- Report of Foreign Issuer (6-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2012.

Commission File No. 333-08880

MEXICAN SATELLITES,

a Mexican Company of Variable Capital

(Translation of registrant’s name into English)

Satélites Mexicanos, S.A. de C.V.

Avenida Paseo de la Reforma No. 222, pisos 20 y 21

Col. Juárez

México, D.F., 06600,

México (52)55-2629-5800

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F Form

20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(1):

Yes ¨ No x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(7):

Yes ¨ No x

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also hereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

REPORT ON FORM 6-K

INDEX TO AUDITED FINANCIAL INFORMATION


		Page

	PART I — FINANCIAL INFORMATION

Item 1.	Basis of presentation of fiscal year information		2

Item 2.	Audited Financial Statements:		3

	Report of Independent Registered Public Accounting Firm		3

	Consolidated Balance Sheets as of December 31, 2011 (Successor Registrant) and 2010 (Predecessor Registrant)		5

	Consolidated Statements of Operations for the Periods From May 26, 2011 Through December 31, 2011 (Successor Registrant), and From January 1, 2011 Through May 25, 2011, and for the Years Ended December, 2010 and 2009 (Predecessor Registrant)		6

	Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Periods From May 26, 2011 Through December 31, 2011 (Successor Registrant), and From January 1, 2011 Through May 25, 2011, and for the Years Ended December, 2010 and 2009 (Predecessor Registrant)		7

	Consolidated Statements of Cash Flows for the Periods From May 26, 2011 Through December 31, 2011 (Successor Registrant), and From January 1, 2011 Through May 25, 2011, and For the Years Ended December, 2010 and 2009 (Predecessor Registrant)		8

	Notes to Consolidated Financial Statements		10

	Schedules of Valuation and Qualifying Accounts		50

Item 3.	Management’s Discussion and Analysis of Financial Condition and Results of Operations:		51

	Results of operations for the year ended December 31, 2011 and 2010		51

	Results of operations for the year ended December 31, 2010 and 2009		54

	PART II — OTHER INFORMATION

Item 1.	Legal Matters		58
Item 2.	Other Matters		58
Item 3.	Exhibits		58
Item 4.	Signatures		59

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

PART I — FINANCIAL INFORMATION

Item 1.

Basis of Presentation of Fiscal Year Information

On May 5, 2011 Satélites Mexicanos, S.A. de C.V. (“Satmex”) entered into an Indenture with Wilmington Trust FSB, as trustee, (the “New Indenture”) pursuant to which we issued $325 million of 9.5% Senior Secured Notes due 2017 (the “New Notes”). Section 4.03 of the New Indenture requires Satmex to furnish to the holders of the New Notes and the Trustee (or file with the SEC for public availability) reports on Form 6-K after the occurrence of an event required to be reported on Form 8-K if Satmex was required to file such reports. As such, Satmex is furnishing this Form 6-K to disclose material non-public information regarding a completed fiscal year pursuant to Item 2.02 of Form 8-K.

The presentation in this Form 6-K gives effect to the issuance of the New Notes pursuant to the New Indenture and the related transactions including, but not limited to, our voluntary filing for protection under Chapter 11 of the U.S. Bankruptcy Code on April 6, 2011 and the confirmation of our plan of reorganization on May 11, 2011, which plan became effective on May 26, 2011 (the “Transactions”). See Note 2 of the Notes to the Audited Consolidated Financial Statements herein for a description of the Transactions.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). References to U.S. GAAP issued by the Financial Accounting Standards Board (“FASB”) in these footnotes are to the FASB Accounting Standards Codification (the “Codification”).

This periodic report on Form 6-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, from time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. They can be identified by the use of forward-looking words such as “believe”, “expect”, “plan”, “may”, “should”, or “anticipate” or their negatives or other variations of these words or other comparable words, or by discussion of strategy that involves risks and uncertainties. These forward-looking statements may be included in, but are not limited to, various filings made by us with the Securities and Exchange Commission (the “Commission”), press releases or oral statements made by or with the approval of one of our authorized executive officers. Forward-looking statements are only predictions. Actual events or results could differ materially from those projected or suggested in any forward-looking statement as a result of a wide variety of factors and conditions. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. In any event the accompanying statements are applicable only as of the date of this Form 6-K and we undertake no obligation to update or revise any of them.

Item 2.

Audited Consolidated Financial Statements

Report of Independent Registered Public

Accounting Firm

To the Board of Directors and Shareholders of

Satélites Mexicanos, S. A. de C. V. and Subsidiaries:

Mexico City, Mexico

We have audited the accompanying consolidated balance sheets of Satélites Mexicanos, S. A. de C. V. and subsidiaries (“Satmex”) as of December 31, 2011 (Successor Registrant balance sheet) and as of December 31, 2010 (Predecessor Registrant balance sheet), and the related consolidated statements of operations, changes in shareholders’ equity, and cash flows for the period from May 26, 2011 through December 31, 2011 (Successor Registrant operations) and for the period from January 1, 2011 through May 25, 2011 and for each of the two years in the period ended December 31, 2010 (Predecessor Registrant operations). Our audits also included the financial statement schedule of the Successor Registrant for the period from May 26, 2011 through December 31, 2011 and the Predecessor Registrant for the period from January 1, 2011 through May 25, 2011 and for each of the two years in the period ended December 31, 2011, as listed in the table of contents. These consolidated financial statements and financial statement schedule are the responsibility of Satmex’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Satmex is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Satmex’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the Successor Registrant consolidated financial statements present fairly, in all material respects, the financial position of Satélites Mexicanos, S. A. de C. V. and subsidiaries as of December 31, 2011, and the results of their operations and their cash flows for the period from May 26, 2011 through December 31, 2011, in conformity with accounting principles generally accepted in the United States of America. Further, in our opinion, the Predecessor Registrant consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Predecessor Registrant as of December 31, 2010 and the results of their operations and their cash flows for the period from January 1, 2011 through May 25, 2011 and for each of the two years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such Successor and Predecessor Registrant consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, as a result of the recapitalization transactions described therein, effective May 26, 2011 a change in control occurred. As a result, the Successor Registrant applied push-down accounting in its consolidated financial statements to reflect its acquisition by the Group of Investors. Therefore, the consolidated financial statements of the Successor Registrant are presented on a different basis than those of the Predecessor Registrant and, therefore, are not comparable.

Galaz, Yamazaki, Ruiz Urquiza, S. C.

Member of Deloitte Touche Tohmatsu Limited

C. P. C. Alejandro González Anaya

Mexico City, Mexico

February 22, 2012

Consolidated Balance Sheets

As of December 31, 2011 and 2010

(In thousands of U. S. dollars)

		September 30,			September 30,
	Successor Registrant			Predecessor Registrant
	2011			2010
Assets
Current assets:
Cash and cash equivalents	$	79,251		$	75,712
Accounts receivable, net		12,658			13,126
Due from related parties		—			840
Inventories, net of allowance for obsolescence		489			494
Prepaid insurance and other assets		6,687			4,911

Total current assets		99,085			95,083

Satellites and equipment, net		443,015			265,158
Concessions, net		44,628			38,185
Intangible assets		63,810			7,156
Deferred financing cost		13,677			—
Guarantee deposits and other assets		728			873
Goodwill		—			32,502


Total	$	664,943		$	438,957


Liabilities and Shareholders’ Equity (Deficit)
Current liabilities:
Short-term portion of debt obligations	$	—		$	238,237
Accounts payable and accrued expenses		18,863			16,411
Deferred revenue		1,361			2,344
Income tax payable		454			101
Deferred income taxes		1,490			325

Total current liabilities		22,168			257,418

Debt obligations		325,000			197,873
Deferred revenue		33,800			60,666
Guarantee deposits and accrued expenses		2,904			2,677
Labor obligations		891			943
Deferred income taxes		19,889			5,413

Total liabilities		404,652			524,990

Contingencies and commitments (Note 17)

Shareholders’ equity (deficit):
Paid-in capital		275,662			46,764
(Predecessor Registrant common stock, class I, no par value, 10,312,499 shares authorized, issued and outstanding		—			—
Predecessor Registrant common stock, class II, no par value, 36,562,500 shares authorized, issued and outstanding		—			—
Successor Registrant common stock, class I, no par value, 50,000 shares authorized, issued and outstanding		—			—
Successor Registrant common stock, class II, no par value, 129,950,000 shares authorized, issued and outstanding)		—			—
Accumulated deficit		(18,882	)		(136,320	)

Total Satélites Mexicanos, S. A. de C. V. shareholders’ equity (deficit)		256,780			(89,556	)
Noncontrolling interest		3,511			3,523

Total shareholders’ equity (deficit)		260,291			(86,033	)


Total	$	664,943		$	438,957

See accompanying notes to these consolidated financial statements.

Consolidated Statements of Operations

For the periods from May 26, 2011 through December 31, 2011 (Successor Registrant) and from January 1,

2011 through May 25, 2011, and for the Years Ended December, 2010 and 2009 (Predecessor Registrant)

(In thousands of U. S. dollars)

		September 30,			September 30,			September 30,			September 30,
	Successor Registrant			Predecessor Registrant
	Period from May 26, 2011 through December 31, 2011			Period from January 1, 2011 through May 25, 2011			2010			2009

Revenues:
Satellite services	$	59,714		$	43,734		$	105,781		$	102,061
Broadband satellite services		7,433			5,190			12,910			12,384
Programming distribution services		7,563			4,786			10,071			10,594

		74,710			53,710			128,762			125,039

Cost of satellite services ⁽¹⁾		6,191			4,401			11,405			12,884
Cost of broadband satellite services ⁽¹⁾		1,388			685			2,821			2,249
Cost of programming distribution services ⁽¹⁾		4,393			2,625			5,387			5,331
Selling and administrative expenses ⁽¹⁾		12,792			7,714			17,040			16,893
Depreciation and amortization		46,547			17,080			43,402			47,657
Recapitalization transactions expenses		—			28,766			16,443			3,324

		71,311			61,271			96,498			88,338

Operating income (loss)		3,399			(7,561	)		32,264			36,701

Other (expenses) income:
Interest expense		(8,990	)		(19,499	)		(45,789	)		(43,708	)
Interest income		328			150			345			480
Foreign exchange (loss) gain – net		(1,461	)		349			71			12


Loss before income tax		(6,724	)		(26,561	)		(13,109	)		(6,515	)

Income tax expense		12,133			2,199			779			13,233


Net loss		(18,857	)		(28,760	)		(13,888	)		(19,748	)

Less: Net income attributable to noncontrolling interest		25			3			444			406


Net loss attributable to Satélites Mexicanos, S. A. de C. V.	$	(18,882	)	$	(28,763	)	$	(14,332	)	$	(20,154	)

⁽¹⁾	Exclusive of depreciation and amortization shown separately below.

See accompanying notes to these consolidated financial statements.

Consolidated Statements of Shareholders’ Equity (Deficit)

For the periods from May 26, 2011 through December 31, 2011 (Successor Registrant) and from January 1,

2011 through May 25, 2011, and for the Years Ended December, 2010 and 2009 (Predecessor Registrant)

(In thousands of U. S. dollars, except share data)

		September 30,		September 30,			September 30,			September 30,			September 30,
	Shares Issued		Paid-in capital			(Accumulated deficit)			Noncontrolling interest			Total shareholders’ (deficit) equity

Balance, January 1, 2009		4,687,500	$	46,764		$	(101,834	)	$	2,673		$	(52,397	)
Net (loss) income		—		—			(20,154	)		406			(19,748	)


Balance, December 31, 2009		4,687,500		46,764			(121,988	)		3,079			(72,145	)
Net (loss) income		—		—			(14,332	)		444			(13,888	)


Balance, December 31, 2010		4,687,500		46,764			(136,320	)		3,523			(86,033	)
Net (loss) income from January 1, 2011 through May 25, 2011		—		—			(28,763	)		3			(28,760	)


Balance, May 25, 2011 (Predecessor Registrant)		4,687,500		46,764			(165,083	)		3,526			(114,793	)

Push-down accounting adjustments:
Valuation adjustments, net		—		225,363			—			(40	)		225,323
Elimination of Predecessor accumulated deficit		—		(165,083	)		165,083			—			—

Issuance of common stock		116,022,700		90,000			—			—			90,000

Capitalization of debt into common stock		9,289,800		78,618			—			—			78,618

Net (loss) income from May 26, 2011 through December 31, 2011		—		—			(18,882	)		25			(18,857	)


Balance, December 31, 2011 (Successor Registrant)		130,000,000	$	275,662		$	(18,882	)	$	3,511		$	260,291

See accompanying notes to these consolidated financial statements.

Consolidated Statements of Cash Flows

For the periods from May 26, 2011 through December 31, 2011 (Successor Registrant) and from January 1,

2011 through May 25, 2011, and for the Years Ended December, 2010 and 2009 (Predecessor Registrant)

(In thousands of U. S. dollars)

		September 30,			September 30,			September 30,			September 30,
	Successor Registrant			Predecessor Registrant
	Period from May 26, 2011 through December 31, 2011			Period from January 1, 2011 through May 25, 2011			2010			2009

Cash flows from operating activities:
Net loss	$	(18,857	)	$	(28,760	)	$	(13,888	)	$	(19,748	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net periodic pension cost		(24	)		—			208			274
Depreciation and amortization		46,547			17,080			43,402			47,657
Deferred income taxes		10,814			1,575			191			517
Deferred revenue		(794	)		(977	)		(2,344	)		(2,344	)
Amortization of deferred financing costs		1,806			—			—			—
Provision for (reversal of) allowance for doubtful accounts		1,360			—			172			(150	)
Interest accrued to principal on debt obligations		—			4,020			15,495			14,318
Write-off of satellite construction costs		—			—			—			1,256

Changes in operating assets and liabilities: (Increase) decrease in:
Accounts receivable		5,594			(6,486	)		(3,755	)		7,888
Due from related parties		—			840			(376	)		(79	)
Inventories		171			(166	)		(84	)		(223	)
Prepaid insurance		(560	)		1,881			784			(1,989	)
Guarantee deposits and other assets		277			(132	)		(227	)		69
Accounts payable, accrued expenses and income tax		(13,472	)		18,594			(457	)		(1,977	)
Guarantee deposits and accrued expenses		(508	)		665			1,889			525


Net cash provided by operating activities		32,354			8,134			41,010			45,994


Cash flows from investing activities:
Construction in progress Satmex 8 (including capitalized interest)		(150,537	)		(42,333	)		(63,113	)		—
Acquisition of equipment		(1,627	)		(635	)		(4,578	)		(1,808	)


Net cash used in investing activities		(152,164	)		(42,968	)		(67,691	)		(1,808	)

Continued

		September 30,			September 30,			September 30,			September 30,
	Successor Registrant			Predecessor Registrant
	Period from May 26, 2011 through December 31, 2011			Period from January 1, 2011 through May 25, 2011			2010			2009

Cash flows from financing activities:
Proceeds from equity interest		90,000			—			—			—
Repayment of First Priority Old Notes		(238,237	)		—			—			—
Issuance of Senior Secured Notes		—			325,000			—			—
Deferred financing costs		(333	)		(18,247	)		—			—


Net cash (used in) provided by financing activities		(148,570	)		306,753			—			—


Cash and cash equivalents:
Net (decrease) increase for the period		(268,380	)		271,919			(26,681	)		44,186
Beginning of period		347,631			75,712			102,393			58,207


End of period	$	79,251		$	347,631		$	75,712		$	102,393


Supplemental disclosures of cash flow information:
Cash paid during the year:
Interest paid, net of interest capitalized	$	16,295		$	40,196		$	32,554		$	28,912

Capitalized interest	$	11,715		$	3,801		$	2,582		$	—

Income taxes paid	$	1,172		$	—		$	4,666		$	9,008


Non-cash investing activities:
Capital expenditures incurred not yet paid	$	3,674		$	35,678		$	844		$	2,391


Non-cash financing activities:
Capitalization of debt into common stock	$	206,890		$	—		$	—		$	—

See accompanying notes to these consolidated financial statements.

Notes to Consolidated Financial Statements

For the periods from May 26, 2011 through December 31, 2011 (Successor Registrant) and from January 1,

2011 through May 25, 2011, and For the Years Ended December, 2010 and 2009 (Predecessor Registrant)

(In thousands of U.S. dollars, unless otherwise stated)

1.	Nature of business

Satélites Mexicanos, S. A. de C. V. and subsidiaries (“Satmex” and together with its subsidiaries, the “Company”) is a provider of fixed satellite services (“FSS”) in the Americas. Satmex’s current fleet is comprised of three satellites, Satmex 6, Satmex 5, and Solidaridad 2 in contiguous orbital slots that enable its customers to effectively serve its entire coverage footprint utilizing a single satellite connection. Satmex’s business provides mission-critical communication services to a diverse range of customers, including large telecommunications companies, private and state-owned broadcasting networks, cable and direct-to-home satellite television operators, and public and private telecommunications networks operated by financial, industrial, transportation, tourism, educational and media companies as well as governmental entities. Satmex provides services primarily to three types of customers: data, voice-over IP networks and video.

Satmex primarily provides commercial FSS through Satmex 6 and Satmex 5, which have a total of 108 C- and Ku-band 36 MHz transponder equivalents. Satmex has started construction and entered into a launch services agreement for a new satellite, Satmex 8, which will replace Satmex 5. Satmex anticipates that construction of Satmex 8 will be completed by July 2012 and that Satmex 8 will be in-service by the end of 2012. In March 2008, Solidaridad 2 was placed in inclined orbit. It primarily provided L-band service to the Mexican government for national security and social services. As of December 31, 2010, Satmex estimated that Solidaridad 2 could remain in inclined orbit for 2.5 years but in early 2011 Satmex began to suspect that it had less propellant than needed to continue to operate in inclined orbit for that period. On June 1, 2011, Satmex received the results of an independent study and based on such study Satmex has decided to de-orbit the satellite. Satmex intends to pursue plans for a new satellite, Satmex 7, to occupy the orbital slot of Solidaridad 2 and offer both C- and Ku-band services. In the interim, Satmex anticipates transferring Satmex 5 to the Solidaridad 2 orbital slot once Satmex 8 is in orbit.

Satmex operates and monitors satellite fleet from two specialized earth stations or satellite control centers, located in Iztapalapa, Mexico, and Hermosillo, Mexico.

In addition to the core FSS business, which is reported as “Satellite services” segment, Satmex also offers the programming distribution services segment to offer TV programs in Spanish for Hispanic communities living in the United States of America (“USA”). Through one of its subsidiaries, the Company also provides other broadband satellite transmission capacity services for various applications, such as internet access via satellite, telecommunication transmission and broadcasting

2.	Recapitalization Transactions

In order to address its liquidity needs, enhance its long-term growth and improve its competitive position, Satmex carried out a comprehensive recapitalization of the Company through various transactions pursuant to which the following actions have been taken (which are referred to, collectively, as the “Recapitalization Transactions”):

On December 22, 2010, Nacional Financiera, S. N. C., Institución de Banca de Desarrollo, Dirección Fiduciaria , in its capacity as trustee (the “NAFIN Trust”) and Deutsche Bank Mexico, S. A., Institución de Banca Múltiple, División Fiduciaria , in its capacity as trustee (the “Deutsche Trust”) (collectively the “Sellers”), former shareholders of Satmex, entered into a Share Purchase Agreement (the “SPA”) with Holdsat Mexico, S. A. P. I. de C. V., a variable capital investment promotion society (sociedad anónima promotora de inversion de capital variable) , organized and existing under the laws of Mexico (“Holdsat Mexico”), as buyer, for the acquisition of the 100% of the outstanding voting equity interests of Satmex. On March 10, 2011, Holdsat Mexico ceded and assigned a portion of its rights under the SPA to acquire all existing Series “B” and “N” shares of Satmex to Satmex International B.V., a limited liability company organized under the laws of the Netherlands (“Investment Holdings BV”), which is beneficially and indirectly owned by holders of the Second Priority Secured Notes (the “Second Priority Old Notes”) of Satmex. Investment Holdings BV owns 49% of the common stock of Holdsat Mexico. The assignment of these rights by Holdsat Mexico to Investment Holdings resulted in both entities forming a collective group of investors (the “Group of Investors” or the “Buyers”) to acquire control in Satmex upon the effectiveness of the SPA, which occurred after the fulfillment of the following transactions:

•

Payment by the Buyers of $6.25 million to the Sellers for 100% of the outstanding common stock of Satmex, which occurred on May 26, 2011;

•

The offering and sale of the Senior Secured Notes (“Senior Secured Notes”), due 2017, for $325,000, which were initially offered on May 5, 2011 to qualified institutional buyers under Rule 144A of the Securities Act and to persons outside of the U.S. in compliance with Regulation S of the Securities Act. The Senior Secured Notes were subsequently exchanged for new exchange notes, due 2017, for a like principal amount, registered with the U.S. Securities and Exchange Commission (the “SEC”), effective September 26, 2011. The proceeds received from the Senior Secured Notes were used to repay the First Priority Senior Secured Notes due 2011 (the “First Priority Old Notes”) on May 26, 2011; and

•

The voluntary filing by Satmex, Alterna’TV Corporation and Alterna’TV International Corporation for protection under Chapter 11 of the U.S. Bankruptcy Code and confirmation of a prepackaged plan of reorganization filed in the United States Bankruptcy Court (the “Plan”), which such confirmation occurred on May 11, 2011. Consummation of the Plan occurred on May 26, 2011 (the “Plan Effective Date”). The Plan contemplated the following transactions:

•

The conversion of the Second Priority Old Notes (which were to mature in 2013) into direct or indirect equity interests representing 7.146% of the economic interests in the emerging entity (“Reorganized Satmex”) (the “Conversion Rights”, subject to dilution by any equity issued under any management incentive plan, as determined, adopted and approved by the Board of Directors of Reorganized Satmex on the Plan Effective Date, and any future issuance of equity, including certain primary rights and follow-on rights (the “Primary Rights” and the “Follow-On Rights”, respectively) of the holders of the Second Priority Old Notes as discussed below). In lieu of the Conversion Rights, the Primary Rights and the Follow-On Rights, holders of the Second Priority Old Notes could have elected to receive a cash payment of 38 cents per U.S. dollar in principal amount of the Second Priority Old Notes (including accrued and paid-in kind interest). All interested holders of Second Priority Old Notes elected the Conversion Rights, which such conversion occurred on May 26, 2011;

•

The offering of the Primary Rights to holders of the Second Priority Old Notes, which comprised the rights to purchase direct or indirect equity interests representing up to 85.753% of the economic interests in Reorganized Satmex for up to $96,250 (subject to dilution by any equity issued under any management incentive plan, as determined, adopted and approved by the Board of Directors of Reorganized Satmex on the Plan Effective Date, and any future issuance of equity, including the Follow-On Rights, as discussed below). The Primary Rights were exercised for $90,000, effective on May 26, 2011, representing 83.254% of the outstanding capital of Reorganized Satmex. Eligible holders of the Second Priority Old Notes also had the right to the Follow-On Rights, comprising the right to invest in their pro rata share of a follow-on issuance of equity securities in an aggregate amount of up to $40,000; this option has expired unexercised;

•

Aside from holders of the First Priority Old Notes and the Second Priority Old Notes which received the treatment described above, all holders of allowed claims against the debtors, including employees, trade creditors and other priority an non-priority creditors, were paid in the ordinary course during the resolution of the bankruptcy or in full on, or shortly after, the Plan Effective Date

Paid-in capital of Reorganized Satmex as a result of the SPA and the Plan is presented in Note 13 to the accompanying consolidated financial statements.

New Basis of Accounting (Push-down accounting)

As the events described above occurred as expected, the SPA became legally effective on May 26, 2011, and resulted in a change in control among the Sellers and the Group of Investors. Given these facts and as a result of becoming substantially wholly-owned by the Group of Investors, Satmex applied push-down accounting in its consolidated financial statements to reflect its acquisition by the Group of Investors. The acquisition method of accounting was applied, resulting in a new basis of accounting for the “successor period” beginning on May 26, 2011 (the “Acquisition Date”).

As a result, the Company recognized and measured, at their fair values, the identifiable assets acquired, liabilities assumed and the related noncontrolling interests. In order to determine fair values, Satmex considered the following generally accepted valuation approaches: The cost approach, the income approach and the market approach. Significant assumptions used in the determination of fair values include cash flow projections and related discount rates, industry indices, market prices regarding replacement cost and comparable market transactions. While Satmex believes that the estimates and assumptions underlying the valuation methodologies were reasonable, different assumptions could have resulted in different fair values.

The total estimated consideration transferred, at fair value, for the acquisition of 100% of Satmex’s common stock was as follows:

		September 30,
Consideration at fair value:	As of May 26, 2011

Cash paid	$	1,000
Executive bonuses		6,303
Cash consideration paid upon completion of the share purchase agreement		5,250
Rights offering		90,000
Capitalization of Second Priority Old Notes		78,618


Fair value of total consideration transferred	$	181,171

Supplementary Pro Forma Information (Unaudited)

The following table presents the revenues and earnings (net loss) of Satmex as if the acquisition had occurred as of January 1, 2011:

		September 30,		September 30,
	Revenues		Net loss
	Unaudited

Actual from May 26, 2011 to December 31, 2011 (Successor Registrant)		74,710		(18,882	)

Supplemental pro forma from January 1, 2011 to December 31, 2011		128,010		(12,027	)

Supplemental pro forma from January 1, 2010 to December 31, 2010		127,779		31,326

Supplemental pro forma from January 1, 2011 to December 31, 2011 was adjusted to exclude $28,766, of recapitalization transaction expenses incurred in such period, as they are considered non-recurring charges.

Supplemental pro forma from January 1, 2010 to December 31, 2010 was adjusted to exclude $16,443, of recapitalization transaction expenses incurred in such period, as they are considered non-recurring charges.

Acquisition-related costs were $47,013, of which $18,247 represent the cost of issuing the Senior Secured Notes, which was capitalized within other assets (see Note 4g) on May 5, 2011 (date of issuance of the Senior Secured Notes) and $28,766 were included in the Predecessor statement of operations within recapitalization transactions expenses.

The following table summarizes the recognized amounts of identifiable assets, assumed liabilities and non-controlling interest, pushed-down in order to be reflected in Satmex’s financial information:

		September 30,
Recognized amounts of identifiable assets acquired and liabilities assumed:	As of May 26, 2011

Satellite and equipment	$	344,000
Intangible assets		88,168
Concessions		45,672
Deferred financing cost		18,247
Financial assets, net of financial liabilities		67,623
Deferred income taxes		(10,372	)
Deferred revenue		(35,956	)
First Priority Old Notes		(238,237	)

Total identifiable net assets		279,145

Non-controlling interest (1)		(3,486	)
Bargain purchase		(94,488	)


	$	181,171

All assets and liabilities acquired have been measured at fair value.

⁽¹⁾

The fair value of the noncontrolling interest in Enlaces, a private entity, was estimated by applying the income approach. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. Key assumptions include a discount rate of 12.30%, a terminal value based on terminal earnings before interest, taxes, depreciation, and amortization, and financial multiples of entities deemed to be similar to Enlaces between 5x and 6x.

As a result of the acquisition, the Company has recorded bargain purchase of $94,488, representing the amount of the fair value of the net assets acquired in excess of the purchase price. The bargain purchase gain represents the purchase of Satmex by the Group of Investors at less than fair value of Satmex’s net assets and stems from the restructuring of Satmex. At the end of 2010, the existing debt of Satmex was set to mature within the following twelve months; additionally, Satmex required additional financing for its future satellites. Its current stockholder at that time did not actively administer or operate Satmex and had not provided further financing so that Satmex could carry out its plans with respect to future operations. Accordingly, a restructuring was entered into, which included the entrance of new active investors, willing and able to contribute the financing necessary for Satmex to continue with its future operating plans, and thus, purchase Satmex from the Sellers at a bargain purchase.

As the bargain purchase gain does not result from the operations of Satmex, it is recognized as part of Reorganized Satmex’s common stock rather than within its consolidated statement of operations.

3.	Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Factors affecting the comparability of the consolidated financial statements—push-down accounting — The Company has accounted for the Recapitalization Transactions using push-down accounting for the acquisition of the Company by the Group of Investors. This resulted in the adjustment of all net assets to their respective fair values as of the Acquisition Date.

Although Satmex continued as the same legal entity after the Recapitalization Transactions, the application of push-down accounting represents the termination of the old accounting entity and the creation of a new one. As a result, the accompanying consolidated balance sheets, statements of operations, stockholders’ equity and cash flows are presented for two periods: Predecessor and Successor, which relate to the period preceding the Recapitalization Transaction and the periods succeeding the Recapitalization Transaction, respectively. The Company refers to the operations of Satmex and subsidiaries for both the Predecessor and Successor periods.

Accordingly, the Successor Company presentation is not comparable to the Predecessor Company presentation due to the different basis of accounting.

Consolidation of financial statements — The consolidated financial statements include the financial statements of Satmex and those of its subsidiaries. The financial statements of the subsidiaries are consolidated from their respective dates of acquisition or incorporation. All intercompany transactions and balances have been eliminated in consolidation.

The activities of the entities in the consolidated group are described below:


Company	Ownership percentage	Activity

Enlaces Integra, S. de R.L. de C.V. (“Enlaces”)	75.00%	Acquired on November 30, 2006. Enlaces offers private networks for voice, video and data as well as other value-added satellite services in Mexico.

HPS Corporativo S. de R. L. de C. V. (“HPS”)	99.97%	Incorporated on December 20, 2007 to provide administrative services exclusively to Enlaces. It is owned 99.97% by Enlaces and 0.03% by Satmex USA.

Alterna’TV Corporation (“Alterna’TV Corp.”)	100.00%	Incorporated on December 19, 2008, to be a vehicle to contract the procurement of the Satmex 7 satellite.

Alterna’TV International Corporation (“Alterna’TV Int.”)	100.00%	Incorporated on May 21, 2009. This entity is engaged in programming distribution services, primarily in the United States of America.

SMVS Administración, S. de R. L. de C. V. and SMVS Servicios Técnicos, S. de R. L. de C. V. (“Service Companies”)	99.97%	Incorporated on June 30, 2006, to provide administrative and operating services exclusively to Satmex.

Satmex U.S.A., LLC (“Satmex USA”)	100.00%	Incorporated on August 4, 2011. This entity holds the non-controlling interests related to the Service Companies.

Satmex Escrow, S. A. de C. V., (“Escrow”) was incorporated on March 8, 2011 solely to act as the issuer of the Senior Secured Notes and was merged into Satmex on May 26, 2011. Satmex assumed all of Escrow’s obligations.

Foreign currency transactions —For U.S. GAAP reporting purposes, the Company maintains separate accounting records in its functional currency, the U.S. dollar. Transactions denominated in Mexican pesos and other foreign currencies are recorded at the rate of exchange in effect at the date of the transactions. Monetary assets and liabilities denominated in Mexican pesos and other foreign currencies are converted into the Company’s functional currency at the rate of exchange in effect at the balance sheet date (Mexican pesos per one U.S. dollar as of December 31, 2011 and 2010, were $13.9787 and $12.3571, respectively), with the resulting effect included in other (expense) income within results of operations.

Fresh-start reporting in 2006 —Satmex went through a reorganization process in 2006, and adopted fresh-start reporting as of November 30, 2006. Reorganization adjustments were made on that date in the consolidated financial information to reflect the effects of agreements in accordance with the confirmation order and to reflect adoption of fresh-start reporting. These adjustments reflected the relative fair values the Company’s assets and liabilities on the effective date of that reorganization. As a result of Satmex’s emergence from Chapter 11 of the United States Federal Bankruptcy Law, for financial reporting purposes a new economic entity was established with respect to Satmex and its subsidiaries; however, each of the legal entities preserved its rights and responds to its obligations individually in accordance with Mexican laws.

4.	Significant accounting policies

A summary of the significant accounting policies used in the preparation of the accompanying consolidated financial statements follows:

Cash and cash equivalents— This line item consists mainly of bank deposits in checking accounts and readily available daily investments of cash surpluses. Cash equivalents are composed of highly liquid investments with original maturities of three months or less. This line item is stated at nominal value plus accrued yields, which are recognized in results as they accrue.

Concentrations of credit risk— Financial assets, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are maintained with high-credit quality financial institutions.

The Company’s customers are comprised of several companies in the private domestic sector and certain foreign companies. Management considers that its credit evaluation, approval and monitoring processes combined with negotiated billing arrangements mitigate potential credit risks with regard to its current customer base.

The principal customers of the Company are as follows: for Satellite services — broadcasting: Grupo Televisa and Productora y Comercializadora de Televisión, S.A. de C.V.; for Satellite services — telecommunications: Teléfonos de México, S.A. de C.V. and Telmex Perú, S.A. (“Telmex”); and for Satellite services — data transmission and Internet: Hughes Network Systems, LLC. For Programming distribution services (Alterna’TV International Corp.), the Company’s principal customers are Direct TV and Comcast Cable Communications. For Broadband satellite services (Enlaces), the principal customers are Globalstar de México, S. de R. L. de C. V. and Grupo Wal-Mart de México.

For the years ended December 31, 2011, 2010 and 2009, revenues from Satellite services, Programming distribution services and Broadband satellite services were obtained from:

		September 30,		September 30,		September 30,
	2011		2010		2009
	%		%		%
Hughes Networks Systems, Inc.		14		17		20
Telmex		15		14		15
Other foreign customers		40		37		36
Other domestic customers		31		32		29

Inventories— Inventories consist mainly of antennas and are stated at the lower of cost or market value. Cost is determined using the average cost method.

Satellites and equipment— As of May 26, 2011, Satmex adopted push-down accounting, under which its satellites and equipment were recorded at fair values based upon the appraised values of such assets. Satmex determined the fair value of the satellites and equipment using the cost approach. The cost approach, often referred to as current replacement cost, estimates fair value based on the amount that currently would be required to replace the service capacity of an asset. Assets acquired after the adoption of push-down accounting are recorded at acquisition cost. As of December 31, 2010, satellites and equipment were valued at their fair value as of November 30, 2006, when Satmex had applied fresh start reporting resulting from a previous reorganization that was effective on such date, less subsequent depreciation.

Depreciation is calculated using the straight-line method for satellites, related equipment and other owned assets over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvements.

The estimated useful lives of the satellites are as follows:

		September 30,
	Useful life (Years)

Satellites in-orbit - original estimated useful life as determined by engineering analysis:

Satmex 6		15
Satmex 5		15
Solidaridad 2		14.5

Depreciation of satellites commences on the date on which the satellite is placed in orbit. Satmex 6 was launched on May 27, 2006 and commenced operations in July 2006. Satmex 5 was launched on December 5, 1998 and commenced operations in January 1999. Solidaridad 2 concluded its depreciation period based upon its estimated useful life during 2009.

The estimated useful lives of equipment are as follows:

		September 30,
	Useful life (Years)

Equipment:

Satellite equipment		15
Furniture and fixtures		10
Leasehold improvements		5
Teleport, equipment and antennas		10

Costs incurred in connection with the construction and successful deployment of the satellites and related equipment are capitalized. Such costs consist primarily of the costs of satellite construction and launch, including launch insurance and insurance during the period of in-orbit testing, the net present value of performance incentives expected to be payable to the satellite manufacturers, costs directly associated with the monitoring and support of satellite construction, and interest costs incurred during the period of satellite construction. Satellite construction and launch services are generally procured under long-term contracts that provide for payments over the contract periods. Satellite construction and launch services costs are capitalized to reflect progress toward completion. Capitalizing these costs typically coincides with contract milestone payment schedules.

The insurance paid to renew in-orbit coverage is recorded as a prepaid insurance and amortized over the related policy period (see Note 17).

Concessions— As of May 26, 2011, Satmex adopted push-down accounting, under which its concessions were recorded at fair values based upon the appraised values of such assets. Satmex determined the fair value of the orbital concessions and the public telecommunications network concession using market approach and income approach methods, respectively. Orbital concessions are amortized over 40 years using the straight-line method; their remaining useful life as of the Acquisition Date was 26 years. The public telecommunications network concession is amortized over 30 years using the straight-line method; its remaining useful life as of the Acquisition Date was 19 years.

As of December 31, 2010, concessions were valued at their fair value as of November 30, 2006, when Satmex had applied fresh start reporting resulting from a previous reorganization, less subsequent amortization.

Valuation of satellites and long-lived assets— The carrying value of the satellites, amortizable intangible assets and other long-lived assets is reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the expected undiscounted future cash flows are less than the carrying value of the long-lived assets, an impairment charge is recorded based on such asset’s estimated fair value. Changes in estimates of future cash flows could result in a write-down of the asset in a future period.

Estimated future cash flows from the Company’s satellites could be impacted by changes in estimates of its ability to operate the satellite at expected levels, changes in the manner in which the satellite is to be used and the loss of one or several significant customer contracts on the satellite.

Deferred financing costs —Deferred financing costs related to the issuance of Senior Secured Notes were capitalized and reported as an asset. These costs are amortized to interest expense using the effective rate interest method.

Goodwill and other intangible assets:

Goodwill — As of December 31, 2010, goodwill represented the amount by which Satmex’s reorganization equity value, stemming from its 2006 reorganization, exceeded the fair value of its net assets (exclusive of debt obligations). Goodwill was fully allocated to the satellite services reporting unit. Goodwill was not amortized but was tested on an annual basis for impairment during the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. Fair value estimates are based on valuation models that typically incorporate probability assessments of expected future cash flows. Goodwill is considered to be impaired when the carrying amount of the reporting unit to which the goodwill belongs exceeds the fair value of that reporting unit. An implied fair value of goodwill is then compared to the carrying value of goodwill, and any impairment loss is recognized within operations. Satmex completed its annual goodwill impairment test in the fourth quarter of 2010 and determined that goodwill was not impaired. As a result of the adoption of push-down accounting stemming from the Recapitalization Transactions in 2011, goodwill was eliminated.

Other intangible assets —Intangible assets arising from push-down accounting are initially recorded at fair value using the income approach method. Intangible assets identified as part of the push-down of acquisition accounting consisted primarily of contract backlog and customer relationships. As of December 31, 2010, intangible assets consisted of contract backlog, customer relationships, landing rights and internally developed software and technology, all of which were recorded in connection with the adoption of fresh-start reporting in 2006. The Company reviews intangible assets for impairment whenever facts and circumstances indicate that the carrying amounts may not be recoverable. An intangible asset with a determinable useful life is considered to have been impaired when its carrying amount exceeds its fair value; however, an impairment loss shall only be recognized when the estimated future undiscounted cash flows expected to result from the use and eventual disposition of the asset are less than the carrying value of the asset. The Company measures an impairment loss as the difference between the carrying value of the asset and its fair value.

The costs of intangible assets with finite and determinable useful lives are amortized to reflect the pattern of consumption, over the estimated useful lives of the assets, as follows:

		September 30,
	Useful life (Years)

Contract backlog		10
Customer relationships		4
Landing rights		5
Internally develop software and technology		5

Labor obligations— In accordance with Mexican Labor Law, Satmex provides seniority premiums benefits to its employees under certain circumstances. These benefits consist of a one-time payment equivalent to 12 days wages for each year of service (at the employee’s most recent salary, but not to exceed twice the legal minimum wage), payable to all employees with 15 or more years of service, as well as to certain employees terminated involuntarily prior to the vesting of their seniority premium benefit. Satmex also provides statutorily mandated severance benefits to its employees terminated under certain circumstances. Such benefits consist of a one-time payment of three months wages plus 20 days wages for each year of service payable upon involuntary termination without just cause. Costs associated with these benefits are provided for based on actuarial computations using the projected unit credit method.

Fair value of financial instruments and fair value measurements— An entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Accounting guidance establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Inputs used to measure fair value may fall into one of three levels:

Level 1—applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2—applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3—applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, accounts receivable, debt, accounts payable and accrued expenses. The Company believes that the recorded values of cash, accounts receivable, accounts payable and accrued expenses approximate their current fair values because of their nature and respective maturity dates or durations. The fair value of debt is disclosed in Note 11.

Provisions— Are recognized for current obligations that result of a past event, are probable to result in the use of economic resources and can be reasonably estimated.

Income taxes— Current income taxes, calculated as the higher of the regular Mexican income tax (“ISR”) or the Business Flat Tax (“IETU”), are recorded in the results of the year in which they are incurred. The Company recognizes deferred income tax assets and liabilities for the future consequences of temporary differences between the financial statement carrying amounts of assets and liabilities and their related tax bases, measured using enacted rates. To determine tax bases of assets and liabilities, the Company evaluates whether it expects to be principally subject to ISR or IETU in the future and uses such tax base accordingly. If the Company is unable to conclude that it will be principally subject to either tax regime, a hybrid calculation may be utilized.

Based on the Company’s projections, it determined that in certain fiscal years it will pay ISR, while in others, it will pay IETU. The Company scheduled the reversal of the temporary differences for both ISR and IETU purposes, determined by year whether the applicable temporary differences should be those under ISR or those under IETU, and applied the applicable rates.

Deferred income tax assets are also recognized for the estimated future effects of tax loss carryforwards and asset tax credit carryforwards. A valuation allowance is applied to reduce deferred income tax assets to the amount of future net benefits that are more likely than not to be realized, which is computed based on projected tax results.

Statutory employee profit sharing— Statutory employee profit sharing (“PTU”) is recorded in the results of the year in which it is incurred and presented within operating expenses in the accompanying consolidated statements of operations. Deferred PTU liabilities are derived from temporary differences that result from comparing the accounting and PTU values of assets and liabilities.

Revenue recognition— Fixed satellite service revenues are recognized as the satellite capacity is provided according to service lease agreements. Satellite transmission capacity is sold through permanent and temporary contracts, which stipulate the agreed capacity. Lease agreements are accounted for either as operating or sales-type leases.

Operating lease revenues are recognized on a straight-line basis over the lease term. Revenues for temporary services are recognized as services are performed.

Revenues from end-of-life leases for transponders are usually collected in advance. The Company does not provide insurance and/or guarantees of any kind for the related transponders to these customers. Total revenues and related costs are accounted as sales-type leases and recognized in income when the risk and rewards of the transponders are transferred to the customer in accordance with the agreements.

The public and private network signal and value-added services (“Broadband satellite services”) are recognized when services are rendered.

To calculate the monthly revenue attributable to purchasers of “Alterna’TV” programming distribution services, the Company estimates, on a monthly basis, the number of “Alterna’TV” subscribers per purchaser according to the contractual value of each subscriber. Approximately 45 to 60 days after the end of each month, the Company receives a definitive report from each purchaser and reconciles the definitive revenue with the estimated amount, issuing an invoice to such purchaser based on the definitive report. Variations between the estimated and actual revenue amounts are not material.

Public and private net signal and value-added services are recognized when rendered. The sale of antennas and installation services are recognized in the period in which risk and rewards are transferred to the customers, which generally coincides with the completion of the installation of the antennas and acceptance by the customer.

Deferred revenue— Satmex is required to provide the Mexican federal government, at no charge, approximately 362.88 MHz of its available transponder capacity for the duration of the orbital concessions (“State Reserve”). As of May 26, 2011, as a result of the adoption of push-down accounting, this obligation was recorded at its fair value, using the income approach method, and recognized as deferred revenue with a corresponding increase in the value of the related assets. As of December 31, 2010, deferred revenue was valued at its fair value as of November 30, 2006, when Satmex had applied fresh-start accounting, and was subsequently amortized. Deferred revenue is amortized to fixed satellite services revenue based on the expected consumption pattern. On May 26, 2011, in conjunction with the adoption of push-down accounting, the Company revised its estimates regarding the expected life of the deferred revenue to better reflect its expected consumption pattern.

Use of estimates — The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amounts of revenues and expenses reported during the periods reported. Such estimates include the allowance for doubtful accounts, the revenue recognition of programming distribution services, the valuation of long-lived assets and goodwill, the valuation allowance on deferred income tax assets, the scheduling of reversal of the temporary differences under different tax regimes, the estimated useful lives of each satellite and estimates of fair values.

Although management believes the estimates and assumptions used in the preparation of these consolidated financial statements were appropriate in the circumstances, actual results could differ from those estimates and assumptions.

Recently adopted accounting pronouncements

On January 1, 2011, the Company adopted FASB Accounting Standard Update (“ASU”) No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force , which contains new guidance on accounting for revenue arrangements with multiple deliverables. When vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. The new guidance includes new disclosure requirements on how the application of the relative selling price method affects the timing and amount of revenue recognition. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements and related disclosures.

On January 1, 2011, the Company adopted FASB ASU No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations . The amendments in this update specify that if a public company presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments apply to all business combinations that are material on an individual or aggregate basis. Refer to Note 2b. for disclosures required pursuant to this ASU.

Recently issued accounting pronouncements pending adoption

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs , which updated the guidance in ASC Topic 820, Fair Value Measurement . ASU 2011-04 clarifies the application of existing fair value measurement requirements including (1) the application of the highest and best use and valuation premise concepts, (2) measuring the fair value of an instrument classified in a reporting entity’s shareholders’ equity, and (3) quantitative information required for fair value measurements categorized within Level 3. ASU 2011-04 also provides guidance on measuring the fair value of financial instruments managed within a portfolio, and application of premiums and discounts in a fair value measurement. In addition, ASU 2011-04 requires additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. The amendments in this guidance are to be applied prospectively, and are effective for interim and annual periods beginning after December 15, 2011, and early application is not permitted. The Company does not anticipate the adoption of the guidance in this ASU will materially affect its consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income , which updated the guidance in ASC Topic 220, Comprehensive Income . Under the amendments in this ASU, an entity has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity only. The amendments in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. This new guidance was originally proposed to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and applied retrospectively. In October 2011, the FASB proposed to indefinitely defer the specific requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income on the face of the respective statements; entities still must comply with the existing requirements during the deferral period. The remaining requirements of ASU 2011-05 are effective for the Company as of the beginning of our first quarter of 2012. The Company does not anticipate the adoption of the guidance in this ASU will materially affect its consolidated financial statements.

5.	Cash and cash equivalents

As of December 31, cash and cash equivalents consist of:

		September 30,		September 30,
	Successor Registrant		Predecessor Registrant
	2011		2010

Cash	$	4,142	$	3,648
Cash equivalents (1)		75,109		72,064


	$	79,251	$	75,712

(1)	The Company’s cash equivalents consist mainly of treasury bills with original maturities less than 20 days.

6.	Accounts receivable

As of December 31, accounts receivable consist of:

		September 30,			September 30,
	Successor Registrant			Predecessor Registrant
	2011			2010

Customers	$	11,748		$	8,315
Allowance for doubtful accounts		(1,360	)		(532	)

		10,388			7,783
Recoverable income taxes		1,519			3,665
Recoverable value-added tax and tax withholdings		651			1,023
Other		100			655


	$	12,658		$	13,126

7.	Satellites and equipment

As of December 31, satellites and equipment consist of:

		September 30,			September 30,
	Successor Registrant			Predecessor Registrant
	2011			2010

Satellites in-orbit	$	196,425		$	314,136
Satellite equipment, teleport and antennas		6,619			13,518
Furniture and fixtures		4,388			6,323
Leasehold improvements		115			2,704

		207,547			336,681
Accumulated depreciation and amortization		(21,145	)		(140,348	)

		186,402			196,333
Construction in-progress for Satmex 8		253,149			63,113
ATP advanced payment for Satmex 7 (Note 17)		2,600			2,600
Other construction in-progress		864			3,112


	$	443,015		$	265,158

For the periods from May 26, 2011 to December 31, 2011 (Successor Registrant), from January 1, 2011 to May 25, 2011 and for the years ended December 31, 2010 and 2009 (Predecessor Registrant), the depreciation and amortization expense related to satellites and equipment was $21,145, $15,188, $36,229 and $ 31,847, respectively.

Satmex estimates that the Satmex 8 construction will be completed by July 2012. For the periods from May 26, 2011 to December 31, 2011 (Successor Registrant), from January 1, 2011 to May 25, 2011 and for the year ended December, 2010 (Predecessor Registrant), interest costs of $11,715, $3,801 and $2,582 respectively, were capitalized.

8.	Concessions

As of December 31, concessions consist of:

		September 30,			September 30,
	Successor Registrant			Predecessor Registrant
	2011			2010

Orbital concessions	$	41,740		$	41,700
Public telecommunications network		3,932			2,248

		45,672			43,948
Accumulated amortization		(1,044	)		(5,763	)


	$	44,628		$	38,185

For the periods from May 26, 2011 to December 31, 2011 (Successor Registrant), from January 1, 2011 to May 25, 2011 and for the years ended December, 2010 and 2009 (Predecessor Registrant), amortization of concessions was $1,044, $588, $1,412, and $1,412 respectively.

Orbital Concessions and Facilities

In October 1997, the Mexican federal government granted to Satmex the rights to three concessions (the “Concessions”) for an initial 20-year term to operate in the orbital slots 113.0° W.L., 116.8° W.L., and 114.9° W.L. In May 2011, extension of the Orbital Concessions was granted by the Mexican federal government for an additional term until 2037, without payment of any additional consideration. Satmex has the right to an additional 20-year extension, at a certain cost to Satmex, to be determined by the Mexican government, as long as Satmex meets certain conditions, as discussed below.

In order to extend the orbital concession term, Satmex must comply with all obligations established by the concession documents, solicit extension of the concession before the beginning of the fifth term of the concession, must obtain approval from the Mexican Secretary of Communication and Transportation (“SCT”) of the technical and operating characteristics of any new satellites, and must guarantee the occupation and use of the orbital slots during the concession’s original and extended terms.

In accordance with the Ley Federal de Telecomunicaciones (Federal Law of Telecommunications or “LFT”), concessionaries are required to maintain the satellite control centers within Mexican territory.

The satellites are controlled and operated through two control centers, one of them is located in the east side of Mexico City, and the other one is located in Hermosillo, Sonora. The land and related facilities of the first control center and the land of the second control center are the property of the Mexican federal government.

Use of the land and facilities where the control centers are located that are property of the Mexican federal government was granted to the Company through a concession for a 40-year term, for which the Company pays a fee, which is adjusted every five years by the Secretaría de la Función Pública (The Ministry of Public Administration) (see Note 17).

Concessions for the Use and Exploitation of a Telecommunications Public Network

On January 20, 2000, the Mexican federal government granted to Enlaces a “Concession to Operate, Install, Exploit and Use a Public Telecommunications Network within Mexican Territory” at no charge, in order to provide services for private and public networks, and to provide value-added services. The concession term is for 30 years, with the possibility for an extension under certain conditions.

On November 9, 2000, Enlaces obtained from the SCT a registration of value-added services certificate, which allows it to offer internet access services, electronic data transfer and multimedia services (content delivery to private television channels).

The terms of both concessions are subject to certain legal provisions regarding assignment or transfer of rights. According to Mexican Law, Satmex is not allowed to transfer the concessions to any foreign country or state. If the Mexican federal government expropriates them, the companies are entitled to liquidation or resignation of their rights. As of December 31, 2011, the Company has complied with the obligations established in the concession titles.

9.	Intangible assets

Intangible assets recognized in connection with the adoption of push-down accounting are as follows:

		September 30,		September 30,		September 30,		September 30,		September 30,
	Weighted average remaining amortization		Successor Registrant 2011				Predecessor Registrant 2010
	period (years)		Gross amount		Accumulated amortization		Gross amount		Accumulated amortization

Contract backlog ⁽¹⁾		9	$	86,835	$	24,077	$	67,990	$	61,660
Customer relationships ⁽¹⁾		3		1,333		281		2,128		1,307
Internally developed software and technology ⁽²⁾		—		—		—		270		270
Landing rights ⁽²⁾		—		—		—		60		55


			$	88,168	$	24,358	$	70,448	$	63,292

⁽¹⁾	Using the income approach to determine fair values as of May 26, 2011, as a result of the adoption of push-down accounting.

⁽²⁾	Using the cost approach to determine fair values as of November 30, 2006, as a result of a previous reorganization.

For the periods from May 26, 2011 to December 31, 2011 (Successor Registrant), from January 1, 2011 to May 25, 2011 and for the years ended December 2010 and 2009 (Predecessor Registrant), amortization expense for these intangible assets was $24,358, $1,304, $5,761 and $14,398, respectively.

Future annual amortization expense for intangible assets is estimated to be as follows:

		September 30,
2012	$	30,888
2013		22,915
2014		5,600
2015		2,658
2016		898
Thereafter		851


	$	63,810

10.

Accounts payable and accrued expenses

As of December 31, accounts payable and accrued expenses consist of:

		September 30,		September 30,
	Successor Registrant		Predecessor Registrant
	2011		2010

Guarantee deposits and customer advances	$	2,308	$	2,622
Accrued interest		3,859		1,781
Professional fees		709		3,849
Performance and sale bonuses		2,294		1,090
Taxes payable, other than income taxes		2,140		3,030
Programming provisions		2,082		1,793
Suppliers		3,941		889
Sundry creditors		1,530		1,357


	$	18,863	$	16,411

11.

Debt obligations

The carrying amounts and fair values of the long-term debt and due dates of the Senior Secured Notes, First Priority Old Notes and Second Priority Old Notes are as follows:

		September 30,		September 30,		September 30,		September 30,
	Successor Registrant				Predecessor Registrant
	2011				2010
	Amount		Fair Value (1)		Amount		Fair Value (1)
Senior Secured Notes at annual fixed rate of 9.5%, due in 2017	$	325,000	$	314,031	$	—	$	—

First Priority Old Notes at variable rate (10.50% plus the greater of the quarterly Eurodollar rate and 1.50%), due in 2011		—		—		238,237		230,852

		September 30,		September 30,		September 30,		September 30,
	Successor Registrant				Predecessor Registrant
	2011				2010
	Amount		Fair Value (1)		Amount		Fair Value (1)
Second Priority Old Notes at annual fixed rate of 10.125%, due in 2013 (aggregate interest added to the principal is $57,873 at December 31, 2010)		—		—		197,873		76,240


Total debt		325,000	$	314,031		436,110	$	307,092


Less: Short–term portion of debt obligations		—				238,237


	$	325,000			$	197,873

(1)

The fair value for debt obligations is determined using quoted market prices. Fair value is based upon pricing information with respect to the trading of the bonds in a secondary market, obtained from several leading market data providers and leading brokerage firms. Inputs used to determine the fair value are classified as Level 1 within the fair value hierarchy from FASB ASC 820, Fair Value Measurements.

The principal characteristics of the Senior Secured Notes are as follows:

•

Maturity is on May 15, 2017.

•

Fixed annual interest of 9.5%, payable semi-annually in arrears on May 15 and November 15 of each year.

•

Fully and unconditionally guaranteed, jointly and severally, on a first priority senior secured basis by all of the existing U.S. subsidiaries and all future material subsidiaries of Satmex, subject to certain exceptions (see Note 19).

•

Optional redemption at any time prior to May 15, 2014, pursuant to which Satmex may redeem up to 35% of the aggregate principal amount of the Notes, plus accrued and unpaid interest.

•

In the event of a change of control, the holders have the right to require Satmex to repurchase the Senior Secured Notes at 101% of their issue price, plus accrued and unpaid interest.

The indenture related to the Senior Secured Notes issued by Satmex establishes certain covenants, common for this type of transaction. Principal covenants are as follows:

•

The Company should pay the notes on the dates and in the manner provided by the indenture.

•

The Company should maintain an office or agency where the notes may be surrendered for registration.

•

The Company should furnish to the holders of the notes and the Trustee all annual reports on Form 20-F, within 180 days after the end of the financial year.

•

The Company and each guarantor should deliver to each of the Trustee and the Collateral Trustee and officers’ certificate stating that such officers have made a review of the activities of the companies.

•

The Company should not permit any of its restricted subsidiaries to declare or pay any dividends, purchase or redeem any equity interest of the Company or make any restricted investment as defined in the indenture.

•

The Company should not incur any additional indebtedness or issue preferred stock unless permitted by the indenture.

•

The Company should not permit any of its restricted subsidiaries to consummate any asset disposition, unless permitted by the indenture.

As of December 31, 2011, Satmex has complied with these obligations.

As a result of the Recapitalization Transactions, the First Priority Old Notes were full repaid on May 26, 2011 and the Second Priority Old Notes were converted into direct or indirect equity interests in Reorganized Satmex (Successor Registrant) on May 26, 2011 (see Note 2).

12.

Labor obligations

For the periods from May 26, 2011 to December 31, 2011 (Successor Registrant), from January 1, 2011 to May 25, 2011 and for the years ended December 2010 and 2009 (Predecessor Registrant), net periodic cost associated with labor obligations was $150, $0, $208 and $274, respectively. Other disclosures required by U.S. GAAP are not considered material.

13.

Shareholders’ equity

Successor Registrant :

After giving effect to the Recapitalization Transactions and the application of the proceeds therefrom, Satmex is owned principally by Holdsat Mexico and Investment Holdings BV. Investment Holdings BV equity interests are owned indirectly by Satmex Investment Holdings L.P., an exempted limited partnership organized under the laws of the Cayman Islands (“Investment Holdings LP”), which owns 99.99% of such equity interests, and Satmex Investment Holdings GP Ltd., an exempted limited company organized under the laws of the Cayman Islands (“Investment Holdings GP” and together with Investment Holdings LP, “Investment Holdings”), which is the general partner of Investment Holdings LP and owns 0.01% of such equity interests. Eligible former holders of the Second Priority Old Notes own 100.00% of the interests in Investment Holdings. Holders that are not eligible to hold their interests through Investment Holdings hold shares of reorganized Satmex directly.

As of December 31, 2011, the authorized, issued and outstanding common stock is as follows:


Fixed		Variable Capital Class II								Rights %
Class I Series A		Series A		Series B		Series N		Total		Voting		Economic

	50,000		6,580,000		—		—		6,630,000		51.000		5.10000
	—		—		6,363,339		116,877,651		123,240,990		48.950		94.80076
	—		—		1,113		20,448		21,561		0.008		0.01659
	—		—		4,081		74,963		79,044		0.031		0.06080
	—		—		1,467		26,938		28,405		0.011		0.02185


	50,000		6,580,000		6,370,000		117,000,000		130,000,000		100.000		100.00000

Satmex is authorized to issue three types of shares: Series A shares, Series B shares, and Series N shares.

All Series A shares of Satmex are owned by Holdsat Mexico. The Series A shares entitle holders to 51.0% of Satmex’s voting rights and 5.1% of its economic rights of all shares. The Series A shares may be owned only by Mexican individuals, Mexican entities that are owned only by Mexican individuals or entities or Mexican entities in which 51.0% of the capital is owned by Mexican individuals or entities.

Series B shares entitle holders to 49.0% of Satmex’s voting rights and 4.9% of the economic rights. The Series B shares may be owned by any person including foreign investors. Over 99% of the Series B shares are owned by Investment Holdings BV. Less than 1% of the Series B Shares are owned by certain holders of the Second Priority Old Notes who were not eligible to invest in Satmex through Investment Holding BV. Less than 0.03% of Series B shares are deposited in Satmex’s treasury for those non-qualified holders of the Second Priority Old Notes who failed to respond to the solicitation under the Plan.

Series N shares entitle holders to 90.0% of the economic rights and limited voting rights. The holders of Series N shares may vote only on the following matters: (i) extension of Satmex’s corporate existence; (ii) dissolution; (iii) change of corporate purpose; (iv) change of nationality; (v) transformation of Satmex from one type of entity to another; and (vi) merger of Satmex with and into another entity. The Series N shares may be owned by any person, including foreign investors.

Under Mexican law, foreign investment in Satmex’s capital, represented by full voting rights shares, may not exceed 49.0%. The Series N shares, however, are not taken into account in determining the level of foreign investment. Over 99% of the Series N shares are owned by Investment Holdings BV. Less than 1% of the Series N shares are owned by certain holders of the Second Priority Old Notes who were not eligible to invest in Satmex through Investment Holding BV. Less than 0.03% of Series N shares are deposited in Satmex’s treasury for those non-qualified holders of the Second Priority Old Notes who failed to respond to the solicitation under the Plan.

Pursuant to a unanimous resolutions adopted by the shareholders at a meeting held on May 26, 2011, the following resolutions were authorized:

•

The outstanding shares formerly held by the NAFIN Trust and the Deutsche Trust, representing the total common stock of the Company as of May 26, 2011, were exchanged through a reverse stock split with a ratio of 10 to 1, resulting in 4,687,500 shares. The stock split has been reflected retrospectively in the accompanying consolidated financial statements.

•

Variable common stock was increased by the issuance of 5,713,333 common, nominative, Class II, Series “A” shares, without par value, through cash contributions of $7,680 in exchange of 5.1% of the economic interest in the Company.

•

Variable common stock was increased by the issuance of 104,459,367 Class II ordinary shares, without par value, of which (i) 5,620,000 are Series “B” shares and (ii) 98,839,367 are Series “N” shares, through cash contributions of $82,320 in exchange for 83.254% of the economic interests in the Company.

•

Pursuant to the Plan, effective on May 26, 2011, 100% of the Second Priority Old Notes were cancelled and converted into the right to receive equity interest (the “Conversion Interest” described in Note 2), directly or indirectly, in the aggregate of 7.146% of the capital stock of the Company. The capitalization of the Conversion Rights and the cancellation of the Second Priority Old Notes were made at the face amount of the Second Priority Old Notes of $206,890, as follows:

•

Variable common stock was increased by the issuance of 9,289,800 Series “N” Class II, shares, without par value, for the capitalization of the Conversion Rights and the cancellation of the Second Priority Old Notes, through the capitalization of liabilities for $70,457.

•

A paid-in capital premium was recognized of $136,433 for the shares subscription in consideration of the Conversion Rights and the cancellation of the Second Priority Old Notes; the amount of such premium was capitalized pro rata between the shareholders of the Company in the proportion of their participation percentage in the capital stock of the Company without issuance of new shares.

•

A put premium was capitalized in the amount of $7,855, in exchange of 4.5% of the economic interests in the Company. The amount of shares issued in exchange for the capitalization of the put premium was 5,850,000 Series “N” Class II, shares, without par value.

As of December 31, 2011 the common stock of Satmex amounted to $275,662.

Shareholders’ equity, except restated tax contributed capital and tax-retained earnings, will be subject to income tax at the rate in effect upon distribution of such equity. Any tax paid on this distribution may be credited against annual and estimated income taxes of the year in which the tax on dividends is paid and the following two fiscal years.

As of December 31, 2011 and 2010, the balance of the tax contributed capital account is $1,994,763 and $1,893,365, respectively.

Predecessor Registrant :

As of December 31, 2010 and until May 26, 2011, the authorized, issued and outstanding common stock was as follows:

			September 30,		September 30,		September 30,		September 30,		September 30,		September 30,		September 30,
Common Stock — Shares
Fixed Capital Class I						Variable Capital Class II						Rights %
Series A		Series B		Series N		Series B		Series N		Total		Voting		Economic

	7,500,000		—		—		—		—		7,500,000		45.00		16.00
	—		221,667		401,770		—		—		623,437		1.33		1.33
	—		111,667		202,395		—		—		314,062		0.67		0.67
	—		—		—		7,166,667		29,395,833		36,562,500		43.00		78.00
	1,666,667		—		208,333		—		—		1,875,000		10.00		4.00


	9,166,667		333,334		812,498		7,166,667		29,395,833		46,874,999		100.00		100.00

The shareholding structure of Satmex consisted of ordinary, nominative Class I and Class II shares at no-par value, which are fully subscribed and paid in. The shares were divided into three series: Series A, which could only be subscribed or acquired by Mexican nationals under certain mechanisms established in Satmex’s bylaws; Series B and Series N, which could be freely subscribed, including by foreign investors.

Through the unanimous resolutions approved during the shareholders’ meeting held on November 30, 2006, the shareholders agreed to reduce the common stock of Satmex by absorbing accumulated losses of $317.5 million. Following this reduction, the common stock of Satmex was fully assigned to minimum fixed capital as required by Mexican General Corporate Law. Additionally, through the unanimous resolutions approved during the shareholders’ meeting held on November 30, 2006, the shareholders agreed to increase variable capital by capitalizing the portion of the principal and interest balance of the Second Priority Old Notes which exceeded the principal ($140 million).

The capitalization process involved the amount of $273.8 million and resulted in the issuance of 7,166,667 new Class II, Series B ordinary, nominative shares without par value and 29,395,833 Class II, Series N ordinary, nominative shares without par value. As of December 31, 2010 and until May 26, 2011, the common stock of Satmex amounted to $46.8 million.

Prior to May 26, 2011, the Deutsche Trust was the owner and holder of shares representing 96% of common stock with economic rights (including neutral investment shares) and 90% of the ordinary voting stock of Satmex.

Prior to May 26, 2011, the NAFIN Trust, was the registered owner and holder of shares representing 4% of the common stock with economic rights (including neutral investment shares) and 10% of the ordinary voting stock of Satmex.

14.

Related party transactions and balances

Related party transactions performed in the normal course of operations were as follows:

		September 30,		September 30,		September 30,		September 30,
	Successor Registrant		Predecessor Registrant
	Period from May 26, 2011 through December 31, 2011		Period from January 1, 2011 through May 25, 2011		2010		2009
Revenues from:
Satellite services — Mexican federal government	$	—	$	2,225	$	4,896	$	2,633
Satellite capacity to Mexican federal government		—		977		2,344		2,344
Loral		—		119		287		1,089

Expenses from:
Rent of control centers — Mexican federal government		—		225		479		434

Capital expenditures for:
Construction Satmex 8- Loral		—		148,932		59,065		—

Related party receivable balances are as follows:

		September 30,		September 30,
	Successor Registrant 2011		Predecessor Registrant 2010

Amounts receivable:
Mexican federal government	$	—	$	840

15.

Income taxes

Income tax expense was comprised as follows:

		September 30,			September 30,			September 30,			September 30,
	Successor Registrant			Predecessor Registrant
	Period from May 26, 2011 through December 31, 2011			Period from January 1, 2011 through May 25, 2011			2010			2009

ISR:
Current	$	1,276		$	267		$	58		$	275
Deferred		(585	)		(571	)		(73	)		37
IETU:
Current		43			357			530			12,441
Deferred		11,399			2,146			264			480


	$	12,133		$	2,199		$	779		$	13,233

The significant components of the net deferred liability are:

		September 30,			September 30,
	Successor Registrant			Predecessor Registrant
Current assets:
Deferred revenue and other	$	785		$	628
Accrued expenses and other		2,194			2,413
Valuation allowance for deferred tax assets		(2,574	)		(1,972	)

Total current asset		405			1,069

Current liabilities:
Prepaid insurance		(1,120	)		(1,394	)
Deferred financing cost		(775	)		—


Net current deferred tax liability	$	(1,490	)	$	(325	)


Noncurrent assets:
Tax loss carryforwards	$	32,838		$	143,613
Concessions, net		32,464			29,665
Deferred revenue		6,858			13,540
Other, net		780			165
Valuation allowance for tax loss carryforwards		(26,036	)		(144,590	)

Total noncurrent asset		46,904			42,393

Noncurrent liabilities:
Satellites and equipment, net		(48,306	)		(45,871	)
Intangibles, net		(17,015	)		(1,935	)
Deferred financing cost		(1,472	)		—

Total noncurrent liabilities		(66,793	)		(47,806	)


Net noncurrent deferred tax liability	$	(19,889	)	$	(5,413	)

A reconciliation of the statutory income tax rate is as follows:

		September 30,			September 30,			September 30,
	Successor Registrant			Predecessor Registrant
	2011			2010			2009
	%			%			%
Statutory income tax rate		30			30			28
Tax inflation effects, including statutory foreign exchanges		(14	)		(14	)		45
Nondeductible expenses		(6	)		(2	)		(10	)
Effects of ISR and IETU reversal rates of non-monetary assets and liabilities		(130	)		(4	)		(191	)
Change in valuation allowance		77			(16	)		(75	)


Effective income tax rate		(43	)		(6	)		(203	)

Enacted tax law changes in 2010 — On December 7, 2009, Mexico enacted new tax laws that became effective January 1, 2010 (the “2010 Tax Reform”). Among other things, the new laws:

•

Provide for a temporary increase in the ISR rate.

•

Disallow crediting IETU loss credit carryforwards against ISR liabilities.

The effects of these changes did not have a material effect on the Company’s financial information.

Statutory income tax rates — Mexican companies are subject to a dual tax system comprised of ISR and IETU. Mexican entities pay the greater of the corporate flat tax or regular income tax and therefore determine their deferred income taxes based on the tax regime expected to be paid to in the future.

In 2011 and 2010, the ISR rate was 30%. As a result of the 2010 Tax Reform, the ISR rate will be 30% until 2012, 29% for 2013 and 28% for 2014 and thereafter. Taxpayers who file tax reports and meet certain requirements may obtain a tax credit equivalent to 0.5% or 0.25% of taxable income.

The IETU rate was 17.5% in 2011 and 2010.

Based on its projections, Satmex determined that in certain fiscal years it will pay ISR, while in others, it will pay IETU. Accordingly, Satmex scheduled the reversal of the temporary differences for both ISR and IETU purposes, determined by year, and applied the respective rates to temporary differences.

The Company has not taken any uncertain tax positions for which it believes it is more likely than not, based on technical merits, that it will not receive benefits taken for its tax positions. The tax years that remain subject to examination by the tax authorities include 2007 – 2011.

As of December 31, 2011, Satmex has tax loss carryforwards, which are available to offset future taxable income, as follows:

		September 30,
Expiration Date	Amount

2012	$	63,680
2013		74,742
2014		27,538
2016		205,549
2017		22,248
2018		71,697
2021		7,385


	$	472,839

The amounts presented above have been adjusted for Mexican inflation as permitted by Mexican tax law. Satmex utilized tax loss carryforwards of $53,758 as of December 31, 2010.

During 2011, $69,095 of tax loss carryforwards expired.

Due to uncertainties regarding Satmex’s ability to realize the full benefit from these tax loss carryforwards, Satmex has established a valuation allowance of $28,610 and $146,562 as of December 31, 2011 and 2010 respectively, against the deferred tax assets.

16.

Recapitalization transactions expenses

This caption includes legal, financial and regulatory expenses and fees in connection with various attempts made by Satmex in each year to carry out a restructuring, reorganization or sale transaction and/or recapitalization of its outstanding indebtedness.

17.

Contingencies and commitments

Satellite and insurance matters

In December 2011, Satmex renewed the in-orbit insurance policy for Satmex 6, which expires on December 5, 2012, and provides coverage for $288 million. The insurance companies have the right to review the terms and conditions of the insurance policy, including the right to terminate the insurance coverage.

The insurance policy terms and conditions are in accordance with current industry standards. Any uninsured loss of Satmex 6 would have a material adverse effect on Satmex’s results of operations and financial position.

In December 2011, Satmex renewed the in-orbit insurance policy for Satmex 5, which expires on December 5, 2012, and provides coverage for $21.5 million as of December 31, 2011.

The Satmex 5 insurance policy excludes coverage for the Xenon Ion Propulsion System (“XIPS”) and any other anomaly related to this system. It also has another exclusion related to the anomaly from the channel 1C.

Satmex 5 operates using the chemical propellant subsystem. Due to a XIPS failure that occurred during 2010, the estimated remaining life of the satellite is 0.94 years as of December 31, 2011. Such failure does not have an impact on the service capacity of Satmex 5.

The insurance policy terms and conditions are in accordance with current industry standards. Any uninsured loss of Satmex 5 could have a material adverse effect on Satmex’s results of operations and financial position.

The in-orbit insurance for Solidaridad 2 was not renewed primarily because the satellite’s geostationary life was ended in 2009. Any uninsured loss of Solidaridad 2 would not have a material adverse effect on Satmex’s results of operations and financial condition.

Legal matters

The management of the Company is not aware of any material pending litigation against Satmex, nor are its assets subject to any legal action.

On January 1, 2008, the IETU Law went into effect. Satmex, on one hand, and Enlaces, the Service Companies and HPS, on the other hand, have submitted appeals against the IETU Law to minimize Satmex’s tax burden.

On March 22, 2010, the appeals submitted by Enlaces, the Service Companies and HPS against the IETU Law were denied due to the fact that the latter was considered constitutional.

On June 14, 2010, through a court resolution, the appeal submitted by Satmex against the IETU Law was denied; as a result Satmex submitted a second appeal for review of such court decision. On October 27, 2011, the second appeal was also denied, confirming the court resolution. Therefore, no further actions can be taken against the IETU law and the lawsuit is considered closed.

Commitments

Satmex entered into a contract with Space Systems/Loral, Inc. (“SS/L”) and granted to SS/L a usufruct right (a Mexican law concept that grants another person the right to use and benefit from another person’s property) over certain transponders on the Satmex 5 and Satmex 6 satellites, until the end of the life of such satellites. SS/L was not required to post a bond related to the usufruct arrangement. In the event that Satmex or a new shareholder decides not to continue with the usufruct arrangement, SS/L has the right to receive the higher of a percentage of the net sale value of Satmex 6 and Satmex 5 or an amount equal to the market value related to the transponders granted under the usufruct arrangement.

State Reserve — Under the orbital concessions granted by the Mexican federal government, Satmex must provide, at no charge, satellite capacity of approximately 362.88 MHz to the Mexican federal government in C- and Ku- bands.

On October 15, 1997, the Mexican government granted a property concession that relates to Satmex’s use of the land and buildings on which its satellite control centers are located and allows Satmex to base its ground station equipment within telecommunication facilities that belong to the Mexican government. Under such concession, Satmex is obliged to pay an annual fee, equivalent to 7.5% of the total value of the land, which is determined by appraisal experts assigned by the Mexican federal government. For the periods from May 26, 2011 to December 31, 2011 (Successor Registrant), from January 1, 2011 to May 25, 2011 and for the years ended December 2010 and 2009 (Predecessor Registrant), the fees paid were $283, $224, $479 and $359, respectively.

On May 7, 2010, but effective as of April 1, 2010, Satmex entered into a construction contract (the “Construction Agreement”) with SS/L for the design and construction of a new, 64 transponder, C- and Ku- band satellite, to be named Satmex 8 and which will replace Satmex 5.

The Construction Agreement provides that SS/L will have the satellite ready for shipment to the launch site prior to July 1, 2012. The Construction Agreement contemplates a fixed price for the construction of Satmex 8 and specified support services, plus additional costs depending on the launch vehicle selected and Satmex 8’s achievement of orbital performance. Payments are due from Satmex upon SS/L achieving specified milestones.

On December 23, 2010, Satmex entered into a Launch Services Agreement (the “Launch Services Agreement”) with ILS International Launch Services, Inc. (“ILS”) for the launch of Satmex 8. The Launch Services Agreement provides for the launch of Satmex 8 in the third quarter of 2012. Amounts due to ILS for launch services under the agreement are payable prior to the launch date.

On June 20, 2008, SS/L and Satmex entered into an Authorization to Proceed (“ATP-S7”) for Satmex 7. On October 2, 2009, Satmex, with the approval of SS/L, assigned ATP-S7 to Alterna’TV Corp. Satmex agreed to be jointly and severally liable for Alterna’TV Corp.’s obligations under ATP-S7 and unconditionally guaranteed to SS/L the due and timely performance by Alterna’TV Corp. of all the present and future undertakings and obligations to SS/L under ATP-S7. On December 3, 2010, Alterna’TV Corp. and SS/L entered into a Second Amendment to ATP-S7, to extend the term of the ATP-S7 to December 31, 2011. On December 22, 2011, the Company entered into a Third Amendment, to extend the term of the ATP-S7 to December 31, 2012.

Satmex has no obligations beyond the $2.6 million already paid to SS/L.

Satmex leases two floors in the building where its headquarters are located. The corresponding lease agreement establishes a mandatory period of five years and three months as of October 2008 and ending in December 2013. For the periods from May 26, 2011 to December 31, 2011 (Successor Registrant), from January 1, 2011 to May 25, 2011 and for the years ended December 2010 and 2009 (Predecessor Registrant), rent expense was $207, $503, $494 and $374, respectively. The minimum future payments are as follows:

		September 30,
Years

2012	$	517
2013		517


	$	1,034

Future minimum revenues due from customers under non-cancelable operating lease contracts, which include a penalty clause against customers in case of early termination, for transponder capacity on satellites in-orbit as of December 31, 2011, are as follows:

		September 30,
Years

2012	$	95,056
2013		63,198
2014		21,613
2015		11,424
Thereafter		25,503


	$	216,794

Other Matters

The primary and alternate control centers used by Satmex to operate its satellites form part of a building complex that also houses equipment owned and used by the Mexican federal government’s teleport and mobile satellite services systems. Under its property concession, Satmex can only use these control centers for the operation of satellites. However, the teleport of Enlaces is also housed at the primary control center. A request for approval to use the control center for the operation of Enlaces’ teleport was filed with SCT in July 2000. In March 2009, Enlaces provided the SCT with a list of the equipment and antennas being used at the control center that are independent of Satmex’s satellite operations.

On May 14, 2010, the SCT issued an amendment to the property concession granted on October 15, 1997, under which the Company may, with prior authorization from the SCT, lease or give under a commodatum (i.e., a rent-free lease) agreement, segments of the primary and alternate control centers to third parties as long as such segments are used for activities related to the subject matter of the property concession. This amendment allows the Company, among other things, to provide control and satellite operation services to other operators, with the prior authorization of the SCT.

Pursuant to this amendment to the property concession, the Company filed a new authorization request for Enlaces’ teleport to be housed at Satmex’s primary control center on May 17, 2010. Authorization is pending as of the date of the accompanying consolidated financial statements.

18.

Business segment information

The Company identifies its reportable segments as the following three operating segments, based on the information used by its chief operating decision maker with respect to resource allocation and performance of the Company: Satellite services, Broadband satellite services and Programming distribution services. Satmex’s satellites are in geosynchronous orbit, and consequently are not attributable to any geographic location. Of the Company’s remaining assets, substantially all are located in Mexico.

The following table presents the operating income (loss) items and assets information by reportable segment:

		September 30,			September 30,			September 30,			September 30,			September 30,
	Successor Registrant For the Period From May 26, 2011 through December 31, 2011
	Satellite services			Broadband satellite services			Programming distribution services			Eliminations upon consolidation			Total

Revenues	$	63,505		$	7,448		$	7,576		$	—		$	78,529
Eliminations		(3,791	)		(15	)		(13	)		—			(3,819	)

Operating revenues		59,714			7,433			7,563			—			74,710


Cost and expenses		25,627			5,599			6,240			—			37,466
Eliminations		(8,585	)		(3,106	)		(1,011	)		—			(12,702	)

		17,042			2,493			5,229			—			24,764

Depreciation and amortization		45,110			722			715			—			46,547

Operating income (loss)		(2,438	)		4,218			1,619			—			3,399


Interest expense		—			—			—			—			(8,990	)
Interest income		—			—			—			—			328
Foreign exchange loss — Net		—			—			—			—			(1,461	)


Loss before income tax		—			—			—			—			(6,724	)

Income tax expense		—			—			—			—			12,133


Net loss		—			—			—			—		$	(18,857	)


Capital expenditures	$	155,604		$	47		$	187		$	—		$	155,838


Total assets	$	657,872		$	20,861		$	6,982		$	(20,772	)	$	664,943

		September 30,			September 30,			September 30,			September 30,			September 30,
	Predecessor Registrant For the Period From January 1, 2011 through May 25, 2011
	Satellite services			Broadband satellite services			Programming distribution services			Eliminations upon consolidation			Total

Revenues	$	46,577		$	5,198		$	4,801		$	—		$	56,576
Eliminations		(2,843	)		(8	)		(15	)		—			(2,866	)

Operating revenues		43,734			5,190			4,786			—			53,710


Cost and expenses		22,202			5,080			3,748			—			31,030
Eliminations		(12,460	)		(2,200	)		(945	)		—			(15,605	)

		9,742			2,880			2,803			—			15,425


Depreciation and amortization		16,682			398			167			(167	)		17,080
Restructuring expenses		28,766			—			—			—			28,766


Operating income		(11,456	)		1,912			1,816			167			(7,561	)


Interest expense		—			—			—			—			(19,499	)
Interest income		—			—			—			—			150
Foreign exchange gain — Net		—			—			—			—			349


Loss before income tax		—			—			—			—			(26,561	)
Income tax expense		—			—			—			—			2,199


Net loss		—			—			—			—		$	(28,760	)


Capital expenditures	$	78,522		$	55		$	69		$	—		$	78,646


Total assets	$	795,778		$	19,365		$	8,573		$	(29,806	)	$	793,910

		September 30,			September 30,			September 30,			September 30,			September 30,
	Predecessor Registrant
	For the year ended December 31, 2010
	Satellite services			Broadband satellite services			Programming distribution services			Eliminations upon consolidation			Total

Revenues	$	112,666		$	12,924		$	10,158		$	—		$	135,748
Eliminations		(6,885	)		(14	)		(87	)		—			(6,986	)

Operating revenues		105,781			12,910			10,071			—			128,762


Cost and expenses		37,326			10,556			9,714			—			57,596
Eliminations		(12,712	)		(5,167	)		(3,064	)		—			(20,943	)

		24,614			5,389			6,650			—			36,653


Depreciation and amortization		42,501			901			392			(392	)		43,402
Restructuring expenses		16,443			—			—			—			16,443
Gain on sale of programming agreements		(5,885	)		—			—			5,885			—


Operating income		28,108			6,620			3,029			(5,493	)		32,264


Interest expense		—			—			—			—			(45,789	)
Interest income		—			—			—			—			345
Foreign exchange gain — Net		—			—			—			—			71


Loss before income tax		—			—			—			—			(13,109	)

Income tax expense		—			—			—			—			779


Net loss		—			—			—			—		$	(13,888	)


Capital expenditures	$	67,959		$	576		$	—		$	—		$	68,535


Total assets	$	416,760		$	17,537		$	2,896		$	1,764		$	438,957

		September 30,			September 30,			September 30,			September 30,		September 30,
	Predecessor Registrant
	For the year ended December 31, 2009
	Satellite services			Broadband satellite services			Programming distribution services			Eliminations upon consolidation		Total

Revenues	$	107,183		$	12,396		$	10,594		$	—	$	130,173
Eliminations		(5,122	)		(12	)		—			—		(5,134	)


Operating revenues		102,061			12,384			10,594			—		125,039


Cost and expenses		38,323			9,898			7,442			—		55,663
Eliminations		(12,534	)		(5,220	)		(552	)		—		(18,306	)

		25,789			4,678			6,890			—		37,357


Depreciation and amortization		46,800			853			4			—		47,657
Restructuring expenses		3,324			—			—			—		3,324


Operating income		26,148			6,853			3,700			—		36,701


Interest expense		—			—			—			—		(43,708	)
Interest income		—			—			—			—		480
Foreign exchange gain — Net		—			—			—			—		12


Loss before income tax		—			—			—			—		(6,515	)

Income tax expense		—			—			—			—		13,233


Net loss												$	(19,748	)


Capital expenditures	$	3,522		$	677		$	—		$	—	$	4,199


Total assets	$	418,644		$	16,493		$	3,340		$	930	$	439,407

19.

Supplemental Guarantor Condensed Consolidating Financial Statements

Satmex offered $325,000 in aggregate principal amount of Senior Secured Notes as part of its Plan discussed in Note 2. Satmex exchanged the Senior Secured Notes for $325.0 million of registered 9.5% Senior Secured Notes due 2017 (the “Exchange Notes”). The Exchange Notes are guaranteed by all of Satmex’s U.S. domiciled subsidiaries existing on the issue date (which as of the date of these financial statements includes Alterna’TV Corp. and Alterna’TV Int. (the “Guarantors”)). Future guarantor subsidiaries are contemplated in the offering. The guarantees are full and unconditional and are joint and several obligations of the guarantors and are secured by first priority liens on the collateral securing the notes, subject to certain permitted liens.

Satmex’s investments in subsidiaries in the accompanying guarantor information are accounted for under the equity method, representing acquisition cost adjusted for Satmex’s share of the subsidiary’s cumulative results of operations capital contributions and distributions and other equity changes. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions.

The following tables have been prepared in accordance with Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered , in order to present the (i) condensed consolidating balance sheets as of December 31, 2011 (Successor registrant) and December 31, 2010 (Predecessor Registrant), (ii) condensed consolidating statements of operations and condensed statements of cash flows for the periods from (a) May 26, 2011 through December 31, 2011 (Successor registrant) and (b) from January 1, 2011 through May 25, 2011 and for the years ended December 31, 2010 and 2009 (Predecessor Registrant) of Satmex, which is the issuer of the Senior Secured Notes, the Guarantors (which are combined for this purpose), the Non-Guarantors, and the elimination entries necessary to consolidate the issuer with the Guarantor and Non-Guarantor subsidiaries.

Condensed Consolidating Balance Sheets

As of December 31, 2011

(In thousands of U. S. dollars)

		September 30,			September 30,			September 30,			September 30,			September 30,
	Successor Registrant
	Satmex Issuer			Guarantor Subsidiaries			Non Guarantor Subsidiaries			Eliminations and reclassifications			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	65,393		$	989		$	12,869		$	—		$	79,251
Accounts receivable and others, net		8,503			2,253			6,366			(4,464	)		12,658
Inventories, net		—			—			489			—			489
Prepaid insurance and deferred financing cost		6,592			21			74			—			6,687
Deferred income taxes		—			—			386			(386	)		—


Total current assets		80,488			3,263			20,184			(4,850	)		99,085
Satellites and equipment, net		440,697			95			2,223			—			443,015
Concessions, net		40,819			—			3,809			—			44,628
Due from related parties		5,023			—			778			(5,801	)		—
Intangible assets and other assets		60,480			2,985			1,073			—			64,538
Investment in subsidiaries		16,688			—			—			(16,688	)		—
Deferred financing cost		13,677			—			—			—			13,677
Deferred income taxes		—			685			—			(685	)		—


Total	$	657,872		$	7,028		$	28,067		$	(28,024	)	$	664,943


Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable, accrued expenses and other	$	17,557		$	2,974		$	4,611		$	(4,464	)	$	20,678
Deferred income taxes		1,757			—			119			(386	)		1,490


Total current liabilities		19,314			2,974			4,730			(4,850	)		22,168
Debt obligations		325,000			—			—			—			325,000
Other long-term liabilities		37,482			5,023			891			(5,801	)		37,595
Deferred income taxes		19,296			—			1,278			(685	)		19,889


Total liabilities		401,092			7,997			6,899			(11,336	)		404,652
Shareholders’ equity:
Paid-in capital		275,662			(1,173	)		21,481			(20,308	)		275,662
(Accumulated deficit) retained earnings		(18,882	)		204			(313	)		109			(18,882	)
Noncontrolling interest		—			—			—			3,511			3,511


Total shareholders’ equity		256,780			(969	)		21,168			(16,688	)		260,291


Total	$	657,872		$	7,028		$	28,067		$	(28,024	)	$	664,943

Condensed Consolidating Balance Sheets

As of December 31, 2010

(In thousands of U. S. dollars)

		September 30,			September 30,		September 30,		September 30,			September 30,
	Predecessor Registrant
	Satmex Issuer			Guarantor Subsidiaries		Non - Guarantor Subsidiaries		Eliminations and reclassifications			Consolidated

Assets
Current assets:
Cash and cash equivalents	$	25,000		$	40,469	$	10,243	$	—		$	75,712
Accounts receivable and other		9,066			2,368		7,102		(4,570	)		13,966
Inventories, net		—			—		494		—			494
Prepaid insurance		4,792			42		77		—			4,911

Total current assets		38,858			42,879		17,916		(4,570	)		95,083

Satellites and equipment, net		302,640			—		2,518		(40,000	)		265,158
Concessions, net		36,336			—		1,849		—			38,185
Due from related parties		5,885			—		820		(6,705	)		—
Intangible assets and other assets		7,110			5,510		902		(5,493	)		8,029
Investment in subsidiaries		15,530			—		—		(15,530	)		—
Goodwill		32,502			—		1,327		(1,327	)		32,502


Total	$	438,861		$	48,389	$	25,332	$	(73,625	)	$	438,957


Liabilities and Shareholders’ Deficit
Current liabilities:
Short-term portion of debt obligations	$	238,237		$	—	$	—	$	—		$	238,237
Accounts payable, accrued expenses and other		17,446			42,335		3,645		(44,570	)		18,856
Deferred income taxes		—			—		325		—			325

Total current liabilities		255,683			42,335		3,970		(44,570	)		257,418

Debt obligations		197,873			—		—		—			197,873
Other long-term liabilities		64,163			5,885		943		(6,705	)		64,286
Deferred income taxes		4,813			—		600		—			5,413

Total liabilities		522,532			48,220		5,513		(51,275	)		524,990

Shareholders’ deficit:
Paid-in capital		46,764			100		16,447		(16,547	)		46,764
(Accumulated deficit) retained earnings		(130,435	)		69		3,372		(9,326	)		(136,320	)
Noncontrolling interest		—			—		—		3,523			3,523

Total shareholders’ equity (deficit)		(83,671	)		169		19,819		(22,350	)		(86,033	)


Total	$	438,861		$	48,389	$	25,332	$	(73,625	)	$	438,957

Condensed Consolidating Statements of Operations

For the period from May 26, 2011 through December 31, 2011

(In thousands of U. S. dollars)

		September 30,			September 30,			September 30,			September 30,			September 30,
	Successor Registrant
	Satmex Issuer			Guarantor Subsidiaries			Non - Guarantor Subsidiaries			Eliminations and consolidating adjustments			Consolidated
Revenues:
Satellite services	$	63,505		$	—		$	—		$	(3,791	)	$	59,714
Broadband satellite services		—			—			7,448			(15	)		7,433
Programming distribution services		1,063			6,513			—			(13	)		7,563
Services companies		—			—			9,050			(9,050	)		—

		64,568			6,513			16,498			(12,869	)		74,710

Cost of satellite services		6,533			—			2,549			(2,891	)		6,191
Cost of broadband satellite services		—			—			4,432			(3,044	)		1,388
Cost of programming distribution services		636			4,489			—			(732	)		4,393
Selling and administrative expenses		10,465			1,332			7,030			(6,035	)		12,792
Depreciation and amortization		45,110			714			723			—			46,547

		62,744			6,535			14,734			(12,702	)		71,311

Operating income		1,824			(22	)		1,764			(167	)		3,399

Interest expense — net and other		(9,059	)		(121	)		(1,244	)		301			(10,123	)

(Loss) income before income tax		(7,235	)		(143	)		520			134			(6,724	)

Income tax expense (benefit)		11,647			(347	)		833			—			12,133


Net (loss) income		(18,882	)		204			(313	)		134			(18,857	)

Less: Net income attributable to noncontrolling interest		—			—			—			25			25


Net (loss) income attributable to Satélites Mexicanos, S. A. de C. V.	$	(18,882	)	$	204		$	(313	)	$	109		$	(18,882	)

Condensed Consolidating Statements of Operations

For the period from January 1, 2011 through May 25, 2011

(In thousands of U. S. dollars)

		September 30,			September 30,		September 30,			September 30,			September 30,
	Predecessor Registrant
	Satmex Issuer			Guarantor Subsidiaries		Non - Guarantor Subsidiaries			Eliminations and consolidating adjustments			Consolidated
Revenues:
Satellite services	$	46,577		$	—	$	—		$	(2,843	)	$	43,734
Broadband satellite services		—			—		5,198			(8	)		5,190
Programming distribution services		761			4,040		—			(15	)		4,786
Services companies		—			—		12,739			(12,739	)		—

		47,338			4,040		17,937			(15,605	)		53,710

Cost of satellite services		4,586			—		1,960			(2,145	)		4,401
Cost of broadband satellite services		—			—		2,839			(2,154	)		685
Cost of programming distribution services		454			2,875		—			(704	)		2,625
Selling and administrative expenses		5,535			595		12,186			(10,602	)		7,714
Depreciation and amortization		16,682			167		398			(167	)		17,080
Restructuring expenses		28,766			—		—			—			28,766

		56,023			3,637		17,383			(15,772	)		61,271

Operating income		(8,685	)		403		554			167			(7,561	)

Interest expense, net and other		17,761			93		(473	)		1,619			19,000

(Loss) income before income tax		(26,446	)		310		1,027			(1,452	)		(26,561	)

Income tax expense		2,317			1		(119	)		—			2,199


Net (loss) income		(28,763	)		309		1,146			(1,452	)		(28,760	)

Less: Net income attributable to noncontrolling interest		—			—		—			3			3


Net (loss) income attributable to Satélites Mexicanos, S. A. de C. V.	$	(28,763	)	$	309	$	1,146		$	(1,455	)	$	(28,763	)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2010

(In thousands of U. S. dollars)

		September 30,			September 30,			September 30,		September 30,			September 30,
	Predecessor Registrant
	Satmex Issuer			Guarantor Subsidiaries			Non - Guarantor Subsidiaries		Eliminations and consolidating adjustments			Consolidated
Revenues:
Satellite services	$	112,666		$	—		$	—	$	(6,885	)	$	105,781
Broadband satellite services		—			—			12,924		(14	)		12,910
Programming distribution services		1,935			8,223			—		(87	)		10,071
Services companies		—			—			13,957		(13,957	)		—

		114,601			8,223			26,881		(20,943	)		128,762

Cost of satellite services		11,697			—			4,454		(4,746	)		11,405
Cost of broadband satellite services		—			—			7,988		(5,167	)		2,821
Cost of programming distribution services		1,117			6,075			—		(1,805	)		5,387
Selling and administrative expenses		13,679			1,483			11,103		(9,225	)		17,040
Depreciation and amortization		42,501			392			901		(392	)		43,402
Restructuring expenses		16,443			—			—		—			16,443
Gain on sale of programming agreements		(5,885	)		—			—		5,885			—

		79,552			7,950			24,446		(15,450	)		96,498

Operating income		35,049			273			2,435		(5,493	)		32,264

Interest expense, net and other		(43,222	)		(176	)		333		(2,308	)		(45,373	)

(Loss) income before income tax		(8,173	)		97			2,768		(7,801	)		(13,109	)

Income tax expense		274			—			505		—			779


Net (loss) income		(8,447	)		97			2,263		(7,801	)		(13,888	)

Less: Net income attributable to noncontrolling interest		—			—			—		444			444


Net (loss) income attributable to Satélites Mexicanos, S. A. de C. V.	$	(8,447	)	$	97		$	2,263	$	(8,245	)	$	(14,332	)

Condensed Consolidating Statements of Operations

For the year ended December 31, 2009

(In thousands of U. S. dollars)

		September 30,			September 30,			September 30,		September 30,			September 30,
	Predecessor Registrant
	Satmex Issuer			Guarantor Subsidiaries			Non - Guarantor Subsidiaries		Eliminations and consolidating adjustments			Consolidated
Revenues:
Satellite services	$	107,183		$	—		$	—	$	(5,122	)	$	102,061
Broadband satellite services		—			—			12,396		(12	)		12,384
Programming distribution services		10,594			—			—		—			10,594
Services companies		—			—			13,172		(13,172	)		—

		117,777			—			25,568		(18,306	)		125,039

Cost of satellite services		13,069			—			4,293		(4,478	)		12,884
Cost of broadband satellite services		—			—			7,371		(5,122	)		2,249
Cost of programming distribution services		5,331			—			—		—			5,331
Selling and administrative expenses		15,125			41			10,433		(8,706	)		16,893
Depreciation and amortization		46,804			—			853		—			47,657
Restructuring expenses		3,324			—			—		—			3,324

		83,653			41			22,950		(18,306	)		88,338

Operating (loss) income		34,124			(41	)		2,618		—			36,701

Interest expense, net and other		(42,031	)		13			38		(1,236	)		(43,216	)

(Loss) income before income tax		(7,907	)		(28	)		2,656		(1,236	)		(6,515	)

Income tax expense		12,247			—			986		—			13,233


Net (loss) income		(20,154	)		(28	)		1,670		(1,236	)		(19,748	)

Less: Net income attributable to noncontrolling interest		—			—			—		406			406


Net (loss) income attributable to Satélites Mexicanos, S. A. de C. V.	$	(20,154	)	$	(28	)	$	1,670	$	(1,642	)	$	(20,154	)

Condensed Consolidating Statements of Cash Flows

For the period from May 26, 2011 through December 31, 2011

		September 30,			September 30,			September 30,			September 30,		September 30,
	Successor Registrant
	Satmex Issuer			Guarantor Subsidiaries			Non - Guarantor Subsidiaries			Eliminations		Consolidated

Cash flows from operating activities	$	33,386		$	(3,806	)	$	2,774		$	—	$	32,354

Cash flows from investing activities:
Construction in progress Satmex 8 (including capitalized interest)		(150,537	)		—			—			—		(150,537	)
Acquisition of equipment		(1,393	)		(47	)		(187	)		—		(1,627	)

Net cash used in investing activities		(151,930	)		(47	)		(187	)		—		(152,164	)


Cash flows from financing activities:
Proceeds from equity issuance		90,000			—			—			—		90,000
Repayment of First Priority Old Notes		(238,237	)		—			—			—		(238,237	)
Deferred financing costs		(333	)		—			—			—		(333	)

Net cash used in financing activities		(148,570	)		—			—			—		(148,570	)


Cash and cash equivalents:
Net (decrease) increase for the period		(267,114	)		(3,853	)		2,587			—		(268,380	)
Beginning of period		332,507			4,842			10,282			—		347,631


End of period	$	65,393		$	989		$	12,869		$	—	$	79,251

Condensed Consolidating Statements of Cash Flows

For the period from January 1, 2011 through May 25, 2011

		September 30,			September 30,			September 30,			September 30,		September 30,
	Predecessor Registrant
	Satmex Issuer			Guarantor Subsidiaries			Non - Guarantor Subsidiaries			Eliminations		Consolidated

Cash flows from operating activities:	$	43,598		$	(35,570	)	$	106		$	—	$	8,134

Cash flows from investing activities:
Construction in progress Satmex 8 (including capitalized interest)		(42,333	)		—			—			—		(42,333	)
Acquisition of equipment		(511	)		(57	)		(67	)		—		(635	)

Net cash used in investing activities		(42,844	)		(57	)		(67	)		—		(42,968	)


Cash flows from financing activities:
Issuance of Senior Secured Notes		325,000			—			—			—		325,000
Deferred financing costs		(18,247	)		—			—			—		(18,247	)

Net cash provided by financing activities		306,753			—			—			—		306,753


Cash and cash equivalents:
Net (decrease) increase for the period		307,507			(35,627	)		39			—		271,919
Beginning of period		25,000			40,469			10,243			—		75,712


End of period	$	332,507		$	4,842		$	10,282		$	—	$	347,631

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2010

		September 30,			September 30,		September 30,			September 30,		September 30,
	Predecessor Registrant
	Satmex Issuer			Guarantor Subsidiaries		Non - Guarantor Subsidiaries			Eliminations		Consolidated

Cash flows from operating activities:	$	38,341		$	381	$	2,288		$	—	$	41,010

Cash flows from investing activities:
Construction in progress Satmex 8 (including capitalized interest)		(63,113	)		—		—			—		(63,113	)
Acquisition of equipment		(3,999	)		—		(579	)		—		(4,578	)

Net cash used in investing activities		(67,112	)		—		(579	)		—		(67,691	)


Cash and cash equivalents:
Net (decrease) increase for the year		(28,771	)		381		1,709			—		(26,681	)
Beginning of year		53,771			40,088		8,534			—		102,393


End of year	$	25,000		$	40,469	$	10,243		$	—	$	75,712

Condensed Consolidating Statements of Cash Flows

For the year ended December 31, 2009

		September 30,			September 30,			September 30,			September 30,			September 30,
	Predecessor Registrant
	Satmex Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated

Cash flows from operating activities:	$	43,257		$	(12	)	$	2,749		$	—		$	45,994

Cash flows from investing activities:
Investment in shares of subsidiaries		(100	)		—			—			100			—
Acquisition of equipment		(1,131	)		—			(677	)		—			(1,808	)

Net cash used in investing activities		(1,231	)		—			(677	)		100			(1,808	)


Cash flows from financing activities:
Issuance of common stock		—			100			—			(100	)		—

Net cash used in financing activities		—			100			—			(100	)		—


Cash and cash equivalents:
Net increase for the year		42,026			88			2,072			—			44,186
Beginning of year		11,745			40,000			6,462			—			58,207


End of year	$	53,771		$	40,088		$	8,534		$	—		$	102,393

20.

Subsequent events

Satellite Program Agreements — On February 3, 2012, the Company entered into a contract for launch services (the “Satmex Launch Services Agreement”) for the launch of a dual-satellite payload consisting of its next generation satellite, designed Satmex 7 (“Satmex 7”).

* * * * * *

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

Schedules of Valuation and Qualifying Accounts

		September 30,			September 30,		September 30,			September 30,
	Successor Registrant
	Balance at beginning of period			Additional charged (credited) to expenses		Deductions and other			Balance at ending of period
Allowance for doubtful accounts:

For the period from May 26, 2011 through December 31, 2011	$	—		$	1,360	$	—		$	1,360

Valuation allowance on deferred income taxes:

For the period from May 26, 2011 through December 31, 2011	$	135,291	⁽¹⁾	$	—	$	(106,681	) ⁽²⁾	$	28,610

		September 30,		September 30,			September 30,			September 30,
	Predecessor Registrant
	Balance at beginning of period		Additional charged (credited) to expenses			Deductions and other			Balance at ending of period
Allowance for doubtful accounts:

For the period from January 1, 2011 through May 25, 2011	$	532	$	—		$	(532	) ⁽³⁾	$	—
Year ended December 31, 2010		360		172			—			532
Year ended December 31, 2009		510		(150	)		—			360

Valuation allowance on deferred income taxes:

For the period from January 1, 2011 through May 25, 2011	$	146,562	$	10,394		$	—		$	156,956
Year ended December 31, 2010		164,472		76			(17,986	)		146,562
Year ended December 31, 2009		162,009		2,463			—			164,472

⁽¹⁾

Ending balance for the Predecessor Registrant does not match the beginning balance for the Successor Registrant due to the application of push-down accounting.

⁽²⁾

Due to the use of the hybrid method, certain tax loss carryforwards are excluded from the deferred tax computation during those years in which the Company expects to pay IETU; accordingly, the related reserve is also excluded from the deferred tax computation.

⁽³⁾

Write-offs of uncollectible accounts due to the application of push-down accounting.

* * * * * *

Item 3. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In thousands of U.S. dollars)

Results of Operations for the year ended December 31, 2011 compared to the year ended December 31, 2010

Revenue

Revenue for 2011 was $128.4 million, compared to $128.7 million for 2010. The net decrease was due to a decrease in fixed satellite services of $2.3 million and $0.2 million in broadband satellite services provided by Enlaces partially offset by an increase of $2.2 million in programming distribution services.

		September 30,		September 30,		September 30,
	Year ended December 31,
	2011		2010		Difference

Satellite services	$	103,448	$	105,781	$	(2,333	)
Broadband satellite services		12,623		12,910		(287	)
Programming distribution services		12,349		10,071		2,278

Total revenue	$	128,420	$	128,762	$	(342	)

(In thousands of U.S. dollars)

The net decrease of $2.3 million in FSS was due to a decrease of $2.6 million of net capacity contracted by existing customers, $1.2 million in expired contracts and a $0.6 million in the state reserve amortization due to the change in its fair value of the state reserve given the push-down acquisition accounting, partially offset by an increase of $2.1 million in new contracts.

The increase of $2.2 million in programming distribution services was due to an increase of $2.5 million in revenues from existing customers (Comcast, Dish Network AT&T, and Time Warner), partially offset by a decrease of $0.3 million from Direct TV customers.

Operating Costs and Expenses

Operating costs and expenses increased $36.1 million to $132.6 million in 2011 (103% of revenues), from $96.5 million for the same period in 2010 (75% of revenues). The table below sets forth the components of our operating expenses:

		September 30,		September 30,		September 30,
	Year ended December 31,
	2011		2010		Difference

Operating costs	$	19,683	$	19,613	$	70
Selling and administrative expenses		20,506		17,040		3,466
Restructuring expenses		28,766		16,443		12,323
Depreciation and amortization		63,627		43,402		20,225

Total operating expenses	$	132,582	$	96,498	$	36,084

(In thousands of U.S. dollars)

Operating Costs

Operating costs for 2011 increased $0.1 million to $19.7 million (15% of revenues) compared to $19.6 million in 2010 (15% of revenues). The table below sets forth the components of our operating costs:

		September 30,		September 30,		September 30,
	Year ended December 31,
	2011		2010		Difference

Satellite services	$	10,592	$	11,405	$	(813	)
Broadband satellite services		2,073		2,821		(748	)
Programming distribution services		7,018		5,387		1,631

Total operating costs	$	19,683	$	19,613	$	70

(In thousands of U.S. dollars)

Satellite services costs decreased due to a reduction of $0.9 million in satellite insurance costs and other net expenses.

Broadband satellite services costs decreased $0.7 million due to the reduction in costs associated with antennas and maintenance of teleport and antennas.

Programming distribution services costs increased $1.6 million due to increased costs of transmission, programming and fiber optics costs.

Selling and Administrative Expenses

Selling and administrative expenses amounted to $20.5 million in 2011, or 16% as a percentage of revenues, compared to $17.0 million in 2010, or 13% as a percentage of revenue. Selling and administrative expenses, which consist primarily of salaries and other employee compensation, professional fees, allowance for doubtful accounts and other expenses increased $3.5 million, for a total of $20.5 million in 2011 (15% of revenues), as compared to $17.0 million in 2010 (13% of revenues).

The increase in selling and administrative expenses can be attributable to the following:

•

An increase in personnel costs and performance bonus of $0.8 million, due to an increase of $0.5 million in salaries, severance, wage taxes and other benefits and the cancelation in 2010 of the performance bonus and sales bonus reserve of $0.3 million in Enlaces and the service companies;

•

An increase of $0.6 million in allowance for doubtful accounts in Enlaces, due to the application of our internal policy relative to the allowance for doubtful accounts related to contracts regarding services to the Mexican government;

•

An increase in other expenses which include rent, travel expenses, maintenance, commercial agent fees and communications; and

•

Other legal and professional fees paid after May 26, 2011 amounted to $1.3 million.

Restructuring Expenses

Restructuring expenses consist primarily of fees paid to our financial and legal advisors involved in the restructuring process. Restructuring expenses increased $12.3 million, from $16.4 million in 2010 to $28.8 million in 2011. The increase relates to the costs associated with our attempt to modify our financial arrangements during 2011, including legal, professional and advisory fees. Depreciation and Amortization.

Depreciation and amortization expense increased $20.2 million, for a total of $63.6 million in 2011 (50% of revenues) compared to $43.4 million in 2010 (34% of revenues). The table below sets forth the components of our depreciation and amortization expense:

		September 30,		September 30,		September 30,
	Year Ended December 31
	2011		2010		Difference

Contract backlog	$	25,251	$	5,391	$	19,860
Satmex 6		16,157		14,531		1,626
Satmex 5		17,786		19,375		(1,589	)
Concessions		1,633		1,411		222
Equipment for satellite, furniture and equipment and other		2,966		2,694		272

Total depreciation and amortization	$	63,793	$	43,402	$	20,391

(in thousands of U.S. dollars)

As of May 26, 2011, Satmex recognized an increase in the value of intangible assets (contract backlog, customer relationship) reflecting the fair values of those assets on that date as a result of the push-down of acquisition accounting. The net increase in depreciation and amortization in 2011 is derived from the recognition of the new values of these assets as of May 26, 2011 as a consequence of this treatment.

Operating Income (Loss)

Our operating loss was $4.2 million in 2011, compared to operating income of $32.3 million in 2010.

Interest Expense

Total interest cost for the year ended in 2011 was $28.5 million, compared to $45.8 million in 2010. The table below set forth the components of our interest expense:

		September 30,			September 30,			September 30,
	Year Ended December 31
	2011			2010			Difference

Existing Notes interest	$	21,193		$	—		$	21,193
First Priority Old Notes interest		12,275			27,839			(15,564	)
Second Priority Old Notes interest		8,648			20,450			(11,802	)
Capitalized interest in Satmex 8		(15,516	)		(2,582	)		(12,934	)
Amortization of deferred financing costs		1,806			—			1,806
Other commissions		83			82			1

Total interest expense	$	28,489		$	45,789		$	(17,300	)

(In thousands of U.S. dollars)

The decrease of $17.3 million was mainly due to the ability of Satmex to capitalize $12.9 million of interest costs incurred in 2011, as a result of the commencement of construction of Satmex 8 coupled with a lower interest rate incurred on the Existing Notes as compared to the First Priority Old Notes and the Second Priority Old Notes.

Net Foreign Exchange Gain (Loss)

We recorded a foreign exchange loss for the year of 2011 of $1.1 million, and a foreign exchange gain of $0.1 million in the same period of 2010. Foreign exchange losses and gains are calculated based on outstanding balances of Mexican peso-dominated assets and liabilities relative to the prevailing U.S. dollar/Mexican peso exchange rate.

Income Tax

Satmex applied different income tax rates according to the estimated date of reversal of each of the temporary items due to rate differences for each year as a result of the Mexican laws enacted on December 31, 2009. Satmex and its subsidiaries pay both (i) the business flat tax known as Impuesto Empresarial a Tasa Única , or IETU, since 2008 and (ii) the income tax known as Impuesto sobre la Renta or ISR. Our future projections indicate that we will continue to pay both taxes during the life of the Concessions. Accordingly, deferred taxes are calculated based on a hybrid approach, which considers a mix of both tax regimens. For the year ended in 2011, we recorded income tax expense of $14.3 million on a loss before income taxes of $33.3 million, while for the same period of 2010 we recorded income tax expense of $0.8 million on a loss before income taxes of $13.1 million yielding a negative effective rate in both years. The negative effective rate principally arises from the fact that interest expense, depreciation and amortization are not deductible for IETU purposes, which results in taxable income for those entities that pay IETU. The IETU tax is computed on a cash basis (excluding interest expenses).

Net Loss Attributable to Satélites Mexicanos, S.A. de C.V.

As a result of the aforementioned factors, the net loss attributable to Satmex for the year of 2011 was $47.6 million, as compared to a loss of $14.3 million for the same period in 2010.

Results of operations for the year ended December 31, 2010 compared to the year ended December 31, 2009.

Revenue

Revenue for 2010 was $128.8 million, compared to $125.0 million for 2009, an increase of approximately $3.8 million, or 3%. The increase was due to an increase in FSS of approximately $3.8 million and an increase in broadband satellite services provided by Enlaces of $500,000, partially offset by a decrease in programming distribution services of $500,000.

		September 30,		September 30,		September 30,
	Year Ended December 31,
	2010		2009		Difference
Satellite services	$	105,781	$	102,061	$	3,720
Broadband satellite services		12,910		12,384		526
Programming distribution services		10,071		10,594		(523	)

Total revenue	$	128,762	$	125,039	$	3,723

(in thousands of U.S. dollars)

The increase of approximately $3.8 million in FSS was due to an increase of $1.4 million in new contracts, plus an increase of $4.3 million for additional net capacity contracted by existing customers, partially offset by approximately $2.1 million in expired contracts.

Operating Costs and Expenses

Operating costs and expenses increased $8.2 million to $96.5 million in 2010, or 75% as a percentage of revenue, from $88.3 million in 2009, or 71% as a percentage of revenue. The table below sets forth the components of our operating expenses:

		September 30,		September 30,		September 30,
	Year Ended December 31,
	2010		2009		Difference
Operating costs	$	19,613	$	20,464	$	(851	)
Selling and administrative expenses		17,040		16,893		147
Restructuring expenses		16,443		3,324		13,119
Depreciation and amortization		43,402		47,657		(4,255	)

Total operating expenses	$	96,498	$	88,338	$	8,160

(in thousands of U.S. dollars)

Operating Costs

Operating costs for 2010 decreased $851,000 to $19.6 million, or 15% as a percentage of revenue, compared to $20.4 million in 2009, or 16% as a percentage of revenue. The table below sets forth the components of our operating costs:

		September 30,		September 30,		September 30,
	Year Ended December 31,
	2010		2009		Difference
Satellite services	$	11,405	$	12,884	$	(1,479	)
Broadband satellite services		2,821		2,249		572
Programming distribution services		5,387		5,331		56

Total operating costs	$	19,613	$	20,464	$	(851	)

(in thousands of U.S. dollars)

Satellite services costs decreased $1.4 million. This improvement is mostly due to a reduction in satellite insurance cost of approximately $688,000. In addition, in 2009 approximately $780,000 of costs were incurred with respect to Satmex 7, which were expensed as they did not meet the applicable criteria for capitalization.

Broadband satellite services cost increased due to costs associated with installation of antennas and maintenance of teleport and antennas.

Selling and Administrative Expenses

Selling and administrative expenses consist primarily of salaries and employee compensation, professional fees, allowance for doubtful accounts and other expenses. Selling and administrative expenses amounted to $17.0 million in 2010, or 13% as a percentage of revenue, compared to $16.9 million in 2009, or 14% as a percentage of revenue.

The minor increase in selling and administrative expenses was attributable to an increase in personnel costs offset by a decrease in professional fees and other expenses.

Restructuring Expenses

Restructuring expenses consist primarily of fees paid to our financial and legal advisors involved in the restructuring process. Restructuring expenses increased $13.1 million to $16.4 million in 2010, or 13% as a percentage of revenue, compared to $3.3 million in 2009, or 3% as a percentage of revenue. The increase relates to the costs associated with our attempt to modify our financial arrangements during 2010, including legal, professional and advisory fees.

Depreciation and Amortization

Depreciation and amortization expense decreased $4.3 million to $43.4 million in 2010, or 34% as a percentage of revenue, compared to $47.7 million in 2009, or 38% as a percentage of revenue. The table below sets forth the components of our depreciation and amortization expense:

		September 30,		September 30,		September 30,
	Year Ended December 31,
	2010		2009		Difference
Contract backlog	$	5,391	$	13,935	$	(8,544	)
Satmex 6		14,531		14,531		—
Satmex 5		19,375		13,537		5,838
Solidaridad 2		—		784		(784	)
Concessions		1,412		1,412		—
Equipment for satellite, furniture and equipment and other		2,693		3,458		(765	)

Total depreciation and amortization	$	43,402	$	47,657	$	(4,255	)

(in thousands of U.S. dollars)

As of November 30, 2006, in connection with the adoption of fresh-start reporting, we recorded our intangible assets (contract backlog, customer relationships, internally developed software and landing rights) at their fair value. The remaining useful lives of such assets were also determined at the date of fresh-start accounting in 2006, based on estimated cash flows expected to be generated by the intangible assets during their useful life. The net decrease in amortization of contract backlog is due to the expiration of various contract terms to which the backlog related. The increase in the depreciation of Satmex 5 is due to the reduction of its expected useful life resulting from the XIPS failure described herein.

Operating Income

Our operating income decreased $4.4 million to $32.3 million in 2010, compared to $36.7 million in 2009, due to the reasons discussed above.

Interest Expense

Total interest cost increased $2.1 million to $45.8 million in 2010, compared to $43.7 million in 2009. The increase is primarily due to the increase in the interest rate payable on the First Priority Old Notes.

Net Foreign Exchange Gain (Loss)

We recorded a foreign exchange gain of $71,000 in 2010 and $12,000 in 2009. Foreign exchange gains (losses) are calculated based on outstanding balances of Mexican peso-dominated assets and liabilities relative to the prevailing U.S. dollar/Mexican peso exchange rate.

Income Tax

We applied different income tax rates according to the estimated date of reversal of each of the temporary items due to rate differences for each year as a result of the laws enacted on December 31, 2009. We and our subsidiaries pay both (i) the business flat tax known as Impuesto Empresial a Tasa Única , or IETU, since 2008 and (ii) the income tax known as Impuesto Sobre la Renta , or ISR. Our future projections indicate that we will continue to pay both taxes during the life of our Concessions. Accordingly, deferred taxes are calculated based on a hybrid approach, which considers a mix of both tax regimes. For 2010, we recorded income tax expense (including both ISR and IETU) of $779,000 on a loss before income taxes of $13.1 million, while for 2009 we recorded income tax expense of $13.2 million on a loss before income taxes of $6.5 million yielding a negative effective rate in both years. The negative effective rate principally arises from the fact that interest expense, depreciation and amortization are not deductible for IETU purposes, which results in taxable income for those entities that pay IETU. The IETU tax is computed on a cash basis (excluding interest expenses). The variation in the total income tax expense is a consequence of the recognition of the deferred income taxes as of December 31, 2011.

The decrease in IETU tax expenses in 2010 as compared to 2009 was mainly due to Satmex 8’s costs of construction in 2010, which are deductible for flat tax purposes.

Net Loss Attributable to Satmex

According to the factors described above, our net loss decreased $5.9 million to $14.3 million in 2010, compared to a loss of $20.2 million in 2009.

PART II — OTHER INFORMATION

Item 1.

Legal Matters

None.

Item 2.

Other Matters

None.

Item 3.

Exhibits

None.

Item 4.

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.


	Satélites Mexicanos. S.A. de C.V. (Registrant)

Date: March 15, 2012	By:	/s/ René Moran Salazar
		(Signature)
		Name: René Moran Salazar
		Title: Acting Chief Financial Officer

* * * * * *

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