##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 20-F
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 Or
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Or
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 Commission File No. 333-8880
 Satélites Mexicanos, S.A. de C.V.
 Mexican Satellites, a Mexican Company of Variable Capital
(Translation of the Registrants Name into English)
Avenida Paseo de la Reforma 222 Pisos 20 y 21
Colonia Juárez
06600 Mexico, D.F.
Mexico
(52) 55-2629-5800
Jurisdiction of incorporation: Mexico
 Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: not applicable.
 The number of outstanding shares of capital stock as of December 31, 2010 was:
9,166,667 Class I Series A Shares
333,334 Class I Series B Shares
7,166,667 Class II Series B Shares
812,498 Class I Series N Shares
29,395,833 Class II Series N Shares
  o þ
  o þ
  þ o
  o þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
  U.S. GAAP þ
    
    International Financial Reporting Standards o
    
    Other oas issued by the International Accounting Standards Board o
  o o
  o þ
  þ o




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##### 



TABLE OF CONTENTS
 PART I
    
    
    3ITEM 1. Identity of Directors, Senior Management and Advisers
    
    
    3ITEM 2. Offer Statistics and Expected Timetable
    
    
    3ITEM 3. Key Information
    
    
    4ITEM 4. Information on the Company
    
    
    23ITEM 4A. Unresolved Staff Comments
    
    
    45ITEM 5. Operating and Financial Review and Prospects
    
    
    45ITEM 6. Directors, Senior Management and Employees
    
    
    59ITEM 7. Major Shareholders and Related Party Transactions
    
    
    66ITEM 8. Financial Information
    
    
    70ITEM 9. The Offer and Listing
    
    
    70ITEM 10. Additional Information
    
    
    70ITEM 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    86PART II
    
    
    86ITEM 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    86ITEM 14. Material Modifications to the Rights of Security Holders
    
    
    86ITEM 15. Controls and Procedures
    
    
    86ITEM 16A. Audit Committee Financial Expert
    
    
    87ITEM 16B. Code of Ethics
    
    
    87ITEM 16C. Principal Accountant Fees and Services
    
    
    88ITEM 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    88ITEM 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    88ITEM 16F. Change in Registrants Certifying Accountant
    
    
    88ITEM 16G. Corporate Governance
    
    
    88ITEM 17. Financial Statements
    
    
    88PART III
    
    
    89ITEM 18. Financial Statements
    
    
    89ITEM 19. Exhibits
    
    
    89Exhibit 4.18Exhibit 4.19Exhibit 4.20Exhibit 4.21Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2
   2




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##### Table of Contents



EXPLANATORY NOTE
  
    
    the voluntary filing on April 6, 2011 by Satélites Mexicanos, S.A. de C.V. (Satmex
or the Company), and our subsidiaries, AlternaTV Corporation and AlternaTV
International Corporation, for protection under Chapter 11 of the Bankruptcy Code and
the confirmation (on May 11, 2011) and consummation (on May 26, 2011) of a prepackaged
plan of reorganization filed in the United States Bankruptcy Court for the District of
Delaware (the Plan of Reorganization) to provide the resources to repay the notes
(the First Priority Old Notes) issued under the Indenture, dated as of November 30,
2006, between Satmex, each of the First Priority Guarantors named therein, as First
Priority Guarantors, and U.S. Bank National Association, a national banking
association, as First Priority Indenture (successor) Trustee (the Old First Priority
Indenture) and finance the completion and launch of our Satmex 8 satellite through the
offering of the New Notes and the Rights Offering described below;
 
    
    the conversion of the notes (the Second Priority Old Notes and, together with the
First Priority Old Notes, the Old Notes) issued under the Indenture, dated as of
November 30, 2006, between Satmex, each of the Second Priority Guarantors named therein
as Second Priority Guarantors, and Wells Fargo Bank, National Association, a national
banking association as Trustee (the Old Second Priority Indenture and, together with
the Old First Priority Indenture, the Indentures) into direct or indirect equity
interests in reorganized Satmex;
 
    
    the offering to holders of the Second Priority Old Notes of rights to purchase
direct or indirect equity interests in reorganized Satmex (the Rights Offering);
 
    
    the offering and sale of $325 million in principal amount of 9.5% Senior Secured
Notes due 2017 (the New Notes) issued pursuant to an Indenture with Wilmington Trust
FSB, as trustee (the New Indenture) dated as of May 5, 2011;
 
    
    the payment of distributions and reserves for distributions under the Plan of
Reorganization; and
 
    
    the payment of fees and expenses related to the foregoing.
    
 PART I
 
 ITEM 1. Identity of Directors, Senior Management and Advisers.
  
 ITEM 2. Offer Statistics and Expected Timetable.
   3




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##### Table of Contents



ITEM 3. Key Information
 SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
 Financial Reporting by Entities in Reorganization under the Bankruptcy Code
  Predecessor
    
    
    SuccessorJanuary 1 to
    
    
    December 1 toNovember 30,
    
    
    December 31,
    
    
    Fiscal Year Ended December 31,2006
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010Statement of Operations
Data:Revenues:Satellite services
    
    $
    82,323
    
    
    $
    4,721
    
    
    $
    80,250
    
    
    $
    93,248
    
    
    $
    102,061
    
    
    $
    105,781Broadband satellite services
    
    
    
    
    
    
    1,473
    
    
    
    15,136
    
    
    
    13,335
    
    
    
    12,384
    
    
    
    12,910Programming distribution
services
    
    
    6,019
    
    
    
    557
    
    
    
    6,815
    
    
    
    8,136
    
    
    
    10,594
    
    
    
    10,071Total revenues
    
    
    88,342
    
    
    
    6,751
    
    
    
    102,201
    
    
    
    114,719
    
    
    
    125,039
    
    
    
    128,762Costs and expenses:Satellite services(1)
    
    
    32,526
    
    
    
    2,360
    
    
    
    21,421
    
    
    
    14,183
    
    
    
    12,884
    
    
    
    11,405Broadband satellite services(1)
    
    
    
    
    
    
    175
    
    
    
    3,824
    
    
    
    2,186
    
    
    
    2,249
    
    
    
    2,821Programming distribution
services(1)
    
    
    2,592
    
    
    
    213
    
    
    
    3,223
    
    
    
    4,162
    
    
    
    5,331
    
    
    
    5,387Selling and administrative
expenses(1)
    
    
    12,048
    
    
    
    1,687
    
    
    
    26,509
    
    
    
    21,223
    
    
    
    16,893
    
    
    
    17,040Depreciation and amortization
    
    
    51,780
    
    
    
    6,266
    
    
    
    53,106
    
    
    
    59,807
    
    
    
    47,657
    
    
    
    43,402Restructuring expenses(2)
    
    
    33,447
    
    
    
    
    
    
    
    
    
    
    
    4,424
    
    
    
    3,324
    
    
    
    16,443Reversal of provision for
orbital incentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,989
    )
    
    
    
    
    
    
    Gain on recovery from customer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,610
    )
    
    
    
    
    
    
    Total cost and expenses
    
    
    132,393
    
    
    
    10,701
    
    
    
    108,083
    
    
    
    94,386
    
    
    
    88,338
    
    
    
    96,498Operating (loss) income
    
    
    (44,051
    )
    
    
    (3,950
    )
    
    
    (5,882
    )
    
    
    20,333
    
    
    
    36,701
    
    
    
    32,264Interest expense
    
    
    (19,152
    )
    
    
    (4,333
    )
    
    
    (51,672
    )
    
    
    (48,498
    )
    
    
    (43,708
    )
    
    
    (45,789
    )Interest income
    
    
    2,711
    
    
    
    103
    
    
    
    1,650
    
    
    
    1,481
    
    
    
    480
    
    
    
    345Net foreign exchange gain
(loss)
    
    
    5,690
    
    
    
    (123
    )
    
    
    145
    
    
    
    (1,828
    )
    
    
    12
    
    
    
    71Loss before income tax
    
    
    (54,802
    )
    
    
    (8,303
    )
    
    
    (55,759
    )
    
    
    (28,512
    )
    
    
    (6,515
    )
    
    
    (13,109
    )
  4




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Predecessor
    
    
    SuccessorJanuary 1 to
    
    
    December 1 toNovember 30,
    
    
    December 31,
    
    
    Fiscal Year Ended December 31,2006
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010Income tax expense
    
    
    18,726
    
    
    
    311
    
    
    
    893
    
    
    
    6,829
    
    
    
    13,233
    
    
    
    779Net loss
    
    $
    (73,528
    )
    
    $
    (8,614
    )
    
    $
    (56,652
    )
    
    $
    (35,341
    )
    
    $
    (19,748
    )
    
    $
    (13,888
    )Net loss applicable to
controlling shareholders
    
    $
    (73,528
    )
    
    $
    (8,754
    )
    
    $
    (57,454
    )
    
    $
    (35,626
    )
    
    $
    (20,154
    )
    
    $
    (14,332
    )(in thousands of U.S. dollars)Statement of Cash Flows Data:Net cash flows provided by
(used in) operating activities
    
    
    15,667
    
    
    
    (2,608
    )
    
    
    15,073
    
    
    
    27,549
    
    
    
    45,994
    
    
    
    41,010Net cash flows used in
investing activities
    
    
    (41,877
    )
    
    
    (1,528
    )
    
    
    (2,425
    )
    
    
    (6,518
    )
    
    
    (1,808
    )
    
    
    (67,691
    )Net cash flows used in
financing activities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance Sheet Data (End of
Period):Cash and cash equivalents
    
    $
    26,657
    
    
    $
    24,528
    
    
    $
    37,176
    
    
    $
    58,207
    
    
    $
    102,393
    
    
    $
    75,712Accounts receivable, net
    
    
    6,483
    
    
    
    6,892
    
    
    
    8,181
    
    
    
    17,281
    
    
    
    9,543
    
    
    
    13,126Satellites and equipment
    
    
    436,881
    
    
    
    325,452
    
    
    
    290,428
    
    
    
    264,149
    
    
    
    235,240
    
    
    
    265,158Concessions
    
    
    400,071
    
    
    
    43,831
    
    
    
    42,419
    
    
    
    41,007
    
    
    
    39,597
    
    
    
    38,185Total assets
    
    
    883,146
    
    
    
    508,064
    
    
    
    470,182
    
    
    
    445,494
    
    
    
    439,407
    
    
    
    438,957Deferred revenue
    
    
    68,118
    
    
    
    72,387
    
    
    
    70,042
    
    
    
    67,698
    
    
    
    65,354
    
    
    
    63,010Total debt
    
    
    652,016
    
    
    
    378,237
    
    
    
    393,171
    
    
    
    406,297
    
    
    
    420,615
    
    
    
    436,110Total liabilities
    
    
    780,405
    
    
    
    468,335
    
    
    
    487,238
    
    
    
    497,891
    
    
    
    511,552
    
    
    
    524,990Total shareholders equity
(deficit)
    
    
    102,741
    
    
    
    39,729
    
    
    
    (17,056
    )
    
    
    (52,397
    )
    
    
    (72,145
    )
    
    
    (86,033
    )Controlling interest
shareholders deficit
    
    
102,741
    
    
   
    38,010
    
    
    
    (19,444
    )
    

    
    (55,070
    )
    
    
    (75,224
    )
    
    
    (89,556
    )Other Financial Data:Depreciation and amortization
    
    $
    51,780
    
    
    $
    6,266
    
    
    $
    53,106
    
    
    $
    59,807
    
    
    $
    47,657
    
    
    $
    43,402Maintenance capital
expenditures(3)
    
    $
    585
    
    
    $
    1,528
    
    
    $
    2,034
    
    
    $
    3,053
    
    
    $
    1,808
    
    
    $
    4,578Satellite capital
expenditures(4)
    
    
    45,299
    
    
    
    
    
    
    
    391
    
    
    
    3,465
    
    
    
    
    
    
    
    63,113EBITDA(5)
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    80,140
    
    
    
    84,358
    
    
    
    75,666Adjusted EBITDA(5)
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    74,739
    
    
    
    86,366
    
    
    
    89,373
  
 (1)
    
    Exclusive of depreciation and amortization shown separately.(2)
    
    Restructuring expenses consists of costs incurred by Satmex as part of its capital
restructuring activities (including principally financial advisory, professional and
regulatory fees).(3)
    
    Includes payments for the acquisition of electronic, data processing and other infrastructure
type equipment and vehicles.(4)
    
    Includes construction in process payments related to Satmex 6 ($45.3 million in 2006), Satmex
7 ($391,000 in 2007, $3.5 million in 2008) and Satmex 8 ($63.1 million in 2010), capitalized
interest, technical fees and expenses related to such construction.(5)
    
    We present EBITDA and Adjusted EBITDA because we consider them to be important supplemental
measures of our operating performance. EBITDA and Adjusted EBITDA are each one of the measures
reported to our Chief Executive Officer on a monthly basis and are used by our management to
evaluate operational performance both against internal targets and the performance of our
competitors. Compensation decisions are also based in part on Adjusted EBITDA. We consider
EBITDA and Adjusted EBITDA to be operating performance measures, and not liquidity measures,
that provide measures of operating results unaffected by differences in capital structures,
capital investment cycles and ages of related assets among otherwise comparable companies. The
adjustments made to EBITDA to calculate Adjusted EBITDA are adjustments for items that
management does not consider to be reflective of our core operating performance. Management
considers our core operating performance to be that which can be affected by our managers in
any particular period through their management of the resources that affect our underlying
revenue and profit generating operations during that period.  5




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
    
    EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future
requirements, for capital expenditures or contractual commitments;
    
    EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our
working capital needs;
    
    EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the
cash requirements necessary to service interest or principal payments, on our debts;
    
    although depreciation and amortization are non-cash charges, the assets being
depreciated and amortized will often have to be replaced in the future, and EBITDA and
Adjusted EBITDA do not reflect any cash requirements for such replacements;
    
    EBITDA and Adjusted EBITDA do not reflect the impact of certain cash charges
resulting from matters we consider not to be indicative of our ongoing operations; and
    
    other companies in our industry may calculate EBITDA and Adjusted EBITDA differently
than we do, limiting its usefulness as a comparative measure.Because of these limitations, when analyzing our operating performance, investors should
use EBITDA and Adjusted EBITDA in addition to, and not as an alternative for, net
income, operating income or any other performance measure presented in accordance with
GAAP. Similarly, investors should not use EBITDA or Adjusted EBITDA as an alternative to
cash flow from operating activities or as a measure of our liquidity.EBITDA represents net loss excluding income tax expense, interest expense, interest
income, foreign currency fluctuation effects and depreciation and amortization expense.
Adjusted EBITDA represents EBITDA adjusted to exclude the effects of the orbital
incentives settlement, restructuring expenses, state reserve amortization and other
income and expenses, each as described below. The following table reconciles net loss to
EBITDA and Adjusted EBITDA for the periods presented:
 Fiscal Year Ended December 31,2008
    
    
    2009
    
    
    2010Net loss
    
    $
    (35,341
    )
    
    $
    (19,748
    )
    
    $
    (13,888
    )Income tax expense
    
    
    6,829
    
    
    
    13,233
    
    
    
    779Interest expense
    
    
    48,498
    
    
    
    43,708
    
    
    
    45,789Interest income
    
    
    (1,481
    )
    
    
    (480
    )
    
    
    (345
    )Net foreign exchange
    
    
    1,828
    
    
    
    (12
    )
    
    
    (71
    )Depreciation and amortization
    
    
    59,807
    
    
    
    47,657
    
    
    
    43,402EBITDA
    
    
    80,140
    
    
    
    84,358
    
    
    
    75,666Restructuring expenses(a)
    
    
    8,542
    
    
    
    3,388
    
    
    
    16,477Orbital incentives settlement(b)
    
    
    (6,989
    )
    
    
    
    
    
    
    State reserve amortization(c)
    
    
    (2,344
    )
    
    
    (2,344
    )
    
    
    (2,344
    )Other (expenses) income(d)
    
    
    (4,610
    )
    
    
    964
    
    
    
    (426
    )Adjusted EBITDA
    
    $
    74,739
    
    
    $
    86,366
    
    
    $
    89,373
  
 (a)
    
    Restructuring expenses consist of costs incurred by Satmex as part
of its activities to restructure its capital structure (including
principally financial advisory, professional and regulatory fees)
as well as operating restructuring activities (including
principally employee indemnification claims and contract
termination fees). Our management excludes these expenses when
evaluating our ongoing performance and, therefore, our Adjusted
EBITDA excludes these expenses.(b)
    
    In the event that a transponder is a successfully operating
transponder at the end of the specific useful lifetime and we
continue to use it for telecommunications purposes, we must make
daily payments to the supplier calculated on a daily basis. The
orbital incentive provision for 2006 and 2007 was reversed in 2008
in accordance with a confidential settlement agreement signed that
same year. The reversal amount was $7.0 million, which had the
effect of offsetting costs in 2008.(c)
    
    Amortization of deferred income related to transponders provided
to the Mexican government free of charge. These transponders are
provided without cost to Satmex and have been eliminated based
upon our belief that such exclusion provides a better comparison
to the results of operation of our peers.(d)
    
    Other income in 2008 represents a gain from the successful outcome
of a lawsuit against a former customer, which occurred in the
second quarter of 2008. EXCHANGE RATES
   6




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Noon Buying RatePeriod Ended(1)
    
    Period End
    
    
    Average(2)
    
    
    Low
    
    
    High(Mexican pesos per $1.00)December 31, 2008
    
    
    13.54
    
    
    
    11.14
    
    
    
    9.92
    
    
    
    13.92December 31, 2009
    
    
    13.06
    
    
    
    13.51
    
    
    
    12.60
    
    
    
    15.37December 31, 2010
    
    
    12.36
    
    
    
    12.64
    
    
    
    12.16
    
    
    
    13.18
 
 (1)
    
    For all dates through December 31, 2008, exchange rates between
Mexican pesos and U.S. dollars are presented at the noon buying rate
in New York, New York for cable transfers in Mexican pesos per U.S.
dollars as certified for customs purposes by the Federal Reserve Bank
of New York. For January 1, 2009 and all later dates and periods, the
exchange rate refers to the noon buying rate as set forth in the H.10
statistical release of the U.S. Federal Reserve Board.(2)
    
    Annual averages are calculated using the average of the rates on the
last business day of each month during the relevant year. MARKET AND INDUSTRY DATA
 Projection Model Satmex 2020; 17 th Satellite Communications &
Broadcasting Markets Survey Forecasts to 2010 Euroconsult Convergencia Latina Map 2010; Via
Satellites 2010 Industry Directory; Company Profiles, Analysis of FSS Operators Euroconsult Company Profiles, Analysis of FSS Operators Euroconsult Price
Assumptions in C-bands Satmex Satmex Industry Analysis; Executive Summary
of Satmex 8 Market Validation Euroconsult Satmex 8 Market Study Northern Sky Research Satmex 8 Market Validation Euroconsult; Executive Summary of Satmex 8 Market Study Northern Sky
Research Satmex 8 Market Study Northern Sky Research Satmex 8 Market
Validation Euroconsult
 CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
   7




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
    
    our history of significant net operating losses;
 
    
    our ability to pay the New Notes in full at maturity;
 
    
    our high degree of leverage and significant debt service obligations;
 
    
    our inability to finance, build and successfully launch our Satmex 8 satellite and
our currently intended Satmex 7 satellite;
 
    
    our in-orbit satellites are vulnerable to failure;
 
    
    our small number of customers accounts for a large portion of our revenue;
 
    
    competition;
 
    
    our ability to incur more debt;
 
    
    restrictions and limitations imposed on us by the agreements and instruments
governing the notes;
 
    
    our ability to maintain satellites in the orbital slots we currently use;
 
    
    our government concessions may be revoked under certain circumstances;
 
    
    the effects of changes to the current Mexican telecommunications laws and
regulations;
 
    
    Mexican social, political and economic developments; and
 
    
    foreign currency exchange fluctuations relative to the U.S. dollar or the Mexican
peso.
  RISK FACTORS
 Risks Related to Our Business
 We have a history of significant net operating losses and may continue to suffer net operating
losses in the future.
   8




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We may not have enough financial resources to pay the New Notes in full at maturity and
finance Satmex 7.
   If we are unable to finance, build and successfully launch our proposed Satmex 8 and Satmex 7
satellites, our ability to grow our business will be materially and adversely affected.
     New or proposed satellites are subject to construction and launch failures (including a failure
to reach their intended orbit) and delays, the occurrence of which can materially and adversely
affect our results of operations, business prospects, financial condition and cash flow.
   9




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Satellites have limited useful lives and are vulnerable to premature failure. The actual useful
life may be shorter than we anticipate.
  
    
    the amount of propellant used in maintaining the satellites orbital location or
relocating the satellite to a new orbital location (and, for newly-launched satellites,
the amount of propellant used during orbit raising following launch);
 
    
    the performance, malfunction or failure of their components;
 
    
    conditions in space such as solar flares, space debris and solar and other
astronomical events;
 
    
    the orbit in which the satellite is placed;
 
    
    operational considerations, including operational failures and other anomalies; and
 
    
    changes in technology that may make all or a portion of our satellite fleet
obsolete.
     10




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Our financial condition could be materially and adversely affected if we were to suffer a satellite
loss that is not adequately covered by insurance.
     11




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Our revenues and profitability may be adversely affected by the global financial downturn and
negative global economic conditions may have a material adverse effect on our customers and
suppliers.
  
    
    significant reductions in available capital and liquidity from banks and other
providers of credit;
 
    
    substantial reductions in equity and currency values in financial markets;
 
    
    extreme volatility in credit, equity and fixed income markets; and
 
    
    general economic uncertainty.
  A small number of customers accounts for a large portion of our revenues. The loss of one or more
of these significant customers would adversely affect our revenues.
  We operate in a competitive environment.
   Comisión Federal de Telecomunicaciones
  12




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Our affiliation agreement with DirecTV, Inc. (DirecTV) to provide Canal 22 to subscribers is
terminable at will. If such agreement is terminated, it could have a material adverse effect on our
results of operations and profitability.
  Enlaces requires capacity on Ku-band frequencies in order to grow its business and such capacity
may not be available on commercially reasonable terms.
  Enlaces operates from one facility and without a back-up location. A natural disaster or antenna
failure could significantly disrupt its business.
  Our future success depends on our ability to maintain a strong management team, retain our key
employees and adapt to technological changes.
   13




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Technological advances may require us to make significant expenditures to maintain and improve the
competitiveness of our service offerings, and our ability to make such expenditures may be limited
by our lack of funds.
  Certain corporate action of Satmex will require the approval of a small group of holders.
  Mexican local ownership requirements could limit our ability to increase our capital
 Secretaría de Economía
 Our ability to report our U.S. GAAP financial results accurately on a timely basis depends on
maintenance of the corrective measures that we implemented in 2008 and 2009 and on our ability to
achieve and maintain an effective system of internal controls.
     14




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Risks Related to Our Regulatory Environment
 Our business is regulated, causing uncertainty and additional costs.
   Secretaría de Comunicaciones y Transportes
   Our operations may be limited or precluded by ITU rules or processes, and we are required to
coordinate our operations with those of other satellite operators. Other operators may not comply
with ITU rules requiring coordination of operations and failure of such other operators to comply
could cause harmful interference to the signals that we or our customers transmit.
   15




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If we do not maintain satellites in the orbital slots we currently use, those orbital locations may
become available for other satellite operators to use.
    16




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Our government concessions may be revoked under certain circumstances.
 Ley Federal de Telecomunicaciones
 
    
    the term of any such Orbital Concession expires;
    
    we resign our rights under any such Orbital Concession;
    
    the SCT revokes such Orbital Concession;
    
    the Mexican government (through the SCT) terminates such Orbital Concession through
a proceeding called Rescate; or
    
    we become subject to liquidation or bankruptcy (quiebra).
  
    
    unjustified or unauthorized interruption of our operations or the services that may
be provided under such Orbital Concession, whether in whole or in part;
    
    taking any action or refraining from taking any action that affects the rights of
other licensees or concessionaires;
    
    our failure to satisfy the terms or conditions set forth in the Orbital Concessions
(including failure to deliver the free satellite capacity reserved for the Mexican
government);
    
    our unjustified failure to interconnect other concessionaires or licensees that have
the right to provide telecommunications services;
    
    change of our nationality; or
    
    the assignment, transfer or encumbrance of rights granted under the Orbital
Concessions in contravention of the terms of applicable Mexican law.
  Ley General de Bienes Nacionales
   17




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Requisa
   The SCT and COFETEL are preparing the auction of additional segment capacity in the 3.4  3.7 GHz
frequency band in Mexico and the use of this capacity could interfere with our satellite
transmissions, which could affect our operations.
  Comisión Federal de Telecomunicaciones
 If the SCT does not approve Enlaces teleport operation in the Primary Control Center, our
financial performance could be materially and adversely affected.
      18




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Decreases in market rates for telecommunication services could have a material adverse effect on
our business, results of operation and our financial condition.
  
    
    increased competition and focus by our competitors on increasing market share; and
    
    recent technological advances that permit substantial increases in the transmission
capacity.
  We are subject to different corporate disclosure requirements than U.S. companies, which may limit
the information available to our investors.
   Risks Related to Mexico
 Any change to the current Mexican telecommunications laws, rules, regulations and policies could
have a material adverse effect on our business.
  Social and economic developments in Mexico may adversely affect our business.
     19




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High interest rates in Mexico could increase our financing and operating costs.
 Certificados de la Tesorería de la
Federación
 High inflation rates in Mexico may decrease demand for our services while increasing our costs.
  
    
    inflation can adversely affect consumer purchasing power, thereby adversely
affecting consumer and advertiser demand for our services and products; and
    
    to the extent inflation exceeds our price increases, our prices and revenues will be
adversely affected in real terms.
 The Ley del Impuesto Empresarial a Tasa Única has increased our tax burden and could affect our
operations.
 Ley del Impuesto Empresarial a Tasa Única
   20




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Your ability to effect service of process on our directors and officers outside the U.S. and your
ability to enforce U.S. judgments against us or our directors, officers, and assets outside the
U.S. may be limited.
  Political instability in Mexico could affect our operations.
      Mexico has experienced a period of increasing criminal violence and such activities could affect
our operations.
  Developments in other countries could adversely affect the Mexican economy, our business, financial
condition or results of operations and the market value of our securities.
   21




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Currency devaluations may impair our ability to service our debt.
    Exchange controls may impair our ability to pay interest and principal on the New Notes.
  Payment of judgments against us would be in Mexican pesos.
 Ley Monetaria de los Estados Unidos Mexicanos
  22




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ITEM 4. Information on the Company
 General Description
 Sociedad Anónima de Capital Variable .
 Organizational
Structure
 
 (1)
    
    0.03% of SMVS Administración is owned by SMVS Servicios Técnicos.(2)
    
    0.03% of SMVS Servicios Técnicos is owned by SMVS Administración. Business
     23




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
    
    Data and voice-over IP networks. Our data and voice-over IP networks services
include voice and data backhaul for telecommunication companies as well as the sale of
satellite transmission capacity to broadband Internet service providers, public
communications carriers, government agencies and multinational corporations. Demand
from private and public network providers in Latin America for broadband Internet
services and cellular telephony backhaul is anticipated to be a strong source of future
growth. Approximately 70.6% of our FSS revenue for 2010 was attributed to our data and
voice-over IP network services.
    
    Video. Our video distribution services include providing FSS to television broadcast
networks, cable and DTH television operators and broadcasters of special events. The
increased transmission of high-definition television, or HDTV, signals requires greater
transmission capacity than standard television signals. We also expect continued demand
for bandwidth as a result of increased offerings of television services by
non-traditional providers offering bundled services (i.e., triple play), such as
telecommunication companies. A third source of video demand growth is the trend towards
a greater number of television channel offerings, driven by consumer demands for more
diverse and specialized content. Approximately 22.7% of our FSS revenue for 2010 was
attributed to our video services.
    
    Government. Our government services include providing data and voice-over IP
services to the public sector, the sale of satellite transmission capacity to national
security networks and government-sponsored connectivity programs to provide broadband
Internet access to rural and often remote geographic areas. Governments have
experienced an increased need for commercial satellite communications services driven,
in part, by expanded services for voice-over IP networks, disaster recovery, military,
counterterrorism, anti-drug efforts and social programs. There has also been a trend of
increased outsourcing of broadband services from government-owned to commercial
satellite fleets. Approximately 6.7% of our FSS revenue for 2010 was attributed to our
government services.
     24




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Our Satellites
    Orbital Slot
    
    Band
    
    Total MHzOrbital slot occupied by Satmex 6
    
    C-
    
    26.320Ku-
    
    105.000Orbital slot occupied by Satmex 5
    
    C-
    
    73.100Ku-
    
    30.640Orbital slot occupied by Solidaridad 2
    
    C-
    
    56.690Ku-
    
    71.130Total Satellite Capacity
    
    C- and Ku-band
    
    362.880
  25




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Satmex 6
        Satmex 5
     26




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Solidaridad 2
     Satellite Under Construction (Satmex 8)
   27




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Satmex 5.
    Future Satellite (Satmex 7)
   Services
  Telecommunications Transmission Services
    28




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##### Table of Contents



Integrators
  Broadband Internet Service Providers
  Broadcasting and Video Distribution Services
     29




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##### Table of Contents



Enlaces (Broadband Satellite Services)
       AlternaTV (Programming Distribution Services)
    30




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Orbital Coordination
    31




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Landing Rights
      Satellite Control Centers and Property Concession
   
    
    telemetry, tracking and control systems;
    
    an equipment maintenance area;
    
    a communications signal monitoring area;
    
    a dynamic simulator, which allows for the simulation of spacecraft dynamics and
control maneuvers; and
    
    antennas for satellite control and carrier monitoring.
  32




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Indice Nacional de Precios al Consumidor Secretaría de la Función Pública
  Properties
   Insurance
     33




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##### Table of Contents




    
    military or similar actions;
 
    
    anti-satellite devices;
 
    
    governmental actions;
 
    
    nuclear reaction or radiation contamination;
 
    
    willful or intentional acts by us or our contractors;
 
    
    loss of income, indirect and consequential damages; and
 
    
    third-party claims against us.
    Customers
     Year Ended December 31,2008
    
    
    2009
    
    
    2010U.S.
    
    $
    50,285
    
    
    $
    50,742
    
    
    $
    48,379Mexico
    
    
    42,032
    
    
    
    43,702
    
    
    
    45,660Other
    
    
    22,402
    
    
    
    30,595
    
    
    
    34,723Total
    
    $
    114,719
    
    
    $
    125,039
    
    
    $
    128,762(In thousands of U.S. dollars)
  34




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Sales and Marketing
 Sales Force
    Pricing
    Contracts
     35




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Competition and Markets
 Competition
        36




---



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Employees
 Sindicato de Trabajadores de la Industria
de la Radiofusión, Televisión, Similares y Conexos de la República Mexicana
   Regulation
 Regulatory Framework within Mexico
  Ley General de Bienes
Nacionales Ley General del Equilibrio Ecológico y Protección al Ambiente Ley Federal
de Competencia Económica Ley de Vías Generales de
Comunicación
   37




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The Orbital and Property Concessions
  
    
    the Orbital Concessions providing the right to occupy each of three orbital slots
(one concession per orbital slot) and the use of the associated C- and Ku-
radio-frequency bands; and
 
    
    the Property Concession providing the right to use the buildings and areas where the
control centers are located.
 Comisión Federal de Competencia
    
    
    carry out research and development in Mexico;
 
    
    maintain satellite control centers within Mexico and preferentially staff them with
Mexican nationals; and
 
    
    maintain satellite services continuously and efficiently.
    38




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
    
    the term of any such Orbital Concession expires;
 
    
    we resign our rights under any such Orbital Concession;
 
    
    the SCT revokes any such Orbital Concession;
 
    
    the Mexican government, through the SCT, terminates any such Orbital Concession
through a proceeding called Rescate; or
 
    
    we become subject to liquidation or bankruptcy (quiebra).
  
    
    unjustified or unauthorized interruption of our operations or the services that may
be provided under such Orbital Concession, whether in whole or in part;
 
    
    our taking any action or refraining from taking any action that affects the rights
of other licensees or concessionaires;
 
    
    our failure to satisfy the terms or conditions set forth in the Orbital Concessions
(including the failure to deliver the free satellite capacity reserved to the Mexican
government);
 
    
    our unjustified failure to interconnect other concessionaires or licensees that have
the right to provide telecommunications services;
 
    
    change of nationality; or
 
    
    the assignment, transfer or encumbrance of rights granted under the Orbital
Concessions in contravention of the terms of applicable Mexican law.
  Ley General de Bienes Nacionales
   39




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
    
    pay an annual fee in an amount equal to 7.5% of the assessed property value, through
twelve installments; and
 
    
    maintain the premises in good condition.
 Indice Nacional de Precios al
Consumidor Instituto de Administración y Avalúos de Bienes Nacionales
       
    
    the Property Concession term expires;
 
    
    we resign our rights to any of the Orbital Concessions or the Property Concession;
 
    
    its purpose or the object of the Property Concession disappears;
 
    
    the Property Concession is nullified, revoked or expired;
 
    
    the Mexican government decrees a Rescate on the Property Concession for reasons of
public interest;
  40




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
    
    the Orbital Concessions are terminated;
 
    
    the property and the buildings on it are inadequately maintained or are used for a
different purpose than the purpose for which the Property Concession was granted; and
 
    
    terminated pursuant to terms and conditions generally applicable to Property
Concessions of this type under applicable Mexican law.
  
    
    failure to use the Property Concession for the purpose for which it was granted;
 
    
    failure to comply with the terms of the Property Concession;
 
    
    the occurrence of activities interfering with satellite operations on the premises
for which the Property Concession was granted, without prior permission of the SCT; or
 
    
    pursuant to terms and conditions generally applicable to Property Concessions of
this type under applicable Mexican law.
 Enlaces Network Concession and Value-Added Services Certificate
      
    
    its term expires;
 
    
    Enlaces resigns its rights contained therein;
 
    
    the Mexican government, acting through the SCT, decrees a Rescate on the Network
Concession;
 
    
    Enlaces becomes subject to liquidation or bankruptcy; or
 
    
    the SCT revokes the Network Concession (in which case no compensation will be paid
to us).
    41




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U.S. Regulation and ITU Requirements
 FCC Regulation of Satellite Services and Foreign Ownership of FCC Licenses
     
    
    obtaining a satellite license by participating in a U.S. space station processing
round or filing an application in accordance with the FCCs first-come, first-served
filing procedures;
 
    
    having a U.S. earth station operator apply for authority to communicate with the
non-U.S. satellite; or
 
    
    otherwise petitioning the FCC to reserve spectrum rights for, or provide market
access for, the foreign satellite (e.g., by listing the satellite on the Permitted
Space Station List of non-U.S. licensed satellites that any U.S.-authorized earth
station with an ALSAT designation may communicate with, subject to any condition the
FCC may impose).
 International Telecommunications Union Coordination and Registration Requirements
    42




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Status of Our Satellites
     43




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Treaties and International Accords
 Reciprocity Agreement between the U.S. and Mexico
  Direct-to-Home Protocol
  Fixed Satellite Services Protocol
  Reciprocity Agreement between Canada and Mexico
   Brazilian Agreement
   Argentine Agreement
   44




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Comisión Nacional de Comunicaciones Secretaría de Comunicaciones
 
 ITEM 4A. Unresolved Staff Comments
  
 ITEM 5. Operating and Financial Review and Prospects
  Overview
    45




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Financial Restructurings
 concurso mercantil
   46




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Results of Operations for the Year Ended December 31, 2010 Compared to the Year Ended December 31,
2009
 Revenue
  Year Ended December 31,2010
    
    
    2009
    
    
    DifferenceSatellite services
    
    $
    105,781
    
    
    $
    102,061
    
    
    $
    3,720Broadband satellite services
    
    
    12,910
    
    
    
    12,384
    
    
    
    526Programming distribution services
    
    
    10,071
    
    
    
    10,594
    
    
    
    (523
    )Total revenue
    
    $
    128,762
    
    
    $
    125,039
    
    
    $
    3,723
   Operating Costs and Expenses
  Year Ended December 31,2010
    
    
    2009
    
    
    DifferenceOperating costs
    
    $
    19,613
    
    
    $
    20,464
    
    
    $
    (851
    )Selling and administrative expenses
    
    
    17,040
    
    
    
    16,893
    
    
    
    147Restructuring expenses
    
    
    16,443
    
    
    
    3,324
    
    
    
    13,119Depreciation and amortization
    
    
    43,402
    
    
    
    47,657
    
    
    
    (4,255
    )Total operating expenses
    
    $
    96,498
    
    
    $
    88,338
    
    
    $
    8,160
  Operating Costs
  Year Ended December 31,2010
    
    
    2009
    
    
    DifferenceSatellite services
    
    $
    11,405
    
    
    $
    12,884
    
    
    $
    (1,479
    )Broadband satellite services
    
    
    2,821
    
    
    
    2,249
    
    
    
    572Programming distribution services
    
    
    5,387
    
    
    
    5,331
    
    
    
    56Total operating costs
    
    $
    19,613
    
    
    $
    20,464
    
    
    $
    (851
    )
   47




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Selling and Administrative Expenses
   Restructuring Expenses
  Depreciation and Amortization
  Year Ended December 31,2010
    
    
    2009
    
    
    DifferenceContract backlog
    
    $
    5,391
    
    
    $
    13,935
    
    
    $
    (8,544
    )Satmex 6
    
    
    14,531
    
    
    
    14,531
    
    
    
    Satmex 5
    
    
    19,375
    
    
    
    13,537
    
    
    
    5,838Solidaridad 2
    
    
    
    
    
    
    784
    
    
    
    (784
    )Concessions
    
    
    1,412
    
    
    
    1,412
    
    
    
    Equipment for satellite, furniture and equipment and other
    
    
    2,693
    
    
    
    3,458
    
    
    
    (765
    )Total depreciation and amortization
    
    $
    43,402
    
    
    $
    47,657
    
    
    $
    (4,255
    )
   Operating Income
  Interest Expense
   48




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Net Foreign Exchange Gain (Loss)
  Income Tax
 Impuesto
Empresial a Tasa Unica Impuesto Sobre la
Renta
  Net Loss Attributable to Satmex
  Results of operations for the year ended December 31, 2009 compared to the year ended December 31,
2008.
 Revenue
  Year Ended December 31,2009
    
    
    2008
    
    
    DifferenceSatellite services
    
    $
    102,061
    
    
    $
    93,248
    
    
    $
    8,813Broadband satellite services
    
    
    12,384
    
    
    
    13,335
    
    
    
    (951
    )Programming distribution services
    
    
    10,594
    
    
    
    8,136
    
    
    
    2,458Total revenue
    
    $
    125,039
    
    
    $
    114,719
    
    
    $
    10,320
    49




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Operating Costs and Expenses
  Year Ended December 31,2009
    
    
    2008
    
    
    DifferenceOperating costs
    
    $
    20,464
    
    
    $
    20,531
    
    
    $
    (67
    )Selling and administrative expenses
    
    
    16,893
    
    
    
    21,223
    
    
    
    (4,330
    )Restructuring expenses
    
    
    3,324
    
    
    
    4,424
    
    
    
    (1,100
    )Depreciation and amortization
    
    
    47,657
    
    
    
    59,807
    
    
    
    (12,150
    )Reversal of provision for orbital incentive
    
    
    
    
    
    
    (6,989
    )
    
    
    6,989Gain on recovery from customers
    
    
    
    
    
    
    (4,610
    )
    
    
    4,610Total operating expenses
    
    $
    88,338
    
    
    $
    94,386
    
    
    $
    (6,048
    )
  Operating Costs
  Year Ended December 31,2009
    
    
    2008
    
    
    DifferenceSatellite services
    
    $
    12,884
    
    
    $
    14,183
    
    
    $
    (1,299
    )Programming distribution services
    
    
    5,331
    
    
    
    4,162
    
    
    
    1,169Broadband satellite services
    
    
    2,249
    
    
    
    2,186
    
    
    
    63Total operating costs
    
    $
    20,464
    
    
    $
    20,531
    
    
    $
    (67
    )
    Selling and Administrative Expenses
   Restructuring Expenses
   50




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Depreciation and Amortization
  Year Ended December 31,2009
    
    
    2008
    
    
    DifferenceContract backlog
    
    $
    13,935
    
    
    $
    25,190
    
    
    $
    (11,255
    )Satmex 5
    
    
    13,537
    
    
    
    13,534
    
    
    
    3Satmex 6
    
    
    14,531
    
    
    
    14,531
    
    
    
    Solidaridad 2
    
    
    784
    
    
    
    2,286
    
    
    
    (1,502
    )Concessions
    
    
    1,412
    
    
    
    1,412
    
    
    
    Other expenses
    
    
    3,458
    
    
    
    2,854
    
    
    
    604Total depreciation and amortization
    
    $
    47,657
    
    
    $
    59,807
    
    
    $
    (12,150
    )
   Orbital Incentive
  Gain on Recovery from Customers
  Operating Income
  Interest Expense
  Net Foreign Exchange Loss/Gain
  Income Tax
   51




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Net Loss Attributable to Satmex
  Inflation and Foreign Exchange Fluctuations
   Backlog
  Liquidity and Capital Resources
   52




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Year Ended December 31,2010
    
    
    2009
    
    
    2008Acquisition of property, furniture and equipment
    
    $
    5.4
    
    
    $
    4.2
    
    
    $
    3.0Construction of Satmex 7
    
    
    
    
    
    
    
    
    
    
    3.5Construction of Satmex 8
    
    
    63.1
    
    
    
    
    
    
    
    Total
    
    $
    68.5
    
    
    $
    4.2
    
    
    $
    6.5
   Sources and Uses of Cash
  Year Ended December 31,2010
    
    
    2009
    
    
    2008Net cash provided by operating activities
    
    $
    41.0
    
    
    $
    46.0
    
    
    $
    27.5Net cash used in investing activities
    
    $
    (67.7
    )
    
    $
    (1.8
    )
    
    $
    (6.5
    )
  Operating Activities
   Investing Activities
  Financing Activities
   53




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Financing Agreements
 First Priority Old Notes
 pari passu pari passu
  Second Priority Old Notes
   Contractual Obligations
  Payments Due By PeriodLess than 1Total
    
    
    Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    After 5 YearsContractual Obligations:Debt and related interest accrued as of
December 31, 2010(1)(2)
    
    $
    547,458
    
    
    $
    288,393
    
    
    $
    259,065
    
    
    $
    
    
    
    $
    Construction in progress and launch of Satmex 8
    
    
    221,057
    
    
    
    177,257
    
    
    
    43,800
    
    
    
    
    
    
    
    Operating leases(3)
    
    
    1,762
    
    
    
    567
    
    
    
    1,088
    
    
    
    92
    
    
    
    15Other long-term obligations(4)
    
    
    5,079
    
    
    
    508
    
    
    
    1,016
    
    
    
    1,016
    
    
    
    2,539Other commercial commitments(5)
    
    
    6,452
    
    
    
    2,221
    
    
    
    3,080
    
    
    
    1,150
    
    
    
    Total contractual cash obligations
    
    $
    781,808
    
    
    $
    468,946
    
    
    $
    308,049
    
    
    $
    2,258
    
    
    $
    2,554
  
 (1)
    
    Interest on the First Priority Old Notes is calculated using a projected interest rate of
approximately 12.000% over the remaining life of the notes. Interest on the Second Priority
Old Notes is calculated using an annual fixed rate of 10.125%, taking into account capitalized
interest (in-kind in 2007 and in-kind until 2013).  54




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##### Table of Contents



(2)
    
    As of May 27, 2011, after giving effect to the Transactions, we paid in full the aggregate
outstanding principal amount of the First Priority Old Notes together with accrued but unpaid
interest. Additionally, our Second Priority Old Notes were cancelled and converted into direct
and indirect equity interests in reorganized Satmex. The New Notes were also issued but are
not reflected in this table.(3)
    
    Represents future minimum payments under non-cancelable operating leases with initial or
remaining terms of one year or more.(4)
    
    Represents payments to the Mexican government under the Property Concession.(5)
    
    Represents future payments under services and maintenance contracts. Off-Balance Sheet Arrangements
  Critical Accounting Policies
  Business Combinations
 Design and Useful Lives of Satellites
   Satellite
    
    Design LifeSatmex 6
    
    15.0 yearsSatmex 5
    
    15.0 yearsSolidaridad 2
    
    14.5 years
  EstimatedRemaining UsefulSatellite
    
    LifeSatmex 6
    
    11.77 yearsSatmex 5
    
    1.52 yearsSolidaridad 2(1)
    
    0.33 years
 
 (1)
    
    In March 2008, Solidaridad 2
was placed in inclined orbit to
conserve propellant. Since
then, it has primarily provided
L-band service to the Mexican
Government for national
security and social services
and makes no material
contribution to our operating
income. It concluded its
depreciation period based upon
its original estimated design
life at the end of 2009. As of
December 31, 2010, we estimated
that Solidaridad 2 could remain
in inclined orbit for 2.5 years
but in early 2011 we began to
suspect that it had less
propellant than needed to
continue to operate in inclined
orbit for that period. On June
1, 2011 we received the results
of an independent study and
based on such study we have
decided to de-orbit the
satellite which we plan to
commence in October 2011. We
intend to pursue plans for a
new satellite, Satmex 7, to
occupy the orbital slot of
Solidaridad 2 and offer both C-
and Ku-band services. In the
interim, we anticipate
transferring Satmex 5 to the
Solidaridad 2 orbital slot once
Satmex 8 is in orbit.  55




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##### Table of Contents



Valuation of Long-Lived Assets
  
    
    changes in estimates of the useful life of the satellite;
    
    changes in estimates of our ability to operate the satellite at expected levels;
    
    changes in the manner in which the satellite is to be used; and
    
    the loss of one or several significant customer contracts on the satellite.
  Goodwill and Other Intangible Assets
 Intangibles  Goodwill and Other
  56




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##### Table of Contents



Income Tax
   57




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##### Table of Contents



Revenue Recognition
 AlternaTV
  Sales of Antennas and Installation Services
  Allowance for Doubtful Accounts
  Accounting Pronouncements
 Recently Adopted Accounting Pronouncements
 Consolidation
(Top 810)  Accounting and Reporting for Decreases in Ownership of a Subsidiary  a Scope
Clarification
 Subsequent Events (Top 855)  Amendments to Certain
Recognition and Disclosure Requirements
 Fair Value Measurements and Disclosures
(Topic 820); Improving Disclosures about Fair Value Measurements.
 Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue Arrangements  Consensus of the FASB Emerging Issues Task Force
  58




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##### Table of Contents



Recently Issued Accounting Pronouncements
 Intangibles  Goodwill and Other (Topic
350)  When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or
Negative Carrying Amounts
 
 ITEM 6. Directors, Senior Management and Employees
 Directors of Satmex
  Members of Satmex BoardSeriesName
    
    Position
    
    Age
    
    Period of Service
    
    RepresentingLuis Rebollar Corona
    
    Chairman of the
Board and Director
    
    
    73
    
    
    Since November 30,
2006
    
    AVicente Ariztegui Andreve
    
    Director
    
    
    56
    
    
    Since November 30,
2006
    
    AErwin Starke Fabris
    
    Director
    
    
    56
    
    
    Since November 30,
2006
    
    AJosé Manuel Canal Hernando
    
    Director
    
    
    70
    
    
    Since November 19,
2007
    
    ARichard Mastoloni
    
    Director
    
    
    45
    
    
    Since November 30,
2006
    
    BJohn H. Stevens
    
    Director
    
    
    62
    
    
    Since August 26, 2009
    
    BJames Duplessie
    
    Director
    
    
    51
    
    
    Since September 19,
2007
    
    BLuis Alfonso Nicolau Gutiérrez
    
    Alternate Director
for Mr. Mastoloni
    
    
    52
    
    
    Since September 19,
2007
    
    B
 Non-Members of Satmex BoardName
    
    Position
    
    Age
    
    Period of ServiceLuis Rubio Barnetche
    
    Secretary of the
Board of Directors
    
    
    47
    
    
    Since August 4, 2008Bertha Alicia Ordaz Avilés
    
    Alternate Secretary
of the Board of
Directors
    
    
    37
    
    
    Since August 4, 2008Luis Daniel del Barrio Burgos
    
    Statutory Examiner
    
    
    56
    
    
    Since September 19, 2007
   59




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##### Table of Contents



Members of Satmex BoardSeriesProprietary Member
    
    Position
    
    Age
    
    Alternate Member
    
    RepresentingMaite de Alba de Gandiaga
    
    Director
    
    
    35
    
    
    Gabriel Miguel Agustín de Alba del
Castillo Negrete
    
    AGabriel Ander de Alba de
Gandiaga
    
    Director
    
    
    38
    
    
    Ofelia Elizabeth de Gandiaga Saavedra
    
    AAlejandro Sainz Orantes
    
    Director and
Secretary of the
Board
    
    
    41
    
    
    Diego Martínez Rueda Chapital,
Alternate
Secretary of the Board
    
    AJosé Manuel Canal
Hernando
    
    Independent Director
    
    
    70
    
    
    Eduardo Arias Sánchez
    
    AJosiah Rotenberg
    
    Director and
Chairman of the
Board
    
    
    40
    
    
    Zachary Lewis
    
    BJim Frownfelter
    
    Director
    
    
    47
    
    
    Jared Scott Hendricks
    
    BFernando Tisne
    
    Director
    
    
    41
    
    
    Jose Miguel Lyon
    
    B
 Non-Members of Satmex BoardName
    
    Position
    
    Age
    
    Period of ServiceLuis Daniel del Barrio Burgos
    
    Statutory Examiner
    
    
    56
    
    
    Since September 19, 2007Alejandro González Anaya
    
    Alternate Statutory
Examiner
    
    
    42
    
    
    Since May 26, 2011
 Maite de Alba de Gandiaga.
  60




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##### Table of Contents



Gabriel Ander de Alba de Gandiaga.
 Alejandro Sainz. Licenciado
en Derecho
 José Manuel Canal Hernando.
 Josiah Rotenberg.
  61




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Jim Frownfelter.
 Fernando Tisné.
 Gabriel Miguel Agustín de Alba del Castillo Negrete.
 Ofelia Elizabeth de Gandiaga Saavedra
 Diego Martínez Rueda Chapital. Licenciado en Derecho
 Eduardo Arias Sánchez.
  62




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##### Table of Contents



Zachary Lewis.
 Jared Scott Hendricks. summa cum laude
 Jose Miguel Lyon.
 Daniel del Barrio Burgos.
 Alejandro González Anaya.
 Senior Management of Satmex
 Name
    
    Position
    
    Age
    
    Period of ServicePatricio E. Northland
    
    Chief Executive Officer
    
    
    55
    
    
    Since April 2008Luis Fernando Stein Velasco
    
    Chief Financial Officer
    
    
    50
    
    
    Since November 2008Dionisio Manuel Tun Molina
    
    Vice President of Engineering and
Satellite Operations
    
    
    47
    
    
    Since May 2006Clemente Humberto Cabello Alcérreca
    
    Vice President Business Development
    
    
    40
    
    
    Since January 2009Alejandro Camberos Chacón
    
    Director Strategic Planning
    
    
    40
    
    
    Since July 2007Leticia María Concepción Soto Walls
    
    Director of Human Resources,
Development & Administration
    
    
    46
    
    
    Since October 2008Pablo Manzur y Bernabeu
    
    General Counsel
    
    
    38
    
    
    Since June 2009
 Patricio E. Northland.
  63




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##### Table of Contents



Luis Fernando Stein Velasco.
 Dionisio Manuel Tun Molina. Telecomunicaciones de México
 Clemente Humberto Cabello Alcérreca.
 Alejandro Camberos Chacón.
 Leticia María Concepción Soto Walls.
 Pablo Manzur y Bernabeu. ®
  64




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##### Table of Contents



Audit and Compensation Committee
 Comité Único de Auditoría y Compensaciones
 Member
    
    Position
    
    Alternate Member
    
    PositionJosé Manuel Canal Hernando
    
    President
    
    Erwin Starke Fabris
    
    Series ALuis Rebollar Corona
    
    Miembro Series A
    
    Erwin Starke Fabris
    
    Series AJames Duplessie
    
    Miembro Series BLuis Daniel del Barrio Burgos
    
    Statutory ExaminerLuis Rubio Barnetche
    
    Secretary
    
    Bertha A. Ordaz Avilés
    
    Alternate Secretary
  Compensation Committee
 Member
    
    Position
    
    Alternate Member
    
    PositionJosiah Rotenberg
    
    Series B Member
    
    Zachary Lewis
    
    Series B
Alternate MemberJim Frownfelter
    
    Series B Member
    
    Jared Scott Hendricks
    
    Series B
Alternate MemberGabriel Miguel Agustín 
de Alba del Castillo 
Negrete
    
    Series A-1 Member
    
    Maite de Alba de Gandiaga
    
    Series A-1
Alternate MemberAlejandro Sainz Orantes
    
    Secretary Non Member
    
    Diego Martíniez Rueda
Chapital
    
    Alternate Secretary
Non Member
 Audit Committee:
 Member
    
    Position
    
    Alternate Member
    
    PositionJosé Manuel Canal 
Hernando
    
    Chairman Series A
(Independent)
    
    Eduardo Arias Sánchez
    
    Series A
(Independent)Josiah Rotenberg
    
    Series B Member
    
    Zachary Lewis
    
    Series B
Alternate MemberJim Frownfelter
    
    Series B Member
    
    Jared Scott Hendricks
    
    Series B
Alternate MemberGabriel Miguel Agustín 
de Alba del Castillo 
Negrete
    
    Series A-1 Member
    
    Maite de Alba de Gandiaga
    
    Series A-1
Alternate MemberLuis Daniel del Barrio 
Burgos
    
    Statutory Auditor
Non Member
    
    Alejandro González Anaya
    
    Alternate Non
member Statutory
AuditorAlejandro Sainz Orantes
    
    Secretary Non Member
    
    Diego Martíniez Rueda
Chapital
    
    Alternate Secretary
Non Member
   65




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##### Table of Contents



Compensation
       
 ITEM 7. Major Shareholders and Related Party Transactions
 Share Ownership
  SharesMinimum Fixed Capital
    
    
    Variable CapitalClass I
    
    
    Class IIShareholders
    
    Series A
    
    
    Series B
    
    
    Series N
    
    
    Series B
    
    Series N
    
    
    %Deutsche Bank México, S.A., Institución de
Banca Múltiple, División Fiduciaria, as trustee under that certain Irrevocable Administration Trust
Agreement No. F/589, for the benefit of Servicios Corporativos Satelitales, S.A. de C.V.
and/or the Federal Government of the United Mexican States
    
    
    7,500,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45% Equity Voting Rights; 16% Equity Financial RightsDeutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as trustee under that certain Irrevocable Administration Trust
Agreement No. F/589, for the benefit of Loral Skynet Corporation or any successor or permitted assignee
    
    
    
    
    
    
    221,667
    
    
    
    401,770
    
    
    
    
    
    
    
    
    
    1.33% Equity Voting and Equity Financial Rights
  66




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##### Table of Contents



SharesMinimum Fixed Capital
    
    
    Variable CapitalClass I
    
    
    Class IIShareholders
    
    Series A
    
    
    Series B
    
    
    Series N
    
    
    Series B
    
    
    Series N
    
    
    %Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as trustee under that certain Irrevocable Administration Trust
Agreement No. F/589, for the benefit of Principia, S.A. de C.V. or any successor or permitted assignee
    
    
    
    
    
    
    111,667
    
    
    
    202,395
    
    
    
    
    
    
    
    
    
    
    0.67% Equity Voting and Equity Financial RightsDeutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria, as trustee under that certain Irrevocable Administration Trust
Agreement No. F/589, for the benefit of The Bank of New York or any successor or permitted assignee
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,166,667
    
    
    
    29,395,833
    
    
    43% Equity Voting Rights; 78% Equity Financial RightsNacional Financiera, S.N.C., Institución de Banca de Desarrollo, Trust Division, as trustee under that certain Irrevocable Trust Agreement No. 80501
    
    
    1,666,667
    
    
    
    
    
    
    
    208,333
    
    
    
    
    
    
    
    
    
    
    10% Equity Voting Rights; 4% Equity Financial RightsTotal
    
    
    9,166,667
    
    
    
    333,334
    
    
    
    812,498
    
    
    
    7,166,667
    
    
    
    29,395,833
   MinimumFixed Capital
    
    
    Variable CapitalClass I
    
    
    Class IIShareholders
    
    Series A
    
    
    Series A
    
    
    Series B
    
    
    Series N
    
    
    %Holdsat México, S.A.P.I. de C.V.
    
    
    50,000
    
    
    
    6,580,000
    
    
    
    
    
    
    
    
    
    
    51% Equity Voting Rights; 5.1% Equity Financial RightsSatmex International, B.V.
    
    
    
    
    
    
    
    
    
    
    6,363,339
    
    
    
    116,877,651
    
    
    48.94876% Equity Voting Rights; 94.80076% Equity Financial RightsEJA Holdings LTD
    
    
    
    
    
    
    
    
    
    
    1,113
    
    
    
    20,448
    
    
    0.00856% Equity Voting Rights; 0.01659% Equity Financial RightsCenterbridge Capital Partners SBS (Cayman), L.P.
    
    
    
    
    
    
    
    
    
    
    4,081
    
    
    
    74,963
    
    
    0.03139% Equity Voting Rights; 0.06080% Equity Financial RightsCompanys treasury
    
    
    
    
    
    
    
    
    
    
    1,467
    
    
    
    26,938
    
    
    0.01128% Equity Voting Rights; 0.02185% Equity Financial RightsTotal
    
    
    50,000
    
    
    
    6,580,000
    
    
    
    6,370,000
    
    
    
    117,000,000
    
    
    100%
  67




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##### Table of Contents



Shareholders Equity
 Post-Transaction Satmex Structure
 
  
    
    Satmex is authorized to issue three types of shares: Series A shares, Series B
 shares, and Series N shares.
 
    
    The Series A shares entitle holders to 51.0% of Satmexs voting rights and 5.1% of
its economic rights of all shares. The Series A shares may be owned only by Mexican
individuals, Mexican entities that are owned only by Mexican individuals or entities or
Mexican entities in which 51.0% of the capital is owned by Mexican individuals or
entities (if entities, only if 51.0% of the capital of such entities is also owned by
Mexican individuals or entities). All Series A shares of reorganized Satmex are owned
by Holdsat México.
 
    
    Series B shares entitle holders to 49.0% of Satmexs voting rights and 4.9% of the
economic rights. The Series B shares may be owned by any person including foreign
investors. Over 99% of the Series B shares are owned by Investment Holdings BV; certain
holders of the Second Priority Old Notes not eligible to invest through Investment
Holdings hold less than 1% of Series B Shares. Less than 0.03% of Series B shares are
deposited in the Companys treasury for those non-qualified holders of the Second
Priority Old Notes who failed to respond to the solicitation under the Plan.
  68




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##### Table of Contents




    
    Series N shares entitle holders to 90.0% of the economic rights and limited voting
rights. The holders of Series N shares may vote only on the following matters: (i)
extension of Satmexs corporate existence; (ii) dissolution; (iii) change of corporate
purpose; (iv) change of nationality; (v) transformation of Satmex from one type of
entity to another and (vi) merger of Satmex with and into another entity. The Series N
 shares may be owned by any person, including foreign investors. Under Mexican law,
foreign investment in Satmexs capital, represented by full voting rights shares, may
not exceed 49.0%. The Series N shares, however, are not taken into account in
determining the level of foreign investment. Over 99% of the Series N shares are owned
by Investment Holdings BV; certain holders of the Second Priority Old Notes not
eligible to invest through Investment Holdings hold less than 1% of Series N shares.
Less than 0.03% of Series N shares are deposited in the Companys treasury for those
non-qualified holders of the Second Priority Old Notes who failed to respond to the
solicitation under the Plan.
 Related Party Transactions
  Mexican Government
     Loral Usufructo
 usufructo usufructo
 usufructo usufructo
  69




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##### Table of Contents



ITEM 8. Financial Information
 Consolidated Financial Statements and Other Financial Information
  Legal Matters
 Dirección General de Política de
Telecomunicaciones y de Radiodifusión
  Dividend Policy
  Significant Changes
  
 ITEM 9. The Offer and Listing
  
 ITEM 10. Additional Information
  Articles of Incorporation
  Corporate Purpose
  
    
    the installation, operation, control and exploitation of artificial satellites,
through the occupation and exploitation of geostationary orbital slots and satellite
orbits assigned to Mexico, with their corresponding frequency bands and emission
rights and signal reception under the terms of the Federal Telecommunications Law and
pursuant to the concessions granted to Satmex by the Mexican Government;
 
    
    the construction, operation and exploitation of control centers associated with
its satellite system;
  70




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##### Table of Contents




    
    the rendering of all types of national and international telecommunication
satellite services including, without limitation, the rendering of television
(including the television direct diffusion services (DTH/DBS)), telephone and data
signal conduction and distribution, among others that are technically viable, in
accordance with the authorizations, concessions, permits, licenses and any other
document that is necessary to provide such services; and
 
    
    the exploitation of rights to transmission and reception of signals from frequency
bands associated with foreign satellite systems, granted through a concession issued,
as the case may be, by the appropriate authority.
 Domicile
  Corporate Capital
  Shares
   a.
    
    Individuals of Mexican nationality;
 b.
    
    Mexican companies whose by-laws include a foreigner
exclusion clause and, therefore, whose members, partners or shareholders may
only be Mexican individuals or Mexican companies whose by-laws further
contain such foreigner exclusion clause; and
 c.
    
    Mexican companies, a majority of whose corporate capital
at any time and at all times is owned, directly or indirectly, by Mexican
individuals or by Mexican companies, a majority of whose corporate capital
is at any time and at all times owned by Mexican individuals or Mexican
companies with majority Mexican capital.
    71




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##### Table of Contents



Comisión
Nacional de Inversiones Extranjeras Ley de Inversión
Extranjera
 a)
    
    Holders are entitled to full economic rights but are
entitled to vote on only the following matters:
 (i)
    
    Extension of the duration of
Satmex;(ii)
    
    Anticipated dissolution of Satmex;(iii)
    
    Change in the corporate purpose of Satmex;(iv)
    
    Change of nationality of Satmex;(v)
    
    Transformation of Satmex; and(vi)
    
    Merger with other company or spin
off.
   b)
    
    Of the remaining 10% of the capital stock of Satmex, that
is, the non-neutral capital, 51% must be subscribed and paid by Mexican
individuals or Mexican companies whose By-laws have a foreigner exclusion
clause or have a foreigner admission clause but with the majority of capital
stock held by Mexicans and controlled by Mexican investment, for purposes of
having the majority of shares with full voting rights, under the control of
Mexican investment.
 c)
    
    Article 7 of the Foreign Investment Law (Ley de Inversión
Extranjera), states that the foreign investment limitations set forth in such
article cannot be exceeded directly, either through trusts, agreements,
social or statutory pacts, pyramidal schemes, or any other mechanism that
grants control or a major participation surpassing the referred limitations,
except for the provisions set forth in Title Fifth of the Foreign Investment
Law. As a result of the foregoing, control of Satmex in no event and under
no
circumstance may remain in hands of a foreign individual or a foreign group
of individuals, foreign companies and/or Mexican companies where the majority
of its capital is foreign.
  72




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##### Table of Contents



Registry Book of Nominative Shares. Ley General de Sociedades
Mercantiles
   Share Certificates
  Increases and Decreases in Corporate Capital
  Increases
  Diario Oficial de la Federación provided however
   73




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##### Table of Contents



SCT Approval .
 a.
    
    Satmex must provide notice to the SCT of the persons (each
an Interested Person) interested in subscribing for the shares.
Such notice must be in writing and include information on each Interested
Person, provided that, if any Interested Person is not an individual,
sufficient information must be provided to the SCT to identify the person or
persons that, directly or indirectly, hold 10% or more of such Interested
Person except if such Interested Person is a retirement fund manager or an
investment fund;
 b.
    
    The SCT has the right to object to the relevant
transaction, for justified cause, provided that such objection is made within
a period of 30 calendar days from the date of receipt of the relevant notice
from Satmex;
 c.
    
    If the SCT does not object the relevant transaction within
the aforementioned 30 calendar-day period, the transaction shall be deemed
authorized; and
 d.
    
    Only those transactions referred that are not objected to
by the SCT may be recorded in the Registry Book of Nominative Shares of
Satmex.
  Decreases .
     74




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##### Table of Contents



Right of Withdrawal and Transfer of Shares
   Shareholders Meetings
 Authority.
 Ordinary, Extraordinary and Special Meetings
  a.
    
    Discuss, approve or amend the report rendered by the
Board of Directors pursuant to the provisions of Article 172 of the General
Law of Commercial Organizations, taking into consideration the report of the
Statutory Auditor(s) (Comisario);
 b.
    
    Discuss, approve or amend the annual report rendered by
the Audit and Compensation Committee, if any;
 c.
    
    If necessary, appoint the members of the Board of
Directors and Statutory Auditor(s) and their respective alternates, if any,
provided that each Series of Shares would have the right to appoint members
of the Board as described hereinafter; and
 d.
    
    Determine the compensation payable to the members of the
Board of Directors, the Statutory Auditor(s) and their respective
alternates, if
any, taking into account the proposal of the Compensation Committee, if
any.
  75




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##### Table of Contents



a.
    
    Extension of the duration of Satmex;b.
    
    Voluntary dissolution and liquidation of Satmex;c.
    
    Increases and decreases of the corporate capital of
Satmex;d.
    
    Changing the purposes of Satmex;e.
    
    Changing Satmexs nationality or any re-incorporation or
alteration in the nationality of Satmex (including without limitation by
domestication in any other jurisdiction);f.
    
    Transformation of Satmex;g.
    
    Merger of Satmex with another entity;h.
    
    Spin-off of Satmex;i.
    
    Issuance of preferred stock or any special series or
sub-series of stock;j.
    
    Redemption by Satmex of its own shares and issuance of
acciones de goce;k.
    
    Issuance of bonds;l.
    
    Any amendment to the By-laws of Satmex;m.
    
    Declaration of dividends or distributions to shareholders
or redemption of stock or other equity securities;n.
    
    Effecting any other Change of Control (as defined below)
of Satmex;o.
    
    Supermajority Matters (as defined in paragraph (c) of
Article Twenty-Fifth); andp.
    
    Any other matters specifically reserved by applicable
Mexican law or the By-laws to a General Extraordinary Shareholders Meeting.
  Calls for Shareholder Meetings.
  76




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##### Table of Contents



Diario Oficial de la
Federación
 Quorum Requirements.
   1.
    
    Supermajority Matters (as defined below);2.
    
    Distribution of dividends by Satmex;3.
    
    Voluntary dissolution and liquidation of Satmex;4.
    
    Increases and decreases of the corporate capital of Satmex;5.
    
    Merger of Satmex with another entity;6.
    
    Spin-off of Satmex;7.
    
    Issuance of preferred stock by Satmex;8.
    
    Redemption by Satmex of its own shares and issuance of acciones de goce;
  77




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9.
    
    Determination of the manner in which the shares, stock or any type of equity
interests owned by Satmex representing the corporate capital of any entity, Mexican or
foreign, including but not limited to subsidiaries of Satmex, will be voted, and
appointing the special delegate, legal representative or attorney-in-fact to
participate in such meetings and vote such shares, stock or any type of equity
interests owned by Satmex (collectively, the Voting Resolution);10.
    
    Issuance of bonds by Satmex; and11.
    
    Any amendment to the By-laws of Satmex.
 Admission to Shareholders Meetings.
   Unanimous Written Resolutions.
 Management of Satmex
 Board of Directors
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1.
    
    A person that is, or was at any time during the prior three years, an
employee or officer of Satmex or any parent or subsidiary of Satmex;
 2.
    
    A person that is, or that is a partner, shareholder, director or officer of
an organization that is, or was at any time during the prior three years, a direct or
indirect shareholder of Satmex;
 3.
    
    A person that has, or is a partner, shareholder, director or officer of an
organization that has, the direct or indirect power to elect or direct a majority of
the members of the Board of Directors of Satmex;
 4.
    
    A person that is an advisor or consultant to Satmex or its Affiliates, or a
partner, shareholder, director or officer of an organization that acts as an advisor
or consultant to Satmex or its Affiliates and such persons or organizations income
significantly depends on such relationship with Satmex;
 5.
    
    A person that is, or is a partner, shareholder, officer or employee of, the
outside auditor of Satmex;
 6.
    
    A person that is a client, customer, supplier, borrower or lender of Satmex,
or a partner, advisor, employee, director or officer of any such client, customer,
supplier, borrower or lender;
 7.
    
    A person that is an official or employee of any governmental agency or a
person that was at any time during the prior three years an official or employee of
any governmental agency, in each case subject to exceptions agreed (i) by the majority
of the Series A shares and the majority of the Series B shares upon appointment of a
member of the Board of Directors, or (ii) by the majority of the members of the Board
of Directors, including at least one Series B Director;
 8.
    
    A person that is an officer, director, trustee or employee of a foundation,
university, association or non-profit association that receives donations from Satmex;
or
 9.
    
    A person that is a family member, up to the third degree, of any of the
persons mentioned in paragraphs 1 to 5 above, or up to the first degree of any of the
persons mentioned in paragraphs 6 and 8 above.
  Board Meetings.
  79




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Calls.
 Quorum Requirements.
  Supermajority Matters
 1.
    
    Engaging in any new line of business;
2. Transfer of all or a significant portion of Satmexs material assets;
3. Adoption or amendment of the strategic business plan and annual budget;4.
    
    Transactions with any Affiliate of Satmex (or any of its subsidiaries) or any
transaction in which any Series A Director or any affiliate of any holder of Series A
Shares has directly or indirectly, any interest or participation;5.
    
    Deviations (i) from the annual budget that impact operating cash flow by the
equivalent of $10,000,000 or more, or (ii) of 10% or more of the annual budget;6.
    
    Incurrence, prepayment or voluntary redemption of indebtedness by Satmex or
any of its subsidiaries;7.
    
    Engagement of Satmexs public accounting firm;8.
    
    Change in accounting or tax methods by Satmex or any of its subsidiaries or
controlled entities;9.
    
    Settlement by Satmex or of any of its subsidiaries or controlled entities of
litigation and arbitration above $1,000,000;10.
    
    Adoption of or material amendment to any executive management compensation or
employee benefit plan by Satmex or of any of its subsidiaries or controlled entities;11.
    
    Voting Resolution;12.
    
    Initial public offering of equity securities or registration of securities
for such purposes by either Satmex or any of its subsidiaries or controlled entities;13.
    
    Any issuance of common stock by Satmex or any of its subsidiaries or
controlled entities;14.
    
    Hiring or firing of Chief Executive Officer or Chief Financial Officer (or
the equivalent) of Satmex or of any of its subsidiaries or controlled entities;15.
    
    Any acquisition or disposition of securities of any other company (however
structured, including if by merger);
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16.
    
    Satmex making any other loan or investment in any existing subsidiary or
controlled entity other than a wholly-owned subsidiary;17.
    
    Any acquisition or disposition of assets of Satmex constituting a business or
other assets having a fair market value above $1,000,000;18.
    
    Request of filing for, or consent to, any modification or transfer of the
orbital concessions held, or to be held, by Satmex;19.
    
    Amending or waiving in any material respect any provision of any
shareholders agreement, limited liability company or partnership agreement, or any
equivalent agreement of Satmex or of any of its subsidiaries or controlled entities;20.
    
    Voluntary bankruptcy or concurso mercantilor consent to involuntary
bankruptcy or concurso mercantil, by Satmex or of any of its subsidiaries or
controlled entities, without regard to the jurisdiction in which such proceeding is
commenced; and21.
    
    Filing for bankruptcy or concursoprotection in any jurisdiction.
 Unanimous Written Resolutions.
 Audit and Compensation Committees
 The Committees.
  Audit Committee
      81




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Compensation Committee.
       82




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##### Table of Contents



Statutory Auditors
  Fiscal Years; Financial Information; Profit and Loss
 Fiscal Years.
 Report of the Board of Directors.
 Profits.
    Losses.
 Material Contracts
  Exchange Controls
   83




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##### Table of Contents



Certain Mexican Tax Considerations
          Taxation of Interest and Principal
   84




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##### Table of Contents



casas de bolsa Ley
del Mercado de Valores Comisión Nacional Bancaria y de Valores Secretaría de Hacienda y Crédito Público
     Payments of Principal
  Taxation of Acquisitions and Dispositions
   85




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##### Table of Contents



Transfer and Other Taxes
  
 ITEM 11. Quantitative and Qualitative Disclosures About Market Risk
  ITEM 12. Description of Securities Other Than Equity Securities
  
 PART II
 
 ITEM 13. Defaults, Dividend Arrearages and Delinquencies
  
 ITEM 14. Material Modifications to the Rights of Security Holders
  
 ITEM 15. Controls and Procedures
 Disclosure Controls and Procedures
   86




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Managements Annual Report on Internal Control Over Financial Reporting
   Changes in Internal Control over Financial Reporting
  
 ITEM 16A. Audit Committee Financial Expert
   
 ITEM 16B. Code of Ethics
     87




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##### Table of Contents



ITEM 16C. Principal Accountant Fees and Services
  2010
    
    
    2009
    
    
    2008(Amounts in thousands)Audit fees (1)
    
    $
    502
    
    
    $
    683
    
    
    $
    581Tax fees (2)
    
    
    92
    
    
    
    120
    
    
    
    148Total fees
    
    $
    594
    
    
    $
    803
    
    
    $
    729
 
 (1)
    
    Audit fees:Audit fees in the above table are the aggregate fees billed by GYRU in connection
with the audit under U.S. GAAP and Mexican NIF (Normas de Información Financiera) of our annual
financial statements and statutory and regulatory audits.(2)
    
    Tax fees:Tax fees in the above table are fees billed by GYRU in connection with financial
statements for tax purposes.  
 ITEM 16D. Exemptions from the Listing Standards for Audit Committees
  
 ITEM 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
 ITEM 16F. Change in Registrants Certifying Accountant
  
 ITEM 16G. Corporate Governance
  
 ITEM 17. Financial Statements
   88




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PART III
 
 ITEM 18. Financial Statements
 Please refer to Item 19.
 
 ITEM 19. Exhibits
 (a) Index to Financial Statements
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2010 and 2009
    
    
    F-3Consolidated Statements of Operations for the Years ended December 31, 2010, 2009 and 2008
    
    
    F-4Consolidated Statements of Changes in Shareholders Deficit for the years ended December
31, 2010, 2009 and 2008
    
    
    F-5Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7Schedule of Valuation and Qualifying Accounts
    
    
    F-37
 (b) Index to Exhibits
 Exhibit No.
    
    Description1.1
    
    
    Estatutos Sociales(bylaws) of Satélites Mexicanos, S.A. de C.V.(2)1.2
    
    
    Estatutos Sociales(bylaws) of Satélites Mexicanos, S.A. de C.V. (English translation).(4)1.3
    
    
    Bylaws of Satélites Mexicanos, S.A. de C.V. (English Translation)(10)2.1
    
    
    Indenture, dated as of November 30, 2006, between Satélites Mexicanos, S.A. de C.V., each of the
First Priority Guarantors named there in, as First Priority Guarantors, and HSBC Bank USA, National
Association, as First Priority Indenture Trustee.(5)2.2
    
    
    First Priority Collateral Trust Agreement among Satélites Mexicanos, S.A. de C.V., each of the First
Priority Guarantors named therein, HSBC Bank USA, National Association, as Indenture Trustee, and
HSBC Bank USA, National Association, as Collateral Trustee, dated as of November 30,
2006.(5)2.3
    
    
    Intercreditor Agreement, dated as of November 30, 2006, by and among Satélites Mexicanos, S.A. de
C.V., as the Company, HSBC Bank USA, National Association, as the First Priority Collateral Trustee
and as the First Priority Indenture Trustee, and Wells Fargo Bank, National Association, as the
Second Priority Collateral Trustee and as the Second Priority Indenture Trustee.(5)2.4
    
    
    Registration Rights Agreement, dated as of November 30, 2006, by Satélites Mexicanos, S.A. de C.V.,
for the benefit of certain holders of its First Priority Senior Secured Notes due
2011.(5)2.5
    
    
    First Priority Mortgage in and over the Mortgaged Assets to secure the First Priority Obligations
granted by the Company in favor of, and/or for the benefit of, HSBC Bank USA, National Association,
in its capacity as First Priority Collateral Trustee under the First Priority Collateral Trust
Agreement for the benefit of the beneficiaries of the First Priority Collateral Trust
Agreement.(5)
  89




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Exhibit No.
    
    Description2.6
    
    
    Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A.
de C.V. as Pledgor, HSBC Bank USA, National Association, as First Priority Collateral Trustee, for
itself and for the benefit of the First Priority Holders pursuant to the Collateral Trust Agreement,
as Pledgee, and Enlaces Integra S. de R.L. de C.V., as the Company.(5)2.7
    
    
    Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A.
de C.V. as Pledgor, HSBC Bank USA, National Association, as First Priority Collateral Trustee, for
itself and for the benefit of the First Priority Holders pursuant to the Collateral Trust Agreement,
as Pledgee, and SMVS-Servicios Tecnicos, S. de R.L. de C.V., as the Company.(5)2.8
    
    
    Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A.
de C.V. as Pledgor, HSBC Bank USA, National Association, as First Priority Collateral Trustee, for
itself and for the benefit of the First Priority Holders pursuant to the Collateral Trust Agreement,
as Pledgee, and SMVS-Administracion, S. de R.L. de C.V., as the Company.(5)2.9
    
    
    Floating Lien Pledge Agreement, as of November 30, 2006, by and between SMVS-Servicios Tecnicos, S.
de R.L. de C.V., as Pledgor, and HSBC Bank USA, National Association, as First Priority Collateral
Trustee for itself and for the benefit of the First Priority Holders, as the Pledgee.(5)2.10
    
    
    Floating Lien Pledge Agreement, as of November 30, 2006, by and between SMVS-Administracion, S. de
R.L. de C.V., as Pledgor, and HSBC Bank USA, National Association, as First Priority Collateral
Trustee for itself and for the benefit of the First Priority Holders, as the Pledgee.(5)2.11
    
    
    Indenture, dated as of November 30, 2006, between Satélites Mexicanos, S.A. de C.V. as Issuer, each
of the Second Priority Guarantors named therein as Second Priority Guarantors, and Wells Fargo Bank,
National Association, as Trustee.(5)2.12
    
    
    Second Priority Collateral Trust Agreement, among Satélites Mexicanos, S.A. de C.V., each of the
Second Priority Guarantors named therein, Wells Fargo Bank, National Association, as Indenture
Trustee, and Wells Fargo Bank, National Association, as Collateral Trustee, dated as of November 30,
2006.(5)2.13
    
    
    Registration Rights Agreement, dated as of November 30, 2006, by Satélites Mexicanos, S.A. de C.V.,
for the benefit of certain holders of its Second Priority Senior Secured Notes due
2013.(5)2.14
    
    
    Second Priority Mortgage in and over the Mortgaged Assets of Satélites Mexicanos, S.A. de C.V. to
secure the Second Priority Obligations granted by the Company in favor of, and/or for the benefit
of, Wells Fargo Bank, National Association, in its capacity as Second Priority Collateral Trustee
under the Second Priority Collateral Trust Agreement for the benefit of the beneficiaries of the
Second Priority Collateral Trust Agreement.(5)2.15
    
    
    Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A.
de C.V., as the Pledgor, and Wells Fargo Bank, N.A., as Second Priority Collateral Trustee and for
the benefit of the Second Priority Holders pursuant to the Second Collateral Trust Agreement, as the
Pledgee, and Enlaces Integra, S. de R.L. de C.V., as the Company.(5)2.16
    
    
    Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A.
de C.V., as the Pledgor, and Wells Fargo Bank, N.A., as Second Priority Collateral Trustee and for
the benefit of the Second Priority Holders pursuant to the Second Collateral Trust Agreement, as the
Pledgee, and SMVS-Administración, S. de R.L. de C.V., as the Company.(5)2.17
    
    
    Equity Interest Pledge Agreement, as of November 30, 2006, by and between Satélites Mexicanos, S.A.
de C.V., as the Pledgor, and Wells Fargo Bank, N.A., as Second Priority Collateral Trustee and for
the benefit of the Second Priority Holders pursuant to the Second Collateral Trust Agreement, as the
Pledgee, and SMVS-Servicios Técnicos, S. de R.L. de C.V., as the Company.(5)
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Exhibit No.
    
    Description2.18
    
    
    Floating Lien Pledge Agreement, as of November 30, 2006, by and between SMVS-Administracion, S. de
R.L. de C.V., as Pledgor, and Wells Fargo Bank, N.A., as Second Priority Collateral Trustee for
itself and for the benefit of the Second Priority Holders, as the Pledgee.(5)2.19
    
    
    Floating Lien Pledge Agreement, as of November 30, 2006, by and between SMVS-Servicios Técnicos, S.
de R.L. de C.V., as Pledgor, and Wells Fargo Bank, N.A., as Second Priority Collateral Trustee for
itself and for the benefit of the Second Priority Holders, as the Pledgee.(5)2.20
    
    
    Irrevocable Administration Trust Agreement No. F/589, dated as of November 28, 2006, by and between
Satélites Mexicanos, S.A. de C.V. as the Company, in its capacity as Settlor and Beneficiary, and
Deutsche Bank Mexico, S.A., Institution de Banca Multiple, Division Fiduciaria, in its capacity as
Trustee.(5)2.21
    
    
    Agency Agreement, dated as of November 30, 2006, between Satélites Mexicanos, S.A. de C.V. and The
Bank of New York, as Agent, for the benefit of holders of Trust Interests.(5)2.22
    
    
    Registration Rights Agreement, dated as of November 30, 2006, by Satélites Mexicanos, S.A. de C.V.
for the benefit of certain holders of Beneficial Interests in the Irrevocable Administrative Trust
Agreement No. F/0 598, dated November 28, 2006.(5)2.23
    
    
    Supplemental Indenture, dated as of December 30, 2008, among Satélites Mexicanos, S.A. de C.V. as
Issuer, AlternaTV Corporation, as New First Priority Guarantor, and HSBC Bank USA, National
Association, as Trustee.(7)2.24
    
    
    Supplemental Indenture, dated as of January 20, 2009, among Satélites Mexicanos, S.A. de C.V. as
Issuer, AlternaTV Corporation, as New Second Priority Guarantor, and Wells Fargo Bank, National
Association, as Trustee.(7)2.25
    
    
    Additional Guarantee Designation, dated December 30, 2008, delivered to HSBC Bank USA, National
Association, as Trustee, by AlternaTV Corporation, as New First Priority Guarantor.(7)2.26
    
    
    Additional Guarantee Designation, dated January 20, 2009, delivered to Wells Fargo Bank, National
Association, as Trustee, by AlternaTV Corporation, as New Second Priority Guarantor.(7)2.27
    
    
    Joinder, dated January 20, 2009, by AlternaTV Corporation.(7)2.28
    
    
    Pledge Agreement, dated as of December 30, 2008, by and between Satélites Mexicanos, S.A. de C.V.,
as Pledgor, and HSBC Bank USA, National Association, as Trustee.(7)2.29
    
    
    Pledge Agreement, dated as of January 20, 2009, by and between Satélites Mexicanos, S.A. de C.V., as
Pledgor, and Wells Fargo Bank, National Association, as Trustee.(7)2.30
    
    
    Supplemental Indenture, dated as of May 21, 2009, among Satélites Mexicanos, S.A. de C.V. as Issuer,
AlternaTV International Corporation, as New First Priority Guarantor, and HSBC Bank USA, National
Association, as Trustee.(7)2.31
    
    
    Supplemental Indenture, dated as of May 21, 2009, among Satélites Mexicanos, S.A. de C.V. as Issuer,
AlternaTV International Corporation, as New Second Priority Guarantor, and Wells Fargo Bank,
National Association, as Trustee(7)2.32
    
    
    Additional Guarantee Designation, dated May 21, 2009, delivered to HSBC Bank USA, National
Association, as Trustee, by AlternaTV International Corporation, as New First Priority
Guarantor.(7)2.33
    
    
    Additional Guarantee Designation, dated May 21, 2009, delivered to Wells Fargo Bank, National
Association, as Trustee, by AlternaTV International Corporation, as New Second Priority
Guarantor.(7)2.34
    
    
    Joinder, dated May 21, 2009, by AlternaTV International Corporation.(7)2.35
    
    
    Pledge Agreement, dated as of May 21, 2009, by and between Satélites Mexicanos, S.A. de C.V., as
Pledgor, and HSBC Bank USA, National Association, as Trustee.(7)
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Exhibit No.
    
    Description2.36
    
    
    Pledge Agreement, dated as of May 21, 2009, by and between Satélites Mexicanos, S.A. de C.V., as
Pledgor, and Wells Fargo Bank, National Association, as Trustee.(7)2.37
    
    
    Agreement and Plan of Merger, dated as of May 26, 2011, by and between Satélites Mexicanos, S.A. de
C.V. and Satmex Escrow, S.A. de C.V.(10)2.38
    
    
    Indenture, dated as of May 5, 2011, by and between Satmex Escrow, S.A. de C.V. and Wilmington Trust
FSB, as trustee.(10)2.39
    
    
    Collateral Trust Agreement, dated as of May 26, 2011, by and among Satélites Mexicanos, S.A. de
C.V., the Guarantors from time to time party thereto, Wilmington Trust, FSB, as trustee, and Wells
Fargo National Association, as collateral trustee. (10)2.40
    
    
    Registration Rights Agreement, dated as of May 5, 2011, by and among Satélites Mexicanos, S.A. de
C.V., Satmex Escrow, S.A. de C.V., AlternaTV Corporation, AlternaTV International Corporation and
Jefferies & Company, Inc.(10)2.41
    
    
    Security Agreement, dated as of May 26, 2011, by and among AlternaTV Corporation, AlternaTV
International Corporation, the other grantors from time to time party thereto and Wells Fargo Bank,
National Association, as collateral trustee.(10)2.42
    
    
    Pledge Agreement, dated as of May 26, 2011, among Satélites Mexicanos, S.A. de C.V., the other
pledgors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral
trustee.(10)2.43
    
    
    Mortgage, dated as of May 26, 2011, granted by Satélites Mexicanos, S.A. de C.V. in favor of Wells
Fargo Bank, National Association, as collateral trustee. (English Translation)(10)2.44
    
    
    Floating Lien Pledge Agreement, dated as of May 26, 2011, by and between Satélites Mexicanos, S.A.
de C.V. and Wells Fargo Bank, National Association, as collateral trustee. (English
Translation)(10)2.45
    
    
    Equity Interest Pledge Agreement, dated as of May 26, 2011, by and between Satélites Mexicanos, S.A.
de C.V. and Wells Fargo Bank, National Association, as collateral trustee. (English
Translation)(10)2.46
    
    
    Guarantee of AlternaTV Corporation.(10)2.47
    
    
    Guarantee of AlternaTV International Corporation. (10)4.1
    
    
    Satellite Concession 116.8 degrees W. L.(2)4.2
    
    
    Satellite Concession 116.8 degrees W. L.(English Translation)(2)4.3
    
    
    Satellite Concession 113.0 degrees W. L.(2)4.4
    
    
    Satellite Concession 113.0 degrees W. L.(English Translation)(2)4.5
    
    
    Satellite Concession 109.2 degrees W. L.(2)4.6
    
    
    Satellite Concession 109.2 degrees W. L.(English Translation)(2)4.7
    
    
    Property Concession(2)4.8
    
    
    Property Concession (English Translation)(2)4.9
    
    
    Amended and Restated Membership Agreement, dated as of August 21, 1998 among Loral SatMex Ltd.,
Ediciones Enigma, S.A. de C.V. and Firmamento Mexicano, S. de R. L. de C.V.(2)4.10
    
    
    Agreement between Hughes Electronics Corporation, through its division, Hughes Network Systems and
Satélites Mexicanos, S.A. de C.V., dated as of January 20, 2000, the Tenth Amendment thereto, dated
December 1, 2005 and the Twelfth Amendment thereto, dated February 1, 2006.(3)
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Exhibit No.
    
    Description4.11
    
    
    Thirteenth Amendment, dated September 15, 2006, to Agreement between Hughes Electronics Corporation,
through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of
January 20, 2000.(6)4.12
    
    
    Fourteenth Amendment, dated August 1, 2008, to Agreement between Hughes Electronics Corporation,
through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of
January 20, 2000.(7)4.13
    
    
    Fifteenth Amendment, dated February 1, 2009, to Agreement between Hughes Electronics Corporation,
through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of
January 20, 2000.(7)4.14
    
    
    Sixteenth Amendment, dated September 1, 2009, to Agreement between Hughes Electronics Corporation,
through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of
January 20, 2000.(1)(8)4.15
    
    
    Seventeenth Amendment, dated October 1, 2009, to Agreement between Hughes Electronics Corporation,
through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of
January 20, 2000.(1)(8)4.16
    
    
    Stock Purchase Agreement, dated February 26, 2010, between EchoStar Satellite Acquisition L.L.C. and
Satélites Mexicanos, S.A. de C.V.(3)(9)4.17
    
    
    Contract between Space Systems/Loral, Inc. and Satélites Mexicanos, S.A. de C.V. (executed on May 7,
2010 and effective as of April 1, 2010) for the design and construction of a new, 64 transponder, C-
and Ku- band satellite, Satmex 8.(1)(9)4.18
    
    
    Eighteenth Amendment, dated July 1, 2010, to Agreement between Hughes Electronics Corporation,
through its division, Hughes Network Systems and Satélites Mexicanos, S.A. de C.V., dated as of
January 20, 2000.(1)(11)4.19
    
    
    Amendment No.1 to the Contract between Space Systems/Loral, Inc. and Satélites Mexicanos, S.A. de
C.V. dated February 24, 2011 for the Satmex 8 Satellite Program.(1)(11)4.20
    
    
    Launch Services Agreement, dated December 23, 2010, between Satélites Mexicanos, S.A. de C.V. and
ILS International Launch Services, Inc. for the launch of its C- and Ku- band satellite, Satmex 8
together with Amendment No.1 dated January 19, 2011.(1) (11)4.21
    
    
    Amendment No.1 to Contract No. ILSB-1006-4488 for Launch Services between ILS International Launch
Services, Inc. and Satélites Mexicanos, S.A. de C.V.(11)12.1
    
    
    Section 302 Certification of Patricio Northland, Chief Executive Officer.(11)12.2
    
    
    Section 302 Certification of Luis Stein, Chief Financial Officer.(11)13.1
    
    
    Section 906 Certification of Patricio Northland, Chief Executive Officer.(11)13.2
    
    
    Section 906 Certification of Luis Stein, Chief Financial Officer.(11)
 
 (1)
    
    Portions of exhibit have been omitted pursuant to Satmexs Confidential Treatment Request,
submitted to the Commission on the date of the filing of this Form 20-F.(2)
    
    Incorporated by reference from the registrants Registration Statement on Form F-4 filed on
November 9, 1998 (File No. 333-8880).(3)
    
    Incorporated by reference to the registrants Form 20-F for the fiscal year ended December
31, 2005.(4)
    
    Incorporated by reference from the registrations Amendment to Form T-3 filed on November 22,
2006 (File No. 022-28822).(5)
    
    Incorporated by reference from the registrants Form 6-K for the month of December, 2006.(6)
    
    Incorporated by reference to the registrants Form 20-F for the fiscal year ended December
31, 2006.(7)
    
    Incorporated by reference to the registrants Form 20-F for the fiscal year ended December
31, 2008.(8)
    
    Incorporated by reference to the registrants Form 20-F for the fiscal year ended December
31, 2009.(9)
    
    Incorporated by reference from the registrants Form 6-K filed November 22, 2010.(10)
    
    Incorporated by reference from the registrants Form 6-K filed June 10, 2011.(11)
    
    Filed herewith.  93




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SIGNATURES
  SATÉLITES MEXICANOS, S.A. DE C.V.By:
    
    /s/ LUIS FERNANDO STEIN VELASCO

Luis Fernando Stein VelascoChief Financial OfficerDate: June 17, 2011.
  94




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SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES
 PART III
 INDEX TO FINANCIAL STATEMENTS
 SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
 INDEPENDENT AUDITORS REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
 Table of Contents
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2010 and 2009
    
    
    F-3Consolidated Statements of Operations for the Years Ended December 31, 2010, 2009 and 2008
    
    
    F-4Consolidated Statements of Changes in Shareholders Deficit for the Years Ended December
31, 2010, 2009 and 2008
    
    
    F-5Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7Schedule of Valuation and Qualifying Accounts
    
    
    F-37
  F-1




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 To the Board of Directors and Shareholders of
Satélites Mexicanos, S. A. de C. V. and Subsidiaries:
Mexico City, Mexico
     
  F-2




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SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 AS OF DECEMBER 31, 2010 AND 2009
 2010
    
    
    2009(In thousands of U.S. dollars)AssetsCurrent assets:Cash and cash equivalents
    
    $
    75,712
    
    
    $
    102,393Accounts receivable  net
    
    
    13,126
    
    
    
    9,543Due from related parties
    
    
    840
    
    
    
    464Inventories  net of allowance for obsolescence
    
    
    494
    
    
    
    410Prepaid insurance
    
    
    4,911
    
    
    
    5,695Total current assets
    
    
    95,083
    
    
    
    118,505Satellites and equipment  net
    
    
    265,158
    
    
    
    235,240Concessions  net
    
    
    38,185
    
    
    
    39,597Intangible assets
    
    
    7,156
    
    
    
    12,917Guarantee deposits and other assets
    
    
    873
    
    
    
    646Goodwill
    
    
    32,502
    
    
    
    32,502Total
    
    $
    438,957
    
    
    $
    439,407Liabilities and Shareholders DeficitCurrent liabilities:Short-term portion of debt obligations
    
    $
    238,237
    
    
    $
    Accounts payable and accrued expenses
    
    
    14,630
    
    
    
    16,816Deferred revenue
    
    
    2,344
    
    
    
    2,344Accrued interest
    
    
    1,781
    
    
    
    1,641Income tax payable
    
    
    101
    
    
    
    56Deferred income taxes
    
    
    325
    
    
    
    146Total current liabilities
    
    
    257,418
    
    
    
    21,003Debt obligations
    
    
    197,873
    
    
    
    420,615Deferred revenue
    
    
    60,666
    
    
    
    63,010Guarantee deposits and accrued expenses
    
    
    2,677
    
    
    
    788Labor obligations
    
    
    943
    
    
    
    735Deferred income taxes
    
    
    5,413
    
    
    
    5,401Total liabilities
    
    
    524,990
    
    
    
    511,552Contingencies and commitments (Note 18)Shareholders deficit:Satélites Mexicanos, S. A. de C. V. shareholders deficitCommon stock:Class I, no par value, 10,312,499 shares authorized, issued and outstanding
    
    
    
    
    
    
    Class II, no par value, 36,562,500 shares authorized, issued and outstanding
    
    
    
    
    
    
    Paid-in capital
    
    
    46,764
    
    
    
    46,764Accumulated deficit
    
    
    (136,320
    )
    
    
    (121,988
    )Total Satélites Mexicanos, S. A. de C. V. shareholders deficit
    
    
    (89,556
    )
    
    
    (75,224
    )Noncontrolling interest
    
    
    3,523
    
    
    
    3,079Total shareholders deficit
    
    
    (86,033
    )
    
    
    (72,145
    )Total
    
    $
    438,957
    
    
    $
    439,407
   F-3




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SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
 2010
    
    
    2009
    
    
    2008(In thousands of U.S. dollars)Revenues (see Note 14):Satellite services
    
    $
    105,781
    
    
    $
    102,061
    
    
    $
    93,248Broadband satellite services
    
    
    12,910
    
    
    
    12,384
    
    
    
    13,335Programming distribution services
    
    
    10,071
    
    
    
    10,594
    
    
    
    8,136128,762
    
    
    
    125,039
    
    
    
    114,719Cost of satellite services (1)
    
    
    11,405
    
    
    
    12,884
    
    
    
    14,183Cost of broadband satellite services (1)
    
    
    2,821
    
    
    
    2,249
    
    
    
    2,186Cost of programming distribution services (1)
    
    
    5,387
    
    
    
    5,331
    
    
    
    4,162Selling and administrative expenses (1)
    
    
    17,040
    
    
    
    16,893
    
    
    
    21,223Depreciation and amortization
    
    
    43,402
    
    
    
    47,657
    
    
    
    59,807Restructuring expenses
    
    
    16,443
    
    
    
    3,324
    
    
    
    4,424Reversal of provision for orbital incentive
    
    
    
    
    
    
    
    
    
    
    (6,989
    )Gain on recovery from customer
    
    
    
    
    
    
    
    
    
    
    (4,610
    )96,498
    
    
    
    88,338
    
    
    
    94,386Operating income
    
    
    32,264
    
    
    
    36,701
    
    
    
    20,333Other (expenses) income:Interest expense
    
    
    (45,789
    )
    
    
    (43,708
    )
    
    
    (48,498
    )Interest income
    
    
    345
    
    
    
    480
    
    
    
    1,481Foreign exchange gain (loss)  net
    
    
    71
    
    
    
    12
    
    
    
    (1,828
    )Loss before income tax
    
    
    (13,109
    )
    
    
    (6,515
    )
    
    
    (28,512
    )Income tax expense
    
    
    779
    
    
    
    13,233
    
    
    
    6,829Net loss
    
    
    (13,888
    )
    
    
    (19,748
    )
    
    
    (35,341
    )Less: Net income attributable to noncontrolling interest
    
    
    444
    
    
    
    406
    
    
    
    285Net loss attributable to Satélites Mexicanos, S. A. de C. V.
    
    $
    (14,332
    )
    
    $
    (20,154
    )
    
    $
    (35,626
    )
 
 (1)
    
    Exclusive of depreciation and
amortization shown separately below.   F-4




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SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS DEFICIT
 FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
 Common Stock
    
    
    
    
    
    
    
    
    
    
    TotalShares
    
    
    
    
    
    
    Accumulated
    
    
    Noncontrolling
    
    
    ShareholdersIssued
    
    
    Amount
    
    
    Deficit
    
    
    Interest
    
    
    Deficit(In thousands of U. S. dollars, except share data)Balance, January 1, 2008
    
    
    46,874,999
    
    
    $
    46,764
    
    
    $
    (66,208
    )
    
    $
    2,388
    
    
    $
    (17,056
    )Net income (loss)
    
    
    
    
    
    
    
    
    
    
    (35,626
    )
    
    
    285
    
    
    
    (35,341
    )Balance, December 31, 2008
    
    
    46,874,999
    
    
    
    46,764
    
    
    
    (101,834
    )
    
    
    2,673
    
    
    
    (52,397
    )Net income (loss)
    
    
    
    
    
    
    
    
    
    
    (20,154
    )
    
    
    406
    
    
    
    (19,748
    )Balance, December 31, 2009
    
    
    46,874,999
    
    
    
    46,764
    
    
    
    (121,988
    )
    
    
    3,079
    
    
    
    (72,145
    )Net income (loss)
    
    
    
    
    
    
    
    
    
    
    (14,332
    )
    
    
    444
    
    
    
    (13,888
    )Balance, December 31, 2010
    
    
    46,874,999
    
    
    $
    46,764
    
    
    $
    (136,320
    )
    
    $
    3,523
    
    
    $
    (86,033
    )
   F-5




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SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
 2010
    
    
    2009
    
    
    2008(In thousands of U. S. dollars)Cash flows from operating activities:Net loss
    
    $
    (13,888
    )
    
    $
    (19,748
    )
    
    $
    (35,341
    )Adjustments to reconcile net loss to net cash provided by
operating activities:Net periodic pension cost
    
    
    208
    
    
    
    274
    
    
    
    8Depreciation and amortization
    
    
    43,402
    
    
    
    47,657
    
    
    
    59,807Deferred income taxes
    
    
    191
    
    
    
    517
    
    
    
    4,824Deferred revenue
    
    
    (2,344
    )
    
    
    (2,344
    )
    
    
    (2,344
    )Interest accrued to principal on debt obligations (see Note 11b)
    
    
    15,495
    
    
    
    14,318
    
    
    
    13,126Write-off of satellite construction costs
    
    
    
    
    
    
    1,256
    
    
    
    Provision for (reversal of) allowance for doubtful accounts
    
    
    172
    
    
    
    (150
    )
    
    
    136Changes in operating assets and liabilities:(Increase) decrease in:Accounts receivable
    
    
    (3,755
    )
    
    
    7,888
    
    
    
    (9,236
    )Due from related parties
    
    
    (376
    )
    
    
    (79
    )
    
    
    194Inventories
    
    
    (84
    )
    
    
    (223
    )
    
    
    151Prepaid insurance
    
    
    784
    
    
    
    (1,989
    )
    
    
    348Guarantee deposits and other assets
    
    
    (227
    )
    
    
    69
    
    
    
    221Accounts payable, accrued expenses and income tax
    
    
    (597
    )
    
    
    (2,058
    )
    
    
    (4,537
    )Guarantee deposits and accrued expenses
    
    
    1,889
    
    
    
    525
    
    
    
    (17
    )Accrued interest
    
    
    140
    
    
    
    81
    
    
    
    209Net cash provided by operating activities
    
    
    41,010
    
    
    
    45,994
    
    
    
    27,549Cash flows from investing activities:Construction in progress Satmex 8 (including capitalized interest)
    
    
    (63,113
    )
    
    
    
    
    
    
    Acquisition of equipment
    
    
    (4,578
    )
    
    
    (1,808
    )
    
    
    (3,053
    )Satellite construction cost
    
    
    
    
    
    
    
    
    
    
    (3,465
    )Net cash used in investing activities
    
    
    (67,691
    )
    
    
    (1,808
    )
    
    
    (6,518
    )Cash and cash equivalents:Net (decrease) increase for the year
    
    
    (26,681
    )
    
    
    44,186
    
    
    
    21,031Beginning of year
    
    
    102,393
    
    
    
    58,207
    
    
    
    37,176End of year
    
    $
    75,712
    
    
    $
    102,393
    
    
    $
    58,207Supplemental disclosures of cash flow information:Cash paid during the year:Interest paid
    
    $
    32,554
    
    
    $
    28,912
    
    
    $
    32,952Capitalized interest
    
    $
    2,582
    
    
    $
    
    
    
    $
    Income taxes paid
    
    $
    4,666
    
    
    $
    9,008
    
    
    $
    9,017Non-cash investing activities:Capital expenditures incurred not yet paid
    
    $
    844
    
    
    $
    2,391
    
    
    $
    
   F-6




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SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 2010, 2009 AND 2008
 (IN THOUSANDS OF U.S. DOLLARS)
 1. Nature of Business
    2. Basis of Presentation
  Going concern
    F-7




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
    
    Holders of Satmexs FPSSN due 2011 will be paid out in cash at par plus accrued
interest.
 
    
    Holders of Satmexs SPSSN will receive their pro rata share of (i) a pool of equity
interests in the indirect parent of Reorganized Satmex (the Parent Interests), (ii)
the Primary Rights to invest in additional Parent Interests, and (iii) the Follow-On
Rights, but only to the extent that holders have exercised their Primary Rights. As an
alternative, such holders may elect to receive, in lieu of the Parent Interests,
Primary Rights and Follow-On Rights, a cash payment of $0.38 for every dollar of SPSSN
held by such electing holders, which payment will be funded by certain of the
Supporting Holders.
   Fresh-start reporting
 Consolidation of financial statements
  OwnershipCompany
    
    Percentage
    
    
    ActivityEnlaces Integra, S. de R. L. de C. V. (Enlaces)
    
    
    75.00
    %
    
    Acquired on
November 30, 2006.
Its main activities
are broadband
satellite services
(installation,
operation, control
and exploitation of
public
telecommunications
networks in
Mexico).HPS Corporativo S. de R. L. de C. V. (HPS)
    
    
    99.97
    %
    
    Provides
administrative
services
exclusively to
Enlaces.AlternaTV Corporation (AlternaTV Corp.)
    
    
    100.00
    %
    
    Incorporated on
December 19, 2008,
to be a vehicle to
contract with a
third party the
procurement of the
Satmex 7 satellite.AlternaTV International Corporation (AlternaTV Int.)
    
    
    100.00
    %
    
    Incorporated on May
21, 2009. This
entity is engaged
in programming
distribution
services.SMVS Administración, S. de R. L. de C. V. and SMVS
Servicios Técnicos, S. de R. L. de C. V. (Service
Companies).
    
    
    99.97
    %
    
    Incorporated on June 30, 2006, to provide administrative and operating services exclusively to Satmex.
  F-8




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##### Table of Contents



Foreign currency transactions
 3. Reorganization of 2006
    concurso mercantil concurso mercantil Ley
de Concursos Mercantiles
 concurso mercantil
 concurso mercantil
 Convenio Concursal concurso mercantil Secretaría de Comunicaciones y
Transportes Convenio Concursal
  F-9




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Convenio Concursal concurso mercantil
    Convenio Concursal Convenio
Concursal
  First Priority Senior Secured Notes
  Second Priority Senior Secured Notes
  4. Significant Accounting Policies
  Cash and cash equivalents 
 Concentrations of credit risk 
   F-10




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2010
    
    
    2009
    
    
    2008%
    
    
    %
    
    
    %Hughes Networks Systems, Inc.
    
    
    17
    
    
    
    20
    
    
    
    23Telmex
    
    
    14
    
    
    
    15
    
    
    
    14Other foreign customers
    
    
    37
    
    
    
    36
    
    
    
    31Other domestic customers
    
    
    32
    
    
    
    29
    
    
    
    32
 Inventories 
 Satellites and equipment 
  Design Lifein  YearsSatellites in-orbit  original estimated useful life as determined by engineering analysis:Satmex 6
    
    
    15Satmex 5
    
    
    15Solidaridad 2
    
    
    14.5
 AverageYearsEquipment:Satellite equipment
    
    
    3Furniture and fixtures
    
    
    10Leasehold improvements
    
    
    5Teleport, equipment and antennas
    
    
    10
     F-11




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Concessions 
 Valuation of satellites and long-lived assets 
 
    
    Changes in estimates of the useful life of the satellite.
 
    
    Changes in estimates of our ability to operate the satellite at expected levels.
 
    
    Changes in the manner in which the satellite is to be used.
 
    
    The loss of one or several significant customer contracts on the satellite.
 Goodwill 
 Intangible assets 
 Labor obligations 
  F-12




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##### Table of Contents



Provisions 
 Income taxes 
  Statutory employee profit sharing 
 Revenue recognition 
       F-13




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##### Table of Contents



Deferred revenue 
 Use of estimates 
 Recently adopted accounting pronouncements Consolidation (Topic 810)  Accounting and Reporting for Decreases in Ownership of a Subsidiary 
a Scope Clarification
 Subsequent Events (Topic 855)  Amendments to
Certain Recognition and Disclosure Requirements
 Fair Value Measurements and Disclosures
(Topic 820): Improving Disclosures about Fair Value Measurements
 Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue Arrangements  a consensus of the FASB Emerging Issues Task Force
 Recently issued accounting pronouncements pending adoption Intangibles  Goodwill and Other (Topic 350)  When to Perform Step 2 of
the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts
  F-14




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5. Cash and Cash Equivalents
  2010
    
    
    2009Cash
    
    $
    3,648
    
    
    $
    44,442Cash equivalents (1)
    
    
    72,064
    
    
    
    57,951$
    75,712
    
    
    $
    102,393
 
 (1)
    
    The Companys cash equivalents consist mainly of treasury bills with original maturities
less than 20 days. 6. Accounts Receivable
  2010
    
    
    2009Customers
    
    $
    8,315
    
    
    $
    8,078Allowance for doubtful accounts
    
    
    (532
    )
    
    
    (360
    )7,783
    
    
    
    7,718Recoverable income taxes
    
    
    3,665
    
    
    
    125Recoverable value-added tax and tax withholdings
    
    
    1,023
    
    
    
    1,058Other
    
    
    655
    
    
    
    642$
    13,126
    
    
    $
    9,543
 7. Satellites and Equipment
  2010
    
    
    2009Satellites in-orbit
    
    $
    314,136
    
    
    $
    314,136Satellite equipment, teleport and antennas
    
    
    13,518
    
    
    
    11,986Furniture and fixtures
    
    
    6,323
    
    
    
    5,836Leasehold improvements
    
    
    2,704
    
    
    
    1,527336,681
    
    
    
    333,485Accumulated depreciation and amortization
    
    
    (140,348
    )
    
    
    (104,119
    )196,333
    
    
    
    229,366Construction in progress for Satmex 8 (1)
    
    
    63,113
    
    
    
    ATP advanced payment for Satmex 7 (Note 18k)
    
    
    2,600
    
    
    
    2,600Other construction in-progress
    
    
    3,112
    
    
    
    3,274$
    265,158
    
    
    $
    235,240
     F-15




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##### Table of Contents



8. Concessions
  2010
    
    
    2009Orbital concessions
    
    $
    41,700
    
    
    $
    41,700Public telecommunications network
    
    
    2,248
    
    
    
    2,24843,948
    
    
    
    43,948Accumulated amortization
    
    
    (5,763
    )
    
    
    (4,351
    )$
    38,185
    
    
    $
    39,597
  Orbital Concessions and Facilities
   Ley Federal de Telecomunicaciones
  Secretaría de la Función
Pública
 Concessions for the Use and Exploitation of a Telecommunications Public Network
     F-16




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9. Intangible Assets
  Weighted AverageRemaining
    
    
    2010
    
    
    2009Amortization Period
    
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    Accumulated(Years)
    
    
    Gross Amount
    
    
    Amortization
    
    
    Gross Amount
    
    
    AmortizationContract backlog (1)
    
    
    5
    
    
    $
    67,990
    
    
    $
    61,660
    
    
    $
    67,990
    
    
    $
    56,268Customer relationships (1)
    
    
    3
    
    
    
    2,128
    
    
    
    1,307
    
    
    
    2,128
    
    
    
    1,003Internally developed
software and technology
(2)
    
    
    
    
    
    
    270
    
    
    
    270
    
    
    
    270
    
    
    
    209Landing rights (1)
    
    
    1
    
    
    
    60
    
    
    
    55
    
    
    
    60
    
    
    
    51$
    70,448
    
    
    $
    63,292
    
    
    $
    70,448
    
    
    $
    57,531
 (1) (2)
  2011
    
    $
    3,1292012
    
    
    2,2042013
    
    
    1,2362014
    
    
    4512015
    
    
    136$
    7,156
 10. Accounts Payable and Accrued Expenses
  2010
    
    
    2009Guarantee deposits and customer advances
    
    $
    2,622
    
    
    $
    5,349Professional fees
    
    
    3,849
    
    
    
    1,440Performance and sale bonuses
    
    
    1,090
    
    
    
    1,600Taxes payable, other than income taxes
    
    
    3,030
    
    
    
    2,520Programming provisions
    
    
    1,793
    
    
    
    2,534Suppliers
    
    
    889
    
    
    
    2,371Sundry creditors
    
    
    1,357
    
    
    
    1,002$
    14,630
    
    
    $
    16,816
 11. Debt Obligations
  2010
    
    
    2009FPSSN at variable rate (10.50% plus
the greater of the quarterly Eurodollar
rate and 1.50%), due in 2011(a)
    
    $
    238,237
    
    
    $
    238,237SPSSN at annual fixed rate of 10.125%, due
in 2013 (b) (aggregate interest accrued to
the principal is $57,873 and $42,378 as of
December 31, 2010 and 2009, respectively)
    
    
    197,873
    
    
    
    182,378Total debt
    
    
    436,110
    
    
    
    420,615Less: Short-term maturity
    
    
    238,237
    
    
    
    $
    197,873
    
    
    $
    420,615
   F-17




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
    
    Maturity is on November 30, 2011.
    
    Interest accrues at a variable rate (10.50% plus the greater of the quarterly
Eurodollar rate and one and one-half percent (1.50%)). This was increased from the
previous interest rate on the FPSSN, effective on May 7, 2010, due to a covenant Waiver
discussed below (see Note 18j).
    
    Contain covenants that require the redemption of notes to the extent that the
Companys excess cash flow in any quarter exceeds $5,000 based on the formula
established in the contract.
    
    Impose limits on spending for capital expenditures. On May 7, 2010, the Company
obtained a Waiver for certain indenture covenants from the holders of a majority of
each of the FPSSN and SPSSN to allow Satmex to enter into a satellite construction and
launch agreement for Satmex 8, giving Satmex the ability to use up to $100,000 of cash
funds for the construction of Satmex 8 (see Note 18j).
    
    In the event of any change in the control of Satmex, holders may redeem all or part
of the debentures at 101% of the unpaid balance of principal and accrued interest.
    
    In the event of debt payment noncompliance, the penalty interest rate applicable to
the unpaid principal balance, until such situation is remedied, will be 2% higher than
the regular interest rate applicable at that time.
    
    Principal and interest are guaranteed by a first priority lien on substantially all
of the assets of Satmex per article 92 and subsequent articles of the Ley de Vías
Generales de Comunicación(Law of General Communications Media), and by a combination
of guarantees over the shares held by Satmex in Enlaces and the Services Companies.b.
    
    The main characteristics for the SPSSN are as follows:
    
    Maturity is on November 30, 2013.
    
    Quarterly interest at the annual rate of 10.125%.
    
    In the first year, the interest at the annual 10.125% rate will not be paid but
added to the principal amount of the SPSSN; from the second up to the fifth year, 2% of
the 10.125% interest will be paid in cash, and the remaining 8.125% will continue to be
added to the principal amount of the SPSSN; and beginning in the sixth year, total
interest will be paid in cash until the SPSSN have been paid in full.
    
    Contain covenants require the redemption of notes once the FPSSN have been fully
paid, to the extent that the Companys excess cash flow in any quarter exceeds $5,000
based on the formula established in the contract and impose limits on spending for
capital expenditures.
    
    In the event of a change in control of Satmex resulting from a buyer which is not
included in the list of approved buyers, unless such buyer is approved by 66.66% of the
SPSSN holders, the holders may redeem all or part of the unpaid balance of principal
and accrued interest of the bonds, which may take place at the same time as the change
of control.
    
    Principal and interest are guaranteed by a second priority lien on substantially all
the assets of Satmex per article 92 and subsequent articles of the Law of General
Communications Media. Additionally, Satmex executed certain guarantees over the shares
it holds in Enlaces and the Service Companies. Such guarantees are subject to the
bankruptcy protection condition of the FPSSN.
    F-18




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##### Table of Contents



12. Labor Obligations
  13. Shareholders Equity
   Common Stock  SharesFixed Capital Class I
    
    
    Variable Capital Class II
    
    
    Rights %Series A
    
    
    
    
    Series B
    
    
    Series N
    
    
    Series B
    
    
    Series N
    
    
    Voting
    
    
    Economic7,500,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45.00
    
    
    
    16.00
    
    
    
    
    
    221,667
    
    
    
    401,770
    
    
    
    
    
    
    
    
    
    
    
    1.33
    
    
    
    1.33
    
    
    
    
    
    111,667
    
    
    
    202,395
    
    
    
    
    
    
    
    
    
    
    
    0.67
    
    
    
    0.67
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,166,667
    
    
    
    29,395,833
    
    
    
    43.00
    
    
    
    78.001,666,667
    
    
    
    
    
    
    
    
    
    208,333
    
    
    
    
    
    
    
    
    
    
    
    10.00
    
    
    
    4.009,166,667
    
    
    
    
    
    333,334
    
    
    
    812,498
    
    
    
    7,166,667
    
    
    
    29,395,833
    
    
    
    100.00
    
    
    
    100.00
  Comisión Federal
de Competencia
     F-19




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##### Table of Contents



14. Related Party Transactions and Balances
  2010
    
    
    2009
    
    
    2008Revenues from:Satellite services Mexican federal government
    
    $
    4,896
    
    
    $
    2,633
    
    
    $
    1,966Satellite capacity to Mexican federal government (see Notes 4n and 18h)
    
    
    2,344
    
    
    
    2,344
    
    
    
    2,344Loral
    
    
    287
    
    
    
    1,089
    
    
    
    2,018Expenses from:Rent of control centers  Mexican federal government
    
    
    479
    
    
    
    434
    
    
    
    504Capital expenditures for:Construction Satmex 8- Loral
    
    
    59,065
    
    
    
    
    
    
    
    Construction Satmex 7- Loral
    
    
    
    
    
    
    
    
    
    
    2,600
  2010
    
    
    2009Amounts receivable:Loral
    
    $
    
    
    
    $
    33Mexican federal government
    
    
    840
    
    
    
    431$
    840
    
    
    $
    464
 15. Gain on Recovery from Customer
  16. Restructuring Expenses
  17. Income Taxes
  2010
    
    
    2009
    
    
    2008ISR:Current
    
    $
    58
    
    
    $
    275
    
    
    $
    959Deferred
    
    
    (73
    )
    
    
    37
    
    
    
    98IETU:Current
    
    
    530
    
    
    
    12,441
    
    
    
    1,046Deferred
    
    
    264
    
    
    
    480
    
    
    
    4,726$
    779
    
    
    $
    13,233
    
    
    $
    6,829
  F-20




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##### Table of Contents



2010
    
    
    2009Current assets:Deferred revenue
    
    $
    628
    
    
    $
    628Accrued expenses and other  net
    
    
    2,413
    
    
    
    1,670Valuation allowance
    
    
    (1,972
    )
    
    
    (885
    )Total current asset
    
    
    1,069
    
    
    
    1,413Current liabilities:Prepaid insurance
    
    
    (1,394
    )
    
    
    (1,559
    )Net current deferred tax liability
    
    $
    (325
    )
    
    $
    (146
    )Noncurrent assets:Tax loss carryforwards
    
    $
    143,613
    
    
    $
    161,731Concessions  net
    
    
    29,665
    
    
    
    33,311Deferred revenue
    
    
    13,540
    
    
    
    12,124Other  net
    
    
    165
    
    
    
    26Valuation allowance
    
    
    (144,590
    )
    
    
    (163,587
    )Total noncurrent asset
    
    
    42,393
    
    
    
    43,605Noncurrent liabilities:Satellites and equipment  net
    
    
    (45,871
    )
    
    
    (45,582
    )Intangibles  net
    
    
    (1,935
    )
    
    
    (3,424
    )Total noncurrent liabilities
    
    
    (47,806
    )
    
    
    (49,006
    )Net noncurrent deferred tax liability
    
    $
    (5,413
    )
    
    $
    (5,401
    )
  2010
    
    
    2009
    
    
    2008%
    
    
    %
    
    
    %Statutory income tax rate
    
    
    30
    
    
    
    28
    
    
    
    28Tax inflation effects, including statutory foreign exchanges
    
    
    (14
    )
    
    
    45
    
    
    
    79Nondeductible expenses
    
    
    (2
    )
    
    
    (10
    )
    
    
    (5
    )Effect of IETU tax
    
    
    (4
    )
    
    
    (191
    )
    
    
    (20
    )Change in valuation allowance
    
    
    (16
    )
    
    
    (75
    )
    
    
    (106
    )Effective income tax rate
    
    
    (6
    )
    
    
    (203
    )
    
    
    (24
    )
 Enacted tax law changes in 2010
 
    
    Provide for a temporary increase in the ISR rate.
    
    Disallow crediting IETU loss credit carryforwards against ISR liabilities.
  Statutory income tax rates
     F-21




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##### Table of Contents



Expiration Date
    
    Amount2012
    
    $
    69,0952013
    
    
    81,0992014
    
    
    29,8812016
    
    
    223,0522017
    
    
    24,1432018
    
    
    77,802$
    505,072
   18. Contingencies and Commitments
 Satellite and Insurance Matters
        Legal Matters
    F-22




---



##### Table of Contents



Ley Federal de
Derechos
  Commitments
          F-23




---



##### Table of Contents



Years
    
    Amount2011
    
    $
    4972012
    
    
    4972013
    
    
    497$
    1,491
  Years
    
    Amount2011
    
    $
    95,3342012
    
    
    68,4002013
    
    
    44,7262014
    
    
    9,4722015
    
    
    3,816Thereafter
    
    
    3,820$
    225,568
  F-24




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##### Table of Contents



Other Matters
    19. Business Segments Information
   For The Year Ended December 31, 2010Broadband
    
    
    ProgrammingSatellite
    
    
    Satellite
    
    
    Distribution
    
    
    CorporateServices
    
    
    Services
    
    
    Services
    
    
    And Other
    
    
    TotalRevenues
    
    $
    112,666
    
    
    $
    12,924
    
    
    $
    10,158
    
    
    $
    13,957
    
    
    $
    149,705Eliminations
    
    
    (6,885
    )
    
    
    (14
    )
    
    
    (87
    )
    
    
    (13,957
    )
    
    
    (20,943
    )Operating revenues
    
    
    105,781
    
    
    
    12,910
    
    
    
    10,071
    
    
    
    
    
    
    
    128,762Cost and expenses
    
    
    37,326
    
    
    
    10,556
    
    
    
    9,714
    
    
    
    
    
    
    
    57,596Eliminations
    
    
    (12,712
    )
    
    
    (5,167
    )
    
    
    (3,064
    )
    
    
    
    
    
    
    (20,943
    )24,614
    
    
    
    5,389
    
    
    
    6,650
    
    
    
    
    
    
    
    36,653Depreciation and amortization
    
    
    42,501
    
    
    
    901
    
    
    
    392
    
    
    
    (392
    )
    
    
    43,402Restructuring expenses
    
    
    16,443
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,443Gain on sale of programming agreements
    
    
    (5,885
    )
    
    
    
    
    
    
    
    
    
    
    5,885
    
    
    
    Operating income
    
    
    28,108
    
    
    
    6,620
    
    
    
    3,029
    
    
    
    (5,493
    )
    
    
    32,264Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,789
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    345Foreign exchange gain  net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71Loss before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,109
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    779Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,888
    )Less: Net income attributable to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    444Net loss attributable to Satélites
Mexicanos, S. A. de C. V.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (14,332
    )Capital expenditures
    
    $
    67,959
    
    
    $
    576
    
    
    $
    
    
    
    $
    
    
    
    $
    68,535Total assets
    
    $
    416,760
    
    
    $
    17,537
    
    
    $
    2,896
    
    
    $
    1,764
    
    
    $
    438,957
  F-25




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##### Table of Contents



For The Year Ended December 31, 2009Broadband
    
    
    ProgrammingSatellite
    
    
    Satellite
    
    
    Distribution
    
    
    Corporate AndServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    TotalRevenues
    
    $
    107,183
    
    
    $
    12,396
    
    
    $
    10,594
    
    
    $
    13,172
    
    
    $
    143,345Eliminations
    
    
    (5,122
    )
    
    
    (12
    )
    
    
    
    
    
    
    (13,172
    )
    
    
    (18,306
    )Operating revenues
    
    
    102,061
    
    
    
    12,384
    
    
    
    10,594
    
    
    
    
    
    
    
    125,039Cost and expenses
    
    
    38,323
    
    
    
    9,898
    
    
    
    7,442
    
    
    
    
    
    
    
    55,663Eliminations
    
    
    (12,534
    )
    
    
    (5,220
    )
    
    
    (552
    )
    
    
    
    
    
    
    (18,306
    )25,789
    
    
    
    4,678
    
    
    
    6,890
    
    
    
    
    
    
    
    37,357Depreciation and amortization
    
    
    46,800
    
    
    
    853
    
    
    
    4
    
    
    
    
    
    
    
    47,657Restructuring expenses
    
    
    3,324
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,324Operating income
    
    
    26,148
    
    
    
    6,853
    
    
    
    3,700
    
    
    
    
    
    
    
    36,701Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (43,708
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    480Foreign exchange gain  net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12Loss before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,515
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,233Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,748
    )Less: Net income
attributable to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    406Net loss attributable to
Satélites Mexicanos, S. A.
de C. V.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (20,154
    )Capital expenditures
    
    $
    3,522
    
    
    $
    677
    
    
    $
    
    
    
    $
    
    
    
    $
    4,199Total assets
    
    $
    418,644
    
    
    $
    16,493
    
    
    $
    3,340
    
    
    $
    930
    
    
    $
    439,407
 For The Year Ended December 31, 2008Broadband
    
    
    ProgrammingSatellite
    
    
    Satellite
    
    
    Distribution
    
    
    Corporate AndServices
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    TotalRevenues
    
    $
    98,074
    
    
    $
    13,470
    
    
    $
    8,136
    
    
    $
    15,536
    
    
    $
    135,216Eliminations
    
    
    (4,826
    )
    
    
    (135
    )
    
    
    
    
    
    
    (15,536
    )
    
    
    (20,497
    )Operating revenues
    
    
    93,248
    
    
    
    13,335
    
    
    
    8,136
    
    
    
    
    
    
    
    114,719Cost and expenses
    
    
    45,163
    
    
    
    10,277
    
    
    
    6,810
    
    
    
    
    
    
    
    62,250Eliminations
    
    
    (14,893
    )
    
    
    (4,826
    )
    
    
    (777
    )
    
    
    
    
    
    
    (20,496
    )30,270
    
    
    
    5,451
    
    
    
    6,033
    
    
    
    
    
    
    
    41,754Depreciation and amortization
    
    
    59,083
    
    
    
    722
    
    
    
    2
    
    
    
    
    
    
    
    59,807Restructuring expenses
    
    
    4,424
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,424Reversal of provision for orbital incentive
    
    
    (6,989
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,989
    )Gain on recovery from customer
    
    
    (4,610
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,610
    )Operating income
    
    
    11,070
    
    
    
    7,162
    
    
    
    2,101
    
    
    
    
    
    
    
    20,333Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,498
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,481Foreign exchange loss  net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,828
    )Loss before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,512
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,829Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,341
    )Less: Net income attributable to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    285Net loss attributable to Satélites
Mexicanos, S. A. de C. V
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (35,626
    )Capital expenditures
    
    $
    6,192
    
    
    $
    326
    
    
    $
    
    
    
    $
    
    
    
    $
    6,518Total assets
    
    $
    426,114
    
    
    $
    16,064
    
    
    $
    2,157
    
    
    $
    1,159
    
    
    $
    445,494
  F-26




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##### Table of Contents



2010
    
    
    2009
    
    
    2008United States of America
    
    $
    48,379
    
    
    $
    50,742
    
    
    $
    50,285Mexico
    
    
    45,660
    
    
    
    43,702
    
    
    
    42,032Central and South America
    
    
    34,723
    
    
    
    30,595
    
    
    
    22,402$
    128,762
    
    
    $
    125,039
    
    
    $
    114,719
 20. Supplemental Guarantor Condensed Consolidating Financial Statements
   Financial
Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered
 SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2010
 NonGuarantor
    
    
    GuarantorSatmex Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands of U. S. dollars)AssetsCurrent assets:Cash and cash equivalents
    
    $
    25,000
    
    
    $
    40,469
    
    
    $
    10,243
    
    
    $
    
    
    
    $
    75,712Accounts receivable  net
    
    
    7,540
    
    
    
    2,368
    
    
    
    3,218
    
    
    
    
    
    
    
    13,126Due from related parties
    
    
    1,526
    
    
    
    
    
    
    
    3,884
    
    
    
    (4,570
    )
    
    
    840Inventories  net of allowance for
obsolescence
    
    
    
    
    
    
    
    
    
    
    494
    
    
    
    
    
    
    
    494Prepaid insurance
    
    
    4,792
    
    
    
    42
    
    
    
    77
    
    
    
    
    
    
    
    4,911Total current assets
    
    
    38,858
    
    
    
    42,879
    
    
    
    17,916
    
    
    
    (4,570
    )
    
    
    95,083Satellites and equipment  net
    
    
    302,640
    
    
    
    
    
    
    
    2,518
    
    
    
    (40,000
    )
    
    
    265,158Concessions  net
    
    
    36,336
    
    
    
    
    
    
    
    1,849
    
    
    
    
    
    
    
    38,185Due from related parties
    
    
    5,885
    
    
    
    
    
    
    
    820
    
    
    
    (6,705
    )
    
    
    Intangible assets
    
    
    6,335
    
    
    
    5,493
    
    
    
    821
    
    
    
    (5,493
    )
    
    
    7,156Investment in subsidiaries
    
    
    15,530
    
    
    
    
    
    
    
    
    
    
    
    (15,530
    )
    
    
    Guarantee deposits and other assets
    
    
    775
    
    
    
    17
    
    
    
    81
    
    
    
    
    
    
    
    873Goodwill
    
    
    32,502
    
    
    
    
    
    
    
    1,327
    
    
    
    (1,327
    )
    
    
    32,502Total
    
    $
    438,861
    
    
    $
    48,389
    
    
    $
    25,332
    
    
    $
    (73,625
    )
    
    $
    438,957Liabilities and Shareholders DeficitCurrent liabilities:Short-term portion of debt obligations
    
    $
    238,237
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    238,237
  F-27




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##### Table of Contents



NonGuarantor
    
    
    GuarantorSatmex Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands of U. S. dollars)Accounts payable and accrued expenses
    
    
    9,438
    
    
    
    1,648
    
    
    
    3,544
    
    
    
    
    
    
    
    14,630Due to related parties
    
    
    3,883
    
    
    
    40,687
    
    
    
    
    
    
    
    (44,570
    )
    
    
    Deferred revenue
    
    
    2,344
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,344Accrued interest
    
    
    1,781
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,781Income tax payable
    
    
    
    
    
    
    
    
    
    
    101
    
    
    
    
    
    
    
    101Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    325
    
    
    
    
    
    
    
    325Total current liabilities
    
    
    255,683
    
    
    
    42,335
    
    
    
    3,970
    
    
    
    (44,570
    )
    
    
    257,418Debt obligations
    
    
    197,873
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    197,873Deferred revenue
    
    
    60,666
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,666Guarantee deposits and accrued expenses
    
    
    2,677
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,677Due to related parties
    
    
    820
    
    
    
    5,885
    
    
    
    
    
    
    
    (6,705
    )
    
    
    Labor obligations
    
    
    
    
    
    
    
    
    
    
    943
    
    
    
    
    
    
    
    943Deferred income taxes
    
    
    4,813
    
    
    
    
    
    
    
    600
    
    
    
    
    
    
    
    5,413Total liabilities
    
    
    522,532
    
    
    
    48,220
    
    
    
    5,513
    
    
    
    (51,275
    )
    
    
    524,990Shareholders deficit:Satélites Mexicanos, S. A. de C. V.
shareholders déficit:Paid-in capital
    
    
    46,764
    
    
    
    100
    
    
    
    16,447
    
    
    
    (16,547
    )
    
    
    46,764(Accumulated deficit) retained earnings
    
    
    (130,435
    )
    
    
    69
    
    
    
    3,372
    
    
    
    (9,326
    )
    
    
    (136,320
    )Noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,523
    
    
    
    3,523Total shareholders deficit
    
    
    (83,671
    )
    
    
    169
    
    
    
    19,819
    
    
    
    (22,350
    )
    
    
    (86,033
    )Total
    
    $
    438,861
    
    
    $
    48,389
    
    
    $
    25,332
    
    
    $
    (73,625
    )
    
    $
    438,957
  F-28




---



##### Table of Contents



SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2009
 NonSatmex
    
    
    Guarantor
    
    
    GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands of U. S. dollars)AssetsCurrent assets:Cash and cash equivalents
    
    $
    53,771
    
    
    $
    40,088
    
    
    $
    8,534
    
    
    $
    
    
    
    $
    102,393Accounts receivable  net
    
    
    6,701
    
    
    
    
    
    
    
    2,842
    
    
    
    
    
    
    
    9,543Due from related parties
    
    
    467
    
    
    
    
    
    
    
    3,896
    
    
    
    (3,899
    )
    
    
    464Inventories  net of allowance for
obsolescence
    
    
    
    
    
    
    
    
    
    
    410
    
    
    
    
    
    
    
    410Prepaid insurance
    
    
    5,644
    
    
    
    
    
    
    
    51
    
    
    
    
    
    
    
    5,695Total current assets
    
    
    66,583
    
    
    
    40,088
    
    
    
    15,733
    
    
    
    (3,899
    )
    
    
    118,505Satellites and equipment  net
    
    
    272,802
    
    
    
    
    
    
    
    2,438
    
    
    
    (40,000
    )
    
    
    235,240Concessions
    
    
    37,650
    
    
    
    
    
    
    
    1,947
    
    
    
    
    
    
    
    39,597Due from related parties
    
    
    
    
    
    
    
    
    
    
    642
    
    
    
    (642
    )
    
    
    Intangible assets
    
    
    11,792
    
    
    
    
    
    
    
    1,125
    
    
    
    
    
    
    
    12,917Investment in subsidiaries
    
    
    13,222
    
    
    
    
    
    
    
    
    
    
    
    (13,222
    )
    
    
    Guarantee deposits and other assets
    
    
    570
    
    
    
    
    
    
    
    76
    
    
    
    
    
    
    
    646Goodwill
    
    
    32,502
    
    
    
    
    
    
    
    1,327
    
    
    
    (1,327
    )
    
    
    32,502Total
    
    $
    435,121
    
    
    $
    40,088
    
    
    $
    23,288
    
    
    $
    (59,090
    )
    
    $
    439,407Liabilities and Shareholders DeficitCurrent liabilities:Accounts payable and accrued expenses
    
    $
    14,202
    
    
    $
    13
    
    
    $
    2,601
    
    
    $
    
    
    
    $
    16,816Due to related parties
    
    
    2,516
    
    
    
    40,003
    
    
    
    1,380
    
    
    
    (43,899
    )
    
    
    Deferred revenue
    
    
    2,344
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,344Accrued interest
    
    
    1,641
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,641Income tax payable
    
    
    48
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    56Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    146
    
    
    
    
    
    
    
    146Total current liabilities
    
    
    20,751
    
    
    
    40,016
    
    
    
    4,135
    
    
    
    (43,899
    )
    
    
    21,003Debt obligations
    
    
    420,615
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    420,615Deferred revenue
    
    
    63,010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,010Accrued expenses
    
    
    788
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    788Due to related parties
    
    
    642
    
    
    
    
    
    
    
    
    
    
    
    (642
    )
    
    
    Labor obligations
    
    
    
    
    
    
    
    
    
    
    735
    
    
    
    
    
    
    
    735Deferred income taxes
    
    
    4,539
    
    
    
    
    
    
    
    862
    
    
    
    
    
    
    
    5,401Total liabilities
    
    
    510,345
    
    
    
    40,016
    
    
    
    5,732
    
    
    
    (44,541
    )
    
    
    511,552Shareholders deficit:Satélites Mexicanos, S. A. de C. V.
shareholders déficit:Paid-in capital
    
    
    46,764
    
    
    
    100
    
    
    
    16,447
    
    
    
    (16,547
    )
    
    
    46,764(Accumulated deficit) retained earnings
    
    
    (121,988
    )
    
    
    (28
    )
    
    
    1,109
    
    
    
    (1,081
    )
    
    
    (121,988
    )Noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,079
    
    
    
    3,079Total shareholders deficit
    
    
    (75,224
    )
    
    
    72
    
    
    
    17,556
    
    
    
    (14,549
    )
    
    
    (72,145
    )Total
    
    $
    435,121
    
    
    $
    40,088
    
    
    $
    23,288
    
    
    $
    (59,090
    )
    
    $
    439,407
  F-29




---



##### Table of Contents



SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010
 NonSatmex
    
    
    Guarantor
    
    
    GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands of U. S. dollars)Revenues:Satellite services
    
    $
    112,666
    
    
    $
    
    
    
    $
    
    
    
    $
    (6,885
    )
    
    $
    105,781Broadband satellite services
    
    
    
    
    
    
    
    
    
    
    12,924
    
    
    
    (14
    )
    
    
    12,910Programming distribution services
    
    
    1,935
    
    
    
    8,223
    
    
    
    
    
    
    
    (87
    )
    
    
    10,071Services companies
    
    
    
    
    
    
    
    
    
    
    13,957
    
    
    
    (13,957
    )
    
    
    114,601
    
    
    
    8,223
    
    
    
    26,881
    
    
    
    (20,943
    )
    
    
    128,762Cost of satellite services
    
    
    11,697
    
    
    
    
    
    
    
    4,454
    
    
    
    (4,746
    )
    
    
    11,405Cost of broadband satellite services
    
    
    
    
    
    
    
    
    
    
    7,988
    
    
    
    (5,167
    )
    
    
    2,821Cost of programming distribution services
    
    
    1,117
    
    
    
    6,075
    
    
    
    
    
    
    
    (1,805
    )
    
    
    5,387Selling and administrative expenses
    
    
    13,679
    
    
    
    1,483
    
    
    
    11,103
    
    
    
    (9,225
    )
    
    
    17,040Depreciation and amortization
    
    
    42,501
    
    
    
    392
    
    
    
    901
    
    
    
    (392
    )
    
    
    43,402Restructuring expenses
    
    
    16,443
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,443Gain on sale of programming agreements
    
    
    (5,885
    )
    
    
    
    
    
    
    
    
    
    
    5,885
    
    
    
    79,552
    
    
    
    7,950
    
    
    
    24,446
    
    
    
    (15,450
    )
    
    
    96,498Operating income
    
    
    35,049
    
    
    
    273
    
    
    
    2,435
    
    
    
    (5,493
    )
    
    
    32,264Other (expenses) income:Interest expense
    
    
    (45,773
    )
    
    
    (204
    )
    
    
    (16
    )
    
    
    204
    
    
    
    (45,789
    )Interest income
    
    
    335
    
    
    
    25
    
    
    
    189
    
    
    
    (204
    )
    
    
    345Foreign exchange gain (loss)  net
    
    
    (92
    )
    
    
    3
    
    
    
    160
    
    
    
    
    
    
    
    71Equity in earnings of subsidiaries
    
    
    2,308
    
    
    
    
    
    
    
    
    
    
    
    (2,308
    )
    
    
    (Loss) income before income tax
    
    
    (8,173
    )
    
    
    97
    
    
    
    2,768
    
    
    
    (7,801
    )
    
    
    (13,109
    )Income tax expense
    
    
    274
    
    
    
    
    
    
    
    505
    
    
    
    
    
    
    
    779Net (loss) income
    
    
    (8,447
    )
    
    
    97
    
    
    
    2,263
    
    
    
    (7,801
    )
    
    
    (13,888
    )Less: Net income attributable to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    444
    
    
    
    444Net (loss) income attributable to
Satélites Mexicanos, S. A. de C. V.
    
    $
    (8,447
    )
    
    $
    97
    
    
    $
    2,263
    
    
    $
    (8,245
    )
    
    $
    (14,332
    )
  F-30




---



##### Table of Contents



SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2009
 NonSatmex
    
    
    Guarantor
    
    
    GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands of U. S. dollars)Revenues:Satellite services
    
    $
    107,183
    
    
    $
    
    
    
    $
    
    
    
    $
    (5,122
    )
    
    $
    102,061Broadband satellite services
    
    
    
    
    
    
    
    
    
    
    12,396
    
    
    
    (12
    )
    
    
    12,384Programming distribution services
    
    
    10,594
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,594Services companies
    
    
    
    
    
    
    
    
    
    
    13,172
    
    
    
    (13,172
    )
    
    
    117,777
    
    
    
    
    
    
    
    25,568
    
    
    
    (18,306
    )
    
    
    125,039Cost of satellite services
    
    
    13,069
    
    
    
    
    
    
    
    4,293
    
    
    
    (4,478
    )
    
    
    12,884Cost of broadband satellite services
    
    
    
    
    
    
    
    
    
    
    7,371
    
    
    
    (5,122
    )
    
    
    2,249Cost of programming distribution services
    
    
    5,331
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,331Selling and administrative expenses
    
    
    15,125
    
    
    
    41
    
    
    
    10,433
    
    
    
    (8,706
    )
    
    
    16,893Depreciation and amortization
    
    
    46,804
    
    
    
    
    
    
    
    853
    
    
    
    
    
    
    
    47,657Restructuring expenses
    
    
    3,324
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,32483,653
    
    
    
    41
    
    
    
    22,950
    
    
    
    (18,306
    )
    
    
    88,338Operating (loss) income
    
    
    34,124
    
    
    
    (41
    )
    
    
    2,618
    
    
    
    
    
    
    
    36,701Other (expenses) income:Interest expense
    
    
    (43,694
    )
    
    
    
    
    
    
    (14
    )
    
    
    
    
    
    
    (43,708
    )Interest income
    
    
    304
    
    
    
    13
    
    
    
    163
    
    
    
    
    
    
    
    480Foreign exchange gain (loss)  net
    
    
    123
    
    
    
    
    
    
    
    (111
    )
    
    
    
    
    
    
    12Equity in earnings of subsidiaries
    
    
    1,236
    
    
    
    
    
    
    
    
    
    
    
    (1,236
    )
    
    
    (Loss) income before income tax
    
    
    (7,907
    )
    
    
    (28
    )
    
    
    2,656
    
    
    
    (1,236
    )
    
    
    (6,515
    )Income tax expense
    
    
    12,247
    
    
    
    
    
    
    
    986
    
    
    
    
    
    
    
    13,233Net (loss) income
    
    
    (20,154
    )
    
    
    (28
    )
    
    
    1,670
    
    
    
    (1,236
    )
    
    
    (19,748
    )Less: Net income attributable to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    406
    
    
    
    406Net (loss) income attributable to
Satélites Mexicanos, S. A. de C. V.
    
    $
    (20,154
    )
    
    $
    (28
    )
    
    $
    1,670
    
    
    $
    (1,642
    )
    
    $
    (20,154
    )
  F-31




---



##### Table of Contents



SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2008
 NonGuarantor
    
    
    GuarantorSatmex Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands of U. S. dollars)Revenues:Satellite services
    
    $
    98,074
    
    
    $
    
    
    
    $
    
    
    
    $
    (4,826
    )
    
    $
    93,248Broadband satellite services
    
    
    
    
    
    
    
    
    
    
    13,469
    
    
    
    (134
    )
    
    
    13,335Programming distribution services
    
    
    8,136
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,136Services companies
    
    
    
    
    
    
    
    
    
    
    15,536
    
    
    
    (15,536
    )
    
    
    106,210
    
    
    
    
    
    
    
    29,005
    
    
    
    (20,496
    )
    
    
    114,719Cost of satellite services
    
    
    14,569
    
    
    
    
    
    
    
    5,828
    
    
    
    (6,214
    )
    
    
    14,183Cost of broadband satellite services
    
    
    
    
    
    
    
    
    
    
    7,012
    
    
    
    (4,826
    )
    
    
    2,186Cost of programming distribution services
    
    
    4,162
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,162Selling and administrative expenses
    
    
    18,687
    
    
    
    
    
    
    
    11,992
    
    
    
    (9,456
    )
    
    
    21,223Depreciation and amortization
    
    
    59,086
    
    
    
    
    
    
    
    721
    
    
    
    
    
    
    
    59,807Restructuring expenses
    
    
    4,424
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,424Reversal of provision for orbital incentive
    
    
    (6,989
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,989
    )Gain on recovery from customer
    
    
    (4,610
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,610
    )89,329
    
    
    
    
    
    
    
    25,553
    
    
    
    (20,496
    )
    
    
    94,386Operating income
    
    
    16,881
    
    
    
    
    
    
    
    3,452
    
    
    
    
    
    
    
    20,333Other (expenses) income:Interest expense
    
    
    (48,485
    )
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    (48,498
    )Interest income
    
    
    1,158
    
    
    
    
    
    
    
    323
    
    
    
    
    
    
    
    1,481Foreign exchange gain (loss)  net
    
    
    (703
    )
    
    
    
    
    
    
    (1,125
    )
    
    
    
    
    
    
    (1,828
    )Equity in earnings of subsidiaries
    
    
    848
    
    
    
    
    
    
    
    
    
    
    
    (848
    )
    
    
    (Loss) income before income tax
    
    
    (30,301
    )
    
    
    
    
    
    
    2,637
    
    
    
    (848
    )
    
    
    (28,512
    )Income tax expense
    
    
    5,325
    
    
    
    
    
    
    
    1,504
    
    
    
    
    
    
    
    6,829Net (loss) income
    
    
    (35,626
    )
    
    
    
    
    
    
    1,133
    
    
    
    (848
    )
    
    
    (35,341
    )Less: Net income attributable to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    285
    
    
    
    285Net (loss) income attributable to
Satélites Mexicanos, S. A. de C. V.
    
    $
    (35,626
    )
    
    $
    
    
    
    $
    1,133
    
    
    $
    (1,133
    )
    
    $
    (35,626
    )
  F-32




---



##### Table of Contents



SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2010
 NonGuarantor
    
    
    GuarantorSatmex Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (8,447
    )
    
    $
    97
    
    
    $
    2,263
    
    
    $
    (7,801
    )
    
    $
    (13,888
    )Adjustments to reconcile net (loss)
income to net cash provided by operating
activities:Net periodic pension cost
    
    
    
    
    
    
    
    
    
    
    208
    
    
    
    
    
    
    
    208Depreciation and amortization
    
    
    42,501
    
    
    
    392
    
    
    
    901
    
    
    
    (392
    )
    
    
    43,402Equity in earnings of subsidiaries
    
    
    (2,308
    )
    
    
    
    
    
    
    
    
    
    
    2,308
    
    
    
    Deferred income taxes
    
    
    274
    
    
    
    
    
    
    
    (83
    )
    
    
    
    
    
    
    191Deferred revenue
    
    
    (2,344
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,344
    )Interest accrued to principal on debt
obligations
    
    
    15,495
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,495Provision for allowance for doubtful
accounts
    
    
    10
    
    
    
    
    
    
    
    162
    
    
    
    
    
    
    
    172Changes in operating assets and
liabilities: (Increase) decrease in:Accounts receivable
    
    
    (849
    )
    
    
    (2,368
    )
    
    
    (538
    )
    
    
    
    
    
    
    (3,755
    )Related parties  net
    
    
    (5,399
    )
    
    
    684
    
    
    
    (1,546
    )
    
    
    5,885
    
    
    
    (376
    )Inventories
    
    
    
    
    
    
    
    
    
    
    (84
    )
    
    
    
    
    
    
    (84
    )Prepaid insurance
    
    
    852
    
    
    
    (42
    )
    
    
    (26
    )
    
    
    
    
    
    
    784Guarantee deposits and other assets
    
    
    (205
    )
    
    
    (17
    )
    
    
    (5
    )
    
    
    
    
    
    
    (227
    )Increase (decrease) in:Accounts payable, accrued expenses and
income taxes
    
    
    (3,268
    )
    
    
    1,635
    
    
    
    1,036
    
    
    
    
    
    
    
    (597
    )Guarantee deposits and accrued expenses
    
    
    1,889
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,889Accrued interest
    
    
    140
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    140Net cash provided by operating activities
    
    
    38,341
    
    
    
    381
    
    
    
    2,288
    
    
    
    
    
    
    
    41,010Cash flows from investing activities:Construction in progress Satmex 8
(including capitalized interest)
    
    
    (63,113
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (63,113
    )Acquisition of equipment
    
    
    (3,999
    )
    
    
    
    
    
    
    (579
    )
    
    
    
    
    
    
    (4,578
    )Net cash used in investing activities
    
    
    (67,112
    )
    
    
    
    
    
    
    (579
    )
    
    
    
    
    
    
    (67,691
    )Cash and cash equivalents:Net (decrease) increase for the year
    
    
    (28,771
    )
    
    
    381
    
    
    
    1,709
    
    
    
    
    
    
    
    (26,681
    )Beginning of year
    
    
    53,771
    
    
    
    40,088
    
    
    
    8,534
    
    
    
    
    
    
    
    102,393End of year
    
    $
    25,000
    
    
    $
    40,469
    
    
    $
    10,243
    
    
    $
    
    
    
    $
    75,712Supplemental disclosures of cash flow
information:Cash paid during the year:Interest paid
    
    $
    32,554
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    32,554Capitalized interest
    
    $
    2,582
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2,582Income taxes paid
    
    $
    3,357
    
    
    $
    205
    
    
    $
    1,104
    
    
    $
    
    
    
    $
    4,666Non-cash investing activities:Capital expenditures incurred not yet paid
    
    $
    844
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    844
  F-33




---



##### Table of Contents



SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2009
 NonGuarantor
    
    
    GuarantorSatmex Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (20,154
    )
    
    $
    (28
    )
    
    $
    1,670
    
    
    $
    (1,236
    )
    
    $
    (19,748
    )Adjustments to reconcile net (loss) income
to net cash provided by operating
activities:Net periodic pension cost
    
    
    
    
    
    
    
    
    
    
    274
    
    
    
    
    
    
    
    274Depreciation and amortization
    
    
    46,804
    
    
    
    
    
    
    
    853
    
    
    
    
    
    
    
    47,657Deferred income taxes
    
    
    207
    
    
    
    
    
    
    
    310
    
    
    
    
    
    
    
    517Deferred revenue
    
    
    (2,344
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,344
    )Write-off of satellite construction costs
    
    
    1,256
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,256Equity in earnings of subsidiaries
    
    
    (1,236
    )
    
    
    
    
    
    
    
    
    
    
    1,236
    
    
    
    Interest accrued to principal on debt
obligations
    
    
    14,318
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,318Reversal of allowance for doubtful accounts
    
    
    (32
    )
    
    
    
    
    
    
    (118
    )
    
    
    
    
    
    
    (150
    )Changes in operating assets and liabilities:(Increase) decrease in:Accounts receivable
    
    
    6,001
    
    
    
    
    
    
    
    1,887
    
    
    
    
    
    
    
    7,888Related parties  net
    
    
    (382
    )
    
    
    3
    
    
    
    300
    
    
    
    
    
    
    
    (79
    )Inventories
    
    
    
    
    
    
    
    
    
    
    (223
    )
    
    
    
    
    
    
    (223
    )Prepaid insurance
    
    
    (1,999
    )
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    (1,989
    )Guarantee deposits and other assets
    
    
    75
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    69Increase (decrease) in:Accounts payable, accrued expenses and
income taxes
    
    
    137
    
    
    
    13
    
    
    
    (2,208
    )
    
    
    
    
    
    
    (2,058
    )Guarantee deposits and accrued expenses
    
    
    525
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    525Accrued interest
    
    
    81
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81Net cash provided by operating activities
    
    
    43,257
    
    
    
    (12
    )
    
    
    2,749
    
    
    
    
    
    
    
    45,994Cash from investing activities:Investment in shares of subsidiaries
    
    
    (100
    )
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    Acquisition of equipment
    
    
    (1,131
    )
    
    
    
    
    
    
    (677
    )
    
    
    
    
    
    
    (1,808
    )Net cash used in investing activities
    
    
    (1,231
    )
    
    
    
    
    
    
    (677
    )
    
    
    100
    
    
    
    (1,808
    )Cash from financing activities:Issuance of common stock
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    (100
    )
    
    
    Net cash flows from financing activities
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    (100
    )
    
    
    Cash and cash equivalents:Net (decrease) increase for the year
    
    
    42,026
    
    
    
    88
    
    
    
    2,072
    
    
    
    
    
    
    
    44,186Beginning of year
    
    
    11,745
    
    
    
    40,000
    
    
    
    6,462
    
    
    
    
    
    
    
    58,207End of year
    
    $
    53,771
    
    
    $
    40,088
    
    
    $
    8,534
    
    
    $
    
    
    
    $
    102,393Supplemental disclosures of cash flow
information:Cash paid during the year:Interest paid
    
    $
    28,912
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    28,912Income taxes paid
    
    $
    7,649
    
    
    $
    
    
    
    $
    1,359
    
    
    $
    
    
    
    $
    9,008Non-cash investing activities:Capital expenditures incurred not yet paid
    
    $
    2,391
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2,391
  F-34




---



##### Table of Contents



SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2008
 NonGuarantor
    
    
    GuarantorSatmex Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net (loss) income
    
    $
    (35,626
    )
    
    $
    
    
    
    $
    1,133
    
    
    $
    (848
    )
    
    $
    (35,341
    )Adjustments to reconcile net (loss) income
to net cash flows provided by operating
activities:Net periodic pension cost
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    8Depreciation and amortization
    
    
    59,087
    
    
    
    
    
    
    
    720
    
    
    
    
    
    
    
    59,807Equity in earnings of subsidiaries
    
    
    (848
    )
    
    
    
    
    
    
    
    
    
    
    848
    
    
    
    Deferred income taxes
    
    
    4,332
    
    
    
    
    
    
    
    492
    
    
    
    
    
    
    
    4,824Deferred revenue
    
    
    (2,344
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,344
    )Interest accrued to principal on debt
obligations
    
    
    13,126
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,126Provision for allowance for doubtful
accounts
    
    
    49
    
    
    
    
    
    
    
    87
    
    
    
    
    
    
    
    136Changes in operating assets and liabilities:(Increase) decrease in:Accounts receivable
    
    
    (7,183
    )
    
    
    
    
    
    
    (2,053
    )
    
    
    
    
    
    
    (9,236
    )Related parties  net
    
    
    (173
    )
    
    
    40,000
    
    
    
    367
    
    
    
    (40,000
    )
    
    
    194Inventories
    
    
    
    
    
    
    
    
    
    
    151
    
    
    
    
    
    
    
    151Prepaid insurance
    
    
    363
    
    
    
    
    
    
    
    (15
    )
    
    
    
    
    
    
    348Guarantee deposits and other assets
    
    
    90
    
    
    
    
    
    
    
    131
    
    
    
    
    
    
    
    221Increase (decrease) in:Accounts payable, accrued expenses and
income taxes
    
    
    (4,772
    )
    
    
    
    
    
    
    235
    
    
    
    
    
    
    
    (4,537
    )Guarantee deposits and accrued expenses
    
    
    (17
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )Accrued interest
    
    
    209
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    209Net cash provided by operating activities
    
    
    26,293
    
    
    
    40,000
    
    
    
    1,256
    
    
    
    (40,000
    )
    
    
    27,549Cash from investing activities:Acquisition of equipment
    
    
    (2,728
    )
    
    
    
    
    
    
    (325
    )
    
    
    
    
    
    
    (3,053
    )Satellite construction in progress
    
    
    (43,465
    )
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    (3,465
    )Net cash used in investing activities
    
    
    (46,193
    )
    
    
    
    
    
    
    (325
    )
    
    
    40,000
    
    
    
    (6,518
    )Cash and cash equivalents:Net (decrease) increase for the year
    
    
    (19,900
    )
    
    
    40,000
    
    
    
    931
    
    
    
    
    
    
    
    21,031Beginning of year
    
    
    31,645
    
    
    
    
    
    
    
    5,531
    
    
    
    
    
    
    
    37,176End of year
    
    $
    11,745
    
    
    $
    40,000
    
    
    $
    6,462
    
    
    $
    
    
    
    $
    58,207Supplemental disclosures of cash flow
information:Cash paid during the year:Interest paid
    
    $
    32,952
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    32,952Income taxes paid
    
    $
    7,782
    
    
    $
    
    
    
    $
    1,235
    
    
    $
    
    
    
    $
    9,017Non-cash investing activities:Capital expenditures incurred not yet paid
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 21. Subsequent Events
  
    
    The voluntary filing on April 6, 2011 by Satmex, AlternaTV Corp and AlternaTV Int.
Corp. for protection under Chapter 11 of the Bankruptcy Code, and the confirmation
(received on May 11, 2011) and consummation (which occurred on May 26, 2011) of a
prepackaged plan of reorganization filed in
the United States Bankruptcy Court to provide the Company resources to (i) repay the
FPSSN and (ii) to finance the completion of Satmex 8 satellite through a new high-yield
bond offering (see below) and a rights offering to certain holders of the SPSSN (see
below)
  F-35




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##### Table of Contents




    
    The conversion of the SPSSN into direct or indirect equity interests in reorganized
Satmex.
 
    
    The offering to holders of the SPSSN of rights to purchase additional direct or
indirect equity interests in reorganized Satmex, and
 
    
    The offering and sale of $325 million in principal amount of 9.5% Senior Secured
Notes due 2017 issued pursuant to an Indenture with Wilmington Trust FSB, as trustee,
dated as of May 5, 2011
      F-36




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##### Table of Contents



SATÉLITES MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES

SCHEDULES OF VALUATION AND QUALIFYING ACCOUNTS
 AdditionalBalance At
    
    
    Charged
    
    
    
    
    
    
    Balance AtBeginning Of
    
    
    (Credited) To
    
    
    
    
    
    
    Ending OfPeriod
    
    
    Expenses
    
    
    Deductions
    
    
    Period(In thousands of U.S. dollars)Allowance for doubtful accountsYear ended December 31, 2010
    
    $
    360
    
    
    $
    172
    
    
    $
    
    
    
    $
    532Year ended December 31, 2009
    
    
    510
    
    
    
    (150
    )
    
    
    
    
    
    
    360Year ended December 31, 2008
    
    
    399
    
    
    
    136
    
    
    
    25
    (1)
    
    
    510Valuation allowance on deferred income taxesYear ended December 31, 2010
    
    $
    164,472
    
    
    $
    76
    
    
    $
    17,986
    
    
    $
    146,562Year ended December 31, 2009
    
    
    162,009
    
    
    
    2,463
    
    
    
    
    
    
    
    164,472Year ended December 31, 2008
    
    
    207,974
    
    
    
    (45,965
    )
    
    
    
    
    
    
    162,009
 
 (1)
    
    Write-offs of uncollectible accounts.   F-37