UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

|ý                                                             | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|For the quarterly period ended September 30, 2005            
|OR                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                             to

Commission File Number 001-32456

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PANAMSAT HOLDING CORPORATION(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization)        |  | 20-1728720(I.R.S. Employer
Identification No.)
|----------------------------------------------------------------------------- |  | ----------------------------------------------
|20 Westport Road, Wilton, Connecticut(Address of principal executive offices) |  | 06897(Zip Code)                               

(203) 210-8000(Registrant's telephone number, including area code)

Not Applicable(Former name, former address and former fiscal year, if changed since last report)

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Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o No ý

As of November 8, 2005, an aggregate of 122,598,093 shares of our common stock were outstanding.



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PANAMSAT HOLDING CORPORATION    INDEX

|Part I    |  | FINANCIAL INFORMATION |  |                                                                                                                                         
|--------- |  | --------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|          |  | Item 1.               |  | Condensed Consolidated Financial Statements (Unaudited)                                                                                 
|          |  |                       |  | Condensed Consolidated Statements of Operations Three months ended September 30, 2004 and 2005                                          
|          |  |                       |  | Condensed Consolidated Statements of Operations Nine months ended September 30, 2004 and 2005                                           
|          |  |                       |  | Condensed Consolidated Balance Sheets December 31, 2004 and September 30, 2005 (Unaudited)                                              
|          |  |                       |  | Condensed Consolidated Statement of Changes in Stockholders' Equity and Comprehensive Income (Loss) Nine months ended September 30, 2005
|          |  |                       |  | Condensed Consolidated Statements of Cash Flows Nine months ended September 30, 2004 and 2005                                           
|          |  |                       |  | Notes to Condensed Consolidated Financial Statements                                                                                    
|          |  | Item 2.               |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                   
|          |  | Item 3.               |  | Quantitative and Qualitative Disclosures About Market Risk                                                                              
|          |  | Item 4.               |  | Controls and Procedures                                                                                                                 
|Part II   |  | OTHER INFORMATION     |  |                                                                                                                                         
|          |  | Item 1.               |  | Legal Proceedings                                                                                                                       
|          |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                             
|          |  | Item 3.               |  | Defaults Upon Senior Securities                                                                                                         
|          |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                                     
|          |  | Item 5.               |  | Other Information                                                                                                                       
|          |  | Item 6.               |  | Exhibits                                                                                                                                
|Signature |  | 62                   

2

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In this Quarterly Report on Form 10-Q, unless the context otherwise requires or it is otherwise indicated, all references to
(1) "Holdco", "we", "us" and "our" refer to PanAmSat Holding Corporation and its subsidiaries and (2) "PanAmSat" refers to PanAmSat Corporation.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Quarterly Report on Form 10-Q contains certain forward-looking statements, including, without limitation, statements concerning the
conditions in our industry, our operations, our economic performance and financial condition, including, in particular, statements relating to our business and growth strategy and service development
efforts. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements so long as such information is identified as forward-looking and is
accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information. When used in this Quarterly
Report on Form 10-Q, the words "may", "might", "should", "estimate", "project", "plan", "anticipate", "expect", "intend", "outlook", "believe" and other similar expressions are
intended to identify forward-looking statements and information. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These
forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain and subject to a number of risks and
uncertainties. These risks and uncertainties include, without limitation, those identified under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations",
under "Risk Factors" in our registration statement on Form S-1 (File No. 333-121463) filed with the Securities and Exchange Commission ("SEC"), as such
registration statement became effective on March 16, 2005, and the risks identified in all of our other filings filed with the SEC from March 16, 2005 through the current date pursuant
to the Securities Exchange Act of 1934.

The
following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these
forward-looking statements:



3

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We
caution you that the foregoing list of important factors is not exclusive. In light of these risks and uncertainties, the matters referred to in the forward-looking statements
contained in this quarterly report may not in fact occur. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or
otherwise, except as otherwise required by law. Reference is also made to such risks and uncertainties detailed from time to time in our filings with the SEC.

WEBSITE ACCESS TO COMPANY'S REPORTS

Our Internet website address iswww.panamsat.com. Our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange
Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.

4

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PART 1.    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS.

PANAMSAT HOLDING CORPORATION    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2005  (IN THOUSANDS, EXCEPT SHARE DATA)

|                                    |                                                                     | September 30,
2004                 |          | September 30,
2005 |        
|----------------------------------- | ------------------------------------------------------------------- | ---------------------------------- | -------- | ------------------ | -------
|REVENUES:                           |                                                                     |                                    |          |                    |        
|                                    | Operating leases, satellite services and other                      |                                    | $        | 203,268            |        
|                                    | Outright sales and sales-type leases                                |                                    |          | 3,827              |        
|                                    |                                                                     |                                    |          |                    |        
|                                    |                                                                     | Total revenues                     |          |                    | 207,095
|                                    |                                                                     |                                    |          |                    |        
|OPERATING COSTS AND EXPENSES:       |                                                                     |                                    |          |                    |        
|                                    | Cost of outright sales and sales-type leases                        |                                    |          | 2,224              |        
|                                    | Depreciation and amortization                                       |                                    |          | 74,322             |        
|                                    | Direct operating costs (exclusive of depreciation and amortization) |                                    |          | 38,649             |        
|                                    | Selling, general and administrative expenses                        |                                    |          | 21,509             |        
|                                    | Gain on undesignated interest rate swap                             |                                    |          |                   |        
|                                    | Facilities restructuring and severance costs                        |                                    |          | 2,080              |        
|                                    | Transaction-related costs                                           |                                    |          | 154,535            |        
|                                    |                                                                     |                                    |          |                    |        
|                                    |                                                                     | Total operating costs and expenses |          |                    | 293,319
|                                    |                                                                     |                                    |          |                    |        
|INCOME (LOSS) FROM OPERATIONS       |                                                                     |                                    | (86,224  | )                  |        
|INTEREST EXPENSENet                |                                                                     |                                    | 57,794   |                    |        
|                                    |                                                                     |                                    |          |                    |        
|INCOME (LOSS) BEFORE INCOME TAXES   |                                                                     |                                    | (144,018 | )                  |        
|INCOME TAX BENEFIT                  |                                                                     |                                    | (67,363  | )                  |        
|                                    |                                                                     |                                    |          |                    |        
|NET INCOME (LOSS)                   |                                                                     | $                                  | (76,655  | )                  | $      
|                                    |                                                                     |                                    |          |                    |        
|NET INCOME (LOSS) PER SHAREBasic   |                                                                     | $                                  | (0.28    | )                  | $      
|                                    |                                                                     |                                    |          |                    |        
|NET INCOME (LOSS) PER SHAREDiluted |                                                                     | $                                  | (0.28    | )                  | $      
|                                    |                                                                     |                                    |          |                    |        

See
notes to condensed consolidated financial statements.

5

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PANAMSAT HOLDING CORPORATION    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2005  (IN THOUSANDS, EXCEPT SHARE DATA)

|                                    |                                                                     | September 30,
2004                 |          | September 30,
2005 |        
|----------------------------------- | ------------------------------------------------------------------- | ---------------------------------- | -------- | ------------------ | -------
|REVENUES:                           |                                                                     |                                    |          |                    |        
|                                    | Operating leases, satellite services and other                      |                                    | $        | 607,165            |        
|                                    | Outright sales and sales-type leases                                |                                    |          | 12,185             |        
|                                    |                                                                     |                                    |          |                    |        
|                                    |                                                                     | Total revenues                     |          |                    | 619,350
|                                    |                                                                     |                                    |          |                    |        
|OPERATING COSTS AND EXPENSES:       |                                                                     |                                    |          |                    |        
|                                    | Cost of outright sales and sales-type leases                        |                                    |          | 2,224              |        
|                                    | Depreciation and amortization                                       |                                    |          | 220,969            |        
|                                    | Direct operating costs (exclusive of depreciation and amortization) |                                    |          | 118,484            |        
|                                    | Selling, general and administrative expenses                        |                                    |          | 88,814             |        
|                                    | Loss on undesignated interest rate swap                             |                                    |          |                   |        
|                                    | Sponsor management fees                                             |                                    |          |                   |        
|                                    | Loss on termination of sales-type lease                             |                                    |          |                   |        
|                                    | Transaction-related costs                                           |                                    |          | 155,035            |        
|                                    | Facilities restructuring and severance costs                        |                                    |          | 4,508              |        
|                                    | Satellite impairment loss                                           |                                    |          | 99,946             |        
|                                    |                                                                     |                                    |          |                    |        
|                                    |                                                                     | Total operating costs and expenses |          |                    | 689,980
|                                    |                                                                     |                                    |          |                    |        
|INCOME (LOSS) FROM OPERATIONS       |                                                                     |                                    | (70,630  | )                  |        
|INTEREST EXPENSENet                |                                                                     |                                    | 122,503  |                    |        
|                                    |                                                                     |                                    |          |                    |        
|INCOME (LOSS) BEFORE INCOME TAXES   |                                                                     |                                    | (193,133 | )                  |        
|INCOME TAX EXPENSE (BENEFIT)        |                                                                     |                                    | (95,215  | )                  |        
|                                    |                                                                     |                                    |          |                    |        
|NET INCOME (LOSS)                   |                                                                     | $                                  | (97,918  | )                  | $      
|                                    |                                                                     |                                    |          |                    |        
|NET INCOME (LOSS) PER SHAREBasic   |                                                                     | $                                  | (0.26    | )                  | $      
|                                    |                                                                     |                                    |          |                    |        
|NET INCOME (LOSS) PER SHAREDiluted |                                                                     | $                                  | (0.26    | )                  | $      
|                                    |                                                                     |                                    |          |                    |        

See
notes to condensed consolidated financial statements.

6

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PANAMSAT HOLDING CORPORATION    CONDENSED CONSOLIDATED BALANCE SHEETS  (IN THOUSANDS, EXCEPT SHARE DATA)

|                                                                                                                 |                                                                                                                                                                                                                                                     | December 31,
2004                          |           | September 30,
2005 |          
|---------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | ------------------ | ---------
|
|ASSETS                                                                                                           |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|CURRENT ASSETS:                                                                                                  |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|                                                                                                                 | Cash and cash equivalents                                                                                                                                                                                                                           |                                            | $         | 38,982             |          
|                                                                                                                 | Accounts receivablenet                                                                                                                                                                                                                             |                                            |           | 69,380             |          
|                                                                                                                 | Net investment in sales-type leases                                                                                                                                                                                                                 |                                            |           | 24,776             |          
|                                                                                                                 | Prepaid expenses and other current assets                                                                                                                                                                                                           |                                            |           | 26,595             |          
|                                                                                                                 | Deferred income taxes                                                                                                                                                                                                                               |                                            |           | 7,817              |          
|                                                                                                                 | Assets held for sale                                                                                                                                                                                                                                |                                            |           | 3,300              |          
|                                                                                                                 |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|                                                                                                                 |                                                                                                                                                                                                                                                     | Total current assets                       |           |                    | 170,850  
|SATELLITES AND OTHER PROPERTY AND EQUIPMENTNet                                                                  |                                                                                                                                                                                                                                                     |                                            | 1,955,664 |                    |          
|NET INVESTMENT IN SALES-TYPE LEASES                                                                              |                                                                                                                                                                                                                                                     |                                            | 74,990    |                    |          
|GOODWILL                                                                                                         |                                                                                                                                                                                                                                                     |                                            | 2,244,131 |                    |          
|DEFERRED CHARGES AND OTHER ASSETSNet                                                                            |                                                                                                                                                                                                                                                     |                                            | 326,296   |                    |          
|                                                                                                                 |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|                                                                                                                 |                                                                                                                                                                                                                                                     | TOTAL ASSETS                               |           | $                  | 4,771,931
|                                                                                                                 |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                             |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|CURRENT LIABILITIES:                                                                                             |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|                                                                                                                 | Accounts payable and accrued liabilities                                                                                                                                                                                                            |                                            | $         | 69,456             |          
|                                                                                                                 | Current portion of long-term debt                                                                                                                                                                                                                   |                                            |           | 4,100              |          
|                                                                                                                 | Current portion of satellite incentive obligations                                                                                                                                                                                                  |                                            |           | 13,148             |          
|                                                                                                                 | Accrued interest payable                                                                                                                                                                                                                            |                                            |           | 45,589             |          
|                                                                                                                 | Dividends payable                                                                                                                                                                                                                                   |                                            |           |                   |          
|                                                                                                                 | Deferred gains and revenues                                                                                                                                                                                                                         |                                            |           | 26,618             |          
|                                                                                                                 |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|                                                                                                                 |                                                                                                                                                                                                                                                     | Total current liabilities                  |           |                    | 158,911  
|LONG-TERM DEBT                                                                                                   |                                                                                                                                                                                                                                                     |                                            | 3,859,038 |                    |          
|DEFERRED INCOME TAXES                                                                                            |                                                                                                                                                                                                                                                     |                                            | 31,779    |                    |          
|DEFERRED CREDITS AND OTHER (principally customer deposits, satellite incentive obligations and deferred revenue) |                                                                                                                                                                                                                                                     |                                            | 271,100   |                    |          
|                                                                                                                 |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|                                                                                                                 |                                                                                                                                                                                                                                                     | TOTAL LIABILITIES                          |           |                    | 4,320,828
|                                                                                                                 |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|COMMITMENTS AND CONTINGENCIES                                                                                    |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|STOCKHOLDERS' EQUITY:                                                                                            |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|                                                                                                                 | Preferred stock; 0 shares and 50,000,000 shares authorized at December 31, 2004 and September 30, 2005, respectively, and 0 shares outstanding at both December 31, 2004 and September 30, 2005                                                     |                                            |           |                   |          
|                                                                                                                 | Common stock $0.01 par value; 131,697,822 and 400,000,000 shares authorized, at December 31, 2004 and September 30, 2005, respectively, and 72,580,647 and 122,598,093 shares outstanding at December 31, 2004
and September 30, 2005, respectively |                                            |           | 726                |          
|                                                                                                                 | Additional paid-in-capital                                                                                                                                                                                                                          |                                            |           | 131,690            |          
|                                                                                                                 | Retained earnings                                                                                                                                                                                                                                   |                                            |           | 320,883            |          
|                                                                                                                 | Accumulated other comprehensive income                                                                                                                                                                                                              |                                            |           | 1,222              |          
|                                                                                                                 | Other stockholders' equity                                                                                                                                                                                                                          |                                            |           | (3,418             | )        
|                                                                                                                 |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|                                                                                                                 |                                                                                                                                                                                                                                                     | TOTAL STOCKHOLDERS' EQUITY                 |           |                    | 451,103  
|                                                                                                                 |                                                                                                                                                                                                                                                     |                                            |           |                    |          
|                                                                                                                 |                                                                                                                                                                                                                                                     | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |           | $                  | 4,771,931
|                                                                                                                 |                                                                                                                                                                                                                                                     |                                            |           |                    |          

See notes to condensed consolidated financial statements.

7

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PANAMSAT HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
AND COMPREHENSIVE INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
(IN THOUSANDS, EXCEPT SHARE DATA)

Accumulated
Other
Comprehensive
Income,
net of taxCommon StockAdditional
Paid-In
Capital

Retained
Earnings

Other
Stockholders'
Equity



Comprehensive
IncomeShares

Amount

TotalBALANCE, JANUARY 1, 2005

72,580,647

$
726

$
131,690

$
320,883

$
1,222

$
(3,418
)
$
451,103Fractional share paymentreverse stock split

(24
)
















Additional issuances of common stockinitial public offering

50,000,000


500


899,500











900,000Foreign currency translation adjustment













401





401

$
401Unrealized loss on interest rate hedge













(1,523
)




(1,523
)

(1,523
)Transaction costs capitalized to equity







(40,923
)










(40,923
)

Stock compensation







781











781


Issuance of restricted shares

17,470





350








(350
)




Deferred compensation reclassdeferred stock units







1,535











1,535


Amortization of deferred compensation
















185


185


Dividends to stockholders










(300,291
)







(300,291
)

Net income










23,153








23,153


23,153BALANCE, SEPTEMBER 30, 2005

122,598,093

$
1,226

$
992,993

$
43,745

$
100

$
(3,583
)
$
1,034,421

$
22,031


Other Stockholders' Equity:

January 1, 2005

September 30, 2005Excess of purchase price over historical cost basis of net assets acquired

$
(3,418
)
$
(3,418
)Deferred compensation, net





(165
)TOTAL OTHER STOCKHOLDERS' EQUITY

$
(3,418
)
$
(3,583
)


See notes to condensed consolidated financial statements.

8

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PANAMSAT HOLDING CORPORATION    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2005  (IN THOUSANDS)

|                                                                                         |                                                                | September 30,
2004                                  |                                           | September 30,
2005 |         
|---------------------------------------------------------------------------------------- | -------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------- | ------------------ | --------
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                    |                                                                |                                                     |                                           |                    |         
|Net income (loss)                                                                        |                                                                | $                                                   | (97,918                                   | )                  | $       
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |                                                                |                                                     |                                           |                    |         
|                                                                                         | Depreciation and amortization                                  |                                                     |                                           | 220,969            |         
|                                                                                         | Deferred income taxes                                          |                                                     |                                           | (98,457            | )       
|                                                                                         | Amortization of debt issuance costs and other deferred charges |                                                     |                                           | 7,698              |         
|                                                                                         | Loss on undesignated interest rate swap                        |                                                     |                                           |                   |         
|                                                                                         | Accretion on senior discount notes                             |                                                     |                                           |                   |         
|                                                                                         | Provision for uncollectible receivables                        |                                                     |                                           | 31,982             |         
|                                                                                         | Loss on early extinguishment of debt                           |                                                     |                                           | 20,589             |         
|                                                                                         | Satellite impairment loss                                      |                                                     |                                           | 99,946             |         
|                                                                                         | Loss on Galaxy 10R XIPS anomaly                                |                                                     |                                           | 9,090              |         
|                                                                                         | Facilities restructuring and severance costs                   |                                                     |                                           | 4,309              |         
|                                                                                         | Reversal of sales-type lease liabilities                       |                                                     |                                           | (3,727             | )       
|                                                                                         | Loss on termination of sales-type lease                        |                                                     |                                           |                   |         
|                                                                                         | Gain on disposal of fixed assets                               |                                                     |                                           | (1,332             | )       
|                                                                                         | Other non-cash items                                           |                                                     |                                           | (3,950             | )       
|                                                                                         | Changes in assets and liabilities:                             |                                                     |                                           |                    |         
|                                                                                         |                                                                | Collections on investments in sales-type leases     |                                           |                    | 19,035  
|                                                                                         |                                                                | Operating leases and other receivables              |                                           |                    | 6,166   
|                                                                                         |                                                                | Prepaid expenses and other assets                   |                                           |                    | (4,222  
|                                                                                         |                                                                | Accounts payable and accrued liabilities            |                                           |                    | (49,345 
|                                                                                         |                                                                | Deferred gains and revenues                         |                                           |                    | 1,209   
|                                                                                         |                                                                |                                                     |                                           |                    |         
|                                                                                         |                                                                |                                                     | NET CASH PROVIDED BY OPERATING ACTIVITIES |                    |         
|                                                                                         |                                                                |                                                     |                                           |                    |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                    |                                                                |                                                     |                                           |                    |         
|                                                                                         | Capital expenditures (including capitalized interest)          |                                                     |                                           | (103,299           | )       
|                                                                                         | Insurance proceeds from satellite recoveries                   |                                                     |                                           | 286,915            |         
|                                                                                         | Net sales of short-term investments                            |                                                     |                                           | 374,097            |         
|                                                                                         | Proceeds from sale of teleport                                 |                                                     |                                           |                   |         
|                                                                                         | Acquisitions, net of cash acquired                             |                                                     |                                           | (522               | )       
|                                                                                         |                                                                |                                                     |                                           |                    |         
|                                                                                         |                                                                | NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES |                                           |                    | 557,191 
|                                                                                         |                                                                |                                                     |                                           |                    |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                    |                                                                |                                                     |                                           |                    |         
|                                                                                         | Issuance of common stock  initial public offering             |                                                     |                                           |                   |         
|                                                                                         | Issuance of long-term debt                                     |                                                     |                                           | 3,512,615          |         
|                                                                                         | Repayments of long-term debt                                   |                                                     |                                           | (1,443,459         | )       
|                                                                                         | Dividends to stockholders                                      |                                                     |                                           |                   |         
|                                                                                         | Capitalized transaction costs                                  |                                                     |                                           | (152,064           | )       
|                                                                                         | Capitalized costs of initial public offering                   |                                                     |                                           |                   |         
|                                                                                         | Capitalized debt issuance costs                                |                                                     |                                           |                   |         
|                                                                                         | New incentive obligations                                      |                                                     |                                           | 16,250             |         
|                                                                                         | Repayments of incentive obligations                            |                                                     |                                           | (9,571             | )       
|                                                                                         | Funding of capital expenditures by customer                    |                                                     |                                           |                   |         
|                                                                                         | Repurchase of treasury stock                                   |                                                     |                                           | (2,784,556         | )       
|                                                                                         | Reissuance of treasury stock                                   |                                                     |                                           | 757                |         
|                                                                                         | Capital contributed by affiliate                               |                                                     |                                           | 9,200              |         
|                                                                                         | Other equity related transactions                              |                                                     |                                           | 3,384              |         
|                                                                                         |                                                                |                                                     |                                           |                    |         
|                                                                                         |                                                                | NET CASH USED IN FINANCING ACTIVITIES               |                                           |                    | (847,444
|                                                                                         |                                                                |                                                     |                                           |                    |         
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                  |                                                                |                                                     | 328                                       |                    |         
|                                                                                         |                                                                |                                                     |                                           |                    |         
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                     |                                                                |                                                     | (127,883                                  | )                  |         
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                           |                                                                |                                                     | 176,087                                   |                    |         
|                                                                                         |                                                                |                                                     |                                           |                    |         
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                                 |                                                                | $                                                   | 48,204                                    |                    | $       
|                                                                                         |                                                                |                                                     |                                           |                    |         
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                        |                                                                |                                                     |                                           |                    |         
|                                                                                         | Cash received for interest                                     |                                                     | $                                         | 6,955              |         
|                                                                                         |                                                                |                                                     |                                           |                    |         
|                                                                                         | Cash paid for interest                                         |                                                     | $                                         | 134,453            |         
|                                                                                         |                                                                |                                                     |                                           |                    |         
|                                                                                         | Cash received for taxes                                        |                                                     | $                                         | 122                |         
|                                                                                         |                                                                |                                                     |                                           |                    |         
|                                                                                         | Cash paid for taxes                                            |                                                     | $                                         | 3,422              |         
|                                                                                         |                                                                |                                                     |                                           |                    |         

See notes to condensed consolidated financial statements.

9

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PANAMSAT HOLDING CORPORATION    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)   Basis of Presentation

Within these unaudited condensed consolidated financial statements, PanAmSat Holding Corporation and its subsidiaries are referred to as "Holdco", "we", "us" and
"our". The term "PanAmSat" refers to PanAmSat Corporation, our wholly-owned subsidiary.

These
unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the
instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements. The condensed consolidated financial statements include all normal and recurring adjustments that management considers
necessary to present fairly the financial position as of September 30, 2005, results of operations for the three and nine months ended September 30, 2004 and 2005 and cash flows for the
nine months ended September 30, 2004 and 2005. Certain prior period amounts have been reclassified to conform to the current period's presentation. Operating results for the three and nine
months ended September 30, 2004 and 2005 are not necessarily indicative of the operating results for the full year. For further information, refer to the consolidated financial statements and
footnotes thereto included in our audited financial statements for the year ended December 31, 2004 included in our registration statement on Form S-1 (File
No. 333-121463) filed with the SEC, as such registration statement became effective on March 16, 2005, and all of our other filings filed with the SEC from March 16,
2005 through the current date pursuant to the Securities Exchange Act of 1934.

On
August 20, 2004, affiliates of Kohlberg Kravis Roberts & Co. L.P., or KKR, The Carlyle Group, or Carlyle, and Providence Equity Partners, Inc., or Providence,
completed a series of transactions resulting in an entity affiliated with KKR owning approximately 44% of PanAmSat's outstanding common stock and entities affiliated with Carlyle and Providence each
owning approximately 27% of PanAmSat's
common stock, with the remainder held by certain members of management and our board of directors. We collectively refer to KKR, Carlyle and Providence as the "Sponsors" in this quarterly report. We
refer to the August 20, 2004 series of transactions through which the Sponsors acquired and recapitalized PanAmSat as the "Recapitalization".

On
September 22, 2004, Holdco was formed by the then existing stockholders of PanAmSat. On October 8, 2004, all of PanAmSat's outstanding common stock held by its then
existing stockholders was contributed to Holdco in exchange for an equal number of shares of Holdco common stock, par value $.01 per share. As a result of and immediately following that contribution,
PanAmSat's then existing stockholders owned Holdco in equal proportion to their prior ownership interest in PanAmSat, and PanAmSat became a wholly-owned subsidiary of Holdco.

The
contribution of PanAmSat to Holdco was accounted for as a recapitalization because neither a change in control nor a business combination occurred and Holdco was not a substantive
operating entity. Accordingly, there was no change in the basis of the assets and liabilities of PanAmSat. Therefore, all operations of PanAmSat prior to the contribution to Holdco are reflected
herein at their historical amounts.

(2)   Initial Public Offering

On March 22, 2005, we consummated an initial public offering of 50 million shares of our common stock at $18 per share and used the net proceeds to
make an equity contribution to PanAmSat of approximately $658.4 million and to pay a $200 million dividend to our then pre-existing stockholders. PanAmSat used this equity
contribution to repay approximately $265.0 million of the borrowings under its Term Loan A Facility and on April 1, 2005, it redeemed $353.5 million, or 35%, of its 9% senior
notes and paid a redemption premium of $31.8 million to holders of those notes. In connection with

10

---



and
contingent upon our initial public offering, PanAmSat's senior secured credit facilities were amended to, among other things:



(3)   PanAmSat/Intelsat Merger

On August 29, 2005, we and Intelsat, Ltd. announced that the two companies signed a definitive merger agreement under which Intelsat will acquire us
for $25 per share in cash, or $3.2 billion. Under the agreement, which was approved unanimously by the boards of directors of both companies, Intelsat will acquire all of our outstanding common
shares. Also in connection with the merger, our board of directors approved the adoption of a severance plan, on terms similar to our existing severance plan, and authorized a retention pool of up to
$10 million for non-senior management employees.

On
October 26, 2005, our shareholders approved and adopted the merger agreement. Consummation of the merger remains subject to various conditions, including satisfaction of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act"), waiting period, receipt of Federal Communications Commission approvals, receipt of financing and other
conditions. Also on October 26, 2005, we received a request from the United States Department of Justice, or DOJ, for additional information and documentary materials in connection with the
merger. The effect of this request is to extend the waiting period imposed by the HSR Act until 30 days after the parties have substantially complied with the request, unless that period is
terminated earlier by the DOJ or extended voluntarily. If the conditions to the merger are satisfied or waived (to the extent permitted by applicable law), we expect to consummate the merger in the
second or third quarter of 2006.

(4)   Dividend Policy

Our board of directors adopted a dividend policy that became effective upon the closing of our initial public offering. Our dividend policy reflects an intention
to distribute a substantial portion of the cash generated by our business in excess of operating expenses and working capital requirements, interest and principal payments on our indebtedness and
capital expenditures as regular quarterly dividends to our stockholders. On March 21, 2005, our board of directors declared a partial quarterly dividend for the period from March 22,
2005 to March 31, 2005 in the amount of $0.043056 per share, or an aggregate of approximately $5.28 million, which was paid on April 15, 2005, to stockholders of record as of
March 31, 2005. On June 20, 2005, our board of directors declared a quarterly dividend for the period from April 1, 2005 to June 30, 2005 in the amount of $0.3875 per
share, or an aggregate of approximately $47.5 million, which was paid on July 15, 2005, to stockholders of record as of June 30, 2005. On September 19, 2005, our board of
directors declared a quarterly dividend for the period from July 1, 2005 to September 30, 2005 in the amount of $0.3875 per share, or an aggregate of approximately $47.5 million,
which was paid on October 14, 2005, to stockholders of record as of September 30, 2005.

11

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(5)   Stock Split, Reverse Stock Split and Amended and Restated Certificate of Incorporation

In connection with the Recapitalization, on August 20, 2004, PanAmSat's board of directors effected an approximately 4.37 for 1 stock split of PanAmSat's
common stock. In addition, on March 1, 2005, we amended and restated our certificate of incorporation to (i) effect a reverse stock split of our outstanding shares of common stock on a
one for 1.518628 basis and (ii) increase the number of authorized shares from 200 million to 450 million, consisting of 400 million shares of common stock and
50 million shares of preferred stock. The amended and restated certificate of incorporation provides that our board of directors is authorized to provide for one or more series of preferred
stock and fix the number of shares, voting power, preferences and other special rights in each series. No such series of preferred stock has been designated and no shares of preferred stock have been
issued. All share and per share amounts, as well as the par value amount and additional paid in capital amount related to these shares within these condensed consolidated financial statements, have
been restated for all the periods presented to give retroactive effect to the stock split and the reverse stock split.

(6)   Long-Term Debt

With a portion of the proceeds from our initial public offering, we made an equity contribution to PanAmSat of approximately $658.4 million, which PanAmSat
used to repay approximately $265.0 million of the borrowings under its Term Loan A Facility on March 22, 2005, redeem $353.5 million, or 35%, of its 9% senior notes and pay a
redemption premium of $31.8 million to holders of these notes on April 1, 2005. PanAmSat also repaid an additional $25.0 million of the Term Loan A facility with cash on hand on
March 22, 2005. On June 17, 2005 PanAmSat made a voluntary prepayment of $28.4 million under its Term Loan A facility from available cash on hand.

During
the nine months ended September 30, 2005, we recorded non-cash charges totaling approximately $24.2 million for unamortized debt issuance costs written
off as a result of the $353.5 million redemption of PanAmSat's 9% senior notes and the $318.4 million of voluntary debt repayments made on PanAmSat's Term Loan A facility during this
period.

As
of December 31, 2004 and September 30, 2005, long-term debt consisted of the following (in thousands):

December 31,
2004

September 30,
200563/8% Notes due 2008

$
150,000

$
150,00081/2% Notes due 2012


1,190


1,19067/8% Notes due 2028


125,000


125,000Transaction Related Financing:Revolving Credit Facility





Term Loan A due 2009


674,310


355,910Term Loan B/Term Loan B-1 due 2011


1,647,500


1,647,5009% Senior Notes due 2014


1,010,000


656,500103/8% Senior Discount Notes due 2014


255,138


275,2463,863,138


3,211,346Less: current maturities


4,100


16,550Total Long-Term Debt

$
3,859,038

$
3,194,796


At
September 30, 2005, we had total debt outstanding of approximately $3.2 billion, including current maturities of $16.6 million related to our Term Loan
B-1 facility due 2011.

On
October 19, 2004, pursuant to Rule 144A under the Securities Act of 1933, as amended, we issued $416.0 million aggregate principal amount at maturity of our
103/8% senior discount notes due 2014. All of the proceeds of that offering, less discounts, commissions and expenses, or approximately

12

---



$245.8 million,
were paid on October 19, 2004 as a dividend to our stockholders. On May 31, 2005, we exchanged all the outstanding notes for an equal amount of
103/8% senior discount notes due 2014, or Senior Discount Notes, which are registered under the Securities Act of 1933 and which have substantially similar terms. The Senior Discount
Notes accrete at the rate of 103/8% per annum, compounded semi-annually to, but not including, November 1, 2009. From and after November 1, 2009, cash interest
on the Senior Discount Notes will accrue at the rate of 103/8% per annum, and will be payable semiannually in arrears on May 1 and November 1 of each year, commencing on
May 1, 2010, until maturity. As of September 30, 2005, the accreted balance of approximately $275.2 million was outstanding in relation to these notes.

Our
primary source of liquidity is cash flow generated from the operations of our subsidiaries, including PanAmSat. Our ability to pay dividends on our common stock and make payments on
our Senior Discount Notes is dependent on the earnings and the distribution of funds from PanAmSat. The agreements governing PanAmSat's senior secured credit facilities and 9% senior notes are the two
contractual obligations of PanAmSat that significantly restrict its ability to pay dividends or otherwise transfer assets to Holdco. Payment of dividends is also subject to compliance with Delaware
law.

Concurrent
with the completion of our initial public offering, we amended PanAmSat's senior secured credit facilities. Borrowings under PanAmSat's senior secured credit facilities bear
interest at the
borrower's option at either adjusted LIBOR plus an applicable margin or the alternate base rate plus an applicable margin, and are subject to adjustment based on a pricing grid.

PanAmSat's
senior secured credit facilities are comprised of a $250.0 million revolving credit facility, which will terminate in August 2009, an $800.0 million Term
Loan A Facility, which matures in August 2009, and a $1,647.5 million Term Loan B-1 Facility, which matures in August 2011. At September 30, 2005, the interest
rate on the Term Loan A Facility was 1 month LIBOR of 3.82% plus 1.75%. At September 30, 2005, the Term Loan B-1 facility was split into two tranches in order to provide for
the principal payment of $4.1 million which is due on November 18, 2005. The first tranche in the amount of $4.1 million, which is subject to the principal paydown, had an
interest rate of 2 month LIBOR of 3.80% plus 2.00%. The remaining tranche, in the amount of $1,643.4 million, had an interest rate of 3 month LIBOR of 3.86% plus 2.00%. The
revolving credit facility was undrawn. These rates are subject to change based upon our total leverage ratio. In addition, we are required to pay a commitment fee for the unused commitments under the
revolving credit facility, if any, which, as of September 30, 2005, on an annual basis was 0.25%. As of September 30, 2005, we had outstanding letters of credit totaling
$49.2 million. Outstanding letters of credit reduce our ability to borrow against the revolving credit facility by an equivalent amount. Any amounts borrowed under the revolving credit facility
would bear interest at 1 month LIBOR plus 1.75% as of September 30, 2005, although this interest rate is subject to adjustment based on our total leverage ratio.

Obligations
under the senior secured credit facilities are, or will be, as the case may be, unconditionally and irrevocably guaranteed jointly and severally by PanAmSat's current and
future domestic subsidiaries and are secured by substantially all of PanAmSat's assets and substantially all of the assets of each of its current and future domestic subsidiaries.

The
9% senior notes require interest payments to be made semi-annually, mature on August 15, 2014, are unsecured, and are, or will be, as the case may be,
unconditionally guaranteed by each of PanAmSat's existing and certain subsequently acquired or organized domestic restricted subsidiaries.

In
connection with the Recapitalization, in August 2004, we completed a tender offer for substantially all of our $275 million 61/8% Notes due 2005 and our
$800 million 81/2% Senior Notes due 2012. We completed the redemption of our remaining 61/8% Notes due 2005 in October 2004. In September 2004, we
repaid the outstanding balance under our revolving credit facility.

13

---



As of September 30, 2005, PanAmSat had outstanding 10 and 30-year fixed rate notes totaling $275.0 million which were issued in January 1998. The
outstanding principal balances, interest rates and maturity dates for these notes as of September 30, 2005, are $150.0 million at 63/8% due 2008 and $125.0 million
at 67/8% due 2028, respectively. Principal on these notes is payable at maturity, while interest is payable semi-annually.

As
of September 30, 2005, PanAmSat also had outstanding $1.2 million of its 81/2% senior notes due 2012. These notes are unsecured, and are unconditionally
guaranteed by each of PanAmSat's domestic restricted subsidiaries existing prior to the Recapitalization.

We
are required to maintain certain financial covenants and are also subject to restrictive covenants under our borrowings. As of September 30, 2005, we were in compliance with
all such covenants.

(7)   Interest Rate Swap Agreements

In accordance with the agreement governing PanAmSat's old senior secured credit facilities that were repaid in 2004, PanAmSat was party to an interest rate swap
agreement for a fixed rate payment of 5.64% on $100.0 million through August 30, 2005. In June of 2004, in connection with the repayment of the term loan B-1 facility of
PanAmSat's old credit facility, PanAmSat's cash flow hedge became undesignated and therefore changes in the fair value of the interest rate swap have been recorded within our consolidated statement of
operations from that time. In August 2005, this agreement expired.

On
March 14, 2005, PanAmSat entered into a five year interest rate swap agreement to hedge interest expense on a notional amount of $1.25 billion. The notional amount will
amortize down to $625 million from March 14, 2008 until expiration on March 15, 2010. In relation to this swap agreement, PanAmSat exchanged its floating-rate
obligation on $1.25 billion of its Term Loan B-1 facility for a fixed-rate obligation, subject to scheduled rate increases based on the LIBOR rate used.

The
counterparties to this agreement are highly rated financial institutions. In the unlikely event that the counterparties fail to meet the terms of the interest rate swap agreement,
PanAmSat's exposure is
limited to the interest rate differential on the notional amount at each quarterly settlement period over the life of the agreements. We do not anticipate non-performance by the
counterparties.

The
fair value of the interest rate swap agreement is the estimated amount that we would pay or receive to terminate the agreement at the reporting date, taking into account current
interest rates, the market expectation for future interest rates and our current creditworthiness. From the inception of the interest rate swap agreement through May 24, 2005, the interest rate
swap was undesignated and the increase in the fair value of the related obligation of approximately $18.6 million was recorded within loss on undesignated interest rate swap in our consolidated
statement of operations for the quarter ended June 30, 2005, in accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 133. Between May 25,
2005 and June 30, 2005, the interest rate swap was designated as a cash flow hedge and deemed effective, and therefore qualified for hedge accounting treatment under SFAS No. 133. In
accordance with SFAS No. 133, changes in the hedged asset or liability representing the effectiveness of the hedge were recorded within comprehensive income (loss) in our consolidated balance
sheet. The ineffective portion of the hedge (approximately $630 thousand) was recorded as an adjustment to interest expense in the consolidated statement of operations for the quarter ended
June 30, 2005.

Pursuant
to SFAS No. 133 we are required to perform a quarterly analysis of the effectiveness of the hedge. Under SFAS No.133 in order to maintain the effectiveness of the hedge,
an effectiveness rate of between 80% and 125% must be maintained. This effectiveness rate is calculated by dividing the cumulative change in the hedge liability by the cumulative change in the cash
flows of the debt being

14

---



hedged.
As a result of this test, it was determined that the interest rate swap agreement was no longer an effective hedge, and therefore did not qualify for hedge accounting treatment under SFAS
No. 133. As a result, the interest rate swap was undesignated and therefore pursuant to the guidance within SFAS No. 133, the reduction in the fair value of the interest rate swap
obligation of approximately $18.3 million was recorded as a gain on undesignated interest rate swap in our consolidated statement of operations for the three months ended September 30,
2005. The net loss on undesignated interest rate swap for the nine months ended September 30, 2005 was $0.3 million. As of September 30, 2005 the liability related to this
interest rate swap of $3.2 million was included in deferred credits and other within our condensed consolidated balance sheet.

On
the interest rate reset date of September 14, 2005, the interest rate which the counterparties will utilize on December 14, 2005 to compute interest due to PanAmSat was
determined to be 3.857%. This will result in PanAmSat paying the counterparties approximately $206 thousand on December 14, 2005 (the difference between the rate PanAmSat must pay of
3.922% and the rate it will receive from the counterparties of 3.857%).

(8)   Stock-Based Compensation

Effective January 1, 2003, we adopted the fair value recognition provision of Financial Accounting Standards Board ("FASB") Statement No. 123,
"Accounting for Stock Based Compensation," prospectively, to all employee awards granted on or after January 1, 2003, pursuant to FASB Statement No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure", as revised by FASB Statement No. 123(R) "Share-Based Payment" ("SFAS No. 123R") issued in December 2004. Since December 31, 2004,
we have issued the following awards (after giving effect to the August 20, 2004 stock split and the March 1, 2005 reverse stock split):

Outstanding At:

Employee Stock
Options Granted

Deferred Stock
Units GrantedDecember 31, 2004

5,043,797

202,2132005 grants

26,339

September 30, 2005

5,070,136

202,213


PanAmSat
issued stock options to purchase its common stock to certain employees and directors subsequent to the Recapitalization. These stock options were assumed by Holdco on
October 8, 2004. All in-the-money employee stock options and all restricted stock units granted prior to the Recapitalization, other than stock options and restricted
stock units held by certain members of management, were cashed out in the Recapitalization. All out-of-the-money stock options were cancelled without payment.
Certain members of our management agreed not to have certain of their equity interests cashed out in the Recapitalization; existing options, restricted shares and restricted stock units granted to
such individuals remained outstanding as options and deferred stock units following the Recapitalization and were converted into options and deferred stock units of Holdco upon the contribution of
PanAmSat's common stock to us.

Employee
stock options granted prior to the Recapitalization in August 2004 were scheduled to vest ratably over three years. The stock options granted after the Recapitalization
vest over five to eight years. Portions of these awards vest over a five-year period based upon the passage of time and portions vest over an eight year period, which may be reduced if
certain pre-established company operating performance targets are achieved. Compensation expense for these nonqualified stock options is based on the fair value of the options at the
respective grant dates utilizing the Black-Scholes model for estimating fair value and the amount of compensation is charged to expense over the vesting period of the options. We recorded compensation
expense related to our outstanding stock options of approximately $114 thousand and $266 thousand for the three months ended September 30, 2004 and

15

---



2005,
respectively and $196 thousand and $780 thousand for the nine months ended September 30, 2004 and 2005, respectively.

Prior
to the consummation of the Recapitalization, restricted stock units granted in 2003 and 2004 were scheduled to vest 50% on the second anniversary of the grant date and the
remaining 50% on the third anniversary. Stock compensation expense was being recognized over the vesting period based on our stock price on the grant date. We recorded compensation expense related to
the restricted stock units of approximately $0.4 million and $1.7 million during the three and nine months ended September 30, 2004.

In
connection with, and as a result of, the Recapitalization, 202,213 deferred stock units were granted to certain of PanAmSat's employees. These deferred stock units were granted under
PanAmSat's deferred compensation plan and are payable in our common stock. As of September 30, 2005, all of these deferred stock units were outstanding. We recorded compensation expense related
to these deferred stock units of approximately $0.1 million and $0.7 million, respectively, during the three and nine months ended September 30, 2005.

The
following table illustrates the effect on net income as if the fair value based method had been applied to all outstanding and unvested awards in each period (in thousands):

Three Months Ended
September 30,

Nine Months Ended September 30,2004

2005

2004

2005Net income (loss), as reported

$
(76,655
)
$
54,226

$
(97,918
)
$
23,153Add: Stock-based employee compensation expense included in reported net income (loss), net of related tax effects


6,389


218


7,281


954Deduct: Total stock-based employee compensation expense determined under fair value based methods for all awards, net of related tax effects


(6,384
)

(218
)

(9,685
)

(954
)Pro forma net income (loss)

$
(76,650
)
$
54,226

$
(100,322
)
$
23,153Net income (loss) per share:Basicas reported

$
(0.28
)
$
0.44

$
(0.26
)
$
0.21Basicpro forma

$
(0.28
)
$
0.44

$
(0.27
)
$
0.21Dilutedas reported

$
(0.28
)
$
0.43

$
(0.26
)
$
0.21Dilutedpro forma

$
(0.28
)
$
0.43

$
(0.27
)
$
0.21


On
June 8, 2005, the Compensation Committee of our board of directors and that of PanAmSat approved a combined compensation program for non-employee directors. Costs
of this compensation program are shared equally by us and PanAmSat. Non-employee directors are compensated $70,000 per annual term, $35,000 paid in cash, quarterly and as earned, and
$35,000 paid in shares of our common stock, calculated using the closing price of our common stock on the day prior to the grant date.

For
the initial board term following the closing of the initial public offering of our common stock on March 22, 2005, the $35,000 in compensation paid in shares of our common
stock was calculated as

16

---



above
and granted on the date the plan was approved. Accordingly, each non-employee director was granted 1,747 shares on June 8, 2005.

In
addition to compensation for service on our board, Audit Committee members are paid $7,500 per term, Compensation Committee members $5,000 per term, the Chairman of the board $100,000
per term, the Audit Committee Chairman $20,000 per term, and the Compensation Committee Chairman $10,000 per term, each payable quarterly in cash and as earned.

Common
stock issued to non-employee directors as compensation is not transferable until vested. The common stock granted on June 8, 2005, will vest on March 22,
2006. Subsequent issuances of common stock will vest one year after issuance. In the event a non-employee director's term ends prior to the vesting date, the shares will vest on a
pro-rata basis based on the number of days served.

During
the three and nine months ended September 30, 2005 we recorded expenses of approximately $0.1 million and $0.2 million, respectively, related to this
compensation program.

(9)   Facilities Restructuring and Severance Costs

Facilities restructuring and severance costs were $2.1 million and $0.2 million for the three months ended September 30, 2004 and 2005, and
$4.5 million and $4.0 million for the nine months ended September 30, 2004 and 2005, respectively.

In
January 2003, our management approved a plan to consolidate certain of our teleports in order to improve customer service and reduce operating costs. This teleport
consolidation plan included the closure of certain owned teleports and the reduction of services at our Fillmore and Castle Rock teleports. Under this plan, our Homestead, Florida teleport was closed
in 2003 and our Spring Creek, New York teleport was closed in June 2004. Our Spring Creek teleport was sold on October 28, 2004. On June 3, 2005, we completed the sale of our Homestead
teleport for approximately $3.2 million, net of associated selling costs. During the three months ended September 30, 2004 and 2005, we recorded credits of $0.2 million and
charges of $0, respectively, and during the nine months ended September 30, 2004 and 2005 we recorded charges of $0.8 million and $2.5 million, respectively, related to this
teleport consolidation plan, representing severance costs in 2004 and certain costs incurred in relation to equipment transferred to other locations in 2005.

On
March 29, 2002, our management approved a plan to restructure several of our United States locations and close certain facilities, some of which are currently being leased
through 2011. In an effort to further streamline our operations, in the first quarter of 2004, we consolidated our Manhattan Beach, El Segundo and Long Beach, California facilities. As a result, we
recorded a non-cash charge of $1.4 million during the first quarter of 2004 reflecting future lease costs related to approximately 18,000 square feet of unused facilities in
Manhattan Beach. Additionally, in the third quarter of 2004 we recorded a non-cash charge of approximately $2.3 million due to a reduction in future anticipated sublease income
related to one of our idle facilities. We recorded a non-cash charge of approximately $0.5 million in the nine months ended September 30, 2005 in relation to increased future
lease costs related to one of our idle facilities.

In
October 2003 and October 2004, our management approved plans to reduce our workforce by approximately 45 employees and 25 employees, respectively. During the three
months ended September 30, 2004 and 2005, we recorded severance charges of $0 and $0.2 million, respectively, and during the nine months ended September 30, 2004 and 2005, we
recorded charges of $0 and $1.0 million, respectively, in relation to these plans. These severance costs were primarily related to employee compensation, benefits and outplacement services.

17

---



The
following table summarizes the recorded accruals and activity related to our teleport consolidation, facilities restructuring and severance charges during the nine months ended
September 30, 2005 (in millions):

Facilities
Restructuring

Teleport
Consolidation

Severance
Costs

TotalBalance as of January 1, 2005

$
6.3

$
0.3

$
0.5

$
7.1Restructuring charges


0.5


2.5


1.0


4.0Less: non-cash items





(2.5
)




(2.5
)Less: net cash payments


(1.2
)

(0.2
)

(1.0
)

(2.4
)Balance as of September 30, 2005

$
5.6

$
0.1

$
0.5

$
6.2


We
expect to pay the $0.6 million of liabilities related to our severance costs and teleport consolidation plans within the next year and we expect to pay the $5.6 million
of liabilities related to our facilities restructuring plan over the next six years.

(10) Interest ExpenseNet

Interest expense for the three months ended September 30, 2004 and 2005 is recorded net of capitalized interest of $2.0 million and
$7.3 million, respectively, and interest income of $1.7 million and $0.8 million,
respectively. Interest expense for the nine months ended September 30, 2004 and 2005 is recorded net of capitalized interest of $4.3 million and $18.3 million, respectively, and
interest income of $6.8 million and $2.1 million, respectively. Included in interest expense for the three and nine months ended September 30, 2004 is approximately
$15.1 million and $20.6 million, respectively, for the write-off of unamortized debt issuance costs related to the June 2004 prepayment under the term loan B facility
of PanAmSat's old credit facility and August 2004 repayments of certain indebtedness. Included in interest expense for the three and nine months ended September 30, 2005 is approximately
$0 million and $56.0 million, respectively, of unamortized debt issuance costs which were written-off as a result of the prepayment of $290.0 million on PanAmSat's
senior secured credit facilities on March 22, 2005, the redemption of $353.3 million, or 35%, of PanAmSat's 9% senior notes on April 1, 2005, including a redemption premium of
$31.8 million paid to the holders of these notes, and the voluntary prepayment of $28.4 million on June 17, 2005 under PanAmSat's Term Loan A facility from available cash on hand.

(11) Acquisitions

On August 31, 2005, PanAmSat acquired multiple European orbital slots, as well as a satellite with European, Middle Eastern, African and Asian coverage
from Alcatel, a French communications company, for a purchase price of approximately $60.2 million plus liabilities and costs incurred in relation to the acquisition of approximately
$13.3 million, including $9.0 million of contingent performance payments due to Alcatel in addition to the purchase price. This acquisition was accomplished in order to strengthen our
presence in these markets and expand our global reach into key growth regions. Through September 30, 2005, we paid $41.9 million of this aggregate purchase price from cash on hand. The
satellite acquired, formerly known as Europe*Star 1, was renamed PAS-12, and is capable of providing a broad range of enhanced services to European customers for program distribution,
broadcast contribution and enterprise networking. The agreement provides for purchase price installments and performance payment installments contingent on the future performance of the satellite.

The
results of this acquisition have been included in our fixed satellite services segment from the date of acquisition.

18

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The
purchase price allocation for this acquisition has been prepared on a preliminary basis, and reasonable changes are expected as additional information becomes available. The
$60.2 million purchase price represents $73.5 million allocated to assets acquired less $13.3 million allocated to liabilities and costs incurred. Of the assets acquired,
$2.0 million was allocated to intangible assets, of which approximately $1.8 million allocated to orbital slots was determined to have an indefinite life. The remaining tangible assets
acquired include the PAS-12 satellite, non-satellite equipment and a 51% investment in an entity affiliated with Alcatel. The
$13.3 million of liabilities and costs incurred primarily represents $9.0 million of contingent performance incentive obligations.

(12) Commitments and Contingencies

Satellite Incentive Obligations

Satellite contracts typically require that we make progress payments during the period of the satellite's construction and orbital incentive payments (plus
interest) over the orbital life of the satellite. The incentive obligations may be subject to reduction if the satellite fails to meet specific technical operating standards. Certain of our satellite
construction contracts also provide that certain amounts paid by us during the construction phase are subject to refund (with interest) if the satellite fails to meet these technical operating
standards. As of September 30, 2005, we had $110.1 million of liabilities recorded in relation to these satellite incentive obligations.

Satellite Commitments

As of September 30, 2005, we had approximately $184.6 million of expenditures remaining under existing satellite construction contracts and
$83.0 million remaining under existing satellite launch contracts. Satellite launch and in-orbit insurance contracts related to future satellites to be launched are cancelable up to
thirty days prior to the satellite's launch. As of September 30, 2005, we did not have any non-cancelable commitments related to existing launch insurance or in-orbit
insurance contracts for satellites to be launched.

In
April 2004, we committed to construct a new satellite, Galaxy 16, and in February 2005, we entered into an agreement for the construction of Galaxy 18. These satellites,
together with our Galaxy 17 satellite already under construction, will serve as replacements for Galaxy 4R, Galaxy 10R and Galaxy 11. The construction program contemplates the availability of one of
these satellites as an on-ground backup against launch failure or substantial delay of either of the other two satellites. Construction of Galaxy 18 began in 2005 and we plan to launch
this satellite in the second quarter of 2007.

The
manufacturer of Galaxy 16 and Galaxy 18 is in the process of emerging from Chapter 11 bankruptcy. Both the Galaxy 16 and Galaxy 18 construction contracts have been approved by the
bankruptcy court. Our agreements for the construction of Galaxy 16 and Galaxy 18 contain financial covenants applicable to the manufacturer, including a requirement that all payments made or to be
made to the manufacturer be utilized for the construction of these satellites. We also have a security interest in the satellites under construction by this manufacturer. In June 2005, we
entered into launch agreements for these two satellites. Pursuant to these agreements, $65.8 million previously paid for the launch of Galaxy 8-iR will be applied to the launch of
our Galaxy 16 satellite.

On
April 12, 2005, we entered into an agreement for the construction of PAS-11, which will be located at 43 degrees west longitude and will serve as a replacement for
our PAS-6B Ku-band satellite and the C-band portion of our PAS-3R satellite. In July 2005, PanAmSat Corporation signed an agreement for the
launch of this satellite in the first quarter of 2007.

On
August 1, 2005, PanAmSat formed its second 50-50 joint venture with JSAT International, Inc., or JSAT, a leading satellite operator in the
Asia-Pacific region, that will build and launch a Ku-band

19

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satellite
to replace our SBS-6 satellite at 74 degrees west longitude. The joint venture is named Horizons-2. The satellite will support digital video,
high-definition television (HDTV) and IP-based content distribution networks to broadband Internet and satellite news gathering services (SNG) in the United States. This
Horizons-2 satellite will be constructed over the next two years and is expected to be in service by late 2007. The total investment in this joint venture is expected to be approximately
$160 million, of which each of the joint venture partners is required to fund their 50% share beginning in early 2008. PanAmSat's investment in this joint venture is being accounted for using
the equity method. As of September 30, 2005 we have recorded a liability of $79.8 million within our condensed consolidated financial statements in relation to the future funding of this
investment.

On
August 14, 2005, we successfully launched our Galaxy 14 satellite into orbit. This satellite will be co-located with Galaxy 12 at 125 degrees west longitude.

Satellite Insurance

In December 2003, we reached a final settlement of insurance claims on our PAS-1R and Galaxy 11 satellites for payment of
$260.0 million, which related to solar panel anomalies on those satellites. We will continue to own and operate these satellites free and clear of any claims of these insurers. We offset the
proceeds from this settlement against the carrying value of the satellites. In the first quarter of 2004, we received the $260.0 million settlement amount.

In
July 2003, we filed a proof of loss under the insurance policy for our Galaxy 4R satellite after the secondary xenon-ion propulsion system, or XIPS, on this
satellite ceased working. Later in 2003, we settled an insurance claim on this satellite related to the failure of its propulsion system and received $102.6 million from insurers representing
approximately 83% of the insurance coverage on the satellite. In March 2004, we reached an agreement with, and received $26.9 million from, the insurer representing the remaining 17% of
the insurance coverage on this satellite. The settlement with the insurer representing 17% coverage includes a future sharing of revenues actually received from the satellite. We proportionately
offset the proceeds from these settlements against the insured carrying value of the satellite and the net investment in sales-type lease. We are constructing a replacement satellite for
Galaxy 4R, which is scheduled to be launched in 2006, prior to the end of Galaxy 4R's useful life.

As
of September 30, 2005, we had in effect launch and in-orbit insurance policies covering five satellites in the aggregate amount of approximately
$458.7 million. As of such date, these insured satellites had an aggregate net book value and other insurable costs of $596.1 million. We had 19 uninsured satellites in orbit as of
September 30, 2005. In July 2005, the insurance policy on our PAS-9 satellite expired and was not replaced. As a result, PAS-9 is no longer insured. As of
September 30, 2005, PAS-9 had approximately $99 million of net book value and other insurable costs. Our HGS-5 satellite, which had been operating in an inclined
orbit, was de-orbited on September 29, 2005. HGS-5 had a net book value and other insurable costs of $0. Our currently uninsured satellites are: PAS-4, which
is used as a backup satellite; PAS-5 and PAS-7, for which we received insurance proceeds for constructive total losses; Galaxy 1R, Galaxy 3R, and SBS-6, which are
approaching the end of their useful lives; Galaxy 4R, Galaxy 10R, Galaxy 11 and PAS-1R, for which we received insurance proceeds for partial losses; PAS-2, PAS-3R,
PAS-6B, PAS-8, PAS-9, Galaxy 9, and Galaxy 12, for which we determined that insurance was not available on commercially reasonable terms; and HGS-3 and
Leasat, which have an aggregate book value of approximately $0.5 million. Our Galaxy 9 and Galaxy 14 satellites currently serve as in-orbit backups for the C-band
portions of Galaxy 1R, Galaxy 3C, Galaxy 4R, Galaxy 10R, Galaxy 11, Galaxy 12 and Galaxy 13/Horizons 1. The C-band portion of the satellites that are currently covered by
C-band in-orbit backups had an aggregate net book value of approximately $314.6 million as of September 30, 2005.

20

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Of
the insured satellites, as of September 30, 2005, one was covered by policies with substantial exclusions or exceptions to coverage for failures of specific components
identified by the underwriters as at risk for possible failure, or Significant Exclusion Policies. The exclusions reduce the probability of an insurance recovery in the event of a loss on this
satellite. Galaxy 13/ Horizons 1, which was placed in service in January 2004 and is insured by a policy with an exclusion for XIPS related anomalies, continues to have available redundant XIPS
as its primary propulsion system. Certain enhancements have been made to the XIPS on this satellite to make the systems more robust. In addition, Galaxy 13/Horizons 1 has available backup
bi-propellant of approximately 11.3 years as of September 30, 2005.

At
September 30, 2005, the uninsured satellites and the satellites insured by Significant Exclusion Policies had a total net book value and other insurable costs of approximately
$986.7 million. Of this amount, $894.2 million related to uninsured satellites and $92.5 million related to satellites insured by Significant Exclusion Policies.

Upon
the expiration of the insurance policies, there can be no assurance that we will be able to procure new policies on commercially reasonable terms. New policies may only be available
with higher premiums or with substantial exclusions or exceptions to coverage for failures of specific components.

An
uninsured failure of one or more of our satellites could have a material adverse effect on our financial condition and results of operations. In addition, higher premiums on insurance
policies will increase our costs, thereby reducing our income from operations by the amount of such increased premiums.

Operating Leases

We have commitments for operating leases primarily relating to our executive office facilities in Wilton, Connecticut and other locations. These leases contain
escalation provisions that call for increased payments in the event of increases in real estate taxes and operating expenses. As of September 30, 2005, minimum annual rentals of all leases,
exclusive of potential increases in real estate taxes, operating assessments and future sub-lease income aggregated $29.3 million.

Customer and Vendor Obligations

We have contracts with certain of our customers which require us to provide equipment, services and other support during the term of the related contracts with
us. As of September 30, 2005, we had commitments to provide equipment, services and other support under these customer contracts, which aggregated approximately $39.2 million.

In
July 2005, PanAmSat signed an agreement with a customer in which PanAmSat is a subcontractor and the customer is the prime contractor to its end user customer. In exchange for
PanAmSat's engagement as a subcontractor on this project, PanAmSat has agreed to guarantee the prime contractor's $8.8 million performance bond.

We
have long-term contractual obligations with service providers primarily for the operation of certain of our satellites. As of September 30, 2005, we had commitments
under these vendor contracts which aggregated approximately $57.6 million related to the provision of equipment, services and other support.

Change-in-Control Obligations

Certain of our senior executives are party to change-in-control severance agreements which provide for payment of severance and other
benefits in the event of an involuntary termination of the executive's employment (as defined in such agreements) within three years after a change in control. The requisite changes of control
required under these agreements have occurred and these agreements will apply if an involuntary termination of an executive occurs during the periods specified by the

21

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agreements.
Based upon current compensation levels, if all of these executives receive the termination related benefits as specified by their respective agreements, the aggregate cost to us would be
up to $11.1 million (net of tax benefits of $6.4 million).

In
connection with our pending merger with Intelsat, our board of directors approved the adoption of a 2005 Severance Pay Plan on terms similar to our existing 2003 Severance Pay Plan
and authorized a retention pool of up to $10 million for employees. As of the current date, retention bonuses totaling approximately $8.0 million have been designated for employees. The
2005 Severance Pay Plan allows for the payment of enhanced severance to employees who are laid off or who resign for good reason (as defined in such plan) due to, and within 18 months
following, a change in control (as defined in such plan). We are currently unable to estimate the amount which would be payable pursuant to the 2005 Severance Pay Plan in the event of a change in
control.

As
more fully described in Note 8 "Stock Based Compensation", PanAmSat and Holdco granted stock options to certain employees subsequent to the Recapitalization. The options
granted by PanAmSat were assumed by us in October 2004. In addition, certain employees also acquired common stock of Holdco. The vesting of the stock options accelerates in the event of certain
changes in control of Holdco. Pursuant to contractual obligations, we could be obligated to make payments for vested options and to repurchase shares held by certain employees in the event of the
death or qualifying disability of any such employee. In all other circumstances, we have the right, but not the obligation, to call the common stock held by employees and, therefore, no contingent
obligation would exist for us.

Upon
the consummation of our pending merger with Intelsat, based upon the $25 per share merger consideration, assuming the acceleration of all outstanding options and other equity based
arrangements and their conversion into a right to receive cash, each as required by the merger
agreement, and assuming that the holders of such equity based arrangements receive the amounts described in the merger agreement, we will be required to recognize an expense of between
$100 million and $110 million.

We
estimate that the maximum tax costs related to these obligations, including reimbursement of employee excise taxes and lost income tax deductions, would be approximately
$40 million.

Foreign Withholding Taxes

We have outstanding tax claims related to withholding taxes assessed on revenues derived from broadcasters inside and outside of India who broadcast from or into
India. The total amount assessed for all periods from March 31, 1996 through March 31, 2002 is approximately $56.9 million. We are contesting the imposition of such taxes. While
this contest proceeds, we have been required to advance cash and provide a bank guarantee for a total of approximately $49.2 million. As of September 30, 2005, we had paid cash of
approximately $1.2 million related to these assessment years. If unsuccessful in our contest, we could be subject to comparable claims for subsequent years. In connection with the
Recapitalization, The DIRECTV Group, which controlled us prior to the Recapitalization, agreed to indemnify us for these and certain other taxes related to any periods or portions of such periods
ending on or prior to the day of the closing of the Recapitalization in amounts equal to 80% of the first $75.0 million of such taxes and 100% of such taxes in excess of the first
$75.0 million. As a result, our net tax liability related to these periods is capped at $15.0 million.

(13) Certain Relationships and Related Transactions Prior to and as a Result of the Completion of the Recapitalization

Transactions with The DIRECTV Group and its Affiliates

Until the consummation of the Recapitalization on August 20, 2004, The DIRECTV Group and its affiliates were related parties of ours.

22

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In relation to the tax separation agreement we entered into with The DIRECTV Group as part of the Recapitalization, we have recorded an $84.3 million receivable related to foreign
withholding tax claims made against us by the Indian government, the related payments made to date by us on those claims, and for certain other foreign and domestic tax claims against us and tax
payments made by us.

We
provide satellite capacity, telemetry, tracking and control, or TT&C, and other related services and facilities to several subsidiaries of The DIRECTV Group and purchase certain
services and equipment from a subsidiary of The DIRECTV Group. Additionally, for the period prior to the consummation of the Recapitalization, we reimbursed The DIRECTV Group for the allocated costs
of certain jointly incurred expense items, principally relating to administrative and other expenses. Revenues derived from The DIRECTV Group and its affiliates were $31.6 million and
$95.4 million for the three and nine months ended September 30, 2004, respectively, or 15.3% and 15.4% of our total revenues for the respective periods.

In
addition, The DIRECTV Group leases office space to us in Long Beach, California and land for our teleport in Castle Rock, Colorado, and permits the participation by us and our
employees in certain discount programs. Prior to the Recapitalization, The DIRECTV Group provided general liability insurance and certain administrative services to us, including the provision of
certain advisory and audit services. During the three and nine months ended September 30, 2004, we incurred expenses related to such arrangements with The DIRECTV Group of approximately $0.7
and $1.7 million. In addition, during the three and nine months ended September 30, 2004, we purchased services and equipment from the DIRECTV Group of approximately $0.7 million
and $1.6 million, respectively.

Transactions with The News Corporation and its Affiliates (Other than The DIRECTV Group)

Until the consummation of the Recapitalization on August 20, 2004, The News Corporation and its affiliates were related parties of ours.

We
are a party to agreements with The News Corporation and certain of its subsidiaries and affiliates pursuant to which we provide satellite capacity, TT&C and other related services.
Revenues derived from The News Corporation and its affiliates were $24.4 million and $65.4 million for the three and nine months ended September 30, 2004, respectively, or 11.8%
and 10.6% of our total revenues for the respective periods.

Effect of the Recapitalization

As a result of the Recapitalization, effective August 20, 2004, The DIRECTV Group and The News Corporation were no longer related parties of ours and the
Sponsors and their affiliates became related parties of ours.

Transactions with The Sponsors and Their Affiliates

The Sponsors provided management and advisory services to us pursuant to management services agreements executed at the closing of the Recapitalization. The
Sponsors charged us an aggregate management fee of $2.0 million annually for the provision of these services, subject to an annual increase of three percent. In connection with, and effective
upon completion of, our initial public offering on March 22, 2005, each of the Sponsors terminated their respective management services agreements for an aggregate consideration of
$10.0 million. For the period from January 1, 2005 through March 22, 2005, we recorded approximately $10.4 million of expense for these management fees (including the
termination payment). The annual advisory fee did not include, and the Sponsors may receive, additional compensation for providing investment banking or other advisory services provided in connection
with any specific acquisition or divestiture transactions or in the event the Sponsors perform services above and beyond those previously called for by the agreements. For the period August 20,
2004 through September 30, 2004, we accrued $231 thousand of expense for these

23

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management
fees. In addition, during the three and nine months ended September 30, 2005, we reimbursed the Sponsors for $0.1 million and $0.2 million, respectively, for expenses
incurred.

During
2004, we retained Capstone Consulting to provide us with consulting services, primarily to identify and advise on potential opportunities to reduce our costs and identify other
potential opportunities to grow our business. Although neither KKR nor any entity affiliated with KKR owns any of the equity of Capstone, KKR has provided financing to Capstone. We recorded
approximately $0.1 million and $0.6 million of expenses during the three and nine months ended September 30, 2005, respectively, related to Capstone Consulting, all of which was
paid through September 30, 2005.

Certain
members of our board of directors whose services are compensated are principals of or are affiliated with the Sponsors.

We
provide satellite capacity, TT&C and other related services to affiliates of one of the Sponsors. Revenues for these services were $0.5 million and $1.7 million for the
three and nine months ended September 30, 2005, respectively. As of September 30, 2005, we had customer receivables related to these affiliates of approximately $0.2 million.

Included
in our total contracted backlog of $4.54 billion as of September 30, 2005 is approximately $3.6 million of contracted backlog from these affiliates of the
Sponsors. Contracted backlog represents future cash payments expected from customers under all long-term contractual agreements.

During
the three and nine months ended September 30, 2005, we procured $0 million and $0.9 million, respectively, of insurance and insurance-related services from an
affiliate of one of the Sponsors.

(14) Operating Segments

SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information" ("SFAS No. 131") establishes standards for reporting information
about operating segments in annual financial statements of public business enterprises and requires that those enterprises report selected information about operating segments in interim financial
reports issued to shareholders. Operating segments are components of an enterprise about which separate financial information is available and regularly evaluated by the chief operating decision
maker(s) of an enterprise. We have organized our company into two operating segments based upon the types of customers served, services provided and the economic characteristics of each segment. Our
operating segments are:

Fixed
Satellite Services ("FSS"): Through FSS, we lease transponder capacity to customers for various applications, including broadcasting, news gathering, Internet access and
transmission, private voice and data networks, business television, distance learning and Direct-to-Home, or DTH, television and provide TT&C and network services to customers.

Government
Services ("G2"): Through G2, we provide global satellite and related telecommunications services to the federal government, international government entities, and their
contractors.

The
DIRECTV Group and The News Corporation, which are customers of our FSS segment, comprised approximately 15.7% and 12.5% respectively, of our total revenues for the three months ended
September 30, 2005 and approximately 15.8% and 12.4%, respectively, of our total revenues for the nine months ended September 30, 2005.

As
a result of the Recapitalization, we began utilizing Segment EBITDA as a measure of performance for our operating segments beginning in the third quarter of 2004. We evaluate the
performance of our operating segments based on several factors, of which the primary financial measure is segment net income (loss) plus net interest expense, income tax expense (benefit) and
depreciation and amortization, further adjusted to exclude non-recurring items and other non-cash

24

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adjustments
largely outside of the segment operating managers' control ("Segment EBITDA"). Segment EBITDA is presented herein because our chief operating decision maker evaluates and measures each
business unit's performance based on its Segment EBITDA results.

Selected
information for our operating segments is as follows (in thousands):

Three Months Ended
September 30,

Nine Months Ended
September 30,2004

2005

2004

2005Revenues:FSS

$
191,945

$
195,878

$
570,154

$
588,195G2


20,497


19,737


64,918


62,718Eliminations


(5,347
)

(6,497
)

(15,722
)

(19,135
)Total Revenues

$
207,095

$
209,118

$
619,350

$
631,778Depreciation and Amortization Expense:FSS

$
74,011

$
68,564

$
219,878

$
204,914G2


311


297


1,091


877Total Depreciation and Amortization Expense

$
74,322

$
68,861

$
220,969

$
205,791Income (loss) from Operations:FSS

$
(88,909
)
$
105,644

$
(78,640
)
$
247,262G2


2,685


4,430


8,010


10,934Parent





(1,080
)




(2,221
)Total Income (loss) from Operations

$
(86,224
)
$
108,994

$
(70,630
)
$
255,975Segment EBITDA:FSS

$
156,236

$
162,978

$
459,254

$
486,343G2

$
2,996

$
4,798

$
9,101

$
12,288


Capital Expenditures:FSS

$
19,527

$
74,172

$
103,277

$
140,641G2


22


291


22


1,538Total Capital Expenditures

$
19,549

$
74,463

$
103,299

$
142,179


December 31,
2004

September 30,
2005Assets:FSS

$
4,736,428

$
4,840,659G2


39,531


44,967Parent


707,386


1,357,685Eliminations


(711,414
)

(1,373,178
)Total Assets

$
4,771,931

$
4,870,133


25

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The
following table sets forth a reconciliation of Income from operations to Segment EBITDA for our FSS operating segment and our G2 operating segment for the periods indicated (in
thousands):

|                                                                   |  | Three Months Ended September 30, |         | Nine Months Ended September 30, |  
|------------------------------------------------------------------ |  | -------------------------------- | ------- | ------------------------------- | -
|
|FSS Operating Segment:                                             |  |                                  |         |                                 |  
|Reconciliation of income (loss) from operations to Segment EBITDA: |  |                                  |         |                                 |  
|Income (loss) from operations                                      |  | $                                | (88,909 | )                               | $
|Depreciation and amortization                                      |  |                                  | 74,011  |                                 |  
|                                                                   |  |                                  |         |                                 |  
|EBITDA                                                             |  |                                  | (14,898 | )                               |  
|Adjustment of sales-type leases to operating leases(a)             |  |                                  | 6,608   |                                 |  
|Loss on termination of sales-type leases(b)                        |  |                                  |        |                                 |  
|Effect of Galaxy 10R anomaly(c)                                    |  |                                  | 9,090   |                                 |  
|Satellite impairment(d)                                            |  |                                  |        |                                 |  
|Restructuring charges(e)                                           |  |                                  | 2,080   |                                 |  
|Reserves for long-term receivables and sales-type leases(f)        |  |                                  | (3,727  | )                               |  
|Reversal of allowance for customer credits(g)                      |  |                                  | 1,800   |                                 |  
|Transaction-related costs(h)                                       |  |                                  | 154,535 |                                 |  
|(Gain) loss on undesignated interest rate swap(i)                  |  |                                  |        |                                 |  
|Other items(j)                                                     |  |                                  | 748     |                                 |  
|                                                                   |  |                                  |         |                                 |  
|Segment EBITDA                                                     |  | $                                | 156,236 |                                 | $
|                                                                   |  |                                  |         |                                 |  
|G2 Operating Segment:                                              |  |                                  |         |                                 |  
|Reconciliation of income from operations to Segment EBITDA:        |  |                                  |         |                                 |  
|Income from operations                                             |  | $                                | 2,685   |                                 | $
|Depreciation and amortization                                      |  |                                  | 311     |                                 |  
|                                                                   |  |                                  |         |                                 |  
|EBITDA                                                             |  |                                  | 2,996   |                                 |  
|Restructuring charges(e)                                           |  |                                  |        |                                 |  
|                                                                   |  |                                  |         |                                 |  
|Segment EBITDA                                                     |  | $                                | 2,996   |                                 | $
|                                                                   |  |                                  |         |                                 |  

---

26

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(15) Short-Term Investments

For all periods presented herein investments in auction rate certificates have been reclassified from cash and cash equivalents to short-term
investments on the consolidated balance sheet. The

27

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reclassification
was effected because the certificates had stated maturities beyond three months. The amounts of the investments in auction rate certificates as of December 31, 2003 were
$335.2 million and $0 at December 31, 2004 and September 30, 2004 and 2005, respectively. The reclassification resulted in changes in the 2004 consolidated statement of cash flows
within the net sales (purchases) of short-term investments and the cash and cash equivalents balances.

(16) Earnings Per Share

The following table sets forth the computation of net income (loss) per share for the three and nine months ended September 30, 2004 and 2005 (in
thousands, except share data):

|                                  |                                                                        | Three Months Ended
September 30, |             | Nine Months Ended
September 30,
|--------------------------------- | ---------------------------------------------------------------------- | -------------------------------- | ----------- | -------------------------------
|
|Net income (loss)                 |                                                                        | $                                | (76,655     | )                              
|                                  |                                                                        |                                  |             |                                
|                                  | Weighted Average number of common shares outstanding during the period |                                  |             | 271,884,000                    
|                                  | Add: common share equivalents                                          |                                  |             |                               
|                                  |                                                                        |                                  |             |                                
|Total                             |                                                                        |                                  | 271,884,000 |                                
|                                  |                                                                        |                                  |             |                                
|Amounts per basic common share:   |                                                                        |                                  |             |                                
|Net income (loss)                 |                                                                        | $                                | (0.28       | )                              
|                                  |                                                                        |                                  |             |                                
|Amounts per diluted common share: |                                                                        |                                  |             |                                
|Net income (loss)                 |                                                                        | $                                | (0.28       | )                              
|                                  |                                                                        |                                  |             |                                

For
the three and nine months ended September 30, 2004, the weighted average impact of approximately 268,000 and 355,000 stock options respectively, and restricted stock units and
shares related to other deferred compensation arrangements of approximately 669,000 and 960,000, respectively, were not included in the calculation of weighted average shares for diluted earnings per
share because their effects were anti-dilutive.

(17) New Accounting Pronouncements

In May 2005, FASB issued SFAS No. 154 "Accounting Changes and Error Corrections" ("SFAS No. 154"). SFAS No. 154 replaces APB Opinion
No. 20 and FASB Statement No. 3. This Statement provides guidance on the accounting for and reporting of accounting changes and error corrections. It requires retrospective application
as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. SFAS No. 154 carries
forward without change the guidance contained in APB No. 20 for reporting the correction of an error in previously issued financial statements and a change in accounting estimate. SFAS
No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The adoption of SFAS No. 154 will not have a material
impact on our consolidated financial statements.

On
April 15, 2005, the SEC announced the adoption of a new rule that amends the compliance dates for SFAS No. 123R "Share-Based Payment". Under SFAS No. 123R,
registrants would have been required to implement the standard as of the beginning of the first interim or annual period that begins after June 15, 2005. The SEC's new rule requires companies
to implement SFAS No. 123R at the beginning of their first fiscal year beginning on or after June 15, 2005, instead of the first reporting period that begins after June 15, 2005.
This means that our financial statements must comply with SFAS No. 123R beginning with the interim financial statements for the first quarter of 2006. The SEC's

28

---



new
rule does not change the accounting required by SFAS No. 123R; it changes only the dates for compliance with the standard. The adoption of SFAS No. 123R will not have a material
impact on our consolidated financial statements.

On
March 29, 2005, the SEC released Staff Accounting Bulletin No. 107 ("SAB No. 107"). SAB No. 107 provides an interpretation of SFAS No. 123R and its
interaction with certain SEC rules and regulations and provides the SEC's views regarding the valuation of share-based payment arrangements for public companies. The SAB provides guidance with regard
to share-based payment transactions with non-employees, the transition from nonpublic to public entity status, valuation methods (including assumptions such as expected volatility and
expected term), the accounting for certain redeemable financial instruments issued under share-based payment arrangements, the classification of compensation expense, non-GAAP financial
measures, first-time adoption of SFAS No. 123R, the modification of employee share options prior to adoption of SFAS No. 123R and disclosures in Management's Discussion and
Analysis subsequent to the adoption of SFAS No. 123R. We have already adopted the fair value recognition provision of SFAS No. 123, effective January 1, 2003, on a prospective
basis. Therefore, we have determined that the adoption of SAB 107 will not have an impact on our consolidated financial statements.

(18) Subsequent Events

On October 13, 2005, we successfully launched our Galaxy 15 satellite into orbit. This satellite will be co-located with Galaxy 1R at 133
degrees west longitude.

29

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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                   RESULTS OF OPERATIONS.

The following management's discussion and analysis should be read in conjunction with our management's discussion and analysis included in our registration
statement on Form S-1 (File No. 333-121463) filed with the SEC, as such registration statement became effective on March 16, 2005, and all of our other
filings filed with the SEC from March 16, 2005 through the current date pursuant to the Securities Exchange Act of 1934.

Management Overview

On March 22, 2005, we consummated an initial public offering of 50 million shares of our common stock and used the net proceeds to make an equity
contribution to PanAmSat of approximately $658.4 million and to pay a $200 million dividend to our then pre-existing stockholders. PanAmSat used this equity contribution to
repay approximately $265.0 million of the borrowings under its Term Loan A Facility and on April 1, 2005, it redeemed $353.5 million, or 35%, of its 9% senior notes and paid a
redemption premium of $31.8 million to holders of those notes.

Our
board of directors adopted a dividend policy that became effective upon the closing of our initial public offering which reflects an intention to distribute a substantial portion of
the cash generated by our business in excess of operating expenses and working capital requirements, interest and principal payments on our indebtedness and capital expenditures as regular quarterly
dividends to our stockholders. Consistent with this dividend policy, on April 15, 2005, we paid a partial quarter dividend in the aggregate amount of approximately $5.28 million, on
July 15, 2005, we paid a full quarter dividend in the aggregate amount of approximately $47.5 million and on October 14, 2005, we paid a full quarter dividend in the aggregate
amount of approximately $47.5 million.

On
August 31, 2005, PanAmSat acquired multiple European orbital slots, as well as a satellite with European, Middle Eastern, African and Asian coverage from Alcatel, a French
communications company, for a purchase price of approximately $60.2 million plus liabilities and costs incurred in relation to the acquisition of approximately $13.3 million, including
$9.0 million of contingent performance payments due to Alcatel in addition to the purchase price. This acquisition was accomplished in order to strengthen our presence in these markets and
expand our global reach into key growth regions. Through September 30, 2005, we paid $41.9 million of this aggregate purchase price
from cash on hand. The satellite acquired, formerly known as Europe*Star 1, was renamed PAS-12, and is capable of providing a broad range of enhanced services to European customers for
program distribution, broadcast contribution and enterprise networking. The agreement provides for purchase price installments and performance payment installments contingent on the future performance
of the satellite.

The
results of this acquisition have been included in our fixed satellite services segment from the date of acquisition.

On
August 1, 2005, PanAmSat formed its second 50-50 joint venture with JSAT, a leading satellite operator in the Asia-Pacific region, that will build and
launch a Ku-band satellite to replace our SBS-6 satellite at 74 degrees west longitude. The joint venture is named Horizons-2. The satellite will support digital
video, high-definition television (HDTV) and IP-based content distribution networks to broadband Internet and satellite news gathering services (SNG) in the United States. This
Horizons-2 satellite will be constructed over the next two years and is expected to be in service by late 2007. The total investment in this joint venture is expected to be approximately
$160 million, of which each of the joint venture partners is required to fund their 50% share beginning in early 2008. PanAmSat's investment in this joint venture is being accounted for using
the equity method. As of September 30, 2005 we have recorded a liability of $79.8 million within our condensed consolidated financial statements in relation to the future funding of this
investment.

30

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On
August 29, 2005, we and Intelsat, Ltd. announced that the two companies signed a definitive merger agreement under which Intelsat will acquire us for $25 per share in
cash, or $3.2 billion. Under the agreement, which was approved unanimously by the boards of directors of both companies, Intelsat will acquire all of our outstanding common shares. Also in
connection with the merger, our board of directors approved the adoption of a severance plan, on terms similar to our existing severance plan, and authorized a retention pool of up to
$10 million for non-senior management employees.

On
October 26, 2005, our shareholders approved and adopted the merger agreement. Consummation of the merger remains subject to various conditions, including satisfaction of the
HSR Act, waiting period, receipt of Federal Communications Commission approvals, receipt of financing and other conditions. Also on October 26, 2005, we received a request from the DOJ for
additional information and documentary materials in connection with the merger. The effect of this request is to extend the waiting period imposed by the HSR Act until 30 days after the parties
have substantially complied with the request, unless that period is terminated earlier by the DOJ or extended voluntarily. If the conditions to the merger are satisfied or waived (to the extent
permitted by applicable law), we expect to consummate the merger in the second or third quarter of 2006.

Stock Split and Reverse Stock Split

In connection with the Recapitalization, on August 20, 2004, PanAmSat's board of directors effected an approximately 4.37 for 1 stock split of PanAmSat's
common stock. In addition, on March 1, 2005, we amended and restated our certificate of incorporation to effect a 1 for approximately 1.52 reverse stock split of our common stock. Unless
otherwise indicated, all share and per share amounts, as well as the par value amounts and additional paid-in-capital amounts related to our shares, contained in this quarterly
report have been adjusted to give retroactive effect to the stock split and the reverse stock split.

Results of OperationsThree Months Ended September 30, 2004 and 2005

|                                    |                                                                     | Three Months Ended
September 30,   |         |          |         |        |        
|----------------------------------- | ------------------------------------------------------------------- | ---------------------------------- | ------- | -------- | ------- | ------ | -------
|
|
|
|Revenues                            |                                                                     |                                    |         |          |         |        |        
|                                    | Operating leases, satellite services and other                      |                                    | $       | 203,268  |         | $      | 205,637
|                                    | Outright sales and sales-type leases                                |                                    |         | 3,827    |         |        | 3,481  
|                                    |                                                                     |                                    |         |          |         |        |        
|                                    |                                                                     | Total revenues                     |         |          | 207,095 |        |        
|                                    |                                                                     |                                    |         |          |         |        |        
|Costs and expenses                  |                                                                     |                                    |         |          |         |        |        
|                                    | Cost of outright sales and sales-type leases                        |                                    |         | 2,224    |         |        |       
|                                    | Depreciation and amortization expense                               |                                    |         | 74,322   |         |        | 68,861 
|                                    | Direct operating costs (exclusive of depreciation and amortization) |                                    |         | 38,649   |         |        | 30,973 
|                                    | Selling, general and administrative expenses                        |                                    |         | 21,509   |         |        | 18,413 
|                                    | Gain on undesignated interest rate swap                             |                                    |         |         |         |        | (18,332
|                                    | Facilities restructuring and severance costs                        |                                    |         | 2,080    |         |        | 209    
|                                    | Transaction-related costs                                           |                                    |         | 154,535  |         |        |       
|                                    |                                                                     |                                    |         |          |         |        |        
|                                    |                                                                     | Total operating costs and expenses |         |          | 293,319 |        |        
|                                    |                                                                     |                                    |         |          |         |        |        
|                                    | Income (loss) from operations                                       |                                    |         | (86,224  | )       |        | 108,994
|                                    | Interest expensenet                                                |                                    |         | 57,794   |         |        | 55,311 
|                                    |                                                                     |                                    |         |          |         |        |        
|                                    | Income (loss) before income taxes                                   |                                    |         | (144,018 | )       |        | 53,683 
|                                    | Income tax benefit                                                  |                                    |         | (67,363  | )       |        | (543   
|                                    |                                                                     |                                    |         |          |         |        |        
|Net income (loss)                   |                                                                     | $                                  | (76,655 | )        | $       | 54,226 |        
|                                    |                                                                     |                                    |         |          |         |        |        
|Net income (loss) per sharebasic   |                                                                     | $                                  | (0.28   | )        | $       | 0.44   |        
|                                    |                                                                     |                                    |         |          |         |        |        
|Net income (loss) per sharediluted |                                                                     | $                                  | (0.28   | )        | $       | 0.43   |        
|                                    |                                                                     |                                    |         |          |         |        |        

31

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Certain prior period FSS segment revenue amounts have been reclassified to different revenue service classifications to conform with the current
period's presentation. In-orbit back-up service revenues and TT&C services revenues, which were classified within other services revenues during the third quarter of 2004, have
been reclassified to video services revenues and network services revenues based upon the nature of the related customers' services. Additionally, consulting/technical services revenues, which were
also classified within other services revenues during the third quarter of 2004, have been reclassified to its own service classification. See explanations of changes in FSS segment revenue
classifications within "FSS SegmentFSS Revenue By Service-Type" below.

Total RevenuesThe increase in total revenues was primarily attributable to higher video services revenues of
$7.6 million, partially offset by a $3.8 million reduction in network services revenues, lower consulting/technical services revenues of $1.0 million and lower government services
revenues of $0.8 million. (See "Operating Segments" below).

Cost of Outright Sales and Sales-Type LeasesThe decrease in cost of sales-type leases from
September 30, 2004 primarily relates to an adjustment of certain costs for outright sales and sales-type leases recorded during the third quarter 2004 related to the XIPS anomaly on
Galaxy 10R. During the third quarter of 2004, an increase to cost of sales-type leases of approximately $5.9 million was partially offset by the reversal of approximately
$3.7 million of in-orbit insurance liabilities related to sales-type leases that are no longer insured.

Depreciation and Amortization ExpenseThe decrease in depreciation and amortization expense is due primarily to the following:



These
decreases were partially offset by higher depreciation of $6.9 million resulting from reduced end of life estimates for our Galaxy 11, PAS-1R and
PAS-9 satellites, and additional depreciation resulting from the acquisition of PAS-12 as part of the Europe*Star acquisition.

Direct Operating Costs (exclusive of depreciation and amortization)The decrease in total direct operating costs, as compared
to the third quarter of 2004, is due primarily to lower G2 direct operating costs of $3.7 million resulting from a shift in the composition of G2 revenues to services/products with higher
margins during the third quarter of 2005 as compared to the same period in 2004, lower engineering and operational costs of $1.9 million resulting from reduced headcount/operational
efficiencies obtained since the third quarter of 2004, and lower in-orbit insurance costs of $1.8 million as a result of reduced or expired satellite insurance policies since the
second quarter of 2004. (See "Operating Segments" below).

Selling, General & Administrative ExpensesThe decrease in selling, general and administrative expenses was primarily
due to lower bad-debt expense of $1.7 million.

Gain on Undesignated Interest Rate SwapAs of September 30, 2005, PanAmSat completed its effectiveness test in relation
to its $1.25 billion interest rate swap agreement. As a result of this test, it was determined that the interest rate swap agreement was no longer an effective hedge, and therefore

32

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did
not qualify for hedge accounting treatment under SFAS No.133. As a result, the interest rate swap was undesignated and therefore the reduction in the fair value of the interest rate swap
obligation of approximately $18.3 million was recorded as a gain on undesignated interest rate swap in our consolidated statement of operations for the three months ended September 30,
2005. (See "Interest Rate Swap Agreements" below).

Facilities Restructuring and Severance CostsFacilities restructuring and severance costs decreased $1.9 million during
the three months ended September 30, 2005, as compared to the same period in 2004. This decrease was primarily due to a non-cash charge of $2.3 million that was recorded
during the third quarter of 2004 as a result of a reduction in future anticipated sub-lease income related to one of our idle facilities. (See "Liquidity and Capital
ResourcesFacilities Restructuring and Severance Costs" below).

Transaction-related CostsThe decrease in transaction-related costs is due to costs incurred during the third quarter 2004 in
relation to the Recapitalization. There were no such costs recorded during the three months ended September 30, 2005.

Income From OperationsThe increase in income from operations of $195.2 million during the three months ended
September 30, 2005, as compared to the same period last year, was primarily due to the $154.5 million of the transaction related costs recorded during the third quarter of 2004, the
$18.3 million gain on undesignated interest rate swap recorded during the third quarter of 2005 as well as an increase of $22.4 million resulting from the other items described above.

Interest ExpenseNetInterest expensenet consisted of the following (in thousands):

Three Months Ended
September 30,Dollar
Change2004

2005Gross interest expense

$
61,545

$
63,408

$
1,863Less: Interest income


1,702


791


(911
)Less: Capitalized interest


2,049


7,306


5,257Total interest expense, net

$
57,794

$
55,311

$
(2,483
)


Interest
expensenet decreased primarily as a result of:



These
decreases were partially offset by an increase of approximately $17.0 million of additional interest expense due to additional incremental indebtedness at higher average
interest rates after the Recapitalization, partially offset by $15.1 million of debt issuance costs write-offs recorded during the third quarter of 2004 in relation to the
Recapitalization.

Income Tax BenefitThe decrease in 2005 income tax benefit from 2004 is due primarily to the change in the effective income
tax rates in effect for the quarter and the one-time income tax benefit on the $154.5 million of transaction costs incurred during the third quarter of 2004. After excluding the
impact of this discrete item, all other income and expense for the three months ended September 30, 2005 were tax effected at an effective rate of (1.01) percent compared to an effective tax
rate as of September 30, 2004 of (104.19) percent. The effective tax rate in 2005 reflects the effects of the undesignated interest rate swaps recorded during the third quarter of 2005,
combined with the effect of the extraterritorial income exclusion benefit recorded in both years.

33

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Results of OperationsNine Months Ended September 30, 2004 and 2005

|                                    |                                                                     | Nine Months Ended
September 30,    |       |          |         |      |        
|----------------------------------- | ------------------------------------------------------------------- | ---------------------------------- | ----- | -------- | ------- | ---- | -------
|
|
|
|Revenues                            |                                                                     |                                    |       |          |         |      |        
|                                    | Operating leases, satellite services and other                      |                                    | $     | 607,165  |         | $    | 621,183
|                                    | Outright sales and sales-type leases                                |                                    |       | 12,185   |         |      | 10,595 
|                                    |                                                                     |                                    |       |          |         |      |        
|                                    |                                                                     | Total revenues                     |       |          | 619,350 |      |        
|                                    |                                                                     |                                    |       |          |         |      |        
|Costs and expenses                  |                                                                     |                                    |       |          |         |      |        
|                                    | Cost of outright sales and sales-type leases                        |                                    |       | 2,224    |         |      | (4,303 
|                                    | Depreciation and amortization expense                               |                                    |       | 220,969  |         |      | 205,791
|                                    | Direct operating costs (exclusive of depreciation and amortization) |                                    |       | 118,484  |         |      | 99,811 
|                                    | Selling, general and administrative expenses                        |                                    |       | 88,814   |         |      | 57,474 
|                                    | Loss on undesignated interest rate swap                             |                                    |       |         |         |      | 305    
|                                    | Sponsor management fees                                             |                                    |       |         |         |      | 10,444 
|                                    | Loss on termination of sales-type leases                            |                                    |       |         |         |      | 2,307  
|                                    | Transaction-related costs                                           |                                    |       | 155,035  |         |      |       
|                                    | Facilities restructuring and severance costs                        |                                    |       | 4,508    |         |      | 3,974  
|                                    | Satellite impairment loss                                           |                                    |       | 99,946   |         |      |       
|                                    |                                                                     |                                    |       |          |         |      |        
|                                    |                                                                     | Total operating costs and expenses |       |          | 689,980 |      |        
|                                    |                                                                     |                                    |       |          |         |      |        
|                                    | Income (loss) from operations                                       |                                    |       | (70,630  | )       |      | 255,975
|                                    | Interest expensenet                                                |                                    |       | 122,503  |         |      | 232,463
|                                    |                                                                     |                                    |       |          |         |      |        
|                                    | Income (loss) before income taxes                                   |                                    |       | (193,133 | )       |      | 23,512 
|                                    | Income tax expense (benefit)                                        |                                    |       | (95,215  | )       |      | 359    
|                                    |                                                                     |                                    |       |          |         |      |        
|                                    | Net income (loss)                                                   |                                    | $     | (97,918  | )       | $    | 23,153 
|                                    |                                                                     |                                    |       |          |         |      |        
|Net income (loss) per sharebasic   |                                                                     | $                                  | (0.26 | )        | $       | 0.21 |        
|                                    |                                                                     |                                    |       |          |         |      |        
|Net income (loss) per sharediluted |                                                                     | $                                  | (0.26 | )        | $       | 0.21 |        
|                                    |                                                                     |                                    |       |          |         |      |        

Certain prior period FSS segment revenue amounts have been reclassified to different revenue service classifications to conform with the current
period's presentation. In-orbit back-up service revenues and TT&C services revenues, which were classified within other services revenues during the first nine months of 2004,
have been reclassified to video services revenues and network services revenues based upon the nature of the related customers' services. Additionally, consulting/technical services revenues, which
were also classified within other services revenues during the first nine months of 2004, have been reclassified to its own service classification. See explanations of changes in FSS segment revenue
classifications within "FSS SegmentFSS Revenue By Service-Type" below.

Total RevenuesThe increase in total revenues was primarily attributable to higher video services revenues of
$29.2 million and higher consulting/technical services revenues of $0.8 million, partially offset by an $15.3 million reduction in network services revenues and a reduction in
government services revenues of $2.2 million, as compared to 2004. (See "Operating Segments" below).

Cost of Outright Sales and Sales-Type LeasesThe decrease in cost of sales-type leases during the nine
months ended September 30, 2005 was due to the reversal of approximately $4.3 million of in-orbit insurance liabilities, representing previously recorded expenses for
sales-type leases on our Galaxy 4R and Galaxy 10R satellites that are no longer insured. These insurance policies expired during the nine months ended September 30, 2005, were not
replaced and, as a result, these satellites and their related assets are no longer insured. The increase in cost of sales-type leases during the nine months ended September 30, 2004
primarily relates to an adjustment of certain costs for outright sales and sales-type leases recorded during the third quarter 2004 related to the XIPS anomaly on our Galaxy 10R satellite.
During the third quarter of 2004, an increase to cost of sales-type leases of approximately $5.9 million was partially offset by the reversal of approximately $3.7 million of
in-orbit insurance liabilities related to sales-type leases that are no longer insured.

34

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Depreciation and Amortization ExpenseThe decrease in depreciation and amortization is due primarily to the following:



These
decreases were partially offset by increased depreciation of $19.2 million resulting from reduced end of life estimates for Galaxy 11, PAS-1R and
PAS-9 satellites.

Direct Operating Costs (exclusive of depreciation and amortization)The decrease in total direct operating costs, as compared
to the nine months ended September 30, 2004, is due primarily to lower in-orbit insurance costs of $5.0 million as a result of reduced or expired satellite insurance policies
since January 2004, reduced engineering and operations costs of approximately $5.5 million resulting from reduced headcount/operational efficiencies obtained since January 2004
and a decrease in G2 direct operating costs of approximately $8.7 million as compared to the nine months ended September 30, 2004. The decrease in G2 operating costs was due primarily to
a shift in the composition of G2 revenues to services/products with higher margins during the nine months ended September 30, 2005, as compared to the same period in 2004. (See "Operating
Segments" below).

Selling, General & Administrative ExpensesThe decrease in selling, general and administrative expenses was primarily
due to $32.1 million of bad debt expense recorded during the nine months ended September 30, 2004 as compared to the same period in 2005. In July of 2004, we terminated our transponder
lease agreements with a customer due to non-payment of the customer's obligations to us through June 30, 2004. As a result, in the second quarter 2004 we recorded a
pre-tax charge of approximately $29.6 million related to the current and long-term receivable balances due from this customer, which was recorded within our provision
for uncollectible receivables.

Loss on Undesignated Interest Rate SwapOn March 14, 2005, PanAmSat entered into a five year interest rate swap
agreement to hedge interest expense on a notional amount of $1.25 billion. The notional amount will amortize down to $625 million from March 14, 2008 until expiration on
March 14, 2010. From March 14, 2005 through May 24, 2005, the interest rate swap was undesignated and changes in its fair value of approximately $18.6 million through
May 24, 2005 were recorded within operating costs and expenses in our consolidated statement of operations. Between May 25, 2005 and June 30, 2005, the interest rate swap was
designated as a cash flow hedge and deemed effective, and therefore qualified for hedge accounting treatment under SFAS No. 133. As of September 30, 2005, we completed our effectiveness
assessment in relation to this swap agreement. As a result of this test, it was determined that the interest rate swap agreement was no longer an effective hedge, and therefore, did not qualify for
hedge accounting treatment under SFAS No.133. As a result, the interest rate swap was undesignated and therefore the reduction in the fair value of the interest rate swap obligation of approximately
$18.3 million was recorded as a gain on undesignated interest rate swap in our consolidated statement of operations for the three months ended September 30, 2005. The net loss on
undesignated interest rate swap for the nine months ended September 30, 2005 was $0.3 million. (See "Interest Rate Swap Agreements" below).

35

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Sponsor Management FeesThe Sponsors provided management and advisory services to us pursuant to management services
agreements executed at the closing of the Recapitalization in August 2004. The Sponsors charged us an aggregate management fee of $2.0 million annually for the provision of these
services, subject to an annual increase of three percent. In connection with, and effective upon completion of, our initial public offering on March 22, 2005, each of the Sponsors terminated
their respective management services agreements with us for an aggregate consideration of $10.0 million. During the nine months ended September 30, 2005, we recorded approximately
$10.4 million of expense for these management fees, including the termination payment.

Loss on Termination of Sales-Type LeasesIn the first quarter of 2005 we recorded a loss of $2.3 million in
relation to the amendment of a customer's sales-type lease agreement, which resulted in a new operating lease agreement for that customer. As a result of this amendment, during the first
quarter of 2005, we wrote off the remaining net investment in sales-type lease balance of $2.3 million related to this agreement.

Facilities Restructuring and Severance CostsFacilities restructuring and severance costs were $4.5 million and
$4.0 million for the nine months ended September 30, 2004 and 2005, respectively. The decrease in these costs during the first nine months of 2005 was primarily due to the following:



(See
"Liquidity and Capital ResourcesFacilities Restructuring and Severance Costs" below).

Transaction-related CostsThe decrease in transaction-related costs is due to costs incurred during the third quarter of 2004
in relation to the Recapitalization. There were no such costs recorded during the nine months ended September 30, 2005.

Satellite Impairment LossIn the first quarter of 2004, we recorded a non-cash charge of $99.9 million in
relation to the impairment and subsequent de-orbiting of our PAS-6 satellite. This resulted in an approximate $63.3 million non-cash charge to net income
after taxes during this period. PAS-6 had been previously replaced and was being used as a backup for another satellite prior to de-orbiting.

Income from OperationsThe increase in income from operations was primarily due to the non-recurrence of certain expenses,
including the $155.0 million of transaction related costs recorded during the third quarter of 2004, the $99.9 million satellite impairment loss recorded during the first quarter of
2004, the $29.6 million charge recorded during the second quarter of 2004 described above and the other changes in revenues and operating expenses discussed above, including
$10.4 million of Sponsor management fees recorded during the first quarter of 2005.

36

---



Interest ExpenseNetInterest expensenet consisted of the following (in thousands):

Nine Months Ended
September 30,Dollar
Change2004

2005Gross interest expense

$
133,542

$
252,815

$
119,273Less: Interest income


6,789


2,093


(4,696
)Less: Capitalized interest


4,250


18,259


14,009Total interest expense, net

$
122,503

$
232,463

$
109,960


Interest
expensenet increased primarily as a result of:



These
increases were partially offset by higher capitalized interest expense of $14.0 million during the first nine months of 2005 as a result of higher satellite construction in
progress balances and higher interest rates, as compared to the first nine months of 2004.

Income Tax Expense (Benefit)The increase in income tax expense during the nine months ended September 30, 2005, as
compared to the same period in 2004, is primarily due to the following discrete items impacting the 2004 income tax benefit (i) the $99.9 million PAS-6 satellite impairment
loss recorded during the first quarter of 2004 and (ii) the $155.0 million of transaction costs incurred during the second and third quarters of 2004. The impact of these discrete items
was partially offset by the 2005 tax benefit related to the $10 million sponsor management agreement termination fee.

After
excluding the impact of these discrete items, all other income and expense for the first nine months of 2005 were tax effected at an effective rate of 9.56 percent compared
to an effective tax rate as of September 30, 2004 of (3.47) percent. The effective tax rate in 2005 reflects the lower earnings before taxes in 2005 that are attributable primarily to higher
interest costs in 2005 combined with the effect of the extraterritorial income exclusion benefit recorded in both years.

37

---



Operating Segments:

Selected segment data

|                                    |  | Three Months Ended
September 30, |         | Nine Months Ended
September 30, |  
|----------------------------------- |  | -------------------------------- | ------- | ------------------------------- | -
|
|
|Revenues:                           |  |                                  |         |                                 |  
|FSS                                 |  | $                                | 191,945 |                                 | $
|G2                                  |  |                                  | 20,497  |                                 |  
|Eliminations                        |  |                                  | (5,347  | )                               |  
|                                    |  |                                  |         |                                 |  
|Total revenues                      |  | $                                | 207,095 |                                 | $
|                                    |  |                                  |         |                                 |  
|Income (loss) from operations:      |  |                                  |         |                                 |  
|FSS                                 |  | $                                | (88,909 | )                               | $
|G2                                  |  |                                  | 2,685   |                                 |  
|Parent                              |  |                                  |        |                                 |  
|                                    |  |                                  |         |                                 |  
|Total income (loss) from operations |  | $                                | (86,224 | )                               | $
|                                    |  |                                  |         |                                 |  
|Segment EBITDA:                     |  |                                  |         |                                 |  
|FSS                                 |  | $                                | 156,236 |                                 | $
|                                    |  |                                  |         |                                 |  
|G2                                  |  | $                                | 2,996   |                                 | $
|                                    |  |                                  |         |                                 |  

As
a result of the Recapitalization, we began utilizing Segment EBITDA (as defined above) as a measure of performance for our operating segments during the third quarter of 2004. We
evaluate the
performance of our operating segments based on several factors, of which the primary financial measure is Segment EBITDA. Segment EBITDA is presented because our chief operating decision maker
evaluates and measures each business unit's performance based on its Segment EBITDA results. See Note 14 "Operating Segments" to our condensed consolidated financial statements appearing
elsewhere in this quarterly report for a reconciliation of income (loss) from operations to Segment EBITDA for our FSS operating segment and our G2 operating segment.

Our
operations are comprised of the following two segments:

Fixed Satellite ServicesThrough FSS, we lease transponder capacity to customers for various applications, including
broadcasting, news gathering, Internet access and transmission, private voice and data networks, business television, distance learning and DTH and provide TT&C and network services to customers.

Government ServicesThrough G2, we provide global satellite and related telecommunications services to the U.S. government,
international government entities, and their contractors.

38

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FSS Segment

FSS Revenue by Service-Type

|                              |  | Three Months Ended
September 30, |         | Nine Months Ended
September 30,
|----------------------------- |  | -------------------------------- | ------- | -------------------------------
|
|
|FSS Revenues:                 |  |                                  |         |                                
|Video Services                |  | $                                | 126,246 |                                
|Network Services              |  |                                  | 54,658  |                                
|Government Services           |  |                                  | 5,347   |                                
|Consulting/Technical Services |  |                                  | 5,694   |                                
|                              |  |                                  |         |                                
|Total FSS revenues            |  | $                                | 191,945 |                                
|                              |  |                                  |         |                                

Three Months Ended September 30, 2004 and 2005:

Revenues.The $3.9 million increase in FSS revenues for the three months ended September 30, 2005 was primarily
attributable to higher video services revenues of $7.6 million and higher government services revenues of $1.2 million, offset partially by a $3.8 million reduction in network
services revenues as follows:

Video Services.    The increase in video services revenues was primarily due to higher program distribution services revenues of
approximately $8.4 million. This increase in program distribution services revenues was due primarily to new customer arrangements on our Galaxy 12 satellite and the impact of the contractual
arrangements entered into with affiliates of The DIRECTV Group in connection with the Recapitalization as compared to the same period in 2004.

Network Services.    The decrease in network services revenues was primarily attributable to the expiration of a lease
associated with a non-core satellite that was used by a network services customer during the nine months ended September 30, 2004. This lease expiration resulted in a
$2.9 million reduction in network services revenues during the third quarter of 2005, as compared to the third quarter of 2004.

Government Services.    The increase in government services revenues as compared to the third quarter of 2004 represents an
increase in satellite capacity leased to our G2 segment by our FSS segment. This revenue eliminates in consolidation.

Income from Operations.The increase in income from operations of $194.6 million was primarily due to the
non-recurrence of $154.5 million of the transaction related costs recorded during the third quarter of 2004, the $18.3 million gain on undesignated interest rate swap recorded during the
third quarter of 2005, lower depreciation and amortization of $5.4 million, lower selling, general and administrative expenses of $4.2 million, lower direct operating costs of
$3.9 million, increased revenues of $3.9 million, lower costs of sales and sales-type leases of $2.2 million and lower facilities structuring and severance costs of
$1.9 million.

Segment EBITDA.The increase in FSS Segment EBITDA of $6.7 million for the three months ended September 30,
2005 is due to the increased FSS revenues of $3.9 million and lower operating costs and expenses of $2.8 million.

39

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Nine Months Ended September 30, 2004 and 2005:

Revenues.The $18.0 million increase in FSS revenues for the nine months ended September 30, 2005 was primarily
attributable to higher video services revenues of $29.1million, and higher government services revenues of $3.4 million, offset partially by a $15.3 million reduction in network services
revenues as follows:

Video
Services. The increase in video services revenues was primarily due to higher program distribution and DTH services revenues of approximately $26.4 million and higher
occasional use services revenues of approximately $2.1 million. This increase in program distribution and DTH services revenues was due primarily to new customer arrangements on our Galaxy 12
satellite and the impact of the contractual arrangements entered into with affiliates of The DIRECTV Group in connection with the Recapitalization, offset partially by reduced revenue as a result of
an international DTH customer termination that occurred during the second quarter of 2004. The increase in occasional use services revenues is due primarily to multi-year minimum
commitment agreements entered into with video resellers during the nine months ended September 30, 2005, as well as various special events which occurred during the nine months ended
September 30, 2005.

Network
Services. The decrease in network services revenues was primarily attributable to the expiration of a lease associated with a non-core satellite that was used by a
network services customer during nine months ended September 30, 2004. This lease expiration resulted in a $10.1 million reduction in network services revenues during the nine months
ended September 30, 2005, as compared to the nine months ended September 30, 2004. The remaining $5.2 million decrease in network services revenues is primarily due to customer
contract expirations and customer credit related issues.

Government
Services. The increase in government services revenues as compared to the nine months ended September 30, 2004 represents an increase in satellite capacity leased to
our G2 segment by our FSS segment. This revenue eliminates in consolidation.

Income from Operations.The $325.9 million increase in income from operations for the nine months ended
September 30, 2005 was primarily due to the non-recurrence of certain costs including
$155.0 million of the transaction related costs recorded during the third quarter of 2004, the $99.9 million satellite impairment loss recorded during the first quarter of 2004, the
$29.6 million charge recorded during the second quarter of 2004 described above, the increase in FSS revenues of $18.0 million described above and a decrease in depreciation and
amortization expense of approximately $15.0 million, which resulted primarily from satellites that were fully depreciated or de-orbited, lower direct operating costs of
$9.9 million, lower costs of sales and sales-type lease expense of $6.5 million, lower selling general and administrative expenses of $4.0 million and lower facilities
restructuring and severance costs of $1.0 million. These increases were partially offset by the $10.4 million of Sponsor management fees recorded during the first quarter of 2005.

Segment EBITDA.The increase in FSS Segment EBITDA of $27.1 million for the nine months ended September 30,
2005 is due to the increased FSS revenues of $18.0 million and lower operating costs and expenses of $9.1 million.

G2 Segment

Revenue.G2 segment revenues decreased by $0.8 million for the three months ended September 30, 2005, as
compared to the same period in 2004. Reflected in this decrease was a change in the mix of revenues between these two periods. Revenues related to the construction of an L-Band payload on
Galaxy 15 decreased $0.8 million due to the timing of completion of certain milestones on this construction project, equipment sales decreased by $2.6 million, and the lease of
non-PanAmSat FSS provided satellite capacity decreased $0.4 million. These decreases in G2 revenue were partially

40

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offset
by increases in Managed Network Services of $1.3 million and increases in revenues related to the lease of PanAmSat FSS provided satellite capacity of $1.8 million.

G2
segment revenues decreased $2.2 million for the nine months ended September 30, 2005, as compared to the same period in 2004. Reflected in this decrease was a
significant change in the composition of revenues. Revenue related to the construction of an L-Band payload on Galaxy 15 decreased $5.7 million, the lease of
non-PanAmSat FSS provided satellite capacity decreased $3.5 and the sale of equipment and other non-satellite products decreased $3.8 million. This decrease was
partially offset by an increase in revenues related to managed network services of $4.5 million and an increase in revenues related to the lease of PanAmSat FSS provided satellite capacity of
$6.3 million.

Income from Operations and Segment EBITDA.Income from operations increased by $1.7 million and Segment EBITDA
increased by $1.8 million for the three months ended September 30, 2005, as compared to the same period in 2004. These changes were primarily due to a shift in revenue, as described
above. The focus on higher margin products and services resulted in these increases.

Income
from operations and segment EBITDA increased by $2.9 million and $3.2 million, respectively, for the nine months ended September 30, 2005, as compared to the
same period in 2004. These increases were primarily due to the shift in the composition of revenue as described above. The focus on higher margin products and services resulted in these increases.
Restructuring charges of $0.5 million were included in income from operations for the nine months ended September 30, 2005. These charges were excluded from segment EBITDA for that same
period.

Contracted backlog

Contracted backlog represents the actual dollar amount (without discounting to present value) of the expected future cash payments to be received from customers
under all long-term contractual agreements, including operating leases, sales-type leases and related service agreements, which may extend to the end of the life of the
satellite or beyond to a replacement satellite. Contracted backlog is attributable both to satellites currently in orbit and those planned for future launch. Our contracted backlog for future services
as of June 30, 2005 and September 30, 2005 was $4.68 billion and $4.54 billion, respectively. The change in contracted backlog of approximately $139 million was the
result of customer contract activity during the third quarter of 2005 (approximately $209 million of customer billings during the three months partially offset by net new contracted backlog of
approximately $70 million as a result of the execution of customer contracts). Our contracted backlog as of September 30, 2005 also included approximately $1.45 billion relating
to future services on satellites we expect to launch.

Satellite Deployment Plan

In January 2005, we replaced Galaxy 5 at 125 degrees west longitude with Galaxy 12 and subsequently de-orbited Galaxy 5.

In
April 2004, we committed to construct a new satellite, Galaxy 16, and in February 2005, we entered into an agreement for the construction of Galaxy 18. These satellites,
together with our Galaxy 17 satellite already under construction, will serve as replacements for Galaxy 4R, Galaxy 10R and Galaxy 11. The construction program contemplates the availability of one of
these satellites as an on-ground backup against launch failure or substantial delay of either of the other two satellites. Construction of Galaxy 18 began in 2005 and we plan to launch
this satellite in the second quarter of 2007.

The
manufacturer of Galaxy 16 and Galaxy 18 is in the process of emerging from Chapter 11 bankruptcy. Both the Galaxy 16 and Galaxy 18 construction contracts have been approved by the

41

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bankruptcy
court. Our agreements for the construction of Galaxy 16 and Galaxy 18 contain financial covenants applicable to the manufacturer, including a requirement that all payments made or to be
made to the manufacturer be utilized for the construction of these satellites. We also have a security interest in the satellites under construction by this manufacturer. In June 2005 we
entered into launch agreements for these two satellites. Pursuant to these agreements, $65.8 million previously paid for the launch of Galaxy 8-iR will be applied to the launch of
our Galaxy 16 satellite.

On
April 12, 2005, we entered into an agreement for the construction of PAS-11, which will be located at 43 degrees west longitude and will serve as a replacement for
our PAS 6B Ku-band satellite and the C-band portion of our PAS-3R satellite. See "Commitments and ContingenciesSatellite Commitments" below.

On
August 14, 2005, we successfully launched our Galaxy 14 satellite into orbit. This satellite will be co-located with Galaxy 12 at 125 degrees west longitude.

Our
HGS-5 satellite, which had been operating in an inclined orbit, was de-orbited on September 29, 2005. HGS-5 had a net book value of $0.

On
October 13, 2005, we successfully launched our Galaxy 15 satellite into orbit. This satellite will be co-located with Galaxy 1R at 133 degrees west longitude.

We
expect to launch three satellites by the end of 2007 as follows:

Satellite

Expected Launch DateGalaxy 16

Second quarter of 2006PAS-11

First quarter of 2007Galaxy 18

Second quarter of 2007


Assuming
satellites under development are successfully launched and services on the satellites commence on schedule, we believe that amounts available under PanAmSat's revolving credit
facility, vendor financing, future cash flows from operations and cash on hand will be sufficient to fund our operations and our remaining costs for the construction and launch of satellites currently
under development. There can be no assurance, however, that our assumptions with respect to costs for future construction and launch of our satellites will be correct, or that amounts available under
PanAmSat's revolving credit facility, vendor financing, future cash flows from operations and cash on hand will be sufficient to cover any shortfalls in funding for (i) launches caused by
uninsured launch or in-orbit failures, (ii) cost overruns, (iii) delays, (iv) capacity shortages, or (v) other unanticipated expenses.

Liquidity and Capital Resources

Initial Public Offering

On March 22, 2005, we consummated an initial public offering of 50 million shares of our common stock at $18 per share and used the net proceeds to
make an equity contribution to PanAmSat of approximately $658.4 million and to pay a $200 million dividend to our then pre-existing stockholders. PanAmSat used this equity
contribution to repay approximately $265.0 million of the borrowings under its Term Loan A Facility and on April 1, 2005, it redeemed $353.5 million, or 35%, of its 9% senior
notes and paid a redemption premium of $31.8 million to holders of those notes. In
connection with and contingent upon our initial public offering, PanAmSat's senior secured credit facilities were amended to, among other things:



42

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Dividend Policy

Our board of directors adopted a dividend policy that became effective upon the closing of our initial public offering. Our dividend policy reflects an intention
to distribute a substantial portion of the cash generated by our business in excess of operating expenses and working capital requirements, interest and principal payments on our indebtedness and
capital expenditures as regular quarterly dividends to our stockholders. On March 21, 2005 our board of directors declared a partial quarterly dividend for the period from March 22, 2005
to March 31, 2005 in the amount of $0.043056 per share, or an aggregate of approximately $5.28 million, which was paid on April 15, 2005, to stockholders of record as of
March 31, 2005. On June 20, 2005 our board of directors declared a quarterly dividend for the period from April 1, 2005 to June 30, 2005 in the amount of $0.3875 per share,
or an aggregate of approximately $47.5 million, which was paid on July 15, 2005, to stockholders of record as of June 30, 2005. On September 19, 2005 our board of directors
declared a quarterly dividend for the period from July 1, 2005 to September 30, 2005 in the amount of $0.3875 per share, or an aggregate of approximately $47.5 million, which was
paid on October 14, 2005, to stockholders of record as of September 30, 2005.

Cash and Cash Equivalents

At September 30, 2005, we had cash and cash equivalents of $87.9 million, compared to $39.0 million at December 31, 2004. On
March 22, 2005, we consummated an initial public offering of 50 million shares of our common stock and used the net proceeds to make an equity contribution to PanAmSat of approximately
$658.4 million and to pay a $200 million dividend to our then pre-existing stockholders. PanAmSat used this equity contribution to repay approximately $265.0 million
of the borrowings under its Term Loan A Facility and on April 1, 2005, it redeemed $353.5 million, or 35%, of its 9% senior notes and paid a redemption premium of $31.8 million to
holders of those notes.

During
the nine months ended September 30, 2005, we recorded the following other significant transactions impacting cash and cash equivalents:



43

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|                                                    |  | Nine Months Ended September 30, |          |   |  
|--------------------------------------------------- |  | ------------------------------- | -------- | - | -
|
|
|
|Net cash provided by operating activities           |  | $                               | 162,042  |   | $
|Net cash provided by (used in) investing activities |  |                                 | 557,191  |   |  
|Net cash used in financing activities               |  |                                 | (847,444 | ) |  
|Effect of exchange rate changes on cash             |  |                                 | 328      |   |  

The
increase in the net cash provided by operating activities was primarily due to the non-recurrence of $155.0 million of transaction-related costs expensed and paid during the
nine months ended September 30, 2004, a decrease in cash used within accounts payable and accrued liabilities of $39.7 million and other increases in cash from operations of
approximately $12.2 million during the first nine months of 2005 as compared with the same period in 2004. These increases were partially offset by $10.4 million of Sponsor management
fees paid and an increase of $87.7 million of cash paid for interest during the nine months ended September 30, 2005.

The
increase in net cash used in investing activities was primarily due to a reduction in net sales of short-term investments of approximately $374.1 million, the
receipt of insurance proceeds of $286.9 million in the first nine months of 2004, higher capital expenditures of $38.9 million and additional cash paid for acquisitions of
$41.3 million, partially offset by cash proceeds of $3.2 million from the sale of our Homestead teleport, as compared to the first nine months of 2004.

The
decrease in net cash used in financing activities was primarily due to the proceeds of our initial public offering of $900 million and the funding of capital expenditures by a
customer of $33.5 million in 2005. These increases were largely offset by the repayments of long-term debt of $671.9 million, dividends paid to our stockholders of
$252.8 million, capitalized IPO costs of $40.9 million and repayments of satellite incentive obligations of $9.5 million during the nine months ended September 30, 2005. In
the first nine months of 2004, as part of the Recapitalization, we issued new debt of $3.5 billion, terminated and repaid our old credit facilities and completed a tender offer for
substantially all of our 61/8% Notes due 2005 and 81/2% Notes due 2012 for $1.4 billion and repurchased treasury stock of $2.8 billion. We also incurred new
incentive obligations of $16.3 million and paid $9.6 million of incentive obligations during this period.

We
expect that for the year ended December 31, 2005 cash payments in respect of capital expenditures, including approximately $23 million of incentive payments and interest
on satellites in service, will be in the range of $155 million to $170 million and that cash interest on our debt obligations will be in the range of $200 million to
$215 million. Dividend payments to our stockholders for the period following the completion of our initial public offering through December 31, 2005, are expected to be approximately
$100 million. Based upon the current level of operations, we believe that cash flows from operations, available cash and cash equivalents, together with borrowings available under our senior
secured credit facilities, will be adequate to meet these expected payments. Our acquisition of Europe*Star closed on August 31, 2005 and was funded from cash on hand. This acquisition is not
expected to impact our ability to pay future dividends, service our debt or fund future capital expenditures.

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Our
ability to make scheduled payments of principal, or to pay the interest on, or to refinance our indebtedness, to make dividend payments on our common stock, or to fund planned
capital expenditures will depend on our future performance, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are
beyond our control.

Long-term Debt

With a portion of the proceeds from our initial public offering, we made an equity contribution to PanAmSat of approximately $658.4 million, which PanAmSat
used to repay approximately $265.0 million of the borrowings under its Term Loan A Facility on March 22, 2005, redeem $353.5 million, or 35%, of its 9% senior notes and pay a
redemption premium of $31.8 million to holders of these notes on April 1, 2005. PanAmSat also repaid an additional $25.0 million of the Term Loan A facility with cash on hand on
March 22, 2005. On June 17, 2005 PanAmSat made a voluntary prepayment of $28.4 million under its Term Loan A facility from available cash on hand.

As
of September 30, 2005, long-term debt consisted of the following (in thousands):

September 30,
200563/8% Notes due 2008

$
150,00081/2% Notes due 2012


1,19067/8% Notes due 2028


125,000Transaction Related Financing:Revolving Credit Facility


Term Loan A due 2009


355,910Term Loan B-1 due 2011


1,647,5009% Senior Notes due 2014


656,500103/8% Senior Discount Notes due 2014


275,2463,211,346Less: current maturities


16,550Total Long-Term Debt

$
3,194,796


At
September 30, 2005, we had total debt outstanding of approximately $3.2 billion, including current maturities of $16.6 million related to our Term Loan
B-1 facility due 2011.

On
October 19, 2004, pursuant to Rule 144A under the Securities Act of 1933, as amended, we issued $416.0 million aggregate principal amount at maturity of our
103/8% senior discount notes due 2014. All of the proceeds of that offering, less discounts, commissions and expenses, or approximately $245.8 million, were paid on
October 19, 2004 as a dividend to our stockholders. On May 31, 2005, we exchanged all the outstanding notes for an equal amount of Senior Discount Notes which are registered under the
Securities Act of 1933 and which have substantially similar terms. The Senior Discount Notes accrete at the rate of 103/8% per annum, compounded semi-annually to, but not
including, November 1, 2009. From and after November 1, 2009, cash interest on the Senior Discount Notes will accrue at the rate of 103/8% per annum, and will be payable
semi-annually in arrears on May 1 and November 1 of each year, commencing on May 1, 2010, until maturity. As of September 30, 2005, the accreted balance of approximately
$275.2 million was outstanding in relation to these notes.

Our
primary source of liquidity is cash flow generated from the operations of our subsidiaries, including PanAmSat. Our ability to pay dividends on our common stock and make payments on
our Senior Discount Notes is dependent on the earnings and the distribution of funds from PanAmSat. The agreements governing PanAmSat's senior secured credit facilities and 9% senior notes are the two

45

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contractual
obligations of PanAmSat that significantly restrict its ability to pay dividends or otherwise transfer assets to us. Payment of dividends is also subject to compliance with Delaware law.

Concurrent
with the completion of our initial public offering, we amended PanAmSat's senior secured credit facilities. Borrowings under PanAmSat's senior secured credit facilities bear
interest at the borrower's option at either adjusted LIBOR plus an applicable margin or the alternate base rate plus an applicable margin, and are subject to adjustment based on a pricing grid.

PanAmSat's
senior secured credit facilities are comprised of a $250.0 million revolving credit facility, which will terminate in August 2009, an $800.0 million Term
Loan A Facility, which matures in August 2009, and a $1,647.5 million Term Loan B-1 Facility, which matures in August 2011. At September 30, 2005, the interest
rate on the Term Loan A Facility was 1 month LIBOR of 3.82% plus 1.75%. At September 30, 2005, the Term Loan B-1 facility was split into
two tranches in order to provide for the principal payment of $4.1 million which is due on November 18, 2005. The first tranche in the amount of $4.1 million, which is subject to
the principal paydown, had an interest rate of 2 month LIBOR of 3.80% plus 2.00%. The remaining tranche, in the amount of $1,643.4 million, had an interest rate of 3 month LIBOR
of 3.86% plus 2.00%. The revolving credit facility was undrawn. These rates are subject to change based upon our total leverage ratio. In addition, we are required to pay a commitment fee for the
unused commitments under the revolving credit facility, if any, which, as of September 30, 2005 on an annual basis was 0.25%. As of September 30, 2005 we had outstanding letters of
credit totaling $49.2 million. Outstanding letters of credit reduce our ability to borrow against the revolving credit facility by an equivalent amount. Any amounts borrowed under the revolving
credit facility would bear interest at 1 month LIBOR plus 1.75% as of September 30, 2005, although this interest rate is subject to adjustment based on our total leverage ratio.

Obligations
under the senior secured credit facilities are, or will be, as the case may be, unconditionally and irrevocably guaranteed jointly and severally by PanAmSat's current and
future domestic subsidiaries and are secured by substantially all of our assets and substantially all of the assets of each of our current and future domestic subsidiaries.

The
9% senior notes require interest payments to be made semi-annually, mature on August 15, 2014, are unsecured, and are, or will be, as the case may be,
unconditionally guaranteed by each of PanAmSat's existing and certain subsequently acquired or organized domestic restricted subsidiaries.

In
connection with the Recapitalization, in August 2004, we completed a tender offer for substantially all of our $275 million 61/8% Notes due 2005 and our
$800 million 81/2% Senior Notes due 2012. We completed the redemption of our remaining 61/8% Notes due 2005 in October 2004. In September 2004, we
repaid the outstanding balance under our revolving credit facility.

As
of September 30, 2005, PanAmSat had outstanding 10 and 30-year fixed rate notes totaling $275.0 million which were issued in January 1998. The
outstanding principal balances, interest rates and maturity dates for these notes as of September 30, 2005, are $150.0 million at 63/8% due 2008 and $125.0 million
at 67/8% due 2028, respectively. Principal on these notes is payable at maturity, while interest is payable semi-annually.

As
of September 30, 2005, PanAmSat also had outstanding $1.2 million of its 81/2% senior notes due 2012. These notes are unsecured, and are unconditionally
guaranteed by each of PanAmSat's domestic restricted subsidiaries existing prior to the Recapitalization.

We
are required to maintain certain financial covenants and are also subject to restrictive covenants under our borrowings. As of September 30, 2005, we were in compliance with
all such covenants.

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The
indenture governing our Senior Discount Notes, the indenture governing PanAmSat's 9% senior notes and PanAmSat's senior secured credit facilities contain financial covenant ratios,
specifically total leverage and interest coverage ratios, that are calculated by reference to Adjusted EBITDA. Adjusted EBITDA is defined as net income (loss) plus net interest expense, income tax
expense (benefit) and depreciation and amortization, further adjusted to give effect to unusual items, non-cash items and other adjustments specifically required in calculating covenant
ratios and compliance under the indenture governing our Senior Discount Notes, the indenture governing PanAmSat's 9% senior notes due 2014 and PanAmSat's senior secured credit facilities. These
adjustments include unusual items such as severance, relocation costs and one-time compensation charges, non-cash charges such as non-cash compensation expense and
the other adjustments shown below. Adjusted EBITDA is a material component of these covenants. For instance, non-compliance with the financial ratio maintenance covenants contained in the
senior secured credit facilities could result in the requirement that PanAmSat immediately repay all amounts outstanding under such facilities and a prohibition on PanAmSat paying dividends to us, and
non compliance with the debt incurrence ratios contained in our Senior Discount Notes and PanAmSat's 9% senior notes could prohibit us from being able to incur additional indebtedness or make
restricted payments, including payments of dividends on our common stock, other than pursuant to specified exceptions. In addition, under the restricted payments covenants contained in the indentures,
the ability of Holdco and PanAmSat, as applicable, to pay dividends is restricted by a formula based on the amount of Adjusted EBITDA. We believe the adjustments listed below are in accordance with
the covenants discussed above.

Adjusted
EBITDA is not a presentation made in accordance with GAAP, and does not purport to be an alternative to net income (loss) determined in accordance with GAAP or as a measure of
operating performance or to cash flows from operating activities determined in accordance with GAAP as a measure of liquidity. Additionally, Adjusted EBITDA is not intended to be a measure of cash
flow for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Because not all companies use
identical calculations, this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The following table sets forth a reconciliation of Adjusted
EBITDA and

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EBITDA
to net income (loss) and to net cash provided by operating activities for the periods indicated (in thousands):

|                                                                                  |  | Three Months Ended
September 30, |         | Nine Months Ended
September 30, |  
|--------------------------------------------------------------------------------- |  | -------------------------------- | ------- | ------------------------------- | -
|
|Reconciliation of Net Cash Provided by Operating Activities to Net Income (Loss): |  |                                  |         |                                 |  
|Net cash provided by (used in) operating activities                               |  | $                                | (60,217 | )                               | $
|Depreciation and amortization                                                     |  |                                  | (74,322 | )                               |  
|Deferred income taxes                                                             |  |                                  | 67,929  |                                 |  
|Amortization of debt issue costs and other deferred charges                       |  |                                  | (3,736  | )                               |  
|Accretion on senior discount notes                                                |  |                                  |        |                                 |  
|Provision for uncollectible receivables                                           |  |                                  | (1,526  | )                               |  
|Other non-cash items                                                              |  |                                  | 742     |                                 |  
|Satellite impairment loss                                                         |  |                                  |        |                                 |  
|Loss on Galaxy 10R XIPS anomaly                                                   |  |                                  | (9,090  | )                               |  
|Loss on termination of sales-type leases                                          |  |                                  |        |                                 |  
|Facilities restructuring and severance costs                                      |  |                                  | (2,288  | )                               |  
|Reversal of sales-type lease liabilities                                          |  |                                  | 3,727   |                                 |  
|Gain on disposal of fixed assets                                                  |  |                                  | 1,332   |                                 |  
|Loss on early extinguishment of debt                                              |  |                                  | (15,134 | )                               |  
|Gain (loss) on undesignated interest rate swap                                    |  |                                  |        |                                 |  
|Changes in assets and liabilities, net of acquired assets and liabilities         |  |                                  | 15,928  |                                 |  
|                                                                                  |  |                                  |         |                                 |  
|Net income (loss)                                                                 |  | $                                | (76,655 | )                               | $
|                                                                                  |  |                                  |         |                                 |  
|Reconciliation of Net Income (Loss) to EBITDA:                                    |  |                                  |         |                                 |  
|Net income (loss)                                                                 |  | $                                | (76,655 | )                               | $
|Interest expense, net                                                             |  |                                  | 57,794  |                                 |  
|Income tax expense (benefit)                                                      |  |                                  | (67,363 | )                               |  
|Depreciation and amortization                                                     |  |                                  | 74,322  |                                 |  
|                                                                                  |  |                                  |         |                                 |  
|EBITDA                                                                            |  | $                                | (11,902 | )                               | $
|                                                                                  |  |                                  |         |                                 |  
|Reconciliation of EBITDA to Adjusted EBITDA:                                      |  |                                  |         |                                 |  
|EBITDA                                                                            |  | $                                | (11,902 | )                               | $
|Adjustment of sales-type leases to operating leases(a)                            |  |                                  | 6,608   |                                 |  
|Loss on termination of sales-type leases(b)                                       |  |                                  |        |                                 |  
|Effect of Galaxy 10R anomaly(c)                                                   |  |                                  | 9,090   |                                 |  
|Satellite impairment(d)                                                           |  |                                  |        |                                 |  
|Restructuring charges(e)                                                          |  |                                  | 2,080   |                                 |  
|Reserves for long-term receivables and sales-type leases(f)                       |  |                                  | (3,727  | )                               |  
|Reversal of allowance for customer credits(g)                                     |  |                                  | 1,800   |                                 |  
|Transaction-related costs(h)                                                      |  |                                  | 154,535 |                                 |  
|(Gain) Loss on undesignated interest rate swap(i)                                 |  |                                  |        |                                 |  
|Other items(j)                                                                    |  |                                  | 748     |                                 |  
|                                                                                  |  |                                  |         |                                 |  
|Adjusted EBITDA                                                                   |  | $                                | 159,232 |                                 | $
|                                                                                  |  |                                  |         |                                 |  

---

48

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Future principal debt repayments are expected to be paid out of cash flows from operations, borrowings under PanAmSat's revolving credit facility,
future refinancing of our debt and any future insurance proceeds received.

Interest Rate Swap Agreements

In accordance with the agreement governing PanAmSat's old senior secured credit facilities that were repaid in 2004, PanAmSat was party to an interest rate swap
agreement for a fixed rate payment of 5.64% on $100.0 million through August 30, 2005. In June of 2004, in connection with the repayment of the term loan B-1 facility of
PanAmSat's old credit facility, PanAmSat's cash flow hedge became undesignated and therefore changes in the fair value of the interest rate swap have been recorded within our consolidated statement of
operations from that time. In August 2005, this agreement expired.

49

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On March 14, 2005, PanAmSat entered into a five year interest rate swap agreement to hedge interest expense on a notional amount of $1.25 billion. The notional amount will
amortize down to $625 million from March 14, 2008 until expiration on March 15, 2010. In relation to this swap agreement, PanAmSat exchanged its floating-rate
obligation on $1.25 billion of its Term Loan B-1 facility for a fixed-rate obligation, subject to scheduled rate increases based on the LIBOR rate used as described in
the following table:

Start Date

End Date

Total Notional
Amount

PanAmSat
Corporation
pays banks

Banks pay
PanAmSat
Corporation3/14/2005

6/14/2005

$
1,250,000,000

3.000
%
3.000%6/14/2005

9/14/2005

$
1,250,000,000

3.548
%
3.400%9/14/2005

12/14/2005

$
1,250,000,000

3.922
%
3.857%12/14/2005

3/14/2006

$
1,250,000,000

4.178
%
3 Month LIBOR3/14/2006

6/14/2006

$
1,250,000,000

4.316
%
3 Month LIBOR6/14/2006

9/14/2006

$
1,250,000,000

4.422
%
3 Month LIBOR9/14/2006

12/14/2006

$
1,250,000,000

4.523
%
3 Month LIBOR12/14/2006

3/14/2007

$
1,250,000,000

4.610
%
3 Month LIBOR3/14/2007

6/14/2007

$
1,250,000,000

4.646
%
3 Month LIBOR6/14/2007

9/14/2007

$
1,250,000,000

4.681
%
3 Month LIBOR9/14/2007

12/14/2007

$
1,250,000,000

4.714
%
3 Month LIBOR12/14/2007

3/14/2008

$
1,250,000,000

4.763
%
3 Month LIBOR3/14/2008

6/14/2008

$
625,000,000

4.802
%
3 Month LIBOR6/14/2008

9/14/2008

$
625,000,000

4.839
%
3 Month LIBOR9/14/2008

12/14/2008

$
625,000,000

4.876
%
3 Month LIBOR12/14/2008

3/14/2009

$
625,000,000

4.912
%
3 Month LIBOR3/14/2009

6/14/2009

$
625,000,000

4.943
%
3 Month LIBOR6/14/2009

9/14/2009

$
625,000,000

4.970
%
3 Month LIBOR9/14/2009

12/14/2009

$
625,000,000

4.997
%
3 Month LIBOR12/14/2009

3/14/2010

$
625,000,000

5.023
%
3 Month LIBOR


The
counterparties to this agreement are highly rated financial institutions. In the unlikely event that the counterparties fail to meet the terms of the interest rate swap agreement,
PanAmSat's exposure is limited to the interest rate differential on the notional amount at each quarterly settlement period over the life of the agreements. We do not anticipate
non-performance by the counterparties.

The
fair value of the interest rate swap agreement is the estimated amount that we would pay or receive to terminate the agreement at the reporting date, taking into account current
interest rates, the market expectation for future interest rates and our current creditworthiness. From the inception of the interest rate swap agreement through May 24, 2005, the interest rate
swap was undesignated and the increase in the fair value of the related obligation of approximately $18.6 million was recorded within loss on undesignated interest rate swap in our consolidated
statement of operations for the quarter ended June 30, 2005, in accordance with the provisions of SFAS No. 133. Between May 25, 2005 and June 30, 2005, the interest rate
swap was designated as a cash flow hedge and deemed effective, and therefore qualified for hedge accounting treatment under SFAS No. 133. In accordance with SFAS No. 133, changes in the
hedged asset or liability representing the effectiveness of the hedge were recorded within comprehensive income (loss) in our consolidated balance sheet. The ineffective portion of the hedge
(approximately $630 thousand) was recorded as an adjustment to interest expense in the consolidated statement of operations for the quarter ended June 30, 2005.

Pursuant
to SFAS No. 133 we are required to perform a quarterly analysis of the effectiveness of the hedge. Under SFAS No.133 in order to maintain the effectiveness of the hedge,
an effectiveness rate of between 80% and 125% must be maintained. This effectiveness rate is calculated by dividing the

50

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cumulative
change in the hedge liability by the cumulative change in the cash flows of the debt being hedged. As a result of this test, it was determined that the interest rate swap agreement was no
longer an effective hedge, and therefore did not qualify for hedge accounting treatment under SFAS No. 133. As a result, the interest rate swap was undesignated and pursuant to the guidance
within SFAS No. 133, the reduction in the fair value of the interest rate swap obligation of approximately $18.3 million was recorded as a gain on undesignated interest rate swap in our
consolidated statement of operations for the three months ended September 30, 2005. The net loss on undesignated interest rate swap for the nine months ended September 30, 2005 was
$0.3 million. As of September 30, 2005 the liability related to this interest rate swap of $3.2 million was included in deferred credits and other within our condensed
consolidated balance sheet.

On
the interest rate reset date of September 14, 2005, the interest rate which the counterparties will utilize on December 14, 2005 to compute interest due to PanAmSat was
determined to be 3.857%. This will result in PanAmSat paying the counterparties approximately $206 thousand on December 14, 2005 (the difference between the rate PanAmSat must pay of
3.922% and the rate it will receive from the counterparties of 3.857%).

Facilities Restructuring and Severance Costs

Facilities restructuring and severance costs were $2.1 million and $0.2 million for the three months ended September 30, 2004 and 2005, and
$4.5 million and $4.0 million for the nine months ended September 30, 2004 and 2005, respectively.

In
January 2003, our management approved a plan to consolidate certain of our teleports in order to improve customer service and reduce operating costs. This teleport
consolidation plan included the closure of certain owned teleports and the reduction of services at our Fillmore and Castle Rock teleports. Under this plan, our Homestead, Florida teleport was closed
in 2003 and our Spring Creek, New York teleport was closed in June 2004. Our Spring Creek teleport was sold on October 28, 2004. On June 3, 2005, we completed the sale of our Homestead
teleport for approximately $3.2 million, net of associated selling costs. During the three months ended September 30, 2004 and 2005, we recorded credits of $0.2 million and
charges of $0, respectively, and during the nine months ended September 30, 2004 and 2005 we recorded charges of $0.8 million and $2.5 million, respectively, related to this
teleport consolidation plan, representing severance costs in 2004 and certain costs incurred in relation to equipment transferred to other locations in 2005.

On
March 29, 2002, our management approved a plan to restructure several of our United States locations and close certain facilities, some of which are currently being leased
through 2011. In an effort to further streamline our operations, in the first quarter of 2004, we consolidated our Manhattan Beach, El Segundo and Long Beach, California facilities. As a result, we
recorded a non-cash charge of $1.4 million during the first quarter of 2004 reflecting future lease costs related to approximately 18,000 square feet of unused facilities in
Manhattan Beach. Additionally, in the third quarter of 2004 we recorded a non-cash charge of approximately $2.3 million due to a reduction in future anticipated sublease income
related to one of our idle facilities. We recorded a non-cash charge of approximately $0.5 million in the nine months ended September 30, 2005 in relation to increased future
lease costs related to one of our idle facilities.

In
October 2003 and October 2004, our management approved plans to reduce our workforce by approximately 45 employees and 25 employees, respectively. During the three
months ended September 30, 2004 and 2005, we recorded severance charges of $0 and $0.2 million, respectively, and during the nine months ended September 30, 2004 and 2005, we
recorded charges of $0 and $1.0 million, respectively, in relation to these plans. These severance costs were primarily related to employee compensation, benefits and outplacement services.

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The
following table summarizes the recorded accruals and activity related to our teleport consolidation, facilities restructuring and severance charges during the nine months ended
September 30, 2005 (in millions):

Facilities
Restructuring

Teleport
Consolidation

Severance
Costs

TotalBalance as of January 1, 2005

$
6.3

$
0.3

$
0.5

$
7.1Restructuring charges


0.5


2.5


1.0


4.0Less: non-cash items





(2.5
)




(2.5
)Less: net cash payments


(1.2
)

(0.2
)

(1.0
)

(2.4
)Balance as of September 30, 2005

$
5.6

$
0.1

$
0.5

$
6.2


We
expect to pay the $0.6 million of liabilities related to our severance costs and teleport consolidation plans within the next year and we expect to pay the $5.6 million
of liabilities related to our facilities restructuring plan over the next six years.

Commitments and Contingencies

The following schedule summarizes our contractual obligations and commercial commitments as of September 30, 2005:

|                                            |                                       | Payments Due by Period
|------------------------------------------- | ------------------------------------- | ----------------------
|
|
|Total Debt:                                 |                                       |                       
|                                            | 103/8% Senior Discount Notes Due 2014 |                       
|                                            | Senior Secured Credit Facility        |                       
|                                            | 9% Senior Notes Due 2014              |                       
|Other Notes(1)                              |                                       |                       
|                                            |                                       |                       
|                                            | Total                                 |                       
|Interest Payments(2)                        |                                       |                       
|Satellite Incentive Obligations             |                                       |                       
|Horizons Contributions Obligations          |                                       |                       
|Europe*Star Purchase Price Obligation       |                                       |                       
|Operating Leases                            |                                       |                       
|Satellite Construction and Launch Contracts |                                       |                       
|Customer Contracts                          |                                       |                       
|Vendor Contracts                            |                                       |                       
|                                            |                                       |                       
|                                            | Total Contractual Obligations         |                       
|                                            |                                       |                       

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52

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Satellite launch and in-orbit insurance contracts related to future satellites to be launched are cancelable up to 30 days prior to the satellite's launch. As of
September 30, 2005, we did not have any non-cancelable commitments related to existing launch insurance or in-orbit insurance contracts for satellites to be launched.

Satellite Incentive Obligations

Satellite contracts typically require that we make progress payments during the period of the satellite's construction and orbital incentive payments (plus
interest) over the orbital life of the satellite. The incentive obligations may be subject to reduction if the satellite fails to meet specific technical operating standards. Certain of our satellite
construction contracts also provide that certain amounts paid by us during the construction phase are subject to refund (with interest) if the satellite fails to meet these technical operating
standards. As of September 30, 2005, we had $110.1 million of liabilities recorded in relation to these satellite incentive obligations.

Satellite Commitments

As of September 30, 2005, we had approximately $184.6 million of expenditures remaining under existing satellite construction contracts and
$83.0 million remaining under existing satellite launch contracts. Satellite launch and in-orbit insurance contracts related to future satellites to be launched are cancelable up to
thirty days prior to the satellite's launch. As of September 30, 2005, we did not have any non-cancelable commitments related to existing launch insurance or in-orbit
insurance contracts for satellites to be launched.

In
April 2004, we committed to construct a new satellite, Galaxy 16, and in February 2005, we entered into an agreement for the construction of Galaxy 18. These satellites,
together with our Galaxy 17 satellite already under construction, will serve as replacements for Galaxy 4R, Galaxy 10R and Galaxy 11. The construction program contemplates the availability of one of
these satellites as an on-ground backup against launch failure or substantial delay of either of the other two satellites. Construction of Galaxy 18 began in 2005 and we plan to launch
this satellite in the second quarter of 2007.

The
manufacturer of Galaxy 16 and 18 is in the process of emerging from Chapter 11 bankruptcy. Both the Galaxy 16 and Galaxy 18 construction contracts have been approved by the
bankruptcy court. Our agreements for the construction of Galaxy 16 and Galaxy 18 contain financial covenants applicable to the manufacturer, including a requirement that all payments made or to be
made to the manufacturer be utilized for the construction of these satellites. We also have a security interest in the satellites under construction by this manufacturer. In June 2005, we
entered into launch agreements for these two satellites. Pursuant to these agreements, $65.8 million previously paid for the launch of Galaxy 8-iR will be applied to the launch of
our Galaxy 16 satellite.

On
April 12, 2005, we entered into an agreement for the construction of PAS-11, which will be located at 43 degrees west longitude and will serve as a replacement for
our PAS-6B Ku-band satellite and the C-band portion of our PAS-3R satellite. In July 2005, PanAmSat signed an agreement for the launch of this
satellite in the first quarter of 2007.

On
August 1, 2005, PanAmSat formed its second 50-50 joint venture with JSAT, a leading satellite operator in the Asia-Pacific region, that will build and
launch a Ku-band satellite to replace our SBS-6 satellite at 74 degrees west longitude. The joint venture is named Horizons-2. The satellite will support digital
video, high-definition television (HDTV) and IP-based content distribution networks to broadband Internet and satellite news gathering services (SNG) in the United States. This
Horizons-2 satellite will be constructed over the next two years and is expected to be in service by late 2007. The total investment in this joint venture is expected to be approximately
$160 million, of which each of the

53

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joint
venture partners is required to fund their 50% share beginning in early 2008. PanAmSat's investment in this joint venture is being accounted for using the equity method.

Satellite Insurance

In December 2003, we reached a final settlement of insurance claims on our PAS-1R and Galaxy 11 satellites for payment of
$260.0 million, which related to solar panel anomalies on those satellites. We will continue to own and operate these satellites free and clear of any claims of these insurers. We offset the
proceeds from this settlement against the carrying value of the satellites. In the first quarter of 2004, we received the $260.0 million settlement amount.

In
July 2003, we filed a proof of loss under the insurance policy for our Galaxy 4R satellite after the secondary XIPS on this satellite ceased working. Later in 2003, we settled
an insurance claim on this satellite related to the failure of its propulsion system and received $102.6 million from insurers
representing approximately 83% of the insurance coverage on the satellite. In March 2004, we reached an agreement with, and received $26.9 million from, the insurer representing the
remaining 17% of the insurance coverage on this satellite. The settlement with the insurer representing 17% coverage includes a future sharing of revenues actually received from the satellite. We
proportionately offset the proceeds from these settlements against the insured carrying value of the satellite and the net investment in sales-type lease. We are constructing a replacement
satellite for Galaxy 4R, which is scheduled to be launched in 2006, prior to the end of Galaxy 4R's useful life.

As
of September 30, 2005, we had in effect launch and in-orbit insurance policies covering five satellites in the aggregate amount of approximately
$458.7 million. As of such date, these insured satellites had an aggregate net book value and other insurable costs of $596.1 million. We had 19 uninsured satellites in orbit as of
September 30, 2005. In July 2005, the insurance policy on our PAS-9 satellite expired and was not replaced. As a result, PAS-9 is no longer insured. As of
September 30, 2005, PAS-9 had approximately $99 million of net book value and other insurable costs. Our HGS-5 satellite, which had been operating in an inclined
orbit, was de-orbited on September 29, 2005. HGS-5 had a net book value and other insurable costs of $0. Our currently uninsured satellites are: PAS-4, which
is used as a backup satellite; PAS-5 and PAS-7, for which we received insurance proceeds for constructive total losses; Galaxy 1R, Galaxy 3R, and SBS-6, which are
approaching the end of their useful lives; Galaxy 4R, Galaxy 10R, Galaxy 11 and PAS-1R, for which we received insurance proceeds for partial losses; PAS-2, PAS-3R,
PAS-6B, PAS-8, PAS-9, Galaxy 9, and Galaxy 12, for which we determined that insurance was not available on commercially reasonable terms; and HGS-3 and
Leasat, which have an aggregate book value of approximately $0.5 million. Our Galaxy 9 and Galaxy 14 satellites currently serve as in-orbit backups for the C-band
portions of Galaxy 1R, Galaxy 3C, Galaxy 4R, Galaxy 10R, Galaxy 11, Galaxy 12 and Galaxy 13/Horizons 1. The C-band portion of the satellites that are currently covered by
C-band in-orbit backups had an aggregate net book value of approximately $314.6 million as of September 30, 2005.

Of
the insured satellites, as of September 30, 2005, one was covered by policies with substantial exclusions or exceptions to coverage for failures of specific components
identified by the underwriters as at risk for possible failure, or Significant Exclusion Policies. The exclusions reduce the probability of an insurance recovery in the event of a loss on this
satellite. Galaxy 13/ Horizons 1, which was placed in service in January 2004 and is insured by a policy with an exclusion for XIPS related anomalies, continues to have available redundant XIPS
as its primary propulsion system. Certain enhancements have been made to the XIPS on this satellite to make the systems more robust. In addition, Galaxy 13/Horizons 1 has available backup
bi-propellant of approximately 11.3 years as of September 30, 2005.

At
September 30, 2005, the uninsured satellites and the satellites insured by Significant Exclusion Policies had a total net book value and other insurable costs of approximately
$986.7 million. Of this

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amount,
$894.2 million related to uninsured satellites and $92.5 million related to satellites insured by Significant Exclusion Policies.

Upon
the expiration of the insurance policies, there can be no assurance that we will be able to procure new policies on commercially reasonable terms. New policies may only be available
with higher premiums or with substantial exclusions or exceptions to coverage for failures of specific components.

An
uninsured failure of one or more of our satellites could have a material adverse effect on our financial condition and results of operations. In addition, higher premiums on insurance
policies will increase our costs, thereby reducing our income from operations by the amount of such increased premiums.

Operating Leases

We have commitments for operating leases primarily relating to our executive office facilities in Wilton, Connecticut and other locations. These leases contain
escalation provisions for increases as a result of increases in real estate taxes and operating expenses. As of September 30, 2005, minimum annual rentals of all leases, exclusive of potential
increases in real estate taxes, operating assessments and future sub-lease income aggregated $29.3 million.

Customer and Vendor Obligations

We have contracts with certain of our customers which require us to provide equipment, services and other support during the term of the related contracts with
us. As of September 30, 2005, we had commitments to provide equipment, services and other support under these customer contracts, which aggregated approximately $39.2 million.

In
July 2005, PanAmSat signed an agreement with a customer in which PanAmSat is a subcontractor and the customer is the prime contractor to its end user customer. In exchange for
PanAmSat's engagement as a subcontractor on this project, PanAmSat has agreed to guarantee the prime contractor's $8.8 million performance bond.

We
have long-term contractual obligations with service providers primarily for the operation of certain of our satellites. As of September 30, 2005, we have
commitments under these vendor contracts which aggregated approximately $57.6 million related to the provision of equipment, services and other support.

Change-in-Control Obligations

Certain of our senior executives are party to change-in-control severance agreements which provide for payment of severance and other
benefits in the event of an involuntary termination of the executive's employment (as defined in such agreements) within three years after a change in control. The requisite changes of control
required under these agreements have occurred and these agreements will apply if an involuntary termination of an executive occurs during the periods specified by the agreements. Based upon current
compensation levels, if all of these executives receive the termination related benefits as specified by their respective agreements, the aggregate cost to us would be up to $11.1 million (net
of tax benefits of $6.4 million).

In
connection with the merger, our board of directors approved the adoption of a 2005 Severance Pay Plan on terms similar to our existing 2003 Severance Pay Plan and authorized a
retention pool of up to $10 million for employees. As of the current date, retention bonuses totaling approximately $8.0 million have been designated for employees. The 2005 Severance
Pay Plan, adopted in connection with the merger, allows for the payment of enhanced severance to employees laid off or who resign for good reason (as defined in such plan) due to, and within
18 months following, a change in control (as defined in such plan). We are currently unable to estimate the amount of future severance to be paid

55

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pursuant
to the 2005 Severance Pay Plan which would result from a change in control upon the closing of the Intelsat merger.

As
more fully described in Note 8 "Stock Based Compensation" to our condensed consolidated financial statements, PanAmSat and Holdco granted stock options to certain employees
subsequent to the Recapitalization. The options granted by PanAmSat were assumed by us in October 2004. In addition, certain employees also acquired common stock of Holdco. The vesting of these
stock options accelerates in the event of certain changes in control of Holdco. Pursuant to contractual obligations, we could be obligated to make payments for vested options and to repurchase shares
held by certain employees in the event of the death or qualifying disability of any such employee. In all other circumstances, we have the right, but not the obligation, to call the common stock held
by employees and, therefore, no contingent obligation would exist for us.

Upon
the consummation of our pending merger with Intelsat, based upon the $25 per share merger consideration, assuming the acceleration of all outstanding options and other equity
based arrangements and their conversion into a right to receive cash, each as requried by the merger agreement, and assuming that the holders of such equity based arrangements receive the amounts
described in the merger agreement, we will be required to recognize an expense of between $100 million and $110 million.

We
estimate maximum tax costs related to these obligations, including reimbursement of employee excise taxes and lost income tax deductions, to be approximately $40 million.

Foreign Withholding Taxes

We have outstanding tax claims related to withholding taxes assessed on revenues derived from broadcasters inside and outside of India who broadcast from or into
India. The total amount assessed for all periods from March 31, 1996 through March 31, 2002 is approximately $56.9 million. We are contesting the imposition of such taxes. While
this contest proceeds, we have been required to advance cash and provide a bank guarantee for a total of approximately $49.2 million. As of September 30, 2005, we had paid cash of
approximately $1.2 million related to these assessment years. If unsuccessful in our contest, we could be subject to comparable claims for subsequent years. In connection with the
Recapitalization, The DIRECTV Group, which controlled us prior to the Recapitalization agreed to indemnify us for these and certain other taxes related to any periods or portions of such periods
ending on or prior to the day of the closing of the Recapitalization in amounts equal to 80% of the first $75.0 million of such taxes and 100% of such taxes in excess of the first
$75.0 million. As a result, our net tax liability related to these periods is capped at $15.0 million.

Critical Accounting Policies

For a description of our Critical Accounting Policies refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" within our
registration statement on Form S-1 (File No. 333-121463) filed with the SEC, as such registration statement became effective on March 16, 2005. There have
been no significant changes to our critical accounting policies during 2005.

New Accounting Pronouncements

In May 2005, FASB issued SFAS No. 154. SFAS No. 154 replaces APB Opinion No. 20 and FASB Statement No. 3. This Statement
provides guidance on the accounting for and reporting of accounting changes and error corrections. It requires retrospective application as the required method for reporting a change in accounting
principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. SFAS No. 154 carries forward without change the guidance contained in APB
No. 20 for reporting the correction of an error in previously issued financial statements and a change in accounting estimate. SFAS No. 154 is effective for accounting changes and

56

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corrections
of errors made in fiscal years beginning after December 15, 2005. The adoption of SFAS No. 154 will not have a material impact on our consolidated financial statements.

On
April 15, 2005, the SEC announced the adoption of a new rule that amends the compliance dates for SFAS No. 123R "Share-Based Payment". Under SFAS No. 123R,
registrants would have been required to implement the standard as of the beginning of the first interim or annual period that begins after June 15, 2005. The SEC's new rule requires companies
to implement SFAS No. 123R at the beginning of their first fiscal year beginning on or after June 15, 2005, instead of the first reporting period that begins after June 15, 2005.
This means that our financial statements must comply with SFAS No. 123R beginning with the interim financial statements for the first quarter of 2006. The SEC's new rule does not change the
accounting required by SFAS No. 123R; it changes only the dates for compliance with the standard. The adoption of SFAS No. 123R will not have a material impact on our consolidated
financial statements.

On
March 29, 2005, the SEC released Staff Accounting Bulletin No. 107 ("SAB No. 107"). SAB No. 107 provides an interpretation of SFAS No. 123R and its
interaction with certain SEC rules and regulations and provides the SEC's views regarding the valuation of share-based payment arrangements for public companies. The SAB provides guidance with regard
to share-based payment transactions with non-employees, the transition from nonpublic to public entity status, valuation methods (including assumptions such as expected volatility and
expected term), the accounting for certain redeemable financial instruments issued under share-based payment arrangements, the classification of compensation expense, non-GAAP financial
measures, first-time adoption of SFAS No. 123R, the modification of employee share options prior to adoption of SFAS No. 123R and disclosures in Management's Discussion and
Analysis subsequent to the adoption of SFAS No. 123R. We have already adopted the fair value recognition provision of SFAS No. 123, effective January 1, 2003, on a prospective
basis. Therefore, we have determined that the adoption of SAB 107 will not have an impact on our consolidated financial statements.

Market Risks

We manage our exposure to market risks through internally established policies and procedures and, when we deem appropriate, through the use of derivative
financial instruments, including interest rate hedges. See "Liquidity and Capital ResourcesLong-term debt" above. The objective of our policies is to mitigate
potential statement of operations, cash flow and fair value exposures resulting from possible future adverse fluctuations in interest rates. We evaluate our exposure to market risks by assessing the
anticipated near-term and long-term fluctuations in interest rates on a periodic basis. This evaluation includes the review of leading market indicators, discussions with
financial analysts and investment bankers regarding current and future economic conditions and the review of market projections as to expected future interest rates. We utilize this information to
determine our own investment strategies as well as to determine if the use of derivative financial instruments is appropriate to mitigate any potential future interest rate exposure that we may face.
Our policy does not allow speculation in derivative instruments for profit or execution of derivative instrument contracts for which there are no underlying exposures. We do not use financial
instruments for trading purposes and are not a party to any leveraged derivatives.

We
determine the impact of changes in interest rates on the fair value of our financial instruments based on a hypothetical 10% adverse change in interest rates from the rates in effect
as of the end of the period for these financial instruments. We use different methodologies to determine the impact of these hypothetical changes on our fixed rate public debt and
sales-type leases and on our variable rate debt.

In
accordance with the agreement governing our old senior secured credit facilities, we were party to an interest rate swap agreement for a fixed rate payment of 5.64% on
$100.0 million through

57

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August 30,
2005. In August 2005, this hedge agreement expired. On March 14, 2005, we entered into a five year interest rate swap agreement to hedge interest expense on a notional
amount of $1.25 billion. The notional amount will amortize down to $625 million from March 14, 2008 until expiration on March 14, 2010. In relation to this swap agreement,
we exchanged its floating-rate obligation on $1.25 billion of our Term Loan B-1 facility for a fixed-rate obligation. See "Interest Rate Swap
Agreements" above.

We
have effectively mitigated our cash interest exposure in relation to $1.25 billion of our Term Loan B-1 facility as a result of entering into the interest rate swap
agreements described above. The remaining balance of our senior secured credit facilities of approximately $753 million, which is subject to variable interest rates, will be subject to changes
in interest rates based upon economic conditions. Other than entering into the new $1.25 billion interest rate swap agreement, our strategies and procedures to manage exposure to interest rates
have not changed in comparison to prior periods.

We
are subject to fluctuating interest rates on our floating rate debt and any changes in interest rates would impact cash flows and results of operations. The potential effect of a
hypothetical 10% adverse fluctuation in interest rates for one year on our floating rate debt outstanding at September 30, 2005 would be a reduction in cash flows of approximately
$4.4 million and a decrease in net income of approximately $2.8 million.

As
of September 30, 2005, long-term debt consisted of fixed-rate borrowings of approximately $1.21 billion and floating rate debt of approximately
$2.0 billion. In addition, we had a fixed interest rate swap agreement on a notional amount of $1.25 billion, as described above. Fluctuations in interest rates may affect the fair
values of fixed-rate borrowings and fixed-rate net investments in sales-type lease receivables. Any changes in interest rates would also impact results of
operations and cash flows as described above. At September 30, 2005, outstanding fixed-rate borrowings bore interest at rates ranging from 63/8% to
103/8% and sales type lease receivables bore interest at rates between 8% and 12%. The potential fair value change resulting from a hypothetical 10% adverse fluctuation in interest
rates related to our outstanding fixed-rate debt, including our interest rate swap, and our fixed-rate net investment in sales-type lease receivable balances would
be approximately $64.8 million and $2.5 million, respectively, as of September 30, 2005.

Certain Relationships and Related Transactions Prior to and as a Result of the Completion of the Recapitalization

Transactions with The DIRECTV Group and its Affiliates

Until the consummation of the Recapitalization on August 20, 2004, The DIRECTV Group and its affiliates were related parties of ours.

In
relation to the tax separation agreement we entered into with The DIRECTV Group as part of the Recapitalization, we have recorded an $84.3 million receivable related to foreign
withholding tax claims made against us by the Indian government, the related payments made to date by us on those claims, and for certain other foreign and domestic tax claims against us and tax
payments made by us.

We
provide satellite capacity, TT&C, and other related services and facilities to several subsidiaries of The DIRECTV Group and purchase certain services and equipment from a subsidiary
of The DIRECTV Group. Additionally, for the period prior to the consummation of the Recapitalization, we reimbursed The DIRECTV Group for the allocated costs of certain jointly incurred expense items,
principally relating to administrative and other expenses. Revenues derived from The DIRECTV Group and its affiliates were $31.6 million and $95.4 million for the three and nine months
ended September 30, 2004, respectively, or 15.3% and 15.4% of our total revenues for the respective periods.

In
addition, The DIRECTV Group leases office space to us in Long Beach, California and land for our teleport in Castle Rock, Colorado, and permits the participation by us and our
employees in

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certain
discount programs. Prior to the Recapitalization, The DIRECTV Group provided general liability insurance and certain administrative services to us, including the provision of certain advisory
and audit services. During the three and nine months ended September 30, 2004, we incurred expenses related to such arrangements with The DIRECTV Group of approximately $0.7 and
$1.7 million. In addition, during the three and nine months ended September 30, 2004, we purchased services and equipment from the DIRECTV Group of approximately $0.7 million and
$1.6 million, respectively.

Transactions with The News Corporation and its Affiliates (Other than The DIRECTV Group)

Until the consummation of the Recapitalization on August 20, 2004, The News Corporation and its affiliates were related parties of ours.

We
are a party to agreements with The News Corporation and certain of its subsidiaries and affiliates pursuant to which we provide satellite capacity, TT&C and other related services.
Revenues derived from The News Corporation and its affiliates were $24.4 million and $65.4 million for the three and nine months ended September 30, 2004, respectively, or 11.8%
and 10.6% of our total revenues for the respective periods.

Effect of the Recapitalization

As a result of the Recapitalization, effective August 20, 2004, The DIRECTV Group and The News Corporation were no longer related parties of ours and the
Sponsors and their affiliates became related parties of ours.

Transactions with The Sponsors and Their Affiliates

The Sponsors provided management and advisory services to us pursuant to management services agreements executed at the closing of the Recapitalization. The
Sponsors charged us an aggregate management fee of $2.0 million annually for the provision of these services, subject to an annual increase of three percent. In connection with, and effective
upon completion of, our initial public offering on March 22, 2005, each of the Sponsors terminated their respective management services agreements for an aggregate consideration of
$10.0 million. For the period from January 1, 2005 through March 22, 2005, we recorded approximately $10.4 million of expense for these management fees (including the
termination payment). The annual advisory fee did not include, and the Sponsors may receive, additional compensation for providing investment banking or other advisory services provided in connection
with any specific acquisition or divestiture transactions or in the event the Sponsors perform services above and beyond those previously called for by the agreements. For the period August 20,
2004 through September 30, 2004, we accrued $231 thousand of expense for these management fees. In addition, during the three and nine months ended September 30, 2005, we
reimbursed the Sponsors for $0.1 million and $0.2 million, respectively, for expenses incurred.

During
2004, we retained Capstone Consulting to provide us with consulting services, primarily to identify and advise on potential opportunities to reduce our costs and identify other
potential opportunities to grow our business. Although neither KKR nor any entity affiliated with KKR owns any of the equity of Capstone, KKR has provided financing to Capstone. We recorded
approximately $0.1 million and $0.6 million of expenses during the three and nine months ended September 30, 2005, respectively, related to Capstone Consulting, all of which was
paid through September 30, 2005.

Certain
members of our board of directors whose services are compensated are principals of or are affiliated with the Sponsors.

We
provide satellite capacity, TT&C and other related services to affiliates of one of the Sponsors. Revenues for these services were $0.5 million and $1.7 million for the
three and nine months ended

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September 30,
2005, respectively. As of September 30, 2005, we had customer receivables related to these affiliates of approximately $0.2 million.

Included
in our total contracted backlog of $4.54 billion as of September 30, 2005 is approximately $3.6 million of contracted backlog from these affiliates of the
Sponsors. Contracted backlog represents future cash payments expected from customers under all long-term contractual agreements.

During
the three and nine months ended September 30, 2005, we procured $0 million and $0.9 million, respectively, of insurance and insurance-related services from an
affiliate of one of the Sponsors.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

See "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations-Market Risks."

ITEM 4.    CONTROLS AND PROCEDURES.

Based upon the required evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act")), our Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that as of
September 30, 2005 our disclosure controls and procedures were adequate and effective to ensure that information was gathered, analyzed and disclosed on a timely basis.

There
has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that
occurred during our fiscal quarter ended September 30, 2005, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PANAMSAT HOLDING CORPORATION    PART IIOTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS.

We have outstanding tax claims related to withholding taxes assessed on revenues derived from broadcasters inside and outside of India who broadcast from or into
India. The total amount assessed for all periods from March 31, 1996 through March 31, 2002 is approximately $56.9 million. We are contesting the imposition of such taxes. While
this contest proceeds, we have been required to advance cash and provide a bank guarantee for a total of approximately $49.2 million. As of September 30, 2005, we had paid cash of
approximately $1.2 million related to these assessment years. If unsuccessful in our contest, we could be subject to comparable claims for subsequent years. In connection with the
Recapitalization, The DIRECTV Group, which controlled us prior to the Recapitalization, agreed to indemnify us for these and certain other taxes related to any periods or portions of such periods
ending on or prior to the day of the closing of the Recapitalization in amounts equal to 80% of the first $75.0 million of such taxes and 100% of such taxes in excess of the first
$75.0 million. As a result, our net tax liability related to these periods is capped at $15.0 million.

We
periodically become involved in various claims and lawsuits that are incidental to our business. Other than the matter described above, we believe that no matters currently pending
would, in the event of an adverse outcome, be material.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5.    OTHER INFORMATION.

None.

ITEM 6.    EXHIBITS.

|Exhibit
Number |  | Exhibit Description                                                                                                                        
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|31.1           |  | Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended *
|31.2           |  | Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended *
|32.1           |  | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350 *                                                              
|32.2           |  | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350 *                                                              

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                 | PANAMSAT HOLDING CORPORATION                                                                                                             
|---------------- | -----------------------------------------------------------------------------------------------------------------------------------------
|November 9, 2005 |                                                                                                                                          
|                 | /s/MICHAEL J. INGLESEMichael J. Inglese Executive Vice
President and
Chief Financial Officer
and a Duly Authorized
Officer of the Company

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