Back on January 1st Intelsat adopted the ASC 606 accounting rules* which make absolute like-for-like comparisons with 2016’s numbers slightly difficult. This year’s Q1 numbers saw total revenue of $544 million, an increase of $5 million or 1 per cent as compared to the first quarter of 2017. Total revenue excluding the effects of ASC 606 was $519 million for the first quarter of 2018, a decline of $20 million or 4 per cent as compared to the first quarter of 2017.
“Factors reflected in the first quarter 2018 to first quarter 2017 comparison include: lower pricing associated with high volume commitments on high-throughput capacity in certain regions and applications; reduced volume from non-renewing data services, inclusive of point-to-point telecommunications infrastructure services; and the previously reported end of a US government contract. We continue to experience growth in revenue from broadband mobility networks for commercial and military applications,” said Intelsat.
Contracted backlog at March 31st 2018 was $8.6 billion, inclusive of $1 billion attributable to the effects of ASC 606. Excluding the effects of ASC 606, contracted backlog at March 31st 2018 was $7.6 billion, representing expected future revenue under existing contracts with customers, as compared to $7.8 billion at December 31st 2017. “At approximately 3.5 times trailing 12 months revenue (from April 1st 2017 to March 31st 2018), our backlog remains sizable; we believe it provides a solid foundation for predictable cash flow and investment in our business. Nearly two-thirds of our backlog is related to our longer-term media contracts,” added the company.
Intelsat commented on the prospects of freeing up C-band spectrum over the US for 5G usage. “The C-band Joint Use Proposal was made in response to an FCC Notice of Inquiry about potential other uses for this mid-band spectrum. There is significant interest from the FCC, the US Congress and the Trump administration to make additional spectrum available for terrestrial use in deploying future 5G networks in the US. Intelsat continues to meet with relevant parties, including our customers, mobile operators and regulators, to advocate for our commercial framework that would allow us to protect the reliability of the services we deliver and result in an efficient and timely process should the FCC implement the proposal. We believe that a Notice of Proposed Rule Making (“NPRM”) could be issued by the FCC in the summer of 2018, with the potential for a final order in early to mid-2019. However, we can provide no assurance as to the likelihood of the FCC’s acceptance of the various facets of our proposal, or as to the actual timing of issuance of an NPRM or a final ruling, all of which are in the control of the FCC.”
*Financial Accounting Standards Board Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”).