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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, 2008
 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
 Date of event requiring this shell company report: N/A
 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, 2008 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 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
  U.S. GAAP þ
    
    International Financial Reporting Standards
    
    Other oas issued buy the International Accounting Standards Board o
  o o
  o þ
  þ o




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TABLE OF CONTENTS
 PagePART IITEM 3. Key Information
    
    
    [3]ITEM 4. Information on the Company
    
    
    [18]ITEM 4A. Unresolved Staff Comments
    
    
    [40]ITEM 5. Operating and Financial Review and Prospects
    
    
    [41]ITEM 6. Directors, Senior Management and Employees
    
    
    [57]ITEM 7. Major Shareholders and Related Party Transactions
    
    
    [64]ITEM 8. Financial Information
    
    
    [65]ITEM 9. Markets
    
    
    [66]ITEM 10. Additional Information
    
    
    [66]ITEM 11. Quantitative and Qualitative Disclosures about Market Risk
    
    
    [68]PART IIITEM 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    [69]ITEM 14. Material Modifications to the Rights of Security Holders
    
    
    [69]ITEM 15T. Controls and Procedures
    
    
    [69]ITEM 16A. Audit Committee Financial Expert
    
    
    [70]ITEM 16B. Code of Conduct
    
    
    [70]ITEM 16C. Principal Accountant Fees and Services
    
    
    [70]PART IIIITEM 18. Financial Statements
    
    
    [71]ITEM 19. Exhibits
    
    
    [71]Exhibit 2.23Exhibit 2.24Exhibit 2.25Exhibit 2.26Exhibit 2.27Exhibit 2.28Exhibit 2.29Exhibit 2.30Exhibit 2.31Exhibit 2.32Exhibit 2.33Exhibit 2.34Exhibit 2.35Exhibit 2.36Exhibit 4.12Exhibit 4.13Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2
    2




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PART I
 
 ITEM 3. Key Information
 SELECTED FINANCIAL DATA
  Financial Reporting by
Entities in Reorganization under the Bankruptcy Code
 Successor Registrant
    
    
    Predecessor RegistrantYears Ended
    
    
    December 1 to
    
    
    January 1 to
    
    
    Years EndedDecember 31,
    
    
    December 31,
    
    
    November 30,
    
    
    December 31,2008
    
    
    2007
    
    
    2006
    
    
    2006
    
    
    2005
    
    
    2004(Amount in millions of U.S. dollars)Statement of Operations Data:Revenue
    
    $
    114.7
    
    
    $
    102.2
    
    
    $
    6.8
    
    
    $
    88.3
    
    
    $
    69.9
    
    
    $
    71.7Operating income (loss)
    
    
    20.3
    
    
    
    (5.9
    )
    
    
    (3.9
    )
    
    
    (10.6
    )
    
    
    (11.1
    )
    
    
    (5.4
    )Loss before income taxes
    
    
    (28.5
    )
    
    
    (55.8
    )
    
    
    (8.3
    )
    
    
    (54.8
    )
    
    
    (70.6
    )
    
    
    (58.9
    )Income tax (expense) benefit
    
    
    (6.8
    )
    
    
    (0.9
    )
    
    
    (0.3
    )
    
    
    (18.7
    )
    
    
    (0.2
    )
    
    
    4.4Net loss
    
    
    (35.6
    )
    
    
    (57.5
    )
    
    
    (8.7
    )
    
    
    (73.5
    )
    
    
    (70.8
    )
    
    
    (54.5
    )Net loss applicable to common
shareholders(1)
    
    
    (35.6
    )
    
    
    (57.5
    )
    
    
    (8.7
    )
    
    
    (74.7
    )
    
    
    (72.3
    )
    
    
    (56.0
    )Other Data:Depreciation and amortization
    
    $
    59.8
    
    
    $
    53.1
    
    
    $
    6.2
    
    
    $
    51.8
    
    
    $
    47.9
    
    
    $
    48.1Capital expenditures
    
    
    6.5
    
    
    
    2.4
    
    
    
    1.5
    
    
    
    45.9
    
    
    
    8.3
    
    
    
    1.4Balance Sheet Data (at end of period):Total assets
    
    $
    445.5
    
    
    $
    470.2
    
    
    $
    508.1
    
    
    $
    883.1
    
    
    $
    925.3
    
    
    $
    953.4Current maturities of long-term
debt (excluding accrued interest)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    527.7
    
    
    
    527.7
    
    
    
    523.4Long-term debt
    
    
    406.3
    
    
    
    393.2
    
    
    
    378.2
    
    
    
    
    
    
    
    
    
    
    
    Shareholders (deficit) equity
    
    
    (55.1
    )
    
    
    (19.4
    )
    
    
    38.0
    
    
    
    102.7
    
    
    
    178.6
    
    
    
    249.4
 (1)
    
    Net loss applicable to common shareholders comprises our net loss for the period less our
preferred stock dividend. This information only applies for Predecessor Registrant.  3




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EXCHANGE RATES
  CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
  Factors Relating to Satmex
 As a result of our concurso mercantil and the implementation of our plan of reorganization (the
Plan of Reorganization) filed with the U.S. Bankruptcy Court for the Southern District of New
York (the U.S. Bankruptcy Court) in our bankruptcy case under Chapter 11 of Title 11 of the U.S.
Bankruptcy Code, our financial information after November 30, 2006 is not comparable to our prior
years financial information.
 concurso mercantil Ley de
Concursos Mercantiles usufructo
 We have a history of significant net operating losses and we may not be able to improve
successfully our performance or obtain profitability.
   4




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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.
   Our ability to obtain additional financing and to refinance the notes in the future may be
limited.
  We have incurred significant indebtedness to acquire and launch our satellites, including secured
indebtedness, which may limit our cash flow for capital expenditures and other expenses.
   
    
    limited cash flow available for capital expenditures, acquisitions, working capital
and other general corporate purposes as a result of dedicating a substantial portion of
our cash flow from operations to servicing our debt;
 
    
    increased our vulnerability to general adverse economic and industry conditions;
 
    
    limited our flexibility in planning for, or reacting to, competitive and other
changes in our business and the industries in which we operate;
 
    
    placed us at a relative disadvantage to our competitors that have less debt and
greater operating and financing flexibility than we do;
 
    
    made us vulnerable to interest rate increases because approximately 61% of our
indebtedness is, and will continue to be, subject to variable rates of interest;
 
    
    exposed us to increased interest expense to the extent we refinance existing debt
with higher cost debt; and
 
    
    limited, through covenants in our indebtedness, our ability to borrow additional
funds.
  5




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
    
    adversely affect our relationship with customers and suppliers; and
 
    
    limit future increases in the value, or cause a decline in the value of our equity,
which could limit our ability to raise additional capital by issuing equity.
   We may not have sufficient funds available to redeem our First Priority Notes and Second Priority
Notes upon a change of control.
  The value of the collateral securing the Notes may not be sufficient to satisfy our obligations
under the Notes.
    6




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The agreements and instruments governing our debt contain restrictions and limitations that could
significantly affect our ability to operate our business, as well as significantly affect our
liquidity.
  
    
    incur additional debt or amend the terms of existing debt;
 
    
    repurchase or redeem equity interests and debt;
 
    
    issue equity;
 
    
    merge or consolidate with any other person or enter into a change of control
transaction (see We may not have sufficient funds available to redeem our First Priority
Notes and Second Priority Notes upon a change of control);
 
    
    spend excess cash flow or insurance proceeds;
 
    
    make certain investments, loans, guaranties or acquisitions;
 
    
    pay dividends or make other distributions;
 
    
    create restrictions on the payment of dividends or other amounts;
 
    
    sell, assign, transfer, lease or otherwise convey certain of our assets;
 
    
    enter into related party transactions;
 
    
    enter into new lines of business; and
 
    
    grant liens and pledge assets.
  Investors in the Notes may not be able to find a purchaser should they need to dispose of their
investment prior to maturity.
   7




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Our business is capital intensive, and we may not be able to raise adequate capital to finance our
business strategies.
   Our in-orbit satellites are vulnerable to failure.
  
    
    component failure;
 
    
    loss of power or fuel;
 
    
    inability to control positioning of the satellite;
 
    
    solar and other astronomical events; and
 
    
    collisions with space debris.
  
    
    station-keeping fuel consumption to maintain a satellites position in orbit;
 
    
    the quality of manufacture;
 
    
    gradual degradation of solar panels or other systems or components; and
 
    
    the durability of components.
   8




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If we are unable to finance, build and successfully launch our proposed Satmex 7 satellite our
ability to grow our business will be materially and adversely affected.
   We may not be able to renew our insurance policies for our satellites at commercially reasonable
rates, if at all, when they expire, and our existing insurance coverage has, and our future
insurance coverage will likely have, significant exceptions.
      9




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Our revenues and profitability may be adversely affected by the current global financial downturn,
and negative global economic conditions may have a material adverse effect on our customers and
suppliers.
  A small number of customers account for a large portion of our revenues, and the loss of one or
more of these significant customers would adversely affect our revenues.
   We operate in a competitive environment.
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The Mexican government has economic rights with respect to us and may exercise influence in respect
of 55% of our series A shares. As a result, the Mexican government may cause us to pursue certain
macroeconomic and social objectives that may have an adverse effect on our results of operations
and financial condition.
  Our future success depends on our ability to maintain a strong management team, retain our key
employees and adapt to technological changes.
  Technological advances may require us to make significant expenditures to maintain and improve the
competitiveness of our service offerings for which our ability to compete is limited by our lack of
funds.
   11




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You may not be able to effect service of process in the U.S. upon our officers or our Mexican
directors.
  The recent enactment of the Ley del Impuesto Empresarial a Tasa Única increases our tax burden and
could affect our operations.
 Impuesto Empresarial a Tasa Única
 amparo amparo
 Under certain circumstances, federal and state laws may allow courts to avoid guarantees and liens
securing the notes and require holders of the notes to return any payments they receive from the
guarantors.
  
    
    received less than reasonably equivalent value or fair consideration for the incurrence
of indebtedness under its guarantee or the grant of such lien and was insolvent or rendered
insolvent by reason of the incurrence;
 
    
    was engaged in a business or transaction for which its remaining assets constituted
unreasonably small capital; or
 
    
    intended to incur, or believed that it would incur, debts beyond its ability to pay such
debts as they became due.
  12




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
    
    the sum of its debts, including contingent liabilities, was greater than the fair
saleable value of all of its assets;
 
    
    the present fair saleable value of its assets was less than the amount that would be
required to pay its probable liability on its existing debts, including contingent
liabilities, as they became absolute and mature; or
 
    
    it could not pay its debts as they became due.
   Rights of holders of the Notes in the collateral may be adversely affected by a concurso mercantil.
    Factors Relating to Regulatory Environment
 Our business is regulated, causing uncertainty and additional costs.
    13




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Coordination results may adversely affect our ability to use a satellite at a given orbital slot
for our proposed service or coverage area.
  If we do not maintain satellites in orbital slots we currently use, those orbital locations may
become available for other satellite operators to use.
  Our government concessions may be revoked under certain circumstances.
  
    
    the term of any such Orbital Concession expires;
 
    
    we resign our rights under any such Orbital Concession;
 
    
    the Mexican government, through the SCT), terminates such Orbital Concession
through a proceeding called Rescate;
 
    
    we become subject to liquidation (quiebra); or
 
    
    the SCT revokes such Orbital Concession.
  
    
    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;
  14




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
    
    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
 
    
    our assignment, transfer or encumbrance of rights granted under the Orbital
Concessions in contravention of the terms of applicable Mexican law.
   Rescate Rescate Ley General de Bienes Nacionales Rescate
 Ley Federal de Telecomunicaciones,
 Requisa Requisa Requisa Requisa
 COFETEL and the SCT are preparing the auction of segment capacity in the 3.6  3.7 GHz frequency
band in Mexico and the use of this capacity could interfere with our satellite transmissions, which
could affect our operations.
   15




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Comisión Federal de Telecomunicaciones
 Enlaces requires capacity on the Ku- band frequency in order to grow its business, which capacity
may not be available to it on commercially reasonable terms.
  Enlaces operates from one facility, without a back-up location, and a natural disaster or antenna
failure could significantly disrupt its business.
  We are subject to different corporate disclosure requirements than U.S. companies, which may limit
the information available to our investors.
  Compliance with the Sarbanes-Oxley Act increases our operating expenses.
  We had a material weakness in our internal control over financial reporting as of December 31,
2007. We corrected such material weakness in 2008, but our ability to accurately report our U.S.
GAAP financial results on a timely basis depends on maintenance of the corrective measures that we
implemented and on our ability to achieve and maintain an effective system of internal controls.
   16




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If SCT does not approve Enlaces Teleport operation in the Primary Control Center, our financial
performance could be materially and adversely affected.
   Factors Relating to Mexico
 Economic developments in Mexico may adversely affect our business.
     17




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Political Events in Mexico Could affect Mexican Economic Policy and Our Business, Financial
Condition and Results of Operations.
  Currency devaluations may impair our ability to service our debt.
  Payment of judgments against us would be in pesos.
 Ley Monetaria de los Estados Unidos Mexicanos, Banco de México
 
 ITEM 4. Information on the Company
 General Description
 Sociedad Anónima de Capital Variable.
 Telecomunicaciones de México,
     18




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2006 Restructuring
  concurso mercantil concurso mercantil
  Our Satellites
   19




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Solidaridad 2
       Satmex 5
   20




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usufructo usufructo usufructo
 Satmex 6
    21




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usufructo usufructo usufructo
 Satmex 7
     22




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Capital Investments
     Orbital Coordination
   23




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Landing Rights
    Satellite Control Centers and Property Concession
   
    
    telemetry, tracking and control (TT&C) 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.
  24




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Indice Nacional de Precios al Consumidor Secretaría de la Función Pública
 Properties
  Insurance
     
    
    military or similar actions;
 
    
    anti-satellite devices;
 
    
    governmental actions;
 
    
    nuclear reaction or radiation contamination;
 
    
    willful or intentional acts of us or our contractors;
 
    
    loss of income, indirect and consequential damages; and
 
    
    third-party claims against us.
  25




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Services
  Telecommunications Transmission Services
     Integrators
   26




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Broadband Internet Service Providers
  Broadcasting and Video Distribution Services
     Alterna TV (Programming Distribution Services)
     27




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Enlaces
      28




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Business Strategy
  Enhance Our Regional Presence
 Strengthen Our Customer Base and Offer Value-Added Services
 Review Processes to Focus on Customer Service and Cost Efficiency.
 Market Available Inventory and Sustain High Renewal Rates
 Further Grow Alterna TVs Programming Distribution Services (Digital Distribution Platform
for Latin American Programming)
  Further Grow Enlaces Services
   29




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Customers
    2008
    
    
    2007
    
    
    2006 (1)(In thousands)U.S.
    
    $
    50,285
    
    
    $
    47,558
    
    
    $
    36,269Mexico
    
    
    42,032
    
    
    
    42,333
    
    
    
    26,403Other
    
    
    22,402
    
    
    
    12,310
    
    
    
    9,421Total
    
    $
    114,719
    
    
    $
    102,201
    
    
    $
    72,093
 
 (1)
    
    Excludes one-time sales, in the amount of $26.0 million, because ratios otherwise would be
distorted. Sales and Marketing
 Sales Force
      30




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Pricing
     Contracts
     Competition and Markets
 Competition
   31




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New Satellite Capacity
  Domestic Market
     32




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U.S. Market
   Latin American Market
     33




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REGULATION
 Regulatory Framework within Mexico
 Comisión Nacional de Inversiones
Extranjeras
 Rescate Ley General del Equilibrio Ecológico y Protección al Ambiente Ley Federal de Competencia Económica Ley de Vías Generales de Comunicación
   The Orbital and Property Concessions
  
    
    the Orbital Concessions providing the right to occupy each of three orbital slots
(one concession per orbital slot) and use associated C- and Ku radio-frequency bands, and
 
    
    the Property Concession providing the right to use the buildings and areas in which
the control centers are located.
 Comisión Federal de Competencia
  34




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Telecomunicaciones de México
   
    
    carry out research and development in Mexico;
 
    
    maintain satellite control centers within the territory of Mexico and
preferentially staff them with Mexican nationals; and
 
    
    maintain satellite services continuously and efficiently.
     
    
    pay an annual fee in an amount equal to 7.5% of the assessed property value; and
 
    
    maintain the premises in good condition.
 Indice
Nacional de Precios al Consumidor Instituto de Administración y Avalúos de Bienes Nacionales
   35




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
    
    the term of any such Orbital Concession expires;
 
    
    we resign our rights under any such Orbital Concession;
 
    
    the Mexican government, through the SCT, terminates such Orbital Concession through
a proceeding called Rescate;
 
    
    we become subject to liquidation (quiebra); or
 
    
    the SCT revokes such Orbital Concession.
  
    
    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 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 our nationality; or
 
    
    our assignment, transfer or encumbrance of rights granted under the Orbital
Concessions in contravention of the terms of applicable Mexican law.
   Rescate Rescate, Rescate,
  Requisa Requisa Requisa Requisa
  36




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
    
    the Property Concession term expires;
 
    
    we resign our rights to any of the Concessions;
 
    
    the Orbital Concessions are terminated;
 
    
    the purpose for which the Property Concession is granted no longer exists;
 
    
    the Mexican government decrees a Rescateon the Property Concession for reasons of
public interest; or
 
    
    the Property Concession is revoked.
  
    
    failure to use the Property Concession for the purpose for which it was granted;
 
    
    failure to comply with the terms of the Property Concession;
 
    
    activities taking place on the premises for which the Property Concession was
granted, without prior permission of the SCT, that interfere with satellite operations;
or
 
    
    under terms and conditions generally applicable to Property Concessions of this
type under applicable Mexican law.
 Enlaces Concession and Value Added Services Certificate
     Rescate Rescate
  37




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U.S. and ITU Regulation
 FCC Regulation of Satellite Services and Foreign Ownership of FCC Licenses
    
    
    participating in a U.S. space station processing round;
 
    
    having a U.S. earth station operator apply for authority to communicate with the
non-U.S. satellite; or
 
    
    applying to be listed 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 Telecommunication Union Regulation
    38




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Status of Our Satellites
    Treaties and International Accords
 Reciprocity Agreement between the U.S. and Mexico
   39




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Direct-to-Home Protocol
  Fixed Satellite Services Protocol
  Reciprocity Agreement between Canada and Mexico
   Argentine Agreement
   
 ITEM 4A. Unresolved Staff Comments
   40




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ITEM 5. Operating and Financial Review and Prospects
 The information in this section should be read in conjunction with the financial statements
beginning on page

 F-1. Our financial statements are published in U.S. dollars and prepared in conformity with
accounting principles generally accepted in the U.S., which we refer to as U.S. GAAP. We maintain
our accounting books and records in both Mexican pesos and U.S. dollars. Our functional currency is
the U.S. dollar. Monetary assets and liabilities denominated in pesos are translated into U.S.
dollars using current exchange rates. The exchange gain or loss is reflected in the results of
operations as a component of net income. Non-monetary assets and liabilities originally denominated
in pesos are translated into U.S. dollars using the historical exchange rate at the date of the
transaction. Common stock is translated at historical exchange rates in effect at the date of
contribution or on the date of change to common stock. Certain amounts presented in this annual
report may not sum due to rounding.
 We adopted fresh-start reporting as of November 30, 2006 in accordance with Statement of
Position No. 90-7, Financial Reporting of Entities in Reorganization Under the Bankruptcy Code
(SOP 90-7). Accordingly, our financial information disclosed under the heading Successor
Registrant for the year ended December 31, 2008 and 2007 and for the period from December 1 to
December 31, 2006 is presented on a basis different from, and is therefore not comparable to, our
financial information disclosed under the heading Predecessor Registrant for the period from
January 1 to November 30, 2006 (the date on which we adopted fresh-start reporting) and prior
years.
  Successor Registrant
    
    
    
    
    
    
    PredecessorRegistrantDecember 1 to
    
    
    Year ended
    
    
    January 1 toYears ended December 31,
    
    
    December 31,
    
    
    December 31,
    
    
    November 30,2008
    
    
    2007
    
    
    2006
    
    
    2006
    
    
    2006(In thousands)RevenuesSatellite services
    
    $
    93,248
    
    
    $
    80,250
    
    
    $
    4,721
    
    
    $
    87,044
    
    
    $
    82,323Programming distribution
services
    
    
    8,136
    
    
    
    6,815
    
    
    
    557
    
    
    
    6,576
    
    
    
    6,019Broadband satellite services
    
    
    13,335
    
    
    
    15,136
    
    
    
    1,473
    
    
    
    1,473
    
    
    
    114,719
    
    
    
    102,201
    
    
    
    6,751
    
    
    
    95,093
    
    
    
    88,342Costs and expenses:Satellite services
    
    
    14,126
    
    
    
    21,421
    
    
    
    2,360
    
    
    
    34,886
    
    
    
    32,526Reversal of provision for
orbital incentive
    
    
    (6,989
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Programming distribution
services
    
    
    4,162
    
    
    
    3,223
    
    
    
    213
    
    
    
    2,805
    
    
    
    2,592Broadband satellite services
    
    
    2,186
    
    
    
    3,824
    
    
    
    175
    
    
    
    175
    
    
    
    Selling and administrative
expenses
    
    
    25,704
    
    
    
    26,509
    
    
    
    1,687
    
    
    
    13,735
    
    
    
    12,048Depreciation
    
    
    32,797
    
    
    
    37,282
    
    
    
    2,934
    
    
    
    42,884
    
    
    
    39,950Amortization
    
    
    27,010
    
    
    
    15,824
    
    
    
    3,332
    
    
    
    15,162
    
    
    
    11,83098,996
    
    
    
    108,083
    
    
    
    10,701
    
    
    
    109,647
    
    
    
    98,946Other income
    
    
    4,610
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    20,333
    
    
    
    (5,882
    )
    
    
    (3,950
    )
    
    
    (14,554
    )
    
    
    (10,604
    )Reorganization expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,447
    )
    
    
    (33,447
    )Interest expense
    
    
    (48,498
    )
    
    
    (51,672
    )
    
    
    (4,333
    )
    
    
    (23,485
    )
    
    
    (19,152
    )Interest income
    
    
    1,481
    
    
    
    1,650
    
    
    
    103
    
    
    
    2,814
    
    
    
    2,711Net foreign exchange (loss) gain
    
    
    (1,828
    )
    
    
    145
    
    
    
    (123
    )
    
    
    5,567
    
    
    
    5,690Loss before income tax,
minority interest and preferred
stock dividends
    
    
    (28,512
    )
    
    
    (55,759
    )
    
    
    (8,303
    )
    
    
    (63,105
    )
    
    
    (54,802
    )Income tax
    
    
    6,829
    
    
    
    893
    
    
    
    311
    
    
    
    19,037
    
    
    
    18,726Minority interest
    
    
    285
    
    
    
    802
    
    
    
    140
    
    
    
    140
    
    
    
    Consolidated net loss
    
    
    (35,626
    )
    
    
    (57,454
    )
    
    
    (8,754
    )
    
    
    (82,282
    )
    
    
    (73,528
    )Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,130
    
    
    
    1,130Consolidated net loss
applicable to common
shareholders
    
    $
    (35,626
    )
    
    $
    (57,454
    )
    
    $
    (8,754
    )
    
    $
    (83,412
    )
    
    $
    (74,658
    )
  41




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##### Table of Contents



Overview
   Financial Restructuring
  concurso mercantil concurso mercantil
    42




---



##### Table of Contents



Recent Tax Developments
 Impuesto Empresarial a Tasa Única amparo
 Industry Overview and Trends
     
    
    the important role satellites play in reducing the social digital breach by
servicing governmental communications networks such as e-Mexico in Mexico, Compartel in
Colombia, and G-SAC in Brazil;
 
    
    the continued development of data and voice communication technology in emerging
markets where terrestrial communication facilities and service coverage areas may be more
limited;
 
    
    increased demand worldwide for enterprise-level regional and global public Internet
and private networking services, including broadband Internet access, voice-over Internet
Protocol (VoIP), and managed data services, including government sponsored connectivity
programs for remote communities;
  43




---



##### Table of Contents




    
    expansion of broadcast video applications such as HDTV, and a continued increase in
the number of channels broadcast;
 
    
    continued growth of the DTH market and demand for ethnic and religious channels
requiring continental coverage; and
 
    
    general economic growth in our region.
 Results of Operations for the Year ended December 31, 2008 Compared to the Year ended December 31,
2007
 Revenues
  Costs and Expenses
  Operating Costs
  Reversal of Provision for Orbital Incentive
  Selling and Administrative Expenses
   44




---



##### Table of Contents



Depreciation and Amortization
  Other income
  Operating Income/Loss
  Interest Expense
  Net Foreign Exchange Gain/Loss
  Income Tax
 Accounting for Income Taxes.
 Net Loss Applicable to Common Shareholders
  Results of Operations for the Year ended December 31, 2007 Compared to the Year ended December 31,
2006
 Revenues
   45




---



##### Table of Contents



Operating Expenses
  Operating Costs
  Selling and Administrative Expenses
  Depreciation and Amortization
   Operating Loss
   46




---



##### Table of Contents



Interest Expense
 concurso mercantil
 Net Foreign Exchange Gain/Loss
 unidades de
inversión
 Income Tax
  Net Loss Applicable to Common Shareholders
  Inflation and Foreign Exchange Fluctuations
 Índice Nacional de Precios al Consumidor
 Capital Expenditures
    47




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##### Table of Contents



Year Ended December 31,2008
    
    
    2007
    
    
    2006(in millions of U.S. dollars)Acquisition of property, furniture and equipment
    
    $
    3.0
    
    
    $
    2.0
    
    
    $
    2.1Acquisition of Satmex 7
    
    
    3.5
    
    
    
    0.4
    
    
    
    Acquisition and launch of Satmex 6
    
    
    
    
    
    
    
    
    
    
    45.3Total
    
    $
    6.5
    
    
    $
    2.4
    
    
    $
    47.4
   Total Debt
  Liquidity and Capital Resources
    Sources and Uses of Cash
 Year ended December 31, 2008 compared to the year ended December 31, 2007
   48




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##### Table of Contents



Operating Activities
  Investing Activities
  Year ended December 31, 2007 compared to the year ended December 31, 2006
  Operating Activities
  Investing Activities
   Contractual Obligations and Other Commercial Commitments
  Payments Due By PeriodLess than
    
    
    
    
    
    
    
    
    
    
    After 5Contractual Obligations
    
    Total
    
    
    One Year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    YearsDebt and related interest accrued
as of December 31, 2008(1)
    
    $
    587,502
    
    
    $
    29,735
    
    
    $
    300,873
    
    
    $
    256,894
    
    
    $
    Operating leases(2)
    
    
    2,463
    
    
    
    493
    
    
    
    985
    
    
    
    985
    
    
    
    Other long-term obligations(3)
    
    
    4,261
    
    
    
    426
    
    
    
    852
    
    
    
    852
    
    
    
    2,131Total contractual cash obligations
    
    $
    594,226
    
    
    $
    30,654
    
    
    $
    302,710
    
    
    $
    258,731
    
    
    $
    2,131Other Commercial Commitments:Maintenance
    
    $
    5,538
    
    
    $
    1,864
    
    
    $
    2,152
    
    
    $
    1,522
    
    
    $
    
 
 (1)
    
    Variable interest on the First Priority Notes is calculated using projected interest rate,
approximately 12.5% over the five-year life of the notes. For the Second Priority Notes, we
have calculated interest at an annual fixed rate of 10.125% taking into consideration
capitalized interest (in-kind in 2007 and in cash and in-kind until 2011).(2)
    
    Represents future minimum payments under non-cancelable operating leases with initial or
remaining terms of one year or more.(3)
    
    Represents payments to the Mexican government under the Property Concession.  49




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##### Table of Contents



The First Priority Notes
 pari passu pari passu
   
    
    incur additional indebtedness;
 
    
    pay dividends or make other distributions;
 
    
    make certain loans, guarantees or investments, including investments in
unrestricted subsidiaries;
 
    
    enter into interest rate and currency hedges;
 
    
    apply the proceeds of insurance payments or asset sales (and use the proceeds
thereof);
 
    
    create or suffer to exist liens;
 
    
    enter into negative pledge agreements;
 
    
    enter into businesses other than the satellite telecommunications business;
 
    
    transfer or dispose of concessions and other assets;
 
    
    enter into certain transactions with shareholders or affiliates;
 
    
    issue preferred stock, or permit the issuance of stock of restricted subsidiaries;
 
    
    enter into sale and leaseback transactions;
 
    
    merge, consolidate or transfer substantially all of our assets; and
 
    
    make investments in unrestricted subsidiaries.
  50




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##### Table of Contents



The Second Priority Notes
   
    
    incur additional indebtedness;
 
    
    pay dividends or make other distributions;
 
    
    make certain loans, guaranties or investments, including investments un
unrestricted subsidiaries;
 
    
    enter into interest rate and currency hedges;
 
    
    apply the proceeds of insurance payments or asset sales (and use the proceeds
thereof);
 
    
    create or suffer to exist liens;
 
    
    enter into negative pledge agreements;
 
    
    enter into businesses other than the satellite telecommunications business;
 
    
    transfer or dispose of concessions and other assets;
 
    
    enter into certain transactions with shareholders or affiliates;
 
    
    issue preferred stock, or permit the issuance of stock of restricted subsidiaries;
 
    
    enter into sale and leaseback transactions;
 
    
    merge, consolidate or transfer substantially all of our assets; and
 
    
    make investments in unrestricted subsidiaries.
  51




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##### Table of Contents



Off-Balance Sheet Arrangements
  Critical Accounting Policies
  Business Combinations
 Useful Lives of Satellites
   Solidaridad 2
    
    14.5 yearsSatmex 5
    
    15 yearsSatmex 6
    
    15 years
   52




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##### Table of Contents



Valuation of Satellites and Long-Lived Assets
 Accounting for the Impairment or
Disposal of Long-Lived Assets
 Goodwill and Other Intangible Assets
 Goodwill and Other Intangible Assets Fair Value Measurements,
  Income Tax
   53




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##### Table of Contents



Revenue Recognition
 1. AlternaTV
  2. Sales of antennas and installation services
  Allowance for Doubtful Accounts
  Accounting Pronouncements
 The Fair Value Option for Financial Assets and
Financial Liability
 Fair Value Measurements Determining the Fair Value of a Financial Asset When
the Market for That Asset is Not Active
 The Fair Value Option for Financial Assets and
Financial Liabilities  including an amendment of FASB Statement No. 115
  54




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##### Table of Contents



Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51.
 Business Combinationsa replacement of FASB
No. 141. Accounting for Income Taxes
 Disclosures about Derivative Instruments and
Hedging Activities, an Amendment of FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities
 Determination of the Useful Life of
Intangible Assets
   55




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##### Table of Contents



Noncontrolling Interests in Consolidated
Financial Statements-an amendment of ARB No. 51 S
 Business Combinations-a replacement of
FASB No. 141
 Disclosures about Derivative Instruments and
Hedging Activities, an Amendment of FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities
 Determination of the Useful Life of
Intangible Assets Goodwill and Other Intangible Asset
   56




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##### Table of Contents



ITEM 6. Directors, Senior Management and Employees
 Directors
 SeriesName
    
    Position
    
    
    Age
    
    
    Period of Service
    
    RepresentingLuis Rebollar Corona
    
    Chairman of the Board and Director
    
    
    72
    
    
    Since November 30, 2006
    
    AVicente Ariztegui Andreve
    
    Director
    
    
    55
    
    
    Since November 30, 2006
    
    AErwin Starke Fabris
    
    Director
    
    
    55
    
    
    Since November 30, 2006
    
    AJosé Manuel Canal Hernando
    
    Director
    
    
    69
    
    
    Since September 19, 2007
    
    ARichard Mastoloni
    
    Director
    
    
    44
    
    
    Since November 30, 2006
    
    BDavid Meltzer
    
    Director
    
    
    49
    
    
    Since September 19, 2007
    
    BJames Duplessie
    
    Director
    
    
    50
    
    
    Since September 19, 2007
    
    BLuis Alfonso Nicolau Gutiérrez
    
    Alternate Director
    
    
    51
    
    
    Since September 19, 2007
    
    BJohn H. Stevens
    
    Alternate Director
    
    
    61
    
    
    Since November 30, 2006
    
    B
  Non-Members
 Name
    
    Position
    
    
    Age
    
    
    Period of ServiceLuis Rubio Barnetche
    
    Secretary of the Board of Directors
    
    
    46
    
    
    Since August 4, 2008Bertha Alicia Ordaz Avilés
    
    Alternate Secretary of the Board of Directors
    
    
    36
    
    
    Since August 4, 2008Daniel del Barrio Burgos
    
    Statutory Examiner
    
    
    55
    
    
    Since September 19, 2007
 Senior Management
 Name
    
    Position
    
    
    Age
    
    
    Period of ServicePatricio E. Northland
    
    Chief Executive Officer
    
    
    54
    
    
    Since May 2008Luis Fernando Stein Velasco
    
    Chief Financial Officer
    
    
    50
    
    
    Since November 2008Dionisio Manuel Tun Molina
    
    Vice President of Engineering and Satellite Operations
    
    
    46
    
    
    Since May 2006Clemente Humberto Cabello Alcérreca
    
    Vice President Business & Development
    
    
    39
    
    
    Since January 2009Alejandro Camberos Chacon
    
    Director Strategic Planning
    
    
    45
    
    
    Since July 2007Leticia María Concepción Soto Walls
    
    Director of Human Resources, Development & Administration
    
    
    45
    
    
    Since October 2008Pablo Manzur Bernabeu
    
    General Counsel
    
    
    36
    
    
    Since June 2009John Mays Compton
    
    Chief Executive Officer of Enlaces
    
    
    54
    
    
    Since December 2008
   57




---



##### Table of Contents



Luis Rebollar Corona
 Vicente Ariztegui Andreve
 Erwin Starke Fabris
 José Manuel Canal Hernando
 Richard Mastoloni
  58




---



##### Table of Contents



David Meltzer
 James Duplessie
 Luis Alfonso Nicolau Gutiérrez
 John H. Stevens
 Luis Rubio Barnetche
 Bertha Alicia Ordaz Avilés
  59




---



##### Table of Contents



Daniel del Barrio Burgos
 Patricio E. Northland
 Dionisio Manuel Tun Molina
 Luis Fernando Stein Velasco
 Clemente Humberto Cabello Alcérreca
  60




---



##### Table of Contents



Alejandro Camberos Chacón
 Leticia María Concepción Soto Walls.
 Pablo Manzur Bernabeu. ®
 John Mays Compton
 Audit and Compensation Committee
 Comité Único de Auditoría y
Compensaciones
  Compensation
     61




---



##### Table of Contents



Employees
      62




---



##### Table of Contents



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
    
    
    
    
    
    
    221,667
    
    
    
    401,770
    
    
    
    
    
    
    
    
    
    
    1.33% 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
Principia, S.A. de
C.V.
    
    
    
    
    
    
    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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
  63




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##### Table of Contents



ITEM 7. Major Shareholders and Related Party Transactions
 Major Shareholders
  Shareholders Equity
    
    
    Voting: 55% of total common voting rights
 
    
    Preemptive Rights: Equity calls
 Series B Stock:
 
    
    Voting: 45% of total common voting rights
 
    
    Preemptive Rights: Equity calls
 Series N Stock:
 
    
    Voting: Limited voting rights; may vote only with respect to extension of term,
conversion or anticipated dissolution, amendment to Satmexs corporate purpose or change
of Satmexs nationality
 
    
    Preemptive Rights: Equity calls
 Related Party Transactions
 Mexican Government
 Telecomunicaciones de México, or
 Indice Nacional de
Precios al Consumidor Secretaría de la Función Pública
  64




---



##### Table of Contents



Loral Usufructo
 usufructo usufructo
 usufructo
 
 ITEM 8. Financial Information
 Legal Proceedings
      amparo amparo
 Dividend Policy
    65




---



##### Table of Contents



ITEM 9. Markets
  
 ITEM 10. Additional Information
  Articles of Incorporation
  Material Contracts
  Exchange Controls
   66




---



##### Table of Contents



TAXATION
    Taxation of Interest and Principal
 (casas de bolsa) (Registro National de Valores) (Secretaría de Hacienda y Crédito Público)
      67




---



##### Table of Contents



Taxation of Dispositions
  Transfer and Other Taxes
  
 ITEM 11. Quantitative and Qualitative Disclosures About Market Risk
  Exchange Rate Risk
  Interest Rate Risk
    68




---



##### Table of Contents



PART II
 
 ITEM 13. Defaults, Dividend Arrearages and Delinquencies
  
 ITEM 14. Material Modifications to the Rights of Security Holders
  
 ITEM 15T. Controls and Procedures
 Disclosure Controls and Procedures
    Managements Annual Report on Internal Control Over Financial Reporting
    69




---



##### Table of Contents



Remediation of Previously Disclosed Material Weakness
    
 ITEM 16A. Audit Committee Financial Expert
 Comité Único de
Auditoría y Compensación
  
 ITEM 16B. Code of Conduct
 www.satmex.com
 
 ITEM 16C. Principal Accountant Fees and Services
  2008
    
    
    2007
    
    
    2006(Amounts in thousands)Audit fees (1)
    
    $
    581
    
    
    $
    797
    
    
    $
    377Tax fees (2)
    
    
    148
    
    
    
    85
    
    
    
    82Total fees
    
    $
    729
    
    
    $
    882
    
    
    $
    459
 (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. Audit fees in 2007 include
$408 related to audit procedures with respect to Satmexs financial restructuring and the
application of fresh-start reporting.(2)
    
    Tax fees:Tax fees in the above table are fees billed by GYRU in connection to financial
statements for tax purposes.
   70




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##### Table of Contents



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-2]Consolidated Balance Sheets as of December 31, 2008 and 2007 (Successor Registrant)
    
    
    [F-3]Consolidated Statements of Operations for the years ended December 31, 2008 and
2007 and the period from December 1 to December 31, 2006 (Successor Registrant),
and from January 1 to November 30, 2006 (Predecessor Registrant)
    
    
    [F-4]Consolidated Statements of Changes in Shareholders Equity (Deficit) for the years
ended December 31, 2008 and 2007 and the period from December 1 to December 31,
2006 (Successor Registrant), and from January 1 to November 30, 2006 (Predecessor
Registrant)
    
    
    [F-5]Consolidated Statements of Cash Flows for the years ended December 31, 2008 and
2007 and the period from December 1 to December 31, 2006 (Successor Registrant),
and from January 1 to November 30, 2006 (Predecessor Registrant)
    
    
    [F-6]Notes to Consolidated Financial Statements
    
    
    [F-8]Schedule of Valuation and Qualifying Accounts
    
    
    [F-36]
 (b) Index to Exhibits
 Exhibit No.
    
    Description1.1
    
    
    Estatutos Sociales(bylaws) of Satélites Mexicanos, S.A. de C.V.1.2
    
    
    Estatutos Sociales(bylaws) of Satélites Mexicanos, S.A. de C.V. (English translation).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.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.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.
  71




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##### Table of Contents



Exhibit No.
    
    Description2.4
    
    
    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.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.2.6
    
    
    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.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.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.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.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.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.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.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.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.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.
  72




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Exhibit No.
    
    Description2.16
    
    
    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.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.2.18
    
    
    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.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.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.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.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.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.*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.*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.*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.*2.27
    
    
    Joinder, dated January 20, 2009, by AlternaTV Corporation.*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.*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.*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.*
  73




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##### Table of Contents



Exhibit No.
    
    Description2.31
    
    
    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.*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.*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.*2.34
    
    
    Joinder, dated May 21, 2009, by AlternaTV International Corporation.*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.*2.36
    
    
    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.*4.1
    
    
    Satellite Concession 116.8 degrees W. L.4.2
    
    
    Satellite Concession 116.8 degrees W. L.(English Translation)4.3
    
    
    Satellite Concession 113.0 degrees W. L.4.4
    
    
    Satellite Concession 113.0 degrees W. L.(English Translation)4.5
    
    
    Satellite Concession 109.2 degrees W. L.4.6
    
    
    Satellite Concession 109.2 degrees W. L.(English Translation)4.7
    
    
    Property Concession4.8
    
    
    Property Concession (English Translation)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.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.***4.11
    
    
    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.**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.*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.*
  74




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Exhibit No.
    
    Description12.1
    
    
    Section 302 Certification of Patricio Northland, Chief Executive Officer.*12.2
    
    
    Section 302 Certification of Luis Stein, Chief Financial Officer.*13.1
    
    
    Section 906 Certification of Patricio Northland, Chief Executive Officer.*13.2
    
    
    Section 906 Certification of Luis Stein, Chief Financial Officer.*
 
 
    
    Incorporated by reference from the registrants Registration Statement on Form F-4 filed on
November 9, 1998 (File No. 333-8880).
    
    Incorporated by reference from the registrants Form 6-K for the month of December, 2006.
    
    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.
    
    Incorporated by reference from the registrations Amendment to Form T-3 filed on November 22, 2006
(File No. 022-28822).****
    
    Incorporated by reference to the registrants Form 20-F for the fiscal year ended December 31, 2007.***
    
    Incorporated by reference to the registrants Form 20-F for the fiscal year ended December 31, 2005.**
    
    Incorporated by reference to the registrants Form 20-F for the fiscal year ended December 31, 2006.*
    
    Filed herewith.  75




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##### Table of Contents



SIGNATURES
  SATÉLITES MEXICANOS, S.A. DE C.V.By:
    /s/ LUIS FERNANDO STEIN VELASCOLuis Fernando Stein VelascoChief Financial Officer   76




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##### Table of Contents



SATÉLITES MEXICANOS, S.A. DE C.V. AND SUBSIDIARIES
PART III
INDEX TO FINANCIAL STATEMENTS
 Table of contents
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2008 and 2007 (Successor Registrant)
    
    
    F-3Consolidated Statements of Operations for the years ended December 31, 2008 and
2007 and the period from December 1 to December 31, 2006 (Successor
Registrant), and from January 1 to November 30, 2006 (Predecessor Registrant)
    
    
    F-4Consolidated Statements of Changes in Shareholders Equity (Deficit) for the
years ended December 31, 2008 and 2007 and the period from December 1 to
December 31, 2006 (Successor Registrant), and from January 1 to November 30,
2006 (Predecessor Registrant)
    
    
    F-5Consolidated Statements of Cash Flows for the years ended December 31, 2008 and
2007 and the period from December 1 to December 31, 2006 (Successor Registrant),
and from January 1 to November 30, 2006 (Predecessor Registrant)
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-8Schedule of Valuation and Qualifying Accounts
    
    
    F-36
  F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 To the Board of Directors and Shareholders of Satélites Mexicanos, S. A. de C.
V. and Subsidiaries
    Financial Reporting by Entities in Reorganization Under the Bankruptcy Code
 
  
  F-2




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##### Table of Contents



Satélites Mexicanos, S. A. de C.V. and Subsidiaries
 
 Consolidated Balance Sheets
 As of December 31, 2008 and 2007  (Thousands of U. S. dollars)
 Successor Registrant2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    $
    58,207
    
    
    $
    37,176Accounts receivable  net
    
    
    17,281
    
    
    
    8,181Due from related parties
    
    
    385
    
    
    
    579Inventories  net
    
    
    187
    
    
    
    338Prepaid insurance
    
    
    3,706
    
    
    
    4,054Deferred income taxes
    
    
    61
    
    
    
    709Total current assets
    
    
    79,827
    
    
    
    51,037Satellites and equipment  net
    
    
    264,149
    
    
    
    290,428Concessions  net
    
    
    41,007
    
    
    
    42,419Intangible assets  net
    
    
    27,294
    
    
    
    52,860Guarantee deposits and other assets
    
    
    715
    
    
    
    936Goodwill
    
    
    32,502
    
    
    
    32,502Total
    
    $
    445,494
    
    
    $
    470,182Liabilities and Shareholders DeficitCurrent liabilities:Accrued interest
    
    $
    1,560
    
    
    $
    1,351Accounts payable and accrued expenses
    
    
    15,844
    
    
    
    20,967Deferred revenue
    
    
    2,344
    
    
    
    2,344Income tax payable
    
    
    677
    
    
    
    59Total current liabilities
    
    
    20,425
    
    
    
    24,721Debt obligations
    
    
    406,297
    
    
    
    393,171Deferred revenue
    
    
    65,354
    
    
    
    67,698Labor obligations
    
    
    461
    
    
    
    453Accrued expenses
    
    
    263
    
    
    
    280Deferred income taxes
    
    
    5,091
    
    
    
    915Total liabilities
    
    
    497,891
    
    
    
    487,238Contingencies and commitments (Note 20)Minority interest in consolidated subsidiaries
    
    
    2,673
    
    
    
    2,388Shareholders deficit:Common stock
    
    
    46,764
    
    
    
    46,764Accumulated deficit
    
    
    (101,834
    )
    
    
    (66,208
    )Total shareholders deficit
    
    
    (55,070
    )
    
    
    (19,444
    )Total
    
    $
    445,494
    
    
    $
    470,182
   F-3




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##### Table of Contents



Satélites Mexicanos, S. A. de C.V. and Subsidiaries
 
 Consolidated Statements of Operations
 (Thousands of U. S. dollars)
 PredecessorSuccessor Registrant
    
    
    RegistrantFor the Period
    
    
    For the PeriodYear Ended
    
    
    Year Ended
    
    
    from December 1
    
    
    from January 1December 31,
    
    
    December 31,
    
    
    to December 31,
    
    
    to November 30,2008
    
    
    2007
    
    
    2006
    
    
    2006Revenues (see Note 16):Satellite services
    
    $
    93,248
    
    
    $
    80,250
    
    
    $
    4,721
    
    
    $
    82,323Programming distribution services
    
    
    8,136
    
    
    
    6,815
    
    
    
    557
    
    
    
    6,019Broadband satellite services
    
    
    13,335
    
    
    
    15,136
    
    
    
    1,473
    
    
    
    114,719
    
    
    
    102,201
    
    
    
    6,751
    
    
    
    88,342Cost and expenses:Satellite services (1)
    
    
    14,126
    
    
    
    21,421
    
    
    
    2,360
    
    
    
    32,526Reversal of provision for
orbital incentive
    
    
    (6,989
    )
    
    
    
    
    
    
    
    
    
    
    Programming distribution
services (1)
    
    
    4,162
    
    
    
    3,223
    
    
    
    213
    
    
    
    2,592Broadband satellite services
(1)
    
    
    2,186
    
    
    
    3,824
    
    
    
    175
    
    
    
    Selling and administrative
expenses (1)
    
    
    25,704
    
    
    
    26,509
    
    
    
    1,687
    
    
    
    12,048Depreciation and amortization
    
    
    59,807
    
    
    
    53,106
    
    
    
    6,266
    
    
    
    51,78098,996
    
    
    
    108,083
    
    
    
    10,701
    
    
    
    98,946Other income
    
    
    4,610
    
    
    
    
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    20,333
    
    
    
    (5,882
    )
    
    
    (3,950
    )
    
    
    (10,604
    )Interest expense
    
    
    (48,498
    )
    
    
    (51,672
    )
    
    
    (4,333
    )
    
    
    (19,152
    )Interest income
    
    
    1,481
    
    
    
    1,650
    
    
    
    103
    
    
    
    2,711Net foreign exchange (loss) gain
    
    
    (1,828
    )
    
    
    145
    
    
    
    (123
    )
    
    
    5,690Reorganization expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33,447
    )Loss before income tax, minority
interest and preferred
stock dividends
    
    
    (28,512
    )
    
    
    (55,759
    )
    
    
    (8,303
    )
    
    
    (54,802
    )Income tax
    
    
    6,829
    
    
    
    893
    
    
    
    311
    
    
    
    18,726Minority interest
    
    
    285
    
    
    
    802
    
    
    
    140
    
    
    
    Consolidated net loss
    
    
    (35,626
    )
    
    
    (57,454
    )
    
    
    (8,754
    )
    
    
    (73,528
    )Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,130Consolidated net loss applicable
to common shareholders
    
    $
    (35,626
    )
    
    $
    (57,454
    )
    
    $
    (8,754
    )
    
    $
    (74,658
    )
 (1)
    
    Exclusive of depreciation and amortization shown separately below. 
  F-4




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##### Table of Contents



Satélites Mexicanos, S. A. de C.V. and Subsidiaries
 
 Consolidated Statements of Shareholders Equity (Deficit)
 (Thousands of U. S. dollars, except per share data)
 Common stock
    
    
    Preferred stock
    
    
    
    
    
    
    TotalShares
    
    
    
    
    
    
    Shares
    
    
    
    
    
    
    Accumulated
    
    
    shareholdersissued
    
    
    Amount
    
    
    issued
    
    
    Amount
    
    
    deficit
    
    
    equity(deficit)Predecessor RegistrantBalance January 1, 2006
    
    
    10,000,000
    
    
    $
    389,575
    
    
    
    606,730
    
    
    $
    31,886
    
    
    $
    (242,880
    )
    
    $
    178,581Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (73,528
    )
    
    
    (73,528
    )Preferred stock
dividends
    
    
    
    
    
    
    1,130
    
    
    
    
    
    
    
    
    
    
    
    (1,130
    )
    
    
    Reduction of common
stock
    
    
    (10,000,000
    )
    
    
    (285,652
    )
    
    
    (606,730
    )
    
    
    (31,886
    )
    
    
    317,538
    
    
    
    Debt capitalization
    
    
    46,874,999
    
    
    
    273,779
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    273,779Fresh-start adjustment
    
    
    
    
    
    
    (332,068
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (332,068
    )Balance November 30,
2006
    
    
    46,874,999
    
    
    
    46,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,764Successor RegistrantNet loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,754
    )
    
    
    (8,754
    )Balance December 31,
2006
    
    
    46,874,999
    
    
    
    46,764
    
    
    
    
    
    
    
    
    
    
    
    (8,754
    )
    
    
    38,010Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,454
    )
    
    
    (57,454
    )Balance December 31,
2007
    
    
    46,874,999
    
    
    
    46,764
    
    
    
    
    
    
    
    
    
    
    
    (66,208
    )
    
    
    (19,444
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,626
    )
    
    
    (35,626
    )Balance December 31,
2008
    
    
    46,874,999
    
    
    $
    46,764
    
    
    $
    
    
    
    $
    
    
    
    $
    (101,834
    )
    
    $
    (55,070
    )
  
  F-5




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##### Table of Contents



Satélites Mexicanos, S. A. de C.V. and Subsidiaries
 
 Consolidated Statements of Cash Flows
 Thousands of U. S. dollars)
 PredecessorSuccessor Registrant
    
    
    RegistrantFor the period
    
    
    For the periodYear ended
    
    
    Year ended
    
    
    from December 1
    
    
    from January 1December 31,
    
    
    December 31,
    
    
    to December 31,
    
    
    to November 30,2008
    
    
    2007
    
    
    2006
    
    
    2006Cash flows from operating activities:Consolidated net loss
    
    $
    (35,626
    )
    
    $
    (57,454
    )
    
    $
    (8,754
    )
    
    $
    (73,528
    )Adjustments to reconcile net loss
to net cash flows provided by (used
in) operating activities:Loss on discharge of prepetition
liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,346Minority interest
    
    
    285
    
    
    
    802
    
    
    
    140
    
    
    
    Depreciation and amortization
    
    
    59,807
    
    
    
    53,106
    
    
    
    6,266
    
    
    
    51,780Labor obligations
    
    
    8
    
    
    
    123
    
    
    
    
    
    
    
    329Income taxes
    
    
    4,824
    
    
    
    507
    
    
    
    311
    
    
    
    18,726Deferred revenue
    
    
    (2,344
    )
    
    
    (2,344
    )
    
    
    (195
    )
    
    
    (2,023
    )Interest capitalized in debt
obligations (see Note 13b)
    
    
    13,126
    
    
    
    14,934
    
    
    
    
    
    
    
    Profit on sales-type lease
arrangement  usufruct
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,312
    )Exchange rate fluctuation and
change in value of notes payable
to reflect amount in UDI in
accordance with concurso
mercantil
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,613
    )Changes in operating assets and
liabilities: (Increase) decrease in:Accounts receivable  net
    
    
    (9,100
    )
    
    
    (1,289
    )
    
    
    1,614
    
    
    
    (2,915
    )Due from / to related parties  net
    
    
    194
    
    
    
    (48
    )
    
    
    (2,562
    )
    
    
    1,645Inventories  net
    
    
    151
    
    
    
    467
    
    
    
    (10
    )
    
    
    Prepaid insurance
    
    
    348
    
    
    
    215
    
    
    
    (1,492
    )
    
    
    407Guarantee deposits and others assets
    
    
    221
    
    
    
    680
    
    
    
    (172
    )
    
    
    2,177Increase (decrease) in:Accounts payable and accrued
expenses
    
    
    (4,554
    )
    
    
    8,132
    
    
    
    (1,863
    )
    
    
    3,400Accrued interest
    
    
    209
    
    
    
    (2,758
    )
    
    
    4,109
    
    
    
    18,248Net cash flows provided by (used in)
operating activities
    
    
    27,549
    
    
    
    15,073
    
    
    
    (2,608
    )
    
    
    15,667Cash flows from investing activities:Acquisition of equipment  net
    
    
    (3,053
    )
    
    
    (2,034
    )
    
    
    (1,528
    )
    
    
    (585
    )Satellite construction in progress
    
    
    (3,465
    )
    
    
    (391
    )
    
    
    
    
    
    
    (45,299
    )Cash acquired on Enlaces business
combination
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,007Restricted cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,000Net cash flows used in investing
activities
    
    
    (6,518
    )
    
    
    (2,425
    )
    
    
    (1,528
    )
    
    
    (41,877
    )Cash and cash equivalents:Net increase (decrease) for the year
    
    
    21,031
    
    
    
    12,648
    
    
    
    (4,136
    )
    
    
    (26,210
    )Beginning of year
    
    
    37,176
    
    
    
    24,528
    
    
    
    28,664
    
    
    
    54,874
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##### Table of Contents



PredecessorSuccessor Registrant
    
    
    RegistrantFor the period
    
    
    For the periodYear ended
    
    
    Year ended
    
    
    from December 1
    
    
    from January 1December 31,
    
    
    December 31,
    
    
    to December 31,
    
    
    to November 30,2008
    
    
    2007
    
    
    2006
    
    
    2006End of year
    
    $
    58,207
    
    
    $
    37,176
    
    
    $
    24,528
    
    
    $
    28,664Supplemental disclosures:Interest paid
    
    $
    32,952
    
    
    $
    36,900
    
    
    $
    
    
    
    $
    Income taxes paid
    
    $
    9,017
    
    
    $
    340
    
    
    $
    
    
    
    $
    Supplemental non-cash
flow information:Exchange for
cancellation of the
FRN old debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    238,237Exchange for
cancellation of the
HYB old debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    140,000Debt capitalization
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    273,779Account receivable
exchanged for 75%
of Enlaces common
stock
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    8,493
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##### Table of Contents



Satélites Mexicanos, S. A. de C.V. and Subsidiaries
 
 Notes to Consolidated Financial Statements
 (Thousands of U.S. dollars)
 1.
    
    Nature of BusinessSatélites Mexicanos, S. A. de C. V. and subsidiaries (collectively Satmex or the Company)
is a lead provider of fixed satellite services in the Americas, providing satellite
transmission capacity for fixed and mobile telephone networks, Internet, remote educational
services, and maritime and aerial operating controls. It also markets the use of satellite
transmission capacity for telecommunication transmission and broadcasting, which includes
special events, sports, news and entertainment. Related to direct-to-home television service,
the Company has created AlternaTV (Programming distribution services) to offer TV programs
in Spanish for Hispanic communities living in the United States of America (USA). The
Company also provides broadband satellites services, through its main subsidiary, of
transmission capacity for new applications, such as Internet access via satellite,
telecommunication transmission and broadcasting.In order to provide satellite transmission capacity, Satmex owns and operates three
satellites, Solidaridad 2, which was placed in inclined orbit on March 1, 2008, Satmex 5 and
Satmex 6 in geostationary orbits at 114.9° W.L., 116.8° W.L. and 113.0° W.L., respectively.
In total, Satmex has 156 36-MHz transponder equivalents operating in the C and Ku bands,
covering substantially the USA, Mexico, the Caribbean and the rest of Latin American
countries, excluding certain western regions of Brazil.2.
    
    Organization and Comparative Financial Statements
 a.
    
    The consolidated financial statements include the figures of Satélites Mexicanos,
S. A. de C. V. and its subsidiaries. The activities of the entities in the consolidated
group are described below:
 
    
    Enlaces Integra, S. de R. L. de C. V. (Enlaces), a 75% owned subsidiary, was
acquired on November 30, 2006. Its main activity is the installation, operation,
control and exploitation of public networks of telecommunications in Mexico.
    
    HPS Corporativo, S. de R. L. de C.V. (HPS), a 99.97% owned subsidiary, of
Enlaces was incorporated on December 20, 2007. It is engaged in providing
administrative services exclusively to Enlaces.
    
    AlternaTV Corporation (AlternaTV Corp), a 100% owned subsidiary, was
incorporated on December 19, 2008, to be a vehicle to contract with a third party
the procurement of the Satmex 7 satellite.
    
    SMVS Administración, S. de R. L. de C. V. and SMVS Servicios Técnicos, S. de R.
L. de C. V. (New Service Companies), 99.97% owned subsidiaries, were
incorporated on June 30, 2006, to provide administrative and operating services
exclusively to Satmex.
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##### Table of Contents



b.
    
    In conformity with accounting principles generally accepted in the United States of
America (US GAAP), Satmex adopted fresh-start reporting as of November 30, 2006, in
accordance with Statement of Position No. 90-7, Financial Reporting of Entities in
Reorganization under the Bankruptcy Code(SOP 90-7). Accordingly, the consolidated
financial information disclosed under the heading Successor Registrant for the years
ended December 31, 2008 and 2007 and for the period from December 1 to December 31,
2006, is presented on a basis different from, and is therefore not comparable to, the
financial information disclosed under the heading Predecessor Registrant for the
period from January 1 to November 30, 2006. As a result of Satmexs emergence from
Chapter 11 of the U.S. Federal Bankruptcy Law on October 26, 2006, for financial
reporting purposes a new economic entity was established as Satmex and subsidiaries;
however, each of the legal entities preserves its rights and responds to its
obligations individually in accordance with Mexican laws.
 3.
    
    Bankruptcy Filings and Reorganization
 a.
    
    BackgroundIn February and March 1998, Satmex issued Fixed Rate Notes (the FRNs) and variable
rate High Yield Bonds (the HYBs). The FRNs issued were $325 million with interest at
LIBOR plus 4.5%, with quarterly payments through March 2004 and a final payment in June
2004. The HYBs issued were $320 million with interest payable at a fixed rate of
10.125% and with maturity on November 1, 2004. Payment of the FRNs was demanded in June
2004, but they were not paid. Interest payments on the HYBs were not made beginning
August 2003, and the bonds due in November 2004, were not paid.b.
    
    Shareholders DecisionsOn March 31, 2006, Satmex and approximately 52.8% of the FRNs holders and 71.6% of the
HYBs holders and other interested parties signed a restructuring agreement and agreed
to present to the District Court Judge in Mexico City and the USAs Bankruptcy Court an
appeal and a protection request, respectively.Concurso Mercantil and Reorganization Process according to Chapter 11 of the USA
Bankruptcy Code (Chapter 11)
 
    
    Concurso MercantilIn an effort to restructure the outstanding indebtedness of Satmex, on June 29,
2005, Satmex voluntarily filed a petition for concurso mercantil. This proceeding
was sent to the Second District Court (the Court), where it was admitted on
June 30, 2005. A concurso mercantilis a Mexican reorganization proceeding based
on the Ley de Concursos Mercantiles, which was enacted in May 2000 (the LCM).On September 7, 2005, the Court declared Satmex to be in concurso mercantilunder
the LCM. Among other things, this order suspended the payment of any of Satmexs
debt obligations as of the date of the order, other than those obligations
necessary for Satmex to continue its ordinary operations, and suspended
attachment or foreclosure procedures against Satmex assets. Accordingly, as of
that date the HYBs no longer accrued interest and were valued and recorded at the
Mexican peso equivalent translated to Investment Units (UDI) using the
equivalence issued by the Banco de México and the fluctuation of the valuation of
the UDI was considered interest. The unpaid FRNs were maintained in their
original currency and only accrued ordinary interest in accordance with the
contract.
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In order to protect the assets of Satmex located outside of Mexican territory, on
August 4, 2005, Satmex filed an appeal with the USAs Bankruptcy Court for the
Southern District Court of New York (the Bankruptcy Court), in accordance with
Section 304 of the Bankruptcy Code in the United States. Satmex requested
protection of any new lawsuit against its assets in the USA. As a result of the
legal promotion, the Bankruptcy Court ordered the suspension of any seizure or
execution against Satmex assets located in the USA, during the concurso mercantil
process.After the concurso mercantildeclaration and as a result of the negotiations
among Satmex, the main bondholders and the shareholders carried out the
conciliation stage. On March 31, 2006, Satmex and the majority of its holders of
the FRNs, approximately two-thirds of the holders of HYBs and its main
shareholders; Servicios Corporativos Satelitales, S. A. de C. V. (Servicios),
Loral Skynet Corp. (Loral) and Principia, S. A. de C. V. (Principia),
executed the Restructuring Plan, whose principal terms included the following
matters: i) capitalizing a significant part of the HYBs and the related accrued
interest; ii) emission of new bonds for $140 million to replace the HYBs not
capitalized; iii) emission of new bonds to replace the FRNs (principal and
interest); iv) amending Satmexs corporate by-laws; v) making changes in Satmexs
shareholder control; vi) making changes in Satmexs shareholder voting and
financial rights; and vii) making changes to Satmexs management.On May 4, 2006, the terms on the restructuring plan were adopted in the Convenio
Concursal, which was submitted to the holders acknowledgedby Satmex, which
agreement was proposed to be signed as established by the LCM. On June 1, 2006,
once it was signed by the required number of holders, the agreement was
considered effective in accordance with the terms of the LCM. The Conciliador
appointed by the Court submitted the Convenio Concursalfor the approval of the
Court.On May 8, 2006, the Board of Directors confirmed and approved the Restructuring
Plan and the Convenio Concursal. As soon as the concurso mercantilprocess ended,
the Board of Directors accepted implementing both legal documents and submitted a
voluntary reorganization form pursuant to chapter 11, title 11 of the USA
Bankruptcy Code (Chapter 11) 11 U.S.C. §§ 101-1532.On June 23, 2006, the Secretaría de Comunicaciones y Transportes (The Ministry
of Communications and Transportation or the SCT), as a regulator and the
grantor of Satmexs orbital concessions, filed a motion with the Court that
allowed the Convenio Concursalto proceed on the terms agreed to by Satmexs
bondholders. The Convenio Concursalwas approved on July 17, 2006, in the
concurso mercantilproceeding, which became final and not subject to appeal
effective August 1, 2006.
    
    Chapter 11In order to complete the necessary formalities to implement the restructuring and
to comply with the Board of Directors resolutions approved on May 8, 2006, Satmex
filed a voluntary petition for reorganization under Chapter 11 in the Bankruptcy
Court, on August 11, 2006.Jointly with the voluntary reorganization request, Satmex filed a petition with
the Bankruptcy Court, the plan of reorganization and the supplement plan
documents, duly approved by the shareholders. Subsequently, on September 8, 2006,
Satmex submitted to the Bankruptcy Court the first modification to the
aforementioned documents and on September 13, 2006, the Bankruptcy Court issued
an approval of order that the same documents contained the necessary information
to require the necessary votes from the bondholders in order to approve or reject
the Restructuring Plan.The Restructuring Plan was accepted by the majority of the bondholders and the
holders of each class of shares issued, in accordance with the Bankruptcy Code.
The Bankruptcy Court issued an order (the Confirmation Order) dated October 26,
2006, which became final.
  F-10




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##### Table of Contents



After the Confirmation Order became final and not subject to appeal effective
November 21, 2006, Satmex, the bondholders and the shareholders initiated several
actions to implement the agreements established in the Restructuring Plan, the
Convenio Concursal and Restructuring Agreement. Such agreements were implemented
on November 30, 2006 (the Effective Date), the date on which all the
significant conditions established in the Restructuring Agreement and Convenio
Concursal agreements were satisfied.
 c.
    
    ReorganizationThe main agreements for financial restructuring at the Effective Date were as follows:
 
    
    New Debt and Debt Capitalization
 First Priority Senior Secured Notes
  Second Priority Senior Secured Notes
   
    
    Satmex entered into a new contract with Space Systems/Loral, Inc. (SSL) and
granted to SSL a Mexican usufructofigure with respect to certain transponders of
the satellites Satmex 5 and Satmex 6. Pursuant to Mexican law, the usufructo
figure grants to SSL the right to use and benefits from certain transponders until
the end of life of the referred satellites. SSL was not required to post a bond
related to the usufructofigure (see Note 20f).
    
    On November 30, 2006 in exchange for a loan receivable from Enlaces for $8.4
million, Satmex received 75% of the shares of its common stock.
    
    Satmex made a donation to Enlaces, consisting of a teleport, antenna and
communications equipment, servers, other minor equipments and spare parts, whose
net book value was $675.
    
    The personnel that provided administrative services to Satmex through Satmex
Corporativo,
S. de R. L. de C. V., Satmex Administración, S. de R. L. de C. V. and Satmex
Servicios Técnicos, S. de R. L. de C. V. (the Service Companies), related
parties of Satmex through the Effective Date, were transferred to the New Service
Companies. Transferred personnel maintained their wages and benefits according to
Mexican Federal Labor Law.
  F-11




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##### Table of Contents



4.
    
    Basis of presentationThe accompanying consolidated financial statements have been prepared in accordance with US
GAAP. All intercompany transactions have been eliminated. References in these consolidated
financial statements to the Predecessor Registrant refer to Satmex until November 30, 2006,
and references to the Successor Registrant refer to Satmex after November 30, 2006 and after
giving effect to the plan reorganization adjustments and to the adoption of fresh-start
reporting.
 a.
    
    Fresh-Start Reporting The accompanying consolidated financial statements have
been prepared in accordance with SOP 90-7 and on a going concern basis, which
contemplates continuing operations, realization of assets and liquidation of liabilities
in the ordinary course of business. Moreover, SOP 90-7 requires Satmex to distinguish
prepetition liabilities subject to compromise from postpetition liabilities in Satmexs
consolidated balance sheets. The caption prepetition liabilities subject to compromise
in the Predecessor Registrant November 30, 2006 balance sheet (see Note 6) reflects the
carrying value of prepetition claims that were restructured in Satmexs Chapter 11
proceedings. In addition, the consolidated statements of operations portray the results
of operations during the Chapter 11 proceedings. As a result, any revenue, expenses,
realized gains and losses and provision for losses resulting directly from the
reorganization and restructuring of the organization are reported separately as
reorganization items.As noted above, Satmex emerged from bankruptcy on November 26, 2006 and pursuant to SOP
90-7 adopted fresh-start reporting as of November 30, 2006. Upon emergence, Satmexs
reorganization enterprise value as determined by the Bankruptcy Court was approximately
$425 million which, after reduction of the debt obligations, results in a
reorganization equity value of approximately $46.7 million. This reorganization
enterprise value was allocated to assets and liabilities (see Note 6). Assets and
liabilities were stated at fair value in accordance with Statement of Financial
Accounting Standards (SFAS) No. 141, Business Combinations. In addition, Satmexs
accumulated deficit was eliminated, and the new debt and equity were recorded in
accordance with distributions pursuant to the Plan of Reorganization (POR).b.
    
    Use of EstimatesThe preparation of the consolidated financial statements in
accordance with US GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the
amounts of revenues and expenses reported during the periods reported. Such estimates
include the allowance for doubtful accounts, the revenue recognition of Programming
distribution services, the valuation of long-lived assets and goodwill, the valuation
allowance on deferred income tax assets, the scheduling of reversal of the temporary
differences under different tax regimes and the estimated useful lives of each
satellite. Although management believes the estimates and assumptions used in the
preparation of these consolidated financial statements were appropriate in the
circumstances, actual results could differ from those estimates and assumptions.c.
    
    Foreign Currency Transactions For statutory purposes books and records are
maintained in Mexican pesos, Spanish language and Mexican Financial Reporting Standards.
For US GAAP purposes, Satmex keeps separate accounting records in its functional
currency, the U.S. dollar. Transactions denominated in Mexican pesos and other foreign
currencies are recorded at the rate of exchange in effect at the date of the
transactions. Monetary assets and liabilities denominated in Mexican pesos and other
foreign currencies are converted into the Companys functional currency at the rate of
exchange in effect at the balance sheet date (Mexican pesos per one U.S. dollar as of
December 31, 2008 and 2007, were Ps. 13.54 and Ps. 10.87, respectively). The effect of
changes in exchange rates is recorded in the results of operations.d.
    
    Loss of two-thirds of
paid-in capitalAs of December 31, 2008, the Companys
statutory financial statements show an accumulated deficit exceeding two-thirds of its
paid-in capital. Under Mexican law, this condition might be considered as a cause for
dissolution if requested by an interested party, in which case and in accordance with
the Mexican law, the dissolution of Company might be executed in the lapse of the time
established in the Companys bylaws. Management of the Company considers this situation
to be remote due to the specific plans that the Company has agreed with its shareholders
for maintaining the Company on a going concern basis. Therefore, the accompanying
consolidated financial statements do not include any adjustments that might result from
the outcome of this uncertainty.Currently, the Company is actively pursuing financing for Satmex 7 and investors to
capitalize it. Satmexs ability to obtain additional financing or additional investment
in the future may be limited.
  F-12




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##### Table of Contents



5.
    
    Significant Accounting PoliciesA summary of the significant accounting policies used in the preparation of the accompanying
consolidated financial statements follows:
 a.
    
    Cash and cash equivalents This line item consists mainly of bank deposits in
checking accounts and readily available daily investments of cash surpluses. Cash
equivalents are composed of highly liquid investments with original maturities of three
months or less. This line item is stated at nominal value plus accrued yields, which are
recognized in results as they accrue.b.
    
    Concentrations of credit risk Financial assets, which potentially subject
Satmex to concentrations of credit risk, consist principally of cash and cash
equivalents and accounts receivable. Satmexs cash and cash equivalents are maintained
with high-credit quality financial institutions. Satmexs customers are several
companies of the private domestic sector and foreign companies. Management considers
that its credit evaluation, approval and monitoring processes combined with negotiated
billing arrangements mitigate potential credit risks with regard to its current customer
base.The main customers for
Satellite services  broadcasting are Grupo Televisa and
Productora y Comercializadora de Televisión, S. A. de C.V.; Satellite services 
telecommunications are Teléfonos de México, S. A. de C. V. and Telmex Perú, S. A.
(Telmex); Satellite services  data transmission and Internet is Hughes Network
Systems, Inc. For Programming distribution services are Direct TV and Comcast LLC and
the main customers of Enlaces Integra (Broadband satellite services) are Wal-Mart and
Globalstar de México, S. de R. L. de C. V.For the years ended December 31, 2008 and 2007 and the period from December 1 to
December 31, 2006 (Successor Registrant) and for the period from January 1 to November
30, 2006 (Predecessor Registrant), the satellite service revenues, Programming
distribution services and Broadband satellite services were obtained from:
 PredecessorSuccessor Registrant
    
    
    RegistrantDecember 1 to
    
    
    January 1 toDecember 31,
    
    
    November 30,2008
    
    
    2007
    
    
    2006
    
    
    2006%
    
    
    %
    
    
    %
    
    
    %Hughes Networks
Systems, Inc.
    
    
    23
    
    
    
    26
    
    
    
    29
    
    
    
    19Telmex
    
    
    14
    
    
    
    9
    
    
    
    6
    
    
    
    5Loral
    
    
    2
    
    
    
    2
    
    
    
    1
    
    
    
    27Other foreign customers
    
    
    29
    
    
    
    26
    
    
    
    35
    
    
    
    27Other domestic customers
    
    
    32
    
    
    
    37
    
    
    
    29
    
    
    
    22
 c.
    
    Inventories Inventories consist mainly of antennas and are stated at the lower
of cost or market. Cost is determined using the weighted average cost method.d.
    
    Satellites and equipment As of November 30, 2006, Satmex adopted fresh-start
reporting, under which its satellites and equipment were recorded at fair values based
upon the appraised values of such assets. Satmex determined the fair value of the
satellites and equipment using the planned future use of each asset or group of assets,
quoted market prices for assets where a market exists for such assets. In the
determination of fair value, Satmex also considered whether an asset would be sold
either individually or with other assets and the proceeds Satmex expected to receive
from such sale.
  F-13




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##### Table of Contents



Assumptions relating to the expected future use of individual assets could affect the
fair value of such assets and the depreciation expense recorded related to such assets
in the future. Depreciation is provided on the straight-line method for satellites,
related equipment and other owned assets over the estimated useful lives of the related
assets. Leasehold improvements are amortized over the shorter of the lease term or the
estimated useful life of the improvements. Below are the estimated useful lives of the
satellites and equipment as of December 31, 2008 and 2007:
 Average YearsSatellites in-orbit  estimated useful life is determined by
engineering analysisSolidaridad 2
    
    
    14.5Satmex 5
    
    
    15Satmex 6
    
    
    15EquipmentSatellite equipment
    
    
    3Furniture and fixtures
    
    
    10Leasehold improvements
    
    
    5Teleport, equipment and antennas
    
    
    10
 Depreciation of satellites commences on the date on which the satellite is placed in
orbit. Solidaridad 2, Satmex 5 and Satmex 6 commenced their operation in November 1994,
January 1999 and July 2006, respectively.Costs incurred in connection with the construction and successful deployment of the
satellites and related equipment are capitalized. Such costs include direct contract
costs, allocated indirect costs, launch costs, in-orbit test insurance and construction
period interest.The Company insures its satellites to cover any possible loss, except for that
mentioned in Note 20. The amounts of contracted coverage are based on satellite
industry standards. When a new satellite is launched, Satmex procures insurance to
cover both the launch risk and a period of in-orbit risk. The premium paid for these
concepts is capitalized within the cost of the satellite. The premium paid to renew
in-orbit coverage is recorded as a prepaid expense and amortized over the related
policy period.e.
    
    Concessions As of November 30, 2006, Satmex adopted fresh-start reporting,
under which its orbital concessions were recorded at fair value and are amortized over
40 years using the straight-line method. Their remaining useful life was 31 years at the
Effective Date. The concession to operate a telecommunications public network is
amortized over 23 years, which is the remaining useful life at the Effective Date
originally granted for 30 years.f.
    
    Valuation of satellites and long-lived assets The carrying value of the
satellites, amortizable intangible assets and other long-lived assets is reviewed for
impairment in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. Satmex periodically evaluates potential impairment loss relating to
the satellites, amortizable intangible assets and other long-lived assets, when a change
in circumstances occurs, by assessing whether the carrying amount of these assets can be
recovered over their remaining lives through future undiscounted expected cash flows
generated by those assets (excluding financing costs). If the expected undiscounted
future cash flows were less than the carrying value of the long-lived asset, an
impairment charge would be recorded based on such assets estimated fair value. Changes
in estimates of future cash flows could result in a write-down of the asset in a future
period. Estimated future cash flows from our satellites could be impacted by, among
other things:
 
    
    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.
  F-14




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##### Table of Contents



g.
    
    Goodwill Goodwill represents the amount by which the Companys reorganization
equity value exceeded the fair value of its net assets (exclusive of debt obligations)
in accordance with the provisions of SFAS No. 141 as of November 30, 2006. Pursuant to
the provisions of SFAS No. 142, Goodwill and Other Intangible Assets, goodwill is not
amortized and is subject to an annual impairment test which the Company performs in the
fourth quarter of each fiscal year. Goodwill was allocated to the reporting unit level
(operating segment or one level below an operating segment). SFAS No. 142 requires the
Company to compare the fair value of the reporting unit to its carrying amount on an
annual basis to determine if there is potential impairment. If the fair value of the
reporting unit is less than its carrying value, an impairment loss is recorded to the
extent that the implied fair value of the goodwill within the reporting unit is less
than its carrying value. The Company completed its annual goodwill impairment test in
the fourth quarter of 2008 and determined that goodwill was not impaired.h.
    
    Intangible Assets The intangible assets consist primarily of customer
relationships, landing rights, contract backlog and internally developed software and
technology, all of which were recorded in connection with the adoption of fresh-start
reporting. The fair values were calculated using several approaches that encompassed the
use of excess earnings, relief from royalty and the build-up methods. The excess
earnings, relief from royalty and build-up approaches are variations of the income
approach. The income approach, more commonly known as the discounted cash flow approach,
estimates fair value based on the cash flows that an asset can be expected to generate
over its useful life. Identifiable intangible assets with finite useful lives are
amortized on a straight-line basis over the estimated useful lives of the assets, except
for contract backlog which is amortized in accordance with the agreements maturity.
Intangible assets are also reviewed for impairment in accordance with SFAS No. 144, as
described above.i.
    
    Labor obligations In accordance with Mexican Labor Law, the Company provides
seniority premiums benefits to its employees under certain circumstances. These benefits
consist of a one-time payment equivalent to 12 days wages for each year of service (at
the employees most recent salary, but not to exceed twice the legal minimum wage),
payable to all employees with 15 or more years of service, as well as to certain
employees terminated involuntarily prior to the vesting of their seniority premium
benefit.The Company also provides statutorily mandated severance benefits to its employees
terminated under certain circumstances. Such benefits consist of a one-time payment of
three months wages plus 20 days wages for each year of service payable upon involuntary
termination without just cause.Costs associated with these benefits are provided for based on actuarial computations
using the project unit credit method.j.
    
    Provisions The provisions are recognized for current obligations that result of
a past event, are probable to result in the use of economic resources and can be
reasonably estimated.k.
    
    Income taxes Income taxes, calculated as the higher of regular income tax
(ISR) or the Business Flat Tax (IETU) are recorded in the results of the year in
which they are incurred. The Company, based on its financial projections determines
whether it expects to incur ISR or IETU in the future and accordingly recognizes
deferred income tax assets and liabilities for the future consequences of temporary
differences between the financial statement carrying amounts of assets and liabilities
and their respective ISR or IETU bases, measured using enacted rates. The effects of
changes in the statutory rates are accounted for in the period that includes the
enactment date. Deferred income tax assets are also recognized for the estimated future
effects of tax loss carryforwards and asset tax credit carryforwards. A valuation
allowance is applied to reduce deferred income tax assets to the amount of future net
benefits that are more likely than not to be realized.Tax on assets (IMPAC) paid through 2007 that is expected to be recovered is recorded
as an advanced payment of ISR and is presented in the consolidated balance sheets
within the deferred income tax asset or liability.
  F-15




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l.
    
    Employees statutory profit sharing Employees Statutory Profit Sharing (PTU)
is recorded in the results of the year in which is incurred and presented within
operating expenses in the accompanying consolidated statements of operations. Deferred
PTU liabilities are derived from temporary differences that result from comparing the
accounting and PTU values of assets and liabilities.m.
    
    Revenue recognition Satellite service revenues are recognized as the satellite
capacity is provided according to service lease agreements. Satellite capacity is sold
through permanent and temporary contracts, which stipulate the agreed capacity. Lease
agreements are accounted for either as operating or sales-type leases.Operating lease revenues are recognized on a straight-line basis over the lease term.
Revenues for temporary services are recognized as services are performed.Revenues from end-of-life leases for transponders are usually collected in advance.
Satmex does not provide insurance and/or guarantee of any kind for the related
transponders to these customers. Total revenue and related cost are accounted as
sales-type leases and recognized in income when the risk and rewards of the
transponders are transferred to the customer in accordance with the agreements.On a monthly basis, Satmex estimates the number of subscribers to Programming
distribution services for each purchaser of its programming. Satmex applies the
contractual value of each subscriber to calculate the monthly revenue attributable to
the purchaser. Approximately 45 to 60 days after the end of each month, Satmex receives
a definitive report from the purchaser and reconciles the definitive revenue with the
estimated amount, issuing an invoice to the purchaser based on definitive report.
Variations between the estimated and actual revenue amounts are not material.The public and private net signal and value-added services (Broadband satellite
services) are recognized when rendered. The sale of antennas and installation services
are recognized in the period which risk and rewards are transferred to the customers,
which generally coincides with the completion of the installation of the antennas.
Sales and installation of antennas are subject to contractual customer acceptance
provisions; consequently, the Company recognizes revenue at the date of customers
formal acceptance of the equipment.n.
    
    Deferred revenue Satmex is required to provide the Mexican federal government,
at no charge, approximately 362.88 MHz of its available transponder capacity for the
duration of the concessions. In 1997, Satmex recorded $88 million as deferred revenue,
as the value of this obligation, and an increase in the value of the concessions by the
same amount. This obligation is being amortized over 40 years as an increase in revenue
and corresponding increase in amortization expense. Amortization of deferred revenue
totals $2.2 million annually for the Predecessor Registrant. As a result of the
application of fresh-start reporting, deferred revenue was adjusted to fair value (see
Note 6). Annual amortization for the Successor Registrant is $2.3 million.o.
    
    Comprehensive Loss Comprehensive loss includes, in addition to net loss, all
other changes in an entitys equity during the period resulting from transactions and
other events and circumstances except those from investments by owners and distributions
to owners. As Satmex did not generate changes in equity from nonowner sources, Satmexs
comprehensive loss includes solely the net loss for each respective year.p.
    
    New accounting standards In September 2006, the Financial Accounting Standards
Board (FASB) issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS 157 clarifies the definition of exchange price as the price between
market participants in an orderly transaction to sell an asset or transfer a liability
in the market in which the reporting entity would transact for the asset or liability,
that is, the principal or most advantageous market for the asset or liability. The
changes to current practice resulting from the application of this statement relate to
the definition of fair value, the methods used to measure fair value, and the expanded
disclosures about fair value measurements. SFAS 157 was effective for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years for
financial assets and liabilities. On October 10, 2008, the FASB issued Staff Position
(FSP) FAS No. 157-3 (FSP 157-3), Determining the Fair Value of a Financial Asset
When the Market for That Asset is Not Active. FSP 157-3 is effective upon issuance. SFAS
157 has been deferred until fiscal years beginning after November 15, 2008 for
nonfinancial assets and liabilities.
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In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities  including an amendment of FASB Statement No. 115.
SFAS No. 159 permits a company to measure certain financial assets and financial
liabilities at fair value that were not previously required to be measured at fair
value. The Company has not elected to measure any financial assets or financial
liabilities at fair value which were not previously required to be measured at fair
value.In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statementsan amendment of ARB No. 51. SFAS No. 160 amends ARB
No. 51 to establish accounting and reporting standards for the noncontrolling interest
in a subsidiary and the deconsolidation of a subsidiary, including: (a) changes the way
the consolidated balance sheet and consolidated income statement are presented; (b)
establishes a single method of accounting for changes in a parents ownership interest
in a subsidiary that do not result in a change of control or deconsolidation; (c)
requires that a parent recognize a gain or loss in net income when a subsidiary is
deconsolidated; and (d) requires expanded disclosures in the consolidated financial
statements that clearly identify and distinguish between the interests of the parent
and the interests of the noncontrolling owners of a subsidiary. SFAS No. 160 is
effective on a prospective basis for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008, except for the presentation and
disclosure requirements, which will be applied retrospectively.In December 2007, the FASB issued SFAS No. 141(R), Business Combinationsa replacement
of FASB No. 141. SFAS No. 141(R) requires (a) a company to recognize 100% of the assets
acquired, the liabilities assumed, and any noncontrolling interest in the acquire at
fair value as of the acquisition date; and (b) an acquirer in preacquisition periods to
expense all acquisition-related costs, among various other modifications to SFAS No.
141. SFAS No. 141(R) also amends SFAS No. 109, Accounting for Income Taxes, to require
that any reductions to an acquired entitys valuation allowances on deferred taxes and
acquired tax contingencies that occur after the measurement period be recorded as a
component of income tax expense. SFAS No. 141(R) must be applied prospectively to all
business combinations for which the acquisition date occurs during fiscal years
beginning on or after December 15, 2008, with the exception of the amendments to SFAS
No. 109, which will also be applied to business combinations with acquisition dates
prior to the effective date of this standard. Early adoption is prohibited.In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments
and Hedging Activities, an Amendment of FASB Statement No. 133. SFAS No. 161 requires
companies to provide qualitative disclosures about the objectives and strategies for
using derivatives, quantitative data about the fair value of and gains and losses on
derivative contracts, and details of credit-risk-related contingent features in their
hedged positions.  The statement also requires companies to disclose more information
about the location and amounts of derivative instruments in financial statements; how
derivatives and related hedges are accounted for under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities; and how the hedges affect the entitys
financial position, financial performance and cash flows. SFAS No. 161 is effective for
periods beginning after November 15, 2008. The Company is in the process of determining
the impact of adopting this new accounting principle on its consolidated financial
position, results of operations and cash flows.In April 2008, the FASB issued FSP FAS No. 142-3, Determination of the Useful Life of
Intangible Assets(FSP 142-3). FSP 142-3 amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Asset.
The objective of the FSP is to improve the consistency between the useful life of a
recognized intangible asset under SFAS No. 142 and the period of expected cash flows
used to measure the fair value of the asset under SFAS No. 141(R). FSP 142-3 is
effective for fiscal years beginning after December 15, 2008. Early application is not
permitted.
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In January 2008, the FASB unveiled the FASB Accounting Standards Codification (the
Codification) for a one-year verification period by constituents. While the
Codification does not change U.S. GAAP, it does combine all authoritative accounting
standards issued by bodies such as the FASB, AICPA and EITF into a topically organized
comprehensive online database. The Codification will (a) reduce the amount of time and
effort required to solve an accounting research issue; (b) improve usability of the
literature thereby mitigating the risk of noncompliance with the standard; (c) provide
real-time updates as new standards are released; (d) assist the FASB with the research
and convergence efforts required during the standard-setting process; and (e) become
the authoritative source of literature for the completed XBRL taxonomy. The
Codification does not represent authoritative guidance until after the verification
period, at which time the Codification will supersede all existing accounting
literature (other than guidance issued by the SEC).The Company is in the process of determining the impact of adopting the new accounting
standards on its consolidated financial position, results of operations and cash flows.
 6.
    
    Fresh-Start ReportingOn October 26, 2006, the Bankruptcy Court entered its Confirmation Order confirming the
Companys POR. Satmexs emergence from Chapter 11 proceedings resulted in a new reporting
entity and adoption of fresh-start reporting in accordance with SOP 90-7 as of November 30,
2006, the date on which all material conditions were met, as reflected in the following
financial information. Reorganization adjustments have been made in the consolidated
financial information to reflect the effects of the several agreements in accordance with the
Confirmation Order and the adoption of fresh-start reporting. These adjustments were
determined to recognize the relative fair values the Companys assets and liabilities on the
Effective Date.
 Consolidated balance sheet (a)Predecessor
    
    
    
    
    
    
    Fresh-start
    
    
    SuccessorRegistrant November 30,
    
    
    Plan reorganization
    
    
    valuation
    
    
    Registrant November 30,2006
    
    

adjustments (b)
    
    
    adjustments
    
    
    2006AssetsCurrent assets:Cash and cash equivalents
    
    $
    26,657
    
    
    $
    2,007
    
    
    $
    
    
    
    $
    28,664Accounts receivable  net
    
    
    6,483
    
    
    
    2,405
    
    
    
    (382
    )(b1)
    
    
    8,506Due from related parties  net
    
    
    8,907
    
    
    
    (8,493
    )(c)
    
    
    
    
    
    
    414Inventories
    
    
    21
    
    
    
    795
    
    
    
    (21
    )(d)
    
    
    795Prepaid insurance
    
    
    3,733
    
    
    
    148
    
    
    
    
    
    
    
    3,881Deferred income taxes
    
    
    
    
    
    
    603
    
    
    
    
    
    
    
    603Total current assets
    
    
    45,801
    
    
    
    (2,535
    )
    
    
    (403
    )
    
    
    42,863Satellites  net
    
    
    423,213
    
    
    
    2,312
    (e)
    
    
    (111,389
    )(e1)
    
    
    314,136Equipment  net
    
    
    13,668
    
    
    
    1,040
    
    
    
    (2,031
    )(e1)
    
    
    12,677Concessions  net
    
    
    400,071
    
    
    
    2,248
    (f)
    
    
    (358,371
    )(f)
    
    
    43,948Intangible assets
    
    
    
    
    
    
    2,128
    (g)
    
    
    68,320
    (g1)
    
    
    70,448Other assets
    
    
    393
    
    
    
    970
    
    
    
    (1,021
    )
    
    
    342Goodwill
    
    
    
    
    
    
    
    
    
    
    32,502
    (h)
    
    
    32,502Total assets
    
    $
    883,146
    
    
    $
    6,163
    
    
    $
    (372,393
    )
    
    $
    516,916Liabilities and shareholders
equityCurrent liabilities:Prepetition liabilities subject
to compromise
    
    $
    652,016
    
    
    $
    (652,016
    )(i)
    
    $
    
    
    
    $
    Deferred revenue
    
    
    2,200
    
    
    
    
    
    
    
    144
    
    
    
    2,344Other current liabilities
    
    
    14,900
    
    
    
    2,241
    
    
    
    (99
    )
    
    
    17,042Total current
liabilities
    
    
    669,116
    
    
    
    (649,775
    )
    
    
    45
    
    
    
    19,386
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Consolidated balance sheet (a)Predecessor
    
    
    
    
    
    
    Fresh-start
    
    
    SuccessorRegistrant November 30,
    
    
    Plan reorganization
    
    
    valuation
    
    
    Registrant November 30,2006
    
    

adjustments (b)
    
    
    adjustments
    
    
    2006Debt obligations
    
    
    
    
    
    
    378,237
    (i)
    
    
    
    
    
    
    378,237Labor obligations and accrued
expenses
    
    
    681
    
    
    
    60
    
    
    
    
    
    
    
    741Deferred revenue
    
    
    65,918
    
    
    
    
    
    
    
    4,320
    
    
    
    70,238Deferred income taxes
    
    
    44,690
    
    
    
    20
    
    
    
    (44,690
    )
    
    
    20Total liabilities
    
    
    780,405
    
    
    
    (271,458
    )
    
    
    (40,325
    )
    
    
    468,622Minority interest
    
    
    
    
    
    
    1,530
    
    
    
    
    
    
    
    1,530Shareholders equity:Common stock
    
    
    390,705
    
    
    
    (11,873
    )(j)(k)
    
    
    (332,068
    )
    
    
    46,764Preferred stock
    
    
    31,886
    
    
    
    (31,886
    )(j)
    
    
    
    
    
    
    Accumulated deficit
    
    
    (319,850
    )
    
    
    319,850
    (j)
    
    
    
    
    
    
    Total
shareholders
equity
    
    
    102,741
    
    
    
    276,091
    
    
    
    (332,068
    )
    
    
    46,764Total
liabilities and
shareholders
equity
    
    $
    883,146
    
    
    $
    6,163
    
    
    $
    (372,393
    )
    
    $
    516,916
 (a)
    
    The condensed consolidated balance sheet reflects a reorganization enterprise
value of $425 million based on the Bankruptcy Courts determination (see Note 3), which,
after reduction of the Debt Obligations (see Notes 11 and 13), results in a
reorganization equity value of approximately $46.7 million. This results in goodwill
equal to the excess of reorganization equity value over the fair value of identifiable
net assets.(b)
    
    POR adjustments mainly include the incorporation of Enlaces and the New
Services Companies assets and liabilities at fair value and the restructuring of debt
and common stock.(b1)
    
    This adjustment is to recognize the accounts receivable at fair value.(c)
    
    Reflects the loan receivable from Enlaces for $8,493 which in accordance with
the POR was exchanged for 75% of Enlaces representative shares of its common stock. The
purchase price allocation among acquired assets and liabilities are as follows: Balances as ofNovember 30, 2006Total current assets
    
    $
    5,956Teleport, antennas and equipment  net
    
    
    1,0416,997Concession
    
    
    2,248Customer relationships
    
    
    2,128Goodwill
    
    
    970Total assets
    
    
    12,343Total liabilities
    
    
    (2,320
    )Minority interest
    
    
    (1,530
    )Net assets acquired
    
    $
    8,493
 (d)
    
    To recognize the inventories at fair value.(e)
    
    Reflects the effect of the capitalization of orbital incentive.  F-19




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##### Table of Contents



(e1)
    
    To recognize the satellites and equipment at fair value.(f)
    
    To recognize the orbital and telecommunications public network concessions at
fair value.(g)
    
    Represents the intangible assets fair value as a result of the acquisition of
Enlaces, in this case identified as customer relationships.(g1)
    
    Reflects the values that arise from Satmexs asset valuation at fair value,
identified as landing rights $60, contract backlog $67,990 and internally developed
software and technology $270.(h)
    
    Reflects goodwill equal to the excess of the reorganization equity value over
the estimated fair value of Satmexs identifiable net assets.(i)
    
    Reflects the discharge of prepetition liabilities in accordance with the POR
and the reclassification of the remaining liabilities subject to compromise to the
appropriate liability accounts in accordance with the POR. Discharge of Satmexs
prepetition liabilities is summarized as follows: Predecessor liabilities subject to compromise
    
    $
    652,016Debt capitalization
    
    
    (273,779
    )Exchanged for new debt obligations (Successor
Registrant debt)
    
    $
    378,237
 (j)
    
    Pursuant to a resolution made at the general ordinary shareholders meeting on
November 30, 2006, it was decided to reduce common stock to $5, through the absorption
of accumulated deficit.(k)
    
    Pursuant to a resolution made at the general ordinary shareholders meeting on
November 30, 2006, variable common stock was increased by $273.7 million, through the
capitalization of HYBs. 7.
    
    Cash and cash equivalentsAs of December 31, consist of:
 2008
    
    
    2007Cash
    
    $
    44,360
    
    
    $
    4,671Cash equivalents
    
    
    13,847
    
    
    
    32,505$
    58,207
    
    
    $
    37,176
 8.
    
    Accounts receivable  NetAs of December 31, consist of:
 2008
    
    
    2007Customers
    
    $
    10,220
    
    
    $
    6,887Allowance for doubtful accounts
    
    
    (510
    )
    
    
    (399
    )9,710
    
    
    
    6,488Recoverable IETU
    
    
    5,600
    
    
    
    Value-added tax and tax withholdings
    
    
    1,595
    
    
    
    1,345Sundry deposits
    
    
    376
    
    
    
    348$
    17,281
    
    
    $
    8,181
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9.
    
    Satellites and equipment  NetAs of December 31, consist of:
 2008
    
    
    2007Satellites in-orbit
    
    $
    314,136
    
    
    $
    314,136Equipment for satellites
    
    
    11,440
    
    
    
    10,561Furniture and fixtures
    
    
    4,807
    
    
    
    4,385Leasehold improvements
    
    
    1,256
    
    
    
    18331,639
    
    
    
    329,100Accumulated depreciation and amortization
    
    
    (72,524
    )
    
    
    (39,960
    )259,115
    
    
    
    289,140Construction in progress  Satmex 7
    
    
    3,856
    
    
    
    391Other construction in-progress
    
    
    1,178
    
    
    
    713Advances to antenna suppliers
    
    
    
    
    
    
    184$
    264,149
    
    
    $
    290,428
    10.
    
    Concessions  NetAs of December 31, consist of:
 2008
    
    
    2007Orbital concessions
    
    $
    41,700
    
    
    $
    41,700Public telecommunications network
    
    
    2,248
    
    
    
    2,24843,948
    
    
    
    43,948Accumulated amortization
    
    
    (2,941
    )
    
    
    (1,529
    )$
    41,007
    
    
    $
    42,419
  a.
    
    Orbital Concessions and FacilitiesIn October 1997, the Mexican federal government granted to Satmex the rights to three
concessions (the Concessions) for an initial 20-year term to operate in the orbital
slots 114.9° W.L., 113.0° W.L. and 116.8° W.L. In November 2006, Satmex received
information from the SCT that the extension of the orbital concession for an additional
20-year term will be granted at the end of the first 20-year period without the payment
of any additional consideration to the Mexican federal government.For the orbital concessions extension, Satmex must comply with the obligations
mentioned in the concession documents, requiring the extension before starts the final
fifth part of the concession term, obtain the approval from the SCT of the new
satellites technical and operating characteristics, and guarantee the use of the
orbital slot during the concessions initial term and its extension.
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The concession grantee, in accordance with the Ley Federal de Telecomunicaciones
(Federal Law of Telecommunications or LFT), is required to maintain the satellite
control centers within Mexican territory.The satellites are controlled and operated through two control centers, one of them is
located in the east side of Mexico City, and the other one is located in Hermosillo,
Sonora. The land and installations of the first control center and the land of the
second control center are the property of the Mexican federal government.The land and installations where the control centers are located were granted through a
concession for a 40-year term, and the Company pays rights of use, which are adjusted
every five years by experts from the Secretaría de la Función Pública (The Ministry of
Public Administration) (see Note 20).b.
    
    Concessions for the Use and Exploitation of a Telecommunications Public NetworkOn January 20, 1997, the Mexican federal government granted to Enlaces a Concession to
Operate, Install, Exploit and use a Public Telecommunications Network within Mexican
Territory at no charge, in order to operate services for private and public networks,
and to provide value-added services. The concession term is for 30 years, with the
possibility for an extension under certain conditions.On November 9, 2000, Enlaces obtained from the SCT a registration of value-added
services certificate, which allows it to offer the internet access services, electronic
data transfer and multimedia services (content deliver to supermarket stands and
television private channels).
 The terms of both concessions are subject to some legal provisions regarding assignment or
transfer of rights. According to Mexican Law, Satmex is not allowed to transfer them to any
foreign country or state. If the Mexican federal government expropriates them, the companies
are entitled to liquidation or resignation of its rights. As of December 31, 2008, the
Company has fully complied with the obligations established in the concession titles.11.
    
    Intangible assets  NetThe intangible assets recognized in connection with the adoption of fresh-start reporting are
as follows:
 WeightedAverageRemainingAmortization
    
    
    2008
    
    
    2007Period
    
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    Accumulated(Years)
    
    
    Gross Amount
    
    
    Amortization
    
    
    Gross Amount
    
    
    AmortizationContract backlog
(1)
    
    
    6
    
    
    $
    67,990
    
    
    $
    42,333
    
    
    $
    67,990
    
    
    $
    17,143Customer relationships
(1)
    
    
    5
    
    
    
    2,128
    
    
    
    634
    
    
    
    2,128
    
    
    
    330Internally developed
software and technology
(2)
    
    
    2
    
    
    
    270
    
    
    
    140
    
    
    
    270
    
    
    
    73Landing rights (1)
    
    
    1
    
    
    
    60
    
    
    
    47
    
    
    
    60
    
    
    
    42$
    70,448
    
    
    $
    43,154
    
    
    $
    70,448
    
    
    $
    17,588
 (1) (2)
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2009
    
    $
    13,6892010
    
    
    5,8822011
    
    
    3,0342012
    
    
    2,006Thereafter
    
    
    2,683$
    27,294
 12.
    
    Accounts payable and accrued expensesAs of December 31, consist of:
 2008
    
    
    2007Orbital incentive (a)
    
    $
    
    
    
    $
    7,989Deposits and customer advances
    
    
    3,113
    
    
    
    3,753Professional fees
    
    
    3,438
    
    
    
    1,858Performance and sale bonuses
    
    
    2,389
    
    
    
    1,736Taxes payable
    
    
    2,003
    
    
    
    2,273AlternaTV provisions
    
    
    1,881
    
    
    
    1,140Suppliers
    
    
    1,704
    
    
    
    605Sundry creditors
    
    
    1,316
    
    
    
    1,613$
    15,844
    
    
    $
    20,967
 (a)
    
    The orbital incentive provision was reversed in accordance with a settlement
agreement signed in 2008, included a final payment of $1.0 million. 13.
    
    Debt obligationsThe new bonds named FPSSN and SPSSN present the following amounts, rates and periods, as of
December 31:
 2008
    
    
    2007FPSSN at variable rate
(LIBOR + 8.75%)
approximately 12.51% and
13.94%, for 2008 and
2007, due in 2011
(a)
    
    $
    238,237
    
    
    $
    238,237SPSSN at annual fixed
rate of 10.125%, due in
2013 (b)
(asof
December 31, 2008 and
2007, the accumulated
interest capitalized is
$28,060 and $14,934,
respectively)
    
    
    168,060
    
    
    
    154,934$
    406,297
    
    
    $
    393,171
    F-23




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##### Table of Contents



a.
    
    In exchange for cancellation of the old debt, at the Effective Date the FRNs
holders received new bonds issued by Satmex, named FPSSN, whose main characteristics are
as follows:
 
    
    Maturity is on November 30, 2011.
    
    Quarterly interest at annual LIBOR rate plus 8.75%.
    
    Optional cash prepayments of principal and accrued interest plus 3%, 2% and 1%,
in the first, second and third years, respectively. From the fourth year on, all
payments will be at the stated interest rate.
    
    Holders may request the Company to make prepayments of principal whenever the
Satmexs cash balance exceeds $5 million, based on the formula established in the
contract.
    
    In the event of any change in the share 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 and while this situation prevails,
the penalty interest applicable to the unpaid principal balance will be 2% higher
than the regular interest rate applicable at that time.
    
    Principal and interest are guaranteed with the assets of Satmex in first place
and precedence stage substantially over all the assets of Satmex per article 92
and subsequent articles of the Ley de Vías Generales de Comunicación (Law on
General Communications Media), and by a combination of pledges over the shares
held by Satmex in Enlaces, New Services Companies and AlternaTV Corp.
 b.
    
    In exchange for cancellation of the old debt, at the Effective Date, the HYBs
holders received new bonds issued by Satmex with a principal amount of $140 million,
named SPSSN, whose main characteristics 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 FPSSN have been paid in
full.
    
    Holders may request prepayments of principal, once the FPSSN have been fully
paid, and there is available cash in excess of $5 million, based on the formula
established in the contract.
    
    In the event of a change in the share control of Satmex other than that of a
buyer approved under the Restructuring Agreement, and unless approved by 66.66% of
the SPSSN holders, the holders may redeem all or part of the debentures of the
unpaid balance of principal and accrued interest, which may take place at the same
time as the change of share control.
    
    Principal and interest are guaranteed with the assets of Satmex in second place
and precedence stage substantially over all the Satmex assets, supported with a
guarantee contract legally valid and linked in the present and in the future, and
a combination of securities over the shares owned by Satmex like the shares of
Enlaces, Service Companies and AlternaTV Corp securities that are subject to the
bankruptcy protection condition of the FPSSN.
  F-24




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##### Table of Contents



14.
    
    Labor obligations
  15.
    
    Shareholders equitySuccessor Registrant
 a.
    
    The shareholding structure of Satmex consists of ordinary, nominative Class I and a
Class II shares at no-par value, which are fully subscribed and paid in. The shares are
divided into three series; the shares Series A, which may only be subscribed or acquired
by Mexican nationals under certain mechanisms established in the Companys bylaws, while
the shares Series B and N may be freely subscribed or acquired by anybody, including
foreign investors.As of December 31, 2008 and 2007, the common stock is as follows:
 Common Stock - SharesFixed Capital
    
    
    Variable CapitalClass I
    
    
    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
     F-25




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##### Table of Contents



b.
    
    Through the unanimous resolutions approved during the meeting of November 30, 2006,
shareholders agreed to reduce the common stock of Satmex by absorbing accumulative losses
of $317.5 million. Following this reduction, the common stock of Satmex was fully
assigned to minimum fixed stock as required by Mexican General Corporate Law.c.
    
    Similarly, through the unanimous resolutions approved during the meeting of
November 30, 2006, shareholders agreed to increase variable capital by capitalizing the
portion of the principal and interest balance of the HYBs exceeding the principal of the
SPSSN ($140 million). The capitalization process involved the amount of $273.8 million
and resulted in the issuance of 7,166,667 new Class II, Series B ordinary, nominative
 shares without par value and 29,395,833 Class II, Series N ordinary, nominative shares
without par value.As of December 31, 2008 and 2007, the common stock of the Company amounted to $46.7
million.d.
    
    As of the Effective Date, Deutsche Bank Mexico, S. A., Institución de Banca
Múltiple, División Fiduciaria, in its capacity as trustee, is the owner and holder of
 shares representing 96% of common stock with economic rights (including neutral
investment shares) and 90% of the ordinary voting stock of Satmex.e.
    
    Nacional Financiera, S. N. C., Institución de Banca de Desarrollo, Dirección
Fiduciaria, in its capacity as trustee, is currently the registered owner and holder of
 shares representing 4% of the common stock with economic rights (including neutral
investment shares) and 10% of the ordinary voting stock of Satmex.f.
    
    On February 15, 2008, the Companys Board of Directors through its authorized
representatives, authorized continuing the negotiations with one of the most important
satellite builders, issuing an authorization to proceed (ATP), a document specifying
the contract terms and conditions for the acquisition of the satellite Satmex 7,
including the agreements for its launch.Effective March 1, 2008, the Company was authorized to operate Solidaridad in an
inclined orbit.g.
    
    Shareholders equity, except restated tax contributed capital and tax-retained
earnings, will be subject to income tax at the rate in effect upon distribution. Any tax
paid on this distribution may be credited against annual and estimated income taxes of
the year in which the tax on dividends is paid and the following two fiscal years.h.
    
    As of December 31, 2008, the balance of the tax contributed capital account is
$1,606,327, which is higher than shareholders deficit according to the consolidated
balance sheets.
 Predecessor Registrant
   Series A
    
    
    2,601,000Series B
    
    
    2,499,000Series N
    
    
    4,900,000Series C
    
    
    606,73010,606,730
  F-26




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##### Table of Contents



Shares
    
    
    AmountCommon stock
    
    
    5,000
    
    
    $
    6Fixed
    
    
    9,995,000
    
    
    
    389,569Variable
    
    
    10,000,000
    
    
    $
    389,575Preferred stockFixed
    
    
    606,730
    
    
    $
    31,886
 As of December 31, 2005, Servicios held 70.71% of the outstanding common stock of Satmex,
Loral held 4.46% in preferred stock; Principia held 1.26% in preferred stock and the Mexican
federal government held 23.57%.16.
    
    Related party transactions and balances
 a.
    
    Related party transactions performed in the normal course of operations were as
follows:
 PredecessorSuccessor Registrant
    
    
    RegistrantDecember 1 to
    
    
    January 1 toDecember 31,
    
    
    November 30,2008
    
    
    2007
    
    
    2006
    
    
    2006Revenues from:Satellite services-Mexican federal government
    
    $
    1,966
    
    
    $
    2,403
    
    
    $
    253
    
    
    $
    2,612Satellite capacity to
Mexican federal
government
    
    
    2,344
    
    
    
    2,344
    
    
    
    195
    
    
    
    2,017Loral
    
    
    2,018
    
    
    
    1,882
    
    
    
    96
    
    
    
    24,071Enlaces-Satellite services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,360Lease of teleport and
equipment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    149Interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    781Expenses from:Administrative labor 
Service Companies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,454Storage  SSL
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    105Rent of control centers 
Mexican federal government
    
    
    504
    
    
    
    444
    
    
    
    74
    
    
    
    368Guarantee fees  Servicios
and Firmamento
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    53Construction Satmex 6 and
Satmex 7- Loral
    
    
    2,600
    
    
    
    
    
    
    
    
    
    
    
    26,776
  F-27




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##### Table of Contents



b.
    
    Related party receivable balances are as follows:
 2008
    
    
    2007Amounts receivable:Loral
    
    $
    68
    
    
    $
    264Mexican federal government
    
    
    317
    
    
    
    315$
    385
    
    
    $
    579
 17.
    
    Reorganization expenses due to chapter 11 processReorganization expenses due to emergence from bankruptcy were as follows:
 PredecessorRegistrantJanuary 1 toNovember 30,2006Professional fees
    
    $
    27,985Loss on discharge of prepetition liabilities
    
    
    5,346Other
    
    
    116$
    33,447
 18.
    
    Other incomeIn June 2004, Satmex filed Proof of Claim against a former customer, arising out of the
former customers rejection of a contract. In 2008, Satmex recovered approximately $4.6
million of the claim.19.
    
    Income taxes
 a.
    
    Income tax expense (benefit) was comprised as follows:
 PredecessorSuccessor Registrant
    
    
    RegistrantDecember 1 to
    
    
    January 1 toDecember 31,
    
    
    November 30,2008
    
    
    2007
    
    
    2006
    
    
    2006ISR:Current
    
    $
    959
    
    
    $
    386
    
    
    $
    29
    
    
    $
    Deferred
    
    
    98
    
    
    
    818
    
    
    
    282
    
    
    
    18,726IETU:Current
    
    
    1,046
    
    
    
    
    
    
    
    
    
    
    
    Deferred
    
    
    4,726
    
    
    
    (311
    )
    
    
    
    
    
    
    $
    6,829
    
    
    $
    893
    
    
    $
    311
    
    
    $
    18,726
  F-28




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##### Table of Contents



b.
    
    The significant components of the net deferred asset (liability) are:
 2008
    
    
    2007Current assets:Deferred revenue
    
    $
    1,759
    
    
    $
    1,742Effect of deferred IETU
    
    
    
    
    
    
    232Tax loss carryforwards
    
    
    
    
    
    
    217Other  net
    
    
    2,051
    
    
    
    3,559Total current asset
    
    
    3,810
    
    
    
    5,750Current liabilities:Prepaid insurance
    
    
    (972
    )
    
    
    (1,095
    )Valuation allowance
    
    
    (2,777
    )
    
    
    (3,946
    )Net current deferred tax asset
    
    $
    61
    
    
    $
    709Noncurrent assets:Tax loss carryforwards
    
    $
    154,905
    
    
    $
    186,856Concessions
 net
    
    
    34,801
    
    
    
    70,045Deferred revenue
    
    
    12,323
    
    
    
    19,322Effect of deferred IETU
    
    
    
    
    
    
    79Other  net
    
    
    
    
    
    
    123Total noncurrent asset
    
    
    202,029
    
    
    
    276,425Noncurrent liabilities:Satellites and equipment  net
    
    
    (41,676
    )
    
    
    (58,252
    )Intangibles  net
    
    
    (6,212
    )
    
    
    (15,060
    )Valuation allowance
    
    
    (159,232
    )
    
    
    (204,028
    )Total noncurrent liabilities
    
    
    (207,120
    )
    
    
    (277,340
    )Net noncurrent deferred tax liability
    
    $
    (5,091
    )
    
    $
    (915
    )
 Due to uncertainties regarding Satmexs ability to realize the full benefit from these
tax loss carryforwards, Satmex has established a valuation allowance of $162 million
and $208 million as of December 31, 2008 and 2007 respectively, against the deferred
tax assets.c.
    
    A reconciliation of the statutory income tax rate is as follows:
 PredecessorSuccessor Registrant
    
    
    RegistrantDecember 1 to
    
    
    January 1 toDecember 31,
    
    
    November 30,2008
    
    
    2007
    
    
    2006
    
    
    2006%
    
    
    %
    
    
    %
    
    
    %Statutory income tax rate
    
    
    28
    
    
    
    28
    
    
    
    29
    
    
    
    29Tax inflation effects
    
    
    79
    
    
    
    5
    
    
    
    (11
    )
    
    
    13Nondeductible expenses
    
    
    (5
    )
    
    
    (1
    )
    
    
    (2
    )
    
    
    (23
    )Effect of deferred IETU
    
    
    (20
    )
    
    
    1
    
    
    
    
    
    
    
    Change in valuation allowance
    
    
    (106
    )
    
    
    (35
    )
    
    
    (20
    )
    
    
    (53
    )Effective income tax rate
    
    
    (24
    )
    
    
    (2
    )
    
    
    (4
    )
    
    
    (34
    )
 d.
    
    In accordance with Mexican tax law, in 2008, Satmex and its subsidiaries on
stand-alone basis are subject to ISR and IETU and through December 31, 2007, were
subject to ISR and IMPAC. For 2008 and 2007, the ISR rate was 28%. Taxpayers who file
tax reports and meet certain requirements may obtain a tax credit equivalent to 0.5% or
0.25% of taxable income.
  F-29




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##### Table of Contents



e.
    
    As of December 31, 2008 Satmex has tax loss carryforwards, which are available to
offset future taxable income, as follows:
 Expiration Date
    
    Amount2010
    
    $
    126,9442012
    
    
    58,3382013
    
    
    68,4722014
    
    
    25,2282016
    
    
    188,3252017
    
    
    20,3852018
    
    
    65,540$
    553,232
 20.
    
    Contingencies and commitmentsSatellite and insurance matters
 a.
    
    The in-orbit insurance for Solidaridad 2 was not renewed primarily because the
satellites useful life ends in 2009. Any uninsured loss of Solidaridad 2 would have a
minor adverse effect on Satmexs results of operations and financial position.b.
    
    In May 2008, Satmex renewed the in-orbit insurance policy for the Satmex 6, which
expires in May 2009, and provides coverage for $288 million. The insurance companies
have the right to review the terms and conditions of the insurance policy, including the
right to terminate the insurance coverage.The insurance policy terms and conditions are in accordance with current industry
standards. Any uninsured loss of Satmex 6 would have a material adverse effect on
Satmexs results of operations and financial position.
  F-30




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##### Table of Contents



c.
    
    In December 2008, Satmex renewed the in-orbit insurance policy for the Satmex 5
satellite, which expires in December 2009, and provides coverage for $90 million. The
insurance companies have the right to review the terms and conditions of the insurance
policy, including the right to terminate the insurance coverage.The insurance policy excludes coverage for the Xenon Ion Propulsion System (XIPS) and
any other anomaly related to this system. Because XIPS has experienced anomalies on
other similar satellites, this exclusion has become a typical feature in insurance
policies for satellites with the same propulsion system. It also has another exclusion
related to the anomaly from the channel 1C.The insurance policy terms and conditions are according to actual industry standards.
Any uninsured loss of Satmex 5 would have a material adverse effect on Satmexs results
of operations and financial position.Since June 2005, the primary XIPS has been used as the operating propulsion system
because the secondary XIPS ceased providing the required inclination control. Use of
the primary XIPS will produce adverse effects such as contamination on the solar arrays
and it will require bipropellant gas supplementary consumptions. Tests suggested by the
manufacturer have been performed on the secondary XIPS; however, the results indicate
that the secondary XIPS is no longer available. Nevertheless the final diagnostic is
still pending.If Satmex 5 experiences a total failure of its XIPS, the remaining useful life with
bipropellant gas would be 2.9 years from April 1, 2009.
 Legal matters
 d.
    
    Management is not aware of any pending litigation against Satmex neither Satmex
nor its assets are subject to any legal action other than those that arise in the normal
course of business. The liability for all legal actions or other claims against Satmex
prior to October 15, 1997 has been retained by the Mexican Government.e.
    
    On January 1, 2008 the LIETU went into effect. Satmex, on the one hand, and
Enlaces, the New Service Companies and HPS, on the other hand, have submitted an amparo
writ against LIETU to minimize the Companys tax burden. The Company cannot assure that
the outcome of such amparowill be determined in its favor.
 Commitments
 f.
    
    Satmex entered into a new contract with SSL and granted to SSL an usufructolegal
figure that grants to SSL the right to use and benefits from certain transponders until
the end of life of the satellites Satmex 5 and Satmex 6. SSL was not required to post a
bond related to the usufructofigure.SSL has the right to receive a percentage (different for each satellite) of the net
sale value of Satmex 5 and Satmex 6 or an amount equal to the market value related to
the transponders granted under the usufructofigure, whichever is higher, determined by
a panel of three experts in satellite valuation, and will not continue if Satmex or the
new shareholders decide to not continue with the usufructofigure.g.
    
    The satellite concessions granted by the Mexican federal government establish
that Satmex should assign satellite capacity for them in band C and band Ku. The
capacity assigned amounts to approximately 362.88 MHz.h.
    
    Satmex pays rights of usage for the facilities where control centers are located.
Accordingly, with the concession titles it should pay rights during the concession
period for an equivalent of 7.5% of the facilities value determined by experts assigned
by the Mexican federal government and updated periodically. In 2008, 2007 and 2006, the
fees paid for the use of these control centers were $504, $444 and $442, respectively.
  F-31




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##### Table of Contents



Other Matters
 i.
    
    Additional taxes payable could arise in transactions with related parties if the
tax authorities, during a review, believe that the prices and amounts used by Satmex are
not similar to those used with or between independent parties in comparable
transactions.j.
    
    Satmex leases the building where are located its administrative offices.
According with the leasing contract it establishes a mandatory period of five years and
three months starting in October 2008 and concluding in December 2013. Rental expense
was $394 in 2008, $307 in 2007 and $303 in 2006 under this new lease as well as the
previous lease. The minimum future payments, until the end of the contract, amount to
$2,463.k.
    
    Future minimum revenues due from customers under non-cancelable operating lease
contracts for transponder capacity on satellites in-orbit as of December 31, 2008, are
as follows:
 Expiration Date
    
    Amount2009
    
    $
    94,7982010
    
    
    59,1472011
    
    
    39,939Thereafter
    
    
    31,205$
    225,089
 l.
    
    The Primary Control Center is part of a building complex that also houses
equipment owned and used for the Mexican federal governments teleport and mobile
telecommunications services systems. Teleport of Enlaces is also housed at the Primary
Control Center. A request for approval of the operation of Enlaces Teleport in the
Primary Control Center was filed with SCT. No official response has been received as of
the date hereof.
 21.
    
    Business segmentsThe Company identifies its reportable segments by three concepts: Satellite services,
Programming distribution services and Broadband satellite services, as follows:Successor Registrant
 For the Year Ended December 31, 2008Programmingdistribution
    
    
    BroadbandSatellite services
    
    
    services
    
    
    satellite services
    
    
    Other
    
    
    TotalRevenues
    
    $
    98,074
    
    
    $
    8,136
    
    
    $
    13,470
    
    
    $
    15,420
    
    
    $
    135,100Eliminations
    
    
    (4,826
    )
    
    
    
    
    
    
    (135
    )
    
    
    (15,420
    )
    
    
    (20,381
    )Operating revenues
    
    
    93,248
    
    
    
    8,136
    
    
    
    13,335
    
    
    
    
    
    
    
    114,719Cost and expenses
    
    
    49,587
    
    
    
    6,810
    
    
    
    10,277
    
    
    
    
    
    
    
    66,674Eliminations
    
    
    (14,893
    )
    
    
    (777
    )
    
    
    (4,826
    )
    
    
    
    
    
    
    (20,496
    )34,694
    
    
    
    6,033
    
    
    
    5,451
    
    
    
    
    
    
    
    46,178Reversal of
provision for
orbital incentive
    
    
    (6,989
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,989
    )Depreciation and
amortization
    
    
    59,083
    
    
    
    2
    
    
    
    722
    
    
    
    
    
    
    
    59,807Operating cost and
expenses
    
    
    86,788
    
    
    
    6,035
    
    
    
    6,173
    
    
    
    
    
    
    
    98,996Other income
    
    
    4,610
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,610Operating income
    
    
    11,070
    
    
    
    2,101
    
    
    
    7,162
    
    
    
    
    
    
    
    20,333
  F-32




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##### Table of Contents



For the Year Ended December 31, 2008Programmingdistribution
    
    
    BroadbandSatellite services
    
    
    services
    
    
    satellite services
    
    
    Other
    
    
    TotalInterest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,498
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,481Net foreign exchange
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,828
    )Loss before income
tax and minority
interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,512
    )Income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,829Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    285Consolidated net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (35,626
    )Capital expenditures
    
    $
    6,192
    
    
    $
    
    
    
    $
    326
    
    
    $
    
    
    
    $
    6,518Total assets
    
    $
    426,114
    
    
    $
    2,157
    
    
    $
    16,064
    
    
    $
    1,159
    
    
    $
    445,494
 For the Year Ended December 31, 2007Programmingdistribution
    
    
    BroadbandSatellite services
    
    
    services
    
    
    satellite services
    
    
    Other
    
    
    TotalRevenues
    
    $
    101,178
    
    
    $
    6,815
    
    
    $
    15,318
    
    
    $
    17,675
    
    
    $
    140,986Eliminations
    
    
    (20,928
    )
    
    
    
    
    
    
    (182
    )
    
    
    (17,675
    )
    
    
    (38,785
    )Operating revenues
    
    
    80,250
    
    
    
    6,815
    
    
    
    15,136
    
    
    
    
    
    
    
    102,201Cost and expenses
    
    
    60,228
    
    
    
    4,603
    
    
    
    11,111
    
    
    
    
    
    
    
    75,942Eliminations
    
    
    (17,481
    )
    
    
    (231
    )
    
    
    (3,253
    )
    
    
    
    
    
    
    (20,965
    )42,747
    
    
    
    4,372
    
    
    
    7,858
    
    
    
    
    
    
    
    54,977Depreciation and
amortization
    
    
    52,461
    
    
    
    3
    
    
    
    642
    
    
    
    
    
    
    
    53,106Operating cost and
expenses
    
    
    95,208
    
    
    
    4,375
    
    
    
    8,500
    
    
    
    
    
    
    
    108,083Operating (loss) income
    
    
    (14,958
    )
    
    
    2,440
    
    
    
    6,636
    
    
    
    
    
    
    
    (5,882
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51,672
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,650Net foreign exchange
gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145Loss before income tax
and minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (55,759
    )Income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    893Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    802Consolidated net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (57,454
    )Capital expenditures
    
    $
    1,736
    
    
    $
    
    
    
    $
    689
    
    
    $
    
    
    
    $
    2,425Total assets
    
    $
    452,774
    
    
    $
    1,857
    
    
    $
    15,119
    
    
    $
    432
    
    
    $
    470,182
  F-33




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##### Table of Contents



From December 1 to December 31, 2006Programmingdistribution
    
    
    BroadbandSatellite services
    
    
    services
    
    

satellite services
    
    
    Other
    
    
    TotalRevenues
    
    $
    4,964
    
    
    $
    557
    
    
    $
    1,509
    
    
    $
    1,938
    
    
    $
    8,968Eliminations
    
    
    (243
    )
    
    
    
    
    
    
    (36
    )
    
    
    (1,938
    )
    
    
    (2,217
    )Operating revenues
    
    
    4,721
    
    
    
    557
    
    
    
    1,473
    
    
    
    
    
    
    
    6,751Cost and expenses
    
    
    5,763
    
    
    
    233
    
    
    
    656
    
    
    
    
    
    
    
    6,652Eliminations
    
    
    (1,954
    )
    
    
    (20
    )
    
    
    (243
    )
    
    
    
    
    
    
    (2,217
    )3,809
    
    
    
    213
    
    
    
    413
    
    
    
    
    
    
    
    4,435Depreciation and
amortization
    
    
    6,239
    
    
    
    3
    
    
    
    24
    
    
    
    
    
    
    
    6,266Operating cost and
expenses
    
    
    10,048
    
    
    
    216
    
    
    
    437
    
    
    
    
    
    
    
    10,701Operating (loss) income
    
    
    (5,327
    )
    
    
    341
    
    
    
    1,036
    
    
    
    
    
    
    
    (3,950
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,333
    )Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103Net foreign exchange
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (123
    )Loss before income tax
and minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,303
    )Income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    311Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    140Consolidated net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (8,754
    )Capital expenditures
    
    $
    814
    
    
    $
    
    
    
    $
    714
    
    
    $
    
    
    
    $
    1,528Total assets
    
    $
    494,301
    
    
    $
    1,524
    
    
    $
    12,221
    
    
    $
    18
    
    
    $
    508,064
 Predecessor Registrant
 January 1, 2006 through November 30, 2006ProgrammingSatellite services
    
    
    distribution services
    
    
    TotalOperating revenues
    
    $
    82,323
    
    
    $
    6,019
    
    
    $
    88,342Costs and expenses
    
    
    44,574
    
    
    
    2,592
    
    
    
    47,166Depreciation and amortization
    
    
    51,778
    
    
    
    2
    
    
    
    51,780Operating cost and expenses
    
    
    96,352
    
    
    
    2,594
    
    
    
    98,946Operating (loss) income
    
    
    (14,029
    )
    
    
    3,425
    
    
    
    (10,604
    )Reorganization expenses
    
    
    
    
    
    
    
    
    
    
    (33,447
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    (19,152
    )Interest income
    
    
    
    
    
    
    
    
    
    
    2,711Net foreign exchange gain
    
    
    
    
    
    
    
    
    
    
    5,690Preferred stock dividend requirement
    
    
    
    
    
    
    
    
    
    
    (1,130
    )Deferred income tax
    
    
    
    
    
    
    
    
    
    
    18,726Consolidated net loss
    
    
    
    
    
    
    
    
    
    $
    74,658Capital expenditures
    
    $
    45,884
    
    
    $
    
    
    
    $
    45,884Total assets
    
    $
    881,648
    
    
    $
    1,498
    
    
    $
    883,146
  F-34




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##### Table of Contents



PredecessorSuccessor Registrant
    
    
    RegistrantDecember 1 to
    
    
    January 1 toDecember 31,
    
    
    November 30,2008
    
    
    2007
    
    
    2006
    
    
    2006United States of America
    
    $
    50,285
    
    
    $
    47,558
    
    
    $
    3,508
    
    
    $
    55,761Mexico
    
    
    42,032
    
    
    
    42,333
    
    
    
    2,324
    
    
    
    24,079Central and South America
    
    
    22,402
    
    
    
    12,310
    
    
    
    919
    
    
    
    8,502$
    114,719
    
    
    $
    102,201
    
    
    $
    6,751
    
    
    $
    88,342
  F-35




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##### Table of Contents



Satélites Mexicanos, S. A. de C.V. and Subsidiaries
 
 Schedule of Valuation and Qualifying Accounts
 Thousands of U. S. dollars
 AdditionalBalance at
    
    
    Charged
    
    
    
    
    
    
    Balance atBeginning of
    
    
    (Credited) to
    
    
    
    
    
    
    Ending ofPeriod
    
    
    Expenses
    
    
    Deductions
    
    
    PeriodAllowance for doubtful accountsSuccessor RegistrantYear ended December 31, 2008
    
    $
    399
    
    
    $
    174
    
    
    $
    63
    (1)
    
    $
    510Year ended December 31, 2007
    
    
    1
    
    
    
    398
    
    
    
    
    
    
    
    399December 1 to December 31,
2006
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1Predecessor RegistrantJanuary 1 to November 30, 2006
    
    
    107
    
    
    
    38
    
    
    
    144
    (1)
    
    
    1Allowance for due from related party
accountsPredecessor RegistrantJanuary 1 to November 30, 2006
    
    $
    3,500
    
    
    $
    (3,500
    )
    
    
    
    
    
    
    Valuation allowance on deferred
income taxesSuccessor RegistrantYear ended December 31, 2008
    
    $
    207,974
    
    
    $
    (45,965
    )
    
    $
    
    
    
    $
    162,009Year ended December 31, 2007
    
    
    188,092
    
    
    
    19,882
    
    
    
    
    
    
    
    207,974December 1 to December 31,
2006
    
    
    183,671
    
    
    
    4,421
    
    
    
    
    
    
    
    188,092Predecessor RegistrantJanuary 1 to November 30, 2006
    
    
    88,762
    
    
    
    94,909
    
    
    
    
    
    
    
    183,671
 (1)
    
    Write-offs of uncollectible accounts.   F-36




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description2.23
    
    
    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.*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.*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.*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.*2.27
    
    
    Joinder, dated January 20, 2009, by AlternaTV Corporation.*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.*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.*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.*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.*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.*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.*2.34
    
    
    Joinder, dated May 21, 2009, by AlternaTV International Corporation.*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.*
  77




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##### Table of Contents



Exhibit No.
    
    Description4.13
    
    
    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.*12.1
    
    
    Section 302 Certification of Patricio Northland, Chief Executive Officer.*12.2
    
    
    Section 302 Certification of Luis Stein, Chief Financial Officer.*13.1
    
    
    Section 906 Certification of Patricio Northland, Chief Executive Officer.*13.2
    
    
    Section 906 Certification of Luis Stein, Chief Financial Officer.*
 
 
    
    Incorporated by reference from the registrants Registration Statement on Form F-4 filed on
November 9, 1998 (File No. 333-8880).
    
    Incorporated by reference from the registrants Form 6-K for the month of December, 2006.
    
    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.
    
    Incorporated by reference from the registrations Amendment to Form T-3 filed on November 22, 2006
(File No. 022-28822).****
    
    Incorporated by reference to the registrants Form 20-F for the fiscal year ended December 31, 2007.***
    
    Incorporated by reference to the registrants Form 20-F for the fiscal year ended December 31, 2005.**
    
    Incorporated by reference to the registrants Form 20-F for the fiscal year ended December 31, 2006.*
    
    Filed herewith.  78