##### Table of Contents



SECURITIES AND EXCHANGE
    COMMISSIONWashington, D.C.
    20549
    Form 20-F
  o

REGISTRATION STATEMENT PURSUANT
    TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
    OF 1934orþ

ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934oro

SHELL COMPANY REPORT PURSUANT
    TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934Date 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)
 Rodolfo Gaona
    No. 86
 Col. Lomas de Sotelo
 11200 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, 2006 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
  Rule 12b-2
  Large accelerated
    filer o     Accelerated
    Filer o     Non-accelerated
    filer þ
   Item 17 o     Item 18
    þ
  Rule 12b-2
 Yes o     No þ
   Yes þ     No o




---



##### 



TABLE OF
    CONTENTS
  PagePART
    IITEM 3.

Key
    Information


1ITEM 4.

Information on the
    Company


10ITEM 4A.

Unresolved Staff
    Comments


37ITEM 5.

Operating and
    Financial Review and Prospects


38ITEM 6.

Directors, Senior
    Management and Employees


52ITEM 7.

Major Shareholders
    and Related Party Transactions


58ITEM 8.

Financial
    Information


60ITEM 9.

Markets


60ITEM 10.

Additional
    Information


60ITEM 11.

Quantitative and
    Qualitative Disclosures About Market Risk


62PART
    IIITEM 13.

Defaults, Dividend
    Arrearages and Delinquencies


62ITEM 14.

Material
    Modifications to the Rights of Security Holders


63ITEM 15.

Controls and
    Procedures


63ITEM 16A.

Audit Committee
    Financial Expert


63ITEM 16B.

Code of
    Ethics


64ITEM 16C.

Principal
    Accountant Fees and Services


64PART
    IIIITEM 18.

Financial
    Statements


65ITEM 19.

Exhibits


65EX-4.11: Thirteenth Amendment dated September 15, 2006 to AgreementEX-12.1: Section 302 CertificationEX-12.2: Section 302 CertificationEX-13.1: Section 906 CertificationEX-13.2: Section 906 Certification     i




---



##### Table of Contents



PART I  ITEM 3.
    Key
    Information  SELECTED
    FINANCIAL DATA
    No. 90-7, Financial Reporting of Entities in Reorganization under the
    Bankruptcy Code (SOP 90-7).
  SuccessorPredecessor Registrant


RegistrantJanuary 1 to


December 1 toYears Ended December 31,


November 30


December 312002


2003


2004


2005


2006


2006(Amount in millions of U.S. dollars)Statement of Operations
    Data:Revenue

$
85.0


$
78.8


$
71.7


$
69.9


$
88.3


$
6.8Operating loss


(1.4
)


(7.6
)


(5.4
)


(11.1
)


(10.6
)


(3.9
)Loss before income taxes


(28.7
)


(43.4
)


(58.9
)


(70.6
)


(54.8
)


(8.3
)Deferred income tax (expense)
    benefit


8.8



(21.3
)


4.4



(0.2
)


(18.7
)


(0.3
)Net loss


(19.9
)


(64.7
)


(54.5
)


(70.8
)


(73.5
)


(8.7
)Net loss applicable to common
    stockholders(1)


(21.4
)


(66.3
)


(56.0
)


(72.3
)


(74.7
)


(8.7
)Other Data:Depreciation and amortization

$
47.4


$
48.4


$
48.1


$
47.9



51.8



6.2Capital expenditures


123.2



37.9



1.4



8.3



45.9



1.5Balance Sheet Data (at end of
    period):Total assets

$
1,004.8


$
977.1


$
953.4


$
925.3


$
883.1


$
508.1Current maturities of long-term
    debt (excluding accrued interest)


1.0



523.6



523.4



527.7



527.7



Long-term debt


523.4



















378.2Shareholders equity


368.7



303.9



249.4



178.6



102.7



38.0     (1)
    
    Net loss applicable to common shareholders comprises our net
    loss for the year less our preferred stock dividend. 1




---



##### Table of Contents



EXCHANGE
    RATES
    CERTAIN
    FACTORS THAT MAY AFFECT FUTURE RESULTS
  Form 20-F
  Factors
    Relating to Satmex
  Since we have not met all of our financial reporting
    obligations under the First Priority Senior Secured Note
    indenture, which included the filing of this annual report on
    Form 20-F,
    the holders of the First Senior Secured Priority Notes have the
    right to accelerate their notes and we would not have sufficient
    funds available to pay the principal that would be due on the
    First Priority Senior Secured Notes if they were
    accelerated.
  Form 20-F,
  As a result of the implementation of our plan of
    reorganization (the Plan of Reorganization) filed
    with the U.S. Bankruptcy Court in our bankruptcy case under
    chapter 11 of title 11 of the U.S. Bankruptcy
    Code, our financial information as of December 31, 2006 is
    not comparable to our prior years financial
    information.
  90-7. Form 20-F.
  We have a history of significant net operating losses and
    we may not be able to successfully improve our performance or
    obtain profitability.
   2




---



##### Table of Contents



Our ability to obtain additional financing in the future
    may be limited.
  and/or
    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
    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 components; and
    the durability of components.     3




---



##### Table of Contents



back-up, back-up
  back-up
        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.
   4




---



##### Table of Contents



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 have incurred significant indebtedness, including
    secured indebtedness, to acquire and launch our satellites that
    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 because a substantial portion of our cash flow from
    operations must be dedicated to servicing our debt;
    increased our vulnerability to general adverse economic and
    industry conditions; 5




---



##### Table of Contents




    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; and
    limited, through covenants in our indebtedness, our ability to
    borrow additional funds.    We operate in a highly competitive environment.
         6




---



##### Table of Contents



The Mexican government has economic rights, and may
    exercise substantial 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.
    You may not be able to effect service of process in the
    U.S. upon our officers or our Mexican directors.
    Our future success depends on our ability to retain our
    key employees.
    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.
    We may not have sufficient funds to be available to redeem
    our First Priority Senior Secured Notes and Second Priority
    Senior Secured Notes upon a change of control.
   7




---



##### Table of Contents



Factors
    Relating to Regulatory Environment
  Our business is regulated, causing uncertainty and
    additional costs.
    o o o
  Our government concessions may be revoked under certain
    circumstances.
  (quiebra)
    
    the term of any such Orbital Concessions expires;
    we resign our rights under any such Orbital Concession;
    the Mexican government, through the Secretaría de
    Comunicaciones y Transportes(the Ministry of Communications
    and Transportation or the SCT), expropriates any of
    the Orbital Concessions;
    we become subject to liquidation (quiebra);
    the SCT revokes any of the Orbital Concessions; or
    we fail to deliver the free capacity reserved for the Mexican
    government.    
    unjustified or unauthorized interruption of our operations or
    the services that may be provided under the Orbital Concessions;
    our undertaking any action or refraining from taking any action
    that affects the rights of other licensees or concessionaires;
    failure by us to satisfy the terms or conditions set forth in
    the Orbital Concession Titles;
    unjustified failure by us to interconnect other concessionaires
    or licensees that have the right to provide telecommunications
    services;
    change of our nationality; and 8




---



##### Table of Contents




    assignment or transfer of rights granted under the Orbital
    Concession Titles in contravention of the terms of applicable
    Mexican law.      rescate
    (Rescate)
  (Requisa)
  We are subject to different corporate disclosure
    requirements than U.S. companies, which may limit the
    information available to our investors.
  non-U.S. issuers
  Factors
    Relating to Mexico
  Downturns in the Mexican economy adversely affect
    us.
    Currency devaluations may impair our ability to service
    our debt.
   9




---



##### Table of Contents



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. (52) 55-2629-5800.
  Ley Federal de
    Telecomunicaciones Telecomunicaciones de México,
    o o o
  Our
    Restructuring
  back-up
   10




---



##### Table of Contents



concurso
    mercantil. concurso mercantil Ley de Concursos
    Mercantiles concurso mercantil conciliador, concurso
    mercantil, sentencia de
    reconocimiento, graduación y prelación de
    créditos
    concurso mercantil agreed-upon concurso mercantil concurso mercantil
  concurso mercantil
    
    five (5) year maturity with a monthly or quarterly coupon
    of London Interbank Offer Rate (LIBOR) +
    875 basis points;
    callable at a price of 103% of the principal in year 1, 102% in
    year 2, 101% in year 3, and par thereafter plus accrued interest;
    first priority security interest in all of our assets;
    cash sweep prepayments on any cash balances over
    $5 million; and
    a change of control put option at 101% (plus accrued interest). 11




---



##### Table of Contents




    seven (7) year maturity with a quarterly coupon of
    101/8%
    per annum, with no cash payments and
    101/8%
    payable in kind in year 1, and 2% cash payments and
    81/8%
    payable in kind thereafter until the First Priority Senior
    Secured Notes are paid in full, after which time the coupon
    shall be paid wholly in cash;
    second priority security interest in all of our assets,
    identical in operation and effect to the security interests of
    the First Priority Senior Secured Notes;
    after the full payment of the First Priority Senior Secured
    Notes, cash sweep prepayments on any cash balances over
    $5 million; and
    a change of control put option at par plus accrued interest,
    unless waived by holders of
    662/3%
    of the Second Priority Senior Secured Notes or unless following
    the change of control we are controlled by certain approved
    buyers.           12




---



##### Table of Contents



Our
    Satellites
  o o o o o o 36-MHz
      Satmex
    6
  o o o 36-MHz
    o
        usufructo usufructo
 13




---



##### Table of Contents



Satmex
    5
  o
    back-up,
    180-day
  back-up
  back-up
 14




---



##### Table of Contents



usufructo usufructo
  Solidaridad
    2
  o o o
      Satmex
    7
  o o
  36-MHz
   15




---



##### Table of Contents



Capital
    Investments
        Orbital
    Coordination
  o o o o
    Landing
    Rights
   16




---



##### Table of Contents



Satellite
    Control Centers and Property Concession
      
    the 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
    antennae for the control, monitoring and in-orbit testing of
    satellites.      (Indice Nacional de Precios al
    Consumidor) (Secretaría de la
    Función Pública)
  Properties
    Insurance
   17




---



##### Table of Contents




    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.    Services
  Spanish-language
  set-up
   18




---



##### Table of Contents



Business
    Strategy
    on-site
    
    enhancing our regional presence;
    strengthening our position in market segments that benefit from
    fixed satellite services;
    growing our current customer base offering value-added-solutions
    and developing strategic alliances;
    further growing the AlternaTV service;
    strengthening our satellite broadband business
    (Enlaces); and
    pursuing strategic alliances.  Enhance
    Our Regional Presence
       19




---



##### Table of Contents



Strengthen
    Our Position in Market Segments that Benefit from Fixed
    Satellite Services
        Video
    Distribution Services
    Broadcasting
    Transmission Services
    ad hoc ad hoc
    Telecommunications
    Transmission Services
   20




---



##### Table of Contents



and/or
  Internet
    Service Providers
    Grow
    Our Current Customer Base and Offering Value-Added Solutions and
    Developing Strategic Alliances
     21




---



##### Table of Contents



Further
    grow the AlternaTV Service  Digital
    Distribution Platform for
    Latin-American
    Programming
    Spanish-language
      Spanish-language
    
    Advertising sales.  AlternaTV will market
    content and audience to advertisers, while managing advertising
    traffic and insertion. AlternaTV will capture a percentage
    of the advertising sales economics as payment for services
    provided to programmers.
    Low Power Television Stations
    (LPTVs).  AlternaTV will sell programming on
    a
    show-by-show
    basis to U.S. based LPTVs that target Hispanics.  22




---



##### Table of Contents



Further
    Grow Enlaces Services
      Customers
        23




---



##### Table of Contents



2006


2005


2004(In thousands)Mexico

$
26,403


$
29,315


$
32,712U.S.


59,269



34,692



33,569Other


9,421



5,865



5,424Total

$
95,093


$
69,872


$
71,705   Sales and
    Marketing
  Sales
    Force
        Pricing
    Comisión Federal de Telecomunicaciones
      Contracts
      3-year
 24




---



##### Table of Contents



Competition
        Consolidation
    in the Fixed Satellite Services (FSS)
    Industry
    Regional
    Satellite Operators
    New
    Satellite Capacity
   25




---



##### Table of Contents



Domestic
    Market
            U.S.
    Market
   26




---



##### Table of Contents



Ka-band. dial-up
  Canadian
    Market
    REGULATION
  Regulatory
    Framework
  provided however (Comisión Nacional Inversiones
    Extranjeras)
  Ley General de Bienes Nacionales Ley General del Equilibrio Ecológico y
    Protección al Ambiente Ley Federal de
    Competencia Económica Ley de Vías Generales de Comunicación
  Comisión Federal de
    Telecomunicaciones
   27




---



##### Table of Contents



The
    Orbital Concessions
    
    the Orbital Concessions providing the right to occupy each of
    three orbital slots (one concession per orbital slot) and
    exploit their respective C- and Ku- frequency bands, and
    the Property Concession providing the right to use the buildings
    and areas in which the control centers are located.  o o o o o o Comision Federal de Competencia
      L-band
 28




---



##### Table of Contents




    carry out research and development in Mexico,
    maintain the control centers within Mexico and preferentially
    staff them with Mexican nationals, and
    maintain satellite service continuously and efficiently.      20-year
        
    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). (Secretaría de la
    Función Pública)
    Termination
    of the Orbital Concessions
    
    the term of any such Orbital Concession expires;
    we resign our rights under any such Orbital Concession;
    the Mexican government through the SCT, expropriates any of the
    Orbital Concessions; 29




---



##### Table of Contents




    we become subject to liquidation (quiebra); or
    the SCT revokes any of the Orbital Concessions.      
    unjustified or unauthorized interruption of our operations or
    the services that may be provided under the Orbital Concessions;
    our undertaking any action or refraining from taking any action
    that affects the rights of other licensees or concessionaires;
    failure by us to satisfy the terms or conditions set forth in
    the Orbital Concessions;
    unjustified failure by us to interconnect other concessionaires
    or licensees that have the right to provide telecommunications
    services;
    change of our nationality, and
    assignment or transfer of rights granted under the Orbital
    Concessions in contravention of the terms of the
    Telecommunications Law.          
    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 expropriates 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,
    which interfere with satellite operations; and 30




---



##### Table of Contents




    under terms and conditions generally applicable to Property
    Concessions of this type under applicable Mexican law.    Enlaces
    Concession and Value Added Services Certificate
          (quiebra)
  e-mail
   31




---



##### Table of Contents



Treaties
    and International Accords
  Reciprocity
    Agreement Between the U.S. and Mexico
    
    Mexican satellites are permitted to provide satellite service
    to, from and within the U.S. (in conformance with
    applicable U.S. law),
    U.S. satellites are permitted to provide satellite service
    to, from and within Mexico (in conformance with applicable
    Mexican law),
    the conditions for the transmission and reception of satellite
    signals will be as agreed to in protocols to the agreement,
    the entities operating commercial satellites and earth stations
    may be structured with either public or private participation
    (in conformity with both Mexican and U.S. law),
    neither Mexico nor the U.S. shall require a satellite
    licensed by the other government to obtain an additional license
    for the operation of the satellite in order to provide the
    satellite services described in the protocols to the Reciprocity
    Agreement,
    licenses for earth stations and satellite services must comply
    with national laws and regulations,
    applicable foreign ownership restrictions on satellite service
    providers and earth station licenses continue to apply, and
    both Mexico and the U.S. retain the right to take actions
    that either government considers necessary for the protection of
    our essential security interests.    Direct-to-Home
    Protocol
   32




---



##### Table of Contents



Fixed
    Satellite Services Protocol
      Reciprocity
    Agreement Between Canada and Mexico
      Argentine
    Agreement
   33




---



##### Table of Contents



,
  The
    General Agreement on Trade in Services
      
    telex and telegraph services are not included;
    cross-border traffic must be routed through a company licensed
    by the SCT;
    license fees are imposed;
    licenses will only be awarded to Mexican companies, in which
    foreign participation is limited to 49%, except in cellular,
    where foreign participation may be higher; and
    there is no limit to foreign investment in companies that offer
    services to third parties.  Government
    and Supra-Governmental Regulation
  FCC
    Regulation of Satellite Services and Foreign Ownership of FCC
    Licenses
  non-U.S. licensed
  non-U.S. licensed
 34




---



##### Table of Contents



non-U.S. satellite
    non-U.S. licensed U.S.-licensed non-U.S. satellite
  
    participating in a U.S. space station processing
    round, or
    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.  non-U.S. citizens non-U.S. citizen non-U.S. citizens
  U.S.-authorized
 35




---



##### Table of Contents



Role of
    the International Telecommunication Union
              Status
    of Our Satellites
    o o
   36




---



##### Table of Contents



ITEM 4A.
    Unresolved
    Staff Comments   37




---



##### Table of Contents



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 accounting 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 month ended as
    of 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 ended as of November 30,
    2006 (the date we adopted fresh-start accounting) or
    for the previous years.
    Successor


PredecessorRegistrant


RegistrantDecember 1


January 1


January 1to


to


to


Predecessor RegistrantDecember 31,


November 30,


December 31,


December 31,


December 31,2006


2006


2006


2005


2004Revenues

$
6,751


$
88,342


$
95,093


$
69,872


$
71,705Operating expenses:Satellite operating cost


2,594



33,956



36,550



10,563



11,923Selling and administrative expenses


1,841



13,210



15,051



22,505



17,120Depreciation


2,934



39,950



42,884



35,022



35,203Amortization


3,332



11,830



15,162



12,905



12,90510,701



98,946



109,647



80,995



77,151Operating loss


(3,950
)


(10,604
)


(14,554
)


(11,123
)


(5,446
)Reorganization expenses






(33,447
)


(33,447
)


(7,666
)


(7,416
)Interest expense and amortization
    of deferred financing cost


(4,333
)


(19,152
)


(23,485
)


(48,375
)


(49,543
)Interest income


103



2,711



2,814



2,315



3,583Net foreign exchange (gain) loss


(123
)


5,690



5,567



(5,722
)


(97
)Loss before income tax, minority
    interest and preferred stock dividends


(8,303
)


(54,802
)


(63,105
)


(70,571
)


(58,919
)Income tax


311



18,726



19,037



238



(4,378
)Minority interest


140







140







Consolidated net loss


(8,754
)


(73,528
)


(82,282
)


(70,809
)


54,541Preferred stock dividends






1,130



1,130



1,507



1,507Consolidated net loss applicable
    to common shareholders

$
(8,754
)

$
(74,658
)

$
(83,412
)

$
(72,316
)

$
(56,048
)  38




---



##### Table of Contents



Overview
    Financial
    Restructuring
  back-up
    sentencia de reconocimiento, graduación y
    prelación de créditos
  concurso mercantil agreed-upon concurso mercantil concurso mercantil
  concurso mercantil
 39




---



##### Table of Contents




    five (5) year maturity with a monthly or quarterly coupon
    of LIBOR + 875 basis points;
    callable at a price of 103% of the principal in year 1, 102% in
    year 2, 101% in year 3, and par thereafter plus accrued interest;
    first priority security interest in all of our assets;
    cash sweep prepayments on any cash balances over
    $5 million; and
    a change of control put option at 101% (plus accrued interest).    
    seven (7) years maturity with a quarterly coupon of
    101/8%
    per annum, with no cash payments and
    101/8%
    payable in kind in year 1, and 2% cash payments and
    81/8%
    payable in kind thereafter until the First Priority Senior
    Secured Notes are paid in full, after which time the coupon
    shall be paid wholly in cash;
    second priority security interest in all of our assets,
    identical in operation and effect to the security interests of
    the First Priority Senior Secured Notes;
    after the full payment of the First Priority Senior Secured
    Notes, cash sweep prepayments on any cash balances over
    $5 million; and
    a change of control put option at par plus accrued interest,
    unless waived by holders of
    662/3%
    of the Second Priority Senior Secured Notes or unless following
    the change of control we are controlled by certain approved
    buyers.    No. 06-11868 90-7,
  Recent
    Trends in the Satellite Industry
    pick-up
 40




---



##### Table of Contents



Satellite
    Operations
  back-up back-up
    back-up, back-up
 41




---



##### Table of Contents



back-up
  back-up
           42




---



##### Table of Contents



Results
    of Operations for the Year Ended December 31, 2006 Compared
    to December 31, 2005
  Revenue
    Operating
    Expenses
    Satellite
    Operations
    Selling
    and Administrative Expenses
    Depreciation
    and Amortization
   43




---



##### Table of Contents



Operating
    Loss
    Interest
    Income
    Reorganization
    Expenses
  concurso mercantil convenio concursal
  Interest
    Financing Cost
  concurso mercantil
  Net
    Foreign Exchange Gain/Loss
    Deferred
    Income Tax Expense
    Preferred
    Stock Dividend Requirement
    Net Loss
    Applicable to Common Shareholders
   44




---



##### Table of Contents



Results
    of Operations for the Year Ended December 31, 2005 Compared
    to December 31, 2004
  Revenue
    Operating
    Expenses
    Satellite operations.
  Selling and administrative expenses.
  License and management fees.
  Depreciation and Amortization.
  Operating
    Loss
    Interest
    Income
   45




---



##### Table of Contents



Interest
    and Other Financing Costs
  concurso mercantil
  Net
    Foreign Exchange Loss/Gain
    Deferred
    Income Tax Expense/Benefit
    Preferred
    Stock Dividend Requirement
    Net Loss
    Applicable to Common Shareholders
    Inflation
    and Foreign Exchange Fluctuations
  Índice Nacional de Precios al Consumidor
  Capital
    Expenditures
   46




---



##### Table of Contents



Liquidity
    and Capital Resources
    Sources
    and Uses of Cash
          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, 2006(1)

$
690,319


$
36,001


$
117,084


$
299,517


$
237,717Operating leases(2)


340



240



100







Other long-term obligations(3)


4,460



446



892



892



2,230Total contractual cash obligations

$
695,119


$
36,687


$
118,076


$
300,409


$
239,947Other Commercial
    Commitments:Maintenance

$
1,527


$
713


$
814


$



$
     (1)
    
    Variable interest on the First Priority Senior Secured Notes is
    calculated using Libor + 8.75% from December 1, 2006 and
    over the five-year life of the notes. In addition for the Second
    Priority Senior Secured Notes due 2013, 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. 47




---



##### Table of Contents



The
    First Priority Senior Secured Notes
  pari
    passu
    The
    Second Priority Senior Secured Notes
      Critical
    Accounting Policies
  90-7 SOP 90-7),
 48




---



##### Table of Contents



SOP 90-7, Business Combination
  Useful
    Lives of Satellites
      Solidaridad 2


14.5 yearsSatmex 5


15 yearsSatmex 6


15 years       Valuation
    of Long-Lived Assets
    Goodwill
    and Other Intangible Assets
  Goodwill and Other Intangible Assets
 49




---



##### Table of Contents



build-up build-up
  Deferred
    Income Tax Assets
    Revenue
    Recognition on AlternaTV
    Allowance
    for Doubtful Accounts
    Accounting
    Pronouncements
  Accounting for Uncertainty in Income Taxes
  Fair Value Measurements
 50




---



##### Table of Contents



Employers Accounting for Defined Benefit Pensions and
    Other Postretirement Plans
  The
    Fair Value Option for Financial Assets and Financial Liabilities
  Considering the Effects of
    Prior Year Misstatements when Quantifying Misstatements in
    Current Year Financial Statements
  FAS 115-1 FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its
    Application to Certain Investments, No. 03-1, No. D-44,
  Accounting Changes and Error Corrections
  05-6, Determining the Amortization Period for Leasehold
    Improvements Purchased after Lease Inception or Acquired in a
    Business Combination, (EITF 05-6), EITF 05-6
  No. 96-16, Investors Accounting for an Investee When the Investor
    Has a Majority of the Voting Interest but the Minority
    Shareholder or Shareholders Have Certain Approval or Veto Rights EITF 96-16, No. 04-5 ,
    Determining Whether a
 51




---



##### Table of Contents



ITEM 6.
    Directors,
    Senior Management and Employees  Directors
  Name

Position

Age

Period of ServiceLuis Rebollar Corona(1)

Chairman of the Board and Director


69


Since November 30, 2006Thomas S. Heather Rodríguez

Director


52


Since November 30, 2006Robert L. Rauch

Director


48


Since November 30, 2006Roberto Enrique Colliard
    López(1)

Director


53


Since November 30, 2006Alberto Felipe Mulás Alonso(1)

Director


45


Since November 30, 2006Vicente Ariztegui Andreve(1)

Director


53


Since November 30, 2006Sergio M. A. Autrey Maza

Director


55


Since November 17, 1997Erwin Starke Fabris(1)

Alternate Director, President of
    Audit and Compensation Committee


53


Since November 30, 2006Richard Mastoloni

Alternate Director


42


Since November 30, 2006Eugenio Gamboa Hirales

Alternate Director


53


Since November 30, 2006John Stevens(1)

Alternate Director


59


Since November 30, 2006Carmen Ochoa Avendaño

Secretary (non-member) of the
    Board of Directors and General Counsel


49


Since December 2006 and April 2002Francisco Fernández Cueto

Alternate Secretary (non-member)
    of the Board of Directors


37


Since November 30, 2006José Manuel Canal Hernando

Statutory Examiner


66


Since November 30, 2006   Senior
    Management
  NameRaúl Cisneros Matusita

Chief Executive Officer and Chief
    Executive Officer of Enlaces


52


Since December 2006 and January
    22, 2007Luis Alfonso Maza Urueta

Chief Financial Officer


58


Since February 2007Dionisio Tun Molina

Vice President of Engineering and
    Satellite Operations


44


Since May 2006Jorge Espinosa Mireles

Executive Director of Sales and
    Chief Marketing Officer


51


Since March 2007José Manuel Wiechers Urquiza

Senior Executive Vice President of
    Enlaces


41


Since January 22, 2007Carlos Roberto Durán Martinez

Internal Audit Director


55


Since February 2007     (1)
    
    Independent Director   52




---



##### Table of Contents



Luis Rebollar Corona.
  Thomas S. Heather
    Rodríguez.
  Robert L. Rauch.
 53




---



##### Table of Contents



Roberto Enrique Colliard
    López.
  Alberto Felipe Mulás
    Alonso.
  Vicente Ariztegui Andreve.
  Sergio M.A. Autrey Maza.
  Erwin Starke Fabris.
  Richard Mastoloni.
 54




---



##### Table of Contents



Eugenio J. Gamboa Hirales.
  John H. Stevens.
  Francisco Fernández
    Cueto.
  José Manuel Canal
    Hernando.
  Raúl Cisneros Matusita.
  Luis Alfonso Maza Urueta.
 55




---



##### Table of Contents



Jorge Espinosa Mireles.
  Dionisio Tun Molina. Telecomunicaciones de México
  Carmen Ochoa Avendaño. Telecomunicaciones de México Presidencia de la República Subsecretaría de Protección Civil,
    Prevención y Readaptación Social of Secretaría de
    Gobernación Secretaría de Educación Pública Universidad Nacional Autónoma de México
  José Manuel Wiechers
    Urquiza.
  Carlos Roberto Durán
    Martinez.
  Compensation
   56




---



##### Table of Contents



Employees
      57




---



##### Table of Contents



Share
    Ownership
    SharesMinimum Fixed Capital


Variable CapitalClass I


Class IIShareholders


Series A


Series B


Series N


Series B


Series N


%Equity Trust Trustee, for the
    benefit of Servicios and/or the Mexican government


7,500,000















45% Equity Voting Rights; 16%
    Equity Financial RightsEquity Trust Trustee, for the
    benefit of Loral





221,667


401,770









1.33% Equity Voting and
    Equity Financial RightsEquity Trust Trustee, for the
    benefit of Principia





111,667


202,395









0.67% Equity Voting and
    Equity Financial RightsEquity Trust Trustee, for the
    benefit of The Bank of New York, as agent for the benefit of the
    beneficial holders of the Bondholder Equity











7,166,667


29,395,833



43% Equity Voting Rights; 78%
    Equity Financial RightsNafin Trust Trustee


1,666,667





208,333









10% Equity Voting Rights; 4%
    Equity Financial Rights   ITEM 7.
    Major
    Shareholders and Related Party Transactions  Major
    Shareholders
    New
    Common Stock
        Issuer:

SatmexClassification:

Series A Common StockPar Value:

NoneVoting:

55% of total common voting rightsPreemptive Rights:

Equity calls  58




---



##### Table of Contents



Issuer:

SatmexClassification:

Series B Common StockPar Value:

NoneVoting:

45% of total common voting rightsPreemptive Rights:

Equity calls     Issuer:

SatmexClassification:

Series N Common StockPar Value:

None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 to Satmexs nationality.Preemptive Rights:

Equity calls   Related
    Party Transactions
  Loral
    Usufructo
  usufructo usufructo usufructo
  (Indice Nacional de
    Precios al Consumidor) (Secretaría de la Función
    Pública)
       59




---



##### Table of Contents



ITEM 8.
    Financial
    Information  Legal
    Proceedings
    Dividend
    Policy
    Form 20-F.
  ITEM 9.
    Markets    ITEM 10.
    Additional
    Information    Articles
    of Incorporation
  form F-4 No. 333-08880.
  Material
    Contracts
    Exchange
    Controls
    TAXATION
   60




---



##### Table of Contents



Taxation
    of Interest and Principal
  (casas de bolsa) (Registro National de Valores) (Secretaría de Hacienda y Crédito Público)
           61




---



##### 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
      PART II  ITEM 13.
    Defaults,
    Dividend Arrearages and Delinquencies  The First
    Priority Senior Secured Notes
   62




---



##### Table of Contents



Form 6-Ks
  The
    Second Priority Senior Secured Notes
    Form 6-Ks
  ITEM 14.
    Material
    Modifications to the Rights of Security
    Holders    ITEM 15.
    Controls
    and Procedures  rules 13a-14(c) 15d-14(c))
      ITEM 16A.
    Audit
    Committee Financial Expert   63




---



##### Table of Contents



ITEM 16B.
    Code
    of Ethics  www.satmex.com
  ITEM 16C.
    Principal
    Accountant Fees and Services    2006


2005(Amounts in thousands)Audit fees

$
377


$
286Audit related fees






Tax fees


82



71All other fees






Total fees

$
459


$
357   Audit fees: Normas de Información
    Financiera
  Audit-related fees:
  Tax fees:
   64




---



##### Table of Contents



PART III  ITEM 18.
    Financial
    Statements    ITEM 19.
    Exhibits    PageReport of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance Sheets as of December 31, 2006 and 2005


F-3Consolidated
    Statements of Operations for the periods from December 1 to
    December 31, 2006 (Successor Registrant), from January 1 to
    November 30, 2006 and for the years ended December 31,
    2005 and 2004 (Predecessor Registrant)


F-4Consolidated
    Statements of Changes in Shareholders Equity for the
    periods from December 1 to December 31, 2006 (Successor
    Registrant), from January 1 to November 30, 2006 and for
    the years ended December 31, 2005 and 2004 (Predecessor
    Registrant)


F-5Consolidated
    Statements of Cash Flows for the periods from December 1 to
    December 31, 2006 (Successor Registrant), from January 1 to
    November 30, 2006 and for the years ended December 31,
    2005 (Restated) and 2004 (Predecessor Registrant)


F-6Notes to
    Consolidated Financial Statements


F-7  65




---



##### Table of Contents



(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., as the Company, each of the First Priority Guarantors
    named therein, 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, dates 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. 2
.4

Registration Rights Agreement,
    dated as of November 30, 2006, by Satélites Mexicanos,
    S.A. de C.V., for the benefit of certain holders of its First
    Priority Senior Secured Notes due 2011. 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. a 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.  66




---



##### Table of Contents



Exhibit No.

Description2
.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. 2
.16

Equity Interest Pledge Agreement,
    as of November 30, 2006, by and between Satélites
    Mexicanos, S.A. de C.V., as the Pledgor, and Wells Fargo Bank,
    N.A., as Second Priority Collateral Trustee and for the benefit
    of the Second Priority Holders pursuant to the Second Collateral
    Trust Agreement, as the Pledgee, and
    SMVS-Administración, S. de R.L. de C.V., as the Company.
    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. 4
.1

Satellite Concession 116.8 degrees
    W. L.4
.2

Satellite Concession 116.8 degrees
    W. L. (EnglishTranslation)4
.3

Satellite Concession 113.0 degrees
    W. L.4
.4

Satellite Concession 113.0 degrees
    W. L. (EnglishTranslation)4
.5

Satellite Concession 109.2 degrees
    W. L.4
.6

Satellite Concession 109.2 degrees
    W. L. (EnglishTranslation)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. *12
.1

Section 302 Certification of
    Raúl Cisneros, Chief Executive Officer.*12
.2

Section 302 Certification of
    Alfonso Maza, Chief Financial Officer.*13
.1

Section 906 Certification of
    Raúl Cisneros, Chief Executive Officer.*13
.2

Section 906 Certification of
    Alfonso Maza, 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). 67




---



##### Table of Contents




    
    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 from the registrants
    Form 20-F
    for the fiscal year ended December 31, 2005.*
    
    Filed herewith. 68




---



##### Table of Contents



SIGNATURES
  Form 20-F
     By:
    /s/  ALFONSO
    MAZA      69




---



##### Table of Contents



SATÉLITES
    MEXICANOS, S. A. DE C. V. AND SUBSIDIARIES
  PART III
  INDEX TO
    FINANCIAL STATEMENTS
  PageReport of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance Sheets as of December 31, 2006 and 2005


F-3Consolidated
    Statements of Operations for the periods from December 1 to
    December 31, 2006 (Successor Registrant), from January 1 to
    November 30, 2006 and for the years ended December 31,
    2005 and 2004 (Predecessor Registrant)


F-4Consolidated
    Statements of Changes in Shareholders Equity for the
    periods from December 1 to December 31, 2006 (Successor
    Registrant), from January 1 to November 30, 2006 and for
    the years ended December 31, 2005 and 2004 (Predecessor
    Registrant)


F-5Consolidated
    Statements of Cash Flows for the periods from December 1 to
    December 31, 2006 (Successor Registrant), from January 1 to
    November 30, 2006 and for the years ended December 31,
    2005 and 2004 (Predecessor Registrant)


F-6Notes to
    Consolidated Financial Statements


F-7  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the Shareholders and Board of Directors of Satélites
    Mexicanos, S. A. de C. V.
        90-7, Financial Reporting by Entities in Reorganization Under the
    Bankruptcy Code,
         F-2




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and SubsidiariesConsolidated Balance Sheets
    As of December 31, 2006 and 2005
    (Thousands of U. S. dollars)
  Successor Registrant


Predecessor Registrant2006


2005AssetsCurrent assets:Cash and cash equivalents

$
24,528


$
54,874Restricted cash






2,000Accounts receivable  net


6,892



3,588Due from related parties, net


630



8,348Guarantee deposits


705



2,739Inventories


805



Prepaid insurance


4,269



3,170Deferred income taxes


192



4,310Total current assets


38,021



79,029Noncurrent receivable from related
    party






2,645Satellites and
    equipment  net


325,452



430,947Concessions  net


43,831



411,900Intangibles  net


67,238



Guarantee deposits and other assets


911



750Deferred income taxes


109



Goodwill


32,502



Total

$
508,064


$
925,271Liabilities and
    Shareholders EquityCurrent liabilities:Prepetition liabilities subject to
    compromise

$



$
634,035Accrued interest


4,109



Accounts payable and accrued
    expenses


11,248



9,387Due to related parties


1,439



2,540Deferred revenue


2,344



2,200Income tax payable


29



Total current liabilities


19,169



648,162Debt obligations


378,237



Deferred revenue


70,043



67,935Labor obligations


329



Accrued expenses


557



318Deferred income taxes






30,275Total liabilities


468,335



746,690Contingencies and commitments
    (Note 17)






Minority interest in consolidated
    subsidiaries


1,719



Shareholders equity:Common stock


46,764



389,575Preferred stock






31,886Accumulated deficit


(8,754
)


(242,880
)Total shareholders equity


38,010



178,581Total

$
508,064


$
925,271    F-3




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and SubsidiariesConsolidated Statements of Operations
    For the periods from December 1 to December 31, 2006
    (Successor Registrant), from January 1 to
     November 30, 2006 and for the years ended
    December 31, 2005 and 2004 (Predecessor Registrant)
    (Thousands of U. S. dollars)
  SuccessorRegistrantDecember 1 to


Predecessor RegistrantDecember 31,


January 1 to2006


November 30, 2006


2005


2004Revenues (see Note 14):Satellite services  net

$
4,721


$
82,323


$
66,046


$
70,986Alterna TV


557



6,019



3,826



719Broadband satellite services


1,473











6,751



88,342



69,872



71,705Cost and expenses:Satellite services  net


2,206



31,364



8,985



10,944Alterna TV


213



2,592



1,578



979Broadband satellite services


175











Selling and administrative expenses


1,841



13,210



22,505



17,120Depreciation and amortization


6,266



51,780



47,927



48,10810,701



98,946



80,995



77,151Operating loss


(3,950
)


(10,604
)


(11,123
)


(5,446
)Reorganization expenses






(33,447
)


(7,666
)


(7,416
)Interest expense and amortization
    of deferred financing costs


(4,333
)


(19,152
)


(48,375
)


(49,543
)Interest income


103



2,711



2,315



3,583Net foreign exchange (loss) gain


(123
)


5,690



(5,722
)


(97
)Loss before income taxes, minority
    interest and preferred stock dividends


(8,303
)


(54,802
)


(70,571
)


(58,919
)Income taxes


311



18,726



238



(4,378
)Minority interest


140











Consolidated net loss


(8,754
)


(73,528
)


(70,809
)


(54,541
)Preferred stock dividends






1,130



1,507



1,507Consolidated net loss applicable
    to common shareholders

$
(8,754
)

$
(74,658
)

$
(72,316
)

$
(56,048
)    F-4




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and SubsidiariesConsolidated Statements of Changes in
    Shareholders Equity
    For the periods from December 1 to December 31, 2006
    (Successor Registrant), from January 1 to
    November 30, 2006 and for the years ended December 31,
    2005 and 2004 (Predecessor Registrant)
    (Thousands of U. S. dollars)
  Common Stock


Preferred Stock


Accumulated


ShareholdersShares


Amount


Shares


Amount


Deficit


EquityPredecessor
    RegistrantBalance January 1, 2004


10,000,000


$
386,561



606,730


$
31,886


$
(114,516
)

$
303,931Net loss


















(54,541
)


(54,541
)Preferred stock dividends






1,507











(1,507
)


Balance December 31, 2004


10,000,000



388,068



606,730



31,886



(170,564
)


249,390Net loss


















(70,809
)


(70,809
)Preferred stock dividends






1,507











(1,507
)


Balance December 31, 2005


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
)

$
38,010    F-5




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and SubsidiariesConsolidated Statements of Cash Flows
    For the periods from December 1 to December 31, 2006
    (Successor Registrant), from January 1 to
    November 30, 2006, and for the years ended
    December 31, 2005 and 2004 (Predecessor Registrant)
    (Thousands of U. S. dollars)
  SuccessorRegistrant


Predecessor RegistrantDecember 1 to


January 1 toDecember 31,


November 30,


20052006


2006


(Restated)


2004Cash flows from operating
    activities:Consolidated net loss

$
(8,754
)

$
(73,528
)

$
(70,809
)

$
(54,541
)Adjustments to reconcile net loss
    to operating cash flows:Loss on discharge of prepetition
    liabilities






5,346







Minority interest


140











Depreciation and amortization


6,266



51,780



47,927



48,108Income taxes


311



18,726



238



(4,378
)Deferred revenue


(195
)


(2,023
)


(2,200
)


(2,200
)Amortization of deferred financing
    cost














1,929Profit on sales  type
    lease arrangement  usufructo






(2,312
)






Exchange rate fluctuation and
    change of value of notes payable to reflect amount in UDIs
    in accordance with concurso mercantil






(5,613
)


5,613



Changes in operating assets and
    liabilities:(Increase) decrease in:Accounts receivable  net


1,614



(2,915
)


(1,226
)


1,115Due from / to related
    parties  net


(1,222
)


1,645



(5,193
)


(2,021
)Inventories


(10
)










Prepaid insurance


(1,492
)


407



(30
)


135Guarantee deposits and others assets


(172
)


2,177



60



(25
)Increase (decrease) in:Accounts payable and accrued
    expenses


(3,203
)


3,729



1,107



3Accrued interest


4,109



18,248



40,148



34,490Net cash flows (used in) provided
    by operating activities


(2,608
)


15,667



15,635



22,615Financing activities 
    cash flow used in repayment of Floating Rate Notes














(162
)Investing activities:Acquisition of equipment


(1,528
)


(585
)


(2,436
)


(1,446
)Refund of insurance
    advance  Satmex 6














5,058Acquisitions of satellites






(45,299
)


(5,901
)


Liquidity damages for delivery
    delay of Satmex 6










8,500



Cash acquired on Enlaces business
    combination






2,007







Return of unused deposits
    restricted for construction of Satmex 6










2,000



Restricted cash






2,000



(2,000
)


Net cash flows (used in) provided
    by investing activities


(1,528
)


(41,877
)


163



3,612Cash and cash equivalents:Net (decrease) increase


(4,136
)


(26,210
)


15,798



26,065Cash and cash
    equivalents  beginning of period


28,664



54,874



39,076



13,011Cash and cash
    equivalents  end of period

$
24,528


$
28,664


$
54,874


$
39,076Supplemental disclosures:Interest paid

$



$



$
7,412


$
14,664Supplemental non-cash flow
    information:Exchange for cancellation of the
    FRN old debt

$



$
238,237


$



$
Exchange for cancellation of the
    HYB old debt

$



$
140,000


$



$
Debt capitalization

$



$
273,779


$



$
Account receivable exchanged for
    75% of Enlaces common stock

$



$
8,493


$



$
    F-6




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes
    to Consolidated Financial Statements
 (Thousands
    of U.S. dollars)
  1.
    Organization
    and Comparative Financial Statements      156 36-MHz
        No. 90-7, Financial Reporting of Entities in Reorganization under the
    Bankruptcy Code (SOP 90-7).
    2.
    Bankruptcy
    Filings and Reorganization       F-7




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Concurso
    Mercantil
  concurso mercantil. concurso mercantil Ley de
    Concursos Mercantiles
    concurso mercantil
  conciliador, concurso mercantil, sentencia de reconocimiento, graduación
    y prelación de créditos
  concurso mercantil
  Convenio Concursal Conciliador Convenio Concursal
  Conciliador
  Convenio
    Concursal concurso mercantil
  Conciliador concurso mercantil agreed-upon
 F-8




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  concurso mercantil
  Convenio Concursal
  Chapter 11
    Process
    06-11868
      Convenio Concursal Convenio Concursal
  Satmex
    Reorganization
    New Debt and Debt Capitalization
  First
    Priority Senior Secured Notes
    Second
    Priority Senior Secured Notes
   F-9




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Other Agreements on the Effective
    Date
  
    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 usufructofigure 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.  usufructo usufructo
      usufructo usufructo
  
    In exchange for a loan receivable from Enlaces for
    $8.4 million, Satmex received 75% of the representative
    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 donation was recorded at Satmexs carrying amount of
    the assets transferred since Enlaces is under the control of
    Satmex.
    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,
    were transferred to the New Service Companies. Transferred
    personnel maintained their wages and benefits according to the
    Federal Labor Law.  3.
    Fresh-Start
    Accounting  SOP 90-7
  F-10




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Consolidated Balance Sheet (a)Predecessor








SuccessorRegistrant


Plan


Fresh-Start


RegistrantNovember 30,


Reorganization


Valuation


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



(8,491
)(c)






416Inventories


21



795



(21
)(d)


795Prepaid insurance


3,733



146







3,879Deferred 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
)


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
(l)


(99
)


17,042Total current liabilities


669,116



(649,775
)


45



19,386Debt 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
)






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 2),
    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 fair
    value of identifiable net assets. F-11




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
   (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.      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)
    
    This adjustment is to recognize the inventories at fair value.(e)
    
    This amount reflects the effect of the capitalization of orbital
    incentive.(e1)
    
    This amount is to recognize the satellites and equipment at fair
    value.(f)
    
    To recognize the orbital and telecommunications public network
    concessions at fair value.(g)
    
    Represent the intangible assets fair value as a result of
    the acquisition of Enlaces, in this case identified as customer
    relationships.(g1)
    
    This amount 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.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 Plan of Reorganization.
    Discharge of Satmex 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   (i)
    
    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.(j)
    
    Pursuant to a resolution made at the general ordinary
    shareholders meeting on November 30, 2006, variable
    common stock was increased by $273,779 million, through the
    capitalization of HYBs. F-12




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
   4.
    Basis of
    Presentation  Fresh-Start Accounting
    Adoption
  SOP 90-7
  SOP 90-7 Business Combinations
  Use of Estimates
    Reclassifications
    As Reclassified


Retrospectively Reclassified


As Previously ReportedStatement of Operations:

2005


2004


2005


2004


2005


2004Reorganization expenses

$
(7,666
)

$
(7,416
)

$
(7,666
)

$
(7,416
)

$



$
Interest expense and amortization
    of deferred financing costs

$
(48,375
)

$
(49,543
)

$
7,666


$
7,416


$
(56,041
)

$
(56,959
)   Foreign Currency
    Transactions
 F-13




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Cash and Cash
    Equivalents
  Restricted Cash
  Concentrations of Credit
    Risk
      2006


2005


2004%


%


%Domestic customers


22



39



46Hughes Networks Systems


20



31



28Mexican government sector


7



8



8Loral


26



2



2Foreign customers


25



20



16   Inventories
  Satellites and Equipment
   F-14




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Years AverageSatellitesSolidaridad 2


14.5Satmex 5


15Satmex 6


15EquipmentSatellite equipment


3Furniture and mixtures


10Leasehold improvements


11Teleport, equipment and antennas


10         Concessions
  Valuation of Satellites and Long-Lived
    Assets
  
    Changes in estimates of the useful life of the satellite;
    Changes in estimates of our ability to operate the satellite at
    expected levels;
    Changes in the manner in which the satellite is to be used;
    The loss of one or several significant customer contracts on the
    satellite.  Goodwill and Other Intangible
    Assets Goodwill and Other Intangible
    Assets
 F-15




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    build-up build-up
  Labor Obligations
  Provisions
  Deferred Income Tax
  Revenue Recognition
        Deferred Revenue
 F-16




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Comprehensive Loss
  Cash Flow Restatement concurso mercantil
  As PreviouslyReported


As RestatedNet cash provided by operating
    activities

$
10,022


$
15,635Net cash provided by financing
    activities

$
5,613


$
   t.
    New Accounting Standards         F-17




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      5.
    Accounts
    Receivable    Successor Registrant


Predecessor Registrant2006


2005Customers

$
3,738


$
2,164Allowance for doubtful accounts


(1
)


(107
)Value added tax and tax
    withholdings


2,279



615Prepaid expenses


876



890Other receivables






26$
6,892


$
3,588   6.
    Satellites
    and Equipment    Successor Registrant


Predecessor Registrant2006


2005Satellites in-orbit

$
314,136


$
403,707Equipment for satellites


9,688



32,233Furniture and fixtures


3,962



8,416Leasehold improvements






5,868327,786



450,224Accumulated depreciation and
    amortization


(2,937
)


(261,267
)324,849



188,957Satellite under construction






241,514Other construction in-process


573



476Advances to antenna suppliers


30



$
325,452


$
430,947      F-18




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  7.
    Concessions  Successor Registrant


Predecessor Registrant2006


2005Orbital concession

$
41,700


$
516,206Public telecommunications network


2,248



43,948



516,206Accumulated amortization


(117
)


(104,306
)$
43,831


$
411,900     a.
    Orbital
    Concessions and Facilities  20-year
          b.
    Concession
    for the Use and Exploitation of a Telecommunications Public
    Network       F-19




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      8.
    Intangibles    Weighted AverageRemaining


Successor RegistrantAmortization Period





Accumulated(Years)


Gross Amount


Amortization


Net AmountInternally developed software and
    technology(2)


4


$
270


$
6


$
264Landing rights(1)


3



60



4



56Customer relationships(1)


7



2,128



8



2,120Contracts backlog(1)


8



67,990



3,192



64,798Total





$
70,448


$
3,210


$
67,238       2007

$
14,3252008


25,3372009


13,6222010


5,8212011


3,035Thereafter


5,098$
67,238  F-20




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  9.
    Accounts
    Payable and Accrued Expenses    Successor Registrant


Predecessor Registrant2006


2005Deposits and customer advances

$
3,129


$
2,073Accounts payable to suppliers


1,744



1,635Alterna TV provisions


1,167



738Capital expenditures payable


1,095



Taxes payable


1,071



1,824Equipment suppliers


900



Performance and sale bonuses


630



1,771Professional fees


624



446Sundry creditors


481



145Other


407



755$
11,248


$
9,387   10.
    Prepetition
    Liabilities Subject to Compromise  Predecessor
    Registrant    Predecessor Registrant2005(Short Term)FRNs at a variable rate using
    LIBOR plus 4.5%

$
203,388HYBs at annual fixed rate of
    10.125%, converted to UDIs on September 7, 2005
    (955,015,542 UDIs at $3.637532 Mexican pesos each)


324,333Accrued interest


106,314$
634,035   11.
    Debt
    Obligations    Successor Registrant2006(Long Term)FPSSN at variable rate using LIBOR
    + 8.75% (approximately 14.07% at December 31, 2006), due in
    2011.

$
238,237SPSSN at annual fixed rate of
    10.125%, due in 2013.


140,000$
378,237  F-21




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      
    Due date: November 30, 2011.
    Interest monthly or quarterly coupon at annual London Interbank
    Offer Rate (LIBOR) plus 875 basis points.
    Optional cash prepayments of principal and accrued interest plus
    3%, 2% and 1%, in the first, second and third year,
    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 Companys cash balance exceeds $5 million.
    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, which may take
    place at the same time as the change of share control.
    Principal and interest are secured with the assets of Satmex,
    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 and
    the New Services Companies.    
    Due date: November 30, 2013.
    Interest: at the annual rate of 10.125%.
    In the first year, the interest at the annual 10.125% rate will
    be capitalized; 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 be reinvested; 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.
    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 at 100% 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 and the New Service Companies securities that are
    subject to the bankruptcy protection condition of the FPSSN.   F-22




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
        12.
    Labor
    obligations    13.
    Shareholders
    Equity  Successor
    Registrant
      SharesCommon Stock


Variable StockClass 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-23




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
            Predecessor
    Registrant
    SeriesA Common stock


2,601,000B Common stock


2,499,000N Common stock


4,900,000C Preferred stock


606,73010,606,730     Shares


AmountCommon stock:Fixed


5,000


$
6Variable


9,995,000



389,56910,000,000


$
389,575Preferred stock:Fixed


606,730


$
31,886    F-24




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  14.
    Related
    Party Transactions    SuccessorRegistrant


Predecessor RegistrantDecember 1


January 1to


toDecember 31,


November 302006


2006


2005


2004Revenues from:Satellite servicesMexican government sector

$
253


$
2,612


$
3,036


$
2,454Satellite capacity to Mexican
    government


195



2,017



2,200



2,200Loral Skynet Corporation


96



24,071



1,253



1,542Enlaces (11 months of 2006)






1,360



950



659Liquidity damages for delivery
    delay of Satmex 6










8,500



Enlaces (11 months of 2006)Expense reimbursements










287



2,597Lease of teleport and equipment






149







500Interest






781



632



7Expenses from:Administrative labor 
    Service Companies






10,454



10,622



14,773Storage  SSL






105



1,760



1,753Purchase equipment 
    Enlaces














107Commissions  Loral
    Skynet










1,540



Technical assistance 
    Loral Skynet










164



533Rent of control
    centers  Mexican government


74



368



411



382Guarantee fees 
    Servicios and Firmamento


1



53



55



53Replacement capacity 
    Loral










7



7Construction Satmex 6 
    Loral






26,776



1,651



  F-25




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Successor Registrant


Predecessor Registrant2006


2005Amounts receivable,
    net:Loral Skynet

$
99


$
6,221Enlaces:Administrative and logistical
    expenses






3,406Current portion of long-term
    unpaid balance






690Interest






735Satellite service and teleport
    lease






120Mexican government sector


318



676Globalstar Mexico, S. A. de C.
    V.


213



Allowance for doubtful accounts






(3,500
)$
630


$
8,348Enlaces  long-term
    unpaid balance

$



$
2,645Amounts payable:Service Companies

$
1,342


$
1,910Loral SpaceCom Corporation


15



630Servicios


10



Servicios Corporativos Alcance, S.
    A. de C. V.


69



Principia


3



$
1,439


$
2,540   15.
    Reorganization
    Expenses Due to Chapter 11 Process    Predecessor RegistrantJanuary 1 toNovember 30,2006


2005


2004Professional fees

$
27,985


$
7,666


$
7,416Loss on discharge of pre-petition
    liabilities


5,346







Others


116







$
33,447


$
7,666


$
7,416   16.
    Income
    and Asset Taxes     F-26




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
                Successor Registrant


Predecessor RegistrantDecember 1


January 1to


toDecember 31,


November 30,2006


2006


2005


2004ISR:Current

$
29


$



$



$
Deferred


282



18,726



238



(4,378
)$
311


$
18,726


$
238


$
(4,378
)       Successor


Predecessor RegistrantRegistrant


January 1December 1 to


toDecember 31,


November 30,2006


2006


2005


2004Statutory income tax rate


29
%


29
%


30
%


33
%Plus (minus) permanent difference
    effects:Inflation effects


(11
)


13



(19
)


(2
)Non deductible expenses


(2
)


(23
)






Effect of change in statutory tax
    rate














13Change in valuation allowance


(20
)


(53
)


(11
)


(37
)Effective income tax rate


(4
)%


(34
)%


0
%


7
%  F-27




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Successor Registrant


Predecessor Registrant2006


2005Current assets:Deferred revenue and others

$
1,464


$
1,024Other, net


1,314



4,107Total current assets


2,778



5,131Current Liabilities:Prepaid insurance


(1,321
)


(821
)Valuation allowance


(1,265
)


Net current deferred tax asset

$
192


$
4,310Noncurrent assets:Tax loss carryforwards

$
174,612


$
111,298Concessions  net


74,410



Deferred revenue and others


20,002



13,745Other, net


191



954Deferred ISR asset


269,215



125,997Noncurrent
    liabilities:Satellites and
    equipment  net


(63,167
)


(34,013
)Concessions  net






(33,497
)Intangibles  net


(19,112
)


Total noncurrent liabilities


(82,279
)


(67,510
)Valuation allowance


(186,827
)


(88,762
)Net, long-term deferred tax asset
    (liability)

$
109


$
(30,275
)     Expiration Date

Amount2008

$
93,2802010


142,9772012


65,7122013


77,1282014


29,5822015


2,8062016


212,131$
623,616  F-28




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  17.
    Contingencies
    and Commitments  Satellite
    Matters
                    Regulatory
    Matters
       F-29




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Other
    Matters
          Expiration Date

Amount2007

$
72,2332008


50,5712009


27,3552010


13,7192011


7,520Thereafter


10,189$
181,587    F-30




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  18.
    Business
    Segments    Successor
    Registrant
  From December 1 to December 31, 2006Satellite Services


AlternaTV


Enlaces


Other


TotalRevenues

$
4,964


$
557


$
1,509


$
1,938


$
8,968Eliminations


(243
)






(36
)


(1,938
)


(2,217
)Operating revenues as reported


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 loss from continuing
    operations


(5,327
)


341



1,036







(3,950
)Interest expense


















(4,333
)Interest income


















103Net foreign exchange gain


















(123
)Loss before income taxes and
    minority interest


















(8,303
)Income taxes


















311Minority interest


















140Loss from continuing operations

















$
(8,754
)Capital expenditures

$
814


$



$
714


$



$
1,528Total assets

$
494,301


$
1,524


$
12,221


$
18


$
508,064  F-31




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Predecessor
    Registrant
  January 1, 2006 through November 30, 2006Satellite Services


AlternaTV


TotalRevenues

$
82,323


$
6,019


$
88,342Costs and expenses


44,574



2,592



47,166Depreciation and amortization


51,778



2



51,780Operating loss from continuing
    operations


(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










18,726Loss from continuing operations









$
74,658Capital expenditures

$
45,884


$



$
45,884Total assets

$
881,648


$
1,498


$
883,146   For the Year Ended December 31, 2005Satellite Services


AlternaTV


TotalRevenues

$
66,046


$
3,826


$
69,872Costs and expenses


31,490



1,578



33,068Depreciation and amortization


47,925



2



47,927Operating (loss) income from
    continuing operations


(13,369
)


2,246



(11,123
)Reorganization expenses










(7,666
)Interest expense










(48,375
)Interest income










2,315Net foreign exchange loss










(5,722
)Preferred stock dividend
    requirement










(1,507
)Deferred income tax










238Loss from continuing operations









$
(72,316
)Capital expenditures

$
8,335


$
2


$
8,337Total assets

$
923,995


$
1,276


$
925,271  F-32




---



##### Table of Contents



Satélites
    Mexicanos, S. A. de C. V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  For the Year Ended December 31, 2004Satellite Services


AlternaTV


TotalRevenues

$
70,986


$
719


$
71,705Costs and expenses


28,064



979



29,043Depreciation and amortization


48,106



2



48,108Operating loss from continuing
    operations


(5,184
)


(262
)


(5,446
)Reorganization expenses










(7,416
)Interest expense










(49,543
)Interest income










3,583Net foreign exchange loss










(97
)Preferred stock dividend
    requirement










(1,507
)Deferred income tax










(4,378
)Loss from continuing operations









$
56,048Capital expenditures

$
1,429


$
17


$
1,446Total assets

$
952,639


$
739


$
953,378     SuccessorRegistrant


Predecessor RegistrantDecember 1 to


January 1 toDecember 31,


November 30,2006


2006


2005


2004United States of America

$
3,508


$
55,761


$
34,692


$
33,569Mexico


2,324



24,079



29,315



32,712Central and South America


919



8,502



5,865



5,424$
6,751


$
88,342


$
69,872


$
71,705  F-33




---



##### Table of Contents



SATÉLITES
    MEXICANOS, S. A. DE C. V.
  VALUATION
    AND QUALIFYING ACCOUNTS
 For the
    periods from December 1 to December 31, 2006
    (Successor Registrant), from January 1 to November 30,
    2006 and for the years ended December 31, 2005 and 2004
    (Predeccessor Registrant)
  AdditionalBalance at


Charged





Balance atBeginning of


(Credited) to





Beginning ofPeriod


Expenses


Deductions


PeriodAllowance for doubtful
    accountsSuccessor RegistrantDecember 1 to December 31,
    2006

$
1


$



$



$
1Predecessor RegistrantJanuary 1 to November 30, 2006


107



38



144
(1)


1Year ended December 31, 2005


563



104



560
(1)


107Year ended December 31, 2004


1,859



12



1,308
(1)


563Allowance for due from related
    party accountsSuccessor RegistrantDecember 1 to December 30,
    2006

$



$



$



$
Predecessor RegistrantJanuary 1 to November 30, 2006


3,500



(3,500
)






Year ended December 31, 2005


922



2,578







3,500Year ended December 31, 2004


1,934



(1,012
)






922Valuation allowance on deferred
    income taxesSuccessor RegistrantDecember 1 to December 31,
    2006

$
183,671


$
4,421


$



$
188,092Predecessor RegistrantJanuary 1 to November 30, 2006


88,762



94,909







183,671Year ended December 31, 2005


75,519



13,243







88,762Year ended December 31, 2004


70,130



5,389







75,519     (1)
    
    Write-offs of uncollectible accounts. F-34