SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1997
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 0-22531
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below: PanAmSat Corporation Retirement Savings
Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office: PanAmSat Corporation, One Pickwick
Plaza, Greenwich, Connecticut 06830
<PAGE>
PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND EXHIBIT
FILED AS REQUIRED BY ITEM 4 OF FORM 11-K
- ------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT 2
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Plan Benefits
with Fund Information as of December 31, 1997 3
Statement of Changes in Net Assets Available for Plan Benefits
with Fund Information for the Period from
June 1, 1997 (Inception) to December 31, 1997 4
Notes to Financial Statements 5-7
SUPPLEMENTAL SCHEDULES:
Item 27a - Schedule of Assets Held for Investment Purposes as of 8
December 31, 1997
Item 27d - Schedule of Reportable Transactions for the Period from
June 1, 1997 (Inception) to December 31, 1997 9
Exhibit 23 - Consent of Independent Auditors 11
<PAGE>
Letterhead of Deloitte & Touche LLP
Stamford Harbor Park Telephone (203) 708-4000
333 Ludlow Street Facsimile (203) 708-4797
P.O. Box 10098
Stamford, Connecticut 06904
INDEPENDENT AUDITORS' REPORT
To the Trustees of the
PanAmSat Corporation Retirement Savings Plan
We have audited the statement of net assets available for benefits of the
PanAmSat Corporation Retirement Savings Plan (the "Plan") as of December 31,
1997, and the related statement of changes in net assets available for benefits
for the period from June 1, 1997 (Inception), to December 31, 1997. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit includes
examining the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1997, and the changes in net assets available for benefits for the period from
June 1, 1997 (Inception) to December 31, 1997, in conformity with generally
accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
table of contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statement of net assets available for benefits
and the statement of changes in net assets available for benefits is presented
for purposes of additional analysis rather than to present information regarding
the net assets available for plan benefits and changes in net assets available
for plan benefits of each fund. The supplemental schedules and the fund
information is the responsibility of the Plan's management. The supplemental
schedules and fund information have been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
June 8, 1998
<PAGE>
EIN
PLAN #001
PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Fund Information
Blackrock Merrill
Dreyfus Small Merrill Lynch
Federated Massachusetts Capital Ivy Lynch Global
Bond Investors Growth International Retirement Allocation
Fund Trust Fund Fund Trust Fund
<S> <C> <C> <C> <C> <C> <C>
Investments,
at fair value
(Note 3):
Mutual Funds $200,644 $5,396,138 $476,303 $433,791 $2,019,378 $2,469,129 [Table continued
Common Stock - - - - - - below]
Participant Loans - - - - - -
-------- ---------- --------- --------- ---------- ----------
Net assets
available for
benefits $200,644 $5,396,138 $476,303 $433,791 $2,019,378 $2,469,129
======== ========== ======== ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Merrill Raytheon General PanAmSat
Lynch Corporation Motors Corporation
Growth Stock Class H Stock Participant
Fund Fund Stock Fund Fund Loans Total
<S> <C> <C> <C> <C> <C> <C>
Investments,
at fair value
(Note 3):
Mutual Funds $971,099 - - - - $11,966,482
Common Stock - $1,018,978 $1,319,207 $1,467,981 - 3,806,166
Participant Loans - - - - $410,254 410,254
---------- ---------- ---------- ---------- -------- -----------
Net assets
available for
benefits $971,099 $1,018,978 $1,319,207 $1,467,981 $410,254 $16,182,902
======== ========== ========== ========== ======== ===========
</TABLE>
<PAGE>
PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE PERIOD FROM JUNE 1, 1997 (INCEPTION) TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
Fund Information
Blackrock Merrill
Dreyfus Small Merrill Lynch
Federated Massachusetts Capital Ivy Lynch Global
Bond Investors Growth International Retirement Allocation
Fund Trust Fund Fund Trust Fund
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Invested Income
Net appreciation
(depreciation) in
fair value of $ 2,368 $ 81,400 $(18,236) $ (33,181) $ - $(263,496)
investments 3,917 392,296 25,198 9,902 66,262 307,644
Dividends and
interest
Participant 76,464 275,788 199,890 245,756 208,846 602,579
contributions
Employer
contributions - - - - - -
------- --------- -------- -------- --------- ---------
Total additions 82,749 749,484 206,852 222,477 275,108 646,727 [Table continued
------- --------- -------- -------- --------- --------- below]
DEDUCTION:
Distributions to
participants (183) (21,622) (1,242) (1,215) (27,057) (14,937)
INTERFUND TRANSFERS 78,995 44,411 147,913 139,250 (131,620) (20,778)
------- --------- -------- -------- ---------- ---------
NET INCREASE 161,561 772,273 353,523 360,512 116,431 611,012
TRANSFERS OF ASSETS 39,083 4,623,865 122,780 73,279 1,902,947 1,858,117
FROM PREDECCESSOR
PLANS
NET ASSETS - - - - - -
--------- --------- -------- -------- --------- ---------
AVAILABLE BENEFITS:
BEGINNING OF PERIOD
End of period $200,644 $5,396,138 $476,303 $433,791 $2,019,378 $2,469,129
======== ========== ======== ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Merrill Raytheon General PanAmSat
Lynch Corporation Motors Corporation
Growth Stock Class H Stock Participant
Fund Fund Stock Fund Fund Loans Total
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Invested Income
Net appreciation
(depreciation) in
fair value of $(58,087) $ 373,695 $ (98,225) $ 368,591 $ - $ 354,829
investments 69,687 - 20,807 - 19,628 915,341
Dividends and
interest
Participant 388,499 - - 204,283 - 2,202,105
contributions
Employer
contributions - - - 467,391 - 467,391
-------- ---------- ---------- ---------- ------- ----------
Total additions 400,099 373,695 (77,418) 1,040,265 19,628 3,939,666
-------- ---------- ----------- ---------- ------- ----------
DEDUCTION:
Distributions to
participants (2,502) - (75,014) (81,375) (8,031) (233,178)
INTERFUND TRANSFERS 175,554 645,283 (1,019,862) 3,461 (62,607) -
-------- ---------- ------------ --------- ------- ----------
NET INCREASE 573,151 1,018,978 (1,172,294) 962,351 (51,010) 3,706,488
TRANSFERS OF ASSETS 397,948 - 2,491,501 505,630 461,264 12,476,414
FROM PREDECCESSOR
PLANS
NET ASSETS - - - - - -
--------- --------- --------- --------- --------- ---------
AVAILABLE BENEFITS:
BEGINNING OF PERIOD
End of period $971,099 $1,018,978 $1,319,207 $1,467,981 $410,254 $16,182,902
======== ========== ========== ========== ======== ===========
See notes to
financial
statements.
</TABLE>
<PAGE>
PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1997
- -----------------------------------------------------------------------------
1. PLAN MERGER
As of May 16, 1997, PanAmSat Corporation, a Delaware corporation
("PanAmSat" or the "Company") commenced operation upon the merger of
PanAmSat International Systems, Inc. (then operating under its previous
name, PanAmSat Corporation) and the Galaxy Satellite Services division of
Hughes Communications, Inc. As a result, the Company established a new
voluntary defined contribution plan, the PanAmSat Corporation Retirement
Savings Plan (the "Plan"), effective June 1, 1997. The 401(k) plan
maintained by the predecessor corporation was merged into the new Plan.
The account balances of the employees of the Galaxy Satellite Services
division of Hughes Communications, Inc. held in the Hughes Salaried
Employees' Thrift and Savings Plan were transferred to the Plan.
2. DESCRIPTION OF THE PLAN
The following brief description of the Plan is provided for general
information purposes only. Participants should refer to the Plan document
for a more complete description of the Plan's provisions.
General - The Plan is a voluntary defined contribution plan. Generally,
all employees of the Company who have completed 1/2 year of service are
eligible to participate in the Plan. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA").
Participant Contributions - Eligible employees can elect to defer a
percentage of their compensation by means of a pretax contribution to the
Plan, up to an annual maximum of 16% of compensation, provided such amount
withheld does not exceed a maximum dollar amount established under the
Internal Revenue Code ($9,500 in 1997).
Employer Matching Contributions - The Company contributes on a matching
basis an amount equal to 100 percent, of up to the first 4 percent of each
participants deferred savings, which is invested in PanAmSat Corporation
common stock. Matching contributions with respect to Elective Deferrals
made in any calendar year must remain invested in that form for a period
of time which is at least the January 1 following one calendar year after
the calendar year in which such contribution is made.
Vesting - There is 100% vesting of employee and employer contribution
immediately upon participation.
Investment Options -
Merrill Lynch Retirement Trust - The objective of this fund is to
provide a high degree of safety of principal, liquidity and
diversification by investing in investment grade fixed income
securities. A portion of this Fund's investments are Guaranteed
Investment Contracts with stated interest rates ranging from 5.28%
to 8.58% as of December 31, 1997.
Merrill Lynch Global Allocation Fund - This fund seeks the highest
total investment return with prudent risk. The fund invests in U.S.
and foreign equities and bonds, and money market instruments.
Merrill Lynch Growth Fund - This fund seeks long-term growth of
capital and, secondarily, income. The fund invests in equity
securities with principal emphasis on issuers believed to be
undervalued.
Federated Bond Fund - The objective of this fund is to provide as
high a level of current income as is consistent with the
presentation of capital by investing primarily in a portfolio of
investment grade bonds.
Dreyfus Massachusetts Investors Trust - The objective of this fund
is to provide reasonable current income and long-term growth of
capital and income by investing in common stock and/or securities
convertible into common stock.
Blackrock Small Capital Growth Fund - This fund seeks to provide
long-term capital appreciation through investment in small capital
stock with earnings growth potential.
Ivy International Fund - The principal objective of this fund is
long-term capital growth primarily through investment in equity
securities.
General Motors Corporation Stock Fund - Funds are invested in
General Motors Corporation Class H common stock. In December 1997,
each issued and outstanding share of General Motors Class H common
stock was recapitalized and converted into one share of a new class
of common stock, "New General Motors Class H Common Stock," and the
right to receive 0.56240 shares of Class A common stock, which was
renamed Raytheon Corporation common stock. No additional investment
by participants is permitted in this fund.
Raytheon Corporation Stock Fund - Funds are invested in Raytheon
Corporation common stock. No additional investment by participants
is permitted in this fund.
PanAmSat Corporation Stock Fund - Funds are invested in PanAmSat
Corporation common stock.
Participant Accounts - Each Participant's account is credited with the
participant's contribution and allocation of any Employer contribution and
Plan earnings. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested account.
Participant Loans - Participants can borrow from their fund accounts. Loan
amounts may not exceed the lesser of (a) 50% of the participant's vested
balance, or (b) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the plan to the participant during the
one year period ending on the day before the date on which such loan is
made, over the outstanding balance of loans from the Plan to the
participant on the date on which such loan was made. Loan transactions are
treated as directed investments to (from) the investment fund from (to)
the Participant Loan Fund. Loan terms cannot exceed five years except for
the purchase of a primary residence. All loans bear a reasonable rate of
interest as determined by the Company, based on prevailing interest rates.
Payment of Benefits - On termination of service due to death, disability,
retirement, or other termination, a participant or the lawfully designated
beneficiary would receive a lump-sum amount equal to the value of the
participant's vested interest in his or her account. In addition, the
payment could be made in installments over any period which does not
exceed the life expectancy of participant or, in the event of a
participants' death, the employee's beneficiary.
Participant Distributions - Participants could withdraw, without penalty,
their vested interest upon termination of the Plan, retirement, death,
disability, hardship, separation from service or sale of the Company.
Plan Termination - Although it has not been expressed any intent to do so,
the Company has the right under the Plan to discontinue its contributions
at any time and to terminate the Plan subject to the provisions of ERISA.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The financial statements of the Plan have been
prepared on the accrual basis of accounting.
Investments - Investments held in the funds are valued on the basis of
quoted market value. Purchases and sales of securities are recorded on a
trade-date basis. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date. The Plan's investment
assets are maintained and administered by Merrill Lynch Trust Company for
the benefit of participants.
Payment of Benefits - Distributions to participants are recorded when
paid.
Expenses of the Plan - All administrative expenses of the Plan including
custodian, recordkeeping, audit and legal expenses are paid by the Company
and are not to be reimbursed by the Plan.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of net assets
available for benefits at the date of the financial statements and changes
therein during the reporting period. Actual amounts could differ from
those estimates.
4. PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are shares of funds managed by the Custodian and,
therefore, investment transactions with such funds qualify as
parties-in-interest transactions as defined by the Employee Retirement
Income Security Act of 1974.
5. TAX STATUS
The sponsor adopted a voluntary defined contribution plan effective June
1, 1997. The Plan Administrator will be applying for an IRS determination
letter on the Plan as adopted. The Plan Administrator believes that the
plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
******
<PAGE>
PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
ITEM 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Description of Asset Cost Value
<S> <C> <C>
* General Motors Stock, Class H $ 1,316,451 $ 1,319,207
* PanAmSat Corporation Stock 1,153,305 1,467,981
Raytheon Corporation Stock 645,283 1,018,978
* Merrill Lynch Retirement Trust 2,019,378 2,019,378
* Merrill Global Allocation Fund 2,734,308 2,469,129
* Merrill Lynch Growth Fund` 1,030,678 971,099
Federated Bond Fund 198,293 200,644
Blackrock Small Capital Growth Fund 494,144 476,303
Ivy International Fund 465,034 433,791
Massachusetts Investors Trust 5,325,741 5,396,138
Participant Loans 410,254 410,254
----------- -----------
$15,792,869 $16,182,902
=========== ===========
</TABLE>
* Party-in-interest.
<PAGE>
PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
ITEM 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
PERIOD FROM JUNE 1, 1997 (INCEPTION) TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
Current Value
of Asset on Net
Purchase Selling Cost of Transaction Date Gain
Description of Asset Price Price Asset (Loss)
<S> <C> <C> <C> <C> <C>
SINGLE TRANSACTIONS:
General Motors Stock, Class H $1,316,451 - - - -
General Motors Stock, Class H 2,491,502 - - - -
General Motors Stock, Class H - $1,316,451 $1,505,656 $1,316,451 $(189,205)
Merrill Lynch Retirement Trust 1,869,118 - - - -
Merrill Lynch Global Allocation 1,626,161 - - - -
Fund
Massachusetts Investors Trust 4,521,216 - - - -
SERIES OF TRANSACTIONS:
General Motors Stock, Class H 3,866,043 - - - -
General Motors Stock, Class H 1,904,309 1,767,114 1,904,309 (137,195)
PanAmSat Corporation Stock 1,277,382 - - - -
Merill Lynch Retirement
Preservation Trust 2,398,249 - - - -
Merrill Lynch Global Allocation 2,831,059 - - - -
Fund
Massachusetts Investors Trust 5,665,686 - - - -
</TABLE>
<PAGE>
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Corporate Employee Benefits Committee of PanAmSat Corporation has
duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
PanAmSat Corporation Retirement Savings Plan
By /s/ Kenneth N. Heintz
Kenneth N. Heintz, Committee Chairman
Corporate Employee Benefits Committee of
PanAmSat Corporation
EXHIBIT 23
Letterhead of Deloitte & Touche LLP
Stamford Harbor Park Telephone (203) 708-4000
333 Ludlow Street Facsimile (203) 708-4797
P.O. Box 10098
Stamford, Connecticut 06904
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
PanAmSat Corporation on Form S-8 (Registration No. 333-28253) of our report
dated June 8, 1998 appearing in the Annual Report on Form 11-K of the PanAmSat
Corporation Retirement Savings Plan for the period from June 1, 1997 (Inception)
to December 31, 1997.
/s/ DELOITTE & TOUCHE LLP
June 29, 1998
