( millins) Quarter Ended September 30, 2016 27 Octber, 2016 Third Quarter 2016 Perfrmance Summary In the third quarter f 2016, we cntinued t advance the imprtant perating pririties that will psitin us fr future grwth. We successfully cmpleted the final tw f ur fur planned satellite launches fr 2016, and prgressed ur managed services fferings, bth f which are expected t drive incremental revenue grwth in 2017. As we clse 2016, we remain fcused n leveraging ur first t market advantage fr ur Intelsat Epic NG satellite fleet. This includes the rllut f managed services that makes it easier fr custmers t access ur high thrughput platfrm. As we think abut 2017, maintaining ur launch schedule and executing against ur service strategies are pririties that we expect will psitin the cmpany fr a return t grwth. Third quarter 2016 revenue was $543 millin, a 7 percent decline as cmpared t revenue f $581 millin in the third quarter f 2015. Net incme attributable t Intelsat S.A. was $196 millin fr the three mnths ended September 30, 2016. Adjusted EBITDA 1 f $405 millin, r 75% f revenue, declined 12 percent frm $458 millin, r 79% f revenue, in the third quarter f 2015. The reduced Adjusted EBITDA and Adjusted EBITDA margin $700 $600 $500 $400 $300 $200 $100 $0 Third Quarter 2016 Revenue and Adjusted EBITDA reflect lwer revenue, an increase in bad debt, primarily related t a limited number f custmers in Latin America and increased csts related t staff. Headwinds cntinue t dminate ur financial results, including pricing pressure, reflecting versupply cnditins f wide-beam capacity fr certain regins and applicatins, pint-t-pint telecmmunicatins infrastructure services mving t fiber alternatives and limited new U.S. gvernment pprtunities. Incremental revenue frm ur 2016 satellite launches is reflected in ur sequential revenue result, a slight imprvement as cmpared t the secnd quarter f 2016. $581 3Q15 $458 $543 3Q16 $405 Revenue AEBITDA
Cntracted backlg at September 30, 2016 was $8.9 billin, representing expected future revenue under existing cntracts with custmers, as cmpared t $9.2 billin at June 30, 2016. At ver 4.0 times trailing 12 mnths revenue (frm Octber 1, 2015 t September 30, 2016), ur backlg remains sizable and we believe it prvides a slid fundatin fr predictable cash flw and investment in ur business. 2016 Operatinal Pririties: Expanding Service Offerings t Drive Differentiatin and Accelerate Adptin f High Thrughput Satellite Services We are pursuing five peratinal pririties as we psitin fr grwth. Our strategy is centered n cntinuing t prvide infrastructure t ur current sectrs, such as media, netwrk services and gvernment, but with an emphasis n services and innvative technlgies that we believe will psitin us t cmpete fr apprximately $3.3 billin in incremental revenue pprtunity thrugh 2021 with sustainable, new applicatins with high traffic vlumes that feature attractive grwth rates. The applicatins cmprising this grwth pprtunity include bradband fr enterprise, wireless infrastructure, Internet f Things, cmmercial aernautical and maritime mbility and gvernment. At the same time, we will cntinue t supprt the needs f ur media custmers with current and incremental capacity fr direct t hme (DTH) and ther distributin applicatins. Prgress n Our 2016 Operatinal Pririties: Maintain ur design, manufacturing and launch schedule fr the next generatin Intelsat Epic NG high thrughput satellite ( HTS ) fleet and ther satellites in ur plan t ensure availability f new, differentiated inventry t drive revenue grwth; Intelsat 36 and Intelsat 33e successfully launched n August 24, 2016. Intelsat 36 entered int service in late September 2016. Intelsat 36 includes a Ku-band paylad used by MultiChice fr the expansin f high definitin (HD) services in Sub-Saharan Africa and a C-band paylad that prvides in-rbit resilience fr Intelsat s media neighbrhds serving the Africa and Indian Ocean regins. Fllwing cmpletin f an extended rbit-raising missin (detailed in Fleet and Operatins Update, belw), Intelsat 33e, the secnd f ur Intelsat Epic NG satellites, is nw expected t enter int service in the first quarter f 2017. At that pint, the Intelsat Epic NG high perfrmance ftprint will span frm the Americas, the Caribbean and the Nrth Atlantic t the Middle East, Eurpe, Africa and the Asia-Pacific regins, including key maritime and aernautical rutes imprtant t capturing new grwth. As we reprted in September 2016, custmers using Intelsat 29e are experiencing up t a 165% efficiency imprvement when using current netwrking hardware. Ecsystem tests demnstrate up t a 330% efficiency imprvement when using new netwrking hardware. These results are directly translatable int lwer cst per bit perfrmance fr ur custmers. We are demnstrating the prmise f high thrughput technlgy, and the benefits f ur pen architecture and efficiency-fcused design philsphy which will deliver nging imprvement in thrughput t ur custmers as new technlgies are intrduced ver the life f the satellite. The cmpany s Intelsat 32e paylad is scheduled t launch n an Arianespace rcket in the first quarter f 2017. Intelsat 35e, scheduled t launch n a SpaceX Falcn 9 launcher, is expected t take place during the secnd quarter f 2017 (see table belw fr ur cmplete launch plan). 2
Since July 27, 2016, Intelsat has signed 9 additinal Intelsat Epic NG agreements with custmers, spanning applicatins including mbility, enterprise and fixed and wireless infrastructure. Of the ttal megahertz cntracted since July 27, 2016, the majrity is incremental business. Cntract terms n the entire Intelsat Epic NG fleet cntinue t be favrable, with the average cntract length n grwth services ranging frm five t six years; this is lnger than that f the average fleet-wide netwrk services cntract. Drive innvatin t create next generatin slutins, including cllabrating with grund technlgy manufacturers and ther partners t ensure ptimized perfrmance, ecnmics and simplified access fr Intelsat Epic NG fr applicatins including bradband infrastructure, mbility, gvernment, media and enterprise slutins; Intelsat emphasizes supprting innvatin n the grund as well as in the sky in rder t develp technlgies that can pen larger and faster grwing applicatins, stimulating demand fr ur satellite slutins. Our antenna develpment prjects cntinue t prgress. Antenna develper, Kymeta Crpratin, is expected t begin prductin f its 70 centimeter electrnically steerable antenna by mid-2017; Intelsat will initially fcus n deplyment f the technlgy fr mbility applicatins. In August 2016, Intelsat partnered with Newtec and Casablanca at the SET Exp in Sã Paul, Brazil, t demnstrate the higher perfrmance and efficiency f Intelsat 29e s Ku-band spt beams, using Newtec s 32APSK higher-rder mdulatin, and the latest satellite transmissin standard, DVB-S2X. The cmbined perfrmance f grund and space technlgies resulted in a crystal clear 4K-UHDTV signal transmissin at 20 Mbps, utilizing nly 6.6 MHz f bandwidth. Develp applicatin-specific capacity and new service fferings that supprt the grwth bjectives f ur custmers acrss ur business in the media, netwrk services and gvernment sectrs, including mbility applicatins, and invest in ur vide neighbrhd rbital lcatins t supprt lng-term grwth gals; In August 2016, PSSI Glbal Services used IntelsatOne Prism t supprt the bradcast f the Canadian Pacific Wmen's Open glf turnament in Calgary, Canada. The managed service prvides guaranteed high-thrughput, tw-way IP cnnectivity fr the transmissin f multiple vide, vice and data files ver a single satellite link, simplifying the jb f news cntributin frm sites with limited r highly-cntended services 3
( millins) Intelsat S.A. Maintain ur leadership in gvernment services, fcusing n prjects that require end-t-end netwrk respnsibilities and cmplex netwrk supprt, thereby imprving ur value prpsitin t gvernment custmers seeking affrdable slutins frm a trusted cmmercial prvider; Intelsat General Crpratin signed an agreement with General Atmics Aernautical Systems Inc. (GA-ASI). The agreement allws GA-ASI t evaluate the advanced technical capability and inherent cst effectiveness f leveraging Intelsat Epic NG satellites fr unmanned aerial systems (UAS) peratins using the Predatr and Predatr B/MQ-9 Reaper systems. Tgether, Intelsat General Crpratin and GA-ASI intend t develp a rad map t mve cntrl and supprt f the UAS frm traditinal wide-beam Ku-band satellites t Intelsat Epic NG spt beam capability. Optimize use f ur spectrum rights and glbal presence t maximize market access and cntinuity, particularly in attractive regins, while maintaining investment discipline; The Intelsat 38 satellite prgram, under which Intelsat is wrking with Azercsms t develp a new satellite fr the 45 E rbital lcatin, cntinues t prgress. The satellite is nw expected t launch in 2018, which in additin t ther capacity at the lcatin, will replace Intelsat 12. Q3 2016 Business Highlights and Custmer Set Perfrmance All 2016 cmparisns are t 2015 unless nted therwise Netwrk Services Netwrk Services revenue was $222 millin in the third quarter f 2016, a $41 millin, r 16 percent, decrease frm the prir year quarter and a $6 millin, r 3 percent, decline as cmpared t the secnd quarter f 2016. The largest factrs cntributing t the decline were lwer renewals, including terminated pint-t-pint trunking services, and pricing pressure n renewals, reflecting the cmpetitive envirnment primarily in the Africa and Eurpe-Africa dwnlink regins. The decline als reflects the end f lifecycle f the channel prduct, as was previusly disclsed. These declines were ffset smewhat by new business n Intelsat 29e. Third Quarter Netwrk Services Highlights and Business Trends: Netwrk Services Quarterly Revenue Intelsat cntinues t build the backlg cmmitments fr ur next generatin Intelsat Epic NG fleet, while als bking new business and renewals n ur wide beam assets. In the third quarter f 2016, we signed agreements supprting netwrks in the enterprise, mbility and telecm infrastructure sectrs. In many cases, ur slutins use multiple satellites within the Intelsat Glbalized Netwrk. Netwrk Services backlg was essentially flat when cmpared t the prir year quarter. Cntracts signed in the third quarter include: $300 $250 $200 $150 $100 $50 $0 $263 $245 $228 $228 $222 3Q15 4Q15 1Q16 2Q16 3Q16 Glbal Eagle Entertainment entered int a new and expanded cntract t deliver reliable, high perfrmance bradband cnnectivity acrss five cntinents and three vertical sectrs. The multiyear glbal cnnectivity slutin, which prvides an apprximate 25% cmmitted revenue 4
increase frm prir agreements, will utilize C- and Ku-band capacity n eight satellites in Intelsat s current glbal mbility infrastructure as well as tw Intelsat Epic NG satellites, Intelsat 33e and Intelsat 35e. As a result f this agreement, Glbal Eagle Entertainment has nw cntracted satellite slutins n three ut f the seven planned Intelsat Epic NG satellites and 17 Intelsat satellites in ttal. Enterprise netwrks large private data netwrks that use satellite slutins because f gegraphic reach, efficient bradcast transmissins and reliability represent ne f the largest applicatins within ur netwrk services business. Industry surces such as Nrthern Sky Research frecast that enterprise netwrks will becme a $2.9 billin applicatin by 2021, reflecting an expected six-year cmpund annual grwth rate f 4 percent. Enterprise cntracts signed during the third quarter include: Saudi Telecmmunicatin Cmpany (STC), the largest telecm peratr in Saudi Arabia, has further expanded its relatinship with Intelsat and entered int a new cntract fr satellite services n Intelsat 10-02. The additinal cnnectivity frm Intelsat 10-02 supprts the private data netwrk STC prvides fr the largest il and gas prducer in Saudi Arabia. Telstra, Australia s leading telecmmunicatins and media cmpany, signed a multi-year renewal fr satellite and managed services acrss seven Intelsat satellites. Leveraging the Intelsat 18, Intelsat 19, Intelsat 901, Intelsat 902, Intelsat 904, Intelsat 906 and Intelsat 33e satellites, Telstra will prvide satellite cnnectivity t supprt Australia s Department f Freign Affairs and Trade (DFAT) netwrk, which supprts peratins acrss a number f embassies, cnsulates and diplmatic ffices fr the Australian gvernment. In additin, Telstra signed a new, multi-year cntract fr a high-pwered Ku-band beam n Intelsat 19 that is ptimized t prvide cmmunicatin services fr enterprise custmers thrughut mainland Australia. Snema, a leading prvider f telecmmunicatins services in Eurpe and Africa, extended its current multi-year agreement with Intelsat fr C-band satellite slutins n Intelsat 14 and transitining services t Intelsat 33e. Snema, based in Mnac, supprts mre than 600 VSAT sites fr banking and insurance peratins acrss Africa, with a prime fcus n rbustness and high quality f service. On a glbal basis, grwth pprtunities fr ur netwrk services business include increased demand fr aernautical mbility, Internet f Things and maritime mbility applicatins, and high thrughput capacity fr fixed and mbile bradband applicatins fr telecmmunicatins prviders and enterprise netwrks. On a cmbined basis, these applicatins are expected t grw frm a $4.5 billin pprtunity in 2015 t a $7.1 billin pprtunity in 2021. In additin t Intelsat 29e, which entered int service in the first quarter f 2016, ver the next 12 mnths, we expect t access new inventry frm Intelsat 33e, which is scheduled t enter int service in the first quarter f 2017. Media Media revenue was essentially flat at $217 millin in the third quarter f 2016 cmpared t the prir year perid. New revenue frm ur Intelsat 31 satellite was partially ffset by small declines frm nn-renewing services utside f Nrth America, as has been previusly reprted. As cmpared t the secnd quarter f 2016, media revenues increased $6 millin, r 2.7%, benefitting frm new capacity frm Intelsat 31, which entered int service in July 2016. 5
( millins) Intelsat S.A. Third Quarter Media Highlights and Business Trends: Media Quarterly Revenue Business activity was driven primarily by new and renewing cntracts related t Intelsat s media distributin neighbrhds in Nrth $250 $200 $150 $217 $219 $212 $211 $217 America, Africa and Latin America. Overall, $100 apprximately 80 percent f ur media $50 revenues are generated by ur distributin and DTH neighbrhds. Our vide $0 3Q15 4Q15 1Q16 2Q16 3Q16 neighbrhds prvide excellent value and represent differentiated capacity that deliver millins f viewers t cntent wners. The value f ur vide neighbrhds remains slid with strng demand, reflecting ur ability t deliver a maximum audience fr cntent wners. Encmpass Digital Media, a glbal technlgy services cmpany delivering end-t-end vide slutins t bradcast and media cmpanies, increased its cmmitment n Intelsat s Galaxy fleet fr delivery f HD and 4K ultra high definitin (4K UHD) cntent t 64 millin husehlds acrss Nrth America. Under a new, multi-year agreement, Encmpass will leverage Galaxy 13, lcated at 127 W, t hst fur f NASA TV s HD channels, the nly cmmercial 4K cntent in Nrth America, as well as NASA TV s 4K UHD distributin channel. Already hsting apprximately 80 HD channels, Galaxy 13 is nw building up a 4K UHD cmmunity. Discvery Netwrks Internatinal, a divisin f Discvery Cmmunicatins, renewed and expanded its relatinship with Intelsat fr distributin services n Intelsat 20, ne f the Asia- Pacific regin s premium vide neighbrhds. By leveraging Intelsat 20, which has the highest penetratin f cable distributin in the Indian Ocean regin, Discvery will have access t an estimated 90 millin Pay-TV subscribers acrss India, wh will be nw be able t enjy the high quality, infrmative and entertaining cntent that the Discvery Channel has t ffer. Grup Imagen, a leading media cmpany in Mexic, has selected Intelsat t distribute a new natinal bradcast TV netwrk featuring HD prgramming t viewers thrughut Mexic. Under the lng-term agreement, Grup Imagen is utilizing C-band capacity via Intelsat s premier vide neighbrhd, Galaxy 19, t deliver its new, natinal ver-the-air bradcast netwrk. The satellite slutins will be used t supprt Digital Terrestrial Televisin transmissins as well as cntent backhaul services acrss Mexic. The Nine Netwrk, ne f Australia s tp rated cmmercial televisin netwrks, signed a new, multi-year cntract fr satellite and terrestrial services n Intelsat 19, ne f Intelsat s premier vide neighbrhds fr the Asia-Pacific regin. The Nine Netwrk will use Intelsat 19 fr natinal distributin f its prgramming, as well as use Intelsat s Glbalized Netwrk t bring natinal and internatinal news cntent and special events t the Netwrk. Given the high fill rates n ur mst ppular vide neighbrhd satellites, the grwth catalyst fr ur media business is ur 2016 launch prgram featuring the launch f tw DTH satellites fr which the Kuband paylads are fully-cntracted. Intelsat 31 entered int service in late July 2016. Intelsat 36 entered int service in September 2016 and is expected t supprt grwth fr ur Suth Africa DTH neighbrhd at 68.5ºE. 6
( millins) Intelsat S.A. Gvernment Sales t gvernment custmers generated revenue f $97 millin in the third quarter f 2016, a $2 millin, r 2 percent, increase as cmpared t the prir year quarter. Revenue was weighted mre heavily t n-netwrk services and represented the same mix f business when cmpared t the third quarter f 2015. The current prtin f n-netwrk services as a percentage f ttal gvernment revenue is 59 percent. Third Quarter Gvernment Highlights and Business Trends: Gvernment Quarterly Revenue Stability in this sectr is demnstrated by Intelsat General Crpratin s attractive renewal rates fr the prvisin f cmmercial satellite services t the U.S. gvernment; ur renewal rates fr nnetwrk and ff-netwrk services are extremely high. $150 $100 In the third quarter, we received renewals fr nearly all ptential 2016 gvernment business, with rders 3Q15 4Q15 1Q16 2Q16 3Q16 received fr apprximately 3,150 MHz f capacity, the majrity f which was fr n-netwrk services. $50 $0 $95 $100 $104 $94 $97 In September 2016, we were ntified that we have been granted a cntract mdificatin extending certain services that we prvide fr the CBSP (Cmmercial Bradband Satellite Prgram) beynd the currently cntracted date f Octber 31, 2016. We have received a funded rder fr an extensin f certain f these services thrugh December 31, 2016. Airbus Defence and Space renewed a lng-term agreement t use ur services t prvide cmmercial satellite cmmunicatin services fr a Eurpean defense netwrk. The renewal includes selected C- and Ku-band transpnders acrss multiple Intelsat satellites. The satellite slutins supprt natinal and internatinal vice and data applicatins and will prvide a cmplementary layer t the custmer s existing military satcm capabilities, ensuring a high perfrming, resilient and secure slutin n land and at sea. RiteNet Crpratin has cntracted with Intelsat General Crpratin t prvide Ku-band satellite capacity t supprt testing by the U.S. Army at Ft. Bliss in El, Pas, Texas, and at the nearby White Sands Missile Range in New Mexic fr their Warfighter Infrmatin Netwrk (WIN-T). This cntract allws the U.S. Army t test new equipment and technlgies that will ne day prvide American warfighters arund the glbe with advanced capabilities. The ne-year cntract has ptins fr fur additinal ne-year extensins. As f the third quarter 2016, ur gvernment business remains stable. We believe that ur business activity in this custmer set reflects the current temp f ur end-custmers peratins. Still, visibility remains limited, as the pace f RFP issuances and subsequent awards remains slw. We see increasing use f lwest price technically acceptable, r LPTA, evaluatin frmats fr awards f new business. Over the mid-term, ur strategy t grw ur gvernment business includes prviding mbility services t the U.S. gvernment fr aernautical and grund mbile requirements, especially as ur next generatin Intelsat Epic NG services are activated. We are als psitining t prvide satellite-related peratins supprt as the gvernment cnsiders cmmercializatin f certain satellite peratins capabilities. 7
Fleet and Operatins Update The statin-kept 36 MHz transpnder equivalent unit cunt n ur wide-beam fleet was apprximately 2,125 at the end f the third quarter f 2016. Utilizatin was at 77 percent, reflecting a slight increase ver the prir quarter, primarily related t units under cntract fr mbility applicatins. The HTS Intelsat Epic NG unit cunt was unchanged frm the secnd quarter, with 270 units in service. Intelsat currently has three satellites in the design and manufacturing stages that are cvered by ur capital expenditure plan. In additin, we are wrking n three ther satellites, including tw custm paylads being built n third-party satellites and a jint venture satellite. Our Intelsat 36 and Intelsat 33e satellites were successfully launched n August 24, 2016. Intelsat 36 entered int service in September 2016. In late August 2016, we reprted that Intelsat 33e experienced thruster malfunctin, requiring us t utilize redundant thrusters and thus extending the time needed t arrive at the final rbital lcatin. The Intelsat 33e antennas and reflectrs have been deplyed; there is n evidence f any impact t the cmmunicatins paylad. Intelsat 33e is nw scheduled t enter int service in the first quarter f 2017 as cmpared t its previusly scheduled in-service date f late in the furth quarter f 2016. Our satellites and third-party paylads and jint venture prject currently in the design and manufacturing stages are nted belw. Intelsat Epic NG -class satellites are nted with a small e fllwing the satellite number. Satellite Fllws Orbital Lcatin Launch Prvider Intelsat 33e IS-904 60 E Arianespace Ariane 5 Estimated Launch Date Launched August 24 Estimated In-Service Date 1Q17 Applicatin Bradband Infrastructure Intelsat 35e IS-903 325.5 E SpaceX Falcn 9 2Q17 3Q17 Bradband & Media Intelsat 37e TBD TBD Arianespace Ariane 5 4Q17 2018 Bradband Infrastructure Intelsat 39 IS-902 62 E Nt Yet Assigned 2018 2019 Bradband Infrastructure Epic NG class 10-series Replacement TBD Nt Yet Assigned 2019 2020 Bradband & Media 8
( millins) Intelsat S.A. Third Quarter 2016 Financial Perfrmance Quarterly Ttal Revenue and Adjusted EBITDA $750 $500 $250 $581 $571 $553 $542 $543 $458 $453 $418 $411 $405 Revenue AEBITDA $0 3Q15 4Q15 1Q16 2Q16 3Q16 Cash Flws During the third quarter f 2016, net cash prvided by perating activities was $254 millin. Cash paid fr interest in the third quarter was $121 millin. Under existing debt agreements, Intelsat makes significantly greater interest payments in the secnd and furth quarters as cmpared t the first and third quarters f the year. Capital expenditures were $203 millin, and payments fr satellites frm investing activities were $18 millin, resulting in free cash flw frm peratins 1 f $33 millin fr the third quarter f 2016. Our ending cash balance at September 30, 2016 was $958 millin. 9
Capital Markets and Debt Transactins In the third quarter f 2016, Intelsat cntinued its liability management initiatives, including: The cmpletin f tender ffers in July resulting in the repurchase f apprximately $673.5 millin in aggregate principal amunt f Intelsat Jacksn Hldings S.A. s ( Intelsat Jacksn ) utstanding 6 5/8% Senir Ntes due 2022 ( 2022 Jacksn Ntes ). This created a net gain n early extinguishment f debt f apprximately $219.6 millin in the three mnths ending September 30, 2016. In September 2016, Intelsat Jacksn cmpleted a debt exchange receiving $141.4 millin aggregate principal amunt f its 2022 Jacksn Ntes in exchange fr $99.7 millin aggregate principal amunt f newly issued Intelsat Jacksn 8% Senir Secured Ntes due 2024 and $17.0 millin in cash. In cnnectin with this exchange, Intelsat Jacksn als received a cnsent frm hlders f $141.5 millin principal amunt f 2022 Jacksn Ntes in exchange fr $9.2 millin in cash t amend the indenture gverning the 2022 Jacksn Ntes, amng ther things t: (i) eliminate substantially all f the restrictive cvenants and certain events f default pertaining t the 2022 Jacksn Ntes, and (ii) waive any defaults r events f default ptentially existing under the indenture gverning the 2022 Jacksn Ntes as f September 12, 2016. We appreciate the cllabrative and cnstructive relatinships built with the investment cmmunity during the curse f these and earlier financial transactins and the alignment f interests as we strive t d what is right fr ur cmpany and we enhance the financial health f ur business. We cntinue t lk fr pprtunities t enhance ur capital structure in furtherance f ur liability management initiatives. 10
2016 Outlk Intelsat reaffirmed its revenue and capital expenditures guidance issued n February 22, 2016: We cntinue t expect full year 2016 revenue f $2.14 billin t $2.20 billin. Adjusted EBITDA Guidance: Perfrmance is expected t range frm $1.625 billin t $1.675 billin, reflecting lwer revenue and increased perating csts, as we develp ur service infrastructure. Capital expenditure guidance remains as fllws: Guidance FY 2016 FY 2017 FY 2018 Capital Expenditures $725M - $800M $625M - $700M $425M - $525M Our capital expenditure guidance includes capitalized interest. The annual classificatin f capital expenditure and prepayments culd be affected by the timing f achievement f cntract, satellite manufacturing, launch and ther milestnes. Our net number f transpnder equivalents is expected t increase by a cmpund annual grwth rate, r CAGR, f 10 percent as a result f all f ur satellites entering service between January 1, 2016 and December 31, 2018. Cash Taxes: We expect annual cash taxes t be apprximately $30 millin t $35 millin. Stephen Spengler, Chief Executive Officer, Intelsat S.A. Jacques Kerrest, Executive Vice President and Chief Financial Officer, Intelsat S.A. 1 In this quarterly cmmentary dcument, financial measures are presented bth in accrdance with U.S. GAAP and als n a nn- U.S. GAAP basis. EBITDA, Adjusted EBITDA ( AEBITDA ), free cash flw frm peratins and related margins, and adjusted net incme included in this cmmentary are nn-u.s. GAAP financial measures. Please see the cnslidated financial infrmatin fund in ur earnings release and available n ur website fr infrmatin recnciling nn-u.s. GAAP financial measures t cmparable U.S. GAAP financial measures. 11
Safe Harbr Statement Sme f the infrmatin and statements in this quarterly cmmentary and certain ral statements made frm time t time by Intelsat s representatives cnstitute "frward-lking statements" that d nt directly r exclusively relate t histrical facts. When used in this quarterly cmmentary, the wrds may, will, might, shuld, expect, plan, anticipate, prject, believe, estimate, predict, intend, ptential, utlk, and cntinue, and the negative f these terms, and ther similar expressins are intended t identify frward-lking statements and infrmatin. Frward-lking statements include: ur expectatin that the launches f ur satellites in the future will psitin us fr grwth; ur plans fr satellite launches in the near t mid-term; ur guidance regarding ur expectatins fr ur revenue perfrmance, including in ur different custmer sets, and Adjusted EBITDA perfrmance in 2016; ur capital expenditure guidance fr 2016 and the next several years; ur expectatins as t the increased number f transpnder equivalents n ur fleet ver the next several years; ur expectatins as t the level f ur cash tax expenses in the future; and ur belief that as we execute n ur initiatives, we will build the inventry and service capabilities t allw us t capture future grwth, including in emerging pprtunities. Frward-lking statements reflect Intelsat's intentins, plans, expectatins, anticipatins, prjectins, estimatins, predictins, utlk, assumptins and beliefs abut future events and are subject t risks, uncertainties and ther factrs, many f which are utside f Intelsat's cntrl. Imprtant factrs that culd cause actual results t differ materially frm the expectatins expressed r implied in the frward-lking statements include knwn and unknwn risks. Sme f the factrs that culd cause actual results t differ frm histrical results r thse anticipated r predicted by these frward-lking statements include: risks assciated with perating ur in-rbit satellites; satellite launch failures, satellite launch and cnstructin delays and in-rbit failures r reduced perfrmance; ptential changes in the number f cmpanies ffering cmmercial satellite launch services and the number f cmmercial satellite launch pprtunities available in any given time perid that culd impact ur ability t timely schedule future launches and the prices we pay fr such launches; ur ability t btain new satellite insurance plicies with financially viable insurance carriers n cmmercially reasnable terms r at all, as well as the ability f ur insurance carriers t fulfill their bligatins; pssible future lsses n satellites that are nt adequately cvered by insurance; U.S. and ther gvernment regulatin; changes in ur cntracted backlg r expected cntracted backlg fr future services; pricing pressure and vercapacity in the markets in which we cmpete; ur ability t access capital markets fr debt r equity; the cmpetitive envirnment in which we perate; custmer defaults n their bligatins t us; ur internatinal peratins and ther uncertainties assciated with ding business internatinally; and litigatin. Knwn risks include, amng thers, the risks described in Intelsat s annual reprt n Frm 20-F fr the years ended December 31, 2015 and its ther filings with the U.S. Securities and Exchange Cmmissin, the plitical, ecnmic and legal cnditins in the markets we are targeting fr cmmunicatins services r in which we perate and ther risks and uncertainties inherent in the telecmmunicatins business in general and the satellite cmmunicatins business in particular. Because actual results culd differ materially frm Intelsat's intentins, plans, expectatins, anticipatins, prjectins, estimatins, predictins, utlk, assumptins and beliefs abut the future, yu are urged t view all frward-lking statements with cautin. Intelsat des nt undertake any bligatin t update r revise any frward-lking statements, whether as a result f new infrmatin, future events r therwise. Cntact Dianne VanBeber Vice President, Investr Relatins and Cmmunicatins dianne.vanbeber@intelsat.cm +1 703-559-7406 12