Note 13 — Financial Statements of Parent and Subsidiary Guarantors

As of December 28, 2012, $575.0 million in aggregate principal amount of 2020 Notes issued by the Company was outstanding. The 2020 Notes are jointly and severally guaranteed on a full and unconditional basis by each of the Guarantor Subsidiaries, subject to certain customary release provisions, including the sale, transfer or other disposition of the capital stock or all or substantially all of the assets of a Guarantor Subsidiary, the designation of a Guarantor Subsidiary as an unrestricted subsidiary, the release or discharge of the Guarantor Subsidiary’s guarantee of the Credit Facility or the exercise of the legal defeasance option or covenant defeasance option. All of the Guarantor Subsidiaries are direct or indirect 100% owned subsidiaries of the Company. The indentures governing the 2020 Notes limit, among other things, the Company’s and its restricted subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt; make loans and investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries; sell or otherwise dispose of assets; enter into transactions with affiliates; reduce the Company’s satellite insurance; and consolidate or merge with, or sell substantially all of their assets to, another person.

The following supplemental financial information sets forth, on a condensed consolidating basis, the balance sheets, statements of operations and comprehensive income (loss), and statements of cash flows for the Company (as “Issuing Parent Company”), the Guarantor Subsidiaries, the non-guarantor subsidiaries and total consolidated Company and subsidiaries as of December 28, 2012 and March 30, 2012 and for the three and nine months ended December 28, 2012 and December 30, 2011.

Condensed Consolidated Balance Sheet as of December 28, 2012


	Issuing Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	99,961	$	2,787	$	9,919	$	—		$	112,667
Accounts receivable, net		216,196		14,090		7,265		—			237,551
Inventories		96,661		22,910		6,866		—			126,437
Deferred income taxes		18,380		1,526		308		—			20,214
Prepaid expenses and other current assets		30,618		5,276		769		—			36,663
Current portion of intercompany receivables		91,642		1,581		1,403		(94,626	)		—

Total current assets		553,458		48,170		26,530		(94,626	)		533,532

Satellites, net		342,778		205,027		—		—			547,805
Property and equipment, net		185,075		156,494		6,161		—			347,730
Other acquired intangible assets, net		1,824		42,754		6,491		—			51,069
Goodwill		63,938		9,687		9,936		—			83,561
Investments in subsidiaries and intercompany receivables		394,545		1,439		302		(396,286	)		—
Other assets		138,874		45,682		682		—			185,238

Total assets	$	1,680,492	$	509,253	$	50,102	$	(490,912	)	$	1,748,935


LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	62,590	$	13,142	$	1,198	$	—		$	76,930
Accrued liabilities		107,373		25,775		6,399		—			139,547
Current portion of other long-term debt		107		920		—		—			1,027
Current portion of intercompany payables		1,403		89,977		3,246		(94,626	)		—

Total current liabilities		171,473		129,814		10,843		(94,626	)		217,504

Senior Notes, net		585,265		—		—		—			585,265
Other long-term debt		—		62		—		—			62
Intercompany payables		308		—		6,263		(6,571	)		—
Other liabilities		39,847		15,810		2,382		—			58,039

Total liabilities		796,893		145,686		19,488		(101,197	)		860,870

Equity:
ViaSat, Inc. stockholders’ equity
Total ViaSat, Inc. stockholders’ equity		883,599		363,567		30,614		(394,181	)		883,599
Noncontrolling interest in subsidiary		—		—		—		4,466			4,466

Total equity		883,599		363,567		30,614		(389,715	)		888,065

Total liabilities and equity	$	1,680,492	$	509,253	$	50,102	$	(490,912	)	$	1,748,935

Condensed Consolidated Balance Sheet as of March 30, 2012


	Issuing Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	162,426	$	439	$	9,718	$	—		$	172,583
Accounts receivable, net		192,313		12,411		6,966		—			211,690
Inventories		106,151		16,474		5,021		—			127,646
Deferred income taxes		18,482		1,526		308		—			20,316
Prepaid expenses and other current assets		27,128		2,923		866		—			30,917

Total current assets		506,500		33,773		22,879		—			563,152

Satellites, net		358,580		227,151		—		—			585,731
Property and equipment, net		178,611		110,137		6,225		—			294,973
Other acquired intangible assets, net		2,633		52,389		8,019		—			63,041
Goodwill		63,939		9,687		9,835		—			83,461
Investments in subsidiaries and intercompany receivables		437,631		2,501		1,428		(441,560	)		—
Other assets		117,300		18,886		609		—			136,795

Total assets	$	1,665,194	$	454,524	$	48,995	$	(441,560	)	$	1,727,153


LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	62,085	$	12,192	$	763	$	—		$	75,040
Accrued liabilities		128,327		27,477		3,958		—			159,762
Current portion of other long-term debt		129		1,111		—		—			1,240

Total current liabilities		190,541		40,780		4,721		—			236,042

Senior Notes, net		547,791		—		—		—			547,791
Other long-term debt		74		700		—		—			774
Intercompany payables		1,428		4,462		9,429		(15,319	)		—
Other liabilities		37,385		10,269		2,699		—			50,353

Total liabilities		777,219		56,211		16,849		(15,319	)		834,960

Equity:
ViaSat, Inc. stockholders’ equity
Total ViaSat, Inc. stockholders’ equity		887,975		398,313		32,146		(430,459	)		887,975
Noncontrolling interest in subsidiary		—		—		—		4,218			4,218

Total equity		887,975		398,313		32,146		(426,241	)		892,193

Total liabilities and equity	$	1,665,194	$	454,524	$	48,995	$	(441,560	)	$	1,727,153

Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the Three Months Ended December 28, 2012


	Issuing Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
Revenues:
Product revenues	$	156,334		$	652		$	7,859		$	(151	)	$	164,694
Service revenues		53,895			66,685			1,566			(398	)		121,748

Total revenues		210,229			67,337			9,425			(549	)		286,442
Operating expenses:
Cost of product revenues		113,397			908			5,079			(134	)		119,250
Cost of service revenues		35,650			56,042			860			(407	)		92,145
Selling, general and administrative		34,741			24,542			2,926			—			62,209
Independent research and development		7,496			28			96			(8	)		7,612
Amortization of acquired intangible assets		260			3,159			541			—			3,960

Income (loss) from operations		18,685			(17,342	)		(77	)		—			1,266
Other income (expense):
Interest income		36			—			2			—			38
Interest expense		(10,658	)		(14	)		—			—			(10,672	)
Loss on extinguishment of debt		(26,501	)		—			—			—			(26,501	)

Income (loss) before income taxes		(18,438	)		(17,356	)		(75	)		—			(35,869	)
Provision for (benefit from) income taxes		(5,765	)		(9,685	)		195			—			(15,255	)
Equity in net income (loss) of consolidated subsidiaries		(8,103	)		—			—			8,103			—

Net income (loss)		(20,776	)		(7,671	)		(270	)		8,103			(20,614	)
Less: Net income (loss) attributable to noncontrolling interest, net of tax		—			—			—			162			162

Net income (loss) attributable to ViaSat, Inc.	$	(20,776	)	$	(7,671	)	$	(270	)	$	7,941		$	(20,776	)

Comprehensive income (loss) attributable to ViaSat, Inc.	$	(20,710	)	$	(7,671	)	$	(296	)	$	7,967		$	(20,710	)

Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the Nine Months Ended December 28, 2012


	Issuing Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
Revenues:
Product revenues	$	460,645		$	4,158		$	16,468		$	(373	)	$	480,898
Service revenues		142,923			181,072			7,305			(1,171	)		330,129

Total revenues		603,568			185,230			23,773			(1,544	)		811,027
Operating expenses:
Cost of product revenues		336,104			3,018			10,922			(324	)		349,720
Cost of service revenues		97,016			165,523			4,737			(1,180	)		266,096
Selling, general and administrative		96,484			68,264			8,041			—			172,789
Independent research and development		22,859			538			382			(40	)		23,739
Amortization of acquired intangible assets		809			9,635			1,621			—			12,065

Income (loss) from operations		50,296			(61,748	)		(1,930	)		—			(13,382	)
Other income (expense):
Interest income		138			—			5			—			143
Interest expense		(33,716	)		(50	)		(5	)		—			(33,771	)
Loss on extinguishment of debt		(26,501	)		—			—			—			(26,501	)

Income (loss) before income taxes		(9,783	)		(61,798	)		(1,930	)		—			(73,511	)
Provision for (benefit from) income taxes		(3,563	)		(27,052	)		8			—			(30,607	)
Equity in net income (loss) of consolidated subsidiaries		(36,883	)		—			—			36,883			—

Net income (loss)		(43,103	)		(34,746	)		(1,938	)		36,883			(42,904	)
Less: Net income (loss) attributable to noncontrolling interest, net of tax		—			—			—			199			199

Net income (loss) attributable to ViaSat, Inc.	$	(43,103	)	$	(34,746	)	$	(1,938	)	$	36,684		$	(43,103	)

Comprehensive income (loss) attributable to ViaSat, Inc.	$	(42,710	)	$	(34,746	)	$	(1,717	)	$	36,463		$	(42,710	)

Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the Three Months Ended December 30, 2011


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
Revenues:
Product revenues	$	115,537		$	735		$	5,651		$	(61	)	$	121,862
Service revenues		30,438			50,864			2,211			(411	)		83,102

Total revenues		145,975			51,599			7,862			(472	)		204,964
Operating expenses:
Cost of product revenues		85,440			854			3,230			(61	)		89,463
Cost of service revenues		17,781			38,200			1,760			(423	)		57,318
Selling, general and administrative		31,801			11,767			2,057			15			45,640
Independent research and development		5,821			—			181			(3	)		5,999
Amortization of acquired intangible assets		971			3,238			543			—			4,752

Income (loss) from operations		4,161			(2,460	)		91			—			1,792
Other income (expense):
Interest income		19			—			1			—			20
Interest expense		(305	)		(26	)		—			—			(331	)

Income (loss) before income taxes		3,875			(2,486	)		92			—			1,481
Provision for (benefit from) income taxes		(1,901	)		(1,318	)		(418	)		—			(3,637	)
Equity in net income (loss) of consolidated subsidiaries		(636	)		—			—			636			—

Net income (loss)		5,140			(1,168	)		510			636			5,118
Less: Net income (loss) attributable to noncontrolling interest, net of tax		—			—			—			(22	)		(22	)

Net income (loss) attributable to ViaSat, Inc.	$	5,140		$	(1,168	)	$	510		$	658		$	5,140

Comprehensive income (loss) attributable to ViaSat, Inc.	$	5,036		$	(1,168	)	$	195		$	973		$	5,036

Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the Nine Months Ended December 30, 2011


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
Revenues:
Product revenues	$	370,293		$	2,313		$	18,818		$	(405	)	$	391,019
Service revenues		70,123			155,853			7,624			(1,530	)		232,070

Total revenues		440,416			158,166			26,442			(1,935	)		623,089
Operating expenses:
Cost of product revenues		275,370			2,396			13,695			(1,804	)		289,657
Cost of service revenues		43,253			113,657			5,419			(1,491	)		160,838
Selling, general and administrative		88,335			36,827			6,578			12			131,752
Independent research and development		17,778			—			753			(29	)		18,502
Amortization of acquired intangible assets		2,911			9,715			1,665			—			14,291

Income (loss) from operations		12,769			(4,429	)		(1,668	)		1,377			8,049
Other income (expense):
Interest income		264			—			5			(210	)		59
Interest expense		(457	)		(85	)		(210	)		210			(542	)

Income (loss) before income taxes		12,576			(4,514	)		(1,873	)		1,377			7,566
Provision for (benefit from) income taxes		(5,364	)		(2,140	)		(303	)		492			(7,315	)
Equity in net income (loss) of consolidated subsidiaries		(3,951	)		—			—			3,951			—

Net income (loss)		13,989			(2,374	)		(1,570	)		4,836			14,881
Less: Net income (loss) attributable to noncontrolling interest, net of tax		—			—			—			7			7

Net income (loss) attributable to ViaSat, Inc.	$	13,989		$	(2,374	)	$	(1,570	)	$	4,829		$	14,874

Comprehensive income (loss) attributable to ViaSat, Inc.	$	12,470		$	(2,374	)	$	(2,444	)	$	5,703		$	13,355

Condensed Consolidated Statement of Cash Flows for the Nine Months Ended December 28, 2012


	Issuing Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(39,621	)	$	88,567		$	143		$	49		$	49,138

Cash flows from investing activities:
Purchase of property, equipment and satellites, net		(33,742	)		(85,390	)		(1,050	)		—			(120,182	)
Cash paid for patents, licenses and other assets		(18,795	)		—			(85	)		—			(18,880	)
Long-term intercompany notes and investments		(1,155	)		—			—			1,155			—

Net cash provided by (used in) investing activities		(53,692	)		(85,390	)		(1,135	)		1,155			(139,062	)
Cash flows from financing activities:
Proceeds from issuance of Additional 2020 Notes		300,000			—			—			—			300,000
Repayment of 2016 Notes		(271,582	)		—			—			—			(271,582	)
Payment of debt issuance costs		(8,059	)		—			—			—			(8,059	)
Proceeds from issuance of common stock under equity plans		19,512			—			49			(49	)		19,512
Purchase of common stock in treasury		(7,902	)		—			—			—			(7,902	)
Payments on capital lease		(96	)		(829	)		—			—			(925	)
Payments of satellite performance incentives obligation		(1,025	)		—			—			—			(1,025	)
Long-term intercompany financing		—			—			1,155			(1,155	)		—

Net cash provided by (used in) financing activities		30,848			(829	)		1,204			(1,204	)		30,019
Effect of exchange rate changes on cash		—			—			(11	)		—			(11	)

Net increase (decrease) in cash and cash equivalents		(62,465	)		2,348			201			—			(59,916	)
Cash and cash equivalents at beginning of period		162,426			439			9,718			—			172,583

Cash and cash equivalents at end of period	$	99,961		$	2,787		$	9,919		$	—		$	112,667

Condensed Consolidated Statement of Cash Flows for the Nine Months Ended December 30, 2011


	Issuing Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	10,692		$	51,853		$	4,365		$	(1,945	)	$	64,965

Cash flows from investing activities:
Purchase of property, equipment and satellites, net		(130,843	)		(28,069	)		(2,200	)		1,945			(159,167	)
Cash paid for patents, licenses and other assets		(17,068	)		—			(36	)		—			(17,104	)
Long-term intercompany notes and investments		3,265			—			—			(3,265	)		—

Net cash provided by (used in) investing activities		(144,646	)		(28,069	)		(2,236	)		(1,320	)		(176,271	)
Cash flows from financing activities:
Proceeds from issuance of common stock under equity plans		14,369			—			—			—			14,369
Purchase of common stock in treasury		(6,991	)		—			—			—			(6,991	)
Payments on capital lease		(84	)		(678	)		—			—			(762	)
Proceeds from line of credit borrowings		130,000			—			—			—			130,000
Payments on line of credit		(20,000	)		—			—			—			(20,000	)
Long-term intercompany financing		30,531			(30,531	)		(3,265	)		3,265			—

Net cash provided by (used in) financing activities		147,825			(31,209	)		(3,265	)		3,265			116,616
Effect of exchange rate changes on cash		—			—			42			—			42

Net increase (decrease) in cash and cash equivalents		13,871			(7,425	)		(1,094	)		—			5,352
Cash and cash equivalents at beginning of period		24,347			7,600			8,543			—			40,490

Cash and cash equivalents at end of period	$	38,218		$	175		$	7,449		$	—		$	45,842