General Dynamics Reports Third-Quarter 2015 Results

FALLS CHURCH, Va., Oct. 28, 2015 /satPRnews.com/

  • Revenue up 3.1% to $7.99 billion
  • Operating earnings up 3.5% to $1.03 billion
  • Earnings from continuing operations up 5.6% to $733 million
  • Diluted earnings per share from continuing operations up 11.2% to $2.28

General Dynamics (NYSE: GD) today reported third-quarter 2015 earnings from continuing operations of $733 million, a 5.6 percent increase over third-quarter 2014, on revenue of $7.99 billion. Diluted earnings per share from continuing operations were $2.28 compared to $2.05 in the year-ago quarter, an 11.2 percent increase.

“General Dynamics had another solid quarter,” said Phebe Novakovic, chairman and chief executive officer. “This is our fourth consecutive quarter with more than $1 billion in operating earnings, and we expect to maintain this momentum as we see the results of our focus on operating discipline, lower cost structure and execution on our strong backlog.”

Margin

Company-wide operating margin for the third quarter of 2015 was 12.9 percent, with margin expansion in the Aerospace and Information Systems and Technology groups when compared to third-quarter 2014.

Cash

Net cash provided by operating activities in the quarter totaled $822 million. Free cash flow from operations, defined as net cash provided by operating activities less capital expenditures, was $652 million.

Capital Deployment

The company repurchased 7.15 million of its outstanding shares in the third quarter. Year-to-date, the company has repurchased 19.28 million outstanding shares.

Backlog

General Dynamics’ total backlog at the end of third-quarter 2015 was $68.7 billion. The Aerospace group continued to experience steady demand in the quarter with order activity for each of the products in the Gulfstream portfolio. Also, each of the Defense businesses had significant orders in the quarter. The estimated potential contract value, representing management’s estimate of value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $25.5 billion. Total potential contract value, the sum of all backlog components, was $94.3 billion at the end of the quarter.

About General Dynamics

Headquartered in Falls Church, Virginia, General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; C4ISR and IT solutions; and shipbuilding. The company’s revenues in 2014 were $30.9 billion. More information is available at www.generaldynamics.com.

Certain statements made in this press release, including any statements as to future results of operations and financial projections, may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are based on management’s expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors. Additional information regarding these factors is contained in the company’s filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.

All forward-looking statements speak only as of the date they were made. The company does not undertake any obligation to update or publicly release any revisions to any forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.

WEBCAST INFORMATION:  General Dynamics will webcast its third-quarter securities analyst conference call at 9 a.m. EDT on Wednesday, October 28, 2015. The webcast will be a listen-only audio event, available at www.generaldynamics.com. An on-demand replay of the webcast will be available by 12 p.m. on October 28 and will continue for 12 months. To hear a recording of the conference call by telephone, please call 855-859-2056 (international: 404-537-3406); passcode 59471842. The phone replay will be available from 1 p.m. October 28 through November 4, 2015.

 

 

EXHIBIT A

 

CONSOLIDATED STATEMENTS OF EARNINGS – (UNAUDITED)

DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

Third Quarter

Variance

2015

2014

$

%

Revenue

$

7,994

$

7,751

$

243

3.1

%

Operating costs and expenses

6,960

6,752

(208)

Operating earnings

1,034

999

35

3.5

%

Interest, net

(23)

(21)

(2)

Other, net

2

1

1

Earnings from continuing operations before income tax

1,013

979

$

34

3.5

%

Provision for income tax, net

280

285

5

Earnings from continuing operations

$

733

$

694

$

39

5.6

%

Discontinued operations, net of tax

2

(2)

Net earnings

$

733

$

696

37

5.3

%

Earnings per share—basic

Continuing operations

$

2.31

$

2.09

$

0.22

10.5

%

Discontinued operations

$

$

0.01

$

(0.01)

Net earnings

$

2.31

$

2.10

$

0.21

10.0

%

Basic weighted average shares outstanding

316.7

331.8

Earnings per share—diluted

Continuing operations

$

2.28

$

2.05

$

0.23

11.2

%

Discontinued operations

$

$

0.01

$

(0.01)

Net earnings

$

2.28

$

2.06

$

0.22

10.7

%

Diluted weighted average shares outstanding

321.9

338.2

EXHIBIT B

 

CONSOLIDATED STATEMENTS OF EARNINGS – (UNAUDITED)

DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS

Nine Months

Variance

2015

2014

$

%

Revenue

$

23,660

$

22,490

$

1,170

5.2

%

Operating costs and expenses

20,518

19,668

(850)

Operating earnings

3,142

2,822

320

11.3

%

Interest, net

(64)

(67)

3

Other, net

5

2

3

Earnings from continuing operations before income tax

3,083

2,757

326

11.8

%

Provision for income tax, net

882

821

(61)

Earnings from continuing operations

$

2,201

$

1,936

$

265

13.7

%

Discontinued operations, net of tax

(104)

104

Net earnings

$

2,201

$

1,832

$

369

20.1

%

Earnings per share—basic

Continuing operations

$

6.79

$

5.75

$

1.04

18.1

%

Discontinued operations

$

$

(0.31)

$

0.31

Net earnings

$

6.79

$

5.44

$

1.35

24.8

%

Basic weighted average shares outstanding

324.0

336.9

Earnings per share—diluted

Continuing operations

$

6.68

$

5.64

$

1.04

18.4

%

Discontinued operations

$

$

(0.30)

$

0.30

Net earnings

$

6.68

$

5.34

$

1.34

25.1

%

Diluted weighted average shares outstanding

329.4

343.1

EXHIBIT C

 

REVENUES AND OPERATING EARNINGS BY SEGMENT – (UNAUDITED)

DOLLARS IN MILLIONS

Third Quarter

Variance

2015

2014

$

%

Revenue:

Aerospace

$

2,343

$

2,289

$

54

2.4

%

Combat Systems

1,345

1,395

(50)

(3.6)

%

Information Systems and Technology

2,219

2,247

(28)

(1.2)

%

Marine Systems

2,087

1,820

267

14.7

%

Total

$

7,994

$

7,751

$

243

3.1

%

Operating earnings:

Aerospace

$

426

$

411

$

15

3.6

%

Combat Systems

218

232

(14)

(6.0)

%

Information Systems and Technology

219

202

17

8.4

%

Marine Systems

181

170

11

6.5

%

Corporate

(10)

(16)

6

37.5

%

Total

$

1,034

$

999

$

35

3.5

%

Operating margin:

Aerospace

18.2

%

18.0

%

Combat Systems

16.2

%

16.6

%

Information Systems and Technology

9.9

%

9.0

%

Marine Systems

8.7

%

9.3

%

Total

12.9

%

12.9

%

EXHIBIT D

 

REVENUES AND OPERATING EARNINGS BY SEGMENT – (UNAUDITED)

DOLLARS IN MILLIONS

Nine Months

Variance

2015

2014

$

%

Revenue:

Aerospace

$

6,709

$

6,409

$

300

4.7

%

Combat Systems

4,116

4,118

(2)

%

Information Systems and Technology

6,804

6,691

113

1.7

%

Marine Systems

6,031

5,272

759

14.4

%

Total

$

23,660

$

22,490

$

1,170

5.2

%

Operating earnings:

Aerospace

$

1,296

$

1,199

$

97

8.1

%

Combat Systems

648

591

57

9.6

%

Information Systems and Technology

673

573

100

17.5

%

Marine Systems

556

510

46

9.0

%

Corporate

(31)

(51)

20

39.2

%

Total

$

3,142

$

2,822

$

320

11.3

%

Operating margin:

Aerospace

19.3

%

18.7

%

Combat Systems

15.7

%

14.4

%

Information Systems and Technology

9.9

%

8.6

%

Marine Systems

9.2

%

9.7

%

Total

13.3

%

12.5

%

EXHIBIT E

 

CONSOLIDATED BALANCE SHEETS

DOLLARS IN MILLIONS

(Unaudited)

October 4, 2015

December 31, 2014

ASSETS

Current assets:

Cash and equivalents

$

3,372

$

4,388

Accounts receivable

3,796

4,050

Contracts in process

4,215

4,591

Inventories

3,239

3,221

Other current assets

666

1,157

Total current assets

15,288

17,407

Noncurrent assets:

Property, plant and equipment, net

3,370

3,329

Intangible assets, net

800

912

Goodwill

11,533

11,731

Other assets

1,989

1,976

Total noncurrent assets

17,692

17,948

Total assets

$

32,980

$

35,355

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Short-term debt and current portion of long-term debt

$

501

$

501

Accounts payable

2,387

2,057

Customer advances and deposits

5,871

7,335

Other current liabilities

4,419

3,858

Total current liabilities

13,178

13,751

Noncurrent liabilities:

Long-term debt

2,912

3,410

Other liabilities

6,156

6,365

Total noncurrent liabilities

9,068

9,775

Shareholders’ equity:

Common stock

482

482

Surplus

2,697

2,548

Retained earnings

22,655

21,127

Treasury stock

(11,915)

(9,396)

Accumulated other comprehensive loss

(3,185)

(2,932)

Total shareholders’ equity

10,734

11,829

Total liabilities and shareholders’ equity

$

32,980

$

35,355

EXHIBIT F

 

CONSOLIDATED STATEMENTS OF CASH FLOWS – (UNAUDITED)

DOLLARS IN MILLIONS

Nine Months Ended

October 4, 2015

September 28, 2014

Cash flows from operating activities—continuing operations:

Net earnings

$

2,201

$

1,832

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation of property, plant and equipment

272

285

Amortization of intangible assets

88

91

Equity-based compensation expense

84

94

Excess tax benefit from stock-based compensation

(69)

(66)

Deferred income tax provision

88

94

Discontinued operations, net of tax

104

(Increase) decrease in assets, net of effects of business acquisitions:

Accounts receivable

254

189

Contracts in process

391

380

Inventories

(29)

(259)

Increase (decrease) in liabilities, net of effects of business acquisitions:

Accounts payable

334

174

Customer advances and deposits

(1,508)

1,231

Income taxes payable

13

148

Other current and noncurrent liabilities

206

(238)

Other, net

(155)

(261)

Net cash provided by operating activities

2,170

3,798

Cash flows from investing activities:

Maturities of held-to-maturity securities

500

Purchases of held-to-maturity securities

(500)

Capital expenditures

(360)

(337)

Proceeds from sales of assets

290

7

Other, net

(12)

4

Net cash provided (used) by investing activities

418

(826)

Cash flows from financing activities:

Purchases of common stock

(2,729)

(3,117)

Dividends paid

(655)

(618)

Repayment of fixed-rate notes

(500)

Proceeds from stock options exercises

240

475

Other, net

71

66

Net cash used by financing activities

(3,573)

(3,194)

Net cash (used) provided by discontinued operations

(31)

26

Net decrease in cash and equivalents

(1,016)

(196)

Cash and equivalents at beginning of period

4,388

5,301

Cash and equivalents at end of period

$

3,372

$

5,105

EXHIBIT G

 

PRELIMINARY FINANCIAL INFORMATION – (UNAUDITED)

DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS

Third Quarter 2015

Third Quarter 2014

Other Financial Information:

Debt-to-equity (a)

31.8

%

30.1

%

Debt-to-capital (b)

24.1

%

23.1

%

Book value per share (c)

$

33.95

$

39.26

Total taxes paid

$

246

$

292

Company-sponsored research and development (d)

$

104

$

73

Shares outstanding

316,128,160

331,389,741

Non-GAAP Financial Measures:

2015

2014

Quarter

Year-to-date

Quarter

Year-to-date

Free cash flow from operations:

Net cash provided by operating activities

$

822

$

2,170

$

2,504

$

3,798

Capital expenditures

(170)

(360)

(175)

(337)

Free cash flow from operations (e)

$

652

$

1,810

$

2,329

$

3,461

(a)

Debt-to-equity ratio is calculated as total debt divided by total equity as of the end of the period.

(b)

Debt-to-capital ratio is calculated as total debt divided by the sum of total debt plus total equity as of the end of the period.

(c)

Book value per share is calculated as total equity divided by total outstanding shares as of the end of the period.

(d)

Includes independent research and development and Gulfstream product-development costs.

(e)

We believe free cash flow from operations is a measurement that is useful to investors because it portrays our ability to generate cash from our core businesses for such purposes as repaying maturing debt, funding business acquisitions and paying dividends. We use free cash flow from operations to assess the quality of our earnings and as a performance measure in evaluating management. The most directly comparable GAAP measure to free cash flow from operations is net cash provided by operating activities.

EXHIBIT H

 

BACKLOG – (UNAUDITED)

DOLLARS IN MILLIONS

Funded

Unfunded

Total

Backlog

Estimated

Potential

Contract Value*

Total Potential

Contract

Value

Third Quarter 2015

Aerospace

$

13,459

$

100

$

13,559

$

2,479

$

16,038

Combat Systems

18,591

658

19,249

5,261

24,510

Information Systems and Technology

7,294

2,122

9,416

15,074

24,490

Marine Systems

14,391

12,127

26,518

2,734

29,252

Total

$

53,735

$

15,007

$

68,742

$

25,548

$

94,290

Second Quarter 2015

Aerospace

$

13,893

$

125

$

14,018

$

2,474

$

16,492

Combat Systems

18,454

476

18,930

5,199

24,129

Information Systems and Technology

7,096

2,037

9,133

15,562

24,695

Marine Systems

15,993

11,952

27,945

2,345

30,290

Total

$

55,436

$

14,590

$

70,026

$

25,580

$

95,606

Third Quarter 2014

Aerospace

$

11,924

$

143

$

12,067

$

1,857

$

13,924

Combat Systems

20,879

732

21,611

5,760

27,371

Information Systems and Technology

7,421

1,452

8,873

16,520

25,393

Marine Systems

14,308

17,574

31,882

2,524

34,406

Total

$

54,532

$

19,901

$

74,433

$

26,661

$

101,094

*

The estimated potential contract value represents management’s estimate of our future contract value under unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options associated with existing firm contracts, including options to purchase new aircraft and long-term agreements with fleet customers, as applicable. Because the value in the unfunded IDIQ arrangements is subject to the customer’s future exercise of an indeterminate quantity of orders, we recognize these contracts in backlog only when they are funded. Unexercised options are recognized in backlog when the customer exercises the option and establishes a firm order.

EXHIBIT H-1


BACKLOG AND ESTIMATED CONTRACT VALUE – (UNAUDITED)
DOLLARS IN MILLIONS

EXHIBIT H-1 BACKLOG AND ESTIMATED CONTRACT VALUE

Photo – http://photos.prnewswire.com/prnh/20151027/280964-INFO 

EXHIBIT H-2


BACKLOG AND ESTIMATED CONTRACT VALUE BY SEGMENT – (UNAUDITED)
DOLLARS IN MILLIONS

EXHIBIT H-2 BACKLOG AND ESTIMATED CONTRACT VALUE BY SEGMENT

Photo – http://photos.prnewswire.com/prnh/20151027/280992-INFO 

EXHIBIT I


THIRD QUARTER 2015 SIGNIFICANT ORDERS (UNAUDITED)
DOLLARS IN MILLIONS

We received the following significant orders during the third quarter of 2015:

Combat Systems

  • $610 from the U.K. Ministry of Defence to provide in-service support for the AJAX armoured fighting vehicle fleet until 2024.
  • $285 from the U.S. Army to refurbish and upgrade 150 Abrams main battle tanks to the situational awareness configuration for the Kingdom of Morocco under a Foreign Military Sales (FMS) contract.
  • $60 from the Army under the Stryker wheeled armored vehicle program for production of double-V-hulled vehicles.
  • $50 to produce various calibers of ammunition.

Information Systems and Technology

  • $340 from the Centers for Medicare & Medicaid Services for contact-center services.
  • $155 from the Army for ruggedized computing equipment under the CHS-4 program.
  • $100 from the U.S. Air Force to deliver enterprise IT services.
  • $90 from the Army under the Warfighter Field Operations Customer Support (FOCUS) program to provide support for live and virtual operations.
  • $80 from the Army under Increment 2 of the Warfighter Information Network-Tactical (WIN-T) program for additional equipment, engineering and support services.

Marine Systems

  • $265 from the U.S. Navy for design work on the Ohio-class submarine replacement program.
  • $155 from the Navy to provide design, engineering, material and logistics support and research and development activities for active U.S. submarines.
  • $50 from the Navy for the design and manufacture of two moored training ships.

EXHIBIT J

 

AEROSPACE SUPPLEMENTAL DATA – (UNAUDITED)

Third Quarter

Nine Months

2015

2014

2015

2014

Gulfstream Green Deliveries (units):

Large-cabin aircraft

31

32

87

87

Mid-cabin aircraft

9

6

23

19

Total

40

38

110

106

Gulfstream Outfitted Deliveries (units):

Large-cabin aircraft

31

25

89

84

Mid-cabin aircraft

12

6

27

24

Total

43

31

116

108

Pre-owned Deliveries (units):

3

5

3

General Dynamics

Logo – http://photos.prnewswire.com/prnh/20140428/81320

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/general-dynamics-reports-third-quarter-2015-results-300167323.html

SOURCE General Dynamics

Media: Lucy Ryan, General Dynamics, office: 703-876-3631, email: lryan@generaldynamics.com; Investors: Erin Linnihan, General Dynamics, office: 703-876-3583, email: elinnihan@generaldynamics.com

Source: General Dynamics Reports Third-Quarter 2015 Results
Link: General Dynamics Reports Third-Quarter 2015 Results

Our eyes can play tricks on us but shortwave infrared (SWIR) imagery reveals all – part 1 of 2

Deke YoungIf you are an imagery scientist you already know how valuable SWIR data is for satellite image interpretation. However, if you are new imagery user or a user that has only worked with color imagery you may not be familiar with the value SWIR can unlock. Let’s start with an example everyone can understand. Earlier this year there was a great viral debate over the color of a dress…Was it “blue and black” or “white and gold”? (Spoiler, it was blue and black). The debate sparked noteworthy comments from ordinary people “if that’s not gold my entire life has been a lie” and trained scientists “what’s happening here is your visual system is looking at this thing, and you’re trying to discount the chromatic bias of the daylight axis,” says Bevil Conway, a neuroscientist who studies color and vision at Wellesley College. Clearly people are amused and interested by these types of optical illusions. And what we see with our own eyes creates a very powerful sense of certainty in our interpretation of the word around us.

But what if these colors were in a satellite image and being used to make a decision that would save lives, resources or time? Would we accept such strong differences of opinion? No we would not. Would we want a higher level of certainty? Yes we would. Satellite images with near-infrared and shortwave infrared light waves can provide us with the higher levels of interpretability, certainty, and give us the answers we need to make better decisions.

WorldView-3 is the first commercial high-resolution satellite to provide eight spectral bands in the short wave infrared (SWIR) range, in addition to the eight in the visible and near infrared (VNIR). Each SWIR and VNIR band is narrowly focused on an area of the electromagnetic spectrum that is sensitive to a particular feature on the ground or a property of the atmosphere. Used together, these bands allow us to find, see, and interpret features in satellite imagery like never before.

What is Visible and Near Infrared (VNIR) Imagery?

VNIR refers to visible light (the “V” in VNIR), which is the light we all can see with our eyes. Technically speaking these are light waves that fall between 390 and 700 nanometers (nm). Near infrared imagery (the “NIR” in VNIR) is just beyond the capabilities of our eyes and it represents the light waves that fall between 750 and 950 nanometers. Even though we can’t see these near infrared waves they behave just like visible light and reflect off objects all around us. For example, near infrared imagery is ideal for conducting vegetative analyses that can reveal plant type, age, health, and diversity in much greater detail than visible imagery alone. Four-band VINR high-resolution satellite imagery has been available since the launch if IKONOS in 1999. Eight-band very-high-resolution VNIR satellite imagery is unique to WorldView-2 and WorldView-3.

SWIR - Figure 1Figure 1. WorldView-2 and WorldView-3 have eight visible and near infrared (VNIR) bands which are ideal for vegetative analysis and mapping. Visible imagery is shown on the left and near-infrared imagery is shown on the right. Note that healthy vegetation appears red and bare ground appears green in the near-infrared image.

What is Shortwave Infrared (SWIR) Imagery?

SWIR refers to a non-visible range of light falling between about 1400 and 3000 nanometers in wavelength, outside of the visible range. Due to the unique properties of minerals, man-made material, and other features, SWIR imagery can “see” objects in a way that is invisible to the naked eye and VNIR sensors.

SWIR - Figure 2Figure 2. WorldView-3 has eight shortwave infrared (SWIR) bands in addition to eight visible and near infrared.

Collecting satellite imagery in SWIR wavelengths has unique benefits, including improved atmospheric transparency and material identification. Many materials have specific reflectance and absorption features in the SWIR bands that allow them to be identified from space. Snow and ice, different rock types and man-made materials are distinct and can be differentiated in the SWIR bands. SWIR imagery can even penetrate some types of smoke, such as from a forest fire, and identify “hot spots.”

SWIR - Figure 3Figure 3. WorldView-3 has eight shortwave infrared (SWIR) bands which are ideal for material identification and mapping. Visible imagery is shown on the left and classification using SWIR imagery is shown on the right. Note that different roof top materials that look the same in the visible imagery are clearly differentiated in the SWIR imagery.

DigitalGlobe launched our SWIR product this week. We’ve been building SWIR coverage in our Image Library throughout 2015, and offer new collection for areas not yet covered with SWIR imagery. Our 7.5-meter resolution product has 16 times more information than previous satellite SWIR sensors.

Contact DigitalGlobe or a DigitalGlobe partner to see if SWIR can help you solve your problems with higher levels of certainty.

Source: Our eyes can play tricks on us but shortwave infrared (SWIR) imagery reveals all – part 1 of 2
Link: Our eyes can play tricks on us but shortwave infrared (SWIR) imagery reveals all – part 1 of 2

FIRST QUARTER 2015-16 REVENUES UP 2.0% AT CONSTANT CURRENCY

Paris, 28 October 2015 – Eutelsat Communications (ISIN: FR0010221234 – Euronext Paris: ETL) today reported revenues for the first quarter ended 30 September 2015.

Three months to 30 September 2015

In   € millions Q1 2014-15 Q1 2015-16 Actual   change Change at constant   currency
Video Applications 227.6 229.4 +0.8% -1.6%
Data Services 51.2 58.8 +14.9% -0.3%
Value-Added Services 26.3 29.7 +13.1% +12.4%
Government Services 44.5 53.0 +19.2% -0.7%
Other revenues 8.0 16.7 x2.1 x2.0
Sub-total 357.6 387.7 +8.4% +2.0%
Non-recurring revenues
Total 357.6 387.7 +8.4% +2.0%
EUR/USD exchange rate 1.35 1.11

Commenting on the First Quarter, Michel de Rosen, Chairman and CEO, said: “Eutelsat’s first quarter revenues were up 2.0% at constant currency and put us on track to deliver on our full-year objectives. The entry into service of EUTELSAT 8 West B and EUTELSAT 115 West B will bring new capacity during the second quarter, which will ramp-up as the year progresses. We have taken major steps to position ourselves to grasp the significant opportunities on the African Broadband market with the lease AMOS-6 Ka-band payload in partnership with Facebook and the procurement of a follow-on standalone high throughput satellite for Africa.”

RECENT OPERATING HIGHLIGHTS

The Group has had several recent contract successes in Video and Data applications in all geographies, which are detailed later in this release.

Early October saw the entry into service of two new satellites: EUTELSAT 8 West B, boosting coverage of the MENA region, followed by EUTELSAT 115 West B which started operations ahead of schedule and brings additional resources to meet demand in LATAM.

Eutelsat’s African Broadband initiative was kicked off with the lease of the AMOS-6 Ka-band payload in partnership with Facebook and the subsequent procurement of a follow-on standalone High Throughput Satellite to serve the African market.

Finally, as part of its initiatives to advance the adaptation of the satellite industry to evolving video landscapes, Eutelsat along with SES, launched ‘Future Video Initiative’ to develop and promote next-generation video technologies, standards and formats.

FIRST QUARTER REVENUE ANALYSIS[1]

Total revenues for the first quarter ending 30 September 2015 stood at €387.7 million, up 2.0% at constant currency. The appreciation of the dollar relative to the euro added 6.4 points to top-line growth, particularly visible in Government Services and to a lesser extent in Data Services.

[1]The share of each application as a percentage of total revenues is calculated excluding “other revenues” and “non-recurring revenues”. Unless otherwise stated, all growth indicators are made in comparison with first quarter ended 30 September 2014.

VIDEO APPLICATIONS (62% of revenues)

First quarter revenues for Video Applications amounted to €229.4 million, down 1.6% at constant currency. This mainly reflected on one hand a good performance at Eutelsat Americas and higher revenues at 16° East (Sub-Saharan Africa and Central Europe) and 7° East (Turkey and East Africa) and on the other, lower revenues at the HOT BIRD position following the non-renewal of contracts with some service Providers last year and the impact of contract renegotiations with Russian customers.

New capacity entered into service in October should ramp-up as the year progresses.

At 30 September 2015, the total number of channels broadcast by Eutelsat satellites stood at 5,855, up 1.2% year-on-year. HD penetration continued to increase, representing 12.3% of channels compared to 10.9% a year earlier, or 721 channels, up from 629 a year earlier.

Several recent video contracts have been announced in both mature and fast growing markets:

  • In Europe, a multi-year agreement for an additional transponder with Arqiva at 28° East to serve the UK DTH (Direct-to-Home) broadcast market, additional capacity taken by Telekom Austria Group and ANTIK Telekom at 16° East for their new Direct-to-Home platform for the Slovak and Czech markets.
  • In Africa, a multi-year contract with CANAL+ Overseas at 3° East to broadcast a new package of DTT channels for French-speaking Africa and a multi-year contract at 16° East with United Business Machines EG for a new digital TV platform in Equatorial Guinea.
  • In Latin America, a multi-year agreement with SpeedCast Serviços Multimedia for Ku-band capacity on the upcoming EUTELSAT 65 West A satellite for professional video services.

DATA SERVICES (16% of revenues)

First quarter revenues for Data Services stood at €58.8 million, almost unchanged year-on-year at constant currency
(-0.3%). Growth was driven by Latin America and the ramp-up of regular capacity on EUTELSAT 3B. Revenues were lower at 53° East as a result of the rationalization of capacity at this position in May 2015.

As in previous quarters, pricing pressure remains strong in EMEA.

Recent contracts include multi-year / multi-transponder agreements signed by Eutelsat Americas across Latin America for capacity with Elara (at 115° and 117° West) and with Axesat (at 113° and 115° West).

VALUE-ADDED SERVICES (8% of revenues)

First quarter revenues for Value-Added Services amounted to €29.7 million, up 12.4% year-on-year.Uptake on KA-SAT continued, with 190,000 broadband terminals activated at 30 September 2015, compared with 166,000 a year earlier and 185,000 as of 30 June 2015.

Maritime mobility also contributed to year-on-year growth.

GOVERNMENT SERVICES (14% of revenues)

First quarter revenues for Government Services stood at €53.0 million versus €44.5 million a year earlier. At constant currency this represented a decline of -0.7%. The quarter saw the early termination of a significant contract with a distributor, with the attendant termination fee recognized in ‘Other revenues’, and continued to reflect the effect of lower renewals in the last 12 months. These elements were partially offset by new contracts, in particular in Asia-Pacific.

The latest round of contract renewals with the US administration is currently underway, with an estimated renewal rate below the level of last year, in line with expectations. This reflects ongoing pricing pressure due to the impact of reduced operations, budgetary constraints and tougher procurement processes.

OTHER AND NON-RECURRING REVENUES

Other revenues[2]amounted to €16.7 million in the first quarter compared with €8.0 million last year and included revenues related to the agreements signed in 2014 with SES at 28.5° East as well as the early termination fee mentioned above.

There were no non-recurring revenues in the first quarter.

OPERATIONAL AND LEASED TRANSPONDERS

The number of operational 36 MHz-equivalent transponders stood at 1,175 at 30 September 2015, broadly stable compared to 30 September 2014, reflecting on the one hand the reduction in capacity at 53° East and 56° East and on the other the relocation of EUTELSAT 28A to 33°East.

The fill rate stood at 77.6%, slightly up on a year-on-year basis. The decline compared to the fill rate of 78.7% at end June 2015, mostly reflects the early termination of a significant contract with a distributor in Government Services.

The number of operational high throughput spotbeams stood at 87 as of 30 September 2015, unchanged compared to end-June 2015.

30 September2014 30 June2015 30 September2015
Number of operational 36 MHz-equivalent   transponders [3] 1,177 1,168 1,175
Number of leased 36 MHz-equivalent   transponders[4] 906 919 912
Fill rate 77.0% 78.7% 77.6%

Note: Based on 36 MHz-equivalent transponders excluding high throughput capacity (KA-SAT 82 spotbeams and EUTELSAT 3B 5 Ka-band spotbeams).

ORDER BACKLOG

The order backlog[5] stood at €6.0 billion at 30 September 2015, versus €6.3 billion a year earlier and €6.2 billion at end June 2015. In the first quarter, backlog consumption and the impact of the early termination mentioned above offset the impact of new contracts notably at 3° East (CANAL+ Overseas) and 28° East (Arqiva).

The backlog was equivalent to 4.1 times 2014-2015 revenues. Video Applications represented 83% of the backlog.

30 September2014 30 June2015 30 September2015
Value of contracts (in billions of euros) 6.3 6.2 6.0
In years of annual revenues based on last fiscal   year 4.5[6] 4.2 4.1
Share of Video Applications 84% 83% 83%

OUTLOOK

Based on the performance of the first quarter, Eutelsat remains on track to achieve its objective of revenue growth of 2-3% for FY 2015-16at constant currency, excluding non-recurring revenues.

All other targets published on 30 July 2015 are also confirmed.

FLEET DEVELOPMENTS

NOMINAL LAUNCH PROGRAM

The upcoming launch schedule is indicated below. Changes relative to the last quarterly update on 30 July 2015 are as follows:

  • the launch of EUTELSAT 9B is now expected in the first quarter of      calendar year 2016 (versus fourth quarter of calendar year 2015      previously);
  • the launch of EUTELSAT 117 West B is now expected in the first      quarter of calendar year 2016 (versus fourth quarter of calendar year 2015      previously);
  • the launch of EUTELSAT 65 West A is now expected in the first      quarter of calendar year 2016 (versus second half of calendar year 2016      previously);
Satellite1 Orbitalposition Estimated launch
   (calendar year)
Mainapplications Main geographic coverage PhysicalTransponders 36 MHz-equivalent   transponders / Spotbeams Of which expansion36 MHz-equivalent   transponders
EUTELSAT 36C2 36° East Q4 2015 Video, Data, Broadband Russia, Sub-Saharan Africa Up to 52 Ku / 18 Ka-band spotbeams 48 Ku18 Ka Spotbeams 19 Ku18 Ka Spotbeams3
EUTELSAT 9B 9° East Q1 2016 Video Europe 50 Ku 47 Ku 12 Ku
EUTELSAT 117 West B 116.8 ° West Q1 2016 Video, Data, Government Services Latin America 40 Ku 48 Ku 48 Ku
EUTELSAT 65 West A 65° West Q1 2016 Video, Data, Broadband Latin America 24 Ku, 10 C, up to 24 Ka-band spotbeams 24 Ku; 15 C; 24 Ka-band spotbeams 24 Ku; 15 C; 24 Ka-band spotbeams4
EUTELSAT 172B 172° East H1 2017 Data, Government Services, Mobility Asia-Pacific 36 Ku (regular), 14 C, 11 Ku-band HTS spotbeams 42 Ku (regular), 24 C, 11 Ku-band HTS spotbeams 19 Ku (regular); 11 Ku-band HTS spotbeams5
EUTELSAT Quantum To bedefined Delivered end of 2018 Data,GovernmentServices,

Mobility

Flexible 12 “Quantum channels” Not applicable Not applicable
African Broadband satellite To bedefined 2019 Broadband Africa 65 spotbeams 75 Gbps6 75 Gbps6
1 Chemical propulsion   satellites generally enter into service 1 to 2 months after launch. Of the   electric propulsion satellites, EUTELSAT 117 West B will take 7-9 months   after launch to enter into service, and EUTELSAT 172B circa 4 months.2 Partnership with RSCC3 Total capacity of the high throughput payload: 11.6 Gbps

4 Total capacity of the high throughput payload: 37.5 Gbps

5 Total capacity of the high throughput payload: 1.8 Gbps

6 Total capacity for the baseline mission. Option to double the   capacity.

CHANGES IN THE FLEET

In July 2015, EUTELSAT 28A was relocated to 33° East where it now operates as EUTELSAT 33C.

On 20 August 2015, the EUTELSAT 8 West B satellite was successfully launched into orbit by an Ariane 5 rocket. It entered full commercial service at 7/8° West in early October. The EUTELSAT 8 West A satellite was relocated at 12.5° West where it operates under the name EUTELSAT 12 West B; EUTELSAT 8 West C was relocated at 33° East and is now operating as EUTELSAT 33D.

In October 2015, EUTELSAT 115 West B started operations a month ahead of the original date.

In October 2015, the operational life of EUTELSAT 33B was terminated, a month ahead of its planned de-orbiting following the loss of its second solar array. Continuity for customers was assured by other capacity on Eutelsat’s fleet.

Following these fleet movements, the number of satellites operated by Eutelsat stood at 38 as of today’s publication.

LAUNCH CONTRACTS

Eutelsat 65 West A will be launched by Arianespace in the first quarter of calendar year 2016 as a dedicated launch (previously planned in the second half of calendar year 2016 as a double launch). Eutelsat also exercised an option for a future Arianespace launch and now has two future Ariane launches booked in addition to EUTELSAT 65 West A and EUTELSAT 172B.

Elsewhere, Eutelsat has secured a multi-launch agreement with ILS for 2016-23 comprising several conditional launches.

PROCUREMENT OF NEW CAPACITY

In July 2015, the first satellite “Eutelsat Quantum” satellite was ordered from Airbus Defence and Space, to be delivered at the end of 2018.

In October 2015 Eutelsat leased the Ka-band capacity on the AMOS-6 satellite that will enable broadband services to be delivered in Sub-Saharan Africa from end-2016.

In October 2015, Eutelsat ordered a new-generation High Throughput Satellite from Thales Alenia Space (TAS) with exceptional operational flexibility. To be launched in 2019, this all-electric satellite will bring significant additional broadband resources to Sub-Saharan Africa and will be the first to use Thales Alenia Space’s new Spacebus Neo platform.

GOVERNANCE

In October 2015, Michel de Rosen informed the Board of Directors that he will step down from his position as Chief Executive Officer in March 2016. He will remain in the role of non-executive Chairman of the Board of Directors of Eutelsat until the end of his current mandate in November 2016, at which point his mandate will be submitted to the Annual Shareholders’ Meeting for renewal.

Eutelsat’s Board of Directors elected Rodolphe Belmer as the successor to Michel de Rosen in the role of Chief executive Officer, effective from 1 March 2016. In order to create the conditions for a smooth transition process, he will join Eutelsat on 1 December 2015 as Deputy CEO, alongside Michel Azibert, Deputy CEO and Chief Commercial and Development Officer. Rodolphe Belmer will be proposed as a member of Eutelsat’s Board at the Annual Shareholders’ Meeting of November 2016.

APPENDICES

Quarterly reported revenues by business application

Three months ended
In millions of euros 30/09/2014 31/12/2014 31/03/2015 30/06/2015 30/09/2015
Video Applications 227.6 224.8 225.3 235.3 229.4
Data Services 51.2 56.2 58.1 61.1 58.8
Value-Added Services 26.3 25.1 23.4 27.6 29.7
Government Services 44.5 47.7 49.5 54.7 53.0
Other revenues 8.0 11.4 11.4 7.1 16.7
Sub-total 357.6 365.3 367.7 385.9 387.7
Non-recurring revenues
Total 357.6 365.3 367.7 385.9 387.7

First quarter 2015-2016 revenues conference call

A conference call will be held on Wednesday, 28 October 2015 at 6:30pm CET / 5.30pm GMT / 12:30 EST

To connect to the call, please use the following numbers:

  • France: +33 (0)1 72 00 15 10
  • UK: +44(0) 20 3043 2440
  • United States: +1 877 887 4163

Access code: 512730#

Instant replay number will be available from 28 October, 08.30 to November 4, midnight CET:

  • France: +33 (0)1 72 00 15 00
  • UK: + 44 (0) 20 3367 9460
  • United States: + 1 877 642 3018

Access code: 297065#

Financial calendar

The financial calendar below is provided for information purposes only. It is subject to change and will be regularly updated.

-5 November 2015: Annual General Shareholders Meeting

-1 December 2015: Capital market day (Paris)

-17 February 2016: First Half 2015-2016 Results

-12 May 2016: Third Quarter 2015-2016 Revenues

About Eutelsat Communications:

Established   in 1977, Eutelsat Communications (Euronext Paris: ETL, ISIN code:   FR0010221234) is one of the world’s leading and most experienced operators of   communications satellites. The company provides capacity on 38 satellites to   clients that include broadcasters and broadcasting associations, pay-TV   operators, video, data and Internet service providers, enterprises and   government agencies.

Eutelsat’s   satellites provide ubiquitous coverage of Europe, the Middle East, Africa,   Asia-Pacific and the Americas, enabling video, data, broadband and government   communications to be established irrespective of a user’s location.

Headquartered   in Paris, with offices and teleports around the globe, Eutelsat represents a   workforce of 1,000 men and women from 37 countries who are experts in their   fields and work with clients to deliver the highest quality of service.

For   more about Eutelsat please visit www.eutelsat.com

[1]The share of each application as a percentage of total revenues is calculated excluding “other revenues” and “non-recurring revenues”. Unless otherwise stated, all growth indicators are made in comparison with first quarter ended 30 September 2014.

[2]Other revenues include mainly compensation paid on the settlement of business-related litigation, the financing of certain research programmes by the European Union and other organisations, the recognition of EUR/USD foreign exchange gains/losses, the provision of various services or consulting/engineering fees as well as termination fees.

[3]Number of 36 MHz-equivalent transponders on satellites in stable orbit, back-up capacity excluded.

[4]Number of 36 MHz-equivalent transponders leased on satellites in stable orbit.

[5]The backlog represents future revenues from capacity lease agreements and can include contracts for satellites under procurement.

[6]Based on proforma revenues for fiscal year 2013-2014.

______________________________________________________________________________________________

Disclaimer

The forward-looking statements included herein are for illustrative purposes only and are based on management’s current views and assumptions. Such forward-looking statements involve known and unknown risks. For illustrative purposes only, such risks include but are not limited to: postponement of any ground or in-orbit investments and launches including but not limited to delays of future launches of satellites; impact of financial crisis on customers and suppliers; trends in Fixed Satellite Services markets; development of Digital Terrestrial Television and High Definition television; development of satellite broadband services; Eutelsat Communications’ ability to develop and market Value-Added Services and meet market demand; the effects of competing technologies developed and expected intense competition generally in its main markets; profitability of its expansion strategy; partial or total loss of a satellite at launch or in-orbit; supply conditions of satellites and launch systems; satellite or third-party launch failures affecting launch schedules of future satellites; litigation; ability to establish and maintain strategic relationships in its major businesses; and the effect of future acquisitions and investments.

Eutelsat Communications expressly disclaims any obligation or undertaking to update or revise any projections, forecasts or estimates contained in this presentation to reflect any change in events, conditions, assumptions or circumstances on which any such statements are based, unless so required by applicable law.

Source: FIRST QUARTER 2015-16 REVENUES UP 2.0% AT CONSTANT CURRENCY
Link: FIRST QUARTER 2015-16 REVENUES UP 2.0% AT CONSTANT CURRENCY

GSAT-15 begins the payload integration process for Arianespace’s next Ariane 5 mission

GSAT-15 begins the payload integration process for Arianespace’s next Ariane 5 mission


GSAT-15 is shown during the integration process in French Guiana.  At left, the Indian-built satellite is mated to a cone-shaped adapter that will function as its interface with Ariane 5.  The spacecraft was then installed on a pallet (photo at center) and moved into a protective container for its transfer to the Spaceport’s Ariane 5 Final Assembly Building.

October 30, 2015 – Ariane Flight VA227

Preparations for Arianespace’s sixth heavy-lift mission of 2015 have advanced into the payload integration phase, with the Indian GSAT-15 satellite passenger making its first contact with launcher hardware.

The milestone for Arianespace Flight VA227 occurred this week at the Spaceport in French Guiana with GSAT-15’s installation atop the cone-shaped adapter that will serve as its interface with Ariane 5.  This was followed by the transfer of GSAT-15 from the Spaceport’s S5 payload preparation facility to the launcher Final Assembly Building, where it will be readied for installation atop its Ariane 5.

Built by the Indian Space Research Organisation (ISRO), GSAT-15 will be riding in the lower passenger position, installed inside the SYLDA dISPenser system – on which the mission’s other passenger, Arabsat-6B, will be placed.

GSAT-15 is to provide telecommunications services, as well as dedicated navigation-aid and emergency services for India.  With a liftoff mass set by ISRO at 3,164.5 kg., the relay platform has a design lifetime of 12 years and will operate from an orbital slot at 93.5° East.

Flight VA227 is set for a November 10 liftoff from the ELA-3 launch zone.  This will mark Arianespace’s 10th launch in a busy year at the Spaceport that targets a total of 12 flights with the company’s complete launcher family, which also includes the medium-weight Soyuz and light-lift Vega.

Source: GSAT-15 begins the payload integration process for Arianespace’s next Ariane 5 mission
Link: GSAT-15 begins the payload integration process for Arianespace’s next Ariane 5 mission

GSAT-15 begins the payload integration process for next Ariane 5 mission

(30 October 2015) Preparations for Arianespace’s sixth heavy-lift mission of 2015 have advanced into the payload integration phase, with the Indian GSAT-15 satellite passenger making its first contact with launcher hardware.

The milestone for Arianespace Flight VA227 occurred this week at the Spaceport in French Guiana with GSAT-15’s installation atop the cone-shaped adapter that will serve as its interface with Ariane 5.  This was followed by the transfer of GSAT-15 from the Spaceport’s S5 payload preparation facility to the launcher Final Assembly Building, where it will be readied for installation atop its Ariane 5.


gsat 1

GSAT-15 is mated to a cone-shaped adapter that will function as its interface with Ariane 5. (courtesy: ESA, CNES, Arianespace, Optique video du CSG, S Martin)


gsat 2

The spacecraft was then installed on a pallet. (courtesy: ESA, CNES, Arianespace, Optique video du CSG, P Baudon)


gsat 3

GSAT-15 is moved into a protective container for its transfer to the Spaceport’s Ariane 5 Final Assembly Building. (courtesy: ESA, CNES, Arianespace, Optique video du CSG, G Barbaste)

Built by the Indian Space Research Organisation (ISRO), GSAT-15 will be riding in the lower passenger position, installed inside the SYLDA dISPenser system – on which the mission’s other passenger, Arabsat-6B, will be placed.

GSAT-15 is to provide telecommunications services, as well as dedicated navigation-aid and emergency services for India.  With a liftoff mass set by ISRO at 3,164.5 kg., the relay platform has a design lifetime of 12 years and will operate from an orbital slot at 93.5° East.

Flight VA227 is set for a November 10 liftoff from the ELA-3 launch zone.  This will mark Arianespace’s 10th launch in a busy year at the Spaceport that targets a total of 12 flights with the company’s complete launcher family, which also includes the medium-weight Soyuz and light-lift Vega.

(source: Arianespace)

Source: GSAT-15 begins the payload integration process for next Ariane 5 mission
Link: GSAT-15 begins the payload integration process for next Ariane 5 mission