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Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, fell to $1.28 billion compared with $1.48 billion the previous year.
Intelsat filed for Chapter 11 bankruptcy protection in May 2020 to tackle a debt mountain of nearly $15 billion.
The move also freed up funding to buy seven satellites to help clear C-band spectrum for terrestrial 5G networks in the U.S., in exchange for cash from a U.S. Federal Communications Commission (FCC) auction.
Intelsat could receive a cash windfall of around $4.9 billion if it meets accelerated regulatory deadlines for clearing the frequencies.
“The COVID-19 pandemic made 2020 a challenging year; however, we are proud of our ability to maintain a high standard of operations and delivery of mission critical services to our customers,” Intelsat CEO Steve Spengler said.
“The strategic value of our global network and the services it provides to our customers was reaffirmed during the year. Our mobility customers were significantly impacted by the reduction in travel in both the maritime and aeronautical sectors, yet they renewed contracts and committed to new business with Intelsat.”
Intelsat’s network services division contributed 35% of its total revenues.
Despite new business from network operators, and the expansion of maritime mobility managed services, COVID-19 related contract renegotiations helped the division’s revenues fall 12% to $677.4 million for 2020, compared with 2019.
A pandemic-driven decline in occasional use services, such as sporting events and concerts, helped drag media revenue down 8% over the period to $812.5 million, or 42% of total sales. The media business faces secular pressures that are reducing demand, including changing TV viewing habits and improving compression technology.
Government customers provided a boost for the Luxembourg and Virginia-based operator. New orders for its land mobility managed services helped revenue for its government division climb 4% to $392.6 million, about 21% of total revenue.
Seeking growth markets
Intelsat revealed a plan Feb. 12 that would slash its debt load by more than half to $7 billion.
The company said holders of about $3.8 billion of its debt supported the plan, which is subject to a Bankruptcy Court ruling that it expects in the second quarter of 2021.
Intelsat also unveiled strategy plans to target growth initiatives with a lighter debt load.
Although currently impacted by COVID-19, the company highlighted “dramatic long-term growth” in a mobility sector where it currently delivers satellite broadband services.
Providing managed services is an integral part of the company’s growth strategy, and it also sees rising opportunities in the in-flight connectivity market.
Intelsat closed its $400 million acquisition of in-flight connectivity provider Gogo’s commercial aviation business Dec. 1. The deal propels Intelsat deeper into the vertically integrated managed mobility services market.
Commercial aviation will contribute 32% of its total revenues by 2026, according to Intelsat’s forecast.
Speedcast and Global Eagle Entertainment, recently restructured connectivity providers that buy bandwidth from satellite operators, also see strong growth potential in mobility markets as COVID-19 vaccine deployments improve their outlooks.
Intelsat’s C-band clearing proceeds will help bridge the company to these growth markets as it aims to exit Chapter 11 in the second half of this year.
“As we look to 2021 and beyond, our team is focused on the delivery of high-value services to our customers, and also on the catalysts that will drive the transformation of our business,” Spengler said March 30.
“These include executing on the C-band relocation to secure the accelerated payments, successfully integrating and expanding the Intelsat commercial aviation business and emerging from restructuring as a healthy and flexible company.”
C-band battle rages on
However, the company faces a battle to access these spectrum clearing proceeds with satellite operator SES, its one-time C-Band Alliance partner and one of its largest creditors.
SES has filed legal action seeking at least $1.8 billion in damages following Intelsat’s withdrawal from that alliance, where it agreed to split the proceeds evenly.
After the FCC announced a $9.7 billion incentive program to allocate funding to operators on an individual basis, Intelsat broke from the partnership — which also included Canada’s Telesat and France’s Eutelsat — in an unsuccessful attempt for more compensation.
Luxembourg-based SES, which could earn a maximum $3.97 billion in C-band clearing proceeds, alleges Intelsat breached obligations under the alliance when it went solo.
Intelsat alleges the agreement was no longer applicable when the FCC decided to pursue a public auction of C-band spectrum, rather than a private process run by C-Band Alliance members.
SES’ legal claim was filed in the U.S. Bankruptcy Court for the Eastern District of Virginia, which is also handling Intelsat’s Chapter 11 bankruptcy protection.
A two-week trial is slated to begin June 28.
SES objected to Intelsat’s restructuring plan in a bankruptcy court document filed March 31, partly because of how it affects its ability to access the C-band proceeds.