Note 12 — Financial Statements of Parent and Subsidiary Guarantors

As of June 28, 2013, $575.0 million in aggregate principal amount of 2020 Notes issued by the Company was outstanding. The 2020 Notes are jointly and severally guaranteed on a full and unconditional basis by each of the Guarantor Subsidiaries, subject to certain customary release provisions, including the sale, transfer or other disposition of the capital stock or all or substantially all of the assets of a Guarantor Subsidiary, the designation of a Guarantor Subsidiary as an unrestricted subsidiary, the release or discharge of the Guarantor Subsidiary’s guarantee of the Credit Facility or the exercise of the legal defeasance option or covenant defeasance option. All of the Guarantor Subsidiaries are direct or indirect 100% owned subsidiaries of the Company. The indenture governing the 2020 Notes limits, among other things, the Company’s and its restricted subsidiaries’ ability to: incur, assume or guarantee additional debt; issue redeemable stock and preferred stock; pay dividends, make distributions or redeem or repurchase capital stock; prepay, redeem or repurchase subordinated debt; make loans and investments; grant or incur liens; restrict dividends, loans or asset transfers from restricted subsidiaries; sell or otherwise dispose of assets; enter into transactions with affiliates; reduce the Company’s satellite insurance; and consolidate or merge with, or sell substantially all of their assets to, another person.

The following supplemental financial information sets forth, on a condensed consolidating basis, the balance sheets, statements of operations and comprehensive income (loss), and statements of cash flows for the Company (as “Issuing Parent Company”), the Guarantor Subsidiaries, the non-guarantor subsidiaries and total consolidated Company and subsidiaries as of June 28, 2013 and March 29, 2013 and for the three months ended June 28, 2013 and June 29, 2012.

Condensed Consolidated Balance Sheet as of June 28, 2013


	Issuing Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	63,810	$	4,636	$	11,236	$	—		$	79,682
Accounts receivable, net		237,119		16,253		7,329		—			260,701
Inventories		101,438		18,718		5,536		—			125,692
Deferred income taxes		22,300		2,425		290		—			25,015
Prepaid expenses and other current assets		31,785		6,774		670		—			39,229
Current portion of intercompany receivables		134,023		1,581		1,547		(137,151	)		—

Total current assets		590,475		50,387		26,608		(137,151	)		530,319
Satellites, net		368,827		190,417		—		—			559,244
Property and equipment, net		203,463		189,828		5,922		—			399,213
Other acquired intangible assets, net		1,378		37,225		7,520		—			46,123
Goodwill		63,940		9,686		9,006		—			82,632
Investments in subsidiaries and intercompany receivables		378,024		1,439		303		(379,766	)		—
Other assets		163,308		55,665		767		—			219,740

Total assets	$	1,769,415	$	534,647	$	50,126	$	(516,917	)	$	1,837,271

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	107,174	$	13,111	$	1,024	$	—		$	121,309
Accrued liabilities		113,583		25,917		5,870		—			145,370
Current portion of other long-term debt		420		1,490		—		—			1,910
Current portion of intercompany payables		1,547		133,347		2,257		(137,151	)		—

Total current liabilities		222,724		173,865		9,151		(137,151	)		268,589
Senior notes, net		584,717		—		—		—			584,717
Other long-term debt		380		1,076		—		—			1,456
Intercompany payables		303		—		6,681		(6,984	)		—
Other liabilities		36,511		14,679		1,358		—			52,548

Total liabilities		844,635		189,620		17,190		(144,135	)		907,310

Equity:
ViaSat, Inc. stockholders’ equity
Total ViaSat, Inc. stockholders’ equity		924,780		345,027		32,936		(377,963	)		924,780
Noncontrolling interest in subsidiary		—		—		—		5,181			5,181

Total equity		924,780		345,027		32,936		(372,782	)		929,961

Total liabilities and equity	$	1,769,415	$	534,647	$	50,126	$	(516,917	)	$	1,837,271

Condensed Consolidated Balance Sheet as of March 29, 2013


	Issuing Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	93,780	$	3,112	$	8,846	$	—		$	105,738
Accounts receivable, net		240,457		15,537		10,976		—			266,970
Inventories		81,195		19,985		5,101		—			106,281
Deferred income taxes		22,350		2,425		290		—			25,065
Prepaid expenses and other current assets		32,372		7,819		628		—			40,819
Current portion of intercompany receivables		128,383		1,581		1,631		(131,595	)		—

Total current assets		598,537		50,459		27,472		(131,595	)		544,873
Satellites, net		337,437		197,653		—		—			535,090
Property and equipment, net		189,500		183,227		5,964		—			378,691
Other acquired intangible assets, net		1,597		39,989		5,584		—			47,170
Goodwill		63,939		9,686		9,375		—			83,000
Investments in subsidiaries and intercompany receivables		381,338		1,439		303		(383,080	)		—
Other assets		154,854		49,645		749		—			205,248

Total assets	$	1,727,202	$	532,098	$	49,447	$	(514,675	)	$	1,794,072

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	71,931	$	9,999	$	1,079	$	—		$	83,009
Accrued liabilities		128,374		26,916		6,619		—			161,909
Current portion of other long-term debt		454		1,776		—		—			2,230
Current portion of intercompany payables		1,631		127,215		2,750		(131,596	)		—

Total current liabilities		202,390		165,906		10,448		(131,596	)		247,148
Senior notes, net		584,993		—		—		—			584,993
Other long-term debt		380		1,076		—		—			1,456
Intercompany payables		302		—		6,319		(6,621	)		—
Other liabilities		36,136		15,137		1,367		—			52,640

Total liabilities		824,201		182,119		18,134		(138,217	)		886,237

Equity:
ViaSat, Inc. stockholders’ equity
Total ViaSat, Inc. stockholders’ equity		903,001		349,979		31,313		(381,292	)		903,001
Noncontrolling interest in subsidiary		—		—		—		4,834			4,834

Total equity		903,001		349,979		31,313		(376,458	)		907,835

Total liabilities and equity	$	1,727,202	$	532,098	$	49,447	$	(514,675	)	$	1,794,072

Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the Three Months Ended June 28, 2013


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
Revenues:
Product revenues	$	172,676		$	16		$	9,752		$	(283	)	$	182,161
Service revenues		57,483			80,944			875			(361	)		138,941

Total revenues		230,159			80,960			10,627			(644	)		321,102
Operating expenses:
Cost of product revenues		123,802			113			5,755			(256	)		129,414
Cost of service revenues		42,094			63,549			611			(361	)		105,893
Selling, general and administrative		36,737			25,537			2,526			(19	)		64,781
Independent research and development		13,376			—			721			(8	)		14,089
Amortization of acquired intangible assets		219			2,765			517			—			3,501

Income (loss) from operations		13,931			(11,004	)		497			—			3,424
Other income (expense):
Interest income		20			—			1			—			21
Interest expense		(10,138	)		(25	)		—			—			(10,163	)

Income (loss) before income taxes		3,813			(11,029	)		498			—			(6,718	)
Provision for (benefit from) income taxes		(264	)		(6,076	)		1,109			—			(5,231	)
Equity in net income (loss) of consolidated subsidiaries		(5,911	)		—			—			5,911			—

Net income (loss)		(1,834	)		(4,953	)		(611	)		5,911			(1,487	)
Less: Net income (loss) attributable to noncontrolling interest, net of tax		—			—			—			347			347

Net income (loss) attributable to ViaSat, Inc.	$	(1,834	)	$	(4,953	)	$	(611	)	$	5,564		$	(1,834	)

Comprehensive income (loss)	$	(1,799	)	$	(4,953	)	$	(786	)	$	6,086		$	(1,452	)

Comprehensive income (loss) attributable to ViaSat, Inc.	$	(1,799	)	$	(4,953	)	$	(786	)	$	5,739		$	(1,799	)

Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the Three Months Ended June 29, 2012


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
Revenues:
Product revenues	$	143,174		$	531		$	4,128		$	(104	)	$	147,729
Service revenues		37,360			54,584			2,478			(388	)		94,034

Total revenues		180,534			55,115			6,606			(492	)		241,763
Operating expenses:
Cost of product revenues		106,325			82			2,722			(80	)		109,049
Cost of service revenues		24,354			52,925			1,678			(388	)		78,569
Selling, general and administrative		31,143			22,975			2,383			—			56,501
Independent research and development		7,091			150			152			(24	)		7,369
Amortization of acquired intangible assets		275			3,238			551			—			4,064

Income (loss) from operations		11,346			(24,255	)		(880	)		—			(13,789	)
Other income (expense):
Interest income		58			—			2			—			60
Interest expense		(11,521	)		(20	)		(5	)		—			(11,546	)

Income (loss) before income taxes		(117	)		(24,275	)		(883	)		—			(25,275	)
Provision for (benefit from) income taxes		(1,320	)		(9,389	)		(133	)		—			(10,842	)
Equity in net income (loss) of consolidated subsidiaries		(15,623	)		—			—			15,623			—

Net income (loss)		(14,420	)		(14,886	)		(750	)		15,623			(14,433	)
Less: Net income (loss) attributable to noncontrolling interest, net of tax		—			—			—			(13	)		(13	)

Net income (loss) attributable to ViaSat, Inc.	$	(14,420	)	$	(14,886	)	$	(750	)	$	15,636		$	(14,420	)

Comprehensive income (loss)	$	(15,121	)	$	(14,886	)	$	(1,475	)	$	16,348		$	(15,134	)

Comprehensive income (loss) attributable to ViaSat, Inc.	$	(15,121	)	$	(14,886	)	$	(1,475	)	$	16,361		$	(15,121	)

Condensed Consolidated Statement of Cash Flows for the Three Months Ended June 28, 2013


	Issuing Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	15,905		$	35,503		$	2,414		$	—		$	53,822

Cash flows from investing activities:
Purchase of property, equipment and satellites, net		(39,062	)		(33,693	)		(275	)		—			(73,030	)
Cash paid for patents, licenses and other assets		(11,769	)		—			(7	)		—			(11,776	)
Payment related to acquisition of business, net of cash acquired		(2,400	)		—			—			—			(2,400	)
Long-term intercompany notes and investments		(362	)		—			—			362			—

Net cash provided by (used in) investing activities		(53,593	)		(33,693	)		(282	)		362			(87,206	)
Cash flows from financing activities:
Proceeds from issuance of common stock under equity plans		8,279			—			—			—			8,279
Purchase of common stock in treasury		(273	)		—			—			—			(273	)
Other		(288	)		(286	)		—			—			(574	)
Long-term intercompany financing		—			—			362			(362	)		—

Net cash provided by (used in) financing activities		7,718			(286	)		362			(362	)		7,432
Effect of exchange rate changes on cash		—			—			(104	)		—			(104	)

Net increase (decrease) in cash and cash equivalents		(29,970	)		1,524			2,390			—			(26,056	)
Cash and cash equivalents at beginning of period		93,780			3,112			8,846			—			105,738

Cash and cash equivalents at end of period	$	63,810		$	4,636		$	11,236		$	—		$	79,682

Condensed Consolidated Statement of Cash Flows for the Three Months Ended June 29, 2012


	Issuing Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidation and Elimination Adjustments			Consolidated
	(Unaudited, in thousands)
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(24,999	)	$	25,674		$	116		$	—		$	791

Cash flows from investing activities:
Purchase of property, equipment and satellites, net		(12,721	)		(23,944	)		(217	)		—			(36,882	)
Cash paid for patents, licenses and other assets		(6,293	)		—			(34	)		—			(6,327	)
Long-term intercompany notes and investments		(633	)		—			—			633			—

Net cash provided by (used in) investing activities		(19,647	)		(23,944	)		(251	)		633			(43,209	)
Cash flows from financing activities:
Proceeds from issuance of common stock under equity plans		4,635			—			—			—			4,635
Payment of debt issuance costs		(2,215	)		—			—			—			(2,215	)
Purchase of common stock in treasury		(2,020	)		—			—			—			(2,020	)
Other		(287	)		(273	)		—			—			(560	)
Long-term intercompany financing		—			—			633			(633	)		—

Net cash provided by (used in) financing activities		113			(273	)		633			(633	)		(160	)
Effect of exchange rate changes on cash		—			—			(113	)		—			(113	)

Net increase (decrease) in cash and cash equivalents		(44,533	)		1,457			385			—			(42,691	)
Cash and cash equivalents at beginning of period		162,426			439			9,718			—			172,583

Cash and cash equivalents at end of period	$	117,893		$	1,896		$	10,103		$	—		$	129,892