____________________________________________________________________________________________________________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________

FORM 10-Q

_____________________________________

(Mark One)


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

For the quarterly period ended ~~June~~September 30, 2021


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

Commission file number: 001-35878

_____________________________________

INTELSAT S.A.

(Exact name of registrant as specified in its charter)

_____________________________________

Grand Duchy of Luxembourg

98-1009418

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

4, rue Albert Borschette

L-1246

Luxembourg

+352

27 84

1600

(Address of principal executive offices, including zip code)

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of ~~July~~October 3129, 2021, 142,184,518 common shares of the registrant were outstanding, with a nominal value of $0.01 per share.

____________________________________________________________________________________________________________________________________________________________________________________

TABLE OF CONTENTS

		Page
Introduction		3
Financial and Other Information		3
Forward-Looking Statements		3
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets as of December 31, 2020 and June 30, 2021 (Unaudited)	6
	Condensed Consolidated Balance Sheets as of December 31, 2020 and September 30, 2021 (Unaudited)	6
	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2021	7
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2021	7
	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2020 and 2021	8
	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2020 and 2021	8
	Unaudited Condensed Consolidated Statements of Changes in Shareholders' Deficit for the Three and Six Months Ended June 30, 2020 and 2021	9
	Unaudited Condensed Consolidated Statements of Changes in Shareholders' Deficit for the Three and Nine Months Ended September 30, 2020 and 2021	9
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2021	10
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2021	11
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	1213
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3534
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4847
Item 4.	Controls and Procedures	48
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 6.	Exhibits	50
SIGNATURES		51

INTRODUCTION

In this Quarterly Report on Form 10-Q, or Quarterly Report, unless otherwise indicated or the context otherwise requires, (1) the terms “we,” “us,” “our,” “the Company” and “Intelsat” refer to Intelsat S.A., and its subsidiaries on a consolidated basis, (2) the term “Intelsat Holdings” refers to our indirect wholly-owned subsidiary, Intelsat Holdings S.A., (3) the term “Intelsat Investments” refers to Intelsat Investments S.A., Intelsat Holdings’ direct wholly-owned subsidiary, (4) the term “Intelsat Luxembourg” refers to Intelsat (Luxembourg) S.A., Intelsat Investments’ direct wholly-owned subsidiary, (5) the term "Intelsat Envision" refers to Intelsat Envision Holdings LLC, Intelsat Luxembourg's direct wholly-owned subsidiary, (6) the terms “Intelsat Connect” and “ICF” refer to Intelsat Connect Finance S.A., Intelsat Envision’s direct wholly-owned subsidiary, and (7) the term “Intelsat Jackson” refers to Intelsat Jackson Holdings S.A., Intelsat Connect’s direct wholly-owned subsidiary. In this Quarterly Report, unless the context otherwise requires, all references to transponder capacity or demand refer to transponder capacity or demand in the C-band and Ku-band frequencies only.

FINANCIAL AND OTHER INFORMATION

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

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

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

FORWARD-LOOKING STATEMENTS

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

When used in this Quarterly Report, the words “may,” “will,” “ might,” “should,” “expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,” “intend,” “potential,” “outlook” and “continue,” and the negative of these terms, and other similar expressions are intended to identify forward-looking statements and information. Examples of these forward-looking statements include, but are not limited to, statements regarding the following: our belief that the growing worldwide demand for reliable broadband connectivity everywhere at all times, together with our leadership position in our attractive sector, global scale, efficient operating and financial profile, diversified customer sets and sizeable contracted backlog, provide us with a platform for long-term success; our ability to confirm and consummate a plan of reorganization in the Chapter 11 Cases (as defined below); the effects of the Chapter 11 Cases on our liquidity or results of operations or business prospects; other risks related to the Chapter 11 Cases as described further below; our belief that our next generation software-defined satellites (“SDS”) will provide differentiated inventory to help offset recent trends of pricing pressure, new capacity from other satellite operators, and improved access to fiber links in our network services business; our outlook that the increased volume of services provided by our high-throughput satellites (“HTS”) and SDS over time is expected to stabilize the level of business activity in the network services sector; our expectation that over time incremental demand for capacity to support the new 4K format, also known as ultra-high definition, could offset some of the reductions in demand related to use of compression technologies in our media business; our expectation that our new services and technologies will open new sectors that are much larger and faster growing than those we support today; our belief that supporting our video neighborhoods, employing a disciplined yield management approach across our business units, developing and maintaining strong customer relationships and distribution channels for our primary customer sets, and successfully executing on our business plan to deliver strong operational results will drive stability in our core business; our expectation that scaling our differentiated managed service offerings in targeted growth verticals and leveraging the global footprint, higher performance and better economics of our HTS and SDS platforms, in addition to the flexibility of our innovative terrestrial network, will drive revenue growth; our belief that completing targeted investments and partnerships in differentiated space and ground infrastructure will provide a seamless interface with the broader telecommunications ecosystem; our outlook that seeking partnerships and investments for vertical expansion in the growing mobility sector, for example, through our ~~recent~~ Gogo Transaction (as defined below), and in adjacent space-based businesses, will position us for long-term growth; our belief that investing in and deploying innovative new technologies and platforms will change the types of applications we can serve and increase our share of the global demand for broadband connectivity; our projection that our government business will benefit over time from our agile satellite fleet serving the increasing demands for mobility services from the

~~mobility services from the~~ U.S. government for aeronautical and ground mobile requirements; our intention to maximize the value of our spectrum rights; our expectations as to our ability to comply with the final U.S. Federal Communications Commission (“FCC”) order regarding clearing C-band spectrum in North America, including the availability of adequate resources and funds required to comply and the receipt of accelerated clearing payments set forth in the FCC order; our belief that developing differentiated managed services and investing in related software- and standards-based technology will allow us to unlock opportunities that are essential to providing global broadband connectivity; the trends that we believe will impact our revenue and operating expenses in the future; our assessments regarding how long satellites that have experienced anomalies in the past should be able to provide service on their transponders; our belief as to the likelihood of the cause of the failure of Intelsat 29e in 2019 occurring on our other satellites; our assessment of the risks of future anomalies occurring on our satellites; our plans for satellite launches in the near-term; our expected capital expenditures in 2021 and during the next several years; our belief that the diversity of our revenue allows us to benefit from changing market conditions and lowers our risk from revenue fluctuations in our service applications and geographic regions; our belief that the scale of our fleet can reduce the financial impact of any satellite anomalies or launch failures and protect against service interruptions; and the impact on our financial position or results of operations of pending legal proceedings.

Forward-looking statements reflect our intentions, plans, expectations, anticipations, projections, estimations, predictions, outlook, assumptions and beliefs about future events. These forward-looking statements speak only as of their dates and are not guarantees of future performance or results and are subject to risks, uncertainties and other factors, many of which are outside of our control. These factors could cause actual results or developments to differ materially from the expectations expressed or implied in the forward-looking statements and include known and unknown risks. Known risks include, among others, the risks discussed in Part I—Item 1A—Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”), the political, economic, regulatory and legal conditions in the markets we are targeting for communications services or in which we operate and other risks and uncertainties inherent in the telecommunications business in general and the satellite communications business in particular.

Other factors that may cause results or developments to differ materially from historical results or developments or the forward-looking statements made in this Quarterly Report include, but are not limited to:

•risks associated with operating our in-orbit satellites;

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

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

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

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

•U.S. and other government regulation;

•changes in our contracted backlog or expected contracted backlog for future services, including any supply chain disruptions;

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

•our ability to access capital markets for debt or equity;

•the competitive environment in which we operate;

•customer defaults on their obligations to us;

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

•the impact of the novel coronavirus (“COVID-19”) pandemic on our business, the economic environment and our expected financial results;

•our expectations as to the benefits and impact on our future financial performance associated with the Company’s ~~recent~~ purchase of the equity of Gogo Inc.’s (NASDAQ: GOGO) (“Gogo”) commercial aviation business (the “Gogo Transaction”);

•our ability to successfully integrate Gogo’s commercial aviation business;

•litigation; and

•other risks discussed in our 2020 Annual Report or this Quarterly Report.

Further, many of the risks and uncertainties that we face are currently amplified by, and will continue to be amplified by, the risks and uncertainties regarding the Company and certain of its subsidiaries’ voluntary commencement of cases (the “Chapter 11 Cases”) under title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Virginia (the “Bankruptcy Court”), including but not limited to:

•our ability to improve our liquidity and long-term capital structure and to address our debt service obligations through the restructuring;

•our ability to obtain timely approval by the Bankruptcy Court with respect to the motions that we have filed or will file in the Chapter 11 Cases, including those related to our debtor-in-possession (“DIP”) financing;

•objections to the Company’s restructuring process or other pleadings filed that could protract the Chapter 11 Cases or interfere with the Company’s ability to consummate the restructuring;

•our ability to retain the exclusive right to propose a Chapter 11 plan of reorganization and our ability to achieve confirmation of such plan;

•our ability to develop, obtain support for, confirm and consummate a Chapter 11 plan of reorganization, including the proposed plan of reorganization the Company filed in the Bankruptcy Court on ~~February~~August 1224, 2021, as may be modified or amended;

•the length of time that the Company will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the Chapter 11 Cases;

•our substantial level of indebtedness and related debt service obligations and restrictions, including those expected to be imposed by covenants in any exit financing, that may limit our operational and financial flexibility;

•the conditions to which our DIP financing is subject and the risk that these conditions may not be satisfied for various reasons, including for reasons outside of our control;

•our ability to develop and execute our business plan during the pendency of the Chapter 11 Cases;

•increased administrative and legal costs related to the Chapter 11 process;

•potential delays in the Chapter 11 process due to the effects of the COVID-19 pandemic; and

•our ability to continue as a going concern and our ability to maintain relationships with regulators, suppliers, customers, and employees, including the pending retirement and transition period of our current Chief Executive Officer, and other third parties as a result of such going concern, during the restructuring and the pendency of the Chapter 11 Cases.

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

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

INTELSAT S.A. (DEBTOR-IN-POSSESSION)

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	December 31, 2020		~~June~~September 30, 2021
			(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,060,917	$	~~631~~636,~~871~~510
Restricted cash	21,130		27,~~055~~675
Receivables, net of allowances of $40,785 in 2020 and $29,202 in 2021	659,444		1,022,447
Receivables, net of allowances of $40,785 in 2020 and $32,949 in 2021	254,273		217,235
Contract assets, net of allowances	39,774		39,280
Receivables relating to C-band	405,171		1,035,578
Inventory	147,094		140,302
Contract assets, net of allowances	39,774		42,447
Prepaid expenses and other current assets	136,611		123,906
Inventory	147,094		125,288
Total current assets	2,064,970		1,984,861
Prepaid expenses and other current assets	136,611		140,330
Satellites and other property and equipment, net	4,757,877		4,958,927
Total current assets	2,064,970		2,225,063
Goodwill	2,698,247		2,695,866
Satellites and other property and equipment, net	4,757,877		4,981,394
Goodwill	2,698,247		2,689,482
Non-amortizable intangible assets	2,295,000		2,295,000
Amortizable intangible assets, net	290,569		~~271~~262,~~405~~355
Contract assets, net of current portion and allowances	86,017		7671,~~565~~914
Other assets	605,001		~~627~~727,~~486~~862
Total assets	$	12,797,681	$	1213,~~910~~253,~~110~~070
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	252,998	$	~~300~~279,~~179~~122
Taxes payable	7,493		6,~~436~~486
Employee related liabilities	43,404		47,010
Employee-related liabilities	43,404		43,382
Accrued interest payable	17,747		1819,~~035~~094
Current maturities of long-term debt	5,903,724		56,~~909~~162,~~377~~315
Contract liabilities	157,320		~~848~~858,~~691~~941
Deferred satellite performance incentives	47,377		5654,~~115~~512
Other current liabilities	73,479		83105,~~815~~416
Total current liabilities	6,503,542		7,~~269~~529,~~658~~268
Contract liabilities, net of current portion	1,447,891		1,~~108~~309,~~617~~270
Deferred satellite performance incentives, net of current portion	138,116		~~127~~121,~~774~~439
Deferred income taxes	61,345		7177,~~866~~485
Accrued retirement benefits, net of current portion	129,837		~~118~~113,~~458~~452
Other long-term liabilities	262,900		~~283~~315,~~516~~939
Liabilities subject to compromise	10,168,518		10,169,~~230~~243
Shareholders’ deficit:
Common shares, nominal value $0.01 per share	1,421		1,422
Paid-in capital	2,573,840		2,~~576~~577,~~144~~607
Accumulated deficit	(8,416,410)		(8,~~743~~889,~~592~~282)
Accumulated other comprehensive loss	(80,322)		(7877,~~307~~261)
Total Intelsat S.A. shareholders’ deficit	(5,921,471)		(6,~~244~~387,~~333~~514)
Noncontrolling interest	7,003		54,~~324~~488
Total liabilities and shareholders’ deficit	$	12,797,681	$	1213,~~910~~253,~~110~~070

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT S.A. (DEBTOR-IN-POSSESSION)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Three Months EndedJune 30, 2020

Three Months EndedJune 30, 2021

Six Months EndedJune 30, 2020

Six Months EndedJune 30, 2021

Three Months EndedSeptember 30, 2020

Three Months EndedSeptember 30, 2021

Nine Months EndedSeptember 30, 2020

Nine Months EndedSeptember 30, 2021

Revenue

~~482~~489,~~034~~449

~~507~~526,~~862~~095

~~940~~1,~~854~~430,303

1,~~010~~536,~~625~~720

Operating expenses:

Direct costs of revenue (excluding depreciation and amortization)

~~106~~119,~~961~~969

~~163~~177,~~317~~176

~~212~~331,~~046~~191

~~328~~505,~~549~~798

Selling, general and administrative

6369,~~863~~215

~~100~~96,~~161~~796

~~144~~214,~~829~~586

~~202~~299,~~777~~499

Depreciation and amortization

162,~~614~~573

~~168~~162,~~259~~017

~~325~~488,~~662~~235

~~333~~495,~~499~~517

Impairment of non-amortizable intangible and other assets

~~34,043~~—

—

46,243

—

Other operating expense—C-band

—298

6417,~~638~~867

—580

~~122~~140,~~994~~861

Total operating expenses

~~367~~352,~~481~~055

~~496~~453,~~375~~856

~~728~~1,~~780~~080,835

~~987~~1,~~819~~441,675

Income from operations

~~114~~137,~~553~~394

1172,~~487~~239

~~212~~349,~~074~~468

2295,~~806~~045

Interest expense, net

(~~222~~138,~~533~~075)

(~~129~~126,~~893~~600)

(~~540~~678,~~862~~937)

(~~262~~388,~~236~~836)

Other income, net

23,~~762~~067

2010,~~218~~196

58,~~496~~564

2940,~~937~~133

Reorganization items

(~~298~~36,~~691~~367)

(4998,~~591~~316)

(~~298~~335,~~691~~059)

(~~105~~203,~~403~~719)

Loss before income taxes

(~~403~~33,~~909~~981)

(~~147~~142,~~779~~481)

(~~621~~655,~~983~~964)

(~~314~~457,~~896~~377)

Income tax expense

(818)

(3,923)

(959)

(11,112)

Income tax benefit (expense)

18,650

(2,605)

17,691

(13,716)

Net loss

(~~404~~15,~~727~~331)

(~~151~~145,~~702~~086)

(~~622~~638,~~942~~273)

(~~326~~471,~~008~~093)

Net income attributable to noncontrolling interest

(~~628~~600)

(604)

(1,~~184~~784)

(1,~~174~~779)

Net loss attributable to Intelsat S.A.

(~~405~~15,~~355~~931)

(~~152~~145,~~306~~690)

(~~624~~640,~~126~~057)

(~~327~~472,~~182~~872)

Net loss per common share attributable to Intelsat S.A.:

Basic

(20.8511)

(1.0702)

(4.4051)

(23.3033)

Diluted

(20.8511)

(1.0702)

(4.4051)

(23.3033)

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT S.A. (DEBTOR-IN-POSSESSION)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Three Months EndedJune 30, 2020

Three Months EndedJune 30, 2021

Six Months EndedJune 30, 2020

Six Months EndedJune 30, 2021

Three Months EndedSeptember 30, 2020

Three Months EndedSeptember 30, 2021

Nine Months EndedSeptember 30, 2020

Nine Months EndedSeptember 30, 2021

Net loss

(~~404~~15,~~727~~331)

(~~151~~145,~~702~~086)

(~~622~~638,~~942~~273)

(~~326~~471,~~008~~093)

Other comprehensive income (loss), net of tax:

Defined benefit retirement plans:

Reclassification adjustment for amortization of unrecognized prior service credits, net of tax included in other income, net

(626)

(1,~~252~~878)

Reclassification adjustment for amortization of unrecognized actuarial loss, net of tax included in other income, net

1,274

1,672

23,~~548~~822

34,~~267~~939

Other comprehensive income (loss)

648

1,046

1,296

2,015

Other comprehensive income

648

1,046

1,944

3,061

Comprehensive loss

(~~404~~14,~~079~~683)

(~~150~~144,~~656~~040)

(~~621~~636,~~646~~329)

(~~323~~468,~~993~~032)

Comprehensive income attributable to noncontrolling interest

(~~628~~600)

(604)

(1,~~184~~784)

(1,~~174~~779)

Comprehensive loss attributable to Intelsat S.A.

(~~404~~15,~~707~~283)

(~~151~~144,~~260~~644)

(~~622~~638,~~830~~113)

(~~325~~469,~~167~~811)

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT S.A. (DEBTOR-IN-POSSESSION)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(in thousands, except where otherwise noted)

	Common Shares
	Number of Shares(in millions)	Amount		Paid-inCapital		AccumulatedDeficit		Accumulated Other Comprehensive Loss		Total Intelsat S.A. Shareholders’ Deficit		NoncontrollingInterest
Balance at December 31, 2019	141.1	$	1,411	$	2,565,696	$	(7,503,830)	$	(63,135)	$	(4,999,858)	$	11,010
Net income (loss)	—	—		—		(218,771)		—		(218,771)		556
Dividends paid to noncontrolling interests	—	—		—		—		—		—		(1,879)
Share-based compensation	1.0	10		971		—		—		981		—
Postretirement/pension liability adjustment, net of tax	—	—		—		—		648		648		—
Adoption of ASU 2016-13	—	—		—		(916)		—		(916)		—
Balance at March 31, 2020	142.1	$	1,421	$	2,566,667	$	(7,723,517)	$	(62,487)	$	(5,217,916)	$	9,687
Net income (loss)	—	—		—		(405,355)		—		(405,355)		628
Share-based compensation	—	—		2,737		—		—		2,737		—
Postretirement/pension liability adjustment, net of tax	—	—		—		—		648		648		—
Balance at June 30, 2020	142.1	$	1,421	$	2,569,404	$	(8,128,872)	$	(61,839)	$	(5,619,886)	$	10,315
Net income (loss)	—	—		—		(15,931)		—		(15,931)		600
Dividends paid to noncontrolling interests	—	—		—		—		—		—		(3,080)
Share-based compensation	—	—		2,920		—		—		2,920		—
Postretirement/pension liability adjustment, net of tax	—	—		—		—		648		648		—
Balance at September 30, 2020	142.1	$	1,421	$	2,572,324	$	(8,144,803)	$	(61,191)	$	(5,632,249)	$	7,835

	Common Shares
	Number of Shares(in millions)	Amount		Paid-inCapital		AccumulatedDeficit		Accumulated Other Comprehensive Loss		Total Intelsat S.A. Shareholders’ Deficit		NoncontrollingInterest
Balance at December 31, 2020	142.1	$	1,421	$	2,573,840	$	(8,416,410)	$	(80,322)	$	(5,921,471)	$	7,003
Net income (loss)	—	—		—		(174,876)		—		(174,876)		570
Dividends paid to noncontrolling interests	—	—		—		—		—		—		(1,417)
Share-based compensation	0.1	1		723		—		—		724		—
Postretirement/pension liability adjustment, net of tax	—	—		—		—		969		969		—
Balance at March 31, 2021	142.2	$	1,422	$	2,574,563	$	(8,591,286)	$	(79,353)	$	(6,094,654)	$	6,156
Net income (loss)	—	—		—		(152,306)		—		(152,306)		604
Dividends paid to noncontrolling interests	—	—		—		—		—		—		(1,436)
Share-based compensation	—	—		1,581		—		—		1,581		—
Postretirement/pension liability adjustment, net of tax	—	—		—		—		1,046		1,046		—
Balance at June 30, 2021	142.2	$	1,422	$	2,576,144	$	(8,743,592)	$	(78,307)	$	(6,244,333)	$	5,324

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT S.A. (DEBTOR-IN-POSSESSION)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH~~CHANGES ~~FLOWS~~IN SHAREHOLDERS’ DEFICIT

	Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
Cash flows from operating activities:
Net loss	$	(622,942)	$	(326,008)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	325,662		333,499
Provision for expected credit losses	29,542		15,863
Foreign currency transaction (gains) losses	6,927		(147)
Loss on disposal of assets	—		41
Impairment of non-amortizable intangible and other assets	46,243		—
Share-based compensation	6,480		12,712
Deferred income taxes	5,631		3,471
Amortization of discount, premium, issuance costs and related costs	17,277		4,978
Non-cash reorganization items	196,974		—
Debtor-in-possession financing fees	52,182		—
Amortization of actuarial loss and prior service credits for retirement benefits	1,317		2,126
Unrealized losses on derivative financial instruments	349		—
Unrealized (gains) losses on investments and loans held-for-investment	738		(15,161)
Amortization of supplemental type certificate costs	—		6,398
Other non-cash items	—		(130)
Changes in operating assets and liabilities:
Receivables	1,266		22,320
Prepaid expenses, contract and other assets	(28,086)		19,999
Accounts payable and accrued liabilities	27,539		27,088
Accrued interest payable	48,775		287
Contract liabilities	(40,365)		(47,968)
Accrued retirement benefits	(8,267)		(11,379)
Other long-term liabilities	(12,748)		(9,629)
Net cash provided by operating activities	54,494		38,360
Cash flows from investing activities:
Capital expenditures (including capitalized interest)	(199,892)		(468,976)
Acquisition of loans held-for-investment	(1,150)		—
Proceeds from sale of investment	—		15,000
Proceeds from principal payments on loans held-for-investment	724		103
Capital contribution to unconsolidated affiliate (including capitalized interest)	(2,692)		—
Acquisition of intangible assets	—		(2,040)
Other proceeds from satellites	5,625		—
Net cash used in investing activities	(197,385)		(455,913)
Cash flows from financing activities:
Proceeds from debtor-in-possession financing	500,000		—
Debtor-in-possession financing fees	(52,182)		—
Principal payments on deferred satellite performance incentives	(19,195)		(6,921)
Dividends paid to noncontrolling interest	(1,879)		(2,853)
Net cash provided by (used in) financing activities	426,744		(9,774)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3,732)		(1,294)
Net change in cash, cash equivalents and restricted cash	280,121		(428,621)
Cash, cash equivalents, and restricted cash, beginning of period	830,864		1,087,547
Cash, cash equivalents, and restricted cash, end of period	$	1,110,985	$	658,926

(in thousands, except where otherwise noted)


	Common Shares
	Number of Shares (in millions)	Amount		Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Intelsat S.A. Shareholders’ Deficit		Noncontrolling Interest
Balance at December 31, 2020	142.1	$	1,421	$	2,573,840	$	(8,416,410)	$	(80,322)	$	(5,921,471)	$	7,003
Net income (loss)	—	—		—		(174,876)		—		(174,876)		570
Dividends paid to noncontrolling interests	—	—		—		—		—		—		(1,417)
Share-based compensation	0.1	1		723		—		—		724		—
Postretirement/pension liability adjustment, net of tax	—	—		—		—		969		969		—
Balance at March 31, 2021	142.2	$	1,422	$	2,574,563	$	(8,591,286)	$	(79,353)	$	(6,094,654)	$	6,156
Net income (loss)	—	—		—		(152,306)		—		(152,306)		604
Dividends paid to noncontrolling interests	—	—		—		—		—		—		(1,436)
Share-based compensation	—	—		1,581		—		—		1,581		—
Postretirement/pension liability adjustment, net of tax	—	—		—		—		1,046		1,046		—
Balance at June 30, 2021	142.2	$	1,422	$	2,576,144	$	(8,743,592)	$	(78,307)	$	(6,244,333)	$	5,324
Net income (loss)	—	—		—		(145,690)		—		(145,690)		604
Dividends paid to noncontrolling interests	—	—		—		—		—		—		(1,440)
Share-based compensation	—	—		1,463		—		—		1,463		—
Postretirement/pension liability adjustment, net of tax	—	—		—		—		1,046		1,046		—
Balance at September 30, 2021	142.2	$	1,422	$	2,577,607	$	(8,889,282)	$	(77,261)	$	(6,387,514)	$	4,488

	Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
Supplemental cash flow information:
Cash paid for reorganization items included in cash flows from operating activities	$	28,913	$	91,717
Interest paid, net of amounts capitalized	422,839		208,571
Income taxes paid, net of refunds	2,628		2,546
Supplemental disclosure of non-cash investing activities:
Accrued capital expenditures	$	64,442	$	78,882
Conversion of loans held-for-investment to equity securities	4,802		—
Capitalization of deferred satellite performance incentives	—		5,318
Conversion of payment-in-kind interest on loans held-for-investment	—		1,762

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT S.A. (DEBTOR-IN-POSSESSION)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2021
Cash flows from operating activities:
Net loss	$	(638,273)	$	(471,093)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	488,235		495,517
Provision for expected credit losses	36,360		21,729
Foreign currency transaction losses	7,330		2,639
Loss on disposal of assets	—		43
Impairment of non-amortizable intangible and other assets	46,243		—
Share-based compensation	9,399		19,377
Deferred income taxes	4,720		5,404
Amortization of discount, premium, issuance costs and related costs	19,689		7,559
Non-cash reorganization items	196,974		—
Debtor-in-possession financing fees	52,182		46,944
Amortization of actuarial loss and prior service credits for retirement benefits	1,976		3,189
Unrealized losses on derivative financial instruments	372		—
Unrealized (gains) losses on investments and loans held-for-investment	721		(25,226)
Amortization of supplemental type certificate costs	—		8,549
Other non-cash items	—		(133)
Changes in operating assets and liabilities:
Receivables	2,769		22,554
Prepaid expenses, contract and other assets	(67,253)		17,557
Accounts payable and accrued liabilities	60,624		3,603
Accrued interest payable	48,713		1,347
Contract liabilities	(62,737)		(67,054)
Accrued retirement benefits	(12,253)		(16,385)
Other long-term liabilities	(1,062)		(25,944)
Net cash provided by operating activities	194,729		50,176
Cash flows from investing activities:
Capital expenditures (including capitalized interest)	(419,952)		(667,885)
Acquisition of loans held-for-investment	(2,300)		—
Proceeds from sale of investment	—		15,000
Loan amendment fees received	—		1,800
Proceeds from principal payments on loans held-for-investment	973		208
Capital contribution to unconsolidated affiliate (including capitalized interest)	(2,692)		—
Acquisition of intangible assets	—		(3,315)
Other proceeds from satellites	5,625		—
Net cash used in investing activities	(418,346)		(654,192)
Cash flows from financing activities:
Proceeds from debtor-in-possession financing	500,000		1,250,000
Repayments of debtor-in-possession financing	—		(1,000,000)
Debtor-in-possession financing fees	(52,182)		(46,944)
Principal payments on deferred satellite performance incentives	(25,428)		(14,859)
Dividends paid to noncontrolling interest	(4,959)		(4,293)
Net cash provided by financing activities	417,431		183,904
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(4,328)		(3,250)
Net change in cash, cash equivalents and restricted cash	189,486		(423,362)
Cash, cash equivalents, and restricted cash, beginning of period	830,864		1,087,547
Cash, cash equivalents, and restricted cash, end of period	$	1,020,350	$	664,185


	Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2021
Supplemental cash flow information:
Cash paid for reorganization items included in cash flows from operating activities	$	53,983	$	152,675
Interest paid, net of amounts capitalized	532,234		307,901
Income taxes paid, net of refunds	4,717		2,664
Supplemental disclosure of non-cash investing activities:
Accrued capital expenditures	$	51,221	$	67,944
Conversion of loans held-for-investment to equity securities	4,802		—
Capitalization of deferred satellite performance incentives	—		5,318
Conversion of payment-in-kind interest on loans held-for-investment	—		1,762
Purchase price adjustment	—		7,843

See accompanying notes to unaudited condensed consolidated financial statements.

INTELSAT S.A. (DEBTOR-IN-POSSESSION)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~June~~September 30, 2021

Note 1—General

Basis of Presentation

The accompanying condensed consolidated financial statements of Intelsat S.A. and its subsidiaries (“Intelsat S.A.,” “we,” “us,” “our” or the “Company”) have not been audited, but are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. References to U.S. GAAP issued by the Financial Accounting Standards Board (“FASB”) in these footnotes are to the FASB Accounting Standards Codification (“ASC”). The unaudited condensed consolidated financial statements include all adjustments (consisting only of normal and recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of these financial statements. The results of operations for the periods presented are not necessarily indicative of operating results for the full year or for any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”), on file with the U.S. Securities and Exchange Commission (“SEC”).

Use of Estimates

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

C-band Spectrum Clearing

On March 3, 2020, the U.S. Federal Communications Commission (“FCC”) issued its final order in the C-band proceeding (the “FCC Final Order”), which, among other things, provides for monetary incentives for fixed satellite services (“FSS”) providers to clear a portion of the C-band spectrum on an accelerated basis (the “Acceleration Payments”). On August 14, 2020, ~~the~~Intelsat ~~Company~~License LLC (“Intelsat License”) filed its C-band spectrum transition plan with the FCC~~. On September 17~~, ~~2020, the Company announced that it finalized materially all of its required contracts~~ with ~~satellite~~ongoing ~~manufacturers~~updates ~~and~~as ~~launch-vehicle~~requested ~~providers~~by tothe ~~move~~FCC. ~~forward~~The ~~and~~most ~~meet~~recent ~~the~~amended ~~accelerated~~transition ~~C-band~~plan ~~spectrum~~was ~~clearing~~filed ~~timelines~~on ~~established~~September by30, ~~the FCC~~2021.

Under the FCC Final Order, ~~the~~Intelsat ~~Company~~License is eligible to receive Acceleration Payments of approximately $1.2 billion and $3.7 billion based on the milestone clearing certification dates of December 5, 2021 and December 5, 2023, with the respective payments expected to be received in the first half of each successive year, respectively, subject to the satisfaction of certain deadlines and other conditions. In addition, under the FCC Final Order, we are also entitled to receive reimbursement payments for certain C-band spectrum clearing expenses incurred, subject to the satisfaction of certain conditions set forth in the FCC Final Order. As of December 31, 2020 and ~~June~~September 30, 2021, we incurred $405.2 million and $~~805~~1.60 ~~million~~billion, respectively, related to expected reimbursable costs associated with the FCC Final Order, which are included within the receivables relating to C-band line item on our condensed consolidated balance sheets. Fulfillment costs incurred as a result of the FCC Final Order, which include costs to pay personnel or third parties to assist with customer reconfiguration and relocation, installation of filters, and program management costs, are expensed as incurred and are included within other operating expense—C-band on our condensed consolidated statements of operations. On October 4, 2021, as subsequently amended on October 15, 2021, Intelsat License filed its Phase I Certification of Accelerated Relocation, indicating completion of required clearing activities to satisfy the December 5, 2021 deadline and requesting FCC validation to receive the $1.2 billion Acceleration Payment.

Impact of COVID-19 on the Company

As a result of the novel coronavirus (“COVID-19”) pandemic in 2020 and continuing into 2021, in an effort to safeguard public health, governments around the world, including United States (“U.S.”) federal, state and local governments, implemented a number of orders and restrictions on travel and businesses, among other things. Some of these measures remain in effect and have negatively impacted the U.S. and other economies around the world in the short-term, while the long-term economic impact of COVID-19 remains unknown.

The COVID-19 pandemic has had an adverse impact on our business, results of operations and financial condition, a trend we expect to continue. Among the impacts of the COVID-19 pandemic were a reduction of revenue and a decreased likelihood of collection from certain mobility customers and our Intelsat CA (as defined below) business. We continue to closely monitor the ongoing impact on our employees, customers, business and results of operations.

1213

collection from certain mobility customers and our Intelsat CA (as defined below) business. We continue to closely monitor the ongoing impact on our employees, customers, business and results of operations.

Bankruptcy Accounting

Our consolidated financial statements included herein have been prepared as if we are a going concern and reflect the application of ASC 852, Reorganizations (“ASC 852”). ASC 852 requires the financial statements, for periods subsequent to the commencement of our Chapter 11 proceedings, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, we classify liabilities and obligations whose treatment and satisfaction are dependent on the outcome of the reorganization under the Chapter 11 proceedings as liabilities subject to compromise on our condensed consolidated balance sheets. In addition, we classify all income, expenses, gains or losses that are incurred or realized as a result of the Chapter 11 proceedings as reorganization items in our condensed consolidated statements of operations. See Note 2—Chapter 11 Proceedings, Ability to Continue as a Going Concern and Other Related Matters.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less, which are generally time deposits with banks and money market funds. The carrying amount of these investments approximates fair value. Restricted cash represents legally restricted amounts being held as a compensating balance for certain outstanding letters of credit.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our condensed consolidated balance sheets to the total sum of these amounts reported in our condensed consolidated statements of cash flows (in thousands):

	As ofDecember 31, 2020		As ~~ofJune~~ofSeptember 30, 2021
Cash and cash equivalents	$	1,060,917	$	~~631~~636,~~871~~510
Restricted cash	21,130		27,~~055~~675
Restricted cash included in other assets	5,500		—
Cash, cash equivalents and restricted cash	$	1,087,547	$	~~658~~664,~~926~~185

Receivables and Allowance for Credit Losses

We provide satellite services and extend credit to numerous customers in the satellite communication, telecommunications and video markets, as well as the airline industry. We monitor our exposure to credit losses and maintain allowances for credit losses and anticipated losses. The Company’s methodology to measure the provision for credit losses considers all relevant information, including but not limited to, information about historical collectability, current conditions and reasonable and supportable forecasts of future economic conditions. We believe we have adequate customer collateral and reserves to cover our exposure.

The following table provides a roll-forward of the allowance for credit losses reported within our condensed consolidated balance sheets (in thousands):

Description	Three Months Ended ~~June~~September 30, 2020				Three Months Ended ~~June~~September 30, 2021
	Accounts Receivable		Contract Assets		Accounts Receivable		Contract Assets
Balance at April 1	$	51,061	$	1,811	$	40,984	$	4,529
Balance at July 1	$	27,578	$	1,638	$	29,202	$	4,346
Charged to costs and expenses	96,~~771~~743		~~(173)~~75		86,~~449~~484		(~~183~~617)
Deductions(1)	(334,~~254~~483)		—		(202,~~231~~737)		—
Balance at June 30	$	27,578	$	1,638	$	29,202	$	4,346
Balance at September 30	$	29,838	$	1,713	$	32,949	$	3,729

Description	~~Six~~Nine Months Ended ~~June~~September 30, 2020				~~Six~~Nine Months Ended ~~June~~September 30, 2021
	Accounts Receivable		Contract Assets		Accounts Receivable		Contract Assets
Balance at January 1	$	40,028	$	—	$	40,785	$	3,889
Cumulative-effect adjustment of ASU 2016-13 adoption	—		916		—		—
Charged to costs and expenses	2835,~~820~~563		~~722~~797		1521,~~406~~889		~~457~~(160)
Deductions(1)	(4145,~~270~~753)		—		(2629,~~989~~725)		—
Balance at June 30	$	27,578	$	1,638	$	29,202	$	4,346
Balance at September 30	$	29,838	$	1,713	$	32,949	$	3,729

(1)Uncollectible accounts written off, net of recoveries.

1314

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting For Income Taxes (“ASU 2019-12”). The standard removes certain exceptions for recognizing deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. It also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 was adopted in the first quarter of 2021. The adoption of ASU 2019-12 did not have a material effect on our condensed consolidated financial statements and associated disclosures.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The standard simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts regarding an entity’s own equity. ASU 2020-06 is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. ASU 2020-06 will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2021. We are in the process of evaluating the impact that ASU 2020-06 will have on our condensed consolidated financial statements and associated disclosures.

In October 2021, the FASB issued ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). The standard improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to (1) recognition of an acquired contract liability and (2) payment terms and their effect on subsequent revenue recognized by the acquirer. ASU 2021-08 will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. We are in the process of evaluating the impact that ASU 2021-08 will have on our condensed consolidated financial statements and associated disclosures.

Note 2—Chapter 11 Proceedings, Ability to Continue as a Going Concern and Other Related Matters

Voluntary Reorganization under Chapter 11

On May 13, 2020, Intelsat S.A. and certain of its subsidiaries (each, a “Debtor” and collectively, the “Debtors”) commenced voluntary cases (the “Chapter 11 Cases”) under title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Virginia (the “Bankruptcy Court”). Primary factors causing us to file for Chapter 11 protection included the Company’s intention to participate in the accelerated clearing process of C-band spectrum set forth in the FCC Final Order, requiring the Company to incur significant costs related to clearing activities well in advance of receiving reimbursement for such costs and the need for additional financing to fund the C-band clearing process, service our current debt obligations, and meet our operating requirements, as well as the economic slowdown impacting the Company and several of its end markets due to the COVID-19 pandemic. On August 14, 2020, the Company filed its C-band spectrum transition plan with the FCC. On September 17, 2020, the Company announced that it finalized materially all of its required contracts with satellite manufacturers and launch-vehicle providers to move forward and meet the accelerated C-band spectrum clearing timelines established by the FCC.

The Chapter 11 process can be unpredictable and involves significant risks and uncertainties. Pursuant to various orders from the Bankruptcy Court, the Debtors have received approval from the Bankruptcy Court to generally maintain their ordinary operations and uphold certain commitments to their stakeholders, including employees, customers, and vendors, during the restructuring process, subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. Our ability to fund operating expenses may be subject to obtaining further approvals from the Bankruptcy Court in connection with the Chapter 11 Cases.

On June 9, 2020, Intelsat Jackson received approval from the Bankruptcy Court ~~(the “DIP Order”)~~ to enter into a ~~non-amortizing~~ multiple draw superpriority senior secured debtor-in-possession term loan facility (as amended, the “Original DIP Facility”), in an aggregate principal amount of $1.0 billion on the terms and conditions as set forth in the DIP ~~Facility~~ credit agreement (as amended, the “Original DIP Credit Agreement”) ~~with certain of the Debtors’ prepetition secured parties (the “DIP Lenders”)~~, and on June 17, 2020, Intelsat Jackson and certain of its subsidiaries as guarantors (together with Intelsat Jackson, the “DIP Debtors”) entered into the final Original DIP Credit Agreement. ~~with~~On September 14, 2021, the DIP ~~Lenders,~~Debtors asreceived ~~amended~~approval byfrom anthe ~~amendment~~Bankruptcy Court (the “DIP ~~Amendment No. 1~~Order”) to ~~the~~enter ~~DIP~~into ~~Credit~~a ~~Agreement,~~multiple ~~dated~~draw assuperpriority ofsenior ~~August~~secured ~~24,~~debtor-in-possession ~~2020,~~term aloan ~~second~~facility ~~amendment~~ (the “New DIP ~~Amendment No. 2~~Facility”), ~~dated~~in asan aggregate principal amount of ~~November~~$1.5 ~~25,~~billion ~~2020,~~on the terms and aconditions ~~third~~as ~~amendment~~set forth in the credit agreement for the New DIP Facility (the “New DIP ~~Amendment~~Credit ~~No. 3~~Agreement”), ~~dated~~and ason ofSeptember ~~July 13~~14, 2021., ~~For~~Intelsat ~~additional~~Jackson ~~information~~and ~~regarding~~certain of the DIP ~~Facility,~~Debtors entered into the final New DIP Credit Agreement,. The New DIP ~~Amendment~~Facility ~~No.~~provided $1.25 billion in new money at closing for Intelsat Jackson to, ~~DIP~~among ~~Amendment~~other ~~No.~~things, 2refinance ~~and~~the Original DIP ~~Amendment~~Facility Noand, provides the ability for Intelsat Jackson, at its sole discretion, to make an incremental $250.0 3million draw. For additional information regarding our credit facilities, see Note 1211—Debt.

On July 11, 2020, the Debtors filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the Debtors, subject to the assumptions filed in connection therewith. These schedules and statements may be subject to further amendment or modification after filing.

On February 11, 2021, the Debtors entered into a plan support agreement (together with all exhibits and schedules thereto, the “PSA”) with certain of the Debtors’ prepetition secured and unsecured creditors (the “Consenting Creditors” and together with the Debtors, the “PSA Parties”). The PSA contains certain covenants on the part of the PSA Parties, including but not limited to the Consenting Creditors voting in favor of the Joint Chapter 11 Plan of Reorganization of Intelsat S.A. and Its Debtor Affiliates (as proposed, the “Plan”), and provides that the Debtors shall achieve certain milestones (unless extended or waived in writing). In connection with the PSA, on February 12, 2021, the Debtors filed the Plan and the Disclosure Statement for the Joint Chapter 11 Plan of Reorganization of Intelsat S.A. and Its Debtor Affiliates (the “Disclosure Statement”), which describes a variety of topics related to the Chapter 11 Cases, including (i) events leading to the Chapter 11 Cases; (ii) significant events that took place during the Chapter 11 15

On 14February 11, 2021, the Debtors entered into a plan support agreement with certain of the Debtors’ prepetition secured and unsecured creditors. After entry into such plan support agreement, the Debtors continued to engage with their stakeholders and on August 24, 2021, entered into an amended plan support agreement (together with all exhibits and schedules thereto, the “PSA”) with certain of the Debtors’ prepetition secured and unsecured creditors (the “Consenting Creditors” and together with the Debtors, the “PSA Parties”). The PSA contains certain covenants on the part of the PSA Parties, including but not limited to the Consenting Creditors voting in favor of the Amended Joint Chapter 11 Plan of Reorganization of Intelsat S.A. and Its Debtor Affiliates (as amended, the “Plan”), and provides that the Debtors shall achieve certain milestones (unless extended or waived in writing). In connection with the PSA, on August 24, 2021, the Debtors filed the Plan and the Amended Disclosure Statement for the Amended Joint Chapter 11 Plan of Reorganization of Intelsat S.A. and Its Debtor Affiliates (as amended, the “Disclosure Statement”), which describes a variety of topics related to the Chapter 11 Cases, including (i) events leading to the Chapter 11 Cases; (ii) significant events that took place during the Chapter 11 Cases; (iii) certain terms of the Plan; and (iv) certain anticipated risk factors associated with, and anticipated consequences of the Plan. On September 7, 2021, the Bankruptcy Court entered an order approving the Disclosure Statement. A hearing on confirmation of the Plan has been set by the Bankruptcy Court to begin on December 2, 2021.

The filing of the Chapter 11 Cases; ~~(iii)~~constituted ~~certain~~an ~~terms~~event of ~~the~~default ~~Plan;~~that ~~and~~accelerated ~~(iv)~~substantially ~~certain~~all ~~anticipated~~of ~~risk~~our ~~factors~~obligations ~~associated~~under ~~with,~~the ~~and~~documents ~~anticipated~~governing ~~consequences~~the prepetition existing indebtedness of ~~the~~Intelsat ~~Plan~~S.A., ~~The~~Intelsat ~~Bankruptcy~~Luxembourg, ~~Court~~Intelsat isConnect ~~currently~~and ~~scheduled~~Intelsat toJackson. ~~determine~~For additional discussion regarding the ~~adequacy~~impact of the ~~Disclosure~~Chapter ~~Statement~~11 inCases ~~the~~on ~~third~~our ~~quarter~~debt ofobligations, ~~2021~~see Note 11—Debt.

~~The~~While ~~filing of~~ the Chapter 11 Cases ~~constituted~~are anpending, ~~event~~the ofDebtors ~~default~~do ~~that~~not ~~accelerated~~anticipate ~~substantially~~making ~~all~~interest ofpayments ~~our~~due ~~obligations~~ under their respective unsecured debt instruments; however, the ~~documents~~Debtors ~~governing~~expect to make monthly interest payments on their senior secured debt instruments pursuant to the ~~prepetition~~adequate ~~existing~~protection ~~indebtedness~~requirements ofunder ~~Intelsat~~the SDIP Order.~~A.,~~ ~~Intelsat~~The ~~Luxembourg,~~contractual ~~Intelsat~~interest ~~Connect~~expense ~~and~~pursuant ~~Intelsat~~to ~~Jackson.~~our ~~For~~unsecured ~~additional~~debt ~~discussion~~instruments ~~regarding~~that ~~the~~was ~~impact~~not recognized in our condensed consolidated statements of operations was $196.4 million and $192.3 million for the ~~Chapter~~three 11months ~~Cases~~ended onSeptember ~~our~~30, ~~debt~~2020 ~~obligations~~and 2021, ~~see~~respectively, ~~Note~~and ~~12—Debt~~$298.9 million and $576.8 million for the nine months ended September 30, 2020 and 2021, respectively.

~~While~~Delisting ~~the~~and ~~Chapter~~Deregistration 11 Cases are pending, the Debtors do not anticipate making interest payments due under their respective unsecured debt instruments; however, the Debtors expect to make monthly interest payments on their senior secured debt instruments pursuant to the adequate protection requirements under the DIP Order. The contractual interest expense pursuant to our unsecured debt instruments that was not recognized in our condensed consolidated statement of ~~operations~~Intelsat ~~was $102~~S.~~5 million and $192~~A.~~3 million~~ ~~for~~Common ~~the three months ended June 30, 2020 and 2021, respectively, and $102.5 million and $384.5 million for the six months ended June 30, 2020 and 2021, respectively.~~ Shares

~~Delisting~~On May 20, 2020, the New York Stock Exchange (“NYSE”) filed a Form 25 with the SEC to delist the Company’s common shares, $0.01 par value from the NYSE. The delisting became effective 10 days after the Form 25 was filed. The deregistration of ~~Intelsat~~the Scommon shares under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) became effective 90 days after the filing date of the Form 25.A As of September 30, 2021, the common shares remain registered under Section 12(g) and Section 15(d) of the Exchange Act. ~~Common~~However, ~~Shares~~the Company filed a Form 15 to terminate the registration of its common shares under Section 12(g) of the Exchange Act on September 3, 2021. We expect the termination of the registration of the common shares under Section 12(g) to become effective 90 days after the filing date of the Form 15. The Company’s common shares began trading on the OTC Pink Marketplace on May 19, 2020 under the symbol “INTEQ.”

On May 20, 2020, the New York Stock Exchange (“NYSE”) filed a Form 25 with the SEC to delist the Company’s common shares, $0.01 par value from the NYSE. The delisting became effective 10 days after the Form 25 was filed. The deregistration of the common shares under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) became effective 90 days after the filing date of the Form 25. The common shares remain registered under Section 12(g) and Section 15(d) of the Exchange Act. The Company’s common shares began trading on the OTC Pink Marketplace on May 19, 2020 under the symbol “INTEQ.”

Liabilities Subject to Compromise

Prepetition unsecured liabilities of the Debtors subject to compromise under the Chapter 11 proceedings have been distinguished from secured liabilities that are not expected to be compromised and post-petition liabilities in our condensed consolidated balance sheets. Liabilities subject to compromise have been recorded at the amounts expected to be allowed by the Bankruptcy Court. The ultimate settlement amounts of these liabilities remain at the discretion of the Bankruptcy Court and may vary from the expected allowed amounts.

Liabilities subject to compromise consisted of the following (in thousands):

	As ofDecember 31, 2020		As ~~ofJune~~ofSeptember 30, 2021
Accounts payable	$	9,545	$	10,~~645~~671
Debt subject to comprise	9,782,161		9,782,161
Accrued interest on debt subject to compromise	341,676		341,676
Other long-term liabilities subject to compromise	35,136		34,~~748~~735
Total liabilities subject to compromise	$	10,168,518	$	10,169,~~230~~243

Reorganization Items

The expenses, gains and losses directly and incrementally resulting from the Chapter 11 Cases are separately reported as reorganization items in our condensed consolidated statement of operations.

	Three Months EndedJune 30, 2020		Three Months EndedJune 30, 2021		Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
Adjustment of debt discount, premium and issuance costs	$	196,974	$	—	$	196,974	$	—
Debtor-in-possession financing fees	52,182		—		52,182		—
Professional fees	48,971		49,591		48,971		105,373
Other reorganization costs	564		—		564		30
Total reorganization items	$	298,691	$	49,591	$	298,691	$	105,403

Reorganization items consisted of the following (in thousands):


	Three Months Ended September 30, 2020		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2021
Adjustment of debt discount, premium and issuance costs	$	—	$	—	$	196,974	$	—
Debtor-in-possession financing fees	—		46,944		52,182		46,944
Professional fees	36,262		50,825		85,233		156,199
Other reorganization costs	105		547		670		576
Total reorganization items	$	36,367	$	98,316	$	335,059	$	203,719

Going Concern

Our condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the normal course of business. In connection with the preparation of our condensed consolidated financial statements, we conducted an evaluation as to whether there were conditions and events, considered in the aggregate, that raised substantial doubt as to the Company’s ability to continue as a going concern. As reflected in our condensed consolidated financial statements, the Company had cash and cash equivalents of $636.5 million and an accumulated deficit of $8.9 billion as of September 30, 2021. The Company generated income from operations of $95.0 million and a net loss of $471.1 million for the nine months ended September 30, 2021.

were conditions and events, considered in the aggregate, that raised substantial doubt as to the Company’s ability to continue as a going concern. As reflected in our condensed consolidated financial statements, the Company had cash and cash equivalents of $631.9 million and an accumulated deficit of $8.7 billion as of June 30, 2021. The Company generated income from operations of $22.8 million and a net loss of $326.0 million for the six months ended June 30, 2021.

In light of the Company’s Chapter 11 proceedings, our ability to continue as a going concern is contingent upon, among other things, our ability to, subject to the Bankruptcy Court’s approval, implement a business plan of reorganization, emerge from the Chapter 11 proceedings and generate sufficient liquidity following the reorganization to meet our contractual obligations and operating needs. As a result of risks and uncertainties related to, among other things, (i) the Company’s ability to obtain requisite support for the business plan of reorganization from various stakeholders, and (ii) the disruptive effects of the Chapter 11 proceedings on our business making it potentially more difficult to maintain business, financing and operational relationships, substantial doubt exists regarding our ability to continue as a going concern.

The filing of the Chapter 11 Cases constituted an event of default that accelerated substantially all of our obligations under the documents governing the prepetition existing indebtedness of Intelsat S.A., Intelsat Luxembourg, Intelsat Connect and Intelsat Jackson. As such, we have reclassified all such debt obligations, other than debt subject to compromise, to current maturities of long-term debt on our condensed consolidated balance sheets as of December 31, 2020 and ~~June~~September 30, 2021. For additional discussion regarding the impact of the Chapter 11 Cases on our debt obligations, see Note 1211—Debt.

Our condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Note 3—Acquisition of Gogo’s Commercial Aviation Business

On August 31, 2020, following approval from the Bankruptcy Court, Intelsat Jackson and Gogo Inc. (NASDAQ: GOGO), a Delaware corporation (“Gogo”), entered into a purchase and sale agreement (the “Purchase and Sale Agreement”) with respect to Gogo’s commercial aviation business, consisting of all of the equity interests of Gogo LLC and Gogo International Holdings LLC (collectively known as “Intelsat CA”), for $400.0 million in cash, subject to customary adjustments. On December 1, 2020, Intelsat Jackson completed the acquisition pursuant to the terms and conditions of the Purchase and Sale Agreement (the “Gogo Transaction”). Upon completion of the acquisition, the entities comprising the Intelsat CA business became indirect wholly-owned subsidiaries of Intelsat S.A.

Intelsat CA is one of the largest global providers of in-flight broadband connectivity. The acquisition of Intelsat CA brings together two complementary enterprises – one of the world’s largest satellite operators with a leading provider of commercial in-flight broadband and entertainment services, to deliver innovation and long-term value to commercial airlines.

The Company accounted for the business combination in accordance with ASC 805, Business Combinations. The Company recorded the acquisition using the acquisition method of accounting and recognized assets and liabilities at their fair value as of the date of acquisition. The Company based the preliminary allocation of the purchase price on estimates and assumptions known at the date of acquisition that are subject to change within the purchase price allocation period, which is generally one year from the acquisition date.

The net payment associated with the transaction was $386.4 million, which represents total cash consideration of $400.0 million, adjusted for estimated closing cash, indebtedness, working capital excess and any transaction expenses. The primary difference between the net payment and purchase consideration of $409.1 million was the settlement of a pre-existing relationship that was favorable to Intelsat S.A.

The following table summarizes the preliminary allocation of the purchase consideration to tangible and intangible assets acquired and liabilities assumed on the acquisition date, based on estimated fair values both as disclosed in the Company’s 2020 Annual Report and as adjusted for measurement period adjustments identified during the first half of 2021 (in thousands):

	Purchase Price Allocation
	As of December, 1, 2020 (preliminary)		Measurement Period Adjustments		As of June 30, 2021 (as adjusted)
Assets acquired
Cash and cash equivalents	$	9,867	$	—	$	9,867
Receivables, net of allowances	52,849		138		52,987
Inventory	144,014		(5,619)		138,395
Prepaid expenses and other current assets	36,140		—		36,140
Property and equipment	41,328		6,522		47,850
Amortizable intangible assets
Software	45,464		—		45,464
Trade name	1,000		—		1,000
Goodwill	77,620		(2,381)		75,239
Other assets
Supplemental type certificates	24,253		48		24,301
Line fit certificates	21,776		—		21,776
Other assets	100,566		—		100,566
Total assets acquired	554,877		(1,292)		553,585
Liabilities assumed
Current liabilities
Accounts payable and accrued liabilities	(63,300)		779		(62,521)
Contract liabilities	(13,527)		513		(13,014)
Other current liabilities	(25,472)		—		(25,472)
Noncurrent liabilities	(43,522)		—		(43,522)
Total liabilities assumed	(145,821)		1,292		(144,529)
Total purchase consideration	$	409,056	$	—	$	409,056

The fair value estimates of the net assets acquired are based upon calculations and valuations, and estimates and assumptions regarding certain tangible and identifiable intangible assets acquired and liabilities assumed. The excess of the total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities is recorded as goodwill. Goodwill represents expected synergies in mobility services and connectivity, $64.5 million of which is deductible for tax purposes.

The measurement period adjustments decreased the provisionally recognized goodwill by $2.4 million and have been recognized prospectively, which primarily relate to a $6.5 million adjustment in the provisional value of property and equipment and a $5.6 million adjustment in the provisional value of inventory as a result of additional information obtained during the first half of 2021. These adjustments did not have a material impact on our condensed consolidated balance sheets, statements of operations or cash flows in any periods previously reported.

	Pro Forma
	Three Months Ended June 30, 2020		Six Months Ended June 30, 2020
Revenue	$	516,070	$	1,080,220
Net loss	(477,133)		(771,294)

The unaudited pro forma combined financial information is disclosed for illustrative purposes only, and does not purport to represent what the results of operations would actually have been if the business combination occurred as of the dates indicated or what the results would be for any future periods.

~~Acquisition-related~~The ~~costs~~following ~~amounted~~table tosummarizes ~~$0.1 million~~the ~~for~~preliminary ~~both~~allocation of the ~~three~~purchase ~~and~~consideration ~~six~~to ~~months~~tangible ~~ended~~and ~~June~~intangible ~~30,~~assets ~~2020,~~acquired and ~~$1.6 million~~liabilities ~~and~~assumed ~~$5.0 million~~on ~~for~~ the ~~three~~acquisition ~~and~~date, ~~six~~based ~~months~~on ~~ended~~estimated ~~June~~fair ~~30,~~values ~~2021,~~both ~~respectively,~~as ~~which~~disclosed ~~were~~in ~~included~~the ~~within~~Company’s ~~selling,~~2020 ~~general~~Annual Report and ~~administrative~~as ~~expenses~~adjusted infor ~~our~~measurement ~~condensed~~period ~~consolidated~~adjustments ~~statements~~identified ofduring ~~operations.~~the nine months ended September 30, 2021 (in thousands):


	Purchase Price Allocation
	As of December, 1, 2020 (preliminary)		Measurement Period Adjustments		As of September 30, 2021 (as adjusted)
Assets acquired
Cash and cash equivalents	$	9,867	$	—	$	9,867
Receivables, net of allowances	52,849		138		52,987
Inventory	144,014		(5,619)		138,395
Prepaid expenses and other current assets	36,140		—		36,140
Property and equipment	41,328		5,063		46,391
Amortizable intangible assets
Software	45,464		—		45,464
Trade name	1,000		—		1,000
Goodwill	77,620		(8,765)		68,855
Other assets
Supplemental type certificates	24,253		48		24,301
Line fit certificates	21,776		—		21,776
Other assets	100,566		—		100,566
Total assets acquired	554,877		(9,135)		545,742
Liabilities assumed
Current liabilities
Accounts payable and accrued liabilities	(63,300)		779		(62,521)
Contract liabilities	(13,527)		513		(13,014)
Other current liabilities	(25,472)		—		(25,472)
Noncurrent liabilities	(43,522)		—		(43,522)
Total liabilities assumed	(145,821)		1,292		(144,529)
Total purchase consideration	$	409,056	$	(7,843)	$	401,213

The fair value estimates of the net assets acquired are based upon calculations and valuations, and estimates and assumptions regarding certain tangible and identifiable intangible assets acquired and liabilities assumed. The excess of the total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities is recorded as goodwill. Goodwill represents expected synergies in mobility services and connectivity, $42.3 million of which is deductible for tax purposes.

The measurement period adjustments decreased the provisionally recognized goodwill by $8.8 million and have been recognized prospectively, which primarily relate to the resolution of certain purchase price adjustments, a $5.6 million adjustment in the provisional value of inventory and a $5.1 million adjustment in the provisional value of property and equipment as a result of additional information obtained during the nine months ended September 30, 2021. These adjustments did not have a material impact on our condensed consolidated balance sheets, statements of operations or cash flows in any periods previously reported.

The following table presents the unaudited pro forma revenue and net loss of the Company, inclusive of Intelsat CA, as if the acquisition had occurred on January 1, 2020, for the three and nine months ended September 30, 2020 (in thousands):


	Pro Forma
	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Revenue	$	525,965	$	1,606,186
Net loss	(87,165)		(858,459)

Acquisition-related costs amounted to $6.2 million and $6.3 million for the three and nine months ended September 30, 2020, respectively, and $0.5 million and $5.5 million for the three and nine months ended September 30, 2021, respectively, which were included within selling, general and administrative expenses in our condensed consolidated statements of operations.

Note 4—Share Capital

Under our Articles of Incorporation, we have an authorized share capital of $10.0 million, represented by 1.0 billion shares of any class with a nominal value of $0.01 per share. At ~~June~~September 30, 2021, there were approximately 142.2 million common shares issued and outstanding.

Note 5—Revenue

(a) Contract Liabilities

As of December 31, 2020 and ~~June~~September 30, 2021, we had contract liabilities of $405.2 million and $~~805~~1.60 ~~million~~billion, respectively, related to reimbursable costs associated with the FCC Final Order. As of December 31, 2020, these amounts were included within contract liabilities, net of current portion, and as of ~~June~~September 30, 2021, $~~698~~702.0 million of these amounts were included within contract liabilities and $~~107~~333.6 million of these amounts were included within contract liabilities, net of current portion, on our condensed consolidated balance sheets.

For the three months ended ~~June~~September 30, 2020 and 2021, we recognized revenue of $5147.68 million and $4951.95 million, respectively, and for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, we recognized revenue of $~~137~~185.75 million and $~~140~~191.38 million, respectively, that were included in the contract liability balances as of January 1, 2020 and 2021, respectively.

(b) Assets Recognized from the Costs to Obtain a Customer Contract

For the three months ended ~~June~~September 30, 2020 and 2021, we capitalized $1.35 million and $3.72 million for costs to obtain a customer contract, respectively, and amortized $1.1 million ~~during~~and ~~each~~$1.2 ofmillion, ~~those periods~~respectively. For the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, we capitalized $23.49 million and $69.45 million for costs to obtain a customer contract, respectively, and amortized $23.79 million and $23.46 million, respectively. As of December 31, 2020 and ~~June~~September 30, 2021, capitalized costs to obtain a customer contract amounted to $10.4 million and $1416.3 million, respectively, and were included within other assets in our condensed consolidated balance sheets.

Our remaining performance obligation is our expected future revenue under our existing customer contracts and includes both cancelable and non-cancelable contracts. Our remaining performance obligation was approximately $5.86 billion as of ~~June~~September 30, 2021. As of ~~June~~September 30, 2021, the weighted average remaining customer contract life was approximately 3.79 years. Approximately 34 30%, 27 29%, and 3941% of our total remaining performance obligation as of ~~June~~September 30, 2021 is expected to be recognized as revenue during 2021 and 2022, 2023 and 2024, and 2025 and thereafter, respectively. The amount included in the remaining performance obligation represents the full-service charge for the duration of the contract and does not include termination fees. The amount of the termination fees, which is not included in the remaining performance obligation amount, is generally calculated as a percentage of the remaining performance obligation associated with the contract. In certain cases of breach for non-payment or customer financial distress or bankruptcy, we may not be able to recover the full value of certain contracts or termination fees. Our remaining performance obligation includes 100% of the remaining performance obligation of our consolidated ownership interests, which is consistent with the accounting for our ownership interest in these entities.

(d) Business and Geographic Segment Information

We operate in a single industry segment in which we provide satellite and other communications services to our customers around the world. Our revenues are disaggregated by billing region, service type and customer set. Revenue by region is based on the locations of customers to which services are billed. Our satellites are in geosynchronous orbit, and consequently are not attributable to any geographic location. Of our remaining assets, substantially all are located in the U.S. Intelsat CA revenues are allocated to the geographic location where the airline customer is domiciled.

1819

The following table disaggregates revenue by billing region (in thousands, except percentages):

	Three Months EndedJune 30, 2020				Three Months EndedJune 30, 2021				Six Months EndedJune 30, 2020				Six Months EndedJune 30, 2021
	Three Months EndedSeptember 30, 2020				Three Months EndedSeptember 30, 2021				Nine Months EndedSeptember 30, 2020				Nine Months EndedSeptember 30, 2021
North America	$	~~257~~266,~~479~~516	5354	%	$	~~287~~298,~~112~~750	57	%	$	~~492~~758,~~483~~999	5253	%	$	~~572~~871,~~354~~104	57	%
Europe	5254,~~846~~082		11	%	5560,~~512~~585		1112	%	~~106~~160,~~784~~866		11	%	~~108~~169,~~465~~050		11	%
Latin America and Caribbean	5452,~~007~~474		11	%	4850,~~953~~429		10	%	~~105~~157,~~482~~956		11	%	98149,~~660~~088		10	%
Africa and Middle East	5860,~~900~~349		12	%	57,~~551~~502		11	%	~~120~~181,~~803~~151		13	%	~~113~~170,~~472~~973		11	%
Asia-Pacific	5856,~~802~~028		1211	%	58,~~734~~829		1211	%	~~115~~171,~~302~~331		12	%	~~117~~176,~~674~~505		1211	%
Total	$	~~482~~489,~~034~~449			$	~~507~~526,~~862~~095			$	~~940~~1,~~854~~430,303			$	1,~~010~~536,~~625~~720

The following table disaggregates revenue by type of service (in thousands, except percentages):

	Three Months EndedJune 30, 2020				Three Months EndedJune 30, 2021				Six Months EndedJune 30, 2020				Six Months EndedJune 30, 2021
	Three Months EndedSeptember 30, 2020				Three Months EndedSeptember 30, 2021				Nine Months EndedSeptember 30, 2020				Nine Months EndedSeptember 30, 2021
On-Network Revenues
Transponder services	$	~~343~~353,~~599~~758	7172	%	$	~~324~~320,~~053~~260	6461	%	$	~~674~~1,~~934~~028,692	72	%	$	~~649~~969,~~163~~423	6463	%
Managed services	8569,~~050~~438		1814	%	7071,~~228~~856		14	%	~~157~~226,~~311~~749		1716	%	~~139~~211,~~854~~710		14	%
Channel	~~391~~280		—	%	186		—	%	~~816~~1,096		—	%	~~381~~567		—	%
Total on-network revenues	~~429~~423,~~040~~476		8987	%	~~394~~392,~~467~~302		7875	%	~~833~~1,~~061~~256,537		8988	%	~~789~~1,~~398~~181,700		7877	%
Off-Network and Other Revenues
Transponder, MSS and other off-network services	4354,~~617~~478		911	%	3940,~~708~~090		8	%	87141,~~305~~783		910	%	82122,~~303~~393		8	%
Satellite-related services	911,~~377~~495		2	%	911,~~487~~090		2	%	2031,~~488~~983		2	%	1829,~~493~~582		2	%
Total off-network and other revenues	5265,~~994~~973		1113	%	4951,~~195~~180		10	%	~~107~~173,~~793~~766		1112	%	~~100~~151,~~796~~975		10	%
In-flight Services Revenues
Services	—				5767,~~296~~482		1113	%	—				~~102~~169,~~007~~489		1011	%
Equipment	—				615,~~904~~131		13	%	—				1833,~~424~~556		2	%
Total in-flight services revenue	—				6482,~~200~~613		1316	%	—				~~120~~203,~~431~~045		1213	%
Total	$	~~482~~489,~~034~~449			$	~~507~~526,~~862~~095			$	~~940~~1,~~854~~430,303			$	1,~~010~~536,~~625~~720

The following table disaggregates revenue by type of customer application (in thousands, except percentages):

	Three Months EndedJune 30, 2020				Three Months EndedJune 30, 2021				Six Months EndedJune 30, 2020				Six Months EndedJune 30, 2021
	Three Months EndedSeptember 30, 2020				Three Months EndedSeptember 30, 2021				Nine Months EndedSeptember 30, 2020				Nine Months EndedSeptember 30, 2021
Network services	$	~~176~~169,~~699~~594	3735	%	$	~~221~~241,~~034~~737	~~44%~~46	%	$	~~326~~495,~~077~~671	35	%	$	~~435~~676,~~003~~740	4344	%
Media	~~202~~203,~~563~~552		42	%	~~184~~181,~~153~~069		~~36%~~34	%	~~408~~611,~~393~~946		43	%	~~369~~550,~~106~~175		3736	%
Government	96107,~~106~~981		2022	%	95,~~843~~008		~~19%~~18	%	~~191~~299,~~859~~840		2021	%	~~193~~288,~~756~~764		19	%
Satellite-related services	68,~~666~~322		12	%	68,~~832~~281		1%2	%	1422,~~525~~846		2	%	1221,~~760~~041		1	%
Total	$	~~482~~489,~~034~~449			$	~~507~~526,~~862~~095			$	~~940~~1,~~854~~430,303			$	1,~~010~~536,~~625~~720

Our largest customer accounted for approximately 14% and 1110% of our revenue during the three months ended ~~June~~September 30, 2020 and 2021, respectively, and 1514% and 11% during the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively. Our ten largest customers accounted for approximately 4243% and 3635% of our revenue during the three months ended ~~June~~September 30, 2020 and 2021, respectively, and 4041% and 36% during the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively.

Note 6—Net Loss per Share

Basic net loss per common share attributable to Intelsat S.A. (“EPS”) is computed by dividing net loss attributable to Intelsat S.A.’s common shareholders by the weighted average number of common shares outstanding during the periods. Diluted EPS assumes the issuance of common shares pursuant to share-based compensation plans and conversion of the Intelsat S.A. 4.5% Convertible Senior Notes due 2025 (the “2025 Convertible Notes”), unless the effect of such issuances would be anti-dilutive.

	Three Months EndedJune 30, 2020		Three Months EndedJune 30, 2021		Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
Numerator:
Net loss attributable to Intelsat S.A.	$	(405,355)	$	(152,306)	$	(624,126)	$	(327,182)
Denominator:
Basic weighted average shares outstanding (in millions)	142.1		142.2		141.8		142.2
Diluted weighted average shares outstanding (in millions)	142.1		142.2		141.8		142.2
Basic EPS	$	(2.85)	$	(1.07)	$	(4.40)	$	(2.30)
Diluted EPS	$	(2.85)	$	(1.07)	$	(4.40)	$	(2.30)

Due to a net loss for each of the three and six months ended June 30, 2020 and 2021, there were no dilutive securities, and therefore, basic and diluted EPS were the same. The weighted average number of common shares that could potentially dilute basic EPS in the future was 22.1 million and 22.7 million for the three months ended June 30, 2020 and 2021, respectively, and 22.3 million and 22.6 million for the six months ended June 30, 2020 and 2021, respectively, primarily consisting of the 2025 Convertible Notes.

Note 7—Fair Value Measurements

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

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

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

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

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

Recurring Fair Value Measurements

			Fair Value Measurements as of December 31, 2020
Description	As of December 31, 2020		Level 1		Level 2		Level 3
Assets
Marketable securities(1)	$	5,205	$	5,205	$	—	$	—
Common stock warrant(2)	3,239		—		—		3,239
Total assets	$	8,444	$	5,205	$	—	$	3,239
			Fair Value Measurements as of June 30, 2021
Description	As of June 30, 2021		Level 1		Level 2		Level 3
Assets
Marketable securities(1)	$	5,450	$	5,450	$	—	$	—
Common stock warrant(2)	8,771		—		—		8,771
Total assets	$	14,221	$	5,450	$	—	$	8,771

(1)The valuation measurement inputs of these marketable securities represent unadjusted quoted prices in active markets and, accordingly, we have classified such investments as Level 1 within the fair value hierarchy. The cost basis of our marketable securities was $4.0 million and $3.8 million as of December 31, 2020 and June 30, 2021, respectively. We sold nominal

The following table sets forth the computation of basic and diluted EPS (in thousands, except per share data or where otherwise noted):

amounts of marketable securities resulting in a nominal gain during each of the three and six months ended June 30, 2020 and 2021. These amounts were included in other income, net in our condensed consolidated statements of operations.


	Three Months Ended September 30, 2020		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2021
Numerator:
Net loss attributable to Intelsat S.A.	$	(15,931)	$	(145,690)	$	(640,057)	$	(472,872)
Denominator:
Basic weighted average shares outstanding (in millions)	142.1		142.2		141.9		142.2
Diluted weighted average shares outstanding (in millions)	142.1		142.2		141.9		142.2
Basic EPS	$	(0.11)	$	(1.02)	$	(4.51)	$	(3.33)
Diluted EPS	$	(0.11)	$	(1.02)	$	(4.51)	$	(3.33)

~~(2)We~~Due ~~valued~~to ~~the~~a ~~common~~net ~~stock~~loss ~~warrant~~for ~~using~~each aof ~~valuation~~the ~~technique~~three ~~that~~and ~~reflects~~nine ~~the~~months ~~risk-free~~ended ~~interest~~September ~~rate~~30, ~~time~~2020 toand ~~maturity~~2021, ~~volatility~~there ofwere ~~comparable~~no ~~companies~~dilutive securities, and therefore, basic and diluted EPS were the ~~expected~~same. ~~transaction~~The ~~price~~weighted ~~and~~average ~~impact~~number onof ~~this~~common ~~asset~~shares that ~~may~~could ~~result~~potentially ~~from~~dilute abasic ~~potential~~EPS ~~merger~~in orthe ~~acquisition~~future ~~transaction~~was 22.3 million Weand ~~identified~~22.8 million for the ~~inputs~~three ~~used~~months toended ~~calculate~~September ~~the~~30, ~~fair~~2020 ~~value~~and as2021, ~~Level~~respectively, and 22.3 ~~inputs~~million and ~~concluded~~22.6 ~~that~~million for the ~~valuation~~nine inmonths ~~its~~ended ~~entirety~~September is30, ~~classified~~2020 asand ~~Level~~2021, 3respectively, ~~within~~primarily consisting of the ~~fair~~2025 ~~value~~Convertible ~~hierarchy~~Notes.

	Three Months EndedJune 30, 2020		Three Months EndedJune 30, 2021		Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
Balance as of beginning of period	$	3,239	$	8,562	$	3,239	$	3,239
Unrealized gain included in other income, net	—		209		—		5,532
Balance as of end of period	$	3,239	$	8,771	$	3,239	$	8,771

Note 7—Retirement Plans and Other Retiree Benefits

Nonrecurring Fair Value Measurements

The carrying values of certain assets may be adjusted to fair value in subsequent periods on a nonrecurring basis if an event occurs or circumstances change that indicate that the asset is impaired or, for investments in equity securities without readily determinable fair values, observable transactions for identical or similar investments of the same issuer support a change in the investment fair value. During the first quarter of 2020, we recognized an impairment of non-amortizable intangible assets of $12.2 million. This fair value measurement is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs. See Note 11—Goodwill and Other Intangible Assets for additional information.

Other Fair Value Disclosures

See Note 10—Investments, Note 11—Goodwill and Other Intangible Assets and Note 12—Debt for fair value disclosures related to our loan receivables, impairment analysis and debt, respectively. The carrying amounts of the Company's other financial instruments are reasonable estimates of their related fair values due to their short-term nature.

Note 8—Retirement Plans and Other Retiree Benefits

(a) Pension and Other Postretirement Benefits

We maintain a noncontributory defined benefit retirement plan covering employees hired prior to July 19, 2001. The cost of providing benefits to eligible participants under the defined benefit retirement plan is calculated using the plan’s benefit formulas, which take into account the participants’ remuneration, dates of hire, years of eligible service and certain actuarial assumptions. In addition, as part of the overall medical plan, we provide postretirement medical benefits to certain current and future retirees who meet the criteria under the medical plan for postretirement benefit eligibility. In 2015, we amended the defined benefit retirement plan to end the accrual of additional benefits for the remaining active participants. We have received authorization from the Bankruptcy Court to continue making contributions in the ordinary course during our Chapter 11 Cases.

The defined benefit retirement plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). We expect that our future contributions to the defined benefit retirement plan will be based on the minimum funding requirements of the Internal Revenue Code and on the plan’s funded status. Any significant decline in the fair value of our defined benefit retirement plan assets or other adverse changes to the significant assumptions used to determine the plan’s funded status would negatively impact its funded status and could result in increased funding in future years. The impact on the funded status is determined based upon market conditions in effect when we completed our annual valuation.

Included in accumulated other comprehensive loss at ~~June~~September 30, 2021 was $~~111~~110.87 million ($8079.21 million, net of tax) that has not yet been recognized in net periodic benefit cost.

The tables below show the components of net periodic benefit cost (income) for the three and nine months ended September 30, 2020 and 2021 (in thousands). These amounts are recognized in other income (expense), net in the condensed consolidated statements of operations.

	Pension Benefits
	Three Months EndedJune 30, 2020		Three Months EndedJune 30, 2021		Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
	Three Months EndedSeptember 30, 2020		Three Months EndedSeptember 30, 2021		Nine Months EndedSeptember 30, 2020		Nine Months EndedSeptember 30, 2021
Interest cost	$	2,962	$	2,030	$	58,~~925~~888	$	46,~~060~~091
Expected return on plan assets	(5,810)		(5,592)		(1117,~~621~~431)		(1116,~~183~~775)
Amortization of unrecognized net loss	1,600		2,046		34,~~200~~799		46,~~091~~136
Net periodic benefit income	$	(1,248)	$	(1,516)	$	(23,~~496~~744)	$	(34,~~032~~548)

	Other Postretirement Benefits
	Three Months EndedJune 30, 2020		Three Months EndedJune 30, 2021		Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
	Three Months EndedSeptember 30, 2020		Three Months EndedSeptember 30, 2021		Nine Months EndedSeptember 30, 2020		Nine Months EndedSeptember 30, 2021
Interest cost	$	266	$	149	$	~~532~~798	$	~~298~~447
Amortization of unrecognized prior service credits	(636)		(636)		(1,~~272~~908)		(1,~~272~~909)
Amortization of unrecognized net gain	(305)		(347)		(~~610~~915)		(~~693~~1,039)
Net periodic benefit income	$	(675)	$	(834)	$	(12,~~350~~025)	$	(12,~~667~~501)

(b) Other Retirement Plans

We maintain a defined contribution retirement plan qualified under the provisions of Section 401(k) of the Internal Revenue Code for our employees in the United States. We have received authorization from the Bankruptcy Court to continue making our contributions in the ordinary course during the Chapter 11 Cases. We recognized compensation expense for this plan of $2.2 million and $3.43 million for the three months ended ~~June~~September 30, 2020 and 2021, respectively, and $46.57 million and $610.81 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively. We also maintain other defined contribution retirement plans in several non-U.S. jurisdictions, but such plans are not material to our financial position or results of operations.

Note 98—Satellites and Other Property and Equipment

(a) Satellites and Other Property and Equipment, net

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

	As ofDecember 31, 2020		As ~~ofJune~~ofSeptember 30, 2021
Satellites and launch vehicles	$	10,500,021	$	1011,~~925~~090,~~098~~649
Information systems and ground segment	1,062,216		1,~~126~~155,~~371~~922
Buildings and other	322,093		~~343~~320,~~952~~534
Total cost	11,884,330		12,~~395~~567,~~421~~105
Less: accumulated depreciation	(7,126,453)		(7,~~436~~585,~~494~~711)
Total	$	4,757,877	$	4,~~958~~981,~~927~~394

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

Satellites and other property and equipment, net of accumulated depreciation as of December 31, 2020 and ~~June~~September 30, 2021, included construction-in-progress of $768.6 million and $1.12 billion, respectively. These amounts relate primarily to satellites under construction and related launch services. As of ~~June~~September 30, 2021, we incurred C-band clearing related costs and expenses of $~~950~~1.61 ~~million~~billion, of which $~~794~~972.02 million was capitalized. Of this capitalized amount, $~~764~~887.96 million and $2984.16 million were capitalized as satellites and other property and equipment, net of accumulated depreciation, and other current assets, respectively, in the condensed consolidated balance sheets. An estimated $~~737~~904.58 million of the capitalized costs is expected to be reimbursable under the FCC Final Order.

Interest costs of $610.25 million and $1923.24 million were capitalized for the three months ended ~~June~~September 30, 2020 and 2021, respectively, and $1020.27 million and $3558.36 million were capitalized for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively. Additionally, depreciation expense was $154.54 million and $~~156~~151.73 million for the three months ended ~~June~~September 30, ~~2020 and 2021, respectively, and $308.9 million and $311.5 million for the six months ended June 30, 2020 and 2021, respectively.~~

2020 and 2021, respectively, and $463.3 million and $462.8 million for the nine months ended September 30, 2020 and 2021, respectively.

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

~~(b)~~Note ~~Satellite~~9—Investments ~~Launches~~

Galaxy 30, the first satellite in Intelsat’s Galaxy fleet refresh plan, was successfully launched on August 15, 2020. Galaxy 30 replaced Galaxy 14 at 125ºW serving media customers in the North America region. Galaxy 30 is the first four-frequency Intelsat satellite with C-, Ku-, Ka- and L-band capabilities. In addition, Galaxy 30 offers broadband, mobility and network services to mobile network, enterprise and government customers in the North America region. The satellite also plays an important role in the Company’s U.S. C-band spectrum transition plan. Galaxy 30 entered into service in February 2021.

Note 10—Investments

We have an ownership interest in two entities that meet the criteria of a variable interest entity (“VIE”): Horizons Satellite Holdings LLC (“Horizons Holdings”) and Horizons-3 Satellite LLC (“Horizons 3”), which are discussed in further detail below, including our analyses of the primary beneficiary determination as required under ASC 810, Consolidation (“ASC 810”). We also own noncontrolling investments in equity securities and loan receivables as discussed further below.

(a) Horizons Holdings

Horizons Holdings is a joint venture with JSAT International, Inc. (“JSAT”) that consists of two investments: Horizons-1 Satellite LLC and Horizons-2 Satellite LLC. Horizons Holdings borrowed from JSAT a portion of the funds necessary to finance the construction of the Horizons 2 satellite pursuant to a loan agreement. The borrowing was subsequently repaid. We provide certain services to the joint venture and in return utilize capacity from the joint venture.

We have determined that this joint venture meets the criteria of a VIE under ASC 810, and we have concluded that we are the primary beneficiary because decisions relating to any future relocation of the Horizons 2 satellite, the most significant asset of the joint venture, are effectively controlled by us. In accordance with ASC 810, as the primary beneficiary, we consolidate Horizons Holdings within our condensed consolidated financial statements. Total assets of Horizons Holdings were $14.2 million and $129.21 million as of December 31, 2020 and ~~June~~September 30, 2021, respectively. Total liabilities were nominal as of both December 31, 2020 and ~~$1.6~~September ~~million as of June~~ 30, 2021.

We have a revenue sharing agreement with JSAT related to services sold on the Horizons 1 and Horizons 2 satellites. We are responsible for billing and collection for such services, and we remit 50% of the revenue, less applicable fees and commissions, to JSAT. Amounts payable to JSAT related to the revenue sharing agreement, net of applicable fees and commissions, from the Horizons 1 and Horizons 2 satellites were $1.8 million and $32.08 million as of December 31, 2020 and ~~June~~September 30, 2021, respectively.

(b) Horizons-3 Satellite LLC

On November 4, 2015, we entered into an additional joint venture agreement with JSAT. The joint venture, Horizons 3, was formed for the purpose of developing, launching, managing, operating and owning a high-performance satellite located at the 169ºE orbital location.

Horizons 3, which is 50% owned by each of Intelsat and JSAT, was set up with joint sharing of management authority and equal rights to profits and revenues from the joint venture. Similar to Horizons Holdings, we have a revenue sharing agreement with JSAT related to services sold on the Horizons 3e satellite. In addition, we are responsible for billing and collection for such services, and we remit 50% of the revenue, less applicable fees and commissions, to JSAT. Amounts payable to JSAT related to the revenue sharing agreement, net of applicable fees and commissions, from the Horizons 3e satellite were $5.0 million and $78.78 million as of December 31, 2020 and ~~June~~September 30, 2021, respectively.

We have determined that this joint venture meets the criteria of a VIE under ASC 810; however, we have concluded that we are not the primary beneficiary and therefore do not consolidate Horizons 3. The assessment considered both quantitative and qualitative factors, including an analysis of voting power and other means of control of the joint venture, as well as each owner’s exposure to risk of loss or gain. Because we and JSAT equally share control over the operations of the joint venture and also equally share exposure to risk of losses or gains, we concluded that we are not the primary beneficiary of Horizons 3. Our investment, included within other assets in our condensed consolidated balance sheets, is accounted for using the equity method of accounting. The investment balance, which is equivalent to our maximum exposure to loss, was $103.8 million and $103.7 million as of December 31, 2020 and ~~June~~September 30, 2021, respectively. The investment balance exceeded our equity in the net assets of Horizons 3 by $10.9 million and $10.53 million as of December 31, 2020 and ~~June~~September 30, 2021, respectively. This basis difference represents the capitalized interest that we incurred in relation to financing our investment, and we recognize it as a reduction of our equity in earnings of Horizons 3 on a straight-line basis over the life of the satellite. We recognized a nominal amount of equity in losses of Horizons 3 in other income, net for each of the three and nine months ended September 30, 2020 and 2021.

In connection with our investment in Horizons 3, we entered into a capital contribution and subscription agreement, which requires us to fund our 50% share of the amounts due in order to maintain our respective 50% interest in the joint venture. Pursuant to this agreement, we made contributions of $2.7 million for the year ended December 31, 2020, with no comparable amounts during the

~~over~~nine ~~the~~months ~~life~~ended September 30, 2021. We received distributions of $9.0 million for the ~~satellite~~year ended December 31, 2020, with no comparable amounts for the nine months ended September 30, 2021. WeThe ~~recognized~~Company autilizes ~~nominal~~the ~~amount~~cumulative ofearnings approach to determine whether distributions received from equity inmethod ~~losses~~investees are returns on investment or returns of investment. In addition, our indirect subsidiary that holds our investment in Horizons 3 inhas ~~other~~entered ~~income~~into a security and pledge agreement with Horizons 3, ~~net~~pursuant ~~for~~to ~~each~~which ofit ~~the~~has ~~three~~granted ~~and~~a ~~six~~security ~~months~~interest ~~ended~~in ~~June~~its 30membership interest in Horizons 3. Further, ~~2020~~our indirect subsidiary has granted a security interest to Horizons 3 in its customer capacity contracts and ~~2021~~its ownership interest in its wholly-owned subsidiary that holds the FCC license required for the joint venture’s operations.

InThe ~~connection with our investment in~~ Horizons 3,3e wesatellite entered into aservice ~~capital~~in ~~contribution~~January ~~and~~2019. ~~subscription~~The ~~agreement,~~Company ~~which~~purchases ~~requires~~satellite uscapacity toand ~~fund~~related ~~our~~services ~~50%~~from ~~share~~the ofHorizons ~~the~~3 ~~amounts~~joint ~~due~~venture, inand ~~order~~then tosells ~~maintain~~that ~~our~~capacity ~~respective~~to ~~50%~~its ~~interest~~customers. inWe ~~the~~incurred ~~joint~~direct ~~venture.~~costs ~~Pursuant~~of revenue related to ~~this~~these ~~agreement,~~purchases weof ~~made~~$4.9 ~~contributions~~million ofand $24.75 million ~~for~~during the ~~year~~three months ended ~~December~~September 3130, 2020 ~~with~~and no2021, ~~comparable~~respectively, ~~amounts~~and $14.9 million and $13.4 million during the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively. WeThe ~~received~~Company ~~distributions~~also ofsells ~~$9.0~~managed ~~million~~ground ~~for~~network services to the ~~year~~Horizons ~~ended~~3 ~~December~~joint ~~31,~~venture ~~2020~~and ~~with~~provides noprogram ~~comparable~~management ~~amounts~~services for ~~the~~a ~~six~~fee. ~~months~~We ~~ended~~recorded ~~June~~an ~~30,~~offset ~~2021.~~to ~~The~~direct ~~Company~~costs ~~utilizes~~of revenue related to the ~~cumulative~~provision ~~earnings~~of ~~approach~~these toservices ~~determine~~of ~~whether~~$1.7 ~~distributions~~million ~~received~~during ~~from~~each ~~equity~~of ~~method~~the ~~investees~~three ~~are~~months ~~returns~~ended onSeptember ~~investment~~30, or2020 ~~returns~~and of2021, ~~investment~~and $5.2 Inmillion ~~addition,~~during ~~our~~each ~~indirect~~of ~~subsidiary~~the ~~that~~nine ~~holds~~months ~~our~~ended ~~investment~~September in30, ~~Horizons~~2020 3and ~~has~~2021. ~~entered~~On ~~into~~the acondensed ~~security~~consolidated ~~and~~balance ~~pledge~~sheets ~~agreement~~as ~~with~~of ~~Horizons~~September 330, ~~pursuant~~2021, to$0.9 ~~which~~million itdue ~~has~~from ~~granted~~Horizons a3 ~~security~~was ~~interest~~included in ~~its~~receivables ~~membership~~with ~~interest~~no incomparable ~~Horizons~~amount 3.as ~~Further,~~of ~~our~~December ~~indirect~~31, ~~subsidiary~~2020, ~~has~~and ~~granted~~$1.5 amillion ~~security~~due ~~interest~~ to Horizons 3 inwas ~~its~~included ~~customer~~in ~~capacity~~accounts ~~contracts~~payable and ~~its~~accrued ~~ownership~~liabilities ~~interest~~as inof ~~its~~both ~~wholly-owned~~December ~~subsidiary~~31, ~~that~~2020 ~~holds~~and ~~the~~September ~~FCC~~30, ~~license required for the joint venture’s operations~~2021.

The Horizons 3e satellite entered into service in January 2019. The Company purchases satellite capacity and related services from the Horizons 3 joint venture, and then sells that capacity to its customers. We incurred direct costs of revenue related to these purchases of $5.0 million and $4.5 million during the three months ended June 30, 2020 and 2021, respectively, and $10.0 million and $9.0 million during the six months ended June 30, 2020 and 2021, respectively. The Company also sells managed ground network services to the Horizons 3 joint venture and provides program management services for a fee. We recorded an offset to direct costs of revenue related to the provision of these services of $1.8 million and $1.7 million during the three months ended June 30, 2020 and 2021, respectively, and $3.5 million during each of the six months ended June 30, 2020 and 2021. On the condensed consolidated balance sheets as of June 30, 2021, $0.9 million due from Horizons 3 was included in receivables with no comparable amount as of December 31, 2020, and $1.5 million due to Horizons 3 was included in accounts payable and accrued liabilities as of both December 31, 2020 and June 30, 2021.

The Company holds noncontrolling equity investments in ~~five~~four separate privately held companies, including investments in equity securities without readily determinable fair values and common stock warrants.

In accordance with ASC 321, Investments—Equity Securities, we use the measurement alternative to measure the fair value of our investments in equity securities without readily determinable fair values. Accordingly, these investments are measured at cost, less any impairment, and are adjusted for changes in fair value resulting from observable transactions for identical or similar investments of the same issuer. We recognized an increase in fair value relating to investments of $7.73 million and $15.0 million for the three and ~~six~~nine months ended ~~June~~September 30, 2021, respectively, with no comparable amounts for the three and ~~six~~nine months ended ~~June~~September 30, 2020, which are recognized in other income, net in our condensed consolidated statements of operations. Additionally, during the second quarter of 2021, we sold all of our interest in one of our investments for $15.0 million, resulting in a gain of $5.3 million ~~for the three and six months ended June 30~~, ~~2021,~~ which iswas recognized in other income, net in our condensed consolidated statements of operations. These investments were recorded in other assets in our condensed consolidated balance sheets and had a total carrying value of $31.9 million and $2945.89 million as of December 31, 2020 and ~~June~~September 30, 2021, respectively.

We measure our stock warrants at fair value and recognized an increase in fair value of stock warrants of $05.5 million for the six months ended June 30, 2021. These warrants were recorded in other assets in our condensed consolidated balance sheets and had a cumulative fair value of $3.2 million and $58.58 million ~~for~~as ~~the~~of ~~three~~December 31, 2020 and ~~six~~June 30, 2021, respectively. During the three months ended ~~June~~September 30, 2021, ~~respectively,~~these ~~with~~warrants nowere ~~comparable~~converted ~~amounts~~into ~~for~~common ~~the~~shares ~~three~~of ~~and~~a ~~six~~newly ~~months~~merged ~~ended~~public ~~June~~company. 30As a result of the conversion, ~~2020~~we ~~(see~~recognized ~~Note~~a gain of $7~~—Fair~~.3 ~~Value~~million, ~~Measurements~~as ~~and~~well ~~Note~~as ~~13—Derivative~~an ~~Instruments~~additional ~~and~~gain ~~Hedging~~of ~~Activities~~$1.8 million related to an amendment fee for ~~additional~~a ~~information).~~loan ~~The~~receivable, ~~warrants~~both ~~were~~of ~~recorded~~which are included in other ~~assets~~income, net in our condensed consolidated ~~balance~~statements ~~sheets~~of ~~and~~operations ~~had~~for athe ~~cumulative~~three ~~fair~~and ~~value~~nine ofmonths ~~$3.2~~ended ~~million~~September ~~and~~30, $82021.8 ~~million~~There aswere ofno ~~December~~comparable 31amounts for the three and nine months ended September 30, 2020. ~~and~~As ~~June~~of September 30, 2021, ~~respectively~~these common shares had a fair value of $16.0 million, which is included in other assets in our condensed consolidated balance sheets.

(d) Loan Receivables

The Company has loan receivables from three privately held companies that it is holding for long-term investment. These loan receivables are reported at amortized cost, net of the allowance for credit losses. Amortized cost is the outstanding principal, adjusted for unamortized discounts and deferred transaction costs. The Company recognizes interest income on loan receivables using the effective-interest method applied on a loan-by-loan basis. Direct costs associated with originating loans are offset against any related fees received and the balance, along with any premium or discount, is deferred and amortized as an adjustment to interest income over the term of the related loan receivable using the effective interest method.

Loan receivables were recorded in other assets in our condensed consolidated balance sheets at an amortized cost basis of $71.2 million and $7374.70 million as of December 31, 2020 and ~~June~~September 30, 2021, respectively. As of December 31, 2020 and ~~June~~September 30, 2021, $1.9 million and $23.1 million, respectively, of accrued interest related to our loan receivables was recorded in prepaid expenses and other current assets in our condensed consolidated balance sheets. We recognized interest income related to our loan receivables of $1.0 million ~~for~~and ~~each~~$1.1 ofmillion for the three months ended ~~June~~September 30, 2020 and 2021, respectively, and $12.9 million and $23.1 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively.

A loan is determined to be impaired and placed on non-accrual status when, in management’s judgment based on current information and events, it is probable that the Company will be unable to collect all amounts due under the contractual terms of the applicable loan agreement. We recognized impairment losses of $0.6 million related to loan receivables during the three and ~~six~~nine months ended ~~June~~September 30, 2020, with no comparable amounts for the three and ~~six~~nine months ended ~~June~~September 30, 2021.

The fair value of loan receivables is evaluated on a loan-by-loan basis, and is determined based on assessments of discounted cash flows that are considered probable of collection. We consider these inputs to be Level 3 within the fair value hierarchy under ASC 820. The cumulative fair value of our loan receivables as of December 31, 2020 and ~~June~~September 30, 2021 was $72.9 million and $7577.94 million, respectively.

Note 1110—Goodwill and Other Intangible Assets

(a) Goodwill

As a result of the Gogo Transaction, we provisionally recognized goodwill of $77.6 million as of December 1, 2020, which was subsequently decreased by $28.48 million as a result of measurement period adjustments during the ~~first~~nine ~~half~~months ofended September 30, 2021. See Note 3—Acquisition of Gogo’s Commercial Aviation Business for additional discussion.

The carrying amounts of goodwill consisted of the following (in thousands):

	As ofDecember 31, 2020		As ~~ofJune~~ofSeptember 30, 2021
Goodwill	$	6,858,447	$	6,~~856~~849,~~066~~682
Accumulated impairment losses	(4,160,200)		(4,160,200)
Net carrying amount	$	2,698,247	$	2,~~695~~689,~~866~~482

(b) Orbital Locations, Trade Name and Other Intangible Assets

Orbital Locations and Trade Name. During the first quarter of 2020, we recognized an impairment of our trade name intangible asset of $12.2 million, which is included within impairment of non-amortizable intangible assets in the condensed consolidated statements of operations.

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

	As ofDecember 31, 2020		As ~~ofJune~~ofSeptember 30, 2021
Orbital locations	$	2,250,000	$	2,250,000
Trade name	45,000		45,000
Total non-amortizable intangible assets	$	2,295,000	$	2,295,000

Other Intangible Assets. The carrying amounts and accumulated amortization of acquired intangible assets subject to amortization consisted of the following (in thousands):

	As of December 31, 2020						As of ~~June~~September 30, 2021
	Gross CarryingAmount		AccumulatedAmortization		Net CarryingAmount		Gross CarryingAmount		AccumulatedAmortization		Net CarryingAmount
Backlog and other	$	744,760	$	(722,697)	$	22,063	$	744,760	$	(~~727~~729,~~740~~782)	$	1714,~~020~~978
Customer relationships	534,030		(309,486)		224,544		534,030		(~~319~~324,~~719~~835)		~~214~~209,~~311~~195
Software	45,808		(1,846)		43,962		4749,~~848~~122		(710,~~774~~940)		4038,~~074~~182
Total	$	1,324,598	$	(1,034,029)	$	290,569	$	1,~~326~~327,~~638~~912	$	(1,~~055~~065,~~233~~557)	$	~~271~~262,~~405~~355

Intangible assets are amortized based on the expected pattern of consumption. Amortization expense was $7.8 million and $1110.13 million for the three months ended ~~June~~September 30, 2020 and 2021, respectively, and $1523.63 million and $2131.25 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively.

Note 1211—Debt

As discussed in Note 2—Chapter 11 Proceedings, Ability to Continue as a Going Concern and Other Related Matters, the filing of the Chapter 11 Cases constituted an event of default that accelerated substantially all of our obligations under the documents governing the prepetition existing indebtedness of Intelsat S.A., Intelsat Luxembourg, Intelsat Connect and Intelsat Jackson. As such, we have reclassified all such debt obligations, other than debt subject to compromise, to current maturities of long-term debt on our condensed consolidated balance sheet as of ~~June~~September 30, 2021. Any efforts to enforce payment obligations related to the acceleration of

of our debt have been automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. While the Chapter 11 Cases are pending, the Debtors do not anticipate making interest payments due under their respective unsecured debt instruments; however, the Debtors expect to make monthly interest payments on their senior secured debt instruments pursuant to the adequate protection requirements under the DIP Order.

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

	As of December 31, 2020				As of ~~June~~September 30, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Intelsat S.A.:
4.5% Convertible Senior Notes due June 2025 (1)	$	402,500	$	130,813	$	402,500	$	~~120~~56,~~750~~350
Unamortized prepaid debt issuance costs and discount on 4.5% Convertible Senior Notes	—		—		—		—
Total Intelsat S.A. obligations	402,500		130,813		402,500		~~120~~56,~~750~~350
Intelsat Luxembourg:
7.75% Senior Notes due June 2021 (1)	421,219		14,743		421,219		82,~~424~~106
Unamortized prepaid debt issuance costs on 7.75% Senior Notes	—		—		—		—
8.125% Senior Notes due June 2023 (1)	1,000,000		130,000		1,000,000		~~155~~95,000
Unamortized prepaid debt issuance costs on 8.125% Senior Notes	—		—		—		—
12.5% Senior Notes due November 2024 (1)	403,350		42,352		403,350		5430,~~452~~251
Unamortized prepaid debt issuance costs and discount on 12.5% Senior Notes	—		—		—		—
Total Intelsat Luxembourg obligations	1,824,569		187,095		1,824,569		~~217~~127,~~876~~357
Intelsat Connect Finance:
9.5% Senior Notes due February 2023 (1)	1,250,000		334,375		1,250,000		~~437~~312,500
Unamortized prepaid debt issuance costs and discount on 9.5% Senior Notes	—		—		—		—
Total Intelsat Connect Finance obligations	1,250,000		334,375		1,250,000		~~437~~312,500
Intelsat Jackson:
9.5% Senior Secured Notes due September 2022	490,000		543,900		490,000		~~575~~578,~~750~~813
Unamortized prepaid debt issuance costs and discount on 9.5% Senior Secured Notes	(7,495)		—		(54,~~491~~450)		—
8% Senior Secured Notes due February 2024	1,349,678		1,373,297		1,349,678		1,~~393~~385,~~543~~107
Unamortized prepaid debt issuance costs and premium on 8% Senior Secured Notes	(3,072)		—		(2,~~631~~403)		—
5.5% Senior Notes due August 2023 (1)	1,985,000		1,349,800		1,985,000		1,~~111~~091,~~600~~750
Unamortized prepaid debt issuance costs on 5.5% Senior Notes	—		—		—		—
9.75% Senior Notes due July 2025 (1)	1,885,000		1,347,775		1,885,000		1,~~093~~050,~~300~~888
Unamortized prepaid debt issuance costs on 9.75% Senior Notes	—		—		—		—
8.5% Senior Notes due October 2024 (1)	2,950,000		2,079,750		2,950,000		1,~~740~~666,~~500~~750
Unamortized prepaid debt issuance costs and premium on 8.5% Senior Notes	—		—		—		—
Senior Secured Credit Facilities due November 2023	2,000,000		2,025,000		2,000,000		2,~~030~~022,~~000~~140
Unamortized prepaid debt issuance costs and discount on Senior Secured Credit Facilities	(16,955)		—		(1412,~~267~~869)		—
Senior Secured Credit Facilities due January 2024	395,000		400,925		395,000		~~401~~400,~~913~~680
Unamortized prepaid debt issuance costs and discount on Senior Secured Credit Facilities	(1,238)		—		(~~1,050~~952)		—
6.625% Senior Secured Credit Facilities due January 2024	700,000		714,000		700,000		~~712~~709,~~250~~918
Unamortized prepaid debt issuance costs and discount on Senior Secured Credit Facilities	(2,194)		—		(1,~~862~~689)		—

	As of December 31, 2020				As of ~~June~~September 30, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Superpriority Secured DIP Credit Facilities due July 2021	1,000,000		1,011,250		1,000,000		1,003,750
Superpriority Senior Secured DIP Credit Facilities due July 2021	1,000,000		1,011,250		—		—
Total Intelsat Jackson obligations	12,723,724		10,845,697		12,729,377		10,062,606
Superpriority Senior Secured DIP Credit Facilities due July 2022	—		—		1,250,000		1,257,288
Total Intelsat Jackson obligations	12,723,724		10,845,697		12,982,315		10,163,334
Eliminations:
8.125% Senior Notes of Intelsat Luxembourg due June 2023 owned by Intelsat Jackson (1)	(111,663)		(14,517)		(111,663)		(1710,~~308~~608)
Unamortized prepaid debt issuance costs on 8.125% Senior Notes	—		—		—		—
12.5% Senior Notes of Intelsat Luxembourg due November 2024 owned by Intelsat Connect Finance, Intelsat Jackson and Intelsat Envision (1)	(403,245)		(42,341)		(403,245)		(5430,~~438~~243)
Unamortized prepaid debt issuance costs and discount on 12.5% Senior Notes	—		—		—		—
Total eliminations:	(514,908)		(56,858)		(514,908)		(7140,~~746~~851)
Total Intelsat S.A. debt	15,685,885		11,441,122		15,~~691~~944,~~538~~476		10,~~766~~618,~~986~~690
Less: current maturities of long-term debt	5,903,724		6,068,372		56,~~909~~162,~~377~~315		6,~~117~~353,~~206~~946
Less: debt included in liabilities subject to compromise	9,782,161		5,372,750		9,782,161		4,~~649~~264,~~780~~744
Total Intelsat S.A. long-term debt	$—	—	$—	—	$—	—	$—	—

(1)In connection with the Chapter 11 Cases, these balances have been reclassified as liabilities subject to compromise in our condensed consolidated balance sheet as of ~~June~~September 30, 2021. As of April 15, 2020, the Company ceased making principal and interest payments, and as of May 13, 2020 ceased accruing interest expense in relation to this long-term debt that was reclassified as liabilities subject to compromise.

The fair value for publicly traded instruments is determined using quoted market prices, and the fair value for non-publicly traded instruments is based upon composite pricing from a variety of sources, including market leading data providers, market makers and leading brokerage firms. Substantially all of the inputs used to determine the fair value of our debt are classified as Level 1 inputs within the fair value hierarchy from ASC 820, except our senior secured credit facilities and our 2025 Convertible Notes, the inputs for which are classified as Level 2, and Intelsat Luxembourg’s 8.125% Senior Notes due 2023 and 12.5% Senior Notes due 2024, the inputs for which are classified as Level 3. While the Company’s Chapter 11 proceedings remain ongoing, trading and fair value pricing may be more volatile and limited.

Intelsat Jackson Superpriority Senior Secured Debtor-in-Possession Term Loan Facility

On June 179, 2020, (Intelsat Jackson received approval from the ~~“Closing~~Bankruptcy ~~Date”),~~Court to enter into the Original DIP ~~Debtors~~Facility in an aggregate principal amount of $1.0 billion on the terms and conditions as set forth in the Original DIP ~~Lenders~~Credit Agreement and on June 17, 2020, the DIP Debtors entered into the Original DIP Credit Agreement. On September 14, a2021, ~~non-amortizing~~the ~~multiple~~DIP ~~draw~~Debtors ~~superpriority~~received ~~secured~~approval ~~debtor-in-possession~~from ~~term~~the ~~loan~~Bankruptcy ~~facility,~~Court for the DIP Order to enter into the New DIP Facility in an aggregate principal amount of $1.05 billion on the terms and conditions as set forth in the New DIP Credit Agreement, and on September 14, 2021, Intelsat Jackson and certain of the DIP Debtors entered into the New DIP Credit Agreement. The New DIP Facility provided $1.25 billion in new money at closing for Intelsat Jackson to, among other things, refinance the Original DIP Facility and, provides the ability for Intelsat Jackson, at its sole discretion, to make an incremental $250.0 million draw on the terms and conditions set forth therein. See Note 2—Chapter 11 Proceedings, Ability to Continue as a Going Concern and Other Related Matters.

Intelsat Jackson borrowed $500.0 million of term loans under the DIP Facility on the Closing Date. Under the DIP Facility, Intelsat Jackson may, at its sole discretion, make incremental draws of the lesser of $250.0 million and the remaining available commitments of the DIP Lenders. Intelsat Jackson made two additional draws of $250.0 million each on November 27, 2020 and December 14, 2020, bringing the total aggregate principal amount outstanding under the DIP Facility to $1.0 billion as of both December 31, 2020 and June 30, 2021. Drawn amounts under the New DIP Facility bear interest at either (i) 43.575% per annum plus a base rate of the highest of (a) the Federal Funds Effective Rate plus ½ of 1.0%, (b) the Prime Rate as in effect on such day and (c) the ~~London Inter-Bank Offered Rate (“~~LIBOR Rate”) for a one-month ~~interest~~Interest ~~period~~Period on such day (or if such day is not a ~~business~~Business ~~day~~Day (as defined in the New DIP Credit Agreement), the immediately preceding ~~business~~Business ~~day~~Day), plus 1.0%, or (ii) 54.575% plus the LIBOR Rate. ~~For purposes of the DIP Facility, the LIBOR Rate has an effective floor rate of 1.0%.~~ Undrawn amounts under the New DIP Facility shall be subject to a ticking fee of 3.6% of the amount of commitments of the DIP Lenders from the entry of the DIP Order until such commitments ~~terminate~~have terminated, which ticking fee shall be payable on the last day of each fiscal quarter prior to the date such commitments ~~terminate~~have been terminated and on the date of such termination. IfDuring anthe ~~event~~continuance of ~~default~~a ~~under~~payment ~~the~~event ~~DIP~~of ~~Facility occurs~~default, ~~the overdue amounts under the DIP Facility would bear interest at an additional 2.0% per annum above the interest rate otherwise applicable.~~

The proceeds of the DIP Facility may be used, among other things, to pay for (i) working capital needs of the DIP Debtors in the ordinary course of business, (ii) potential C-band relocation costs, (iii) investment and other general corporate purposes, and (iv) the

~~costs~~overdue ~~and~~amounts ~~expenses~~under ~~of administering~~ the ~~Chapter~~New ~~11 Cases. The maturity date of the~~ DIP Facility, aswill ~~amended~~bear byinterest ~~DIP~~at ~~Amendment~~an Noadditional 2.0% 3per ~~discussed~~annum ~~below,~~above ~~is July 13, 2022, subject to certain extensions pursuant to~~ the ~~terms~~interest ofrate ~~the~~otherwise ~~DIP Credit Agreement~~applicable.

The ~~DIP~~use ~~Credit~~of ~~Agreement~~proceeds ~~includes~~under ~~customary~~the ~~negative~~New ~~covenants~~DIP ~~for~~Facility ~~debtor-in-possession~~include: ~~loan~~(i) ~~agreements~~the payment of ~~this~~working ~~type,~~capital ~~including~~of ~~covenants~~the ~~limiting~~DIP ~~the~~Debtors ~~Company’s~~in ~~and~~the ~~its~~ordinary ~~subsidiaries’~~course ~~ability~~of tobusiness, ~~among~~(ii) ~~other~~C-band ~~things~~relocation costs, ~~incur~~(iii) ~~additional~~investment ~~indebtedness,~~and ~~create~~other ~~liens~~general oncorporate ~~assets~~purposes, ~~make~~(iv) ~~investments,~~the ~~loans~~payment orof ~~advances,~~the ~~engage~~costs inand ~~mergers,~~expenses ~~consolidations,~~of ~~sales~~administering ofthe ~~assets~~Chapter ~~and~~11 ~~acquisitions~~Cases, ~~pay~~(v) ~~dividends~~the ~~and~~adequate ~~distributions~~protection payments and ~~make~~(vi) ~~payments~~the inrepayment ~~respect~~of obligations under the Original DIP Credit Agreement. The maturity date of ~~junior~~the orNew ~~prepetition~~DIP ~~indebtedness,~~Facility inis ~~each~~July ~~case~~13, 2022, subject to ~~customary~~the ~~exceptions~~DIP ~~for~~Debtors’ ~~debtor-in-possession~~ability ~~loan~~to ~~agreements~~extend offor ~~this~~regulatory ~~type~~purposes.

The New DIP Credit Agreement ~~also~~ includes ~~certain~~ customary ~~representations~~negative ~~and warranties, affirmative~~ covenants ~~and~~for ~~events~~debtor-in-possession ofloan ~~default,~~agreements ~~including, but not limited to, payment defaults, breaches~~ of ~~representations~~this ~~and warranties~~type, ~~covenant~~including ~~defaults,~~covenants ~~certain~~limiting ~~events~~the ~~under~~Company’s ~~ERISA~~ and ~~change~~its ofsubsidiaries’ ~~control.~~ability ~~Certain~~to, ~~bankruptcy-related~~among ~~events~~other ~~are~~things, ~~also~~incur ~~events~~additional ~~of default~~indebtedness, ~~including,~~create ~~but~~liens ~~not~~on ~~limited to~~assets, ~~the~~make ~~dismissal~~investments, byloans ~~the~~or ~~Bankruptcy~~advances, ~~Court~~engage ofin ~~any~~mergers, ~~of the Chapter 11 Cases~~consolidations, ~~the~~sales ~~conversion~~ of ~~any~~assets ofand ~~the~~acquisitions, ~~Chapter~~pay 11dividends ~~Cases~~and todistributions aand ~~case~~make ~~under~~payments ~~Chapter~~in 7respect of ~~the~~junior ~~Bankruptcy~~or ~~Code~~prepetition ~~and~~indebtedness, ~~certain~~in ~~other~~each ~~events~~case ~~related~~subject to ~~the~~customary ~~impairment~~exceptions offor ~~the~~debtor-in-possession ~~DIP~~loan ~~Lenders’~~agreements ~~rights~~of orthis ~~liens granted under the DIP Credit Agreement~~type.

OnThe ~~August~~New ~~24,~~DIP ~~2020,~~Credit ~~the~~Agreement ~~DIP~~also ~~Debtors~~includes certain customary representations and ~~DIP~~warranties, ~~Lenders~~affirmative ~~entered~~covenants ~~into~~and ~~DIP~~events ~~Amendment~~of ~~No.~~default, 1including, tobut ~~the~~not ~~DIP~~limited ~~Credit~~to, ~~Agreement~~payment defaults, ~~and~~breaches onof ~~November~~representations 25and warranties, ~~2020~~covenant defaults, ~~entered~~certain ~~into~~events ~~DIP~~under ~~Amendment~~ERISA Noand change of control. 2Certain bankruptcy-related events are also events of default, ~~each~~including, inbut ~~connection~~not ~~with~~limited to, the ~~Gogo~~dismissal ~~Transaction~~by ~~(see~~the ~~Note~~Bankruptcy 2—Court of any of the Chapter 11 ~~Proceedings~~Cases, ~~Ability~~the toconversion ~~Continue~~of asany of the Chapter 11 Cases to a ~~Going~~case ~~Concern~~under Chapter 7 of the Bankruptcy Code and ~~Other~~certain ~~Related~~other ~~Matters~~events ~~for~~related ~~additional~~to ~~information).~~the impairment of the DIP Lenders’ rights or liens granted under the New DIP Credit Agreement.

OnThe ~~July~~foregoing ~~13,~~descriptions ~~2021,~~of the ~~DIP~~Original ~~Debtors and~~ DIP ~~Lenders~~Credit ~~entered~~Agreement ~~into~~and ~~DIP Amendment No. 3 whereby, among other things,~~ the ~~parties~~New ~~agreed to certain technical modifications to the~~ DIP Credit Agreement ~~that~~do ~~provided~~not ~~for~~purport ~~the~~to ~~extension~~be ofcomplete ~~the~~and ~~initial~~are ~~scheduled~~qualified ~~maturity~~in ~~date~~their ofentirety ~~July~~by ~~13,~~reference ~~2021,~~to ~~and~~ the ~~Debtors~~full ~~agreed~~text toof ~~waive certain conditions under~~ the ~~PSA.~~Original ~~In connection with~~ DIP ~~Amendment~~Credit ~~No.~~Agreement 3,and the New DIP ~~Debtors~~Credit ~~elected to extend the initial scheduled maturity date for one year to July 13~~Agreement, ~~2022~~as ~~and paid 1~~applicable.~~0% of the aggregate principal amount in extension fees.~~

~~The~~Note ~~foregoing~~12—Income descriptions of the DIP Credit Agreement, DIP Amendment No. 1, DIP Amendment No. 2 and DIP Amendment No. 3 do not purport to be complete and are qualified in their entirety by reference to the full text of the DIP Credit Agreement, DIP Amendment No. 1, DIP Amendment No. 2 and DIP Amendment No. 3, as applicable.Taxes

Note 13—Derivative Instruments and Hedging Activities

Interest Rate Cap Contracts

As of December 31, 2020, we held interest rate cap contracts with an aggregate notional value of $2.4 billion that matured in February 2021. The fair value of the interest rate cap contracts as of December 31, 2020 was zero. These interest rate cap contracts, which were entered into in 2017 and amended in 2018, were designed to mitigate our risk of interest rate increases on the floating rate portion of our senior secured credit facilities (see Note 12—Debt). The contracts were not designated for hedge accounting treatment in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), and the changes in fair value of these instruments, net of payments received, were recognized in the condensed consolidated statements of operations during the period of change.

Common Stock Warrant

During 2019, we were issued a warrant to purchase common shares of an investment. We concluded that the warrant is a free-standing derivative in accordance with ASC 815.

Derivatives not designated as hedging instruments						Classification						As ofDecember 31, 2020						As ofJune 30, 2021
Common stock warrant						Other assets						$	3,239					$	8,771

Derivatives not designated as hedging instruments	Classification	Three Months EndedJune 30, 2020		Three Months EndedJune 30, 2021		Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
Interest rate cap contracts	Loss included in interest expense, net	$	(14)	$	—	$	(349)	$	—
Common stock warrant	Gain included in other income, net	—		209		—		5,532
Total (loss) gain on derivative financial instruments		$	(14)	$	209	$	(349)	$	5,532

Note 14—Income Taxes

The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid.

In response to the COVID-19 pandemic, on March 18, 2020, the Families First Coronavirus Response Act (the “FFCR Act”) was enacted, and on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted. The FFCR Act and the CARES Act contain numerous income tax provisions, such as increasing the 30 percent adjusted taxable income threshold to 50 percent for taxable years beginning in 2019 and 2020 for purposes of determining allowable business interest expense deductions. The CARES Act repeals the 80 percent limitation for taxable years beginning before January 1, 2021 (enacted by the U.S. Tax Cut and Jobs Act (the “Act”)), and it further specifies that net operating losses arising in a taxable year beginning after December 31, 2017, and before January 1, 2021, are allowed as a carryback to each of the five taxable years preceding the taxable year of such losses. Modifications to the tax rules for the carryback of net operating losses and business interest limitations resulted in a federal tax refund of approximately $711.4 million and $1526.59 million for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively. In addition, the CARES Act includes refundable payroll tax credits and deferral of employment side social security payments. As of ~~June~~September 30, 2021, Intelsat’s payroll deferral amount was approximately $6.8 million.

The majority of our operations are located in taxable jurisdictions, including Luxembourg, the U.S. and the United Kingdom (“UK”). Due to our cumulative losses in recent years, and the inherent uncertainty associated with the realization of taxable income in the foreseeable future, we recorded a full valuation allowance against the cumulative net operating losses generated in Luxembourg. The difference between tax expense (benefit) reported in the condensed consolidated statements of operations and tax computed at statutory rates is attributable to the valuation allowance on losses generated in Luxembourg, the provision for foreign taxes, which were principally in the U.S. and the UK, as well as withholding taxes on revenue earned in some of the foreign markets in which we operate, benefits recorded in 2020 from impacts of the CARES Act and a tax reserve established on certain tax benefits taken on the Base Erosion and Anti-Abuse Tax (“BEAT”).

As of December 31, 2020 and ~~June~~September 30, 2021, our gross unrecognized tax benefits were $51.4 million and $55.37 million, respectively (including interest and penalties), of which $47.6 million and $51.37 million, respectively, if recognized, would affect our effective tax rate. As of December 31, 2020 and ~~June~~September 30, 2021, we had recorded reserves for interest and penalties in the ~~amount~~amounts of $0.8 million and $1.21 million, respectively. We continue to recognize interest and, to the extent applicable, penalties with respect to the unrecognized tax benefits as income tax expense. Since December 31, 2020, the change in the balance of unrecognized tax benefits has consisted of an increase of $25.96 million related to current tax positions, ~~and~~ an increase of $1.0.2 million related to prior tax positions, and a decrease of $1.5 million related to the expiration of a statute of limitations on the assessment of certain taxes.

We operate in various taxable jurisdictions throughout the world, and our tax returns are subject to audit and review from time to time. We consider Luxembourg, the U.S., the UK and Brazil to be our significant tax jurisdictions. Our subsidiaries in these jurisdictions are subject to income tax examination for periods after December 31, 2015. We believe that there are no jurisdictions in ~~which the outcome of unresolved tax issues or claims is likely to be material to our results of operations, financial position or cash flows within the next twelve months.~~

~~Effective~~ January 31, 2020, the UK formally exited the European Union (“EU”). As a result of the withdrawal, existing tax reliefs and exemptions on intra-European transactions will likely cease to apply to transactions between UK entities and EU entities. In addition, transactions with non-EU countries, such as the U.S., may also be affected. As of June 30, 2021, all relevant tax laws and treaties remained unchanged and the tax consequences were unknown. Therefore, we have not recognized any impacts of the withdrawal in the income tax provision as of June 30, 2021. We will recognize any impacts to the tax provision when changes in tax laws or treaties between the UK and the EU or individual EU member states are enacted.28

Onwhich ~~December 2, 2019,~~ the ~~U.S.~~outcome ~~Department~~ of ~~Treasury~~unresolved and the U.S. Internal Revenue Service released final regulations with respect to the BEAT as enacted by the Act. These regulations represent the final version of proposed regulations which were released in December 2018. The BEAT is a minimum tax ~~established~~issues ~~by the Act, which was signed into law in December 2017, that subjects certain payments made by U.S. corporations~~ or ~~subsidiaries~~claims tois ~~foreign~~likely ~~related parties~~ to abe ~~secondary~~material ~~federal income tax regime in the U.S. The final regulations clarify which taxpayers are subject~~ to ~~the~~our ~~BEAT~~results ~~and how the BEAT rules apply to certain payments and transactions. We have adopted the final BEAT regulations as~~ of ~~the release date. These regulations are effective for the Company as of its tax year ended December 31~~operations, ~~2018.~~financial Aposition second set of final regulations was issued on September 1, 2020, addressing among other topics, the application of the BEAT to partnerships and the application of the effectively connected income exception to depreciable or ~~amortizable~~cash ~~property~~flows ~~contributed~~within ~~to a U.S. partnership by a foreign partner. Similar to~~ the ~~first~~next ~~set~~twelve of final regulations issued in December 2019, the second set of final regulations are effective for the Company as of its tax year ended December 31, 2018. The Company recognized the BEAT tax impact associated with the second set of final regulations related to its tax year ended December 31, 2020 and six months ~~ended June 30, 2021 in the amounts of $8~~.~~8 million and $2.8 million, respectively.~~

Effective 29January 31, 2020, the UK formally exited the European Union (“EU”). As a result of the withdrawal, existing tax reliefs and exemptions on intra-European transactions will likely cease to apply to transactions between UK entities and EU entities. In addition, transactions with non-EU countries, such as the U.S., may also be affected. As of September 30, 2021, all relevant tax laws and treaties remained unchanged and the tax consequences were unknown. Therefore, we have not recognized any impacts of the withdrawal in the income tax provision as of September 30, 2021. We will recognize any impacts to the tax provision when changes in tax laws or treaties between the UK and the EU or individual EU member states are enacted.

~~Note~~On ~~15—Commitments~~December 2, 2019, the U.S. Department of Treasury and ~~Contingencies~~the U.S. Internal Revenue Service released final regulations with respect to the BEAT as enacted by the Act. These regulations represent the final version of proposed regulations which were released in December 2018. The BEAT is a minimum tax established by the Act, which was signed into law in December 2017, that subjects certain payments made by U.S. corporations or subsidiaries to foreign related parties to a secondary federal income tax regime in the U.S. The final regulations clarify which taxpayers are subject to the BEAT and how the BEAT rules apply to certain payments and transactions. We have adopted the final BEAT regulations as of the release date. These regulations are effective for the Company as of its tax year ended December 31, 2018. A second set of final regulations was issued on September 1, 2020, addressing among other topics, the application of the BEAT to partnerships and the application of the effectively connected income exception to depreciable or amortizable property contributed to a U.S. partnership by a foreign partner. Similar to the first set of final regulations issued in December 2019, the second set of final regulations are effective for the Company as of its tax year ended December 31, 2018. The Company recognized the BEAT tax impact associated with the second set of final regulations related to its tax year ended December 31, 2020 and nine months ended September 30, 2021 in the amounts of $8.8 million and $5.4 million, respectively.

Note 13—Commitments and Contingencies

On May 13, 2020, Intelsat S.A. and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. As a result of such bankruptcy filings, substantially all proceedings pending against the Debtors have been stayed and prepetition liabilities are subject to compromise. See Note 2—Chapter 11 Proceedings, Ability to Continue as a Going Concern and Other Related Matters.

SES Claim

On July 14, 2020, SES Americom, Inc. (“SES”) filed a proof of claim in the Bankruptcy Court in the amount of $1.8 billion against each of the Debtors. SES asserts that the Debtors owe money (or will owe money) to SES pursuant to certain contractual and fiduciary obligations made in the context of the consortium agreement ~~between~~entered into in September of 2018 among Debtor Intelsat US LLC, SES, and other satellite operators (the “Consortium Agreement”). SES claims that it is entitled to 50% of the combined payments that may eventually be payable to the Debtors and SES pursuant to the FCC Final Order, which provides for Acceleration Payments subject to the satisfaction of certain deadlines and other conditions set forth therein. SES’s proof of claim alleges that the Debtors breached the Consortium Agreement by taking the position that the Debtors are not required to split Acceleration Payments with SES and the other members of the consortium. The proof of claim also alleges breach of fiduciary duties and unjust enrichment and seeks monetary and punitive damages. We dispute the allegations in the proof of claim and on October 19, 2020, filed an objection to the claim, which we intend to litigate vigorously. AThe Bankruptcy Court has scheduled the trial on the SES claim ~~is scheduled~~ to commence ~~on September 20, 2021~~ in ~~the~~January ~~Bankruptcy Court~~2022. To the extent that any portion of SES’s claim is allowed, we have asked the Bankruptcy Court to “equitably subordinate” such claim based on SES’s conduct in matters related to the Consortium Agreement. While the ultimate resolution of the claim is not currently predictable, if there is an adverse ruling, the ruling could constitute a material adverse outcome on our future consolidated financial condition.

Other Litigation Matters

In the absence of the automatic stay due to the Chapter 11 Cases, we are subject to litigation in the ordinary course of business. Management does not believe that the resolution of any pending proceedings would have a material adverse effect on our financial position or results of operations.

Note 1614—Related Party Transactions

(a) Shareholders’ Agreements

Certain shareholders of Intelsat S.A. entered into a shareholders’ agreement in December 2018, which provides, among other things, specific rights to and limitations upon the holders of Intelsat S.A.’s share capital with respect to shares held by such holders.

(b) Governance Agreement

In December 2018, the Company entered into a governance agreement with its shareholder affiliated with Serafina S.A. The agreement contains provisions relating to the composition of the Company’s board of directors and certain other matters.

We have entered into agreements with our executive officers and directors to provide contractual indemnification in addition to the indemnification provided for in our articles of incorporation.

(d) Horizons Holdings

We have a 50% ownership interest in Horizons Holdings as a result of a joint venture with JSAT (see Note 109(a)—Investments—Horizons Holdings).

(e) Horizons-3 Satellite LLC

We have a 50% ownership interest in Horizons 3 as a result of a joint venture with JSAT (see Note 109(b)—Investments—Horizons-3 Satellite LLC).

Note 3015—Condensed Combined Debtors' Financial Information

~~Note~~The ~~17—Condensed~~following ~~Combined~~presents our Debtors' ~~Financial~~condensed ~~Information~~combined balance sheets as of December 31, 2020 and September 30, 2021, statements of operations for the three and nine months ended September 30, 2020 and 2021, and statements of cash flows for the nine months ended September 30, 2020 and 2021. Consolidating adjustments include eliminations of the following:

The following presents our Debtors' condensed combined balance sheets as of December 31, 2020 and June 30, 2021, statements of operations for the three and six months ended June 30, 2020 and 2021 and statements of cash flows for the six months ended June 30, 2020 and 2021. Consolidating adjustments include eliminations of the following:

•investments in subsidiaries;

•intercompany accounts;

•intercompany sales and expenses; and

•intercompany equity balances.

Intercompany balances with non-Debtor affiliates have not been eliminated. On the Debtors’ condensed combined balance sheets, these primarily consist of net intercompany trade receivables generated under our Master Intercompany Service Agreement (“MISA”), funding for the operations of non-Debtor affiliates and funding for the acquisition of Intelsat CA. On the Debtors’ condensed combined statements of operations, total reported revenue includes intercompany revenue of $63106.0 million and $7069.87 million for the three months ended ~~June~~September 30, 2020 and 2021, respectively, and $~~122~~228.56 million and $~~138~~208.41 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively, primarily consisting of satellite capacity charges. Cost from affiliates primarily relates to sales and technical support services provided to Debtors as specified under the MISA. Investments in non-Debtor affiliates are presented under the equity method of accounting in the condensed combined financial statements set forth below.

3130

DEBTORS' CONDENSED COMBINED BALANCE SHEET

(in thousands, except per share amounts)

	December 31, 2020		~~June~~September 30, 2021
			(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	879,191	$	~~460~~418,~~617~~715
Restricted cash	20,817		2627,~~682~~308
Receivables, net of allowances of $34,391 in 2020 and $22,140 in 2021	561,573		922,882
Receivables, net of allowances of $34,391 in 2020 and $26,127 in 2021	156,402		116,994
Contract assets, net of allowances	15,474		15,066
Receivables relating to C-band	405,171		1,035,578
Inventory	1,347		1,075
Contract assets, net of allowances	15,474		14,244
Prepaid expenses and other current assets	100,021		87,856
Inventory	1,347		929
Intercompany receivables	678,188		799,081
Prepaid expenses and other current assets	100,021		108,400
Total current assets	2,256,611		2,313,259
Intercompany receivables	678,188		914,875
Satellites and other property and equipment, net	4,656,678		4,862,789
Total current assets	2,256,611		2,637,043
Satellites and other property and equipment, net	4,656,678		4,890,864
Goodwill	2,624,452		2,624,452
Non-amortizable intangible assets	2,295,000		2,295,000
Amortizable intangible assets, net	245,649		~~231~~224,~~331~~173
Contract assets, net of current portion and allowances	26,642		2321,~~275~~600
Investment in affiliates	150,029		48(12,~~117~~342)
Other assets	357,897		~~390~~489,~~066~~954
Total assets	$	12,612,958	$	1213,~~788~~170,~~289~~744
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	222,876	$	~~342~~364,~~390~~253
Taxes payable	6,743		6,~~694~~925
Employee related liabilities	36,563		36,445
Employee-related liabilities	36,563		33,974
Accrued interest payable	17,747		1819,~~035~~094
Current maturities of long-term debt	5,903,724		56,~~909~~162,~~377~~315
Contract liabilities	146,762		~~841~~845,~~136~~055
Deferred satellite performance incentives	47,377		5654,~~115~~512
Other current liabilities	43,885		5475,~~047~~683
Total current liabilities	6,425,677		7,~~264~~561,~~239~~811
Contract liabilities, net of current portion	1,422,893		1,~~072~~270,~~990~~745
Deferred satellite performance incentives, net of current portion	138,116		~~127~~121,~~774~~439
Deferred income taxes	61,069		6974,~~910~~701
Accrued retirement benefits, net of current portion	129,837		~~118~~113,~~458~~452
Other long-term liabilities	188,394		~~210~~246,~~021~~867
Liabilities subject to compromise	10,168,518		10,169,~~230~~243
Shareholders’ deficit:
Common shares, nominal value $0.01 per share	1,421		1,422
Paid-in capital	2,573,840		2,~~576~~577,~~144~~607
Accumulated deficit	(8,416,410)		(8,~~743~~889,~~592~~282)
Accumulated other comprehensive loss	(80,397)		(7877,~~307~~261)
Total shareholders’ deficit	(5,921,546)		(6,~~244~~387,~~333~~514)
Total liabilities and shareholders’ deficit	$	12,612,958	$	1213,~~788~~170,~~289~~744

3231

DEBTORS' UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS

(in thousands)

Three Months EndedJune 30, 2020

Three Months EndedJune 30, 2021

Six Months EndedJune 30, 2020

Six Months EndedJune 30, 2021

Three Months EndedSeptember 30, 2020

Three Months EndedSeptember 30, 2021

Nine Months EndedSeptember 30, 2020

Nine Months EndedSeptember 30, 2021

Revenue

~~431~~473,~~334~~556

~~405~~404,~~550~~727

~~840~~1,~~751~~314,307

~~810~~1,~~831~~215,558

Operating expenses:

Direct costs of revenue (excluding depreciation and amortization)

6668,~~765~~891

6566,~~465~~106

~~131~~199,~~891~~958

~~129~~195,~~148~~254

Selling, general and administrative

5357,~~958~~659

5756,~~460~~964

~~124~~181,~~544~~931

~~118~~175,~~760~~722

Cost from affiliates

9,~~786~~785

11,~~326~~766

2132,~~448~~047

2335,~~809~~575

Depreciation and amortization

157,~~392~~442

~~155~~150,~~680~~683

~~315~~472,~~168~~610

~~309~~459,~~058~~743

Impairment of non-amortizable intangible and other assets

~~34,043~~—

—

46,243

—

Other operating expense—C-band

—298

6417,~~638~~867

—580

~~122~~140,~~994~~861

Total operating expenses

~~321~~294,~~944~~075

~~354~~303,~~569~~386

~~639~~933,~~294~~369

~~703~~1,~~769~~007,155

Income from operations

~~109~~179,~~390~~481

50101,~~981~~341

~~201~~380,~~457~~938

~~107~~208,~~062~~403

Interest expense, net

(~~221~~137,~~934~~444)

(~~122~~119,~~649~~049)

(~~539~~677,~~681~~124)

(~~248~~367,~~428~~477)

Equity in income (loss) of affiliates

3,267

(40,984)

1,712

(94,513)

Equity in loss of affiliates

(40,791)

(34,280)

(41,260)

(128,793)

Other income, net

32,~~432~~973

1611,~~496~~594

1215,~~034~~007

2739,~~630~~224

Reorganization items

(~~298~~36,~~691~~367)

(4998,~~591~~316)

(~~298~~335,~~691~~059)

(~~105~~203,~~403~~719)

Loss before income taxes

(~~404~~32,~~536~~148)

(~~145~~138,~~747~~710)

(~~623~~657,~~169~~498)

(~~313~~452,~~652~~362)

Income tax expense

(818)

(6,559)

(957)

(13,530)

Income tax benefit (expense)

16,217

(6,980)

17,441

(20,510)

Net loss

(~~405~~15,~~354~~931)

(~~152~~145,~~306~~690)

(~~624~~640,~~126~~057)

(~~327~~472,~~182~~872)

3332

DEBTORS' UNAUDITED CONDENSED COMBINED STATEMENT OF CASH FLOWS

(in thousands)

	Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
	Nine Months EndedSeptember 30, 2020		Nine Months EndedSeptember 30, 2021
Cash flows from operating activities:
Net loss	$	(~~624~~640,~~126~~057)	$	(~~327~~472,~~182~~872)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	~~315~~472,~~168~~610		~~309~~459,~~058~~743
Provision for expected credit losses	2834,~~325~~465		1117,~~671~~224
Foreign currency transaction (gains) losses	(~~719~~801)		~~430~~863
Loss on disposal of assets	—		4143
Impairment of non-amortizable intangible and other assets	46,243		—
Share-based compensation	69,~~234~~031		23,~~178~~586
Deferred income taxes	5,~~631~~470		611,~~100~~102
Amortization of discount, premium, issuance costs and related costs	1719,~~277~~689		47,~~978~~559
Non-cash reorganization items	196,974		—
Debtor-in-possession financing fees	52,182		—46,944
Amortization of actuarial loss and prior service credits for retirement benefits	1,~~317~~976		23,~~126~~189
Unrealized losses on derivative financial instruments	~~349~~372		—
Unrealized losses (gains) on investments and loans held-for-investment	721		(2946,~~225~~661)
Equity in (income) losses of affiliates	(141,~~712)~~260		94128,~~513~~793
Other non-cash items	92(7)		(~~311~~517)
Changes in operating assets and liabilities:
Receivables	~~(79)~~12,841		2721,~~008~~697
Intercompany receivables	(70105,~~970~~048)		(~~106~~155,~~845~~277)
Prepaid expenses, contract and other assets	(3481,~~700~~814)		206,~~167~~124
Accounts payable and accrued liabilities	2369,~~791~~812		95116,~~155~~437
Accrued interest payable	48,~~775~~713		~~287~~1,347
Contract liabilities	(3866,~~951~~304)		(5684,~~107~~422)
Accrued retirement benefits	(812,~~267~~253)		(1116,~~379~~385)
Other long-term liabilities	~~(11~~2,~~013)~~801		(820,~~422~~132)
Net cash provided by (used in) operating activities	~~(47~~108,~~458)~~876		3428,~~241~~385
Cash flows from investing activities:
Capital expenditures (including capitalized interest)	(~~196~~414,~~043~~610)		(~~462~~661,~~583~~091)
Dividends from affiliates	20,878		7,836
Acquisition of loan to affiliate	—		(60,000)
Dividends from affiliates	28,960		34,276
Proceeds from sale of investment	—		15,000
Proceeds from principal payments on loans held-for-investment	724		103
Loan amendment fees received	—		1,800
Proceeds from principal payments on loans held-for-investment	973		208
Capital contribution to affiliates	(9,005)		—
Other proceeds from satellites	5,625		—
Net cash used in investing activities	(~~177~~388,~~821~~057)		(~~439~~669,~~644~~807)
Cash flows from financing activities:
Proceeds from debtor-in-possession financing	500,000		—1,250,000
Debtor-in-possession financing fees	(52,182)		—
Repayments of debtor-in-possession financing	—		(1,000,000)
Principal payments on deferred satellite performance incentives	(19,195)		(6,921)
Debtor-in-possession financing fees	(52,182)		(46,944)
Net cash provided by (used in) financing activities	428,623		(6,921)
Principal payments on deferred satellite performance incentives	(25,428)		(14,859)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	686		(385)
Net cash provided by (used in) financing activities	422,390		188,197
Net change in cash, cash equivalents and restricted cash	204,030		(412,709)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	754		(760)
Net change in cash, cash equivalents and restricted cash	143,963		(453,985)
Cash, cash equivalents, and restricted cash, beginning of period	755,313		900,008
Cash, cash equivalents, and restricted cash, end of period	$	~~959~~899,~~343~~276	$	~~487~~446,~~299~~023
Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated Debtors' balance sheet to the total sum of these same amounts shown on the condensed consolidated Debtors' statement of cash flows:
Cash and cash equivalents	$	~~940~~880,~~366~~185	$	~~460~~418,~~617~~715
Restricted cash	1819,~~977~~091		2627,~~682~~308
Total cash, cash equivalents and restricted cash reported in the condensed consolidated Debtors' statement of cash flows	$	~~959~~899,~~343~~276	$	~~487~~446,~~299~~023

3433

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and their notes included in Item 1—Financial Statements in this Quarterly Report, and with our audited consolidated financial statements and their notes included in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”). In addition, see “Forward-Looking Statements” for a discussion of factors that could cause our future financial condition and results of operations to be materially different from those discussed below.

Overview

We operate one of the world’s largest satellite services businesses, providing a critical layer in the global communications infrastructure.

We provide diversified communications services to the world’s leading media companies, fixed and wireless telecommunications operators, data networking service providers for enterprise and mobile applications in the air and on the seas, multinational corporations and Internet Service Providers. We are also the leading provider of commercial satellite capacity to the U.S. government and other select military organizations and their contractors.

Our customers use our global network for a broad range of applications, from global distribution of content for media companies to providing the transmission layer for commercial aeronautical consumer broadband connectivity, to enabling essential network backbones for telecommunications providers in high-growth emerging regions.

Our network solutions are a critical component of our customers’ infrastructures and business models. Generally, our customers need the specialized connectivity that satellites provide so long as they are in business or pursuing their mission. In recent years, mobility services providers have contracted for services on our fleet that support broadband connections for passengers on commercial flights and cruise ships, connectivity that in some cases is only available through our network. In addition, our satellite neighborhoods provide our media customers with efficient and reliable broadcast distribution that maximizes audience reach, a technical and economic benefit that is difficult for terrestrial services to match. In developing regions, our satellite solutions often provide higher reliability than is available from local terrestrial telecommunications services and allow our customers to reach geographies that they would otherwise be unable to serve.

Through our ~~recent~~ acquisition of Gogo Inc.’s (“Gogo”) commercial aviation business (“Intelsat CA”), we became the global leader in providing in-flight connectivity (“IFC”) and wireless in-flight entertainment (“IFE”) solutions to the commercial aviation industry. Services provided by our Intelsat CA business include passenger connectivity, which allows passengers to connect to the Internet from their personal Wi-Fi-enabled devices; passenger entertainment, which offers passengers the opportunity to enjoy a broad selection of IFE options on their laptops and personal Wi-Fi enabled devices; and Connected Aircraft Services (“CAS”), which offer airlines connectivity for various operations and currently include, among others, real-time credit card transaction processing, electronic flight bags and real-time weather information.

Recent Developments

Voluntary Reorganization under Chapter 11

On May 13, 2020, Intelsat S.A. and certain of its subsidiaries (each, a “Debtor” and collectively, the “Debtors”) commenced voluntary cases (the “Chapter 11 Cases”) under title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Virginia (the “Bankruptcy Court”). Primary factors causing us to file for Chapter 11 protection included the Company’s intention to participate in the accelerated clearing process of C-band spectrum set forth in the U.S. Federal Communications Commission’s (“FCC”) March 3, 2020 final order (the “FCC Final Order”), requiring the Company to incur significant costs related to clearing activities well in advance of receiving reimbursement for such costs and the need for additional financing to fund the C-band clearing process, service our current debt obligations, and meet our operating requirements, as well as the economic slowdown impacting the Company and several of its end markets due to the novel coronavirus (“COVID-19”) pandemic.

~~On August 14, 2020, the Company filed its C-band spectrum transition plan with the FCC.~~ The FCC Final Order provides for monetary enticements for fixed satellite services (“FSS”) providers to clear a portion of the C-band spectrum on an accelerated basis (the “Acceleration Payments”). On September 17, 2020, the Company announced that it finalized materially all of its required contracts with satellite manufacturers and launch-vehicle providers to move forward and meet the accelerated C-band spectrum clearing timelines established by the FCC. Under the FCC Final Order, ~~the~~Intelsat ~~Company~~License LLC (“Intelsat License”) is eligible to receive Acceleration Payments of approximately $1.2 billion and $3.7 billion based on the milestone clearing certification dates of December 5, 2021 and December 5, 2023, with the respective payments expected to be received in the first half of each successive year, respectively, subject to the satisfaction of certain deadlines and other conditions set forth therein. On August 14, 2020, Intelsat License filed its C-band spectrum transition plan with the FCC, with ongoing updates as requested by the FCC. The most recent amended transition plan was filed on September 30, 2021. On October 4, 2021, as subsequently amended on October 15, 2021, Intelsat License filed its Phase I Certification of Accelerated Relocation, indicating completion of required clearing activities to satisfy the December 5, 2021 deadline and requesting FCC validation to receive the $1.2 billion Acceleration Payment.

~~The~~ Chapter 11 process can be unpredictable and involves significant risks and uncertainties. As a result of these risks and uncertainties, the amount and composition of the Company’s assets, liabilities, officers and/or directors could be significantly different 34

The 35Chapter 11 process can be unpredictable and involves significant risks and uncertainties. As a result of these risks and uncertainties, the amount and composition of the Company’s assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases, and the description of the Company’s operations, properties and liquidity and capital resources included in this Quarterly Report may not accurately reflect its operations, properties and liquidity and capital resources following the Chapter 11 process.

~~following~~Pursuant to various orders from the ~~outcome~~Bankruptcy Court, the Debtors have received approval from the Bankruptcy Court to generally maintain their ordinary course operations and uphold certain commitments to their stakeholders, including employees, customers, and vendors during the restructuring process, subject to the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. While the Chapter 11 Cases are pending, ~~and~~the Debtors do not anticipate making interest payments due under their respective unsecured debt instruments; however, the ~~description~~Debtors expect to make interest payments on a monthly basis to holders of ~~the~~their ~~Company’s~~senior ~~operations,~~secured ~~properties~~debt ~~and~~instruments. ~~liquidity~~The ~~and~~contractual ~~capital~~interest ~~resources~~expense ~~included~~pursuant into ~~this~~our ~~Quarterly~~unsecured ~~Report~~debt ~~may~~instruments that was not ~~accurately~~recognized ~~reflect~~in ~~its~~our condensed consolidated statements of operations was $196.4 million and $192.3 million for the three months ended September 30, ~~properties~~2020 and ~~liquidity~~2021, respectively, and ~~capital~~$298.9 million ~~resources~~and ~~following~~$576.8 million for the ~~Chapter~~nine 11months ~~process~~ended September 30, 2020 and 2021, respectively.

~~Pursuant~~The tofiling ~~various~~of ~~orders from~~ the ~~Bankruptcy~~Chapter ~~Court,~~11 ~~the~~Cases ~~Debtors~~constituted ~~have~~an ~~received~~event ~~approval~~of ~~from~~default ~~the~~that ~~Bankruptcy~~accelerated ~~Court~~substantially toall ~~generally~~of ~~maintain~~our ~~their~~obligations ~~ordinary~~under ~~course~~the ~~operations~~documents ~~and~~governing ~~uphold~~the ~~certain~~prepetition ~~commitments~~existing toindebtedness ~~their~~of ~~stakeholders,~~Intelsat ~~including employees~~S.A., ~~customers,~~Intelsat ~~and vendors during the restructuring process~~Luxembourg, ~~subject~~Intelsat toConnect ~~the~~and ~~jurisdiction~~Intelsat ofJackson. ~~the~~For ~~Bankruptcy~~additional ~~Court~~discussion ~~and~~regarding ~~in accordance with~~ the ~~applicable~~impact ~~provisions~~ of the ~~Bankruptcy Code. While the~~ Chapter 11 Cases ~~are pending, the Debtors do not anticipate making interest payments due under their respective unsecured debt instruments; however, the Debtors expect to make interest payments~~ on ~~a monthly basis to holders of their senior secured debt instruments. The contractual interest expense pursuant to~~ our ~~unsecured~~ debt ~~instruments that was not recognized in our condensed consolidated statement of operations was $102.5 million and $192.3 million for the three months ended June 30~~obligations, ~~2020~~see ~~and~~Item ~~2021~~1, ~~respectively,~~Note ~~and $102~~11—Debt.~~5 million and $384.5 million for the six months ended June 30, 2020 and 2021, respectively.~~

~~The~~On ~~filing~~June of9, 2020, Intelsat Jackson received approval from the ~~Chapter~~Bankruptcy 11Court ~~Cases~~to ~~constituted~~enter into a multiple draw superpriority senior secured debtor-in-possession term loan facility (as amended, the “Original DIP Facility”) in an ~~event~~aggregate principal amount of ~~default~~$1.0 ~~that~~billion ~~accelerated~~on ~~substantially~~the ~~all~~terms ofand ~~our~~conditions ~~obligations~~as ~~under~~set forth in the ~~documents~~DIP ~~governing~~credit agreement (as amended, the ~~prepetition~~“Original ~~existing~~DIP ~~indebtedness~~Credit Agreement”), and on June 17, 2020, Intelsat Jackson and certain of its subsidiaries as guarantors (together with Intelsat SJackson, the “DIP Debtors”) entered into the final Original DIP Credit Agreement.A On September 14, 2021, the DIP Debtors received approval from the Bankruptcy Court (the “DIP Order”) to enter into a multiple draw superpriority senior secured debtor-in-possession term loan facility (the “New DIP Facility”) in an aggregate principal amount of $1.5 billion on the terms and conditions as set forth in the credit agreement for the New DIP Facility (the “New DIP Credit Agreement”), ~~Intelsat~~and ~~Luxembourg~~on September 14, 2021, Intelsat ~~Connect~~Jackson and certain of the DIP Debtors entered into the final New DIP Credit Agreement. The New DIP Facility provided $1.25 billion in new money at closing for Intelsat Jackson. ~~For~~to, ~~additional~~among ~~discussion~~other ~~regarding~~things, refinance the ~~impact~~Original ofDIP Facility and, provides the ~~Chapter~~ability 11for ~~Cases~~Intelsat onJackson, at its sole discretion, to make an incremental $250.0 million draw. For additional information regarding our ~~debt~~credit ~~obligations~~facilities, see ~~Item~~Liquidity 1,and ~~Note~~Capital 12Resources—Debt below.

On June 9, 2020, Intelsat Jackson received approval from the Bankruptcy Court (the “DIP Order”) to enter into a non-amortizing multiple draw superpriority secured debtor-in-possession term loan facility (the “DIP Facility”), in an aggregate principal amount of $1.0 billion on the terms and conditions as set forth in the DIP Facility credit agreement (the “DIP Credit Agreement”), with certain of the Debtors’ prepetition secured parties (the “DIP Lenders”), and on June 17, 2020, Intelsat Jackson and certain of its subsidiaries as guarantors (together with Intelsat Jackson, the “DIP Debtors”) entered into the DIP Credit Agreement with the DIP Lenders, as amended by an amendment (“DIP Amendment No. 1”) to the DIP Credit Agreement, dated as of August 24, 2020, a second amendment (“DIP Amendment No. 2”), dated as of November 25, 2020, and a third amendment (“DIP Amendment No. 3”), dated as of July 13, 2021. For additional information regarding the DIP Facility, DIP Credit Agreement, DIP Amendment No. 1, DIP Amendment No. 2 and DIP Amendment No. 3, see Liquidity and Capital Resources—Debt below.

On February 11, 2021, the Debtors entered into a plan support agreement with certain of the Debtors’ prepetition secured and unsecured creditors. After entry into such plan support agreement, the Debtors continued to engage with their stakeholders and on August 24, 2021, entered into an amended plan support agreement (together with all exhibits and schedules thereto, the “PSA”) with certain of the Debtors’ prepetition secured and unsecured creditors (the “Consenting Creditors” and together with the Debtors, the “PSA Parties”). The PSA contains certain covenants on the part of the PSA Parties, including but not limited to the Consenting Creditors voting in favor of the Amended Joint Chapter 11 Plan of Reorganization of Intelsat S.A. and Its Debtor Affiliates (as ~~proposed~~amended, the “Plan”), and provides that the Debtors shall achieve certain milestones (unless extended or waived in writing). In connection with the PSA, on ~~February~~August 1224, 2021, the Debtors filed the Plan and the Amended Disclosure Statement for the Amended Joint Chapter 11 Plan of Reorganization of Intelsat S.A. and Its Debtor Affiliates (as amended the “Disclosure Statement”), which describes a variety of topics related to the Chapter 11 Cases, including (i) events leading to the Chapter 11 Cases; (ii) significant events that took place during the Chapter 11 Cases; (iii) certain terms of the Plan; and (iv) certain anticipated risk factors associated with, and anticipated consequences of the Plan. ~~The~~On September 7, 2021, the Bankruptcy Court isentered ~~currently~~an ~~scheduled~~order toapproving ~~determine~~ the ~~adequacy~~Disclosure Statement. A hearing on confirmation of the ~~Disclosure~~Plan ~~Statement~~has inbeen set by the ~~third~~Bankruptcy ~~quarter~~Court ofto begin on December 2, 2021.

Update on the Impact of COVID-19 on the Company

The COVID-19 pandemic has had an adverse impact on our business, results of operations and financial condition, a trend we expect to continue. Among the impacts of the COVID-19 pandemic were a reduction of revenue and a decreased likelihood of collection from certain mobility customers and our Intelsat CA business. We continue to closely monitor the ongoing impact on our employees, customers, business and results of operations.

Gogo Transaction

On August 31, 2020, following approval from the Bankruptcy Court, Intelsat Jackson and Gogo entered into a purchase and sale agreement (the “Purchase and Sale Agreement”) with respect to Gogo’s commercial aviation business for $400.0 million in cash, subject to customary adjustments (the “Purchase Price”). The transaction further propels the Company’s efforts in the growing commercial IFC market, pairing our high-capacity global satellite and ground network with Gogo’s installed base of more than 3,000 commercial aircraft to redefine the connectivity experience. In connection with the transactions contemplated by the Purchase and Sale Agreement, the DIP Debtors and DIP Lenders entered into DIP Amendment No. 1 and DIP Amendment No. 2 to our DIP Credit Agreement (see —Voluntary Reorganization under Chapter 11 above). On December 1, 2020, we completed the transaction (the “Gogo Transaction”) and funded the Purchase Price with proceeds from our existing DIP Facility and cash on hand.

A. Results of Operations

Three Months Ended ~~June~~September 30, 2020 and 2021

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

	Three Months EndedJune 30, 2020		Three Months EndedJune 30, 2021		Dollar Change		PercentageChange
	Three Months EndedSeptember 30, 2020		Three Months EndedSeptember 30, 2021		Dollar Change		PercentageChange
Revenue	$	~~482~~489,~~034~~449	$	~~507~~526,~~862~~095	$	2536,~~828~~646	57%
Operating expenses:
Direct costs of revenue (excluding depreciation and amortization)	~~106~~119,~~961~~969		~~163~~177,~~317~~176		5657,~~356~~207		5348%
Selling, general and administrative	6369,~~863~~215		~~100~~96,~~161~~796		3627,~~298~~581		5740%
Depreciation and amortization	162,~~614~~573		~~168~~162,~~259~~017		~~5,645~~(556)		3less than 1%
Impairment of non-amortizable intangible and other assets	34,043		—		(34,043)		NM
Other operating expense—C-band	298		17,867		17,569		NM
Other operating expense—C-band	—		64,638		64,638		NM
Total operating expenses	352,055		453,856		101,801		29%
Total operating expenses	367,481		496,375		128,894		35%
Income from operations	137,394		72,239		(65,155)		(47%)
Income from operations	114,553		11,487		(103,066)		(90%)
Interest expense, net	(138,075)		(126,600)		11,475		(8%)
Interest expense, net	(222,533)		(129,893)		92,640		(42%)
Other income, net	3,067		10,196		7,129		NM
Other income, net	2,762		20,218		17,456		NM
Reorganization items	(36,367)		(98,316)		(61,949)		NM
Reorganization items	(298,691)		(49,591)		249,100		(83%)
Loss before income taxes	(33,981)		(142,481)		(108,500)		NM
Loss before income taxes	(403,909)		(147,779)		256,130		(63%)
Income tax benefit (expense)	18,650		(2,605)		(21,255)		NM
Income tax expense	(818)		(3,923)		(3,105)		NM
Net loss	(15,331)		(145,086)		(129,755)		NM
Net loss	(404,727)		(151,702)		253,025		(63%)
Net income attributable to noncontrolling interest	(600)		(604)		(4)		1%
Net income attributable to noncontrolling interest	(628)		(604)		24		(4%)
Net loss attributable to Intelsat S.A.	$	(15,931)	$	(145,690)	$	(129,759)	NM
Net loss attributable to Intelsat S.A.	$	(405,355)	$	(152,306)	$	253,049	(62%)

Revenue

We earn revenue primarily by providing services over satellite transponder capacity to our customers. Our customers generally obtain satellite capacity from us by placing an order pursuant to one of several master customer service agreements. The master customer agreements and related service orders under which we sell services specify, among other things, the amount of satellite capacity to be provided, whether service will be non-preemptible or preemptible and the service term. Most services are full time in nature, with service terms ranging from one year to as long as 16 years. Occasional use services used for video applications can be for much shorter periods, including increments of one hour. Our master customer service agreements offer different service types, including transponder services, managed services, and channel, which are all services that are provided on, or used to provide access to, our global network. We refer to these services as on-network services. Our customer agreements also cover services that we procure from third parties and resell, which we refer to as off-network services. These services can include transponder services and other satellite-based transmission services sourced from other operators, often in frequencies not available on our network, and other operational fees related to satellite operations provided on behalf of third-party satellites.

Our Intelsat CA business generates two types of revenue: service revenue and equipment revenue. Service revenue is primarily derived from connectivity services and, to a lesser extent, from entertainment services, CAS and maintenance services. Connectivity is provided to our customers using both air-to-ground (“ATG”) and satellite technologies. Service revenue is earned by services paid for by passengers, airlines and third parties. Equipment revenue primarily consists of the sale of ATG and satellite connectivity equipment and the sale of entertainment equipment. Equipment revenue also includes revenue generated by our installation of connectivity or entertainment equipment on commercial aircraft.

3736

The following table sets forth our comparative revenue by service type, for the periods below (in thousands, except percentages):

Three Months EndedJune 30, 2020

Three Months EndedJune 30, 2021

Increase (Decrease)

PercentageChange

Three Months EndedSeptember 30, 2020

Three Months EndedSeptember 30, 2021

Increase (Decrease)

PercentageChange

On-Network Revenues

Transponder services

~~343~~353,~~599~~758

~~324~~320,~~053~~260

(1933,~~546~~498)

(69%)

Managed services

8569,~~050~~438

7071,~~228~~856

~~(14~~2,~~822)~~418

~~(17~~3%)

Channel

~~391~~280

186

(~~205~~94)

(5234%)

Total on-network revenues

~~429~~423,~~040~~476

~~394~~392,~~467~~302

(3431,~~573~~174)

(87%)

Off-Network and Other Revenues

Transponder, MSS and other off-network services

4354,~~617~~478

3940,~~708~~090

(314,~~909~~388)

(926%)

Satellite-related services

911,~~377~~495

911,~~487~~090

~~110~~(405)

1(4%)

Total off-network and other revenues

5265,~~994~~973

4951,~~195~~180

(314,~~799~~793)

(722%)

In-flight Services Revenues

Services

—

5767,~~296~~482

Equipment

—

615,~~904~~131

Total in-flight services revenue

—

6482,~~200~~613

Total

~~482~~489,~~034~~449

~~507~~526,~~862~~095

2536,~~828~~646

57%

Total revenue for the three months ended ~~June~~September 30, 2021 increased by $2536.86 million, or 57%, as compared to the three months ended ~~June~~September 30, 2020. By service type, our revenues increased or decreased due to the following:

On-Network Revenues:

•Transponder services—an aggregate decrease of $1933.5 million, primarily due to a $1920.28 million net decrease in ~~revenue~~revenues from media customers and a $112.63 million net decrease in revenues from network services customers. The decrease in revenue from media customers was primarily driven by non-renewals, renewals at lower prices, service contractions, service transfers to managed services and service terminations relating to distribution and direct-to-home (“DTH”) solution application customers. ~~The~~These ~~decline~~decreased in revenues ~~from~~were ~~network~~partially ~~services~~offset ~~customers~~by ~~was~~new ~~primarily~~business ~~due~~from toa ~~non-renewals,~~contribution ~~pricing~~solution ~~decreases,~~application ~~service~~customer ~~contractions,~~ and a service ~~contract~~transfer ~~termination.~~to ~~These~~transponder ~~decreased~~services ~~revenues were partially offset by increased revenues~~ from ~~network~~managed services ~~customers,~~for ~~primarily due to~~ a ~~renegotiated~~DTH ~~contract~~solution ~~with~~application ~~a maritime mobility~~ customer. ~~for~~The adecline ~~different~~in ~~service mix of~~ revenues ~~previously~~from ~~classified~~network asservices ~~managed~~customers ~~services,~~was ~~and~~primarily ~~new~~due ~~business~~to ~~and~~non-renewals, pricing ~~capacity~~decreases, ~~increases~~and ~~for~~service ~~an enterprise networks customer~~contractions.

~~•Managed services—an aggregate decrease of $14.8 million, primarily due to a $16.7 million decrease in revenue from~~ Off-network services customers, partially offset by a $1.1 million increase in revenues from government customers. The decline in revenues from network services customers was primarily driven by a renegotiated contract with a maritime mobility customer for a different service mix of revenues previously classified as managed services, partially offset by increased revenues from new flex maritime services. The increase in revenues from government customers was primarily attributable to new flex services and ~~the~~Other ~~entry into service of Galaxy 30, partially offset by non-renewals.~~Revenues:

•Transponder, MSS, and other off-network services —an aggregate decrease of $14.4 million primarily attributable to a $13.4 million decrease in revenues from government customers. The decrease in revenues from government customers was primarily driven by equipment revenues recognized in the third quarter of 2020, with no corresponding revenues in the third quarter of 2021, non-renewals, and a decline in usage-based mobile satellite services (“MSS”), partially offset by new off-network managed services.

In-flight Services Revenues:

•Services and equipment—an aggregate increase of $6482.26 million attributable to our Intelsat CA business.

Operating Expenses

Direct Costs of Revenue (Excluding Depreciation and Amortization)

Direct costs of revenue increased by $5657.42 million, or 5348%, to $~~163~~177.32 million for the three months ended ~~June~~September 30, 2021, as compared to the three months ended ~~June~~September 30, 2020. The increase was primarily due to $6173.26 million in costs attributable to our Intelsat CA business, ~~acquired~~partially offset by a $13.0 million decrease in ~~December~~equipment costs largely related to government customers incurred in 2020 with no similar activity in 2021, and a $3.6 million decrease in staff-related expenses.

Selling, General and Administrative

Selling, general and administrative expenses increased by $3627.36 million, or 5740%, to $~~100~~96.28 million for the three months ended ~~June~~September 30, 2021, as compared to the three months ended ~~June~~September 30, 2020. The increase was primarily due to $3028.6 million in costs attributable to our Intelsat CA business, and a $4.04 million increase in staff-related expenses, ~~largely~~partially ~~relating~~offset toby ~~our employee retention incentive plans, and~~ a $3.6.5 million ~~increase~~decrease in professional fees.

3837

Depreciation and Amortization

Depreciation and amortization expense ~~increased~~decreased by $50.6 million, or 3less than 1%, to $~~168~~162.30 million for the three months ended ~~June~~September 30, 2021, as compared to the three months ended ~~June~~September 30, 2020. Significant items impacting depreciation and amortization included:

•an increase of $76.45 million in depreciation and amortization expense attributable to our Intelsat CA business; and

•an increase of $3.13 million in depreciation expense resulting from the impact of a satellite placed into service; partially offset by

•a decrease of $58.43 million in depreciation expense due to the timing of certain satellites becoming fully depreciated.

Impairment of Non-Amortizable Intangible Assets

We recognized an impairment charge of $34.0 million for the three months ended June 30, 2020 relating to certain satellite and launch vehicle deposits, with no comparable amounts for the three months ended June 30, 2021. See Item 1, Note 9—Satellites and Other Property and Equipment for further discussion.

Other Operating Expense—C-band

Other operating expense—C-band consists of reimbursable and non-reimbursable costs associated with our C-band spectrum relocation efforts. We incurred $640.63 million and $17.9 million of reimbursable and non-reimbursable C-band clearing related expenses for the three months ended ~~June~~September 30, ~~2021,~~2020 ~~with~~and ~~no comparable amounts for the three months ended June 30~~2021, ~~2020~~respectively.

Interest Expense, Net

Interest expense, net consists of gross interest expense incurred together with gains and losses on interest rate cap contracts (which reflect the changes in their fair values), offset by interest income earned and interest capitalized related to assets under construction. As of December 31, 2020, we held interest rate cap contracts with an aggregate notional amount of $2.4 billion that matured in February 2021. These interest rate cap contracts were held to mitigate the risk of interest rate increases on the floating-rate term loans under our senior secured credit facilities. The contracts were not designated as hedges for accounting purposes. Interest expense, net decreased by $9211.65 million, or 428%, to $~~129~~126.96 million for the three months ended ~~June~~September 30, 2021, as compared to the three months ended ~~June~~September 30, 2020, primarily due to the following:

•a decrease of $7612.49 million indue ~~interest~~to ~~expense~~higher capitalized interest primarily resulting from ~~Chapter~~increased 11levels ~~restructuring~~of ~~activities,~~satellites ~~partially~~and ~~offset~~related byassets anunder ~~increase in interest expense recognized on our senior secured credit facilities~~construction; ~~and~~partially offset by

•aan ~~decrease~~increase of $134.18 million ~~due~~in ~~to higher capitalized~~ interest expense primarily ~~resulting~~recognized ~~from~~on ~~increased~~our ~~levels~~senior ofsecured ~~satellites~~credit ~~and related assets under construction~~facilities.

The non-cash portion of total interest expense, net was $26.61 million for the three months ended ~~June~~September 30, 2021, primarily consisting of interest expense related to the significant financing component identified in customer contracts, and amortization and accretion of discounts and premiums ~~and amortization of deferred financing fees~~.

Other Income, Net

Other income, net was $2010.2 million for the three months ended ~~June~~September 30, 2021, as compared to $23.81 million for the three months ended ~~June~~September 30, 2020. The net increase in other income was primarily driven by a $7.73 million gain ~~due~~from tothe aconversion ~~change~~of instock ~~value~~warrants ofinto ancommon ~~investment~~shares inof a ~~third~~newly ~~party~~merged ~~and~~public acompany and $51.38 million ~~gain~~in onfees ~~the~~received ~~sale~~related ofto ~~one~~an ofamendment ~~our~~fee ~~investments~~for a loan receivable, both of which occurred during the three months ended ~~June~~September 30, 2021, with no similar activity for the three months ended ~~June~~September 30, 2020. InOffsetting ~~addition~~this gain, we ~~had~~incurred higher foreign currency ~~gains~~losses in 2021 as compared to ~~losses in~~ 2020, with a net ~~positive~~negative impact of $32.34 million for the three months ended ~~June~~September 30, 2021 as compared to the three months ended ~~June~~September 30, 2020.

Reorganization Items

Reorganization items reflect direct costs incurred in connection with our Chapter 11 restructuring activities. We recorded reorganization items of $~~298~~36.74 million and $4998.63 million for the three months ended ~~June~~September 30, 2020 and 2021, respectively. Reorganization items for the three months ended ~~June~~September 30, 2020 primarily consisted of ~~$197~~professional fees.0 ~~million~~Reorganization ~~related~~items tofor the ~~write-off~~three ofmonths ~~debt~~ended ~~discount~~September 30, ~~premium~~2021 ~~and~~primarily ~~issuance~~consisted ~~costs,~~of ~~$52.2~~professional ~~million~~fees, of financing fees related to the Original DIP Facility and ~~$49.0~~New ~~million~~DIP inFacility ~~professional~~and ~~fees. Reorganization items for~~ the ~~three~~write-off ~~months~~of ~~ended~~debt ~~June~~discount ~~30,~~related ~~2021~~to ~~consisted~~the ofNew ~~professional~~DIP ~~fees~~Facility.

Income Tax Expense

Income tax ~~expense~~benefit ~~increased~~decreased by $321.13 million to income tax expense of $32.96 million for the three months ended ~~June~~September 30, 2021, as compared to the three months ended ~~June~~September 30, 2020. The ~~increase~~decrease was principally attributable to higher income from our U.S. subsidiaries for the three months ended ~~June~~September 30, 2021, ~~withholding taxes on revenue earned in some of the foreign markets in which we operate,~~ benefits recorded in 2020 from impacts of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), and a tax reserve established on certain tax benefits taken on the Base Erosion Anti-Abuse Tax (“BEAT”)~~, partially offset by a tax benefit resulting from changes in the UK deferred tax rate~~.

~~Cash~~ ~~paid for income taxes, net of refunds, totaled $1.7 million and $2.1 million for the three months ended June 30, 2020 and 2021, respectively.~~38

Cash paid for income taxes, net of refunds, totaled $2.1 million and $0.1 million for the three months ended September 30, 2020 and 2021, respectively.

Net Loss Attributable to Intelsat S.A.

Net loss attributable to Intelsat S.A. was $~~152~~145.37 million for the three months ended ~~June~~September 30, 2021, as compared to net loss attributable to Intelsat S.A. of $~~405~~15.49 million for the three months ended ~~June~~September 30, 2020. The change reflects the various items discussed above.

~~Six~~Nine Months Ended ~~June~~September 30, 2020 and 2021

Six Months EndedJune 30, 2020

Six Months EndedJune 30, 2021

Dollar Change

PercentageChange

Nine Months EndedSeptember 30, 2020

Nine Months EndedSeptember 30, 2021

Dollar Change

PercentageChange

Revenue

~~940~~1,~~854~~430,303

1,~~010~~536,~~625~~720

69106,~~771~~417

Operating expenses:

Direct costs of revenue (excluding depreciation and amortization)

~~212~~331,~~046~~191

~~328~~505,~~549~~798

~~116~~174,~~503~~607

5553%

Selling, general and administrative

~~144~~214,~~829~~586

~~202~~299,~~777~~499

5784,~~948~~913

40%

Depreciation and amortization

~~325~~488,~~662~~235

~~333~~495,~~499~~517

7,~~837~~282

21%

Impairment of non-amortizable intangible and other assets

46,243

—

(46,243)

Other operating expense—C-band

—580

~~122~~140,~~994~~861

~~122~~140,~~994~~281

Total operating expenses

~~728~~1,~~780~~080,835

~~987~~1,~~819~~441,675

~~259~~360,~~039~~840

3633%

Income from operations

~~212~~349,~~074~~468

2295,~~806~~045

(~~189~~254,~~268~~423)

(8973%)

Interest expense, net

(~~540~~678,~~862~~937)

(~~262~~388,~~236~~836)

~~278~~290,~~626~~101

(5243%)

Other income, net

58,~~496~~564

2940,~~937~~133

2431,~~441~~569

Reorganization items

(~~298~~335,~~691~~059)

(~~105~~203,~~403~~719)

~~193~~131,~~288~~340

(6539%)

Loss before income taxes

(~~621~~655,~~983~~964)

(~~314~~457,~~896~~377)

~~307~~198,~~087~~587

(4930%)

Income tax expense

(959)

(11,112)

(10,153)

Income tax benefit (expense)

17,691

(13,716)

(31,407)

Net loss

(~~622~~638,~~942~~273)

(~~326~~471,~~008~~093)

~~296~~167,~~934~~180

(4826%)

Net income attributable to noncontrolling interest

(1,~~184~~784)

(1,~~174~~779)

105

(1—%)

Net loss attributable to Intelsat S.A.

(~~624~~640,~~126~~057)

(~~327~~472,~~182~~872)

~~296~~167,~~944~~185

(4826%)

4039

Revenue

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

Six Months EndedJune 30, 2020

Six Months EndedJune 30, 2021

Increase (Decrease)

PercentageChange

Nine Months EndedSeptember 30, 2020

Nine Months EndedSeptember 30, 2021

Increase (Decrease)

PercentageChange

On-Network Revenues

Transponder services

~~674~~1,~~934~~028,692

~~649~~969,~~163~~423

(2559,~~771~~269)

(46%)

Managed services

~~157~~226,~~311~~749

~~139~~211,~~854~~710

(1715,~~457~~039)

(117%)

Channel

~~816~~1,096

~~381~~567

(~~435~~529)

(5348%)

Total on-network revenues

~~833~~1,~~061~~256,537

~~789~~1,~~398~~181,700

(4374,~~663~~837)

(56%)

Off-Network and Other Revenues

Transponder, MSS and other off-network services

87141,~~305~~783

82122,~~303~~393

(519,~~002~~390)

(614%)

Satellite-related services

2031,~~488~~983

1829,~~493~~582

(12,~~995~~401)

(108%)

Total off-network and other revenues

~~107~~173,~~793~~766

~~100~~151,~~796~~975

(621,~~997~~791)

(613%)

In-flight Services Revenues

Services

—

~~102~~169,~~007~~489

Equipment

—

1833,~~424~~556

Total in-flight services revenue

—

~~120~~203,~~431~~045

Total

~~940~~1,~~854~~430,303

1,~~010~~536,~~625~~720

69106,~~771~~417

Total revenue for the ~~six~~nine months ended ~~June~~September 30, 2021 increased by $69106.84 million, or 7%, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020. By service type, our revenues increased or decreased due to the following:

On-Network Revenues:

•Transponder services—an aggregate decrease of $2559.83 million, primarily due to a $3858.19 million net decrease in ~~revenue~~revenues from media customers, ~~partially~~and ~~offset by~~ a $92.76 million net ~~increase~~decrease in revenues from network services customers. The decrease in ~~revenue~~revenues from media customers was primarily due to non-renewals, renewals at lower prices, service contractions and service ~~contractions~~terminations relating to distribution and DTH solution application customers, partially offset by new business from a contribution and ~~distribution~~DTH solution application ~~customer~~customers inand ~~the~~a ~~Americas~~transfer ~~and~~from ~~renegotiated~~managed ~~contracts~~services ~~and~~to ~~new~~transponder ~~business~~services ~~from~~for a DTH solution application customer ~~in Europe~~. The ~~increase~~decrease in revenue from network services customers was primarily due to non-renewals, pricing decreases, service contractions and a service contract termination. These decreased revenues were partially offset by a renegotiated contract with a maritime mobility customer for a different service mix of revenues previously classified as managed services, new business, ~~and~~ pricing ~~and capacity~~ increases ~~for an enterprise networks customer~~, and acapacity ~~service~~upgrades ~~transfer from managed services to transponder services~~ for a cellular backhaul ~~customer.~~solution ~~These~~application ~~increased revenues were partially offset by non-renewals, pricing decreases, service contractions, and a service contract termination~~customers.

•Managed services—an aggregate decrease of $1715.50 million, primarily due to a $1915.29 million decrease in ~~revenue~~revenues from network services customers, partially offset by a $24.90 million increase in ~~revenue~~revenues from government customers. The decline in revenues from network services customers was primarily driven by a renegotiated contract with a maritime mobility customer for a different service mix of revenues previously classified as managed services, non-renewals, and a service transfer from managed services to transponder services for a cellular backhaul customer, ~~and non-renewals,~~ partially offset by increased revenues from new flex maritime services. The increase in revenues from government customers was primarily attributable to new flex services and the entry into service of Galaxy 30, partially offset by non-renewals and service contractions.

Off-network and Other Revenues:

•Transponder, MSS, and other off-network services —an aggregate decrease of $19.4 million primarily attributable to a $16.8 million decrease in revenues from government customers. The decrease in revenues from government customers was primarily driven by equipment revenues recognized in 2020 with no corresponding revenues in 2021, non-renewals, pricing decreases, and service contractions, partially offset by new off-network managed services and pricing increases from recompeted services.

In-flight Services Revenues:

•Services and equipment—an aggregate increase of $~~120~~203.40 million attributable to our Intelsat CA business.

Operating Expenses

Direct Costs of Revenue (Excluding Depreciation and Amortization)

Direct costs of revenue increased by $~~116~~174.56 million, or 5553%, to $~~328~~505.58 million for the ~~six~~nine months ended ~~June~~September 30, 2021, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020. The increase was primarily due to $~~122~~196.40 million in costs attributable to our Intelsat CA business, ~~acquired~~partially offset by a $9.5 million decrease in ~~December~~equipment costs largely related to government customers incurred in 2020 with no similar activity in 2021, and a $5.4 million decrease in staff-related expenses.

Selling, General and Administrative

Selling, general and administrative expenses increased by $5784.9 million, or 40%, to $~~202~~299.85 million for the ~~six~~nine months ended ~~June~~September 30, 2021, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020. The increase was primarily due to the following:

•$5988.40 million in costs attributable to our Intelsat CA business; and

•an $11.2 million increase in staff-related expenses largely relating to our employee retention incentive plans; ~~and~~partially offset by

•a $416.23 million ~~increase~~decrease in ~~professional~~bad ~~fees;~~debt ~~partially~~expense ~~offset~~largely byrelating to a certain customer that filed for Chapter 11 bankruptcy protection in 2020.

•a $15.6 million decrease in bad debt expense due to higher bad debt expense for the six months ended June 30, 2020, largely relating to a certain customer that filed for Chapter 11 bankruptcy protection in 2020.

Depreciation and Amortization

Depreciation and amortization expense increased by $7.83 million, or 21%, to $~~333~~495.5 million for the ~~six~~nine months ended ~~June~~September 30, 2021, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020. Significant items impacting depreciation and amortization included:

•an increase of $1420.26 million in depreciation and amortization expense attributable to our Intelsat CA business; and

•an increase of $47.14 million in depreciation expense resulting from the impact of a satellite placed into service; partially offset by

•a decrease of $1019.92 million in depreciation expense due to the timing of certain satellites becoming fully depreciated.

Impairment of Non-Amortizable Intangible and Other Assets

We recognized impairment charges of $34.0 million and $12.2 million for the ~~six~~nine months ended ~~June~~September 30, 2020 relating to certain satellite and launch vehicle deposits and the Intelsat trade name intangible asset, respectively. No comparable amounts were recognized for the ~~six~~nine months ended ~~June~~September 30, 2021. See Item 1, Note 98—Satellites and Other Property and Equipment and Item 1, Note 1110—Goodwill and Other Intangible Assets for further discussion.

Other Operating Expense—C-band

Other operating expense—C-band consists of reimbursable and non-reimbursable costs associated with our C-band spectrum relocation efforts. We incurred $~~123.~~0.6 million and $140.9 million of reimbursable and non-reimbursable C-band clearing related expenses for the ~~six~~nine months ended ~~June~~September 30, ~~2021,~~2020 ~~with~~and ~~no comparable amounts for the six months ended June 30~~2021, ~~2020~~respectively.

Interest Expense, Net

Interest expense, net decreased by $~~278~~290.61 million, or 5243%, to $~~262~~388.28 million for the ~~six~~nine months ended ~~June~~September 30, 2021, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020, primarily due to the following:

•a decrease of $~~247~~243.80 million in interest expense primarily resulting from Chapter 11 restructuring activities, partially offset by an increase in interest expense recognized on our senior secured credit facilities; and

•a decrease of $2538.10 million due to a higher capitalized interest primarily resulting from increased levels of satellites and related assets under construction.

The non-cash portion of total interest expense, net was $5379.35 million for the ~~six~~nine months ended ~~June~~September 30, 2021, primarily consisting of interest expense related to the significant financing component identified in customer contracts, and amortization and accretion of discounts and premiums ~~and amortization of deferred financing fees~~.

Other Income, Net

Other income, net was $2940.91 million for the ~~six~~nine months ended ~~June~~September 30, 2021, as compared to $58.56 million for the ~~six~~nine months ended ~~June~~September 30, 2020. The net increase in other income was primarily driven by a $712.78 million gain ~~due~~from tothe a change in value of anstock ~~investment~~warrants inwe held and subsequent conversion of the stock warrants into common shares of a ~~third~~newly ~~party~~merged public company, a $57.57 million gain due to a change in value of ~~stock~~an ~~warrants~~investment wein ~~hold,~~a ~~and~~third party, a $5.3 million gain on the sale of one of our investments, and $1.8 million in fees received related to an amendment fee for a loan receivable, all of which occurred during the ~~six~~nine months ended ~~June~~September 30, 2021, with no similar activity for the ~~six~~nine months ended ~~June~~September 30, 2020. In addition, we ~~had~~incurred lower foreign currency ~~gains~~losses in 2021 as compared to ~~losses in~~ 2020, with a net positive impact of $63.07 million for the ~~six~~nine months ended ~~June~~September 30, 2021 as compared to the ~~six~~nine months ended ~~June~~September 30, 2020.

Reorganization Items

Reorganization items reflect direct costs incurred in connection with our Chapter 11 restructuring activities. We recorded reorganization items of $~~298~~335.71 million and $~~105~~203.47 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively. Reorganization items for the ~~six~~nine months ended ~~June~~September 30, 2020 primarily consisted of $197.0 million related to the write-off of debt discount, premium and issuance costs, $85.2 million in professional fees and $52.2 million of financing fees related to the Original DIP Facility ~~and $49~~.0 ~~million in professional fees.~~ Reorganization items for the ~~six~~nine months ended ~~June~~September 30, 2021 primarily consisted of professional fees, financing fees related to the Original DIP Facility and New DIP Facility and the write-off of debt discount related to the New DIP Facility.

Income Tax Expense

Income tax ~~expense~~benefit ~~increased~~decreased by $1031.24 million to income tax expense of $1113.17 million for the ~~six~~nine months ended ~~June~~September 30, 2021, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020. The ~~increase~~decrease was principally attributable to higher income from our U.S. subsidiaries for the ~~six~~nine months ended ~~June~~September 30, 2021, ~~withholding taxes on revenue earned in certain non-U.S. jurisdictions in which we operate,~~ benefits recorded in 2020 from impacts of the CARES Act, and a tax reserve established on certain tax benefits taken on the BEAT, partially offset by a tax benefit resulting from changes in the UK deferred tax rate.

Cash paid for income taxes, net of refunds, totaled $24.67 million and $2.57 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively.

Net Loss Attributable to Intelsat S.A.

Net loss attributable to Intelsat S.A. was $~~327~~472.29 million for the ~~six~~nine months ended ~~June~~September 30, 2021, as compared to net loss attributable to Intelsat S.A. of $~~624~~640.1 million for the ~~six~~nine months ended ~~June~~September 30, 2020. The change reflects the various items discussed above.

EBITDA

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

	Three Months EndedJune 30, 2020		Three Months EndedJune 30, 2021		Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
Net loss	$	(404,727)	$	(151,702)	$	(622,942)	$	(326,008)
Add:
Interest expense, net	222,533		129,893		540,862		262,236
Income tax expense	818		3,923		959		11,112
Depreciation and amortization	162,614		168,259		325,662		333,499
EBITDA	$	(18,762)	$	150,373	$	244,541	$	280,839

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


	Three Months Ended September 30, 2020		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2021
Net loss	$	(15,331)	$	(145,086)	$	(638,273)	$	(471,093)
Add (Subtract):
Interest expense, net	138,075		126,600		678,937		388,836

Income tax expense (benefit)	(18,650)		2,605		(17,691)		13,716
Depreciation and amortization	162,573		162,017		488,235		495,517
EBITDA	$	266,667	$	146,136	$	511,208	$	426,976

Adjusted EBITDA

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

compensation under our incentive compensation plans. Adjusted EBITDA measures have been used historically by investors, lenders and financial analysts to estimate the value of a company, to make informed investment decisions and to evaluate performance. Our management believes that the inclusion of Adjusted EBITDA facilitates comparison of our results with those of companies having different capital structures.

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

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

	Three Months EndedJune 30, 2020		Three Months EndedJune 30, 2021		Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
	Three Months EndedSeptember 30, 2020		Three Months EndedSeptember 30, 2021		Nine Months EndedSeptember 30, 2020		Nine Months EndedSeptember 30, 2021
Net loss	$	(~~404~~15,~~727~~331)	$	(~~151~~145,~~702~~086)	$	(~~622~~638,~~942~~273)	$	(~~326~~471,~~008~~093)
Add (Subtract):
Interest expense, net	138,075		126,600		678,937		388,836
Income tax expense (benefit)	(18,650)		2,605		(17,691)		13,716
Depreciation and amortization	162,573		162,017		488,235		495,517
EBITDA	266,667		146,136		511,208		426,976
Add:
Interest expense, net	222,533		129,893		540,862		262,236
Compensation and benefits(1)	15,484		21,369		39,338		63,605
Income tax expense	818		3,923		959		11,112
Non-recurring and non-cash items(2)	10,510		14,048		25,837		137,876
Depreciation and amortization	162,614		168,259		325,662		333,499
Impairment of non-amortizable intangible and other assets(3)	—		—		46,243		—
EBITDA	(18,762)		150,373		244,541		280,839
Reorganization items(4)	36,367		98,316		335,059		203,719
Add:
Compensation and benefits(1)	20,149		21,561		23,855		41,834
Non-recurring and non-cash items(2)	4,431		58,870		15,329		123,828
Impairment of non-amortizable intangible and other assets(3)	34,043		—		46,243		—
Reorganization items(4)	298,691		49,591		298,691		105,403
Proportionate share from unconsolidated joint venture(5):
Interest expense, net	1,~~045~~074		~~609~~594		23,~~125~~199		1,~~242~~836
Depreciation and amortization	2,~~814~~815		2,~~814~~815		58,~~629~~444		58,~~629~~444
Adjusted EBITDA(6)(7)	$	~~342~~332,~~411~~917	$	283,~~818~~278	$	~~636~~969,~~413~~328	$	~~558~~842,~~775~~456

(1)Reflects non-cash expenses incurred relating to our equity compensation plans and expenses incurred relating to our employee retention incentive plans in connection with our Chapter 11 proceedings.

(2)Reflects certain non-recurring expenses, gains and losses and non-cash items, including the following: costs associated with our C-band spectrum relocation efforts; professional fees related to our liability management initiatives; merger and acquisition costs; certain research and development costs; amortization of supplemental type certificates; severance, retention and relocation payments; changes in fair value and gains on sales of certain investments; certain foreign exchange gains and losses; and other various non-recurring expenses.

(3)Reflects a non-cash impairment charge recorded in connection with the write-off of certain satellite and launch vehicle deposits ~~for the three~~ and ~~six months ended June 30, 2020, and~~ a trade name impairment (see Item 1, Note 1110—Goodwill and Other Intangible Assets) for the ~~six~~nine months ended ~~June~~September 30, 2020.

(4)Reflects direct costs incurred in connection with our Chapter 11 restructuring activities. See Item 1, Note 2—Chapter 11 Proceedings, Ability to Continue as a Going Concern and Other Related Matters.

(5)Reflects adjustments related to our interest in Horizons-3 Satellite LLC (“Horizons 3”). See Item 1, Note 109(b)—Investments—Horizons-3 Satellite LLC.

(6)Adjusted EBITDA included $26.42 million and $26.7 million for the three months ended ~~June~~September 30, 2020 and 2021, respectively, and $5278.57 million and $5379.28 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively, of revenue relating to the significant financing component identified in customer contracts in accordance with the adoption of ASC 606, Revenue from Contracts with Customers.

(7)Intelsat S.A. Adjusted EBITDA reflected $54.14 million and $4.7 8 million for the three months ended ~~June~~September 30, 2020 and 2021, respectively, and $914.83 million and $813.7 5 million for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2021, respectively, of Adjusted EBITDA attributable to Intelsat Horizons-3 LLC, its subsidiaries and its proportionate share of Horizons 3. These entities are considered to be unrestricted subsidiaries under the definitions set forth in our applicable debt agreements.

B. Liquidity and Capital Resources

Overview

We are a highly leveraged company and our contractual obligations, commitments and debt service requirements over the next several years are significant. At ~~June~~September 30, 2021, the aggregate principal amount of our debt outstanding not held by affiliates was $15.79 billion. Our interest expense, net for the three and ~~six~~nine months ended ~~June~~September 30, 2021 was $~~129~~126.96 million and $~~262~~388.28 million, respectively, which included $26.61 million and $5379.35 million of non-cash interest expense, respectively. At ~~June~~September 30, 2021, cash, cash equivalents and restricted cash were approximately $~~658~~664.92 million.

The commencement of the Chapter 11 Cases accelerated substantially all of our outstanding debt. Any efforts to enforce payment obligations related to the acceleration of our debt have been automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code.

During the pendency of the Chapter 11 Cases, as discussed above in —Recent Developments, Voluntary Reorganization under Chapter 11, the Debtors do not anticipate making interest payments due under their respective unsecured debt instruments. In past years, our cash flows from operations and cash on hand have been sufficient to fund interest obligations ($1.1 billion and $634.7 million for the years ended December 31, 2019 and 2020, respectively), and significant capital expenditures ($229.8 million and $606.8 million for the years ended December 31, 2019 and 2020, respectively). However, as discussed above in —Recent Developments, Voluntary Reorganization under Chapter 11, our ability to fund operating expenses is now, to some extent, subject to obtaining certain approvals from the Bankruptcy Court in connection with our Chapter 11 proceedings.

A significant factor driving the Company’s decision to file for Chapter 11 protection was the Company’s desire to participate in the FCC’s process for accelerated clearing of the C-band spectrum, for which we need to incur significant upfront expenses for clearing activities well in advance of receiving reimbursement payments. On August 14, 2020, ~~the~~Intelsat ~~Company~~License filed its C-band spectrum transition plan with the FCC, with ongoing updates as requested by the FCC. The most recent amended transition plan was filed on September 30, 2021.

In addition to the significant capital expenditures we expect to make in 2021 and beyond, we expect total clearing costs will be approximately $1.3 billion over the next three years. Our primary source of liquidity is and will continue to be cash generated from operations, as well as existing cash. We currently expect to use cash on hand, ~~and~~ cash flows from operations and borrowings under the New DIP Facility to fund our most significant cash outlays, including debt service requirements and capital expenditures, in the next twelve months and beyond. We also expect to receive reimbursement payments for certain upfront C-band spectrum clearing expenses incurred, and under the FCC Final Order, the Company is eligible to receive Acceleration Payments of approximately $1.2 billion and $3.7 billion based on the milestone clearing certification dates of December 5, 2021 and December 5, 2023, respectively, with the respective payments expected to be received in the first half of each successive year, subject to the satisfaction of certain deadlines and other conditions set forth therein. On October 4, 2021, as subsequently amended on October 15, 2021, Intelsat License filed its Phase I

Certification of Accelerated Relocation, indicating completion of required clearing activities to satisfy the December 5, 2021 deadline and requesting FCC validation to receive the $1.2 billion Acceleration Payment.

Cash Flow Items

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

	Six Months EndedJune 30, 2020		Six Months EndedJune 30, 2021
	Nine Months EndedSeptember 30, 2020		Nine Months EndedSeptember 30, 2021
Net cash provided by operating activities	$	54194,~~494~~729	$	3850,~~360~~176
Net cash used in investing activities	(~~197~~418,~~385~~346)		(~~455~~654,~~913~~192)
Net cash provided by (used in) financing activities	426,744		(9,774)
Net cash provided by financing activities	417,431		183,904
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(34,~~732~~328)		(13,~~294~~250)
Net change in cash, cash equivalents and restricted cash	$	~~280~~189,~~121~~486	$	(~~428~~423,~~621~~362)

Net Cash Provided by Operating Activities

Net cash provided by operating activities decreased by $16144.16 million to $3850.42 million for the ~~six~~nine months ended ~~June~~September 30, 2021, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020. The decrease was due to a $28111.75 million decrease in net loss and changes in non-cash items, ~~partially~~as ~~offset~~well byas a $1233.61 million ~~increase~~decrease from changes in operating assets and liabilities. The ~~increase~~decrease from changes in operating assets and liabilities was primarily due to ~~lower~~higher outflows related to ~~the~~accounts ~~amount~~payable and ~~timing~~accrued ~~of accounts receivable~~liabilities, ~~prepaid~~interest ~~expenses,~~payments and ~~contract and~~ other ~~assets~~long-term liabilities, partially offset by ~~higher~~lower outflows related to ~~interest~~the ~~payments~~amount and timing of accounts receivable, prepaid expenses, and contract ~~liabilities~~and other assets.

Net Cash Used in Investing Activities

Net cash used in investing activities increased by $~~258~~235.58 million to $~~455~~654.92 million for the ~~six~~nine months ended ~~June~~September 30, 2021, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020, primarily due to increased capital expenditures, partially offset by $15.0 million of proceeds from the sale of an investment.

Net 45Cash Provided by Financing Activities

Net ~~Cash~~cash ~~Provided~~provided by ~~(Used~~financing ~~in)~~activities ~~Financing~~decreased ~~Activities~~by $233.5 million to $183.9 million for the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020, primarily due to decreased net proceeds of $244.8 million resulting from our financing activities related to our senior secured credit facilities completed during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020, partially offset by lower principal payments on deferred performance incentives.

Net cash provided by financing activities decreased by $436.5 million to cash used of $9.8 million for the six months ended June 30, 2021, as compared to the six months ended June 30, 2020, primarily due to net proceeds of $447.8 million resulting from our DIP financings completed during the six months ended June 30, 2020, partially offset by lower principal payments on deferred performance incentives.

Restricted Cash

As of ~~June~~September 30, 2021, $27.17 million of cash was legally restricted, being held as a compensating balance for certain outstanding letters of credit.

Debt

The filing of the Chapter 11 Cases constituted an event of default that accelerated substantially all of our obligations under the documents governing the prepetition existing indebtedness of Intelsat S.A., Intelsat Luxembourg, Intelsat Connect and Intelsat Jackson. Any efforts to enforce payment obligations related to the acceleration of our debt have been automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. While the Chapter 11 Cases are pending, the Debtors do not anticipate making interest payments due under their respective unsecured debt instruments; however, the Debtors expect to make monthly interest payments on their senior secured debt instruments pursuant to the adequate protection requirements under the DIP Order.

Intelsat Jackson Superpriority Senior Secured Debtor-in-Possession Term Loan Facility

On June 179, 2020, (Intelsat Jackson received approval from the ~~“Closing~~Bankruptcy ~~Date”),~~Court to enter into the Original DIP ~~Debtors~~Facility in an aggregate principal amount of $1.0 billion on the terms and ~~DIP~~conditions ~~Lenders~~as ~~entered~~set ~~into~~forth in the Original DIP Credit Agreement, aand ~~non-amortizing~~on ~~multiple~~June ~~draw~~17, ~~superpriority~~2020, ~~secured~~the ~~debtor-in-possession~~DIP ~~term~~Debtors ~~loan~~entered ~~facility,~~into inthe anOriginal ~~aggregate~~DIP ~~principal~~Credit ~~amount~~Agreement. ofOn ~~$1.0~~September ~~billion~~14, on2021, the ~~terms~~DIP ~~and~~Debtors ~~conditions~~received ~~set~~approval ~~forth~~from ~~therein~~the ~~(see—Recent~~Bankruptcy ~~Developments—Voluntary~~Court ~~Reorganization~~for ~~under~~the ~~Chapter~~DIP 11Order ~~above)~~to enter into the New DIP Facility in an aggregate principal amount of $1.5

~~Intelsat~~ Jackson borrowed $500.0 million of term loans under the DIP Facility on the Closing Date. Under the DIP Facility, Intelsat Jackson may, at its sole discretion, make incremental draws of the lesser of $250.0 million and the remaining available commitments of the DIP Lenders. Intelsat Jackson made two additional draws of $250.0 million each on November 27, 2020 and December 14, 2020, bringing the total aggregate principal amount outstanding under the DIP Facility to $1.0 billion as of both December 31, 2020 and June 30, 2021. Drawn amounts under the DIP Facility bear interest at either (i) 4.5% per annum plus a base rate of the highest of (a) the Federal Funds Effective Rate plus ½ of 1.0%, (b) the Prime Rate as in effect on such day and (c) the London Inter-Bank Offered Rate (“LIBOR Rate”) for a one-month interest period on such day (or if such day is not a business day, the immediately preceding business day) plus 1.0%, or (ii) 5.5% plus the LIBOR Rate. For purposes of the DIP Facility, the LIBOR Rate has an effective floor rate of 1.0%. Undrawn amounts under the DIP Facility shall be subject to a ticking fee of 3.6% of the amount of commitments of the DIP Lenders from the entry of the DIP Order until such commitments terminate, which ticking fee shall be payable on the last day of each fiscal quarter prior to the date such commitments terminate and on the date of such termination. If an event of default under the DIP Facility occurs, the overdue amounts under the DIP Facility would bear interest at an additional 2.0% per annum above the interest rate otherwise applicable.45

~~The~~billion ~~proceeds~~on of the ~~DIP~~terms ~~Facility~~and ~~may~~conditions beas ~~used,~~set ~~among~~forth ~~other~~in ~~things,~~the toNew ~~pay~~DIP ~~for~~Credit ~~(i)~~Agreement, ~~working~~and ~~capital~~on ~~needs~~September of14, ~~the~~2021, ~~DIP~~Intelsat ~~Debtors~~Jackson inand ~~the~~certain ~~ordinary course~~ of ~~business,~~the ~~(ii)~~DIP ~~potential~~Debtors ~~C-band~~entered ~~relocation~~into ~~costs,~~the ~~(iii)~~New ~~investment~~DIP ~~and~~Credit ~~other~~Agreement. ~~general~~The ~~corporate~~New ~~purposes,~~DIP ~~and~~Facility ~~(iv)~~provided ~~the~~$1.25 ~~costs~~billion ~~and~~in ~~expenses~~new ofmoney ~~administering~~at ~~the~~closing ~~Chapter~~for 11Intelsat ~~Cases.~~Jackson ~~The~~to, ~~maturity~~among ~~date~~other ofthings, refinance the Original DIP Facility and, asprovides ~~amended~~the byability ~~DIP~~for ~~Amendment~~Intelsat ~~No. 3 discussed below~~Jackson, isat ~~July~~its ~~13,~~sole ~~2022~~discretion, ~~subject~~ to ~~certain~~make ~~extensions~~an ~~pursuant~~incremental to$250.0 ~~the~~million ~~terms~~draw. ofSee ~~the~~also—Recent ~~DIP~~Developments—Voluntary ~~Credit~~Reorganization ~~Agreement~~under Chapter 11 above.

~~The~~Drawn ~~DIP~~amounts ~~Credit~~under ~~Agreement~~the ~~includes~~New ~~customary~~DIP ~~negative~~Facility ~~covenants~~bear ~~for~~interest ~~debtor-in-possession~~at ~~loan~~either ~~agreements~~(1) of3.75% ~~this~~per ~~type,~~annum ~~including~~plus ~~covenants~~a ~~limiting~~base rate of the ~~Company’s~~highest ~~and~~of ~~its~~(a) ~~subsidiaries’~~the ~~ability~~Federal ~~to,~~Funds ~~among~~Effective ~~other~~Rate ~~things,~~plus ~~incur~~½ ~~additional~~of ~~indebtedness~~1.0%, ~~create~~(b) ~~liens~~the Prime Rate as in effect on ~~assets,~~such ~~make~~day ~~investments,~~and ~~loans~~(c) the LIBOR Rate for a one-month Interest Period on such day (or ~~advances,~~if ~~engage~~such day is not a Business Day (as defined in ~~mergers~~the New DIP Credit Agreement), ~~consolidations~~the immediately preceding Business Day, ~~sales~~plus 1.00%, or (2) 4.75% plus the LIBOR Rate. Undrawn amounts under the New DIP Facility shall be subject to a ticking fee of ~~assets~~3.6% ~~and~~of ~~acquisitions,~~the ~~pay~~amount ~~dividends~~of ~~and~~commitments ~~distributions~~of ~~and~~the ~~make~~DIP ~~payments~~Lenders infrom ~~respect~~the entry of ~~junior~~the orDIP ~~prepetition~~Order ~~indebtedness~~until such commitments have terminated, inwhich ticking fee shall be payable on the last day of each ~~case~~fiscal ~~subject~~quarter prior to ~~customary~~the ~~exceptions~~date ~~for~~such ~~debtor-in-possession~~commitments ~~loan~~have ~~agreements~~been terminated and on the date of ~~this~~such ~~type~~termination. During the continuance of a payment event of default, overdue amounts under the New DIP Facility will bear interest at an additional 2.0% per annum above the interest rate otherwise applicable.

The ~~DIP~~use ~~Credit~~of ~~Agreement~~proceeds ~~also~~under ~~includes~~the ~~certain~~New ~~customary~~DIP ~~representations~~Facility ~~and~~include: ~~warranties,~~(i) ~~affirmative~~the ~~covenants~~payment ~~and events~~ of ~~default,~~working ~~including,~~capital ~~but not limited to, payment defaults, breaches~~ of ~~representations~~the ~~and~~DIP ~~warranties,~~Debtors ~~covenant~~in ~~defaults, certain events under~~ the ~~Employee~~ordinary ~~Retirement~~course ~~Income Security Act~~ of ~~1974~~business, as(ii) ~~amended, and change of control. Certain bankruptcy~~C-~~related~~band ~~events~~relocation ~~are~~costs, ~~also~~(iii) ~~events~~investment ofand ~~default,~~other ~~including,~~general ~~but~~corporate ~~not limited to~~purposes, (iv) the ~~dismissal~~payment byof the ~~Bankruptcy~~costs ~~Court~~and ofexpenses ~~any~~ of administering the Chapter 11 Cases, (v) the ~~conversion~~adequate ofprotection ~~any~~payments ofand (vi) the ~~Chapter~~repayment 11of ~~Cases~~obligations tounder athe ~~case~~Original ~~under~~DIP ~~Chapter~~Credit 7Agreement. The maturity date of the ~~Bankruptcy~~New ~~Code~~DIP ~~and~~Facility ~~certain~~is ~~other~~July ~~events~~13, ~~related~~2022, subject to the ~~impairment of the~~ DIP ~~Lenders~~Debtors’ ~~rights~~ability orto ~~liens~~extend ~~granted~~for ~~under~~regulatory ~~the DIP Credit Agreement~~purposes.

The 46New DIP Credit Agreement includes customary negative covenants for debtor-in-possession loan agreements of this type, including covenants limiting the Company’s and its subsidiaries’ ability to, among other things, incur additional indebtedness, create liens on assets, make investments, loans or advances, engage in mergers, consolidations, sales of assets and acquisitions, pay dividends and distributions and make payments in respect of junior or prepetition indebtedness, in each case subject to customary exceptions for debtor-in-possession loan agreements of this type.

OnThe ~~August~~New ~~24,~~DIP ~~2020,~~Credit ~~the~~Agreement ~~DIP~~also ~~Debtors~~includes certain customary representations and ~~DIP~~warranties, ~~Lenders~~affirmative ~~entered~~covenants ~~into~~and ~~DIP~~events ~~Amendment~~of ~~No.~~default, 1including, tobut ~~the~~not ~~DIP~~limited ~~Credit~~to, ~~Agreement~~payment defaults, breaches of representations and onwarranties, ~~November~~covenant 25defaults, ~~2020~~certain events under the Employee Retirement Income Security Act of 1974, ~~entered~~as ~~into~~amended, ~~DIP~~and ~~Amendment~~change Noof control. 2Certain bankruptcy-related events are also events of default, ~~each~~including, inbut ~~connection~~not ~~with~~limited to, the ~~Gogo~~dismissal ~~Transaction~~by ~~(see~~the ~~Item~~Bankruptcy 1,Court ~~Note~~of 2—any of the Chapter 11 ~~Proceedings~~Cases, ~~Ability~~the toconversion ~~Continue~~of asany of the Chapter 11 Cases to a ~~Going~~case ~~Concern~~under Chapter 7 of the Bankruptcy Code and ~~Other~~certain ~~Related~~other ~~Matters~~events ~~for~~related ~~additional~~to ~~information)~~the impairment of the DIP Lenders’ rights or liens granted under the New DIP Credit Agreement.

OnThe ~~July~~foregoing ~~13,~~descriptions ~~2021,~~of the ~~DIP~~Original ~~Debtors and~~ DIP ~~Lenders~~Credit ~~entered~~Agreement ~~into~~and ~~DIP Amendment No. 3 whereby, among other things,~~ the ~~parties~~New ~~agreed to certain technical modifications to the~~ DIP Credit Agreement ~~that~~do ~~provided~~not ~~for~~purport ~~the~~to ~~extension~~be ofcomplete ~~the~~and ~~initial~~are ~~scheduled~~qualified ~~maturity~~in ~~date~~their ofentirety ~~July~~by ~~13,~~reference ~~2021,~~to ~~and~~ the ~~Debtors~~full ~~agreed~~text toof ~~waive certain conditions under~~ the ~~PSA.~~Original ~~In connection with~~ DIP ~~Amendment~~Credit ~~No.~~Agreement 3,and ~~the~~New DIP ~~Debtors~~Credit ~~elected to extend the initial scheduled maturity date for one year to July 13~~Agreement, ~~2022~~as ~~and paid 1~~applicable.~~0% of the aggregate principal amount in extension fees.~~

The foregoing descriptions of the DIP Credit Agreement, DIP Amendment No. 1, DIP Amendment No. 2 and DIP Amendment No. 3 do not purport to be complete and are qualified in their entirety by reference to the full text of the DIP Credit Agreement, DIP Amendment No. 1, DIP Amendment No. 2 and DIP Amendment No. 3, as applicable.

Contracted Backlog

We benefit from strong visibility of our future revenues. Our contracted backlog is our expected future revenue under existing customer contracts and includes both cancelable and non-cancelable contracts. As of ~~June~~September 30, 2021, our contracted backlog was approximately $65.07 billion. The amount included in backlog represents the full service charge for the duration of the contract and does not include termination fees. The amount of the termination fees is generally calculated as a percentage of the remaining backlog associated with the contract. In certain cases of breach for non-payment or customer bankruptcy, we may not be able to recover the full value of certain contracts or termination fees. Our contracted backlog includes 100% of the backlog of our consolidated ownership interests, which is consistent with the accounting for our ownership interests in these entities. We believe this backlog and the resulting predictable cash flows in the FSS sector make our results less volatile than that of typical companies outside our industry.

Capital Expenditures

Our capital expenditures depend on our business strategies and reflect our commercial responses to opportunities and trends in our industry. Our actual capital expenditures may differ from our expected capital expenditures if, among other things, we enter into any currently unplanned strategic transactions. Levels of capital spending from one year to the next are also influenced by the nature of the satellite life cycle and by the capital-intensive nature of the satellite industry. For example, we incur significant capital expenditures during the years in which satellites are under construction. We typically procure a new satellite within a timeframe that would allow the satellite to be deployed at least one year prior to the end of the service life of the satellite to be replaced. As a result, we frequently experience significant variances in our capital expenditures from year to year. Further, following ~~the~~Intelsat ~~Company~~License’s filing of its C-band spectrum transition plan with the FCC on August 14, 2020, with ongoing updates as requested by the FCC, we expect total clearing costs will be approximately $1.3 billion over the next three years, of which approximately $~~900~~800.0 million is expected to be incurred in 2021. Payments for satellites and other property and equipment during the ~~six~~nine months ended ~~June~~September 30, 2021 were $469.0 million. However, subject to the satisfaction of certain deadlines and other conditions set forth in the FCC Final Order, the Company is eligible to receive Acceleration Payments in an aggregate total amount of approximately $4.9 billion over the next 2 years.

30, 2021 were $667.9 million. However, subject to the satisfaction of certain deadlines and other conditions set forth in the FCC Final Order, the Company is eligible to receive Acceleration Payments in an aggregate total amount of approximately $4.9 billion over the next 2 years.

We intend to fund our capital expenditure requirements from cash on hand and cash provided from operating activities; however, our ability to fund capital expenditures in the ordinary course is, to some extent, subject to obtaining certain approvals from the Bankruptcy Court in connection with our Chapter 11 proceedings.

Off-Balance Sheet Arrangements

We have revenue sharing agreements with JSAT International, Inc. (“JSAT”) related to services sold on the Horizons 1, Horizons 2 and Horizons 3 satellites. We are responsible for billing and collection for such services and we remit 50% of the revenue, less applicable fees and commissions, to JSAT. Refer to Item 1, Note 109—Investments for disclosures relating to the revenue sharing agreements with JSAT.

Contractual Obligations

Other than as disclosed elsewhere in this report with respect to the filing of the Chapter 11 Cases and the acceleration of substantially all of our debt as a result, there have been no material changes outside the ordinary course of business to the information provided with respect to our contractual obligations as disclosed in our 2020 Annual Report.

Critical Accounting Policies and Estimates

The Company’s significant accounting policies are described in Note 1—Background and Summary of Significant Accounting Policies in our 2020 Annual Report. The Company’s critical accounting estimates are described in Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2020 Annual Report and are further described below.

Bankruptcy Accounting

Our condensed consolidated financial statements included herein have been prepared as if we are a going concern and reflect the application of ASC 852, Reorganizations (“ASC 852”). ASC 852 requires the financial statements, for periods subsequent to the commencement of the Chapter 11 proceedings, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, we classify liabilities and obligations whose treatment and satisfaction are dependent on the outcome of the reorganization under the Chapter 11 proceedings as liabilities subject to compromise on our condensed consolidated balance sheets. In addition, we classify all income, expenses, gains or losses that are incurred or realized as a result of the Chapter 11 proceedings as reorganization items in our condensed consolidated statements of operations (see Item 1, Note 2—Chapter 11 Proceedings, Ability to Continue as a Going Concern and Other Related Matters).

Recently Issued Accounting Pronouncements

For disclosures related to recently issued accounting pronouncements, see Item 1, Note 1—General—Recently Issued Accounting Pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the Company’s disclosures about market risk made in Part II—Item 7A—Quantitative and Qualitative Disclosures about Market Risk of the Company’s 2020 Annual Report.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the quarter ended ~~June~~September 30, 2021. Based upon that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of ~~June~~September 30, 2021.

Changes in Internal Control over Financial Reporting

Except as described below, there were no other changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(f) of the Exchange Act during the quarter ended ~~June~~September 30, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On December 1, 2020, we completed our acquisition of Intelsat CA. As part of our ongoing integration of the Intelsat CA business, we are currently integrating policies, processes, people, technology and operations for the combined Company. Management will continue to evaluate the Company's internal control over financial reporting as it continues to integrate the Intelsat CA business.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Chapter 11 Cases

On May 13, 2020, the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in Bankruptcy Court. The information contained in Item 1, Note 2—Chapter 11 Proceedings, Ability to Continue as a Going Concern and Other Related Matters—Voluntary Reorganization under Chapter 11 is incorporated herein by reference. As a result of such bankruptcy filings, substantially all legal proceedings pending against the Debtors have been stayed. These matters will be subject to resolution in accordance with the Bankruptcy Code and applicable orders of the Bankruptcy Court.

As part of the Chapter 11 Cases, parties believing that they have claims or causes of action against the Debtors could file proofs of claim evidencing such claims. Pursuant to an order entered by the Bankruptcy Court, all proofs of claim were to be filed with the Bankruptcy Court by September 9, 2020, except for claims by governmental units. Claims by governmental units were to be filed with the Bankruptcy Court by November 16, 2020. The filed claims have been or are being reconciled to amounts recorded in liabilities subject to compromise in our condensed consolidated balance ~~sheet~~sheets. The Debtors ~~may~~continue ~~ask~~to reconcile the claims register. The Debtors have asked the Bankruptcy Court to disallow certain claims that the Debtors believe are duplicative, have been later amended or superseded, are without merit, are overstated or should be disallowed for other reasons. In addition, as a result of this process, the Debtors may identify additional liabilities that will need to be recorded or reclassified to liabilities subject to compromise. In light of the substantial number of claims filed, and expected to be filed, the claims resolution process may take considerable time to complete and likely will continue after the Debtors emerge from ~~bankruptcy~~the Chapter 11 proceedings.

SES Claim

Other Litigation Matters

In the absence of the automatic stay in our Chapter 11 ~~cases~~Cases, we are subject to litigation in the ordinary course of business, but management does not believe that the resolution of any of those pending proceedings would have a material adverse effect on our financial position or results of operations.

Item 1A. Risk Factors

There have been no material changes or additions to the risk factors previously disclosed in Part I—Item 1A—Risk Factors of our 2020 Annual Report.

Item 6. Exhibits

Exhibit No.						Document Description
10.1						~~Amendment~~Plan ~~No.~~Support ~~3 and Waiver~~Agreement, dated as of ~~July~~August 1324, 2021, toby ~~Superpriority~~and ~~Secured~~among ~~Debtor-in-Possession~~the ~~Credit~~Debtors ~~Agreement,~~and ~~dated~~Consenting asCreditors of(incorporated ~~June~~by ~~17,~~reference ~~2020,~~to byExhibit ~~and~~10.1 ~~among~~of Intelsat ~~Jackson Holdings~~ S.A.,’s asCurrent ~~Borrower,~~Report ~~the~~on ~~Guarantor~~Form ~~parties thereto~~8-K, ~~Credit~~File ~~Suisse~~No. AG001-35878, asfiled ~~Administrative~~on ~~Agent~~August ~~and~~25, ~~Collateral Agent and the Lender parties thereto~~2021).*
10.2						Superpriority Secured Debtor-in-Possession Credit Agreement, dated as of September 14, 2021, by and among Intelsat Jackson, as borrower, the guarantor parties thereto, Credit Suisse AG, as administrative agent and collateral agent, and the lender parties thereto (incorporated by reference to Exhibit 10.1 of Intelsat S.A.’s Current Report on Form 8-K, File No. 001-35878, filed on September 16, 2021).
10.3						Amended and Restated Employment Agreement, dated as of October 21, 2021, by and among Intelsat S.A., Intelsat US LLC and Stephen Spengler (incorporated by reference to Exhibit 10.1 of Intelsat S.A.’s Current Report on Form 8-K, File No. 001-35878, filed on October 21, 2021).
31.1						Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.*
31.2						Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.*
32.1						Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2						Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101						The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~June~~September 30, 2021, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Loss, (iv) Consolidated Statements of Changes in Shareholders' Deficit, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.*
104						Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.


*			Filed herewith.

The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Intelsat S.A. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INTELSAT S.A.
Date: August 3, 2021	By	/s/ STEPHEN SPENGLER
Date: November 4, 2021	By	/s/ STEPHEN SPENGLER
		Stephen Spengler
		Chief Executive Officer
Date: August 3, 2021	By	/s/ DAVID TOLLEY
Date: November 4, 2021	By	/s/ DAVID TOLLEY
		David Tolley
		Chief Financial Officer

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