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SUPPLEMENTAL CONSOLIDATING FINANCIAL INFORMATION
12 Months Ended
Dec. 31, 2011
SUPPLEMENTAL CONSOLIDATING FINANCIAL INFORMATION

18. SUPPLEMENTAL CONSOLIDATING FINANCIAL INFORMATION

 

In connection with the Company’s issuance of the 5.0% Notes and 5.0% warrants, certain of the Company’s domestic subsidiaries (the “Guarantor Subsidiaries”), fully, unconditionally, jointly, and severally guaranteed the payment obligations under these Notes.  The following supplemental financial information sets forth, on a consolidating basis, the balance sheets, statements of operations and statements of cash flows for Globalstar, Inc. (“Parent Company”), for the Guarantor Subsidiaries and for the Parent Company’s other subsidiaries (the “Non-Guarantor Subsidiaries”).  

 

The supplemental condensed consolidating financial information has been prepared pursuant to the rules and regulations for condensed financial information and does not include disclosures included in annual financial statements.  The principal eliminating entries eliminate investments in subsidiaries, intercompany balances and intercompany revenues and expenses.

Globalstar, Inc.

Supplemental Consolidating Balance Sheet

As of December 31, 2011

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-
Guarantor
Subsidiaries
    Elimination     Consolidated  
    (In thousands)  
ASSETS                                        
Current assets:                                        
Cash and cash equivalents   $ 7,343     $ 587     $ 2,021     $ —     $ 9,951  
Restricted cash     —       —       —       —       —  
Accounts receivable     3,363       4,322       4,708       —       12,393  
Intercompany receivables     538,876       351,510       13,923       (904,309 )     —  
Inventory     1       4,564       37,283       —       41,848  
Prepaid expenses and other current assets     2,846       303       2,132       —       5,281  
Total current assets     552,429       361,286       60,067       (904,309 )     69,473  
                                         
Property and equipment, net     1,070,543       60,872       87,624       (1,321 )     1,217,718  
Restricted cash     46,776       —       —       —       46,776  
Intercompany notes receivable     40,456       —       1,800       (42,256 )     —  
Investment in subsidiaries     (106,377 )     (18,629 )     —       125,006       —  
Deferred financing costs     53,409       —       73       —       53,482  
Advances for inventory     9,158       —       —       —       9,158  
Intangible and other assets, net     12,773       2,988       8,052       (15 )     23,798  
Total assets   $ 1,679,167     $ 406,517     $ 157,616     $ (822,895 )   $ 1,420,405  

 

LIABILITIES AND STOCKHOLDERS’ EQUITY                                        
Current liabilities:                                        
Accounts payable   $ 19,346     $ 1,953     $ 26,509     $ —     $ 47,808  
Accrued expenses     11,558       8,459       8,789       —       28,806  
Intercompany payables     333,201       427,852       142,966       (904,019 )     —  
Payables to affiliates     378       —       —       —       378  
Deferred revenue     1,043       12,740       805       —       14,588  
Total current liabilities     365,526       451,004       179,069       (904,019 )     91,580  
                                         
Long-term debt     723,888       —       —       —       723,888  
Employee benefit obligations     7,407       —       —       —       7,407  
Intercompany notes payable     —       —       41,356       (41,356 )     —  
Derivative liabilities     38,996       —       —       —       38,996  
Deferred revenue     6,695       600       —       —       7,295  
Other non-current liabilities     2,860       3,837       10,747       —       17,444  
 Total non-current liabilities     779,846       4,437       52,103       (41,356 )     795,030  
Stockholders’ equity     533,795       (48,924 )     (73,556 )     122,480       533,795  
Total liabilities and stockholders’ equity   $ 1,679,167     $ 406,517     $ 157,616     $ (822,895 )   $ 1,420,405  

  

 

Globalstar, Inc.

Supplemental Consolidating Balance Sheet

As of December 31, 2010

 

    Parent
Company
    Guarantor
Subsidiaries
    Non-
Guarantor
Subsidiaries
    Elimination     Consolidated  
    (In thousands)  
ASSETS                                        
Current assets:                                        
Cash and cash equivalents   $ 32,288     $ (766 )   $ 1,495     $ —     $ 33,017  
Restricted cash     2,064       —       —       —       2,064  
Accounts receivable     4,351       5,105       4,215       —       13,671  
Intercompany receivables     424,903       313,857       10,527       (749,287 )     —  
Inventory     33       8,105       47,497       —       55,635  
Prepaid expenses and other current assets     2,011       497       2,553       —       5,061  
Total current assets     465,650       326,798       66,287       (749,287 )     109,448  
                                         
Property and equipment, net     1,056,380       86,276       10,856       (3,042 )     1,150,470  
Restricted cash     34,276       —       —       —       34,276  
Intercompany notes receivable     45,166       —       —       (45,166 )     —  
Investment in subsidiaries     (58,529 )     (18,743 )     —       77,272       —  
Deferred financing costs     59,797       —       73       —       59,870  
Advances for inventory     9,387       44       —       —       9,431  
Intangible and other assets, net     2,915       6,100       14,298       —       23,313  
Total assets   $ 1,615,042     $ 400,475     $ 91,514     $ (720,223 )   $ 1,386,808  

  

LIABILITIES AND STOCKHOLDERS’ EQUITY                                        
Current liabilities:                                        
Accounts payable   $ 19,787     $ 3,020     $ 3,627     $ —     $ 26,434  
Accrued expenses     29,865       9,682       8,453       —       48,000  
Intercompany payables     287,462       391,597       70,228       (749,287 )     —  
Payables to affiliates     709       1       —       —       710  
Deferred revenue     3,413       11,615       1,074       —       16,102  
Total current liabilities     341,236       415,915       83,382       (749,287 )     91,246  
                                         
Long-term debt     664,543       —       —       —       664,543  
Employee benefit obligations     4,727       —       —       —       4,727  
Intercompany notes payable     —       —       45,166       (45,166 )     —  
Derivative liabilities     60,819       —       —       —       60,819  
Deferred revenue     6,923       —       —       —       6,923  
Other non-current liabilities     1,376       4,594       17,162       —       23,132  
Total non-current liabilities     738,388       4,594       62,328       (45,166 )     760,144  
Stockholders’ equity     535,418       (20,034 )     (54,196 )     74,230       535,418  
Total liabilities and stockholders’ equity   $ 1,615,042     $ 400,475     $ 91,514     $ (720,223 )   $ 1,386,808  

 

 

Globalstar, Inc.

 Supplemental Consolidating Statement of Operations

 Year Ended December 31, 2011

 

                Non-              
    Parent     Guarantor     Guarantor              
    Company     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (In thousands)  
Revenues:                                        
Service revenues   $ 30,904     $ 28,850     $ 16,102     $ (20,459 )   $ 55,397  
Subscriber equipment sales     790       13,115       7,619       (4,094 )     17,430  
 Total revenue     31,694       41,965       23,721       (24,553 )     72,827  
Operating expenses:                                        
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)     13,025       7,293       12,707       (3,779 )     29,246  
Cost of subscriber equipment sales     723       9,913       5,636       (4,345 )     11,927  
Cost of subscriber equipment sales - reduction in the value of inventory     —       1,254       7,572       —       8,826  
Reduction in the value of long-lived assets     1,074       2,453       51       —       3,578  
Marketing, general and administrative     9,285       23,107       10,044       —       42,436  
Depreciation, amortization, and accretion     24,298       28,006       14,589       (16,844 )     50,049  
 Total operating expenses     48,405       72,026       50,599       (24,968 )     146,062  
Loss from operations     (16,711 )     (30,061 )     (26,878 )     415       (73,235 )
 Other income (expense):                                        
Interest income     1,135       —       6       (1,126 )     15  
Interest expense, net of amounts capitalized     (3,848 )     (5 )     (2,105 )     1,134       (4,824 )
Derivative gain (loss)     23,839       —       —       —       23,839  
Equity in subsidiary earnings     (59,466 )     9,392       —       50,074       —  
Other     145       (76 )     (783 )     (114 )     (828 )
 Total other income (expense)     (38,195 )     9,311       (2,882 )     49,968       18,202  
Loss before income taxes     (54,906 )     (20,750 )     (29,760 )     50,383       (55,033 )
Income tax expense     18       1       (128 )     —       (109 )
Net (loss) gain   $ (54,924 )   $ (20,751 )   $ (29,632 )   $ 50,383     $ (54,924 )

 

 

Globalstar, Inc.

 Supplemental Consolidating Statement of Operations

 Year Ended December 31, 2010

  

                Non-              
    Parent     Guarantor     Guarantor              
    Company     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (In thousands)  
Revenues:                                        
Service revenues   $ 10,603     $ 35,691     $ 16,579     $ (11,936 )   $ 50,937  
Subscriber equipment sales     281       14,738       6,781       (4,796 )     17,004  
 Total revenue     10,884       50,429       23,360       (16,732 )     67,941  
Operating expenses:                                        
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)     10,678       12,468       19,799       (11,773 )     31,172  
Cost of subscriber equipment sales     131       12,509       5,348       (4,806 )     13,182  
Cost of subscriber equipment sales - reduction in the value of inventory     59       761       10,042       —       10,862  
Reduction in the value of long-lived assets     546       2,703       —       —       3,249  
Marketing, general and administrative     6,620       24,546       10,770       (109 )     41,827  
Depreciation, amortization, and accretion     1,658       23,055       3,193       (488 )     27,418  
 Total operating expenses     19,692       76,042       49,152       (17,176 )     127,710  
Loss from operations     (8,808 )     (25,613 )     (25,792 )     444       (59,769 )
 Other income (expense):                                        
Interest income     1,315       —       31       (922 )     424  
Interest expense, net of amounts capitalized     (4,344 )     (1 )     (1,592 )     916       (5,021 )
Derivative gain (loss)     (29,975 )     —       —       —       (29,975 )
Equity in subsidiary earnings     (51,651 )     (8,494 )     —       60,145       —  
Other     (3,952 )     340       1,332       (450 )     (2,730 )
 Total other income (expense)     (88,607 )     (8,155 )     (229 )     59,689       (37,302 )
Loss before income taxes     (97,415 )     (33,768 )     (26,021 )     60,133       (97,071 )
Income tax expense     52       50       294       —       396  
Net (loss) gain   $ (97,467 )   $ (33,818 )   $ (26,315 )   $ 60,133     $ (97,467 )

  

 

Globalstar, Inc.

 Supplemental Consolidating Statement of Operations

 Year Ended December 31, 2009

 

                Non-              
    Parent     Guarantor     Guarantor              
    Company     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (In thousands)  
Revenues:                                        
Service revenues   $ 9,921     $ 34,004     $ 20,207     $ (13,904 )   $ 50,228  
Subscriber equipment sales     3,625       7,153       6,135       (2,862 )     14,051  
 Total revenue     13,546       41,157       26,342       (16,766 )     64,279  
Operating expenses:                                        
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below)     18,118       5,757       22,516       (10,187 )     36,204  
Cost of subscriber equipment sales     601       6,659       7,526       (4,905 )     9,881  
Cost of subscriber equipment sales - reduction in the value of inventory     —       335       578       —       913  
Reduction in the value of long-lived assets     —       —       —       —       —  
Marketing, general and administrative     10,311       23,711       15,238       (50 )     49,210  
Depreciation, amortization, and accretion     1,120       18,057       3,149       (464 )     21,862  
 Total operating expenses     30,150       54,519       49,007       (15,606 )     118,070  
Loss from operations     (16,604 )     (13,362 )     (22,665 )     (1,160 )     (53,791 )
 Other income (expense):                                        
Interest income     1,653       —       135       (1,286 )     502  
Interest expense, net of amounts capitalized     (6,115 )     (1 )     (1,903 )     1,289       (6,730 )
Derivative gain (loss)     (15,585 )     —       —       —       (15,585 )
Equity in subsidiary earnings     (35,048 )     (9,149 )     —       44,197       —  
Other     (3,115 )     (93 )     3,795       78       665  
 Total other income (expense)     (58,210 )     (9,243 )     2,027       44,278       (21,148 )
Loss before income taxes     (74,814 )     (22,605 )     (20,638 )     43,118       (74,939 )
Income tax expense     109       15       (140 )     —       (16 )
Net (loss) gain   $ (74,923 )   $ (22,620 )   $ (20,498 )   $ 43,118     $ (74,923 )

 

 

Globalstar, Inc.

Supplemental Consolidating Statement of Cash Flows

Year Ended December 31, 2011

 

                Non-              
    Parent     Guarantor     Guarantor              
    Company     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (In thousands)  
                               
Net cash provided by (used in) operating activities   $ (10,758 )   $ 3,819     $ 1,445     $ (9 )   $ (5,503 )
                                         
Cash flows from investing activities:                                        
Second-generation satellites, ground and related launch costs     (85,589 )     —       —       —       (85,589 )
Property and equipment additions     —       (2,466 )     (137 )     9       (2,594 )
Investment in businesses     (800 )     —       —       —       (800 )
Restricted cash     (10,436 )     —       —       —       (10,436 )
                                         
Net cash from investing activities     (96,825 )     (2,466 )     (137 )     9       (99,419 )
                                         
Cash flows from financing activities:                                        
Proceeds from exercise of warrants and stock options     525       —       —       —       525  
Borrowings from Facility Agreement     18,659       —       —       —       18,659  
Proceeds from the issuance of 5.0% convertible notes     38,000       —       —       —       38,000  
Proceeds from the contribution to the debt service reserve account     12,500       —       —       —       12,500  
Proceeds from contingent equity agreement     14,200                               14,200  
Payment of deferred financing costs     (1,246 )     —       —       —       (1,246 )
Net cash provided by financing activities     82,638       —       —       —       82,638  
Effect of exchange rate changes on cash and cash equivalents     —       —       (782 )     —       (782 )
Net increase (decrease) in cash and cash equivalents     (24,945 )     1,353       526       —       (23,066 )
Cash and cash equivalents at beginning of period     32,288       (766 )     1,495       —       33,017  
Cash and cash equivalents at end of period   $ 7,343     $ 587     $ 2,021     $ —     $ 9,951  

 

 

 

Globalstar, Inc.

Supplemental Consolidating Statement of Cash Flows

Year Ended December 31, 2010

 

                Non-              
    Parent     Guarantor     Guarantor              
    Company     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (In thousands)  
                               
Net cash provided by (used in) operating activities   $ (28,895 )   $ 4,445     $ 522     $ 590     $ (23,338 )
                                         
Cash flows from investing activities:                                        
Second-generation satellites, ground and related launch costs     (201,108 )     —       —       (16 )     (201,124 )
Property and equipment additions     (1,307 )     (5,696 )     (283 )     —       (7,286 )
Investment in businesses     (1,110 )     —       —       —       (1,110 )
Restricted cash     4,129       —       —       —       4,129  
                                         
Net cash from investing activities     (199,396 )     (5,696 )     (283 )     (16 )     (205,391 )
                                         
Cash flows from financing activities:                                        
Borrowings from Facility Agreement     188,417       —       —       —       188,417  
Payment of deferred financing costs     (70 )     —       —       —       (70 )
Proceeds from exercise of warrants     6,249       —       —       —       6,249  
Issuance of common stock     74       —       —       —       74  
Net cash provided by financing activities     194,670       —       —       —       194,670  
Effect of exchange rate changes on cash and cash equivalents     —       —       (231 )     (574 )     (805 )
Net increase (decrease) in cash and cash equivalents     (33,621 )     (1,251 )     8       —       (34,864 )
Cash and cash equivalents at beginning of period     65,909       485       1,487       —       67,881  
Cash and cash equivalents at end of period   $ 32,288     $ (766 )   $ 1,495     $ —     $ 33,017  

  

 

Globalstar, Inc.

Supplemental Consolidating Statement of Cash Flows

Year Ended December 31, 2009

 

                Non-              
    Parent     Guarantor     Guarantor              
    Company     Subsidiaries     Subsidiaries     Eliminations     Consolidated  
    (In thousands)  
                               
Net cash provided by (used in) operating activities   $ (23,583 )   $ 3,333     $ 1,827     $ —     $ (18,423 )
                                         
Cash flows from investing activities:                                        
Second-generation satellites, ground and related launch costs     (321,827 )     —       —       —       (321,827 )
Property and equipment additions     (143 )     (1,760 )     (368 )     —       (2,271 )
Investment in businesses     (323 )     (1,500 )     —       —       (1,823 )
Restricted cash     14,229       —       —       —       14,229  
                                         
Net cash from investing activities     (308,064 )     (3,260 )     (368 )     —       (311,692 )
                                         
Cash flows from financing activities:                                        
Proceeds from revolving credit loan, net     7,750       —       —       —       7,750  
Proceeds from issuance of 8.00% Notes     55,000       —       —       —       55,000  
Borrowings from Facility Agreement     371,219       —       —       —       371,219  
Borrowings from Subordinated Loan     25,000       —       —       —       25,000  
Borrowings under short-term loan     2,259       —       —       —       2,259  
Payment of deferred financing costs     (63,047 )     —       —       —       (63,047 )
Payment for interest rate swap     (12,425 )     —       —       —       (12,425 )
Issuance of common stock     1,000       —       —       —       1,000  
Net cash provided by financing activities     386,756       —       —       —       386,756  
Effect of exchange rate changes on cash and cash equivalents     —       —       (1,117 )     —       (1,117 )
Net increase (decrease) in cash and cash equivalents     55,109       73       342       —       55,524  
Cash and cash equivalents at beginning of period     10,800       412       1,145       —       12,357  
Cash and cash equivalents at end of period   $ 65,909     $ 485     $ 1,487     $ —     $ 67,881