Intelsat S.A.
Société anonyme
Annual accounts
For the year ended December 31, 2020
(With the report of the Réviseur d'Entreprises agréé thereon)
Stephen Spengler | David Tolley |
Chief Executive Officer | Chief Financial Officer |
4, rue Albert Borschette L-1246 Luxembourg
RCS Luxembourg B162.135
Intelsat S.A.
Index to the Annual Accounts
Page | |
Report of the Réviseur d'entreprises agréé .............................................................................................. | 2-5 |
Annual Accounts: | |
Balance sheet ........................................................................................................................................ | 6-7 |
Profit and loss account .......................................................................................................................... | 8-9 |
Notes to Annual Accounts .................................................................................................................... | 10-15 |
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KPMG Luxembourg, Société coopérative | Tel.: +352 22 51 51 1 |
39, Avenue John F. Kennedy | Fax: +352 22 51 71 |
L-1855 Luxembourg | |
E-mail: info@kpmg.lu | |
Internet: www.kpmg.lu |
To the Shareholders of Intelsat S.A.
4, rue Albert Borschette L-1246 Luxembourg
REPORT OF THE REVISEUR D'ENTREPRISES AGREE
Opinion
We have audited the annual accounts of Intelsat S.A. (the "Company"), which comprise the balance sheet as at 31 December 2020, and the profit and loss account for the year then ended, and notes to the annual accounts, including a summary of significant accounting policies.
In our opinion, the accompanying annual accounts give a true and fair view of the financial position of the Company as at 31 December 2020 and of the results of its operations for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the annual accounts.
Basis for opinion
We conducted our audit in accordance with the Law of 23 July 2016 on the audit profession ("Law of 23 July 2016") and with International Standards on Auditing ("ISAs") as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier ("CSSF"). Our responsibilities under the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the « Responsibilities of "réviseur d'entreprises agréé" for the audit of the annual accounts » section of our report. We are also independent of the Company in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants ("IESBA Code") as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the annual accounts, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 to the annual accounts which state that the Company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code which constituted an event of default on substantially all of the Company's debt obligations which raise substantial doubt about its ability to continue as a going concern. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
© 2021 KPMG Luxembourg, Société coopérative, a Luxembourg entity and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
T.V.A. LU 27351518
R.C.S. Luxembourg B 149133
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts of the current period. These matters were addressed in the context of the audit of the annual accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Valuation of Shares in Affiliated Undertakings
Refer to accounting policies and valuation methods in note 2(c) and to note 3 (financial assets) to the annual accounts.
Why the matter was considered to be one | How the matter was addressed in our audit | |||||||||||
of the most significant in our audit of the | ||||||||||||
annual accounts of the current period | ||||||||||||
Since April 2020, the Company and its | Our audit procedures over the valuation of shares | |||||||||||
subsidiaries stopped paying the services | in affiliated undertakings included, but were not | |||||||||||
attached to their unsecured debts. | limited to: | |||||||||||
In May 2020, the Intelsat group has filed for | • Evaluating the appropriateness of the | |||||||||||
voluntary protection under the Chapter 11 in | ||||||||||||
the US and the shares has been delisted form | accounting policies | and valuation methods, | ||||||||||
our business | understanding and industry | |||||||||||
New York stock exchange. | ||||||||||||
practice; | ||||||||||||
Management | considered | other | qualitative | • | Assessing | our | understanding | of | ||||
factors | including, | general | macroeconomic | management's processes over valuation of | ||||||||
shares in affiliated undertakings; | ||||||||||||
conditions with covid-19, industry and market | ||||||||||||
• | Evaluating | the | reasonableness | of | ||||||||
considerations, cost factors, overall financial | ||||||||||||
performance and other relevant entity-specific | management's | key | judgements | and | ||||||||
estimates made in | valuation of | shares in | ||||||||||
events at year end and accordingly, decided to | ||||||||||||
affiliated undertakings, including selection of | ||||||||||||
record a full value adjustment on the shares in | ||||||||||||
methods, models, | assumptions | and | data | |||||||||
Intelsat | Investment Holding S.à | r.l. as at | ||||||||||
sources; | ||||||||||||
December 31, 2020. | ||||||||||||
• Evaluating uncertainties surrounding the exit | ||||||||||||
We identified the | valuation of the shares in | from Chapter 11 and restructuring of the | ||||||||||
affiliated undertakings as a key audit matter, | Company and other contingencies; | |||||||||||
considering the complex management and | • Assessing the completeness, accuracy and | |||||||||||
auditor judgment was required in evaluating | relevance of key data used in the Company's | |||||||||||
the Company's evaluation, which was | valuation model; | |||||||||||
performed using a discounted cash flow model | • Evaluating the appropriateness and testing | |||||||||||
and included assumptions regarding the | the mathematical accuracy of the model | |||||||||||
amount and timing of the C-band accelerated | applied; | |||||||||||
clearing incentive payments to be received | • Evaluating the completeness, accuracy and | |||||||||||
from | the | Federal | Communications | relevance of disclosures required by | ||||||||
Commission | (FCC), projected | revenue | Luxembourg | legal | and | regulatory | ||||||
amounts to be realized as well as the | requirements. | |||||||||||
Company's qualitative evaluation of the | ||||||||||||
uncertainties related to the restructuring of the | ||||||||||||
Company and its subsidiaries and | ||||||||||||
contingencies existing as at December 31, | ||||||||||||
2020. |
Responsibilities of the Board of Directors for the annual accounts
The Board of Directors is responsible for the preparation and fair presentation of the annual accounts in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the annual accounts, and for such internal control as the Board of Directors determines is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error.
In preparing the annual accounts, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Responsibilities of the réviseur d'entreprises agréé for the audit of the annual accounts
The objectives of our audit are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the "réviseur d'entreprises agréé" that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts.
As part of an audit in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the annual accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.
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Intelsat SA published this content on 23 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 April 2021 20:10:03 UTC.