SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 1999
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
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PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND EXHIBIT FILED AS REQUIRED BY ITEM 4
OF FORM 11-K
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Page
INDEPENDENT AUDITORS' REPORT 2
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits
as of December 31, 1999 and 1998 3
Statement of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 1999 and 1998 4
Notes to Financial Statements 5-9
SUPPLEMENTAL SCHEDULES:
Item 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1999 10
Item 27d - Schedule of Reportable Transactions for the Year
Ended December 31, 1999 11
Exhibit 23 - Consent of Independent Auditors
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INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of the
PanAmSat Corporation Retirement Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the PanAmSat Corporation Retirement Savings Plan (the "Plan") as of
December 31, 1999 and 1998, and the related statements of changes in net assets
available for benefits for the years then ended. 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in net assets available for benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
Our audits were conducted 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 supplemental schedules are the responsibility of the Plan's
management. Such supplemental schedules have been subjected to the auditing
procedures applied in our audits 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.
Deloitte & Touche LLP
Stamford, Connecticut
June 21, 2000
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PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1999 AND 1998
1999 1998
ASSETS:
Investments, at fair value:
Mutual Funds $18,546,669 $16,159,118
Common Stock 7,211,789 2,825,961
Participant Loans 1,057,490 879,353
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Total Investments 26,815,948 19,864,432
Receivables:
Participant Contributions 62,282 0
Employer Contribution 40,210 0
Dividends Receivable 12,524 8,912
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Total Receivables 115,016 8,912
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NET ASSETS AVAILABLE FOR BENEFITS $26,930,964 $19,873,344
============= =============
See Notes To Financial Statements
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PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998
1999 1998
ADDITIONS:
Investment Income:
Net appreciation
in fair value of investments $4,341,004 $347,807
Dividends and interest 1,197,380 939,307
Participant Contributions 2,798,396 2,336,729
Employer Contributions 1,264,080 1,038,612
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Total additions 9,600,860 4,662,455
DEDUCTIONS:
Distributions to Participants (2,543,240) (972,013)
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NET INCREASE 7,057,620 3,690,442
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NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 19,873,344 16,182,902
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End of year $26,930,964 $19,873,344
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See Notes to Financial Statements
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PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
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1. PLAN MERGER
As of May 16, 1997, PanAmSat Corporation, a Delaware corporation ("PanAmSat" or
the "Company") commenced operations 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 one month 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
($10,000 in 1999 and 1998).
Employer Matching Contributions - The Company contributes on a matching basis an
amount equal to 100%, of up to the first 4% of each participant's compensation,
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 contributions
immediately upon participation.
Investment Options - (see Note 6)
Merrill Lynch Retirement Trust - The objective of this fund is
to provide a high degree of safety of principal, liquidity and
diversification by investing
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in investment grade fixed income securities. A portion of this
fund's investments are guaranteed investment contracts. Plan
assets invested in this fund are recorded at contract value
(which represents contributions made under the contract, plus
earnings, less withdrawals). The average yield was approximately
6.43% and 6.55% in 1999 and 1998 respectively, with stated
interest rates ranging from 4.5% to 7.6% and 4.5% to 8.19% at
December 31, 1999 and December 31, 1998, respectively. Generally
fair value of plan assets invested approximates contract value,
which was approximately $3,984,814 at December 31, 1999.
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
preservation of capital by investing primarily in a portfolio of
investment grade bonds.
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 stocks 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 Class H Stock Fund - Funds are invested in
General Motors Corporation Class H common stock. In
December 1998, 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.
During the 1998 Plan year, the investments in this fund were
liquidated and redirected to other investment funds. No additional
contributions to this fund are allowed under the Plan.
Raytheon Corporation Stock Fund - Funds are invested in Raytheon
Corporation common stock. During the 1998 Plan year, the
investments in
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this fund were liquidated and redirected to other investment
funds. No additional contributions to this fund are allowed
under the Plan.
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 principal 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. Alternatively, the payment
could be made in installments over any period which does not exceed the life
expectancy of a participant or, in the event of a participant's death, the
participant'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 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 (the "Custodian") for the benefit of
participants. See Note 6. The following investments comprised 5% or more of the
total assets of the Plan as of December 31, 1999 and 1998:
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1999 1998
PanAmSat Corporation Stock Fund $7,211,789 $2,825,961
Merrill Lynch Retirement Trust 3,984,814 3,326,297
Merrill Lynch Global Allocation Fund 2,595,243 2,058,879
Merrill Lynch Growth Fund 1,862,771 1,244,771
Blackrock Small Capital Growth Fund 2,202,355 1,076,978
Massachusetts Investors Trust 6,081,736 7,092,292
Ivy International Equity Funds 1,420,615 972,305
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 reimbursed by the Plan. Certain fees are assessed by the Custodian for
the processing of participant loans. These fees are deducted from the related
participants' account.
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.
Adoption of New Accounting Principle - The Plan has adopted the AICPA's
Statement of Position (SOP) 99-3, Accounting and Reporting of Certain Defined
Contribution Plan Investments and Other Disclosure Matters. As a result,
reclassification of the prior year financial statements has been made to
eliminate by fund disclosures.
4. PARTY-IN-INTEREST TRANSACTIONS
The Plan has investments and transactions with parties-in-interest, those
parties being Merrill Lynch, PanAmSat Corporation, and participants with loan
balances. Therefore, investment transactions with such funds qualify as
parties-in-interest transactions as defined by ERISA.
5. TAX STATUS
The sponsor adopted a non-standardized prototype plan which received an Internal
Revenue Service opinion letter. The Plan Administrator will be applying for an
IRS determination 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.
6. SUBSEQUENT EVENT
Effective February 1, 2000, the Plan changed trustees and recordkeepers from the
Merrill Lynch Trust Company ("Merrill Lynch") to Fidelity Management Trust
Company ("Fidelity").
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In conjunction with this change in trustees, the Plan liquidated all of its
investments with Merrill Lynch. Proceeds from this liquidation, net of any
administrative costs, were transferred to mutual fund investment options offered
by Fidelity.
******
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PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Description Current
Identify of Party of Investment Cost Value
<S> <C> <C> <C>
* PanAmSat Corporation Stock Fund 121,497 shares $5,414,613 $7,211,789
* Merrill Lynch Retirement Trust 3,984,814 units 3,984,814 3,984,814
* Merrill Lynch Global Allocation Fund 185,242 units 2,404,373 2,595,243
* Merrill Lynch Growth Fund 68,283 units 1,472,047 1,862,771
Federated Bond Fund 44,348 units 434,129 399,135
Blackrock Capital Growth Fund 69,344 units 1,568,129 2,202,355
Ivy International Equity Funds 30,168 units 1,280,346 1,420,615
Massachusetts Investors Trust 290,298 units 5,881,649 6,081,736
* Participant Loans Loans to participants at
interest rates between
7% and 10% 1,057,490 $1,057,490
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$23,497,590 $26,815,948
=========== ============
</TABLE>
* Party-in-interest
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PANAMSAT CORPORATION RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
Identity of Party Involved Description of Asset Purchase Price
SINGLE TRANSACTIONS:
None
SERIES OF TRANSACTIONS:
*PanAmSat Corporation PanAmSat Corporation Stock $1,224,428
*Party-in-interest
Note: Participant-directed transactions were excluded.
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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
June 28, 2000 By:/s/ Bruce A. Haymes
------------------------------------------
Bruce A. Haymes, Member
Corporation Employee Benefits
Committee of PanAmSat Corporation
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