"At the end of June 2003, the secondary XIPS on PanAmSat's Galaxy IVR satellite experienced an unexpected shutdown and we have not been able to restart the system to date. This problem has not affected service to any of our customers. The primary XIPS on this satellite had previously ceased working. The satellite is operating nominally on its backup bi-propellant system. We are working with the manufacturer to determine whether the secondary system can be recovered. If XIPS is no longer available, the satellite has over three years of bi-propellant fuel on-board. The bi-propellant life may be subject to further extension through operational actions that we are currently considering. This as well as other satellites are backed up by in orbit satellites with immediately available capacity. We believe that this problem will not affect revenues from the customers on this satellite, or our total backlog, as the satellite's backup bi-propellant propulsion system has sufficient fuel for over three years of operation, which should provide ample time to seamlessly transition customers to a new or replacement satellite. We also believe that the satellite's net book value and our investments in sales-type leases on this satellite are fully recoverable. Galaxy IVR is insured, and if we ultimately conclude the secondary XIPS has failed permanently, we expect to make a claim under the insurance policy. We intend to replace this satellite and expect the proceeds of insurance together with a spare launch service contract that we had previously paid for to be sufficient to provide for such replacement."
PanAmSat 8-K filing
Last updated: