<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
March 25, 1998 (May 16, 1997)
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Date of report (Date of earliest event reported)
PanAmSat Corporation*
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(Exact name of registrant as specified in its charter)
Delaware 0-22531 95-4607698
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Pickwick Plaza, Greenwich, CT 06830
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 622-6664
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* PanAmSat Corporation ("PanAmSat" or the "Registrant") is the parent
corporation of PanAmSat International Systems, Inc. ("PanAmSat International")
(Commission File No. 0-26712; IRS Employer Identification No. 06-1407851), which
was known as "PanAmSat Corporation" until May 16, 1997, when it became a wholly-
owned subsidiary of PanAmSat as a consequence of the merger (the "Merger") of
PanAmSat International and the Galaxy Satellite Services division ("Galaxy") of
Hughes Communications, Inc. The Registrant has applied the purchase method of
accounting to the transaction with Galaxy as the acquiror.
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 7. Financial Statements and Exhibits.
- ------ ---------------------------------
(b) Pro Forma Financial Information.
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The pro forma financial information of PanAmSat as of and for the
year ended December 31, 1996 required by this Item 7(b) in
respect of the Merger is incorporated herein by reference to the
Unaudited Pro Forma Combined Financial Statements of PanAmSat as
of and for the year ended December 31, 1996 set forth on pages
172 through 176 of the Proxy Statement of PanAmSat International
filed with the Securities and Exchange Commission on April 18,
1997 under the name PanAmSat Corporation.
The pro forma financial information of PanAmSat as of and for the
three-month period ended March 31, 1997 required by this Item
7(b) in respect of the Merger is incorporated herein by reference
to Exhibit 99 hereto.
(c) Exhibits.
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99. Pro forma financial information of PanAmSat as of and for
the three-month period ended March 31, 1997.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this Current Report to be signed on
its behalf by the undersigned thereunto duly authorized.
PANAMSAT CORPORATION
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(Registrant)
By /s/ Kenneth N. Heintz
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Kenneth N. Heintz
Executive Vice President and
Chief Financial Officer
and a Duly Authorized Officer
of the Company
Date: March 25, 1998
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EXHIBIT INDEX
Sequentially
Exhibit Numbered Page
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99. Pro forma financial information of
PanAmSat as of and for the three-month
period ended March 31, 1997.
<PAGE>
EXHIBIT 99
PRO FORMA FINANCIAL INFORMATION
OF PANAMSAT CORPORATION
The Unaudited Pro Forma Financial Statements of PanAmSat Corporation
("PanAmSat") give effect to (i) the transactions contemplated by the merger (the
"Merger") of PanAmSat International Systems, Inc. (then operating under its
previous name, PanAmSat Corporation) ("PanAmSat International") and the Galaxy
Satellite Services division ("Galaxy") of Hughes Communications, Inc. ("HCI")
applying the purchase method of accounting with Galaxy as the acquiror of
PanAmSat International and (ii) the loan by Hughes Electronics Corporation
("HE") of $1.725 billion to PanAmSat (the "New Financing") as if they had
occurred at January 1, 1997 for purposes of the Unaudited Pro Forma Combined
Statement of Income and on March 31, 1997 for purposes of the Unaudited Pro
Forma Combined Balance Sheet. The Unaudited Pro Forma Combined Financial
Statements do not purport to present the financial position or results of
operations of PanAmSat had the transactions and events assumed therein occurred
on the dates specified, nor are they necessarily indicative of the results of
operations that may be achieved in the future.
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PANAMSAT CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As of March 31, 1997
(In thousands)
<TABLE>
<CAPTION>
Historical
Historical PanAmSat Pro Forma Pro Forma
Galaxy International Adjustments PanAmSat
-------------- ---------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . $ 32 $ 4,569 $ 225,000 (a) $ 216,601
(13,000)(b)
Operating lease, sale and contract receivables . . . . 22,007 11,278 33,285
Net investment in sales-type leases . . . . . . . . . 21,512 21,512
Prepaid expenses and other receivables . . . . . . . . 18,542 5,844 24,386
Deferred income taxes . . . . . . . . . . . . . . . . 43,125 43,125
-------------- ---------------- -------------- --------------
Total current assets . . . . . . . . . . . . 105,218 21,691 212,000 338,909
Satellites and other property and equipment,
net . . . . . . . . . . . . . . . . . . . . . . . 1,044,761 1,255,274 2,300,035
Net investment in sales-type leases . . . . . . . . . 342,439 342,439
Marketable securities and restricted cash . . . . . . 375,582 94,362 (c) 469,944
Operating lease and other receivables . . . . . . . . 38,404 38,404
Intangible assets, net of amortization . . . . . . . . 72,077 2,483,171 (d) 2,555,248
Deferred costs and other assets . . . . . . . . . . . 9,441 17,250 (e) 26,691
Deferred income taxes . . . . . . . . . . . . . . . . 24,427 19,637 (f) 0
(44,064)(f)
-------------- ---------------- -------------- --------------
Total . . . . . . . . . . . . . . . . . . . . $ 1,627,326 $ 1,661,988 $ 2,782,356 $ 6,071,670
============== ================ ============== ==============
LIABILITIES AND NET INVESTMENT OF HUGHES
ELECTRONOICS CORPORATION ("HE") /
SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities . . . . . . . $ 24,356 $ 14,840 $ 90,000 (a) 146,446
17,250 (e)
Accrued in-orbit performance insurance . . . . . . . . 25,547 25,547
Deferred gains on sales and leasebacks . . . . . . . . 42,870 42,870
Deferred revenues . . . . . . . . . . . . . . . . . . 6,406 11,159 17,565
Current portion of long-term debt . . . . . . . . . . 4,271 4,271
-------------- ---------------- -------------- --------------
Total current liabilities . . . . . . . . . . 99,179 30,270 107,250 236,699
Due to affiliates . . . . . . . . . . . . . . . . . . 17,000 (g) 17,000
Long-term debt . . . . . . . . . . . . . . . . . . . . 635,702 49,092 (h) 2,409,794
1,725,000 (i)
Accrued operating leaseback and contract
expense . . . . . . . . . . . . . . . . . . . . . 72,668 643 73,311
Deferred gains on sales and leasebacks . . . . . . . . 224,035 224,035
Deferred revenues . . . . . . . . . . . . . . . . . . 29,995 71,277 101,272
Deferred income taxes . . . . . . . . . . . . . . . . 0 72,952 (44,064)(f) 28,888
-------------- ---------------- -------------- --------------
Total liabilities . . . . . . . . . . . . . . 425,877 810,844 1,854,278 3,090,999
Preferred stock/minority interest . . . . . . . . . . 340,200 69,660 (h) 409,860
HE's net investment . . . . . . . . . . . . . . . . . 1,201,449 (1,201,449)(j) 0
PanAmSat International Class A Common Stock
($0.01 par value, 100,000,000 shares authorized,
40,459,432 shares issued and outstanding) . . . . 405 (405)(j) 0
PanAmSat International Class B Common Stock
($0.01 par value, 100,000,000 shares authorized,
40,459,431 shares issued and outstanding) . . . . 405 (405)(j) 0
PanAmSat International Common Stock
($0.01 par value, 400,000,000 shares authorized,
19,092,757 shares issued and outstanding) . . . . 191 (191)(j) 0
PanAmSat Common Stock ($0.01 par
value, 149,122,807 shares issued
and outstanding) . . . . . . . . . . . . . . . . . 1,491 (j) 1,491
Additional Paid-in-Capital . . . . . . . . . . . . . . 477,612 2,091,708 (j) 2,569,320
Retained Earnings . . . . . . . . . . . . . . . . . . 32,331 (32,331)(j) 0
-------------- ---------------- -------------- --------------
Total . . . . . . . . . . . . . . . . . . . . $ 1,627,326 $ 1,661,988 $ 2,782,356 $ 6,071,670
============== ================ ============== ==============
</TABLE>
See notes to unaudited pro forma combined financial statements.
<PAGE>
<TABLE>
<CAPTION>
PANAMSAT CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
For the Three Months Ended March 31, 1997
(In thousands, except per share data)
Historical
Historical PanAmSat Pro Forma Pro Forma
Galaxy International Adjustments PanAmSat
-------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues
Outright sales and sales-type leases $ 41,026 $ - $ - $ 41,026
Operating leases, satellite services and other 86,527 75,256 (717) (k) 161,066
-------------- ---------------- --------------- ---------------
Total revenues 127,553 75,256 (717) 202,092
-------------- ---------------- --------------- ---------------
Costs and Expenses
Cost of outright sales and sales-type leases 16,422 - - 16,422
Leaseback expense, net of deferred gain 15,417 - - 15,417
Depreciation and amortization 14,585 16,208 15,520 (l) 46,313
Direct operating costs 8,158 8,264 (717) (k) 15,705
Selling, general and administrative expenses 5,460 10,699 - 16,159
Reorganization costs - 675 - 675
-------------- ---------------- --------------- ---------------
Total 60,042 35,846 14,803 110,691
-------------- ---------------- --------------- ---------------
Operating income 67,511 39,410 (15,520) 91,401
Interest expense, net (1,778) 2,390 (31,605) (m) (30,993)
Other income 1,232 - - 1,232
-------------- ---------------- --------------- ---------------
Income before income taxes and minority interest 66,965 41,800 (47,125) 61,640
Income tax expense 25,112 17,203 (12,642) (n) 29,673
Minority interest - - 7,892 (o) 7,892
-------------- ---------------- --------------- ---------------
Net Income 41,853 24,597 (42,375) 24,075
Preferred stock dividend - 11,129 (11,129) (o) 0
-------------- ---------------- --------------- ---------------
Net income to common shares $ 41,853 $ 13,468 $ (31,246) $ 24,075
============== ================ =============== ===============
Income per share $ 0.16
===============
Weighted average number of common shares
outstanding 100,420 48,703 (p) 149,123
---------------- --------------- ---------------
</TABLE>
See notes to unaudited pro forma combined financial statements.
<PAGE>
NOTES TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)
The Unaudited Pro Forma Combined Financial Statements of PanAmSat give effect to
the Merger applying the purchase method of accounting with Galaxy as the
acquiror of PanAmSat International, the New Financing and certain related
transactions as if they had occurred at January 1, 1997 for purposes of the
Unaudited Pro Forma Combined Statement of Income and on March 31, 1997 for
purposes of the Unaudited Pro Forma Combined Balance Sheet. The Unaudited Pro
Forma Combined Financial Statements do not purport to present the financial
position or results of operations of PanAmSat had the transactions and events
assumed therein occurred on the dates specified, nor are they necessarily
indicative of the results of operations that may be achieved in the future.
The Unaudited Pro Forma Combined Statement of Income does not give effect to (i)
any cost savings that may be realized as a result of the combination of the two
companies nor (ii) nonrecurring costs that may be incurred after the
consummation of the Merger, primarily related to employee relocations and
facility modification-related expenses. The significance of such potential cost
savings and nonrecurring cost increases will depend on how PanAmSat decides in
the future to structure its operations.
The following pro forma adjustments were made:
(a) To record cash proceeds and tax liability related to the sale of direct-to-
home television rights in certain foreign markets (the "DTH Options") to an
affiliate concurrent with the Merger.
(b) To reflect the expected cost of repurchasing PanAmSat International's
outstanding stock options.
(c) To record estimated cash required to be contributed by HCI and/or HE to
partially fund the construction and launch costs of various Galaxy
spacecraft pursuant to the Agreement and Plan of Reorganization dated
September 20, 1996 (as amended April 4, 1997) entered into among HCI,
Hughes Communications Galaxy, Inc., Hughes Communications Satellite
Services, Inc., Hughes Communications Services, Inc., Hughes Communications
Carrier Services, Inc., Hughes Communications Japan, Inc., PanAmSat
International and PanAmSat.
<PAGE>
NOTES TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS (CONTINUED)
(d) To record the increase in intangible assets representing the excess of the
purchase price over the fair value of the net assets acquired:
<TABLE>
<S> <C>
Cash portion of the aggregate consideration (the "Merger Consideration") paid to
holders of PanAmSat International's Class A Common Stock, Class B Common Stock
and Common Stock (collectively, the "PAS Common Stock") in connection with
the Merger...................................................................... $1,500,000
Estimated fair value of the equity portion of the Merger Consideration........... 1,275,000
Estimated transaction fees, costs and expenses................................... 17,000
PanAmSat International historical equity at March 31, 1997....................... (510,944)
Adjustment to fair value of existing PanAmSat International indebtedness and
preferred stock................................................................. 118,752
Adjustment for the repurchase of PanAmSat International stock options............ 13,000
Adjustment to deferred income taxes.............................................. (19,637)
Adjustment for current income taxes payable...................................... 90,000
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Net increase in intangible assets................................... $2,483,171
==========
</TABLE>
Based on the results of an outside appraisal, the fair values of PanAmSat
International's satellites, based on their estimated replacement costs,
approximate their existing net book values. Except as indicated in note (f)
and note (h) below, the fair values of the remaining net assets of PanAmSat
International are assumed to approximate their existing net book values.
(e) To accrue estimated debt issuance costs. See note (i) below.
(f) To record deferred income taxes in connection with the increase in the
carrying values of the existing PanAmSat International indebtedness and to
net the non-current deferred income tax liability with the non-current
deferred income tax assets.
(g) To record payable to HE for reimbursement of estimated transaction fees,
costs and expenses expected to be paid by HE.
(h) To increase the carrying values of existing PanAmSat International
indebtedness and preferred stock to their respective fair values as
required by the purchase accounting treatment of the Merger.
(i) To reflect anticipated borrowings. HE will provide the New Financing from
intercompany funding provided by General Motors Corporation.
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NOTES TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS (CONTINUED)
(j) To give effect to the issuance of approximately 149,123,000 shares of
PanAmSat common stock, $0.01 par value, and other capital transactions in
connection with the Merger.
<TABLE>
<S> <C>
Estimated fair value of the equity portion of the Merger Consideration . . . . . . $1,275,000
PanAmSat International historical equity . . . . . . . . . . . . . . . . . . . . . (510,944)
Estimated cash required to be contributed by HCI for satellite construction
and launch costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,362
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$858,418
========
</TABLE>
The estimated fair value of the equity portion of the Merger Consideration
represents the difference between the aggregate total consideration ($3
billion) and the maximum aggregate cash consideration to be paid in
connection with the Merger of $1.5 billion (defined as the product of (x)
$15, and (y) the aggregate number of shares of PAS Common Stock issued and
outstanding immediately prior to the effective time of the Merger
(approximately 100,000,000).
(k) To eliminate intercompany revenues, costs and transactions between Galaxy
and PanAmSat International.
(l) To reflect amortization of the excess of the purchase price of PanAmSat
International over the preliminary estimate of the fair value of the net
assets acquired using the straight-line method over 40 years.
(m) To adjust interest expense as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1997
------------------
<S> <C>
To reflect pro forma interest expense at an assumed rate of 8.0%
(six-month LIBOR plus 2%) related to the borrowings contemplated
by the Merger including amortization of debt issuance costs............... $35,940
To reduce interest expense to reflect the amortization of the adjustment
to fair value of existing PanAmSat International indebtedness ............ (4,335)
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Net increase in interest expense........................................... $31,605
=======
</TABLE>
(n) To reflect income taxes at an assumed marginal rate of 40% on the pro forma
adjustments described in note (m) above. Amortization of goodwill is not
deductible for tax purposes.
<PAGE>
NOTES TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS (CONTINUED)
(o) To reclassify the preferred stock dividend of subsidiary to minority
interest and to reflect amortization of the adjustment to fair value of
preferred stock of subsidiary (historical PanAmSat International) of
$3,237.
(p) Represents the difference between PanAmSat International's weighted average
common shares and the number of shares of PanAmSat Common Stock that are
assumed to be outstanding upon consummation of the Merger.
