Business As Usual Despite PanAmSat's Galaxy's Propulsion System Failure

SPACEMART

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Wilton CT (SPX) Aug 06, 2004
On August 3, 2004, the secondary XIPS on Galaxy 10R experienced an unexpected shutdown, and we have not been able to restart the system. This event has not affected service to any of our customers. The primary XIPS on this satellite had previously failed.

The satellite is operating normally on its backup bi-propellant propulsion system, which has proven to be a highly- reliable propulsion system with extensive flight experience. The manufacturer has determined that the secondary XIPS system has permanently failed.

In the absence of the secondary XIPS, this satellite can operate normally on its available bi-propellant fuel for over three years.

We do not expect this event to affect service to our customers or to affect revenues from the customers on this satellite over the remaining life of the satellite. As a result, there should be no material impact on services, revenues or operations.

In addition, we do not believe that this event will affect our contracted backlog because the remaining fuel for the backup bi-propellant propulsion system should provide ample time to seamlessly transition customers to a new or replacement satellite and substantially all of our customer contracts would continue in effect on their terms on such new or replacement satellite.

This event will result in acceleration to the 2004-2007 timeframe of planned capital expenditures to replace this satellite. Galaxy 10R is insured and we will make a claim under its insurance policy. We will use any proceeds to partially offset the replacement cost.

We had already begun construction of Galaxy 17 as an on-ground spare for Galaxy 16.

Upon the successful launch of Galaxy 16, Galaxy 17 will be available as a replacement for Galaxy 10R. We also have contractual arrangements in place that would allow us to procure the construction and launch of an additional satellite.

We operate three other Boeing 601 HP satellites that continue to operate normally with XIPS as their primary propulsion system. Two of these satellites have over 6 years of bi-propellant fuel and the third, which also has a more robust XIPS than its predecessors, has over 11 years of bi- propellant fuel.

Under the terms of the Transaction Agreement for the sale of PanAmSat, dated April 20, 2004, among Constellation, LLC, the Company, The DIRECTV Group, and PAS Merger Sub, the permanent XIPS failure on Galaxy 10R allows the purchasers to not consummate the transactions contemplated thereby.

The purchasers, including affiliates of Kohlberg Kravis Roberts & Co. L.P., The Carlyle Group and Providence Equity Partners, are evaluating the impact of the XIPS failure on the transactions and are working with the Company and The DIRECTV Group to address the effect of this event.

SPACEMART

Thomson Signs Set-Top Box Agreements With Sky Mexico And Sky Brasil

Indianapolis IN (SPX) Aug 05, 2004
Thomson announced Wednesday that it has signed two year agreements with both Sky Mexico and Sky Brasil for the manufacture of digital set-top boxes that will deliver digital satellite television throughout each country.

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