Certain Relationships and Related-Party Transactions

6 Months Ended

Sep. 30, 2011

Certain Relationships and Related-Party Transactions [Abstract]

Certain Relationships and Related-Party Transactions

Note 12 — 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 constructed 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 six months ended September 30, 2011 and October 1, 2010, under the satellite construction contract, the Company paid $1.3 million and $19.2 million, respectively, to SS/L and had $1.3 million outstanding payables as of September 30, 2011 and no payables as of April 1, 2011. During the six months ended September 30, 2011 and October 1, 2010, the Company also received less than $0.1 million and $6.0 million of cash, respectively, from SS/L under the beam sharing agreement with Loral. Accounts receivable due from SS/L were $12.2 million as of September 30, 2011, and an immaterial amount as of April 1, 2011 included in prepaid expenses and other current assets. All other amounts related to SS/L under the ViaSat-1 related satellite contracts were not material.

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 an immaterial amount and $1.5 million in revenue during the three and six months ended September 30, 2011, respectively. There were no collections in excess of revenues and deferred revenues related to a contract with SS/L as of September 30, 2011 and there were $1.4 million in such collections as of April 1, 2011. The Company received cash of $1.9 million and an immaterial amount from Telesat Canada during the six months ended September 30, 2011 and October 1, 2010, respectively. During the six months ended September 30, 2011 and October 1, 2010, the Company paid $4.8 million and $4.7 million, respectively, to Telesat Canada. The Company also recognized $1.3 million and $1.7 million of expense related to Telesat Canada during the six months ended September 30, 2011 and October 1, 2010, respectively. All other amounts related to SS/L and Telesat Canada, excluding activities under the ViaSat-1 related satellite contracts, were not material.