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x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | | 26-1344998 |
(State of incorporation) | | (I.R.S. Employer Identification No.) |
| | |
1750 Tysons Boulevard, Suite 1400, McLean, Virginia | | 22102 |
(Address of principal executive offices) | | (Zip code) |
Large accelerated filer | ¨ | Accelerated filer | x |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
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Item No. | | Page | |
| | | |
Part I. Financial Information | | | |
| | | |
| Financial Statements | | |
| | | |
| Condensed Consolidated Balance Sheets | | 3 |
| | | |
| Condensed Consolidated Statements of Operations and Comprehensive Income | | 4 |
| | | |
| Condensed Consolidated Statements of Cash Flows | | 5 |
| | | |
| Notes to Condensed Consolidated Financial Statements | | 6 |
| | | |
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 14 |
| | | |
ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk | | 25 |
| | | |
ITEM 4. | Controls and Procedures | | 26 |
| | | |
PART II. Other Information | | | |
| | | |
ITEM 1. | Legal Proceedings | | 26 |
| | | |
ITEM 1A. | Risk Factors | | 26 |
| | | |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | | 28 |
| | | |
ITEM 3. | Defaults Upon Senior Securities | | 28 |
| | | |
ITEM 4. | Mine Safety Disclosures | | 28 |
| | | |
ITEM 5. | Other Information | | 28 |
| | | |
ITEM 6. | Exhibits | | 28 |
| | | |
| Signatures | | 29 |
2 | ||
| | September 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | | | | |
Assets | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 196,997 | | $ | 254,418 | |
Marketable securities | | | 73,325 | | | - | |
Accounts receivable, net | | | 64,550 | | | 56,135 | |
Inventory | | | 28,188 | | | 26,335 | |
Deferred tax assets, net | | | 9,743 | | | 21,160 | |
Income tax receivable | | | 909 | | | 4,302 | |
Prepaid expenses and other current assets | | | 4,767 | | | 4,816 | |
Total current assets | | | 378,479 | | | 367,166 | |
Property and equipment, net | | | 1,451,311 | | | 1,210,693 | |
Restricted cash | | | 81,215 | | | 54,233 | |
Other assets | | | 7,708 | | | 2,912 | |
Intangible assets, net | | | 60,715 | | | 70,502 | |
Deferred financing costs | | | 127,205 | | | 123,796 | |
Goodwill | | | 87,039 | | | 87,039 | |
Total assets | | $ | 2,193,672 | | $ | 1,916,341 | |
| | | | | | | |
Liabilities and stockholders' equity | | | | | | | |
Current liabilities: | | | | | | | |
Accounts payable | | $ | 9,156 | | $ | 13,834 | |
Accrued expenses and other current liabilities | | | 39,968 | | | 26,704 | |
Interest payable | | | 16,912 | | | 5,359 | |
Deferred revenue | | | 44,244 | | | 42,755 | |
Total current liabilities | | | 110,280 | | | 88,652 | |
Accrued satellite operations and maintenance expense, net of current portion | | | 16,723 | | | 17,727 | |
Credit facility | | | 936,290 | | | 751,787 | |
Deferred tax liabilities, net | | | 184,776 | | | 167,821 | |
Other long-term liabilities | | | 20,433 | | | 13,796 | |
Total liabilities | | | 1,268,502 | | | 1,039,783 | |
| | | | | | | |
Commitments and contingencies | | | | | | | |
| | | | | | | |
Stockholders' equity | | | | | | | |
Series A Preferred Stock, $0.0001 par value, 1,000 shares authorized, issued and outstanding | | | - | | | - | |
Common stock, $0.001 par value, 300,000 shares authorized, 76,660 and 76,461 shares issued and outstanding, respectively | | | 77 | | | 76 | |
Additional paid-in capital | | | 800,879 | | | 793,511 | |
Retained earnings | | | 124,992 | | | 83,328 | |
Accumulated other comprehensive loss, net of taxes | | | (778) | | | (357) | |
Total stockholders' equity | | | 925,170 | | | 876,558 | |
Total liabilities and stockholders' equity | | $ | 2,193,672 | | $ | 1,916,341 | |
3 | ||
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | | | | | | | | | | | | |
Revenue: | | | | | | | | | | | | | |
Services | | $ | 75,381 | | $ | 71,403 | | $ | 215,569 | | $ | 206,736 | |
Subscriber equipment | | | 20,253 | | | 26,371 | | | 57,399 | | | 71,825 | |
Engineering and support services | | | 4,935 | | | 2,667 | | | 11,474 | | | 12,675 | |
Total revenue | | | 100,569 | | | 100,441 | | | 284,442 | | | 291,236 | |
| | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | |
Cost of services (exclusive of depreciation and amortization) | | | 14,776 | | | 14,000 | | | 43,458 | | | 47,991 | |
Cost of subscriber equipment | | | 15,550 | | | 14,194 | | | 39,563 | | | 40,828 | |
Research and development | | | 3,125 | | | 3,623 | | | 6,525 | | | 12,741 | |
Selling, general and administrative | | | 18,290 | | | 16,452 | | | 55,054 | | | 52,570 | |
Depreciation and amortization | | | 19,377 | | | 20,484 | | | 56,205 | | | 63,056 | |
Total operating expenses | | | 71,118 | | | 68,753 | | | 200,805 | | | 217,186 | |
| | | | | | | | | | | | | |
Operating income | | | 29,451 | | | 31,688 | | | 83,637 | | | 74,050 | |
| | | | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | | | |
Interest income, net | | | 557 | | | 399 | | | 1,835 | | | 588 | |
Undrawn credit facility fees | | | (1,886) | | | (2,488) | | | (6,002) | | | (7,849) | |
Other expense, net | | | (1,101) | | | (67) | | | (3,366) | | | (6) | |
Total other expense | | | (2,430) | | | (2,156) | | | (7,533) | | | (7,267) | |
Income before income taxes | | | 27,021 | | | 29,532 | | | 76,104 | | | 66,783 | |
Provision for income taxes | | | (10,436) | | | (11,693) | | | (29,172) | | | (18,863) | |
Net income | | | 16,585 | | | 17,839 | | | 46,932 | | | 47,920 | |
Series A Preferred Stock dividends | | | 1,750 | | | - | | | 5,250 | | | - | |
Net income attributable to common stockholders | | $ | 14,835 | | $ | 17,839 | | $ | 41,682 | | $ | 47,920 | |
| | | | | | | | | | | | | |
Weighted average shares outstanding - basic | | | 76,962 | | | 74,376 | | | 76,877 | | | 73,738 | |
Weighted average shares outstanding - diluted | | | 87,591 | | | 76,131 | | | 87,532 | | | 75,886 | |
Net income attributable to common stockholders per share - basic | | $ | 0.19 | | $ | 0.24 | | $ | 0.54 | | $ | 0.65 | |
Net income attributable to common stockholders per share - diluted | | $ | 0.19 | | $ | 0.23 | | $ | 0.54 | | $ | 0.63 | |
| | | | | | | | | | | | | |
Comprehensive income: | | | | | | | | | | | | | |
Net income | | $ | 16,585 | | $ | 17,839 | | $ | 46,932 | | $ | 47,920 | |
Foreign currency translation adjustments, net of tax | | | (94) | | | 5 | | | (355) | | | (80) | |
Unrealized gain (loss) on marketable securities, net of tax | | | 219 | | | - | | | (66) | | | - | |
Comprehensive income | | $ | 16,710 | | $ | 17,844 | | $ | 46,511 | | $ | 47,840 | |
4 | ||
| | Nine Months Ended September 30, | | ||||
| | 2013 | | 2012 | | ||
| | | | | | | |
Cash flows from operating activities: | | | | | | | |
Net cash provided by operating activities | | $ | 144,332 | | $ | 132,715 | |
| | | | | | | |
Cash flows from investing activities: | | | | | | | |
Capital expenditures | | | (263,445) | | | (221,343) | |
Purchases of marketable securities | | | (100,794) | | | - | |
Sales and maturities of marketable securities | | | 26,904 | | | - | |
Investment in equity method affiliate | | | (5,000) | | | - | |
Net cash used in investing activities | | | (342,335) | | | (221,343) | |
| | | | | | | |
Cash flows from financing activities: | | | | | | | |
Borrowings under credit facility | | | 184,503 | | | 171,805 | |
Payment of deferred financing fees | | | (11,704) | | | (11,980) | |
Change in restricted cash - Credit Facility | | | (26,982) | | | (27,062) | |
Proceeds from exercise of stock options and warrants | | | 15 | | | 9,143 | |
Payment of offering costs | | | - | | | (245) | |
Payment of Series A Preferred Stock dividends | | | (5,250) | | | - | |
Net cash provided by financing activities | | | 140,582 | | | 141,661 | |
| | | | | | | |
Net increase (decrease) in cash and cash equivalents | | | (57,421) | | | 53,033 | |
Cash and cash equivalents, beginning of period | | | 254,418 | | | 136,366 | |
Cash and cash equivalents, end of period | | $ | 196,997 | | $ | 189,399 | |
| | | | | | | |
Supplemental cash flow information: | | | | | | | |
Interest paid | | $ | 5,096 | | $ | 2,907 | |
Income taxes paid (refunded) | | $ | (2,947) | | $ | 351 | |
| | | | | | | |
Supplemental disclosure of non-cash investing activities: | | | | | | | |
Property and equipment received but not paid for yet | | $ | 6,382 | | $ | 2,821 | |
Interest capitalized but not paid | | $ | 16,912 | | $ | 11,317 | |
Capitalized amortization of deferred financing costs | | $ | 8,294 | | $ | 2,182 | |
Capitalized paid-in-kind interest | | $ | 11,667 | | $ | 6,677 | |
Capitalized stock-based compensation | | $ | 996 | | $ | 547 | |
5 | ||
Satellites | estimated useful life |
Ground system | 5-7 years |
Equipment | 3-5 years |
Internally developed software and purchased software | 3-7 years |
Building | 39 years |
Building improvements | estimated useful life |
Leasehold improvements | shorter of useful life or remaining lease term |
6 | ||
| | Nine Months Ended | | |
| | September 30, 2013 | | |
| | (in thousands) | | |
Balance at beginning of the period | | $ | 4,050 | |
Provision | | | 9,524 | |
Utilization | | | (4,707) | |
Balance at end of the period | | $ | 8,867 | |
• | Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; |
• | Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
7 | ||
| | September 30, | | December 31, | | Recurring Fair | | ||
| | 2013 | | 2012 | | Value Measurement | | ||
| | (in thousands) | | | | ||||
Cash and cash equivalents: | | | | | | | | | |
Cash | | $ | 91,911 | | $ | 166,326 | | | |
Money market funds | | | 88,589 | | | 88,092 | | Level 1 | |
Commercial paper | | | 14,496 | | | - | | Level 2 | |
Government-issued debt securities | | | 2,001 | | | - | | Level 2 | |
Total Cash and cash equivalents | | $ | 196,997 | | $ | 254,418 | | | |
| | September 30, | | Recurring Fair | | |
| | 2013 | | Value Measurement | | |
| | (in thousands) | | | | |
Marketable securities: | | | | | | |
Fixed-income debt securities | | $ | 57,109 | | Level 2 | |
Commercial paper | | | 16,216 | | Level 2 | |
Total Marketable securities | | $ | 73,325 | | | |
| | Amortized | | Unrealized | | Estimated | | |||
| | Cost | | Gain (Loss) | | Fair Value | | |||
| | (in thousands) | | |||||||
Fixed-income debt securities: | | | | | | | | | | |
Mature within one year | | $ | 5,953 | | $ | 2 | | $ | 5,955 | |
Mature after one year and within three years | | | 51,264 | | | (110) | | | 51,154 | |
Commercial paper: | | | | | | | | | | |
Mature within one year | | | 16,216 | | | - | | | 16,216 | |
Total | | $ | 73,433 | | $ | (108) | | $ | 73,325 | |
8 | ||
| | Operating | | |
Year ending December 31, | | Lease | | |
| | (In thousands) | | |
2014 | | $ | 359 | |
2015 | | | 730 | |
2016 | | | 755 | |
2017 | | | 779 | |
2018 | | | 804 | |
Thereafter | | | 4,621 | |
Total | | $ | 8,048 | |
9 | ||
10 | ||
11 | ||
| | Three Months Ended September 30, | | ||||
| | 2013 | | 2012 | | ||
| | (in thousands, except per share data) | | ||||
Numerator: | | | | | | | |
Net income attributable to common stockholders | | $ | 14,835 | | $ | 17,839 | |
Net income allocated to participating securities | | | (11) | | | (11) | |
Numerator for basic net income per share | | | 14,824 | | | 17,828 | |
Dividends on Series A Preferred Stock | | | 1,750 | | | - | |
Numerator for diluted net income per share | | $ | 16,574 | | $ | 17,828 | |
| | | | | | | |
Denominator: | | | | | | | |
Denominator for basic net income per share - weighted average outstanding common shares | | | 76,962 | | | 74,376 | |
Dilutive effect of warrants | | | - | | | 1,731 | |
Dilutive effect of stock options | | | 3 | | | 1 | |
Dilutive effect of contingently issuable shares | | | 24 | | | 23 | |
Dilutive effect of Series A Preferred Stock | | | 10,602 | | | - | |
Denominator for diluted net income per share | | | 87,591 | | | 76,131 | |
| | | | | | | |
Net income attributable to common stockholders per share - basic | | $ | 0.19 | | $ | 0.24 | |
Net income attributable to common stockholders per share - diluted | | $ | 0.19 | | $ | 0.23 | |
12 | ||
| | Nine Months Ended September 30, | | ||||
| | 2013 | | 2012 | | ||
| | (in thousands, except per share data) | | ||||
Numerator: | | | | | | | |
Net income attributable to common stockholders | | $ | 41,682 | | $ | 47,920 | |
Net income allocated to participating securities | | | (48) | | | (47) | |
Numerator for basic net income per share | | | 41,634 | | | 47,873 | |
Dividends on Series A Preferred Stock | | | 5,250 | | | - | |
Numerator for diluted net income per share | | $ | 46,884 | | $ | 47,873 | |
| | | | | | | |
Denominator: | | | | | | | |
Denominator for basic net income per share - weighted average outstanding common shares | | | 76,877 | | | 73,738 | |
Dilutive effect of warrants | | | 1 | | | 2,092 | |
Dilutive effect of stock options | | | - | | | 8 | |
Dilutive effect of contingently issuable shares | | | 52 | | | 48 | |
Dilutive effect of Series A Preferred Stock | | | 10,602 | | | - | |
Denominator for diluted net income per share | | | 87,532 | | | 75,886 | |
| | | | | | | |
Net income attributable to common stockholders per share - basic | | $ | 0.54 | | $ | 0.65 | |
Net income attributable to common stockholders per share - diluted | | $ | 0.54 | | $ | 0.63 | |
13 | ||
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
14 | ||
| • | demand for remote and reliable mobile communications services; |
| | |
| • | increased demand for communications services by disaster and relief agencies, and emergency first responders; |
| | |
| • | a broad and expanding wholesale distribution network with access to diverse and geographically dispersed niche markets; |
| | |
| • | a growing number of new products and services and related applications; |
| | |
| • | improved data transmission speeds for mobile satellite service offerings; |
| | |
| • | regulatory mandates requiring the use of mobile satellite services; |
| | |
| • | a general reduction in prices of mobile satellite services and subscriber equipment; and |
| | |
| • | geographic market expansion through the receipt of licenses to sell our services in additional countries. |
| • | our ability to develop Iridium NEXT and related ground infrastructure, and to develop products and services for Iridium NEXT; |
| | |
| • | our ability to access the Credit Facility to meet our future capital requirements for the design, build and launch of the Iridium NEXT satellites, including our ability to negotiate modifications to the Credit Facility with our lenders and, if required by our lenders, to obtain additional external debt or equity financing; |
| | |
| • | our ability to obtain sufficient internally generated cash flows, including potential cash flows from hosted payloads and Iridium PRIME, to fund a portion of the costs associated with Iridium NEXT and support ongoing business; |
| | |
| • | Aireon LLC’s ability to successfully fund, develop and market its space-based automatic dependent surveillance-broadcast, or ADS-B, global aviation monitoring service to be carried as a hosted payload on the Iridium NEXT system; |
| | |
| • | our ability to maintain the health, capacity, control and level of service of our existing satellite network through the transition to Iridium NEXT; |
15 | ||
| • | changes in general economic, business and industry conditions; |
| | |
| • | our reliance on a single primary commercial gateway and a primary satellite network operations center; |
| | |
| • | competition from other mobile satellite service providers and, to a lesser extent, from the expansion of terrestrial-based cellular phone systems and related pricing pressures; |
| | |
| • | market acceptance of our products; |
| | |
| • | regulatory requirements in existing and new geographic markets; |
| | |
| • | rapid and significant technological changes in the telecommunications industry; |
| | |
| • | reliance on our wholesale distribution network to market and sell our products, services and applications effectively; |
| | |
| • | reliance on single-source suppliers for some of the components required in the manufacture of our end-user subscriber equipment and our ability to purchase parts that are periodically subject to shortages resulting from surges in demand, natural disasters or other events; and |
| | |
| • | reliance on a few significant customers for a substantial portion of our revenue, where the loss or decline in business with any of these customers may negatively impact our revenue and collectability of related accounts receivable. |
16 | ||
| | Three Months Ended September 30, | | | | | | | | |||||||||
| | | | % of Total | | | | | | % of Total | | | Change | | ||||
($ in thousands) | | 2013 | | Revenue | | | 2012 | | Revenue | | | Dollars | | Percent | | |||
Revenue: | | | | | | | | | | | | | | | | | | |
Services | | $ | 75,381 | | 75 | % | | $ | 71,403 | | 71 | % | | $ | 3,978 | | 6 | % |
Subscriber equipment | | | 20,253 | | 20 | % | | | 26,371 | | 26 | % | | | (6,118) | | (23) | % |
Engineering and support services | | | 4,935 | | 5 | % | | | 2,667 | | 3 | % | | | 2,268 | | 85 | % |
Total revenue | | | 100,569 | | 100 | % | | | 100,441 | | 100 | % | | | 128 | | 0 | % |
| | | | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | | | |
Cost of services (exclusive of depreciation and amortization) | | | 14,776 | | 15 | % | | | 14,000 | | 14 | % | | | 776 | | 6 | % |
Cost of subscriber equipment | | | 15,550 | | 16 | % | | | 14,194 | | 14 | % | | | 1,356 | | 10 | % |
Research and development | | | 3,125 | | 3 | % | | | 3,623 | | 4 | % | | | (498) | | (14) | % |
Selling, general and administrative | | | 18,290 | | 18 | % | | | 16,452 | | 16 | % | | | 1,838 | | 11 | % |
Depreciation and amortization | | | 19,377 | | 19 | % | | | 20,484 | | 20 | % | | | (1,107) | | (5) | % |
Total operating expenses | | | 71,118 | | 71 | % | | | 68,753 | | 68 | % | | | 2,365 | | 3 | % |
| | | | | | | | | | | | | | | | | | |
Operating income | | | 29,451 | | 29 | % | | | 31,688 | | 32 | % | | | (2,237) | | (7) | % |
| | | | | | | | | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | | | | | | | | |
Interest income, net | | | 557 | | 1 | % | | | 399 | | 0 | % | | | 158 | | 40 | % |
Undrawn credit facility fees | | | (1,886) | | (2) | % | | | (2,488) | | (2) | % | | | 602 | | (24) | % |
Other expense, net | | | (1,101) | | (1) | % | | | (67) | | 0 | % | | | (1,034) | | 1,543 | % |
Total other expense | | | (2,430) | | (2) | % | | | (2,156) | | (2) | % | | | (274) | | 13 | % |
Income before income taxes | | | 27,021 | | 27 | % | | | 29,532 | | 30 | % | | | (2,511) | | (9) | % |
Provision for income taxes | | | (10,436) | | (10) | % | | | (11,693) | | (12) | % | | | 1,257 | | (11) | % |
Net income | | $ | 16,585 | | 17 | % | | $ | 17,839 | | 18 | % | | $ | (1,254) | | (7) | % |
17 | ||
| | | Three Months Ended September 30, 2013 | | Three Months Ended September 30, 2012 | | Change | | |||||||||||||||||
| | (Revenue in millions and subscribers in thousands) | | ||||||||||||||||||||||
| | | | Billable | | | | | | | | Billable | | | | | | | | Billable | | | | | |
| | Revenue | | Subscribers (1) | | ARPU (2) | | Revenue | | Subscribers (1) | | ARPU (2) | | Revenue | | Subscribers | | ARPU | | ||||||
Commercial voice and data | | $ | 48.5 | | 345 | | $ | 47 | | $ | 45.2 | | 333 | | $ | 46 | | $ | 3.3 | | 12 | | $ | 1 | |
Commercial M2M data | | | 12.8 | | 259 | | | 17 | | | 10.9 | | 213 | | | 18 | | | 1.9 | | 46 | | | (1) | |
Total Commercial | | | 61.3 | | 604 | | | | | | 56.1 | | 546 | | | | | | 5.2 | | 58 | | | | |
Government voice and data | | | 13.1 | | 32 | | | 135 | | | 14.5 | | 35 | | | 136 | | | (1.4) | | (3) | | | (1) | |
Government M2M data | | | 1.0 | | 19 | | | 17 | | | 0.8 | | 14 | | | 19 | | | 0.2 | | 5 | | | (2) | |
Total Government | | | 14.1 | | 51 | | | | | | 15.3 | | 49 | | | | | | (1.2) | | 2 | | | | |
Total Service Revenue | | $ | 75.4 | | 655 | | | | | $ | 71.4 | | 595 | | | | | $ | 4.0 | | 60 | | | | |
18 | ||
19 | ||
| | Nine Months Ended September 30, | | | | | | | | |||||||||
| | | | % of Total | | | | | | % of Total | | | Change | | ||||
($ in thousands) | | 2013 | | Revenue | | | 2012 | | Revenue | | | Dollars | | Percent | | |||
Revenue: | | | | | | | | | | | | | | | | | | |
Services | | $ | 215,569 | | 76 | % | | $ | 206,736 | | 71 | % | | $ | 8,833 | | 4 | % |
Subscriber equipment | | | 57,399 | | 20 | % | | | 71,825 | | 25 | % | | | (14,426) | | (20) | % |
Engineering and support services | | | 11,474 | | 4 | % | | | 12,675 | | 4 | % | | | (1,201) | | (9) | % |
Total revenue | | | 284,442 | | 100 | % | | | 291,236 | | 100 | % | | | (6,794) | | (2) | % |
| | | | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | | | |
Cost of services (exclusive of depreciation and amortization) | | | 43,458 | | 15 | % | | | 47,991 | | 17 | % | | | (4,533) | | (9) | % |
Cost of subscriber equipment | | | 39,563 | | 14 | % | | | 40,828 | | 14 | % | | | (1,265) | | (3) | % |
Research and development | | | 6,525 | | 2 | % | | | 12,741 | | 4 | % | | | (6,216) | | (49) | % |
Selling, general and administrative | | | 55,054 | | 20 | % | | | 52,570 | | 18 | % | | | 2,484 | | 5 | % |
Depreciation and amortization | | | 56,205 | | 20 | % | | | 63,056 | | 22 | % | | | (6,851) | | (11) | % |
Total operating expenses | | | 200,805 | | 71 | % | | | 217,186 | | 75 | % | | | (16,381) | | (8) | % |
| | | | | | | | | | | | | | | | | | |
Operating income | | | 83,637 | | 29 | % | | | 74,050 | | 25 | % | | | 9,587 | | 13 | % |
| | | | | | | | | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | | | | | | | | |
Interest income, net | | | 1,835 | | 1 | % | | | 588 | | 0 | % | | | 1,247 | | 212 | % |
Undrawn credit facility fees | | | (6,002) | | (2) | % | | | (7,849) | | (3) | % | | | 1,847 | | (24) | % |
Other expense, net | | | (3,366) | | (2) | % | | | (6) | | 0 | % | | | (3,360) | | 56,000 | % |
Total other expense | | | (7,533) | | (3) | % | | | (7,267) | | (3) | % | | | (266) | | 4 | % |
Income before income taxes | | | 76,104 | | 27 | % | | | 66,783 | | 22 | % | | | 9,321 | | 14 | % |
Provision for income taxes | | | (29,172) | | (10) | % | | | (18,863) | | (6) | % | | | (10,309) | | 55 | % |
Net income | | $ | 46,932 | | 17 | % | | $ | 47,920 | | 16 | % | | $ | (988) | | (2) | % |
20 | ||
| | Nine Months Ended September 30, 2013 | | Nine Months Ended September 30, 2012 | | Change | | ||||||||||||||||||
| | (Revenue in millions and subscribers in thousands) | | ||||||||||||||||||||||
| | | | Billable | | | | | | | | Billable | | | | | | | | Billable | | | | | |
| | Revenue | | Subscribers (1) | | ARPU (2) | | Revenue | | Subscribers (1) | | ARPU (2) | | Revenue | | Subscribers | | ARPU | | ||||||
Commercial voice and data | | $ | 135.7 | | 345 | | $ | 45 | | $ | 129.9 | | 333 | | $ | 45 | | $ | 5.8 | | 12 | | $ | - | |
Commercial M2M data | | | 36.4 | | 259 | | | 17 | | | 30.3 | | 213 | | | 18 | | | 6.1 | | 46 | | | (1) | |
Total Commercial | | | 172.1 | | 604 | | | | | | 160.2 | | 546 | | | | | | 11.9 | | 58 | | | | |
Government voice and data | | | 40.7 | | 32 | | | 134 | | | 44.4 | | 35 | | | 137 | | | (3.7) | | (3) | | | (3) | |
Government M2M data | | | 2.8 | | 19 | | | 18 | | | 2.1 | | 14 | | | 19 | | | 0.7 | | 5 | | | (1) | |
Total Government | | | 43.5 | | 51 | | | | | | 46.5 | | 49 | | | | | | (3.0) | | 2 | | | | |
Total Service Revenue | | $ | 215.6 | | 655 | | | | | $ | 206.7 | | 595 | | | | | $ | 8.9 | | 60 | | | | |
21 | ||
22 | ||
23 | ||
· | an available cash balance of at least $25 million; |
| |
· | a debt-to-equity ratio, which is calculated as the ratio of total net debt to the aggregate of total net debt and total stockholders’ equity, of no more than 0.7 to 1, measured each June 30 and December 31; |
| |
· | specified maximum levels of annual capital expenditures (excluding expenditures on the construction of Iridium NEXT satellites) through the year ending December 31, 2024; |
| |
· | specified minimum consolidated operational earnings before interest, taxes, depreciation and amortization, or operational EBITDA, levels for the 12-month periods ending each December 31 and June 30 through June 30, 2017; |
| |
· | specified minimum cash flow requirements from customers who have hosted payloads on our satellites during the 12-month periods ending each December 31 and June 30, beginning December 31, 2014 and ending on June 30, 2017; |
| |
· | a debt service coverage ratio, measured during the repayment period, of not less than 1 to 1.5; and |
| |
· | specified maximum leverage levels during the repayment period that decline from a ratio of 4.75 to 1 for the 12 months ending June 30, 2017 to a ratio of 2.5 to 1 for the 12 months ending June 30, 2025. |
| | 2013 | | 2012 | | Change | | |||
| | (in thousands) | | |||||||
Cash provided by operating activities | | $ | 144,332 | | $ | 132,715 | | $ | 11,617 | |
Cash used in investing activities | | $ | (342,335) | | $ | (221,343) | | $ | (120,992) | |
Cash provided by financing activities | | $ | 140,582 | | $ | 141,661 | | $ | (1,079) | |
24 | ||
25 | ||
26 | ||
| · | compliance with the covenants under the Credit Facility, including financial covenants and covenants relating to hosted payloads; |
| | |
| · | accuracy of the representations we make under the Credit Facility; |
| | |
| · | compliance with the other terms of the Credit Facility, including the absence of events of default; and |
| | |
| · | maintenance of our insurance policy with COFACE. |
27 | ||
28 | ||
| IRIDIUM COMMUNICATIONS INC. | |
| | |
| By: | /s/ Thomas J. Fitzpatrick |
| | Thomas J. Fitzpatrick |
| | Chief Financial Officer (as duly authorized officer and as principal financial officer of the registrant) |
29 | ||
Exhibit | | Description | |
| | | |
10.1 | | Amendment, dated as of July 26, 2013, to COFACE Facility Agreement, dated as of October 4, 2010, by and among Iridium Communications Inc., Iridium Satellite LLC, the other Obligors party thereto, the Lenders party thereto, the COFACE Agent and Deutsche Bank Trust Company Americas, as Security Agent and U.S. Collateral Agent, as amended and restated by the Supplemental Agreement dated as of August 1, 2012. | |
| | | |
10.2 | | Amendment No. 15 to the Full Scale System Development Contract No. IS-10-021 between Iridium Satellite LLC and Thales Alenia Space France for the Iridium NEXT System, dated June 11, 2013. | |
| | | |
10.3 | | Amendment No. 16 to the Full Scale System Development Contract No. IS-10-021 between Iridium Satellite LLC and Thales Alenia Space France for the Iridium NEXT System, dated July 24, 2013. | |
| | | |
10.4 | | Amendment No. 17 to the Full Scale System Development Contract No. IS-10-021 between Iridium Satellite LLC and Thales Alenia Space France for the Iridium NEXT System, dated August 20, 2013. | |
| | | |
10.5 | | Amendment No. 3 to the Contract for Launch Services No. IS-10-008 between Iridium Satellite LLC and Space Exploration Technologies Corp., dated as of May 9, 2013. | |
| | | |
31.1 | | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to section 302 of The Sarbanes-Oxley Act of 2002. | |
| | | |
31.2 | | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to section 302 of The Sarbanes-Oxley Act of 2002. | |
| | | |
32.1* | | Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) and 15d-14(b) promulgated under the Securities Exchange Act of 1934 and 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 Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, filed with the Securities and Exchange Commission on October 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): | |
| | (i) | Condensed Consolidated Balance Sheets at September 30, 2013 and December 31, 2012; |
| | (ii) | Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2013 and 2012; |
| | (iii) | Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012; and |
| | (iv) | Notes to Condensed Consolidated Financial Statements. |
| Confidential treatment has been requested for certain portions omitted from this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Confidential portions of this exhibit have been separately filed with the Securities and Exchange Commission. |
| |
* | These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing. |
| |
** | Furnished electronically herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files included in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
30 | ||
Execution Version
THIS AMENDMENT TO THE COFACE FACILITY AGREEMENT (this “Amendment”), dated as of 26 July, 2013 (the “Effective Date”), is made by and among IRIDIUM COMMUNICATIONS INC., a Delaware corporation (the “Parent”), IRIDIUM SATELLITE LLC, a Delaware limited liability company, as borrower (the “Borrower”), THE GUARANTORS under and as defined in the COFACE Facility Agreement referred to below and SOCIÉTÉ GÉNÉRALE as agent of the other Finance Parties (in this capacity the “COFACE Agent”) and is made with reference to the COFACE Facility Agreement, dated as of October 4, 2010, by and among the Parent, the Borrower, the other Obligors party thereto, the Lenders party thereto, the COFACE Agent and Deutsche Bank Trust Company Americas, as Security Agent and U.S. Collateral Agent, as amended and restated by the Supplemental Agreement dated as of August 1, 2012 (the “COFACE Facility Agreement”).
RECITALS:
WHEREAS, pursuant to that certain amendment request letter dated May 30, 2013 from the Borrower, the Borrower has requested to amend certain provisions of the COFACE Facility Agreement which the Lenders have agreed and COFACE has approved, in each case as provided for herein;
WHEREAS, the COFACE Agent is authorised to execute this Amendment on behalf of the Finance Parties;
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:
agreement:
1. | Definitions; Interpretation |
1.1 | Definitions |
Capitalised terms defined in the COFACE Facility Agreement have, unless expressly defined in this Amendment, the same meaning in this Amendment.
1.2 | Construction |
The principles of construction set out in Clause 1.2 (Construction) of the COFACE Facility Agreement will have effect as if set out in this Amendment.
2. | Amendments |
2.1 Effective as of the Effective Date, the COFACE Facility Agreement is hereby amended as follows:
Amendment to COFACE Facility Agreement
Execution Version
(a) | The definition of “Key Assets” set forth in Section 1.1 (Definitions) of the COFACE Facility Agreement is hereby amended by adding the word “and limitations” immediately after the word “restrictions”. |
(b) | The definition of “Material Company” set forth in Section 1.1 (Definitions) of the COFACE Facility Agreement is hereby amended by: |
(i) | replacing the period at the end of paragraph (b) with the following text: “or;”; and |
(ii) | inserting a new paragraph (c) immediately after paragraph (b) and which shall read as follows: |
“(c) any Foreign Transferee Subsidiary.”.
(c) | The definition of “Permitted Disposal” set forth in Section 1.1 (Definitions) of the COFACE Facility Agreement is hereby amended by: |
(i) | adding the following text immediately after the words “except in the case of paragraph (b)” in the beginning of the definition thereof: “and paragraph (m)”; |
(ii) | adding the following text immediately after the word “Obligor” at the end of paragraph (b)(i) of the definition thereof: “or if the Disposing Company is a Foreign Transferee Subsidiary, the Acquiring Company must also be a Foreign Transferee Subsidiary or an Obligor”; |
(iii) | deleting the word “and” at the end of paragraph (j); |
(iv) | adding the text “;” at the end of paragraph (k); |
(v) | replacing the period at the end of paragraph (l) with the following text: “; and” and |
(vi) | inserting a new paragraph (m) immediately after paragraph (l) and which shall read as follows: |
“(m) of any equipment or assets (including, without limitation, any Gateway, upgrades to ground systems or services in connection thereto) by any Obligor or Foreign Transferee Subsidiary to any Foreign Transferee Subsidiary or an Obligor as a capital contribution, for cash consideration or otherwise to the extent permitted by the Finance Documents; provided that:
(i) such equipment or assets (including, without limitation, any Gateway, upgrades to ground systems or services in connection thereto) was developed and/or acquired for the purposes of, or in connection with, operating and maintaining, upgrading, improving or otherwise enhancing the Borrower’s global network (including, without limitation, any ground stations, TTACs and other associated ground infrastructure) and/or in connection with or related to the geographic expansion and growth of the Borrower’s Permitted Business; and
Amendment to COFACE Facility Agreement
Execution Version
(ii) with respect to each Financial Year specified in column1 below, the aggregate book value at the time of disposal (as determined according to the Accounting Principles) of such equipment or assets (including, without limitation, any Gateway, or upgrades to ground systems or services in connection thereto) sold, leased, licensed, transferred or otherwise disposed of during such Financial Year pursuant to this paragraph (m) does not exceed the amount specified in column 2 below opposite such Financial Year (in the aggregate and on a cumulative basis):
Column 1 Financial Year Ending | Column 2 Permitted Disposal Amount | |||
12/31/2013 | $ | 50,000,000 | ||
12/31/2014 | $ | 60,000,000 | ||
12/31/2015 | $ | 70,000,000 | ||
12/31/2016 | $ | 80,000,000 | ||
12/31/2017 | $ | 90,000,000 | ||
12/31/2018 | $ | 100,000,000.”. |
(d) | Section 1.1 (Definitions) of the COFACE Facility Agreement is hereby amended by adding the following new definition in the correct alphabetical order in Section 1.1 (Definitions) of the COFACE Facility Agreement: |
““Foreign Transferee Subsidiary” means any direct or indirect wholly owned Subsidiary of the Parent:
(i) that is a member of the NEXT Group and is incorporated or organized (as applicable) under the laws of any jurisdiction other than the United States or any state or territory thereof and is a “controlled foreign corporation” (within the meaning of Section 957 of the Code); and
(ii) where one or more of its direct shareholders is an Obligor or are Obligors which has or have:
(A) granted Transaction Security over no less than 65% in aggregate of the outstanding shares or other ownership interests in such wholly owned Subsidiary;
(B) delivered to the COFACE Agent the Transaction Security Documents duly executed by it and the Security Agent (together with all such notices, documents, instruments or filings set forth in Part 2 of Schedule 2 (Conditions Precedent) (as if references to an ‘Additional Guarantor’ were references to such direct shareholder(s) and references to ‘Accession Deed’ were references to the Transaction Security Documents and provided further that, but subject to paragraph (ii)(A) above, the proviso in paragraph 11 shall not apply)) as are required by the COFACE Agent to be given, executed, made or delivered; and
Amendment to COFACE Facility Agreement
Execution Version
(C) taken all such action that is necessary to protect, perfect or give priority to such Transaction Security.
For the avoidance of doubt, such wholly owned Subsidiary will become a Foreign Transferee Subsidiary on the date the COFACE Agent has received all of the documents and other evidence listed in (ii) (A), (B) and (C) above, in form and substance reasonably satisfactory to it. The COFACE Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.
3. | Representations |
3.1 | Representations |
The representations set out in this Clause 3 (Representations) are made by each Obligor on the date of this Amendment to each Finance Party.
3.2 | Powers and authority |
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise the entry into, performance and delivery of, this Amendment and the transactions contemplated by this Amendment.
3.3 | Legal validity |
Subject to the Legal Reservations, the obligations expressed to be assumed by it in this Amendment are legal, valid, binding and enforceable obligations.
3.4 | Non-conflict |
The entry into and performance by it of, and the transactions contemplated by, this Amendment do not and will not conflict with:
(a) | any law or regulation applicable to it; |
(b) | its constitutional documents; or |
(c) | any agreement or instrument binding upon it or any of its assets or constitute a default of termination event (however described) under any such agreement or instrument where such circumstance has or is reasonably likely to have a Material Adverse Effect. |
3.5 | Authorisations |
All authorisations required by it in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, this Amendment have been obtained or effected (as appropriate) and are in full force and effect.
Amendment to COFACE Facility Agreement
Execution Version
3.6 | Governing law and enforcement |
(a) | Subject to the Legal Reservations, the choice of governing law of this Amendment will be recognised and enforced in its Relevant Jurisdictions. |
(b) | Subject to the Legal Reservations, any judgment obtained in relation to this Amendment will be recognised and enforced in its Relevant Jurisdictions. |
3.7 | Credit Agreement |
Unless a representation and warranty set out in clause 20 (Representations) of the COFACE Facility Agreement is expressed to be given at a specific date, each Obligor makes the representations and warranties set out in clause 20 (Representations) of the COFACE Facility Agreement (other than the representations and warranties in clauses 20.14(a), (b) and (c) (Original Financial Statements), 20.18 (Taxation) and 20.24 (Shares and Material Companies) of the COFACE Facility Agreement) on the Effective Date, in each case as if references to the COFACE Facility Agreement are references to the COFACE Facility Agreement, as amended hereby, with reference to the facts and circumstances then existing, provided that, in the case of those representations and warranties contained in clause 20.13 (No misleading information) of the COFACE Facility Agreement, such representations and warranties are made only with respect to any subsequent and new information delivered under the COFACE Facility Agreement since the last period where such representation and warranty was made or deemed to be made under the COFACE Facility Agreement.
4. | CONDITIONS TO EFFECTIVENESS |
This Amendment shall become effective on the Effective Date upon the due execution of a signature page to this Amendment by each of the Parent, the Borrower, the other Obligors and the COFACE Agent on behalf of the Finance Parties and delivery of each party’s respective signature pages to each of the other parties hereto.
5. | Governing law; jurisdiction, etc. |
This Amendment and any non-contractual obligations arising out of or in connection with it are governed by English law. The provisions of Clause 40 (Enforcement) of the COFACE Facility Agreement are hereby incorporated by reference, mutatis mutandis, as if set forth in full herein.
6. | Miscellaneous |
(a) | This Amendment is a Finance Document. |
(b) | Each Obligor: |
(i) | agrees to the amendments to the COFACE Facility Agreement as contemplated by this Amendment; and |
(ii) | with effect from the Effective Date, confirms that any guarantee or security given by it or created under a Finance Document will: |
(A) | continue in full force and effect; and |
Amendment to COFACE Facility Agreement
Execution Version
(B) | extend to the liabilities and obligations of the Obligors to the Finance Parties under the Finance Documents as amended by this Amendment. |
(c) | On and after the date hereof, each reference in the COFACE Facility Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the COFACE Facility Agreement, and each reference in the other Finance Documents to the “COFACE Facility Agreement”, “thereunder”, “thereof” or words of like import referring to the COFACE Facility Agreement shall mean and be a reference to the COFACE Facility Agreement as amended by this Amendment. |
(d) | Except as specifically amended by this Amendment, the COFACE Facility Agreement shall remain unchanged and in full force and effect and is hereby ratified and confirmed. |
(e) | Each Finance Party reserves any other right or remedy it may have now or subsequently. The execution, delivery and performance of this Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Finance Parties under the COFACE Facility Agreement. |
(f) | Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect. |
(g) | This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Signatures to this Amendment may be delivered by facsimile or other electronic means of transmission, and any signature so delivered shall be deemed an original executed counterpart. |
[Signature Pages to follow]
Amendment to COFACE Facility Agreement
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be duly executed and delivered as of the date first above written.
Parent
IRIDIUM COMMUNICATIONS INC. | ||
By: | /s/ Thomas J. Fitzpatrick | |
Name: Thomas J. Fitzpatrick | ||
Title: Chief Financial Officer |
Borrower
IRIDIUM SATELLITE LLC
By: | /s/ Thomas J. Fitzpatrick | |
Name: Thomas J. Fitzpatrick | ||
Title: Chief Financial Officer |
Obligors
IRIDIUM COMMUNICATIONS INC.
By: | /s/ Thomas J. Fitzpatrick | |
Name: Thomas J. Fitzpatrick | ||
Title: Chief Financial Officer |
IRIDIUM HOLDINGS LLC
By: | /s/ Thomas J. Fitzpatrick | |
Name: Thomas J. Fitzpatrick | ||
Title: Chief Financial Officer |
IRIDIUM CARRIER HOLDINGS LLC
By: | /s/ Thomas J. Fitzpatrick | |
Name: Thomas J. Fitzpatrick | ||
Title: Chief Financial Officer |
IRIDIUM CARRIER SERVICES LLC
By: | /s/ Thomas J. Fitzpatrick | |
Name: Thomas J. Fitzpatrick | ||
Title: Chief Financial Officer |
Signature Page to Amendment to COFACE Facility Agreement
IRIDIUM CONSTELLATION LLC
By: | /s/ Thomas J. Fitzpatrick | |
Name: Thomas J. Fitzpatrick | ||
Title: Chief Financial Officer |
IRIDIUM GOVERNMENT SERVICES LLC
By: | /s/ Thomas J. Fitzpatrick | |
Name: Thomas J. Fitzpatrick | ||
Title: Chief Financial Officer of Iridium Constellation LLC, the Manager |
SYNCOM-IRIDIUM HOLDINGS CORP.
By: | /s/ Thomas J. Fitzpatrick | |
Name: Thomas J. Fitzpatrick | ||
Title: Chief Financial Officer |
IRIDIUM BLOCKER-B INC.
By: | /s/ Thomas J. Fitzpatrick | |
Name: Thomas J. Fitzpatrick | ||
Title: Chief Financial Officer |
Signature Page to Amendment to COFACE Facility Agreement
COFACE Agent
SOCIÉTÉ GÉNÉRALE
By: | /s/ Denis de Pallierets | |
Name: Denis de Pallierets | ||
Title: Co-Head of TMT Finance |
By: | /s/ Frederic Surdon | |
Name: Frederic Surdon | ||
Title: Global Head of Export Finance |
Signature Page to Amendment to COFACE Facility Agreement
AMENDMENT N° 15
TO THE
FULL SCALE SYSTEM DEVELOPMENT CONTRACT
No. IS-10-021
Between
Iridium Satellite LLC
And
THALES ALENIA SPACE FRANCE
for the
IRIDIUM NEXT SYSTEM
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy
PREAMBLE
This Amendment N° 15 (the “Amendment”) to the Full Scale System Development Contract No. IS-10-021 signed on June 1, 2010 between Iridium Satellite LLC and Thales Alenia Space France for the Iridium NEXT System, as amended, (the “Contract”) is entered into on this 11th day of June, 2013 by and between Thales Alenia Space France, a company organized and existing under the laws of France, having its registered office at 26 avenue Jean François Champollion 31100 Toulouse – FRANCE (“Contractor”), and Iridium Satellite LLC, a limited liability company organized under the laws of Delaware, having an office at 1750 Tysons Boulevard, Suite 1400, McLean, VA 22102 - USA (“Purchaser”).
RECITALS
WHEREAS, the Parties have agreed that certain “[***]” tests of Satellite components are required due to the “[***]”;
WHEREAS, Contractor has provided to Purchaser quotation TAS-13-CI/DCE-92, dated April 22, 2013, in the amount of “[***]” US Dollars (US$“[***]”) for such “[***]” tests;
WHEREAS, Purchaser issued an email to Contractor, dated May 3, 2013, accepting Contractor’s quotation; and
WHEREAS, the Parties now desire to amend Article 4 and Exhibit D of the Contract in accordance with the terms and conditions provided for in this Amendment.
NOW, THEREFORE, in consideration of the premises and for good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, and intending to be legally bound, the Parties hereby agree as follows:
Article 1: The Base Contract Price set forth in Article 4.1 of the Contract is hereby increased by “[***]” U.S. Dollars (US$“[***]”) to a new Base Contract Price of not more than “[***]” U.S. dollars (US$“[***]”).
Article 2: Exhibit D of the Contract is hereby revised to add the following separate milestone payment schedule applicable to the “[***]”.
[***] | [***] | [***] | [***] | |||||||||
[***] | [***] | [***] | [***] | |||||||||
[***] | [***] | [***] | [***] |
Article 3: This Amendment may be executed and delivered (including via facsimile or other electronic means) in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.
Article 4: All other provisions of the Contract not expressly referred to in this Amendment remain in full force and effect.
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium / Thales Alenia Space Confidential & Proprietary
1 |
IN WITNESS WHEREOF, the Parties have executed this Amendment by their duly authorized officers as of the date set forth in the Preamble.
IRIDIUM SATELLITE LLC | THALES ALENIA SPACE FRANCE | |
/s/ Scott Smith | /s/ Nathalie Smirnov | |
S. Scott Smith | Nathalie Smirnov | |
Executive Vice President | Executive Vice President | |
Technology Development and Satellite Operations | Business Line Telecommunications |
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium / Thales Alenia Space Confidential & Proprietary
2 |
AMENDMENT N° 16
TO THE
FULL SCALE SYSTEM DEVELOPMENT CONTRACT
No. IS-10-021
Between
Iridium Satellite LLC
And
THALES ALENIA SPACE FRANCE
for the
IRIDIUM NEXT SYSTEM
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy
PREAMBLE
This Amendment N° 16 (the “Amendment”) to the Full Scale System Development Contract No. IS-10-021 signed on June 1, 2010 between Iridium Satellite LLC and Thales Alenia Space France for the Iridium NEXT System, as amended, (the “Contract”) is entered into on this 24th day of July, 2013 by and between Thales Alenia Space France, a company organized and existing under the laws of France, having its registered office at 26 avenue Jean François Champollion 31100 Toulouse – FRANCE (“Contractor”), and Iridium Satellite LLC, a limited liability company organized under the laws of Delaware, having an office at 1750 Tysons Boulevard, Suite 1400, McLean, VA 22102 - USA (“Purchaser”).
RECITALS
WHEREAS, the Parties have agreed to pricing of “[***]” US Dollars (US$“[***]”) for Contractor’s performance of the Launch Segment Services associated with the first Launch from the Yasny Launch Site using the Dnepr Launch Vehicle;
WHEREAS the baseline Next System Launch Campaign consists in one (1) launch of two satellites from the Yasny launch site and seven (7) launches of ten (10) Satellites from the Vandenberg site;
WHEREAS, the Parties have agreed to the Launch Date for the first Launch;
WHEREAS, the Parties have agreed to incorporate the “[***]” in place of the “[***]”;
WHEREAS, the Parties have agreed on an additional cost of “[***]” US Dollars (US$“[***]”) for incorporation of “[***]” that include “[***]” and “[***]” into the “[***]”;
WHEREAS, the Parties have agreed to add certain “[***]” testing at a cost of “[***]” US Dollars (US$“[***]”);
WHEREAS, the Parties have agreed to align “[***]” with “[***]”; and
WHEREAS, the Parties now desire to amend Articles 1, 3, 4, 21, 35 and Exhibit D of the Contract, and Amendment No. 13 and Amendment No. 14, in accordance with the terms and conditions provided for in this Amendment.
NOW, THEREFORE, in consideration of the premises and for good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, and intending to be legally bound, the Parties hereby agree as follows:
Article 1: Capitalized terms used but not defined in this Amendment shall have the meanings ascribed thereto in the Contract or any amendments thereto, as the case may be.
Article 2: Article 1 of the Contract is hereby revised to add the following definitions.
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium / Thales Alenia Space Confidential & Proprietary
1 |
“[***]” means “[***]”.
“[***]” or “[***]” means “[***]”.
“Primary Transportation” means the transportation (including transportation, transit insurance, taxes and duties) of Satellites, ground support equipment (“GSE”) and hydrazine (collectively, “Transported Items”) to or from the shipping points defined in Article 9.
“Yasny Launch Site” means the Launch Site located in Yasny, Orenburg Region, Russian Federation.
Article 3: The first paragraph of Article 3.3.2 is hereby deleted and replaced in its entirety with the following paragraph.
“With respect to the initial Satellite Batch, the scheduled Launch date shall be February 1, 2015, the Launch Services Provider shall be International Space Company Kosmotras, the Launch Site shall be Yasny Launch Site located in the Orenburg Region, Russian Federation, and the quantity of Satellites to be included in the initial Satellite Batch shall be two (2).”
Article 4: The text “…subsequent “[***]” day Satellite Batch launch campaign” at the end of Article 3.4.1 is hereby deleted and replaced in its entirety with the wording “…subsequent Satellite Batch launch campaign of “[***]” days, or “[***]” days in the case of launch campaigns from the Yasny Launch Site.
Article 5: The first sentence of Article 3.4.3 is modified by inserting the wording “, excluding Launch of Satellites using the Dnepr Launch Vehicle.” directly after the words “to the Base Contract Price” in the fifth line. The last sentence of Article 3.4.3 is modified by inserting the wording “, or “[***]” day period for Satellites using the Dnepr Launch Vehicle,” directly after the words “such additional “[***]” day period”.
Article 6: Article 5.e set forth in Amendment No. 13 is hereby deleted and replaced in its entirety with the following:
“e. | incorporate the “[***]”, including “[***]” and “[***]” into “[***]”, at a cost to Iridium of “[***]” US Dollars (US$“[***]”); such agreed to amount to be deducted from the Adjustment, leaving a remaining Adjustment balances of “[***]” U.S. Dollars (US$“[***]”).” |
Article 7: Article 2 set forth in Amendment No. 14 is hereby deleted and replaced in its entirety with the following:
“The cost to implement “[***]”,“[***]” U.S. Dollars (US$“[***]”), shall be accounted for as follows:
(i) | “[***]” U.S. Dollars (US$“[***]”) of this total amount shall be deducted from the Adjustment, leaving no remaining Adjustment balance; and |
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium / Thales Alenia Space Confidential & Proprietary
2 |
(ii) | the Base Contract Price set forth in Article 4.1 of the Contract is hereby increased by “[***]” U.S. Dollars (US$“[***]”) to a new Base Contract Price of not more than “[***]” U.S. Dollars (US$“[***]”).” |
Article 8: The Base Contract Price set forth in Article 4.1 of the Contract is hereby increased by “[***]” U.S. Dollars (US$“[***]”) to a new Base Contract Price of not more than “[***]” U.S. dollars (US$“[***]”).
Article 9: Article 4.4 is hereby modified by addition of the following directly after the first paragraph.
“Notwithstanding the foregoing, pricing applicable to Launch Segment Services for Launches from the Yasny Launch Site does not include the following costs.
(a) | Primary Transportation; |
(b) | “[***]”; |
(c) | “[***]”; and | |
(d) | any activities that may be required by “[***]”. |
Contractor shall provide to Purchaser a firm, fixed price proposal for Primary Transportation no less than six (6) months prior to the then-scheduled Launch of the initial Satellite Batch. If Contractor provides such transportation, the shipping and delivery points shall be: (i) from “[***]” and (ii) from “[***]”. If Purchaser accepts Contractor’s proposal for Primary Transportation, then Contractor shall arrange Primary Transportation, and the cost for Primary Transportation shall become a part of the Base Contract Price, and Milestone Payments for Primary Transportation shall be agreed by the Parties, and as appropriate, integrated into and made part of Exhibit D, Payment Plan.
If Purchaser does not accept Contractor’s proposal for Primary Transportation applicable to the then-scheduled Launch of the initial Satellite Batch, Purchaser shall be responsible for procuring such Primary Transportation.
If Primary Transportation is procured by Purchaser:
1. | the shipping points and delivery points shall be: (i) from “[***]”; and (ii) from “[***]”. |
2. | Contractor shall be liable for shipping the “[***]”, as designated by Purchaser, and “[***]”. |
3. | Risk of loss or damage to the Transported Items shall pass from Contractor to Purchaser upon delivery of said items by Contractor to Purchaser in accordance with Incoterms DAT at “[***]”. Thereafter, risk of loss or damage to the Transported Items shall revert to the Contractor. |
4. | Primary Transportation will exclude any transportation resulting from the errors or omissions of Contractor or its Subcontractors. |
Though Contractor acknowledges that its Subcontractor responsible for the performance of Launch Segment Services, Orbital Sciences Corporation, shall coordinate the review and approval of the “[***]”, Contractor shall not be liable for this activity.
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium / Thales Alenia Space Confidential & Proprietary
3 |
If Purchaser exercises its Options under CLIN 010, the Parties agree to negotiate in good faith the cost of Primary Transportation for such exercised Options.
Title to the Satellites, GSE and hydrazine shall remain with Contractor, and Contractor shall be responsible for all applicable export license(s) regardless of which Party is responsible for Primary Transportation. Purchaser shall arrange for the issuance of required import licence(s). The Parties shall cooperate and provide each other all reasonable and necessary assistance in obtaining and maintaining any and all such export or import licenses.
Article 10: The second paragraph of Article 21.1.1 is hereby deleted and replaced in its entirety with the following paragraph.
“In the event Contractor fails to meet the “[***]” dates set forth herein for Satellite Batches Number Two (#2) through Eight (#8), as such dates may be adjusted in accordance with this Contract, Contractor shall pay Purchaser, as liquidated damages and not as a penalty, the incremental amounts listed below (the “Liquidated Damages”), with the damages period beginning as set forth in Table 21.1.1 taking into account any applicable grace period for Satellite Batches Number One (#1) through Eight (#8) noted in Table 21.1.2.”
Article 11: Table 21.1.1 is hereby deleted and replaced in its entirety with the following table.
Table 21.1.1 | ||
Satellite Batch | Percentage of Base Contract Price | |
“[***]” | “[***]” | |
“[***]” | “[***]” | |
“[***]” | “[***]” |
Article 12: The title set forth in the first (1st) column of Table 21.1.1(a) in Article 21.1.1 is hereby modified by (i) deleting the phrase “(as of the corresponding “[***]” Milestone)” and inserting the phrase “(as of “[***]”)”.
Article 13: Article 21.1.2 is hereby modified by (i) deleting the words “Tables 21.1.1(a) and (b)” immediately following the text “periods set forth in” in the third line and inserting the words “Table 21.1.2(a) and (b)” in place thereof.
Article 14: The wording “, or “[***]” days in the case of Launches from the Yasny Launch Site,” is hereby added directly following the wording “”occur “[***]” days” in the first line of Article 21.2.1.
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium / Thales Alenia Space Confidential & Proprietary
4 |
Article 15: The following sentences are hereby added immediately at the end of Article 21.2.1.
(1) | “Contractor’s payment of Liquidated Damages to Purchaser shall be subject to an aggregate pool of “[***]” days of grace, which may be applied to each Satellite Batch, provided that: (i) Contractor provides to Purchaser documented justification that Contractor requires additional time to complete the Launch Segment Services; (ii) the Parties shall discuss in good faith the details for applying any days of grace; and (iii) such “[***]” day grace period shall not be available to Contractor if requested “[***]” or less days prior to the then-scheduled Launch. |
Article 16: Article 35 is hereby revised by the addition of the following Article 35.12.
“Article 35.12 Option for Additional Launches from the Yasny Launch Site (CLIN 010)
Purchaser may, at its option to be exercised by written notice, order Contractor to Launch a Batch of NEXT Satellites at the Yasny Launch Site in accordance with the SOW. All other terms not specified below relating to the performance of the Work associated with the Yasny Launch Site shall be in accordance with the terms of this Contract, including the SOW. CLIN 010 is for Launches that are in addition to the current NEXT System Launch Campaign, which consists of one (1) Launch of two (2) Satellites from the Yasny Launch Site and seven (7) Launches of ten (10) Satellites from the Vandenberg Launch Site. The Parties shall negotiate in good faith if there is a change to the current NEXT System Launch Campaign.
(i) | Option Exercise. Purchaser may exercise CLIN 010 consistent with the advance notification requirements for the Launch of Satellite Batches involving existing Launch Services Providers as provided for in Article 3.3.2 (b). |
(ii) | Period of Performance. From the CLIN 010 option exercise date up through completion of the Launch of the applicable Satellite Batch. |
(iii) | Price. The price for CLIN 010 is set forth in Table 35.10 below, and shall become part of the Base Contract Price. |
(iv) | The price for CLIN 010 does not include the following costs: |
(a) | Primary Transportation; |
(b) | “[***]”; and |
(c) | “[***]”. |
Table 35.10
CLIN 010 YASNY LAUNCH SITE | |
CLIN 010 Yasny 1 launch per 2 Satellites |
· US$“[***]” · Price valid through “[***]” for up to “[***]” consecutive Launches · Price will be subject to an annual escalation of “[***]” percent (“[***]”%) after “[***]”. |
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium / Thales Alenia Space Confidential & Proprietary
5 |
(v) | Payment. Milestone Payments for any Launches ordered under CLIN 010 shall be as set forth in Exhibit D, Payment Plan. |
Article 17: Article 35 is hereby revised by the addition of the following Article 35.13.
“Article 35.13 Option for Additional Days for Performance of Launch Segment Services at the Yasny Launch Site (CLIN 011)
If additional days are needed to complete the Launch Segment Services after the Satellites have arrived at the Yasny Launch Site for reasons not attributable to Contractor, Purchaser may, at its option to be exercised by written notice, authorize up to “[***]” additional days for Contractor to perform such Launch Segment Services in accordance with the SOW. All other terms not specified below relating to the performance of the Work associated with such Launch Segment Services shall be in accordance with the terms of this Contract, including the SOW.
(i) | Option Exercise. Purchaser may exercise CLIN 011 item any time before the Launch of a Satellite Batch for Launch Segments Services are being performed. | |
(ii) | Period of Performance. From the CLIN 011 exercise date for no more than “[***]” days. |
(iii) | Price. The price for CLIN 011 shall be “[***]” U.S. dollars ($“[***]”) per day for up to “[***]” days, and shall become part of the Base Contract Price. This price does not include: |
(a) “[***]”; and
(b) “[***]”.
(iv) | Payment. Milestone Payments for any additional days shall be agreed by the Parties, and as appropriate, integrated into and made part of Exhibit D, Payment Plan. |
Article 18: Milestones “[***]” and “[***]” set forth in the Payment Plan are hereby deleted and replaced in their entirety by the following payment amounts.
“[***]”
Article 19: Milestones “[***]” and “[***]” set forth in the separate milestone payment schedule, applicable to the implementation of the “[***]” services, in Amendment No. 11 to the Contract are hereby deleted and replaced in their entirety by the following:
“[***]”
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium / Thales Alenia Space Confidential & Proprietary
6 |
Article 20: Exhibit D of the Contract is hereby revised to add the following separate milestone payment schedule applicable to the “[***]”.
“[***]”
Article 21: The table set forth in Amendment No. 11 to the Contract that revised Appendix A of the SOW to add a separate CDRL table applicable to the implementation of the “[***]” Service is hereby deleted and replaced in its entirety with the following.
“[***]”
Article 22: The separate milestone payment schedule, applicable to the implementation of the “[***]” services, set forth in Amendment No. 14 to the Contract is hereby modified by (i) deleting the payment amount of “US$“[***]”” for Milestone “[***]” and (ii) inserting the payment amount of “US$“[***]”” in place thereof.
Article 23: This Amendment may be executed and delivered (including via facsimile or other electronic means) in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.
Article 24: All other provisions of the Contract not expressly referred to in this Amendment remain in full force and effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment by their duly authorized officers as of the date set forth in the Preamble.
IRIDIUM SATELLITE LLC | THALES ALENIA SPACE FRANCE | |
/s/ S. Scott Smith | /s/ Nathalie Smirnov | |
S. Scott Smith | Nathalie Smirnov | |
Executive Vice President | Executive Vice President | |
Technology Development and Satellite Operations | Business Line Telecommunications |
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium / Thales Alenia Space Confidential & Proprietary
7 |
AMENDMENT N° 17
TO THE
FULL SCALE SYSTEM DEVELOPMENT CONTRACT
No. IS-10-021
Between
Iridium Satellite LLC
And
THALES ALENIA SPACE FRANCE
for the
IRIDIUM NEXT SYSTEM
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy
PREAMBLE
This Amendment N° 17 (the “Amendment”) to the Full Scale System Development Contract No. IS-10-021 signed on June 1, 2010 between Iridium Satellite LLC and Thales Alenia Space France for the Iridium NEXT System, as amended, (the “Contract”) is entered into on this 20th day of August, 2013 by and between Thales Alenia Space France, a company organized and existing under the laws of France, having its registered office at 26 avenue Jean François Champollion 31100 Toulouse – FRANCE (“Contractor”), and Iridium Satellite LLC, a limited liability company organized under the laws of Delaware, having an office at 1750 Tysons Boulevard, Suite 1400, McLean, VA 22102 - USA (“Purchaser”).
RECITALS
WHEREAS, Purchaser and Contractor have engaged in discussions relating to changes the Parties would like to incorporate in the Contract to modify Milestones “[***]” and “[***]”.
WHEREAS, the Parties now desire to amend Exhibit D of the Contract, in accordance with the terms and conditions provided for in this Amendment.
NOW, THEREFORE, in consideration of the premises and for good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, and intending to be legally bound, the Parties hereby agree as follows:
Article 1: Capitalized terms used but not defined in this Amendment shall have the meanings ascribed thereto in the Contract or any amendments thereto, as the case may be.
Article 2: Milestones “[***]” and “[***]”, set forth in the Payment Plan, are hereby deleted and replaced in their entirety by the following payment amounts.
“[***]”
Article 23: This Amendment may be executed and delivered (including via facsimile or other electronic means) in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.
Article 24: All other provisions of the Contract not expressly referred to in this Amendment remain in full force and effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment by their duly authorized officers as of the date set forth in the Preamble.
IRIDIUM SATELLITE LLC | THALES ALENIA SPACE FRANCE | |
/s/ S. Scott Smith | /s/Nathalie Smirnov | |
S. Scott Smith | Nathalie Smirnov | |
Chief Operating Officer | Executive Vice President | |
Business Line Telecommunications |
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium / Thales Alenia Space Confidential & Proprietary
1 |
AMENDMENT NO. 3
TO THE
CONTRACT FOR LAUNCH SERVICES
NO. IS-10-008
BETWEEN
IRIDIUM SATELLITE LLC
AND
SPACE EXPLORATION TECHNOLOGIES CORP.
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium & Space Exploration Technologies Corp. Proprietary Information
PREAMBLE
This Amendment No. 3 (the “Amendment”) to the Contract for Launch Services No. IS-10-008, signed on March 19, 2010 between Iridium Satellite LLC and Space Exploration Technologies Corp. (the “Contract”) is entered into on this 9th day of May, 2013, by and between Iridium Satellite LLC, a limited liability company organized and existing under the laws of Delaware, having its office at 1750 Tysons Boulevard, Suite 1400, McLean, VA 22102 (“Customer”) and Space Exploration Technologies Corp., a Delaware corporation, having its office at 1 Rocket Road, Hawthorne, CA 90250 (“Contractor”).
RECITALS
WHEREAS, Customer and Contractor have engaged in discussions relating to certain changes to the Contract; and
WHEREAS, the Parties now desire to amend Articles 2 and 11 of the Contract.
NOW, THEREFORE, in consideration of the foregoing, the agreements contained herein, the payments to be made by Customer to Contractor under the Contract and other good and valid consideration, the receipt and adequacy of which are hereby expressly acknowledged, and intending to be legally bound, the Parties agree as follows:
Article 1: Capitalized terms used but not defined in this Amendment shall have the meanings ascribed thereto in the Contract.
Article 2: Section 2.1.2 of the Contract is hereby modified by (i) deleting the words “[***]” months after EDC” immediately following the text “no later than” in the second sentence and (ii) inserting the words “[***]” in place thereof.
Article 3: The following Section 2.6 is added.
“Contractor agrees that it will have no need for the “[***]” after “[***]”.”
Article 4: Section 11.1.1(C) is hereby modified by (i) deleting the text “No later than “[***]” …” and replacing them with the text “No later than “[***]” …”.
Article 5: This Amendment may be executed and delivered (including via facsimile or other electronic means) in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium & Space Exploration Technologies Corp. Proprietary Information
2 |
Article 6: All other provisions of the Contract not expressly referred to in this Amendment remain in full force and effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment by their duly authorized officers as of the date set forth in the Preamble.
For Customer | For Contractor | |||
IRIDIUM SATELLITE LLC |
SPACE EXPLORATION TECHNOLOGIES CORP. | |||
Signature: | /s/ S. Scott Smith | Signature: | /s/ Gwynne Shotwell | |
Name: | S. Scott Smith | Name: | Gwynne Shotwell | |
Title: | Executive Vice President, Satellite Development & Operations | Title: | President |
*** Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Execution Copy Iridium & Space Exploration Technologies Corp. Proprietary Information
3 |
1. | I have reviewed this quarterly report on Form 10-Q of Iridium Communications Inc.; |
| |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| | |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| | |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: October 31, 2013 | | /s/ Matthew J. Desch |
| | Matthew J. Desch |
| | Chief Executive Officer (principal executive officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Iridium Communications Inc.; |
| |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| | |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| | |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| | |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: October 31, 2013 | | /s/ Thomas J. Fitzpatrick |
| | Thomas J. Fitzpatrick |
| | Chief Financial Officer (principal financial officer) |
1. | The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and |
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2. | The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Quarterly Report and results of operations of the Company for the periods covered in the financial statements in the Quarterly Report. |
/s/ Matthew J. Desch | | /s/ Thomas J. Fitzpatrick |
Matthew J. Desch | | Thomas J. Fitzpatrick |
Chief Executive Officer | | Chief Financial Officer |
Net Income Per Share (Tables)
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The computations of basic and diluted net income per share are set forth as follows:
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