
Capitalized interest in Satmex 8		—			(7,219	)		7,219
Amortization of deferred financing costs		800			801			(1	)
Other commissions		24			22			2

Total interest expense, net	$	6,825		$	2,595		$	4,230

		(In thousands of U.S.dollars)

~~Income~~The ~~Tax~~net increase of $4.2 million was mainly due to the ability of Satmex to capitalize in 2012 $7.2 million of interest and $3.0 million of interest cost incurred in 2013, as a result of the construction of satellites.

~~Satmex applied~~Net ~~different income tax rates according to the estimated date of reversal of each of the temporary items due to~~Foreign ~~rate~~Exchange ~~differences~~Gain ~~for each year as a result of the Mexican laws enacted on December 17, 2012. Satmex and its subsidiaries pay both~~ (iLoss) ~~the~~ business flat tax known as Impuesto Empresarial a Tasa Única, or IETU, since 2008 and (ii) the income tax known as Impuesto sobre la Renta or ISR. Our future projections indicate that we will continue to pay both taxes during the life of the Concessions. Accordingly, deferred taxes are calculated based on a hybrid approach, which considers a mix of both tax regimens. For the three months ended June 30, 2013, we recorded deferred income tax expense of $2.3 million on a loss before income taxes of $1.6 million, while for the same period of 2012 we recorded a deferred income tax benefit of $0.5 million on an income before income taxes of $6.8 million, yielded a negative “effective” income tax rate, principally arising from the fact that interest expense, depreciation and amortization are not deductible for IETU purposes, which results in taxable income for those entities that pay IETU.

~~Based~~We onrecorded ~~tax projections,~~a ~~Satmex~~foreign ~~determined~~exchange ~~that~~gain infor ~~certain~~the ~~fiscal~~three ~~years~~months itended ~~will pay ISR~~September 30, ~~while~~2013 inand ~~others,~~2012 itof ~~will~~$0.2 ~~pay~~million, and ~~IETU~~$0.6 ~~Accordingly~~million, ~~Satmex~~respectively. ~~scheduled~~Foreign ~~the~~exchange ~~reversal~~gains ofand ~~the~~losses ~~temporary~~are ~~differences~~calculated ~~for~~based ~~both~~on ~~ISR~~outstanding ~~and~~balances ~~IETU~~of ~~purposes,~~Mexican ~~determined~~peso-dominated byassets ~~year,~~ and ~~applied~~ liabilities relative to the ~~respective~~prevailing ~~rates~~U.S. todollar/Mexican ~~temporary~~peso ~~differences~~exchange rate.

~~Net~~33 ~~Income Attributable to Satmex~~

~~PART~~SATÉLITES IIMEXICANOS, —S.A. ~~OTHER~~DE ~~INFORMATION~~ C.V. AND SUBSIDIARIES

~~Item~~Income 1.Tax ~~Legal Matters~~

~~None~~Satmex applied different income tax rates according to the estimated date of reversal of each of the temporary items due to rate differences for each year as a result of the Mexican laws enacted on December 17, 2012. Satmex and its subsidiaries pay both (i) the business flat tax known as Impuesto Empresarial a Tasa Única, or IETU, since 2008 and (ii) the income tax known as Impuesto sobre la Renta or ISR. Our future projections indicate that we will continue to pay both taxes during the life of the Concessions. Accordingly, deferred taxes are calculated based on a hybrid approach, which considers a mix of both tax regimens. For the three months ended September 30, 2013 and 2012, we recorded deferred income tax expense of $0.3 million and $3.6 million, respectively, on an income before income taxes of $1.0 million and $4.4 million, respectively, yielding a positive “effective” income tax rate, principally arising from the fact that interest expense, depreciation and amortization are not deductible for IETU purposes, which results in taxable income for those entities that pay IETU.

~~Item~~Based 2on tax projections, Satmex determined that in certain fiscal years it will pay ISR, while in others, it will pay IETU. ~~Other~~Accordingly, ~~Matters~~Satmex scheduled the reversal of the temporary differences for both ISR and IETU purposes, determined by year, and applied the respective rates to temporary differences.

~~Liquidity~~Net ~~and Capital~~Income ~~Resources~~Attributable to Satmex

~~Satmex’s~~As ~~cash~~a ~~balance~~result as of ~~June 30,~~the ~~2013~~aforementioned ~~was~~factors, ~~$33.7~~the ~~million~~net ~~compared~~loss attributable to ~~$74.7~~Satmex for ~~million~~the ~~on December 31,~~three ~~2012,~~months ~~and~~ended aSeptember 30, ~~decrease~~2013 ofwas $~~41.~~0 ~~million~~. ~~At June 30~~6 million, ~~2013,~~as ~~Satmex~~compared ~~had~~to ~~total~~net ~~debt~~income of $~~360.~~0.7 million. ~~This~~for ~~amount represents~~ the ~~Notes~~same ~~issued~~period onin ~~May 5, 2011 and April 9,~~ 2012.

WePART ~~generally~~II ~~rely~~— onOTHER ~~cash~~INFORMATION generated from our operations, capital increases and long-term debt to fund our working capital needs, capital expenditures, interest payments and debt repayments. As a consequence of our operating activities, cash flow from operations improved from 2008 through December 31, 2012. As of June 30, 2013, we had cash and cash equivalents of approximately $33.7 million. However, our business is capital intensive. We may continue to face liquidity constraints as our capital expenditures increase in connection with the construction, launch and insurance of new satellites and the expansion and upgrade of our satellite network.

34Item 1. Legal Matters

~~Table~~None. ~~of Contents~~

~~SATÉLITES~~Item ~~MEXICANOS, S~~2.A. DEOther ~~C.V. AND SUBSIDIARIES~~ Matters

~~Substantially~~Liquidity ~~all~~and ~~of our capital expenditures are denominated in U.S. dollars.~~ Capital ~~expenditure satellite~~Resources includes capitalized interest costs. Also we invested, in electronic, data and processing equipment, infrastructure and vehicles. The table below sets forth our capital expenditures for the periods indicated:

	Six monthsendedJune 30,2013		Year ended December 31,
			2012		2011		2010
Acquisition of property, furniture and equipment	$	1.0	$	2.0	$	2.2	$	4.6
Construction of Satmex 7(1)		37.2		28.5		—		—
Construction of Satmex 8(2)		18.3		82.4		192.9		63.1
Construction of Satmex 9		1.6		3.8		—		—
	$	58.1	$	116.7	$	195.1	$	67.7
						(In millions of U.S. dollars)

Satmex’s cash balance as of September 30, 2013 was $34.9 million compared to $74.7 million on December 31, 2012, a decrease of $39.8 million. At September 30, 2013, Satmex had total debt of $360.0 million. This amount represents the Notes issued on May 5, 2011 and April 9, 2012.

	Six months
	endedJune 30,2013		Year ended December 31,
Includes capitalized interest:			2012		2011		2010
(1) Construction of Satmex 7	$	2.5	$	1.1	$	—	$	—
(2) Construction of Satmex 8		—		32.7		11.7		2.6
	$	2.5	$	33.8	$	11.7	$	2.6
						(In millions of U.S. dollars)

We generally rely on cash generated from our operations, capital increases and long-term debt to fund our working capital needs, capital expenditures, interest payments and debt repayments. As a consequence of our operating activities, cash flow from operations improved from 2008 through December 31, 2012. As of September 30, 2013, we had cash and cash equivalents of approximately $34.9 million. However, our business is capital intensive. We may continue to face liquidity constraints as our capital expenditures increase in connection with the construction, launch and insurance of new satellites and the expansion and upgrade of our satellite network.

We34 anticipate funding any future capital expenditures, including the construction, launch and insurance of Satmex 7, from proceeds raised through the offering of the Notes and from cash from operations. There can be no assurance that we will have sufficient financial resources to fund such expenditures.

~~The~~SATÉLITES ~~following~~MEXICANOS, ~~table~~S.A. ~~sets~~DE ~~forth~~C.V. ~~our~~AND ~~major~~SUBSIDIARIES ~~sources and (uses) of cash for each period as set forth below:~~

	SixmonthsendedJune 30,2013Successor			Year EndedDecember 31,2012Successor			May 26 –December 31,2011Successor			January 1,- May 25,2011Predecessor			Year EndedDecember 31,2010Predecessor
Net cash provided by operating activities	$	12.2		$	82.5		$	32.4		$	8.1		$	41.0
Net cash used in investing activities	$	(53.2	)	$	(121.6	)	$	(152.2	)	$	(42.9	)	$	(67.7	)
Net cash provided by financing activities	$	—		$	34.5		$	(148.2	)	$	306.7			—
					(In millions of U.S. dollars)

Substantially all of our capital expenditures are denominated in U.S. dollars. Capital expenditure satellite includes capitalized interest costs. Also we invested in data and processing equipment, infrastructure and vehicles. The table below sets forth our capital expenditures for the periods indicated:

Operating Activities


	Nine months ended
	September 30,		Year ended December 31,
	2013		2012		2011		2010
Acquisition of property, furniture and equipment	$	1.6	$	2.0	$	2.2	$	4.6
Construction of Satmex 7⁽¹⁾		49.2		28.5		—		—
Construction of Satmex 9⁽²⁾		16.2		3.8		—		—
Construction of Satmex 8⁽³⁾		19.2		82.4		192.9		63.1

	$	86.2	$	116.7	$	195.1	$	67.7

		(In millions of U.S. dollars)

Our operations for the six months ended June 30, 2013 generated $12.2 million in positive cash flow. This is principally given that our net income is comprised of certain significant non-cash expenses, including $26.4 million of depreciation and amortization, net of a deferred IETU/ISR benefit of $0.2 million as a result of additional tax loss carryforwards recognized in 2013 as a result of tax projections that will permit the Company to recover the benefit of such losses in the future.


	Nine months
	ended September 30,		Year ended December 31,
	2013		2012		2011		2010
Includes capitalized interest:
⁽¹⁾Construction of Satmex 7	$	4.9	$	1.1	$	—	$	—
⁽²⁾Construction of Satmex 9		0.7		—		—		—
⁽³⁾Construction of Satmex 8		—		32.7		11.7		2.6

	$	5.6	$	33.8	$	11.7	$	2.6

		(In millions of U.S. dollars)

~~Our~~We ~~operations~~anticipate ~~for~~funding ~~the~~any ~~year~~future ~~ended~~capital ~~December 31~~expenditures, ~~2012~~including ~~generated $82.5 million~~the ~~in positive cash flow. This is principally given that our net income is comprised of certain significant non-cash expenses~~construction, ~~including~~launch ~~$65.0 million of depreciation~~ and ~~amortization,~~insurance ~~net~~ of Satmex a7, ~~deferred~~from ~~IETU/ISR~~proceeds ~~benefit~~raised ofthrough ~~$14.8 million~~the asoffering ~~a result~~ of ~~additional~~the ~~tax~~Notes ~~loss~~and ~~carryforwards~~from ~~recognized~~cash infrom ~~2012~~operations. asThere acan ~~result~~be ofno ~~tax~~assurance ~~projections~~ that we will ~~permit~~have ~~the~~sufficient ~~Company~~financial resources to ~~recover~~fund ~~the benefit of~~ such ~~losses in the future~~expenditures.

35Sources and Uses of Cash

~~Table~~The following table sets forth our major sources and (uses) of ~~Contents~~cash for each period as set forth below:

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES


	Nine months ended September 30, 2013 Successor			Year Ended December 31, 2012 Successor			May 26 – December 31, 2011 Successor			January 1, - May 25, 2011 Predecessor			Year Ended December 31, 2010 Predecessor
Net cash provided by operating activities	$	48.9		$	82.5		$	32.4		$	8.1		$	41.0
Net cash used in investing activities	$	(86.2	)	$	(121.6	)	$	(152.2	)	$	(42.9	)	$	(67.7	)
Net cash (used in) provided by financing activities	$	(2.5	)	$	34.5		$	(148.2	)	$	306.7
		(In millions of U.S. dollars)

~~Notwithstanding~~Operating ~~our~~Activities net loss, our operations for the period from January 1, 2011 to May 25, 2011 generated $8.1 million in positive cash flow while our operations for the period from May 26, 2011 to December 31, 2011 generated $32.4 million in positive cash flow. This is due to the fact that our net loss is comprised of certain significant non-cash expenses, principally $17.0 million and $46.5 million of depreciation and amortization for the periods from January 1, 2011 to May 25, 2011 and May 26, 2011 to December 31, 2011, respectively.

Our operations for ~~2010~~the nine months ended September 30, 2013 generated $4148.09 million in positive cash flow. ~~despite~~This is principally given that our net ~~loss~~income ~~which~~is ~~was~~comprised ~~principally~~of ~~due~~certain to significant non-cash expenses, including $43.43 million of depreciation and amortization, ~~and~~net ~~$15.5 million~~ of ~~accrued~~a ~~and~~deferred ~~capitalized~~IETU/ISR ~~paid-in-kind~~expense ~~interest.~~of ~~Changes in operating assets and liabilities during 2010 negatively affected our cash flow by~~ $20.21 million ~~principally~~ as a result of ~~slower~~additional ~~collections~~tax ofloss ~~accounts~~carryforwards ~~receivable~~recognized ~~when compared to our revenue growth~~ in ~~2010,~~2013 as a ~~well~~result asof ~~an IETU~~ tax ~~credit~~projections inthat ~~excess~~will ofpermit ~~$3.2~~the ~~million~~Company asto arecover ~~result~~the benefit of ~~capital~~such ~~expenditures~~losses ~~for Satmex 8 which has not yet been realized~~ in ~~cash~~the future.

~~Investing~~35 ~~Activities~~

~~Our~~SATÉLITES ~~net cash used in investing activities for December 31~~MEXICANOS, ~~2012~~S.A. ~~primarily~~DE ~~resulted~~C.V. ~~from~~AND ~~the~~SUBSIDIARIES ~~payments associated with the construction of Satmex 8, Satmex 7 and F4 satellite program (Satmex 9) and our investment in infrastructure, vehicles and electronic, data and processing equipment.~~

Our ~~net~~operations ~~cash used in investing activities~~ for the ~~period~~year ~~from~~ended ~~January~~December 131, ~~2011~~2012 togenerated ~~May~~$82.5 ~~25,~~million ~~2011 and from May 26,~~in ~~2011~~positive tocash ~~December~~flow. ~~2011,~~This ~~primarily~~is ~~resulted~~principally ~~from~~given ~~the~~that ~~payments~~our ~~associated~~net ~~with~~income ~~the~~is ~~construction~~comprised of ~~Satmex 8~~certain ~~and~~significant ~~our~~non-cash ~~investment~~expenses, inincluding ~~infrastructure,~~$65.0 million ~~vehicles~~of depreciation and ~~electronic~~amortization, ~~data~~net ~~and~~of ~~processing~~a ~~equipment.~~deferred ~~Our~~IETU/ISR ~~net~~benefit ~~cash~~of ~~used~~$14.8 inmillion ~~investing~~as ~~activities~~a ~~for~~result ~~the~~of ~~years~~additional ~~ended~~tax ~~2010~~loss ~~resulted~~carryforwards ~~from~~recognized ~~payment~~in ~~associated~~2012 ~~with~~as ~~the~~a ~~execution~~result of antax ~~ATP~~projections ~~for~~that ~~the~~will ~~future~~permit ~~construction~~the ofCompany ~~Satmex 8~~to ~~and~~recover ~~our~~the ~~investment~~benefit inof ~~infrastructure,~~such ~~vehicles~~losses ~~and~~in ~~electronic,~~the ~~data and processing equipment~~future.

~~Financing~~Notwithstanding ~~Activities~~our net loss, our operations for the period from January 1, 2011 to May 25, 2011 generated $8.1 million in positive cash flow while our operations for the period from May 26, 2011 to December 31, 2011 generated $32.4 million in positive cash flow. This is due to the fact that our net loss is comprised of certain significant non-cash expenses, principally $17.0 million and $46.5 million of depreciation and amortization for the periods from January 1, 2011 to May 25, 2011 and May 26, 2011 to December 31, 2011, respectively.

Our ~~net~~operations ~~cash~~for ~~provided~~2010 bygenerated ~~financing~~$41.0 ~~activities~~million ~~for~~in ~~the~~positive ~~year~~cash ~~ended~~flow ~~December 31,~~despite ~~2012~~our net loss which was principally due to significant non-cash expenses, including $3443.54 million of depreciation and ~~reflects~~amortization ~~the~~and ~~issuance~~$15.5 million of ~~senior~~accrued ~~secured~~and ~~notes~~capitalized paid-in-kind ~~the~~interest. ~~amount~~Changes ofin operating assets and liabilities during 2010 negatively affected our cash flow by $352.02 million, principally ~~net~~as a result of ~~payment~~ slower collections of ~~deferred~~accounts ~~financing~~receivable ~~costs~~when compared to our revenue growth in 2010, as well as an IETU tax credit in excess of $13.2 million as a result of capital expenditures for Satmex 8 which has not yet been realized in cash.

~~Our~~Investing ~~net~~Activities cash provided by financing activities for the period from January 1, 2011 to May 25, 2011 consisted of this issuance of the Notes for $325.0 million net of the payment of debt issuance cost of $18.2 million. Our net cash used in financing activities for the period from May 26, 2011 to December 31, 2011 consisted principally of the repayment of the First Priority Old Notes of $238.2 million, partially offset by the proceeds received from the issuance of the equity of $90.0 million.

WeOur ~~did~~net ~~not experience~~ cash ~~inflow~~used orin ~~outflow~~investing ~~from financing~~ activities ~~during~~for the ~~six~~nine months ended ~~June~~September 30, 2013 primarily resulted from the payments associated with the construction of Satmex 8, Satmex 7 and Satmex 9 and our investment in infrastructure, electronic, data and processing equipment.

~~Item~~Our 3net cash used in investing activities for December 31, 2012 primarily resulted from the payments associated with the construction of Satmex 8, Satmex 7 and F4 satellite program (Satmex 9) and our investment in infrastructure, vehicles and electronic, data and processing equipment. ~~Exhibits~~

~~None~~Our net cash used in investing activities for the period from January 1, 2011 to May 25, 2011 and from May 26, 2011 to December 2011, primarily resulted from the payments associated with the construction of Satmex 8 and our investment in infrastructure, vehicles and electronic, data and processing equipment. Our net cash used in investing activities for the years ended 2010 resulted from payment associated with the execution of an ATP for the future construction of Satmex 8 and our investment in infrastructure, vehicles and electronic, data and processing equipment.

36Financing Activities

~~Table~~Our net cash used in financing activities for the nine months ended September 30, 2013 primarily resulted for shareholders’ minority payments of ~~Contents~~$2.5 million.

~~SATÉLITES~~Our ~~MEXICANOS~~net cash provided by financing activities for the year ended December 31, S2012 was $34.A.5 DEmillion Cand reflects the issuance of senior secured notes in the amount of $35.V.0 ~~AND~~million, ~~SUBSIDIARIES~~net of payment of deferred financing costs of $1.2 million.

~~Item~~Our net cash provided by financing activities for the period from January 41, 2011 to May 25, 2011 consisted of this issuance of the Notes for $325.0 million net of the payment of debt issuance cost of $18.2 million. Our net cash used in financing activities for the period from May 26, 2011 to December 31, 2011 consisted principally of the repayment of the First Priority Old Notes of $238.2 million, partially offset by the proceeds received from the issuance of the equity of $90.0 million.

~~Pursuant~~Item ~~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~~3. Exhibits

None.

*36 ~~* * * * *~~

Satélites Mexicanos, S. A. de C. V. (Registrant)

Date: August 14, 2013

/s/ Juan Antonio García Gayou Facha

(Signature)

Juan Antonio García Gayou Facha Chief Financial Officer

SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES

Item 4.

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.


		Satélites Mexicanos, S. A. de C. V. (Registrant)

Date: November 15, 2013	By:	/s/ Juan Antonio García Gayou Facha
		(Signature)
		Juan Antonio García Gayou Facha Chief Financial Officer

* * * * * *

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