Note 17 — Financial Statements of Parent and Subsidiary Guarantors

As of March 29, 2013, $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 indenture governing the 2020 Notes limits, 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 March 29, 2013 and March 30, 2012 and for the fiscal years ended March 29, 2013, March 30, 2012 and April 1, 2011.

Condensed Consolidated Balance Sheet as of March 29, 2013


	Issuing Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidation and Elimination Adjustments			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	93,780	$	3,112	$	8,846	$	—		$	105,738
Accounts receivable, net		240,457		15,537		10,976		—			266,970
Inventories		81,195		19,985		5,101		—			106,281
Deferred income taxes		22,350		2,425		290		—			25,065
Prepaid expenses and other current assets		32,372		7,819		628		—			40,819
Current portion of intercompany receivables		128,383		1,581		1,631		(131,595	)		—

Total current assets		598,537		50,459		27,472		(131,595	)		544,873
Satellites, net		337,437		197,653		—		—			535,090
Property and equipment, net		189,500		183,227		5,964		—			378,691
Other acquired intangible assets, net		1,597		39,989		5,584		—			47,170
Goodwill		63,939		9,686		9,375		—			83,000
Investments in subsidiaries and intercompany receivables		381,338		1,439		303		(383,080	)		—
Other assets		154,854		49,645		749		—			205,248

Total assets	$	1,727,202	$	532,098	$	49,447	$	(514,675	)	$	1,794,072

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	71,931	$	9,999	$	1,079	$	—		$	83,009
Accrued liabilities		128,374		26,916		6,619		—			161,909
Current portion of other long-term debt		454		1,776		—		—			2,230
Current portion of intercompany payables		1,631		127,215		2,750		(131,596	)		—

Total current liabilities		202,390		165,906		10,448		(131,596	)		247,148
Senior notes, net		584,993		—		—		—			584,993
Other long-term debt		380		1,076		—		—			1,456
Intercompany payables		302		—		6,319		(6,621	)		—
Other liabilities		36,136		15,137		1,367		—			52,640

Total liabilities		824,201		182,119		18,134		(138,217	)		886,237

Equity:
ViaSat, Inc. stockholders’ equity
Total ViaSat, Inc. stockholders’ equity		903,001		349,979		31,313		(381,292	)		903,001
Noncontrolling interest in subsidiary		—		—		—		4,834			4,834

Total equity		903,001		349,979		31,313		(376,458	)		907,835

Total liabilities and equity	$	1,727,202	$	532,098	$	49,447	$	(514,675	)	$	1,794,072

Condensed Consolidated Balance Sheet as of March 30, 2012


	Issuing Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidation and Elimination Adjustments			Consolidated
	(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 Fiscal Year Ended March 29, 2013


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(In thousands)
Revenues:
Product revenues	$	631,067		$	4,714		$	29,141		$	(505	)	$	664,417
Service revenues		193,478			254,796			8,531			(1,532	)		455,273

Total revenues		824,545			259,510			37,672			(2,037	)		1,119,690
Operating expenses:
Cost of product revenues		463,553			3,383			18,463			(426	)		484,973
Cost of service revenues		133,404			225,730			5,587			(1,533	)		363,188
Selling, general and administrative		133,273			96,346			11,248			(8	)		240,859
Independent research and development		34,274			525			719			(70	)		35,448
Amortization of acquired intangible assets		1,037			12,400			2,147			—			15,584

Income (loss) from operations		59,004			(78,874	)		(492	)		—			(20,362	)
Other income (expense):
Interest income		168			—			5			—			173
Interest expense		(43,916	)		(72	)		(5	)		—			(43,993	)
Loss on extinguishment of debt		(26,501	)		—			—			—			(26,501	)

Income (loss) before income taxes		(11,245	)		(78,946	)		(492	)		—			(90,683	)
Provision for (benefit from) income taxes		(18,861	)		(30,612	)		(581	)		—			(50,054	)
Equity in net income (loss) of consolidated subsidiaries		(48,788	)		—			—			48,788			—

Net income (loss)		(41,172	)		(48,334	)		89			48,788			(40,629	)
Less: Net income (loss) attributable to noncontrolling interest, net of tax		—			—			—			543			543

Net income (loss) attributable to ViaSat, Inc.	$	(41,172	)	$	(48,334	)	$	89		$	48,245		$	(41,172	)

Comprehensive income (loss).	$	(42,005	)	$	(48,334	)	$	(874	)	$	49,751		$	(41,462	)

Comprehensive income (loss) attributable to ViaSat, Inc.	$	(42,005	)	$	(48,334	)	$	(874	)	$	49,208		$	(42,005	)

Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the Fiscal Year Ended March 30, 2012


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(In thousands)
Revenues:
Product revenues	$	514,577		$	2,998		$	24,767		$	(278	)	$	542,064
Service revenues		106,548			206,470			10,482			(1,937	)		321,563

Total revenues		621,125			209,468			35,249			(2,215	)		863,627
Operating expenses:
Cost of product revenues		384,858			2,902			16,711			(1,677	)		402,794
Cost of service revenues		66,833			160,579			7,612			(1,837	)		233,187
Selling, general and administrative		119,227			53,051			9,453			(3	)		181,728
Independent research and development		24,109			—			928			(45	)		24,992
Amortization of acquired intangible assets		3,569			12,954			2,209			—			18,732

Income (loss) from operations		22,529			(20,018	)		(1,664	)		1,347			2,194
Other income (expense):
Interest income		264			—			6			(210	)		60
Interest expense		(8,199	)		(108	)		(210	)		210			(8,307	)

Income (loss) before income taxes		14,594			(20,126	)		(1,868	)		1,347			(6,053	)
Provision for (benefit from) income taxes		(7,407	)		(6,038	)		(698	)		492			(13,651	)
Equity in net income (loss) of consolidated subsidiaries		(15,360	)		—			—			15,360			—

Net income (loss)		6,641			(14,088	)		(1,170	)		16,215			7,598
Less: Net income (loss) attributable to noncontrolling interest, net of tax		—			—			—			102			102

Net income (loss) attributable to ViaSat, Inc.	$	6,641		$	(14,088	)	$	(1,170	)	$	16,113		$	7,496

Comprehensive income (loss)	$	5,803		$	(14,088	)	$	(1,351	)	$	16,396		$	6,760

Comprehensive income (loss) attributable to ViaSat, Inc.	$	5,803		$	(14,088	)	$	(1,351	)	$	16,294		$	6,658

Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the Fiscal Year Ended April 1, 2011


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(In thousands)
Revenues:
Product revenues	$	505,634		$	5,546		$	16,583		$	(3,825	)	$	523,938
Service revenues		53,701			215,267			10,994			(1,694	)		278,268

Total revenues		559,335			220,813			27,577			(5,519	)		802,206
Operating expenses:
Cost of product revenues		375,635			8,228			9,426			(3,344	)		389,945
Cost of service revenues		34,339			121,024			6,926			(1,666	)		160,623
Selling, general and administrative		104,235			50,946			9,123			(39	)		164,265
Independent research and development		27,807			—			924			(20	)		28,711
Amortization of acquired intangible assets		4,672			12,954			1,783			—			19,409

Income (loss) from operations		12,647			27,661			(605	)		(450	)		39,253
Other income (expense):
Interest income		687			—			9			(373	)		323
Interest expense		(3,103	)		(49	)		(375	)		373			(3,154	)

Income (loss) before income taxes		10,231			27,612			(971	)		(450	)		36,422
Provision for (benefit from) income taxes		(10,188	)		10,325			353			(492	)		(2	)
Equity in net income (loss) of consolidated subsidiaries		15,654			—			—			(15,654	)		—

Net income (loss)		36,073			17,287			(1,324	)		(15,612	)		36,424
Less: Net income (loss) attributable to noncontrolling interest, net of tax		—			—			—			309			309

Net income (loss) attributable to ViaSat, Inc.	$	36,073		$	17,287		$	(1,324	)	$	(15,921	)	$	36,115

Comprehensive income (loss)	$	37,891		$	17,287		$	611		$	(17,547	)	$	38,242

Comprehensive income (loss) attributable to ViaSat, Inc.	$	37,891		$	17,287		$	611		$	(17,856	)	$	37,933

Condensed Consolidated Statement of Cash Flows for the Fiscal Year Ended March 29, 2013


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(In thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(37,754	)	$	130,299		$	(820	)	$	73		$	91,798

Cash flows from investing activities:
Purchase of property, equipment and satellites, net		(46,413	)		(128,667	)		(1,215	)		—			(176,295	)
Cash paid for patents, licenses and other assets		(25,154	)		—			(116	)		—			(25,270	)
Long-term intercompany notes and investments		(1,232	)		—			—			1,232			—

Net cash provided by (used in) investing activities		(72,799	)		(128,667	)		(1,331	)		1,232			(201,565	)
Cash flows from financing activities:
Proceeds from issuance of 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		31,001			—			73			(73	)		31,001
Purchase of common stock in treasury		(8,412	)		—			—			—			(8,412	)
Other		(1,041	)		1,041			—			—			—
Long-term intercompany financing		—			—			1,232			(1,232	)		—

Net cash provided by (used in) financing activities		41,907			1,041			1,305			(1,305	)		42,948
Effect of exchange rate changes on cash		—			—			(26	)		—			(26	)

Net increase (decrease) in cash and cash equivalents		(68,646	)		2,673			(872	)		—			(66,845	)
Cash and cash equivalents at beginning of fiscal year		162,426			439			9,718			—			172,583

Cash and cash equivalents at end of fiscal year	$	93,780		$	3,112		$	8,846		$	—		$	105,738

Condensed Consolidated Statement of Cash Flows for the Fiscal Year Ended March 30, 2012


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(In thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	64,191		$	71,869		$	7,350		$	(1,961	)	$	141,449

Cash flows from investing activities:
Purchase of property, equipment and satellites, net		(156,874	)		(46,922	)		(3,138	)		1,961			(204,973	)
Cash paid for patents, licenses and other assets		(23,993	)		—			(56	)		—			(24,049	)
Long-term intercompany notes and investments		2,849			—			—			(2,849	)		—

Net cash provided by (used in) investing activities		(178,018	)		(46,922	)		(3,194	)		(888	)		(229,022	)
Cash flows from financing activities:
Proceeds from issuance of 2020 Notes		275,000			—			—			—			275,000
Payment of debt issuance costs		(5,706	)		—			—			—			(5,706	)
Proceeds from line of credit borrowings		130,000			—			—			—			130,000
Payments on line of credit		(190,000	)		—			—			—			(190,000	)
Proceeds from issuance of common stock under equity plans		19,341			—			—			—			19,341
Purchase of common stock in treasury		(7,451	)		—			—			—			(7,451	)
Other		(438	)		(948	)		—			—			(1,386	)
Long-term intercompany financing		31,160			(31,160	)		(2,849	)		2,849			—

Net cash provided by (used in) financing activities		251,906			(32,108	)		(2,849	)		2,849			219,798
Effect of exchange rate changes on cash		—			—			(132	)		—			(132	)

Net increase (decrease) in cash and cash equivalents		138,079			(7,161	)		1,175			—			132,093
Cash and cash equivalents at beginning of fiscal year		24,347			7,600			8,543			—			40,490

Cash and cash equivalents at end of fiscal year	$	162,426		$	439		$	9,718		$	—		$	172,583

Condensed Consolidated Statement of Cash Flows for the Fiscal Year Ended April 1, 2011


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(In thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	57,877		$	112,029		$	(19	)	$	(270	)	$	169,617

Cash flows from investing activities:
Purchase of property, equipment and satellites, net		(152,416	)		(54,126	)		(2,013	)		270			(208,285	)
Cash paid for patents, licenses and other assets		(15,942	)		—			(44	)		—			(15,986	)
Payments related to acquisition of businesses, net of cash acquired		(14,203	)		—			747			—			(13,456	)
Long-term intercompany notes and investments		(726	)		100			1,731			(1,105	)		—

Net cash provided by (used in) investing activities		(183,287	)		(54,026	)		421			(835	)		(237,727	)
Cash flows from financing activities:
Payment of debt issuance costs		(2,775	)		—			—			—			(2,775	)
Proceeds from line of credit borrowings		40,000			—			—			—			40,000
Payments on line of credit		(40,000	)		—			—			—			(40,000	)
Proceeds from issuance of common stock under equity plans		26,398			—			—			—			26,398
Purchase of common stock in treasury		(5,880	)		—			—			—			(5,880	)
Incremental tax benefits from stock-based compensation		867			—			—			—			867
Long-term intercompany financing		64,889			(66,619	)		625			1,105			—

Net cash provided by (used in) financing activities		83,499			(66,619	)		625			1,105			18,610
Effect of exchange rate changes on cash		—			—			359			—			359

Net increase (decrease) in cash and cash equivalents		(41,911	)		(8,616	)		1,386			—			(49,141	)
Cash and cash equivalents at beginning of fiscal year		66,258			16,216			7,157			—			89,631

Cash and cash equivalents at end of fiscal year	$	24,347		$	7,600		$	8,543		$	—		$	40,490