Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 28, 2016 | |
Document and Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | GSAT | |
Entity Registrant Name | Globalstar, Inc. | |
Entity Central Index Key | 1,366,868 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Voting common stock | ||
Document and Entity Information [Line Items] | ||
Entity common stock, shares outstanding (in shares) | 947,666,353 | |
Nonvoting common stock | ||
Document and Entity Information [Line Items] | ||
Entity common stock, shares outstanding (in shares) | 134,008,656 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue: | ||||
Service revenues | $ 21,952 | $ 19,644 | $ 61,671 | $ 55,367 |
Subscriber equipment sales | 3,592 | 4,034 | 10,795 | 12,356 |
Total revenue | 25,544 | 23,678 | 72,466 | 67,723 |
Operating expenses: | ||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) | 8,373 | 7,761 | 23,901 | 23,222 |
Cost of subscriber equipment sales | 2,411 | 2,914 | 7,475 | 9,028 |
Marketing, general and administrative | 10,077 | 9,675 | 30,137 | 28,430 |
Depreciation, amortization, and accretion | 19,446 | 19,417 | 57,825 | 57,734 |
Total operating expenses | 40,307 | 39,767 | 119,338 | 118,414 |
Loss from operations | (14,763) | (16,089) | (46,872) | (50,691) |
Other income (expense): | ||||
Loss on extinguishment of debt | 0 | 0 | 0 | (2,254) |
Gain (loss) on equity issuance | 4,272 | (2,920) | 2,349 | (5,832) |
Interest income and expense, net of amounts capitalized | (8,866) | (9,019) | (27,020) | (26,780) |
Derivative gain | 10,982 | 54,194 | 50,137 | 183,416 |
Other | (505) | (1,953) | (581) | 1,728 |
Total other income (expense) | 5,883 | 40,302 | 24,885 | 150,278 |
Income (loss) before income taxes | (8,880) | 24,213 | (21,987) | 99,587 |
Income tax expense (benefit) | (6,303) | 115 | (6,562) | 449 |
Net income (loss) | (2,577) | 24,098 | (15,425) | 99,138 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 84 | (615) | (1,492) | (1,458) |
Total comprehensive income (loss) | $ (2,493) | $ 23,483 | $ (16,917) | $ 97,680 |
Net income (loss) per common share: | ||||
Basic (USD per share) | $ 0 | $ 0.02 | $ (0.01) | $ 0.10 |
Diluted (USD per share) | $ 0 | $ 0.02 | $ (0.01) | $ 0.09 |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 1,080,313 | 1,031,398 | 1,056,993 | 1,014,165 |
Diluted (in shares) | 1,080,313 | 1,234,551 | 1,056,993 | 1,221,287 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 12,910 | $ 7,476 |
Accounts receivable, net of allowance of $4,099 and $5,270, respectively | 16,585 | 14,536 |
Inventory | 9,731 | 12,023 |
Prepaid expenses and other current assets | 5,571 | 4,456 |
Total current assets | 44,797 | 38,491 |
Property and equipment, net | 1,048,322 | 1,077,560 |
Restricted cash | 37,959 | 37,918 |
Prepaid second-generation ground costs | 2,579 | 8,929 |
Intangible and other assets, net of accumulated amortization of $6,943 and $6,315, respectively | 15,106 | 12,117 |
Total assets | 1,148,763 | 1,175,015 |
Current liabilities: | ||
Current portion of long-term debt | 38,112 | 32,835 |
Accounts payable | 6,570 | 8,118 |
Accrued contract termination charge | 19,654 | 19,121 |
Accrued expenses | 28,066 | 22,439 |
Payables to affiliates | 243 | 616 |
Deferred revenue | 27,354 | 23,902 |
Total current liabilities | 119,999 | 107,031 |
Long-term debt, less current portion | 547,311 | 548,286 |
Employee benefit obligations | 4,911 | 4,810 |
Derivative liabilities | 189,500 | 239,642 |
Deferred revenue | 6,068 | 6,413 |
Debt restructuring fees | 20,795 | 20,795 |
Other non-current liabilities | 5,477 | 10,907 |
Total non-current liabilities | 774,062 | 830,853 |
Commitments and contingent liabilities (Notes 7 and 8) | ||
Stockholders’ equity: | ||
Preferred Stock | 0 | 0 |
Additional paid-in capital | 1,625,926 | 1,591,443 |
Accumulated other comprehensive loss | (6,325) | (4,833) |
Retained deficit | (1,365,007) | (1,349,582) |
Total stockholders’ equity | 254,702 | 237,131 |
Total liabilities and stockholders’ equity | 1,148,763 | 1,175,015 |
Series A preferred stock | ||
Stockholders’ equity: | ||
Preferred Stock | 0 | 0 |
Common stock | ||
Stockholders’ equity: | ||
Common Stock | 95 | 90 |
Nonvoting common stock | ||
Stockholders’ equity: | ||
Common Stock | $ 13 | $ 13 |
Condensed Consolidated Balance4
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts receivable, allowance | $ 4,099 | $ 5,270 |
Accumulated amortization | $ 6,943 | $ 6,315 |
Preferred stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series A preferred stock | ||
Preferred stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1 | 1 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock | ||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,200,000,000 | 1,200,000,000 |
Common stock, shares issued (in shares) | 946,322,913 | 904,448,226 |
Common stock, shares outstanding (in shares) | 946,322,913 | 904,448,226 |
Nonvoting common stock | ||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 134,008,656 | 134,008,656 |
Common stock, shares outstanding (in shares) | 134,008,656 | 134,008,656 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows provided by (used in) operating activities: | ||
Net income (loss) | $ (15,425) | $ 99,138 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation, amortization, and accretion | 57,825 | 57,734 |
Change in fair value of derivative assets and liabilities | (50,137) | (183,416) |
Stock-based compensation expense | 2,963 | 2,073 |
Amortization of deferred financing costs | 6,932 | 7,110 |
Provision for bad debts | 860 | 3,035 |
Noncash interest and accretion expense | 8,320 | 8,381 |
Loss on extinguishment of debt | 0 | 2,254 |
Change in fair value related to equity issuance | (2,349) | 5,832 |
Noncash expense related to legal settlement | 1,094 | 0 |
Reversal of uncertain tax position | (6,317) | 0 |
Unrealized foreign currency (gain) loss | 357 | (2,150) |
Other, net | 114 | 424 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,066) | (2,532) |
Inventory | 2,972 | 2,045 |
Prepaid expenses and other current assets | (1,276) | 749 |
Other assets | (476) | (648) |
Accounts payable and accrued expenses | 2,714 | 4,534 |
Payables to affiliates | (374) | 55 |
Other non-current liabilities | 82 | (904) |
Deferred revenue | 2,891 | 3,600 |
Net cash provided by operating activities | 7,704 | 7,314 |
Cash flows used in investing activities: | ||
Second-generation network costs (including interest) | (8,472) | (15,484) |
Property and equipment additions | (7,646) | (4,222) |
Purchase of intangible assets | (1,327) | (1,840) |
Change in restricted cash | (41) | 0 |
Net cash used in investing activities | (17,486) | (21,546) |
Cash flows provided by (used in) financing activities: | ||
Principal payments of the Facility Agreement | (16,418) | (3,225) |
Proceeds from issuance of stock to Terrapin | 28,500 | 39,000 |
Proceeds from issuance of common stock and exercise of options and warrants | 3,001 | 426 |
Net cash provided by financing activities | 15,083 | 36,201 |
Effect of exchange rate changes on cash | 133 | (1,117) |
Net increase in cash and cash equivalents | 5,434 | 20,852 |
Cash and cash equivalents, beginning of period | 7,476 | 7,121 |
Cash and cash equivalents, end of period | 12,910 | 27,973 |
Supplemental disclosure of cash flow information: | ||
Interest | 11,409 | 9,746 |
Income taxes | 152 | 5 |
Supplemental disclosure of non-cash financing and investing activities: | ||
Increase in capitalized accrued interest for second-generation ground costs | 2,340 | 1,574 |
Increase in accrued second-generation network costs | 0 | 2,392 |
Capitalized accretion of debt discount and amortization of prepaid financing costs | 3,225 | 2,416 |
Payments made in convertible notes and common stock | 0 | 735 |
Principal amount of debt converted into common stock | 0 | 6,491 |
Reduction of debt discount and issuance costs due to note conversions | 0 | 2,085 |
Increase of principal amount of Thermo Loan Agreement | 0 | 6,000 |
Fair value of common stock issued upon conversion of debt | 0 | 26,669 |
Reduction in derivative liability due to conversion of debt | 0 | 20,008 |
Fair value of common stock issued to vendor for payment of invoices | $ 0 | $ 16,684 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION Globalstar, Inc. (“Globalstar” or the “Company”) provides Mobile Satellite Services (“MSS”) including voice and data communications services through its global satellite network. Thermo Capital Partners LLC, through its affiliates (collectively, “Thermo”), is the principal owner and largest stockholder of Globalstar. The Company’s Chairman and Chief Executive Officer controls Thermo. Two other members of the Company's Board of Directors are also directors, officers or minority equity owners of various Thermo entities. The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Certain information and footnote disclosures normally in financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"); however, management believes the disclosures made are adequate to make the information presented not misleading. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Globalstar Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on February 26, 2016 (the "2015 Annual Report"), and Management's Discussion and Analysis of Financial Condition and Results of Operations herein. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. The Company evaluates estimates on an ongoing basis. Significant estimates include the value of derivative instruments, the allowance for doubtful accounts, the net realizable value of inventory, the useful life and value of property and equipment, the value of stock-based compensation and income taxes. The Company has made certain reclassifications to prior period condensed consolidated financial statements to conform to current period presentation. These unaudited interim condensed consolidated financial statements include the accounts of Globalstar and all its subsidiaries. All significant intercompany transactions and balances have been eliminated in the consolidation. In the opinion of management, the information included herein includes all adjustments, consisting of normal recurring adjustments, that are necessary for a fair presentation of the Company’s condensed consolidated statements of operations, condensed consolidated balance sheets, and condensed consolidated statements of cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the full year or any future period. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers . ASU No. 2014-09 has been modified four times since its initial release. This ASU outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09, as amended, becomes effective for annual reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact that these standards will have on its financial statements and related disclosures and believes that the most significant changes to the Company's revenue recognition accounting policies will be related to the allocation and timing of revenue recognized between service revenue and subscriber equipment sales. This ASU also requires the deferment of certain contract acquisition costs and the recognition of these costs over a customer's contract period or over a customer's expected life. The Company has not yet selected a transition method nor has it determined the effect of these standards on its ongoing reporting. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory . ASU No. 2015-11 requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) and retail inventory method (RIM) are excluded from this new guidance. This ASU replaces the concept of market with the single measurement of net realizable value and is intended to create efficiencies for preparers and more closely align U.S. GAAP with IFRS. This ASU is effective for public business entities in fiscal years, and interim periods within those years, beginning after December 15, 2016. Prospective application is required and early adoption is permitted as of the beginning of an interim or annual reporting period. This ASU will not have a material effect on the Company's consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU. No. 2015-17, Balance Sheet Classification of Deferred Taxes . ASU No. 2015-17 simplifies the presentation of deferred taxes on the balance sheet by requiring classification of all deferred tax items as noncurrent including valuation allowances by jurisdiction. The ASU is effective for public entities for annual and interim periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures, but does not expect the effect to be material. In March 2016, the FASB issued ASU No. 2016-02, Leases . The main difference between the provisions of ASU No. 2016-02 and previous U.S. GAAP is the recognition of right-of-use assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. ASU No. 2016-02 retains a distinction between finance leases and operating leases, and the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous U.S. GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize right-of-use assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This ASU is effective for public business entities in fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company has not yet determined the effect of the standard on its ongoing reporting. In March 2016, the FASB issued ASU No. 2016-04, Liabilities-Extinguishment of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products . ASU No. 2016-04 contains specific guidance for the derecognition of prepaid stored-value product liabilities within the scope of this ASU. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2017. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company does not expect this ASU to have a material effect on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU. No. 2016-06, Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments . ASU No. 2016-06 clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company does not expect the adoption of this ASU to have a material effect on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation . ASU No. 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for public business entities for annual and interim periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company has not yet determined the effect of this standard on its ongoing reporting. In June 2016, the FASB issued ASU No. 2016-13, Credit Losses, Measurement of Credit Losses on Financial Instruments . ASU No. 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today’s incurred loss approach with an expected loss model for instruments measured at amortized cost. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for all entities for annual periods beginning after December 15, 2018, and interim periods therein. The Company has not yet determined the effect of this standard on its ongoing reporting. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments . ASU No. 2016-15 is intended to reduce diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. The new guidance clarifies the classification of cash activity related to debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate and bank-owned life insurance policies, distributions received from equity-method investments, and beneficial interests in securitization transactions. The guidance also describes a predominance principle pursuant to which cash flows with aspects of more than one class that cannot be separated should be classified based on the activity that is likely to be the predominant source or use of cash flow. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2017. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures, but does not expect it to have a material effect on the Company's consolidated financial statements and related disclosures. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment consists of the following (in thousands): September 30, December 31, Globalstar System: Space component First and second-generation satellites in service $ 1,211,090 $ 1,211,768 Prepaid long-lead items 17,040 17,040 Second-generation satellite, on-ground spare 32,481 32,481 Ground component 48,382 46,870 Construction in progress: Space component 81 81 Ground component 197,712 177,780 Next-generation software upgrades 9,552 3,440 Other 2,517 2,153 Total Globalstar System 1,518,855 1,491,613 Internally developed and purchased software 14,702 14,492 Equipment 11,959 10,802 Land and buildings 3,333 3,151 Leasehold improvements 1,732 1,671 Total property and equipment 1,550,581 1,521,729 Accumulated depreciation (502,259 ) (444,169 ) Total property and equipment, net $ 1,048,322 $ 1,077,560 Amounts in the above table consist primarily of costs incurred related to the construction of the Company’s second-generation constellation and ground upgrades. The ground component of construction in progress represents costs (including capitalized interest) associated with the Company's contracts with Hughes Network Systems, LLC ("Hughes") and Ericsson Inc. (“Ericsson”) to complete next-generation upgrades to the Company's ground infrastructure. The Company expects to begin depreciating this asset in the near future. See Note 7: Commitments for further discussion of these contracts. Amounts included in the Company’s second-generation satellite, on-ground spare balance as of September 30, 2016 consist primarily of costs related to a spare second-generation satellite that has not been placed in orbit, but is capable of being included in a future launch. As of September 30, 2016 , this satellite and the prepaid long-lead items ("LLI") have not been placed into service; therefore, the Company has not started to record depreciation expense for these items. Pursuant to the Amended and Restated Contract for the construction of Globalstar Satellites for the Second Generation Constellation between the Company and Thales Alenia Space France ("Thales"), dated and executed in June 2009 (the "2009 Contract"), the Company paid €12 million in purchase price plus an additional €3.1 million in procurement costs for the LLI to be procured by Thales on the Company's behalf. The LLI were to be used in the construction of the Phase 3 satellites for the Company. As reflected on the Company's condensed consolidated balance sheets and in the above table, the Company believes that it owns the LLI and that title to them transferred upon payment. The Company has asked Thales to turn over the LLI. Despite historical statements to the contrary, Thales currently disputes the Company's ownership of the LLI and has asserted that the Company released its title to the LLI pursuant to that certain Release Agreement, dated as of June 24, 2012, which is described more fully in Note 8: Contingencies. Thales further asserts that the LLI belong to Thales and that Thales has no obligation to turn over possession of the LLI to the Company. The Company disputes Thales' assertions and is currently considering its rights and remedies to recover the LLI. At this time, the Company cannot predict the outcome related to this dispute, including, without limitation, the likelihood of any settlement or the probability of success with respect to any litigation that the Company may determine to commence with respect to the LLI. Capitalized Interest and Depreciation Expense The following table summarizes capitalized interest (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Interest costs eligible to be capitalized $ 12,092 $ 10,935 $ 35,884 $ 31,640 Interest costs recorded in interest income (expense), net (8,504 ) (8,292 ) (25,649 ) (24,400 ) Net interest capitalized $ 3,588 $ 2,643 $ 10,235 $ 7,240 The following table summarizes depreciation expense (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Depreciation expense $ 19,341 $ 19,299 $ 57,508 $ 57,330 |
Long-Term Debt and Other Financ
Long-Term Debt and Other Financing Arrangements | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Other Financing Arrangements | LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS As required by U.S. GAAP, the Company adopted the provisions of ASU No. 2015-03, Interest - Imputation of Interest - Simplifying the Presentation of Debt Issue Costs during the quarter ended March 31, 2016. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the condensed consolidated balance sheets as a reduction in the carrying amount of the related debt liability, consistent with debt discounts. The Company has applied the provisions of this ASU on a retrospective basis, and therefore, the Company has reduced long-term debt on its condensed consolidated balance sheet as of December 31, 2015 by $57.9 million of deferred financing costs previously reported as assets. Long-term debt consists of the following (in thousands): September 30, 2016 December 31, 2015 Principal Amount Unamortized Discount and Deferred Financing Costs Carrying Value Principal Amount Unamortized Discount and Deferred Financing Costs Carrying Value Facility Agreement $ 559,429 $ 48,677 $ 510,752 $ 575,846 $ 57,829 $ 518,017 Thermo Loan Agreement 91,139 30,387 60,752 83,222 32,558 50,664 8.00% Convertible Senior Notes Issued in 2013 16,936 3,017 13,919 16,747 4,307 12,440 Total Debt 667,504 82,081 585,423 675,815 94,694 581,121 Less: Current Portion 38,112 — 38,112 32,835 — 32,835 Long-Term Debt $ 629,392 $ 82,081 $ 547,311 $ 642,980 $ 94,694 $ 548,286 The principal amounts shown above include payment of in-kind interest, as applicable. The carrying value is net of deferred financing costs and any discounts to the loan amounts at issuance, including accretion, as further described below. The current portion of long-term debt represents the scheduled principal repayments under the Facility Agreement due within one year of the balance sheet date. Facility Agreement On July 31, 2013, the Company entered into a Global Deed of Amendment and Restatement with Thermo, the Company's domestic subsidiaries, a syndicate of bank lenders, including BNP Paribas, Société Générale, Natixis, Credit Agricole Corporate and Investment Bank and Credit Industrial et Commercial, as arrangers, and BNP Paribas, as the security agent and COFACE Agent, providing for the amendment and restatement of its former facility agreement and certain related credit documents effective August 22, 2013 (the amended and restated facility agreement is herein referred to as the "Facility Agreement"). On August 7, 2015, the Company, Thermo, the lenders and their agent entered into a Second Global Amendment and Restatement Agreement (the "2015 GARA"). The Facility Agreement is scheduled to mature in December 2022 . As of September 30, 2016 , the Facility Agreement was fully drawn. Semi-annual principal repayments began in December 2014. The facility bears interest at a floating rate of LIBOR plus 2.75% through June 2017, increasing by an additional 0.5% each year thereafter to a maximum rate of LIBOR plus 5.75% . Ninety-five percent of the Company’s obligations under the Facility Agreement are guaranteed by COFACE, the French export credit agency. The Company’s obligations under the Facility Agreement are guaranteed on a senior secured basis by all of its domestic subsidiaries and are secured by a first priority lien on substantially all of the assets of the Company and its domestic subsidiaries (other than their FCC licenses), including patents and trademarks, 100% of the equity of the Company’s domestic subsidiaries and 65% of the equity of certain foreign subsidiaries. The Facility Agreement contains customary events of default and requires that the Company satisfy various financial and non-financial covenants. Pursuant to the terms of the Facility Agreement, the Company has the ability to cure noncompliance with financial covenants with Equity Cure Contributions (as described below) through a date as late as June 2019. If the Company violates any of these covenants and is unable to make a sufficient Equity Cure Contribution or obtain a waiver, it would be in default under the agreement and payment of the indebtedness could be accelerated. The acceleration of the Company's indebtedness under one agreement may permit acceleration of indebtedness under other agreements that contain cross-acceleration provisions. The covenants in the Facility Agreement limit the Company's ability to, among other things, incur or guarantee additional indebtedness; make certain investments, acquisitions or capital expenditures above certain agreed levels; pay dividends or repurchase or redeem capital stock or subordinated indebtedness; grant liens on its assets; incur restrictions on the ability of its subsidiaries to pay dividends or to make other payments to the Company; enter into transactions with its affiliates; merge or consolidate with other entities or transfer all or substantially all of its assets; and transfer or sell assets. As of September 30, 2016 , the Company was in compliance with respect to the covenants of the Facility Agreement. The compliance calculations of the financial covenants of the Facility Agreement permit inclusion of certain cash funds contributed to the Company from the issuance of the Company's common stock and/or subordinated indebtedness. These funds are referred to as "Equity Cure Contributions" and may be used to achieve compliance with financial covenants, subject to the conditions set forth in the Facility Agreement. Each Equity Cure Contribution must be made in a minimum amount of $10 million for each measurement period or in the aggregate for all periods until the date that such funding is no longer allowed by the Facility Agreement. In August 2015, February 2016, and June 2016, the Company drew $15 million , $6.5 million , and $22.0 million , respectively, under its common stock purchase agreement with Terrapin Opportunity, L.P. ("Terrapin") (the "August 2015 Terrapin Agreement"). The Company used these funds as Equity Cure Contributions under the Facility Agreement with respect to the calculation of compliance with financial covenants for the measurement periods ended December 31, 2015 and June 30, 2016. The Company anticipates that it will continue to use Equity Cure Contributions to maintain compliance with certain financial covenants under the Facility Agreement for the measurement periods ending December 31, 2016 and June 30, 2017, including, but not limited to, the remaining amounts available under the August 2015 Terrapin Agreement. The Facility Agreement requires the Company to maintain a total of $37.9 million in a debt service reserve account, which is pledged to secure all of the Company's obligations under the Facility Agreement. The use of these funds is restricted to making principal and interest payments under the Facility Agreement. As of September 30, 2016 , the balance in the debt service reserve account, which was established with the proceeds of the loan agreement with Thermo discussed below, was $38.0 million and classified as restricted cash on the Company's condensed consolidated balance sheets. Thermo Loan Agreement In connection with the amendment and restatement of the Facility Agreement, the Company amended and restated its loan agreement with Thermo (as amended and restated, the “Loan Agreement”). All obligations of the Company to Thermo under the Loan Agreement are subordinated to all of the Company’s obligations under the Facility Agreement. The Loan Agreement accrues interest at 12% per annum, which is capitalized and added to the outstanding principal in lieu of cash payments. The Company will make payments to Thermo only when permitted by the Facility Agreement. Principal and interest under the Loan Agreement become due and payable six months after the obligations under the Facility Agreement have been paid in full, or earlier if the Company has a change in control or if any acceleration of the maturity of the loans under the Facility Agreement occurs. As of September 30, 2016 , $47.6 million of interest had accrued since 2009 with respect to the Loan Agreement; the Loan Agreement is included in long-term debt on the Company’s condensed consolidated balance sheets. The Company evaluated the various embedded derivatives within the Loan Agreement (See Note 5: Fair Value Measurements for additional information about the embedded derivative in the Loan Agreement). The Company determined that the conversion option and the contingent put feature upon a fundamental change required bifurcation from the Loan Agreement. The conversion option and the contingent put feature were not deemed clearly and closely related to the Loan Agreement and were separately accounted for as a standalone derivative. The Company recorded this compound embedded derivative liability as a non-current liability on its condensed consolidated balance sheets with a corresponding debt discount, which is netted against the face value of the Loan Agreement. The Company is accreting the debt discount associated with the compound embedded derivative liability to interest expense through the maturity of the Loan Agreement using an effective interest rate method. The fair value of the compound embedded derivative liability is marked-to-market at the end of each reporting period, with any changes in value reported in the condensed consolidated statements of operations. The Company determines the fair value of the compound embedded derivative using a blend of a Monte Carlo simulation model and market prices. In connection with, and as a condition to the effectiveness of, the 2015 GARA, Thermo and certain of its affiliates executed and delivered to the agent under the Facility Agreement an undertaking (the “Second Thermo Group Undertaking Letter”) in which they agreed that, during the period commencing on the effective date of the 2015 GARA and ending on the later of March 31, 2018 and, if the Company's 2013 8.00% Notes shall have been redeemed in full, September 30, 2019 (the “Commitment Period”), under certain circumstances, they will make, or cause to be made, available to the Company cash equity financing in the aggregate amount of up to $30.0 million . The balance of this commitment is reduced by any cash equity financing received by the Company during the Commitment Period from Thermo or an external equity funding source, including Terrapin, if the Company uses the funds as an Equity Cure Contribution. Simultaneously with the execution of the 2015 GARA and the Second Thermo Group Undertaking Letter, the Company entered into an Equity Commitment Agreement (the “Equity Agreement”) and the Loan Agreement. Pursuant to the Equity Agreement, Thermo agreed to make, or cause to be made, available to the Company up to $30.0 million in additional cash equity investments as contemplated by the 2015 GARA and the Second Thermo Group Undertaking Letter. The price per share that Thermo will pay to purchase any shares of the Company's common stock pursuant to this equity commitment will be established using the same method as used to establish the price per share under the August 2015 Terrapin Agreement. If the issuance of shares of voting common stock to Thermo pursuant to the Equity Agreement would constitute a “Change of Control,” “Default” or “Event of Default” under any applicable agreement, the Company will issue instead an equal number of shares of non-voting common stock. Since the inception of the 2015 GARA, the Company has received cash equity financing in excess of Thermo's equity commitment. This cash equity financing primarily includes draws under the August 2015 Terrapin Agreement in August 2015, February 2016, and June 2016 for $15.0 million , $6.5 million , and $22.0 million , respectively. As a result, Thermo has no remaining cash equity commitment under the Equity Agreement as of September 30, 2016 . All of the transactions between the Company and Thermo and its affiliates were reviewed and approved on the Company's behalf by a Special Committee of its independent directors, who were represented by independent counsel. 8.00% Convertible Senior Notes Issued in 2013 The 8.00% Convertible Senior Notes Issued in 2013 (the "2013 8.00% Notes") initially were convertible into shares of common stock at a conversion price of $0.80 per share of common stock, or 1,250 shares of the Company’s common stock per $1,000 principal amount of the 2013 8.00% Notes, subject to adjustment. The conversion price of the 2013 8.00% Notes is adjusted in the event of certain stock splits or extraordinary share distributions, or as a reset of the base conversion and exercise price pursuant to the terms of the Fourth Supplemental Indenture between the Company and U.S. Bank National Association, as Trustee, dated May 20, 2013 (the "Indenture"). Due to common stock issuances by the Company since May 20, 2013 at prices below the then effective conversion rate, the base conversion price (rounded to the nearest cent) has been reduced to $0.73 per share of common stock as of September 30, 2016 . The 2013 8.00% Notes are senior unsecured debt obligations of the Company with no sinking fund. The 2013 8.00% Notes will mature on April 1, 2028, subject to various call and put features, and bear interest at a rate of 8.00% per annum. Interest on the 2013 8.00% Notes is payable semi-annually in arrears on April 1 and October 1 of each year. Interest is paid in cash at a rate of 5.75% per annum and in additional notes at a rate of 2.25% per annum. The Indenture for the 2013 8.00% Notes provides for customary events of default. As of September 30, 2016 , the Company was in compliance with respect to the terms of the 2013 8.00% Notes and the Indenture. Subject to certain conditions set forth in the Indenture, the Company may redeem the 2013 8.00% Notes, with the prior approval of the majority lenders under the Facility Agreement, in whole or in part, at any time on or after April 1, 2018, at a price equal to the principal amount of the 2013 8.00% Notes to be redeemed plus all accrued and unpaid interest thereon. A holder of the 2013 8.00% Notes has the right, at the holder’s option, to require the Company to purchase some or all of the 2013 8.00% Notes held by it on each of April 1, 2018 and April 1, 2023 at a price equal to the principal amount of the 2013 8.00% Notes to be purchased plus accrued and unpaid interest. Subject to the procedures for conversion and other terms and conditions of the Indenture, a holder may convert its 2013 8.00% Notes at its option at any time prior to the close of business on the business day immediately preceding April 1, 2028 , into shares of common stock (or, at the option of the Company, cash in lieu of all or a portion thereof, provided that, under the Facility Agreement, the Company may pay cash only with the consent of the Majority Lenders). As of September 30, 2016 , holders had converted a total of $39.4 million principal amount of the 2013 8.00% Notes, resulting in the issuance of approximately 72.1 million shares of voting common stock. There were no conversions during the three and nine -month periods ended September 30, 2016 . There were no conversions during the three-month period ended September 30, 2015 . During the nine -month period ended September 30, 2015 , holders converted a total of $6.5 million principal amount of the 2013 8.00% Notes, resulting in the issuance of approximately 10.9 million shares of voting common stock, and recognition of a loss on extinguishment of debt of $2.3 million . Holders who convert 2013 8.00% Notes receive conversion shares over a 40 -consecutive trading day settlement period. Accordingly, the portion of converted debt is extinguished on an incremental basis over the 40 -day settlement period, reducing the Company's outstanding debt balance. As of September 30, 2016 , no conversions had been initiated but not yet fully settled. The Company evaluated the various embedded derivatives within the Indenture for the 2013 8.00% Notes. The Company determined that the conversion option and the contingent put feature within the Indenture required bifurcation from the 2013 8.00% Notes. The Company did not deem the conversion option and the contingent put feature to be clearly and closely related to the 2013 8.00% Notes and separately accounted for them as a standalone derivative. The Company recorded this compound embedded derivative liability as a non-current liability on its condensed consolidated balance sheets with a corresponding debt discount which is netted against the face value of the 2013 8.00% Notes. The Company is accreting the debt discount associated with the compound embedded derivative liability to interest expense through the first put date of the 2013 8.00% Notes (April 1, 2018) using an effective interest rate method. The Company is marking to market the fair value of the compound embedded derivative liability at the end of each reporting period, with any changes in value reported in the condensed consolidated statements of operations. The Company determines the fair value of the compound embedded derivative using a blend of a Monte Carlo simulation model and market prices. Warrants Outstanding Warrants are outstanding to purchase shares of common stock as shown in the table below: Outstanding Warrants Strike Price September 30, December 31, September 30, December 31, Contingent Equity Agreement (1) 24,571,428 30,191,866 $ 0.01 $ 0.01 5.0% Warrants (2) — 8,000,000 — 0.32 24,571,428 38,191,866 (1) Pursuant to the terms of the Contingent Equity Agreement with Thermo (See Note 9: Related Party Transactions in the Consolidated Financial Statements in the 2015 Annual Report for a description of the Contingent Equity Agreement), the Company issued to Thermo warrants to purchase shares of common stock pursuant to the annual availability fee and subsequent reset provisions in the Contingent Equity Agreement. These warrants were issued between June 2009 and June 2012 and have a five -year exercise period from issuance. As of September 30, 2016 , Thermo had exercised warrants to purchase approximately 16.9 million of these shares prior to the expiration of the associated warrants. In June 2016, Thermo exercised warrants to purchase 5.6 million shares of voting common stock for a total purchase price of $ 0.1 million . The exercise period for the remaining outstanding warrants expires in June 2017. (2) In June 2011, the Company issued warrants (the “ 5.0% Warrants”) to purchase 15.2 million shares of its voting common stock in connection with the issuance of its 5.0% Convertible Senior Unsecured Notes. In June 2016, Thermo exercised all of the remaining warrants outstanding to purchase 8.0 million shares of voting common stock for a total purchase price of $ 2.5 million . See Note 3: Long-Term Debt and Other Financing Arrangements in the Consolidated Financial Statements in the 2015 Annual Report for a complete description of the 5.0% Warrants. Terrapin Opportunity, L.P. Common Stock Purchase Agreement On December 28, 2012 the Company entered into a common stock purchase agreement with Terrapin pursuant to which the Company, subject to certain conditions, could require Terrapin to purchase up to $30.0 million of shares of voting common stock over the 24 -month term following the effectiveness of a resale registration statement, which became effective on August 2, 2013. When the Company made a draw under this Terrapin common stock purchase agreement, it issued Terrapin shares of common stock at a price per share calculated as specified in the agreement. During the nine months ended September 30, 2015 , the Company drew $24.0 million under the agreement and issued 11.1 million shares of voting common stock to Terrapin at an average price of $2.18 per share. Through the term of this agreement, Terrapin purchased a total of 17.2 million shares of voting common stock at a total purchase price of $30.0 million . No funds remain available under this agreement. In conjunction with the amendment of the Facility Agreement in August 2015 (as discussed above), the Company entered into a new common stock purchase agreement with Terrapin pursuant to which the Company may require Terrapin to purchase up to $75.0 million of shares of the Company’s voting common stock over the 24 -month term following the date of the agreement. From time to time over the 24 -month term, in the Company’s discretion, the Company may present Terrapin with up to 24 draw notices requiring Terrapin to purchase a specified dollar amount of shares of voting common stock, based on the price per share per day over ten consecutive trading days (a "Draw Down Period"). The per share purchase price for these shares of voting common stock will equal the daily volume weighted average price of the common stock on each date during the Draw Down Period on which shares are purchased by Terrapin, but not less than a minimum price specified by the Company (a “Threshold Price”), less a discount ranging from 2.75% to 4.00% based on the Threshold Price. In addition, in the Company’s discretion, but subject to certain limitations, the Company may grant to Terrapin the option to purchase additional shares during a Draw Down Period. The Company has agreed not to sell to Terrapin a number of shares of voting common stock that, when aggregated with all other shares of voting common stock then beneficially owned by Terrapin and its affiliates, would result in their beneficial ownership of more than 9.9% of the then issued and outstanding shares of voting common stock. As discussed above in this Note 3: Long-Term Debt and Other Financing Arrangements and in Note 9: Related Party Transactions, Thermo committed, under certain conditions, to purchase equity securities of the Company on the same pricing terms as the August 2015 Terrapin Agreement. In August 2015, the Company drew $15.0 million under the August 2015 Terrapin Agreement and issued 9.3 million shares of voting common stock to Terrapin at an average price of $1.61 per share. In February 2016, the Company drew $6.5 million under the August 2015 Terrapin Agreement and issued 6.4 million shares of voting common stock to Terrapin at an average price of $1.02 per share. In June 2016, the Company drew $22.0 million under the August 2015 Terrapin Agreement and issued 19.5 million shares of voting common stock to Terrapin at an average price of $1.13 per share. As of September 30, 2016 , $31.5 million remained available under the August 2015 Terrapin Agreement. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | DERIVATIVES In connection with certain existing and past borrowing arrangements, the Company was required to record derivative instruments on its condensed consolidated balance sheets. None of these derivative instruments is designated as a hedge. The following tables disclose the fair values of the derivative instruments on the Company’s condensed consolidated balance sheets (in thousands): September 30, 2016 December 31, 2015 Derivative assets: Interest rate cap $ 1 $ 6 Total derivative assets $ 1 $ 6 Derivative liabilities: Compound embedded derivative with 2013 8.00% Notes $ (18,779 ) $ (26,203 ) Compound embedded derivative with the Amended and Restated Thermo Loan Agreement (170,721 ) (213,439 ) Total derivative liabilities $ (189,500 ) $ (239,642 ) The following table discloses the changes in value recorded as derivative gain (loss) in the Company’s condensed consolidated statement of operations (in thousands): Three Months Ended Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Interest rate cap $ — $ (11 ) $ (5 ) $ (38 ) Compound embedded derivative with 2013 8.00% Notes 1,641 11,475 7,424 30,367 Compound embedded derivative with the Amended and Restated Thermo Loan Agreement 9,341 42,730 42,718 153,087 Total derivative gain $ 10,982 $ 54,194 $ 50,137 $ 183,416 Intangible and Other Assets Interest Rate Cap In June 2009, in connection with entering into the Facility Agreement, under which interest accrues at a variable rate, the Company entered into five ten -year interest rate cap agreements. The interest rate cap agreements reflect a variable notional amount at interest rates that provide coverage to the Company for exposure resulting from escalating interest rates over the term of the Facility Agreement. The interest rate cap provides limits on the six-month Libor rate (“Base Rate”) used to calculate the coupon interest on outstanding amounts on the Facility Agreement and is capped at 5.50% should the Base Rate not exceed 6.5% . Should the Base Rate exceed 6.5% , the Company’s Base Rate will be 1% less than the then six-month Libor rate. The Company paid an approximately $12.4 million upfront fee for the interest rate cap agreements. The interest rate cap did not qualify for hedge accounting treatment, and changes in the fair value of the agreements are included in the condensed consolidated statements of operations. Derivative Liabilities The Company has identified various embedded derivatives resulting from certain features in the Company’s debt instruments. These embedded derivatives required bifurcation from the debt host agreement. All embedded derivatives that required bifurcation are recorded as a derivative liability on the Company’s condensed consolidated balance sheets with a corresponding debt discount netted against the principal amount of the related debt instrument. The Company accretes the debt discount associated with each derivative liability to interest expense over the term of the related debt instrument using an effective interest rate method. The fair value of each embedded derivative liability is marked-to-market at the end of each reporting period with any changes in value reported in its condensed consolidated statements of operations. Each liability and the features embedded in the debt instrument, which required the Company to account for the instrument as a derivative, are described below. Compound Embedded Derivative with the 2013 8.00% Notes As a result of the conversion option and the contingent put feature within the 2013 8.00% Notes, the Company recorded a compound embedded derivative liability on its condensed consolidated balance sheets with a corresponding debt discount that is netted against the face value of the 2013 8.00% Notes. The Company determined the fair value of the compound embedded derivative liability using a blend of a Monte Carlo simulation model and market prices. Compound Embedded Derivative with the Amended and Restated Thermo Loan Agreement As a result of the conversion option and the contingent put feature within the Thermo Loan Agreement, the Company recorded a compound embedded derivative liability on its condensed consolidated balance sheets with a corresponding debt discount that is netted against the face value of the Amended and Restated Loan Agreement. The Company determined the fair value of the compound embedded derivative liability using a blend of a Monte Carlo simulation model and market prices. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company follows the authoritative guidance for fair value measurements relating to financial and non-financial assets and liabilities, including presentation of required disclosures herein. This guidance establishes a fair value framework requiring the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets and liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Recurring Fair Value Measurements The following table provides a summary of the financial assets and liabilities measured at fair value on a recurring basis (in thousands): September 30, 2016 (Level 1) (Level 2) (Level 3) Total Balance Assets: Interest rate cap $ — $ 1 $ — $ 1 Total assets measured at fair value $ — $ 1 $ — $ 1 Liabilities: Liability for potential stock issuance to Hughes $ — $ (3,146 ) $ — $ (3,146 ) Compound embedded derivative with 2013 8.00% Notes — — (18,779 ) (18,779 ) Compound embedded derivative with the Amended and Restated Thermo Loan Agreement — — (170,721 ) (170,721 ) Total liabilities measured at fair value $ — $ (3,146 ) $ (189,500 ) $ (192,646 ) December 31, 2015 (Level 1) (Level 2) (Level 3) Total Balance Assets: Interest rate cap $ — $ 6 $ — $ 6 Total assets measured at fair value $ — $ 6 $ — $ 6 Liabilities: Liability for potential stock issuance to Hughes $ — $ (5,495 ) $ — $ (5,495 ) Compound embedded derivative with 2013 8.00% Notes — — (26,203 ) (26,203 ) Compound embedded derivative with the Amended and Restated Thermo Loan Agreement — — (213,439 ) (213,439 ) Total liabilities measured at fair value $ — $ (5,495 ) $ (239,642 ) $ (245,137 ) Assets Interest Rate Cap The fair value of the interest rate cap is determined using observable pricing inputs including benchmark yields, reported trades, and broker/dealer quotes at the reporting date. See Note 4: Derivatives for further discussion. Liabilities Liability for potential stock issuance to Hughes The Company has one liability classified as Level 2. As described in Note 7: Commitments, the Company agreed to provide downside protection after the issuance of shares of common stock to Hughes in lieu of cash for contract payments in June 2015. This feature requires the Company to issue to Hughes additional shares of common stock equal to the difference, if any, between $15.5 million and the total amount of gross proceeds Hughes receives from the sale of any shares plus the market value of any shares still held by Hughes as of the close of trading on December 30, 2016. The value of this option is calculated using a Black-Scholes pricing model. This liability is marked-to-market at each balance sheet date and through the settlement date. Derivative Liabilities The Company has two derivative liabilities classified as Level 3. The Company marks-to-market these liabilities at each reporting date with the changes in fair value recognized in the Company’s condensed consolidated statements of operations. See Note 4: Derivatives for further discussion. The significant quantitative Level 3 inputs utilized in the valuation models are shown in the tables below: September 30, 2016 Stock Price Volatility Risk-Free Interest Rate Note Conversion Price Market Price of Common Stock Compound embedded derivative with the 2013 8.00% Notes 100% - 125% 0.7 % $ 0.73 $ 1.21 Compound embedded derivative with the Amended and Restated Thermo Loan Agreement 40% - 125% 1.4 % $ 0.73 $ 1.21 December 31, 2015 Stock Price Volatility Risk-Free Interest Rate Note Conversion Price Market Price of Common Stock Compound embedded derivative with 2013 8.00% Notes 75% - 90% 1.1 % $ 0.73 $ 1.44 Compound embedded derivative with the Amended and Restated Thermo Loan Agreement 50% - 90% 2.1 % $ 0.73 $ 1.44 Fluctuation in the Company’s stock price is the primary driver for the changes in the derivative valuations during each reporting period. As the stock price decreases towards the current conversion price for each of the related derivative instruments, the value to the holder of the instrument generally decreases, thereby decreasing the liability on the Company’s condensed consolidated balance sheets. These valuations are sensitive to the weighting applied to each of the simulated values. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the expected volatility of the Company's stock price. Decreases in expected volatility would generally result in a lower fair value measurement. Probability of a change of control is another significant unobservable input used in the fair value measurement of the Company’s derivative instruments. Subject to certain restrictions in each indenture, the Company’s debt instruments contain certain provisions whereby holders may require the Company to purchase all or any portion of the convertible debt instrument upon a change of control. A change of control will occur upon certain changes in the ownership of the Company or certain events relating to the trading of the Company’s common stock. The simulated fair value of the derivative liabilities above is sensitive to changes in the assumed probabilities of a change of control. Decreases in the assumed probability of a change of control would generally result in a lower fair value measurement. In addition to the inputs described above, the valuation model used to calculate the fair value measurement of the compound embedded derivatives within the Company’s 2013 8.00% Notes and Thermo Loan Agreement included the following inputs and features: discount rate, payment in kind interest payments, make whole premiums, a 40 -day stock issuance settlement period upon conversion, automatic conversions, estimated maturity date, and the principal balance of each loan at the balance sheet date. There are also certain put and call features within the 2013 8.00% Notes that impact the valuation model. The trading activity in the market provides the Company with additional valuation support. The Company uses a weight factor to calculate the fair value of the embedded derivatives to align the fair value produced from the Monte Carlo simulation model with the market value of the 2013 8.00% Notes. Due to the similarities of the debt instruments, the Company applies a similar weight to the embedded derivative in the Thermo Loan Agreement. These valuations are sensitive to the weighting applied to each of the simulated values. The following table presents a rollforward for all liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Balance at beginning of period $ (200,482 ) $ (292,293 ) $ (239,642 ) $ (441,550 ) Derivative adjustment related to conversions — — — 20,008 Unrealized gain, included in derivative gain 10,982 54,206 50,142 183,455 Balance at end of period $ (189,500 ) $ (238,087 ) $ (189,500 ) $ (238,087 ) Fair Value of Debt Instruments The Company believes it is not practicable to determine the fair value of the Facility Agreement. Unlike typical long-term debt, interest rates and other terms for the Facility Agreement are not readily available and generally involve a variety of factors, including due diligence by the debt holders. As such, it is not practicable to determine the fair value of the Facility Agreement without incurring significant additional costs. The following table sets forth the carrying values and estimated fair values of the Company's other debt instruments, which are classified as Level 3 financial instruments (in thousands): September 30, 2016 December 31, 2015 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Thermo Loan Agreement $ 60,752 $ 38,552 $ 50,664 $ 17,244 2013 8.00% Notes 13,919 13,247 12,440 9,831 |
Accrued Expenses and Other Non-
Accrued Expenses and Other Non-Current Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Non-Current Liabilities | ACCRUED EXPENSES AND OTHER NON-CURRENT LIABILITIES Accrued expenses consist of the following (in thousands): September 30, December 31, Accrued interest $ 5,776 $ 317 Accrued compensation and benefits 3,562 2,098 Accrued property and other taxes 4,213 4,125 Accrued customer liabilities and deposits 3,477 3,216 Accrued professional and other service provider fees 2,860 1,830 Accrued commissions 715 1,216 Accrued telecommunications expenses 618 1,487 Accrued inventory 62 502 Accrued liability for potential stock issuance to Hughes 3,146 5,495 Accrued liability for legal settlement 1,411 328 Other accrued expenses 2,226 1,825 Total accrued expenses $ 28,066 $ 22,439 Accrued liability for potential stock issuance to Hughes includes the estimated value at September 30, 2016 of the downside protection that the Company provided to Hughes in connection with its April 2015 agreement (as amended). See Note 5: Fair Value Measurements and Note 7: Commitments for further discussion. Other accrued expenses include primarily capital lease obligations, warranty reserve, occupancy costs, advertising costs, payments to independent gateway operators ("IGOs") and estimated payroll shortfall under the Cooperative Endeavor Agreement with the Louisiana Department of Economic Development. Other non-current liabilities consist of the following (in thousands): September 30, December 31, Long-term accrued interest $ 194 $ 96 Asset retirement obligation 1,408 1,302 Deferred rent and other deferred expense 517 593 Liability related to the Cooperative Endeavor Agreement with the State of Louisiana 573 716 Uncertain income tax positions — 5,795 Foreign tax contingencies 2,624 2,311 Capital lease obligations 161 94 Total other non-current liabilities $ 5,477 $ 10,907 As a result of the expiration of the statute of limitations associated with the tax position of one of the Company's foreign subsidiaries, the Company removed the total unrecognized tax position of $6.3 million , inclusive of cumulative interest and penalties, from its non-current liabilities and recorded a $6.3 million tax benefit in its condensed consolidated financial statements during the quarter ended September 30, 2016. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2016 | |
COMMITMENTS [Abstract] | |
Commitments | COMMITMENTS Contractual Obligations - Second-Generation Satellites, Next-Generation Gateways and Other Ground Facilities As of September 30, 2016 , the Company had purchase commitments with Thales, Hughes and Ericsson related to the procurement, deployment and maintenance of the second-generation network. Second-Generation Satellites As of September 30, 2016 , the Company had a contract with Thales for the construction of the Company’s second-generation low-earth orbit satellites and related services. The Company has successfully launched all of these second-generation satellites, excluding one on-ground spare. The Company and Thales have discussed the ownership of certain deliverables under this contract, but have been unable to reach an agreement. Effective October 24, 2014, the Company entered into a contract with Thales for in-orbit support services for the second-generation satellites delivered under the 2009 contract described in Note 2: Property and Equipment. These services will be performed over a three -year period for a total cost of approximately €1.9 million . A credit of €0.6 million was applied to the total cost, reducing the first annual payment to €0 . This credit results from a settlement of amounts previously paid in conjunction with the 2009 contract. Next-Generation Gateways and Other Ground Facilities Hughes Network Systems In May 2008, the Company entered into a contract with Hughes under which Hughes will design, supply and implement the Radio Access Network (RAN) ground network equipment and software upgrades for installation at a number of the Company’s satellite gateway ground stations and satellite interface chips to be used in various second-generation Globalstar devices. In March 2015, the Company entered into an agreement with Hughes for the design, development, build, testing and delivery of four custom test equipment units for a total of $1.9 million . This test equipment was delivered during the fourth quarter of 2015. In April 2015, the Company extended the scope of work for delivery of two additional RANs for a total of $4.0 million . These RANs were delivered in February 2016. As of September 30, 2016 , the Company had purchase commitments due under this contract of $0.8 million , which will be payable upon final acceptance. In April 2015, Hughes exercised an option to be paid in shares of the Company's common stock (at a price 7% below market) in lieu of cash for certain of its remaining contract payments, including those related to the 2015 work mentioned above, totaling approximately $15.5 million . In June 2015, the Company issued 7.4 million shares of freely tradable common stock at the 7% discount pursuant to this option. The portion of these contract payments related to future milestone work is included in Prepaid second-generation ground costs on the condensed consolidated balance sheets as of September 30, 2016 . As the contract milestones are achieved, the Company reclassifies the related costs from Prepaid second-generation ground costs to construction in progress within Property and equipment. In the April 2015 agreement (as amended), the Company agreed to provide downside protection through December 30, 2016. This feature requires that the Company issue additional shares of common stock equal to the difference, if any, between $15.5 million and the total amount of gross proceeds Hughes receives from the sale of any shares plus the market value of any shares still held by Hughes as of the close of trading on December 30, 2016. Pursuant to this agreement, the Company recorded a liability of $3.1 million as of September 30, 2016 and $5.5 million as of December 31, 2015, respectively. The Company calculated these estimates of the value of this option using a Black-Scholes pricing model and an estimate of the number of shares of common stock held by Hughes as of the balance sheet dates. This liability is marked-to-market at each balance sheet date and through the settlement date. The Company records gains and losses resulting from changes in the value of this liability in its condensed consolidated statement of operations. Ericsson In October 2008, the Company entered into a contract with Ericsson to develop, implement and maintain a ground interface, or core network system, which will be installed at a number of the Company’s satellite gateway ground stations. In July 2014, the parties signed an amended and restated contract to specify the remaining contract value and a new milestone schedule to reflect a revised program timeline. Prior to the amended and restated contract being finalized, Ericsson and the Company agreed to defer certain milestone payments previously due under the 2008 contract to 2014 and beyond. The deferred payments were incurring interest at a rate of 6.5% per annum. In April 2015, the Company signed an amendment to the 2014 contract to incorporate certain changes in scope and timing identified as necessary by the parties. In conjunction with signing this amendment, the parties executed a new letter agreement under which Ericsson waived the remaining $1.0 million in deferred milestone payments and $0.4 million in interest accrued on the milestone payments under the 2008 contract. In the first quarter of 2015, the Company reversed these amounts from accounts payable, accrued expenses and construction in progress on the Company's condensed consolidated balance sheet. In August 2015, the Company and Ericsson executed a second amendment to the 2014 contract which incorporated revised payment and pricing schedules. This amendment also reflected an accelerated timeline for the project providing that the work was estimated to be completed in the second quarter, instead of the third quarter, of 2016. During the second quarter of 2016, the Company took possession of the final Ericsson hardware for the Company's global deployment. As of September 30, 2016 , the Company had purchase commitments due under this contract of $2.9 million , which is related to the final acceptance of all contract deliverables. Other Second-Generation Commitments Various maintenance, licensing and royalty agreements are necessary for the use of proprietary, third-party technology embedded in its second-generation ground infrastructure and products. The fees due under these maintenance and license agreements are projected to be approximately $3.6 million per year and will be recognized in the Company's condensed consolidated statement of operations over the maintenance and license terms, which are expected to begin at various times during 2017. The fees due under the royalty agreements will fluctuate based on product sales and will be recognized in the Company's condensed consolidated statement of operations on a per unit basis as second-generation products are manufactured, sold or activated. As of September 30, 2016 , a portion of these fees have been paid and are recorded as a prepaid asset in the Company's condensed consolidated balance sheets. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
CONTINGENCIES [Abstract] | |
Contingencies | CONTINGENCIES Arbitration On June 3, 2011, Globalstar filed a demand for arbitration against Thales before the American Arbitration Association to enforce certain rights to order additional satellites under the 2009 Contract. The Company did not include within its demand any claims that it had against Thales for work previously performed under the contract to design, manufacture and timely deliver the first 25 second-generation satellites. On May 10, 2012, the arbitration tribunal issued its award in which it determined that the Company had terminated the 2009 Contract "for convenience" and had materially breached the contract by failing to pay to Thales the €51.3 million in termination charges required under the contract. The tribunal additionally determined that absent further agreement between the parties, Thales had no further obligation to manufacture or deliver satellites under Phase 3 of the 2009 Contract. Based on these determinations, the tribunal directed the Company to pay Thales approximately €53 million in termination charges, plus interest by June 9, 2012. On May 23, 2012, Thales commenced an action in the United States District Court for the Southern District of New York by filing a petition to confirm the arbitration award (the “New York Proceeding”). Thales and the Company entered into a tolling agreement as of June 13, 2013, under which Thales dismissed the New York Proceeding without prejudice. The tolling agreement has expired. Thales may refile the petition at a later date and pursue the confirmation of the arbitration award, which the Company would oppose. Should Thales be successful in confirming the arbitration award, this would have a material adverse effect on the Company's financial condition, results of operations and liquidity. On June 24, 2012, the Company and Thales agreed to settle their prior commercial disputes, including those disputes that were the subject of the arbitration award. In order to effectuate this settlement, the Company and Thales entered into a Release Agreement, a Settlement Agreement and a Submission Agreement. Under the terms of the Release Agreement, Thales agreed unconditionally and irrevocably to release and forever discharge the Company from any and all claims and obligations (with the exception of those items payable under the Settlement Agreement or in connection with a new contract for the purchase of any additional second-generation satellites), including, without limitation, a full release from paying €35.6 million of the termination charges awarded in the arbitration together with all interest on the award amount effective upon the earlier of December 31, 2012, and the effective date of the financing for the purchase of any additional second-generation satellites. Under the terms of the Release Agreement, the Company agreed unconditionally and irrevocably to release and forever discharge Thales from any and all claims (with limited exceptions), including, without limitation, claims related to Thales’ work under the 2009 satellite construction contract, including any obligation to pay liquidated damages, effective upon the earlier of December 31, 2012, and the effective date of the financing for the purchase of any additional second-generation satellites. In connection with the Release Agreement and the Settlement Agreement, the Company recorded a contract termination charge of approximately €17.5 million which is recorded in the Company’s condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015. The releases became effective on December 31, 2012. Under the terms of the Settlement Agreement, the Company agreed to pay €17.5 million to Thales, representing one-third of the termination charges awarded to Thales in the arbitration, subject to certain conditions, on the later of the effective date of the new contract for the purchase of any additional second-generation satellites and the effective date of the financing for the purchase of these satellites. As of September 30, 2016 , this condition had not been satisfied. Because the effective date of the new contract for the purchase of additional second-generation satellites did not occur on or prior to February 28, 2013, any party may terminate the Settlement Agreement. If any party terminates the Settlement Agreement, all parties’ rights and obligations under the Settlement Agreement shall terminate. The Release Agreement is a separate and independent agreement from the Settlement Agreement and provides that it supersedes all prior understandings, commitments and representations between the parties with respect to the subject matter thereof; therefore it would survive any termination of the Settlement Agreement. As of September 30, 2016 , no party had terminated the Settlement Agreement. Litigation Due to the nature of the Company's business, the Company is involved, from time to time, in various litigation matters or subject to disputes or routine claims regarding its business activities. Legal costs related to these matters are expensed as incurred. During the second quarter of 2016, the Company increased an accrual related to the settlement of litigation incurred on behalf of the Company's Brazilian subsidiary. The Company paid the total settlement of 4.5 million reais, or $1.4 million , by issuing approximately 1.3 million shares of Globalstar common stock on October 24, 2016. In management's opinion, there is no pending litigation, dispute or claim, other than those described in this report, which could be expected to have a material adverse effect on the Company's financial condition, results of operations or liquidity. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Payables to Thermo and other affiliates related to normal purchase transactions were $0.2 million and $0.6 million at each of September 30, 2016 and December 31, 2015 , respectively. Transactions with Thermo Expenses incurred by Thermo on behalf of the Company, including non-cash expenses and those expenses charged to the Company, were $0.2 million and $0.4 million during the three months ended September 30, 2016 and 2015, respectively and were $0.5 million and $0.7 million during the nine months ended September 30, 2016 and 2015, respectively. Non-cash expenses, which the Company accounts for as a contribution to capital, relate to services provided by two executive officers of Thermo (who are also directors of the Company and receive no cash compensation from the Company). The Thermo expense charges are based on actual amounts (with no mark-up) incurred or upon allocated employee time. As of September 30, 2016 , the principal amount outstanding under the Loan Agreement with Thermo was $91.1 million , and the fair value of the compound embedded derivative liability associated with the Loan Agreement was $170.7 million . During the three months ended September 30, 2016 and 2015, interest accrued on the Loan Agreement was approximately $2.7 million and $2.4 million , respectively. During the nine months ended September 30, 2016 and 2015, interest accrued on the Loan Agreement was approximately $7.9 million and $6.6 million , respectively. In addition, as of September 30, 2016 , warrants to purchase approximately 24.6 million shares issued under the Contingent Equity Agreement remain outstanding, all of which are held by Thermo and are scheduled to expire in June 2017. In June 2016, Thermo exercised warrants to purchase 5.6 million and 8.0 million shares of voting common stock related to the Contingent Equity Agreement and the Company's 5.0% Warrants, respectively. As a result of these warrant exercises, the Company received aggregate proceeds of $2.6 million in June 2016. In August 2015, the Company entered into an Equity Agreement with Thermo. Thermo agreed to purchase up to $30.0 million in equity securities of the Company if the Company so requests or if an event of default is continuing under the Facility Agreement and funds are not available under the August 2015 Terrapin Agreement. The Company has received cash equity financing in excess of Thermo's equity commitment. This cash equity financing primarily includes draws under the August 2015 Terrapin Agreement in August 2015, February 2016, and June 2016 for $15.0 million , $6.5 million , and $22.0 million , respectively. As a result, Thermo had no remaining cash equity commitment under the Equity Agreement as of September 30, 2016 . The Facility Agreement requires Thermo to maintain minimum and maximum ownership levels in the Company's common stock. Thermo may convert shares of nonvoting common stock into shares of voting common stock as needed to comply with these ownership limitations. See Note 3: Long-Term Debt and Other Financing Arrangements and Note 4: Derivatives for further discussion of the Company's debt and financing transactions with Thermo. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated other comprehensive income (loss) includes all changes in equity during a period from non-owner sources. The components of accumulated other comprehensive income (loss) were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Accumulated other comprehensive loss, beginning of period $ (6,409 ) $ (3,741 ) $ (4,833 ) $ (2,898 ) Other comprehensive income (loss): Foreign currency translation adjustments 84 (615 ) (1,492 ) (1,458 ) Accumulated other comprehensive loss, end of period $ (6,325 ) $ (4,356 ) $ (6,325 ) $ (4,356 ) No amounts were reclassified out of accumulated other comprehensive loss for the periods shown above. |
Geographic Information
Geographic Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Geographic Information | GEOGRAPHIC INFORMATION The Company attributes subscriber equipment sales to various countries based on the location where equipment is sold. Service revenue is generally attributed to the various countries based on the Globalstar entity that holds the customer contract. Property and equipment is attributed to the various countries based on the physical location of the asset at the end of a given period, except for the Company's satellites that are included in the property and equipment of the United States. The Company’s information by geographic area is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues: Service revenue: United States $ 14,703 $ 13,506 $ 42,379 $ 37,689 Canada 4,512 3,863 11,822 11,067 Europe 1,785 1,634 5,048 4,377 Central and South America 824 486 2,012 1,788 Others 128 155 410 446 Total service revenue $ 21,952 $ 19,644 $ 61,671 $ 55,367 Subscriber equipment sales: United States 2,150 2,304 5,680 5,883 Canada 689 962 2,502 3,401 Europe 242 313 1,198 1,299 Central and South America 505 409 1,172 1,465 Others 6 46 243 308 Total subscriber equipment sales $ 3,592 $ 4,034 $ 10,795 $ 12,356 Total revenue $ 25,544 $ 23,678 $ 72,466 $ 67,723 September 30, December 31, Property and equipment, net: United States $ 1,043,827 $ 1,073,327 Canada 675 510 Europe 435 484 Central and South America 3,147 2,782 Others 238 457 Total property and equipment, net $ 1,048,322 $ 1,077,560 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share are computed based on the weighted average number of shares of common stock outstanding during the period. Common stock equivalents are included in the calculation of diluted earnings per share only when the effect of their inclusion would be dilutive. The following table sets forth the calculation of basic and diluted earnings (loss) per share for the periods indicated (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Net income (loss) $ (2,577 ) $ 24,098 $ (15,425 ) $ 99,138 Effect of dilutive securities: 2013 8.00% Notes 550 547 1,625 1,860 Thermo Loan Agreement 2,453 2,291 7,211 6,542 Income (loss) to common stockholders plus assumed conversions $ 426 $ 26,936 $ (6,589 ) $ 107,540 Weighted average common shares outstanding: Basic shares outstanding 1,080,313 1,031,398 1,056,993 1,014,165 Incremental shares from assumed exercises, conversions and other issuances: Stock options, restricted stock, restricted stock units and ESPP — 7,111 — 8,550 2013 8.00% Notes — 27,475 — 27,778 Thermo Loan Agreement — 130,375 — 132,602 Warrants and other — 38,192 — 38,192 Diluted shares outstanding 1,080,313 1,234,551 1,056,993 1,221,287 Income (loss) per share: Basic — 0.02 (0.01 ) 0.10 Diluted — 0.02 (0.01 ) 0.09 For the three and nine months ended September 30, 2016 , 195.8 million and 199.7 million shares of potential common stock were excluded from diluted shares outstanding because the effects of assuming issuance of these potentially dilutive securities would be anti-dilutive. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 9 Months Ended |
Sep. 30, 2016 | |
SUPPLEMENTAL CONSOLIDATING FINANCIAL INFORMATION [Abstract] | |
Condensed Consolidating Financial Information | CONDENSED CONSOLIDATING FINANCIAL INFORMATION In connection with the Company’s issuance of the 2013 8.00% Notes, certain of the Company’s 100% owned domestic subsidiaries (the “Guarantor Subsidiaries”), fully, unconditionally, jointly, and severally guaranteed the payment obligations under the 2013 8.00% Notes. The following financial information sets forth, on a consolidating basis, the balance sheets, statements of operations and statements of cash flows for Globalstar, Inc. (the “Parent Company”), for the Guarantor Subsidiaries and for the Parent Company’s other subsidiaries (the “Non-Guarantor Subsidiaries”). The 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. Condensed Consolidating Statement of Operations Three Months Ended September 30, 2016 (Unaudited) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated (In thousands) Revenue: Service revenues $ 23,996 $ 7,529 $ 11,501 $ (21,074 ) $ 21,952 Subscriber equipment sales 84 2,833 1,559 (884 ) 3,592 Total revenue 24,080 10,362 13,060 (21,958 ) 25,544 Operating expenses: Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) 5,178 2,538 8,442 (7,785 ) 8,373 Cost of subscriber equipment sales (18 ) 2,108 1,203 (882 ) 2,411 Marketing, general and administrative 5,229 1,504 15,497 (12,153 ) 10,077 Depreciation, amortization, and accretion 19,083 194 291 (122 ) 19,446 Total operating expenses 29,472 6,344 25,433 (20,942 ) 40,307 Income (loss) from operations (5,392 ) 4,018 (12,373 ) (1,016 ) (14,763 ) Other income (expense): Gain on equity issuance 4,272 — — — 4,272 Interest income and expense, net of amounts capitalized (8,894 ) (9 ) 36 1 (8,866 ) Derivative gain 10,982 — — — 10,982 Equity in subsidiary earnings (loss) (2,743 ) (12,794 ) — 15,537 — Other (802 ) (80 ) 284 93 (505 ) Total other income (expense) 2,815 (12,883 ) 320 15,631 5,883 Income (loss) before income taxes (2,577 ) (8,865 ) (12,053 ) 14,615 (8,880 ) Income tax benefit — — (6,303 ) — (6,303 ) Net income (loss) $ (2,577 ) $ (8,865 ) $ (5,750 ) $ 14,615 $ (2,577 ) Comprehensive income (loss) $ (2,577 ) $ (8,865 ) $ (5,659 ) $ 14,608 $ (2,493 ) Globalstar, Inc. Condensed Consolidating Statement of Operations Three Months Ended September 30, 2015 (Unaudited) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated (In thousands) Revenue: Service revenues $ 14,830 $ 8,426 $ 8,251 $ (11,863 ) $ 19,644 Subscriber equipment sales 219 2,853 889 73 4,034 Total revenue 15,049 11,279 9,140 (11,790 ) 23,678 Operating expenses: Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) 4,723 1,694 3,809 (2,465 ) 7,761 Cost of subscriber equipment sales (52 ) 2,365 (1,641 ) 2,242 2,914 Marketing, general and administrative 5,282 1,486 14,411 (11,504 ) 9,675 Depreciation, amortization, and accretion 18,955 291 282 (111 ) 19,417 Total operating expenses 28,908 5,836 16,861 (11,838 ) 39,767 Income (loss) from operations (13,859 ) 5,443 (7,721 ) 48 (16,089 ) Other income (expense): Loss on equity issuance (2,920 ) — — — (2,920 ) Interest income and expense, net of amounts capitalized (8,872 ) (8 ) (140 ) 1 (9,019 ) Derivative gain 54,194 — — — 54,194 Equity in subsidiary earnings (loss) (3,559 ) (18,162 ) — 21,721 — Other (886 ) (60 ) 3,800 (4,807 ) (1,953 ) Total other income (expense) 37,957 (18,230 ) 3,660 16,915 40,302 Income (loss) before income taxes 24,098 (12,787 ) (4,061 ) 16,963 24,213 Income tax expense — 1 114 — 115 Net income (loss) $ 24,098 $ (12,788 ) $ (4,175 ) $ 16,963 $ 24,098 Comprehensive income (loss) $ 24,098 $ 20,357 $ (12,258 ) $ (8,714 ) $ 23,483 Globalstar, Inc. Condensed Consolidating Statement of Operations Nine Months Ended September 30, 2016 (Unaudited) Parent Guarantor Non- Eliminations Consolidated (In thousands) Revenue: Service revenues $ 51,878 $ 25,887 $ 31,615 $ (47,709 ) $ 61,671 Subscriber equipment sales 508 7,299 5,232 (2,244 ) 10,795 Total revenue 52,386 33,186 36,847 (49,953 ) 72,466 Operating expenses: Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) 15,126 4,608 14,039 (9,872 ) 23,901 Cost of subscriber equipment sales 169 5,648 3,896 (2,238 ) 7,475 Marketing, general and administrative 15,833 3,358 48,561 (37,615 ) 30,137 Depreciation, amortization, and accretion 56,706 620 860 (361 ) 57,825 Total operating expenses 87,834 14,234 67,356 (50,086 ) 119,338 Income (loss) from operations (35,448 ) 18,952 (30,509 ) 133 (46,872 ) Other income (expense): Gain on equity issuance 2,349 — — — 2,349 Interest income and expense, net of amounts capitalized (26,875 ) (21 ) (116 ) (8 ) (27,020 ) Derivative gain 50,137 — — — 50,137 Equity in subsidiary earnings (loss) (4,170 ) (10,715 ) — 14,885 — Other (1,418 ) (192 ) 888 141 (581 ) Total other income (expense) 20,023 (10,928 ) 772 15,018 24,885 Income (loss) before income taxes (15,425 ) 8,024 (29,737 ) 15,151 (21,987 ) Income tax benefit — — (6,562 ) — (6,562 ) Net income (loss) $ (15,425 ) $ 8,024 $ (23,175 ) $ 15,151 $ (15,425 ) Comprehensive income (loss) $ (15,425 ) $ 8,024 $ (24,662 ) $ 15,146 $ (16,917 ) Globalstar, Inc. Condensed Consolidating Statement of Operations Nine Months Ended September 30, 2015 (Unaudited) Parent Guarantor Non- Eliminations Consolidated (In thousands) Revenue: Service revenues $ 47,005 $ 22,969 $ 28,271 $ (42,878 ) $ 55,367 Subscriber equipment sales 573 8,917 6,380 (3,514 ) 12,356 Total revenue 47,578 31,886 34,651 (46,392 ) 67,723 Operating expenses: Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) 14,227 4,871 10,098 (5,974 ) 23,222 Cost of subscriber equipment sales 8 7,808 4,091 (2,879 ) 9,028 Marketing, general and administrative 14,731 4,477 46,716 (37,494 ) 28,430 Depreciation, amortization, and accretion 56,282 882 934 (364 ) 57,734 Total operating expenses 85,248 18,038 61,839 (46,711 ) 118,414 Income (loss) from operations (37,670 ) 13,848 (27,188 ) 319 (50,691 ) Other income (expense): Loss on extinguishment of debt (2,254 ) — — — (2,254 ) Loss on equity issuance (5,832 ) — — — (5,832 ) Interest income and expense, net of amounts capitalized (26,315 ) (23 ) (449 ) 7 (26,780 ) Derivative gain 183,416 — — — 183,416 Equity in subsidiary earnings (loss) (12,508 ) (12,736 ) — 25,244 — Other 246 334 5,902 (4,754 ) 1,728 Total other income (expense) 136,753 (12,425 ) 5,453 20,497 150,278 Income (loss) before income taxes 99,083 1,423 (21,735 ) 20,816 99,587 Income tax expense (benefit) (55 ) 16 488 — 449 Net income (loss) $ 99,138 $ 1,407 $ (22,223 ) $ 20,816 $ 99,138 Comprehensive income (loss) $ 99,138 $ 1,407 $ (23,702 ) $ 20,837 $ 97,680 Globalstar, Inc. Condensed Consolidating Balance Sheet As of September 30, 2016 (Unaudited) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In thousands) ASSETS Current assets: Cash and cash equivalents $ 6,281 $ 2,337 $ 4,292 $ — $ 12,910 Accounts receivable 6,133 6,776 3,676 — 16,585 Intercompany receivables 881,227 661,824 25,362 (1,568,413 ) — Inventory 2,268 5,299 2,164 — 9,731 Prepaid expenses and other current assets 2,950 345 2,276 — 5,571 Total current assets 898,859 676,581 37,770 (1,568,413 ) 44,797 Property and equipment, net 1,040,091 3,735 4,492 4 1,048,322 Restricted cash 37,959 — — — 37,959 Intercompany notes receivable 10,086 — 6,436 (16,522 ) — Investment in subsidiaries (277,528 ) 59,947 35,042 182,539 — Prepaid second-generation ground costs 2,579 — — — 2,579 Intangible and other assets, net 14,270 164 682 (10 ) 15,106 Total assets $ 1,726,316 $ 740,427 $ 84,422 $ (1,402,402 ) $ 1,148,763 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 38,112 $ — $ — $ — $ 38,112 Accounts payable 2,030 3,473 1,067 — 6,570 Accrued contract termination charge 19,654 — — — 19,654 Accrued expenses 14,919 5,710 7,437 — 28,066 Intercompany payables 619,104 740,464 208,735 (1,568,303 ) — Payables to affiliates 243 — — — 243 Deferred revenue 1,390 20,123 5,841 — 27,354 Total current liabilities 695,452 769,770 223,080 (1,568,303 ) 119,999 Long-term debt, less current portion 547,311 — — — 547,311 Employee benefit obligations 4,911 — — — 4,911 Intercompany notes payable 6,435 — 10,086 (16,521 ) — Derivative liabilities 189,500 — — — 189,500 Deferred revenue 5,751 317 — — 6,068 Debt restructuring fees 20,795 — — — 20,795 Other non-current liabilities 1,459 320 3,698 — 5,477 Total non-current liabilities 776,162 637 13,784 (16,521 ) 774,062 Stockholders’ equity (deficit) 254,702 (29,980 ) (152,442 ) 182,422 254,702 Total liabilities and stockholders’ equity $ 1,726,316 $ 740,427 $ 84,422 $ (1,402,402 ) $ 1,148,763 Globalstar, Inc. Condensed Consolidating Balance Sheet As of December 31, 2015 (Unaudited) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In thousands) ASSETS Current assets: Cash and cash equivalents $ 3,530 $ 719 $ 3,227 $ — $ 7,476 Accounts receivable 4,860 5,215 4,461 — 14,536 Intercompany receivables 839,215 609,500 54,507 (1,503,222 ) — Inventory 2,148 6,321 3,554 — 12,023 Prepaid expenses and other current assets 2,399 291 1,766 — 4,456 Total current assets 852,152 622,046 67,515 (1,503,222 ) 38,491 Property and equipment, net 1,069,605 3,722 4,587 (354 ) 1,077,560 Restricted cash 37,918 — — — 37,918 Intercompany notes receivable 12,037 — 5,355 (17,392 ) — Investment in subsidiaries (274,453 ) 58,686 32,945 182,822 — Prepaid second-generation ground costs 8,929 — — — 8,929 Intangible and other assets, net 11,384 280 464 (11 ) 12,117 Total assets $ 1,717,572 $ 684,734 $ 110,866 $ (1,338,157 ) $ 1,175,015 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 32,835 $ — $ — $ — $ 32,835 Accounts payable 4,292 2,439 1,387 — 8,118 Accrued contract termination charge 19,121 — — — 19,121 Accrued expenses 9,816 6,949 5,674 — 22,439 Intercompany payables 585,091 706,913 211,188 (1,503,192 ) — Payables to affiliates 616 — — — 616 Deferred revenue 1,980 17,722 4,200 — 23,902 Total current liabilities 653,751 734,023 222,449 (1,503,192 ) 107,031 Long-term debt, less current portion 548,286 — — — 548,286 Employee benefit obligations 4,810 — — — 4,810 Intercompany notes payable 5,563 — 11,818 (17,381 ) — Derivative liabilities 239,642 — — — 239,642 Deferred revenue 6,027 386 — — 6,413 Debt restructuring fees 20,795 — — — 20,795 Other non-current liabilities 1,567 305 9,035 — 10,907 Total non-current liabilities 826,690 691 20,853 (17,381 ) 830,853 Stockholders’ equity (deficit) 237,131 (49,980 ) (132,436 ) 182,416 237,131 Total liabilities and stockholders’ equity $ 1,717,572 $ 684,734 $ 110,866 $ (1,338,157 ) $ 1,175,015 Globalstar, Inc. Condensed Consolidating Statement of Cash Flows Nine Months Ended September 30, 2016 (Unaudited) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated (In thousands) Cash flows provided by (used in) operating activities $ 4,785 $ 1,618 $ 1,301 $ — $ 7,704 Cash flows used in investing activities: Second-generation network costs (including interest) (8,272 ) — (200 ) — (8,472 ) Property and equipment additions (7,477 ) — (169 ) — (7,646 ) Purchase of intangible assets (1,327 ) — — — (1,327 ) Change in restricted cash (41 ) (41 ) Net cash used in investing activities (17,117 ) — (369 ) — (17,486 ) Cash flows provided by (used in) financing activities: Principal payments of the Facility Agreement (16,418 ) — — — (16,418 ) Proceeds from issuance of stock to Terrapin 28,500 — — — 28,500 Proceeds from issuance of common stock and exercise of options and warrants 3,001 — — — 3,001 Net cash provided by financing activities 15,083 — — — 15,083 Effect of exchange rate changes on cash — — 133 — 133 Net increase (decrease) in cash and cash equivalents 2,751 1,618 1,065 — 5,434 Cash and cash equivalents, beginning of period 3,530 719 3,227 — 7,476 Cash and cash equivalents, end of period $ 6,281 $ 2,337 $ 4,292 $ — $ 12,910 Globalstar, Inc. Condensed Consolidating Statement of Cash Flows Nine Months Ended September 30, 2015 (Unaudited) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated (In thousands) Cash flows provided by (used in) operating activities $ 2,869 $ 2,901 $ 1,544 $ — $ 7,314 Cash flows used in investing activities: Second-generation network costs (including interest) (15,484 ) — — — (15,484 ) Property and equipment additions (1,587 ) (1,967 ) (668 ) — (4,222 ) Purchase of intangible assets (1,840 ) (1,840 ) Net cash used in investing activities (18,911 ) (1,967 ) (668 ) — (21,546 ) Cash flows provided by (used in) financing activities: Principal payments of the Facility Agreement (3,225 ) (3,225 ) Proceeds from issuance of stock to Terrapin 39,000 — — — 39,000 Proceeds from issuance of common stock and exercise of options and warrants 426 — — — 426 Net cash provided by financing activities 36,201 — — — 36,201 Effect of exchange rate changes on cash — — (1,117 ) — (1,117 ) Net increase (decrease) in cash and cash equivalents 20,159 934 (241 ) — 20,852 Cash and cash equivalents, beginning of period 3,166 672 3,283 — 7,121 Cash and cash equivalents, end of period $ 23,325 $ 1,606 $ 3,042 $ — $ 27,973 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Globalstar, Inc. (“Globalstar” or the “Company”) provides Mobile Satellite Services (“MSS”) including voice and data communications services through its global satellite network. Thermo Capital Partners LLC, through its affiliates (collectively, “Thermo”), is the principal owner and largest stockholder of Globalstar. The Company’s Chairman and Chief Executive Officer controls Thermo. Two other members of the Company's Board of Directors are also directors, officers or minority equity owners of various Thermo entities. The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Certain information and footnote disclosures normally in financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"); however, management believes the disclosures made are adequate to make the information presented not misleading. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Globalstar Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on February 26, 2016 (the "2015 Annual Report"), and Management's Discussion and Analysis of Financial Condition and Results of Operations herein. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. The Company evaluates estimates on an ongoing basis. Significant estimates include the value of derivative instruments, the allowance for doubtful accounts, the net realizable value of inventory, the useful life and value of property and equipment, the value of stock-based compensation and income taxes. The Company has made certain reclassifications to prior period condensed consolidated financial statements to conform to current period presentation. These unaudited interim condensed consolidated financial statements include the accounts of Globalstar and all its subsidiaries. All significant intercompany transactions and balances have been eliminated in the consolidation. In the opinion of management, the information included herein includes all adjustments, consisting of normal recurring adjustments, that are necessary for a fair presentation of the Company’s condensed consolidated statements of operations, condensed consolidated balance sheets, and condensed consolidated statements of cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the full year or any future period. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers . ASU No. 2014-09 has been modified four times since its initial release. This ASU outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09, as amended, becomes effective for annual reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact that these standards will have on its financial statements and related disclosures and believes that the most significant changes to the Company's revenue recognition accounting policies will be related to the allocation and timing of revenue recognized between service revenue and subscriber equipment sales. This ASU also requires the deferment of certain contract acquisition costs and the recognition of these costs over a customer's contract period or over a customer's expected life. The Company has not yet selected a transition method nor has it determined the effect of these standards on its ongoing reporting. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory . ASU No. 2015-11 requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) and retail inventory method (RIM) are excluded from this new guidance. This ASU replaces the concept of market with the single measurement of net realizable value and is intended to create efficiencies for preparers and more closely align U.S. GAAP with IFRS. This ASU is effective for public business entities in fiscal years, and interim periods within those years, beginning after December 15, 2016. Prospective application is required and early adoption is permitted as of the beginning of an interim or annual reporting period. This ASU will not have a material effect on the Company's consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU. No. 2015-17, Balance Sheet Classification of Deferred Taxes . ASU No. 2015-17 simplifies the presentation of deferred taxes on the balance sheet by requiring classification of all deferred tax items as noncurrent including valuation allowances by jurisdiction. The ASU is effective for public entities for annual and interim periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures, but does not expect the effect to be material. In March 2016, the FASB issued ASU No. 2016-02, Leases . The main difference between the provisions of ASU No. 2016-02 and previous U.S. GAAP is the recognition of right-of-use assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. ASU No. 2016-02 retains a distinction between finance leases and operating leases, and the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous U.S. GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize right-of-use assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This ASU is effective for public business entities in fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company has not yet determined the effect of the standard on its ongoing reporting. In March 2016, the FASB issued ASU No. 2016-04, Liabilities-Extinguishment of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products . ASU No. 2016-04 contains specific guidance for the derecognition of prepaid stored-value product liabilities within the scope of this ASU. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2017. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company does not expect this ASU to have a material effect on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU. No. 2016-06, Derivatives and Hedging: Contingent Put and Call Options in Debt Instruments . ASU No. 2016-06 clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company does not expect the adoption of this ASU to have a material effect on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation . ASU No. 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for public business entities for annual and interim periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company has not yet determined the effect of this standard on its ongoing reporting. In June 2016, the FASB issued ASU No. 2016-13, Credit Losses, Measurement of Credit Losses on Financial Instruments . ASU No. 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today’s incurred loss approach with an expected loss model for instruments measured at amortized cost. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for all entities for annual periods beginning after December 15, 2018, and interim periods therein. The Company has not yet determined the effect of this standard on its ongoing reporting. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments . ASU No. 2016-15 is intended to reduce diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. The new guidance clarifies the classification of cash activity related to debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate and bank-owned life insurance policies, distributions received from equity-method investments, and beneficial interests in securitization transactions. The guidance also describes a predominance principle pursuant to which cash flows with aspects of more than one class that cannot be separated should be classified based on the activity that is likely to be the predominant source or use of cash flow. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2017. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures, but does not expect it to have a material effect on the Company's consolidated financial statements and related disclosures. |
Derivatives, Embedded Derivatives | The Company has identified various embedded derivatives resulting from certain features in the Company’s debt instruments. These embedded derivatives required bifurcation from the debt host agreement. All embedded derivatives that required bifurcation are recorded as a derivative liability on the Company’s condensed consolidated balance sheets with a corresponding debt discount netted against the principal amount of the related debt instrument. The Company accretes the debt discount associated with each derivative liability to interest expense over the term of the related debt instrument using an effective interest rate method. The fair value of each embedded derivative liability is marked-to-market at the end of each reporting period with any changes in value reported in its condensed consolidated statements of operations. Each liability and the features embedded in the debt instrument, which required the Company to account for the instrument as a derivative, are described below. |
Fair Value Measurement | The Company follows the authoritative guidance for fair value measurements relating to financial and non-financial assets and liabilities, including presentation of required disclosures herein. This guidance establishes a fair value framework requiring the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets and liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). |
Legal Costs | Due to the nature of the Company's business, the Company is involved, from time to time, in various litigation matters or subject to disputes or routine claims regarding its business activities. Legal costs related to these matters are expensed as incurred. |
Earnings Per Share | Basic earnings (loss) per share are computed based on the weighted average number of shares of common stock outstanding during the period. Common stock equivalents are included in the calculation of diluted earnings per share only when the effect of their inclusion would be dilutive. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment consists of the following (in thousands): September 30, December 31, Globalstar System: Space component First and second-generation satellites in service $ 1,211,090 $ 1,211,768 Prepaid long-lead items 17,040 17,040 Second-generation satellite, on-ground spare 32,481 32,481 Ground component 48,382 46,870 Construction in progress: Space component 81 81 Ground component 197,712 177,780 Next-generation software upgrades 9,552 3,440 Other 2,517 2,153 Total Globalstar System 1,518,855 1,491,613 Internally developed and purchased software 14,702 14,492 Equipment 11,959 10,802 Land and buildings 3,333 3,151 Leasehold improvements 1,732 1,671 Total property and equipment 1,550,581 1,521,729 Accumulated depreciation (502,259 ) (444,169 ) Total property and equipment, net $ 1,048,322 $ 1,077,560 |
Capitalized interest | The following table summarizes capitalized interest (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Interest costs eligible to be capitalized $ 12,092 $ 10,935 $ 35,884 $ 31,640 Interest costs recorded in interest income (expense), net (8,504 ) (8,292 ) (25,649 ) (24,400 ) Net interest capitalized $ 3,588 $ 2,643 $ 10,235 $ 7,240 |
Depreciation expense | The following table summarizes depreciation expense (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Depreciation expense $ 19,341 $ 19,299 $ 57,508 $ 57,330 |
Long-Term Debt and Other Fina21
Long-Term Debt and Other Financing Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consists of the following (in thousands): September 30, 2016 December 31, 2015 Principal Amount Unamortized Discount and Deferred Financing Costs Carrying Value Principal Amount Unamortized Discount and Deferred Financing Costs Carrying Value Facility Agreement $ 559,429 $ 48,677 $ 510,752 $ 575,846 $ 57,829 $ 518,017 Thermo Loan Agreement 91,139 30,387 60,752 83,222 32,558 50,664 8.00% Convertible Senior Notes Issued in 2013 16,936 3,017 13,919 16,747 4,307 12,440 Total Debt 667,504 82,081 585,423 675,815 94,694 581,121 Less: Current Portion 38,112 — 38,112 32,835 — 32,835 Long-Term Debt $ 629,392 $ 82,081 $ 547,311 $ 642,980 $ 94,694 $ 548,286 |
Summary of warrants outstanding | Warrants are outstanding to purchase shares of common stock as shown in the table below: Outstanding Warrants Strike Price September 30, December 31, September 30, December 31, Contingent Equity Agreement (1) 24,571,428 30,191,866 $ 0.01 $ 0.01 5.0% Warrants (2) — 8,000,000 — 0.32 24,571,428 38,191,866 (1) Pursuant to the terms of the Contingent Equity Agreement with Thermo (See Note 9: Related Party Transactions in the Consolidated Financial Statements in the 2015 Annual Report for a description of the Contingent Equity Agreement), the Company issued to Thermo warrants to purchase shares of common stock pursuant to the annual availability fee and subsequent reset provisions in the Contingent Equity Agreement. These warrants were issued between June 2009 and June 2012 and have a five -year exercise period from issuance. As of September 30, 2016 , Thermo had exercised warrants to purchase approximately 16.9 million of these shares prior to the expiration of the associated warrants. In June 2016, Thermo exercised warrants to purchase 5.6 million shares of voting common stock for a total purchase price of $ 0.1 million . The exercise period for the remaining outstanding warrants expires in June 2017. (2) In June 2011, the Company issued warrants (the “ 5.0% Warrants”) to purchase 15.2 million shares of its voting common stock in connection with the issuance of its 5.0% Convertible Senior Unsecured Notes. In June 2016, Thermo exercised all of the remaining warrants outstanding to purchase 8.0 million shares of voting common stock for a total purchase price of $ 2.5 million . See Note 3: Long-Term Debt and Other Financing Arrangements in the Consolidated Financial Statements in the 2015 Annual Report for a complete description of the 5.0% Warrants. |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative instruments | The following tables disclose the fair values of the derivative instruments on the Company’s condensed consolidated balance sheets (in thousands): September 30, 2016 December 31, 2015 Derivative assets: Interest rate cap $ 1 $ 6 Total derivative assets $ 1 $ 6 Derivative liabilities: Compound embedded derivative with 2013 8.00% Notes $ (18,779 ) $ (26,203 ) Compound embedded derivative with the Amended and Restated Thermo Loan Agreement (170,721 ) (213,439 ) Total derivative liabilities $ (189,500 ) $ (239,642 ) |
Schedule of derivative gains (losses) | The following table discloses the changes in value recorded as derivative gain (loss) in the Company’s condensed consolidated statement of operations (in thousands): Three Months Ended Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Interest rate cap $ — $ (11 ) $ (5 ) $ (38 ) Compound embedded derivative with 2013 8.00% Notes 1,641 11,475 7,424 30,367 Compound embedded derivative with the Amended and Restated Thermo Loan Agreement 9,341 42,730 42,718 153,087 Total derivative gain $ 10,982 $ 54,194 $ 50,137 $ 183,416 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities measured at fair value on recurring basis | The following table provides a summary of the financial assets and liabilities measured at fair value on a recurring basis (in thousands): September 30, 2016 (Level 1) (Level 2) (Level 3) Total Balance Assets: Interest rate cap $ — $ 1 $ — $ 1 Total assets measured at fair value $ — $ 1 $ — $ 1 Liabilities: Liability for potential stock issuance to Hughes $ — $ (3,146 ) $ — $ (3,146 ) Compound embedded derivative with 2013 8.00% Notes — — (18,779 ) (18,779 ) Compound embedded derivative with the Amended and Restated Thermo Loan Agreement — — (170,721 ) (170,721 ) Total liabilities measured at fair value $ — $ (3,146 ) $ (189,500 ) $ (192,646 ) December 31, 2015 (Level 1) (Level 2) (Level 3) Total Balance Assets: Interest rate cap $ — $ 6 $ — $ 6 Total assets measured at fair value $ — $ 6 $ — $ 6 Liabilities: Liability for potential stock issuance to Hughes $ — $ (5,495 ) $ — $ (5,495 ) Compound embedded derivative with 2013 8.00% Notes — — (26,203 ) (26,203 ) Compound embedded derivative with the Amended and Restated Thermo Loan Agreement — — (213,439 ) (213,439 ) Total liabilities measured at fair value $ — $ (5,495 ) $ (239,642 ) $ (245,137 ) |
Schedule of significant quantitative level 3 inputs utilized | The significant quantitative Level 3 inputs utilized in the valuation models are shown in the tables below: September 30, 2016 Stock Price Volatility Risk-Free Interest Rate Note Conversion Price Market Price of Common Stock Compound embedded derivative with the 2013 8.00% Notes 100% - 125% 0.7 % $ 0.73 $ 1.21 Compound embedded derivative with the Amended and Restated Thermo Loan Agreement 40% - 125% 1.4 % $ 0.73 $ 1.21 December 31, 2015 Stock Price Volatility Risk-Free Interest Rate Note Conversion Price Market Price of Common Stock Compound embedded derivative with 2013 8.00% Notes 75% - 90% 1.1 % $ 0.73 $ 1.44 Compound embedded derivative with the Amended and Restated Thermo Loan Agreement 50% - 90% 2.1 % $ 0.73 $ 1.44 |
Rollforward of liabilities measured at fair value | The following table presents a rollforward for all liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Balance at beginning of period $ (200,482 ) $ (292,293 ) $ (239,642 ) $ (441,550 ) Derivative adjustment related to conversions — — — 20,008 Unrealized gain, included in derivative gain 10,982 54,206 50,142 183,455 Balance at end of period $ (189,500 ) $ (238,087 ) $ (189,500 ) $ (238,087 ) |
Schedule of carrying values and estimated fair values of debt instruments | The following table sets forth the carrying values and estimated fair values of the Company's other debt instruments, which are classified as Level 3 financial instruments (in thousands): September 30, 2016 December 31, 2015 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Thermo Loan Agreement $ 60,752 $ 38,552 $ 50,664 $ 17,244 2013 8.00% Notes 13,919 13,247 12,440 9,831 |
Accrued Expenses and Other No24
Accrued Expenses and Other Non-Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses consist of the following (in thousands): September 30, December 31, Accrued interest $ 5,776 $ 317 Accrued compensation and benefits 3,562 2,098 Accrued property and other taxes 4,213 4,125 Accrued customer liabilities and deposits 3,477 3,216 Accrued professional and other service provider fees 2,860 1,830 Accrued commissions 715 1,216 Accrued telecommunications expenses 618 1,487 Accrued inventory 62 502 Accrued liability for potential stock issuance to Hughes 3,146 5,495 Accrued liability for legal settlement 1,411 328 Other accrued expenses 2,226 1,825 Total accrued expenses $ 28,066 $ 22,439 |
Schedule of Other Non-current Liabilities | Other non-current liabilities consist of the following (in thousands): September 30, December 31, Long-term accrued interest $ 194 $ 96 Asset retirement obligation 1,408 1,302 Deferred rent and other deferred expense 517 593 Liability related to the Cooperative Endeavor Agreement with the State of Louisiana 573 716 Uncertain income tax positions — 5,795 Foreign tax contingencies 2,624 2,311 Capital lease obligations 161 94 Total other non-current liabilities $ 5,477 $ 10,907 |
Accumulated Other Comprehensi25
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Components of accumulated other comprehensive loss | The components of accumulated other comprehensive income (loss) were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Accumulated other comprehensive loss, beginning of period $ (6,409 ) $ (3,741 ) $ (4,833 ) $ (2,898 ) Other comprehensive income (loss): Foreign currency translation adjustments 84 (615 ) (1,492 ) (1,458 ) Accumulated other comprehensive loss, end of period $ (6,325 ) $ (4,356 ) $ (6,325 ) $ (4,356 ) |
Geographic Information (Tables)
Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Company's information on revenues and long-lived assets by geographic area | The Company’s information by geographic area is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues: Service revenue: United States $ 14,703 $ 13,506 $ 42,379 $ 37,689 Canada 4,512 3,863 11,822 11,067 Europe 1,785 1,634 5,048 4,377 Central and South America 824 486 2,012 1,788 Others 128 155 410 446 Total service revenue $ 21,952 $ 19,644 $ 61,671 $ 55,367 Subscriber equipment sales: United States 2,150 2,304 5,680 5,883 Canada 689 962 2,502 3,401 Europe 242 313 1,198 1,299 Central and South America 505 409 1,172 1,465 Others 6 46 243 308 Total subscriber equipment sales $ 3,592 $ 4,034 $ 10,795 $ 12,356 Total revenue $ 25,544 $ 23,678 $ 72,466 $ 67,723 September 30, December 31, Property and equipment, net: United States $ 1,043,827 $ 1,073,327 Canada 675 510 Europe 435 484 Central and South America 3,147 2,782 Others 238 457 Total property and equipment, net $ 1,048,322 $ 1,077,560 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic weighted average share to diluted weighted average common shares outstanding | The following table sets forth the calculation of basic and diluted earnings (loss) per share for the periods indicated (in thousands): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Net income (loss) $ (2,577 ) $ 24,098 $ (15,425 ) $ 99,138 Effect of dilutive securities: 2013 8.00% Notes 550 547 1,625 1,860 Thermo Loan Agreement 2,453 2,291 7,211 6,542 Income (loss) to common stockholders plus assumed conversions $ 426 $ 26,936 $ (6,589 ) $ 107,540 Weighted average common shares outstanding: Basic shares outstanding 1,080,313 1,031,398 1,056,993 1,014,165 Incremental shares from assumed exercises, conversions and other issuances: Stock options, restricted stock, restricted stock units and ESPP — 7,111 — 8,550 2013 8.00% Notes — 27,475 — 27,778 Thermo Loan Agreement — 130,375 — 132,602 Warrants and other — 38,192 — 38,192 Diluted shares outstanding 1,080,313 1,234,551 1,056,993 1,221,287 Income (loss) per share: Basic — 0.02 (0.01 ) 0.10 Diluted — 0.02 (0.01 ) 0.09 |
Condensed Consolidating Finan28
Condensed Consolidating Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
SUPPLEMENTAL CONSOLIDATING FINANCIAL INFORMATION [Abstract] | |
Supplemental condensed consolidating statement of operations | Globalstar, Inc. Condensed Consolidating Statement of Operations Nine Months Ended September 30, 2016 (Unaudited) Parent Guarantor Non- Eliminations Consolidated (In thousands) Revenue: Service revenues $ 51,878 $ 25,887 $ 31,615 $ (47,709 ) $ 61,671 Subscriber equipment sales 508 7,299 5,232 (2,244 ) 10,795 Total revenue 52,386 33,186 36,847 (49,953 ) 72,466 Operating expenses: Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) 15,126 4,608 14,039 (9,872 ) 23,901 Cost of subscriber equipment sales 169 5,648 3,896 (2,238 ) 7,475 Marketing, general and administrative 15,833 3,358 48,561 (37,615 ) 30,137 Depreciation, amortization, and accretion 56,706 620 860 (361 ) 57,825 Total operating expenses 87,834 14,234 67,356 (50,086 ) 119,338 Income (loss) from operations (35,448 ) 18,952 (30,509 ) 133 (46,872 ) Other income (expense): Gain on equity issuance 2,349 — — — 2,349 Interest income and expense, net of amounts capitalized (26,875 ) (21 ) (116 ) (8 ) (27,020 ) Derivative gain 50,137 — — — 50,137 Equity in subsidiary earnings (loss) (4,170 ) (10,715 ) — 14,885 — Other (1,418 ) (192 ) 888 141 (581 ) Total other income (expense) 20,023 (10,928 ) 772 15,018 24,885 Income (loss) before income taxes (15,425 ) 8,024 (29,737 ) 15,151 (21,987 ) Income tax benefit — — (6,562 ) — (6,562 ) Net income (loss) $ (15,425 ) $ 8,024 $ (23,175 ) $ 15,151 $ (15,425 ) Comprehensive income (loss) $ (15,425 ) $ 8,024 $ (24,662 ) $ 15,146 $ (16,917 ) Globalstar, Inc. Condensed Consolidating Statement of Operations Nine Months Ended September 30, 2015 (Unaudited) Parent Guarantor Non- Eliminations Consolidated (In thousands) Revenue: Service revenues $ 47,005 $ 22,969 $ 28,271 $ (42,878 ) $ 55,367 Subscriber equipment sales 573 8,917 6,380 (3,514 ) 12,356 Total revenue 47,578 31,886 34,651 (46,392 ) 67,723 Operating expenses: Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) 14,227 4,871 10,098 (5,974 ) 23,222 Cost of subscriber equipment sales 8 7,808 4,091 (2,879 ) 9,028 Marketing, general and administrative 14,731 4,477 46,716 (37,494 ) 28,430 Depreciation, amortization, and accretion 56,282 882 934 (364 ) 57,734 Total operating expenses 85,248 18,038 61,839 (46,711 ) 118,414 Income (loss) from operations (37,670 ) 13,848 (27,188 ) 319 (50,691 ) Other income (expense): Loss on extinguishment of debt (2,254 ) — — — (2,254 ) Loss on equity issuance (5,832 ) — — — (5,832 ) Interest income and expense, net of amounts capitalized (26,315 ) (23 ) (449 ) 7 (26,780 ) Derivative gain 183,416 — — — 183,416 Equity in subsidiary earnings (loss) (12,508 ) (12,736 ) — 25,244 — Other 246 334 5,902 (4,754 ) 1,728 Total other income (expense) 136,753 (12,425 ) 5,453 20,497 150,278 Income (loss) before income taxes 99,083 1,423 (21,735 ) 20,816 99,587 Income tax expense (benefit) (55 ) 16 488 — 449 Net income (loss) $ 99,138 $ 1,407 $ (22,223 ) $ 20,816 $ 99,138 Comprehensive income (loss) $ 99,138 $ 1,407 $ (23,702 ) $ 20,837 $ 97,680 Globalstar, Inc. Condensed Consolidating Statement of Operations Three Months Ended September 30, 2016 (Unaudited) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated (In thousands) Revenue: Service revenues $ 23,996 $ 7,529 $ 11,501 $ (21,074 ) $ 21,952 Subscriber equipment sales 84 2,833 1,559 (884 ) 3,592 Total revenue 24,080 10,362 13,060 (21,958 ) 25,544 Operating expenses: Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) 5,178 2,538 8,442 (7,785 ) 8,373 Cost of subscriber equipment sales (18 ) 2,108 1,203 (882 ) 2,411 Marketing, general and administrative 5,229 1,504 15,497 (12,153 ) 10,077 Depreciation, amortization, and accretion 19,083 194 291 (122 ) 19,446 Total operating expenses 29,472 6,344 25,433 (20,942 ) 40,307 Income (loss) from operations (5,392 ) 4,018 (12,373 ) (1,016 ) (14,763 ) Other income (expense): Gain on equity issuance 4,272 — — — 4,272 Interest income and expense, net of amounts capitalized (8,894 ) (9 ) 36 1 (8,866 ) Derivative gain 10,982 — — — 10,982 Equity in subsidiary earnings (loss) (2,743 ) (12,794 ) — 15,537 — Other (802 ) (80 ) 284 93 (505 ) Total other income (expense) 2,815 (12,883 ) 320 15,631 5,883 Income (loss) before income taxes (2,577 ) (8,865 ) (12,053 ) 14,615 (8,880 ) Income tax benefit — — (6,303 ) — (6,303 ) Net income (loss) $ (2,577 ) $ (8,865 ) $ (5,750 ) $ 14,615 $ (2,577 ) Comprehensive income (loss) $ (2,577 ) $ (8,865 ) $ (5,659 ) $ 14,608 $ (2,493 ) Globalstar, Inc. Condensed Consolidating Statement of Operations Three Months Ended September 30, 2015 (Unaudited) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated (In thousands) Revenue: Service revenues $ 14,830 $ 8,426 $ 8,251 $ (11,863 ) $ 19,644 Subscriber equipment sales 219 2,853 889 73 4,034 Total revenue 15,049 11,279 9,140 (11,790 ) 23,678 Operating expenses: Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) 4,723 1,694 3,809 (2,465 ) 7,761 Cost of subscriber equipment sales (52 ) 2,365 (1,641 ) 2,242 2,914 Marketing, general and administrative 5,282 1,486 14,411 (11,504 ) 9,675 Depreciation, amortization, and accretion 18,955 291 282 (111 ) 19,417 Total operating expenses 28,908 5,836 16,861 (11,838 ) 39,767 Income (loss) from operations (13,859 ) 5,443 (7,721 ) 48 (16,089 ) Other income (expense): Loss on equity issuance (2,920 ) — — — (2,920 ) Interest income and expense, net of amounts capitalized (8,872 ) (8 ) (140 ) 1 (9,019 ) Derivative gain 54,194 — — — 54,194 Equity in subsidiary earnings (loss) (3,559 ) (18,162 ) — 21,721 — Other (886 ) (60 ) 3,800 (4,807 ) (1,953 ) Total other income (expense) 37,957 (18,230 ) 3,660 16,915 40,302 Income (loss) before income taxes 24,098 (12,787 ) (4,061 ) 16,963 24,213 Income tax expense — 1 114 — 115 Net income (loss) $ 24,098 $ (12,788 ) $ (4,175 ) $ 16,963 $ 24,098 Comprehensive income (loss) $ 24,098 $ 20,357 $ (12,258 ) $ (8,714 ) $ 23,483 |
Supplemental condensed consolidating balance sheet | Globalstar, Inc. Condensed Consolidating Balance Sheet As of September 30, 2016 (Unaudited) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In thousands) ASSETS Current assets: Cash and cash equivalents $ 6,281 $ 2,337 $ 4,292 $ — $ 12,910 Accounts receivable 6,133 6,776 3,676 — 16,585 Intercompany receivables 881,227 661,824 25,362 (1,568,413 ) — Inventory 2,268 5,299 2,164 — 9,731 Prepaid expenses and other current assets 2,950 345 2,276 — 5,571 Total current assets 898,859 676,581 37,770 (1,568,413 ) 44,797 Property and equipment, net 1,040,091 3,735 4,492 4 1,048,322 Restricted cash 37,959 — — — 37,959 Intercompany notes receivable 10,086 — 6,436 (16,522 ) — Investment in subsidiaries (277,528 ) 59,947 35,042 182,539 — Prepaid second-generation ground costs 2,579 — — — 2,579 Intangible and other assets, net 14,270 164 682 (10 ) 15,106 Total assets $ 1,726,316 $ 740,427 $ 84,422 $ (1,402,402 ) $ 1,148,763 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 38,112 $ — $ — $ — $ 38,112 Accounts payable 2,030 3,473 1,067 — 6,570 Accrued contract termination charge 19,654 — — — 19,654 Accrued expenses 14,919 5,710 7,437 — 28,066 Intercompany payables 619,104 740,464 208,735 (1,568,303 ) — Payables to affiliates 243 — — — 243 Deferred revenue 1,390 20,123 5,841 — 27,354 Total current liabilities 695,452 769,770 223,080 (1,568,303 ) 119,999 Long-term debt, less current portion 547,311 — — — 547,311 Employee benefit obligations 4,911 — — — 4,911 Intercompany notes payable 6,435 — 10,086 (16,521 ) — Derivative liabilities 189,500 — — — 189,500 Deferred revenue 5,751 317 — — 6,068 Debt restructuring fees 20,795 — — — 20,795 Other non-current liabilities 1,459 320 3,698 — 5,477 Total non-current liabilities 776,162 637 13,784 (16,521 ) 774,062 Stockholders’ equity (deficit) 254,702 (29,980 ) (152,442 ) 182,422 254,702 Total liabilities and stockholders’ equity $ 1,726,316 $ 740,427 $ 84,422 $ (1,402,402 ) $ 1,148,763 Globalstar, Inc. Condensed Consolidating Balance Sheet As of December 31, 2015 (Unaudited) Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated (In thousands) ASSETS Current assets: Cash and cash equivalents $ 3,530 $ 719 $ 3,227 $ — $ 7,476 Accounts receivable 4,860 5,215 4,461 — 14,536 Intercompany receivables 839,215 609,500 54,507 (1,503,222 ) — Inventory 2,148 6,321 3,554 — 12,023 Prepaid expenses and other current assets 2,399 291 1,766 — 4,456 Total current assets 852,152 622,046 67,515 (1,503,222 ) 38,491 Property and equipment, net 1,069,605 3,722 4,587 (354 ) 1,077,560 Restricted cash 37,918 — — — 37,918 Intercompany notes receivable 12,037 — 5,355 (17,392 ) — Investment in subsidiaries (274,453 ) 58,686 32,945 182,822 — Prepaid second-generation ground costs 8,929 — — — 8,929 Intangible and other assets, net 11,384 280 464 (11 ) 12,117 Total assets $ 1,717,572 $ 684,734 $ 110,866 $ (1,338,157 ) $ 1,175,015 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 32,835 $ — $ — $ — $ 32,835 Accounts payable 4,292 2,439 1,387 — 8,118 Accrued contract termination charge 19,121 — — — 19,121 Accrued expenses 9,816 6,949 5,674 — 22,439 Intercompany payables 585,091 706,913 211,188 (1,503,192 ) — Payables to affiliates 616 — — — 616 Deferred revenue 1,980 17,722 4,200 — 23,902 Total current liabilities 653,751 734,023 222,449 (1,503,192 ) 107,031 Long-term debt, less current portion 548,286 — — — 548,286 Employee benefit obligations 4,810 — — — 4,810 Intercompany notes payable 5,563 — 11,818 (17,381 ) — Derivative liabilities 239,642 — — — 239,642 Deferred revenue 6,027 386 — — 6,413 Debt restructuring fees 20,795 — — — 20,795 Other non-current liabilities 1,567 305 9,035 — 10,907 Total non-current liabilities 826,690 691 20,853 (17,381 ) 830,853 Stockholders’ equity (deficit) 237,131 (49,980 ) (132,436 ) 182,416 237,131 Total liabilities and stockholders’ equity $ 1,717,572 $ 684,734 $ 110,866 $ (1,338,157 ) $ 1,175,015 |
Supplemental condensed consolidating statement of cash flows | Globalstar, Inc. Condensed Consolidating Statement of Cash Flows Nine Months Ended September 30, 2016 (Unaudited) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated (In thousands) Cash flows provided by (used in) operating activities $ 4,785 $ 1,618 $ 1,301 $ — $ 7,704 Cash flows used in investing activities: Second-generation network costs (including interest) (8,272 ) — (200 ) — (8,472 ) Property and equipment additions (7,477 ) — (169 ) — (7,646 ) Purchase of intangible assets (1,327 ) — — — (1,327 ) Change in restricted cash (41 ) (41 ) Net cash used in investing activities (17,117 ) — (369 ) — (17,486 ) Cash flows provided by (used in) financing activities: Principal payments of the Facility Agreement (16,418 ) — — — (16,418 ) Proceeds from issuance of stock to Terrapin 28,500 — — — 28,500 Proceeds from issuance of common stock and exercise of options and warrants 3,001 — — — 3,001 Net cash provided by financing activities 15,083 — — — 15,083 Effect of exchange rate changes on cash — — 133 — 133 Net increase (decrease) in cash and cash equivalents 2,751 1,618 1,065 — 5,434 Cash and cash equivalents, beginning of period 3,530 719 3,227 — 7,476 Cash and cash equivalents, end of period $ 6,281 $ 2,337 $ 4,292 $ — $ 12,910 Globalstar, Inc. Condensed Consolidating Statement of Cash Flows Nine Months Ended September 30, 2015 (Unaudited) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated (In thousands) Cash flows provided by (used in) operating activities $ 2,869 $ 2,901 $ 1,544 $ — $ 7,314 Cash flows used in investing activities: Second-generation network costs (including interest) (15,484 ) — — — (15,484 ) Property and equipment additions (1,587 ) (1,967 ) (668 ) — (4,222 ) Purchase of intangible assets (1,840 ) (1,840 ) Net cash used in investing activities (18,911 ) (1,967 ) (668 ) — (21,546 ) Cash flows provided by (used in) financing activities: Principal payments of the Facility Agreement (3,225 ) (3,225 ) Proceeds from issuance of stock to Terrapin 39,000 — — — 39,000 Proceeds from issuance of common stock and exercise of options and warrants 426 — — — 426 Net cash provided by financing activities 36,201 — — — 36,201 Effect of exchange rate changes on cash — — (1,117 ) — (1,117 ) Net increase (decrease) in cash and cash equivalents 20,159 934 (241 ) — 20,852 Cash and cash equivalents, beginning of period 3,166 672 3,283 — 7,121 Cash and cash equivalents, end of period $ 23,325 $ 1,606 $ 3,042 $ — $ 27,973 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,550,581 | $ 1,521,729 |
Accumulated depreciation | (502,259) | (444,169) |
Total property and equipment, net | 1,048,322 | 1,077,560 |
Internally developed and purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 14,702 | 14,492 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,959 | 10,802 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,333 | 3,151 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,732 | 1,671 |
Globalstar System | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,518,855 | 1,491,613 |
Globalstar System | Ground component | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 48,382 | 46,870 |
Globalstar System | First and second-generation satellites in service | Space component | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,211,090 | 1,211,768 |
Globalstar System | Prepaid long-lead items | Space component | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 17,040 | 17,040 |
Globalstar System | Second-generation satellite, on-ground spare | Space component | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 32,481 | 32,481 |
Globalstar System | Construction in progress | Space component | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 81 | 81 |
Globalstar System | Construction in progress | Ground component | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 197,712 | 177,780 |
Globalstar System | Construction in progress | Next-generation software upgrades | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,552 | 3,440 |
Globalstar System | Construction in progress | Other | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,517 | $ 2,153 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) (Details) € in Millions | 1 Months Ended |
Jun. 30, 2009EUR (€) | |
Property, Plant and Equipment [Abstract] | |
Payments to Acquire Machinery and Equipment (in euros) | € 12 |
Payments for construction in process (in euros) | € 3.1 |
Property and Equipment - Capita
Property and Equipment - Capitalized Interest and Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Interest Costs Incurred [Abstract] | ||||
Interest costs eligible to be capitalized | $ 12,092 | $ 10,935 | $ 35,884 | $ 31,640 |
Interest costs recorded in interest income (expense), net | (8,504) | (8,292) | (25,649) | (24,400) |
Net interest capitalized | 3,588 | 2,643 | 10,235 | 7,240 |
Depreciation expense | $ 19,341 | $ 19,299 | $ 57,508 | $ 57,330 |
Long-Term Debt and Other Fina32
Long-Term Debt and Other Financing Arrangements - ASU No. 2015-03 Update (Details) $ in Millions | Dec. 31, 2015USD ($) |
Accounting Standards Update 2015-03 | Long-term Debt | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |
Debt issuance costs, net | $ 57.9 |
Long-Term Debt and Other Fina33
Long-Term Debt and Other Financing Arrangements - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Principal Amount | ||
Total Debt | $ 667,504 | $ 675,815 |
Less: Current Portion | 38,112 | 32,835 |
Long-Term Debt | 629,392 | 642,980 |
Unamortized Discount and Deferred Financing Costs | 82,081 | 94,694 |
Carrying Value | ||
Total Debt | 585,423 | 581,121 |
Less: Current Portion | 38,112 | 32,835 |
Long-term debt, less current portion | 547,311 | 548,286 |
Facility Agreement | ||
Principal Amount | ||
Total Debt | 559,429 | 575,846 |
Unamortized Discount and Deferred Financing Costs | 48,677 | 57,829 |
Carrying Value | ||
Total Debt | 510,752 | 518,017 |
Thermo Loan Agreement | ||
Principal Amount | ||
Total Debt | 91,139 | 83,222 |
Unamortized Discount and Deferred Financing Costs | 30,387 | 32,558 |
Carrying Value | ||
Total Debt | 60,752 | 50,664 |
8.00% Convertible Senior Notes Issued in 2013 | ||
Principal Amount | ||
Total Debt | 16,936 | 16,747 |
Unamortized Discount and Deferred Financing Costs | 3,017 | 4,307 |
Carrying Value | ||
Total Debt | $ 13,919 | $ 12,440 |
Long-Term Debt and Other Fina34
Long-Term Debt and Other Financing Arrangements - Facility Agreement (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Jun. 30, 2016 | Feb. 29, 2016 | Aug. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jul. 31, 2013 | |
Terrapin | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from lines of credit | $ 22,000,000 | $ 6,500,000 | $ 15,000,000 | $ 24,000,000 | ||
Facility Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Interest above LIBOR rate | 2.75% | |||||
Percentage of guarantee provided by French export credit agency to lending syndicate | 95.00% | |||||
Debt instrument, covenant, equity cure contribution, minimum amount | $ 10,000,000 | |||||
Debt service reserve account | $ 38,000,000 | $ 37,900,000 | ||||
Facility Agreement | Domestic Subsidiaries | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of equity pledged as collateral | 100.00% | |||||
Facility Agreement | Foreign Subsidiaries | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of equity pledged as collateral | 65.00% | |||||
Facility Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate increase | 0.50% | |||||
Facility Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate increase | 5.75% |
Long-Term Debt and Other Fina35
Long-Term Debt and Other Financing Arrangements - Thermo Loan Agreement (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Jun. 30, 2016 | Feb. 29, 2016 | Aug. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 28, 2012 | |
Debt Instrument [Line Items] | ||||||
Maximum value of shares required to be purchased per terms of stock purchase agreement | $ 75,000,000 | $ 30,000,000 | ||||
Thermo | ||||||
Debt Instrument [Line Items] | ||||||
Maximum value of shares required to be purchased per terms of stock purchase agreement | 30,000,000 | $ 0 | ||||
Terrapin | ||||||
Debt Instrument [Line Items] | ||||||
Maximum value of shares required to be purchased per terms of stock purchase agreement | $ 31,500,000 | |||||
Proceeds from lines of credit | $ 22,000,000 | $ 6,500,000 | $ 15,000,000 | $ 24,000,000 | ||
Thermo Loan Agreement | Thermo | ||||||
Debt Instrument [Line Items] | ||||||
Loan interest rate | 12.00% | |||||
Maturity period after full payment of Facility Agreement | 6 months | |||||
Outstanding interest | $ 47,600,000 |
Long-Term Debt and Other Fina36
Long-Term Debt and Other Financing Arrangements - 8.00% Convertible Senior Notes Issued in 2013 (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 33 Months Ended | ||
Sep. 30, 2016USD ($)$ / shares | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015USD ($)shares | Dec. 31, 2013USD ($)shares$ / shares | Sep. 30, 2016USD ($)$ / shares | |
Debt Instrument [Line Items] | ||||||
Principal Amount Converted | $ 0 | $ 6,491,000 | ||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 0 | 2,254,000 | ||
Debt conversion, converted instrument, settlement period | 40 days | |||||
8.00% Convertible Senior Notes Issued in 2013 | ||||||
Debt Instrument [Line Items] | ||||||
Loan interest rate | 8.00% | |||||
Conversion price per share of common stock (USD per share) | $ / shares | $ 0.73 | $ 0.73 | $ 0.80 | $ 0.73 | ||
Number of shares of common stock convertible into (in shares) | shares | 1,250 | |||||
Principal Amount Converted | $ 1,000 | |||||
Interest rate, payable in cash | 5.75% | |||||
Interest rate, payable in additional notes | 2.25% | |||||
Debt conversion, converted instrument, amount | $ 0 | $ 0 | $ 6,500,000 | $ 39,400,000 | ||
Debt conversion, converted instrument, shares issued (in shares) | shares | 72,100,000 | 10,900,000 | ||||
Loss on extinguishment of debt | $ 2,300,000 |
Long-Term Debt and Other Fina37
Long-Term Debt and Other Financing Arrangements - Warrants Outstanding (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2011 | |
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 24,571,428 | 38,191,866 | ||
Contingent Equity Agreement | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 24,571,428 | 30,191,866 | ||
Exercise price of warrants (USD per share) | $ 0.01 | $ 0.01 | ||
Expiration period | 5 years | |||
Number of warrants exercised (in shares) | 5,600,000 | 5,600,000 | ||
Proceeds from warrant exercises | $ 0.1 | |||
Contingent Equity Agreement | Thermo | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 24,600,000 | |||
Number of shares issued (in shares) | 16,900,000 | |||
Proceeds from warrant exercises | $ 2.6 | |||
5.00% Convertible Senior Unsecured Notes | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 0 | 8,000,000 | ||
Exercise price of warrants (USD per share) | $ 0 | $ 0.32 | ||
Number of warrants exercised (in shares) | 8,000,000 | 8,000,000 | 15,200,000 | |
Proceeds from warrant exercises | $ 2.5 | |||
Loan interest rate | 5.00% |
Long-Term Debt and Other Fina38
Long-Term Debt and Other Financing Arrangements - Terrapin Opportunity, L.P. Common Stock Purchase Agreement (Details) | Dec. 28, 2012USD ($) | Jun. 30, 2016USD ($)$ / sharesshares | Feb. 29, 2016USD ($)$ / sharesshares | Aug. 31, 2015USD ($)draw_down_notice$ / sharesshares | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2015USD ($)shares |
Debt Instrument [Line Items] | |||||||
Maximum value of shares required to be purchased per terms of stock purchase agreement | $ 30,000,000 | $ 75,000,000 | |||||
Stock purchase agreement term | 24 months | 24 months | |||||
Proceeds from issuance of stock to Terrapin | $ 28,500,000 | $ 39,000,000 | |||||
Number of draw down notices (in notices) | draw_down_notice | 24 | ||||||
Draw down period | 10 days | ||||||
Minimum discount percentage per each share sold under the stock sold agreement | 2.75% | ||||||
Maximum discount percentage per each share sold under the stock purchase agreement | 4.00% | ||||||
Maximum beneficial ownership percentage allowed per terms of stock purchase agreement | 9.90% | ||||||
Terrapin | |||||||
Debt Instrument [Line Items] | |||||||
Maximum value of shares required to be purchased per terms of stock purchase agreement | $ 31,500,000 | ||||||
Proceeds from lines of credit | $ 22,000,000 | $ 6,500,000 | $ 15,000,000 | $ 24,000,000 | |||
Number of shares issued (in shares) | shares | 19,500,000 | 6,400,000 | 9,300,000 | 11,100,000 | 17,200,000 | ||
Shares issued, price per share (USD per share) | $ / shares | $ 1.13 | $ 1.02 | $ 1.61 | $ 2.18 | |||
Proceeds from issuance of stock to Terrapin | $ 30,000,000 |
Derivatives - Schedule of Fair
Derivatives - Schedule of Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Derivative assets: | ||
Total derivative assets | $ 1 | $ 6 |
Derivative liabilities: | ||
Derivative liabilities, non-current | (189,500) | (239,642) |
Total derivative liabilities | 189,500 | 239,642 |
Interest rate cap | ||
Derivative assets: | ||
Interest rate cap | 1 | 6 |
Compound embedded derivative with 2013 8.00% Notes | ||
Derivative liabilities: | ||
Derivative liabilities, non-current | (18,779) | (26,203) |
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | ||
Derivative liabilities: | ||
Derivative liabilities, non-current | $ (170,721) | $ (213,439) |
Derivatives - Schedule of Deriv
Derivatives - Schedule of Derivative Gain (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative gain (loss) | $ 10,982 | $ 54,194 | $ 50,137 | $ 183,416 |
Interest rate cap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative gain (loss) | 0 | (11) | (5) | (38) |
Compound embedded derivative with 2013 8.00% Notes | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative gain (loss) | 1,641 | 11,475 | 7,424 | 30,367 |
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative gain (loss) | $ 9,341 | $ 42,730 | $ 42,718 | $ 153,087 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) $ in Millions | 1 Months Ended | |
Jun. 30, 2009USD ($)contract | Dec. 31, 2013 | |
8.00% Convertible Senior Notes Issued in 2013 | ||
Derivative [Line Items] | ||
Loan interest rate | 8.00% | |
Interest rate cap | ||
Derivative [Line Items] | ||
Number of Interest rate cap agreements (in contracts) | contract | 5 | |
Maturity period | 10 years | |
Interest rate cap | Six-month LIBOR Rate | ||
Derivative [Line Items] | ||
Base rate to be capped, should the Base Rate not exceed 6.50% | 5.50% | |
Interest on outstanding amounts on the Facility Agreement | 6.50% | |
Base rate to be lowered from LIBOR, should the base rate exceed 6.50% | 1.00% | |
Fee for interest rate cap agreements | $ | $ 12.4 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair value, measurements, recurring - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | $ 1 | $ 6 |
Total liabilities measured at fair value | (192,646) | (245,137) |
Liability for potential stock issuance to Hughes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | (3,146) | (5,495) |
Interest rate cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 1 | 6 |
Compound embedded derivative with 2013 8.00% Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | (18,779) | (26,203) |
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | (170,721) | (213,439) |
(Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
(Level 1) | Liability for potential stock issuance to Hughes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
(Level 1) | Interest rate cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
(Level 1) | Compound embedded derivative with 2013 8.00% Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
(Level 1) | Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
(Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 1 | 6 |
Total liabilities measured at fair value | (3,146) | (5,495) |
(Level 2) | Liability for potential stock issuance to Hughes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | (3,146) | (5,495) |
(Level 2) | Interest rate cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 1 | 6 |
(Level 2) | Compound embedded derivative with 2013 8.00% Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
(Level 2) | Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
(Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | (189,500) | (239,642) |
(Level 3) | Liability for potential stock issuance to Hughes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 0 | 0 |
(Level 3) | Interest rate cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
(Level 3) | Compound embedded derivative with 2013 8.00% Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | (18,779) | (26,203) |
(Level 3) | Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | $ (170,721) | $ (213,439) |
Fair Value Measurements - Narra
Fair Value Measurements - Narratives (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |||
Jun. 30, 2015USD ($) | Apr. 30, 2015USD ($) | Sep. 30, 2016USD ($)contract | Sep. 30, 2015USD ($) | Dec. 31, 2013 | |
Fair Value Measurements [Line Items] | |||||
Fair value of common stock issued to vendor for payment of invoices | $ 0 | $ 16,684 | |||
Stock issuance settlement period | 40 days | ||||
8.00% Convertible Senior Notes Issued in 2013 | |||||
Fair Value Measurements [Line Items] | |||||
Loan interest rate | 8.00% | ||||
(Level 3) | |||||
Fair Value Measurements [Line Items] | |||||
Number of derivatives (in contracts) | contract | 2 | ||||
Hughes Network Systems LLC | |||||
Fair Value Measurements [Line Items] | |||||
Fair value of common stock issued to vendor for payment of invoices | $ 15,500 | $ 15,500 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Significant Quantitative Level 3 Inputs Utilized (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Compound embedded derivative with 2013 8.00% Notes | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Risk-Free Interest Rate | 0.70% | 1.10% |
Note Conversion Price/Warrant Exercise Price (USD per share) | $ 0.73 | $ 0.73 |
Market Price of Common Stock (USD per share) | $ 1.21 | $ 1.44 |
Compound embedded derivative with 2013 8.00% Notes | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Stock Price Volatility | 100.00% | 75.00% |
Compound embedded derivative with 2013 8.00% Notes | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Stock Price Volatility | 125.00% | 90.00% |
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Risk-Free Interest Rate | 1.40% | 2.10% |
Note Conversion Price/Warrant Exercise Price (USD per share) | $ 0.73 | $ 0.73 |
Market Price of Common Stock (USD per share) | $ 1.21 | $ 1.44 |
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Stock Price Volatility | 40.00% | 50.00% |
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Stock Price Volatility | 125.00% | 90.00% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | $ (200,482) | $ (292,293) | $ (239,642) | $ (441,550) |
Unrealized gain, included in derivative gain | 10,982 | 54,206 | 50,142 | 183,455 |
Balance at end of period | (189,500) | (238,087) | (189,500) | (238,087) |
Derivative Financial Instruments, Liabilities | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Derivative adjustment related to conversions | $ 0 | $ 0 | $ 0 | $ 20,008 |
Fair Value Measurements - Fai46
Fair Value Measurements - Fair Value and Carrying Value of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | $ 585,423 | $ 581,121 |
Thermo Loan Agreement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | 60,752 | 50,664 |
Thermo Loan Agreement | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | 60,752 | 50,664 |
Thermo Loan Agreement | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | 38,552 | 17,244 |
8.00% Convertible Senior Notes Issued in 2013 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | 13,919 | 12,440 |
8.00% Convertible Senior Notes Issued in 2013 | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying value | 13,919 | 12,440 |
8.00% Convertible Senior Notes Issued in 2013 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | $ 13,247 | $ 9,831 |
Accrued Expenses and Other No47
Accrued Expenses and Other Non-Current Liabilities (Details) $ in Thousands, BRL in Millions | Sep. 30, 2016USD ($) | Sep. 30, 2016BRL | Dec. 31, 2015USD ($) |
Accrued expenses: | |||
Accrued interest | $ 5,776 | $ 317 | |
Accrued compensation and benefits | 3,562 | 2,098 | |
Accrued property and other taxes | 4,213 | 4,125 | |
Accrued customer liabilities and deposits | 3,477 | 3,216 | |
Accrued professional and other service provider fees | 2,860 | 1,830 | |
Accrued commissions | 715 | 1,216 | |
Accrued telecommunications expenses | 618 | 1,487 | |
Accrued inventory | 62 | 502 | |
Accrued liability for potential stock issuance to Hughes | 3,146 | 5,495 | |
Accrued liability for legal settlement | 1,411 | BRL 4.5 | 328 |
Other accrued expenses | 2,226 | 1,825 | |
Total accrued expenses | 28,066 | 22,439 | |
Non-current liabilities: | |||
Long-term accrued interest | 194 | 96 | |
Asset retirement obligation | 1,408 | 1,302 | |
Deferred rent and other deferred expense | 517 | 593 | |
Liability related to the Cooperative Endeavor Agreement with the State of Louisiana | 573 | 716 | |
Uncertain income tax positions | 0 | 5,795 | |
Foreign tax contingencies | 2,624 | 2,311 | |
Capital lease obligations | 161 | 94 | |
Total other non-current liabilities | $ 5,477 | $ 10,907 |
Accrued Expenses and Other No48
Accrued Expenses and Other Non-Current Liabilities - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Payables and Accruals [Abstract] | ||||
Unrecognized tax benefits | $ 6,300 | |||
Income tax expense (benefit) | $ 6,303 | $ (115) | $ 6,562 | $ (449) |
Commitments (Details)
Commitments (Details) $ in Thousands | Oct. 24, 2014EUR (€) | Jun. 30, 2015USD ($)shares | Apr. 30, 2015USD ($) | Jul. 31, 2014 | Sep. 30, 2016EUR (€) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) |
Commitments [Line Items] | |||||||||
Fair value of common stock issued to vendor for payment of invoices | $ 0 | $ 16,684 | |||||||
Accrued liability for potential stock issuance to Hughes | 3,146 | $ 5,495 | |||||||
Hughes Network Systems LLC | |||||||||
Commitments [Line Items] | |||||||||
Contractual obligation | 800 | $ 1,900 | |||||||
Increase in contract amount | $ 4,000 | ||||||||
Percentage discount when paid In stock | 7.00% | 7.00% | |||||||
Contract amount | $ 15,500 | ||||||||
Share-based goods and nonemployee services transaction, quantity of securities issued (in shares) | shares | 7,400,000 | ||||||||
Fair value of common stock issued to vendor for payment of invoices | $ 15,500 | 15,500 | |||||||
Accrued liability for potential stock issuance to Hughes | 3,100 | $ 5,500 | |||||||
Ericsson Inc. | |||||||||
Commitments [Line Items] | |||||||||
Contract amount | 1,000 | $ 2,900 | |||||||
Interest accrued rate | 6.50% | ||||||||
Accounts payable, interest-bearing, current | $ 400 | ||||||||
Support Services | Thales Alenia Space | |||||||||
Commitments [Line Items] | |||||||||
Long-term purchase commitment, period | 3 years | ||||||||
Long-term purchase commitment, amount (in euros) | € | € 1,900,000 | ||||||||
Long-term purchase commitment, contract credit amount (in euros) | € | 600,000 | ||||||||
Long-term purchase commitment, first annual payment contract amount (in euros) | € | € 0 | ||||||||
Maintenance, Licensing, and Royalties | |||||||||
Commitments [Line Items] | |||||||||
Long-term purchase commitment, amount (in euros) | € | € 3,600,000 |
Contingencies (Details)
Contingencies (Details) $ in Thousands, € in Millions, shares in Millions, BRL in Millions | Oct. 24, 2016shares | Jun. 24, 2012EUR (€) | May 10, 2012EUR (€) | Jun. 03, 2011satellite | Sep. 30, 2016EUR (€) | Dec. 31, 2015EUR (€) | Sep. 30, 2016USD ($) | Sep. 30, 2016BRL | Dec. 31, 2015USD ($) |
Loss Contingencies [Line Items] | |||||||||
Number of satellites (in satellites) | satellite | 25 | ||||||||
Accrued liability for legal settlement | $ 1,411 | BRL 4.5 | $ 328 | ||||||
Thales Alenia Space | |||||||||
Loss Contingencies [Line Items] | |||||||||
Contract termination, damages awarded (in euros) | € 51.3 | ||||||||
Contract termination charge (in euros) | € 53 | € 17.5 | € 17.5 | ||||||
Gain on release of liability (in euros) | € 35.6 | ||||||||
Settlement amount | € 17.5 | ||||||||
Subsequent Event | |||||||||
Loss Contingencies [Line Items] | |||||||||
Stock issued for settlement | shares | 1.3 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Jun. 30, 2016 | Feb. 29, 2016 | Aug. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 28, 2012 | Jun. 30, 2011 | |
Related Party Transaction [Line Items] | ||||||||||
Payables to affiliates | $ 243,000 | $ 243,000 | $ 616,000 | |||||||
Debt instrument, face amount | 667,504,000 | 667,504,000 | 675,815,000 | |||||||
Derivative liabilities | $ (189,500,000) | $ (189,500,000) | $ (239,642,000) | |||||||
Warrants outstanding (in shares) | 24,571,428 | 24,571,428 | 38,191,866 | |||||||
Maximum value of shares required to be purchased per terms of stock purchase agreement | $ 75,000,000 | $ 30,000,000 | ||||||||
Thermo Loan Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Debt instrument, face amount | $ 91,139,000 | $ 91,139,000 | $ 83,222,000 | |||||||
Contingent Equity Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Warrants outstanding (in shares) | 24,571,428 | 24,571,428 | 30,191,866 | |||||||
Number of warrants exercised (in shares) | 5,600,000 | 5,600,000 | 5,600,000 | |||||||
Proceeds from warrant exercises | $ 100,000 | |||||||||
5.00% Convertible Senior Unsecured Notes | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Warrants outstanding (in shares) | 0 | 0 | 8,000,000 | |||||||
Number of warrants exercised (in shares) | 8,000,000 | 8,000,000 | 8,000,000 | 15,200,000 | ||||||
Proceeds from warrant exercises | $ 2,500,000 | |||||||||
Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Derivative liabilities | $ (170,721,000) | $ (170,721,000) | $ (213,439,000) | |||||||
Thermo | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Change in fair value related to equity issuance | 200,000 | $ 400,000 | 500,000 | $ 700,000 | ||||||
Maximum value of shares required to be purchased per terms of stock purchase agreement | 30,000,000 | $ 0 | $ 0 | |||||||
Thermo | Contingent Equity Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Warrants outstanding (in shares) | 24,600,000 | 24,600,000 | ||||||||
Proceeds from warrant exercises | 2,600,000 | |||||||||
Thermo | Compound embedded derivative with the Amended and Restated Thermo Loan Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Interest Expense, Related Party | $ 2,700,000 | $ 2,400,000 | $ 7,900,000 | 6,600,000 | ||||||
Terrapin | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Maximum value of shares required to be purchased per terms of stock purchase agreement | $ 31,500,000 | $ 31,500,000 | ||||||||
Proceeds from lines of credit | $ 22,000,000 | $ 6,500,000 | $ 15,000,000 | $ 24,000,000 |
Accumulated Other Comprehensi52
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive loss, beginning of period | $ 237,131 | |||
Other comprehensive income (loss): | ||||
Accumulated other comprehensive loss, end of period | $ 254,702 | 254,702 | ||
AOCI Attributable to Parent | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive loss, beginning of period | (6,409) | $ (3,741) | (4,833) | $ (2,898) |
Other comprehensive income (loss): | ||||
Accumulated other comprehensive loss, end of period | (6,325) | (4,356) | (6,325) | (4,356) |
Accumulated Foreign Currency Adjustment Attributable to Parent | ||||
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | $ 84 | $ (615) | $ (1,492) | $ (1,458) |
Geographic Information - Inform
Geographic Information - Information by Geographic Area Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 25,544 | $ 23,678 | $ 72,466 | $ 67,723 |
Service | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 21,952 | 19,644 | 61,671 | 55,367 |
Service | United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 14,703 | 13,506 | 42,379 | 37,689 |
Service | Canada | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 4,512 | 3,863 | 11,822 | 11,067 |
Service | Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,785 | 1,634 | 5,048 | 4,377 |
Service | Central and South America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 824 | 486 | 2,012 | 1,788 |
Service | Others | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 128 | 155 | 410 | 446 |
Subscriber equipment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3,592 | 4,034 | 10,795 | 12,356 |
Subscriber equipment | United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,150 | 2,304 | 5,680 | 5,883 |
Subscriber equipment | Canada | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 689 | 962 | 2,502 | 3,401 |
Subscriber equipment | Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 242 | 313 | 1,198 | 1,299 |
Subscriber equipment | Central and South America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 505 | 409 | 1,172 | 1,465 |
Subscriber equipment | Others | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 6 | $ 46 | $ 243 | $ 308 |
Geographic Information - Info54
Geographic Information - Information by Geographic Area, Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Property and equipment, net | $ 1,048,322 | $ 1,077,560 |
United States | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Property and equipment, net | 1,043,827 | 1,073,327 |
Canada | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Property and equipment, net | 675 | 510 |
Europe | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Property and equipment, net | 435 | 484 |
Central and South America | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Property and equipment, net | 3,147 | 2,782 |
Others | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Property and equipment, net | $ 238 | $ 457 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Net income (loss) | $ (2,577) | $ 24,098 | $ (15,425) | $ 99,138 |
Income (loss) to common stockholders plus assumed conversions | $ 426 | $ 26,936 | $ (6,589) | $ 107,540 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 1,080,313 | 1,031,398 | 1,056,993 | 1,014,165 |
Incremental shares from assumed exercises, conversions and other issuances: | ||||
Stock options, restricted stock, restricted stock units and ESPP (in shares) | 0 | 7,111 | 0 | 8,550 |
Warrants (in shares) | 0 | 38,192 | 0 | 38,192 |
Diluted (in shares) | 1,080,313 | 1,234,551 | 1,056,993 | 1,221,287 |
Income (loss) per share: | ||||
Basic (USD per share) | $ 0 | $ 0.02 | $ (0.01) | $ 0.10 |
Diluted (USD per share) | $ 0 | $ 0.02 | $ (0.01) | $ 0.09 |
Antidilutive shares excluded from computation of earnings per share (in shares) | 195,800 | 199,700 | ||
8.00% Convertible Senior Notes Issued in 2013 | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Convertible Securities | $ 550 | $ 547 | $ 1,625 | $ 1,860 |
Incremental shares from assumed exercises, conversions and other issuances: | ||||
Conversion of debt securities (in shares) | 0 | 27,475 | 0 | 27,778 |
Warrants Associated With Thermo Loan Agreement | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Convertible Securities | $ 2,453 | $ 2,291 | $ 7,211 | $ 6,542 |
Incremental shares from assumed exercises, conversions and other issuances: | ||||
Conversion of debt securities (in shares) | 0 | 130,375 | 0 | 132,602 |
Condensed Consolidating Finan56
Condensed Consolidating Financial Information - Narrative (Details) | Dec. 31, 2013 |
8.00% Convertible Senior Notes Issued in 2013 | |
Condensed Financial Statements, Captions [Line Items] | |
Loan interest rate | 8.00% |
Condensed Consolidating Stateme
Condensed Consolidating Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue: | ||||
Service revenues | $ 21,952 | $ 19,644 | $ 61,671 | $ 55,367 |
Subscriber equipment sales | 3,592 | 4,034 | 10,795 | 12,356 |
Total revenue | 25,544 | 23,678 | 72,466 | 67,723 |
Operating expenses: | ||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) | 8,373 | 7,761 | 23,901 | 23,222 |
Cost of subscriber equipment sales | 2,411 | 2,914 | 7,475 | 9,028 |
Marketing, general and administrative | 10,077 | 9,675 | 30,137 | 28,430 |
Depreciation, amortization, and accretion | 19,446 | 19,417 | 57,825 | 57,734 |
Total operating expenses | 40,307 | 39,767 | 119,338 | 118,414 |
Loss from operations | (14,763) | (16,089) | (46,872) | (50,691) |
Other income (expense): | ||||
Loss on extinguishment of debt | 0 | 0 | 0 | (2,254) |
Gain on equity issuance | 4,272 | (2,920) | 2,349 | (5,832) |
Interest income and expense, net of amounts capitalized | (8,866) | (9,019) | (27,020) | (26,780) |
Derivative gain | 10,982 | 54,194 | 50,137 | 183,416 |
Equity in subsidiary earnings (loss) | 0 | 0 | 0 | 0 |
Other | (505) | (1,953) | (581) | 1,728 |
Total other income (expense) | 5,883 | 40,302 | 24,885 | 150,278 |
Income (loss) before income taxes | (8,880) | 24,213 | (21,987) | 99,587 |
Income tax expense (benefit) | (6,303) | 115 | (6,562) | 449 |
Net income (loss) | (2,577) | 24,098 | (15,425) | 99,138 |
Comprehensive income (loss) | (2,493) | 23,483 | (16,917) | 97,680 |
Reportable Legal Entities | Parent Company | ||||
Revenue: | ||||
Service revenues | 23,996 | 14,830 | 51,878 | 47,005 |
Subscriber equipment sales | 84 | 219 | 508 | 573 |
Total revenue | 24,080 | 15,049 | 52,386 | 47,578 |
Operating expenses: | ||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) | 5,178 | 4,723 | 15,126 | 14,227 |
Cost of subscriber equipment sales | (18) | (52) | 169 | 8 |
Marketing, general and administrative | 5,229 | 5,282 | 15,833 | 14,731 |
Depreciation, amortization, and accretion | 19,083 | 18,955 | 56,706 | 56,282 |
Total operating expenses | 29,472 | 28,908 | 87,834 | 85,248 |
Loss from operations | (5,392) | (13,859) | (35,448) | (37,670) |
Other income (expense): | ||||
Loss on extinguishment of debt | (2,254) | |||
Gain on equity issuance | 4,272 | (2,920) | 2,349 | (5,832) |
Interest income and expense, net of amounts capitalized | (8,894) | (8,872) | (26,875) | (26,315) |
Derivative gain | 10,982 | 54,194 | 50,137 | 183,416 |
Equity in subsidiary earnings (loss) | (2,743) | (3,559) | (4,170) | (12,508) |
Other | (802) | (886) | (1,418) | 246 |
Total other income (expense) | 2,815 | 37,957 | 20,023 | 136,753 |
Income (loss) before income taxes | (2,577) | 24,098 | (15,425) | 99,083 |
Income tax expense (benefit) | 0 | 0 | 0 | (55) |
Net income (loss) | (2,577) | 24,098 | (15,425) | 99,138 |
Comprehensive income (loss) | (2,577) | 24,098 | (15,425) | 99,138 |
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Revenue: | ||||
Service revenues | 7,529 | 8,426 | 25,887 | 22,969 |
Subscriber equipment sales | 2,833 | 2,853 | 7,299 | 8,917 |
Total revenue | 10,362 | 11,279 | 33,186 | 31,886 |
Operating expenses: | ||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) | 2,538 | 1,694 | 4,608 | 4,871 |
Cost of subscriber equipment sales | 2,108 | 2,365 | 5,648 | 7,808 |
Marketing, general and administrative | 1,504 | 1,486 | 3,358 | 4,477 |
Depreciation, amortization, and accretion | 194 | 291 | 620 | 882 |
Total operating expenses | 6,344 | 5,836 | 14,234 | 18,038 |
Loss from operations | 4,018 | 5,443 | 18,952 | 13,848 |
Other income (expense): | ||||
Loss on extinguishment of debt | 0 | |||
Gain on equity issuance | 0 | 0 | 0 | 0 |
Interest income and expense, net of amounts capitalized | (9) | (8) | (21) | (23) |
Derivative gain | 0 | 0 | 0 | 0 |
Equity in subsidiary earnings (loss) | (12,794) | (18,162) | (10,715) | (12,736) |
Other | (80) | (60) | (192) | 334 |
Total other income (expense) | (12,883) | (18,230) | (10,928) | (12,425) |
Income (loss) before income taxes | (8,865) | (12,787) | 8,024 | 1,423 |
Income tax expense (benefit) | 0 | 1 | 0 | 16 |
Net income (loss) | (8,865) | (12,788) | 8,024 | 1,407 |
Comprehensive income (loss) | (8,865) | 20,357 | 8,024 | 1,407 |
Reportable Legal Entities | Non- Guarantor Subsidiaries | ||||
Revenue: | ||||
Service revenues | 11,501 | 8,251 | 31,615 | 28,271 |
Subscriber equipment sales | 1,559 | 889 | 5,232 | 6,380 |
Total revenue | 13,060 | 9,140 | 36,847 | 34,651 |
Operating expenses: | ||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) | 8,442 | 3,809 | 14,039 | 10,098 |
Cost of subscriber equipment sales | 1,203 | (1,641) | 3,896 | 4,091 |
Marketing, general and administrative | 15,497 | 14,411 | 48,561 | 46,716 |
Depreciation, amortization, and accretion | 291 | 282 | 860 | 934 |
Total operating expenses | 25,433 | 16,861 | 67,356 | 61,839 |
Loss from operations | (12,373) | (7,721) | (30,509) | (27,188) |
Other income (expense): | ||||
Loss on extinguishment of debt | 0 | |||
Gain on equity issuance | 0 | 0 | 0 | 0 |
Interest income and expense, net of amounts capitalized | 36 | (140) | (116) | (449) |
Derivative gain | 0 | 0 | 0 | 0 |
Equity in subsidiary earnings (loss) | 0 | 0 | 0 | 0 |
Other | 284 | 3,800 | 888 | 5,902 |
Total other income (expense) | 320 | 3,660 | 772 | 5,453 |
Income (loss) before income taxes | (12,053) | (4,061) | (29,737) | (21,735) |
Income tax expense (benefit) | (6,303) | 114 | (6,562) | 488 |
Net income (loss) | (5,750) | (4,175) | (23,175) | (22,223) |
Comprehensive income (loss) | (5,659) | (12,258) | (24,662) | (23,702) |
Eliminations | ||||
Revenue: | ||||
Service revenues | (21,074) | (11,863) | (47,709) | (42,878) |
Subscriber equipment sales | (884) | 73 | (2,244) | (3,514) |
Total revenue | (21,958) | (11,790) | (49,953) | (46,392) |
Operating expenses: | ||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) | (7,785) | (2,465) | (9,872) | (5,974) |
Cost of subscriber equipment sales | (882) | 2,242 | (2,238) | (2,879) |
Marketing, general and administrative | (12,153) | (11,504) | (37,615) | (37,494) |
Depreciation, amortization, and accretion | (122) | (111) | (361) | (364) |
Total operating expenses | (20,942) | (11,838) | (50,086) | (46,711) |
Loss from operations | (1,016) | 48 | 133 | 319 |
Other income (expense): | ||||
Loss on extinguishment of debt | 0 | |||
Gain on equity issuance | 0 | 0 | 0 | 0 |
Interest income and expense, net of amounts capitalized | 1 | 1 | (8) | 7 |
Derivative gain | 0 | 0 | 0 | 0 |
Equity in subsidiary earnings (loss) | 15,537 | 21,721 | 14,885 | 25,244 |
Other | 93 | (4,807) | 141 | (4,754) |
Total other income (expense) | 15,631 | 16,915 | 15,018 | 20,497 |
Income (loss) before income taxes | 14,615 | 16,963 | 15,151 | 20,816 |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Net income (loss) | 14,615 | 16,963 | 15,151 | 20,816 |
Comprehensive income (loss) | $ 14,608 | $ (8,714) | $ 15,146 | $ 20,837 |
Condensed Consolidating Balance
Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||||
Cash and cash equivalents | $ 12,910 | $ 7,476 | $ 27,973 | $ 7,121 |
Accounts receivable | 16,585 | 14,536 | ||
Intercompany receivables | 0 | 0 | ||
Inventory | 9,731 | 12,023 | ||
Prepaid expenses and other current assets | 5,571 | 4,456 | ||
Total current assets | 44,797 | 38,491 | ||
Property and equipment, net | 1,048,322 | 1,077,560 | ||
Restricted cash | 37,959 | 37,918 | ||
Intercompany notes receivable | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Prepaid second-generation ground costs | 2,579 | 8,929 | ||
Intangible and other assets, net | 15,106 | 12,117 | ||
Total assets | 1,148,763 | 1,175,015 | ||
Current liabilities: | ||||
Current portion of long-term debt | 38,112 | 32,835 | ||
Accounts payable | 6,570 | 8,118 | ||
Accrued contract termination charge | 19,654 | 19,121 | ||
Accrued expenses | 28,066 | 22,439 | ||
Intercompany payables | 0 | 0 | ||
Payables to affiliates | 243 | 616 | ||
Deferred revenue | 27,354 | 23,902 | ||
Total current liabilities | 119,999 | 107,031 | ||
Long-term debt, less current portion | 547,311 | 548,286 | ||
Employee benefit obligations | 4,911 | 4,810 | ||
Intercompany notes payable | 0 | 0 | ||
Derivative liabilities | 189,500 | 239,642 | ||
Deferred revenue | 6,068 | 6,413 | ||
Debt restructuring fees | 20,795 | 20,795 | ||
Other non-current liabilities | 5,477 | 10,907 | ||
Total non-current liabilities | 774,062 | 830,853 | ||
Total stockholders’ equity | 254,702 | 237,131 | ||
Total liabilities and stockholders’ equity | 1,148,763 | 1,175,015 | ||
Reportable Legal Entities | Parent Company | ||||
Current assets: | ||||
Cash and cash equivalents | 6,281 | 3,530 | 23,325 | 3,166 |
Accounts receivable | 6,133 | 4,860 | ||
Intercompany receivables | 881,227 | 839,215 | ||
Inventory | 2,268 | 2,148 | ||
Prepaid expenses and other current assets | 2,950 | 2,399 | ||
Total current assets | 898,859 | 852,152 | ||
Property and equipment, net | 1,040,091 | 1,069,605 | ||
Restricted cash | 37,959 | 37,918 | ||
Intercompany notes receivable | 10,086 | 12,037 | ||
Investment in subsidiaries | (277,528) | (274,453) | ||
Prepaid second-generation ground costs | 2,579 | 8,929 | ||
Intangible and other assets, net | 14,270 | 11,384 | ||
Total assets | 1,726,316 | 1,717,572 | ||
Current liabilities: | ||||
Current portion of long-term debt | 38,112 | 32,835 | ||
Accounts payable | 2,030 | 4,292 | ||
Accrued contract termination charge | 19,654 | 19,121 | ||
Accrued expenses | 14,919 | 9,816 | ||
Intercompany payables | 619,104 | 585,091 | ||
Payables to affiliates | 243 | 616 | ||
Deferred revenue | 1,390 | 1,980 | ||
Total current liabilities | 695,452 | 653,751 | ||
Long-term debt, less current portion | 547,311 | 548,286 | ||
Employee benefit obligations | 4,911 | 4,810 | ||
Intercompany notes payable | 6,435 | 5,563 | ||
Derivative liabilities | 189,500 | 239,642 | ||
Deferred revenue | 5,751 | 6,027 | ||
Debt restructuring fees | 20,795 | 20,795 | ||
Other non-current liabilities | 1,459 | 1,567 | ||
Total non-current liabilities | 776,162 | 826,690 | ||
Total stockholders’ equity | 254,702 | 237,131 | ||
Total liabilities and stockholders’ equity | 1,726,316 | 1,717,572 | ||
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 2,337 | 719 | 1,606 | 672 |
Accounts receivable | 6,776 | 5,215 | ||
Intercompany receivables | 661,824 | 609,500 | ||
Inventory | 5,299 | 6,321 | ||
Prepaid expenses and other current assets | 345 | 291 | ||
Total current assets | 676,581 | 622,046 | ||
Property and equipment, net | 3,735 | 3,722 | ||
Restricted cash | 0 | 0 | ||
Intercompany notes receivable | 0 | 0 | ||
Investment in subsidiaries | 59,947 | 58,686 | ||
Prepaid second-generation ground costs | 0 | 0 | ||
Intangible and other assets, net | 164 | 280 | ||
Total assets | 740,427 | 684,734 | ||
Current liabilities: | ||||
Current portion of long-term debt | 0 | 0 | ||
Accounts payable | 3,473 | 2,439 | ||
Accrued contract termination charge | 0 | 0 | ||
Accrued expenses | 5,710 | 6,949 | ||
Intercompany payables | 740,464 | 706,913 | ||
Payables to affiliates | 0 | 0 | ||
Deferred revenue | 20,123 | 17,722 | ||
Total current liabilities | 769,770 | 734,023 | ||
Long-term debt, less current portion | 0 | 0 | ||
Employee benefit obligations | 0 | 0 | ||
Intercompany notes payable | 0 | 0 | ||
Derivative liabilities | 0 | 0 | ||
Deferred revenue | 317 | 386 | ||
Debt restructuring fees | 0 | 0 | ||
Other non-current liabilities | 320 | 305 | ||
Total non-current liabilities | 637 | 691 | ||
Total stockholders’ equity | (29,980) | (49,980) | ||
Total liabilities and stockholders’ equity | 740,427 | 684,734 | ||
Reportable Legal Entities | Non- Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 4,292 | 3,227 | 3,042 | 3,283 |
Accounts receivable | 3,676 | 4,461 | ||
Intercompany receivables | 25,362 | 54,507 | ||
Inventory | 2,164 | 3,554 | ||
Prepaid expenses and other current assets | 2,276 | 1,766 | ||
Total current assets | 37,770 | 67,515 | ||
Property and equipment, net | 4,492 | 4,587 | ||
Restricted cash | 0 | 0 | ||
Intercompany notes receivable | 6,436 | 5,355 | ||
Investment in subsidiaries | 35,042 | 32,945 | ||
Prepaid second-generation ground costs | 0 | 0 | ||
Intangible and other assets, net | 682 | 464 | ||
Total assets | 84,422 | 110,866 | ||
Current liabilities: | ||||
Current portion of long-term debt | 0 | 0 | ||
Accounts payable | 1,067 | 1,387 | ||
Accrued contract termination charge | 0 | 0 | ||
Accrued expenses | 7,437 | 5,674 | ||
Intercompany payables | 208,735 | 211,188 | ||
Payables to affiliates | 0 | 0 | ||
Deferred revenue | 5,841 | 4,200 | ||
Total current liabilities | 223,080 | 222,449 | ||
Long-term debt, less current portion | 0 | 0 | ||
Employee benefit obligations | 0 | 0 | ||
Intercompany notes payable | 10,086 | 11,818 | ||
Derivative liabilities | 0 | 0 | ||
Deferred revenue | 0 | 0 | ||
Debt restructuring fees | 0 | 0 | ||
Other non-current liabilities | 3,698 | 9,035 | ||
Total non-current liabilities | 13,784 | 20,853 | ||
Total stockholders’ equity | (152,442) | (132,436) | ||
Total liabilities and stockholders’ equity | 84,422 | 110,866 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Accounts receivable | 0 | 0 | ||
Intercompany receivables | (1,568,413) | (1,503,222) | ||
Inventory | 0 | 0 | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | (1,568,413) | (1,503,222) | ||
Property and equipment, net | 4 | (354) | ||
Restricted cash | 0 | 0 | ||
Intercompany notes receivable | (16,522) | (17,392) | ||
Investment in subsidiaries | 182,539 | 182,822 | ||
Prepaid second-generation ground costs | 0 | 0 | ||
Intangible and other assets, net | (10) | (11) | ||
Total assets | (1,402,402) | (1,338,157) | ||
Current liabilities: | ||||
Current portion of long-term debt | 0 | 0 | ||
Accounts payable | 0 | 0 | ||
Accrued contract termination charge | 0 | 0 | ||
Accrued expenses | 0 | 0 | ||
Intercompany payables | (1,568,303) | (1,503,192) | ||
Payables to affiliates | 0 | 0 | ||
Deferred revenue | 0 | 0 | ||
Total current liabilities | (1,568,303) | (1,503,192) | ||
Long-term debt, less current portion | 0 | 0 | ||
Employee benefit obligations | 0 | 0 | ||
Intercompany notes payable | (16,521) | (17,381) | ||
Derivative liabilities | 0 | 0 | ||
Deferred revenue | 0 | 0 | ||
Debt restructuring fees | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Total non-current liabilities | (16,521) | (17,381) | ||
Total stockholders’ equity | 182,422 | 182,416 | ||
Total liabilities and stockholders’ equity | $ (1,402,402) | $ (1,338,157) |
Condensed Consolidating State59
Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Condensed Financial Statements, Captions [Line Items] | ||
Cash flows provided by (used in) operating activities | $ 7,704 | $ 7,314 |
Cash flows used in investing activities: | ||
Second-generation network costs (including interest) | (8,472) | (15,484) |
Property and equipment additions | (7,646) | (4,222) |
Purchase of intangible assets | (1,327) | (1,840) |
Change in restricted cash | (41) | 0 |
Net cash used in investing activities | (17,486) | (21,546) |
Cash flows provided by (used in) financing activities: | ||
Principal payments of the Facility Agreement | (16,418) | (3,225) |
Proceeds from issuance of stock to Terrapin | 28,500 | 39,000 |
Proceeds from issuance of common stock and exercise of options and warrants | 3,001 | 426 |
Net cash provided by financing activities | 15,083 | 36,201 |
Effect of exchange rate changes on cash | 133 | (1,117) |
Net increase in cash and cash equivalents | 5,434 | 20,852 |
Cash and cash equivalents, beginning of period | 7,476 | 7,121 |
Cash and cash equivalents, end of period | 12,910 | 27,973 |
Reportable Legal Entities | Parent Company | ||
Condensed Financial Statements, Captions [Line Items] | ||
Cash flows provided by (used in) operating activities | 4,785 | 2,869 |
Cash flows used in investing activities: | ||
Second-generation network costs (including interest) | (8,272) | (15,484) |
Property and equipment additions | (7,477) | (1,587) |
Purchase of intangible assets | (1,327) | (1,840) |
Change in restricted cash | (41) | |
Net cash used in investing activities | (17,117) | (18,911) |
Cash flows provided by (used in) financing activities: | ||
Principal payments of the Facility Agreement | (16,418) | (3,225) |
Proceeds from issuance of stock to Terrapin | 28,500 | 39,000 |
Proceeds from issuance of common stock and exercise of options and warrants | 3,001 | 426 |
Net cash provided by financing activities | 15,083 | 36,201 |
Effect of exchange rate changes on cash | 0 | 0 |
Net increase in cash and cash equivalents | 2,751 | 20,159 |
Cash and cash equivalents, beginning of period | 3,530 | 3,166 |
Cash and cash equivalents, end of period | 6,281 | 23,325 |
Reportable Legal Entities | Guarantor Subsidiaries | ||
Condensed Financial Statements, Captions [Line Items] | ||
Cash flows provided by (used in) operating activities | 1,618 | 2,901 |
Cash flows used in investing activities: | ||
Second-generation network costs (including interest) | 0 | 0 |
Property and equipment additions | 0 | (1,967) |
Purchase of intangible assets | 0 | |
Net cash used in investing activities | 0 | (1,967) |
Cash flows provided by (used in) financing activities: | ||
Principal payments of the Facility Agreement | 0 | |
Proceeds from issuance of stock to Terrapin | 0 | 0 |
Proceeds from issuance of common stock and exercise of options and warrants | 0 | 0 |
Net cash provided by financing activities | 0 | 0 |
Effect of exchange rate changes on cash | 0 | 0 |
Net increase in cash and cash equivalents | 1,618 | 934 |
Cash and cash equivalents, beginning of period | 719 | 672 |
Cash and cash equivalents, end of period | 2,337 | 1,606 |
Reportable Legal Entities | Non- Guarantor Subsidiaries | ||
Condensed Financial Statements, Captions [Line Items] | ||
Cash flows provided by (used in) operating activities | 1,301 | 1,544 |
Cash flows used in investing activities: | ||
Second-generation network costs (including interest) | (200) | 0 |
Property and equipment additions | (169) | (668) |
Purchase of intangible assets | 0 | |
Net cash used in investing activities | (369) | (668) |
Cash flows provided by (used in) financing activities: | ||
Principal payments of the Facility Agreement | 0 | |
Proceeds from issuance of stock to Terrapin | 0 | 0 |
Proceeds from issuance of common stock and exercise of options and warrants | 0 | 0 |
Net cash provided by financing activities | 0 | 0 |
Effect of exchange rate changes on cash | 133 | (1,117) |
Net increase in cash and cash equivalents | 1,065 | (241) |
Cash and cash equivalents, beginning of period | 3,227 | 3,283 |
Cash and cash equivalents, end of period | 4,292 | 3,042 |
Eliminations | ||
Condensed Financial Statements, Captions [Line Items] | ||
Cash flows provided by (used in) operating activities | 0 | 0 |
Cash flows used in investing activities: | ||
Second-generation network costs (including interest) | 0 | 0 |
Property and equipment additions | 0 | 0 |
Purchase of intangible assets | 0 | |
Net cash used in investing activities | 0 | 0 |
Cash flows provided by (used in) financing activities: | ||
Principal payments of the Facility Agreement | 0 | |
Proceeds from issuance of stock to Terrapin | 0 | 0 |
Proceeds from issuance of common stock and exercise of options and warrants | 0 | 0 |
Net cash provided by financing activities | 0 | 0 |
Effect of exchange rate changes on cash | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | $ 0 | $ 0 |