Certain Relationships and Related-Party Transactions

12 Months Ended

Apr. 01, 2011

Certain Relationships and Related-Party Transactions [Abstract]

Certain Relationships and Related-Party Transactions


Note 16 —	Certain Relationships and Related-Party Transactions

Michael Targoff, a director of the Company since February 2003, currently serves as the Chief Executive Officer and the Vice Chairman of the board of directors of Loral Space & Communications, Inc. (Loral), the parent of Space Systems/Loral, Inc. (SS/L), and is also a director of Telesat Holdings Inc., a joint venture company formed by Loral and the Public Sector Pension Investment Board to acquire Telesat Canada in October 2007. John Stenbit, a director of the Company since August 2004, also currently serves on the board of directors of Loral.

In January 2008, the Company entered into a satellite construction contract with SS/L under which the Company purchased a new high-capacity Ka-band spot-beam satellite (ViaSat-1) designed by the Company and currently under construction by SS/L for approximately $209.1 million, subject to purchase price adjustments based on satellite performance. In addition, the Company entered into a beam sharing agreement with Loral, whereby Loral is responsible for contributing 15% of the total costs (estimated at approximately $57.6 million) associated with the ViaSat-1 satellite project. The Company’s purchase of the ViaSat-1 satellite from SS/L was approved by the disinterested members of the Company’s Board of Directors, after a determination by the disinterested members of the Company’s Board that the terms and conditions of the purchase were fair to and in the best interests of the Company and its stockholders. On March 1, 2011, Loral entered into agreements with Telesat Canada pursuant to which Loral assigned to Telesat Canada and Telesat Canada assumed from Loral all of Loral’s rights and obligations with respect to the Canadian beams on ViaSat-1.

During the fiscal years ended April 1, 2011, April 2, 2010 and April 3, 2009, under the satellite construction contract, the Company paid $25.0 million, $62.9 million and $92.7 million, respectively, to SS/L and had no payable to SS/L as of April 1, 2011 and $3.8 million payable to SS/L as of April 2, 2010. During the fiscal years ended April 1, 2011, April 2, 2010 and April 3, 2009, the Company also received $8.2 million, $2.6 million and $0.9 million, respectively, from SS/L under the beam sharing agreement with Loral. Accounts receivable due from SS/L under the beam sharing agreement with Loral were less than $0.1 million and $3.8 million as of April 1, 2011 and April 2, 2010, respectively.

From time to time the Company enters into various contracts in the ordinary course of business with SS/L and Telesat Canada. Under a contract with SS/L, the Company recognized $3.3 million in revenue during fiscal year 2011 and received $3.9 million of cash during fiscal year 2011. During fiscal years 2010 and 2009, the Company recognized no revenue and had no cash receipts related to a contract with SS/L. Accounts receivable due under a contract with SS/L was $0.8 million as of April 1, 2011 and there was no accounts receivable outstanding as of April 2, 2010. Collections in excess of revenues and deferred revenues related to a contract with SS/L were $1.4 million and $0.8 million as of April 1, 2011 and April 2, 2010, respectively. The Company recognized an immaterial amount of revenue related to Telesat Canada for the fiscal years ended April 1, 2011 and April 2, 2010, and approximately $2.0 million for the fiscal year ended April 3, 2009. The Company received $1.2 million, $1.9 million and $2.5 million, respectively, from Telesat Canada during the fiscal years ended April 1, 2011, April 2, 2010 and April 3, 2009. Accounts receivable due from Telesat Canada as of April 1, 2011 and April 2, 2010 were an immaterial amount and $0.9 million, respectively. The Company also recognized $2.2 million and $2.1 million of expense related to Telesat Canada for the fiscal years ended April 1, 2011 and April 2, 2010, respectively, and no material amounts for the fiscal year ended April 3, 2009. During the fiscal years ended April 1, 2011 and April 2, 2010, the Company paid $7.2 million and $2.1 million, respectively, to Telesat Canada. There were no material amounts paid to Telesat Canada during the fiscal year ended April 3, 2009. All other amounts related to SS/L and Telesat Canada, excluding activities under the ViaSat-1 related satellite contracts, were not material.

- Definition

This element may be used for the entire related party transactions disclosure as a single block of text. Disclosure may include: the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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