Ciel Satellite Communications

Home , Astra 1A, Astra 1B, Astra 1K, Brasilsat A2, Brasilsat B1, Brasilsat B2

ABRIDGED

Canada's Rising Star

PART I

Expression of Interest to Utilize the 12 GHz Broadcasting Satellite Service (BSS) Frequency Band at the 129OW Orbital Position

May 14, 2004

5570 Pettapiece Cr. Manotick, Ontario Canada K4M 1C5 ABRIDGED

May 20, 2004

Ms. Chantal Beaumier Director, Space & International Regulatory Activities Radiocommunication & Broadcasting Regulatory Branch Industry Canada 15 `" Floor - Jean Edmonds Tower North 300 Slater Street Ottawa, Ontario K1 A 0C8

Dear Ms . Beaumier:

Re: Gazette Notice No. DGRB-001-04 - Calf for Interest in 12 GHz Broadcasting Satellite Orbital Positions

This submission is filed by Ciel Satellite Communications Inc., in response to the above- referenced call for interest, in which Industry Canada ("the Department") announced the release of a paper inviting interested parties to submit expressions of interest for utilizing the 12 GHz Broadcasting Satellite Service (BSS).

The shareholders and management of Ciel include experienced Canadian satellite experts and users, *** and a well-respected international satellite operating company with an exemplary record of service worldwide. Through its shareholders, Ciel possesses substantial Canadian financial, technical and operating resources and is uniquely positioned to introduce the benefits of competition to the domestic satellite industry. Indeed, Ciel firmly believes that if sustainable domestic satellite competition among Canadian service licensees is to be attained, the time is now or the opportunity will be lost.

In addition to the enclosed expression of interest for utilizing the 12 GHz BSS at 129°W, Ciel is also filing letters of intent relating to the 118.7°W FSS Ka band and to 109.2°W at ABRIDGED

the FSS C and Ku bands . Ciel intends to operate as a full-service new entrant in the Canadian satellite industry with a long-term commitment to providing an array of services across the country.

This submission, then, consists of four parts:

Part I : Expression of Interest to Utilize the 12 GHz Broadcasting Satellite Service (BSS) Frequency Band at the 129°W Orbital Position;

Part II : Letter of Intent to Develop and Operate a Ka Band Fixed Satellite Space Station in the 118.7°W Orbital Position ;

Part III : Letter of Intent to Develop and Operate a C and Ku Band Fixed Satellite Space Station in the 109.2°W Orbital Position; and

Part IV: ***

*** . Ciel believes that only with a plurality of orbital positions will a new entrant be able to provide the range and quality of service offerings necessary to sustain real competition in the domestic satellite industry. In view of the benefits to Canada that the presence of a new Canadian satellite operator would provide, and the specific commitments and plans contained in this multi-part submission, the Applicant urges Industry Canada to grant the licences requested so that Ciel may begin to implement its plans for the provision of service throughout Canada and beyond its borders.

This submission contains (i) trade secrets of Ciel, and its shareholders, Barrett Corporation, Smyth Satellite Holdings Inc., SES Americom, Inc. and *** and their respective affiliates (collectively "Ciel et al") ; (ii) financial, commercial, scientific or technical information that is confidential information of Ciel et al and treated consistently in a confidential manner by Ciel et al ; (iii) information the disclosure of which would prejudice the competitive position of Ciel et al; and (iv) information the disclosure of which would interfere with contractual or other negotiations of Ciel et al., all within the meaning of subsection 20(1) of the Access to Information Act (Canada) . Ciel et al. claims confidentiality with respect to the entire submission, except

ABRIDGED

to the extent such confidentiality is explicitly waived by Ciel or disclosure is required by operation of law.

Ciel is very pleased to have the opportunity to participate in this process. Should it receive a favourable licensing decision, Ciel looks forward to a long and productive relationship with the Department both as a strong new force in the Canadian satellite industry and as an important new player in the communications sector in Canada.

Sincerely,

David Lewis Kevin B. Smyth Director Director ABRIDGED

CONTACT INFORMATION

Any inquiries regarding this submission should be addressed to one of the following :

- and -

ABRIDGED

Table of Contents

EXECUTIVE SUMMARY

INTRODUCTION

Ill . THE APPLICANT

1 .0 Introduction

2.0 Barren Corporation 2.1 Background 2.2 Barren Xplore 2.3 *** 2.4 A Unique Infrastructure Built to Reach Rural and Remote Communities

3 .0 Smyth Satellite Holdings (SSH) 3.1 Experience and Expertise

41 SES 4.1 SES Americom 4.2 SES Attributes

5.0

6 .0 Senior Management Team

7 .0 Ownership and Control

IV. THE BUSINESS PLAN

1 .0 Business Plan Outline

2.0 Capital Expenditures

3.0 Financials Annex to Financial Model - Assumptions

V. BENEFITS TO CANADA

1 .0 Introduction 2.0 General Public Policy Objectives 2.1 Introduction 2.2 Radiocommunication Act 2.3 Telecommunications Act 2.4 Broadcasting Act 2.5 *** 2 .5.1 ***

ABRIDGED

2.5.2 2.5.3 2.6 Innovation 3.0 Competition/Innovation 3.1 Introduction 3.2 Competition in Telecom Services 3.3 Proposed Benefits to 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3 .4 Barriers to Entry 3.5 The Benefits of Competition 4.0 Public Benefits/Benefits to *** 5.0 Benefits to Canadian Suppliers and Manufacturers 6 .0 Conclusion

V1 . THE TECHNICAL PLAN

1 .0 Overall Description 1 .1 In-Service Date 1 .2 Procurement and Launch 2.0 Communications Payload 2.1 Transponder Characteristics 2.1 .1 Transponder Frequency Plan 2 .2 Emission Designators 2 .3 Communications Coverage 2 .3 .1 Canadian Coverage Area 2 .3 .2 Potential non-Canadian Coverage Area 2 .4 Noise Temperatures 2 .5 Gain 2 .6 Flux Control 2 .7 Saturation Flux Density 2.8 Transponder Gain 2.9 Spurious Emissions 2.10 Cross Polarization Isolation 2.11 Frequency Tolerance 2.12 Link Budgets 2.13 Cessation of Emissions 3.0 Spacecraft Bus Description 3.1 Tracking, Telemetry, and Command (TT&C) Subsystem 3.2 Attitude Control and Station keeping Subsystem 3.3 Electrical Power Subsystem 3.4 Propulsion 3.5 Structural Compatibility, Dimensions and Mass Budget 3.6 Thermal Control Subsystem 3.7 Reliability and Operational Life 4.0 ITU and Regulatory Considerations

ABRIDGED

4.1 Undertaking to not Cause Harmful Interference 4.2 Undertaking to Conform to Existing Canadian Coordination Agreements 4 .3 Frequency Coordination Plan 5.0 Ku Band BSS Payload 1290 W - ***; ***

VII . CONSOLIDATED STATEMENT OF COMMITMENTS

APPENDICES A Certificates of Incorporation

C Letters of Support

D E F SES Global - 2003, 2002 & 2001 Annual Reports G Barren Corporation - Consolidated Financial Statements - 2003, 2002 & 2001 H I Biographies of Management (Board of Directors, Senior Management) i Glossary Abridged Version

Canada’s Rising Star

Licence Application for 129ºW Ku Band BSS

Executive Summary

CIEL PROPRIETARY INFORMATION 1 Abridged Version

Canada’s Rising Star Executive Summary - Outline

Vision Benefits of Ciel’s Entry Company Shareholders Senior Management/Board of Directors BSS Strategy Space & Ground Segment Services & Demand Financial Summary Widespread Support Public Benefits

CIEL PROPRIETARY INFORMATION 2 Abridged Version

Canada’s Rising Star Vision

Canada’s first real competitive alternative for Ku band BSS satellite capacity:

Enables Direct-to-Home video and/or Ciel 2 content distribution through a new Ku satellite platform BSS

129ºW Maximizes the value of Canada’s remaining nationwide BSS orbital Direct-to- location to launch a new wholesale Home Video platform

Brings into commercial use for Canada the 129ºW slot to meet ITU deadline

New Satellite Platform Enabling a Full Range of BSS Services

CIEL PROPRIETARY INFORMATION 3 Abridged Version

Canada’s Rising Star Benefits of Ciel’s Entry

Canadian owned and controlled Creates choice of space segment providers Motivated entrant*** Extensive knowledge of Canadian market Backed by credible, proven partners Canada-wide coverage Competitive pricing Innovative services Highly responsive to customer needs Significant public benefits***

CIEL PROPRIETARY INFORMATION 4 Abridged Version

Canada’s Rising Star Company Shareholders

Barrett Corp *** Smyth Satellite SES Americom Holdings Proven Canadian provider of satellite communication Proven Canadian Wholly-owned services satellite entrepreneur subsidiary of SES Global Pioneer of Direct-to- Experience in Home video and managing and Leading global satellite broadband services developing satellite operator with 16 to remote areas businesses satellites in operation Established Strong international Strong design, distribution network experience in satellite procurement and for new satellite communication operations experience services industry – industry leading reliability/quality Leader in satellite communication research and innovation

Leading Satellite Industry Partners Committed to New Operator CIEL PROPRIETARY INFORMATION 5 Abridged Version

Canada’s Rising Star Senior Management/Board of Directors Ciel Satellite Holdings Inc.***

CIEL PROPRIETARY INFORMATION 6 Abridged Version

Canada’s Rising Star Senior Management/Board of Directors Ciel Satellite Communications Inc.***

CIEL PROPRIETARY INFORMATION 7 Abridged Version

Canada’s Rising Star BSS Strategy***

CIEL PROPRIETARY INFORMATION 8 Abridged Version

Canada’s Rising Star Space & Ground Segment Ciel 2 – 129ºW Ku Band BSS Downlink

***

CIEL PROPRIETARY INFORMATION 9 Abridged Version

Canada’s Rising Star Services & Demand

Ciel 2 at 129ºW

Enabled Services Direct-to-Home (DTH) video Content distribution Cable Non Pay 60% Markets TV DTH service providers 23% Programmers

Market Sizing DTH 12M households 17% 10M pay TV households 2M DTH households, 0.5M households also have cable Cable/DTH overlap

CIEL PROPRIETARY INFORMATION 10 Abridged Version

Canada’s Rising Star Financial Summary***

CIEL PROPRIETARY INFORMATION 11 Abridged Version

Canada’s Rising Star Widespread Support

“A competitive alternative provider of satellite capacity is important to the future well-being of our industry”***

Encouraging discussions with potential users, including broadcasting distribution undertakings (BDUs), specialty programming providers and conventional broadcasters

Strong letters of support from equipment suppliers in Canada

High-level of support for introducing a new Canadian satellite supplier to the market and confidence in Ciel’s partners

CIEL PROPRIETARY INFORMATION 12 Abridged Version

Canada’s Rising Star Public Benefits***

CIEL PROPRIETARY INFORMATION 13 Abridged Version

Canada’s Rising Star

New Canadian entrant will introduce real competition

Strong partners with a long-term commitment to the Canadian market

Management and shareholders with a wealth of experience and expertise

Ciel will offer significant public benefits***

CIEL PROPRIETARY INFORMATION 14 Abridged Version

Canada’s Rising Star

CIEL PROPRIETARY INFORMATION 15 ABRIDGED

Introduction

Ciel Satellite Communications Inc (Ciel) submits the enclosed application for a Canadian orbital position at 129°W*" and looks forward to the opportunity to establish itself as a leading competitor in the provision of satellite capacity in the Canadian market.

While the Ciel name is new to the domestic satellite industry, its partners are not. Ciel combines the substantial industry experience of its partners in the Canadian satellite market, the market expertise of several Canadian entrepreneurial organizations, together with expert technical and financial teams. The result is an organization capable of delivering competitive quality, choice and value to the domestic satellite market.

With the launch of Anik A1 in 1972, Canada became one of the pioneers in the commercial development of satellite technology and services. Ciel will continue in that tradition and will deliver reliable broadcasting services to Canadians in those areas that have visibility to the satellite, including northern Canada. Ciel will not only serve the needs of Canadians, but will promote Canadian ingenuity and technology throughout the world.

First and foremost Ciel's efforts will be focused on building and maintaining a competitive presence in Canada. Ciel has implemented a Canada First approach to the domestic market for satellite capacity and services. Using this approach, Ciel will provide coverage to reach all areas of Canada visible from this orbital position and will ensure the availability of sufficient capacity for Canadian users on a priority basis. Ciel is committed to providing nondiscriminatory access to satellite capacity.

Ciel believes the time is ripe for a competitive alternative in the provision of domestic satellite services. There has been a growing need for choice among Canadian government, industry and consumer users . History has shown that the benefits of competition in an open market flow ABRIDGED

directly to the end-user. Not only does competition bring about a greater variety of product choice and innovation, but it has been proven to benefit consumers through a wider variety of pricing options, greater customer service and a heightened level of end-user satisfaction . Over the long-term, competition fosters an increase in research and development, which feeds innovative product development and lower pricing.

In the following pages, Ciel clearly demonstrates the strength of its partners and business plan, the benefits that will accrue to Canadians should a licence be granted to Ciel, and the appropriateness of Ciel's technical plan . Ciel is confident that its Application provides Industry Canada with the best use of the 129°W orbital position and looks forward to working with the Department. ABRIDGED

The Applicant

1 .0 Introduction

Ciel Satellite Communications Inc. and Ciel Satellite Holdings Inc., doing business under "Ciel Satellite Group" or "Ciel", is a combination of partners who together are uniquely qualified to enter the satellite business in Canada and to succeed in bringing a high quality competitive alternative to Canadians. Ciel includes large and small Canadian companies with high levels of experience and expertise in the satellite industry, ***, and the world's premier satellite operator.

The *** Canadian companies dedicated to entering the Canadian satellite business searched for a suitable international satellite operator and found in SES a partner with worldwide experience, an impeccable service record and demonstrated sensitivity to the realities of operating in other countries. Barrett, SSH, *** and SES will together be peerless in their combined capabilities to introduce real and lasting competition in the Canadian satellite market. Ciel will be unmatched in its technical expertise, satellite system knowledge, management expertise and financial depth .

Ciel is confident that Industry Canada will recognize that this Company provides exactly what the satellite market in Canada urgently requires. The Company is unencumbered in its customer relationships by affiliations with incumbent wireline or content providers. It possesses the experience, expertise and financial wherewithal to enter the market swiftly and surely. And its partners have a compelling track record of serving a wide variety of needs, from large customers intent on serving the international marketplace to small customers focused on serving remote regions in Canada.

2.0 Barrett Corporation

Barrett Corporation ("Barrett') brings a wealth of satellite expertise and experience to Ciel. Barrett is a privately held Canadian corporation with an impressive record of success in the sales, distribution and support of satellite and other technology products. In addition to acting as the master distributor of the Star Choice DTH service since its inception, Barrett has recently ABRIDGED launched Xplornet, a new, national fixed-wireless ISP, and is the majority owner of LinCsat Communications Inc., one of Canada's only operating satellite ISPs. Barrett senior management also includes a number of individuals who are highly experienced in the satellite markets and will lend their expertise to Ciel's venture .

2.1 Background

Founded in 1976, Barren Corporation is a *** privately held international management company, based in Woodstock, New Brunswick. Barrett, through its subsidiaries, Barren Xplore, Barrett Marketing Group and Dixie Sales, provides sales, marketing, logistical and distribution support for several well-known brands in the recreational, consumer electronics, and outdoor power equipment industries throughout North America. Barrett recently purchased Black Water Designs Limited, be Canadian licensor for Sierra Designs outerwear. Throughout Atlantic Canada, Barren serves the construction and contracting industries through the sales and rental of equipment (Atlantic Rentals, Atlantic Wheeltrac) and provides automotive repair services through Wonder Auto Centres.

2 .2 Barren Xplore

Bxrs base business is the provision of supply chain management services, including distribution, sales and market development, for business partners such as Star Choice, Motorola, Phillips and Hughes Electronics.

The company is national in scope, having facilities in seven Canadian provinces . The company *** . With an inventory of ***, BXI is one of Canada's leading sales and distribution companies in its markets. BXI's expertise is in bringing state-of-the-art technologies to market, with a particular emphasis on and experience in satellite, consumer electronics and technology services. ABRIDGED

2.3 ***

BXI is also the exclusive master distributor for Philips Consumer Electronics in Canada. Phillips' new products include flat panel television technology, recordable CD players, and TiVo personal video recorders. The company also has the distribution rights to Philips-branded accessories including headphones, AN accessories, remotes and others, and OEM accessories for the Motorola PCS (cellular) division.

2.4 A Unique Infrastructure Built to Reach Rural and Remote Communities

The type of infrastructure and corporate mindset required to acquire and manage subscribers in unserved communities has many unique features. Unserved areas are generally serviced by local independent dealers as opposed to urban areas that are mostly served by national accounts such as the "big box" retailers. Since 1996, BXI has invested considerable time and effort in establishing and developing relationships with the over 2,100 members in its independent dealer network in unserved communities across Canada. The reach of the BXI independent dealer network is unparalleled in Canada.

The original BXI subscriber acquisition strategy for Star Choice was focused on reaching unserved communities where traditional cable television was not available . Within the first 18 months, the company and Star Choice determined that urban areas were also interested in an alternative to traditional cable, and the acquisition strategy was expanded to include these areas. Leading retail partners such as Radio Shack, Sears, Canadian Tire and Future Shop/Best Buy were added to BXI's existing customer base, *** including independent dealers, buying groups, value-added resellers, corporate clients and national retailers.

3.0 Smyth Satellite Holdings (SSH)

Smyth Satellite Holdings is a recently incorporated business established by Kevin Smyth *** . *** comprehensive expertise in the areas of satellite operations, sales and marketing, business ABRIDGED planning, regulatory and policy matters and familiarity with the Canadian telecommunications and broadcasting industries . The firm is based in Ottawa, Canada.

3.1 Experience and Expertise

Kevin Smyth, President of SSH, has both an engineering degree and an MBA. He began his satellite related training as an employee of Telesat in 1989 where he occupied a number of business development portfolios over a four year period. From there, he joined PT Pacifica Nusantara (PSN) in Jakarta, Indonesia as Executive Vice President of Business Development. Mr. Smyth was instrumental in establishing PSN as a successful Asian satellite operator through the negotiation of transponder lease contracts totaling over US $170M involving major regional and international broadcasters.

Mr. Smyth brings an extensive background in business development, satellite operations and R&D relations and activities . After spending several years working for other satellite operators operating primarily outside of Canada, the founding of SSH provides an opportunity to bring back to Canada the wide array of skills he has gained throughout his career.

4.0 SES

4.1 SES AMERICOM (A wholly owned subsidiary of SES GLOBAL)

SES GLOBAL is the world's leader in global satellite communications with over 40 spacecraft in operation worldwide. Its satellites provide first-class, worldwide broadband communications including audio-visual broadcasting, feeds for cable networks, Internet trunking and IP multicast, corporate networks, network facilities and telecommunications services.

ABRIDGED

Based in Luxembourg, SES GLOBAL is a group management company that operates through its fully owned companies SES ASTRA and SES AMERICOM, and through the network of partners, in which SES GLOBAL holds interests, namely AsiaSat, Nordic Satellite AB (NSAB), Nahuelsat, Star One and SATLYNX.

This network of established operators, who all enjoy strong leadership positions in their respective markets, enables SES GLOBAL to provide the highest quality global broadband connectivity to customers.

SES Global employs 789 people, and 2003 Revenue exceeded EUR 1 .2 Billion .

As the largest supplier of satellite services in the United States, SES AMERICOM is recognized for the delivery of the highest quality satellite communications services. Established in 1973 with its first satellite circuit for the U.S. Armed Forces, the company also pioneered the distribution of programming via satellite for cable with the 1975 ground-breaking distribution of the "Thrilla in Manila." The company currently operates a fleet of 16 spacecraft in orbital positions providing service throughout the Americas.

As a member of the SES GLOBAL family, AMERICOM is able to provide end-to-end telecommunications solutions to any region in the world. SES AMERICOM's key customers include ABC Radio Networks, AT&T Alascom, Deutsche Welle, Discovery, EchoStar, Fox, Gemstar/TV Guide, Gannett, HBO, Hughes Network Systems, NBC, The New York Times, NHK, PaxNet, PBS, TELE Greenland, TimeWarner, Viacom and, through AMERICOM Government Services, various agencies of the U.S . government.

Based in Princeton, New Jersey, SES AMERICOM maintains offices in the United States, Europe, South America and Asia.

4.2 SES Attributes

SES and its affiliates offer market-leading attributes, including:

. ABRIDGED

" Global Reach - SES covers over 95% of the earth's population . Its two wholly- owned operators, SES ASTRA and SES AMERICOM, respectively reach 92M households in Europe and 80M households in the US. " Largest Satellite Fleet - SES has 41 satellites in operation - 30 operated by wholly its owned subsidiaries and 11 through equity participants. This scale allows affiliates to leverage its purchasing know-how and scale to obtain the highest-quality and value systems . " World Class Support -- SES AMERICOM has four 24/7 operations centers and six dedicated earth stations providing satellite access, uplink services and vital satellite monitoring . SES follows a meticulous process to monitor, analyze and in the long run, maximize spacecraft performance. " Market Leading Quality - SES, in its pursuit of Operational Excellence, has delivered the highest quality systems and operations in the industry. As a measure of is consistent quality, SES by far has the lowest insurance claims as a proportion of its premiums paid in the industry. " Technology Innovation - SES pioneered the distribution of the first satellite-delivered channel to cable systems - HBO, and the first satellite-delivered channel to broadcast television network - NBC. In addition, SES pioneered Direct-to-Home services with ASTRA in Europe and Primestar in the US . As a leader in advanced systems and services, SES leverages its innovation across its affiliate companies. " Financial Stability - SES leads the industry in revenue and EBITDA margin. Over the Last Twelve Months (LTM as of June 2000, SES generated Eurol .2713 in revenue, while Intelsat earned Euro 929, with EBITDA margins of 78.3% and 75.6%, respectively . SES has an investment grade credit rating - BBB+/Baa2. " Global Partnerships - SES has a long tradition of building regional partnerships with local market partners. Often with minority interests, SES has been able to share its global reach, scale and innovation in a balanced manner - benefiting both SES and its local partners and customers. ABRIDGED

6.0 Senior__Mana gement Team

Ciel has a distinct advantage from the outset in having a strong and experienced management team -- all Canadian citizens -- identified prior to award of licence. ***

7 .0 Ownership and Control

This section describes the Canadian ownership and control of Ciel and confirms that the proposed licensee, Ciel, fully complies with the eligibility criteria contained in the Radiocommunication Act, the Telecommunications Act, and the associated regulations .

In this section, and unless a contrary indication is given, when the term "Canadian" is used, it refers to the definition contained in the Regulations.

7.1 Ciel shareholders

With the exception of SES Americom, each of the other partners in Ciel are Canadian, and more specifically, each is a "qualified corporation" within the meaning of paragraph 2(e) of the Regulations. The beneficial ownership and control of each of the Ciel shareholders is described below:

7 . 1 .1 Barrett (Barrett Corporation) : ABRIDGED

7.1 .2 SSH (Smyth Satellite Holdings Ltd.)

SSH is a corporation incorporated pursuant to the laws of Ontario, which has its head office in Manotick, Canada.

7.1 .4 SES (SES Americom, Inc.)

SES Americom is a wholly owned subsidiary of SES Global SA, the world's premier satellite company, which is a publicly traded company listed on the Paris Exchange. SES Global SA is majority-owned and controlled by non-Canadians.

7.2 Ciel Holdings

Ciel Holdings was incorporated under the Canada Business Corporations Act ("CBCA") on May 10, 2004. A copy of the Certificate and Articles of Incorporation of the company is attached in an Appendix to this application .

As described in detail below, Ciel Holdings is a "qualified corporation" and is therefore Canadian within the meaning of the Regulations.

7.2 .1 Ciel Holdings Share Structure

7 .3 Ownership of Ciel

Ciel was incorporated under the Canada Business Corporations Act ("CBCA") on May 10, 2004. A copy of the Certificate and Articles of Incorporation of the company is attached at in an

ABRIDGED

0 owned and Appendix to this application. As described in detail below, Ciel is a Canadian controlled corporation eligible to hold a licence as a Canadian carrier as defined in the Telecommunications Act and a radiocommunication carrier as defined in the Radiocommunication Act and the Regulations thereto.

7.3.1 Ciel Share Structure

7.3.2 Composition of the Board of Directors of Ciel

7.4 Control of Ciel

In addition to the ownership criteria which are satisfied by both Ciel and Ciel Holdings, both 0 must also demonstrate that they are not otherwise controlled in fact by non-Canadians. As noted by the Department in CPC-2-0-15, generally speaking, control in fact can "be viewed as the "ability to manage and run the day-to-day operations of an enterprise ." As will be amply demonstrated below, neither Ciel nor Ciel Holdings are controlled in fact by non-Canadians.

7.4.1 Control of the Board of Directors of Ciel

7.4.2 Control of the Board of Directors of Ciel Holdings

Control of Ciel Holdings, which in turn, controls the Applicant, Ciel, lies with the Board of Directors. It is therefore crucial to ensure that no non-Canadian controls the Board of Directors of Ciel Holdings. ABRIDGED

7.5 Senior Management of Ciel and Ciel Holdings

Most of the key senior managers of both Ciel and Ciel Holdings will be resident Canadians. The remaining officers of Ciel will be appointed by the respective Boards of Directors of the companies, neither of which are controlled by non-Canadians .

7.6 Shareholder Protections

7.7 Capital Contributions

7.7.1 ***

7.7.2 Future Capital Contributions

7 .7 .3 ***

7 .7 .4 ***

10 ABRIDGED

7.8 Definitive Transaction Agreements

7.9 Conclusion on Eligibility

Ciel and Ciel Holdings comply with all of the relevant ownership and control and eligibility criteria. From the perspective of control, it is clear that neither Ciel nor Ciel Holdings will be controlled in fact by non-Canadians. The day-to-day operations of Ciel will be in the hands of a seasoned management team in which key players are resident Canadians. This management team will be overseen by a Board of Directors of which more than 80 per cent are resident Canadians and which is not otherwise controlled in fact by non-Canadians.

ABRIDGED

IV. THE BUSINESS PLAN

ABRIDGED

BENEFITS TO CANADA

1 .0 Introduction

in the preceding section, Ciel demonstrates how it plans to assist businesses, particularly broadcasting undertakings, and other users of satellite spectrum in Canada with its Canada First approach . It is the Applicant's firm belief that it will become a valuable presence as a strong new force in the domestic satellite industry, ***. With the Department's continued management of the orderly introduction of competition in the indigenous satellite industry, efficiencies and innovation will naturally ensue. As a result, Canada will enjoy significant economic, social and cultural benefits, allowing it to be well placed to compete in the global economy.

In this section, Ciel outlines how the awarding of a licence to the Applicant to operate at 129°W will provide significant benefits to Canada . These include : furthering public policy objectives relating to radiocommunication, telecommunications, broadcasting, and competition and innovation; committing to new and expanded benefits and special initiatives for remote communities; and providing benefits for Canadian satellite component suppliers and manufacturers.

2.0 General Public Policy Objectives

2.1 Introduction

Ciel is very familiar with the legislation, policy and regulations that would govern its operations and recognizes that the spectrum is a valuable public resource in Canada . In this section, Ciel highlights some of the key objectives and requirements that would relate to its satellite business. ABRIDGED

2.2 Radiocommunication Act

The Radiocommunication Act is the legislation which governs the licensing and regulation of radio apparatus as well as the technical certification of broadcasting undertakings . It establishes the Minister's powers to regulate the radio frequency spectrum and ensure the orderly development of radiocommunication in Canada. It is pursuant to this Act that Gazette Notice No. DGRB-001-04, Call for Interest in 12 GHz Broadcasting Satellite Orbital Positions, was initiated .

In Canada, all wireless communications depend upon the transmission and reception of radio signals and, accordingly, rely upon adequate interference-free radio spectrum . Under the Radiocommunication Act, Canada's Industry Minister, assisted by expert spectrum management officials and staff, is charged with the duties and assigned the powers necessary to regulate and control all aspects of the use of radio spectrum by Canadian business and other users of wireless communication, including satellite signals . Industry Canada is empowered under the radio legislation to regulate and control the allocation of spectrum and to authorize, through radio licences and other certification, the use of radio channels within a variety of frequency bands. In particular, Ciel notes that the Radiocommunication Act states that the Act applies within Canada and on board any spacecraft that is under the direction and control of a corporation incorporated or resident in Canada.

Under its satellite licensing authorization policy, Industry Canada has instituted a licensing requirement for the allocation and use of the 12 GHz band. In this submission, Ciel seeks licensing under the Radiocommunication Act to exploit the 12 GHz frequency band in the 129°W orbital position and to bring a satellite into service well before the deadline of August 25, 2005, which will secure the extended coverage amendments of this orbital position for Canada.

Ciel wishes to state its unequivocal intent to adhere at all times to the terms and conditions of its satellite licence, should it be granted. Moreover, Ciel will cooperate fully with Industry Canada and will provide the Minister and officials with any information or assistance necessary for the ABRIDGED purposes of establishing appropriate and suitable terms, condition, policies, specifications or standards to be established in connection with the implementation of this and other satellite positions.

In addition, the Radiocommunication Act empowers the Minister to perform a number of functions intended to ensure the orderly development and efficient, interference-free operation of the radio spectrum by users in Canada, with particular reference to frequency allocation and coordination duties within Canada and between Canada and other nations in order to establish interference-free radiocommunication .

Ciel will provide the administrative due diligence information required by ITU Resolution 49 . This information will be provided at least 60 days before the expiry of the modification to the Canadian assignments at the 129°W location in the BSS Plan. ***

Ciel recognizes that the use of the BSS spectrum outside Canada is subject to international coordination and approval of the administration on whose territory the service is to be offered. Ciel's partners have participated in numerous coordination meetings and the Applicant has Canadian coordination expertise with many years of experience in frequency coordination . Ciel will provide the required technical assistance in the form of personnel and required technical calculations to assist at any future frequency coordination meetings that may arise as a result of this application.

The Act also authorizes the Minister to establish rules regarding the eligibility to hold, duration of, and fees associated with radio licences, including licences to operate satellites in spectrum allocated to Canada . Ciel wishes to state its full agreement with and acceptance of the rules and fees outlined by Industry Canada.

It is noteworthy that all of the objectives that the government has established for the Canadian telecommunications industry and embodied in Canada's Telecommunications Act of 1993 are incorporated by reference into the Radiocommunication Act and serve to assist and guide the Minister's exercise of discretion in all matters relating to the development and operation of Canadian radiocommunication . ABRIDGED

Through subsection 5(1 .1) of the Radiocommunication Act, the Minister may have regard to the objectives of Canadian telecommunications policy, which are articulated in section 7 of the Telecommunications Act:

7. It is hereby affirmed that telecommunications performs an essential role in the maintenance of Canada's identity and sovereignty and that Canadian telecommunications policy has as its objectives :

(a) to facilitate the orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada ;

Ciel's entry as a new force in the provision of satellite services throughout Canada would assist in the continued orderly development of the telecommunications system at an ideal time. The incumbent is in a strong financial position to face the challenges of competition, there is a clear demand for increased choice, and there still remains a critical mass of Canadian orbital positions to enable an entrant to introduce real competition .

Ciel will do much for the social and economic fabric of Canada, in providing an affordable satellite platform for businesses and consumers and in contributing, as a public benefit, ***

(b) to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada;

Ciel is committed to providing Canadians with the most advanced and reliable technology in the world, providing transport of broadcasting and video transmission, carriage of voice and data signals, and access to broadband services across Canada . Its international partners bring an unrivalled record of quality and reliability to this Canadian enterprise .

(c) to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications ; ABRIDGED

Opening up the satellite market will naturally lead to increased efficiencies and competitiveness in terms of pricing and service offerings. As a new force in the delivery of domestic satellite services across Canada, Ciel will have the purchasing power needed to support state-of-the-art bus, payload and TT&C facilities . Moreover, Ciel's entry is expected to trigger a swift, competitive response from the incumbent provider, thereby ensuring that Canadian broadcasting and telecommunications services are competitive and world class.

With its diverse shareholders, Ciel is well placed to leverage the international business opportunities and enhance the global position of Canada's satellite industry.

(d) to promote the ownership and control of Canadian carriers by Canadians;

As described in detail in Section III, Ciel fully satisfies the definition of a Canadian owned and controlled corporation pursuant to the Telecommunications Act and complies with the Canadian carrier eligibility criteria as set out in subsection 16(1) of the Act and in the Canadian Telecommunications Common Carrier Ownership and Control Regulations. Ciel is proud to offer Canadian users choice in the delivery of their services through a "made in Canada" consortium -- a unique combination of companies truly capable of becoming Canada's new force in the satellite industry.

(e) to promote the use of Canadian transmission facilities for telecommunications within Canada and between Canada and points outside Canada;

The licensing of Ciel would promote the use of Canadian transmission facilities by enabling a new Canadian satellite facilities-based provider to serve a wide market. While the coverage area encompasses North America, the Applicant will develop facilities in a way that will maximize opportunities for Canadian businesses to provide services within Canada and to the larger North American market. With a North American footprint, Ciel will enable Canadian companies to expand their service offerings beyond Canada's borders . Moreover, with its international partners, Ceil will be able to leverage international business opportunities for its customers. ABRIDGED

Ciel recognizes, of course, that this licence does not confer any rights to operate in a country other than Canada and that the Company would be required to seek the appropriate authorizations from the administrations concerned .

(f) to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective ;

By licensing Ciel the Canadian satellite facilities and services market will immediately increase its reliance on market forces. Moreover, Ciel will likely have an invigorating effect on Telesat and the provision of services to all satellite customers in Canada.

Ciel applauds Industry Canada's pro-competitive stance and urges the Department to use this last remaining opportunity to open the domestic satellite market to real competition. This would represent a major step towards furthering the objective of competition, as is more fully outlined later in this section. Moreover, with two Canadian licenses, regulatory tools become more effective and powerful. There will be more than one operator, which will place increased pressure on licensees, for example, in meeting milestones and providing nondiscriminatory access to potential customers .

(g) to stimulate research and development in Canada in the field of telecommunications and to encourage innovation in the provision of telecommunications services;

(h) to respond to the economic and social requirements of users of telecommunications services;

As the new entrant, Ciel must demonstrate the scope and quality of its services to potential users and will necessarily be required to be highly responsive to its customers. Ciel is sensitive to this challenge from the outset and is particularly cognizant of the needs of remote and underserved communities. The Company's plans to assist in serving them with high quality satellite services are further described later in this section . ABRIDGED

(i) to contribute to the protection of the privacy of persons .

Ciel has identified privacy protection as a critical component of its business success.

2.3. Telecommunications Act

Ciel fully commits to abiding by both the spirit and the letter of the Radiocommunication Act and its associated regulations and referenced policy objectives, including those from the Telecommunications Act as noted above. The Applicant also commits to full adherence to the requirements of the Telecommunications Act, which would govern its future operations as an eligible Canadian Carrier, as defined under that statute .

Ciel will offer third parties nondiscriminatory access to its capacity and will fully adhere to subsection 27(2) of the Telecommunications Act, which states:

27(2) No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference towards any person, including itself or subject any person to an undue or unreasonable disadvantage.

Ciel also commits to providing access to facilities and bandwidth at rates that are both competitive and fair, as required by subsection 27(1):

27(1) Every rate charged by a Canadian carrier for a telecommunications service shall be just and reasonable .

Ciel is committed to offering rates for its services that are very attractive for its customers, assisting the success of their businesses and enabling them, in turn, to offer attractive rates to end users.

2.4 Broadcasting Act

The 129°W orbital position has been allocated for BSS purposes and, in Ciel's opinion, it is the last remaining Canadian BSS slot of commercial value. With a licence to operate at this ABRIDGED position, Ciel plans to develop satellite facilities capable of delivering reliable services to Canadians in all regions, including Northern Canada, to meet existing and future requirements of Canadian broadcasting undertakings .

Ciel's facilities will have the potential to provide the delivery of new discretionary services . Ciel's facilities will also provide a platform for broadcasters to provide a very attractive bundled service offering, including both licensed programming services and Internet access .

3.0 Competition/Innovation

3.1 Introduction

Perhaps the most important benefit to Canada that will result from approval of the Ciel proposal is the long-overdue introduction of real competition to the domestic satellite services marketplace . Canadians have reaped the benefits of competition in every other sector of the telecommunications service industry, but despite the best efforts of government and industry to introduce competition, Telesat Canada remains as the monopoly provider of domestic satellite services in Canada.

With the go-ahead from Industry Canada, Ciel has the potential to transform the Canadian satellite services industry. The introduction of facilities-based competition to the sector will improve the quality of service, increase the amount of capacity available, provide true customer choice, and foster innovative, new services. Approval of the Ciel proposal will clear the way for *** investment in Canadian telecommunications infrastructure .

3 .2 Competition in Telecom Services

The Canadian telecommunications services industry plays a significant and an increasingly important role in the Canadian economy. The industry's share of Canada's real gross domestic product value added (GDP) was 2.7% in 2002. The industry's share of GDP has grown steadily ABRIDGED over the course of the last five years, increasing by roughly 42% since 1998 when telecommunications services accounted for 1 .9% of the GDP. In comparison, the GDP for the overall economy has increased by only 15% since 1998.

There are many diverse reasons for the growth and growing importance of the telecommunications sector in Canada, but a key contributing factor has been the emerging deregulated and competitive business environment.

Over the past decade, the federal Government has fostered a more competitive market with respect to the provision of telecommunications services. The regulated monopoly status once enjoyed by long-distance providers, local phone providers, cable operators and others has been supplanted by competitive markets. From the introduction of private line and data competition in 1979, to the licensing of multiple wireless telephony providers in 1982, to facilities-based long distance competition in 1992, to the licensing of DTH satellite providers in 1996, to the opening of the local telephone market in 1997, every sector of Canadian telecommunications has been opened to competition .

In the spring of 1994, then-Industry Minister John Manley released a strategic framework to guide the development of Canada's Information Highway.' The strategic framework set out five operating principles to guide the process. Prominent among the five principles was the principle of "competition in facilities, products and services." In May 1996, the federal government issued Building the Information Society. Moving Canada into the 21st Century, containing a far-ranging Canadian strategy for the Information Highway. The federal Government emphasized the role of the private sector in implementing that strategy, and adopted as its own the five principles set out in the earlier strategic framework.'

The Information Highway Advisory Council, tasked with advancing this public policy agenda by advising government on outstanding issues and concerns related to the Information Highway, once again identified "competition in facilities, products and services" as one of the five guiding

'Spectrum, Information Technologies and Telecommunications Sector, Industry Canada, The Canadian Information Highway. Building Canada's Information and Communications Infrastructure, April 1994. Government of Canada, Building the Information Society. Moving Canada into the 21st Century, 1996, p.5 ABRIDGED principles shaping its analysis and recommendations. In particular, the Council emphasized the importance of encouraging competition in the Canadian telecommunications sector.

In areas of the Canadian telecommunications sector other than satellite services, there is clear evidence that market forces are at work. The latest CRTC statistics 4 on telecom competition indicate that in 2002, competitors earned 27% of revenue in the long distance market, 59% of revenue in the retail Intemet5, 37% of revenue in wireless services s and 26% of revenue in data and private line services. The exception is in local market services where competitors earned only a 4% market share.'

As noted earlier, the Canadian satellite services sector remains dominated by a single operator holding all current orbital slot licences. According to the former Minister of Industry, this state of affairs should not continue:

These are interesting times for the telecommunications sector. Over the past few years, it has become clear that the Canadian telecommunications landscape, formerly dominated by regional wireline monopolies, is more than ever witnessing new competition in new forms and involving non-traditional players.

We know that it's impossible to predict what or who will be the greatest source of competition in the future : new players, new technology, or both? But we also know that in order for us to prepare to compete in the future, we must modernize our regulations and our policies to promote competition today.

A dynamic, a healthy and an innovative telecommunications industry requires keen competition. Here as elsewhere, competition stirs innovation, encourages

3 Information Highway Advisory Council, Preparing Canada for a Digital World: Final Report of the Information Highway Advisory Council, 1997, preface. 4 CRTC, Status of Competition in Canadian Telecommunications Markets, November 2003. Includes share of cable companies; share excluding cablecos is 23%. 6 This represents the sum of Rogers and Microcell. This low level of competition has been deemed to be unacceptable. Both the federal government and the CRTC have expressed their concern over the limited amount of competition in the local market, and have stated that removing the barriers to local competition is a priority, CRTC, op.cit

ABRIDGED

risk-taking and expands opportunity. The Government of Canada is committed to real and genuine competition in the telecommunications sector.$

Competition in the telecommunications industry has only had a positive impact on consumers and the Canadian public in general . There are numerous examples of how the introduction of competition has opened the floodgates of innovation, competitive pricing and improved customer service - all to the ultimate benefit of the industry, its suppliers, manufacturers and consumers. Ciel will continue the competitive momentum in the provision of satellite capacity to meet the needs of Canadians.

3.3 Competition Policy in Satellite Markets

As noted, Industry Canada has actively promoted competitive entry in all aspects of the telecommunications market in Canada, including the satellite services market. The stimulation of competitive facilities and service offerings was highlighted by Industry Canada in its licensing decisions and policy frameworks for the licensing of PCS, LMCS and MCS operators. The Department has affirmed that the policy framework for FSS was "formulated within the context of introducing full competition in the Canadian satellite communications market."9

The Canadian government, Industry Canada, and the CRTC have each taken the appropriate international, legislative, regulatory and administrative steps to prepare the Canadian satellite services sector for the transition to effective, market-based competition.

Following close to three years of negotiations, Canada entered into the WTOIGATS Agreement' ° on market access to basic telecommunications on February 15, 1997. One of Canada's central commitments under the agreement in respect of satellite services was to end the legislated monopoly of Telesat. In addition, Canada agreed to allow the use of foreign satellites to provide domestic and cross-border FSS services . Telesat's legislated monopoly with respect to fixed satellite facilities and earth stations serving the domestic and US/Canada

a Allan Rock, Minister of Industry, Speech to the Canadian Wireless Telecommunications Association Awards Dinner, March 26, 2003. 9 Industry Canada, RP-008 Policy Framework for the Provision of Fixed Satellite Services in Canada, 1998. '° The Fourth Protocol to the General Agreement on Trade in Services under the World Trade Organization . ABRIDGED markets was eliminated on March 1, 2000. Satellite services used by Direct to Home (DTH) broadcasters, however, were exempt from the WTO/GATS Agreement.

In anticipation of the loss of its legislated monopoly, Telesat applied to the CRTC in 1998 for complete and unconditional forbearance from the regulation of RF Channel Services provided using FSS facilities . Telesat argued that the WTO/GATS Agreement would open these services to sufficient competition to protect the interests of users starting March 1, 2000. In particular, Telesat noted that the competition that it expected would come from PanAmSat, GE Americom (now SES Americom) and Loral Skynet." The CRTC denied Telesat's application. 12 In doing so, the CRTC voiced concerns that Telesat faced insufficient competition in respect of services such as the distribution of programming to cable head ends in remote areas, and the provision of telecommunications service to remote regions, to justify forbearance. In particular, it was the CRTC's conclusion that in respect of these services, Telesat was still a monopolist.

The CRTC held a subsequent hearing to establish a more flexible regulatory regime in respect of Telesat's RF Channel services . In Telecom Decision CRTC 99-6, the CRTC established the environment within which Telesat operates today, where its FSS facilities leased to broadcasters are subject to a price cap of $170,000 per month per channel .

In rendering these decisions, the CRTC essentially adopted a "wait-and-see" approach to its oversight of the market. In its submission, Telesat painted a picture of vigorous Canadian and foreign facilities-based competition emerging in the FSS sector post March 1, 2000, with the attendant need for deregulation to allow Telesat to participate freely in such a market . The CRTC, however, was not convinced that such competition would emerge quickly, and hence adopted a price cap regime in order to protect the interests of Telesat's Canadian customers . Experience has shown that the CRTC was right to be cautious.

11 Submission of Telesat Canada, Telecom Public Notice CRTC 98-40, Telesat Canada-Transitional Regulatory Framework, February 10, 1999 at paragraph 11 . 12 Telecom Decision CRTC 98-24. 13 unprotected, pre-emptible, full period channels for minimum five-year lease terms.

1 2

ABRIDGED

In response to the WTO/GATS Agreement, Industry Canada issued its Policy Framework for the Provision of Fixed Satellite Services, report RP-008 in December 1998 . This document provided a framework for gradually opening all segments of the Canadian fixed satellite market to full competition. Following extensive consultations on its proposed policy approach, Industry Canada adopted a framework that meets Canada's commitments to the WTO, while establishing a regime for the authorization of new Canadian FSS facilities providers .

The policy provides that fixed satellites in the four Canadian orbital positions at the C and Ku bands must provide coverage of all regions of Canada, including Northern Canada. Foreign satellites operating in Canada, however, do not have to provide such coverage. The rationale for this distinction is that Canadian satellites operating in the four Canadian orbital positions should be expected to provide sufficient FSS capacity to serve all regions of Canada. It was unnecessary, therefore, in the view of Industry Canada, to require foreign FSS providers to meet this requirement.

This policy appears to be an implicit recognition that competition amongst the four Canadian orbital slots is sufficient to meet the needs of those customers that require full coverage of Canada including Northern Canada. Of course, for such competition to exist, there must be more than one licensee of the four orbital slots.

More than four years have passed since the nominal introduction of competition to the Canadian satellite services market. A number of important developments have occurred during this period:

" More than 50 foreign-owned FSS satellites have been approved to provide services in Canada. Not one of these satellites provides a footprint that reaches all regions of the country;

" Telesat Canada has been granted access to two additional orbital slots - the FSS C- band and Ku-band at 118.7° W. and the BSS Ku-band at 72.5° W.

" The Canadian Government exchanged the last remaining Canadian C and Ku band slot - 114° W. - with the Mexican Government's 109.2°W slot. The 109 .2°W slot suffers from severe power level restrictions in the Canadian market.

ABRIDGED

3.4 Barriers to Entry

One of the critical roles of the Canadian government in the process of deregulation has been to ensure that the underlying structure of any recently deregulated market fosters effective and sustainable competition that will bring benefits to Canadian telecommunications customers, once deregulation is complete . In the area of satellite services, Industry Canada faces particularly important challenges, since the market, while theoretically open to competition from U.S. facilities, remains a transitional regulated environment given the continued market power of Telesat.

There is still no facilities-based domestic competitor to Telesat Canada in the provision of satellite services to Canadian customers. The reason for this is self-evident : up until recently, only Telesat has been in a position to receive or had an interest in obtaining satellite spectrum licences. Further, in the only processes (i.e . 118.7°W, 72.5°W) where parties in addition to Telesat sought a licence, Telesat was awarded the licences .

The question remains, however, whether Telesat faces significant levels of competition as a result of the ability of foreign FSS providers to enter the Canadian market . The market for such services has been open to U.S. FSS providers since March 1, 2000. Is Telesat's market behaviour in Canada disciplined by the threat of losing customers to such U.S. providers? Is Telesat still a monopolist in services such as the distribution of programming to cable head ends in remote areas, and the provision of telecommunications service to remote regions, as the CRTC found in 1998? In short, does there remain a distinct Canadian market for FSS facilities in which Telesat can operate without market discipline?

Telesat describes the market environment in the following terms : ABRIDGED

However, while the Canadian market is competitive, Telesat believes that it remains strongly positioned in the market, having successfully secured long-term 14 contracts for satellite capacity with its major Canadian customers.

The competition from U.S. suppliers of FSS facilities that was anticipated at the time of the WTO/GATS agreement has not materialized . U.S . satellites do not typically have footprints that allow them to serve all of Canada, including Northern Canada. Telesat's satellites, on the other hand, provide coverage of all of Canada, including Northern Canada. This simple fact means that Telesat is the only operator currently providing ubiquitous satellite coverage of the Canadian market from a single source to Canadian broadcasting customers and other telecommunications clients requiring such ubiquitous coverage. As a result, there are few competitors to Telesat's FSS facilities for the vast majority of Telesat's customers.

The facts upon which the CRTC based its forbearance decisions hold true today, notwithstanding the fact that the WTO/GATS Agreement increased the potential for U.S . FSS facilities to compete for Canadian satellite users' business .

3.5 The Benefits of Competition

The federal Government has established a policy environment for telecommunications and the Information and Communications Technology (ICT) sector more generally that is based on promoting competition. This is enshrined in legislation . New entry into Canada's satellite services industry will bring both short term and long term benefits to Canadians - only through new entry can these benefits be achieved. As the former Minister of Industry has stated:

We've taken this path because we believe competition through stimulating investments in facilities and services is the best means of protecting the public interest. Simply put, competition means better service, more choice and lower prices for Canadians.' 5

14 Telesat Canada, Renewal Annual Information Form For The Year ended December 31, 2003, March 10, 2004, p. 14

' 5 Allan Rock, op. cit.

ABRIDGED

The benefits of competition are well known . Effective facilities-based competition in the domestic satellite market will introduce price discipline, improve customer service, promote innovation and stimulate the rollout of new infrastructure and new services to underserved areas of the country . In particular :

" Greater Choice for Canadian Users of Satellite Capacity - those who wish to enter the telecommunications or broadcasting market in Canada using satellite have no choice but to use the facilities of its most formidable potential competitor - BCE. This is an unacceptable state of affairs for Canadian industry;

" Additional Capacity - The existing Canadian satellite infrastructure is almost fully utilized. The capacity available on existing Canadian satellites is either already sold out, facing significant technology challenges, or delayed. The Ciel proposal will bring additional needed capacity to market in a timely fashion as well as provide a second source of capacity to ensure redundancy.

" Better Service and Customer Responsiveness - Ciel's commitment to customer service, and the forces of a competitive market, will raise the bar for all operators in the marketplace;

" Innovation -Supplementing the investments to be made by Ciel in R&D, Ciel will have access to new technologies and the means to take those technologies to market through its close relationship with Barrett and SES.

As previously noted, the basic policy objectives of Canadian telecommunications policy are enunciated in Section 7 of the 1993 Telecommunications Act. In accordance with those objectives, geostationary satellite orbital positions represent valuable resources that can be used to provide reliable and affordable telecommunications services in both urban and rural areas in all regions of Canada and to provide services between Canada and outside Canada.

Many of the objectives of the Act, including those noted above, have already been met for satellite services under Industry Canada's orbital slot licensing tenure . However, three core policy objectives remain largely unfulfilled with respect to satellite orbital slots:

ABRIDGED

" Enhancing the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications ;

" Fostering increased reliance on market forces; and

" Stimulating research and development and encouraging innovation .

Although the implementation of WTO commitments in 2000 permits the use of certain types of foreign satellites for specific telecom services, up until this point there has been no competition amongst facilities-based Canadian satellite operators since there has been only a single satellite operator licensed by Industry Canada. As such, the core objectives of competition, reliance on market forces and the encouragement of innovation -- which can only spring from intense market rivalry -- have been absent in the Canadian satellite service market.

A sustainable competitive position for Canada in the global marketplace for satellite services will not be assured until Canada's domestic marketplace becomes competitive by authorizing entities other than Telesat Canada to own and operate satellite facilities . If domestic competition is not allowed to take hold in the Canadian market, Canada will not be able to match the innovations, the choice and the costs of products and services offered by satellite operators based in the U.S . and other countries.

4.0 Public Benefits/Benefits ***

5.0 Benefits to Canadian Suppliers and Manufacturers ABRIDGED

6.0 Conclusion

In the Technical Plan section, which follows this section on Benefits to Canada, Ciel shows that with its superior technical capabilities, solid plans for satellite design and deployment and focus on customer care, this exciting vision for a new entrant in Canada's satellite industry and the many corresponding benefits associated with this application can truly be realized.

ABRIDGED

1/I . THE TECHNICAL PLAN

' Industry Canada Industrye Canada

Certificate Certificat of Incorporation de constitution

Canada Business Loi canadienne sur Corporations Act les societes par actions

CIEL SATELLITE COMMUNICATIONS INC. 423?06-4

Name of corporation-Denomination de la societe Corporation number-Numero de la societ6

I hereby certify that the above-named Je cenifie que la societe susmentionnee, dont corporation, the articles of incorporation of les statuts constitutifs sont joints, a ete which are attached, was incorporated under constituee en societe en vertu de la the Canada Business Corporations Act. Loi canadienne sur les societes par actions.

May 10, 2004 / le 10 mai 2004

Director - Directeur Date of Incorporation - Date de constitution

ABRIDGED

VII . CONSOLIDATED STATEMENT OF COMMITMENTS ABRIDGED

APPENDICES

ABRIDGED

APPENDICES

C . Letters of Support ABRIDGED

APPENDICES

D. ABRIDGED

APPENDICES Your Satellite Connection to the World

Disclaimer: Only the printed version of this report is the official document Annual Report 2003 Your satellite connection to the world SES GLOBAL is the world’s premier provider of satellite-delivered services. As a strategic management company, SES GLOBAL operates through a unique network of leading satellite operators around the world. This network comprises the fully-owned SES ASTRA in Europe and SES AMERICOM in the US, as well as participations in regional satellite operators.

Contents 2003 2002 4 Chairman’s statement Financial summary EURmillion EUR million 6 President and CEO’s statement Total revenues 1,207.5 1,349.3 Operational review EBITDA 942.8 1,107.1 8 SES GLOBAL Operating profit 371.7 529.1 12 SES ASTRA Profit of the Group 205.4 204.5 18 SES AMERICOM 24 Global partners Net operating cash flow 873.8 1,051.8 Corporate governance Free cash flow 940.3 306.4 29 SES GLOBAL shareholders 30 Board of Directors Capital expenditure 317.0 683.8 32 Committees of the Board of Directors 34 Executive Committee Net debt 1,699.1 2,661.1 35 Stock-related compensation schemes Shareholders’ equity 3,247.8 3,575.1 35 Our people 36 Our values Earnings per A-share (in EUR) 0.34 0.34 37 Corporate Social Responsibility 38 Management discussion and analysis Dividend per A-share (in EUR) 0.22* 0.20

SES GLOBAL Group Contract backlog 6,435 5,980 consolidated accounts 43 Report of the independent auditor 44 Consolidated balance sheet Employees 789 808 46 Consolidated profit and loss account 47 Consolidated statement of cash flow Key performance ratios in % 48 Consolidated statement of changes EBITDA margin 78.1 82.1 in shareholders’ equity Net income margin 17.0 15.2 49 Notes to the consolidated accounts Return on average equity 6.0 5.5 SES GLOBAL S.A. accounts Net debt to equity 52.3 74.4 72 Report of the independent auditor * Recommended by Directors and subject to shareholder approval 73 Balance sheet 74 Profit and loss account 75 Notes to the accounts

80 Five year financial summary Shareholder information Companies of the Group Annual Report 2003 SES GLOBAL 1

Key 2003 highlights – Revenues of EUR 1.2 billion – EBITDA of EUR 943 million, delivering an EBITDA margin of 78.1% – Profit of the Group of EUR 205 million – Net operating cash flow of EUR 874 million – Successful completion of refinancing programme – Net debt reduced by EUR 1 billion to EUR 1.7 billion – First success for AMERICOM2Home®: EchoStar contract signed for the capacity of the AMC-15 satellite – Major long-term contract renewals at SES ASTRA – Backlog increase to over EUR 6.4 billion at year-end – Rationalisation of regional assets • AMERICOM ASIA-PACIFIC taken into full ownership • NSAB interest increased to 75% (effective February 2004)

Revenues (EUR million) Recent developments 2001 978.2 Following the closure of the business year, the following 2002 1,349.3 developments occurred, which have a material impact on the Company’s business and results. 2003 1,207.5 – In addition to a contract for the capacity of the AMC-15 satellite and for interim capacity on the AMC-2 spacecraft, which was announced in March 2003, EchoStar Communications and SES AMERICOM entered into long-term service agreements for the EBITDA (EUR million) entire capacity on two additional satellites, AMC-14 and AMC-16.

® 2001 794.6 These agreements relative to the use of the AMERICOM2Home platform have initial 10-year terms and renewal provisions. 2002 1,107.1 Both additional spacecraft, AMC-14 and AMC-16, are currently 2003 942.8 under construction with Lockheed Martin.

– On February 24, 2004, SES GLOBAL announced that it had acquired an ownership stake in ORBCOMM Inc., a US-based provider of global satellite data services to industrial, military and Profit of the Group (EUR million) commercial customers, using a Low-Earth-Orbit constellation of spacecraft. As of March 2004, that ownership stake was 10.54%. 2001 280.3

2002 204.5 – On April 2, 2004, SES AMERICOM announced that it received approval from a US Bankruptcy Court to acquire the assets of 2003 205.4 Verestar Inc., for a total cash consideration of US $18.5 million. Verestar focuses on managed solutions for satellite communications in government, broadcast, enterprise, and international services markets with strategically located teleport facilities in the US and abroad. The transaction will be closed upon the receipt of appropriate US government authorisations, including the approval by the Federal Communications Commission to transfer Verestar’s communications licences. SES AMERICOM SES ASTRA SIRIUS 17 satellites 13 satellites 2 satellites WORLDSAT

Nahuelsat 1 satellite

StarOne 5 satellites

SES GLOBAL companies and partners provide access to a fleet of 41 satellites around the globe. These satellites cover an area which is home to 95% of the world’s population. Satellite fleet Name Position ASTRA AsiaSat ASTRA 1A 5.2° East 3 satellites ASTRA 1B 19.2° East ASTRA 1C 19.2° East ASTRA 1D 23.5° East ASTRA 1E 19.2° East ASTRA 1F 19.2° East ASTRA 1G 19.2° East ASTRA 1H 19.2° East ASTRA 2A 28.2° East ASTRA 2B 28.2° East ASTRA 2C 19.2° East ASTRA 2D 28.2° East ASTRA 3A 23.5° East

AMERICOM AMC-1 103°West AMC-2 105°West AMC-3 87°West AMC-4 101°West AMC-5 79°West AMC-6 72°West AMC-7 137°West AMC-8 139°West AMC-9 85°West Gstar 4 105°West Satcom C3 131°West Satcom C4 135°West WORLDSAT Satcom C1 37.5°West TDRS-5 174.3°West TDRS-6 47°West Spacenet 4 172° East WORLDSAT-1 108.2° East

ASIASAT AsiaSat 2 100.5° East AsiaSat 3S 105.5° East AsiaSat 4 122° East

NORDIC SATELLITE AB SIRIUS 2 4.8° East SIRIUS 3 5° East

STAR ONE Brasilsat A2 63°West Brasilsat B1 70°West Brasilsat B2 65°West Brasilsat B3 84°West Brasilsat B4 92°West

NAHUELSAT Nahuel-1 71.8°West

Satellite fleet as at December 31, 2003 4 SES GLOBAL Annual Report 2003

Chairman’s statement Challenges and successes Earnings before interest, taxes, depreciation and amortisation It is my pleasure to report consolidated financial results for (EBITDA), widely used as a reference by investors, was strong the SES GLOBAL Group, which confirm the Group’s position at EUR 943 million, representing an EBITDA margin in excess of as the world’s leading provider of fixed satellite services. 78%. EBITDA ratios in the core business areas remained high with 83.2% at SES ASTRA and 79.7% at SES AMERICOM. As expected, These are good results. However, they break with tradition. we felt the dilutive effect of our investments in lower-margin satellite Ever since 1989, the financial performances of SES, our services ventures. predecessor company, and later of SES GLOBAL have shown steady and impressive progression rates across the board. On the cost side, currency fluctuations led to lower charges arising on the dollar-denominated goodwill amortisation, depreciation Our 2003 performance must be viewed against the backdrop and financing charges. This counterbalanced the negative foreign of the very challenging market environment which prevailed during exchange rate impact at the revenue level, and enabled us to deliver the year in many areas of the world. They have impacted most of a stable profit of the Group at EUR 205.4 million. the market segments for satellite applications in which we are active. During the year, SES GLOBAL generated a strong net operating Despite these adverse conditions, SES GLOBAL achieved the cash flow of EUR 874 million, which contributed to the significant highest revenues in the industry, maintained the highest EBITDA reduction of the net debt by EUR 1 billion to EUR 1,699 million. margin, delivered a net profit at the same level as the prior year, maintained a high net operating cash flow and accomplished an We also completed a substantial refinancing plan, replacing impressive debt reduction programme. syndicated loan facilities, which we contracted in 2001, by more attractive instruments. SES GLOBAL completed a USD 1 billion Yet, with 40% of its revenues generated in the US dollar and private debt placement with a group of US and international Hong Kong dollar zones, SES GLOBAL’s revenues were impacted investors. During the fourth quarter of 2003, we also issued by the deteriorating exchange rate of the Dollar against the Euro. a EUR 500 million benchmark Eurobond and a EUR 300 million Total revenues of SES GLOBAL reached EUR 1.2 billion in 2003, Eurobond. These new financial instruments have improved the a decline of 10.5% at current exchange rates, but only of 3% at terms and the maturity profile of the Company’s debt. They have constant exchange rates. Our business continues to be stable, also created the headroom for the Company to finance additional solid and strong: the recurring revenues (defined as based on investments in new growth opportunities, as they arise. long-term contracts, and net of one-time transactions) decreased During the year, we scored impressive commercial successes: only marginally by 2.6% at constant exchange rates. the validation of the AMERICOM2Home® concept, and the conclusion of long-term contract renewals and of new contracts by SES ASTRA, have enabled us to secure the highest backlog in the fixed satellite services industry, standing at EUR 6.4 billion at the end of the year, a 7.6% increase over the twelve-month period.

‘SES GLOBAL’s performance must be viewed against the backdrop of the challenging market environment in 2003. We scored impressive commercial successes, and our outlook is increasingly favourable.’ Annual Report 2003 SES GLOBAL 5

Outlook The SES GLOBAL Group* With this in mind, the outlook is increasingly favourable for SES GLOBAL. We have a substantial, profitable and world-leading SES GLOBAL is based on a unique network of satellite operators business, which is delivering solid revenues and enjoys the in the different regions of the world. perspectives of strong growth opportunities in Europe and in America. SES GLOBAL S.A. is a strategic management company which oversees the operating companies (SES ASTRA and SES We expect Group recurring revenues to remain flat in 2004, AMERICOM) and holds strategic participations in leading regional and to show double-digit percentage increases in 2005 and 2006 satellite operators. as new satellite capacity makes its contribution. Our focus on customer service, coupled with our prime orbital positions, This structure provides the Group with synergy potential which is enables us to withstand the worst effects of the current successfully leveraged through a unique model of interdependence aggressive pricing environment. of the different members of the SES GLOBAL family. Although costs will be tightly managed, they are expected to SES ASTRA and SES AMERICOM operate with P&L authority in increase in 2004. In combination with the dilutive effect of our their respective markets, enabling them to maximise their positions. investments in service companies, they are expected to result The operating companies are also bound by the common in a reduction of our EBITDA margin percentage in 2004. strategic road map defined at the SES GLOBAL level. The CEOs We will steadfastly continue to abide by our tradition of excellence. of both SES ASTRA and SES AMERICOM are members of the The hallmark of the SES GLOBAL Group is a strong customer base Executive Committee of SES GLOBAL. This model ensures that in every market, loyal to the services we provide. We also rely on the strategic priorities of each operating company are being taken a strong base of strategic shareholders, with a long-term interest into account properly, while supporting an efficient and coordinated in our industry. We benefit from a high backlog that will continue Group strategy. to deliver strong revenue flows. And we will continue to take * Status as of March 2004 advantage of growth opportunities as they develop. Let me close with a word of special thanks to the management and staff of SES GLOBAL and its operating companies. Their commitment, their creativeness and innovative spirit, their dedication to industry leadership and the integrity of their service to our customers provided the groundwork for the performance 100% of the Group in 2003 and enhanced our platform for future growth.

100% 100%

AsiaSat 34.10% SATLYNX 41.69%

NSAB Star One 75% 19.99% Nahuelsat 28.75%

René Steichen Chairman of the Board of Directors 6 SES GLOBAL Annual Report 2003

President and CEO’s statement

Beyond the figures On the operational side, we have confirmed and consolidated our In his introduction statement, Chairman René Steichen referred leadership position in each of the markets that we serve through to SES GLOBAL’s leadership position in the industry. Featuring our wholly-owned operating companies – SES ASTRA and SES the highest revenues, the highest EBITDA, the highest profit AMERICOM – and through our partner companies. And we have and the strongest backlog is undoubtedly a source of justified defined and embarked upon new avenues of growth which will pride in the current environment. However, I would also urge yield results in the years to come. everyone to look beyond the bare figures. The important contracts for capacity on three new satellites What makes SES GLOBAL tick is not the aim to be big, or the concluded by SES AMERICOM with EchoStar Communications wish to be the leader in terms of size. Size is only one aspect firmly establish AMERICOM2Home® in the US – and confirm in a multidimensional game – albeit not an unimportant one, the concept that a wholesale capacity platform for DBS services, since a number of advantages and synergies which are generated inspired by the European model, can be successfully introduced by pure size are supporting our results in 2003. into the US market. We believe that this market will be further developed in the future – both in the field of television broadcasting What is SES GLOBAL all about? It is about creating the future and in the field of residential broadband applications. of satellite communications – as we stated back in 2001, when this Group was created. And it is about creating value for our Our subsidiary WORLDSAT (which was formed in 2003 to hold shareholders and stakeholders. the international satellites of SES AMERICOM), and our partner company AsiaSat have entered a new market segment, providing It should be worth noting that much has been achieved in that satellite capacity to Connexion by Boeing for delivering mobile respect in 2003. In line with our strategy, we have achieved many broadband satellite services to aircraft and ships in the Asia-Pacific milestones, which are critical to the progress of the Group in 2004 region and in Asia. Newest technology enables our customers to and beyond. harness the ubiquitous broadband connectivity provided by satellite and to push the boundaries of Internet and broadband beyond fixed terrestrial connectivity. And in a post-closing development, we have taken a stake in ORBCOMM Inc., the operator of a Low-Earth-orbit spacecraft constellation for mobile messaging services. This positions us well to support our customers in the development of mobile services.

‘In the future, satellite services will become an increasingly important fixture in everyday life. We see significant growth potential.’ Annual Report 2003 SES GLOBAL 7

In the area of broadband satellite services, and despite the As technology develops and changes the way in which people slow growth in market demand, SES ASTRA has expanded its consume entertainment and news content, we are convinced services offering and its market presence. The company now that satellite will play an increasingly important role in the content serves broadband service providers in each of the major markets distribution chain, in particular as new receiving and storage devices in Europe. are introduced, and as alternative video or broadband distribution channels are developed. In the future, satellite services will become In addition, SES ASTRA has extended its theatre of operations an ever more important everyday fixture in all of our lives, and we to include the Western regions of Africa. With limited terrestrial see significant growth potential and returns on investment on the communications infrastructures and tremendous demand for provision of satellite infrastructure which supports the evolution of connectivity, Africa is expected to be one of the quadrants of video distribution and broadband connectivity. growth on our corporate radar screen in the years to come. Our objective is to consolidate our position as the premier satellite We also continued to deliver on our strategy to implement operator in every region of the world, based on our network of synergies and tap further rationalisation potential, which is inherent operating companies, each of which is a market leader in its in the SES GLOBAL Group structure. With SES AMERICOM taking respective region. We will continue to strive for the highest levels full ownership of AMERICOM ASIA-PACIFIC, and SES GLOBAL of reliability in the technical and transmission services that increasing its stake in Nordic Satellite AB, we have enhanced the we provide through our satellite fleet. And we will continue to coordination of available spacecraft capacity, enabling us to provide develop and implement an even more stringent customer focus, more efficient service to our customers. providing the best service to ensure the success of our customers’ First-class satellites are a requirement for serving our customers. business. We will also co-develop new services together with our Therefore, we took the decision in 2003 to pursue our investment customers, allowing them to remain at the leading edge of programme in new spacecraft. Nine satellites are currently under the industry. construction for the SES GLOBAL operating companies, four of which are expected to be launched in 2004, enabling us to further improve our track-proven and outstanding customer service and to enhance our ability to provide custom-made solutions.

Romain Bausch President and CEO 8 SES GLOBAL Annual Report 2003

Operations review Market developments in 2003 The broadband access markets remained subdued. In the US, During 2003, the global market for satellite-delivered services the market continued to await the launch of several broadband was characterised by diverging developments in the major platforms, such as WildBlue, StarBand and AMERICOM2Home®, market sectors. planned for 2004. In Western Europe, DSL-type broadband services via satellite were rolled out in several countries, using satellite as In the area of video broadcasting, the largest market segment a complementary infrastructure to provide broadband connectivity which generates more than 60% of the combined revenues to customers without access to terrestrial DSL solutions. Also, of satellite operators worldwide, further growth was registered. satellite broadband services in Europe have now gathered political The number of TV channels distributed via satellite increased support from the European Commission which considers space- by approximately 12% during 2003, translating into higher demand based broadband networks to be a contribution to reduce the in a regionally diverse pattern. digital divide in Europe. Channel growth has been particularly strong in North America and The enterprise VSAT (Very Small Aperture Terminal) market continued in Europe, specifically in the UK, in Germany and in the countries of to experience sustained growth in line with the previous year, as Central and Eastern Europe. 2003 saw the launch of High Definition more applications, coupled with lower terminal equipment costs,had Television (HDTV), mainly in North America, and to a much lesser a positive effect. Digital platform development is further supporting degree in Europe. At year-end 2003, a number of broadcasters the development of the VSAT sector as data throughput improves. provided approximately 30 High Definition TV channels in the US Moderate growth was seen in the small to medium enterprise where the number of television households with HDTV-compatible networks, with an increased level of interest in Voice over IP. TV sets had reached more than six million. Satellite communications services to government users proved In Europe, HDTV has barely left the starting blocks, with currently to be a fast-growing market segment in 2003. Following the launch one commercial HDTV broadcaster trailblazing the new market of military operations in Iraq, demand for transmission capacity segment. Channel growth in Europe was driven by a further for government and military use on commercial spacecraft increase in digital channels in the UK, Germany, Italy and Spain. increased markedly. This trend is expected to continue over the In Latin America, the prevailing level of economic growth did not next few years, as the communications requirements arising from yet translate into new TV channel growth during 2003. In the Asian the US Homeland Security policy and from the increasingly remote market, the development of demand remained behind expectations. coordination of military activities are further developed. The outbreak of Severe Acute Respiratory Syndrome (SARS) in the 2003 also saw the take-up of capacity demand for mobile Internet spring of 2003 is one of the main reasons for a lower than expected and broadband connectivity to commercial airplanes and ships economic growth rate. on long-haul journeys, especially in Asia, the Asia-Pacific region and in the Atlantic Ocean region.

Your Satellite Connection to the World Annual Report 2003 SES GLOBAL 9

Satellite operators also continued to experience pricing pressure – Expand demand through the development and introduction due to an oversupply of satellite transmission capacity in select of new services frequency bands and on select regional and segmental markets. New products and services include mobile broadband Capacity pricing on premier satellite neighbourhoods in the orbital connectivity applications such as those offered through arc over Europe and North America, which are used for direct-to- Connexion by Boeing for commercial aircraft and ARINC home broadcasting or for serving cable networks, was hurt less for corporate aircraft; SATMODE, which uses a narrowband by price erosion, as additional capacity demand surfaced in these return channel to the satellite for interactive applications; market segments. However, the continuing abundance of available and the ASTRA-NET platform for one-way broadband connectivity Ku-band transponders in Asia and Latin America continued to via satellite. deflate price levels. Strong pricing pressure was also felt in the transoceanic market segment. – Develop our regional presence by strengthening our partnerships with key regional players A winning strategy We are continuing to examine opportunities to extend our SES GLOBAL’s strategy remains based on the four pillars that presence in key markets such as South America, Asia, Africa have guided its development to date: and India. During 2003, SES GLOBAL relentlessly pursued this strategy, which – Strengthen our existing core businesses provides a winning edge in the market. In addition to the operational We are aggressively pursuing new opportunities to develop successes scored by the operating companies, which are described our video broadcasting business in Europe and the United States. in more detail on the following pages, SES GLOBAL’s major strategic High Definition Television is a cornerstone of these developments developments in 2003 included: and will continue to support demand in these core markets. – the pursuit of synergies within our global network of companies: – Expand existing products and services into new markets SES AMERICOM took full ownership of AMERICOM ASIA- We will build on the progress made in the United States with ® PACIFIC; SES GLOBAL also increased its stake in NSAB to the successful initiation of the AMERICOM2Home platform. 75% (effective February 2004), enabling a better marketing In Europe, we are developing Direct-To-Cable offerings and DTH coordination of the SIRIUS and ASTRA satellite fleets in Europe; broadcasting into new markets in Central and Eastern Europe. – the creation of WORLDSAT, as a link between leading continental satellite fleets, enabling SES GLOBAL to make inroads into new market areas, such as the provision of mobile broadband services to commercial aircraft; and – in a development occurring after the year-end closing, SES GLOBAL acquired an ownership stake in ORBCOMM Inc., a US-based provider of global satellite data services to industrial, military and commercial customers. As of March 2004, that ownership stake was 10.54%.

One satellite network, infinite connections. 12 SES GLOBAL Annual Report 2003

Operations review SES ASTRA also developed a range of initiatives during 2003 Highlights in order to spur future growth in the medium term: – ASTRA audience increased to 94 million – together with the Industrial Development Corporation of South – Channel choice grew to 1,194 Africa and with Africa Venture Partners, SES ASTRA invested – Transponder utilisation rate of 82% in IP Direct, a South Africa-based provider of broadband two-way – System reliability of 99.992% services. These services will initially be deployed in West Africa, and in a second phase across the entire African continent. The – Reach of services extended into Eastern Europe and Africa service, under the brand name Accelon, entered into a pilot phase – Pioneering role in HDTV transmissions using transponder capacity on ASTRA 2B’s steerable beam; – to further strengthen its presence and market ASTRA satellite capacity and services in Central and Eastern Europe, SES ASTRA SES ASTRA in the European market opened a marketing office in Vienna; Faced with a continuing challenging market environment in 2003, SES ASTRA – SES ASTRA established a portfolio of turn-key solutions for broadcasters, through a new reseller network which was built – consolidated and enhanced its position as the leading provider up in Europe; of direct-to-home satellite broadcast capacity in Europe; – pioneering the distribution of High Definition TV in Europe, – strengthened its position as the leading provider of satellite SES ASTRA entered into a cooperation agreement with Alfacam, broadband services in Europe, by progressing in the area of the Belgium-based TV facilities provider, to distribute Euro 1080, DSL-type one-way broadband services as well as by expanding Europe’s first High Definition TV channel; the use of interactive broadband services via satellite; and – in cooperation with the European Space Agency and industrial – extended the geographic reach of the ASTRA Satellite System partners, SES ASTRA launched the development of a narrow-band into new territories in Eastern Europe and Northern Africa for return channel for direct-to-home set-top boxes. The product, broadband applications. named SATMODE, is expected to enhance future interactive TV applications; and – SES ASTRA also developed a new portfolio of services in the field of government applications, occasional use and technical consultancy services.

ASTRA coverage in Europe1 in million homes

1995 40 22 In 2003, the ASTRA Satellite System increased its 1996 44 23 reach by 2.3% to 94 million homes in Europe. TV channels transmitted via ASTRA were received 1997 46 25 direct-to-home (DTH) in more than 36 million homes, 1998 48 27 confirming ASTRA’s position as the leading DTH 1999 50 28 satellite services provider in Europe. ASTRA’s audience 2000 57 31 growth was almost exclusively driven by DTH and communal (SMATV) reception, whereas the reception 2001 58 34 of ASTRA-delivered channels re-transmitted via cable 2002 57 34 networks increased only marginally. 2003 58 36 +2.3% Source: SES ASTRA, Satellite Monitors A tradition of excellence Cable DTH&SMATV Annual Report 2003 SES GLOBAL 13

Satellite fleet developments Broadcast services At year-end 2003, SES ASTRA operated 13 spacecraft in the During 2003, the total number of broadcast services transmitted orbital arc over Europe: the ASTRA Satellite System at 19.2° East via the ASTRA satellites at the 19.2°, 28.2°, 23.5/24.2° East orbital and at 28.2° East, plus the ASTRA spacecraft at 23.5/24.2° East locations increased from 1,174 to 1,194. The increase mainly and at 5.2° East. reflects the development of broadcast services at the 19.2° East orbital position. In June 2003, SES ASTRA commissioned Lockheed Martin to design and manufacture two high-powered communications The main developments affecting broadcast capacity at 19.2° East satellites. The primary mission of ASTRA 1KR, an all Ku-band in 2003 included: spacecraft with a 32-transponder payload, will be to replace – Sogecable signed an agreement with SES ASTRA for the ASTRA 1B and ASTRA 1C. The second satellite will be a ground continued distribution of the Spanish merged DTH platform’s spare for ASTRA 1KR and will replace that spacecraft in case programmes via ASTRA until 2017; of a launch failure. In case of launch success of ASTRA 1KR, the second satellite will be reconfigured to include a Ka-band – the German public broadcasters ARD and ZDF renewed long-term payload in addition to its 29 Ku-band transponders. Named contracts for the distribution of virtually all of Germany’s public ASTRA 1L, it will replace ASTRA 1E and reinforce ASTRA’s unique TV and radio programmes in digital until at least 2018, and in intersatellite protection and back-up system by providing capacity analogue until 2010; in the Ku-band (both in FSS and in BSS) and in the Ka-band. – CanalSatellite renewed its capacity agreement for the In relation to this spacecraft procurement, SES ASTRA signed transmission of the French digital TV channel bouquet; a contract with Arianespace covering the launch of ASTRA 1KR in the third quarter of 2005 on an Ariane 5 rocket. – Regio Communications contracted for capacity for the continued distribution of BTV 4U in both analogue and digital; Satellite fleet operations – Poland’s Lux Veritatis Foundation launched digital free-to-air During the year, the ASTRA spacecraft operated without transmissions of the TV TRWAM channel; disruptions. The combined fleet featured an availability rate on the space segment of 99.992%. – MTV2 Pop renewed a long-term contract for the continued free-to-air distribution in both analogue and digital; Of the 196 transponders which are commercially available on the ASTRA satellites at 19.2°, 28.2° and 23.5/24.2° East, 161 (82%) – the travel channel Sonnenklar TV contracted for additional capacity were contracted as at December 31, 2003. In addition, ASTRA also to broadcast in analogue, in addition to the existing digital feed; provided capacity on ASTRA 1A, currently in inclined orbit at 5.2° – Kinderkanal renewed its capacity agreement for the distribution East, and via a steerable beam on ASTRA 2B for use outside Europe, of the children’s channel and signed up for additional transponder and at 28.5° East, on contracted third-party capacity. capacity to extend the broadcasting hours; and – RAZE.TV contracted for capacity for the distribution of the horseracing and betting channel in digital and free-to-air.

1 Digital TV market in Europe1 Year-end 2003 30 countries within the footprint of the ASTRA Satellite System: Austria, Belarus, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Digital satellite TV 70% Digital reception continued its dynamic growth during Germany, Greece, Hungary, Ireland, Italy, Latvia, 2003, increasing by seven million to 32 million homes. Digital cable 21% Lithuania, Luxembourg, the Netherlands, Norway, Satellite is the preferred distribution channel in the digital Poland, Portugal, Romania, Slovak Republic, Slovenia, Digital terrestrial TV 9% marketplace. 23 million homes, representing 70% of the Spain, Sweden, Switzerland, Ukraine, UK. entire digital market in Europe, received digital channels direct-to-home via satellite at year-end 2003. Source: SES ASTRA, Satellite Monitors

Base: 32 million digital TV households. 14 SES GLOBAL Annual Report 2003

Operations review Broadcast services continued ASTRA consolidated its strong position in the digital marketplace. Main developments with effect on broadcasting capacity at More than three out of four digital satellite homes in Europe 28.2° East included: received services transmitted via ASTRA. Digital reception now accounts for 49% of ASTRA’s total DTH reception, up from 44% – the BBC contracted two additional transponders on ASTRA, in 2002. raising the total number of contracted transponders to six; Exclusively analogue reception of ASTRA remained high at – BT Broadcast Services signed up for a full transponder to provide 19 million satellite homes. 70% of these, or more than 13 million, free-to-air and pay-TV services in the UK; and were located in the German-speaking European countries, which – Ideal Shopping Direct PLC. contracted for digital satellite capacity retain a strong analogue channel line-up. for the launch of the Goldshield Vitality channel, as well as for the Create and Craft shopping channel. Broadband services SES ASTRA continued to build its portfolio of one-way satellite- Sustained audience growth delivered broadband services and contracted new capacity ASTRA continued to experience sustained audience growth within for broadband applications. SES ASTRA now serves broadband its footprint in 30 European countries1. At year-end 2003, the number service providers in each important European market. of homes receiving audiovisual broadcast and broadband services Main developments with effect on the contracted capacity were: via the ASTRA Satellite System at 19.2º and 28.2º East reached 94 million, an increase of 2 million over the prior year. – Netsystem entered into a long-term agreement for the use of a second additional transponder on the ASTRA Satellite ASTRA maintained its position as the leading European satellite System at 19.2° East; system for direct-to-home reception (DTH). At year-end 2003, more than 36 million homes in Europe received ASTRA services directly – in Germany, France and the UK, SES ASTRA contracted new via satellite, up from 34.4 million in 2002. capacity to providers of one-way broadband Internet access services BBV Computerdienst, Filiago and Internetagentur Schott ASTRA’s audience growth is driven by the ongoing increase of digital (Germany), NetbySky (France) as well as AVC Broadband (UK); DTH reception in Europe. At year-end 2003, more than 17 million homes received digital services via ASTRA at 19.2° or 28.2° East, – SES ASTRA concluded agreements for the provision of satellite up from 15 million at year-end 2002. one-way broadband capacity for Internet access services targeting new markets, notably Ireland (with Media Satellite Ireland), Poland (with Onet), the Czech Republic and Algeria;

ASTRA coverage in digital satellite homes in Europe1 in million homes

1997 1 2 At year-end 2003, ASTRA had a strong 78% market share in digital direct-to-home reception in Europe. 1998 3 4 more than 17 million homes received digital channels 1999 6 8 transmitted via ASTRA at 19.2° and 28.2° East, up from 15.2 million a year earlier. 2000 10 13 2001 14 17 Source: SES ASTRA, Satellite Monitors 2002 15 19 2003 17 23

ASTRA in Digital Satellite TV (DSTV) DSTV total Annual Report 2003 SES GLOBAL 15

– furthermore SES ASTRA signed multiple new IP streaming services contracts in Europe; and – following its strategic decision to focus on the enterprise market, SATLYNX – a joint venture between SES GLOBAL, Gilat Satellite Networks and Alcatel Space providing interactive satellite broadband services to customers in Europe – reverted two transponders on contracted third-party capacity to SES ASTRA. These transponders have been re-assigned in the meantime to broadcast customers in the UK.

Other services SES ASTRA continued its foray into the Occasional Use and Satellite News Gathering (SNG) markets. VRT, the Flemish public broadcaster, contracted for full-time transponder capacity on ASTRA 1A for European satellite news gathering and contribution feeds. News Equipe, a Dutch-German provider of news gathering services, teamed up with SES ASTRA to develop the occasional use market in the Benelux and German-speaking countries. SES ASTRA also signed a contract with Hellas Sat to provide Tracking, Telemetry and Control services during a period of 12 months for the Hellas Sat spacecraft launched in May 2003. In addition, SES ASTRA has been commissioned to provide, install, and integrate two ground control stations for Hellas Sat in Greece and in Cyprus.

ASTRA reaches deep into the broadband universe

Internet users in Europe1 increasingly rely on broadband All TV HHs 42% 55% connections. At year-end 2003, approximately 22 million on-line homes within 30 European countries were All Satellite HHS 52% 66% connected to a broadband infrastructure, up from 12 million a year earlier. Astra DSTV HHs 60% 73% ASTRA homes are an attractive target for the successful roll-out of broadband DSL via satellite services all over Europe. The proportion of ASTRA digital satellite homes owning a PC (73%) and using an online connection (60%) increased further during 2003 and is significantly higher than in average TV homes (PC: 55%; online: 42%) PC/Online Total PC Source: SES ASTRA, Satellite Monitors

One satellite network, global coverage. 18 SES GLOBAL Annual Report 2003

Operations review SES AMERICOM and Nordic Satellite AB (NSAB) concluded Highlights an agreement to transfer ownership of the European beam – Upgrade of satellite fleet through successful launch and operation on the SIRIUS 2 spacecraft from SES AMERICOM to NSAB. of AMC-9 The ownership transfer, covering 13 BSS and three FSS – Transponder utilisation rate of 71% transponders, took effect on January 1, 2004. – System reliability of 99.997% During 2003, SES AMERICOM contracted for the construction – Conclusion of a contract for the capacity of the AMC-15 satellite of two new satellites: with EchoStar Communications – WORLDSAT-3, a hybrid C/Ku-band spacecraft planned for – Double-digit revenue growth achieved by AMERICOM 172° East. An upgraded version of a spacecraft formerly named Government Services AMC-13, WORLDSAT-3 will have extended coverage of the Pacific – Creation of WORLDSAT to commercialise SES AMERICOM’s Ocean Region. Part of its Ku-band payload, which is customised international satellite fleet for mobile broadband services to aircraft and ships, has been contracted to Connexion by Boeing. WORLDSAT-3 is planned or launch during the second half of 2005. Satellite fleet developments – AMC-14, a Ku-band BSS satellite will support the At year-end 2003, SES AMERICOM operated a satellite fleet AMERICOM2Home® wholesale platform. AMC-14 is scheduled consisting of 17 spacecraft operating at 17 orbital positions. to be launched in 2006. During the year, SES AMERICOM added one new spacecraft to In addition to these spacecraft, SES AMERICOM had five spacecraft its fleet. AMC-9, a hybrid C/Ku-band satellite, became operational under construction at year-end 2003: on June 30, 2003. The satellite operates from the 85°West orbital – AMC-10 and AMC-11 which are planned to support SES location and provides services to television programmers and AMERICOM’s HD PRIME™ cable neighbourhood at 135° and government agencies, and also supports enterprise networks. 131°West respectively; Following the deployment of AMC-9 at 85°West, AMC-2 was repositioned at 105°West to support the AMERICOM2Home®‚ – AMC-15 and AMC-16, both hybrid Ku/Ka-band satellites platform and provide interim services in the Ku-band frequency supporting the AMERICOM2Home® platform; and range to EchoStar Communications prior to the launch and – WORLDSAT-2, formerly known as AMC-12, which will provide operation of AMC-15, expected in the second half of 2004. services in the Atlantic Ocean Region, as well as in the Americas, Africa, and in Europe.

Leadership and innovation Annual Report 2003 SES GLOBAL 19

Four of these satellites were scheduled to be launched during 2004. New contracts and services AMC-10 was successfully brought into orbit on February 5, 2004. During 2003, SES AMERICOM’s satellite fleet transmitted AMC-11 is due to be launched in the second quarter, 2004; AMC-15 audio-visual programming on behalf of most major cable is planned for launch in the third quarter, 2004, and WORLDSAT-2 programmers as well as TV and radio broadcasters to all major is scheduled for launch in the fourth quarter, 2004. networks and cable head-ends, multiple dwelling units and hotels in the US. Two thirds of SES AMERICOM’s satellite capacity is Two of the spacecraft to be launched in 2004, AMC-10 and AMC-11, being used for media distribution, with the balance supporting will replace existing in-orbit capacity. AMC-14, AMC-15, AMC-16, a wide range of broadband, enterprise solutions, data and WORLDSAT-2 and WORLDSAT-3 represent expansion capacity. internet applications. SES AMERICOM signed an agreement with International Launch Main developments in 2003 were: Services (ILS) to launch AMC-15 on a Proton/Breeze M rocket in 2004. – EchoStar Communications signed a multi-year agreement to use the Ku and Ka-band capacity on AMC-15 to offer a Satellite fleet operations combination of satellite TV bundled with high-speed Internet During 2003, the AMERICOM satellite fleet and the supporting services supported by the AMERICOM2Home® platform; terrestrial networks operated with a high degree of reliability, – Discovery Communications, Inc. signed a multi-year, featuring an availability rate of 99.997% on the space segment multi-transponder agreement for follow-up capacity for the and of 99.9987% on the ground network. transmission of services in analogue, digital multiplex and in Of the 420 transponders which were commercially available on high definition; the SES AMERICOM satellite fleet, 297 (71%) were contracted – MTV Networks On Campus, Inc. signed a multi-year agreement as of December 31, 2003. In addition, the occasional use and for Ku-band capacity for the distribution of the College Television broadcast special event inventory of 41 transponders were Network; regularly under contract throughout the year. – Georgia Public Broadcasting concluded a long-term contract for Ku-band capacity for the transmission of a family of services, including Georgia Public Television, Georgia Public Radio and PeachStar Education Services; – The Prison Television Network signed up for long-term Ku-band capacity to deliver educational, spiritual and entertainment programming to 2.1 million prison inmates in the US;

Cable2® Neighbourhood Cable TV households (millions)

Cable 2® is America’s newest premium cable 2000 53.8 neighbourhood, formed by AMC-1 and AMC-4 satellites, at 103º West and 101º West, respectively. 2001 59.7 The close proximity of the two spacecraft permits both satellites to be received by a single ground antenna – 2002 60.7 and SES AMERICOM’s ongoing antenna-seeding programme has increased the neighbourhood’s value to cable programmers through increased penetration. 2003 61.6 20 SES GLOBAL Annual Report 2003

Operational review New contracts and services continued – The Adventist Television Network signed a multi-year contract – E!Networks, Inc. contracted for long-term C-band capacity to for the distribution of religious programming; distribute entertainment, news and lifestyle-related content; – Cornerstone TeleVision Network renewed a multi-year contract – A&E Television Networks signed a long-term agreement for for the distribution of ministry-based programming; and follow-on capacity in C-band to distribute The History Channel; – SES AMERICOM introduced SignalSAT(SM) as an alternative – Victory Sport LLC signed a multi-year contract for C-band to terrestrial solutions to deliver broadcast content to cable, capacity for the distribution of the Regional Sports Network DBS distribution centres and fringe viewing areas. to cable head-ends throughout the US Upper Midwest; SES AMERICOM also provides high-speed satellite based data – SES AMERICOM and Iris Gateway Satellite Services Ltd. networking and internet solutions for corporations in the US. announced a cooperative arrangement to provide pan-European These solutions include: IP Networks, content delivery to remote digital satellite services via Iris’ Cyprus teleport and the SIRIUS 2 locations, business continuity services and connectivity for satellite; international ISPs. In 2003, significant contracts were concluded with Hughes Network Systems, Spacenet, the New York Times, – Japan’s Ministry of Public Management, Home Affairs, Post USA Today, SkyPort, Connexion by Boeing, ARINC,and Microspace. and Telecommunications granted SES AMERICOM a Type 1 Telecommunications Business Licence including the authorisation to operate an earth station for the distribution AMERICOM Government Services of content between Japan and the US; AMERICOM Government Services (AGS) solidified its leadership in the provisioning of satellite-based network solutions to the – SkyPort International, Inc. contracted for Ku-band transponder US Federal Government, and especially the US Department capacity to provide broadband IP, voice, video and data of Defense, which are rapidly expanding their reliance and use of communications for corporate customers; commercially-based satellite bandwidth and services around the world. AGS delivered impressive revenue growth of 17% in 2003. – SES AMERICOM and Foundation Telecommunications, Inc. entered a strategic relationship to enable cable system operators Outstanding developments in 2003 included: to deliver satellite-based Internet broadband connectivity to their subscribers; – AGS’ award to provide capacity, engineering and transmission services via the General Services Administration (GSA) schedule; – the conclusion of a business collaboration agreement between AGS and JSAT of Japan to mutually support the pursuit and development of US government communications solutions in the Asia-Pacific region; Annual Report 2003 SES GLOBAL 21

– the induction of AGS into the National Coordination Center for WORLDSAT is building relationships with regional operators Telecommunications, an influential group of top-level advisors that through condominium arrangements, to enable global mobile assist in the initiation, coordination, restoration and reconstitution broadband development, to leverage the SES ASTRA and SES of services and facilities, both nationally and internationally, to AMERICOM technical platforms and resources, and to facilitate ensure the availability of US government communications global reach for government applications. infrastructure in the wake of all emergencies; and At the end of 2003, WORLDSAT signed an agreement with – AGS’ award by the FBI in support of a critical data Connexion by Boeing to provide a specialised Ku-band payload for communications network with nodes in all 50 states of the US. mobile broadband services to aircraft on its upcoming WORLDSAT-3 spacecraft, planned for launch at the end of 2005. AGS, which celebrated 30 years of service to the US government market segment in 2003, is under contract to serve many federal agencies directly, including the US Departments of Commerce, AMERICOM ASIA-PACIFIC Defense, Interior, Justice and Transportation. In addition, AGS works In June 2003, SES AMERICOM and Lockheed Martin reached closely with several leading commercial contractors, including an agreement to transfer Lockheed Martin’s interest in AMERICOM Arrowhead Space and Communications, AT&T, Bechtel, Comsat ASIA PACIFIC to SES AMERICOM. The satellite involved in this General, CSC, Dyncorp, Lockheed Martin, Mitre, and Worldcom. agreement, AAP-1, operates at 108.2° East, and by year’s end was marketed and commercialised by WORLDSAT under the name WORLDSAT-1. WORLDSAT WORLDSAT was created in the second half of 2003 by SES GLOBAL as a subsidiary of SES AMERICOM, and is responsible for the marketing and commercialisation of satellite capacity on the WORLDSAT-1 (formerly AAP-1), TDRS-5 and TDRS-6, Spacenet-4 and Satcom C-1 satellites. WORLDSAT provides customers with global applications as diverse as mobile communications, broadcasting, internet connections and data networks, and provides added value through unparalleled connections to the premier regional satellite fleets for SES GLOBAL companies and partners.

One satellite network, limitless applications. 24 SES GLOBAL Annual Report 2003

Operational review Global partners

AsiaSat Financial highlights In HK$ million 2003 2002 At year-end, the AsiaSat fleet consisted of three satellites, AsiaSat 2 at 100.5° East, AsiaSat 3S at 105.5° East and AsiaSat 4 Revenues 896 951 at 122° East, covering an area in the Asia-Pacific region which EBITDA 749 798 is home to more than two-thirds of the world’s population. Net profit 424 555 The company provides satellite services to both the broadcasting and the telecommunications industries. Public and private television and radio broadcasters from around the world used the AsiaSat AsiaSat preserved its leading position in the challenging and satellites during 2003 to distribute over 120 analogue and digital competitive environment of the Asia-Pacific market during 2003. television channels and 90 radio channels to more than 80 million homes in the region. Telecommunications customers used AsiaSat’s results were achieved in the context of a weak regional AsiaSat for public telephone networks, private VSAT networks transponder market, which did not live up to the signs of an early and high-speed Internet and broadband services. economic recovery in some Asian markets, and which was also impacted by the outbreak of the Severe Acute Respiratory SES GLOBAL holds 34.10% of the equity of AsiaSat. This participation Syndrome (SARS). is held through 49.5% of the issued share capital and 50% of the voting rights of Bowenvale, a company that controls 68.9% Due to ongoing pricing pressure, weak growth in new demand of the issued share capital of AsiaSat. The remaining 50.5% equity and business slowdown at the customers’ level, the turnover and interests in, and 50% voting rights of, Bowenvale are owned by net profit of AsiaSat declined compared to the prior year. However, CITIC, China’s leading state-owned investment corporation. AsiaSat maintained both its outstanding operating standards and its premium client base. The Company also closed the year with AsiaSat is listed on the stock exchanges of Hong Kong (symbol: a debt-free balance sheet and is well prepared to take advantage 1135HK) and New York (symbol: SAT). AsiaSat employed 83 of the economic recovery when it occurs. permanent staff at year-end 2003. The business year 2003 was marked by the successful launch More information is available at www.asiasat.com and deployment of AsiaSat 4, its newest and most powerful spacecraft with pan-Asian coverage. With AsiaSat 4 being taken into commercial service in July 2003, the number of available transponders on the AsiaSat system increased to 125. At year-end, the number of AsiaSat transponders leased and sold stood at 49, unchanged from the prior year. In 2003, AsiaSat also completed its new Tai Po Earth Station, enabling the company to provide new value added services to customers. The new facility is expected to be fully operational at the end of the first quarter of 2004. Annual Report 2003 SES GLOBAL 25

Nordic Satellite AB (NSAB) Financial highlights In SEK million 2003 2002 The company´s sustained sales activities in Eastern Europe have resulted in new contracts for the distribution of TV and Revenues 459 577 radio services. However, the Eastern European market has also EBITDA 205 277 been affected by the slowdown in the advertising market and Net profit 49 90 by continuing pressure on transponder capacity pricing. NSAB’s broadband activities have progressed as planned in the area of high-speed Internet via satellite services. 2003 has seen NSAB is the owner and operator of the SIRIUS satellites which the launch, in cooperation with the Modern Times Group / Viasat, provide transmission capacity for the distribution of TV and radio of an Internet service targeting Viasat´s existing residential channels and for various telecommunications and broadband subscriber base. services. The company’s primary markets are the Nordic countries and the Baltics, as well as certain Eastern European markets. NSAB’s strategy is to consolidate and expand its strong position in the Nordic and Baltic countries, and to strengthen the company’s At year-end 2003, NSAB’s satellite fleet consisted of SIRIUS 2 business in Eastern Europe, a growing market both for broadcast and SIRIUS 3, both located at 5° East. SIRIUS W, which was and broadband services. launched in 1989, was de-orbited as planned at the end of its operational life, in May 2003. NSAB employed 39 permanent staff at year-end 2003. Out of the available transponders on the SIRIUS satellites, 75%, In 2003, SES GLOBAL held an equity stake of 50% in NSAB. were contracted at year-end 2003, unchanged from the prior year. In December 2003, SES GLOBAL increased its stake to 75%, effective in February 2004. In 2003, 80% of NSAB’s revenues were generated through broadcasting activities (TV and radio distribution). Main customers More information is available at www.nsab-sirius.com are: The Modern Times Group, Teracom and Swedish Television, of Sweden; TEM TV of Latvia; Eurocom and Inter, of Ukraine; and Realitatea of Romania. Broadband and telecommunications activities provided the remainder of revenues. With broadcasting applications providing the bulk of NSAB’s revenues, the company’s 2003 results have been influenced by the continued weakness of the advertising markets as well as by the development of digital terrestrial networks in Sweden and in Finland. 26 SES GLOBAL Annual Report 2003

Operational review Global partners

Star One Financial highlights In R$ million 2003 2002 Star One also obtained ISO 9001:2000 re-certification for its satellite control and associated services. A new Quality Revenues 378 347 Management System was installed with the joint participation EBITDA 248 259 of all of the company’s departments. Previously, Star One Net profit 182 82 had been the first company in the world to have its ISO 9002 certification for this type of service renewed. Star One operates the largest C-band satellite system in Latin In 2003, Star One consolidated its position in Latin America as America, consisting of five geostationary satellites (BrasilSat B1, the leading provider of broadband satellite solutions by increasing B2, B3, B4 and BrasilSat A2). The capacity of the satellites supports the area of coverage of its satellites and, consequently, its customer a wide range of satellite solutions for customers in the telephony, base both in the consumer and corporate areas. TV, data and corporate network segments. Star One won a tender issued by the National Telecommunications Star One also operates a satellite control station in Brazil, located Agency (ANATEL) of Brazil for the right for satellite exploitation in Guaratiba, in Rio de Janeiro. The company operates a backup of new orbital positions. The company acquired the right to exploit control station located in Tanguá, Rio de Janeiro. a satellite in the 70º West position, in the Ku-band. Currently, Star One already operates in C-band at this position: BrasilSat B1, SES GLOBAL holds a 19.99% participation in Star One. received by more than 10 million antennas, transmits TV signals throughout Brazil. Additional information is available at www.starone.com.br Star One signed a contract for the construction and the launch of a new satellite: Star One C1. Scheduled for launch at the end of 2005, Star One C1 will feature 42 transponders in C-band and in Ku-band. The new satellite will be positioned at 70°West; it will replace BrasilSat B1, and will supply high-speed Internet access and multimedia capacity for all of South America. These market initiatives in space segment and broadband were recognised with three relevant marketing awards in Brazil. Annual Report 2003 SES GLOBAL 27

Nahuelsat SATLYNX Financial highlights In ARS million 2003 2002 Financial highlights In EUR million 2003 20021 Revenues 52 63 Revenues 26 14 EBITDA 35 31 EBITDA (18) (15) Net profit/(loss) (29) (95) Net profit/(loss) (72)2 (35)

Nahuelsat S.A. is the operator of the Argentinian Nahuel Satellite 2003 was the first full year of business operation for SATLYNX, System which provides Ku-band coverage in Latin America up to following its inception in mid-2002 as a joint venture between the Southern US. SES GLOBAL and Gilat Satellite Networks. In 2003, Alcatel Space joined SATLYNX as a shareholder with a stake of 9.53%. The Nahuel-1 satellite, launched in 1997, serves customers in Argentina, Bolivia, Brazil, Chile, Peru, Paraguay, Uruguay, Guatemala In a post-closing development, Alcatel Space increased its holding and the US. Nahuel-1 provides capacity for the distribution of TV in SATLYNX to 16.62%, effective on March 10, 2004. SES GLOBAL channels, and telecommunications services such as telephony, held a 45.23% stake in SATLYNX on December 31, 2003. As a result Internet backbone connections, and data transmission. of Alcatel Space increasing its participation, SES GLOBAL’s stake in SATLYNX was 41.69% in March 2004. In 2003, Nahuelsat continued to expand the network of local representatives in different countries of Latin America. SATLYNX is headquartered in Betzdorf, Luxembourg, and has operations centres both in Betzdorf and in Backnang, Germany. Despite challenging economic conditions in Argentina, The company provides an extensive portfolio of two-way satellite Nahuelsat renewed on-going contracts and sold additional services in Europe, either directly to small and large enterprise capacity in Argentina and in the wider region. Nahuelsat also customers, via telecommunications operators and Internet Service closed 2003 with new customers for both direct-to-home Providers, or by regional resellers or systems integrators. SATLYNX and data services. Nahuelsat is also exploring the opportunity also provides DSL-type services via satellite to regions which of launching a second satellite into the 81°West position, are not covered by terrestrial broadband infrastructures. covering the entire American continent. SATLYNX provides services to a wide range of customers which SES GLOBAL holds a participation of 28.75% in Nahuelsat. include Agip, Q8, Esso, Avonline, Sat2Way, IBM, Macab, T-Systems, More information is available at www.nahuelsat.com.ar Telespazio, Siemens, VW, BT Openworld, Tiscali, France Telecom and La Poste. In 2003, SATLYNX concluded contracts and agreements to provide services and solutions to multiple customers including: – Tiscali of Italy in order to extend its offer of high-speed Internet services to the Czech Republic, Finland and Slovakia; – T-Systems of Germany who will provide SATLYNX broadband solutions to corporate customers; – BySky of the Netherlands to deliver satellite broadband two-way services in the Netherlands and in Belgium; and – Sat2Way of France to deliver high-speed Internet services in France. Additional information is available at www.satlynx.com

1 For a seven- month period. 2 Loss is substantially due to amortisation of goodwill and intangible assets. 28 SES GLOBAL Annual Report 2003

Corporate governance Annual Report 2003 SES GLOBAL 29

SES GLOBAL shareholders

Voting interest represented Economic interest by SES GLOBAL shareholders1 Number of shares by FDRs/shares held FDRs/shares held A-shares GSH Global Satelliten-Beteiligungs-Holding GmbH (100% DTAG) 42,516,140 5.77% 7.21% DT-Satelliten-Holding-GmbH (100% DTAG) 35,068,860 4.76% 5.94% Dresdner Bank Luxembourg S.A. 18,130,000 2.46% 3.07% Luxempart S.A. 13,380,000 1.81% 2.27% Loran Telecommunications S.A. 12,776,375 1.73% 2.17% Santander Telecommunications S.A. 12,525,625 1.70% 2.12% Rebelco S.A. 10,000,000 1.36% 1.70% AMB Generali Holding AG 7,900,000 1.07% 1.32% Audiolux S.A. 7,810,000 1.06% 1.34% Banque Générale du Luxembourg S.A. 6,182,610 0.84% 1.05% Private and other A shareholders < 1% economic interest 7,395,433 0.99% 1.24% A-shares held as FDRs (Free float) 136,654,957 18.53% 23.16% Total A-shares 310,340,000 42.08% 52.60%

B-shares BCEE 80,225,463 10.88% 5.44% SNCI 80,215,463 10.88% 5.44% Etat du Grand-Duché de Luxembourg 85,376,910 11.58% 5.79% Total B-shares2 245,817,836 33.33% 16.67%

C-shares GE Capital 148,228,155 20.10% 25.12% State Street Bank & Trust Company3 33,067,517 4.48% 5.61% Total C-shares 181,295,672 24.58% 30.73%

Total shares 737,453,508 100.00% 100.00%

1 Significant shareholdings as of April 15, 2004. 2 Class B-shares: A share of Class B carries 40% of the economic rights of an A or C-share. 3 GE Capital retains ownership (economic rights) in the shares held by the Voting Trust. GE Capital has a 20.1% voting right; the Voting Trust shall vote in the same proportion as all of the other shareholders. 30 SES GLOBAL Annual Report 2003

Corporate governance

The Board of Directors In 2003, the members of the Board of Directors were: Mission The Board of Directors is responsible for defining the investment René Steichen, born November 27, 1942. Mr. Steichen became and general business strategy of the Company, as well as for the a Director on June 1, 1995. He was elected Chairman on April 15, management of the Company, which the Board delegates to the 1996. Prior to that time he was a member of the Luxembourg Executive Committee. Government (1984-1993) and member of the European Commission (1993-1995). He is currently an attorney at law. Composition He is also a member of the Board of Directors of SES ASTRA, SES The Board of Directors is comprised of 21 members. Eleven Board AMERICOM, Dexia-Banque Internationale à Luxembourg, CLT members are elected based on a proposal by holders of Class A Group and Luxempart. Mr. Steichen studied law and political shares; seven Board members are elected based on a proposal by science in Aix-en-Provence and Paris. He graduated with a degree holders of Class B shares; and three Board members are elected in law and also earned the final degree in economics and finance based on a proposal by holders of Class C shares. from the Institut d’Etudes Politiques of Paris.

The Chairman of the Board of Directors is elected by the members John F. Connelly, born July 3, 1943. Mr. Connelly became a Director of the Board. The Chairman is assisted by two or more Vice on November 29, 2001 and was elected Vice Chairman on the Chairmen. Currently the Board has three Vice Chairmen, one each same date. Mr. Connelly retired from GE Capital Corporation elected on the basis of proposals submitted by shareholders of effective September 1, 2003 and formerly served as the President Class A, Class B and Class C. and CEO of GE Americom. He graduated with an undergraduate degree from Niagara University and holds an MBA from St. John’s Class A shares are defined as shares held by private investors University. other than members of the GE Group. Gerd Tenzer, born August 4, 1943. Mr. Tenzer became a Director on Class B shares are owned by the Luxembourg State and by entities March 11, 1999 and was elected Vice Chairman on May 7, 2002. wholly owned by the Luxembourg State. Class B shares entitle Mr.Tenzer is special advisor to the CEO of Deutsche Telekom AG. their holders to 40% of the dividend paid out to shareholders of He is Chairman of ECI and SUTTER-Gruppe. Mr. Tenzer graduated classes A and C. with a degree in Communications Engineering (Dipl. Ing.) from the Technical University of Aachen. Class C shares were created when the Company acquired GE AMERICOM. They are held by GE Capital and other members Jean-Paul Zens, born January 8, 1953. Mr. Zens became a Director of the GE Group. on May 7, 2002 and was elected Vice Chairman on the same date; Mr. Zens is also a member of the Board of Directors of SES ASTRA. In accordance with internal regulations adopted by the Board He is currently Director of the Media and Communications on March 18, 2004, at least one-third of the Board members department of the Ministry of State in Luxembourg. He holds a law must be independent Directors. A Board member is considered degree as well as a degree in psychology and communications independent if he/she has no relationship of any kind with the sciences from the University of Strasbourg. Company or management, which may impact his or her judgement. This is defined as: Charles Alexander, born April 12, 1953. Mr. Alexander became a Director on November 29, 2001. Mr. Alexander is the President • not having been a Director for more than 12 years; of GE Capital Europe, a Director of MEPC and the English National • not having been an employee or officer of the Company over Opera. Mr. Alexander graduated from Oxford University. the last five years; • not having had a material business relationship with the Wolfgang A. Baertz, born June 19, 1940. Mr. Baertz became a Company in the last three years; and Director on April 17, 2000. Mr. Baertz retired at the end of 2003 • not representing a significant shareholder owning directly as President of the Executive Committee of Dresdner Bank or indirectly more than 5% of the Company’s shares. Luxembourg S.A. but remains a member of the Board of Directors of Dresdner Bank Luxembourg S.A. He holds various board As of December 31, 2003, eight Directors out of 21 were memberships as an independent Director. independent. They were Messrs. Wolfgang Baertz, Ernst-Wilhelm Contzen, Richard Goblet d’Alviella, Joachim Kröske, Hadelin de Ernst-Wilhelm Contzen, born November 28, 1948. Mr. Contzen Liedekerke Beaufort, Christian Schaack, Gaston Schwertzer, and became a Director on April 15, 1999. He is the Chief Executive François Tesch. Officer of Deutsche Bank Luxembourg S.A. and a Director of Clearstream International, Deutsche Bank Finance N.V., Deutsche Bank S.A.&N.V. Belgium, DB Re S.A., DB Vita S.A. and DWS Investment S.A. He is also member of the Comité pour le Développement de la Place Financière (Codeplafi) of Luxembourg and member of the Board of Directors of the Fondation pour le Développement de la Coopération Allemagne – Luxembourg dans les Domaines des Sciences. Mr. Contzen graduated with a degree in law from the University of Münster.

Jean-Claude Finck, born January 22, 1956. Mr. Finck became a Director on May 31, 2001. Mr. Finck is Chief Executive of Banque et Caisse d’Epargne de l’Etat, a member of the Board of Directors of Bourse de Luxembourg, Luxair, Cargolux, insurance companies La Luxembourgeoise, La Luxembourgeoise Vie, and ATAG Asset Management. Mr. Finck graduated with a degree in economics from the University of Aix/Marseille. Annual Report 2003 SES GLOBAL 31

Richard Goblet d’Alviella, born July 6, 1948. Mr. Goblet d’Alviella Luis Sanchez-Merlo, born October 10, 1947. Mr. Sanchez-Merlo became a Director on April 15, 1998. Mr. Goblet d’Alviella is became a Director on April 17, 2000. Mr. Sanchez-Merlo is the Administrateur délégué of Sofina S.A., a Director of ADSB Chairman of Lantana Capital S.A. and Comsamer SL, Chairman Telecommunications, Delhaize, Danone, Eurazeo and a Director of the Advisory Board of Ernst & Young Spain and member of the ofTractebel S.A. Mr. Goblet d’Alviella graduated with a degree Advisory Board of Software AG. Mr. Sanchez-Merlo graduated with in economics (Commercial Engineer) from the Université Libre a degree in law and economics from the Universidad Comercial de Bruxelles and also holds an MBA from Harvard University. de Deusto. He also holds a masters in law from the College of Europe and a masters in economics from the University of Louvain. Raymond Kirsch, born January 18, 1942. Mr. Kirsch became a Director on March 1, 1985. Mr. Kirsch held the position of President Christian Schaack, born March 21, 1958. Mr. Schaack became and Chief Executive of Banque et Caisse d’Epargne de l’Etat, a Director on December 7, 2000. Mr. Schaack is Chief Operations Luxembourg. Mr. Kirsch holds a degree in Law and in Economics Officer and Managing Director at Fortis Bank and a member of the from the Université Libre de Bruxelles and the Institut d’Etudes Board of Directors of BGL Investment Partners, Banque Générale Politiques. He also holds a doctorate in Law. Mr. Kirsch resigned du Luxembourg and Euroclear. Mr. Schaack graduated from the from the Board of Directors on February 1, 2004 and was replaced Massachusetts Institute of Technology with a PhD in Operations by Mr. Gilbert Ernst. Research and a SM in Management.

Dr. Joachim Kröske, born January 19, 1944. Dr. Kröske became a Georges Schmit, born April 19, 1953. Mr. Schmit became a Director Director on July 7, 1994. He served as Vice Chairman from April 15, on November 12, 1992. He served as Vice Chairman from May 31, 1996 to May 6, 2002. Dr. Kröske graduated with a degree in business 2001 to May 6, 2002. Mr. Schmit is Secretary General of the administration and a doctorate in political science from the University Ministry of the Economy, Luxembourg, Chairman of CD-PME of Frankfurt. and EUREFI, two public private financing companies for SMEs and a member of the Board of Directors of Banque et Caisse Dr. Raphael Kübler, born January 11, 1963. Dr. Kübler became d’Epargne de l’Etat, Luxembourg, Entreprise des Postes et a Director on November 29, 2001; he is also a member of the Télécommunications Luxembourg, ARCELOR S.A., ARES S.A. Board of Directors of SES ASTRA. Dr. Kübler is Chief Financial and of Paul Wurth S.A. Luxembourg. Mr. Schmit graduated with Officer of T-Mobile Deutschland GmbH, Head of the Supervisory a degree in economics from the Catholic University of Louvain Board of Deutsche Funkturm Management GmbH and member and an M.A. in Economics from the University of Michigan. of the Supervisory Board of SAF Forderungsmanagement GmbH and of SolvenTec GmbH. Dr. Kübler graduated from the University Gaston Schwertzer, born July 18, 1932. Mr. Schwertzer became of Cologne. a Director on September 12, 1992. Mr. Schwertzer is currently Chairman of Luxempart and Administrateur délégué of Audiolux, Hadelin de Liedekerke Beaufort, born April 29, 1955. Mr. de Chairman of Foyer Patrimonium and Luxembourg-Energie and Liedekerke Beaufort became a Director on April 17, 2000. He is member of the Board of Directors of Dexia Group, Paul Wurth, currently a Director of Loran Telecommunications SA, a privately Société Electrique de l’Our, Foyer-Finance, Sichel, Energus, Presta- held company, as well as a Director of other private companies Gaz, Puilaetco Luxembourg and Dexia-Banque Internationale with interests in various fields such as financial, communication Luxembourg. Mr. Schwertzer graduated with a degree in law from and real estate developments. Mr. de Liedekerke Beaufort the University of Grenoble and also holds a doctorate in law. graduated from the Ecole Hôtelière de Lausanne. François Tesch, born January 16, 1951. Mr. Tesch became a Director Denis J. Nayden, born April 9, 1954. Mr. Nayden became a Director on April 15, 1999. Mr. Tesch is the Administrateur délégué of Le on November 29, 2001. Mr. Nayden is a Senior Vice President and Foyer Finance and Luxembourg Chairman of Le Foyer S.A., and Financial Services Advisor of GE and the former Chairman and Audiolux. Mr. Tesch is also a member of the Board of Directors Chief Executive Officer of GE Capital. Additionally, he is a Managing of Bourse de Luxembourg, BNP Paribas Luxembourg and various Partner of the Oak Hill Capital Group and on the Board of Advisors Merrill Lynch funds. He graduated in economics from the Faculté of Alex Partners/Questor Partners and is on the Board of Trustees d’Aix-en-Provence and holds an MBA from INSEAD (Institut of the University of Connecticut. Mr. Nayden is a graduate of the Européen d’Administration des Affaires). University of Connecticut and also holds an MBA in Finance. Gilbert Ernst, born July 30, 1952. Mr. Ernst became a Director Gaston Reinesch, born May 17, 1958. Mr. Reinesch became on March 18, 2004. He is Executive Vice President and has been a Director on July 1, 1998. Mr. Reinesch is General Administrator a member of the Executive Board of Banque et Caisse d’Epargne of the Ministry of Finance, Luxembourg, Professor of Economics de l’Etat since 1995. A former member of the Board of Directors at the Legal and Economics department of the Université de of SWIFT in Brussels, he currently holds positions on the Board Luxembourg and a member of the Board of Directors of of Directors of EBA in Paris, and Cetrel, insurance companies Société Nationale de Crédit et d’Investissement, Cegedel, La Luxembourgeoise and La Luxembourgeoise Vie, SYPAL Gie Banque et Caisse d’Epargne de l’Etat, P&T and European Clearing, FIL and SIPEL in Luxembourg. Mr. Ernst is a graduate Investment Bank. Mr. Reinesch was economic advisor at the in Business Administration of the Faculty of Law of the University Chamber of Commerce of Luxembourg from 1989 to 1995. of Liège in Belgium. Mr. Reinesch graduated with a master of science in economics from the London School of Economics. At the Annual General Meeting of shareholders of May 6, 2002, the members of the Board were elected for a period of three Victor Rod, born April 26, 1950. Mr. Rod became a Director years, by a majority of more than two-thirds of the votes present on November 23, 1995. He is President of Commissariat aux and represented. Assurances, Chairman of the Board of Directors of Banque et Caisse d’Epargne de l’Etat, Luxembourg and a member of the At an Extraordinary General Meeting of shareholders held on Conseil d’Etat of Luxembourg. Mr. Rod graduated with a degree March 18, 2004, shareholders decided that, for future elections in law from the University of Nancy. to the Board, a simple majority of the votes present or represented without considering abstentions will be required. 32 SES GLOBAL Annual Report 2003

Corporate governance continued

Rules of functioning The Board adopted the SES GLOBAL refinancing plan through The Board of Directors meets when required by the Company’s a successful US private placement of more than USD 1 billion business, but at least once in a quarter. In 2003, the functioning and the issue of two Eurobonds of EUR 500 and EUR 300 million of the Board was governed by the following principles: respectively, in conjunction with various bilateral loans.

A quorum of two-thirds of the Directors present or represented The Board approved the acquisition of the 100% ownership in was required for the Board meeting deliberating validly in 2003. AMERICOM ASIA-PACIFIC and the increase of SES GLOBAL’s participation in NSAB to 75%. The Board decides by simple majority vote of the Directors present or represented. A two-thirds majority was required on the following Committees of the Board of Directors issues: the issuing of shares within the limits of the authorised The Chairman’s Office capital, the appointment and revocation of senior managers, the The Chairman and the three Vice Chairmen are members of the representation of management, the election of the Chairperson Chairman’s Office. The Chairman’s Office prepares the agenda of the Board, and the approval of ownership of capital stock in for the Board meetings. Each Vice Chairman coordinates the excess of the thresholds defined by the articles of incorporation. preparation of the Board meetings with the Directors of his share class. Corporate governance changes approved in March 2004 An Extraordinary General Meeting of shareholders, which was The Chairman’s Office met six times in 2003 with a members’ held on March 18, 2004, approved amendments to the articles attendance rate of more than 95%. of incorporation of the Company, which impacted the rules of corporate governance of the Company. The main changes approved The Remuneration Committee by shareholders are the following: The Board established a Remuneration Committee which determines the remuneration of the members of the Executive • the Board of Directors deliberates validly with a simple majority Committee, and which advises on the overall remuneration policies of Directors present or represented; and applied throughout the Company. It reports to the Board on a • the Board of Directors decides by simple majority of the regular basis. Directors present or represented within the provisions of the Luxembourg law. The Remuneration Committee was chaired in 2003 by the Chairman of the Board. Members of the Committee were Messrs. The Extraordinary Meeting of Shareholders also raised the John F. Connelly, Gerd Tenzer and Jean-Paul Zens. threshold of 10% laid down for ownership of capital stock by one single shareholder to 20.1%, and defined a process in case The Remuneration Committee held seven meetings with an a shareholder intends to exceed this threshold. A shareholder or attendance rate of 100%. Matters addressed related to the a potential shareholder who now envisages to acquire by whatever succession plan for the senior executives in SES GLOBAL S.A. means, directly or indirectly, more than 20.1% of the shares of and its two wholly-owned operating companies, the implementation the Company must inform the Chairperson of the Board of the of the 2003 stock option plan, the determination of criteria for Company of such intention. The Chairperson of the Board shall bonus payments to the members of the Executive Committee, inform the Government of the envisaged acquisition. The the adaptation of the SES complementary pension scheme and the Government may oppose the transaction on grounds of general assessment of the SES Group executive remuneration packages. public interest. In case of no opposition from the Government, The Committee submitted proposals to the Board for determining an Extraordinary Meeting of Shareholders decides by a two-thirds the exercise price applicable for the 2003 stock option grant and majority whether to authorise the transaction. a methodology for determining the reference period for the grants in upcoming years. The Extraordinary Meeting of Shareholders also decided that prior approval by the Board of Directors is required for any material Following the adoption of new internal regulations by the Board contract between the Company, or any of its wholly-controlled on March 18, 2004 the Remuneration Committee is now operating subsidiaries, with a significant shareholder holding, composed of five members, a majority of whom are independent directly or indirectly, at least 5% of the shares of SES GLOBAL. Board members. Current members of the Remuneration Committee are: René Steichen, Wolfgang Baertz, John F. Connelly, Activities of the Board of Directors in 2003 Hadelin de Liedekerke Beaufort, Gaston Schwertzer. The Board of Directors held seven meetings in 2003, with an average attendance rate of 86%. Focusing on the strategic The Audit Committee development of the SES GLOBAL Group, the Board adopted The Board established an Audit Committee, which assists the the Business Plan for the 2003-2010 period, the 2004 budget, Board in carrying out its responsibilities in relation to corporate and approved various business transactions at the level of SES policies, internal control, and financial and regulatory reporting AMERICOM and SES ASTRA relating in particular to satellite practices. The committee has an oversight function and provides and launch service procurements, as well as equity investments a link between the internal and external auditors and the Board. in satellite and service companies. In 2003 the Audit Committee was chaired by the Chairman of the Board. Other members were Messrs. Ernst-Wilhelm Contzen, Richard Goblet d’Alviella and Gaston Reinesch. Annual Report 2003 SES GLOBAL 33

The Audit Committee held three meetings with a members’ attendance rate of 100%. Meetings were dedicated in particular to the review of the half-year financial results, the impairment review process, the implementation of the Internal Audit Plan as well as the review of the 2003 results to be submitted to the Board and subsequently to the shareholders at the statutory General Meeting.

The Audit Committee also endorsed the principles of cooperation between the External and the Internal Auditors and gave guidance for a progressive adoption of harmonised reporting formats among the entities of the Group.

Following the adoption of new internal regulations by the Board on March 18, 2004 the Audit Committee is now composed of six members, four of whom are independent Board members. The current members of the Audit Committee are: Ernst-Wilhelm Contzen, Richard Goblet d’Alviella, Jean-Claude Finck, Dr. Joachim Kröske,Gaston Reinesch and François Tesch.

The Nomination Committee Following the adoption of new internal regulations by the Board on March 18, 2004, the Company set up a Nomination Committee composed of five members, a majority of whom are independent Board members.

The role of the Nomination Committee is to propose candidates to be submitted for election as Directors by the Annual General Meeting of Shareholders. Such proposals are based on submissions from shareholders for a number of candidates at least equal to the number of posts to be filled for each class of shareholders.

The role of the Nomination Committee also consists to propose candidates for Executive Committee membership for election by the Board.

The members of the Nomination Committee are: René Steichen, Wolfgang Baertz, John F. Connelly, Hadelin de Liedekerke Beaufort, Gaston Schwertzer.

Remuneration of the members of the Board of Directors The Annual General Meeting of shareholders determines the remuneration of the members of the Board of Directors for attending Board and Committee meetings. The members of the Board of Directors are entitled to a fixed fee and to a variable fee. The variable part of the fee is calculated on the basis of the Directors’ attendance at Board and Committee meetings.

In 2003, the total remuneration fees paid to the members of the Board of Directors amounted to EUR 835,750.

Company stock owned by members of the Board of Directors On March 12, 2004 the members of the Board of Directors owned a combined total of 651,760 shares, FDRs, and options. 34 SES GLOBAL Annual Report 2003

Corporate governance continued

The Executive Committee (from left to right) Romain Bausch, Robert Bednarek, Ferdinand Kayser, Dean Olmstead and Jürgen Schulte.

The Executive Committee Dean Olmstead, born on July 3, 1955, and appointed President Mission and Chief Executive Officer of SES AMERICOM in November 2001. The Executive Committee is in charge of the daily management Previously, Mr. Olmstead was responsible for business of the Group. development at SES and spearheaded its US activities, which culminated in the acquisition of AMERICOM. Mr. Olmstead came The Board has mandated the Executive Committee with the to SES from Hughes Electronics Company, where he held different preparation and planning for discussion and decision by the Board positions in new business development and was most recently in relation to the Company’s overall policies and strategies, as well Executive Vice President, Engineering and Operations, of DirecTV as the decisions reaching beyond the daily management. Japan. Mr. Olmstead has also been responsible for national satellite policy for the US Department of State and served as Programme Composition Manager for the Advanced Communications Technology Satellite The members of the Executive Committee are: (ACTS), the first Ka-band system with on-board processing, for NASA Headquarters, Communications Division. Mr. Olmstead Romain Bausch, born on July 3, 1953, and appointed President and holds a degree in Economics-Mathematics from Western Chief Executive Officer in July 2001. Mr. Bausch is also Chairman Washington University and an M.S. Degree in Engineering- of the Board of Directors of SES ASTRA, SES AMERICOM and Economic Systems from Stanford University School of Engineering. NSAB as well as Vice Chairman of AsiaSat. Mr. Bausch became the Director General and the Chairman of the Management Committee Jürgen Schulte, born on May 15, 1943, and appointed Chief of SES in 1995, following a career in the Luxembourg civil service Financial Officer in November 2001. Since 1991, Mr. Schulte (Ministry of Finance). Mr. Bausch occupied key positions in the had served as the Director of Finance of SES, responsible for banking, media and telecommunications sectors and spent a five- the financial operations of the SES Group. Before joining SES, year term as a Director and Vice Chairman of SES. Mr. Bausch Mr. Schulte held a variety of management positions over 15 years graduated with a degree in economics (specialisation in business in finance operations of General Electric affiliates in Brussels, administration) from the University of Nancy. New York, Madrid, Frankfurt and Luxembourg. Mr. Schulte holds a degree in Business Administration from the University of Münster. Robert Bednarek, born on October 6, 1957, and appointed Executive Vice President, Corporate Development as of January The Executive Committee is chaired by Romain Bausch. The unique 2002. Mr. Bednarek came to SES GLOBAL from PanAmSat, where structure of the SES GLOBAL Group, based on the interdependence he served as Executive Vice President and Chief Technology Officer between its operating companies and the Group management since 1997 and as Senior Executive for Engineering and Operations company, is reflected by the fact that the President and CEOs since 1990. Prior to joining PanAmSat, Mr. Bednarek co-founded of both 100%-owned operating companies are members of the a Washington, D.C.-based technology consulting firm, where he Executive Committee of SES GLOBAL. was a partner from 1984 to 1990, and served as the Deputy Chief Scientist for the US Corporation for Public Broadcasting from 1979 Rules of functioning to 1984. Mr. Bednarek graduated with a degree in electrical The Executive Committee meets on a regular basis and in principle engineering (with a specialty in communications theory and once a week. The Executive Committee held 41 meetings in 2003. mathematical analysis) from the University of Florida and holds several US patents related to GPS (Global Positioning Systems). The General Counsel acts as Secretary to the Executive Committee. He is seconded by the Vice President Legal and Corporate Affairs. Ferdinand Kayser, born on July 4, 1958, and appointed President and Chief Executive Officer of SES ASTRA as of January 2002. Remuneration of the members of the Executive Committee Mr. Kayser came to SES GLOBAL from Premiere World, the digital The remuneration of the members of the Executive Committee Pay-TV bouquet of Germany’s Kirch Group, where he was is determined by the Remuneration Committee. Managing Director between 1997 and 2001. Prior to joining the Kirch Group, Mr. Kayser held a number of executive positions at The remuneration of the members of the Executive Committee CLT, Europe’s largest commercial broadcaster, including Senior Vice is based on a fixed and on a variable portion. President in charge of German TV and radio activities (1989-1992), Managing Director in charge of the launch of RTL 2 (1993) and The total gross remuneration paid to the members of the Executive Executive Vice President and Member of the Management Board Committee relative to the year 2003 amounted to EUR 2,857,800. responsible for all TV activities of CLT(1993-1996). Mr. Kayser holds a Master of Economics from the University of Paris 1, Panthéon- Sorbonne, and has concluded specialised university studies in Media Law and Management of Electronic Media. Annual Report 2003 SES GLOBAL 35

Members of the Executive Committee participate in the Company’s Stock-related compensation schemes Executive Stock Options Plan established by the Board of Directors Equity Incentive Compensation Plan on January 31, 2002. During 2003, a combined total of 296,443 SES GLOBAL applies an Equity Incentive Compensation Plan options to acquire Company FDRs were awarded to the members (EICP). The purpose of the plan is to attract and retain highly of the Executive Committee. qualified leadership-level staff. By fostering share ownership among the executive staff, the plan aims to strengthen leadership- Share ownership of members of the Executive Committee level employees’ commitment to the development of the At year-end 2003, members of the Executive Committee owned Company. This policy applies to executive-level employees of a combined total of 60,000 Class A shares, 28,960 FDRs and SES GLOBAL S.A., SES ASTRA and SES AMERICOM. 871,435 540,653 options in SES GLOBAL. stock options were granted in 2003 to 66 executives.

Succession plan for members of the Executive Committee Stock Appreciation Rights Plan In line with the Company’s business continuity planning principles, SES ASTRA and SES GLOBAL S.A. implement a Stock Appreciation the Compensation Committee approved a succession plan for Rights (STAR) Plan, which applies to the non-executive level staff. members of the Executive Committee 2003. The purpose of this Through the grant of Stock Appreciation Rights, the Company aims plan is to guarantee appropriate staffing to manage the SES to encourage the long-term commitment of the staff towards the GLOBAL Group adequately at all times. Company, and to provide the possibility to share in the value creation of the Company. 586,794 STARs were granted in 2003. Other functions Internal Audit Our people The Internal Audit function at SES GLOBAL Group level was SES GLOBAL is dedicated to sourcing, hiring, developing and created in 2000. The mission of Internal Audit is to support internal retaining world-class talent. We believe that our focus on control regarding the effectiveness and efficiency of business operational excellence is reinforced through our people and their operations, the reliability of financial and operational reporting passionate commitment to the work they do and to the customers and the Company’s compliance with legal and regulatory they serve. Customer satisfaction is our primary objective in all our requirements. Internal Audit is also tasked with identifying, markets worldwide. SES GLOBAL companies employ a widely preventing and minimising risks, as well as with the safeguarding diverse workforce. This diversity is a strength that we leverage in of the Company’s assets. order to maximise our creativity and foster innovative solutions at the service of the market. The Internal Auditor reports to the President and CEO of SES GLOBAL, but may also report directly into the Audit Committee. At year-end 2003, the SES GLOBAL Group employed a total of Internal Audit also regularly coordinates audit planning and 789 staff, down from 808 a year earlier. The detail is shown in the exchanges relevant information with the Company’s External table below. Auditors. The activities of the Internal Audit function are based on a three-year audit plan set up using a risk mapping methodology, 2003 2002 and approved by the Audit Committee. SES ASTRA 301 319 SES AMERICOM 291 277 Investor Relations AsiaSat 83 83 SES GLOBAL has had a dedicated Investor Relations function since its predecessor company SES ASTRA was listed on the SES GLOBAL S.A. 50 48 Luxembourg Stock Exchange in 1998. Its purpose is to develop Other Participations1 64 81 and coordinate the Group’s communications with both equity and debt investors, investment analysts, credit rating agencies, Total 789 808 financial journalists and other external audiences, and to provide feedback to the Executive Committee in respect of market 1 Other Participations include SES GLOBAL’s share of the proportionally consolidated developments. Investor Relations also ensures that the participations in SATLYNX and NSAB. Group’s external communications comply with the relevant legal and regulatory requirements.

The Vice President, Investor Relations, reports to the President and CEO of SES GLOBAL and works closely with the CFO and the Group Treasurer. 36 SES GLOBAL Annual Report 2003

Corporate governance continued

Our people continued Our Human Resources (HR) functions During the year, headcount was reduced at SES ASTRA as a Our organisation is supported by HR functions, which are embedded consequence of a social plan. This plan was implemented in order in the operating entities. The HR team at SES ASTRA consists of to adapt the Company’s organisational structure and to preserve its seven employees and at SES AMERICOM of 11 employees. competitiveness in the face of an increasingly challenging market environment. The plan covered 21 employees and was negotiated Our HR functions are committed to identify, hire, develop and retain and agreed with the Company’s Personnel Delegation and the world-class talent. An HR Strategy function has been created at the Mixed Committee in early 2003. The headcount was reduced SES GLOBAL S.A. level. through internal and external transfers, as well as early retirements. Skills development The headcount variation at SES AMERICOM reflects the taking into We recognise that the know-how and expertise embedded in full ownership of AMERICOM ASIA-PACIFIC, as well as intra-group our people is one of our most precious assets. The aspirational view staff reassignments. of our culture is to create an environment, in which people are continuously learning, sharing best practices and demonstrating The following table provides the gender split among the SES respect towards each other. Our training and development, reward GLOBAL companies: and job exchange programmes support the development of this culture. This programme reaches across the companies of the In % of total Male Female Group and continues to develop the skill set of our employee base SES GLOBAL S.A. 64 36 in order to enhance job satisfaction for the benefit of our customers. SES AMERICOM 76 24 The training and skills development budget of SES ASTRA and SES ASTRA 81 19 of SES GLOBAL S.A. was equivalent to approximately 3% of the companies’ payroll costs in 2003. SES AMERICOM spent The European-based staff of SES GLOBAL S.A. and SES ASTRA the equivalent of approximately 7% of total payroll costs on training comprised representatives of 23 nationalities. The staff of SES and development. AMERICOM is predominantly comprised of US citizens. The SES GLOBAL companies apply a Global Development The SES GLOBAL companies apply a performance-based Programme, which enables a temporary exchange of employees remuneration system. The remuneration includes salaries, between SES GLOBAL S.A., SES AMERICOM and SES ASTRA. performance bonuses, stock options, stock appreciation rights and fringe benefits that are in line with market standards. In order to support its vision of being a learning organisation, SES AMERICOM has initiated the AMERICOM University in 2003. Our values and culture This in-house skills development programme has three areas of In the conduct of our operations, SES GLOBAL and its operating educational focus: technology, leadership and sales. In 2003, a total entities observe a common set of core values, which provide of 27 classes were conducted, with many of the instructors being guidance for their activities. These values inspire a unique in-house subject matter experts. organisational culture and reflect our aspirations, which are geared towards achieving the highest performance at the service of SES AMERICOM also initiated a ‘Passport’ programme, customers, shareholders and society at large. Our values are which enables employees to rotate into new assignments on primarily focused on providing highest-quality customer service. a temporary basis.

These values were redefined in 2003 in an all-round approach Social dialogue within SES GLOBAL within our organisations, with the involvement of staff members at In its dealings with its employees and associates, SES GLOBAL S.A. every level. They are: and its operating entities rely upon best practices of social dialogue and openness. These principles are applied at all levels of the Excellence – having the passion and commitment to be the best in organisation and are rooted both in legal requirements and in our industry. management culture.

Partnership – developing and maintaining cooperative relationships At SES ASTRA, the legal framework provides for: that build upon strengths and skills within the Group to achieve common goals and benefits at the service of the customers. • a Personnel Delegation whose seven members are elected for a five-year term and whose mandate is to protect the interests Leadership – articulating strategic vision, demonstrating values, of the workforce with regard to working conditions, job security and creating an environment in which we can meet the needs of and social matters. The Personnel Delegation is kept informed the marketplace. on the developments affecting the Company and advises on amendments to work rules; and Integrity – consistently applying the principles of honesty, • a Mixed Committee composed of three employer representatives accountability, responsibility, fairness, and respect. and three employee representatives. The Mixed Committee has co-decision powers in matters covering performance Innovation – establishing a business culture that stimulates assessment, health and safety and in the general criteria applied creativity across the organisation, develops employees’ skills and in the recruitment, promotion and dismissal policies. The Mixed improves processes, products and services. Committee is consulted on all important decisions regarding investments in plant or equipment, work processes and working conditions. The Committee is informed about the general development of the Company and employment trends. Annual Report 2003 SES GLOBAL 37

Our Company culture aims at constantly enhancing and harnessing Caring for the environment the strengths and qualities of our employees. Therefore, we apply SES GLOBAL and our operating companies are committed to best practices of people management in order to foster the respecting the world’s natural environment, and to aligning conduct creativity and innovation potential of our staff. with the principles of sustainable development.

In 2003, we conducted a ‘voice of the employee’ survey among We apply the basic principle that all activities and services which all the employees of SES ASTRA, SES AMERICOM, and SES we provide to third-party customers, or which are supplied to us by GLOBAL S.A. The survey confirmed a high level of job satisfaction, third-party vendors, comply with the highest standards of but also resulted in adaptations of management style and environmental protection. Compliance is benchmarked against the practices, a reassessment of training and development initiatives, legal rules and regulations in the countries in which SES GLOBAL and analysis of compensation issues. and our entities operate, as well as against best practices, which are applied industry-wide. Our corporate social responsibility policy In 2003, SES GLOBAL implemented a corporate social We pursue the objective to continuously improve our performance responsibility programme based on the Company’s values. in this area and to further reduce the environmental impact of our activities. We believe that global impact relies on local action. Therefore, in the framework of our corporate social responsibility programme The activities of SES GLOBAL and its operating companies are we deploy decentralised activities in those areas of the world in mainly office and technology-based. In our operations, we promote which SES GLOBAL and our operating entities provide commercial the most efficient use of energy and natural resources. We have and technical services. successfully implemented a programme to rely on co-generation power wherever possible, in order to make maximum use of Our corporate social responsibility programme focuses on energy. In 2003, we reduced the amount of business travel as we supporting educational initiatives, thereby aiming to expand and relied on an increased use of video-conferencing facilities. solidify the basis for the development of a knowledge and communications-based society in every region of the world. We apply a waste recycling programme, which aims to avoid, We believe that this is a key element in the emergence of a model reduce, and recycle waste material as efficiently as possible; this for sustainable development. Our corporate social responsibility programme is subject to independent third-party audits and quality activities are mainly deployed via specialised educational institutions. control. We also conduct environmental training on a regular basis and encourage our staff to adopt environmentally correct attitudes During 2003, SES GLOBAL pursued its cooperation with the in their professional activities. University of Sankt Gallen, Switzerland, by financing a scholarship for one student in the university’s MBA programme on media and The operating entities of SES GLOBAL apply best practices in communications management. minimising environmental impact of the outsourced activities, such as the manufacturing and launching of spacecraft. The companies We pursued our support of the educational activities of the Society also ensure that the amount of radiation emitted from their earth of Satellite Professionals International, based in Washington, D.C., stations respects or remains below the maximum levels defined by by financing a scholarship for one student in 2003. the countries of operation; compliance is checked through yearly internal and third-party audits by accredited organisations which are We initiated a multi-year cooperation with the International Space specialised in the field of industrial safety. University based in Strasbourg, France, supporting scholarships for advanced studies of space applications awarded to two students.

SES GLOBAL also supported the Digital Partnership, an initiative managed by the Prince of Wales International Business Leaders’ Forum. SES GLOBAL sponsored the creation of e-learning centres at the University of Transkei, the Zululand University, the University of Venda, and the University of Qwaqwa, all located in South Africa.

SES GLOBAL also donated IT hardware and infrastructure to the Secondary School Nº1 in Leninsk, Kazakhstan.

In the framework of a long-term commitment, SES GLOBAL continued its support of the Institut St Joseph of Betzdorf, Luxembourg, a home for mentally handicapped persons.

Cultural sponsorships During 2003, SES GLOBAL provided financial support for the Luxembourg Philharmonic Orchestra’s Asia tour. The Company also contributed to the financing of a local music festival in Luxembourg. 38 SES GLOBAL Annual Report 2003

Management discussion and analysis

1 Key financial highlights

SES SES Other Total Total ASTRA AMERICOM AsiaSat Participations Elimination 2003 2002 Segmental information EUR million EUR million EUR million EUR million EUR million EUR million EUR million Revenues Sales to external customers 655.5 412.6 103.1 36.3 – 1,207.5 1,349.3 Inter-segment sales 5.8 4.1 – 0.7 (10.6) –– Total revenues 661.3 416.7 103.1 37.0 (10.6) 1,207.5 1,349.3 Operating expenses (116.1) (87.7) (18.2) (53.3) 10.6 (264.7) (299.3) Exceptional items ––––––57.1 EBITDA 545.2 329.0 84.9 (16.3) – 942.8 1,107.1 Depreciation (157.3) (134.7) (25.5) (13.9) – (331.4) (361.6) Amortisation (31.5) (174.1) (11.2) (22.9) – (239.7) (216.4) Operating profit (loss) 356.4 20.2 48.2 (53.1) – 371.7 529.1 Net financing charges including value adjustments on financial assets (7.4) (91.6) Profit on ordinary activities 364.3 437.5 Taxes (131.2) (188.3) Share of associates’ result 4.5 5.5 Profit attributable to minority interests (32.2) (50.2) Profit of the Group 205.4 204.5

2003 2002 Variance Variance Other key financial indicators EUR million EUR million EUR million % Earnings per A-share EUR 0.34 EUR 0.34 -- -- Capital expenditure 317.0 683.8 (366.8) -53.6 Net operating cash flow 873.8 1,051.8 (178.0) -16.9 Free cash flow 940.3 306.4 633.9 +206.9 Net debt 1,699.1 2,661.1 (962.0) -36.2 Net debt/shareholders’ equity 52.3% 74.4% -22.1 % pts – Contract backlog 6,435.0 5,979.6 455.4 +7.6

2 Commentary to Group financial results Due to the significant impact of currency exchange movements on the Group’s financial results for this year, we are presenting the comparative 2002 figures as reported, and on a constant exchange rate basis. References to movements on a constant exchange rate basis refer to those differences arising after restating the prior period financial information using the exchange rates prevailing in the current period.

On a constant exchange rate basis 2003 2002 Variance Variance 2002 Variance Variance Revenues EUR million EUR million EUR million % EUR million EUR million % Revenues 1,207.5 1,349.3 (141.8) -10.5 1,244.4 (36.9) -3.0

Group revenues of EUR 1,207.5 million were EUR 141.8 million, or 10.5%, lower than in 2002. This fall in reported revenue reflects mainly the impact of the weaker US dollar and Hong Kong dollar on SES AMERICOM and AsiaSat sales. On a constant exchange rate basis, Group revenues fell by 3.0%. After adjusting for non-recurring items, such as the EUR 48.4 million revenues generated by the AAP transaction in 2003, significant termination fees posted in 2002, and the impact of the non-recurring Primestar revenues, recurring revenues were 2.6% under the levels prevailing in 2002. Whilst SES ASTRA generated recurring revenues in line with 2002, SES AMERICOM recorded a fall of 3.6% compared to the prior year.

On a constant exchange rate basis 2003 2002 Variance Variance 2002 Variance Variance Operating expenses EUR million EUR million EUR million % EUR million EUR million % Operating expenses 264.7 299.3 (34.6) -11.6 278.2 (13.5) -4.9

Operating expenses comprise external charges, staff costs and other charges.

Group operating expenses fell by EUR 34.6 million from EUR 299.3 million in 2002 to EUR 264.7 million in 2003. Adjusted to a constant exchange rate basis, the fall was 4.9%. This fall was driven by the full-year impact of the cost management programmes executed in the second half of 2002, and a continuing focus on operating cost control in all operations. The greater part of the savings was generated in the SES ASTRA business segment, which contributed EUR 11.0 million of the EUR 13.5 million constant exchange rate reduction. Annual Report 2003 SES GLOBAL 39

On a constant exchange rate basis 2003 2002 Variance Variance 2002 Variance Variance Exceptional items EUR million EUR million EUR million % EUR million EUR million % Exceptional items 0.0 57.1 (57.1) -100.0 57.1 (57.1) -100.0

In 2002 an exceptional gain of EUR 336.5 million was recorded for proceeds from satellite insurance claims concerning the satellites ASTRA 1G and ASTRA 1K. A corresponding asset write-down of EUR 279.4 million was taken, resulting in a net exceptional gain of EUR 57.1 million. The proceeds of these insurance claims were collected in full in 2003.

On a constant exchange rate basis Earnings before interest, taxation, 2003 2002 Variance Variance 2002 Variance Variance depreciation and amortisation (‘EBITDA’) EUR million EUR million EUR million % EUR million EUR million % EBITDA 942.8 1,107.1 (164.3) -14.8 1,023.3 (80.5) -7.9 EBITDA excluding exceptional items 942.8 1,050.0 (107.2) -10.2 966.2 (23.4) -2.4 EBITDA margin 78.1% 82.1% -4.0 % pts – 82.2% -4.1 % pts – EBITDA margin excluding exceptional items 78.1% 77.8% +0.3 % pts – 77.6% +0.5 % pts –

At EUR 942.8 million, Group EBITDA was 14.8% below the prior year level. EBITDA on a constant exchange rate basis declined by 7.9%, due primarily to the 2002 exceptional items noted above. Excluding exceptional items, the Group EBITDA margin rose 0.3 percentage points from 77.8% in 2002 to 78.1% in 2003.

On a constant exchange rate basis 2003 2002 Variance Variance 2002 Variance Variance Depreciation and amortisation EUR million EUR million EUR million % EUR million EUR million % Depreciation 331.4 361.6 (30.2) -8.4 332.9 (1.5) -0.5 Amortisation 239.7 216.4 23.3 10.8 189.4 50.3 +26.6 Total depreciation and amortisation 571.1 578.0 (6.9) -1.2 522.3 48.8 +9.3

Group depreciation fell by EUR 30.2 million, or 8.4%, from EUR 361.6 million in 2002 to EUR 331.4 million in 2003. On a constant exchange rate basis, the charge for the year was in line with 2002, with extra charges related to the full-year depreciation of ASTRA 3A, which entered service in April 2002, and AMC-9 and AsiaSat 4 (which both entered service in June 2003), offsetting the reduction to prior due to the accelerated depreciation charges of EUR 23.5 million booked in 2002 at SES ASTRA on ground equipment in the framework of the transfer of SES ASTRA’s broadband activities to SATLYNX.

Amortisation charges increased by EUR 23.3 million, or 10.8%, from EUR 216.4 million to EUR 239.7 million. On a constant exchange rate basis, the increase was EUR 50.3 million, of which EUR 45.0 million arises due to the one-off charge taken in the framework of the acquisition of the remaining 50% shareholding in AAP.

On a constant exchange rate basis 2003 2002 Variance Variance 2002 Variance Variance Operating profit EUR million EUR million EUR million % EUR million EUR million % Operating profit 371.7 529.1 (157.4) -29.7 500.9 (129.2) -25.8

Group operating profit for the year, at EUR 371.7 million, was EUR 157.4 million, or 29.7%, lower than 2002. On a constant exchange rate basis the fall was EUR 129.2 million, or 25.8%, of which SES ASTRA contributed EUR 49.3 million and SES AMERICOM EUR 65.9 million. The lower SES ASTRA operating profit is mainly attributable to the exceptional items posted in 2002 as explained above. At SES AMERICOM, while non-recurring revenues remained substantially in line with 2002, operating profit decreased, due primarily to the EUR 45.0 million one-off charge relating to the AAP transaction described above. 40 SES GLOBAL Annual Report 2003

Management discussion and analysis continued

Net financing charges including 2003 2002 Variance Variance value adjustments on financial assets EUR million EUR million EUR million % Net financing charges including value adjustments 7. 4 91.6 (84.2) -91.9

Net financing charges including value adjustments on financial assets fell by EUR 84.2 million from EUR 91.6 million to EUR 7.4 million, as follows:

2003 2002 Variance Variance EUR million EUR million EUR million % Net interest expenses 56.6 122.3 (65.7) -53.7 Capitalised interest (20.3) (31.0) 10.7 +34.5 Net foreign exchange losses/(gains) (34.5) (19.9) (14.6) -73.4 Value adjustments/other 5.6 20.2 (14.6) -72.3 Net financing charges including value adjustments on financial assets 7. 4 91.6 (84.2) -91.9

The fall in financing charges to the prior year is driven primarily by a fall in the net interest expense. This is driven in turn by three factors:

• A significant fall in the level of net debt during the year (see ‘Net debt’ below); • Lower effective interest rates on the Group’s borrowings in the year; and • The impact of the weaker US dollar on the Euro value of US dollar denominated interest charges, where the average rate used in 2002 was EUR 1: USD 0.94 compared to EUR 1: USD 1.12 in 2003.

Of the fall of EUR 10.7 million in capitalised interest charges, EUR 10.1 million came from SES ASTRA where the ASTRA 1K programme was completed in 2002. The commencement of the satellite procurement programmes for ASTRA 1KR and ASTRA 1L did not result in significant postings to capitalised interest in 2003.

Net foreign exchange gains arose on holding certain unhedged US dollar denominated liabilities in the first half of 2003. As of July 2003, movements on these liabilities, in line with the Group’s treatment of similar items, were hedged against the net investment in SES AMERICOM such that further movements were taken directly to the currency exchange reserve.

The prior year saw significant value adjustments being made on investments in Gilat Satellite Networks Ltd and Netsystem.com S.p.A.

2003 2002 Variance Variance Ta x e s EUR million EUR million EUR million % Taxes 131.2 188.3 (57.1) -30.3

The taxation charge fell EUR 57.1 million, or 30.3%, from EUR 188.3 million in 2002 to EUR 131.2 million in 2003. Whilst this is partially explained by a reduction in profit before tax of 16.7%, the Group has also benefited this year from measures implemented in 2003 to ensure that the operations are structured favourably for taxation purposes. As a result the effective tax rate, after adding back non-deductible amortisation on intangible assets, fell from 30.1% in 2002 to 22.9% in 2003.

2003 2002 Variance Variance Share of associates’ result EUR million EUR million EUR million % Share of associates’ result 4.5 5.5 (1.0) -18.2

Share of associates’ result remained at a level similar to the prior year at EUR 4.5 million (2002: EUR 5.5 million), with the small reduction being attributable to start-up costs of IP Direct (Proprietary) Ltd. The main contributor to the share of associates’ result is the Group’s equity interest in Star One in Brazil.

2003 2002 Variance Variance Profit attributable to minority interests EUR million EUR million EUR million % Profit attributable to minority interests 32.2 50.2 (18.0) -35.9

The minority interests relate entirely to the share of AsiaSat statutory income attributable to other AsiaSat shareholders.

2003 2002 Variance Variance Profit of the Group EUR million EUR million EUR million % Profit of the Group 205.4 204.5 0.9 +0.4 Net profit margin 17.0% 15.2% +1.8 % pts – Earnings per A-share 0.34 0.34 ––

Profit of the Group at EUR 205.4 million was in line with the prior year’s result of EUR 204.5 million. At the Profit of the Group level the unfavourable effect of the weakness of the US dollar on revenues in 2003 is largely neutralised by the corresponding impact on US dollar-denominated operating expenses, depreciation and amortisation, and interest on US dollar-denominated borrowings. In addition, the lower operating profit was fully offset by lower financing costs and taxes. Annual Report 2003 SES GLOBAL 41

During 2003 the Group proportionately consolidated the financial results of SATLYNX for 12 months, rather than seven months in 2002. Excluding the impact of SATLYNX, on a same scope basis the profit of the Group rose 4.8% compared to the prior year.

2003 2002 Variance Variance Capital expenditure EUR million EUR million EUR million % SES ASTRA 83.3 200.7 (117.4) -58.5 SES AMERICOM 234.4 514.2 (279.8) -54.4 AsiaSat 19.3 58.9 (39.6) -67.2 Other Participations 2.6 6.6 (4.0) -60.6 Less: intra-Group transfers (22.6) (96.6) 74.0 +76.6 Total capital expenditure 317.0 683.8 (366.8) -53.6

Capital expenditure fell by EUR 366.8 million, or 53.6%, from EUR 683.8 million in 2002 to EUR 317.0 million in 2003.

The greater part of this decline was contributed by SES AMERICOM where, beyond the impact of the weaker US dollar, the satellite procurement agreements for the six satellite programmes running during 2002 and 2003 foresaw fewer significant milestone invoices in 2003 than in 2002.

At SES ASTRA and AsiaSat, declines in capital expenditure were also recorded. At SES ASTRA this was due to the fact that the ASTRA 1K procurement programme was completed in 2002 and the follow-on procurement programmes for ASTRA 1KR and ASTRA 1L did not result in any significant additions before the fourth quarter of 2003. Similarly at AsiaSat, the AsiaSat 4 procurement was completed in the first quarter of 2003 and no further satellite programmes have been initiated to date.

Cash flow 2003 2002 Variance Variance Net operating cash flow EUR million EUR million EUR million % Net operating cash flow 873.8 1,051.8 (178.0) -16.9

The Group net operating cash flow fell by EUR 178.0 million, or 16.9%, from EUR 1,051.8 million in 2002 to EUR 873.8 million in 2003. The greater part of this reduction, at EUR 118.0 million, is attributable to the successful measures taken in 2002 to reduce the Group’s investment in working capital, which boosted net operating cash flow. Cash generated by operations contributed a further EUR 45.7 million to net operating cash flow in 2003.

2003 2002 Variance Variance Free cash flow EUR million EUR million EUR million % Free cash flow 940.3 306.4 633.9 +206.9

The Group’s free cash flow rose EUR 633.9 million, or 206.9%, from EUR 306.4 million in 2002 to EUR 940.3 million in 2003. This was primarily due to a very favourable development in cash absorbed by investing activities as set out below.

The Group recorded a decrease of EUR 811.9 million in cash absorbed by investing activities, driven by the following principal factors:

• The significantly lower levels of capital expenditure compared to the prior year outlined above; • The proceeds of EUR 336.5 million of the ASTRA 1K and ASTRA 1G insurance claims received in the first half of the year; and • The receipt of proceeds of EUR 102.9 million on settlement of swap transactions.

2003 2002 Variance Variance Net cash flow EUR million EUR million EUR million % Net cash flow 22.8 (386.4) 409.2 –

The Group’s net cash flow rose EUR 409.2 million from EUR (386.4) million in 2002 to EUR 22.8 million in 2003, due primarily to the matters outlined above.

In the course of 2003 the brought forward bank borrowings of EUR 2,948.1 million, primarily drawn under the Syndicated Multi-currency Term and Revolving Facilities Agreement of March 28, 2001 (‘syndicated facility’), have been substantially refinanced in order to take advantage of more favourable commercial market conditions, to extend the maturity profile of the Group’s borrowings, and to take advantage of the substantial free cash flow generated in 2003. Net cash repayments of borrowings in 2003 were EUR 663.4 million, an increase of EUR 225.8 million over 2002. This was the primary driver in an overall increase in cash absorbed by financing activities of EUR 244.2 million. 42 SES GLOBAL Annual Report 2003

Management discussion and analysis continued

Net debt At the close of 2003, the net debt of the Group stood at EUR 1,699.1 million, a fall of EUR 962.0 million, or 36.1%, from the prior year closing figure of EUR 2,661.1 million. The refinancing activities in 2003, together with the application of appropriate financial instruments, has succeeded in reducing the interest margin on borrowings by an average of 35 basis points. Furthermore the syndicated facility drawings with maturities until 2006 have been replaced with primary financial instruments, being a private placement of loan notes and two Eurobonds, with maturities between 2008 and 2013, as well as bilateral banking facilities, securing the Group’s financing base for a considerable period of time.

Cash Borrowings Net debt EUR million EUR million EUR million Net debt at December 31, 2002 (286.9) 2,948.0 2,661.1 Net settlement of borrowings 663.4 (663.4) – Increase in cash holdings (686.2) – (686.2) Favourable exchange movement on borrowings – (275.8) (275.8) Net debt at December 31, 2003 (309.7) 2,008.8 1,699.1

Financial derivative products The Group makes use of the following financial derivative products as part of normal treasury activities:

(i) Forward foreign exchange agreements Forward foreign exchange agreements are used to cover significant non-Euro-denominated contracted future payments, for example milestone payments on satellite procurement programmes.

(ii) Interest rate swap agreements Interest rate swap agreements are used to convert contractually fixed-rate interest charges to a floating rate, or vice versa, as deemed appropriate in the light of market conditions.

(iii)Cross-currency swap agreements Cross-currency swap agreements are currently in place as part of an overall strategy to reduce the impact of movements on the EUR:US dollar exchange rate on the financial position of the Group.

The use of financial derivative products takes place within a clear control framework established by the Board of Directors for these activities.

All financial derivatives have been individually valued to reflect market rates and assumptions at the balance sheet date.

Contract backlog The Group’s contract backlog rose EUR 455.4 million, or 7.6%, from EUR 5,979.6 million at December 31, 2002 to EUR 6,435.0 million at the end of 2003. Adjusting for the impact of exchange rates, the rise in the Group’s contract backlog was 15.1%.

SES ASTRA increased its contract backlog by EUR 488.8 million, or 13.5%, as a result of contract renewals and extensions with, among others, the German public broadcasting authorities and the BBC.

SES AMERICOM’s backlog rose EUR 115.1 million, or 6.4%, with significant new contracts with EchoStar, Discovery, Univision and NBC. SES AMERICOM’s underlying US dollar-denominated backlog rose 27.7%.

Dividend The Board of Directors has recommended a dividend per A-share of EUR 0.22. This will result in a total dividend payment of EUR 129.8 million. The dividend will be paid in May 2004 subsequent to approval by the shareholders at the Annual General Meeting on May 6, 2004.

3 Transition to International Financial Reporting Standards (‘IFRS’) In compliance with the European Parliament and Council Regulation 1606/2002 on the application of IFRS adopted on July 19, 2002, the Group will prepare its consolidated financial statements in accordance with IFRS for each financial year – and for each six-monthly interim results period – beginning on or after January 1, 2005. Currently the financial statements of the Group are drawn up in accordance with accounting principles and regulations generally accepted in the Grand Duchy of Luxembourg (‘Lux-GAAP’).

In preparation for this transition, the Group is reviewing its accounting policies to identify areas of divergence between IFRS and Lux-GAAP, to the extent that this is possible given the ongoing finalisation by the regulatory authority of the definitions of certain key accounting standards. Annual Report 2003 SES GLOBAL 43

SES GLOBAL S.A. consolidated accounts Report of the independent auditor

To the Shareholders of SES GLOBAL S.A. Société Anonyme Betzdorf

Following our appointment by the Annual General Meeting of the Shareholders on May 6, 2003, we have audited the accompanying consolidated accounts of SES GLOBAL S.A. for the year ended December 31, 2003 and have read the related consolidated management report. These consolidated accounts and the consolidated management report are the responsibility of the Board of Directors. Our responsibility is to express an opinion on these consolidated accounts based on our audit and to check that the consolidated management report is consistent with the consolidated accounts.

We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated accounts. An audit also includes assessing the accounting principles used and significant estimates made by the Board of Directors, as well as evaluating the overall consolidated accounts presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the accompanying consolidated accounts give, in conformity with Luxembourg legal and regulatory requirements, a true and fair view of the consolidated financial position of SES GLOBAL S.A. as at December 31, 2003 and of the consolidated results of its operations for the year then ended.

The consolidated management report is consistent with the consolidated accounts.

Ernst & Young Société Anonyme Réviseur d’entreprises

Werner Weynand

Luxembourg, March 18, 2004 44 SES GLOBAL Annual Report 2003

Consolidated balance sheet December 31, 2003

Note 2003 2002 Assets EUR million EUR million Fixed assets Intangible assets 4 Goodwill 1,963.7 2,470.1 Other intangibles 796.8 935.9 2,760.5 3,406.0 Tangible assets in use 5 Land and buildings 100.0 94.6 Plant and machinery – space segment 2,290.6 2,332.6 – ground segment 111.4 120.8 Other fixtures and fittings, tools and equipment 14.6 17.9 2,516.6 2,565.9 Payment on account and assets in course of construction 6 686.7 1,008.1 3,203.3 3,574.0 Financial assets Investments in associates 9 79.5 77.5 Long-term investments 10 5.0 8.4 Other financial assets 11 35.7 40.1 120.2 126.0 Current assets Inventories 12 3.4 4.0 Trade debtors 13 119.8 169.6 Other debtors 23 37.3 382.9 Investments 14 36.2 23.1 Cross currency interest rate swap agreements 15 113.7 74.3 Cash at bank and on deposit 309.7 286.9 620.1 940.8

Prepayments and deferred charges 68.4 90.0 Deferred tax assets 18 4.5 4.3

Total assets 6,777.0 8,141.1

The notes are an integral part of the consolidated accounts. Annual Report 2003 SES GLOBAL 45

Note 2003 2002 Liabilities EUR million EUR million Capital and reserves Subscribed capital 16 921.8 921.8 Treasury shares at cost (17.7) (17.8) Share premium account 2,819.7 2,819.7 Reserves – legal reserve 24.5 17.6 – other reserves 61.0 9.8 – currency exchange reserve (768.1) (380.8) Result brought forward 1.2 0.3 Profit of the Group 205.4 204.5 3,247.8 3,575.1 Minority interests In capital and reserves 208.4 220.3 In the result for the year 32.2 50.2 240.6 270.5 Provisions for liabilities and charges Provisions for pensions 17 0.6 0.6 Other provisions 17 10.3 6.7 Provisions for deferred taxes 18 635.1 709.0 646.0 716.3 Creditors Amounts payable after more than one year Notes and bonds 19 1,621.9 – Amounts owed to credit institutions 19 386.9 2,318.6 Other liabilities 20 32.6 14.9 2,041.4 2,333.5 Amounts payable in less than one year Amounts owed to credit institutions 19 – 629.4 Payments received on account 12.8 5.5 Trade creditors 119.1 159.4 Tax and social security payable 155.9 52.8 Other liabilities 20 73.4 98.8 361.2 945.9

Deferred income Upfront payments 163.3 186.3 Other deferred income 76.7 113.5 240.0 299.8

Total liabilities 6,777.0 8,141.1

The notes are an integral part of the consolidated accounts. 46 SES GLOBAL Annual Report 2003

Consolidated profit and loss account Year ended December 31, 2003

Note 2003 2002 EUR million EUR million Net turnover 29 1,121.1 1,321.0 Other operating income 21 86.4 28.3 Total revenues 3 1,207.5 1,349.3

External charges 29 (171.2) (177.0) Staff costs 22 (78.8) (101.7) Other operating charges (14.7) (20.6) Proceeds from satellite insurance claims 23 – 336.5 Asset write-down related to insurance claims 23 – (279.4) Depreciation and amortisation 4,5 (571.1) (578.0) Operating profit 371.7 529.1

Interest receivable and similar income 102.3 61.8 Interest payable and similar charges (103.4) (132.6) Value adjustments on financial assets 10,11 (6.3) (20.8) Profit on ordinary activities 364.3 437.5

Taxes 24 (131.2) (188.3) Profit for the financial year 233.1 249.2

Share of associates’ result 9 4.5 5.5 Profit attributable to minority interests (32.2) (50.2) Profit of the Group 205.4 204.5

Basic and diluted earnings per share (in Euro) 25 A – shares 0.34 0.34 B – shares 0.14 0.13 C – shares 0.34 0.34

The notes are an integral part of the consolidated accounts. Annual Report 2003 SES GLOBAL 47

Consolidated statement of cash flow Year ended December 31, 2003

2003 2002 EUR million EUR million Cash flow from operating activities Consolidated net income before taxes 364.3 437.5 Taxes paid during the year (81.5) (88.8) Net financing charges 23.7 44.6 Depreciation and amortisation 571.2 578.0 Amortisation of client upfront payments (88.8) (76.3) Other non-cash items in the consolidated profit and loss account 32.3 (3.8) Provisions for pensions and other provisions 4.0 (4.0) Result on disposal of fixed assets 2.9 0.9 Consolidated operating profit before working capital changes 828.1 888.1

Changes in operating assets and liabilities Decrease/(increase) in inventories 0.2 (1.7) Decrease in trade debtors 43.4 41.8 Decrease in other debtors 4.2 53.7 (Increase)/decrease in prepayments and deferred charges (4.2) 2.0 (Decrease)/increase in trade creditors (36.9) 34.2 (Decrease) in other creditors (14.1) (11.4) Increase/(decrease) in payments received on account 7. 3 (1.4) Increase in upfront payments 61.7 54.8 (Decrease) in other deferred income (15.9) (8.3) Cash generated by operations 45.7 163.7

Net operating cash flow 873.8 1,051.8

Cash flow from investing activities Purchase of intangible assets (2.2) (2.7) Purchase of tangible assets (315.4) (683.8) Proceeds of insurance claims received for asset disposals 336.5 – Disposal of tangible assets 2.2 3.2 Acquisition of further AAP shareholding (net of cash acquired) (47.0) – Purchase to acquire SATLYNX (net of cash acquired) – (42.0) Purchase to acquire SES AMERICOM (net of cash acquired) – (7.9) Realised proceeds on settlement of swap transactions 102.9 – Proceeds of disposal of consolidated financial assets 3.6 – Investment in non-consolidated financial assets (16.3) (12.2) Proceeds of disposal of non-consolidated financial assets 2.2 – Net cash generated/(absorbed) by investing activities 66.5 (745.4)

Cash flow from financing activities New borrowings 1,708.8 20.2 New borrowings other than from loans – 1. 1 Repayment of borrowings (2,372.2) (458.9) Dividends paid on ordinary shares (net of dividends received) (123.7) (130.4) Dividends paid to minority shareholders (53.1) (7.4) Net financing paid on non-operating activities (23.7) (39.4) Acquisition of FDRs (1.6) (10.8) Dividends from equity investments 4.5 8.8 Net cash absorbed by financing activities (861.0) (616.8)

Movements in exchange (56.5) (76.0) Increase/(decrease) in cash 22.8 (386.4) Cash at beginning of the year 286.9 673.3 Cash at end of the year 309.7 286.9

The notes are an integral part of the consolidated accounts. 48 SES GLOBAL Annual Report 2003

Consolidated statement of changes in shareholders’ equity Year ended December 31, 2003

Share Currency Result Subscribed Treasury premium Legal Other exchange brought Profit of capital shares account reserve reserves reserve forward the year Total EUR million EUR million EUR million EUR million EUR million EUR million EUR million EUR million EUR million At January 1, 2002 175.8 (8.8) 3,696.7 17.6 – (4.1) – 40.2 3,917.4 Allocation of result ––––39.9 – 0.3 (40.2) – Transfer (Note 16) 746.0 – (746.0) –––––– Dividend ––(131.0) –––––(131.0) Purchase of treasury shares – (9.0) ––––––(9.0) Result for the year –––––––204.5 204.5 Impact of currency translation –––––(376.7) ––(376.7) Transfer to other liabilities (Note 27) ––––(30.1) –––(30.1) At December 31, 2002 921.8 (17.8) 2,819.7 17.6 9.8 (380.8) 0.3 204.5 3,575.1

Allocation of result –––6.9 78.7 – 118.9 (204.5) – Dividend ––––(6.3) – (118.0) – (124.3) Disposal of treasury shares – 0.1 ––––––0.1 Result for the year –––––––205.4 205.4 Impact of currency translation –––––(387.3) ––(387.3) Transfer to other liabilities (Note 27) ––––(21.2) –––(21.2) At December 31, 2003 921.8 (17.7) 2,819.7 24.5 61.0 (768.1) 1.2 205.4 3,247.8

The notes are an integral part of the consolidated accounts. Annual Report 2003 SES GLOBAL 49

Notes to the consolidated accounts December 31, 2003

Note 1 Corporate information The consolidated financial statements of SES GLOBAL S.A. for the year ended December 31, 2003 were authorised for issue in accordance with a resolution of the Directors on March 18, 2004.

SES GLOBAL S.A. (‘SES GLOBAL’ or the ‘Company’) was incorporated on March 16, 2001 as a limited liability company (Société Anonyme) under Luxembourg law. References to the ‘Group’ in the following notes are to the Company and its subsidiaries, joint ventures and associates.

SES GLOBAL trades under ‘SESG’ on the Luxembourg Stock Exchange and on the Frankfurt Stock Exchange.

Note 2 Summary of significant accounting policies Basis of preparation The consolidated accounts are prepared on the historical cost basis, except for the measurement at fair value of derivative financial instruments, and in accordance with accounting principles and regulations generally accepted in the Grand Duchy of Luxembourg.

Basis of consolidation The consolidated accounts comprise the accounts of the Company and its controlled subsidiaries, after the elimination of all material inter-company transactions. Subsidiaries are consolidated from the date the Company obtains control until such time as control ceases. Acquisitions of subsidiaries are accounted for using the purchase method of accounting. The financial statements of subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. Adjustments are made to conform with dissimilar material accounting policies that may exist.

Joint ventures The Company’s interests in jointly controlled entities are accounted for by proportional consolidation, which involves recognising a proportional share of the joint ventures’ assets, liabilities, income and expenses with similar items in the consolidated accounts on a line-by-line basis.

Investments in associates Investments in associates over which the Company has significant influence are accounted for under the equity method of accounting and are carried in the balance sheet at the lower of the equity-accounted amount and the recoverable amount. The pro rata share of income (loss) of associates is included in income. The carrying value of such investments includes a goodwill component where the consideration paid exceeded the fair value of the Company’s share of the underlying assets. 50 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 2 Summary of significant accounting policies continued Consolidated subsidiaries, joint ventures and associates The consolidated accounts include the accounts of the subsidiaries, joint ventures and associates listed below:

Effective Effective interest (%) interest (%) Method of 2003 2002 consolidation SES ASTRA S.A., Luxembourg (‘SES ASTRA’) 100.00 100.00 Full SES GLOBAL-Americas Inc., USA (‘SES AMERICOM’) 100.00 100.00 Full SES GLOBAL-Americas Finance Inc., USA 100.00 – Full SES Finance S.A., Luxembourg (‘SES FINANCE’) 100.00 100.00 Full

Held through SES ASTRA: ASTRA Marketing GmbH, Germany 100.00 100.00 Full ASTRA Marketing Ltd, United Kingdom 100.00 100.00 Full ASTRA Marketing Iberica S.A., Spain 100.00 100.00 Full ASTRA Marketing France S.A., France 100.00 100.00 Full ASTRA Marketing Polska Sp. z o.o., Poland 100.00 100.00 Full ASTRA Marketing GmbH, Austria 100.00 – Full SES Ré S.A., Luxembourg 100.00 100.00 Full SES Capital Luxembourg S.A ., Luxembourg 100.00 100.00 Full SES Multimedia S.A., Luxembourg 100.00 100.00 Full SES Capital Belgium S.A., Belgium 100.00 100.00 Full SES GLOBAL-South Americas Inc., USA 100.00 100.00 Full Nahuelsat S.A., Argentina 28.75 28.75 Equity iBEAM Europe Ltd., U.K. (in liquidation) 33.33 33.33 Equity IP Direct (Proprietary) Limited, South Africa 40.96 – Equity

Held through SES AMERICOM: SES Subsidiary 23 Inc., USA 100.00 100.00 Full SES Subsidiary 24 Inc., USA 100.00 100.00 Full SES Subsidiary 25 Inc., USA 100.00 100.00 Full SES Subsidiary 26 Inc., USA 100.00 100.00 Full SES AMERICOM, Inc., USA 100.00 100.00 Full SES AMERICOM (Asia 1A) LLC, USA 100.00 100.00 Full SES AMERICOM International Holdings, Inc., USA 100.00 100.00 Full SES AMERICOM UK Ltd., UK 100.00 100.00 Full SES AMERICOM (Singapore) Pty., Ltd.,Singapore 100.00 100.00 Full Columbia Communications Corporation, USA 100.00 100.00 Full AMERICOM Government Services, Inc., USA 100.00 100.00 Full SES AMERICOM California, Inc., USA 100.00 100.00 Full SES Satellites International, Inc., USA 100.00 100.00 Full Communications Satellite Int. Marketing Inc., USA 100.00 100.00 Full Columbia/Wig USA Communications, Inc., USA 100.00 100.00 Full SES AMERICOM Colorado, Inc., USA 100.00 100.00 Full SES Satellites (Gibraltar) Ltd., Gibraltar 100.00 100.00 Full SES AMERICOM do Brasil, Ltda., Brazil 100.00 100.00 Full SES AMERICOM do Brasil Multimidia, Ltda., Brazil 100.00 100.00 Full SES AMERICOM do Brasil Multimidia Holdings, Ltda., Brazil 100.00 100.00 Full SES AMERICOM (Brazil) Holdings, LLC, USA 100.00 100.00 Full SES AMERICOM Canada, Inc., Canada 100.00 – Full SES AMERICOM PAC, Inc., USA 100.00 – Full Starsys Global Positioning Inc., USA 80.00 80.00 Full AMERICOM Asia Pacific LLC, USA (‘AAP’) 100.00 50.00 Full* Worldsat LLC, USA 100.00 – Full Sistemas Satelitales de Mexico S. de R.L. de C.V., Mexico 49.00 49.00 Equity

*Proportionally consolidated until June 2003. Annual Report 2003 SES GLOBAL 51

Effective Effective interest (%) interest (%) Method of 2003 2002 consolidation Held through SES FINANCE: SES do Brasil S.A., Brazil 100.00 100.00 Full Bowenvale Ltd, British Virgin Islands (‘Bowenvale’) 49.50 49.50 Full Asia Satellite Telecommunications Holdings Ltd, Bermuda (‘AsiaSat’) 34.10 34.10 Full Auspicious City Limited, Hong Kong 34.10 – Full Nordic Satellite AB, Sweden (‘NSAB’) 50.00 50.00 Proportional Norwegian Digital Swap A/S, Norway (liquidated) – 50.00 Proportional Sirius Satellite Services SIA, Latvia 50.00 50.00 Proportional SATLYNX S.A., Luxembourg (‘SATLYNX’) 45.23 50.00 Proportional SATLYNX sro, Czech Republic 45.23 50.00 Proportional SATLYNX S.A., France 45.23 50.00 Proportional SATLYNX GmbH, Germany 45.23 50.00 Proportional SATLYNX Srl, Italy 45.23 50.00 Proportional SATLYNX Ltd., UK 45.23 50.00 Proportional SATLYNX BV, The Netherlands 45.23 50.00 Proportional SATLYNX Europe SL, Spain 45.23 50.00 Proportional PhoenixNet Holdings Ltd., Hong Kong (‘PhoenixNet’) 36.52 36.52 Equity Speedcast Ltd, Hong Kong (‘Speedcast’) 36.52 36.52 Equity Star One S.A., Brazil (‘Star One’) 19.99 19.99 Equity

On January 15, 1999, the Company acquired, through its wholly owned subsidiary SES FINANCE, a 49.5% interest in Bowenvale which controls 68.90% of the ordinary shares of AsiaSat. The Company and Chinese International Trust and Investment Corporation (‘CITIC’), have equal voting rights at Bowenvale’s shareholder and Board meetings. They have entered into a shareholders’ agreement under the terms of which the Company has been given the right to assist AsiaSat in important areas that relate to the operation and further development of new satellite services, due to their knowledge and expertise in this area. The holding of shares, as well as the presence of the Company on the Board of Directors and their particular responsibility in the definition and development of the satellite business, explains the full consolidation of AsiaSat in the Group’s financial statements.

Partnership interests In April 2003, the Company, together with its 100%-owned affiliate SES ASTRA, created a partnership named SES GLOBAL Americas Holdings GP, Delaware, USA.

Intangible assets Goodwill Goodwill represents the difference between the cost of acquisition of shares in a consolidated company and the Group’s share in the fair value of the net assets acquired at the date of acquisition. Such items are amortised over their useful economic life on a straight-line basis, from the date of acquisition. The current maximum period of amortisation is 20 years. The carrying value is reviewed for impairment when events or changes in circumstances indicate that it may not be recoverable. Goodwill is stated at cost less accumulated amortisation and any impairment in value.

Other intangibles Intangible assets, consisting principally of rights of usage of orbital frequencies and acquired transponder service agreements, are amortised on a straight-line basis over their useful lives. The current lives in use range from 20 to 21 years.

Development costs Development expenditure incurred on an individual project is carried forward when its future recoverability can be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project. 52 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 2 Summary of significant accounting policies continued Tangible assets Land and buildings Land is recorded at acquisition cost. Buildings are shown in the balance sheet at cost less depreciation. Buildings are depreciated over their estimated useful life on a straight-line basis. The depreciation period is primarily 25 years.

Plant and machinery – space segment The cost of the space segment includes the procurement of satellites together with launch expenses, insurance, and other related costs. Relevant finance charges arising during the construction period of satellites are capitalised. The economic lives in use for depreciating Group satellites range from ten to 16 years.

Plant and machinery – ground segment Machinery and equipment is depreciated evenly over its estimated useful life, which is between 3 and 15 years.

Other fixtures, fittings, tools and equipment All such items are depreciated evenly over the estimated useful lives of between 3 and 15 years.

Payments on account and assets in course of construction Amounts payable in respect of the purchase of future satellites, launch costs and other related expenses including ground segment expenditure and financing costs are included in the balance sheet when billed. When the asset is subsequently put into service, the expenditure is transferred to assets in use and depreciation commences.

Impairment of long-lived and intangible assets The Group’s long-lived assets and intangible assets, including its in-service satellite fleet and goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Impairments can arise from complete or partial failure of a satellite as well as other changes in expected discounted future cash flows. Such impairment tests are based on a comparison of estimated discounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset value will be written down to fair value based upon discounted cash flows, using an appropriate discount rate.

Loan origination costs Loan origination costs are capitalised and included in prepaid expenses. They are amortised over the loan periods.

Financial assets Long-term investments and other financial assets are carried in the balance sheet at cost. An assessment is made at each balance sheet date to determine whether there is objective evidence that a financial asset may be impaired. If such evidence exists, the estimated recoverable amount of that asset is determined and any impairment loss recognised, being the difference between the estimated recoverable amount and the carrying amount, and recorded in the profit and loss account for the period.

Inventories Inventories primarily consist of customer premises equipment, related accessories and network equipment spares and are stated at the lower of cost or market value, with cost determined on a moving average basis and market value based on the estimated net realisable value.

Debtors Debtors are stated at anticipated realisable value.

Investments Fiduciary Depositary Receipts purchased for use in connection with staff stock option plans are initially valued at acquisition cost. The difference between acquisition cost and exercise price is amortised on a straight-line basis over the vesting period.

Other short-term investments are valued at the lower of cost and market value.

Cash and cash equivalents Cash on hand and in banks, and short-term deposits which are held to maturity, are carried at cost. Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

For the purposes of the consolidated statement of cash flow, cash and cash equivalents consist of cash on hand and deposits in banks, net of outstanding bank overdrafts.

Revenue recognition The Group enters into contracts to provide high-quality satellite transponder capacity and broadcasting services for television and radio broadcasts and data-transmission services. Revenues are generated primarily from service agreements with customers to provide satellite transponder services.

All amounts received from customers under contracts for satellite capacity are recognised over the duration of the respective contracts on a straight-line basis. Payments received in advance are deferred and included in the balance sheet as deferred income. Payments of receivables in arrears are accrued and included in trade debtors. Annual Report 2003 SES GLOBAL 53

Dividends The Company declares dividends after the accounts for the year have been approved. Accordingly dividends are recorded in the subsequent year’s accounts.

Provisions Provisions are recognised when: the Group has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.

Deferred taxes The Group provides for deferred income taxes on all temporary differences between financial and tax reporting, including tax losses and tax credits available for carry-forward. Tax rates enacted or substantively enacted by the balance sheet date are used to determine deferred tax. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax is provided on temporary differences arising on investments in subsidiaries, joint ventures and associates, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Translation of foreign currencies The Company maintains its accounting records in Euro (EUR) and the consolidated accounts are expressed in this currency. The cost of non- monetary assets is translated at the rate applicable at the date of the transaction. All other assets and liabilities are translated at closing rates of exchange.

During the year, expenses and income expressed in foreign currencies are recorded at exchange rates prevailing on the date they occur or accrue. All exchange differences resulting from the application of these principles are included in the profit and loss account.

Goodwill and fair value adjustments arising on the acquisition of a 100%-owned foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

Subsidiary companies keep their accounts in their respective currencies. The assets and liabilities of consolidated subsidiaries are translated into Euro at the year-end exchange rates, while the income and expense items of these subsidiaries are translated at the average exchange rate of the year. The related foreign exchange differences are included in the currency exchange reserve.

Those SES ASTRA marketing subsidiaries which do not maintain their accounts in Euro are dependent upon SES ASTRA for funding and represent an integral part of SES ASTRA’s operations. Accordingly, the temporal method of currency translation is applied to these companies’ accounts for the purposes of presenting the consolidated accounts.

The principal foreign currency exchange rates used by the Group during the year were as follows:

Closing rate Average rate for the Closing rate EUR 1 = December 31, 2002 year 2003 December 31, 2003 US dollar 1.05 1.12 1.26 Hong Kong dollar 8.16 8.71 9.78 Swedish krona 9.14 9.13 9.05

Concentration of credit risk Cash and cash equivalents are primarily maintained with major financial institutions. These deposits are due upon demand and, therefore, bear minimal risk.

The Group provides satellite transponders and related services and extends credit to customers in the commercial satellite communications market. Management monitors its exposure to credit losses and maintains allowances for anticipated losses that are charged to other operating charges.

Basic and diluted earnings per share The Company’s capital structure consists of Class A, Class B and Class C shares that are entitled to the payment of annual dividends as approved by the shareholders at their annual meetings. Holders of Class B shares participate in earnings and are entitled to 40% of the dividends payable per Class A share.

Basic and diluted earnings per share are calculated by dividing the net profit attributable to ordinary shareholders (after deducting the founder share dividend) by the weighted average number of common shares outstanding during the period. Diluted earnings per share are also adjusted for the effects of dilutive options.

Advertising costs The Group expenses all advertising costs as incurred. 54 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 2 Summary of significant accounting policies continued Derivative financial instruments The Group uses derivative financial instruments such as foreign currency contracts and interest rate swaps to hedge its risks associated with interest rate and foreign currency fluctuation. The Group recognises all derivatives on the balance sheet at fair value. The fair value of forward exchange contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. The fair value of interest rate swap contracts is determined by reference to market values for similar instruments. On the date the derivative instrument is entered into, the Group designates the derivative as:

1. a hedge of the fair value of a recognised asset or liability or of an unrecognised firm commitment (‘fair value hedge’); 2. a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognised asset or liability (‘cash flow hedge’); or 3. a hedge of a net investment in a foreign operation (‘net investment hedge’).

Fair value hedges In relation to fair value hedges (interest rate swaps) which meet the conditions for special hedge accounting, any gain or loss from re- measuring the hedging instrument at fair value is recognised immediately in the profit and loss account. Any gain or loss on the hedged item attributable to the hedged risk is adjusted against the carrying amount of the hedged item and recognised in the profit and loss account.

Cash flow hedges In relation to cash flow hedges (forward foreign currency contracts) to hedge firm commitments which meet the conditions for special hedge accounting, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly in equity and the ineffective portion is recognised in net profit or loss.

When the hedged commitment results in the recognition of an asset or a liability, then, at the time the asset or liability is recognised, the associated gains or losses that had previously been recognised in equity are included in the initial measurement of the acquisition cost or carrying amount of the asset or liability.

Net investment hedges Changes in the fair value of a derivative or non-derivative that is designated as, and meets all the required criteria for, a hedge of a net investment are recorded in the currency exchange reserve to the extent that it is deemed to be an effective hedge. The ineffective portion is recognised in net profit or loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for special hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in equity is kept in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to net profit or loss for the period.

The Group formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes allocating all derivatives that are designated as fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Group also formally assesses, both at the inception of the hedge and on an ongoing basis, whether each derivative is highly effective in offsetting changes in fair values or cash flows of the hedged item. If it is determined that a derivative is not highly effective as a hedge, or if a derivative ceases to be a highly effective hedge, the Group will discontinue hedge accounting prospectively.

Accounting for pension obligations The Company and certain subsidiaries operate defined benefit pension plans and/or defined contribution plans. The cost of providing benefits under the defined benefit pension plan is determined using the projected unit credit actuarial valuation method. Actuarial gains and losses are recognised as income or expense when the cumulative unrecognised gains or losses for each individual plan exceed 10% of the higher of the defined benefit obligation and the fair value of plan assets. These gains or losses are recognised over the expected average remaining working lives of the employees participating in the plans. Costs relating to the defined contribution plan are recognised in the profit and loss account as incurred on an accruals basis.

Leases Finance leases, which transfer to the Group substantially all risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair market value of the leased item or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the net profit or loss of the period.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term. Annual Report 2003 SES GLOBAL 55

Note 3 Segment information The Group’s business comprises principally the operations of SES ASTRA, SES AMERICOM and AsiaSat, which are organised and managed separately. Each represents a strategic business unit serving different regional markets and as such is identified as a business segment for internal management reporting and resource allocation. The Group’s other affiliates are included in a fourth business segment called ‘Other Participations’.

SES ASTRA is Europe’s leading direct-to-home satellite operator. The SES ASTRA fleet comprises 13 satellites, delivering TV and radio services to homes throughout Europe. SES ASTRA also transmits high-speed broadband services and provides capacity for two-way satellite applications. Additionally, the product portfolio includes direct-to-cable and occasional use services.

SES AMERICOM operates a fleet of 17 satellites serving the Americas, Europe and the Asia-Pacific region, including satellites providing transoceanic services. The Company also offers a full range of broadband services to enterprise and government markets.

AsiaSat provides transponder capacity for broadcast, broadband and telecommunications services in the Asia-Pacific region. AsiaSat’s three spacecraft currently serve public and private TV and radio broadcasters from around the world.

The ‘Other Participations’ segment includes the Group’s participations in the holding companies SES GLOBAL and SES FINANCE, in SES GLOBAL-Americas Finance Inc., as well as other affiliated companies such as NSAB, SATLYNX and Star One. Up until June 2003, this segment also included AAP. After the transaction taking the Group’s shareholding in AAP up to 100%, this became part of the SES AMERICOM segment.

The Group generally accounts for inter-segment sales and transfers as if the sales or transfers were to third parties at current market prices.

The following segmental information differs from that included in the consolidated accounts as at December 31, 2002 as management are of the opinion that the current format better represents the operating activities of each segment. For comparability purposes, the 2002 figures have been restated.

Segment assets and liabilities include all operating assets and liabilities that are employed by a segment in its operating activities and that are either directly attributable to the segment or can be allocated to the segment on a reasonable basis. Segment assets and liabilities do not include financing liabilities or taxes payable/receivable, and are stated net of inter-segment balances.

For the year ended December 31, 2003:

SES Other SES ASTRA AMERICOM AsiaSat Participations Elimination Total EUR million EUR million EUR million EUR million EUR million EUR million Segmental result Sales to external customers 655.5 412.6 103.1 36.3 – 1,207.5 Inter-segment sales 5.8 4.1 – 0.7 (10.6) – Total revenues 661.3 416.7 103.1 37.0 (10.6) 1,207.5 Operating expenses (116.1) (87.7) (18.2) (53.3) 10.6 (264.7) Exceptional items –––––– EBITDA 545.2 329.0 84.9 (16.3) – 942.8 Depreciation (157.3) (134.7) (25.5) (13.9) – (331.4) Amortisation of goodwill (0.9) (107.9) (11.2) (22.2) – (142.2) Amortisation of other intangible assets (30.6) (66.2) – (0.7) – (97.5) Operating profit (loss) 356.4 20.2 48.2 (53.1) – 371.7

Segmental assets Goodwill – 1,720.7 168.1 74.9 1,963.7 Other intangible assets 483.4 308.9 – 4.5 796.8 Tangible assets 1,077.1 1,741.7 325.7 58.8 3,203.3 Financial assets 9.3 1.9 0.7 108.3 120.2 Other assets 131.8 15.0 21.0 211.0 378.8 Segmental assets 1,701.6 3,788.2 515.5 457.5 6,462.8 Unallocated assets 314.2 Total assets 6,777.0

Segmental liabilities Segmental liabilities 275.2 144.6 39.2 33.8 492.8 Unallocated liabilities 2,795.8 Total liabilities 3,288.6

Capital expenditure 83.3 234.4 19.3 2.6 (22.6) 317.0

Of the total reported share of associates’ results for 2003 of EUR 4.5 million, EUR (1.3) million arose in the ASTRA segment and EUR (2.0) million in the AsiaSat segment. The balance of EUR 7.8 million was attributable to the Other Participations segment. 56 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 3 Segment information continued For the year ended December 31, 2002:

SES Other SES ASTRA AMERICOM AsiaSat Participations Elimination Total EUR million EUR million EUR million EUR million EUR million EUR million Segmental result Sales to external customers 675.4 501.5 130.9 41.5 – 1,349.3 Inter-segment sales 1.8 6.7 – 0.7 (9.2) – Total revenues 677.2 508.2 130.9 42.2 (9.2) 1,349.3 Operating expenses (123.3) (104.2) (25.3) (55.7) 9.2 (299.3) Exceptional items 57.1 ––––57.1 EBITDA 611.0 404.0 105.6 (13.5) – 1,107.1 Depreciation (177.0) (146.2) (22.9) (15.5) – (361.6) Amortisation of goodwill (0.9) (129.1) (11.2) (20.2) – (161.4) Amortisation of other intangible assets (27.7) (27.3) –––(55.0) Operating profit (loss) 405.4 101.4 71.5 (49.2) – 529.1

Segmental assets Goodwill 0.9 2,189.5 179.3 100.4 2,470.1 Other intangible assets 514.0 421.9 –– 935.9 Tangible assets 1,154.7 1,912.4 396.2 110.7 3,574.0 Financial assets 24.4 1.4 22.8 77.4 126.0 Other assets 525.8 25.2 (4.3) 197.3 744.0 Segmental assets 2,219.8 4,550.4 594.0 485.8 7,850.0 Unallocated assets 291.1 Total assets 8,141.1

Segmental liabilities Segmental liabilities 315.6 197.4 48.6 28.4 590.0 Unallocated liabilities 3,705.5 Total liabilities 4,295.5

Capital expenditure 200.7 514.2 58.9 6.6 (96.6) 683.8

Of the total reported share of associates’ results for 2002 of EUR 5.5 million, EUR (1.8) million arose in the AsiaSat segment, with the balance of EUR 7.3 million being attributable to the Other Participations segment. Annual Report 2003 SES GLOBAL 57

Note 4 Intangible assets Other Development Goodwill intangibles1 costs Total EUR million EUR million EUR million EUR million Net book value at January 1, 2002 2,906.0 1,109.7 – 4,015.7

Movements in 2002 on historic cost Cost at January 1, 2002 2,966.2 1,140.9 – 4,107.1 Change of consolidation scope 43.5 ––43.5 Additions 10.4 0.9 – 11.3 Purchase allocation 62.6 (48.5) – 14.1 Transfer from assets in course of construction ––8.5 8.5 Impact of currency translation (406.6) (85.8) – (492.4) Cost at December 31, 2002 2,676.1 1,007.5 8.5 3,692.1

Movements in 2002 on amortisation Accumulated amortisation at January 1, 2002 (60.2) (31.2) – (91.4) Amortisation (151.9) (54.4) (0.6) (206.9) Purchase allocation amortisation (2.2) 2.2 –– Impairment (9.5) ––(9.5) Impact of currency translation 17.8 3.9 – 21.7 Accumulated amortisation at December 31, 2002 (206.0) (79.5) (0.6) (286.1)

Net book value at December 31, 2002 2,470.1 928.0 7.9 3,406.0

Movements in 2003 on historic cost Cost at January 1, 2003 2,676.1 1,007.5 8.5 3,692.1 Change of consolidation scope (4.3) 3.9 – (0.4) Additions 1.7 2.0 – 3.7 Disposals – (48.4) – (48.4) Reclassification (11.2) 18.7 – 7. 5 Impact of currency translation (385.7) (72.6) – (458.3) Cost at December 31, 2003 2,276.6 911.1 8.5 3,196.2

Movements in 2003 on amortisation Accumulated amortisation at January 1, 2003 (206.0) (79.5) (0.6) (286.1) Change of consolidation scope 1.0 ––1. 0 Amortisation (133.1) (94.0) (1.2) (228.3) Impairment (9.1) – (2.3) (11.4) Reversal of accumulated amortisation – 48.4 – 48.4 Impact of currency translation 34.3 6.4 – 40.7 Accumulated amortisation at December 31, 2003 (312.9) (118.7) (4.1) (435.7)

Net book value at December 31, 2003 1,963.7 792.4 4.4 2,760.5

1 Includes rights of usage of orbital frequencies and acquired transponder service agreements. 58 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 4 Intangible assets continued Goodwill The goodwill balance relates to the acquisition of SES AMERICOM, Bowenvale, SATLYNX and NSAB. The goodwill arising through the investments in Bowenvale (EUR 223.6 million) and NSAB (EUR 78.2 million) is being amortised over 20 years beginning January 15, 1999 and October 1, 2000 respectively.

Goodwill arising on the acquisition of SES Capital Luxembourg S.A. has been amortised over five years commencing December 1, 1998 and is completely amortised as at December 31, 2003.

On the acquisition of SES AMERICOM, goodwill of USD 2,367.1 million was generated. In the 12 months following the date of acquisition, the goodwill was adjusted by EUR 62.6 million (USD 61.9 million) to reflect the availability of additional information concerning the assets and liabilities acquired. This transaction and the subsequent goodwill adjustments are set out in more detail in Note 7. The goodwill is being amortised on a straight-line basis over 20 years beginning November 9, 2001. Additional costs of EUR 7.9 million were incurred in 2002 relating to the acquisition of SES AMERICOM.

Goodwill amounting to EUR 44.2 million arose on the acquisition of SATLYNX. This transaction is set out in more detail in Note 8. The goodwill is being amortised on a straight-line basis over a five-year period beginning May 24, 2002. An impairment charge of EUR 9.1 million was recorded against this goodwill in 2003 to reflect the current trading position of this company.

Goodwill of EUR 1.6 million (2002: EUR 1.8 million) arose relating to the contingent settlement of a purchase agreement between SES AMERICOM and Columbia Communications Corporation.

An impairment of EUR 9.5 million was recognised in 2002 on the goodwill arising on the investment in NSAB, to reflect the current trading position of this company.

Other intangible assets On the acquisition of SES AMERICOM, a total valuation of USD 517.0 million was placed on certain of the intangible assets acquired, such as rights of usage of orbital frequencies and acquired transponder service agreements. Subsequent to the date of acquisition the fair value ascribed to these intangibles was adjusted by EUR 48.5 million (USD 48.0 million) to reflect the availability of additional information concerning their fair value. This transaction and the subsequent purchase allocation adjustments are set out in more detail in Note 7.

A termination fee payment from Lockheed Martin in respect of contracted revenues for use of the AAP orbital position was received during the year (see Note 21). As a result, the intangible asset representing the value of this contract has been completely written off, resulting in an amortisation charge of EUR 45.0 million (USD 53.1 million).

During the year ended December 31, 2001, SES ASTRA concluded an agreement with the Luxembourg government in relation to the usage of the Luxembourg frequencies in the orbital positions of the geo-stationary arc from 45°West to 50° East for the period of January 1, 2001 to December 31, 2021. The right of usage was granted at an agreed value of EUR 550.0 million. This cost is being written off on a straight-line basis over the 21-year term of the agreement.

The remaining balance relates to a EUR 10.0 million payment made in relation to orbital access rights. This asset is being written off on a straight-line basis over the period of the agreement.

Development costs During 2002 the Group capitalised development costs incurred amounting to EUR 8.5 million relating to the development of Satellite Interactive Terminals, which allow the use of two-way interactive services technology. In 2003, an impairment of EUR 2.3 million was recognised on this asset to reflect a change in business assumptions concerning a portion of these development projects. The remaining balance is being amortised on a straight-line basis over seven years. Annual Report 2003 SES GLOBAL 59

Note 5 Tangible assets in use Land and Space Ground Fixtures buildings segment segment and fittings Total EUR million EUR million EUR million EUR million EUR million Net book value at January 1, 2002 84.1 2,769.3 103.7 21.0 2,978.1

Movements in 2002 on historic cost Cost at January 1, 2002 125.6 4,039.4 326.8 58.8 4,550.6 Change of consolidation scope 5.6 – 23.0 2.6 31.2 Additions 2.0 4.8 29.1 6.5 42.4 Disposals (0.1) – (60.6) (3.8) (64.5) Transfers from assets in course of construction 10.5 109.3 51.7 – 171.5 Impact of currency translation (3.9) (303.0) (30.2) (2.6) (339.7) Cost at December 31, 2002 139.7 3,850.5 339.8 61.5 4,391.5

Movements in 2002 on amortisation Accumulated depreciation at January 1, 2002 (41.5) (1,270.1) (223.1) (37.8) (1,572.5) Change of consolidation scope ––(8.2) (0.8) (9.0) Depreciation (6.3) (296.5) (49.3) (9.5) (361.6) Asset write-downs related to insurance claims – (14.0) ––(14.0) Depreciation on disposals 0.1 – 38.9 2.6 41.6 Impact of currency translation 2.6 62.7 22.7 1.9 89.9 Accumulated amortisation at December 31, 2002 (45.1) (1,517.9) (219.0) (43.6) (1,825.6)

Net book value at December 31, 2002 94.6 2,332.6 120.8 17.9 2,565.9

Movements in 2003 on historic cost Cost at January 1, 2003 139.7 3,850.5 339.8 61.5 4,391.5 Change of consolidation scope (0.5) 39.1 (0.7) (0.2) 37.7 Additions 2.2 6.6 14.2 4.1 27.1 Disposals (0.5) (138.2) (16.4) (1.8) (156.9) Adjustments (0.2) –––(0.2) Transfers from assets in course of construction 13.0 433.5 14.2 2.7 463.4 Reclassifications ––1. 6 – 1. 6 Impact of currency translation (4.5) (307.9) (29.9) (2.6) (344.9) Cost at December 31, 2003 149.2 3,883.6 322.8 63.7 4,419.3

Movements in 2003 on amortisation Accumulated depreciation at January 1, 2003 (45.1) (1,517.9) (219.0) (43.6) (1,825.6) Change of consolidation scope – 1.4 2.1 0.1 3.6 Depreciation (7.0) (287.0) (27.8) (9.6) (331.4) Depreciation on disposals 0.5 138.2 12.5 1.8 153.0 Reclassifications ––(1.6) – (1.6) Impact of currency translation 2.4 72.3 22.4 2.2 99.3 Accumulated depreciation at December 31, 2003 (49.2) (1,593.0) (211.4) (49.1) (1,902.7)

Net book value at December 31, 2003 100.0 2,290.6 111.4 14.6 2,516.6

The carrying value of fixed assets held under finance lease contracts at December 31, 2003 is EUR 7.9 million (2002: EUR 10.2 million). 60 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 6 Payment on account and assets in course of construction Land and Space Ground buildings segment segment Total EUR million EUR million EUR million EUR million Cost and net book value at January 1, 2002 4.4 892.9 54.7 952.0

Movements in 2002 on historic cost Cost at January 1, 2002 4.4 892.9 54.7 952.0 Additions 13.7 602.7 24.9 641.3 Asset write-down related to insurance claims – (264.3) (1.1) (265.4) Disposals – (2.8) (0.2) (3.0) Purchase allocation adjustment – (20.7) – (20.7) Reclassification 0.2 – (0.2) – Transfers to assets in use (10.5) (109.3) (51.7) (171.5) Transfers to intangible assets ––(8.5) (8.5) Impact of currency translation (0.4) (115.3) (0.4) (116.1) Cost at December 31, 2002 7.4 983.2 17.5 1,008.1

Cost and net book value at December 31, 2002 7.4 983.2 17.5 1,008.1

Movements in 2003 on historic cost Cost at January 1, 2003 7.4 983.2 17.5 1,008.1 Additions 6.5 274.8 8.6 289.9 Transfers to assets in use (13.0) (433.5) (16.9) (463.4) Impact of currency translation (0.9) (146.2) (0.8) (147.9) Cost at December 31, 2003 0.0 678.3 8.4 686.7

Cost and net book value at December 31, 2003 0.0 678.3 8.4 686.7

Borrowing costs of EUR 20.3 million (2002: EUR 31.0 million) arising on financing specifically relating to satellite construction were capitalised during the year and are included in ‘Space segment’ additions in the above table. A weighted average capitalisation rate of 2.76% (2002: 3.4%) was used, representing the borrowing cost of the relevant loans. Annual Report 2003 SES GLOBAL 61

Note 7 Investments in subsidiaries SES AMERICOM On November 9, 2001, SES GLOBAL acquired 100% of the shares of SES AMERICOM, and certain other related assets, from GE Capital, in a USD 4,336.0 million transaction, including transaction costs of USD 35.6 million. SES GLOBAL exercised its option on November 7, 2001, to issue additional Special Equity Shares to GE Capital in order to decrease the cash portion of the purchase consideration by USD 300.0 million. At closing, after taking into account the Special Equity Shares issued, the purchase consideration consisted of USD 2,413.5 million in cash from borrowings under available credit facilities and 176,799,314 of the Company’s Ordinary Class C Shares and 4,496,358 Preferred Class C Shares. The share consideration has been valued at a price of EUR 11.89 per share. In the 12 months following the date of acquisition the fair value of certain assets and liabilities acquired was adjusted to reflect the availability of additional information concerning these assets and liabilities.

The fair value of SES AMERICOM’s assets and liabilities acquired on November 9, 2001 were as follows:

Purchase allocation Amended November 9, 2001 adjustments fair value USD million USD million USD million Intangible assets 517.0 (48.0) 469.0 Tangible assets 1,620.3 (20.5) 1,599.8 Financial assets 65.5 2.1 67.6 Trade and other debtors 93.2 10.1 103.3 Cash at bank and on deposit 272.2 – 272.2 Prepayments and deferred charges 4.7 (0.6) 4.1 Other provisions (2.5) – (2.5) Loan financing, GE Capital (1,900.0) – (1,900.0) Other long-term liabilities (23.4) (4.1) (27.5) Current liabilities (53.9) (17.4) (71.3) Deferred tax (420.2) 8.7 (411.5) Deferred income (104.0) – (104.0) Fair value of net assets acquired (excluding goodwill) 68.9 (69.7) (0.8) Settlement of the loan financing from GE Capital 1,900.0 – 1,900.0 Goodwill arising on acquisition 2,367.1 69.7 2,436.8 Total consideration 4,336.0 – 4,336.0

Under the terms of the agreement, the consideration of USD 4,336.0 million was used to settle the loan financing from GE Capital (USD 1,900.0 million) and to acquire the remaining net assets for a consideration of USD 2,436.0 million.

The total purchase allocation adjustments include re-allocations between existing assets acquired at November 9, 2001 (USD 61.9 million) and additional costs incurred on the acquisition (USD 7.8 million).

AMERICOM Asia Pacific LLC (‘AAP’) On June 27, 2003, the Group acquired the remaining 50% of the share capital in AAP from Lockheed Martin for a total consideration of EUR 49.7 million (USD 58.7 million). 62 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 8 Interests in joint ventures NSAB On October 1, 2000, SES ASTRA acquired 50% of the shares of NSAB. At December 31, 2003, NSAB holds a 100% interest in Sirius Satellite Services SIA, Latvia. The Group’s share of the assets, liabilities, revenue and expenses included in the consolidated accounts (before the elimination of intra-Group transactions) are as follows at December 31 and for the year then ended:

2003 2002 EUR million EUR million Fixed assets 42.5 49.9 Current assets 25.1 14.4 Prepayments, deferred charges and deferred tax assets 2.0 3.0 Provisions for liabilities and charges 11.0 9.6 Amounts payable in less than one year 3.0 4.8 Deferred income 1.9 2.3

Revenue 25.1 31.5 Operating expenses (21.8) (24.5) Finance income/(expenses) 0.5 (0.1) Profit before income tax 3.8 6.9 Taxes (1.1) (2.0) Net profit 2.7 4.9

SATLYNX S.A. In May 2002, SES FINANCE and Gilat Satellite Networks (Holland) B.V. (‘Gilat’) created a joint venture company, SATLYNX S.A. SES FINANCE contributed Broadband Interactive assets for an amount of EUR 21.9 million and cash for EUR 56.6 million. In addition SES FINANCE incurred acquisition costs amounting to EUR 2.3 million. Gilat contributed 100% of the share capital of Gilat-To-Home Europe B.V. for a value of EUR 78.3 million.

In May 2002, SATLYNX purchased from Gilat, 100% of the shares of: – Gilat Europe sro, – Gilat Europe S.A., – Gilat Europe GmbH, – Gilat Europe Srl, – Gilat Europe Ltd. for a total consideration of EUR 18.2 million which has been settled in cash for EUR 13.1 million and the issuance of Gilat A-Shareholder loans (see Note 20) for USD 4.7 million (EUR 5.1 million).

Acquisition costs in relation to these transactions amounted to EUR 5.0 million.

The fair value of the assets and liabilities acquired in 2002 through the above transactions was as follows:

EUR million Tangible fixed assets 22.2 Current assets 26.6 Amounts due in more than one year (9.2) Amounts due in less than one year (4.8) Warrant instruments 1. 8 Goodwill arising on acquisition 44.2 Total purchase price 80.8 Annual Report 2003 SES GLOBAL 63

Note 8 Interests in joint ventures continued On June 3, 2003, SATLYNX increased their share capital by means of the issuance of new shares to Alcatel Spacecom S.A.S and Skybridge LP. This resulted in a dilution of the Group’s shareholding from 50% to 45.23% at that date.

The Group’s share of the assets, liabilities, revenue and expenses included in the consolidated accounts (before the elimination of intra- Group transactions) are as follows at December 31, 2003 and for the year then ended. The comparative figures represent the situation at December 31, 2002 and from the date of acquisition to the year then ended.

2003 2002 EUR million EUR million Fixed assets 35.4 60.7 Current assets 5.7 6.4 Prepayments, deferred charges and deferred tax assets 4.7 9.7 Provisions for liabilities and charges 0.6 0.5 Amounts payable after more than one year 8.9 11.5 Amounts payable in less than one year 6.9 7. 9 Deferred income 0.1 0.1

Revenue 12.2 7. 2 Operating expenses (45.6) (24.3) Finance income/(expenses) 0.3 (0.5) Loss before income tax (33.1) (17.6) Taxes (0.1) – Net loss (33.2) (17.6)

Note 9 Investments in associates On December 31, 2003, the Group held interests, directly or indirectly, in four associates accounted for under the equity method. These were: Star One (19.99%); Nahuelsat (28.75%), Speedcast (36.52%) and IP Direct (Proprietary) Limited (‘IP Direct’) (40.96%).

At December 31, 2003, these investments have the following carrying values in the consolidated financial statements:

Impact of Brought Additions/ Share ofcurrency Carrying forward Dividends (disposals) results translation value EUR million EUR million EUR million EUR million EUR million EUR million Star One 72.0 (4.4) – 9.6 0.6 77.8 Nahuelsat 3.4 ––(1.9) – 1. 5 Speedcast 2.1 ––(2.0) (0.1) – IP Direct ––1. 4 ( 1. 2 ) – 0.2 Total 2003 77.5 (4.4) 1.4 4.5 0.5 79.5 Total 2002 140.9 (8.8) 4.0 5.5 (64.1) 77.5

Investments in associates at December 31, 2003 include goodwill of EUR 26.7 million (2002: EUR 29.5 million). Amortisation of goodwill of EUR 4.2 million (2002: EUR 4.7 million) is included in the share of associates’ result.

SES GLOBAL’s share of shareholders’ equity of the interests listed above was as follows at December 31, 2003: Speedcast EUR 0.1 million; Star One EUR 40.0 million; Nahuelsat EUR 2.3 million; IP Direct EUR 2.1 million.

Note 10 Long-term investments At December 31, 2003 the Group held long-term equity investments in the following companies:

Brought Impact of forward currency Value Carrying Historic cost book value Additions translation adjustment value EUR million EUR million EUR million EUR million EUR million EUR million ND SatCom 2.1 2.1 –––2.1 Netsystem.com S.p.A. 11.9 4.9 ––(4.9) – Gilat Satellite Networks Ltd 9.9 – 2.6 – 0.3 2.9 Internet Satellite Platform Inc. 1.4 1.4 – (0.1) (1.3) – PhoenixStar 3.2 – 0.2 – (0.2) – Total 2003 28.5 8.4 2.8 (0.1) (6.1) 5.0 Total 2002 22.6 22.6 6.4 (0.4) (20.2) 8.4 64 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 11 Other financial assets At December 31, 2003 the Group held the following other financial assets:

Brought Impact of forward currency Value Carrying Historic cost book value Additions translation adjustment value EUR million EUR million EUR million EUR million EUR million EUR million Loan to Able Star1 32.2 38.6 – (6.4) – 32.2 Other assets 6.9 1.5 2.2 – (0.2) 3.5 Total 2003 39.1 40.1 2.2 (6.4) (0.2) 35.7 Total 2002 49.3 46.3 1.8 (7.4) (0.6) 40.1

1 The loan of USD 40.5 million was made in 1999 to Able Star Associates Limited, British Virgin Islands, a fully owned subsidiary of the Chinese International Trust and Investment Corporation (‘CITIC’). The purpose of this loan was to enable CITIC to purchase additional shares in Bowenvale to achieve the desired ownership structure. The loan bears interest at market rates and is repayable on January 15, 2006. No repayments were made in 2003.

Note 12 Inventories 2003 2002 EUR million EUR million Work-in-progress (at cost) 1.8 0.6 Finished goods at net realisable value 1.6 3.4 Total inventories at lower of cost and net realisable value 3.4 4.0

For information purpose: Finished goods at cost 2.1 4.7

Note 13 Trade debtors 2003 2002 EUR million EUR million Outstanding invoices on billed revenues 33.4 44.9 Unbilled accrued revenue 86.4 124.7 Total trade debtors 119.8 169.6

Unbilled accrued revenue represents revenues for use of satellite capacity under long-term contracts but not billed. Billing will occur based on the terms of the contracts. Trade debtors are stated net of accumulated provisions of EUR 27.6 million (2002: EUR 34.2 million). The charge to debtor provisions for 2003 of EUR 3.7 million (2002: EUR 12.5 million) is included in other operating charges.

Trade debtors at December 31, 2003 include EUR 46.8 million (2002: EUR 37.9 million) of amounts becoming due and payable in more than one year.

Note 14 Investments

2003 2002 EUR million EUR million Investments in SES GLOBAL Fiduciary Depositary Receipts 25.0 23.1 Other investments 11.2 – Total investments 36.2 23.1

SES ASTRA and SES GLOBAL have, in agreement with the shareholders, purchased Fiduciary Depositary Receipts (‘FDRs’) in respect of Class A shares for use in connection with staff stock option programmes. Annual Report 2003 SES GLOBAL 65

Note 15 Financial instruments At December 31, 2003, the Group held ten cross currency swap agreements (nine in the name of SES GLOBAL S.A. and one in the name of SES GLOBAL Americas Holdings GP) which have been designated as a hedge of the net investment in the US subsidiary, SES AMERICOM. The average terms of these contracts were as follows:

Currency sold Currency bought Average weighted maturity Average exchange rate USD 1,570.0 million EUR 1,351.6 million October 2006 EUR/USD 1.1616

Currency sold Currency bought Maturity date Exchange rate USD 45.4 million GBP 28.0 million September 2013 GBP/USD 1.6200

As at December 31, 2003, the fair value of these contracts amounted to EUR 105.8 million. Of this amount EUR 73.5 million (net of deferred tax of EUR 32.0 million) is included in the currency exchange reserve, with the remainder, EUR 0.2 million, being recognised in the profit and loss account as the ineffective portion of the hedging relationship.

At December 31, 2002, the Group held ten cross currency swap agreements which had been designated as a hedge of the net investment in SES AMERICOM. The average terms of these contracts were as follows:

Currency sold Currency bought Average weighted maturity Average exchange rate USD 1,225.0 million EUR 1,242.0 million April 2005 EUR/USD 0.9863

During the year the Group closed out these agreements resulting in a realised gain EUR 102.9 million. Of this amount EUR 71.2 million (net of current tax of EUR 31.0 million) is included in the currency exchange reserve with the remainder, EUR 0.7 million, being recognised in the profit and loss account as the ineffective portion of the hedging relationship.

At December 31, 2003, the Company also held six interest rate swap agreements (fair value hedges) with a notional amount of USD 1,045.4 million whereby the Company receives a fixed rate of interest semi-annually and pays a variable rate equal to three-month and six-month LIBOR plus a margin. The interest rate swaps were put in place at the same time as the pricing of the US Private Placement (July 2003) with a maturity profile between 2013 and 2015, amortising as of September 2007. As at December 31, 2003 the fair value of these contracts amounted to EUR 7.9 million.

At December 31, 2003, the Company had outstanding forward foreign exchange contracts (cash flow hedges) for an amount of USD 143.2 million against EUR 127.5 million with an average all-in rate of 1.1232. These foreign exchange transactions have monthly maturities out to December 2005 and correspond to specific contracts relating to satellite procurements for SES ASTRA. As at December 31, 2003 the fair value of the contracts for which no asset or liability had yet been recorded in the balance sheet amounted to EUR (7.0) million, net of deferred tax of EUR 3.0 million, and is included in the currency exchange reserve.

Note 16 Subscribed capital The Company has an authorised share capital of EUR 10,134.0 million comprising 918,749,180 shares. The subscribed share capital of EUR 921.8 million is represented by Class A, B and C shares with no par value. The share capital is divided into the following classes:

Ordinary Ordinary Ordinary Preferred Total A shares B shares C shares C shares shares Subscribed at December 31, 2003 and 2002 310,340,000 245,817,836 176,799,314 4,496,358 737,453,508

Fiduciary Depositary Receipts (FDRs) with respect to the Class A shares of the Company are listed on the Luxembourg Stock Exchange and on the ‘Amtlicher Handel’, the official list of the Deutsche Börse. These FDRs can be traded freely and are convertible to Class A shares at any time at the option of the holder, under the conditions applicable in the Company’s articles of association and in accordance with the terms of the FDRs.

All Class B shares are currently held by the State of Luxembourg or by Luxembourg public institutions.

The Class C shares were issued as part of the consideration for the acquisition of SES AMERICOM. A holder of Preferred C shares is entitled at his option at any time and from time to time to convert all or part of such Preferred C shares into Ordinary C shares at a conversion ratio of one Ordinary C share per one Preferred C share. A holder of Ordinary C shares is entitled at his option at any time and from time to time to convert all or part of such Ordinary C shares into shares of Class A at a conversion ratio of one share of Class A per one Ordinary C share.

One-third of the total number of the members of the Board of Directors are appointed from a list of candidates put up by the holders of Class B shares. The holders of Class C shares can nominate a list of candidates for up to three directors, depending on the percentage of total subscribed shares represented by the category C shares. The shareholders of Class A shares nominate a list of candidates for the remaining Board members. 66 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 16 Subscribed capital continued Dividends are paid in such a manner that the payment on one share of Class B equals 40% of the payment of one share of Class A. Each Preferred C share is entitled to fixed dividends, which consist of cumulative annual dividends payable in cash at the rate of 4% per annum on a notional liquidation value of USD 50.0 million. The fixed dividend shall accrue as from the date of issue of the Preferred C shares. Dividends on Ordinary C shares are calculated as for Class A shares but are subject to deduction of the fixed dividend on the Preferred C shares for the relevant dividend period.

The acquisition of shares beyond a threshold of 20.1% of the shares of the Company by one single shareholder is subject to a process requiring a non-opposition by the Luxembourg Government as well as a decision by an Extraordinary General Meeting of the shareholders. The Luxembourg Government may only oppose such acquisition based on grounds justified by general public interest.

On June 27, 2002, the Board of Directors of the Company decided to increase the issued share capital of the Company by an amount of EUR 746.0 million, thereby raising it from its existing amount of EUR 175.8 million to EUR 921.8 million by incorporating the share premium account to the share capital to the extent of the capital increase, without issuing new shares.

Note 17 Provisions for pensions and other provisions As of January 1, 2002, the Group’s operations in Luxembourg reconstituted their staff pension scheme from an internally managed defined benefit scheme into an externally managed defined contributions scheme. In addition to the Luxembourg operations, various other Group companies operate non-funded and non-contributory defined benefit retirement scheme for qualifying employees. The assets of these schemes are held separately from those of the Group in funds under the control of trustees. The retirement benefits costs charged to the profit and loss account represent contributions payable to the scheme by the Group at rates specified in the rules of the scheme. Where employees leave the scheme prior to their contributions vesting fully, the contributions payable by the Group are reduced by the amount of forfeited contributions.

Contributions made in 2003 under pension schemes totalled EUR 2.3 million (2002: EUR 1.8 million).

Certain Group companies offer post-retirement healthcare and life insurance benefits to eligible domestic retired employees. Retirees share in the cost of their healthcare benefits through service-related contributions and salary-related deductibles. Retiree life insurance benefits are non-contributory.

The movements on the provisions are set out below:

Provisions Other for pensions provisions EUR million EUR million At January 1, 2002 4.2 7.1 Change of consolidation scope 0.4 – Provision for 2002 0.2 0.8 Reversal of provisions – (0.8) Impact of currency translation – (0.4) Transfer to externally managed scheme (4.2) – At December 31, 2002 0.6 6.7

Change of consolidation scope (0.1) – Provision for 2003 0.1 4.0 Reversal of provisions – (0.1) Impact of currency translation – (0.3) At December 31, 2003 0.6 10.3 Annual Report 2003 SES GLOBAL 67

Note 18 Deferred taxes The movements on the provisions are set out below:

Provisions Provisions for deferred for deferred tax assets tax liability EUR million EUR million At January 1, 2002 6.1 573.1 Purchase allocation adjustment – (8.8) Provision for 2002 0.1 241.0 Reversal of provisions (1.9) (12.7) Impact of currency translation – (83.6) At December 31, 2002 4.3 709.0

Adjustment made on purchase of shareholding in AAP – 7. 5 Provision for 2003 0.2 106.9 Reversal of provisions – (106.1) Impact of currency translation – (82.2) At December 31, 2003 4.5 635.1

Deferred tax provisions reflect temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal unity.

Note 19 Interest-bearing loans and borrowings At the end of 2003 and 2002, the loan accounts for the Group were as follows:

2003 2002 EUR million EUR million US Private Placement 2013 – 2015 (USD 1 billion and GBP 28 million) 821.9 – Eurobond 2008 (EUR 500 million) 500.0 – Eurobond 2007 (EUR 300 million) 300.0 – Bilateral multi-currency credit facilities 386.9 – Syndicated multi-currency term and revolving facilities agreement (EUR 1.4 billion and USD 2.5 billion) – 2,927.8 Uncommitted facility – 20.2 2,008.8 2,948.0

The maturity profile of these loans at December 31, 2003 and 2002 is as follows:

2003 2002 EUR million EUR million Within one year – 629.4

Between one and two years – 580.9 Between two and five years 1,287.6 1,737.7 More than five years 721.2 – Total after more than one year 2,008.8 2,318.6

US Private Placement On September 30, 2003, SES GLOBAL Americas Holdings GP issued in the US Private Placement market four series of unsecured Notes amounting to USD 1,000.0 million and GBP 28.0 million made up as follows:

1. Series A USD 400.0 million of 5.29% Senior Notes due September 2013, amortising as of September 2007. 2. Series B USD 513.0 million of 5.83% Senior Notes due September 2015, amortising as of September 2011. 3. Series C USD 87.0 million of 5.93% Senior Notes due September 2015. 4. Series D GBP 28.0 million of 5.63% Senior Notes due September 2013, amortising as of September 2007.

SES GLOBAL is committed under the US Private Placement to maintaining a number of financial covenants within agreed limits in order to provide sufficient security to the lenders.

EUR 500.0 million Eurobond On November 19, 2003, SES GLOBAL issued a Eurobond for the purpose of repayment of all outstanding amounts under the syndicated multi-currency term and revolving facilities agreement dated March 28, 2001. The issuance was for a nominal amount of EUR 500.0 million with a coupon of 4.50% and a final maturity date of November 19, 2008. 68 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 19 Interest-bearing loans and borrowings continued EUR 300.0 million Eurobond On December 17, 2003, SES GLOBAL Americas Holdings GP issued a Eurobond for financing general corporate purposes. The issuance was for a nominal amount of EUR 300.0 million with a coupon of 4.25% and a final maturity of December 17, 2007.

Bilateral multi-currency facilities On December 31, 2003, SES GLOBAL had unsecured bilateral multi-currency revolving credit facilities in place with eight banks for a total of EUR 775.0 million with a weighted average maturity of December 2006, of which USD 487.5 million (EUR 386.9 million) was drawn. These bilateral facilities are available to both SES GLOBAL and SES GLOBAL Americas Holdings GP.

SES GLOBAL is committed under the bilateral multi-currency revolving credit facilities to maintaining a number of financial covenants within agreed limits in order to provide sufficient security to the lenders.

Uncommitted facility In September 2002, the Company arranged an uncommitted, unsecured multi-currency facility up to a counter value of EUR 40.0 million. There were no drawings outstanding at the year-end.

AsiaSat On November 24, 2003, AsiaSat terminated their loan agreement for an amount of USD 250.0 million. No draw-down had ever been made on this loan.

NSAB NSAB had no outstanding loans with third parties as at December 31, 2003. A new credit facility has been negotiated for SEK 40.0 million with no assets pledged.

Note 20 Other liabilities Other liabilities can be analysed as follows:

Total – Less than Between one More than more than one year and five years five years one year EUR million EUR million EUR million EUR million Interest accrued 15.3 ––– Accrued staff expenses 13.1 ––– Movements on forward exchange contracts 12.9 ––– Capital leases 1.0 3.6 3.9 7.5 Shareholder loans 0.3 3.1 – 3.1 Founder share entitlement (see Note 27) – 21.2 – 21.2 Sundry liabilities 30.8 0.8 – 0.8 Total other liabilities 73.4 28.7 3.9 32.6

Shareholder loans These represent the Group’s portion of unsecured loans given to SATLYNX by Gilat, one of their shareholders. The date for the repayment of these loans is dependent on certain conditions.

Sundry liabilities Sundry liabilities include accruals made in the normal course of the Group’s business.

Note 21 Other operating income Amounts included in other operating income include EUR 48.4 million (USD 57.1 million) arising from the purchase of the remaining 50% shareholding in AAP (see Note 7). This amount comprises the following:

(i) EUR 43.0 million (USD 50.7 million), being the termination fee payment from Lockheed Martin in respect of contracted revenues for use of the AAP orbital position; and

(ii) EUR 5.4 million (USD 6.4 million), being recognition of revenue from AAP previously deferred in the books of SES AMERICOM. Annual Report 2003 SES GLOBAL 69

Note 22 Employees The analysis of personnel as of December 31, 2003 and 2002 was:

2003 2002 SES ASTRA 301 319 SES AMERICOM 291 277 AsiaSat 83 83 Other 114 129 Total employees 789 808

The average number of employees for 2003 was 799 (2002: 803).

Staff costs can be analysed as follows:

2003 2002 EUR million EUR million Wages and salaries 67.5 89.1 Social security costs 11.3 12.6 Total staff costs 78.8 101.7

Note 23 Satellite insurance claims and related asset write-downs In December 2002, SES ASTRA made insurance claims concerning two satellites as follows:

ASTRA 1K A claim was made for a total constructive loss of ASTRA 1K after this satellite failed to reach its correct orbital location on November 26, 2002 due to the failure of the second firing of the Block DM fourth stage during the launch procedure. The satellite was successfully de-orbited on December 10, 2002. The total value of this claim was EUR 291.5 million.

As a result of the above, the ASTRA 1K satellite (including related ground equipment) was fully written off in 2002. This resulted in an exceptional charge of EUR 265.4 million.

ASTRA 1G A claim was made for the lost operational capacity of ASTRA 1G arising due to the failure of one of the spacecraft’s battery cells. The loss of the battery cell, which was identified in the first 12 months after the satellite’s launch in December 1997, has resulted in a special battery management programme for the satellite being introduced, in particular during the eclipse season. In November 2002 following the eclipse season, SES ASTRA management concluded that despite the battery management programme a loss of eight of the satellite’s 28 transponders had occurred and an insurance proof of loss was filed on this basis. The Company recognised EUR 45.0 million of insurance proceeds under this claim in 2002.

In relation to the above incident, a write-down of EUR 14.0 million of the carrying value of the satellite was made in 2002. The write-down reflected the projected impact of the transponder years lost as a result of the anomaly.

The revised carrying value reflects the proportion of the historic cost of the asset corresponding to the revised estimated transponder years available divided by the revised estimate of the total transponder years service of ASTRA 1G. This revised carrying value is being depreciated on a straight-line basis over the remaining life of the satellite in accordance with the Group’s accounting policy for fixed assets.

The above receivable amounts were included in Other Debtors as at December 31, 2002 and were settled in full in 2003.

Note 24 Taxes Taxes have been provided in accordance with the relevant local fiscal requirements. Current and deferred taxes can be analysed as follows:

2003 2002 EUR million EUR million Current 85.0 77.3 Deferred 46.2 111.0 Total taxes 131.2 188.3 70 SES GLOBAL Annual Report 2003

Notes to the consolidated accounts continued December 31, 2003

Note 25 Basic and diluted earnings per share Basic earnings per share is calculated by dividing the net profit for the year attributable to ordinary shareholders (after deduction of the dividends attributable to founder shares) of each class of shares by the weighted average number of shares outstanding during the year, for each class of share.

Diluted earnings per share is calculated by dividing the net profit for the year attributable to ordinary shareholders (after deduction of the dividends attributable to founder shares) of each class of shares by the weighted average number of shares outstanding during the year, for each class of share, adjusted for the effects of dilutive options.

For the year 2003, earnings per share of EUR 0.34 per Class A share (2002: EUR 0.34), EUR 0.14 per Class B share (2002: EUR 0.13), and EUR 0.34 per Class C share (2002: EUR 0.34), have been calculated on the following basis:

2003 2002 EUR million EUR million Profit of the Group 205.4 204.5 Founder shares entitlement (5.4) (6.5) Profit attributable to shareholders 200.0 198.0

Weighted average number of shares for the purpose of calculating earnings per share:

2003 2002 Class A shares 310,340,000 310,340,000 Class B shares 245,817,836 245,817,836 Class C shares 181,295,672 181,295,672

The weighted average number of shares is based on the capital structure of the Company as described in Note 16. In calculating the weighted average of the Class C shares, the Ordinary C shares and Preferred C shares have been grouped together. This reflects the fact that the fixed dividend on the Preferred C shares is deducted from the dividend rights of the Ordinary C shareholders, rather than representing an additional entitlement to a share of earnings. Because the Class A and Class C shares have two and a half times the dividend entitlement of the Class B shares on a full year basis, the earnings per share of the Class A and Class C shares will normally be correspondingly higher than that of the Class B shares.

Note 26 Board of Directors’ remuneration The total payments to SES GLOBAL Directors for attendance at Board and Committee meetings in 2003 amounted to EUR 0.8 million (2002: EUR 0.8 million). These payments are computed on a fixed and variable basis, the variable part being based upon attendance at Board and Committee meetings.

Note 27 Founder shares In connection with the formation of SES ASTRA, 50 Founder Shares, without voting rights, were issued, subject to certain conditions. The Articles provide that for a period of 20 years from March 1, 1985, the date of formation of SES ASTRA, the Founder Shares are entitled to a 5% participation in the net profits of SES ASTRA, after tax, resulting exclusively from television activities as determined by Article 2 of the Articles of SES ASTRA at the time of its incorporation in 1985, excluding all other revenues including without limitation those resulting from an enlargement or extension of the initial purpose. The Founder Shares are redeemable by SES ASTRA at the end of the 20-year period at a value equal to the reserved profit entitlement of the Founder Shares not yet distributed.

In 2002, an amount of EUR 30.1 million representing Founder Share distribution payments for the years 1992 to 2001 was transferred from other reserves to other liabilities and settled during 2003. In 2003, a further amount of EUR 21.2 million has been transferred out of reserves into other liabilities representing the remaining reserved profit entitlement for the years up to and including 2002. Annual Report 2003 SES GLOBAL 71

Note 28 Off balance sheet items Capital commitments The Group had outstanding commitments in respect of contracted capital expenditure totalling EUR 895.9 million at December 31, 2003 (2002: EUR 686.6 million). These commitments largely reflect the purchase and launch of future satellites for the expansion and replacement of the Group satellite system, together with necessary expansion of the associated ground station and control facilities.

Operating lease commitments Future minimum rentals payable under non-cancellable operating leases are as follows as at December 31:

2003 2002 EUR million EUR million Within one year 2.4 6.7 Within two to five years 8.9 11.8 More than five years 11.9 – Total minimum rentals payable 23.2 18.5

Customer contracts The Group may become liable for the unused portion of upfront payments in the event of technical failure of its satellites if back-up capacity cannot be provided. This contingent liability is adequately covered by satellite insurance.

Guarantees On December 31, 2003 the Group had outstanding bank guarantees for an amount of EUR 0.9 million. This relates to performance guarantees for services of satellite operations.

Restrictions on use of cash The Group had no restrictions on cash as at December 31, 2003.

At December 31, 2002 there were restrictions on the use of cash balances totalling EUR 7.7 million. Of this, EUR 7.2 million arose under the terms of a lease agreement for one of the satellites belonging to SES AMERICOM.

Satellite acquisitions SES AMERICOM has contractual rights to return two ground spare satellites in course of construction to the manufacturer under certain conditions which, if elected, would increase the aggregate cost of the primary satellite programs by EUR 48.5 million (USD 61.1 million).

Note 29 Related parties The state of Luxembourg holds a direct 11.58% voting interest in the Company and two indirect interests, both of 10.88%, through two state owned banks, Banque et Caisse d’Epargne de l’Etat and Société Nationale de Crédit et d’Investissement. These shares constitute the Company’s B shares, which are described in more detail in Note 16.

GE Capital holds a 20.1% voting interest in the Company. The following transactions and balances with GE Capital and its subsidiaries and affiliates are included in the consolidated financial statements. Other debtors include a receivable from GE Capital of EUR 0.5 million (2002: EUR 0.6 million). Revenues include EUR 17.2 million (2002: EUR 21.4 million) through sales to various General Electric companies. External charges include an amount of EUR 2.5 million (2002: EUR 10.9 million) relating to the supply of a variety of services by various General Electric companies.

The Group generated revenues of EUR 24.0 million (2002: EUR 20.5 million) from Deutsche Telekom AG (‘DT’) in the year ended December 31, 2003. DT holds a voting interest of 10.52% in the Company. At the year-end there were no amounts outstanding.

During the year the Group generated revenues of EUR 5.6 million (2002: EUR 0.9 million) from SATLYNX S.A., a company in which the Group owns 45.23% of the share capital (2002: 50%). In 2002, the Group contributed tangible assets amounting to EUR 21.9 million to SATLYNX as part settlement for the acquisition of the shareholding in this Company. These assets have been contributed at their fair market value.

During the year the Group generated revenues of EUR 3.9 million (2002: EUR 5.0 million) from NSAB, a company in which the Group owns 50% of the share capital. In addition, the Group paid EUR 0.5 million (2002: EUR 0.6 million) to NSAB for the rental of transponder capacity.

During the period from January 1 to June 27, 2003, the Group generated revenues of EUR 0.7 million (2002: EUR 1.6 million) from AMERICOM Asia Pacific (‘AAP’), a company in which the Group owned 50% of the share capital. On June 27, 2003, the Group purchased the remaining 50% of the share capital, at which time AAP became incorporated into SES AMERICOM.

Note 30 Subsequent events On February 2, 2004, the Group purchased an additional 25% of the share capital of NSAB, raising the Group’s shareholding from 50% to 75%. As a result, the consolidation method used for NSAB changed from proportional consolidation to full consolidation as of that date. 72 SES GLOBAL Annual Report 2003

SES GLOBAL S.A. annual accounts Report of the independent auditor

To the Shareholders of SES GLOBAL S.A. Société Anonyme Betzdorf

Following our appointment by the Annual General Meeting of the Shareholders on May 6, 2003, we have audited the accompanying annual accounts of SES GLOBAL S.A. for the year ended December 31, 2003. These annual accounts are the responsibility of the Board of Directors. Our responsibility is to express an opinion on these annual accounts based on our audit.

We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the annual accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the annual accounts. An audit also includes assessing the accounting principles used and significant estimates made by the Board of Directors, as well as evaluating the overall annual accounts presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the accompanying annual accounts give, in conformity with Luxembourg legal and regulatory requirements, a true and fair view of the financial position of SES GLOBAL S.A. as at December 31, 2003 and of the results of its operations for the year then ended.

Ernst and Young Société Anonyme Réviseur d’entreprises

Werner Weynand

Luxembourg, March 18, 2004 Annual Report 2003 SES GLOBAL 73

SES GLOBAL S.A. balance sheet December 31, 2003

2003 2002 Assets Note EUR million EUR million Formation expenses 3 0.5 0.6

Intangible assets 4 1.3 –

Tangible assets 5 Other fixtures and fittings, tools and equipment 0.6 0.2 Payments on account and tangible assets in course of construction – 0.4 0.6 0.6 Financial assets Shares in affiliated undertakings 6 6,103.5 4,510.1 Amounts owed by affiliated undertakings 7 547.5 567.2 Other financial assets 8 8.8 5.6 6,659.8 5,082.9 Current assets Debtors (amounts receivable in less than one year) Amounts owed by affiliated undertakings 10.0 138.3 Other receivables 10.6 10.1 Cash at bank and on hand 2.6 78.1 23.2 226.5 Prepayments 21.0 16.4

Total assets 6,706.4 5,327.0

2003 2002 Liabilities Note EUR million EUR million Capital and reserves Subscribed capital 9 921.8 921.8 Share premium 9 2,925.0 2,925.0 Legal reserve 10 24.5 17.6 Other reserves 66.0 53.0 Result brought forward 1.3 0.3 3,938.6 3,917.7 Creditors Amounts payable after more than one year Notes and bonds 11 1,708.8 – Amounts owed to credit institutions 12 412.9 937.2 2,121.7 937.2 Amounts payable within one year Amounts owed to credit institutions 12 1.8 212.4 Trade creditors 1.4 4.0 Amounts owed to affiliated undertakings 13 351.8 110.1 Taxes and social security payable 136.9 0.1 Other creditors 18.8 6.6 510.7 333.2

Profit for the financial year 135.4 138.9

Total liabilities 6,706.4 5,327.0

The notes are an integral part of the annual accounts. 74 SES GLOBAL Annual Report 2003

SES GLOBAL S.A. profit and loss account Year ended December 31, 2003

2003 2002 Note EUR million EUR million Other operating income 6.1 6.8 External charges (13.1) (13.6) Staff costs 14 (6.3) (6.4) Other operating charges (4.4) (7.0) Value adjustments in respect of formation expenses 3 (0.1) (0.2) Value adjustments in respect of financial assets 6, 8 (44.2) (3.2) Value adjustments of fixed assets 5 (0.2) – Income in respect of affiliated undertakings 16 120.9 133.3 Interest receivable and similar income 17 174.3 69.5 Interest payable in respect of affiliated undertakings (35.3) (0.3) Interest payable and similar charges (26.7) (34.0) Result on ordinary activities 171.0 144.9 Taxes 15 (35.6) (6.0) Profit for the financial year 135.4 138.9

Statement of changes in shareholders’ equity Year ended December 31, 2003

Result Subscribed Share Legal Other brought Result for capital premium reserve reserves forward the year EUR million EUR million EUR million EUR million EUR million EUR million Balance, beginning of the year 921.8 2,925.0 17.6 53.0 0.3 138.9 Allocation of result ––6.9 13.0 1.0 (20.9) Dividend –––––(118.0) Result for the year –––––135.4 Balance, end of the year 921.8 2,925.0 24.5 66.0 1.3 135.4

The notes are an integral part of the annual accounts. Annual Report 2003 SES GLOBAL 75

Notes to the SES GLOBAL S.A. accounts December 31, 2003

Note 1 General SES GLOBAL S.A. (the ‘Company’) was incorporated on March 16, 2001 as a limited liability company (Société Anonyme) under the law of the Grand Duchy of Luxembourg for an unlimited period of time.

The purpose of the Company is to take generally any interest whatsoever in electronic media and to be active, more particularly, in the communications area via satellites and to invest, directly or indirectly, in other companies that are actively involved in the satellite communication industry.

The accounting period of the Company is from January 1 to December 31.

The Company has a 99.94% interest in a partnership, SES GLOBAL Americas Holdings GP, whose accounts are integrated in those of the Company to the level of its share of the partnership.

Note 2 Accounting practices The annual accounts are prepared in accordance with the generally accepted accounting principles and regulations in force in the Grand Duchy of Luxembourg. For comparability purposes certain figures in the 2002 profit and loss account have been reclassified.

Formation expenses The costs of formation of the Company and the costs related to the increases in issued share capital are capitalised and amortised over five years.

Intangible assets Development costs Development expenditure incurred on an individual project is carried forward when its future recoverability can be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project.

Payment on account Amounts payable in respect of development costs are included in the balance sheet when incurred. When the project is complete, the expenditure is transferred to assets in use and amortisation commences.

Fixed assets Other fixtures, fittings, tools and equipment All such items are depreciated evenly over the estimated useful lives, which are ten years or less.

Assets in course of construction Amounts payable in respect of the purchase of future assets are included in the balance sheet when billed. The expenditure is transferred to assets in use and depreciation of the asset commences when it is put into service.

Financial assets Financial assets are carried in the balance sheet at cost of purchase. If this valuation would appear to be excessive and reduction to be permanent, such assets would be written down to their realisable value.

Loan origination costs Loan origination costs are capitalised and included in prepaid expenses. They are amortised over the loan periods.

Dividends Dividends are declared after the accounts for the year have been approved. Accordingly dividends payable are recorded in the subsequent year’s accounts. Dividends receivable from affiliated undertakings are recorded as income in the year in which they are declared by the subsidiary.

Translation of foreign currencies The Company maintains its accounting records in Euro (EUR) and the annual accounts are expressed in that currency.

The cost of fixed assets is translated at the historical rate.

All other assets expressed in other currencies are translated individually at the historical exchange rate or the rate prevailing at the balance sheet date, whichever is lower. For liabilities, the higher exchange rate is applied.

Income and charges expressed in other currencies are recorded on the basis of the exchange rates prevailing on the transaction dates.

Realised exchange gains and losses and unrealised exchange losses are reflected in the profit and loss account. 76 SES GLOBAL Annual Report 2003

Notes to the SES GLOBAL S.A. accounts December 31, 2003

Note 3 Formation expenses The development of the formation expenses during the financial year is as follows:

2003 2002 EUR million EUR million Cost at beginning and end of year 0.8 0.8 Accumulated amortisation at beginning of year (0.2) – Amortisation (0.1) (0.2) Accumulated amortisation at end of year (0.3) (0.2) Net book value at beginning of year 0.6 0.8 Net book value at end of year 0.5 0.6

Note 4 Intangible assets

2003 2002 EUR million EUR million Cost and net book value at beginning of year – – Additions 1.3 – Cost and net book value at end of year 1.3 –

During the year, the Company capitalised development costs incurred amounting to EUR 1.3 million relating to the development of prototypes of advanced Ka-band outdoor unit technology and Ku-band multi-feed technology.

Note 5 Tangible assets The development of tangible assets during the financial years 2003 and 2002 is as follows:

Payments on account and Other fixtures tangible assets and fittings, tools in course of Total Tot al and equipment construction 2003 2002 EUR million EUR million EUR million EUR million Cost at beginning of year 0.2 0.4 0.6 – Accumulated depreciation at beginning of year ––– – Net book value at beginning of year 0.2 0.4 0.6 – Movements of the year Additions 0.1 0.1 0.2 0.6 Transfer 0.5 (0.5) – – Depreciation (0.2) – (0.2) – Cost at end of year 0.8 – 0.8 0.6 Accumulated depreciation at end of year (0.2) – (0.2) – Net book value at end of year 0.6 – 0.6 0.6

Note 6 Shares in affiliated undertakings

2003 2002 EUR million EUR million Cost at beginning of year 4,510.1 4,504.5 Additions 1,639.0 5.6 Cost at end of year 6,149.1 4,510.1 Value adjustments of the year (45.6) – Net book value at end of year 6,103.5 4,510.1

During the year ended 2003, the Company, together with its 100%-owned affiliate SES ASTRA S.A., created a partnership – SES GLOBAL Americas Holdings GP, Delaware, USA. The Company also created a 100% subsidiary SES GLOBAL Americas Finance Inc. In addition, the Company recorded a value adjustment amounting to EUR 45.6 million on its participation in SES Finance S.A.

The addition of EUR 5.6 million in the prior year relates to consultant fees incurred relating to the acquisition of SES GLOBAL-Americas, Inc. Annual Report 2003 SES GLOBAL 77

As at December 31, 2003, the Company holds the following investments:

Net Book Value Participation EUR million SES ASTRA S.A., Betzdorf, Luxembourg 100.00% 1,683.0 SES GLOBAL-Americas, Inc., United States 99.94% 4,375.4 SES Finance S.A., Betzdorf, Luxembourg 99.99% 45.1 SES Multimedia S.A., Betzdorf, Luxembourg 0.01% – SES GLOBAL Americas Finance Inc, United States 100.00% – 6,103.5

Art. 248 paragraph (1) 2º of the Commercial Company Law of Luxembourg (the ‘law’) requires the disclosure of the amount of capital and reserves and profit and loss for the last financial year of each affiliated undertaking. In conformity with Art. 250 (3) of the law these details have been omitted as the Company prepares consolidated accounts and these consolidated accounts and the related consolidated annual report and auditors’ report thereon have been lodged with the Luxembourg Trade Registry.

Note 7 Amounts owed by affiliated undertakings

2003 2002 EUR million EUR million Balance at beginning of year 567.2 – Movements of the year Advances 15.8 567.9 Reimbursements (35.5) (0.7) Balance at end of year 547.5 567.2

Amounts owed by affiliated undertakings represent an intercompany loan with SES Finance S.A., bearing a floating interest rate.

Note 8 Other financial assets

2003 2002 EUR million EUR million Balance at beginning of year 5.6 – Movements of the year Additions 1.8 8.8 Value adjustments – (3.2) Reversal of value adjustments 1.4 – Balance at end of year 8.8 5.6

Own Fiduciary Depositary Receipts The Company purchased a quantity of FDRs (Fiduciary Depositary Receipts) in respect of Class A shares for use in connection with staff stock option programmes. These shares are valued at the lower of cost and market value.

Note 9 Subscribed capital Following a resolution of the Board of Directors on June 27, 2002, the issued and fully paid share capital was increased by EUR 746.0 million through a transfer from share premium to share capital.

As at December 31, 2002 and 2003 the issued and fully paid share capital amounted to EUR 921.8 million represented by 737,453,508 shares with no par value (310,340,000 Class A Ordinary shares; 245,817,836 Class B Ordinary shares and 176,799,314 Class C Ordinary shares and 4,496,358 Class C Preferred shares).

Note 10 Legal reserve In accordance with Luxembourg legal requirements, a minimum of 5% of the yearly net profit is transferred to a legal reserve from which distribution is restricted. This requirement is satisfied when the reserve reaches 10% of the issued share capital. An allocation of EUR 6.8 million is required in the current year. 78 SES GLOBAL Annual Report 2003

Notes to the SES GLOBAL S.A. accounts December 31, 2003

Note 11 Notes and bonds US Private Placement On September 30, 2003, SES GLOBAL Americas Holdings GP issued in the US Private Placement market four series of unsecured Notes amounting to USD 1,000.0 million and GBP 28.0 million made up as follows:

1. Series A – USD 400.0 million of 5.29% Senior Notes due September 2013 amortising as of September 2007. 2. Series B – USD 513.0 million of 5.83% Senior Notes due September 2015 amortising as of September 2011. 3. Series C – USD 87.0 million of 5.93% Senior Notes due September 2015. 4. Series D – GBP 28.0 million of 5.63% Senior Notes due September 2013, amortising as of September 2007.

SES GLOBAL S.A. is committed under the US Private Placement to maintaining a number of financial covenants within agreed limits in order to provide sufficient security to lenders.

EUR 500.0 million Eurobond On November 19, 2003, SES GLOBAL S.A. issued a Eurobond for a purpose of repayment of all outstanding amounts under the syndicated multi-currency term and revolving facilities agreement dated March 28, 2001. The issuance was for a nominal amount of EUR 500.0 million with a coupon of 4.50% and a final maturity date of November 19, 2008.

EUR 300.0 million Eurobond On December 17, 2003, SES GLOBAL S.A., through SES GLOBAL Americas Holdings GP, issued a Eurobond for financing general corporate purposes. The issuance was for a nominal amount of EUR 300.0 million with a coupon of 4.25% and a final maturity of December 17, 2007.

The maturity profile of notes and bonds is as follows as at December 31, 2003:

2003 2002 EUR million EUR million Between one and two years –– Between two and five years 910.5 – After five years 798.3 – Total after more than one year 1,708.8 –

Note 12 Amounts owed to credit institutions Bilateral multi-currency facilities On December 31, 2003, SES GLOBAL S.A. had unsecured bilateral multi-currency revolving credit facilities in place with eight banks for a total of EUR 775.0 million with a weighted average maturity of December 2006, of which USD 487.2 million (EUR 412.9 million) was drawn.

SES GLOBAL S.A. is committed under the bilateral multi-currency revolving credit facilities to maintaining a number of financial covenants within agreed limits in order to provide sufficient security to the lenders.

The maturity profile of the amounts drawn-down is as follows as at December 31, 2003 and 2002:

2003 2002 EUR million EUR million Within one year 1.8 212.4

Between one and two years – 208.0 Between two and five years 412.9 729.2 Total after more than one year 412.9 937.2

Note 13 Amounts owed to affiliated undertakings Amounts owed to affiliated undertakings of EUR 351.8 million (2002: EUR 110.1 million) include the following:

2003 2002 EUR million EUR million Short-term loan 125.2 – Other creditors 226.6 110.1 Total amounts owed to affiliate undertakings 351.8 110.1

The short-term loan amounting to EUR 125.2 million (USD 157.8 million) owed to SES GLOBAL-Americas Inc. as at December 31, 2003 bears floating interest, calculated based on LIBOR minus 15 basis points. The entire principal amount of the loan is repayable at any time upon written demand.

Other creditors include short-term advances bearing interest at market rates owed to SES ASTRA S.A. of EUR 210.3 million as at December 31, 2003. Annual Report 2003 SES GLOBAL 79

Note 14 Staff costs The average number of employees in the workforce for 2003 was 45 (2002: 44). Staff costs can be analysed as follows:

2003 2002 EUR million EUR million Wages and salaries 5.9 6.1 Social security costs 0.4 0.3 Total staff costs 6.3 6.4

Note 15 Taxes Taxes in the profit and loss account have been provided in accordance with the relevant laws. The balance sheet position takes into consideration the taxable result of the Luxembourg subsidiaries (SES Finance S.A., SES ASTRA S.A. and SES Multimedia S.A.), which are part of the tax group structure, in accordance with Art 164 bis LIR.

Note 16 Income in respect of affiliated undertakings

2003 2002 EUR million EUR million Dividend income 100.0 120.0 Interest income 20.9 13.3 Total income in respect of affiliated undertakings 120.9 133.3

Note 17 Interest receivable and similar income

2003 2002 EUR million EUR million Interest income 0.7 3.2 Foreign exchange gains, net 173.4 66.1 Other financial income 0.2 0.2 Total interest receivable and similar income 174.3 69.5

Note 18 Board of Directors’ remuneration At the Annual General Meeting held on May 6, 2003, payments to Directors for attendance at Board and Committee meetings were approved. These payments are computed on a fixed and variable basis, the variable payments being based upon attendance at Board and Committee meetings. Total payments arising in 2003 were EUR 0.8 million (2002: EUR 0.8 million).

Note 19 Off balance sheet items External financial instruments As at December 31, 2003, the Company had ten cross currency swap agreements in order to hedge the net investment in SES GLOBAL- Americas, Inc. and certain GBP-denominated liabilities. The average terms of these contracts as at December 31, 2003 are as follows:

Currency sold Currency bought Maturity Exchange rate USD 1,570.0 million EUR 1,352.0 million October 2006 EUR/USD 1.1616 USD 45.4 million GBP 28.0 million September 2013 GBP/USD 1.6200

As at December 31, 2002, the Company had ten cross currency swap agreements in order to hedge the net investments in SES GLOBAL- Americas, Inc. The average terms of these contracts, which were all terminated during 2003, were as follows as at December 31, 2002.

Currency sold Currency bought Maturity Exchange rate USD 1,225.0 million EUR 1,242.0 million April 2005 EUR/USD 0.9863

As at December 31, 2003, the Company held six interest rate swap agreements with a notional amount of USD 1,045.4 million whereby the Company receives a fixed rate of interest semi-annually and pays a variable rate equal to three-month and six-month LIBOR plus a margin. The interest rate swaps were put in place at the same time as the pricing of the US Private Placement (July 2003) with a maturity profile between 2013 and 2015, amortising as of September 2007.

As at December 31, 2002 the Company held one interest rate swap agreement with a notional amount of USD 300.0 million whereby the Company receives an interest rate of LIBOR and pays a variable rate of LIBOR -0.205% on the notional amount. This contract was terminated in 2003.

As at December 31, 2003 an amount of EUR 10.1 million (2002: EUR 2.6 million) is included in other receivables relating to the net accrued interest on these agreements. 80 SES GLOBAL Annual Report 2003

Notes to the SES GLOBAL S.A. accounts continued December 31, 2003

Note 19 Off balance sheet items continued As at December 31, 2003, the Company held 28 foreign exchange contracts designated as hedges of expected futures USD-denominated liabilities relating to the procurement of two satellites by SES ASTRA S.A.. The average terms of these contracts as at December 31, 2003 are as follows:

Currency sold Currency bought Maturity Exchange rate EUR 127.5 million USD 143.2 million December 2004 EUR/USD 1.1232

Inter-company financial instruments As the expected future USD-denominated liabilities relating to the procurement of the two satellites will be recorded in the books of SES ASTRA S.A., the Company has entered into inter-company foreign exchange contracts with SES ASTRA S.A. which exactly mirror the external foreign exchange contracts. The average terms of these inter-company contracts as at December 31, 2003 are as follows:

Currency sold Currency bought Maturity Exchange rate USD 143.2 million EUR 127.5 million December 2004 EUR/USD 1.1232

In addition, the Company, arranged several intra-Group foreign exchange contracts in order to hedge the US Private Placement as well as certain other USD-denominated facilities. The average terms of these intra-Group contracts are as follows as at December 31, 2003:

Currency sold Currency bought Maturity Exchange rate EUR 897.1 million USD 1,045.4 million August 2012 EUR/USD 1.1653 EUR 395.7 million USD 487.5 million January 2004 EUR/USD 1.2321

On December 17, 2003, the Company arranged two intra-Group cross currency swap agreements whose average terms are as follows:

Currency sold Currency bought Maturity Exchange rate USD 370.0 million EUR 300.0 million December 2007 EUR/USD 1.2333

Capital commitments As at the year-end, the Company had commitments in respect of capital expenditure amounting to a maximum of EUR 3.6 million.

Guarantees On December 31, 2003 the Company had outstanding bank guarantees for an amount of EUR 0.9 million. This relates to performance guarantees for services of satellite operations.

Five year financial summary

2003 2002 2001 2000 1999 EUR million EUR million EUR million EUR million EUR million Total revenues 1,207.5 1,349.3 978.2 835.9 725.2 EBITDA1 942.8 1,107.1 794.6 708.7 580.5 Operating profit 371.7 529.1 524.3 516.6 407.0 Profit of the Group 205.4 204.5 280.3 244.5 201.3 Net operating cash flow 873.8 1,051.8 682.4 422.6 632.6 Capital expenditures 317.0 683.8 432.3 254.3 263.6 Net debt 1,699.1 2,661.1 3,140.0 834.6 559.6 Shareholders’ equity 3,247.8 3,575.1 3,917.4 1,040.1 847.9 Earnings per A-share (in EUR) 0.34 0.34 0.68 0.64 0.52

Key performance ratios in % EBITDA margin 78.1% 82.1% 81.2% 84.8% 80.0% Net income margin 17.0% 15.2% 28.7% 29.2% 27.8% Return on average equity 6.0% 5.5% 11.3% 25.9% 25.7% Net debt to equity 52.3% 74.4% 80.2% 80.2% 66.0%

1 EBITDA is earnings before interest, tax, depreciation and amortisation. Shareholder information Companies of the Group

Registered office and Group headquarters Europe Latin America Château de Betzdorf, L -6815 Luxembourg SES GLOBAL S.A. Star One S.A. Luxembourg Trade Register N° RC Luxembourg 81 267 L-6815 Château de Betzdorf Praia de Botafogo 228, 3º andar Luxembourg 22250-906 Rio de Janeiro RJ 2004 Financial calendar Tel: (352) 710 725 1 Brazil Annual General Meeting of Shareholders May 6, 2004 Fax: (352) 710 725 227 Tel: (55) 21 2121 9381 Dividend payment May 19, 2004 www.ses-global.com Fax: (55) 21 2121 9321 Announcement of first-half 2004 results Mid September 2004 www.starone.com.br SES ASTRA S.A. L-6815 Château de Betzdorf Nahuelsat S.A. Listed security Luxembourg Bouchard 680, 12th Floor Fiduciary Depositary Receipts each in respect of one A-Share of Tel: (352) 710 725 1 C1106ABJ – Buenos Aires SES GLOBAL S.A. are listed on the Luxembourg and Frankfurt Fax: (352) 710 725 227 Argentina Stock Exchanges under the symbol SESG. www.ses-astra.com Tel: (54) 11 5811 2600 Fax: (54) 11 5811 2688 Fiduciary agent SATLYNX S.A. www.nahuelsat.com Banque et Caisse d’Epargne de l’Etat, Building B Luxembourg 16, rue Ste Zithe, L- 2954 Luxembourg L-6815 Château de Betzdorf Asia Tel: (352) 40 15 1 Luxembourg Asia Satellite Tel: (352) 26 700 1 Telecommunications Shareholder enquiries Fax: (352) 26 700 227 Holdings Ltd. For enquiries of a general nature regarding the Company www.satlynx.com 23F, East Exchange Tower or Investor Relations, please contact: Nordic Satellite AB 38-40 Leighton Road Vretenvägen 10 Hong Kong SES GLOBAL S.A. SE-17154 Solna Tel: (852) 2500 0888 Investor Relations Sweden Fax: (852) 2500 0895 Château de Betzdorf Tel: (46) 8 505 645 00 www.asiasat.com L - 6815 Luxembourg Fax: (46) 8 28 24 80 Tel: (352) 710 725 490 www.nsab-sirius.com Fax:(352) 710 725 9836 [email protected] North America SES AMERICOM, Inc. 4 Research Way Princeton, NJ 08540-6684 U.S.A. Tel: (1) 609 987 4000 Fax: (1) 609 987 4517 www.ses-americom.com

WORLDSAT 4 Research Way Princeton, NJ 08540 U.S.A. Tel: (1) 609 987 4555 Fax: (1) 609 987 4517

Disclaimer: Only the printed version of this report is the official document Annual Report 2002 Contents 2 Chairman’s statement Key financial highlights 4 President and CEO’s statement > Growth in revenues by 38% to EUR 1.35 billion, reflecting Operational review 8 SES GLOBAL the first full-year’s contribution from SES AMERICOM, 12 SES ASTRA 18 SES AMERICOM North America’s premier satellite operator. 24 Global partners 28 SES GLOBAL shareholders > EBITDA of EUR 1.1 billion, representing an EBITDA 29 Board of Directors 30 Annual activities report of the margin of 82%. Board of Directors 31 Executive Committee 34 Management discussion and analysis > Profit of the Group declined to EUR 205 million, after SES GLOBAL Group deduction of goodwill amortisation and financing consolidated accounts 39 Report of the independent auditor charges related to the acquisition of SES AMERICOM. 40 Consolidated balance sheet 42 Consolidated profit and loss account 43 Consolidated statement of cash flow > Strong net operating cash flow of EUR 1,052 million 44 Consolidated statement of changes in shareholders’ equity contributed to net debt reduction of EUR 479 million, 45 Notes to the consolidated accounts to less than EUR 2.7 billion. SES GLOBAL S.A. accounts 63 Report of the statutory auditor > Group synergies continued, including satellite 64 Balance sheet 65 Profit and loss account as well as launch vehicle procurement and 66 Notes to the accounts multi-satellite launch insurance. 71 Five year financial summary 72 Shareholder information 73 Companies of the Group > Contract backlog remains the highest in the industry at EUR 6 billion.

Revenues (EUR million) EBITDA (EUR million) Profit of the Group (EUR million)

2000 835.9 2000 708.7 2000 244.5 20011 978.2 20011 794.6 20011 280.3 20022 1,349.3 20022 1,107.1 20022 204.5

1 Includes contribution from SES AMERICOM from November 9, 2001. 2 Includes full-year contribution from SES AMERICOM.

2002 20011 Financial summary EUR million EUR million Total revenues 1,349.3 978.2 EBITDA 1,107.1 794.6 Operating profit 529.1 524.3 Profit of the Group 204.5 280.3

Net operating cash flow 1,051.8 682.4 Capital expenditures 683.8 432.3 Net debt 2,661.1 3,140.0 Shareholders’ funds 3,575.1 3,917.4

2 1 The prior year comparative figures are taken from the Earnings per A-share (in EUR) 0.34 0.68 audited consolidated financial statements of SES Net operating cash flow per A-share (in EUR)3 1.78 1. 6 9 GLOBAL S.A. 2 The basis of the computation of earnings per share Total dividend recommended 118.0 131.0 is set out in Note 25 to the consolidated financial Dividend recommended per A-share (in EUR)4 0.20 0.24 statement. Prior year earnings per share were restated as detailed in the Notes to the accounts. 3 Net operating cash flow per A-share is calculated as Employees 808 779 for earnings per share but using the net operating cash flow for the period rather than the net profit. 4 Recommended by Directors and subject to Key performance ratios in % shareholder approval. EBITDA margin 82.1% 81.2% 5 The relevant Euro/US dollar exchange rates used in the preparation of the financial statements were as Net income margin 15.2% 28.7% follows: December 31, 2001 – EUR 1:USD 0.89; Return on average equity 5.5% 11.3% December 31, 2002 – EUR 1:USD 1.05; average rate January to December 2002 – EUR 1:USD 0.935 Net debt to equity 74.4% 80.2% Your satellite connection to the world SES GLOBAL is the world’s premier provider of satellite-delivered services. As a strategic management company, SES GLOBAL operates through a unique network of leading satellite operators around the world. This network comprises the fully owned SES ASTRA in Europe and SES AMERICOM in the Satellite fleet Satellite Position US, as well as participations in regional ASTRA ASTRA 1A 5.2° East ASTRA 1B 19.2° East satellite operators. ASTRA 1C 19.2° East ASTRA 1D 24.2° East ASTRA 1E 19.2° East ASTRA 1F 19.2° East ASTRA 1G 19.2° East ASTRA 1H 19.2° East ASTRA 2A 28.2° East ASTRA 2B 28.2° East ASTRA 2C 19.2° East ASTRA 2D 28.2° East ASTRA 3A 23.5° East

AMERICOM AMC-1 103°West AMC-2 85°West AMC-3 87°West AMC-4 101°West AMC-5 79°West AMC-6 72°West AMC-7 137°West AMC-8 139°West Gstar 4 105°West Satcom C3 131°West Satcom C4 135°West

Satcom C1 37.5°West TDRS-5 174.3°West TDRS-6 47°West Spacenet 4 172° East

ASIASAT AsiaSat 1 122° East AsiaSat 2 100.5° East AsiaSat 3S 105.5° East

AMERICOM ASIA-PACIFIC AAP-1 108.2° East

NORDIC SATELLITE AB SIRIUS W 13°West SIRIUS 2 4.8° East SIRIUS 3 5° East SES ASTRA is Europe’s leading direct-to- SES AMERICOM operates a fleet of 15 The AsiaSat fleet provides transponder Nordic Satellite AB operates the Star One operates Brasilsat, Latin The Argentinian satellite operator AMERICOM ASIA-PACIFIC provides STAR ONE home satellite operator. The ASTRA fleet satellites serving the Americas, Europe capacity for broadcast, broadband and three SIRIUS satellites, providing America’s largest satellite fleet. The five provides transponder capacity for networking services, including DTH Brasilsat A2 63°West currently comprises 13 satellites, and the Asia-Pacific region, including telecommunications services in the Asia- communications solutions in Europe Brasilsat satellites support a full range of transmissions covering the whole and VSAT applications. The AAP-1 satellite Brasilsat B1 70°West delivering TV and radio services to 92 satellites providing transoceanic services. Pacific region, reaching over 80 million for television and radio broadcasting customer services, including broadband of Latin America up to the southern serves the Asia-Pacific region with Brasilsat B2 65°West million homes throughout Europe, Satellite capacity is contracted to all major homes. AsiaSat’s three spacecraft as well as for data transmission, Internet access, telephony, broadcasting United States. Its Nahuel-1 satellite market-specific beams covering China, Brasilsat B3 84°West including 57 million households US cable programmers and broadcasters currently serve public and private TV Internet and multimedia services. and networking. Star One transmits is used to transmit and distribute TV North-East Asia, the Philippines and India. Brasilsat B4 92°West connected to cable networks. ASTRA serving the key cable networks. SES and radio broadcasters from around SIRIUS reaches more than five million channels on behalf of TV networks to signals, telephony, Internet backbone also transmits high-speed broadband AMERICOM’s two largest cable the world. homes in the Nordic, Baltic and Eastern their affiliates and is also received by and data transmission. services and provides capacity for two- ‘neighbourhoods’ serve all the main cable NAHUELSAT European countries. more than ten million home antennae. way satellite applications. Additionally, networks in the US. The company also Nahuel-1 71.8°West the product portfolio includes direct-to- offers a full range of broadband services cable and occasional use services. to enterprise and government markets. Chairman’s statement Solid performance in a challenging year

I am delighted to report that SES GLOBAL achieved a solid performance during 2002, the first year in which SES AMERICOM fully contributed to the business of SES GLOBAL. We welcome the outstanding track record in satellite operations, as well as the experience and customer commitment which SES AMERICOM brings to the Group. The first full-year consolidation of the results of SES AMERICOM obviously had an important impact on SES GLOBAL’s results in 2002. These solid results were achieved despite challenging market conditions. In particular, the unfavourable macro-economic environment in the main markets of the SES GLOBAL companies impacted the existing customer base and resulted in a slowdown of new business acquisition. During 2002, SES GLOBAL took positive steps to ensure that the Group was well positioned to meet the challenges of the adverse economic René Steichen climate in the telecoms and media sectors. These steps enabled the company to reduce significantly its controllable cost base and support gross margins in the future.

Solid revenues and strong cash flow In 2002, SES GLOBAL sustained solid revenues and profitability. Revenues increased by 38% to EUR 1.35 billion. Our aggressive cost-cutting programme ensured that operating expenses were held broadly level on a like-for-like basis before non-recurring charges (e.g. provisions for restructuring costs). EBITDA stood at EUR 1.1 billion, representing an EBITDA margin of 82%. As expected, the AMERICOM acquisition had a dilutive impact on the net profit of the Group which declined to EUR 205 million, as a consequence of the charge for amortisation of the AMERICOM acquisition goodwill, and transaction financing costs. SES GLOBAL had a strong net operating cash flow of EUR 1,052 million, which enabled the Company to reduce its net debt aggressively by EUR 479 million to EUR 2.66 billion. Debt reduction was supported by the weakness of the US dollar against the Euro.This debt level provides the Group with considerable financial security, and with the capacity and the flexibility to fund its future development. SES GLOBAL retains the highest contract backlog within the industry, worth EUR 6 billion.

A unique structure to leverage synergies As a strategic management company, SES GLOBAL oversees its operating companies (SES ASTRA and SES AMERICOM) and holds strategic participations in regional satellite operators. Inherent synergies within the Group are successfully leveraged by means of a unique model of interdependence across the 100% 100% SES GLOBAL family. In order to function effectively and flexibly, SES ASTRA and SES AMERICOM operate with full P&L authority in their respective markets, Americom enabling them to maximise their market position, AsiaSat Asia-Pacific 34.10% revenues, and profits. 50% At the same time, the operating companies are bound by the common strategic road map which is developed at the SES GLOBAL level. The CEOs NSAB of both SES ASTRA and SES AMERICOM are 50% Columbia members of the Executive Committee of SES 100% GLOBAL. This ensures that the strategic priorities of each operating company are being taken into Nahuelsat Star One 28.75% 19.99% account properly and that the overall Group SATLYNX strategy is efficiently coordinated. This structure 50% effectively stimulates the full creativity and business acumen inherent in all Group companies.

2 SES GLOBAL Annual Report 2002 Outlook SES GLOBAL’s systematic and stringent cost control, coupled with its sound business strategy, has ensured that we are well positioned to take advantage of future opportunities for growth as they arise in the markets around the world. Although we expect revenues to decline slightly due to a combination of factors, mainly non-recurring items, exchange rate developments, and the soft demand for transponder capacity, we expect to maintain strong EBITDA margins in 2003. I am confident that SES GLOBAL launches into the 2003 business year as the world’s leader in satellite operations – a financially sound company with a stable shareholder base and ready to seize growth opportunities as they arise. I thank the management and staff, whose excellent work and commitment to providing our customers with a service of outstanding quality enabled the Group to achieve a solid performance in 2002.

René Steichen Chairman of the Board of Directors

A GLOBAL culture SES GLOBAL’s unique structure breeds a new company culture – a feeling of belonging to the same corporate universe, sharing the same vision and the same mission. The SES GLOBAL culture takes its roots from the very traditions and values cherished by both SES AMERICOM and SES ASTRA: Leadership built on Excellence and Innovation. All with the customer in mind.

3 SES GLOBAL Annual Report 2002 2002 saw SES GLOBAL confirm its industry leadership: revenues, EBITDA, EBITDA President margin, net operating cash flow, contracted backlog and net debt reduction all exceed and CEO’s statement those of our competitors in the satellite operating industry, maintaining SES GLOBAL’s position as a formidable market force. SES GLOBAL posts solid growth figures for the Global leadership with year 2002, mainly as a result of the first-time full-year contribution of SES AMERICOM. a solid foundation On an industry-wide basis, the revenues of most satellite operators remained flat in 2002. This was due to the impact of an adverse macro-economic environment, especially in the telecoms and media sectors. The existing capacity overhang in some regions of the world and in some satellite market applications led to pricing pressure in certain areas, especially for point-to-point satellite transmissions. However, established video broadcasting neighbourhoods for direct-to-home and cable distribution, which remain the core business of the SES GLOBAL companies’ activities, suffered to a lesser degree.

New opportunities to bring future growth The consolidation of the industry has increased the competitive pressure. While video broadcasting is poised to remain the most important source of revenue for satellite operators in the near future, this segment is forecast to develop at a slower pace, albeit with significant pockets of regional growth. Broadband services are expected to remain the growth driver of the future. Satellite’s strong position in broadcasting applications allows the bundling of direct-to-home television with Internet services to result in one of the most promising growth opportunities. Broadband corporate networks and VSAT-type applications are similarly Romain Bausch showing growth opportunities. Our expectation is that the engine of growth in these market segments will start to ignite in 2004, while 2003 will still see flat or declining revenue streams. The results of 2002 confirm the successful implementation of our strategy. Under the umbrella of SES GLOBAL, we created a unique model of interdependent satellite operators with leading positions in their respective markets. These operating companies and the SES GLOBAL partners stand out among their industry competitors because of their focus on highest quality service, customer support, prudent but aggressive innovation, and because of the deep customer relationships in their respective markets. All this creates a solid base for future growth.

Synergies bring significant benefits The SES GLOBAL Group is now effectively leveraging the potential of the synergies inherent in its structure. We have consistently promoted the exchange of expertise between operating companies, thus achieving significant benefits. In the US, the AMERICOM2HomeSM open-architecture platform for direct-to-home broadcasting was launched with the objective of replicating the successful European ASTRA model. In Europe, SES AMERICOM’s experience in developing cable ‘neighbourhoods’ is being applied to the creation of similar direct-to-cable services. Synergies also generated cost savings. The procurement of launch services was optimised by the incorporation of existing launch options held by SES ASTRA into a package of four launches newly contracted by SES AMERICOM. The strength of the

Highlights > SES GLOBAL relies on a solid business foundation and operations covering the widest range of satellite communications markets. > We have consistently promoted the exchange of expertise between operating companies, achieving significant benefits. > Established video broadcasting neighbourhoods, which are at the core of SES GLOBAL companies’ activities, suffered to a lesser degree from pricing pressures. > SES GLOBAL acted as an ‘early bird’ consolidator by creating a unique model of interdependent satellite operators.

4 SES GLOBAL Annual Report 2002 Group’s technical record supported the conclusion of a ground-breaking insurance agreement covering all six of SES AMERICOM’s currently scheduled satellite launches which will result in considerable savings over current market rates in the event that all spacecraft launches are successful. Further synergies are under development, such as a combined SES ASTRA and SES AMERICOM satellite procurement programme which was launched in February 2003 and includes up to three new spacecraft. Today, SES GLOBAL is a Group with a solid business foundation and operations covering a wide range of satellite communications markets: direct-to-home broadcasting and cable distribution, broadband one-way and two-way services, corporate networks and telecommunications. This highly diversified business has the potential to build on each of these markets as they develop.

Increased strength through integration SES GLOBAL has experienced an exciting period of growth via acquisition and is now entering a phase of consolidation. While we do not exclude ourselves from possible M&A activities, our focus is now to benefit from predominantly organic growth. We will be guided by a three-pronged strategy: First, we intend to consolidate and strengthen the core business of our operating companies – by increasing ASTRA’s and AMERICOM’s share of the video direct-to- home and cable markets in Europe and in North America; and by providing diversified services including government services and international connectivity. Secondly, we will continue to export products and services with a successful track record to new markets – by implementing AMERICOM2HomeSM in the US; by establishing a direct-to-cable neighbourhood in Europe at the 23.5/24.2° East orbital position; and by taking advantage of business opportunities in Eastern Europe, the US, Africa and Asia. Thirdly, we plan to launch new satellite-based services: two-way broadband offerings; specific service models supporting video-on-demand, store-and-forward and streaming applications; and the development of open standards-based, low cost two- way broadband and DTH interactive terminals. We are committed to our brand statement: to be ‘Your satellite connection to the world’. In today’s world, satellite is mission-critical for the distribution and broadcasting of news and entertainment, for the efficient operation of corporate networks, for the availability of tele-medicine, for the distribution of Internet content, and for countless other services. We are committed to be the satellite provider of choice for any application. And our customers, and their end-users, are always uppermost in our mind.

Romain Bausch President and CEO

Excellence Excellence of service is embedded in the culture of the SES GLOBAL operating companies: delivering their customers’ services with the highest technical quality and with the widest reach. SES GLOBAL companies feature a satellite network availability rate of 99.999%.

5 SES GLOBAL Annual Report 2002 World-wide and world-class: the satellite fleet of the SES GLOBAL companies distributes programming of the world’s leading TV and radio broadcasters, placing you right at the heart of the action. Wherever you are.

Global industry leadership built on regional strength Operational review SES GLOBAL was born out of the combination of premier satellite operators in the world’s key regions: SES ASTRA in Europe, SES AMERICOM in North America (both 100% owned SES GLOBAL companies); AsiaSat, Nordic Satellite AB (NSAB), Star One, Nahuelsat, and AMERICOM ASIA-PACIFIC (in which SES GLOBAL holds participations). They are all members of a family of interdependent satellite operators under the Your satellite connection umbrella of SES GLOBAL. to the world SES GLOBAL leads the satellite industry not only in terms of revenue generation, backlog, and the size of the satellite fleet of its operating companies. Our companies are also renowned for setting the industry benchmark in terms of customer service, operational quality and reliability, and depth of reach. Some 95% of the world’s population live within the footprint of the satellite fleet of the SES GLOBAL companies and partners. Each of these satellite operators is a leader in its own regional market, providing the highest quality services and access to the largest audiences in Europe, North and South America, and the Asia-Pacific region.

Shaping the future The SES GLOBAL world-class network is built on a track record of prudent and successful innovation. SES GLOBAL companies and partners infuse satellite services into the fabric of life. Satellites bring televised and radio news, information and entertainment broadcasts to viewers and listeners around the globe – either directly to a small home dish or via cable networks; satellites give Internet surfers high-speed access to web pages; satellites are the backbone of many corporate data and communications networks; satellites deliver distance-learning and tele-medicine; satellites transmit ready-to-print newspaper pages to decentralised printing plants; and with the same reliability, satellites relay information related to credit card transactions. Satellites expand horizons, and provide a communication channel to the world.

Statement on the environmental and social impact of SES GLOBAL activities SES GLOBAL is committed to a strategy of respect for the world’s natural environment. As a strategic Group management company, our activities are mainly office and technology-based, and we ensure that these have the least possible direct impact on the natural environment.

Highlights > Global leadership built on regional strength. > 95% of the world’s population lives within the footprint of the satellite fleet of the SES GLOBAL operating companies and partners. > Setting the industry benchmark in terms of quality of service. > We make satellite a part of the fabric of life. > SES GLOBAL: a synonym for a successful track record of prudently aggressive innovation.

8 SES GLOBAL Annual Report 2002 SES GLOBAL Headcount at year-end 2002 – complies with the statutory requirements and regulations applicable within the countries of the company’s operations; – promotes the most efficient use of energy and natural resources; – avoids, reduces and recycles as much waste material as possible, with yearly SES GLOBAL 48 third-party audits and attribution of ecological quality certificates; SES ASTRA 319 SES AMERICOM 277 – disposes of any hazardous materials that were employed in the most AsiaSat 83 environmentally-friendly way; and Others 81 – conducts environmental training and encourages staff to adopt environmentally correct attitudes in their professional activities. The same guidelines are applied by the operating companies, SES ASTRA and SES AMERICOM, whose activities as satellite communications providers are also technology and office-based. In addition to the general rules described above, the operating companies also focus on: – applying best practice to outsourced activities such as the manufacturing and launching of spacecraft; and – limiting the amount of radiation emitted from the company’s Earth stations, with yearly internal and third-party audits by accredited organisations specialised in the field of industrial safety. In 2002, SES GLOBAL initiated a corporate social responsibility programme supporting activities with a focus on education and culture. These activities take place both on the SES GLOBAL level and within the operating companies.

Innovation at the service of the market SES GLOBAL’s operating companies have built their business on a prudent, yet highly innovative use of proven technologies. SES ASTRA enabled the soaring development of direct-to-home reception in Europe. SES AMERICOM introduced frequency re-use and in-orbit sparing to optimise transmission capacity.

9 SES GLOBAL Annual Report 2002 DRAFT 9 16/04/03

The broadcasting of TV and radio channels is at the core of the business of SES GLOBAL companies. They have created a tradition of excellence in reliably transmitting the widest choice of channels in the highest technical quality. DRAFT 9 16/04/03 Satellite operations Operational review During the year 2002, the ASTRA satellite fleet operated without disruption, featuring an availability rate of over 99.999% on the space segment, and an Earth station availability of more than 99.98%. At year-end, the ASTRA satellite fleet consisted of 13 spacecraft, seven of which were operating at 19.2° East, three at 28.2° East, two A tradition of excellence at 23.5/24.2° East and one at 5.2° East. In 2002, the Company expanded the ASTRA Satellite System through the successful launch and deployment of ASTRA 3A. The spacecraft operates at 23.5° East and features an optimised coverage for the German-language markets in Europe (Germany, Austria, Switzerland). ASTRA 3A replaces Deutsche Telekom’s Kopernikus satellite. Deutsche Telekom contracted for ten transponders on the 20-transponder spacecraft, predominantly to provide cable feeds to the German market. The remaining capacity 81% of the commercially is marketed by SES ASTRA mainly for the transmission of broadband and IP services. Following the successful deployment of ASTRA 3A at 23.5° East, ASTRA 1D remained available transponders at 24.2° East to enhance the third ASTRA orbital position over Europe. on the ASTRA Satellite Of the 196 transponders which are commercially available on the ASTRA Satellite System at 19.2°, 28.2°, and 23.5/24.2°, 159 (81%) were contracted as of December 31, System were contracted 2002. In addition, ASTRA provides capacity on ASTRA 1A in inclined orbit at 5.2° East, via a steerable beam on ASTRA 2B at 28.2° East for use outside of Europe, and at 28.5° at year-end 2002. East, on leased third-party capacity. In November 2002, the Company filed an insurance claim regarding the loss of eight of the 28 transponders on ASTRA 1G, co-located at 19.2° East, due to a spacecraft battery anomaly. Because of ASTRA’s unique inter-satellite protection scheme, this has not resulted in any disruption to the services carried by the satellite. On November 26, 2002, ASTRA 1K, launched from the Baikonur Cosmodrome, failed to reach its correct orbit due to the anomalous functioning of the fourth stage (Block DM) of the Proton-K rocket. The satellite could not be recovered for commercial use and was safely de-orbited in December 2002. The loss of the spacecraft, which was scheduled to be co-located at 19.2° East to provide back-up and extended coverage and flexibility of service in both Ku-band and in Ka-band, did not affect existing services at 19.2° East. ASTRA 2C continues to provide comprehensive back-up for the frequency bands that were to be served by ASTRA 1K, while interactive Ka-band services continue to be provided by the existing Ka-band payload on ASTRA 1H. The company filed an insurance claim for the loss of ASTRA 1K to the value of EUR 291.5 million. This claim has been settled and payment received subsequent to the year-end 2002.

Continued audience growth At year-end 2002, the number of satellite and cable homes served by the ASTRA Satellite System in 30 European countries1 reached 92 million, up from 91 million a year earlier. This continued growth confirms ASTRA’s position as Europe’s leading broadcast satellite system.

1 Austria, Belarus, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom.

Highlights ASTRA: pioneer and market leader > Expanded satellite fleet: ASTRA 3A ASTRA pioneered the development of direct- was successfully launched and to-home reception and has for years been the leading broadcast satellite system in Europe. deployed at 23.5° East. Using a high performance satellite fleet at two > Increased channel choice: the number orbital positions, ASTRA transmits an unrivalled variety of more than 1,100 TV and radio services of channels transmitted via ASTRA of leading European and international broadcasters increased to 1,174. to 92 million homes in Europe’s main language markets. In addition, ASTRA delivers a > Enhanced services: in a soft broadband comprehensive portfolio of broadband and data services market, ASTRA signed up communications services throughout Europe. new customers.

12 SES GLOBAL Annual Report 2002 The increase was driven by the dynamic development of digital direct-to-home (DTH) reception. At year-end, 15 million homes received digital services via ASTRA at 19.2° or 28.2° East, up from 14 million at year-end 2001. Total (analogue and digital) DTH reception via ASTRA grew to more than 34 million homes. Digital reception now accounts for 44% of ASTRA’s total DTH reception, up from 42% in 2001. In a very competitive environment, ASTRA has consolidated its strong position in the digital marketplace, and is now received by four out of five digital satellite homes in Europe. ASTRA is received by 19 million exclusively analogue satellite homes. Approximately two-thirds of these homes (more than 13 million) are located in the German-language countries with a strong analogue channel line-up.

Digital TV market in Europe* Broadcast services Year-end 2002 SES ASTRA’s primary commitment is to further enhance the high quality of its services and products. ASTRA’s reach, as well as the company’s technical and marketing support Digital Satellite TV 77% solutions provide highest value to broadcast and broadband customers within a Digital Cable 19% comprehensive customer support environment. Digital Terrestrial TV 4% During 2002, the total number of broadcast services transmitted via ASTRA satellites at 19.2° East, 28.2° East and 23.5/24.2° East increased from 1,127 to 1,174. The increase Base: 25 million digital TV households. is due to the continued development of digital services. The number of analogue *30 European countries channels continued to decline. within ASTRA footprint. Among the most dynamic markets, the UK and Ireland continued to display the highest growth rates. The number of digital services (TV and radio) at 28.2° East, serving the In 2002, digital reception (via satellite, cable, and British Isles, increased by 9.6% to 398. In the continental European marketplace, the terrestrial) in Europe continued to grow. 25 million impact of declining advertising revenues and particularly of the restructuring of a major homes received digital services at year-end 2002, customer in Germany resulted in a virtually unchanged number of services transmitted an increase of 1.5 million compared to the prior year. With a share of more than three quarters of via 19.2° East (738 vs 739). the total digital market, satellite is by far the most New services added during the year 2002 on ASTRA at 19.2° East include: popular digital reception mode in Europe. Source: SES ASTRA, Satellite Monitors, Year-end 2002. – CanalSatellite concluded long-term contracts for two additional transponders in order to diversify the CanalSatellite bouquet line-up with new general interest channels, premium movie and sports contents and interactive TV applications; – Polish media holding company Fincast contracted for transponder capacity for digital free-to-air transmission of Tele 5 Poland and Polonia 1; – CNBC renewed the capacity contracted for analogue distribution in a multi-year agreement; – Tele2 AB Group contracted for the transmission in digital free-to-air of Tango TV, a Luxembourg-language entertainment channel; – German entertainment channel Tele 5 contracted for one full-time transponder for analogue transmission;

With an extensive experience in delivering satellite broadcasting and broadband services throughout Europe, SES ASTRA also provides communications solutions which are optimally tailored to meet the needs of its customers. These include high-speed DSL via satellite services, direct-to-cable offerings and occasional use services.

13 SES GLOBAL Annual Report 2002 Broadcast services continued Operational review – T-Systems contracted for one satellite transponder to meet increasing demand for digital data transmissions via satellite; – ARTE, the French-German culture channel contracted for additional capacity to extend its broadcasting hours; – PIN 24, a home-shopping channel operated by MTG, launched on ASTRA on a part-time basis; and – Bibel TV contracted for additional capacity for the distribution of religious-type content to the German language market. Following the insolvency filing of BetaDigital (Kirch Group), which had contracted for 11.5 transponders, SES ASTRA concluded a contract amendment under ASTRA coverage in digital satellite which BetaDigital terminated the contract and Premiere contracted for 7.5 of homes in Europe these transponders. Main customers and services developments at 28.2° East include: – BBCi contracted for an additional transponder in order to enhance the

19.4 interactive programming made available to TV viewers in the UK;

16.9 – The BBC also renewed two transponder contracts for a ten-year term; – British Telecom and Kingston inmedia signed long-term full-transponder contracts with SES ASTRA for third-party capacity leased at 28.5° East; 12.7 15.1

14.0 – Sony GoPlay contracted for capacity for interactive services; – Ideal Shopping Direct contracted for additional capacity for the distribution In million homes 7. 7

10.1 of two home shopping channels; and – Invest TV contracted for additional capacity to enhance its channel line-up. 3.6 5.9

1.9 Broadband services 2.6

1. 2 In 2002, the demand for broadband capacity remained soft in Europe. Main developments in the line-up of broadband services on ASTRA included: 2000 2001 2002 1997 1998 1999 – Deutsche Telekom commercially launched the T-DSL via satellite service ASTRA in digital satellite homes ‘powered by ASTRA’ to provide high-speed satellite Internet connectivity throughout Digital satellite homes in total Germany at DSL speed, and extending and complementing the terrestrial DSL offer; – BySky, a satellite Internet provider, launched a broadband Internet service at DSL Source: SES ASTRA, Satellite Monitors, Digital Pay speed to residential users in the Netherlands; TV Operators. – following the creation of SATLYNX, a joint-venture between SES GLOBAL and Gilat Satellite Networks, SATLYNX contracted for six transponders on ASTRA and on third-party capacity contracted by ASTRA, to provide interactive broadband services via satellite to customers in Europe; and – in a separate development, the ASTRA Broadband Interactive System, the first commercial system to implement the DVB-RCS standard for two-way satellite-based broadband communications, won an Innovation Award for Systems Development and Applications from the Society of Satellite Professionals International.

Satellite co-location = flexibility and security

ASTRA introduced the co-location of spacecraft in order to maximise the flexibility and reliability of the satellite system at 19.2° and 28.2° East. Co-locating means to position several satellites at one orbital slot. This results in a most efficient use of the available frequency spectrum; in addition co-location enables the creation of an unrivalled reserve and back-up capacity scheme. Currently, seven satellites are co-located at ASTRA’s prime orbital slot at 19.2° East. In addition to their active payload, these satellites carry spare capacity to provide back-up facilities for other satellites. For example, ASTRA 1E’s active transponder payload uses the frequency band D while providing back-up capacity in frequency bands C and B, operated on ASTRA 1C and ASTRA 1B. Should a technical problem occur on a satellite, back-up transponders can be immediately activated, providing customers with unique security and revenue protection. A similar back-up system is in place at ASTRA’s orbital position at 28.2° East.

14 SES GLOBAL Annual Report 2002 Other services SES ASTRA generated revenues through ASTRA 1A, operated in inclined orbit at 5.2° East. During the year under review, the spacecraft provided contribution services on behalf of several European broadcast customers. NSAB contracted one transponder on ASTRA 1A for occasional use.

Other developments During 2002, SES ASTRA effected a restructuring of the Sales and Marketing Department, substantially reinforcing the sales group and enhancing the Company’s potential to capture growth opportunities. Over the year, the headcount of SES ASTRA decreased from 385 to 319, due to the transfer of a certain number of employees to SES GLOBAL and SATLYNX, as well as in an effort to adapt the Company’s headcount to the increasingly competitive market situation. ASTRA – Extensive reach in the broadband universe In a post year-end development, the Luxembourg Court of Appeals determined the amount of dividends to be paid by SES ASTRA to Mr. Clay T. Whitehead in the litigation All TV homes ASTRA digital homes opposing the Company to Mr. Whitehead over the withholding of dividends on Founder shares. The Court accepted the dividend calculation as put forward by SES ASTRA, corresponding to an amount of EUR 30,052,325 covering the years 1992 to 2001. This dividend will be paid out of shareholders’ reserves and will therefore have no impact on the profit and loss account.

66% In early 2003, SES ASTRA issued a request for proposals for two satellites providing 62% replacement capacity mainly for ASTRA 1K lost during launch in November 2002,

49% as well as for ASTRA 1D and ASTRA 1E at end of life. 45%

54% More information on SES ASTRA is available at www.ses-astra.com 47% 37% 31% 2001 2002 2001 2002

Online PC

ASTRA provides a solid foundation for the successful roll-out of broadband DSL via satellite services all over Europe. The proportion of ASTRA digital satellite homes owning a PC (66%) and using an online connection (54%) has increased compared to the prior year and is significantly higher than in average TV homes (PC: 49%; online: 37%). Source: SES ASTRA, Satellite Monitors.

ASTRA Satellite System at 19.2° East ASTRA Satellite System at 28.2° East

Ghz 10.70 10.95 11.20 11.45 11.70 12.10 12.50 12.7529.50 30.00Ghz 10.70 11.20 11.70 12.75

2C 1C 1B 1E 1F 1G 2D 2A 2B

1B BAND-B 2A BAND-E Backup 1C BAND-C Backup-A 2B Backup BAND-F BAND-G 1E BAND-D Backup-C Backup-B Backup-E 2D BAND-D 1F BAND-A Backup-E Backup-F 1G BAND-E Backup-F BAND-G 1H Backup-E BAND-F Backup-G Ka-BAND 2C Backup-D Backup-C Backup-E 10.70Ghz11.20Ghz 11.70Ghz 12.75Ghz Low Band HIGH Band Astra ‘Ka’ Ku-Band

15 SES GLOBAL Annual Report 2002 High-speed two-way broadband connections via the satellites of the SES GLOBAL companies bridge the distance – they ensure that you are connected and are able to participate in the action.

Satellite operations Operational review During the year 2002, the AMERICOM satellite fleet and the supporting terrestrial networks operated with a high degree of reliability, featuring an availability rate of 99.999% on the space segment and of 99.99% on the ground network. The AMERICOM satellite fleet consisted of 16 satellites until the end of the first quarter 2002, when the K-2 spacecraft was retired after more than 16 years of operation. Leadership and innovation This spacecraft had operated since 1985 at 81° West and provided services approximately seven years beyond its design life. Since March 2002, AMERICOM delivers services from 15 satellites at 15 orbital positions. In November, 2002, upon the retirement of the C-515 satellite, the Satcom C1 spacecraft was redeployed to 37.5°West to provide interim service over the Atlantic Ocean. AMERICOM acquired the C-515 satellite in 2000 as part of the acquisition of Columbia Communications Corporation. Of the 368 transponders which were commercially available on the SES AMERICOM satellite system, 299 (81%) were contracted as of December 31, 2002. In addition, the occasional use and broadcast special event inventory of 16 transponders were regularly under contract throughout the year. SES AMERICOM has contracted for the construction of eight next generation satellites, six of which it expects to launch before the end of 2004 and two of which it has the option to return to the manufacturer or could launch if market conditions warrant. Four of these spacecraft will replace existing satellites and the remainder will be additional capacity. In early 2003, AMERICOM issued a request for proposals for a BSS satellite, AMC-14, planned for 105.5° West to support AMERICOM2HomeSM, pending grant The AMERICOM by the US Federal Communications Commission (FCC) of US market access for satellite fleet featured an DBS services at 105.5° West, and satisfactory customer agreements. In June 2002, SES AMERICOM signed launch service agreements with International availability rate of 99.999% Launch Services for the launch of two satellites, and with Arianespace for the launch on the space segment. of two further satellites. The launches of two other satellites scheduled before the end of 2004 were contracted in previous years. In November 2002, AMERICOM signed a precedent-setting insurance agreement that covers the launch and first year of operations of six spacecraft. The placement is performance-based and features rates that reflect the industry-leading quality performance and reliability of both the AMERICOM and ASTRA satellite fleets.

Highlights AMERICOM:The sky’s premier > Highest degree of reliability maintained: cable neighbourhood the AMERICOM satellite fleet featured SES AMERICOM is the premier distributor of cable programming in North America. a 99.999% availability. The combination of signal strength, geographic > Services line-up expanded with coverage, signal availability and built-in reliability makes the AMERICOM satellite neighbourhood business continuity services. the top choice to reach cable head-ends and more > 81% transponder utilisation rate than 80 million American TV households. was achieved. > Residential services push: plans for the AMERICOM2HOME SM platform were launched. > AMERICOM Government Services (AGS) growth exceeded that of all other business segments.

18 SES GLOBAL Annual Report 2002 New contracts and services As of December 31, 2002, the SES AMERICOM satellite fleet transmitted audio-visual programming on behalf of most major cable programmers as well as TV and radio broadcasters to all major networks and head-ends in the US, multiple dwelling units and hotels. Two thirds of SES AMERICOM’s transponder capacity is contracted for media distribution. The balance of the fleet’s capacity supports a wide variety of broadband, telecommunications, Internet and data services.

Main developments – Crown Media US signed a multi-year transponder agreement for satellite capacity on AMC-11 for the distribution of the Hallmark Channel; AMC-11 is planned for operation from 2004 as a replacement for Satcom C3 at 131° West; – Home Box Office (HBO) signed a multi-transponder service agreement to use AMC-4 at 101° West in 2003 for the distribution of four analogue multiplex feeds for the backyard dishes in all 50 states of the US; – HSN, the originator of TV shopping, signed a long-term transponder agreement for next generation C-band capacity on AMC-10, the successor satellite to Satcom C4 at 135° West. AMC-10 is scheduled for operation in 2004; – The European Broadcasting Union (EBU) selected SES AMERICOM to provide satellite capacity to support the EBU and its members in the television coverage of the Winter Olympic Games from Salt Lake City, Utah, in 2002. SES AMERICOM provided a transatlantic connection from the US to Europe; – Stratos, a specialised VSAT network services company, signed a multi-year agreement for one Ku-band transponder on AMC-4 at 101° West to support enterprise data and communications networks; – SES AMERICOM and iDirect, a leading provider of broadband IP solutions over satellite, will jointly market and revenue-share Ku-band satellite capacity on AMC-6 at 72° West to provide enterprises in the Caribbean and in North and Central America with high-speed, two-way private IP networks and broadband connections to the Internet. Additionally, the two companies are cooperating on a suite of Business Continuity solutions to be marketed directly by SES AMERICOM; – Deutsche Welle, one of the world’s leading international broadcasting services, signed an agreement for C-band capacity on AMC-1 at 103° West, to deliver German TV and radio programming into North America and the Caribbean. The agreement also covers digital transmission services, DigitalC®, a fully protected video MCPC solution;

Unquestionable customer commitment The satellite-delivered services provided by SES AMERICOM are deeply rooted in a timeless, customer-first philosophy. The company’s visionary leadership, its people and expertise, its global fleet and global partnerships all add up to solutions that begin and end with customer commitment that, in a word, is unrivalled.

19 SES GLOBAL Annual Report 2002 Main developments continued Operational review – SES AMERICOM acquired a 20% interest in Florida-based Internet Satellite Platform, Inc., ISAT, a leading provider of satellite-based internet connection solutions to ISPs, Data CLECs and rural cable operators. Marketing wholesale services to organisations in North and South America, ISAT uses Ku-band capacity on AMC-6 at 72° West; – Kingston inmedia, the satellite-centric broadband solutions division of London-based Kingston Communications, signed a multi-year agreement for a transponder on SIRIUS 2 at 5° East, to support its MCPC distribution of digital television channels and IP services throughout the UK and Western Europe; – Space Communications Corporation, SCC, of Japan signed a multi-year transponder agreement for SES AMERICOM’s planned satellite, AMC-13, when it becomes operational at 172° East. The agreement also includes transmission services provided AGS delivered impressive by SES AMERICOM to facilitate access to the US Internet backbone. On an interim basis, SCC will use capacity on SES AMERICOM’s Spacenet 4, the satellite currently growth and net profit operating at 172° East, to provide communications services between Japan and in 2002. North America; – ARINC Inc entered into a joint development agreement with SES AMERICOM to facilitate the launch of the SkyLink (SM) broadband communications service for executive aircraft, using SES AMERICOM Ku-band capacity over North America.

AMERICOM Government Services After 29 years of service to the US federal government, SES AMERICOM formalised this portion of its business by establishing AGS. The business unit is dedicated to providing specialised, satellite-based telecommunications solutions – bandwidth, infrastructure and networking – to federal government agencies and their contractors. AGS delivered impressive revenue growth and net profit in 2002. AGS is currently under contract to serve multiple federal agencies directly, including the Departments of Commerce, Defence, Interior, Justice, and Transportation. AGS also works closely with many leading commercial contractors, including Arrowhead Space and Communication, AT&T, Bechtel, Comsat General, CSC, Dyncorp, Lockheed Martin, Mitre, and Worldcom.

A state-of-the-art facilities network forms the 4,000 bits of data are transmitted for monitoring terrestrial backbone of the SES AMERICOM purposes every other second from each individual satellite fleet. Four 24/7 network operations satellite, ensuring that SES AMERICOM’s centres and six dedicated Earth Stations provide customers are guaranteed optimal levels of satellite access, uplink services and vital service at all times of the day and night. fleet monitoring.

20 SES GLOBAL Annual Report 2002 AMERICOM residential satellite services In 2002, AMERICOM announced plans to provide video and broadband Internet direct-to-home services on AMERICOM2HomeSM, a multi-satellite, multi-frequency platform to be initiated in 2003 at 105° West and fully implemented at 105° and 105.5° West by 2005. A Ku/Ka-band hybrid satellite, AMC-15, is under construction with a planned launch into the 105°West orbital location during the third quarter of 2004. AMC-15 will support additional broadcast and high-speed broadband connections to the home. With authority from the ITU and a licence from the government of Gibraltar for 105.5° West, SES AMERICOM petitioned the FCC to grant the Company authority to offer satellite capacity to third parties that will provide direct-to-home satellite video channels to the US consumer. This capacity will be offered on the proposed AMC-14 satellite pending

® FCC grant of US market access for DBS services at 105.5° West, and satisfactory Cable2 Neighbourhood customer agreements. Cable TV households (millions) The AMERICOM2HomeSM open platform is modelled on the success of the ASTRA 1999 48.3 system in Europe and will leverage the technology of existing systems and ASTRA expertise, thus providing the consumer with more programming choices and enhanced 2000 53.8 functionality through a single home antenna. 2001 59.7 Other developments 2002 60.7 During 2002, the headcount of SES AMERICOM decreased from 292 to 277. This decrease resulted from the implementation of SES AMERICOM’s Expense Reduction Strategy put in place to proactively address a changing industry and market environment. One phase of the strategy focused on operating expense reduction, Cable 2® is America’s newest premium cable while the other phase focused on resource reduction by capitalising on opportunities neighbourhood, formed by AMC-1 and AMC-4 for global workforce synergies, integration or outsourcing. satellites, at 103º West and 101º West, respectively. The close proximity of the two spacecraft permits both satellites to be received by a single ground More information on SES AMERICOM is available at www.ses-americom.com antenna – and SES AMERICOM’s ongoing antenna-seeding program has increased the neighbourhood’s value to cable programmers through increased penetration. Cable 2® is also home to DigitalC® – an SES AMERICOM service featuring intra-and inter-satellite restoration protection, a widely-used compression platform (Scientific-Atlanta PowerVu®) and high- performance, 50-state coverage.

Around the clock, teams of highly skilled engineers monitor the quality of transmission signals sent to and from the AMERICOM satellites to ensure the highest reliability of service.

21 SES GLOBAL Annual Report 2002 In a knowledge-based economy, satellite provides an efficient tool to decentralise learning and enable the interactive sharing of information.

AsiaSat Operational review Linking Asia in space Global partners Asia Satellite Telecommunications Holdings Limited (AsiaSat) is Asia’s premier satellite operator. The AsiaSat fleet covers an area in the Asia-Pacific region that is home to more than two-thirds of the world’s population. AsiaSat provides satellite services to both the broadcast and telecommunications industries. Public and private television and radio broadcasters from around the world were using the AsiaSat satellites during 2002 to distribute more than 120 analogue and digital television channels and 90 radio channels to over 80 million homes throughout the region. Telecommunications customers use AsiaSat for public telephone networks, private VSAT networks, high-speed Internet and broadband services. AsiaSat operated three satellites during 2002: AsiaSat 1 at 122° East (in inclined orbit), AsiaSat 2 at 100.5° East, and AsiaSat 3S at 105.5° East. SES GLOBAL holds 34.10% of the equity of AsiaSat. The company is listed on the stock exchanges of Hong Kong and New York. AsiaSat employed 83 permanent staff at the end of 2002. Financial highlights AsiaSat maintained a clear leadership position in the Asia-Pacific market throughout In HK$ million 2002 2001 2002. While the company increased the number of its customers, it reported a marginal Revenues 951 969 decline in revenues and profits in a soft market environment. Demand drivers for AsiaSat’s services continue to be the distribution of broadcast services and the EBITDA 798 847 provision of telecommunications networks to users who need last mile connectivity Net profit 555 563 over wide geographic coverage at a fixed cost. AsiaSat’s satellite fleet operated without interruption of service during 2002. At year- More information on AsiaSat is available end, the utilisation rate of the 36 MHz C-band transponders was maintained at 78% on www.asiasat.com (2001: 79%) and the overall transponder utilisation rate of the fleet was 64% (2001: 65%) despite the highly competitive conditions in a weak market. Demand for Ku-band capacity remained soft in 2002. As this report went to press, AsiaSat 4, the fourth satellite of the AsiaSat fleet, was being readied for launch. The new spacecraft will enable AsiaSat to provide higher power coverage with excellent elevation angles over Australasia and Greater China. AsiaSat 4 features 28 C-band transponders and 16 Ku-band transponders providing regional coverage, as well as four Hong Kong BSS (Broadcast Satellite Service) transponders covering Hong Kong and Southern China. The spacecraft is scheduled to be operational at 122° East and will replace AsiaSat 1 by the end of April 2003. The construction of AsiaSat’s new Earth Station at the Tai Po Industrial Estate in Hong Kong’s New Territories progressed on schedule in 2002. The new infrastructure is expected to be operational in the second half of 2003. The new Earth station duplicates many of the circuits and facilities currently provided by the Stanley Earth Station, and significantly increases AsiaSat’s commitment to provide the highest quality and reliability of service to its customers, while expanding the range of services offered to customers. Both the new space and ground infrastructure enable AsiaSat to capture business growth opportunities as they arise and as the Asia-Pacific market recovers.

The AsiaSat satellite control centre in the In 2002, AsiaSat’s satellite fleet, covering an area company’s Causeway Bay headquarters, from the Middle East to Australia, operated Hong Kong. without interruption of service.

24 SES GLOBAL Annual Report 2002 Star One Reinforcing the leadership position Star One owns and operates the largest C-band satellite system in South America. A fleet of five satellites (Brasilsat B1, B2, B3, B4 and A2) supports the full range of services including broadband Internet access, telephony, TV broadcasting and corporate networks. The Company’s customers include Embratel, TV broadcasters such as Globo and SBT, and corporations such as Petrobrás, ABN Amro, HSBC and Banco do Brasil. Star One is headquartered in Rio de Janeiro, Brazil. SES GLOBAL holds a 19.99 % investment in Star One. During 2002, Star One achieved growth in a difficult environment. The positive development was driven by accomplishments mainly in the space segment area, as well as in the field of broadband solutions via satellite, both for the SOHO and the corporate markets with the introduction of EasyBand Corporate and EasyCast. Star One reinforced its position as Latin America’s leading satellite operator, winning the licence for the use of Ku-band at the 65°West orbital position in an auction held Financial highlights by ANATEL. This orbital slot will be occupied by the Company’s first new generation In BRL million 2002 2001 satellite, Star One C1, scheduled to be launched in 2005 and providing both C-band and Ku-band capacity. Revenues 347 314 Star One initiated negotiations for the construction of a replacement satellite for EBITDA 259 263 Brasilsat B1, operating in C-band at 70° West. Currently, B1 is used by TV networks Net profit 82 62 to transmit channels in analogue and digital to their affiliates across Brazil. In addition, Brasilsat B1 is received via more than ten million home antennae. More information on Star One is available After a year of major challenges and accomplishments, in 2003 Star One plans to grow on www.starone.com.br throughout South America, introducing new services, such as the Company’s most recent product, the Americas Connection – this service will provide satellite connectivity for the entire American continent, and was launched in December 2002.

Star One’s Guaratiba Earth Station, located in Rio de Janeiro, Brazil. Star One operates Brasilsat, Latin America’s largest satellite fleet, and is the leading South American capacity provider of broadcasting, networking, trunking and radio services.

25 SES GLOBAL Annual Report 2002 Nordic Satellite AB (NSAB) Operational review Focus on Nordic and Baltic States Global partners Nordic Satellite AB (NSAB) is the owner and operator of TV and telecommunications satellites SIRIUS 2, SIRIUS 3 and SIRIUS W (in inclined orbit), located at 5° East and 13° West. NSAB provides satellite transmission capacity for the distribution of TV and radio channels and for various telecommunications and broadband services, such as VSAT applications, Internet and occasional use services. The SIRIUS satellites primarily cover the Nordic region, but also the Baltic countries and parts of Eastern Europe. NSAB employed 40 staff at year-end 2002. SES GLOBAL owns a 50% stake in NSAB, the remaining 50% being owned by the Swedish Space Corporation (SSC). As a result of the Company´s focus on the markets of the Baltic countries as well as those of Central and Eastern Europe, new contracts have been signed for the distribution ofTV and radio services in the Baltics, Ukraine and Romania. In a continuous effort to enhance the network infrastructure, NSAB established new Financial highlights uplink stations in Riga and Kiev. In SEK million 2002 2001 Significant efforts were made to develop broadband services, especially Internet Revenues 577 591 services via satellite. Swepet Satellit AB, an Internet service provider, contracted for EBITDA 277 77 transmission capacity on the SIRIUS satellite system to provide high speed Internet connections for customers throughout the Nordic countries. Net profit 90 (63) The Company concluded a number of contracts for VSAT services (data and More information on Nordic Satellite AB telecommunication services via satellite for Business-to-Business applications) is available on www.nsab-sirius.com particularly in Eastern Europe.

Nahuelsat Expanding the network Nahuelsat S.A. is the operator of the Argentinian Nahuel satellite system, which offers Ku-band coverage to the whole of Latin America and up to the Southern US. The Nahuel-1 satellite, launched in 1997, serves customers in Latin America and the US. Nahuel-1 provides capacity for the distribution of TV channels and telecommunications Financial highlights services such as telephony, Internet backbone connections, and data transmission. In ARS million 2002 2001 Nahuelsat has an outstanding track record of network availability and customer support. Revenues 63 35 Nahuelsat is based in Buenos Aires, Argentina. SES GLOBAL holds a 28.75% EBITDA 31 25 participation in the Company. Net profit/(loss) (95) (2) In the framework of the challenging economic conditions in Argentina, Nahuelsat More information on Nahuelsat is continued to expand the network of local representatives in different countries of available on www.nahuelsat.com.ar Latin America. Nahuelsat aims to access these different markets through alliances with local operators.

TTC antennae used for the control of the SIRIUS Nahuelsat’s Earth command station, located satellites. The antennae are located at the SIRIUS in Benavídez, 41 km from Buenos Aires. Satellite Control Centre in Esrange, in the far north of Sweden.

26 SES GLOBAL Annual Report 2002 SATLYNX Europe’s leading broadband satellite services provider SATLYNX is a joint venture between SES GLOBAL, Gilat Satellite Networks and potentially Alcatel Space. The Company was created in June 2002 with the mission to provide an extensive portfolio of two-way broadband satellite services all across Europe. SATLYNX manages network services through wholesale agreements with resellers and primarily direct sales for pan-European networks. SATLYNX operates in various European markets with a strong local presence in France, the UK, Germany, and Spain. The Company is headquartered in Luxembourg, with operational centres in Germany and Luxembourg. SES GLOBAL owns a 50% stake in SATLYNX. The Company serves corporate customers such as Agip, Q8, Esso, telecoms operators such as BT Openworld and NeoSky, and Internet Service Providers such as Tiscali and La Poste. SATLYNX concluded a contract with P&T Luxembourg to offer Internet Services to SOHOs and SMEs in the Luxembourg territory and its adjacent regions. Following its formation in mid-2002, SATLYNX rapidly integrated the operations of Gilat Europe with the Broadband Interactive team and services contributed by SES to the Financial highlights joint venture. SATLYNX has remained strongly focused on business development. In EUR million 2002 In the current challenging business climate SATLYNX has identified a number of Revenues 14.4 opportunities which it will be developing in the coming months. EBITDA (14.6) Net profit/(loss) (35.2)

More information on SATLYNX is available on www.satlynx.com

The SATLYNX Operational Centre, located in Backnang, Germany. SATLYNX has created an unrivalled portfolio of reliable and cost-efficient two-way satellite broadband service solutions for a wide range of applications across Europe.

27 SES GLOBAL Annual Report 2002 SES GLOBAL shareholders

Number of shares Voting interest represented Economic interest by SES GLOBAL shareholders1 by FDR’s /shares held FDR’s/shares held A-shares GSH Global Satelliten-Beteiligungs-Holding GmbH (100% DTAG) 42,516,140 5.77% 7.21% DT-Satelliten-Holding-GmbH (100% DTAG) 35,068,860 4.76% 5.94% Loran Telecommunications S.A. 22,453,750 3.04% 3.81% Dresdner Bank Luxembourg S.A. 18,130,000 2.46% 3.07% Deutsche Bank Luxembourg S.A. 15,800,000 2.14% 2.68% Luxempart S.A. 13,380,000 1.81% 2.27% Rebelco S.A. 10,000,000 1.36% 1.70% Audiolux S.A. 8,010,000 1.09% 1.36% Commerzbank AG 7,900,000 1.07% 1.34% Banque Générale du Luxembourg S.A. 6,182,610 0.84% 1.05% Private and other A shareholders <1% economic interest 10,765,230 1.46% 1.82% A shares held as FDRs (free float) 120,133,410 16.29% 20.36% Total A-shares 310,340,000 42.08% 52.60%

B-shares BCEE 80,225,463 10.88% 5.44% SNCI 80,215,463 10.88% 5.44% Etat du Grand-Duché de Luxembourg 85,376,910 11.58% 5.79% Total B-shares2 245,817,836 33.33% 16.67%

C-shares GE Capital total holding 148,228,155 20.10% 25.12% State Street Bank & Trust Company3 33,067,517 4.48% 5.61%

Total C-shares 181,295,672 24.58% 30.73%

Total shares 737,453,508 100.00% 100.00%

1 Significant shareholdings as of March 26, 2003. 2 Class B-shares: A share of Class B carries 40% of the economic rights of an A or C-share. 3 Voting Trust: An amount of 33,067,517 ordinary C-shares has been transferred to State Street Bank and Trust ( Voting Trust) resulting in a GE Capital Voting percentage of 20.1% and economic percentage of 30.73%. The voting trust will vote proportionate with all other shares.

28 SES GLOBAL Annual Report 2002 Board of Directors

Composition of the Board of Directors and of the Committees set up by the Board as of December 31, 2002.

Chairman René Steichen

Vice-Chairmen John F. Connelly Gerd Tenzer Jean-Paul Zens

Members Charles Alexander Wolfgang A. Baertz Ernst-Wilhelm Contzen Jean-Claude Finck Richard Goblet d’Alviella Raymond Kirsch Dr. Joachim Kröske Dr. Raphael Kübler Hadelin de Liedekerke Beaufort Denis J. Nayden Gaston Reinesch Victor Rod Luis Sanchez Merlo Christian Schaack Georges Schmit Gaston Schwertzer François Tesch

Observers Fred Arbogast, Representative of the Personnel Delegation of SES ASTRA Pierre Goerens, Commissioner of the Luxembourg Government at SES ASTRA

Secretary to the Board of Directors Roland Jaeger, General Counsel

Chairman’s Office (since September 12, 2002) René Steichen, Chairman John F. Connelly Gerd Tenzer Jean-Paul Zens

Bureau of the Board (until September 12, 2002) René Steichen, Chairman John F. Connelly Gerd Tenzer Jean-Paul Zens Wolfgang A. Baertz Richard Goblet d’Alviella Raymond Kirsch François Tesch

Audit Committee René Steichen, Chairman Ernst-Wilhelm Contzen Gaston Reinesch Christian Schaack

Compensation Committee René Steichen, Chairman John F. Connelly Gerd Tenzer Jean-Paul Zens

29 SES GLOBAL Annual Report 2002 2002 Activities report of the Board of Directors

The year 2002 was the first full year of existence of SES GLOBAL following its inception under its current form on November 9, 2001, at the occasion of the closing of the transaction by which SES GLOBAL acquired 100% of GE AMERICOM stock and other assets. On November 8, 2001, SES GLOBAL had become the owner of the entire stock of SES ASTRA. The combination of SES ASTRA and SES AMERICOM created the world’s premier satellite service provider.

The list of major shareholders of SES GLOBAL is published on page 28, and a chart displaying the organisational structure of the SES Group is included on page 2 of the present activities report.

Corporate governance structure of SES GLOBAL On May 6, 2002, the General Meeting of Shareholders elected the Board members for a period of three years. The list of Board members is published on page 29. The Board met the same day and elected Mr. René Steichen as Chairman as well as three Vice-Chairmen: Mr. Gerd Tenzer (proposed by shareholders of category A), Mr. Jean-Paul Zens (proposed by shareholders of category B) and Mr. John F. Connelly (proposed by the shareholder of category C). The Board also established the Bureau of the Board, the Audit Committee and the Compensation Committee.

At its meeting of September 12, 2002, the Board replaced the Bureau of the Board by a body designated as ‘Chairman’s Office’ comprising the Chairman and the three Vice-Chairmen. This newly created body prepares the agenda of the Board meetings and allows the three Vice-Chairmen to organise individual meetings with the respective Board members of the respective category of shareholders to prepare the upcoming Board meetings.

The Commissioner of the Government at SES ASTRA, Mr. Pierre Goerens, and a representative of the SES ASTRA personnel delegation, Mr. Fred Arbogast, participate as observers at the meetings of the SES GLOBAL Board.

The list of members of the Chairman’s Office, the Audit Committee and the Compensation Committee are published on page 29.

The Executive Committee of SES GLOBAL, in charge of the daily management, continues to be composed of Mr. Romain Bausch, President and CEO, Mr. Robert Bednarek, Executive Vice President, Corporate Development, Mr. Jürgen Schulte, Chief Financial Officer, Mr. Ferdinand Kayser, President and CEO of SES ASTRA, and Mr. Dean Olmstead, President and CEO of SES AMERICOM.

Activities of the Audit Committee The Audit Committee held three meetings dedicated in particular to the review of the half-year financial results, the adoption of the Internal Audit Charter and the Internal Audit Plan, the endorsement of a risk mapping approach as well as the review of the 2002 results to be submitted to the Board and subsequently the shareholders at the statutory General Meeting.

The Audit Committee endorsed the principles of cooperation between the External and the Internal Auditors and recommended to strengthen the Internal Audit function by an additional recruitment.

Activities of the Compensation Committee The Compensation Committee held three meetings to address matters related to the adaptation of the Complementary Pension Scheme and of the Executive Stock Option Plan. The Committee submitted proposals to the Board for determining the exercise price applicable for the 2002 Stock Option grant and a methodology for determining grants for upcoming years.

In view of the implementation of the Stock Option Plan the Company continued the acquisition of its own FDR’s with the goal to have them distributed to the staff. Currently the Company owns 3,226,190 FDR’s and 100,000 shares of category A.

The Compensation Committee also addressed issues related to a succession planning for senior positions at the level of SES GLOBAL, SES ASTRA and SES AMERICOM.

30 SES GLOBAL Annual Report 2002 Activities of the Board of Directors The Board was particularly involved in decision-making processes related to the following actions: • to set up rules and a reporting methodology for the two 100% owned subsidiaries (SES ASTRA and SES AMERICOM) as well as the other important participations of the Group; • to define financing-related matters involving SES GLOBAL and its two 100% owned affiliates; and • to decide on or endorse proposed business decisions submitted by the two wholly-owned affiliates.

At its meeting of January 31, 2002 the Board adopted a format for the monthly management reporting by the Executive Committee, including information on the status and development of the Company, its two wholly-owned affiliates and the participations in the other entities such as AsiaSat, NSAB, StarOne, Nahuelsat and SATLYNX.

The Board was informed on a monthly basis by the Executive Committee according to the determined format.

The Board closely followed the financing needs of the Company and had a regular assessment on the appropriateness of a public equity offering in the US or of other models of public offerings. However, due to the negative market situation, which worsened dramatically during the year 2002 and in early 2003, the Board advised against such offerings.

At its December meeting, the Board approved the SES Group budget for the year 2003. The Board also had discussions on the adoption of a Strategic Plan up to the year 2010.

The Board addressed submissions for business developments for the two wholly-owned affiliates related to the development of the two- way broadband services in conjunction with Gilat at the level of SATLYNX, of direct-to-home services by SES AMERICOM under the designation of Americom2HomeSM, of ISAT, ARINC and IP Direct projects.

Human Resources At year-end 2002 SES GLOBAL S.A. had a staff of 48 employees, and the entire SES GLOBAL Group employed a total of 808 staff.

Other matters The Board followed the actions undertaken by SES ASTRA deriving from the Luxembourg Court of Appeals decision of July 10, 2002, in the Whitehead litigation. The Court of Appeals ruled in favour of Mr. Whitehead by declaring his request for dividends founded and thus did not uphold the judgment of first instance of January 26, 2001, which had dismissed Mr. Whitehead’s claim. In its decision rendered on February 12, 2003, the Court of Appeals accepted the dividends as indicated by SES ASTRA and retained the figures put forward by the Company. The payout of the dividend amount will not affect the profitability of the Company as these amounts will be paid out of shareholder reserves.

On a regular basis, based on proposals by the Executive Committee, the Board designated the SES representatives at the Board of affiliate companies.

The Board of Directors considers that despite the difficult business environment the developments of SES GLOBAL Group have evolved in a satisfactory manner and expresses its thanks to Management and all employees for their contribution and dedication.

31 SES GLOBAL Annual Report 2002 Executive Committee

The Executive Committee is in charge of the daily management of SES GLOBAL. The Committee includes the President and CEO of SES GLOBAL, Chairman of the Executive Committee, the Chief Financial Officer and the Executive Vice President Corporate Development of SES GLOBAL, as well as the CEOs of the operating companies. The inclusion of the CEOs of the operating companies ensures close ties to the markets. The Executive Committee embodies decades of combined experience in satellite operations and broadcasting.

Romain Bausch Robert A. Bednarek President and CEO of SES GLOBAL Executive Vice President Corporate Chairman of the Executive Committee Development of SES GLOBAL

Chairman of the Board of Directors Member of the Executive Committee of SES ASTRA, SES AMERICOM of SES GLOBAL; Vice-Chairman of the and AsiaSat*; Vice-Chairman of the Board of Directors of SATLYNX; Member Board of Directors of Nordic Satellite AB; of the Board of Directors of SES ASTRA, and Member of the Board of Directors SES AMERICOM, AsiaSat, and Star One; of SATLYNX. and Board Member of Gilat Technologies, Ltd (appointment ended in September 2002). Joined SES in May 1995. Joined SES GLOBAL in January 2002. Previous appointments Administrator General in the Luxembourg Previous appointments Ministry of Finance; Member of the Board Executive Vice-President and Chief of Directors of Société Européenne des Technology Officer, PanAmSat Corporation; Satellites (SES); Vice-Chairman of SES’ Senior Vice-President, Engineering & Board of Directors; Chairman of Société Operations, PanAmSat Corporation; Nationale de Crédit et d'Investissement; Co-founder and Partner of Rubin, Bednarek Government Commissioner to Compagnie & Associates; and Deputy Chief Scientist of Luxembourgeoise de Télédiffusion (CLT); the US Corporation for Public Broadcasting. and Government Commissioner to Banque Education Internationale à Luxembourg. B.Sc. degree in Electrical Engineering, Education University of Florida. Master of Arts in Economics and Business US national; born October 6, 1957. Administration, University of Nancy (France). Luxembourgish national, born July 3, 1953.

*Since January 1, 2003, Vice-Chairman of the Board of Directors of AsiaSat.

32 SES GLOBAL Annual Report 2002 Ferdinand Kayser Dean A. Olmstead Jürgen Schulte President and CEO of SES ASTRA President and CEO of SES AMERICOM Chief Financial Officer of SES GLOBAL

Member of the Executive Committee Member of the Executive Committee of Member of the Executive Committee of SES GLOBAL; Member of the Board SES GLOBAL; Member of the Board of of SES GLOBAL; Member of the Board of of Directors of SES AMERICOM, Nordic Directors of SES ASTRA, SES AMERICOM, Directors of SES ASTRA, SES AMERICOM, Satellite AB and SATLYNX. AMERICOM GOVERNMENT SERVICES AsiaSat, Nordic Satellite AB and Star One. and AMERICOM ASIA-PACIFIC. Joined SES ASTRA in January 2002. Joined SES in June 1991. Joined SES in January 1998. Previous appointments Previous appointments Managing Director at Kirch Pay Co Holding Previous appointments Management positions held in the financial and Premiere Medien GmbH & Co. KG; Executive Representative of SES in and administrative departments of General Managing Director at Premiere Medien the Americas; Director of Business Electric (USA) affiliates in Brussels, New GmbH & Co. KG; Executive Vice President Development, Member of the Management York, Madrid, Frankfurt and Luxembourg. at CLT-UFA; Executive Vice President, Committee of SES ASTRA; and Executive Education Member of the management board, Vice-President, Engineering and Operations, Master degree in Business Administration, responsible for all TV activities, RTL; and DirecTV Japan. University of Münster (Germany). Senior Vice President at CLT Multi Media. Education German national, born May 15, 1943. Education B.Sc. degree in Economics-Mathematics Master of Economics University of Paris I, from Western Washington University; Panthéon-Sorbonne. M.Sc. degree in Engineering Economic Systems from Stanford University School Luxembourgish national, born July 4, 1958. of Engineering; and completed Ph.D. studies in Economics from the American University in Washington, D.C. US national, born July 3, 1955.

33 SES GLOBAL Annual Report 2002 Management discussion and analysis

The consolidated financial results presented for the year ended December 31, 2002, reflect the first full-year reporting period subsequent to the acquisition of SES AMERICOM (‘AMERICOM’) on November 9, 2001. The strong reported growth in revenues and EBITDA is accounted for primarily by the impact of AMERICOM – although the acquisition, as expected, reduces the profit of the Group level as explained below. With strong growth in net operating cash flow and a solid contract backlog, the results underline the strength and growth potential of the new expanded business.

Given the significant impact of the AMERICOM acquisition and the proportional consolidation of SATLYNX on these financial statements, we have addressed our comments not only to movements in the consolidated Group results, but also to developments in the business excluding the impact of AMERICOM and SATLYNX. References made to ‘same scope basis’ are to figures excluding the consolidated impact of the results of the investments in AMERICOM, Americom Asia-Pacific LLC and Nahuelsat SA (all acquired under the AMERICOM acquisition) and SATLYNX.

ASTRA AMERICOM AsiaSat Other1 Group Segment information For the year ended December 31, 2002 EUR million EUR million EUR million EUR million EUR million Revenues 675.4 501.5 130.9 41.5 1,349.3 EBITDA 611.0 404.0 105.6 (13.5) 1,107.1 Depreciation (177.0) (146.2) (22.9) (15.5) (361.6) Amortisation (28.6) (156.4) (11.2) (20.2) (216.4) Operating profit 405.4 101.4 71.5 (49.2) 529.1 Net financing cost2 10.5 (70.5) (13.1) 2.3 (70.8) Value adjustments on investments (7.0) (12.8) 0.0 (1.0) (20.8) Profit on ordinary activities 408.9 18.1 58.4 (47.9) 437.5 Taxes (123.0) (60.0) (4.0) (1.3) (188.3) Share of associates’ results 0.0 0.0 (1.9) 7.4 5.5 Minority interest 0.0 0.0 (50.2) 0.0 (50.2) Profit of the Group 285.9 (41.9) 2.3 (41.8) 204.5

Segment assets 2,274.4 4,647.4 664.4 554.9 8,141.1 Segment liabilities 529.9 2,961.2 378.1 426.3 4,295.5 Capital expenditure 200.7 417.6 58.9 6.6 683.8

1 The segment ‘other participations’ comprises: the fully consolidated Group companies SES GLOBAL S.A., SES Finance S.A, and SES do Brasil; the 50% proportionally consolidated interests in AMERICOM ASIA-PACIFIC, NSAB and SATLYNX; and the equity investments in Star One and Nahuelsat. 2 Segment net financing charge is stated after the allocation of transaction financing costs.

2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 scope basis Group revenues EUR million EUR million EUR million % EUR million EUR million % Total revenues 1,349.3 978.2 371.1 +37.9% 837.1 (60.5) –6.7%

Compared to the prior year, revenues grew strongly, due to the first full-year contribution by AMERICOM in 2002 of EUR 501.5 million, compared to EUR 80.6 million in the post November 9, 2001 period in the prior year. SATLYNX contributed EUR 7.2 million to Group revenues.

On a same scope basis, revenues fell by 6.7%, with revenue decreases at ASTRA of EUR 64.1 million and AsiaSat of EUR 7.5 million being partially mitigated by growth at NSAB of EUR 10.9 million. The AsiaSat revenue decline was partly due to unfavourable exchange movements, the decline being 5.4% in EUR and 2.3% in local currency, while the increase in NSAB revenues was primarily due to termination payments. The revenues consolidated for NSAB were EUR 30.8 million which represent 50% of this company’s revenues.

Excluding the impact of once-off analogue termination payments in 2001 and 2002, ASTRA recurring revenues declined by EUR 46.1 million (6.6%). The decrease in recurring revenues was driven principally by the reversion during 2002 of capacity at 19.2º East by Premiere and certain broadband customers. In contrast, revenues generated at 28.2º East, and ASTRA’s third orbital location at 23.5º East/24.2º East, continued to grow, mainly reflecting the transponders contracted at these positions in 2001 and 2002 with ITV, BBC and Deutsche Telekom. In particular, the revenues at 28.2º East grew by 15.8% to EUR 177.6 million.

At AMERICOM, year-on-year US dollar revenues decreased by 7.1% primarily driven by customer insolvencies, contract restructurings, and early contract terminations due to unfavourable economic conditions.

34 SES GLOBAL Annual Report 2002 2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 Earnings before interest, tax, scope basis depreciation and amortisation (‘EBITDA’) EUR million EUR million EUR million % EUR million EUR million % Staff costs 101.7 47.2 54.5 +115.5% 47.6 6.7 +16.4% External and other operating charges 197.6 139.3 58.3 +41.9% 135.4 3.3 +2.5% Insurance proceeds1 (336.5) (2.9) (333.6) – (336.5) (333.6) – Asset write-downs1 279.4 – 279.4 – 279.4 279.4 – EBITDA 1,107.1 794.6 312.5 +39.3% 711.2 (16.3) –2.2% EBITDA margin % 82.1% 81.2% +0.9 % pts – 85.0% +3.9 % pts – EBITDA margin excluding exceptional items% 77.8% 80.9% –3.1% pts – 78.1% –2.6 % pts –

1 Insurance proceeds and asset write-downs in 2002 relate to the insurance claims for ASTRA 1K and ASTRA 1G.

The EBITDA margin of the Group remains strong at 82.1% compared to 81.2% in 2001. Excluding the impact of the insurance proceeds and asset write-downs linked to ASTRA 1K and ASTRA 1G, the EBITDA margin of the Group is 77.8%. The EBITDA margins of the main operating companies remain robust (ASTRA 82.0%; AMERICOM 80.6%; AsiaSat 80.7%) with Group EBITDA% being negatively impacted due to the first time proportional consolidation of SATLYNX. The EBITDA margin excluding the exceptional gains and SATLYNX was 78.8%. The ASTRA reported EBITDA margin was 90.5% but excluding the impact of the insurance proceeds and asset-write downs the EBITDA margin was 82.0%.

Staff costs at Group level increased by EUR 54.5 million of which the first full-year consolidation of AMERICOM contributed EUR 42.9 million and the first time proportional consolidation of SATLYNX contributed EUR 3.6 million. Group headcount increased from 779 to 808. On a same scope basis, staff costs rose by EUR 6.7 million (16.4%), which included a non-recurring charge for staff restructuring in ASTRA of EUR 3.6 million. Excluding this non-recurring charge, same scope staff costs increased by 7.6%.

On a same scope basis, external and other operating charges increased slightly by EUR 3.3 million (2.5%) due principally to higher in-orbit insurance and bad debts. The increase in in-orbit insurance was driven by ASTRA satellites entering service in late 2000 (ASTRA 2B) and in 2001 (ASTRA 2D and ASTRA 2C) reaching the end of their first year in-service (the first year of in-orbit insurance being capitalised). Bad debt expense was EUR 3.7 million higher due to the difficult economic environment in 2002. Consultancy costs associated with financing activities amounting to EUR 5.0 million were expensed in the year. All other costs were closely controlled with a reduction of EUR 8.1 million (8.5%) achieved compared to the prior year.

AMERICOM costs increased by 15.9% year-on-year due primarily to a USD 5.0 million employee severance charge and USD 3.7 million in increased third-party transponder rental costs.

The insurance proceeds of EUR 336.5 million relate to two satellite insurance claims made by ASTRA in 2002. A claim was made for a total constructive loss of ASTRA 1K after this satellite failed to reach its correct orbital location on November 26, 2002 due to the failure of the second firing of the Block DM fourth stage during the launch procedure. The satellite was successfully de-orbited on December 10, 2002. The total value of this claim was EUR 291.5 million.

A claim for EUR 45.0 million was made for the lost operational capacity of ASTRA 1G arising due to the failure of one of the spacecraft’s battery cells. The loss of the battery cell, which was identified in the first 12 months after the satellite’s launch in December 1997, has resulted in a special battery management programme for the satellite being introduced in particular during the eclipse season. In November 2002 following the eclipse season, ASTRA management concluded that despite the battery management programme a loss of eight of the satellite’s 28 transponders has occurred and an insurance proof of loss was filed on this basis. With respect to both of these losses, there was no negative impact on continued customer service reflecting the robustness of the ASTRA satellite fleet configuration.

In relation to the satellite insurance claims, asset write-downs of EUR 279.4 million have been booked. The ASTRA 1K satellite has been fully written-off including the related ground equipment. This has resulted in an exceptional charge in 2002 of EUR 265.4 million. The net accounting gain on the ASTRA 1K claim of EUR 26.1 million is due principally to interest expense on ASTRA satellite procurements only being capitalised since the change in accounting policy on November 9, 2001. A write-down of EUR 14.0 million of the carrying value of ASTRA 1G has been made in 2002 reflecting the lost transponder years.

The prior year insurance proceeds related to the recognition of in-orbit insurance proceeds concerning an ASTRA 1A claim made due to partial loss of capacity. The total proceeds were EUR 23.4 million and were amortised over the 24 months commencing April 1, 1999.

35 SES GLOBAL Annual Report 2002 Management discussion and analysis continued

2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 scope basis Depreciation and amortisation EUR million EUR million EUR million % EUR million EUR million % Depreciation 361.6 203.8 157.8 +77.4% 208.1 26.7 +14.7% Amortisation 216.4 66.5 149.9 +225.6% 53.5 10.7 +25.0%

The increase in depreciation at the Group level of EUR 157.8 million is almost entirely due to the full-year consolidation of the depreciation charges at AMERICOM (EUR 146.2 million), AAP (EUR 3.4 million) and SATLYNX (EUR 3.9 million). These three companies contribute EUR 131.1 million of the EUR 157.8 million increase compared to 2001.

The charge for depreciation at ASTRA rose by EUR 27.4 million due to higher space and ground segment depreciation. Space segment depreciation increased due to the successful taking into service of ASTRA 3A in the second quarter of 2002 as well as the full-year depreciation impact of the satellites ASTRA 2D and ASTRA 2C which became operational in February 2001 and September 2001 respectively. ASTRA 1B was fully depreciated in the course of 2001. Following the contribution of the broadband activities from ASTRA to SATLYNX, an accelerated depreciation of EUR 23.5 million has been booked in ASTRA on related ground equipment.

Of the EUR 149.9 million increase in the Group charge for amortisation, EUR 132.7 million arose on the goodwill and other intangible assets generated on the acquisition of AMERICOM. The goodwill was valued at USD 2,367.1 million at December 31, 2001 and, as a result of final purchase accounting adjustments, is valued at USD 2,436.8 million at December 31, 2002. The goodwill is being amortised over the 20-year period from November 9, 2001. The remaining increase of EUR 17.2 million is mainly due to the amortisation of the goodwill arising on the establishment of SATLYNX (EUR 6.5 million) and the NSAB accelerated write-off of EUR 9.5 million as outlined below.

Impairment reviews have been undertaken on all the Group’s investments and as a result of this a provision of EUR 9.5 million has been made against the goodwill arising on the consolidation on the investment in NSAB, to reflect the current trading position of this company. The residual amount of the NSAB goodwill of EUR 59.9 million is being amortised over the period to September 30, 2020.

At AMERICOM, depreciation was similar to the prior year, there being no significant additions or disposals of assets in use in 2002.

2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 scope basis Operating profit EUR million EUR million EUR million % EUR million EUR million % Operating profit 529.1 524.3 4.8 +0.9% 449.6 (53.7) –10.7%

At the operating profit level, the impact of the first full-year consolidation of AMERICOM remains positive. On a same scope basis, operating profit declined by EUR 53.7 million of which ASTRA contributed EUR 22.7 million due to lower revenues and higher depreciation as explained above.

2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 Net financing charges including value scope basis adjustments on financial assets EUR million EUR million EUR million % EUR million EUR million % Interest received and similar income (61.8) (24.4) (37.4) –152.5% (55.0) (31.1) –130.1% Interest paid and similar expenses 132.6 72.2 60.4 +83.6% 51.3 (0.1) –0.2% Value adjustments 20.8 20.8 – – 8.0 (12.8) –61.5% Tot al 91.6 68.6 23.0 +33.6% 4.3 (44.0) –68.4%

Interest received and similar income for 2002 includes EUR 22.8 million of realised and unrealised exchange gains, primarily on US dollar liabilities, an increase of EUR 13.2 million compared to the prior year. Interest income has increased by EUR 24.2 million in the year due to the strong operating cashflow performance of the Group in 2002.

The increase in interest paid and similar expenses of EUR 60.4 million results primarily from the full-year impact of the financing obtained for the AMERICOM transaction.

Value adjustments to the carrying value of financial assets of EUR 20.8 million have been made in 2002, primarily relating to the Group’s investments in Gilat (EUR 9.9 million), Netsystem.com (EUR 7.1 million) and PhoenixStar (EUR 3.2 million) to reflect the trading positions of the companies.

2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 scope basis Taxation EUR million EUR million EUR million % EUR million EUR million % Taxes 188.3 112.6 75.7 67.1% 129.4 29.1 +29.0% Reported tax rate 43.0% 24.7% +18.3% pts – 29.1% +7.1% pts –

The Group’s reported tax rate was 43.0% compared to 24.7% in 2001. This increase is mainly due to the non-deductibility for tax purposes of the amortisation charges on the goodwill and intangible assets created on the acquisition of AMERICOM. Excluding the non-deductible charges for the amortisation of consolidated goodwill, and for the amortisation of intangibles arising on the acquisition of AMERICOM, the effective book tax rate or headline tax rate for the year was 30.1%.

On a cash tax basis, no significant taxes are payable for 2002 due to the five-year depreciation period for AMERICOM satellites for tax purposes and due to the accelerated amortisation of the capitalised franchise fee and deductibility of unrealised exchange losses in ASTRA (with related exchange gains only being taxed when realised).

36 SES GLOBAL Annual Report 2002 2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 scope basis Share of associates’ result EUR million EUR million EUR million % EUR million EUR million % Share of associates’ result 5.5 (9.8) 15.3 – 7.7 17.5 +178.6%

The share of associates’ result in 2002 comprises a profit of EUR 9.5 million from the Star One investment, partially offset by losses relating to Nahuelsat of EUR 2.2 million and Speedcast of EUR 1.8 million.

2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 scope basis Minority interests EUR million EUR million EUR million % EUR million EUR million % Profit attributable to minority interest 50.2 53.0 (2.8) –5.3% 50.2 (2.8) –5.3%

The minority interest of EUR 50.2 million relates to the 65.9% share of AsiaSat profits attributable to the other AsiaSat shareholders.

2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 scope basis Profit of the Group EUR million EUR million EUR million % EUR million EUR million % Profit of the Group 204.5 280.3 (75.8) –27.0% 273.4 (18.5) –6.3% Net profit margin 15.2% 28.7% –13.5% pts – 32.7% +0.2% pts – Earnings Per A-Share (EUR) 0.34 0.68 (0.34) –50.0% – – – Net operating cash flow per A-share (EUR) 1.78 1.69 0.09 +5.3% – – –

At EUR 204.5 million, Profit of the Group was down EUR 75.8 million or 27.0% compared to 2001 mainly due to the impact of the AMERICOM acquisition. Though it makes a strong contribution at the EBITDA level, the impact of AMERICOM at the Profit of the Group level is dilutive due to the amortisation and transaction charges being set off against its trading performance.

On a same scope basis, profit declined 6.3% reflecting the macro-economic climate and the resulting lower revenues of 6.7%. The profit for the year was reduced by the restructuring costs, accelerated depreciation and goodwill amortisation, and the value adjustments on financial assets described above. These costs, although negatively impacting the 2002 results, provide a stronger balance sheet going forward and provide the framework for continued cost management.

The profit of the Group includes a positive contribution from the investment in Star One, accounted for under the equity method and after deducting transaction financing costs, of EUR 6.1 million. The proportionately consolidated investments in SATLYNX, NSAB and AMERICOM ASIA-PACIFIC generated negative contributions to profit of the Group of EUR 20.8 million, EUR 11.0 million and EUR 4.0 million respectively. The equity accounted investment in Nahuelsat generated a negative contribution to profit of the Group of EUR 2.2 million.

Earnings per A-share declined compared to the prior year mainly due to the dilutive impact of the AMERICOM transaction on the profit of the Group as outlined above and due to the effect of the additional shares issued in connection with the transaction.

Net operating cashflow per A-share increased reflecting the strong operating cashflow performance of the Group.

2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 scope basis Capital expenditure EUR million EUR million EUR million % EUR million EUR million % Capital expenditure 683.8 432.3 251.5 +58.2% 261.6 (109.5) –29.5%

Capital expenditure in the year increased by EUR 251.5 million, reflecting the number of satellites under construction in the Group during the year. On a same scope basis, capital expenditure decreased by EUR 109.5 million reflecting the three satellite programmes in progress in 2002 (ASTRA 3A, ASTRA 1K and AsiaSat 4) compared to four in 2001 (+ ASTRA 2C).

2002 2001 Variance Variance 2002 Variance to Variance to on same 2001 2001 scope basis Net operating cash flow EUR million EUR million EUR million % EUR million EUR million % Net operating cash flow 1,051.8 682.4 369.4 +54.1% 633.6 33.9 +5.6%

Net operating cash flow continued to grow at the Group level, increasing by 54.1% compared to the prior year. On a same scope basis, the increase was 5.6%, mainly through effective working capital management. After deducting the net cash absorbed by investing activities of EUR 745.4 million, the free cash flow for the period was EUR 306.4 million. The net cash absorbed by investing activities included EUR 683.8 million of capital expenditures, and EUR 42.0 million of payments to acquire the Group’s share of SATLYNX (net of cash acquired).

37 SES GLOBAL Annual Report 2002 Management discussion and analysis continued

Net debt Net debt fell by EUR 478.9 million to EUR 2,661.1 million. Liabilities were reduced by net loan repayments of EUR 438.8 million as well as a favourable impact of the strengthening Euro on the Group’s US dollar denominated debt amounting to EUR 426.5 million being partially offset by a decrease in cash holdings of EUR 386.4 million, compared to the position at December 31, 2001. The net debt to equity ratio fell by 5.8 percentage points to 74.4%.

Contract backlog The combined Group contract backlog at December 31, 2002 was EUR 5,979.6 million compared to EUR 6,757 million at the end of the prior year. The impact of the weakening of the dollar on the AMERICOM backlog explains EUR 300 million of this movement, with the remaining reduction also reflecting the status of renewal cycles with certain contracts, with important renewals expected in 2003.

Dividend The Board of Directors has recommended a dividend per A-share of EUR 0.20. This will result in a total dividend payment of EUR 118.0 million. The dividend will be paid on May 20th, 2003, subsequent to approval by the shareholders at the Annual General Meeting on May 6, 2003.

38 SES GLOBAL Annual Report 2002 SES GLOBAL S.A. consolidated accounts Report of the independent auditor

To the Shareholders of SES GLOBAL S.A. Société Anonyme Betzdorf

Following our appointment by the General Meeting of the Shareholders on May 6, 2002, we have audited the accompanying consolidated accounts of SES GLOBAL S.A. for the year ended December 31, 2002 and have read the related consolidated management report. These consolidated accounts and the consolidated management report are the responsibility of the Board of Directors. Our responsibility is to express an opinion on these consolidated accounts based on our audit and to check that the consolidated management report is consistent with the consolidated accounts.

In our opinion, the accompanying consolidated accounts give, in conformity with Luxembourg legal and regulatory requirements, a true and fair view of the consolidated financial position of SES GLOBAL S.A. as at December 31, 2002 and of the consolidated results of its operations for the year then ended.

The consolidated management report is consistent with the consolidated accounts.

Ernst & Young Société Anonyme Réviseur d'entreprises

Werner Weynand

Luxembourg, March 20, 2003

39 SES GLOBAL Annual Report 2002 Consolidated balance sheet December 31, 2002

2002 2001 Assets Note EUR million EUR million Fixed assets Intangible assets 4 Goodwill 2,470.1 2,906.0 Other intangibles 935.9 1,109.7 3,406.0 4,015.7 Tangible assets in use 5 Land and buildings 94.6 84.1 Plant and machinery – space segment 2,332.6 2,769.3 – ground segment 120.8 103.7 Other fixtures and fittings, tools and equipment 17.9 21.0 2,565.9 2,978.1 Payment on account and assets in course of construction 6 1,008.1 952.0 3,574.0 3,930.1 Financial assets Investments in associates 9 77.5 140.9 Long term investments 10 8.4 22.6 Other financial assets 11 40.1 46.3 126.0 209.8 Current assets Inventories 12 4.0 – Trade debtors 13 169.6 203.1 Other debtors 22 382.9 98.1 Investments 14 23.1 20.6 Cross currency interest rate swap agreements 15 74.3 – Cash at bank and on deposit 286.9 673.3 940.8 995.1 Prepayments and deferred charges 90.0 114.4 Deferred tax assets 18 4.3 6.1 Total assets 8,141.1 9,271.2

The notes are an integral part of the consolidated accounts.

40 SES GLOBAL Annual Report 2002 2002 2001 Liabilities Note EUR million EUR million Capital and reserves Subscribed capital 16 921.8 175.8 Treasury shares at cost (17.8) (8.8) Share premium account 2,819.7 3,696.7 Reserves – Legal reserve 17.6 17.6 – Other reserves 9.8 – – Currency exchange reserve (380.8) (4.1) Result brought forward 0.3 – Profit of the Group 204.5 40.2 3,575.1 3,917.4 Minority interests In capital and reserves 220.3 220.9 In the result for the year 50.2 53.0 270.5 273.9 Provisions for liabilities and charges Provisions for pensions 17 0.6 4.2 Other provisions 17 6.7 7. 1 Provisions for deferred taxes 18 709.0 573.1 716.3 584.4 Creditors Amounts payable after more than one year Amounts owed to credit institutions 20 2,318.6 3,659.2 Other liabilities 21 14.9 18.0 2,333.5 3,677.2 Amounts payable in less than one year Subordinated loans 19 – 148.7 Amounts owed to credit institutions 20 629.4 5.4 Payments received on account 5.5 6.9 Trade creditors 159.4 130.1 Tax and social security payable 52.8 130.9 Other liabilities 21 98.8 57.3 945.9 479.3

Deferred income Upfront payments 186.3 213.9 Other deferred income 113.5 125.1 299.8 339.0

Total liabilities 8,141.1 9,271.2

The notes are an integral part of the consolidated accounts.

41 SES GLOBAL Annual Report 2002 Consolidated profit and loss account Year ended December 31, 2002

Period from incorporation 2002 20011 to 31.12.20012 Note EUR million EUR million EUR million Net turnover 30 1,321.0 962.4 219.5 Other operating income 28.3 15.8 15.4 Total revenues 3 1,349.3 978.2 234.9 External charges 30 (177.0) (122.5) (28.8) Staff costs 26 (101.7) (47.2) (12.5) Other operating charges 13 (20.6) (16.8) (4.1) Proceeds from satellite insurance claims 22 336.5 2.9 – Asset write-down related to insurance claims 23 (279.4) –– Depreciation and amortisation 4,5 (578.0) (270.3) (81.1) Operating profit 529.1 524.3 108.4 Interest receivable and similar income 61.8 24.4 0.1 Interest payable and similar charges (132.6) (72.2) (14.7) Value adjustment on investments 10,11 (20.8) (20.8) (20.8) Profit on ordinary activities 437.5 455.7 73.0 Taxes 24 (188.3) (112.6) (21.9) Profit for the financial year 249.2 343.1 51.1 Share of associates’ result 9 5.5 (9.8) (2.4) Profit attributable to minority interests (50.2) (53.0) (8.5) Profit of the Group 204.5 280.3 40.2

Basic and diluted earnings per share3 25 (Subsequent to 1:10 share split) A – shares 0.34 0.68 B – shares 0.13 0.19 C – shares 0.34 0.10

The notes are an integral part of the consolidated accounts. 1 The prior year comparative figures represent figures for the period January 1, 2001 to December 31, 2001 as if the exchange offer between Société Européenne des Satellites S.A. and SES GLOBAL S.A. had not occurred. 2 SES GLOBAL S.A. was incorporated on March 16, 2001 but did not trade until subsequent to the completion of the exchange offer described in Note 1 to the financial statements. 3 Prior year earnings per share were restated as detailed in the Notes to the accounts.

42 SES GLOBAL Annual Report 2002 Consolidated statement of cash flow Year ended December 31, 2002

2002 20011 EUR million EUR million Cash flow from operating activities Consolidated net income before taxes 437.5 455.7 Taxes paid during the year (88.8) (56.2) Net financing charges 44.6 44.7 Depreciation and amortisation 578.0 270.3 Amortisation of client upfront payments (76.3) (41.9) Other non-cash items in Profit and Loss Account (3.8) 13.2 Provision for pension and other provisions (4.0) (0.3) Result on disposal of fixed assets 0.9 – Consolidated operating profit before working capital changes 888.1 685.5 Changes in operating assets and liabilities Increase in inventories (1.7) – Decrease in trade debtors 41.8 5.4 Decrease in other debtors 53.7 22.9 Decrease/(increase) in prepayments and deferred charges 2.0 (71.6) Increase in trade creditors 34.2 5.8 (Decrease)/increase in other creditors (11.4) 3.7 (Decrease)/increase in payments received on account (1.4) 5.4 Increase in upfront payments 54.8 38.6 (Decrease) in other deferred income (8.3) (13.3) Cash generated/(absorbed) by operations 163.7 (3.1) Net operating cash flow 1,051.8 682.4 Cash flow from investing activities Purchase of intangible assets (2.7) (10.0) Purchase of tangible assets (683.8) (432.3) Disposal of tangible assets 3.2 1. 4 Purchase to acquire SATLYNX (net of cash acquired) (42.0) – Purchase to acquire AMERICOM (net of cash acquired) (7.9) (2,398.7) Investment in non-consolidated financial assets (12.2) (7.1) Net cash absorbed by investing activities (745.4) (2,846.7) Cash flow from financing activities New borrowings 20.2 3,659.2 New borrowings other than from loans 1.1 – Repayment of borrowings (458.9) (870.4) Dividends paid on ordinary shares (net of dividends received) (130.4) (107.4) Dividends paid to minority shareholders (7.4) (7.4) Net financing paid on non-operating activities (39.4) (44.7) Exercise of share options by employees – 0.6 Acquisition of FDRs (10.8) (5.0) Dividends from equity investments 8.8 – Proceeds from share issue, net – 20.3 Net cash (absorbed)/generated by financing activities (616.8) 2,645.2 Movements in exchange (76.0) 29.0 (Decrease)/increase in cash (386.4) 509.9 Cash at beginning of the year 673.3 163.4 Cash at end of the year 286.9 673.3

The notes are an integral part of the consolidated accounts. 1 The amounts presented represent figures for the period January 1, 2001 to December 31, 2001 as if the exchange offer between Société Européenne des Satellites S.A. and SES GLOBAL S.A. had not occurred (see Note 1).

43 SES GLOBAL Annual Report 2002 Consolidated statement of changes in shareholders’ equity Year ended December 31, 2002

Share Currency Result Subscribed Treasury premium Legal Other exchange brought Profit of capital shares account1 reserve reserves reserve forward the year Total EUR million EUR million EUR million EUR million EUR million EUR million EUR million EUR million EUR million At January 1, 2001 111.0 (3.8) 5.4 11.1 608.4 13.6 49.9 244.5 1,040.1 Allocation of result ––––116.6–127.9(244.5) – Dividend ––––––(108.0)–(108.0) Purchase of treasury shares – (5.0) ––––––(5.0) Result for the period –––––––240.1 240.1 Impact of currency translation –––––(43.0)––(43.0) Prior to share exchange 111.0 (8.8) 5.4 11.1 725.0 (29.4) 69.8 240.1 1,124.2 Exchange offer of Class A and B shares 111.0 (8.8) 1,040.3 11.1 – (29.4) – – 1,124.2 Issuance of additional shares 64.8 – 2,660.1 6.5 ––––2,731.4 Issuing costs – – (3.7) –––––(3.7) Result for the period –––––––40.240.2 Impact of currency translation –––––25.3––25.3 At December 31, 2001 175.8 (8.8) 3,696.7 17.6 – (4.1) – 40.2 3,917.4 Allocation of result ––––39.9–0.3(40.2)– Transfer (Note 16) 746.0 – (746.0) –––––– Dividend – – (131.0) –––––(131.0) Purchase of treasury shares – (9.0) ––––––(9.0) Result for the year –––––––204.5 204.5 Impact of currency translation –––––(376.7) – – (376.7) Transfer to liabilities (Note 28) ––––(30.1)–––(30.1) At December 31, 2002 921.8 (17.8) 2,819.7 17.6 9.8 (380.8) 0.3 204.5 3,575.1

The notes are an integral part of the consolidated accounts. 1 Included in the share premium account is an amount of EUR 21.0 million relating to unpaid founder share dividends (Note 28). This amount is not available for distribution to the ordinary shareholders.

44 SES GLOBAL Annual Report 2002 Notes to the consolidated accounts December 31, 2002

Note 1 Corporate information The consolidated financial statements of SES GLOBAL S.A. for the year ended December 31, 2002 were authorised for issue in accordance with a resolution of the Directors on March 20, 2003.

SES GLOBAL S.A. (‘SES GLOBAL’ or ‘the Company’) was incorporated on March 16, 2001 as a limited liability company (Société Anonyme) under Luxembourg law. References to ‘the Group’ in the following Notes are to the Company and its subsidiaries, joint ventures and associates.

The Company had no trading activities between the date of incorporation and completion of the exchange offer described below on November 8, 2001.

On November 8, 2001, all the existing shareholders of Société Européenne des Satellites (subsequently renamed SES ASTRA S.A. (‘SES ASTRA’)) exchanged their shares in SES ASTRA for shares in SES GLOBAL. For every one share in SES ASTRA the shareholder received ten shares in SES GLOBAL. As a result of the exchange offer, SES GLOBAL owns 100% of SES ASTRA, 50% of Nordic Satellites AB. (‘NSAB’), 34.10% of Asia Satellite Telecommunication Holdings Limited (‘AsiaSat’), 19.99% of Star One S.A.(‘Star One’), 100% of SES Multimedia S.A. and 10% of the satellite technology company ND Satcom GmbH (‘ND Satcom’). SES ASTRA also holds a 28.75% interest in Nahuelsat S.A. acquired on November 9, 2001 under the transaction below. As a result of the exchange, the ultimate shareholders of the Company were the same as the previous shareholders of SES ASTRA.

On November 9, 2001, SES GLOBAL also acquired GE American Communications Inc. stock and other satellite related assets from General Electric Capital Corporation (‘GE Capital’) for a consideration consisting of USD 2,413.5 million in cash and 181,295,672 shares in SES GLOBAL. These assets are held through the Company’s 100% subsidiary SES GLOBAL Americas Inc. (‘SES AMERICOM’). As a result, SES GLOBAL acquired through SES AMERICOM, 100% of Columbia Communications, 50% of AMERICOM Asia-Pacific LLC (‘AAP’) and an 18.4% stake in the satellite technology company Gilat Satellite Networks Limited (‘Gilat’). These entities continue to be held by SES AMERICOM with the exception of Gilat which was transferred to SES Capital Belgium S.A., a wholly-owned subsidiary of SES ASTRA.

In 2002, SES GLOBAL acquired through its subsidiary SES Finance a 50% interest in SATLYNX S.A. (‘SATLYNX’), a Luxembourg company providing two-way interactive services by satellite.

SES GLOBAL trades under ‘SESG’ on the Luxembourg Stock Exchange and on the Frankfurt Stock Exchange.

The prior year comparative figures of the consolidated accounts have been prepared to reflect both the legal presentation as well as a re-organisation under common control. Accordingly: • in the profit and loss account, the second column shows comparative consolidated results for the 12- month period ended December 31, 2001 stated as if the exchange offer had never happened. The consolidated results for the period from incorporation to December 31, 2001 are presented in the third column, thereby reflecting the legal presentation; • in the consolidated statement of cash flow, the comparative results are for the 12-month period ended December 31, 2001, and as if the exchange offer had never happened.

Basis of consolidation The consolidated accounts comprise the accounts of the Company and its controlled subsidiaries, after the elimination of all material inter-company transactions. Subsidiaries are consolidated from the date the Company obtains control until such time as control ceases. Acquisitions of subsidiaries are accounted for using the purchase method of accounting. The financial statements of subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. Adjustments are made to conform any dissimilar material accounting policies that may exist.

45 SES GLOBAL Annual Report 2002 Notes to the consolidated accounts continued December 31, 2002

Effective interest (%) Effective interest (%) Method of 2002 2001 consolidation SES ASTRA S.A., Luxembourg 100.00 100.00 Full SES GLOBAL – Americas, Inc., USA 100.00 100.00 Full SES Finance S.A., Luxembourg 100.00 100.00 Full Held through SES ASTRA S.A.: ASTRA Marketing GmbH, Germany 100.00 100.00 Full ASTRA Marketing Ltd, United Kingdom 100.00 100.00 Full ASTRA Marketing Iberica S.A., Spain 100.00 100.00 Full ASTRA Marketing France S.A., France 100.00 100.00 Full ASTRA Marketing Polska Sp. z o.o., Poland 100.00 100.00 Full SES Ré S.A., Luxembourg 100.00 100.00 Full SES Capital Luxembourg S.A ., Luxembourg 100.00 100.00 Full SES Multimedia S.A., Luxembourg 100.00 100.00 Full SES Capital Belgium S.A., Belgium 100.00 100.00 Full SES GLOBAL-South Americas Inc., USA 100.00 100.00 Full Nahuelsat S.A., Argentina 28.75 28.75 Equity Held through SES GLOBAL-Americas, Inc. SES Subsidiary 23 Inc., USA 100.00 100.00 Full SES Subsidiary 24 Inc., USA 100.00 100.00 Full SES Subsidiary 25 Inc., USA 100.00 100.00 Full SES Subsidiary 26 Inc., USA 100.00 100.00 Full SES AMERICOM, Inc., USA 100.00 100.00 Full SES AMERICOM (Asia 1A) LLC, USA 100.00 100.00 Full SES AMERICOM International Holdings, Inc. USA 100.00 100.00 Full SES AMERICOM UK Ltd., UK 100.00 100.00 Full SES AMERICOM (Singapore) Pty., Ltd. 100.00 100.00 Full Columbia Communications Corporation, USA 100.00 100.00 Full AMERICOM Government Services, Inc., USA 100.00 100.00 Full SES AMERICOM California, Inc., USA 100.00 100.00 Full SES Satellites International, Inc., USA 100.00 100.00 Full Communications Satellite Int. Marketing Inc., USA 100.00 100.00 Full Columbia/Wig USA Communications, Inc., USA 100.00 100.00 Full SES AMERICOM Colorado, Inc., USA 100.00 100.00 Full SES Satellites (Gibraltar) Ltd., Gibraltar 100.00 100.00 Full SES AMERICOM do Brasil, Ltda., Brazil 100.00 – Full SES AMERICOM do Brasil Multimidia, Ltda., Brazil 100.00 – Full SES AMERICOM do Brasil Multimidia Holdings, Ltda., Brazil 100.00 – Full SES AMERICOM (Brazil) Holdings, LLC, USA 100.00 – Full EVidient, Inc. (liquidated in 2002), USA – 100.00 Full Starsys Global Positioning Inc., USA 80.00 80.00 Full AMERICOM Asia Pacific LLC, USA 50.00 50.00 Proportional Sistemas Satelitales de Mexico S. de R.L. de C.V., Mexico 49.00 49.00 Equity

46 SES GLOBAL Annual Report 2002 Effective interest (%) Effective interest (%) Method of 2002 2001 consolidation Held through SES Finance S.A. SES do Brasil S.A., Brazil 100.00 100.00 Full Bowenvale Ltd, British Virgin Islands 49.50 49.50 Full Asia Satellite Telecommunications Hldgs. Ltd, Bermuda 34.10 34.10 Full Nordic Satellite AB, Sweden 50.00 50.00 Proportional Norwegian Digital Swap A/S, Norway 50.00 50.00 Proportional Sirius Satellite Services SIA, Latvia 50.00 50.00 Proportional SATLYNX S.A., Luxembourg 50.00 – Proportional SATLYNX sro, Czech Republic 50.00 – Proportional SATLYNX S.A., France 50.00 – Proportional SATLYNX GmbH, Germany 50.00 – Proportional SATLYNX Srl, Italy 50.00 – Proportional SATLYNX Ltd., UK 50.00 – Proportional SATLYNX BV, The Netherlands 50.00 – Proportional SATLYNX Europe SL, Spain 50.00 – Proportional iBEAM Europe Ltd., UK (in liquidation) 33.33 33.33 Equity PhoenixNet Holdings Ltd, Hong Kong 36.52 36.52 Equity Speedcast Ltd, Hong Kong 36.52 36.52 Equity Star One S.A., Brazil 19.99 19.99 Equity

On January 15, 1999, the Company acquired, through its wholly-owned subsidiary SES Finance S.A., a 49.5% interest in Bowenvale Limited (‘Bowenvale’), a limited liability company incorporated in the British Virgin Islands, which controls 68.90% of the ordinary shares of AsiaSat. The Company and Chinese International Trust and Investment Corporation (‘CITIC’), have equal voting rights at Bowenvale’s shareholder and Board meetings. They have entered into a shareholders’ agreement under the terms of which the Company has been given the right to assist AsiaSat in important areas that relate to the operation and further development of new satellite services, due to their knowledge and expertise in this area. The holding of shares, as well as the presence of the Company on the Board of Directors and their significant influence in the definition and development of the satellite business, explains the full consolidation of AsiaSat in the Group’s financial statements.

Intangible assets Goodwill Goodwill represents the difference between the cost of acquisition of shares in a consolidated company and the Group's share in the fair value of the net assets acquired at the date of acquisition. Such items are amortised over their useful economic life on a straight-line basis, from the date of acquisition. The current maximum period of amortisation is 20 years. It is reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill is stated at cost less accumulated amortisation and any impairment in value.

Developments costs Development expenditure incurred on an individual project is carried forward when its future recoverability can be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project.

Tangible assets Land and buildings Land is recorded at acquisition cost. Buildings are shown in the balance sheet at cost less depreciation. Buildings are depreciated over their estimated useful life on a straight-line basis. The depreciation period is primarily 25 years.

Plant and machinery – space segment The cost of the space segment includes the procurement of satellites together with launch expenses, insurance, and other related costs. Relevant finance charges arising during the construction period of satellites are capitalised. The Group’s satellite depreciable lives range from ten to 16 years.

Plant and machinery – ground segment Machinery and equipment is depreciated evenly over its estimated useful life, which is between three to 15 years.

Other fixtures, fittings, tools and equipment All such items are depreciated evenly over the estimated useful lives of between three to 15 years.

Loan origination costs Loan origination costs are capitalised and included in prepaid expenses. They are amortised over the loan periods.

47 SES GLOBAL Annual Report 2002 Notes to the consolidated accounts continued December 31, 2002

Note 2 Summary of significant accounting policies continued Financial assets Long-term investments and other financial assets are carried in the balance sheet at cost. An assessment is made at each balance sheet date to determine where there is objective evidence that a financial asset may be impaired. If such evidence exists, the estimated recoverable amount of that asset is determined and any impairment loss recognised, being the difference between the estimated recoverable amount and the carrying amount, and recorded in the profit and loss account for the period.

Inventories Inventories primarily consist of customer premises equipment (CPE), related accessories and network equipment spares and are stated at the lower of cost or market value, with cost determined on a moving average basis and market value based on the estimated realisable value.

Debtors Debtors are stated at anticipated realisable value.

Investments Fiduciary Depository Receipts purchased for use in connection with staff stock option plans are initially valued at acquisition cost. The difference between acquisition cost and exercise price is amortised on a straight-line basis over the vesting period.

Cash and cash equivalents Cash on hand and in banks and short-term deposits which are held to maturity are carried at cost. Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

For the purposes of the Consolidated Statement of Cash Flow, cash and cash equivalents consist of cash on hand and deposits in banks, net of outstanding bank overdrafts.

Revenue recognition The Group enters into contracts to provide high quality satellite transponder capacity and broadcasting services through which television, radio and data broadcasting make available programming services to the general public. Revenues are generated primarily from service agreements with customers to provide satellite transponder services.

Dividends The Company declares dividends after the accounts for the year have been approved. Accordingly dividends are recorded in the subsequent year’s accounts.

Deferred tax is provided on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Translation of foreign currencies The Company maintains its accounting records in Euro (EUR) and the consolidated accounts are expressed in this currency. The costs of non-monetary assets are translated at the rate applicable on the date of payment, except when currencies are bought in advance under forward contracts specifically for the acquisition of such assets, in which case the cost of acquisition is translated at the forward rate. All other assets and liabilities are translated at closing rates of exchange.

Goodwill and fair value adjustments arising on the acquisition of a 100%-owned foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

Those SES ASTRA marketing subsidiaries that do not maintain their accounts in Euro are dependent upon SES ASTRA for funding and represent an integral part of SES ASTRA's operations. Accordingly the temporal method of currency translation is applied to these companies’ accounts for the purposes of presenting the consolidated accounts.

48 SES GLOBAL Annual Report 2002 The principal foreign currency exchange rates used by the Group during the year were as follows:

Closing rate Average rate for the Closing rate December 31, 2001 year 2002 December 31, 2002 United States dollar EUR 1 = USD 0.89 EUR 1 = USD 0.935 EUR 1 = USD 1.05 Hong Kong dollar EUR 1 = HKD 6.91 EUR 1 = HKD 7.29 EUR 1 = HKD 8.16 Swedish Krona EUR 1 = SEK 9.42 EUR 1 = SEK 9.17 EUR 1 = SEK 9.14

Concentration of credit risk Cash and cash equivalents are primarily maintained with major financial institutions. These deposits are due upon demand and, therefore, bear minimal risk.

The Company provides satellite transponders and related services and extends credit to customers in the commercial satellite communications market. Management monitors its exposure to credit losses and maintains allowances for anticipated losses that are charged to other operating charges.

Impairment of long-lived and identifiable intangible assets The Company’s long-lived assets and identifiable intangible assets, including its in-service satellite fleet and goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Impairments can arise from complete or partial failure of a satellite as well as other changes in expected discounted future cash flows. Such impairment tests are based on a comparison of estimated discounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset value will be written down to fair value based upon discounted cash flows, using an appropriate discount rate.

Advertising costs The company expenses all advertising costs as incurred.

Derivative financial instruments The Company recognises all derivatives on the balance sheet at fair value. On the date the derivative instrument is entered into, the Company designates the derivative as either: (1) a hedge of the fair value of a recognised asset or liability or of an unrecognised firm commitment (fair value hedge); (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognised asset or liability (cash flow hedge); or (3) a hedge of a net investment in a foreign operation.

Changes in the fair value of a derivative that is designated as and meets all the required criteria for a fair value hedge, along with the gain or loss on the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings. Changes in the fair value of a derivative that is designated as and meets all the required criteria for a cash flow hedge are recorded in the currency exchange reserve and reclassified into earnings as the underlying hedged item affects earnings. Changes in the fair value of a derivative or non-derivative that is designated as and meets all the required criteria for a hedge of a net investment are recorded in the currency exchange reserve. Changes in the fair value of a derivative that is not designated as a hedge are recorded immediately in earnings.

The company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes relating all derivatives that are designated as fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The company also formally assesses, both at the inception of the hedge and on an ongoing basis, whether each derivative is highly effective in offsetting changes in fair values or cash flows of the hedged item. If it is determined that a derivative is not highly effective as a hedge or if a derivative ceases to be a highly effective hedge, the company will discontinue hedge accounting prospectively.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

49 SES GLOBAL Annual Report 2002 Notes to the consolidated accounts continued December 31, 2002

Note 2 Summary of significant accounting policies continued Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term.

Note 3 Segment information The Group’s business comprises principally the three companies SES ASTRA, SES AMERICOM and AsiaSat, which are organised and managed separately. Each represents a strategic business unit serving different regional markets.

The following table presents revenue and expenditure information and certain asset information regarding geographical segments for the year ended December 31, 2002:

SES SES ASTRA AMERICOM AsiaSat Other Group EUR million EUR million EUR million EUR million EUR million Revenue 675.4 501.5 130.9 41.5 1,349.3 EBITDA1 611.0 404.0 105.6 (13.5) 1,107.1 Depreciation (177.0) (146.2) (22.9) (15.5) (361.6) Amortisation (28.6) (156.4) (11.2) (20.2) (216.4) Operating profit 405.4 101.4 71.5 (49.2) 529.1 Net financing cost2 10.5 (70.5) (13.1) 2.3 (70.8) Value adjustments on investments (7.0) (12.8) – (1.0) (20.8) Taxes (123.0) (60.0) (4.0) (1.3) (188.3) Share of associates’ results – – (1.9) 7.4 5.5 Minority interest – – (50.2) – (50.2) Profit of the group 285.9 (41.9) 2.3 (41.8) 204.5

Segment assets3 2,274.4 4,647.4 664.4 554.9 8,141.1 Segment liabilities 529.9 2,961.2 378.1 426.3 4,295.5 Capital expenditure 200.7 417.6 58.9 6.6 683.8

1 Earnings before interest, taxation, depreciation and amortisation. 2 Segmental net financing cost is stated after the allocation of transaction financing costs. 3 Segmental assets comprise:

SES SES ASTRA AMERICOM AsiaSat Other Group EUR million EUR million EUR million EUR million EUR million Intangible assets 514.9 2,611.44 179.3 100.4 3,406.0 Tangible assets 1,154.7 1,912.4 396.2 110.7 3,574.0 Financial assets 24.4 1.4 22.8 77.4 126.0 Other assets 580.4 122.2 66.1 266.4 1,035.1 Segment assets 2,274.4 4,647.4 664.4 554.9 8,141.1

4 This represents the remaining net book value of the intangible assets arising on the acquisition of SES AMERICOM as described in Note 4 to the accounts. As at December 31, 2002, the remaining balances were: goodwill EUR 2,189.5 million (2001: EUR 2,640.3 million); other purchased intangible assets of EUR 421.9 million (2001: EUR 576.6 million). In the segmental results are included not only the direct financial results of the segments concerned, but also centrally-allocated acquisition related financing charges and income. The corresponding financing balances are also allocated to the appropriate segment in the segmental assets and liabilities.

50 SES GLOBAL Annual Report 2002 Note 4 Intangible assets

Other Development Goodwill intangibles1 costs Total EUR million EUR million EUR million EUR million Cost at January 1, 2001 306.5 – – 306.5 Accumulated amortisation at January 1, 2001 (24.8) – – (24.8) Net book value at January 1, 2001 281.7 – – 281.7 Movements in 2001 Extension of scope 2,653.4 579.6 – 3,233.0 Additions – 560.0 – 560.0 Impact of currency translation 6.3 1.3 – 7.6 Amortisation (35.3) (31.2) – (66.5) Impact of currency translation (0.1) – – (0.1) Cost at December 31, 2001 2,966.2 1,140.9 – 4,107.1 Accumulated amortisation at December 31, 2001 (60.2) (31.2) – (91.4) Net book value at December 31, 2001 2,906.0 1,109.7 – 4,015.7 Movements in 2002 Extension of scope 43.5 – – 43.5 Additions 10.4 0.9 – 11.3 Purchase allocation 62.6 (48.5) – 14.1 Transfer from assets in course of construction – – 8.5 8.5 Impact of currency translation (406.6) (85.8) – (492.4) Amortisation (151.9) (54.4) (0.6) (206.9) Purchase allocation amortisation (2.2) 2.2 – – Impairment (9.5) – – (9.5) Impact of currency translation 17.8 3.9 – 21.7 Cost at December 31, 2002 2,676.1 1,007.5 8.5 3,692.1 Accumulated amortisation at December 31, 2002 (206.0) (79.5) (0.6) (286.1) Net book value at December 31, 2002 2,470.1 928.0 7.9 3,406.0

1 Includes rights of usage of orbital frequencies and acquired transponder service agreements.

Goodwill The goodwill brought forward balance relates to the acquisition of SES AMERICOM, SES Capital Luxembourg S.A., Bowenvale Ltd. and NSAB. The SES Capital Luxembourg S.A. goodwill (EUR 4.7 million) is being amortised over five years commencing December 1, 1998. The goodwill arising through the investments in Bowenvale Ltd (EUR 223.6 million) and NSAB (EUR 78.2 million) is being amortised over 20 years beginning January 15, 1999 and October 1, 2000 respectively.

The remaining addition of EUR 1.8 million arises on goodwill related to the contingent settlement of a purchase agreement between SES AMERICOM and Columbia Communications Corporation.

An impairment of EUR 9.5 million has been recognised on the goodwill arising on the investment in NSAB, to reflect the current trading position of this company.

Other intangible assets On the acquisition of SES AMERICOM a total valuation of USD 517.0 million was placed on certain of the intangible assets acquired, such as rights of usage of orbital frequencies and acquired transponder service agreements. Subsequent to the date of acquisition the fair value ascribed to these intangibles was adjusted by EUR 48.5 million (USD 48.0 million) to reflect the availability of additional information concerning their fair value. This transaction and the subsequent adjustments are set out in more detail in Note 7.

During the year ended December 31, 2001, SES ASTRA concluded an agreement with the Luxembourg government in relation to the usage of the Luxembourg frequencies in the orbital positions of the geo-stationary arc from 45 degrees West to 50 degrees East for the period of January 1, 2001 to December 31, 2021. The right of usage was granted at an agreed value of EUR 550.0 million. This cost is being written-off on a straight-line basis over the 21-year term of the agreement.

The remaining balance relates to a EUR 10.0 million payment made in relation to orbital access rights. This asset is being written-off on a straight-line basis over the period of the agreement.

51 SES GLOBAL Annual Report 2002 Notes to the consolidated accounts continued December 31, 2002

Note 4 Intangible assets continued Development costs During the year, the Group capitalised development costs incurred, amounting to EUR 8.5 million, in order to develop Satellite Interactive Terminals, which allow the use of two-way interactive services technology. This asset is being amortised on straight-line basis over seven years.

Note 5 Tangible assets in use

Plant and machinery Other fixtures and fittings, Land Space Ground tools and and buildings segment segment equipment Total EUR million EUR million EUR million EUR million EUR million Cost at January 1, 2001 93.0 2,263.7 111.5 35.7 2,503.9 Accumulated depreciation at January 1, 2001 (23.2) (1,086.7) (62.5) (22.8) (1,195.2) Net book value at January 1, 2001 69.8 1,177.0 49.0 12.9 1,308.7 Movements in 2001 Extension of consolidation scope 21.5 1,476.2 193.5 14.1 1,705.3 Additions 6.8 32.6 10.8 7.4 57.6 Disposals (5.4) (1.4) (0.1) (0.2) (7.1) Transfers from assets in course of construction 9.6 239.1 12.1 0.7 261.5 Reclassifications – – (0.9) 0.9 – Impact of currency translation 0.1 29.2 (0.1) 0.2 29.4 Depreciation – extension of scope (16.8) – (140.1) (7.6) (164.5) Depreciation (6.9) (169.4) (20.8) (6.7) (203.8) Depreciation on disposals 5.4 – 0.1 0.2 5.7 Reclassifications – – 0.7 (0.7) – Impact of currency translation – (14.0) (0.5) (0.2) (14.7) Cost at December 31, 2001 125.6 4,039.4 326.8 58.8 4,550.6 Accumulated depreciation at December 31, 2001 (41.5) (1,270.1) (223.1) (37.8) (1,572.5) Net book value at December 31, 2001 84.1 2,769.3 103.7 21.0 2,978.1 Movements in 2002 Extension of consolidation scope 5.6 – 23.0 2.6 31.2 Additions 2.0 4.8 29.1 6.5 42.4 Disposals (0.1) – (60.6) (3.8) (64.5) Transfers from assets in course of construction 10.5 109.3 51.7 – 171.5 Impact of currency translation (3.9) (303.0) (30.2) (2.6) (339.7) Depreciation – extension of scope – – (8.2) (0.8) (9.0) Depreciation (6.3) (296.5) (49.3) (9.5) (361.6) Asset write-down related to insurance claims – (14.0) – – (14.0) Depreciation on disposals 0.1 – 38.9 2.6 41.6 Impact of currency translation 2.6 62.7 22.7 1.9 89.9 Cost at December 31, 2002 139.7 3,850.5 339.8 61.5 4,391.5 Accumulated depreciation at December 31, 2002 (45.1) (1,517.9) (219.0) (43.6) (1,825.6) Net book value at December 31, 2002 94.6 2,332.6 120.8 17.9 2,565.9

The carrying value of fixed assets held under finance lease contracts at December 31, 2002 is EUR 10.2 million (2001: EUR nil).

52 SES GLOBAL Annual Report 2002 Note 6 Payments on account and assets in course of construction

Land and Space Ground buildings segment segment Total EUR million EUR million EUR million EUR million Cost and net book value at January 1, 2001 4.2 473.2 31.3 508.7 Movements in 2001 Extension of consolidation scope – 321.5 2.2 323.7 Additions 9.9 330.9 33.9 374.7 Transfers to assets in use (9.7) (239.1) (12.7) (261.5) Impact of currency translation – 6.4 – 6.4 Cost and net book value at December 31, 2001 4.4 892.9 54.7 952.0 Movements in 2002 Additions 13.7 602.7 24.9 641.3 Asset write-down related to insurance claims – (264.3) (1.1) (265.4) Disposals – (2.8) (0.2) (3.0) Purchase allocation adjustment – (20.7) – (20.7) Reclassification 0.2 – (0.2) – Transfers to assets in use (10.5) (109.3) (51.7) (171.5) Transfers to intangible assets – – (8.5) (8.5) Impact of currency translation (0.4) (115.3) (0.4) (116.1) Cost and net book value at December 31, 2002 7.4 983.2 17.5 1,008.1

Borrowing costs of EUR 31.0 million (2001: EUR 4.6 million) arising on financing specifically relating to satellite construction were capitalised during the year and are included in ‘Space Segment’ additions in the above table. A weighted average capitalisation rate of 3.4% (2001: 4.8%) was used, representing the borrowing cost of the relevant loans.

Note 7 Investments in subsidiaries SES ASTRA On November 8, 2001 SES GLOBAL acquired all the outstanding share capital of SES ASTRA through an exchange of shares. For every one share in SES ASTRA, the shareholder received ten shares in SES GLOBAL.

SES AMERICOM On November 9, 2001, SES GLOBAL acquired 100% of the shares of SES AMERICOM, and certain other related assets, from GE Capital, in a USD 4,336.0 million transaction, including transaction costs of USD 35.6 million. SES GLOBAL exercised its option on November 7, 2001, to issue additional Special Equity Shares to GE Capital in order to decrease the cash portion of the purchase consideration by USD 300.0 million. At closing, after taking into account the Special Equity Shares issued, the purchase consideration consisted of USD 2,413.5 million in cash from borrowings under available credit facilities and 176,799,314 of the Company’s Ordinary Class C Shares and 4,496,358 Preferred Class C Shares. The share consideration has been valued at a price of EUR 11.89 per share. In the 12 months following the date of acquisition the fair value of certain assets and liabilities acquired was adjusted to reflect the availability of additional information concerning these assets and liabilities.

The fair value of SES AMERICOM’s assets and liabilities acquired on November 9, 2001 were as follows:

Purchase November 9, allocation Amended 2001 adjustments fair value USD million USD million USD million Intangible assets 517.0 (48.0) 469.0 Tangible assets 1,620.3 (20.5) 1,599.8 Financial assets 65.5 2.1 67.6 Trade and other debtors 93.2 10.1 103.3 Cash at bank and on deposit 272.2 – 272.2 Prepayments and deferred charges 4.7 (0.6) 4.1 Other provisions (2.5) – (2.5) Loan financing, GE Capital (1,900.0) – (1,900.0) Other long-term liabilities (23.4) (4.1) (27.5) Current liabilities (53.9) (17.4) (71.3) Deferred tax (420.2) 8.7 (411.5) Deferred income (104.0) – (104.0) Fair value of net assets acquired (excluding goodwill) 68.9 (69.7) (0.8) Settlement of the loan financing from GE Capital 1,900.0 – 1,900.0 Goodwill arising on acquisition 2,367.1 69.7 2,436.8 Total consideration 4,336.0 – 4,336.0

53 SES GLOBAL Annual Report 2002 Notes to the consolidated accounts continued December 31, 2002

Note 8 Interests in joint ventures NSAB On October 1, 2000, SES ASTRA acquired 50% of the shares of NSAB. At December 31, 2002, NSAB holds 100% interests in Norwegian Digital Swap A/S, Norway and Sirius Satellite Services SIA, Latvia. The Group’s share of the assets, liabilities, revenue and expenses included in the consolidated accounts (before the elimination of intra-Group transactions) are as follows at December 31, 2002 and for the year then ended:

2002 2001 EUR million EUR million Fixed assets 49.9 55.5 Current assets 14.4 12.2 Prepayments, deferred charges and deferred tax assets 3.0 2.9 Provisions for liabilities and charges 9.6 7. 3 Amounts payable after more than one year – 5.4 Amounts payable in less than one year 4.8 10.9 Deferred income 2.3 2.7 Revenue 31.5 19.2 Operating profit/(loss) 6.9 (1.5) Taxes (2.0) 0.7 Result for the period 4.9 (2.1)

AMERICOM Asia Pacific LLC (‘AAP’) The Company acquired a 50% shareholding in AAP on November 9, 2001, within the framework of the SES AMERICOM purchase. The Group’s share of the assets, liabilities, revenue and expenses included in the consolidated accounts (before the elimination of intra-Group transactions) are as follows at December 31, 2002 and for the year then ended. The comparative figures represent the revenues and expenses for the 53-day period from the date of acquisition to December 31, 2001.

2002 2001 EUR million EUR million Fixed assets 37.5 47.7 Current assets 2.3 1. 7 Prepayments, deferred charges and deferred tax assets 0.1 0.5 Amounts payable in less than one year 4.6 8.0 Deferred income 0.2 – Revenue 3.5 0.5 Operating loss (4.1) (0.7) Taxes 1.6 0.3 Result for the period (2.4) (0.4)

SATLYNX S.A. In May 2002, SES Finance and Gilat Satellite Networks (Holland) B.V. (‘Gilat’) created a joint venture company, SATLYNX S.A. SES Finance contributed Broadband Interactive assets for an amount of EUR 21.9 million and cash for EUR 56.6 million. In addition SES Finance incurred acquisition costs amounting to EUR 2.3 million. Gilat contributed 100% of the share capital of Gilat-To-Home Europe B.V. for a value of EUR 78.3 million.

In May 2002, SATLYNX purchased from Gilat, 100% of the shares of: – Gilat Europe sro, – Gilat Europe S.A., – Gilat Europe GmbH, – Gilat Europe Srl, – Gilat Europe Ltd., for a total consideration of EUR 18.2 million, which has been settled in cash for EUR 13.1 million and the issuance of Gilat A-Notes (see Note 21) for USD 4.7 million (EUR 5.1 million).

Acquisition costs in relation to these transactions amounted to EUR 5.0 million.

54 SES GLOBAL Annual Report 2002 The fair value of the assets and liabilities acquired during the year through the above transactions were as follows:

2002 2001 EUR million EUR million Tangible fixed assets 22.2 – Current assets 26.6 – Amounts due in more than one year (9.2) – Amounts due in less than one year (4.8) – Warrant instruments 1.8 – Goodwill arising on acquisition 44.2 – Total purchase price 80.8 –

The Group’s share of the assets, liabilities, revenue and expenses included in the consolidated accounts (before the elimination of intra- Group transactions) are as follows at December 31, 2002 and for the period from the date of acquisition to the year-end.

2002 2001 EUR million EUR million Fixed assets 60.7 – Current assets 6.4 – Prepayments and deferred charges 9.7 – Provision for liabilities and charges 0.5 – Amounts payable after more than one year 11.5 – Amounts payable in less than one year 7. 9 – Deferred income 0.1 – Revenue 7. 2 – Operating loss (17.1) – Taxes – – Result for the period (17.6) –

Note 9 Investments in associates

2002 2001 EUR million EUR million At January 1 140.9 12.8 Additions 4.0 5.6 Dividends (8.8) – Share of result 5.5 (9.8) Reclassification – 147.5 Impact of currency translation (64.1) (15.2) At December 31 77.5 140.9

At December 31, 2002 the Company held interests, directly or indirectly, in five associates accounted for under the equity method. These were: Star One (19.99%); Nahuelsat (28.75%); i-Beam Europe Limited (‘i-Beam’ – 33.33%); PhoenixNet Holdings Ltd (‘PhoenixNet’ – 34.10%); and Speedcast Ltd. (‘Speedcast’) a 100% subsidiary of PhoenixNet Holdings Ltd). At December 31, 2002, these investments have the following carrying values in the consolidated financial statements:

Impact of Brought Share of currency Carrying Equity forward Dividends Additions results translation value share EUR million EUR million EUR million EUR million EUR million EUR million EUR million PhoenixNet/Speedcast – – 4.0 (1.9) – 2.1 1.8 i-Beam 1.9 (2.1) – – 0.2 – – Star One 133.6 (6.7) – 9.5 (64.4) 72.0 38.9 Nahuelsat 5.4 – – (2.1) 0.1 3.4 2.4 Total 140.9 (8.8) 4.0 5.5 (64.1) 77.5

Investments in associated undertakings at December 31, 2002 include goodwill of EUR 29.5 million (2001: EUR 52.4 million). Amortisation of goodwill of EUR 4.7 million (2001: EUR 0.4 million) is included in the share of associates result.

55 SES GLOBAL Annual Report 2002 Notes to the consolidated accounts continued December 31, 2002

Note 10 Long-term investments At December 31, 2002 the Company held long-term equity investments in the following companies:

Impact of Brought Additions / Value currency Carrying forward (disposals) adjustment translation value EUR million EUR million EUR million EUR million EUR million ND SatCom 1.9 0.2 – – 2.1 NetSystem.com 10.4 1.6 (7.1) – 4.9 Kokua Communications ––––– DisplayIt Sweden AB 0.1 (0.1) – – – Gilat 10.2 – (9.9) (0.3) – Internet Satellite Platform Inc. – 1.5 – (0.1) 1.4 PhoenixStar – 3.2 (3.2) – – Tot al 22.6 6.4 (20.2) (0.4) 8.4

Value adjustments of EUR 7.1 million, EUR 9.9 million and EUR 3.2 million have been made to the investments in NetSystem.com S.p.A., Gilat and PhoenixStar, respectively, to reflect the current trading positions of these companies.

Note 11 Other financial assets

2002 2001 EUR million EUR million Cost at January 1 49.3 36.9 Accumulated value adjustments at January 1 (3.0) – Net book value at January 1 46.3 36.9 Movements Additions 1.8 1. 5 Disposals – – Impact of currency translation (7.4) 10.9 Value adjustments (1.0) (3.0) Reversal of value adjustments 0.4 – Cost at December 31 43.7 49.3 Accumulated value adjustments at December 31 (3.6) (3.0) Net book value at December 31 40.1 46.3

The principal component of other financial assets is a loan of USD 40.5 million advanced in 1999 to Able Star Associates Limited, British Virgin Islands, a fully owned subsidiary of CITIC. The purpose of this loan was to enable CITIC to purchase additional shares in the Bowenvale operation, to achieve the desired ownership structure. This loan bears interest at market rates and expires on January 15, 2006. No repayments have occurred in 2002.

Note 12 Inventories

2002 2001 EUR million EUR million Work-in-progress (at cost) 0.6 – Finished goods: At cost 4.7 – At net realisable value 3.4 – Total inventories at lower of cost and net realisable value 4.0 –

Note 13 Trade debtors

2002 2001 EUR million EUR million Outstanding invoices on billed revenues 44.9 60.5 Unbilled accrued revenue 124.7 142.6 Trade debtors 169.6 203.1

Unbilled accrued revenue represents revenues for use of satellite capacity under long-term contracts but not billed. Billing will occur based on the terms of the contracts. Trade debtors are stated net of accumulated provisions of EUR 34.2 million (2001: EUR 22.5 million). The charge to debtor provisions for 2002 of EUR 12.5 million (2001: EUR 8.6 million) is included in other operating charges.

Trade debtors at December 31, 2002 included EUR 37.9 million (2001: EUR 25.6 million) of amounts becoming due and payable in more than one year.

56 SES GLOBAL Annual Report 2002 Note 14 Investments

2002 20011 EUR million EUR million Investments 23.1 20.6

SES ASTRA and SES GLOBAL have, in agreement with the shareholders, purchased Fiduciary Depository Receipts (‘FDRs’) in respect o f ‘A’ shares for use in connection with two staff stock-option programmes.

Note 15 Cross currency interest rate swap agreements At December 31, 2002, the Group held ten cross currency interest rate swap agreements which have been designated as a hedge of the net investments in the US subsidiary, SES AMERICOM. The average terms of these contracts were as follows:

Currency sold Currency bought Average weighted maturity Average weighted exchange rate USD 1,225 million EUR 1,242 million April 2005 EUR/USD 0.9863

As at December 31, 2002, an unrealised gain of EUR 74.3 million arose on these contracts. Of this amount EUR 52.5 million (net of deferred tax of EUR 22.9 million) is included in the currency exchange reserve, with the remainder, EUR 1.1 million, being recognised in the Profit and Loss Account as the ineffective portion of the hedging relationship.

In addition, the Group held one interest rate swap agreement with a notional amount of USD 300.0 million whereby the Group receives a rate of interest of LIBOR and pays a variable rate equal to LIBOR – 0.205% on the notional amount.

Note 16 Subscribed capital The Company has an authorised share capital of EUR 10,134.0 million comprising 918,749,180 shares. The subscribed share capital of EUR 921.8 million is represented by category A, B and C shares with no par value. The share capital is divided into the following categories:

Ordinary Ordinary Ordinary Preferred Total A shares B shares C shares C shares shares Subscribed at January 1, 2002 310,340,000 245,817,836 176,799,314 4,496,358 737,453,508 Movement in 2002 ––––– Subscribed at December 31, 2002 310,340,000 245,817,836 176,799,314 4,496,358 737,453,508

Fiduciary Depository Receipts (FDRs) with respect to the A shares of the Company are listed at the Luxembourg Stock Exchange and on the ‘Amtlicher Handel’, the official list of the Deutsche Börse. These FDRs can be traded freely and are convertible to A shares at any time at the option of the holder, under the conditions applicable in the Company’s articles of association and in accordance with the terms of the FDRs.

All B shares are currently held by the State of Luxembourg or by Luxembourg public institutions.

The category C shares were issued as part of the consideration for the acquisition of SES AMERICOM. A holder of Preferred C shares is entitled at his option at any time and from time to time to convert all or part of such Preferred C shares into Ordinary C shares at a conversion ratio of one Ordinary C share per one Preferred C share. A holder of Ordinary C shares is entitled at his option at any time and from time to time to convert all or part of such Ordinary C shares into shares of Class A at a conversion ratio of one share of Class A per one Ordinary C share.

One-third of the total number of the members of the Board of Directors are appointed from a list of candidates put up by the holders of Class B shares. The holders of Class C shares can nominate a list of candidates for up to 3 directors, depending on the percentage of total subscribed shares represented by the category C shares. The shareholders of category A shares nominate a list of candidates for the remaining Board members.

Dividends are paid in such a manner that the payment on one share of Class B equals 40% of the payment of one share of Class A. Each Preferred C Share is entitled to fixed dividends, which consist of cumulative annual dividends payable in cash at the rate of 4% per annum on a notional liquidation value of USD 50.0 million. The fixed dividend shall accrue as from the date of issue of the Preferred C Shares. Dividends on Ordinary C Shares are calculated as for A shares but are subject to deduction of the fixed dividend on the Preferred C Shares for the relevant dividend period.

The acquisition and disposal of shares require, under certain conditions, the approval of the Luxembourg Government.

57 SES GLOBAL Annual Report 2002 Notes to the consolidated accounts continued December 31, 2002

Note 17 Provisions for pension and other provisions As of January 1, 2002, the Group’s operations in Luxembourg reconstituted their staff pension scheme from an internally managed defined benefit scheme into an externally managed defined contributions scheme. In addition to the Luxembourg operations, various other Group companies operate non-funded and non-contributory defined benefit retirement scheme for qualifying employees. The assets of these schemes are held separately from those of the Group in funds under the control of trustees. The retirement benefits costs charged to the profit and loss account represent contributions payable to the scheme by the Group at rates specified in the rules of the scheme. Where employees leave the scheme prior their contributions vesting fully, the contributions payable by the Group are reduced by the amount of forfeited contributions.

Contributions made in 2002 under pension schemes totalled EUR 1.8 million (2001: EUR 0.5 million).

Certain Group companies offer post-retirement healthcare and life insurance benefits to eligible domestic retired employees. Retirees share in the cost of their health care benefits through service-related contributions and salary-related deductibles. Retiree life insurance benefits are non-contributory.

The movements on the provisions are set out below:

Provisions Other for pensions provisions EUR million EUR million At January 1, 2001 3.6 16.1 Extension of consolidation scope – 2.8 Provision for 2001 0.7 1.0 Reversal of provisions (0.1) (1.9) Impact of currency translation – (0.5) Reclassification – (10.4) At December 31, 2001 4.2 7.1 Extension of consolidation scope 0.4 – Provision for 2002 0.2 0.8 Reversal of provisions – (0.8) Impact of currency translation – (0.4) Transfer to externally managed scheme (4.2) – At December 31, 2002 0.6 6.7

Note 18 Deferred taxes The movements on the provisions are set out below:

Provisions Provisions for deferred for deferred tax assets tax liability EUR million EUR million At January 1, 2001 5.7 47.5 Extension of consolidation scope – 471.1 Provision for 2001 1.9 64.5 Reversal of provisions (1.5) (12.5) Impact of currency translation – 2.5 At December 31, 2001 6.1 573.1 Purchase allocation adjustment – (8.8) Provision for 2002 0.1 241.0 Reversal of provisions (1.9) (12.7) Impact of currency translation – (83.6) At December 31, 2002 4.3 709.0

Note 19 Subordinated loans On January 11, 1999, the Company arranged a EUR 148.7 million subordinated loan facility with a group of its shareholders. This is an unsecured facility, which was fully drawn on January 14, 1999. It was repaid on January 11, 2002.

58 SES GLOBAL Annual Report 2002 Note 20 Amounts owed to credit institutions On March 28, 2001, SES GLOBAL and SES ASTRA jointly arranged a Syndicated Multi-currency Term and Revolving Facilities Agreement for the purposes of refinancing existing syndicated loan facilities and arranging acquisition finance for the transaction, concluded on November 9, 2001, to acquire SES AMERICOM. This Syndicated Loan Agreement is the principal committed Credit Facility available to the Group. The Availabilities and Drawings under this Facilities Agreement at December 31, 2002 are as follows:

1. Facility A1 – USD 1.575 billion term loan facility fully drawn (USD 1,552 million by SES ASTRA and USD 23.0 million by SES GLOBAL) for the purpose of the SES AMERICOM acquisition and repayable between July 2003 and March 28, 2006; 2. Facility B1 – USD 486 million term loan facility fully drawn (USD 383 million by SES ASTRA and USD 103.0 million by SES GLOBAL) for the purposes of the SES AMERICOM acquisition and repayable by March 28, 2003. The total for Facility B1 was originally USD 886 million – USD 400 million has been repaid prior to year-end; 3. Facility C – EUR 878 million multi-currency term loan facility available to refinance existing debt and for general corporate purposes. It is repayable between July 2003 and March 28, 2006; 4. Facility D – EUR 400 million revolving loan facility available to refinance existing debt and for general corporate purposes. At year-end under this facility USD 100 million was drawn by SES GLOBAL. It is repayable by March 28, 2006.

The Borrowers are committed in this Syndicated Loan Agreement to maintain a number of financial covenants within agreed limits in order to provide sufficient security to the Lenders. Repayment of Facilities A1, B1 and C reduces the availability under that specific Facility. Interest paid is based on floating interest rates. At the end of the year the weighted average interest rate on the USD borrowings was 2.6496% and on the EUR borrowings 4.365%.

In September 2002, the Company arranged an uncommitted unsecured multi-currency facility up to a countervalue of EUR 20.0 million. Under this facility USD 20.0 million was drawn at year-end.

On November 24, 2000, AsiaSat entered into a new loan agreement for an amount of USD 250.0 million. No draw down had been made on this loan as at the year-end.

NSAB had no outstanding loans as at December 31, 2002. A new Credit Facility has been negotiated for SEK 40.0 million with no assets pledged.

At the end of 2002 and 2001, the loan accounts for SES GLOBAL consolidated were as follows:

Amounts outstanding 2002 2001 EUR million EUR million Share of loan of November 4, 1997 (SEK 770.0 million) – 10.8 Facilities Agreement of March 28, 2001 (EUR 1.4 billion and USD 2.5 billion) 2,927.8 3,653.8 Uncommitted facility 20.2 – Tot al 2,948.0 3,664.6

The maturity profile of these loans at December 31, 2002 and 2001 is as follows:

Amounts outstanding 2002 2001 EUR million EUR million Within one year 629.4 5.4

Between one and two years 580.9 1,171.5 Between two and five years 1,737.7 2,487.7 More than one year 2,318.6 3,659.2

Note 21 Other liabilities Other liabilities include the following items:

Less than Between one and More than one year five years five years Total EUR million EUR million EUR million EUR million Capital leases 8.2 5.0 5.1 18.3 Gilat A – Notes 1.7 0.6 – 2.3 B – Notes – 0.8 – 0.8 C – Notes – 2.9 – 2.9 Other – 0.5 – 0.5

A capital lease obligation of EUR 7.2 million relating to a structured finance arrangement is shown at an amount of EUR 7.2 million (2001: EUR 17.3 million) in other liabilities payable within one year and EUR nil (2001: EUR 7.8 million) within other liabilities payable after one year. As disclosed in Note 29, cash at bank and on deposit includes restricted deposits, which, in substance, defease the capital lease obligations. Both the debt and the deposits have floating interest rates which match equivalent published borrowing rates so there is no interest cost in the arrangements.

59 SES GLOBAL Annual Report 2002 Notes to the consolidated accounts continued December 31, 2002

Note 21 Other liabilities continued In addition other liabilities include capital lease obligations amounting to EUR 11.1 million for the acquisition of various items of fixed assets. Of this amount EUR 10.1 million (2001: EUR nil) is shown in other liabilities payable after one year and EUR 1.0 million is shown within other liabilities payable within one year.

Gilat A-Notes In 2002, SATLYNX issued unsecured ‘A’ Loan Notes (the ‘Gilat A-Notes’) for a total of USD 5 million to Gilat to be used exclusively to finance the acquisition of Gilat subsidiaries described in Note 8. The Gilat A-Notes do not bear interest. Interest at a rate of 6% per annum has been imputed. The Gilat A-Notes are initially repayable at the time of an increase of Ordinary Shares of at least USD 36 million for cash and non- cash consideration. The percentage of repayment at that time will correspond to the portion of the cash consideration in relation to the total value of the issuance of Ordinary Shares. The residual amount will be repaid when the first of the following events occur: i a public listing; ii the issuance of shares by the Company to raise an additional cash amount of USD 40 million; iii on January 31, 2077.

As at December 31, 2002 the Group share of the amount outstanding under Gilat A-Notes is USD 2.4 million (EUR 2.3 million).

Gilat B-Notes In 2002, SATLYNX issued unsecured ‘B’ Loan Notes (the ‘Gilat B-Notes) for a total of USD 2 million to Gilat to be used exclusively to finance the transaction costs related to the formation of the Company and the subsequent investment by Gilat and SES. The Gilat B-Notes do not bear interest. Interest at a rate of 6% per annum has been imputed. The Gilat B-Notes will be repayable when the first of the following events occur: i a public listing; ii the issuance of shares by the Company to raise an additional cash amount of USD 40 million; iii on January 31, 2077.

As at December 31, 2002, the Group share of the amount outstanding under Gilat B-Notes is USD 0.8 million (EUR 0.8 million).

Gilat C-Notes In 2002, SATLYNX issued unsecured ‘C’ Loan Notes (the ‘Gilat C-Notes’) for a total of USD 10.5 million to Gilat to exclusively finance the acquisition of equipment from Gilat. The Gilat C-Notes bear interest at a rate of 6% per annum and are repayable when the first of the following events occur: i a public listing; ii the issuance of shares by the Company to raise an additional cash amount of USD 40 million; iii on January 31, 2077.

As at December 31, 2002, the Group share of the amount outstanding under Gilat C-Notes is USD 3.1 million (EUR 2.9 million).

Note 22 Proceeds from satellite insurance claims In December 2002, SES ASTRA made insurance claims concerning two satellites as follows:

ASTRA 1G A claim was made for the lost operational capacity of ASTRA 1G arising due to the failure of one of the spacecraft’s battery cells. The loss of the battery cell, which was identified in the first 12 months after the satellite’s launch in December 1997, has resulted in a special battery management programme for the satellite being introduced in particular during the eclipse season. In November 2002 following the eclipse season, SES ASTRA management concluded that despite the battery management programme a loss of eight of the satellite’s 28 transponders had occurred and an insurance proof of loss was filed on this basis. The Company is recognising EUR 45.0 million, of insurance proceeds under this claim in 2002.

The above receivable amounts are included in other debtors at year-end.

Note 23 Asset write-down related to insurance claims In connection with the insurance claims outlined above, SES ASTRA has written down the value of the respective assets in its books as follows:

ASTRA 1K The ASTRA 1K satellite has been fully written off including related ground equipment. This has resulted in an exceptional charge in 2002 of EUR 265.4 million.

ASTRA 1G A write-down of EUR 14.0 million of the carrying value of the satellite has been made in 2002. The write-down reflects the projected future impact of the transponder years lost as a result of the incident.

60 SES GLOBAL Annual Report 2002 The revised carrying value reflects the proportion of the historic cost of the asset corresponding to the revised estimated transponder years available divided by the revised estimate of the total transponder years service of ASTRA 1G.

This revised carrying value will be depreciated on a straight-line basis over the remaining life of the satellite in accordance with the Group’s accounting policy for fixed assets.

Note 24 Taxes Taxes have been provided in accordance with the relevant local fiscal requirements. Current and deferred taxes can be analysed as follows:

2002 2001 EUR million EUR million Current 77.3 61.0 Deferred 111.0 51.6 Tot al 188.3 112.6

Note 25 Basic and diluted earnings per share Basic earnings per share is calculated by dividing the net profit for the year attributable to ordinary shareholders (after deduction of the dividends attributable to founder shares) of each category of shares by the weighted average number of shares outstanding during the year, for each category of share.

Diluted earnings per share is calculated by dividing the net profit for the year attributable to ordinary shareholders (after deduction of the dividends attributable to founder shares) of each category of shares by the weighted average number of shares outstanding during the year, for each category of share, adjusted for the effects of dilutive options.

Following the decision of the Luxembourg Court of Appeals as set out in more detail in Note 28, the earnings per share for 2001 have been adjusted for the dividend arising on the founder shares.

For the year 2002, earnings per share of EUR 0.34 per A share, EUR 0.13 per B share, and EUR 0.34 per C share, have been calculated on the following basis:

2002 2001 EUR million EUR million Profit of the Group 204.5 280.3 Founder shares entitlement (6.5) (6.2) Profit attributable to shareholders 198.0 274.1

Weighted average number of shares for the purpose of calculating earnings per share:

A shares 310,340,000 310,340,000 B shares 245,817,836 168,332,562 C shares 181,295,672 26,325,125

The weighted average number of shares is based on the capital structure of the Company as described in Note 16. In calculating the weighted average of the C shares, the Ordinary C shares and Preferred C shares have been grouped together. This reflects the fact that the fixed dividend on the Preferred C shares is deducted from the dividend rights of the Ordinary C shareholders, rather than representing an additional entitlement to a share of earnings. Because the A and C shares have two and a half times the dividend entitlement of the B shares on a full-year basis, the earnings per share of the A and C shares will normally be correspondingly higher than that of the B shares.

Note 26 Employees The analysis of personnel as of December 31, 2002 and 2001 was:

2002 2001 SES ASTRA 319 385 SES AMERICOM 277 292 AsiaSat 83 80 Other 129 22 Tot al 808 779

The average number of employees for 2002 was 803 (2001: 513)

Staff costs can be analysed as follows:

2002 2001 EUR million EUR million Wages and salaries 89.1 42.3 Social security costs 12.6 4.9 Tot al 101.7 47.2

61 SES GLOBAL Annual Report 2002 Notes to the consolidated accounts continued December 31, 2002

Note 27 Board of Directors’ remuneration At the Annual General Meeting of SES GLOBAL, held on May 6, 2002, payments to directors for attendance at Board and Committee meetings in 2002 were approved. These payments are computed on a fixed and variable basis, the variable part being based upon attendance at Board and Committee meetings. Total payments arising in 2002 were EUR 1.0 million (2001: EUR 0.9 million).

Note 28 Founder shares In connection with the formation of SES ASTRA (‘ASTRA’), 50 Founder Shares, without voting rights, were issued, subject to certain conditions. The Articles provide that for a period of 20 years from March 1, 1985, the date of formation of ASTRA, the Founder Shares are entitled to a 5% participation in the net profits of ASTRA, after tax, resulting exclusively from television activities as determined by Article 2 of the Articles of ASTRA at the time of its incorporation in 1985, excluding all other revenues including without limitation those resulting from an enlargement or extension of the initial purpose. The Founder Shares are redeemable by ASTRA at the end of the 20-year period at a value equal to the reserved profit entitlement of the Founder Shares not yet distributed.

At the Annual General Meeting of April 15, 1993, the shareholders of ASTRA on the basis of evidence that the contractual non-compete obligations incumbent on the holder of the Founder Shares are not being adhered to by the holder of the Founder Shares, resolved to suspend the profit entitlement pending the resolution of the matter by the Luxembourg Courts.

However, on July 10, 2002 the Luxembourg Court of Appeals had ruled in favour of the holder of the Founder Shares declaring his request for dividends founded and thus did not uphold the judgement of first instance of January 26, 2001, which has dismissed the claim lodged by the holder of the Founder Shares.

On February 12, 2003 the Court of Appeals determined the amount to be paid on the Founder Shares to an amount of EUR 30.1 million as dividend payout for the years 1992 to 2001. This amount is included in other liabilities.

ASTRA has filed an appeal with the Luxembourg Supreme Court (Cour de Cassation) for reconsideration of the decision of the Court of Appeals of July 10, 2002.

Note 29 Off balance sheet items Capital commitments The Group had outstanding commitments in respect of contracted capital expenditure totalling EUR 686.6 million at December 31, 2002 (2001: EUR 606.4 million). These commitments largely reflect the purchase and launch of future satellites for the expansion and replacement of the Group satellite system, together with necessary expansion of the associated ground station and control facilities.

Operating lease commitments Future minimum rentals payable under non-cancellable operating leases are as follows as at December 31:

2002 2001 EUR million EUR million Within one year 6.7 0.3 Within two to five years 11.8 0.1 Tot al 18.5 0.4

Restrictions on use of cash At December 31, 2002 there were restrictions on the use of cash balances totalling EUR 7.7 million (2001: EUR 34.6 million). Of this, EUR 7.2 million (2001: EUR 25.1 million) arises under the terms of a lease agreement for one of the satellites belonging to SES AMERICOM. For a further EUR nil (2001: EUR 9.5 million) the restriction is that the funds may only be used for settling acquisition costs relating to new loan facilities.

Note 30 Related parties The state of Luxembourg holds a direct 11.58% voting interest in the Company and two indirect interests, both of 10.88%, through two state owned banks, Banque et Caisse d’Epargne de l’Etat and Société Nationale de Crédit et d’Investissement. These shares constitute the Company’s B shares, which are described in more detail in Note 16.

GE Capital holds a 20.1% voting interest in the Company. The following transactions and balances with GE Capital and its subsidiaries and affiliates are included in the consolidated financial statements. Other debtors include a receivable from GE Capital of EUR 0.6 million (2001: EUR 35.2 million). Revenues include EUR 21.4 million (2001: EUR 2.5 million) through sales to various GE companies. External charges include an amount of EUR 10.9 million (2001: EUR 1.2 million) relating to the supply of a variety of services by GE Capital and its subsidiaries and affiliates.

The Group generated revenues of EUR 20.5 million (2001: EUR 13.6 million) from Deutsche Telekom AG (‘DT’) in the year ended December 31, 2002. DT holds a voting interest of 10.52% in the Company. At the year-end there were no amounts outstanding.

During the year the Group generated revenues of EUR 0.9 million (2001: nil) from SATLYNX S.A., a company in which the Group owns 50% of the share capital. In addition, the Group contributed tangible assets amounting to EUR 21.9 million to SATLYNX, as part settlement for the acquisition of the shareholding in this company. These assets have been contributed at their fair market value.

During the year the Group generated revenues of EUR 5.0 million and EUR 1.6 million from Nordic Satellite AB and AMERICOM ASIA PACIFIC, companies in which the Group owns 50% of the share capital. In addition, the Group paid EUR 0.6 million to Nordic Satellite AB for the rental of transponder capacity.

62 SES GLOBAL Annual Report 2002 SES GLOBAL S.A. annual accounts Report of the independent auditor

To the Shareholders of SES GLOBAL S.A. Société Anonyme Betzdorf

Following our appointment by the Annual General Meeting of the Shareholders on May 6, 2002, we have audited the accompanying annual accounts of SES GLOBAL S.A. for the year ended December 31, 2002. These annual accounts are the responsibility of the Board of Directors. Our responsibility is to express an opinion on these annual accounts based on our audit.

We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the annual accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the annual accounts. An audit also includes assessing the accounting principles used and significant estimates made by the Board of Directors, as well as evaluating the overall annual accounts presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the accompanying annual accounts give, in conformity with Luxembourg legal and regulatory requirements, a true and fair view of the financial position of SES GLOBAL S.A. as at December 31, 2002 and of the results of its operations for the year then ended.

Ernst & Young Société Anonyme Réviseur d'entreprises

Werner Weynand

Luxembourg, March 20, 2003

63 SES GLOBAL Annual Report 2002 SES GLOBAL S.A. balance sheet December 31, 2002

2002 2001 Assets Note EUR million EUR million Formation expenses 3 0.6 0.8

Tangible assets 4 Other fixtures and fittings, tools and equipment 0.2 – Payments on account and tangible assets in course of construction 0.4 – 0.6 – Financial assets Shares in affiliated undertakings 5 4,510.1 4,504.5 Amounts owed by affiliated undertakings 6 567.2 – Other financial assets 7 5.6 – 5,082.9 4,504.5 Current assets Debtors (amounts receivable in less than one year) Amounts owed by affiliated undertakings 138.3 83.7 Other receivables 10.1 4.0 Cash at bank and on hand 78.1 35.8 226.5 123.5

Prepayments 16.4 13.7

Total assets 5,327.0 4,642.5

2002 2001 Liabilities Note EUR million EUR million Capital and reserves Subscribed capital 8 921.8 175.8 Share premium 8 2,925.0 3,671.0 Legal reserve 10 17.6 17.6 Other reserve 53.0 – Result brought forward 0.3 – 3,917.7 3,864.4 Creditors Amounts payable after more than one year Amounts owed to credit institutions 11 937.2 591.0

Amounts payable within one year Amounts owed to credit institutions 11 212.4 – Trade creditors 4.0 0.1 Amounts owed to affiliated undertakings 110.1 0.1 Taxes and social security payable 0.1 – Other creditors 6.6 2.6 333.2 2.8

Profit for the financial period 138.9 184.3

Total liabilities 5,327.0 4,642.5

The notes are an integral part of the annual accounts.

64 SES GLOBAL Annual Report 2002 SES GLOBAL S.A. profit and loss account Year ended December 31, 2002

2001 2002 EUR million Note EUR million (Note 1) Other operating income 6.8 – External charges (13.6) (0.3) Staff costs 12 (6.4) – Other operating charges (7.0) (0.3) Value adjustments in respect of formation expenses 3 (0.2) – Value adjustments on other financial assets 7 (3.2) – Value adjustments of fixed assets 4 – – Income in respect of affiliated undertakings 14 133.3 190.0 Interest receivable and similar income 78.2 0.2 Interest payable and similar charges (43.0) (5.3) Result on ordinary activities 144.9 184.3 Taxes 13 (6.0) – Profit for the financial period 138.9 184.3

The notes are an integral part of the annual accounts.

65 SES GLOBAL Annual Report 2002 Notes to the SES GLOBAL S.A. accounts December 31, 2002

The accounting period of the Company is from January 1 to December 31, with the exception of the prior year which runs from March 16, 2001 (date of incorporation) until December 31, 2001.

Note 2 Accounting practices The annual accounts are prepared in accordance with the generally accepted accounting principles and regulations in force in the Grand Duchy of Luxembourg.

Formation expenses The costs of formation of the company and the costs related to the increases in issued share capital are capitalised and amortised over five years.

Dividends Dividends are declared after the accounts for the year have been approved. Accordingly dividends payable are recorded in the subsequent year's accounts. Dividends receivable from affiliated undertakings are recorded as income in the year in which they are declared by the subsidiary.

Loan origination costs Loan origination costs are capitalised and included in prepaid expenses. They are amortised over the loan periods.

Fixed assets Other fixtures, fittings, tools and equipment All such items are depreciated evenly over the estimated useful lives, which are ten years or less.

Translation of foreign currencies The Company maintains its accounting records in Euro (EUR) and the annual accounts are expressed in that currency.

The cost of fixed assets are translated at the historical rate.

Other assets expressed in other currencies are translated individually at the historical exchange rate or the rate prevailing at the balance sheet date, whichever is lower. For liabilities, the higher exchange rate is applied.

Income and charges expressed in other currencies are recorded on the basis of the exchange rates prevailing on the transaction dates.

Realised exchange gains and losses and unrealised exchange losses are reflected in the profit and loss account.

Note 3 Formation expenses The development of the formation expenses during the financial year is as follows:

2002 2001 EUR million EUR million Cost at beginning of year 0.8 – Additions – 0.8 Cost at end of year 0.8 0.8 Accumulated amortisation at beginning of year – – Amortisation (0.2) – Accumulated amortisation at end of year (0.2) – Net book value at beginning of year 0.8 – Net book value at end of year 0.6 0.8

66 SES GLOBAL Annual Report 2002 Note 4 Tangible assets The development of tangible assets during the financial years 2002 and 2001 is as follows:

Other fixtures Tangible assets and fittings tools in course of and equipment construction Total 2002 EUR million EUR million EUR million Cost at beginning of year – – – Accumulated depreciation at beginning of year – – – Net book value at beginning of year ––– Movements of the year Additions 0.2 0.4 0.6 Depreciation ––– Cost at end of year 0.2 0.4 0.6 Accumulated depreciation at end of year – – – Net book value at end of year 0.2 0.4 0.6

Note 5 Shares in affiliated undertakings

2002 2001 EUR million EUR million Balance at beginning of year 4,504.5 – Additions 5.6 4,504.5 Balance at end of year 4,510.1 4,504.5

On November 8, 2001, the Company acquired a 100% shareholding in SES ASTRA S.A. through a contribution in kind of 100% of the issued and outstanding share capital of SES ASTRA S.A. (formerly Société Européenne des Satellites S.A.).

On November 9, 2001, the Company acquired a 100% shareholding in SES GLOBAL-AMERICAS, Inc. through a contribution in kind of all assets and liabilities of GE Capital Luxembourg Holdings Limited and 50 Series A and 50 Series B preferred shares of GE Subsidiary Inc. 22. The addition of EUR 5.6 million in the current year relates to consultants fees incurred in 2002 relating to the acquisition of SES GLOBAL-AMERICAS, Inc..

The principal activity of the above companies is the provision of satellite services.

On December 14, 2001, the Company acquired 299,999 shares in SES Finance S.A., (a limited liability company established in Luxembourg) representing a 99.99% interest in that company. The principal activity of the company is to invest directly or indirectly in other companies that are actively involved in the satellite communication industry.

As at December 31, 2002, the Company holds the following investments:

Participation Acquisition cost EUR million SES ASTRA S.A. 100% 1,683.0 SES GLOBAL-AMERICAS, Inc. 100% 2,736.4 SES Finance S.A. 99.99% 90.7 SES Multimedia S.A. 0.01% –

Art. 248 paragraph (1) 2º of the Commercial Company Law of Luxembourg (the ‘law’) requires the disclosure of the amount of capital and reserves and profit and loss for the last financial year of each affiliated undertaking. In conformity with Art. 250 (3) of the law these details have been omitted as the Company prepares consolidated accounts and these consolidated accounts and the related consolidated annual report and auditors' report thereon have been lodged with the Luxembourg Trade Registry.

Note 6 Amounts owed by affiliated undertakings

2002 2001 EUR million EUR million Balance at beginning of year – – Movements of the year Advances 567.9 – Re-imbursements (0.7) – Balance at end of year 567.2 –

Amounts owed by affiliated undertakings represent an intercompany loan with SES Finance S.A..

67 SES GLOBAL Annual Report 2002 Notes to the SES GLOBAL S.A. accounts continued December 31, 2002

Note 7 Other financial assets

2002 2001 EUR million EUR million Balance at beginning of year – – Movements of the year Additions 8.8 – Value adjustments (3.2) – Balance at end of year 5.6 –

Own Fiduciary Depository Receipts The Company purchased a quantity of FDRs (Fiduciary Depository Receipts) in respect of A shares for use in connection with the Director/Employee option scheme and the executive option plan set up in 2002. These shares are valued at the lower of purchase price and market value.

Note 8 Subscribed capital Upon incorporation, the subscribed capital of the Company was EUR 0.1 million represented by 9,000 shares with no par value (6,000 A shares and 3,000 B shares). The authorised capital amounted to EUR 10,000.0 million.

Following a Board of Directors meeting held on November 8, 2001, the issued share capital was increased to EUR 111.1 million by the issue of 310,340,000 Class A ordinary shares and 155,170,000 Class B ordinary shares, with no par value, having the same rights and advantages as the former shares. The authorised share capital was also increased to EUR 10,134.0 million.

Following two Board of Directors meetings held on November 9, 2001, the issued share capital was increased to EUR 131.4 million by the issue of 85,376,910 Class B ordinary shares with no par value and further increased to EUR 175.9 million by the issue of 176,799,314 Class C ordinary shares, 4,496,358 Class C preferred shares and 5,270,926 Class B ordinary shares.

Following an Extraordinary General Meeting of the shareholders on November 29, 2001, the issued and fully paid share capital was reduced by EUR 0.1 million through the reimbursement of the original share capital on incorporation represented by 6,000 A shares and 3,000 B shares.

Following a resolution of the Board of Directors on June 27, 2002, the issued and fully paid share capital was increased by EUR 746.0 million through a transfer from share premium to share capital.

As at December 31, 2002 the issued and fully paid share capital amounted to EUR 921.8 million represented by 737,453,508 shares with no par value (310,340,000 Class A ordinary shares; 245,817,836 Class B ordinary shares and 176,799,314 Class C ordinary shares and 4,496,358 Class C preferred shares).

Note 9 Movements in equity During the year, the movements in equity were as follows:

Subscribed Share Legal Other Result brought Result for the capital premium reserve reserve forward period EUR million EUR million EUR million EUR million EUR million EUR million At date of incorporation ––––– – Increase in share capital 175.8 3,671.0 17.6 – – – Result for the period –––––184.3 At December 31, 2001 175.8 3,671.0 17.6 – – 184.3 Allocation of result – – – 53.0 0.3 (53.3) Dividend –––––(131.0) Transfer 746.0 (746.0) – – – – Result for the year –––––138.9 At December 31, 2002 921.8 2,925.0 17.6 53.0 0.3 138.9

Note 10 Legal reserve In accordance with Luxembourg legal requirements, a minimum of 5% of the yearly net profit is to be transferred to a legal reserve from which distribution is restricted. This requirement is satisfied when the reserve reaches 10% of the issued share capital. An allocation of EUR 6.9 million is required in the current year.

68 SES GLOBAL Annual Report 2002 Note 11 Amounts owed to credit institutions On March 28, 2001, SES GLOBAL S.A. together with its 100% owned subsidiary SES ASTRA S.A. arranged a Syndicated Multi-currency Term and Revolving Facilities Agreement for the purposes of refinancing existing syndicated loan facilities and arranging acquisition finance for the transaction, concluded on November 9, 2001, to acquire SES GLOBAL-AMERICAS, Inc.. The new Facilities Agreement is made up of the following:

1. Facility A1 USD 1.6 billion term loan facility available for the purposes of the SES AMERICOM acquisition and repayable by March 28, 2006. 2. Facility B1 USD 900 million term loan facility available for the purposes of the SES AMERICOM acquisition and repayable by March 28, 2003. 3. Facility C EUR 1 billion term loan facility available to refinance existing debt and for general corporate purposes. It is repayable by March 28, 2006. 4. Facility D EUR 400 million revolving loan facility available to refinance existing debt and for general corporate purposes. It is repayable by March 28, 2006.

As at December 31, 2002, the facilities drawn by SES GLOBAL S.A. are as follows: 1. Facility A1 USD 23.0 million. 2. Facility B1 USD 103.0 million. 3. Facility C EUR 765.0 million and USD 110.0 million. 4. Facility D USD 100.0 million.

The Borrowers are committed under the Syndicated Loan Agreement to maintaining a number of financial covenants within agreed limits in order to provide sufficient security to the Lenders. SES ASTRA S.A. and SES GLOBAL-AMERICAS, Inc. have also provided a cross guarantee to SES GLOBAL S.A. on these facilities. Interest paid is based on floating interest rates. At the end of the year the weighted average interest rate on the USD borrowings was 2.6496% and on the EUR borrowings 4.365%.

In September 2002, the Company arranged an uncommitted unsecured multi-currency facility up to a counter value of EUR 20.0 million. Under this facility USD 20.0 million was drawn at year-end.

The maturity profile of the amounts drawn down is as follows as at December 31, 2002 and 2001:

2002 2001 EUR million EUR million Within one year 212.4 –

Between one and two years 208.0 576.5 Between two and five years 729.2 14.5 After one year 937.2 591.0

Note 12 Employees The average number of employees in the workforce for 2002 was 44. Staff costs can be analysed as follows:

2002 2001 EUR million EUR million Wages and salaries 6.1 – Social security costs 0.3 – Tot al 6.4 –

Note 13Taxes Taxes in the profit and loss account have been provided in accordance with the relevant laws. The balance sheet position takes into consideration the taxable result of the Luxembourg subsidiaries (SES Finance S.A., SES ASTRA S.A. and SES Multimedia S.A.), which are part of the tax group structure, in accordance with Art 164 bis LIR.

Note 14 Income in respect of affiliated undertakings

2002 2001 EUR million EUR million Dividend income 120.0 190.0 Interest income 13.3 – Tot al 133.3 190.0

Note 15 Board of Directors remuneration At the annual meeting held on May 6, 2002, payments to directors for attendance at Board and Committee meetings were approved which totalled EUR 0.9 million for the year 2001. These payments are computed on a fixed and variable basis. The variable payments are based upon attendance at Board and Board Committee meetings. For 2002, total payments (fixed and variable) amount to EUR 0.8 million.

69 SES GLOBAL Annual Report 2002 Notes to the SES GLOBAL S.A. accounts continued December 31, 2002

Note 16 Off balance sheet items During the year, the Company entered into ten cross currency swap agreements in order to hedge the investment in SES GLOBAL- AMERICAS, Inc.. The average term of these contracts as at December 31, 2002 is as follows:

Currency sold Currency bought Average weighted maturity Average weighted exchange rate USD 1,225 million EUR 1,242 million April 2005 EUR/USD 0.9863

In addition, the Company held one interest rate swap agreement with a notional amount of USD 300.0 million whereby the Company receives an interest rate of LIBOR and pays a variable rate of LIBOR-0.205% on the notional amount. This contract matures on August 16, 2004.

As at December 31, 2002 an amount of EUR 2.6 million is included in other receivables relating to the net accrued interest on these agreements.

70 SES GLOBAL Annual Report 2002 Five year financial summary

2002 2001 2000 1999 1998 EUR million EUR million EUR million EUR million EUR million Total revenues 1,349.3 978.2 835.9 725.2 516.9 EBITDA1 1,107.1 794.6 708.7 580.5 416.4 Operating profit 529.1 524.3 516.6 407.0 279.3 Profit of the Group 204.5 280.3 244.5 201.3 176.2 Net operating cash flow 1,051.8 682.4 422.6 632.6 264.8 Capital expenditures 683.8 432.3 254.3 263.6 123.4 Net debt 2,661.1 3,140.0 834.6 559.6 503.1 Shareholders’ funds 3,575.1 3,917.4 1,040.1 847.9 719.7 Earnings per A-share (in EUR) 2 0.34 0.68 0.64 0.52 0.46

Key performance ratios in % EBITDA margin 82.1% 81.2% 84.8% 80.0% 80.6% Net income margin 15.2% 28.7% 29.2% 27.8% 34.1% Return on average equity 5.5% 11.3% 25.9% 25.7% 25.4% Net debt to equity 74.4% 80.2% 66.0% 69.9% 71.3%

1 EBITDA equals earnings before interest, tax, depreciation and amortisation. 2 The basis of the computation of earnings per share is set out in Note 25 to the consolidated financial statements. Prior year earnings per share for the years 1998–2001 were restated for the reasons outlined in Note 25 to the accounts and to reflect the 1:10 share split on November 8, 2001.

71 SES GLOBAL Annual Report 2002 Shareholder information

Registered office and Group Headquarters Château de Betzdorf, L-6815 Luxembourg Luxembourg Trade Register N° RC Luxembourg 81 267

2003 Financial calendar Annual General Meeting of Shareholders May 6, 2003 Dividend payment May 20, 2003 Announcement of first-half 2003 results Mid September 2003

Listed Security Fiduciary Depository Receipts each in respect of one A Share of SES GLOBAL S.A. are listed on the Luxembourg and Frankfurt Stock Exchanges under the symbol SESG.

Fiduciary Agent Banque et Caisse d’Epargne de l’Etat, Luxembourg 16, rue Ste Zithe, L-2954 Luxembourg Tel: (352) 40 15 1

Shareholder enquiries For enquiries of a general nature regarding the Company or Investor Relations, please contact:

SES GLOBAL S.A. Investor Relations Château de Betzdorf L-6815 Luxembourg Tel: (352) 710 725 490 Fax:(352) 710 725 9836 [email protected]

72 SES GLOBAL Annual Report 2002 Companies of the Group

Europe SES GLOBAL S.A. L-6815 Château de Betzdorf Luxembourg Tel: (352) 710 725 1 Fax: (352) 710 725 227 www.ses-global.com

SES ASTRA S.A. L-6815 Château de Betzdorf Luxembourg Tel: (352) 710 725 1 Fax: (352) 710 725 227 www.ses-astra.com

SATLYNX S.A. Building B L-6815 Château de Betzdorf Luxembourg Tel: (352) 26 700 1 Fax: (352) 26 700 227 www.satlynx.com

Nordic Satellite AB Vretenvägen 10 SE-17154 Solna Sweden Tel: (46) 8 505 645 00 Fax: (46) 8 28 24 80 www.nsab-sirius.com

North America SES AMERICOM, Inc. 4 Research Way Princeton, NJ 08540-6684 U.S.A. Tel: (1) 609 987 4000 Fax: (1) 609 987 4517 www.ses-americom.com

Latin America Star One S.A. Praia de Botafogo 228, 3º andar 22250-906 Rio de Janeiro RJ Brazil Tel: (55) 21 2121 9381 Fax: (55) 21 2121 9321 www.starone.com.br

Nahuelsat S.A. Bouchard 680, 12th Floor C1106ABJ – Buenos Aires Argentina Tel: (54) 11 5811 2600 Fax: (54) 11 5811 2633 www.nahuelsat.com

Asia Asia Satellite Telecommunications Holdings Ltd. 23F, East Exchange Tower 38-40 Leighton Road Hong Kong Tel: (852) 2805 6666 Fax: (852) 2504 3875 www.asiasat.com

AMERICOM ASIA-PACIFIC LLC 240 Tanjong Pagar Road 06-00 GE Tower Singapore, 088540 Tel: (65) 6326 3366 Fax: (65) 6326 3337 www.americom-ap.com

Designed by williams and phoa SES GLOBAL www.ses-global.com SES C/029/04.03 E 9356 SES A&R Cover a/w 26/6/02 4:54 pm Page 3 SES

GLOB SES GLOBAL AL

ANNUAL REPORT 2001 NULRPR 2001 REPORT ANNUAL

Yo ur Satellite Connection to the World 9356 SES A&R Cover a/w 26/6/02 4:54 pm Page 4

Contents 01 Key figures and financial highlights 02 Group structure 03 Operational highlights 04 Chairman’s statement 06 President and CEO’s statement 08 Geographic coverage

Operational review 09 SES GLOBAL 10 SES ASTRA 18 SES AMERICOM 24 SES GLOBAL partners

28 SES GLOBAL shareholders 29 Board of Directors 30 Annual activities report of the Board of Directors 32 Executive Committee 34 Management discussion and analysis

SES GLOBAL Group Consolidated Accounts 37 Report of the independent auditor 38 Consolidated balance sheet 40 Consolidated profit and loss account 41 Consolidated statement of cash flow 42 Consolidated statement of changes in shareholders’ equity 43 Notes to the consolidated accounts

SES GLOBAL S.A. Accounts 57 Report of the statutory auditor 58 Balance sheet 59 Profit and loss account 60 Notes to the accounts 62 Five-year financial summary 63 Shareholder information 64 Companies of the Group

WE CONNECT YOUR WORLD. THROUGH OUR OPERATIONS, WE PROVIDE WORLD- AND UNPARALLELED REGIONAL DEPTH, WHILE SETTING THE HIGHEST STANDARDS 978.2 794.6 280.3 708.7 835.9 244.5 201.3 580.5 725.2 99 00 01 99 00 01 99 00 01 Revenues (EUR million) Profit of the Group (EUR million) EBITDA (EUR million) 9356 SES A&R pp1-11 a/w 26/6/02 3:28 pm Page 1

42SATELLITES

99.99%SERVICE AVAILABILITY

95%OF WORLD POPULATION

400million HOMES CLASS SATELLITE COMMUNICATIONS WITH TRULY GLOBAL REACH OF OPERATIONAL EXCELLENCE.

Financial summary EUR million 20011 20002 20013 Total revenues 978.2 835.9 897.6 EBITDA 794.6 708.7 727.5 Operating profit 524.3 516.6 503.3 Profit of the Group 280.3 244.5 291.9 Net operating cash flow 682.4 422.6 599.8 Capital expenditures 432.3 254.3 371.1 Net debt 3,140.0 834.6 867.7 Shareholders’ funds 3,917.4 1,040.1 1,191.1 Earnings per A-share (in EUR)4 0.69 0.66 – Total dividend 131.0 108.0 – Dividend declared per A-share (in EUR)5 0.24 0.29 – Employees 779 451 487 Key performance ratios in % 12 months ended December 31 20011 20002 20013 EBITDA margin 81.2 84.8 81.1 Net income margin 28.7 29.2 32.5 Return on average equity 11.3 25.9 26.2 Debt to equity 80.2 80.2 72.8

1 The amounts presented represent the results for the period January 1, 2001 to December 31, 2001, as if the exchange offer between Société Européenne des Satellites S.A. and SES GLOBAL S.A. had not occurred, and including the contribution from SES AMERICOM from 9 November, 2001. 2 The prior year comparative figures are taken from the consolidated profit and loss account of Société Européenne des Satellites S.A. as at December 31, 2000. 3 These figures exclude the impact of the acquisition of GE Americom, which was effected on November 9, 2001. 4 Earnings per A-Share are calculated using the weighted average number of economic shares outstanding during the year. Prior year comparative figures have been adjusted to reflect the 10 for 1 Exchange Offer which was concluded on 8 November, 2001. 5 Recommended by Directors and subject to shareholder approval.

SES GLOBAL Annual Report 2001 1 Key figures and financial highlights 9356 SES A&R pp1-11 a/w 26/6/02 3:28 pm Page 2

Group structure chart

SES GLOBALAL

SES AMERICOM SES ASTRA 100% 100%

AMERICOM Columbia SES ASTRA AsiaSat ASIA-PACIFIC Communications marketing affiliates 34.1% 50% 100% 100%

Note: Chart shows a simplified Group structure as of December 31, 2001. February 1, 2001 ASTRA 2D entered operational service at 28.2° East March 12, 2001 AMERICOM’s AMC-8 satellite became operational, while Satcom C-5 retired March 28, 2001 Combination of SES and GE Americom announced

POST YEAR-END DEVELOPMENT

SES GLOBAL, Gilat Satellite Gilat’s Skystar Advantage® Very The new company will acquire 100% Networks and Alcatel Space/ Small Aperture Terminal (VSAT) of Gilat Europe companies, including SkyBridge form a EUR 200 million product, as well as SES ASTRA’s the Gilat Satellite Networks joint venture to provide two-way Broadband Interactive System (BBI). subsidiary. The company’s operations satellite broadband services will be supported by industrial and throughout Europe. In the consumer and SOHO markets, marketing agreements between the company will provide broadband Alcatel and Gilat, as well as between Following the closure of the communication services via Gilat’s Alcatel and SES GLOBAL. business year, SES GLOBAL made 360 VSAT satellite modem. In these the following announcement on markets, the company will serve as a On the same day, SES GLOBAL and April 8, 2002: wholesale provider of broadband Alcatel announced a strategic services to telcos, Internet Service partnership for the implementation of SES GLOBAL, Gilat Satellite Providers (ISPs) and direct-to-home two-way satellite based systems Networks Ltd. as well as Alcatel television providers. using SES’ BBI technology based on Space and SkyBridge, subsidiaries of the DVB-RCS standard. Alcatel, announced the formation of The value of the company exceeds a new company that will provide EUR 200 million and includes cash of Under this partnership, SES GLOBAL two-way satellite broadband more than EUR 50 million with will transfer to Alcatel Space the communications services throughout additional in-kind contributions from prime responsibility of the BBI Europe, using advanced VSAT and each of the partners. SES GLOBAL technology development. Alcatel VSAT-related technology. and Gilat have executed definitive fully endorses the DVB-RCS standard agreements whereby they will serve for the large-scale implementation of By combining industry leading as equal shareholders (50/50 initially) two-way broadband services. Alcatel satellite communications technology in the new company, which will be will continue the development of the and expertise from SES GLOBAL, headquartered in Luxembourg. The system and ensure future supply of Alcatel and Gilat, the new company German cartel authority has cleared gateway and terminal products. immediately becomes a potent force the joint venture between SES Alcatel will work with industrial in the European broadband market. GLOBAL and Gilat on April 4, 2002. partners which are already Building on a strong operations and committed to the development of customer base in the enterprise Alcatel Space and SkyBridge have DVB-RCS subsystems. market, the new company aims to executed an agreement in principle expand into the residential market. with the new company in connection SES GLOBAL will cooperate with with a potential investment, which is Alcatel in the definition of future In the enterprise market, the venture subject to signature of a definitive product enhancements and in will offer complete satellite agreement and regulatory approval, ensuring the broad commercial communications services. These and which will give Alcatel a 20% availability on a global basis of services will be provided both equity stake in the new venture. SES DVB-RCS products. directly by the new company and GLOBAL and Gilat shares will be through wholesalers and will utilize diluted proportionally. SES GLOBAL Annual Report 2001 2 Group structure 9356 SES A&R pp1-11 a/w 26/6/02 3:28 pm Page 3

Star One 19.99%

Nahuelsat 28.75%

NSAB 50% September 1, 2001 ASTRA 2C entered operational service at 19.2° East November 9, 2001 SES GLOBAL completed acquisition of AMERICOM November 21, 2001 ASTRA Broadband Interactive System entered commercial service December 2001 ASTRA 1A transferred to inclined orbit at 5.2° East

SES GLOBAL highlights SES AMERICOM highlights Shaping the future of the satellite Unrivalled customer commitment: industry: SES GLOBAL acquired AMERICOM secured anchor 100% of GE American customers, starting with Viacom, Communications (“Americom”) for the next generation cable and of Société Européenne des neighbourhoods. Satellites S.A. Growing the international SES ASTRA highlights business: AMERICOM contracted Satellites spreading their wings: capacity on both the transoceanic the Company started operations on and the Asian spacecraft. two new satellites (ASTRA 2D and ASTRA 2C), and initiated service at a Enhanced satellite fleet: AMC-8 new orbital position (23.5/24.2° East). initiated service at the 139° West orbital position. Preparing the future: ASTRA’s Broadband Interactive System Serving the institutional providing two-way services directly customers: AMERICOM via satellite was launched Government Services was formed commercially with a first customer to provide services to U.S. contract signed. government agencies.

Progressing broadband: Deutsche Telekom AG chose ASTRA to provide DSL services via satellite; ASTRA- NET platforms were installed in Hilversum and Rio de Janeiro.

Serving the audience: ASTRA transmitted 1,102 analogue and digital services at year-end 2001, an increase of 30 compared to 2000.

Serving the customer: satellite availability was 100% and earth station availability 99.99%; ASTRA enhanced satellite control ground infrastructure with a EUR 36 million investment. SES GLOBAL Annual Report 2001 3 Group operational highlights 9356 SES A&R pp1-11 a/w 26/6/02 3:28 pm Page 4

2001 was a year of change and Broadband revenues originating With demand for broadband capacity of opportunity. It will stand out in from multimedia and Internet generally taking off slower than the history of our Company as the service providers, as well as from expected, the core broadcast and year of the creation of SES GLOBAL, corporate users, increased. The telecommunication markets are through the acquisition of ASTRA Broadband Interactive expected to remain drivers of GE Americom – subsequently System entered commercial service, growth for SES GLOBAL in the renamed SES AMERICOM – and thus achieving an important short term. of SES ASTRA. milestone for the generation of future revenues in the interactive However, as satellite is optimised These two outstanding satellite services marketplace. for the distribution of broadcast operators are now combined under and broadband content to large the roof of SES GLOBAL, the AMERICOM provided a significant audiences over widespread world’s premier satellite operator, contribution to the results of geographic areas, independently of which has grown out of the former SES GLOBAL. While the Company or in combination with terrestrial Société Européenne des Satellites poured a tremendous amount of networks, satellite has a large slice S.A. As a consequence of the energy into the successful transition of the emerging broadband market transaction, we welcome GE Capital from GE to SES, AMERICOM cut out for itself. Within this market, as a new shareholder in SES continued to grow its business, SES GLOBAL has a clear focus on its GLOBAL and are excited to work by signing up new customers for mission: deliver all services – direct- with them. the next generation cable to-home and cable TV and radio, neighbourhoods and the Company residential or corporate broadband The business combination of also increased its earnings. services, telecommunications – in ASTRA and AMERICOM translates unrivalled quality and reliability to the successful implementation AsiaSat made a positive contribution whatever place on the planet. And of our Company’s long-standing to the results of SES GLOBAL, with a firm focus on the customers’ strategy to acquire global reach despite a very challenging market needs and requirements. by forging an efficient network situation in the Asia-Pacific region. of regional satellite operators AsiaSat featured a transponder with strong positions in their fill rate of 65%. respective markets, and providing the full range of satellite-based Nordic Satellite AB continued to services to customers around progress in the Nordic and Eastern the world. European countries. The Nordic operator has been driving the The AMERICOM transaction closed transition from analogue to digital on November 9, 2001. Consequently, services in its market. As could its impact on the full-year financial be expected, the costs associated results of SES GLOBAL remains with this transition have had a restricted to an eight-week period. negative impact.

René Steichen CHAIRMAN’S STATEMENT Chairman of the Board of Directors

SES GLOBAL continued on its SES GLOBAL’s results in Latin growth track in 2001. Total revenues America are marked by the first-time increased by 17% to EUR 978.2 full-year impact of the acquisition of million, driven both by organic 19.99% of Star One. The Brazilian growth and by the result of the operator benefited from a dynamic AMERICOM inclusion. market in the Internet/broadband area, while consolidating its position Operating profits increased by 1.5% in the traditional broadcast sector. to EUR 524.3 million. The company’s net profit grew by 14.6% to EUR Outlook 280.3 million. The business combination of ASTRA and AMERICOM under the umbrella Throughout the year, SES GLOBAL’s of SES GLOBAL has created a new operating companies continued to industry leader, a company well provide the highest quality of service prepared to tackle the challenges to their customers. Both SES ASTRA and opportunities of the future. With and SES AMERICOM maintained its network of regional operating their outstanding track record of companies and its complete portfolio providing unequalled satellite fleet of satellite services, SES GLOBAL is and network availability and highest in a unique position to take advantage reliability in transmissions without of market opportunities worldwide, in-orbit or launch failures. while being able to mitigate possible regional market risks. In its European core business operations, SES ASTRA experienced increased capacity demand due to the continued development of digital satellite services by its customers. While analogue transmissions were phased out in the UK, a sizeable demand for analogue capacity remained in the German-language markets.

SES GLOBAL Annual Report 2001 4 Chairman’s statement 9356 SES A&R pp1-11 a/w 26/6/02 3:29 pm Page 5

SES GLOBAL Annual Report 2001 5 Chairman’s statement 9356 SES A&R pp1-11 a/w 26/6/02 3:29 pm Page 6

PRESIDENT AND CEO’S STATEMENT

SES GLOBAL Annual Report 2001 6 and CEO’s statement 9356 SES A&R pp1-11 a/w 26/6/02 3:29 pm Page 7

In 2001, the newly created SES a federation of established regional GLOBAL emerged as the premier satellite operators with strong market satellite operator in an industry which positions and diversified product and has undergone profound changes. service lines. SES GLOBAL links these under a global umbrella and provides The demise of mobile and dedicated strategic direction, financial resources broadband satellite projects has to implement the strategy, and refocused the financial markets’ commercial cross-fertilisation. attention on the potential of the FSS satellite operators. In the The importance of being global resides development of broadband satellite in this ability to provide all services to infrastructures, operators pursuing all markets, on a secured, long-term an incremental approach and adding basis. With a solid track record of capacity for new broadband services unequalled operational excellence at to already existing solid businesses the service of the customers, and with have emerged as front-runners. a top range of blue chip customers worldwide who entrust the distribution Ongoing consolidation is set to further of their services to SES GLOBAL increase competition among satellite companies and partners, our company operators in the future. At the same is prepared to capture growth. time, our broadcast customers are set to consolidate too, thereby increasing Within the uniquely flexible and the competitive pressure. interdependent SES GLOBAL structure, the operating companies and partners As the world’s leading operator in terms can leverage their core business of satellite fleet, revenues and EBITDA competencies to other operational on a proforma basis, SES GLOBAL is entities within the GLOBAL family. This well positioned for growth in this spawns new centres of excellence and changing environment. enables our customers to develop new services and applications in new During 2001, the SES GLOBAL markets, building on the deep know- companies experienced additional how and experience of the GLOBAL demand for transponder capacity companies and partners. both in the broadcast and in the cable networks and corporate/ Additional growth potential resides in telecommunications segment. broadband services, be they one-way Broadband revenues continued to or two-way. Applications include two- increase, even though the growth way Internet access via satellite for was flatter than expected. residential users and corporate

Romain Bausch President and CEO SES GLOBAL

SES GLOBAL is designed with the two-way satellite platforms, such as customer in mind. Its operating the Broadband Interactive System companies can best provide what developed by SES ASTRA in Europe. customers require, namely: The combination of traditional • world class service, defined as broadcast services with new leading quality and reliability in interactive services by broadcasters spacecraft operations and customer and content providers will stimulate relationships, which have become a future growth for satellite services. benchmark in the industry; • global reach, i.e. worldwide Over the medium term, the coverage, which is provided though a development of interactive broadcast single point of access, for distribution services is expected to add to capacity of the content through one or all of demand. These services include two- the SES GLOBAL companies’ and way direct-to-home broadcast requiring partners’ fleet of 42 satellites only a narrowband return path. And we worldwide. And SES GLOBAL continue to believe in the potential of companies operate transoceanic satellite systems to provide capacity too, providing fully integrated complementary services to the next satellite solutions; generation terrestrial networks. Video • depth of coverage, which can only over DSL, digital terrestrial networks be provided by satellite operators with and 3 and 4G mobile phone networks highest penetration rates in their will require an efficient mechanism respective markets, in each region of to deliver content to their networks’ the world; points of presence – and no network • access to the full range of satellite- is better positioned than satellite to delivered services, from direct-to-home provide that kind of service. broadcasting, to cable feeds, to corporate networks and During 2001, our Company has telecommunications services. changed deeply. It now reaches across • a comprehensive range of services, the world, and has grown in complexity. including the complete spectrum One thing however has not changed – of broadcast, audiovisual, broadband we will relentlessly continue to strive to IP-based and telecoms services. deliver to our customers the quality of the SES GLOBAL service. Such service quality is best provided not through a monolithic and centralized organisation, but through

SES GLOBAL Annual Report 2001 7 President and CEO’s statement 9356 SES A&R pp1-11 a/w 26/6/02 3:30 pm Page 8

Coverage areas Satellite names • ASTRA AMERICOM ASTRA AMERICOM ASIA-PACIFIC • AMERICOM AMC-1 103° West ASTRA-1A 5.2° East AAP-1 108.2° East Columbia satellites providing AMC-2 85° West ASTRA-1B 19.2° East • AMC-3 87° West ASTRA-1C 19.2° East SIRIUS transatlantic and transpacific AMC-4 101° West ASTRA-1D 24.2° East SIRIUS 2 4.8° East services AMC-5 79° West ASTRA-1E 19.2° East SIRIUS 3 5° East AMC-6 72° West ASTRA-1F 19.2° East SIRIUS W 13° West SES GLOBAL partners AMC-7 137° West ASTRA-1G 19.2° East • 50% SIRIUS operated by NSAB AMC-8 139° West ASTRA-1H 19.2° East Nahuelsat covering Northern and Satcom C1 79° West ASTRA-2A 28.2° East Nahuel-1 71.8° West Satcom C3 131° West ASTRA-2B 28.2° East Central Europe Satcom C4 135° West ASTRA-2C 19.2° East Brasilsat • 34.1% AsiaSat serving the Gstar 4 105° West ASTRA-2D 28.2° East B1 70° West Asia Pacific region Satcom K2 81° West B2 65° West • 50% AMERICOM ASIA-PACIFIC AsiaSat B3 84° West • 28.75% Nahuelsat Columbia AsiaSat 1 122.0° East B4 92° West covering Latin America Spacenet 4 172° East AsiaSat 2 100.5° East A2 63° West 515 37.7° West AsiaSat 3S 105.5° East • 19.99% Brasilsat operated by TDRS-5 174.3° West Star One covering Latin America TDRS-6 47° West

SES GLOBAL COVERAGE

A&E Abbott Labs ABC Radio Networks ABC/Capital Cities, Inc. Access Control Center ACS Business Process Solutions, Inc Advance Affiliated Computer Services, I Ins. American Tower Corporation (WIT) Americom Asia-Pacific, LLC Antel Antrix Corporation Limited Apostolate For Family Consecration Applied Graphics Technolo Aspen Skiing Company Associated Christian Television Sys Associated Press Television News Aston AT&T Alascom AT&T Broadband AT&T Corp. ATC Teleports AT Auricle Communications Autotote Communication Svc AVSS/Audio Visual Systems & Support AXEDIA Europe S.A. Azcar USA, Inc. Azteca America,Inc. Azul Te Entertainment, Inc. BetaDigital Gesellschaft für digitale Fernsehdienste mbH Bharti BT Limited Bloomberg Bloomberg, L.P. Boeing Comm'l Info & Comm. Company America Partnership - A/P BSkyB B-TV Television GmbH & Co. KG Bus - Serv. Telecomunicacões BySky Cable Educational Network, Inc. Canal Plus Canal Satellite N Services Cell-Tel Government Systems, Inc. Central View Holdings Co. Ltd. Centrex Communications Channel 9-Australia (LA) Channel One China Broadcasting F Cidera, Inc. Cincinnati International Teleport Cislunar Networks Corporation Clear Channel Communications Clipsoft Television S.A. CM Community Media GmbH Corp. COMSAT Government Systems, Inc. Comtech EF Data, Inc. Continue Learning Networks, LLC Contrast Internet Diensten BV Convergent Media Systems C Distribution, Inc. Dae Ryung Ind. Inc. Danmarks Radio Darcom LTD Data Marine Systems, Inc dc-sat.net Ltd. Defense Info Tech Cont Offi DEPV/Maer Deutsche Discovery Communications-Europe Displayit AB DLR Dolores Press, Inc. Dominion Video Satellite, Inc. Dow Jones DSF Deutsche Sport Fernsehen GmbH DTH Dy Ekushey TV Elsacom s.p.a. Embratel Empire Sports Network English Sports Ltd. ESAT, Inc. Esatel Communications, Inc. ESPN Espresso Productions ESSROC Satellites.Com Euroservice S.A.S. Eurosport Extra/TTT West Coast, Inc. Fainex Faith Pleases God Church Corp. Family Stations, Inc. Fashion TV Federal Express Co News Channel Fox Sports International FOX Sports Net Free Beeper, Inc. Fujisankei Comm. Int'l., Inc. Fundação João Paulo II GALAXIS Technology AG Galaxy Sat Inc. Global Communications Solutions Global Telemann Systems, Inc. GlobeCast Globecomm Systems, Inc. Globo Comunicações Golden Eagle Communications HERTZinger DataNET Hessischer Rundfunk HIRSCHMANN ELECTRONICS GmbH & Co. Hispanic Television Network, Inc. Hollywood Shopping Network, Inc. Hom Network Systems IBM France ICD Media, LLC Ideal World Illinois High School Association IMG SA Impsat Impsat Comunicações Ltda iN Demand LLC Insight T Island Page, Inc. ITC^Deltacom ITN ITV Network Ltd. IWL Communications, Inc. Japan Telecom Co., Ltd Jones Radio Network, Inc. Jones Space Holdings, Inc. JSAT KFSN-ABC KHCB Radio Network Kingston Communication PLC Kingston Inmedia Kingston Teleport London Intl KLTY-FM KMGH KNXV TV 15 Koch Industries, Inc. La Cadena del Milagro, Inc. Landers Sports Production, LLC Landmark Travel Channel Law Talk Live Learfield Communications Liberty Channels Lifetime Entertainm Shared Services Loral Skynet Louisiana Farm Bureau Federation Louisiana Network, Inc. Lucky.Net (Ukraine) Luxsat International S.A. Lyman Brothers Lynden, Inc akademie Mediasatellite Merlin Communications International Ltd. Merlin Communications Intl Michigan Technical University Microsoft (MSNBC) Microspace, Inc. Mitteldeutscher Rundfunk Modern Times Group (MTG) Moonlink Satellite, Inc. Morris Communications Corp. Motient Motors TV mPhase Television.Net, Inc. MTV N NBC TV NDR Netsat Express Netsystem.com S.p.A. Netsystem.com S.p.A. Network News Service Network Services LLC Network Teleports Networx Corp Telecommunications, Inc. NHK Japan Broadcasting NHK New York NOAA NESDIS Nokia Nortevision North Cascades National Park Northern Broadcasting System KG ODS Technologies, LP Oklahoma State University Omega Television Productions, LLC Omnistar, Inc. One on One Sports Network, Inc. OnSat Network Commu Pacific Television Center Pakistan TV Pan American Satellite Pannu Broadcasting, Inc. Pathfire, Inc. Paxson Communications Corporation Peak Uplink, Inc. Peninsu Plenum New Media AG Prevue Networks, Inc. Prime Time Christian Broadcasting Prime TV Primetime 24 Pro Sieben Sat. 1 Public Broadcasting Service Qualcomm LLC Raytheon Support Svc Co. Realitatea TV (Romania) Reminiscent TV Rental Systems Inc. River Communications Royal Programs, Inc. RTBF RTL 2 Fernsehen Communications Sys Inc. Satellite Data Systems Ltd. Satellite Information Svc. Satellite Observers Dish Satlink Services SAT-Medien AG SATUP AG Sears Roebu Sit-up.com Sky Max Communications, Inc. SkyTalkwest Telecom, LLC SM ELECTRONIC GmbH & Co. KG Smith Broadcasting of Vermont, LLC Snowshoe Mount Systems/Loral, Inc. Spacecom Systems Spaceline Communication Svc. GMBH Spacenet Services, Inc. Speedvision Spirit Communications, Inc. Sports Ticker, Inc. Administration of Radio Film and Television of China STM Wireless, Inc. Stratos Offshore Services Company Südwestrundfunk SUNY/New York Network Superadio LLC Technisat Tele Greenland A/S Telecel Telecom Telecom Soluciones Tele-Communications, Inc. Telefe Telefónica Telefónica del Sur Telefónica Mundo Telemar T Familijna S.A. Telluride Cablevision, Inc. The Associated Press The Boeing CompanyThe Cirrus Group, Inc. The Dream Family Network The Dream Family Network Angels Broadcasting Co. Torneos y Competencias Tower Communications Group, Inc. Turner Broadcasting International Turner Broadcasting Systems Turner Broad of Engineers U.S. Dept of Energy U.S. Dept of Justice - FBI U.S. Geological Survey U.S. Naval Observatory UNAVCO/UCAR Unique Promotions Unisys Corporatio UPC USA Radio Network, Inc. USA Today Live Utah State University UVTV-A, Inc. UVTV-X, Inc. VCY/America, Inc. Verestar, Inc. Viacom Inc. Viacom International, und Fernseh GmbH & Co. KG Walla Walla College WBNS WDAY-ABC WDTV WeatherVision Westdeutscher Rundfunk Westwood One, Inc. WFAA - TV - ABC WF Wolf Coach Inc. Won IK Telecom Co., Ltd. Word of God Fellowship, Inc. World Radio Network WorldCom WPBT-TV WTEN-ABC WTNH - ABC W SES GLOBAL Annual Report 2001 8 Geographic coverage 9356 SES A&R pp1-11 a/w 26/6/02 3:30 pm Page 9

Your Satellite Connection • the Columbia satellites, providing to the World transatlantic and transpacific links SES GLOBAL Through its operating companies between continents. and strategic partners, SES GLOBAL offers the world's largest In addition, SES GLOBAL holds satellite fleet – a unique interests in other satellites through communications network partnerships and investments: spanning the globe, situated in • the AsiaSat satellites, covering prime orbital slots and covering Asia-Pacific; the Earth’s landmasses. • AAP-1, operated by AMERICOM ASIA-PACIFIC, covering Asia; The spacecraft fleet which is fully- • the SIRIUS satellites, covering owned by SES GLOBAL includes: Europe and specifically the Northern • 17 AMERICOM satellites and Eastern European regions; optimised for the coverage of • Nahuel-1, covering Argentina and North and South America; the rest of Latin America; • 12 spacecraft of the ASTRA • the Brasilsat satellites, operated by Satellite System, Europe’s leading Star One and covering Latin America. satellite system for the transmission As of December 31, 2001. of direct-to-home programming; (continued on page 11)

ces, Inc. AlasConnect Allen Communications Alphameric Red Onion Limited American Assn of Airport Executives American Family Assoc. American Family Mutual chnologies, Inc. Arirang TV Arkansas Radio Network Armer Communications Engineering Sv Arrowhead Space & Telecom., Inc. Arte Asia Plus Productions Co. Ltd. orts ATEC Contracting Agency Atlanta International Teleport, Inc Atlantic Telecommunicaitons Svc. Atmospheric Systems Corporation Atos Multimedia S.A. AT-SKY zul Televisión b.i.s. Börseninformationssysteme AG B4U Banco do Brasil Bart Fox Productions, Inc. Bayerischer Rundfunk BBC Bechtel Nevada Corp. BellSouth mpany Boilermaker Sports Network Booz-Allen & Hamilton, Inc. Börsinsikt Börsdata AB British Telecom North America British Telecommunications, PLC Broadcast ellite Numérique Capital Connection/ Capital Events Capitol Radio Networks Carling Switch CBN Family (Intl Family Entertain) CBS - Newspath Dept CBS Broadcast sting Film Television Satellite Co. Ltd. China Telecom. Broadcast Satellite Christian Comm. of Chicagoland,Inc. Chunghwa Telecom Church of Spiritual Technology mbH & Co. KG CNBC Coastal Satellite, Inc. Comcast HTS Holdings, Inc. Command Audio Corporation Computer Sciences Corporation Comsat COMSAT General ms Cornerstone Television, Inc. Corporate Access Hong Kong, Ltd. Country Music Television Courtroom Television Network CQG, Inc. Crónica TV CTI Móvil D.S.I. sche Welle DFF/ MPE Deutsches Friseur Fernsehen GmbH & Co. KG Digital Cable Radio Assoc. Discovery Communications Discovery Communications Europe TH DynCorp Information Systems LLC E! Entertainment Eastern Microwave Ecovision Edgix Corporation Educational Information Corp.Egyptian Radio & TV Union SROC Cement Corporation Europe Online Networks EUROPEAN BROADCASTING UNION European Broadcasting Union European Navigator (ENA) European ess Corp. Finance Service Five Star Media Holdings Co. Ltd. Flextech FLIGHT 9 SATELLITE SVC INC Ford Motor Company Fox Net, Inc. FOX Network Center FOX xy Satellite Broadcasting Ltd. GANSAT/USA Today GCI Communication Corp. GE Medical Systems GE Power Systems Geocast Network Systems, Inc. GLENTEL, tions, Inc. Government Agencies Grundig GSAT, Ltd. GTech Corporation GULFCOM, Inc. GWSOLUTIONS, INC. H.O.T. Networks AG Hero Satellite Services, Inc. . Home Shopping Club, Inc. Home Shopping Network Home Shopping Network en Espanol LL Hoonah.Net Hotelevision, Inc. Hughes Global Services, Inc. Hughes ight Telecommunications Integra Telecom Co., Ltd. Interlink Communications, Inc. International Broadcasting Bureau, USA Interpacket Networks, Inc. Ipricot S.A. . JSAT Corporation Justice Telecom Corp KABC-TV Kabel 1 Fernsehen GmbH KAKE - TV - ABC KATU - ABC KCNC-TV KDFW/FOX-4 Kentucky Educational Television s, Inc. KOLO - ABC Korea Telecom Kroger Co. KSAT TV KTBS - ABC KTVX - ABC KTXS - ABC KVEA TV KWBU TV KWGN TV KXLY-ABC KXTV L-3 Communications ertainment Services Linder Farm Network, Inc. Littlewoods Homeshopping Local Communications Network Local Communications Network, Inc. Lockheed Martin n, Inc. Madison Square Garden Network Matrix Dialog TV GmbH MCI McKibben Communications LLC McMaster - Carr Supply Co. Mediacom, LLC mediadesign , Inc. Ministry of Comm. & Works Ministry of Information, Kingdom of Saudi Arabia MISS TENNESSEE SCHOLARSHIP PAGEANT Mississippi Educational Brd. TV MTV Networks Europe Myawady TV N24 National Cable Satellite Corp. National Digital Television Center National Sports Partnership National Technological University x Corporation Neun Live New England Sports Network New Light Church World Outreach & Newhouse Broadcasting Corp. News 12 New Jersey NexGen stem Northrop-Grumman Nova-Net Communications, Inc. NSI Communications Systems Corp NSN Network Services NTL Telecommunications n-tv GmbH & Co. ommunications, Inc. ORB Oregon Dept. of Admin. Services ORF Orion International Holdings, Ltd. ORT International (Russia) PacAmTel LLC. Pacific Century Matrix eninsula Communications, Inc. Pennsylvania Cable Network Pensacola Christian College Personal Petroleum Communications, Inc. Planet Transmissions Services lcomm, Inc. QVC QVC Germany QVC Network, Inc. Radio America, Inc. Radio e TV Bandeirantes Radio Italia Radio One Rainbow Network Comm Inc. Rapcomm, sehen GmbH & Co. KG RTL Group RWE Powerline GmbH S4C Wales Saarländischer Rundfunk Sahara TV Sat. 1 Satelliten Fernsehen GmbH Satconxion Satellite Roebuck & Co. Sender Freies Berlin Service Merchandise Corp. SET Asia Seven Network-Australia (LA) Shared Data Networks, LLC Simply Shopping TV SITCOM Mountain, Inc. Softnet Acquisitions, Inc. Sogecable Sola Communications, Inc. Sound of Life, Inc. Southern California Edison Southern Methodist University Space r, Inc. SPRINT Supplier Disbursement SRG Sri Adhikari Brothers TV Network Ltd. STAR Group STAR Group Ltd. Starguide Digital Networks, Inc. Starnet, Inc State radio Ltd. Partnership Swedish Television (SVT) Swepet Satellit AB T&C Sports Tachyon, Inc. Talk Central Networks, LLC Talk Radio Network, Inc. TCI Development, emar Telemediana S.A. Telemundo Network Group, LLC Telenor Satellite Services, Inc. Telesat Canada Telesouth Communications Televisió de Catalunya Telewizja work Limited The Dream Network, Inc. The Learning Channel The New York Times The Spaceconnection, Inc. The Travel Channel The Weather Channel Inc. Three Broadcasting Systems, Inc. Turner Vision, Inc. TV Chile TV Job Shop TV Travel Shop TV5 TVB Europe TVB Satellite Platform Inc. U.A.E. Radio & TV U.S. Army Corps oration United Cross International, Ltd. Unitel Hellas S.A. University of California, San Diego University Of Western Ontario Univision Network Limited Part. Unysis onal, Inc. Viasat Satellite Networks Vicom Vidcom Corporation Vista Satellite Comm Inc. Viva Fernsehen GmbH & Co. KG Voice Vision International, Inc. VOX Film C WFLA TV NEWS WFTS WGNO WHTM-ABC Williams Communications Group WINEMILLER WITF, Inc. WJLA TV - ABC WLOS-TV-ABC Wold International, Inc. BC WTTV/WB4 WTVG-ABC WUSA - GANNETT WVUE TELEVISION WZZM-TV Xantic Xavier University ZDF ZDTV, LLC Zee Telefilms Ltd. ZEE TV SES GLOBAL Annual Report 2001 9 Geographic coverage 9356 SES A&R pp1-11 a/w 26/6/02 3:30 pm Page 10

SES GLOBAL and thousands SES GLOBAL: BRINGING THE WORLD OF companies and of live events ENTERTAINMENT TO 400 MILLION HOMES partners transmit on behalf of the entertainment, world’s leading sport, information broadcasters.

SES GLOBAL Annual Report 2001 10 review SES GLOBAL 9356 SES A&R pp1-11 a/w 26/6/02 3:31 pm Page 11

We connect your world. Through our Gilat Satellite Networks is a leading operations, we provide world-class provider of telecommunications SES GLOBAL satellite communications with truly solutions based on Very Small global reach and unparalleled regional Aperture Terminal (VSAT) satellite depth, while setting the highest network technology, with close to standards of operational excellence. 400,000 terminals shipped worldwide. The company also Our operating companies and partners markets interactive data broadband provide first-class, worldwide services. Gilat is listed on the broadband communications: audio- Nasdaq (GILTF). SES GLOBAL owns visual broadcasting, feeds for cable an 18.4% stake in Gilat. networks, Internet trunking and IP multicast, corporate networks, network ND SatCom is a well-established facilities and telecommunications provider of satellite-based services. We offer connections communication networks and Earth of the highest quality through a truly stations in Europe. ND SatCom is global network of spacecraft. reviewed on page 17 of this report.

SES GLOBAL sets the benchmark for A focus on quality high-quality broadband connectivity to This world-class satellite network deliver news and information, sports provides superior service quality, and entertainment, Internet content specifically through the full back-up and data services across continents capacity of the ASTRA Satellite and all around the world – to bring System and the excellent track people together and share information record in the management of the as never before. AMERICOM fleet. Both fleets offer outstanding reliability, illustrated SES GLOBAL was born out of the through a network availability rate combination of ASTRA, Europe’s in excess of 99.99%. leading provider of satellite capacity for direct-to-home reception, and Both SES ASTRA and SES AMERICOM, one of the premier AMERICOM have pioneered Fixed Satellite Services operators technological solutions to serve their based in the U.S. SES AMERICOM customers – enabling the creation and SES ASTRA are the operating of direct-to-home services in Europe, companies of SES GLOBAL, which, pioneering satellite co-location, as a group management company, optimising orbital slot and frequency provides strategic guidance, financial spectrum management, creating resources and access to services. unrivalled back-up and security

SES GLOBAL – a network of systems, introducing three-axis strong regional operators stabilised spacecraft and frequency In addition to SES AMERICOM and reuse to increase transmission SES ASTRA, we rely on a network capacity, and developing in-orbit of partners in which SES GLOBAL spacecraft sparing. has interests: AsiaSat, AMERICOM ASIA-PACIFIC, Nordic Satellite AB Statement on the environmental (NSAB), Nahuelsat and Star One. impact of SES GLOBAL activities These satellite operators are leaders As a satellite communications in their respective markets, providing provider, SES GLOBAL’s activities their customers with outstanding are office and technology-based service, highest audiences and and have a limited direct impact unrivalled market expertise. on the natural environment. SES GLOBAL enables global GLOBAL respects the following coverage. 95% of the world’s environmental guidelines: population live within the footprints • comply with the statutory of the satellites of our operating requirements and regulations companies and network of partners. applicable in the countries of the company’s operations; This unique network of premier • promote the most efficient use satellite operators creates single- of energy and natural resources; point global access for broadcasters, • limit the amount of radiation multimedia service providers and emitted from the company’s businesses: content can be fed into Earth stations; any or all of the satellite systems of • recycle as much waste material the SES GLOBAL companies to be as possible; distributed across the globe, • dispose of any hazardous materials reaching in excess of 400 million that were employed in the most homes worldwide. environmentally-friendly way; • apply best practice to outsourced Participations in technology activities such as the manufacturing companies and launching of spacecraft; SES GLOBAL holds participations in • encourage staff to adopt satellite technology companies Gilat environmentally-friendly attitudes Satellite Networks Ltd. and ND SatCom. in their professional activities.

SES GLOBAL Annual Report 2001 11 review SES GLOBAL 9356 SES A&R pp12-17 a/w 26/6/02 2:42 pm Page 12

Unmatched channel diversity transponder for analogue distribution SES ASTRA At year-end 2001, ASTRA via ASTRA at 19.2° East, in addition An SES GLOBAL Company transmitted more than 1,100 audio- to its existing digital capacity. visual broadcast channels from leading European and international RTL Shop, the German-language broadcasters to Europe’s main home shopping channel, launched language markets. ASTRA delivers its analogue service for the German- a choice of TV and radio channels language market via ASTRA at unrivalled by any other transmission 19.2° East. infrastructure. In addition, ASTRA connects residential and business MTV2 – the Pop Channel launched users to the most exciting mix of its service in analogue on ASTRA at information and entertainment, the 19.2° East. At year-end 2001, ASTRA most varied Internet-based content carried four 24-hour music channels as well as the most powerful (MTV, MTV2, VIVA and VIVA ZWEI) corporate data networks. as both analogue and digital free-to- air services. Highlights 2001 • Total number of broadcast services Channel D, operator of a general increased from 1,072 to 1,102. entertainment pay-TV channel and • Digital services grew strongly, a free-to-air radio channel which while analogue services for the UK targets German-language audiences and Irish markets were phased out. outside Europe, contracted for • Additional capacity contracted transatlantic transmission and for the UK and continental distribution capacity over the European markets. Americas with SES ASTRA. Channel • Ongoing development of D uses satellite capacity provided interactive services. on SES AMERICOM satellites.

During the year 2001, the total RTBF, the French-language number of broadcast services Belgian public service broadcaster, transmitted via the ASTRA satellites contracted capacity for the Europe- at 19.2° East and 28.2° East wide free-to-air distribution of the increased by 30 to 1,102. The RTBFSat satellite channel in digital continued channel growth was via ASTRA at 19.2° East. The service driven by the sustained development was launched in November 2001. of digital services, which increased by 90 at both orbital positions. At the In cooperation with Canal+ same time, the number of analogue Technologies, SES ASTRA launched

ASTRA: THE HOTTEST SHOW IN SPACE OVER EUROPE

services decreased, as analogue a DVB-MHP version of the ASTRA transmissions were phased out in Mosaic, one of the first DVB-MHP the UK. At year-end 2001, ASTRA applications. The ASTRA Mosaic, transmitted 48 analogue channels available since March 2001, is an on behalf of broadcasters targeting on-screen guide providing an the German-language and other overview of the increasing choice continental European markets. of free-to-air digital channels on ASTRA at 19.2° East and enables In 2001, ITV Networks Ltd concluded viewers with DVB-MHP reception a 10-year capacity agreement for equipment to access the services three ASTRA transponders at 28.2° via the ASTRA Mosaic navigation. East to broadcast digital services to audiences in the UK. Following the Telewizja Familijna S.A. of Poland launch of ITV services on ASTRA contracted for one analogue in November 2001, ASTRA now transponder on ASTRA at 19.2° carries all the major British public East for the free-to-air distribution and commercial terrestrial network of TV PULS throughout Europe. TV services: BBC 1, BBC 2, ITV1, The analogue distribution, available Channel 4 and Channel 5, in addition since June 2001, completes the to the bouquet of channels provided already existing digital offer of by BSkyB. TV PULS on ASTRA.

Kingston Inmedia contracted one The Luxembourgish Parliament transponder on ASTRA at 28.2° East contracted for digital capacity on to provide satellite distribution ASTRA at 19.2° East for the live services and to secure its long-term transmission of its public sessions continuity of service for independent in free-to-air across Europe. digital TV and radio channels. During the year, dbc, a UK-based B1, a regional channel of Sender company which had contracted for Freies Berlin, broadcast from Berlin, digital capacity on ASTRA at 28.2° Germany, contracted for one East, ceased operations.

SES GLOBAL Annual Report 2001 12 Operational review SES ASTRA 9356 SES A&R pp12-17 a/w 26/6/02 2:43 pm Page 13

Superior quality SES GLOBAL: THE QUALITY GROUP through full backup systems and outstanding fleet management. 9356 SES A&R pp12-17 a/w 26/6/02 2:43 pm Page 14

ASTRA-NET revenue growth The ASTRA Broadband Interactive SES ASTRA The ASTRA-NET one-way broadband System (BBI), the first pan-European An SES GLOBAL Company services, IP File Delivery, IP commercial broadband satellite Streaming and High Speed Internet service to use Ka-band frequencies, continued to increase their revenue entered commercial service in contribution to the overall results of November 2001. BBI has been under SES ASTRA. These services shape development by SES since 1997. BBI the development of broadband and is the first commercial application of interactive applications and have the Digital Video Broadcast Return become an important element in the Channel via Satellite (DVB–RCS) overall product and services portfolio standard. It enables users to of SES ASTRA. contribute data and media-rich content at transmit rates of up to Highlights 2001 2Mbit/s via ASTRA to a hub for • New service provider contracts multicast distribution via satellite signed. at speeds of up to 38 Mbit/s. • Additional ASTRA-NET platforms A fully redundant hub has been installed. installed at SES ASTRA’s • Commercial phase launched for headquarters in Betzdorf. Neo, interactive services. a provider of interactive broadband solutions in Spain, signed up in At year-end, 51 customers from December 2001 as the first A eight European countries contracted commercial customer for the for ASTRA-NET services. Out of BBI service. these, 16 customers were running B broadband satellite trials for services C scheduled for launch in 2002.

ASTRA-NET leveraged on the high brand value of ASTRA by offering, besides its well-accepted business to business solutions, infrastructure Reception modes in Europe1 and satellite IP services to consumer Year-end 2001 in millions TV households and residential markets. Deutsche ASatellite DTH/SMATV 40.59 million (19.3%) Telekom contracted for the provision BTerrestrial only 105.15 million (50.0%) of ASTRA-based digital subscriber CCable 64.53 million (30.7%) line (DSL) services for the German Base: 210.27 million TV households in Europe market. The commercial launch of Source: SES/ASTRA, Satellite Monitors the service is expected in Q2, 2002.

The ASTRA-NET software was licensed for the integration into Siemens AG’s IP/DVB receiver hardware.

Two additional ASTRA-NET platforms were installed in 2001.

Xantic contracted for a complete IP broadband platform, which is operating in Hilversum, the Netherlands.

Star One’s ASTRA-NET service network became operational in Rio de Janeiro, Brazil.

An agreement was also concluded with JSAT, Japan’s satellite operator, to enable the distribution of content between Japan and Europe, using the ASTRA-NET platform.

SES GLOBAL Annual Report 2001 14 Operational review SES ASTRA 9356 SESA&Rpp12-17a/w26/6/022:43pmPage15

92 29.50 11.22 Total 40.72 93 33.75 15.43 Total 49.17 94 36.59 19.99 Total 56.58 95 39.60 21.73 Total 61.33 96 44.00 22.97 Total 66.97 97 1.24 1.94 45.74 24.78 98 2.62 3.58 97 48.03 26.51 Total 70.52 99 5.87 7.67 98 49.68 28.25 Total 74.54 00 10.05 12.69 99 56.57 30.94Total 77.93 01 13.99 16.89 00 57.65 Total33.67 87.51 in millionhomes in Europe ASTRA coverage Satellite Monitors Sources: SES/ASTRA, in millionhomes in Europe in digitalsatelliteTV ASTRA coverage 01Satellite Monitors Source: SES/ASTRA, Total 91.32 homes DTH&SMATV Cable To ASTRA digitalhomes tal digitalsatellite 1 1 At year-end 2001,82.9%ofallDTH by 2.7million(+8.8%)to33.7million. home (DTH)reception,whichgrew was particularlystrongindirect-to- million homesor4.3%.Theincrease This representsanincreaseof3.8 East. and28.2° 19.2° via theASTRASatelliteSystemat and broadbandservicestransmitted received audio-visualbroadcast 91.3 millionhomesinEurope At year-end 2001,morethan ASTRA leadstheEuropeanmarket main growthdriver. • Europe (+39.2%). audience upat14.0millionhomesin • in Europe(+4.3%). 91.3 millionASTRAreceptionhomes • Highlights 2001 audiences inEurope. and serviceproviderstargeting value ofitsservicetobroadcasters system, focusedonenhancingthe Europe’s leadingbroadcastsatellite This confirmsASTRA’s positionas to 91.3millionin30countries. ASTRA SatelliteSystemincreased The numberofhomesservedbythe within itsEuropeanfootprint. growth inthemarketslocated experience sustainedaudience In 2001,ASTRAcontinuedto Sustained audiencegrowth 41.6% ofASTRA’s totaldirect-to- Digital receptionnowaccountsfor (+330,000) andItaly(+210,000). France (+470,000);Spain (+1.7 million);Germany(+500,000); growth marketswere:theUK ASTRA’s maindigitalaudience at 82.9%,upfrom79.3%in2000. of marketplace. ASTRA’s marketshare audience increaseinthedigital smaller markets,arefuellingASTRA’s as thelaunchofnewservicesin in Europe’s majormarkets,aswell The successofdigitalbroadcasts compared tothepreviousyear. an increaseof3.9million(+39.2%) received digitalservicesviaASTRA, end 2001,atotalof14millionhomes increase indigitalreception.Byyear- audience isdrivenbytheongoing The overallgrowthofASTRA’s fuelled bydigitalservices ASTRA’s audiencegrowthis increased by1.1 millionhomes(+1.9%). services throughcablenetworks Reception ofASTRA-transmitted and Italy(+150,000). (+450,000); Spain(+350,000) France (+540,000);Germany reception weretheUK(+1.2million); Major growthmarketsforDTH transmitted byASTRA. homes inEuropereceivedservices Digital servicescontinuedtobethe ASTRA’s digitaldirect-to-home T digital receptioninEuropestands otal audienceincreasedto 1 1 online: 30.8%). average TVhouseholds(PC:45.1%; is significantlyhigherthaninthe having anonlineconnection(46.5%) homes owningaPC(62.3%)and proportion ofASTRAdigitalsatellite emerging applications.The of homespreparedforthese sector isreflectedinthenumber ASTRA’s strongpositioninthis data-rich contentandservices. solutions tomeetthedemandfor broadband multimediaviasatellite ASTRA isactivelydeveloping access in2001. homes usedbroadbandInternet wide, morethan5milliononline strong growthin2001.Europe- this marketsegmentexperienced off moreslowlythanexpected, Despite broadbandreceptiontaking by 4.2millionor33.1%. digital satellitereceptionincreased reception modeinEurope.In2001, satellite isthepreferreddigital 71.8%, or16.9millionhomes, in 2000.Withamarketshareof European TVhomes,upfrom8.1% This represents11.2%ofall in Europereceiveddigitalservices. At year-end 2001,23.5millionhomes in Europegrowsstrongly The digitalreceptionmarket analogue channelline-upremains. and Switzerlandwhereastrong 13.7 millionareinGermany, Austria analogue ASTRAreceptionhomes, 2000. Ofthe19.7millionremaining home households,upfrom32.5%in In 30countries:Austria,Belarus,Belgium,Bulgaria, Spain, Sweden,Switzerland,Ukraine,UK. Poland, Portugal,Romania,SlovakRepublic,Slovenia, Latvia, Lithuania,Luxembourg,Netherlands,Norway, France, Germany, Greece,Hungary, Ireland,Italy, Croatia, CzechRepublic,Denmark,Estonia,Finland, 9356 SES A&R pp12-17 a/w 26/6/02 2:43 pm Page 16

Satellites spreading their wings At December 31, 2001, SES ASTRA In addition to the up-link services During 2001, the Company further had two spacecraft under that SES ASTRA provides for its expanded the space segment on the construction: ASTRA 3A, which was customers, the Company’s engineers ASTRA Satellite System, while launched in March 2002, will replace also conduct thorough “quality further enhancing the back-up ASTRA 1D at 23.5/24.2° East; and control” on the transmission capabilities of the system. ASTRA 1K, a hybrid Ku/Ka-band services. Digital and analogue spacecraft slated for launch in the network performance is constantly Highlights 2001 third quarter of 2002 and providing checked and monitored, in order • Two satellites – ASTRA 2D replacement capacity for ASTRA 1B, to guarantee top-quality service and ASTRA 2C – entered additional back-up capacity and at all times. operational service. extended coverage reach at • ASTRA 1D commenced operation 19.2° East. The people who make it happen at third orbital location at 23.5°/ At year-end 2001, the company 24.2° East. At year-end 2001, the ASTRA employed 385 staff in SES ASTRA’s • ASTRA 1A was retired from its Satellite System consisted of 12 headquarters in Betzdorf, 19.2° East position and was satellites, of which seven were Luxembourg, in the affiliate ASTRA redeployed at 5.2° East. co-located at 19.2° East, three were Marketing companies in France, • Unrivalled network availability. co-located at 28.2° East, one was at Germany, Poland, Spain and the 23.5/24.2° East and one at 5.2° East. UK, and in SES Multimedia. The ASTRA 2D spacecraft, Out of a total of 193 marketable launched on December 19, 2000, transponders on the ASTRA Satellite Originating from 24 nations, the entered operational service on System at 19.2°, 28.2° and 23.5/24.2° SES ASTRA staff create a uniquely February 1, 2001. ASTRA 2D is East, SES ASTRA had contracted 159 multicultural professional the 11th satellite in the ASTRA (or 82%) at year-end. In addition, SES environment, with a broad base of fleet and the third satellite to be ASTRA also provided capacity via technical and commercial expertise permanently positioned at ASTRA 1A in inclined orbit at 5.2° at the service of customers. 28.2° East, where up to 56 East, via the steerable beams on transponders can be activated ASTRA 2B at 28.2° East for use for transmissions to the UK outside Europe, and at 28.5° East on and Ireland. leased capacity.

The ASTRA 2C spacecraft was Over the year, transponder launched in June 2001 and entered availability across the entire system operational service at 19.2° East was 100%. Earth station availability on September 1, 2001. With 32 was 99.99%. This high level of transponders that can be operated achievement is testimony to on 56 different frequency channels, ASTRA’s operational excellence, ASTRA 2C provided follow-on which has become a benchmark in capacity for ASTRA 1A and the industry.

strengthened the intersatellite At its Betzdorf headquarters, SES back-up capacity at 19.2° East. ASTRA operates a state-of-the-art ground control facility which ranks ASTRA 1D, which had been among the most modern in the operating at 28.2° East between world. The infrastructure includes the December 1999 and February 2001, Satellite Control Facility, the Digital was transferred to the 23.5/24.2° Transmission Facility, the ASTRA- East orbital slot, where it NET Network Operations Centre, the commenced operational service in Broadband Interactive Hub, the back- August 2001. The spacecraft is up satellite control facility, the currently providing interim capacity telecommunications tower and until the start of service of ASTRA the power plant. 3A at 23.5° East. This spacecraft, which was launched on March 29, In 2001, a new Satellite Operations 2002, is scheduled to provide follow- Centre, with the capacity to monitor on capacity for the DFS1 Kopernikus and operate up to 24 satellites and spacecraft, operated on behalf of representing an investment of EUR Deutsche Telekom. Part of the 4.5 million, was brought into service. satellite’s capacity is marketed SES ASTRA also officially inaugurated directly by SES ASTRA. its new administrative building, an investment of EUR 26.7 million. As of January 2002, ASTRA 1D carried cable feeds of TV and The Betzdorf ground control facility radio channels for the German- monitors the ASTRA satellite fleet language market. 24 hours a day, 365 days a year. Each satellite is continuously tracked ASTRA 1A, launched in December and controlled to ensure optimum 1988, ended its operational life at performance for SES ASTRA’s 19.2° East. Since August 2001, the customers. Station-keeping satellite is no longer in use at 19.2° manoeuvres are performed East and currently operates in periodically in order to maintain the inclined orbit at 5.2° East to provide accurate alignment of the satellites occasional use services. In this at their assigned orbital positions. operation mode, the satellite is Careful spacecraft management has estimated to have a useful lifetime enabled SES ASTRA to maximise the until 2005. lifetime of its satellites.

SES GLOBAL Annual Report 2001 16 Operational review SES ASTRA 9356 SES A&R pp12-17 a/w 26/6/02 2:43 pm Page 17

SES ASTRA Participations Netsystem.com ND SatCom Netsystem.com, incorporated ND SatCom Gesellschaft für in Milan, Italy, provides Internet Satelliten-kommunikationssysteme broadband connection services mbH is a well-established provider to Italian PC end-users, using the of satellite-based communication ASTRA-NET platform. networks and Earth stations in Europe, delivering innovative At year-end 2001, Netsystem.com solutions to telecom, Internet, offered broadband Internet broadcast, enterprise, government connections via satellite to and military customers worldwide. more than 33,000 users in Italy, positioning the company as the ND SatCom’s product portfolio second residential broadband includes broadband MF-TDMA- operator in the country. based corporate networks, DVB- RCS IP networks, DVB-based data At year-end 2001, SES ASTRA broadcast networks, TV up- and owned a 4.95% stake in downlink stations, satellite news- Netsystem.com. The company gathering vehicles, managed employed 90 staff. In March 2002, contribution networks, broadcasting SES ASTRA increased its equity components, control stations and stake in Netsystem.com to 15%, military turnkey solutions. through an additional capital injection of EUR 1.5 million. ND SatCom has more than 20 years of experience in the satellite networks and systems business. The company employed more than 280 staff at year-end 2001.

SES ASTRA holds a 10% stake in ND SatCom, the remaining equity being held by AUGUSTA Technologie AG of Frankfurt, Germany.

ND SatCom Gesellschaft T +49 7545 9390 Netsystem.com T +39 02 62 495 1 für Satellitenkommuni- F +49 7545 939 8780 S.p.A. F +39 02 62 495 660 kationssysteme mbH www.ndsatcom.com Via Turati, 32, www.netsystem.com 88039 Friedrichshafen I-20121 Milano Germany Italy

SES GLOBAL Annual Report 2001 17 Operational review SES ASTRA 9356 SES A&R pp18-27 a/w 26/6/02 3:04 pm Page 18

SES GLOBAL many businesses SES GLOBAL: TRANSFERRING CORPORATE companies for whom speed DATA WHERE AND WHEN IT’S NEEDED provide the and reliability of satellite networks information is at the core of essential. 9356 SES A&R pp18-27 a/w 26/6/02 3:04 pm Page 19

Since the dawn of the space age, Lifetime Entertainment Services SES AMERICOM AMERICOM has pioneered the will use AMC-11 to deliver its An SES GLOBAL Company development of satellite distribution programming dedicated to women services and technologies with an that currently reaches over 80 million unwavering focus on the customer. households across the U.S. It is groundbreaking programming such In 2001, that customer-first as Lifetime’s that established the commitment yielded solid results industry’s leading cable that include: neighbourhood and will be renewed • securing anchor programmers with the 2004 inauguration of service on AMC-10 and AMC-11, the next on AMC-10 and AMC-11. generation cable neighbourhood; • starting fourth generation services Both AMC-10 and AMC-11 will at 139° West on AMC-8; carry The Weather Channel’s • successfully transitioning meteorological news and information AMERICOM from GE to to 80 million cable households, SES GLOBAL; watched daily by business and • adding capacity and presence for holiday travellers, weekend increased international business; sportsmen, even students, who • establishing AMERICOM depend on weather forecasts and Government Services (AGS), updates to plan their days and dedicated to U.S. government- weeks. The Weather Channel is the related markets. premier service providing in-depth coverage of weather information Establishing the next generation within the U.S. and around the world. cable neighbourhood Throughout 2001, SES AMERICOM iN DEMAND will depend on both successfully built the foundation for AMC-10 and AMC-11 for its pay-per- the next generation cable view network that delivers top-rated neighbourhood aboard satellites box office movies, sporting and AMC-10 and AMC-11. Planned for entertainment events to 29 million operation in 2004, each spacecraft homes across the U.S. iN DEMAND has 24 C-band transponders (36MHz) cited the company’s unparalleled and higher levels of redundancy and launch success record, excellence greater power than the spacecraft in satellite operations, flexibility and they are replacing. SES AMERICOM customer commitment in choosing signed multi-year, multi-transponder SES AMERICOM’s cable agreements with many leading neighbourhood as its programming programmers: Viacom, C-SPAN, delivery platform.

UNRIVALLED CUSTOMER COMMITMENT

Court TV, iN DEMAND, Lifetime Do-it-yourselfers will never have to Entertainment, Scripps, and The worry about missing their favourite Weather Channel; they will use informative series. Scripps Networks AMC-10 at 135° West and AMC-11 will use AMC-11 to deliver its at 131° West to deliver well-known popular programming, including channels as well as to introduce new Home & Garden Television, the Food programming services. Network, DIY Do It Yourself Channel, and Fine Living, channels that will SES AMERICOM’s agreement with reach more than 80 million homes. Viacom, Inc. ensures that viewers of Showtime, The Movie Channel, MTV, Exceeding transition expectations VH1, TV Land and Nickelodeon will while reaching business goals never miss one of their favourite The official start-of-service on AMC-8 shows. The transition to AMC-10 and on a crisp March day was symbolic AMC-11 will mean enhanced and of SES AMERICOM’s overall uninterrupted services for Viacom’s performance in 2001 --- a top- distributors. The increased power of performing spacecraft, Satcom C-5, the new satellites will enable Viacom was retired and replaced with the to introduce new and advanced transition of all services to AMC-8. digital applications, including high At the end of the same month, the definition television, subscription transition of AMERICOM from GE video-on-demand, streaming media ownership to SES GLOBAL was and interactive TV. kicked off. Concluding with the acquisition on November 9, the Washington, D.C.-based C-SPAN will process was seamless and, most use follow-on C-band transponder importantly, customers’ services capacity on AMC-10 and AMC-11 to continued transparently. distribute their political programming and governmental coverage currently reaching over 80 million U.S. households. AMC-11 will be Court TV’s home for distribution of its crime- and justice-focused programming into 60 million cable homes across the U.S.

SES GLOBAL Annual Report 2001 19 Operational review SES AMERICOM 9356 SES A&R pp18-27 a/w 26/6/02 3:04 pm Page 20

Satcom C-5 was retired following Ku-band service ideal for VSAT SES AMERICOM nearly a decade of dedicated operators throughout India. An SES GLOBAL Company telecommunications service delivered by AT&T Alascom to In 2001, SES AMERICOM expanded residents and businesses of Alaska. its Pacific Ocean Region (POR) The citizens and communities of C-band transponder inventory to the state of Alaska depend on the accommodate the growing demand specially designed beams on the for transpacific connectivity. In March, satellite for both interstate and Spacenet 4 was moved from the intrastate telephony services. North American orbital arc to 172° Whether an Alaskan resides on East and its C-band payload began the tiniest Aleutian island or in the operations, adding 18 transponders heart of Juneau, their telephone to the 12 provided by the TDRS-5 connection is relayed via our satellite from 174° West. Primary satellite. AMC-8 is the fourth delivery functions for both satellites generation spacecraft designed include Internet and data services. to address this specialized telecommunications requirement. Communications Systems–West, a division of L-3 Communications, In addition, Satcom C-5 was signed up for bandwidth and services recognized as the home of enabling L-3 to provide high data rate America’s premier radio services communications transmissions neighbourhood, with more than 100 between Hawaii and Korea with distinct channels. More than 6000 broadband data services aboard SES stations receive programming from AMERICOM’s Spacenet 4 satellite. the satellite around the clock. AMC-8 In addition to the satellite bandwidth, continues this illustrious heritage of our Sunset Beach Teleport on the service to radio broadcasters as it north coast of Oahu, Hawaii is officially began operation at 139° providing uplink/downlink services West in March 2001. to complete the connections.

Of the 384 marketable transponders SES AMERICOM’s Spacenet 4 and on AMERICOM satellites, 305 or South Mountain, California teleport 79% were utilised at year-end 2001. have teamed up to provide Worldcom and Corporate Access, a International business on the rise Pacific Century Cyberworks (PCCW) The launch of service on AAP-1 company, with two-way, high signalled the business inauguration bandwidth satellite Internet access of AMERICOM ASIA-PACIFIC, the between Taiwan and the U.S. In

joint venture between SES addition to the duplex DS3 channel AMERICOM and Lockheed Martin, capacity on Spacenet 4, the southern with a string of significant business California teleport is providing uplink, agreements in 2001. downlink and Internet backbone interface to complete the connection AAP-1, a powerful Ku-band satellite between Taiwan and the U.S. located at 108.2° East, provides service via three beams to greater SES AMERICOM signed two China, south Asia including India and significant cooperative agreements northeast Asia and the Philippines. in 2001 which will provide enhanced The spacecraft features 28 Ku-band services and benefits to international transponders (at 36 MHz) with customers. The first of these is with 120 watt TWTAs. AAP-1’s high- New York-based Globecomm powered beams are ideal for direct-to- Systems; the accord facilitates home, VSAT and Internet applications. access to each company’s global resources. Globecomm made a Hong Kong’s largest broadcaster, pre-launch commitment for bulk Galaxy Satellite Broadcasting (GSB), bandwidth on SES AMERICOM’s signed a deal with AMERICOM next generation transoceanic ASIA-PACIFIC to provide teleport satellites, AMC-12 and AMC-13, services to AAP-1. The teleport planned for operation in 2003. facilitates the delivery of broadband data and Internet applications, VSAT In addition, Globecomm became a network services, occasional use founding member of AMERICOM’s feeds, and SCPC and MCPC video Quality Satellite Network (QSN), a programming to cable headends, group of prestigious teleport and broadcast stations, enterprises terrestrial services providers that dot and hotels. the globe from Beijing to Bnei-Brek, from Miami to Mongolia, and from Antrix Corporation Limited signed a Nicosia to New York, offering multi-year service agreement with customers worldwide access to the AMERICOM ASIA-PACIFIC to lease best transmission services and up to three transponders on the network connections to the South Asian payload of the AAP-1 AMERICOM fleet. satellite. This bandwidth supplements INSAT’s domestic satellite fleet with

SES GLOBAL Annual Report 2001 20 Operational review SES AMERICOM 9356 SES A&R pp18-27 a/w 26/6/02 3:05 pm Page 21

Our satellite from broadcast SES GLOBAL: THE FULL SERVICE CLUB networks provide to medical data the full range of transmission. satellite services: 9356 SES A&R pp18-27 a/w 26/6/02 3:05 pm Page 22

A second co-operative agreement AGS offerings go well beyond time- SES AMERICOM with Unitel Hellas, SA, provides SES sensitive satellite links, with the An SES GLOBAL Company AMERICOM international customers capability to design, build, maintain with access to the transmission and and operate custom satellite-based telecommunications services offered networks for government agencies by Unitel Hellas. The Greek and non-government organizations. infrastructure and programme services provider, in turn, will gain AMERICOM people deliver access to the SES AMERICOM As of year-end 2001, the majority GLOBAL fleet. Unitel Hellas made of AMERICOM’s 292 employees pre-launch commitments for 36 MHz supported customer requirements of capacity aboard AMC-12, an from the company’s headquarters Atlantic Ocean region C-band in Princeton, New Jersey. 106 satellite scheduled to be operational associates populated AMERICOM’s in 2003. Unitel Hellas will use this technical facilities and sales offices next-generation capacity to deliver in dozens of U.S. states and across Greek-language entertainment the world, including Gibraltar, Mexico programming to the United States City, London, Hong Kong, and and for connectivity to the U.S. Singapore. Like the American Internet backbone. “melting pot”, SES AMERICOM employees reflect extraordinary AMERICOM Government Services diversity as well as unrivalled The formation of AMERICOM expertise that combine to offer the Government Services (AGS) puts a best in satellite communications name on a legacy of quality service solutions to customers in every that extends beyond the commercial market segment. realm. U.S. government agencies in civilian and defense-related sectors have relied on SES AMERICOM for transponder capacity and customized network solutions for more than a quarter of a century. Today, AGS refines SES AMERICOM’s customer- first philosophy with a keen understanding of our government customers’ unique satellite communications requirements.

AMERICOM Government Services is the sole operating company within the SES GLOBAL family dedicated to supporting US government-related markets. With decades of experience in areas of secure communications and information systems, the AGS team serves government agencies directly and indirectly via commercial sub-contractors and systems integrators.

AGS has long-standing contracts with numerous U.S. Federal agencies within the Departments of Commerce, Defense, Justice, Energy and Interior. We provide on-demand satellite links to facilitate mission-critical communications for both civilian and military agencies. Offering the unsurpassed resources of the SES GLOBAL fleet, AMERICOM Government Services has the capacity to provide broadband solutions around the globe.

SES GLOBAL Annual Report 2001 22 Operational review SES AMERICOM 9356 SES A&R pp18-27 a/w 26/6/02 3:05 pm Page 23

Satellites of the life, for instance SES GLOBAL: SPACE FOR LEARNING SES GLOBAL carrying distance family are part learning programmes. of the fabric of 9356 SES A&R pp18-27 a/w 26/6/02 3:06 pm Page 24

Asia Satellite 38-40 Leighton Road ASIASAT Telecommunications Hong Kong Holdings Limited T +852 2805 6666 23F East Exchange F +852 2504 3875 Tower www.asiasat.com

Asia Satellite Telecommunications Highlights 2001 The Company’s joint venture, Holdings Limited (AsiaSat) reaches • High transponder utilisation SpeedCast, continues to develop and more than two-thirds of the world’s rate achieved. adapt to the changing broadband population in Asia and the Pacific, and • Construction of a new satellite market in Asia. is Asia’s premier satellite operator. control centre initiated. • Strong cash flow maintained. In anticipation of future growth, AsiaSat provides services to both the and to accommodate the operation broadcast and telecommunications AsiaSat operates three satellites: of new satellites, AsiaSat has industry. More than 50 public and AsiaSat 1 at 122° East (in inclined purchased a plot of land in Hong private television and radio orbit), AsiaSat 2 at 100.5° East, and Kong at the Tai Po Industrial Estate. broadcasters from around the world AsiaSat 3S at 105.5° East. All three The land will be used to build a new were using the AsiaSat satellites to satellites continued to operate well satellite control centre that will also transmit more than 100 analogue throughout the year with no allow AsiaSat to offer additional and digital television channels and interruptions to service. At the end services to customers, including 90 radio channels to more than of 2001, the Company was able to uplink services, technical support 224 million homes throughout the maintain its overall transponder and MCPC (Multiple Channels per Asia-Pacific region. A variety of utilisation rate at 65% (2000: 64%) Carrier) platforms. The new centre is telecommunications customers also even in a weak market. Construction expected to be completed in 2003. use AsiaSat for public telephone work continued on AsiaSat 4, a networks, private VSAT networks, spacecraft which is scheduled to Turnover for the year ended high-speed Internet services and replace AsiaSat 1 during mid-2002. December 31, 2001 was HK$ 969 broadband multimedia services. million (2000: HK$ 1,003 million), a In the tight economic environment of decline of 3%. Excluding HK$ 41 SES GLOBAL holds 34.10% of the 2001, supply of transponders in the million from amortised 1996 Ku-band equity of AsiaSat. The company is region continued to exceed demand. sales which ended in May 2000, listed on both the Hong Kong and While demand was sustained for revenues from operations in 2001 New York Stock Exchanges. AsiaSat C-band capacity, there was a clear marginally exceeded those realised is headquartered in Hong Kong and Ku-band capacity overhang. As a in 2000. employed 80 staff in 2001. consequence, and as operators competed for a limited number of Financial highlights HK$ million new customers, transponder lease 2001 2000 rates continued to be under pressure. Revenues 969 1,003 The Company’s growth strategy EBITDA 847 875 continues to rely on both organic Net profit 563 576 growth, and on growth through Based on the company’s statutory financial statements. An SES GLOBAL Partner acquisitions and partnerships.

SES GLOBAL Annual Report 2001 24 Operational review AsiaSat 9356 SES A&R pp18-27 a/w 26/6/02 3:06 pm Page 25

Nordic Satellite AB T +46 8 505 645 00 NORDIC SATELLITE AB Vrentenvägen 10 F +46 8 28 24 80 SE-171 54 Solna www.nsab.se (NSAB) Sweden

Nordic Satellite AB (NSAB) is Highlights 2001 Enhanced sales and marketing the owner and operator of the • SIRIUS DTH audience increased efforts conducted in Eastern Europe TV/telecommunications satellites – to 600,000 homes in the resulted in new contracts signed SIRIUS 2, SIRIUS 3 and SIRIUS W Nordic countries. in 2001: Romanian TV channels (in inclined orbit), located at the • Quick transition from analogue Realitatea TV and Etno TV, and orbital positions 5° East and 13° West. to digital supported. several Ukrainian TV channels, are • New uplink stations in Riga and now carried via SIRIUS. The Company provides satellite Kiev built. capacity for TV and radio • New customers contracted. Financial data in SEK million transmissions and for various 2001 2000 applications within VSAT and Following the decision of the occasional communication and for Modern Times Group (MTG) to Revenues 591 606 broadband and Internet services, launch their digital platform on the EBITDA 77 292 primarily within the Nordic region SIRIUS Satellite System, SIRIUS and Net profit/(loss) (63) 79 but also within the Baltic countries MTG launched a joint marketing and other parts of Eastern Europe. effort to promote the new platform. Based on the company’s statutory financial statements. Public and private broadcasters have This has resulted in a short-term chosen SIRIUS as their TV and radio negative effect on the Company’s distributor. SIRIUS is also used by result. At year-end 2001, more than many broadcasters for occasional 600,000 homes were accessing the use services such as news, sports, Viasat digital platform using a small or other ad-hoc events. satellite dish.

NSAB is headquartered in In 2001, SIRIUS established Stockholm, Sweden, and had a marketing organisation and 32 employees at year-end 2001. strengthened its sales organisation both geographically and within all SES GLOBAL owns a 50% stake in product areas. NSAB, 50% of the equity is held by the Swedish Space Corporation (SSC). With ground equipment and proximity to clients becoming ever more important, SIRIUS decided to build new uplink stations in Riga, Latvia and Kiev, Ukraine. The work began in late autumn and transmissions will commence in 2002. An SES GLOBAL Partner

SES GLOBAL Annual Report 2001 25 Operational review Nordic Satellite AB (NSAB) 9356 SES A&R pp18-27 a/w 26/6/02 3:06 pm Page 26

Nahuelsat S.A. T 54 11 5811 2600 NAHUELSAT Bouchard 680, 12th Floor F 54 11 5811 2633 Buenos Aires www.nahuelsat.com.ar Argentina

Nahuelsat S.A. is the operator of the Highlights 2001 Financial highlights ARS million Argentinian Nahuel Satellite System • Fill factor on Nahuel-1 increased. 2001 2000 offering Ku-band coverage to the • Gain of full service telecom whole of Latin America up to the licences (Nahuelsat Servicios S.A.) Revenues 35 37 southern United States. • Reciprocity Agreement with EBITDA 25 30 Brazil completed. Net profit/(loss) (2) (2) The Nahuel-1 satellite, launched in January 1997, serves 50 customers Based on the company’s statutory financial statements. in Argentina, Brazil, Bolivia, Chile, USA, Peru, Paraguay and Uruguay. These customers use the service for the transmission and distribution of TV signals, telephony, Internet backbone, data transmission and direct-to-home TV.

Nahuelsat is based in Buenos Aires, Argentina and is a 100% privately owned enterprise. SES GLOBAL holds a 28.75% participation in the company.

An SES GLOBAL Partner

SES GLOBAL Annual Report 2001 26 Operational review Nahuelsat 9356 SES A&R pp18-27 a/w 26/6/02 3:07 pm Page 27

Star One S.A. Brazil STAR ONE Rua de Assembléia T +55 21 519 9116 10 sala 2201 F +55 21 519 9163 20119-900 www.starone.com.br Rio de Janeiro RJ

Star One S.A. is Brazil’s leading Star One completed its first full year The satellite will provide residential provider of satellite transponder of successful marketing operations, and business customers in remote capacity. The Company’s customers putting the finishing touches on new locations with faster and more include Embratel, television broadband products. reliable two-way access to broadband broadcasters (Globo, STB) and and Internet applications. several other corporations such In the fourth quarter of 2001, as Shell and Petrobras. Star One introduced the EasyBand During 2002, Star One plans to service, a strategic partnership with extend its services outside of Brazil Star One owns and operates the Brazilian Internet provider Universo to other countries in South America, largest C-band satellite system in Online (UOL) and Gilat as technology particularly the Mercosul nations. South America. A fleet of five partner. EasyBand provides In these countries, the Company satellites (Brasilsat B1, B2, B3, B4 residential and business end-users intends to operate through national and A2) support the full range of with full two-way access to the and regional partners with customer services including Internet via satellite. The service complementary capabilities: ISPs, broadband Internet access, telephony, targets Internet users outside equipment providers and installation broadcasting and networking. urban areas without broadband and maintenance services. access via traditional telephone Star One is also Brazil’s premier or cable connections. Financial data in BRL million satellite earth station operator, 2001 2000 with 25 years of in-orbit experience Star One also introduced the (2 months) through its ISO 9002 certified infrastructure for the launch of Revenues 314 45 Guaratiba station and Tanguà EasyCast in early 2002. This Internet back-up facility. protocol multicast service provides EBITDA 263 41 one-way transmission of streaming Net profit/(loss) 62 16 SES GLOBAL holds a 19.99% audio, video and broadband Based on the company’s statutory financial statements. investment in Star One, which was multimedia information. It is being spun off in 2000 from the satellite used for training, distance learning business unit of Embratel. and entertainment applications.

Highlights 2001 Star One also commissioned the • Revenues increased. construction and launch of the C1 • New broadband products introduced. satellite. C1 will be a leading-edge • C1 satellite commissioned. Ku-band spacecraft which is expected to be launched by 2004.

An SES GLOBAL Partner

SES GLOBAL Annual Report 2001 27 Operational review Star One 9356 SES A&R pp28-36 a/w 26/6/02 2:55 pm Page 28

SES GLOBAL SHAREHOLDERS

Voting interest Economic interest represented by represented by SES GLOBAL Shareholdings1 No of shares FDRs/Shares held FDRs/Shares held

A Shares GSH Global Satelliten-Beteiligungs-Holding GmbH (100% DTAG) 42,516,140 5.77% 7.21% DT-Satelliten-Holding-GmbH (100% DTAG) 35,068,860 4.76% 5.94% Loran Telecommunications S.A. 22,453,750 3.04% 3.81% Dresdner Bank Luxembourg S.A. 18,130,000 2.46% 3.07% Deutsche Bank Luxembourg S.A. 15,800,000 2.14% 2.68% Luxempart S.A. 13,380,000 1.81% 2.27% Trufidee S.A. 10,000,000 1.36% 1.70% Audiolux S.A. 7,910,000 1.07% 1.34% AMB Generali Holding AG 7,900,000 1.07% 1.34% Banque Générale du Luxembourg S.A. 6,182,610 0.84% 1.05% Private and other A shareholders <1% economic 8,766,370 1.19% 1.49% A shares held as FDRs (Free float) 122,232,270 16.57% 20.72% Total A Shares 310,340,000 42.08% 52.60%

B Shares BCEE 80,225,463 10.88% 5.44% SNCI 80,215,463 10.88% 5.44% Etat Grand-Ducal 85,376,910 11.58% 5.79% Total B Shares (Note 2) 245,817,836 33.33% 16.67%

C Shares GE Capital total holding 148,228,155 20.10% 25.12% State Street Bank & Trust (Note 1) 33,067,517 4.48% 5.61% Total C Shares 181,295,672 24.58% 30.73%

Total shares 737,453,508 100.00% 100.00%

1Significant shareholdings as of March 2, 2002

Note 1: Voting Trust An amount of 33,067,517 ordinary C Shares has been transferred to State Street Bank and Trust (Voting Trust) resulting in a GE Capital Voting Percentage of 20.10% and economic percentage of 30.73%. The voting trust will vote proportionate with all other shares

Note 2: Class B Shares A share of Class B carries 40% of the economic rights of an A or C share.

SES GLOBAL Annual Report 2001 28 SES shareholders 9356 SES A&R pp28-36 a/w 26/6/02 2:55 pm Page 29

BOARD OF DIRECTORS

Chairman René Steichen

Vice-Chairmen John F. Connelly Dr. Joachim Kröske Georges Schmit

Members Charles Alexander Wolfgang A. Baertz Georges Bollig Ernst Wilhelm Contzen Jean-Claude Finck Richard Goblet d’Alviella Raymond Kirsch Dr. Raphael Kübler Hadelin de Liedekerke Beaufort Luis Sanchez Merlo Denis J. Nayden Gaston Reinesch Victor Rod Christian Schaack Gaston Schwertzer Gerd Tenzer François Tesch

Observers Jean-Paul Zens Fred Arbogast

Secretary to the Board of Directors Roland Jaeger

Bureau of the Board Chairman René Steichen

Vice-Chairmen John F. Connelly Dr. Joachim Kröske Georges Schmit

Members Wolfgang A. Baertz Richard Goblet d’Alviella Raymond Kirsch François Tesch

Audit Committee Chairman René Steichen

Members Ernst Wilhelm Contzen Gaston Reinesch Christian Schaack

Compensation Committee Chairman René Steichen

Members John F. Connelly Dr. Joachim Kröske Georges Schmit

SES GLOBAL Annual Report 2001 29 Board of Directors 9356 SES A&R pp28-36 a/w 26/6/02 2:55 pm Page 30

ANNUAL ACTIVITIES REPORT OF THE BOARD OF DIRECTORS SES GLOBAL S.A. and Société Européenne des Satellites S.A.

1. SES GLOBAL S.A. The year 2001 was dominated by the conclusion and the implementation of the Americom transaction between SES GLOBAL S.A. and General Electric Capital Corporation (GE Capital). Through this transaction, SES GLOBAL acquired 100% of GE Americom stock and other assets, and became the owner of the entire stock of SES ASTRA S.A., thus creating the world’s premier satellite services provider. The agreements with GE Capital were signed on March 27, 2001 and closing occurred on November 9, 2001 following the completion of the regulatory authorization processes in the U.S. and in Europe.

SES GLOBAL, headquartered in Luxembourg, was incorporated on March 15, 2001 to serve as an investment vehicle for the Americom transaction and to become the follow-on company to SES S.A. at the closing of the transaction. Until November 9, 2001 SES GLOBAL was managed on a fiduciary basis, acting only on behalf of instructions given by SES S.A.

Following the commitment given by all the shareholders and by the community of FDR holders of SES S.A. to accept the transfer of their shareholding from SES S.A. to SES GLOBAL, the current structure of SES GLOBAL was incepted on November 9, 2001. A list of major shareholders is shown on page 28. SES S.A. was renamed into SES ASTRA and, together with SES AMERICOM, became a 100% owned operating company of SES GLOBAL. The organizational chart of the SES GLOBAL Group is shown on pages 2 and 3.

As at March 31, 2002, SES GLOBAL S.A. had a staff of 36 employees. The entire SES GLOBAL Group employed a total of 779 staff at year- end 2001.

At a General Meeting of Shareholders held on November 29, 2001 the Board of SES GLOBAL was appointed in the composition as shown on page 29. This Board held its first meeting the same day and elected Mr. René Steichen as Chairman, and appointed Dr. Joachim Kröske, Mr. Georges Schmit and Mr. John F. Connelly as Vice-Chairmen. The Board also set up the Bureau of the Board, the Audit Committee and the Compensation Committee. The current composition of these bodies is also shown on page 29.

The Board of SES GLOBAL held a second meeting on December 6, 2001 to approve the budget for the year 2002 and to prepare a European two-way broadband investment opportunity.

The Board of SES GLOBAL also adopted a Stock Option Plan. Accordingly the Company initiated the acquisition of own FDRs for the purpose to have them distributed to the staff. Currently the Company owns 2,544,190 FDRs and 100,000 A Shares are owned by SES ASTRA.

The Executive Committee of SES GLOBAL, in charge of the daily management of the Company, is composed of Mr. Romain Bausch, President & CEO, Mr. Robert Bednarek, Executive Vice President, Corporate Development, Mr. Ferdinand Kayser, President & CEO of SES ASTRA; Mr. Dean Olmstead, President & CEO of SES AMERICOM; and Mr. Jürgen Schulte, Chief Financial Officer.

SES GLOBAL Annual Report 2001 30 Annual activities report of the Board of Directors 9356 SES A&R pp28-36 a/w 26/6/02 2:55 pm Page 31

2. Société Européenne des Satellites S.A. During 2001, the Board of SES S.A. held nine meetings. Those meetings were preceded by meetings of the Bureau of the Board to contribute to the preparation of the deliberations and decision-making processes of the Board. The Audit Committee and the Compensation Committee were convened according to the needs determined by the Board.

SES ASTRA continued its operations under the Concession Agreement concluded with the Luxembourg Government. In 2001 the Concession Agreement was updated and its term was extended until the end of 2021. In addition the annual payment of a franchise fee was replaced by the lump sum payment of an amount covering the entire concession period (EUR 550 million). This amount has been capitalized as an intangible asset by SES ASTRA.

The following part of the report is dedicated to the development of the satellite fleet, the overall market situation and the service diversification. It is identical to the description of the activities of SES ASTRA published in this document on pages 12 to 17. The reader is kindly requested to refer to those pages.

Human Resources At year-end 2001, SES ASTRA employed 385 staff originating from 24 nations.

Other matters The lawsuit filed by Mr. Whitehead against SES S.A. in Luxembourg, related to the pay-out of dividends for his founder shares, was dismissed by a court order of the Commercial Court in Luxembourg on January 26, 2001. Mr. Whitehead lodged an appeal against this court order. The Court of Appeals of Luxembourg is expected to hear the case at the end of May, 2002. A Court decision is expected in June-July 2002.

The Board of Directors considers that the Company’s business has developed favorably during the year 2001 and wishes to thank Management and all the employees of the Company for their contribution and dedication, which made these results possible.

SES GLOBAL Annual Report 2001 31 Annual activities report of the Board of Directors 9356 SES A&R pp28-36 a/w 26/6/02 2:55 pm Page 32

Ferdinand Kayser Romain Bausch EXECUTIVE COMMITTEE President and CEO President and CEO SES ASTRA SES GLOBAL

SESESS GLOBALGLOBAL AnnualAnnual ReportReport 20012001 3232Executive Committee 9356 SES A&R pp28-36 a/w 26/6/02 2:56 pm Page 33

Dean Olmstead Robert Bednarek Jürgen Schulte President and CEO EVP Corporate Development Chief Financial Officer SES AMERICOM SES GLOBAL SES GLOBAL 9356 SES A&R pp28-36 a/w 26/6/02 2:56 pm Page 34

MANAGEMENT DISCUSSION AND ANALYSIS

20013 20011 2000 2 Group excluding Group Group SES AMERICOM EUR million EUR million EUR million Group revenues 978.2 835.9 897.6 Staff costs (47.2) (38.9) (40.9) External and other operating charges (139.3) (100.0) (132.1) Exceptional income 2.9 11.7 2.9 EBITDA 794.6 708.7 727.5 EBITDA margin in % 81.2% 84.8% 81.1% Depreciation (203.8) (179.0) (181.4) Amortisation (66.5) (13.1) (42.8) Operating profit 524.3 516.6 503.3 Net financing charges4 (68.6) (27.6) (48.3) Profit on ordinary activities 455.7 489.0 455.0 Taxes (112.6) (185.0) (100.3) Share of associates’ result (9.8) (6.6) (9.8) Profit attributable to minority interests (53.0) (52.9) (53.0) Profit of the Group 280.3 244.5 291.9 Net profit margin in % 28.7% 29.2% 32.5% Capital expenditure 432.3 254.3 371.1 Net operating cash flow 682.4 422.6 599.8 Net debt 3,140.0 834.6 867.7

2 The prior year comparative figures are taken from the consolidated profit and loss account of Société Européenne des Satellites S.A. as at December 31, 2000.

3 These figures exclude the impact of the acquisition of SES AMERICOM, which was effected on November 9, 2001.

4 Net financing charges for 2001 include value adjustments of EUR 20.8 million.

Changes in Group structure and accounting treatment of participations The financial results for the year ended December 31, 2001, include the first time consolidation of SES AMERICOM, which is fully consolidated in the SES GLOBAL results from the date of acquisition (November 9, 2001) to December 31, 2001.

The results of the Group’s 50% joint venture Nordic Satellite AB (“NSAB”) are this year reflected in the results for the whole year compared to just the three month post-acquisition period in 2000. On November 9, 2001, within the framework of the SES AMERICOM acquisition, the Group acquired a 50% shareholding in AMERICOM Asia-Pacific LLC which is proportionally consolidated as of that date.

As of November 9, 2001, the results of Star One S.A. (Brazil) are accounted for under the equity method as described in the notes to the accounts.

Group revenues Group revenues for 2001 grew by EUR 142.3 million or 17% to EUR 978.2 million. Provision of satellite transponder and related services was EUR 962.4 million of the total compared to EUR 829.0 million in 2000. Other operating revenues were EUR 15.8 million (2000: EUR 6.9 million).

Excluding the first time consolidation of SES AMERICOM, Group revenues increased by EUR 61.7 million or 7.4%. On a similar scope basis, this increase was primarily due to: • The continued growth of digital services at 28.2° East orbital position • The commencement of services at a third orbital position • Termination payments relating to the conversion of analogue services to digital for the United Kingdom and Irish markets.

Staff costs The Group’s staff costs for 2001 were EUR 47.2 million (2000: EUR 38.9 million). Excluding the first time consolidation of SES AMERICOM, staff costs increased by EUR 2.0 million, or 5.1%, with the principle drivers being an increase in the average number of employees. The increase in headcount reflects the continued geographical diversification of the business and the development of new activities and services.

Other operating expenses (comprising external charges and other operating charges) The Group’s other operating expenses increased by EUR 39.3 million, or 39.3%, to EUR 139.3 million. Excluding the first time consolidation of SES AMERICOM, the increase was EUR 32.1 million or 32.1%.

The principal drivers of this increase were: • Rental of third party transponder capacity of EUR 18.4 million (2000: EUR 0.8 million); • An increase in bad debts expense due to certain customer insolvencies with the charge to income for bad debts in 2001 being EUR 8.6 million (2000: EUR 0.3 million).

Excluding the above two items and the AMERICOM impact, the Group’s other operating expenses increased by 6.2% mainly due to geographical and product diversification and the full year effect of NSAB.

Exceptional income The exceptional income for 2001 was EUR 2.9 million compared to EUR 11.7 million in 2000. The income in both years related to the recognition of in-orbit insurance proceeds relating to an ASTRA 1A claim made due to partial loss of capacity. The total proceeds were EUR 23.4 million and were amortized over 24 months commencing April 1, 1999.

SES GLOBAL Annual Report 2001 34 Management discussion and analysis 9356 SES A&R pp28-36 a/w 26/6/02 2:56 pm Page 35

Earnings before interest, tax, depreciation and amortization (EBITDA) EBITDA rose by EUR 85.9 million or 12.1% to EUR 794.6 million. The Group’s EBITDA margin for the year ended December 31, 2001 was 81.2%, compared to 84.8% in the previous year. The reduction was mainly due to the reduced exceptional income described above, the third party transponder rental costs and bad debt expense.

Depreciation Depreciation increased by EUR 24.8 million or 13.9% to EUR 203.8 million. The increase reflects the changes to the Group’s structure outlined above, and in particular the inclusion of EUR 22.4 million depreciation from SES AMERICOM and the impact of the full-year NSAB consolidation.

The increase in depreciation also reflects the bringing into service of ASTRA 2B, 2D and 2C (which became operational on December 1, 2000, February 1, 2001 and September 1, 2001 respectively) with ASTRA 1B being fully depreciated as of April 15, 2001. The effect of depreciation changes on these new satellites is however largely offset by the impact of the revision of the depreciation rates for certain satellites in the ASTRA satellite fleet reflecting improvements in technology and satellite performance. The change in estimated economic lives was effective from January 1, 2001 and reduced the depreciation charge by EUR 29.0 million compared to previous rates.

The Group’s satellites remain depreciated over 10 to 16 years on a straight-line basis with the estimated depreciation lives of certain satellites being extended. Specifically, the depreciation lives for ASTRA 1C and 1E were increased from 10 to 12 years, ASTRA 1F, 1G and 2A were increased from 10 to 13 years and ASTRA 1H was increased from 12 to 13 years. The change in estimate applies prospectively from January 1, 2001 with no adjustment being made to prior values.

Amortisation The amortisation expense increased by EUR 53.4 million to EUR 66.5 million. Of the stated increase, EUR 23.6 million arises from the amortisation of goodwill and other intangibles due to the acquisition of SES AMERICOM. A further EUR 26.2 million of the increase is amortisation arising on the right of usage of the Luxembourg orbital positions in accordance with the new concession agreement described in the notes. The balance of the increase arises due to the full-year amortisation of the goodwill arising on the NSAB investment and amortisation of other intangible assets acquired during the period.

The goodwill arising from the AMERICOM acquisition was USD 2,367 million (EUR 2,660 million at the closing rate) with an additional USD 517.0 million (EUR 580.9 million at the closing rate), mainly relating to orbital frequency rights and acquired transponder service agreements, identified as intangible assets. The goodwill is being amortised over 20 years with the intangible assets being amortised over a 14 to 20 year period depending on the asset.

Operating profit Operating profit increased by EUR 7.7 million from EUR 516.6 million to EUR 524.3 million, an increase of 1.5%. Excluding SES AMERICOM’s contribution to operating profit (net of goodwill amortization) of EUR 21.0 million, the operating profit declined by EUR 13.3 million or 2.6%.

The reduction in operating profit compared to the comparable prior year figure of EUR 516.6 million arises primarily due to the increased depreciation and amortisation outpacing the EBITDA growth.

Net financing charges including value adjustments on financial assets Net financing charges including value adjustments on financial assets were EUR 68.6 million versus EUR 27.6 million in 2000. The net financing charges consist of: 1. Net interest charge on borrowings to finance the SES AMERICOM transaction, previous acquisitions, and ongoing satellite procurement (net of capitalised interest) of EUR 57.4 million (2000: EUR 45.1 million); 2. Value adjustments to the carrying value of financial assets of EUR 20.8 million (2000: nil) with EUR 15.5 million relating to Netsystems.com S.p.A. and EUR 5.3 million to Kokua Communications, Inc.. 3. Other financing income, including the impact of currency translation, of EUR 9.6 million (2000 EUR 17.5 million).

Taxes The tax charge for 2001 was EUR 112.6 million compared to a tax and franchise fee charge in 2000 of EUR 185.0 million. Effective from January 1, 2001, the previous franchise fee, which was based on taxable profits and disclosed as part of the charge for taxation, was replaced by a lump sum settlement of EUR 550 million for the right of usage of the relevant orbital positions over a 21-year term. This settlement is being amortised on a straight line basis over this term.

The effective tax rate for the period was 24.7% with continued investment in the ASTRA satellite fleet resulting in investment tax credits reducing the statutory Luxembourg tax rate.

Share of associates’ result The share of associates’ result was a loss of EUR 9.8 million in 2001 compared to a share of losses of EUR 6.6 million in 2000. The share of associates results consist of losses from Speedcast of EUR 7.7 million, iBeam of EUR 3.7 million and Nahuelsat of EUR 0.1 million, with Star One contributing a share of profits of EUR 1.7 million.

Minority interests The minority interest of EUR 53.0 million relates to the 65.9% share of AsiaSat profits attributable to the other AsiaSat shareholders.

Profit of the Group The profit of the Group increased by EUR 35.8 million or 14.6% to EUR 280.3 million. The profit of the Group excluding the first time consolidation of AMERICOM increased by 19.4% or EUR 47.4 million to EUR 291.9 million. The contribution to the Group profit of SES ASTRA was EUR 282.5 million, an increase of 17.3% to the prior year. AsiaSat continued to contribute positively to Group earnings with a profit contribution of EUR 8.4 million in 2001. The Group net profit margin was 28.7% compared to 29.2% in 2001.

SES GLOBAL Annual Report 2001 35 Management discussion and analysis 9356 SES A&R pp28-36 a/w 26/6/02 2:56 pm Page 36

MANAGEMENT DISCUSSION AND ANALYSIS continued

Capital expenditure Capital expenditure for the year was EUR 432.3 million compared to EUR 254.3 million in the previous year. The capital expenditures consolidated from November 9, 2001 for AMERICOM were EUR 61.2 million. The remaining increase reflects the Group’s continued investment in its satellite fleet with ASTRA 2C launched in June 2001 and three further satellites under construction (ASTRA 3A, ASTRA 1K and AsiaSat 4).

Net operating cash flow Net operating cash flow increased by 61.5% or EUR 259.8 million to EUR 682.4 million.

This increase reflects stronger cash flow from operations of EUR 166.9 million and a EUR 93.0 million reduction in working capital requirements.

The reduction in cash flow from operations reflects lower tax and franchise free payments, and higher profit contributions excluding depreciation and amortisation. Excluding the consolidation of AMERICOM the increase in net operating cash flow was 42% or EUR 177.2 million.

Net debt Net debt increased by EUR 2,305.4 million to EUR 3,140.0 million principally due to the borrowings related to the AMERICOM transaction. On March 28, 2001, SES GLOBAL and SES ASTRA jointly arranged a multi-currency term and revolving facilities agreement for the purposes of refinancing existing syndicated loan facilities and arranging acquisition finance for the transaction concluded on November 9, 2001 to acquire SES AMERICOM.

The new facilities agreement consists of USD 2,500 million for facilities A1 and B1 for the transaction, of which USD 2,460 million was drawn down at 31 December, 2001 and EUR 1,400 billion for facilities C and D to refinance existing loans of which EUR 765 million and USD 110 million was drawn down on Facility C as at December 31, 2001.

SES GLOBAL Annual Report 2001 36 Management discussion and analysis 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 37

SES GLOBAL S.A. CONSOLIDATED ACCOUNTS REPORT OF THE INDEPENDENT AUDITOR

To the Shareholders of SES GLOBAL S.A. Société Anonyme Betzdorf

Following our appointment by the Extraordinary General Meeting of the Shareholders on March 16, 2001, we have audited the accompanying consolidated accounts of SES GLOBAL S.A. for the year ended December 31, 2001 and have read the related consolidated management report. These consolidated accounts and the consolidated management report are the responsibility of the Board of Directors. Our responsibility is to express an opinion on these consolidated accounts based on our audit and to check that the consolidated management report is consistent with the consolidated accounts.

In our opinion, the accompanying consolidated accounts give, in conformity with Luxembourg legal and regulatory requirements, a true and fair view of the consolidated financial position of SES GLOBAL S.A. as at December 31, 2001 and of the consolidated results of its operations for the year then ended.

The consolidated management report is consistent with the consolidated accounts.

Ernst & Young Société Anonyme Réviseur d’entreprises

Werner Weynand

March 28, 2002

SES GLOBAL Annual Report 2001 37 Report of the independent auditor 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 38

CONSOLIDATED BALANCE SHEET December 31, 2001

2001 20001 Assets Note EUR 000 EUR 000 Fixed assets Intangible assets 4 Goodwill 2,905,981 281,688 Other intangibles 1,109,753 – 4,015,734 281,688 Tangible assets in use 5 Land & buildings 84,087 69,755 Plant and machinery – space segment 2,769,290 1,177,009 – ground segment 103,715 49,023 Other fixtures & fittings, tools and equipment 21,046 12,884 2,978,138 1,308,671 Payments on account and assets in course of construction 6 951,979 508,696 3,930,117 1,817,367 Financial assets Investments in associates 9 140,886 12,855 Long term investments 10 22,616 177,652 Other financial assets 11 46,277 36,841 209,779 227,348 Current assets Debtors – Trade debtors 12 203,130 201,929 – Other debtors 27 98,145 9,152 Investments 13 20,554 22,245 Cash at bank and on deposit 673,338 163,457 995,167 396,783 Prepayments & deferred charges 114,361 45,960 Deferred tax assets 16 6,052 5,720 Total assets 9,271,210 2,774,866 The notes are an integral part of the consolidated accounts.

1The prior year comparative figures presented are for information purposes only and are taken from the consolidated balance sheet of Société Européenne des Satellites S.A. as at December 31, 2000.

SES GLOBAL Annual Report 2001 38 Consolidated balance sheet 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 39

CONSOLIDATED BALANCE SHEET continued December 31, 2001

2001 20001 Liabilities Note EUR 000 EUR 000 Capital & reserves Subscribed capital 14 175,809 111,000 Treasury shares at cost (8,775)(3,755) Share premium account 3,696,670 5,444 Reserves – Legal reserve 17,581 11,100 – Other reserves – 608,417 – Currency exchange reserve (4,071) 13,564 Result brought forward – 49,841 Profit of the Group 40,159 244,467 3,917,373 1,040,078 Minority interests In capital & reserves 220,982 160,962 In the result for the year 52,959 52,919 273,941 213,881 Provisions for liabilities & charges Provisions for pensions 15 4,161 3,561 Other provisions 15 7,098 16,113 Provisions for deferred taxes 16 573,158 47,545 584,417 67,219 Creditors Amounts payable after more than one year Subordinated loans 17 – 148,736 Amounts owed to credit institutions 18 3,659,178 308,985 Other liabilities 19 17,955 – 3,677,133 457,721 Amounts payable in less than one year Subordinated loans 17 148,736 – Amounts owed to credit institutions 18 5,414 540,325 Payments received on account 6,870 1,502 Trade creditors 130,097 77,264 Tax & social security payable 130,871 126,162 Other liabilities 19 57,368 25,236 479,356 770,489 Deferred income Upfront payments 213,884 106,122 Other deferred income 125,106 119,356 338,990 225,478 Total liabilities 9,271,210 2,774,866 The notes are an integral part of the consolidated accounts.

1The prior year comparative figures presented are for information purposes only and are taken from the consolidated balance sheet of Société Européenne des Satellites S.A. as at December 31, 2000.

SES GLOBAL Annual Report 2001 39 Consolidated balance sheet 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 40

CONSOLIDATED PROFIT AND LOSS ACCOUNT December 31, 2001 Period from Incorporation3 20011 20002 to 31.12.2001 Notes EUR 000 EUR 000 EUR 000 Net turnover 27 962,360 829,003 219,480 Other operating income 15,850 6,859 15,390 Total revenues 3 978,210 835,862 234,870 External charges 27 (122,538) (91,967) (28,826) Staff costs 23 (47,173) (38,851) (12,468) Other operating charges 12 (16,846)(8,078) (4,033) Exceptional income 20 2,937 11,738 – Depreciation and amortisation 4,5 (270,328) (192,122) (81,109) Operating profit 524,262 516,582 108,434 Interest receivable and similar income 24,459 36,968 120 Interest payable and similar charges (72,205) (64,540) (14,754) Value adjustment on investments 10,11 (20,812)–(20,812) Profit on ordinary activities 455,704 489,010 72,988 Taxes 21 (112,675) (184,997) (21,887) Profit for the financial year 343,029 304,013 51,101 Share of associates’ result 9 (9,812)(6,627) (2,395) Profit attributable to minority interests (52,959) (52,919) (8,547) Profit of the Group 280,258 244,467 40,159 Basic and diluted earnings per share (Subsequent to 1:10 share split) 22 A – shares 0.69 0.66 B – shares 0.19 0.26 C – shares 0.10 – The notes are an integral part of the consolidated accounts.

1The amounts presented represent figures for the period January 1, 2001 to December 31, 2001 as if the exchange offer between Société Européenne des Satellites S.A. and SES GLOBAL S.A. had not occurred (see Note 1).

2The prior year comparative figures are taken from the consolidated profit and loss account of Société Européenne des Satellites S.A. as at December 31, 2000.

3SES GLOBAL S.A. was incorporated on March 16, 2001 but did not trade until subsequently to the completion of the exchange offer described in Note 1 to the financial statements.

SES GLOBAL Annual Report 2001 40 Consolidated profit and loss account 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 41

CONSOLIDATED STATEMENT OF CASH FLOW December 31, 2001

20011 20002 EUR 000 EUR 000 Cash flow from operating activities Consolidated net income before taxes 455,704 489,010 Taxes paid during the year (56,163) (153,905) Depreciation and amortisation 270,328 192,122 Amortisation of client upfront payments (41,901) (21,932) Other non-cash items in Profit and Loss Account 57,811 17,479 Provision for pension and other provisions (260)(4,119) Result on disposal of fixed assets (22) (37) Consolidated operating profit before working capital 685,497 518,618 Changes in operating assets and liabilities Decrease / (increase) in trade debtors 5,450 (55,230) Decrease in other debtors 22,901 13,364 (Increase) in prepayments and deferred charges (71,625)(9,830) Increase (decrease) in payments received on account 5,368 (7,008) (Decrease) in trade creditors 5,863 (70,434) Increase in other creditors 3,707 2,687 Increase in upfront payments 38,583 11,150 Increase in other deferred income (13,325) 19,253 Cash (absorbed) by operations (3,078) (96,048) Net operating cash flow 682,419 422,570 Cash flow from investing activities Purchase of intangible assets (10,000)– Purchase of tangible assets (432,302) (254,319) Disposal of tangible assets 1,465 3,529 Purchase to acquire NSAB (net of cash acquired) – (105,327) Purchase to acquire AMERICOM (net of cash acquired) (2,398,734)– Investment in financial assets (7,111) (201,145) Net cash absorbed by investing activities (2,846,682) (557,262) Cash flow from financing activities New borrowings 3,659,182 485,499 Repayment of borrowings (870,382) (324,666) Dividends paid on ordinary shares (107,442) (96,392) Dividends paid to minority shareholders (7,372)(6,704) Net financing paid on non-operating activities (44,665) (13,210) Exercise of share options by employees 547 – Treasury shares acquired (5,019)(3,755) Proceeds from share issue, net 20,334 – Net cash generated by financing activities 2,645,183 40,772 Movements in exchange 28,961 (2,491) Increase / (decrease) in cash 509,881 (96,411) Cash at beginning of the year 163,457 259,868 Cash at end of the year 673,338 163,457 The notes are an integral part of the consolidated accounts.

2The prior year comparative figures presented are for information purposes only and are taken from the consolidated statement of cash flow of Société Européenne des Satellites S.A. as at December 31, 2000.

SES GLOBAL Annual Report 2001 41 Consolidated statement of cash flow 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 42

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY December 31, 2001 Share Currency Result Subscribed Treasury premium Legal Other exchange brought Profit of capital shares account reserve reserves reserve forward the year Total EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 At January 1, 2001 111,000 (3,755) 5,444 11,100 608,417 13,564 49,841 244,467 1,040,078 Allocation of result – – – – 116,548 – 127,919 (244,467) -- Dividend – – – – – – (107,998) -- (107,998) Purchase of treasury shares – (5,020) – – – – – – (5,020) Result for the period – – – – – – – 240,099 240,099 Impact of currency translation – – – – – (42,934) – – (42,934) Prior to share exchange 111,000 (8,775) 5,444 11,100 724,965 (29,370) 69,762 240,099 1,124,225 Exchange offer of Class A and B shares 110,977 (8,775) 1,040,295 11,098 – (29,370) – – 1,124,225 Issuance of additional shares 64,832 -- 2,660,066 6,483 – – – – 2,731,381 Issuing costs – – (3,691) – – – – – (3,691) Result for the period – – – – – – – 40,159 40,159 Impact of currency translation – – – – – 25,299 – – 25,299 At December 31, 2001 175,809 (8,775) 3,696,670 17,581 –(4,071)–40,159 3,917,373 The notes are an integral part of the consolidated accounts.

SES GLOBAL Annual Report 2001 42 Consolidated statement of changes in shareholders’ equity 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 43

NOTES TO THE CONSOLIDATED ACCOUNTS December 31, 2001

Note 1 General SES GLOBAL S.A. (“SES GLOBAL” or “the Company”) was incorporated on March 16, 2001 as a limited liability company (Société Anonyme) under Luxembourg law. References to “the Group” in the following Notes are to the Company and its subsidiaries, joint ventures and associates.

The Company had no trading activities between the date of incorporation and completion of the exchange offer described below on November 8, 2001.

On November 8, 2001, all the existing shareholders of Société Européenne des Satellites (subsequently renamed SES ASTRA S.A. (“SES ASTRA”)) exchanged their shares in SES ASTRA for shares in SES GLOBAL. For every one share in SES ASTRA the shareholder received 10 shares in SES GLOBAL. As a result of the exchange offer, SES GLOBAL owns 100% of SES ASTRA (12 satellites serving Europe), 50% of Nordic Satellite AB (“NSAB”) (three satellites serving the Nordic countries and Europe), 34.10% of Asia Satellite Telecommunication Holdings Limited (“AsiaSat”) (three satellites over Asia and the Pacific), 19.99% of Star One S.A. (“Star One”) (five satellites covering Latin America), 100% of SES Multimedia S.A. and 10% of the satellite technology company ND Satcom GmbH (“ND Satcom”). SES ASTRA also holds a 28.75% interest in Nahuelsat S.A. (one satellite serving Latin America) acquired under the transaction below. As a result of the exchange, the ultimate shareholders of the Company were the same as the previous shareholders of SES ASTRA.

On November 9, 2001, SES GLOBAL also acquired GE American Communications Inc. stock and other satellite-related assets from General Electric Capital Corporation (“GE Capital”) for a consideration consisting of USD 2,413.539 million in cash and 181,295,672 shares in SES GLOBAL. These assets are held through the Company’s 100% subsidiary SES GLOBAL-Americas Inc (“SES AMERICOM”). As a result, SES GLOBAL owns through SES AMERICOM 13 satellites primarily serving North America, 100% of Columbia Communications (four satellites providing transoceanic service), 50% of AMERICOM Asia-Pacific LLC (“AAP”) (one satellite serving Asia) and an 18.4% stake in the satellite technology company Gilat Satellite Networks Limited (“Gilat”).

SES GLOBAL now trades under “SESG” on the Luxembourg Stock Exchange, and “SDSL” on the Frankfurt Stock Exchange.

The consolidated accounts have been prepared to reflect the legal presentation of the accounts as well as a re-organisation under common control. Accordingly: • the comparative figures in the balance sheet represent the consolidated accounts of SES ASTRA as of December 31, 2000; • the profit and loss account reflects: – in the first column, the consolidated results of the group for the 12 months ended December 31, 2001 as if the exchange offer had never happened; – in the second column, the comparative consolidated results for the 12-month period ended December 31, 2000 of SES ASTRA; – in the third column, the consolidated results for the period from incorporation to December 31, 2001; • the consolidated statement of cash flow has been prepared to reflect the 12-month period ended December 31, 2001, with the prior year comparatives being the consolidated figures of SES ASTRA for the year ended December 31, 2000.

Note 2 Accounting policies Basis of preparation The consolidated accounts are prepared in accordance with accounting principles and regulations generally accepted in the Grand Duchy of Luxembourg.

Basis of consolidation The consolidated accounts comprise the accounts of the Company and its controlled subsidiaries, after the elimination of all material inter-company transactions. Subsidiaries are consolidated from the date the Company obtains control until such time as control ceases. Acquisitions of subsidiaries are accounted for using the purchase method of accounting. The financial statements of subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. Adjustments are made to conform any dissimilar material accounting policies that may exist.

Joint ventures The Company’s interest in jointly controlled entities is accounted for by proportionate consolidation, which involves recognising a proportionate share of the joint ventures’ assets, liabilities, income and expenses with similar items in the consolidated accounts on a line-by-line basis.

Investments in associates Investments in associates over which the Company has significant influence are accounted for under the equity method of accounting and are carried in the balance sheet at the lower of the equity-accounted amount and the recoverable amount, and the pro rata share of income (loss) of associates is included in income. The carrying value of such investments includes a goodwill component where the consideration paid exceeded the fair value of the Company’s share of the underlying assets.

SES GLOBAL Annual Report 2001 43 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 44

NOTES TO THE CONSOLIDATED ACCOUNTS continued December 31, 2001

Note 2 Accounting policies continued Consolidated subsidiaries, joint ventures and associates The consolidated accounts include the accounts of the subsidiaries, joint ventures and associates listed below:

Effective interest (%) Effective interest (%) Method of 2001 2000 consolidation SES ASTRA S.A., Luxembourg 100.00 100.00 Full SES GLOBAL-Americas, Inc., USA 100.00 – Full SES Finance S.A., Luxembourg 100.00 100.00 Full Held through SES ASTRA S.A.: ASTRA Marketing GmbH, Germany 100.00 100.00 Full ASTRA Marketing Ltd, United Kingdom 100.00 100.00 Full ASTRA Marketing Iberica S.A., Spain 100.00 100.00 Full ASTRA Marketing France S.A., France 100.00 100.00 Full ASTRA Marketing Polska Sp. z o.o., Poland 100.00 100.00 Full SES Ré S.A., Luxembourg 100.00 100.00 Full SES Capital Luxembourg S.A., Luxembourg 100.00 100.00 Full SES Multimedia S.A., Luxembourg 100.00 100.00 Full SES Capital Belgium S.A., Belgium 100.00 100.00 Full Nahuelsat S.A., Argentina 28.75 – Equity Held through SES GLOBAL-Americas, Inc. SES Subsidiary 23 Inc., USA 100.00 – Full SES Subsidiary 24 Inc., USA 100.00 – Full SES Subsidiary 25 Inc., USA 100.00 – Full SES Subsidiary 26 Inc., USA 100.00 – Full SES AMERICOM, Inc., USA 100.00 – Full SES AMERICOM (Asia 1A) LLC, USA 100.00 – Full SES AMERICOM International Holdings, Inc. 100.00 – Full SES AMERICOM UK Ltd., UK 100.00 – Full SES AMERICOM (Singapore) Pty., Ltd. 100.00 – Full Columbia Communications Corporation 100.00 – Full AMERICOM Government Services, Inc., USA 100.00 – Full SES AMERICOM California, Inc. 100.00 – Full SES Satellites International, Inc. 100.00 – Full Communications Satellite Int. Marketing Inc., USA 100.00 – Full EVidient, Inc. 100.00 – Full Columbia/WigUSA Communications, Inc., USA 100.00 – Full SES AMERICOM Colorado, Inc., USA 100.00 – Full SES Satellites (Gibraltar) Ltd., Gibraltar 100.00 – Full Starsys Global Positioning Inc., USA 80.00 – Full AMERICOM ASIA-PACIFIC LLC, USA 50.00 – Proportional Sistemas Satelitales de Mexico S. de R.L. de C.V., Mexico 49.00 – Equity Held through SES Finance S.A. SES do Brasil S.A., Brazil 100.00 100.00 Full Bowenvale Ltd, British Virgin Islands 49.50 49.50 Full Asia Satellite Telecommunications Hldgs. Ltd, Bermuda 34.10 34.10 Full Nordic Satellite AB, Sweden 50.00 50.00 Proportional Norwegian Digital Swap A/S, Norway 50.00 50.00 Proportional Sirius Satellite Services SIA 50.00 – Proportional iBEAM Europe Ltd. United Kingdom 33.33 33.33 Equity PhoenixNet Holdings Ltd, Hong Kong 36.52 36.52 Equity SpeedCast Ltd, Hong Kong 36.52 36.52 Equity Star One S.A. 19.99 19.99 Equity

On January 15, 1999, the Company acquired, through its wholly owned subsidiary SES Finance S.A., a 49.50% interest in Bowenvale Limited (“Bowenvale”), a limited liability company incorporated in the British Virgin Islands, which controls 68.90% of the ordinary shares of Asia Satellite Telecommunications Holdings Ltd (“AsiaSat”), Bermuda, a Hong Kong-based satellite services provider. The Company and Chinese International Trust and Investment Corporation (“CITIC”), have equal voting rights at Bowenvale’s shareholder and Board meetings. They have entered into a shareholders’ agreement under the terms of which the Company has been given the right to assist AsiaSat in important areas that relate to the operation and further development of new satellite services, due to their knowledge and expertise in this area. The holding of shares, as well as the presence of the Company on the Board of Directors and their significant influence in the definition and development of the satellite business, explains the full consolidation of AsiaSat in the Group’s accounts as of December 31, 2000 and 2001.

SES GLOBAL Annual Report 2001 44 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 45

Note 2 Accounting policies continued Intangible assets Goodwill Goodwill represents the difference between the cost of acquisition of shares in a consolidated company and the Group’s share in the fair value of the net assets acquired at the date of acquisition. Such items are amortised over their estimated useful lives on a straight-line basis, from the date of acquisition. The current maximum period of amortisation is 20 years. Provisions for risk are recorded if they are justified by any particular circumstances and namely when the effective profitability is below the initial plan.

Plant and machinery – space segment The cost of the space segment includes the procurement of satellites together with launch expenses, insurance, and other related costs. With effect from the date of the exchange offer, finance charges arising during the construction period of satellites are capitalised to comply with the Group accounting policy.

As a result of management’s ongoing assessment of depreciable lives determined in part by input from engineering analysis, the depreciable life estimates for SES ASTRA’s satellites were prospectively changed from January 1, 2001. The changes were made to better reflect the satellites’ economic life and improvements in satellite technology, resulting in depreciation periods being extended for certain satellites. The effect of SES ASTRA’s change in depreciable lives estimates for its satellites for the twelve months ending December 31, 2001 is approximately EUR 17.600 million, net of taxes. The Group’s satellite depreciable lives now range from 10 to 16 years.

Plant and machinery – ground segment Machinery and equipment are depreciated evenly over its estimated useful life, which is 10 years or less.

Other fixtures, fittings, tools and equipment All such items are depreciated evenly over the estimated useful lives, which are 10 years or less.

Loan origination costs Loan origination costs are capitalised and included in prepaid expenses. They are amortised over the loan periods.

Financial assets Long-term investments and other financial assets are carried in the balance sheet at cost. An assessment is made at each balance sheet date to determine where there is objective evidence that a financial asset may be impaired. If such evidence exists, the estimated recoverable amount of that asset is determined and any impairment loss recognised, being the difference between the estimated recoverable amount and the carrying amount, is recorded in the profit and loss account for the period.

Debtors Debtors are stated at anticipated realisable value.

For the purposes of the Consolidated Statement of Cash Flow, cash and cash equivalents consist of cash on hand and deposits in banks, net of outstanding bank overdrafts.

Dividends Dividends are declared by the Company after the accounts for the year have been approved. Accordingly dividends are recorded in the subsequent year’s accounts.

SES GLOBAL Annual Report 2001 45 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 46

NOTES TO THE CONSOLIDATED ACCOUNTS continued December 31, 2001

Note 2 Accounting policies continued Pensions The Company and certain subsidiaries operate defined benefit pension plans and/or defined contribution plans. The cost of providing benefits under the defined benefit pension plan is determined using the projected unit credit actuarial valuation method. Costs relating to the defined contribution plan are recognised in the profit and loss account as incurred on an accrual basis.

Provisions Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Translation of foreign currencies The Company maintains its accounting records in Euro (EUR) and the consolidated accounts are expressed in this currency. The cost of non-monetary assets are translated at the rate applicable on the date of payment, except when currencies are bought in advance under forward contracts specifically for the acquisition of such assets, in which case the cost of acquisition is translated at the forward rate. All other assets and liabilities are translated at closing rates of exchange.

Goodwill and fair value adjustments arising on the acquisition of a 100%-owned foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

Subsidiary companies keep their accounts in their respective national currencies. Those marketing subsidiaries that do not maintain their accounts in Euro are all companies which are dependent upon SES ASTRA for funding and represent an integral part of SES ASTRA’s operations. Accordingly the temporal method of currency translation is applied to these companies’ accounts for the purposes of presenting the consolidated accounts. The assets and liabilities of other consolidated subsidiaries are translated into Euro at the year-end exchange rates, while the income and expense items of these subsidiaries are translated at the average exchange rate of the year. The related foreign exchange differences are included in the currency exchange reserve.

Concentration of Credit Risk Cash and cash equivalents are primarily maintained with major financial institutions. These deposits are due upon demand and, therefore, bear minimal risk.

Basic and Diluted Earnings per Share The Company’s capital structure consists of Class A, Class B and Class C shares that are entitled to the payment of annual dividends as approved by the shareholders at their annual meeting. Holders of Class B shares participate in earnings and are entitled to 40% of the dividends payable per Class A share.

Basic and diluted earnings per share are calculated using the weighted average number of shares outstanding during the year and to reflect the exchange offer (see Note 1).

Impairment of Long-Lived and Identifiable Intangible Assets The Company’s long-lived assets and identifiable intangible assets, including its in-service satellite fleet and goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Impairments can arise from complete or partial failure of a satellite as well as other changes in expected undiscounted future cash flows. Such impairment tests are based on a comparison of estimated undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset value will be written down to fair value based upon discounted cash flows, using an appropriate discount rate.

Advertising Costs The Company expenses all advertising costs as incurred.

SES GLOBAL Annual Report 2001 46 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 47

Note 3 Segment information The following table presents revenue and expenditure information and certain asset information regarding geographical segments for the year ended December 31, 2001:

SES ASTRA SES AMERICOM AsiaSat Other Group EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 Revenue 739,535 80,576 138,431 19,668 978,210 EBITDA1 605,421 67,060 117,068 5,041 794,590 Depreciation 149,558 22,408 23,870 7,990 203,826 Amortisation 27,751 23,650 11,192 3,909 66,502 Operating profit 428,112 21,002 82,006 (6,858) 524,262 Net financing cost2 (22,865) (20,327) (17,215) 12,661 (47,746) Value adjustments on investments (20,812) – – – (20,812) Taxes (101,961) (12,349) 4,227 (2,592) (112,675) Share of associates’ results – – (7,649) (2,163) (9,812) Minority interest – – (52,959) – (52,959) Profit of the group 282,474 (11,674) 8,410 1,048 280,258 Segment assets3 2,641,047 5,502,619 680,195 447,349 9,271,210 Segment liabilities 848,631 3,401,539 376,959 452,767 5,079,896 Capital expenditure 283,008 61,209 86,029 2,055 432,301

1Earnings before interest, taxation, depreciation and amortisation.

2Segmental net financing cost is stated after the allocation of transaction financing costs.

3Segmental assets comprise: SES ASTRA SES AMERICOM AsiaSat Other Group EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 Intangible assets 535,007 3,216,8994 190,526 73,302 4,015,734 Tangible assets 1,542,066 1,859,263 425,646 103,142 3,930,117 Financial assets 20,498 10,262 – 179,019 209,779 Other assets 543,476 416,195 64,023 91,886 1,115,580 Segment assets 2,641,047 5,502,619 680,195 447,349 9,271,210

4This represents a goodwill on the acquisition of SES AMERICOM of EUR 2,640,340 and other intangibles assets of EUR 576,559, net of amortisation, as per Note 4 of the accounts.

Goodwill Other intangibles Total Note 4 Intangible assets EUR 000 EUR 000 EUR 000 Cost at December 31, 1999 228,503 – 228,503 Accumulated amortisation at December 31, 1999 (11,747) – (11,747) Net book value at December 31, 1999 216,756 – 216,756 Movements in 2000 Additions 78,189 – 78,189 Adjustment (156) – (156) Amortisation (13,101) – (13,101) Cost at December 31, 2000 306,536 – 306,536 Accumulated amortisation at December 31, 2000 (24,848) – (24,848) Net book value at December 31, 2000 281,688 – 281,688 Movements in 2001 Extension of scope 2,653,386 579,596 3,232,982 Additions – 560,000 560,000 Impact of currency translation 6,280 1,303 7,583 Amortisation (35,356) (31,146) (66,502) Impact of currency translation (17) – (17) Cost at December 31, 2001 2,966,202 1,140,899 4,107,101 Accumulated amortisation at December 31, 2001 (60,221) (31,146) (91,367) Net book value at December 31, 2001 2,905,981 1,109,753 4,015,734

Goodwill The goodwill brought forward balance relates to the acquisition of SES Capital Luxembourg S.A., Bowenvale Ltd. and NSAB. The SES Capital Luxembourg S.A. goodwill (EUR 4.727 million) is being amortised over five years commencing December 1, 1998. The goodwill arising through the investments in Bowenvale Ltd (EUR 223.637 million) and NSAB (EUR 78.189 million) is being amortised over 20 years beginning January 15, 1999 and October 1, 2000 respectively.

On the acquisition of SES AMERICOM, goodwill of USD 2,367.087 million (EUR 2,659.649 million at the closing rate) was generated. This transaction is set out in more detail in Note 7. The goodwill is being amortised on a straight-line basis over 20 years beginning November 9, 2001.

SES GLOBAL Annual Report 2001 47 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 48

NOTES TO THE CONSOLIDATED ACCOUNTS continued December 31, 2001

Note 4 Intangible assets continued Other intangible assets On the acquisition of SES AMERICOM a total valuation of USD 517.000 million (EUR 580.899 million at the closing rate) was placed on certain of the intangible assets acquired, such as rights of usage of orbital frequencies and acquired transponder service agreements. This transaction is set out in more detail in Note 7.

Including the goodwill stated above, intangible assets with an historical cost of USD 2,884.087 million (EUR 3,240.549 million at the closing rate) were generated in the course of the AMERICOM transaction.

During the year ended December 31, 2001, SES ASTRA concluded an agreement with the Luxembourg government in relation to the usage of the Luxembourg frequencies in the orbital positions of the geo-stationary arc from 45 degrees West to 50 degrees East for the period of January 1, 2001 to December 31, 2021. The right of usage was granted at an agreed value of EUR 550.000 million. This cost is being written off on a straight-line basis over the term of the agreement.

The remaining balance of the additions to intangible assets relates to a EUR 10.000 million payment made in relation to orbital access rights. This asset is being written off on a straight-line basis over the period of the agreement.

Plant & Machinery Other fixtures Initial operating and fittings, tools Land & buildings Space segment Ground segment expenses and equipment Total Note 5 Tangible assets in use EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 Cost at Dec 31, 1999 64,668 1,975,633 89,300 36,305 28,588 2,194,494 Accumulated depreciation at Dec 31, 1999 (17,411) (885,033) (47,687) (36,305) (18,695) (1,005,131) Net book value at Dec 31, 1999 47,257 1,090,600 41,613 – 9,893 1,189,363 Movements in 2000 Extension of consol. scope – 96,301 9,633 – 216 106,150 Additions 2,793 – 5,886 – 4,717 13,396 Disposals (8) (3,406) (14) (36,305) (489) (40,222) Transfers from assets in course of construction 26,930 169,549 8,139 – – 204,618 Reclassifications (1,400) – (1,136) – 2,536 – Impact of currency translation – 25,605 (305) – 135 25,435 Depreciation – extension of scope – (30,286) (6,308) – (56) (36,650) Depreciation (5,818) (160,125) (8,672) – (4,406) (179,021) Depreciation on disposals 1 – 13 36,305 412 36,731 Impact of currency translation – (11,229) 174 – (74) (11,129) Cost at Dec 31, 2000 92,983 2,263,682 111,503 – 35,703 2,503,871 Accumulated depreciation at Dec 31, 2000 (23,228) (1,086,673) (62,480) – (22,819) (1,195,200) Net book value at Dec 31, 2000 69,755 1,177,009 49,023 – 12,884 1,308,671 Movements in 2001 Extension of consol. scope 21,554 1,476,150 193,519 – 14,105 1,705,328 Additions 6,834 32,603 10,775 – 7,432 57,644 Disposals (5,435) (1,399) (67) – (254) (7,155) Transfers from assets in course of construction 9,640 239,100 12,063 – 708 261,511 Reclassifications – – (940) – 940 – Impact of currency translation 48 29,218 (57) – 207 29,416 Depreciation – extension of scope (16,754) – (140,079) – (7,603) (164,436) Depreciation (6,951) (169,351) (20,775) – (6,749) (203,826) Depreciation on disposals 5,435 4 67 – 206 5,712 Reclassifications – – 659 – (659) – Impact of currency translation (39) (14,044) (473) – (171) (14,727) Cost at Dec 31, 2001 125,624 4,039,354 326,796 – 58,841 4,550,615 Accumulated depreciation at Dec 31, 2001 (41,537) (1,270,064) (223,081) – (37,795) (1,572,477) Net book value at Dec 31, 2001 84,087 2,769,290 103,715 – 21,046 2,978,138

SES GLOBAL Annual Report 2001 48 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 49

Note 6 Payments on account and assets in Land & buildings Space segment Ground segment Total course of construction EUR 000 EUR 000 EUR 000 EUR 000 Cost and net book value at December 31, 1999 21,920 438,555 15,064 475,539 Movements in 2000 Additions 9,206 207,468 24,405 241,079 Transfers to assets in use (26,930) (169,549) (8,139) (204,618) Impact of currency translation – (3,304) – (3,304) Cost and net book value at December 31, 2000 4,196 473,170 31,330 508,696 Movements in 2001 Extension of consol. scope – 321,461 2,247 323,708 Additions 9,819 330,927 33,911 374,657 Transfers to assets in use (9,640) (239,100) (12,771) (261,511) Impact of currency translation (11) 6,419 21 6,429 Cost and net book value at December 31, 2001 4,364 892,877 54,738 951,979

Borrowing costs of EUR 4.585 million arising on financing specifically relating to satellite construction were capitalised during the year and are included in “Space Segment” additions in the above table. A weighted average capitalisation rate of 4.8% was used, representing the borrowing cost of the relevant loans.

SES AMERICOM On November 9, 2001, SES GLOBAL acquired 100% of the shares of SES AMERICOM, and certain other related assets, from GE Capital, in a USD 4,336.039 million transaction, including transaction costs of USD 35.563 million. SES GLOBAL exercised its option on November 7, 2001, to issue additional Special Equity Shares to GE Capital in order to decrease the cash portion of the purchase consideration by USD 300 million. At closing, after taking into account the Special Equity Shares issued, the purchase consideration consisted of USD 2,413.539 million of cash from borrowings under available credit facilities and 176,799,314 of the Company’s Ordinary Class C Shares and 4,496,358 Preferred Class C Shares. The share consideration has been valued at a price of EUR 11.89 per share.

The fair value of SES AMERICOM’s assets and liabilities acquired on November 9, 2001 were as follows: USD 000 Intangible assets 517,000 Tangible assets 1,620,311 Financial assets 65,536 Trade and other debtors 93,233 Cash at bank and on deposit 272,223 Prepayments and deferred charges 4,682 Other provisions (2,456) Loan financing, GE Capital (1,900,000) Other long-term liabilities (23,448) Current liabilities (53,920) Deferred tax (420,251) Deferred income (103,958) Fair value of net assets acquired (excluding goodwill) 68,952 Settlement of the loan financing from GE Capital 1,900,000 Goodwill arising on acquisition 2,367,087 Total consideration 4,336,039

Under the terms of the agreement, the consideration of USD 4,336.039 million was used to settle the loan financing from GE Capital (USD 1,900 million) and to acquire the remaining net assets for a consideration of USD 2,436.039 million. The goodwill arising of USD 2,367.087 million (EUR 2,653.386 million at the date of acquisition) is being amortised on a straight-line basis over 20 years.

The purchase price is subject to adjustment based upon final working capital amounts acquired. The Company does not expect significant adjustments to the purchase price.

SES GLOBAL Annual Report 2001 49 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 50

NOTES TO THE CONSOLIDATED ACCOUNTS continued December 31, 2001

Note 8 Investments in joint ventures NSAB On October 1, 2000, SES ASTRA acquired 50% of the shares of NSAB. Consideration for the acquisition, including legal fees associated with the transaction, amounted to EUR 126.201 million. The fair value of the net tangible assets acquired of NSAB as at October 1, 2000 was EUR 48.013 million resulting in goodwill of EUR 78.189 million, which is being amortised over a 20-year period. At December 31, 2001, NSAB holds 100% interests in Norwegian Digital Swap A/S, Norway and Sirius Satellite Services SIA, Latvia and a 13% holding in DisplayIt Sweden AB.

50% of the revenues and expenses of this joint venture for the year ended December 31, 2001 have been included in the results of the Group for the year then ended. The Group’s share of the assets, liabilities, revenue and expenses of the joint venture in NSAB, which are included in the consolidated accounts, are as follows at December 31, 2001 and for the year then ended: 2001 2000 EUR 000 EUR 000 Current assets 15,184 27,274 Non-current assets 55,500 65,327 Current liabilities 13,609 19,111 Non-current liabilities 12,756 13,706 Revenue 19,164 10,177 Operating result (1,539) 4,352 Taxes (664) (17) Result for the period (2,068) 4,148

AMERICOM ASIA-PACIFIC LLC (“AAP”) The Company acquired a 50% shareholding in AAP on November 9, 2001, within the framework of the SES AMERICOM purchase.

50% of the revenues and expenses of this joint venture from the date of acquisition, being November 9, 2001, until December 31, 2001 have been included in the results of the Group for the year then ended. The Group’s share of the assets, liabilities, revenue and expenses of the joint venture in AAP, which are included in the consolidated accounts, are as follows at December 31, 2001 and for the 53-day period then ended: 2001 2000 EUR 000 EUR 000 Current assets 2,199 – Non-current assets 47,708 – Current liabilities 8,037 – Revenue 503 – Operating result (697)– Taxes 279 – Result for the period (418)–

2001 2000 Note 9 Investments in associates EUR 000 EUR 000 At December 31, 2000 12,855 – Additions 5,556 19,100 Share of result (9,812) (6,627) Reclassification 147,490 – Impact of currency translation (15,203) 382 At December 31, 2001 140,886 12,855

At December 31, 2001 the Company held interests, directly or indirectly, in five associates accounted for under the equity method. These were: Star One (19.99%); Nahuelsat (28.75%); i-Beam Europe Limited (“i-Beam” – 33.33%); PhoenixNet Holdings Ltd (“PhoenixNet” – 34.10%); and SpeedCast Ltd. (“SpeedCast”) a 100% subsidiary of PhoenixNet Holdings Ltd).

At December 31, 2001, these investments have the following carrying values in the consolidated financial statements: Additions / Impact of Brought forward reclassifications Share of results currency translation Carrying value Equity share EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 PhoenixNet/SpeedCast 7,294 – (7,649) 355 – – i-Beam 5,561 – (3,650) (10) 1,901 1,901 Star One – 147,490 1,610 (15,548) 133,552 75,841 Nahuelsat – 5,556 (123) – 5,433 8,636 Total 12,855 153,046 (9,812)(15,203) 140,886

The investment in Star One was accounted for in the prior year, and in the current year up to November 9, 2001, as a long-term investment. Subsequent to November 9, 2001, the investment has been accounted for as an associate.

Additions to investments in associated undertakings at December 31, 2001 include goodwill of EUR 52.444 million (2000: nil). Amortisation of goodwill of EUR 0.404 million (2000: nil) is included in the share of associates’ result.

SES GLOBAL Annual Report 2001 50 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 51

Note 10 Long-term investments At December 31, 2001 the Company held long-term equity investments in the following companies: Additions / Impact of Brought forward Extension of scope reclassification Value adjustment currency translation Carrying value EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 EUR 000 ND SatCom 1,862 – 32 – – 1,894 Netsystem.com 25,893 – – (15,500) – 10,393 Kokua Communications 2,330 – 4 (2,334) – – Star One 147,490 – (147,490) – – – DisplayIt Sweden AB 77–––(10) 67 Gilat – 10,239 – – 23 10,262 Total 177,652 10,239 (147,454) (17,834) 13 22,616

In 2000, SES ASTRA purchased a 10% interest in ND SatCom GmbH, a 4.95% interest in Netsystem.com S.p.A., and a 10% stake in Kokua Communications Inc. NSAB purchased a 24% interest in Upstage Performance AB., subsequently renamed DisplayIt Sweden AB. The interest in DisplayIt Sweden AB has now been diluted to under 20%.

In the year ended December 31, 2001, the Company acquired an 18.4% shareholding in Gilat, a company incorporated in Israel, through the purchase of SES AMERICOM.

The treatment of the investment in Star One was changed with effect from November 9 from an investment to an associate, accounted for using equity accounting, to reflect the Company’s significant influence on the business.

A value adjustment of EUR 15.500 million has been made to the investment in Netsystem.com S.p.A. to reflect the current trading position of the company.

Note 11 Other financial assets EUR 000 Cost at December 31, 2000 36,841 Accumulated value adjustments at December 31, 2000 – Net book value at December 31, 2000 36,841 Movements in 2001 Additions 1,538 Disposals (18) Impact of currency translation 10,894 Value adjustments (2,978) Cost at December 31, 2001 49,255 Accumulated value adjustments at December 31, 2001 (2,978) Net book value at December 31, 2001 46,277

Other ﬁnancial assets The principal component of other financial assets is a loan of USD 40.516 million advanced in 1999 to Able Star Associates Limited, British Virgin Islands, a fully owned subsidiary of CITIC. The purpose of this loan was to enable CITIC to purchase additional shares in the Bowenvale operation, to achieve the desired ownership structure. This loan bears interest at market rates and expires on January 15, 2006. No repayments have occurred in 2001.

2001 2000 Note 12 Trade debtors EUR 000 EUR 000 Outstanding invoices on billed revenues 60,481 50,709 Unbilled accrued revenue 142,649 151,220 Trade debtors 203,130 201,929

Unbilled accrued revenue represents revenues for use of satellite capacity under long-term contracts but not billed. Billing will occur based on the terms of the contracts.

Trade debtors are stated net of accumulated provisions of EUR 22.516 million. The charge to debtor provisions for 2001 of EUR 8.615 million is included in other operating charges.

Trade debtors at December 31, 2001 included EUR 25.630 million (2000: EUR 9.193 million) of amounts becoming due and payable in more than one year.

SES GLOBAL Annual Report 2001 51 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 52

NOTES TO THE CONSOLIDATED ACCOUNTS continued For the period ended December 31, 2001

2001 2000 Note 13 Investments EUR 000 EUR 000 Investments 20,554 22,245

SES ASTRA purchased a quantity of Fiduciary Deposit Receipts (“FDRs”) in respect of “A” shares by agreement with the shareholders to use in connection with the Director/Employee option scheme set up at the time of the company’s Initial Public Offering.

Note 14 Subscribed capital The Company has an authorised share capital of EUR 10,134,000,000 comprising 918,749,180 shares. The subscribed share capital of EUR 175,808,916 is represented by category A, B and C shares with no par value. The share capital is divided into the following categories: A shares 310,340,000 B shares 245,817,836 C shares: – Ordinary 176,799,314 – Preference 4,496,358 Total subscribed shares 737,453,508

Fiduciary Deposit Receipts (FDRs) with respect to the A shares of the Company are listed at the Luxembourg Stock Exchange and on the “Amtlicher Handel”, the official list of the Deutsche Börse. These FDRs can be traded freely and are convertible to A-shares at any time at the option of the holder, under the conditions applicable in the Company’s articles of association and in accordance with the terms of the FDRs.

The B shares are reserved for Luxembourg public institutions or by entities or organisations which are controlled directly or indirectly by such institutions.

The category C shares were issued as part of the consideration for the acquisition of SES Americom. A holder of Preferred C shares is entitled at his option at any time and from time to time to convert all or part of such Preferred C shares into Ordinary C shares at a conversion ratio of one Ordinary C share per one Preferred C share. A holder of Ordinary C shares is entitled at his option at any time and from time to time to convert all or part of such Ordinary C shares into shares of Class A at a conversion ratio of one share of Class A per one Ordinary C share.

One third of the total number of the members of the Board of Directors are appointed from a list of candidates put up by the holders of Class B shares. The holders of Class C shares can nominate a list of candidates for up to three directors, depending on the percentage of total subscribed shares represented by the category C shares. The shareholders of category A shares nominate a list of candidates for the remaining Board members.

Dividends are paid in such a manner that the payment on one share of Class B equals 40% of the payment of one share of Class A. Each Preferred C Share is entitled to fixed dividends, which consist of cumulative annual dividends payable in cash at the rate of 4% per annum on a notional liquidation value of USD 50 million. The fixed dividend shall accrue as from the date of issue of the Preferred C Shares. Dividends on Ordinary C Shares are calculated as for A shares but are subject to deduction of the fixed dividend on the Preferred C Shares for the relevant dividend period.

The acquisition and disposal of shares require, under certain conditions, the approval of the Luxembourg Government.

Note 15 Provisions for pensions and other provisions The Group’s operations in Luxembourg have a defined benefit pension plan covering substantially all of its employees. Retirement benefits are based on years of credited service, the highest average compensation (as defined), and the relevant government benefit, which vary from plan to plan reflecting applicable local practices and legal requirements.

Certain Group companies also offer post-retirement healthcare and life insurance benefits to all eligible domestic retired employees. Retirees share in the cost of their health care benefits through service-related contributions and salary-related deductibles. Retiree life insurance benefits are non-contributory.

The movements on the provisions are set out below: Provisions for pensions Other provisions EUR 000 EUR 000 At December 31, 1999 2,143 70,542 Restatement of opening balance – (45,625) Extension of consolidation scope – 8,393 Provision for 2000 1,418 1,457 Reversal of provisions – (19,183) Impact of currency translation – 529 At December 31, 2000 3,561 16,113 Extension of consolidation scope – 2,753 Provision for 2001 691 1,008 Reversal of provisions (91) (1,869) Impact of currency translation –(469) Reclassification – (10,438) At December 31, 2001 4,161 7,098

SES GLOBAL Annual Report 2001 52 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 53

Note 15 Provisions for pensions and other provisions continued Provision for pensions Certain companies of the Group have set up a non-funded and non-contributory defined benefit pension plan covering all of their employees. Retirement benefits are based on years of credited service and the latest salary. The principal assumptions used in determining pension benefit obligations for Luxembourg-based companies are shown below: Discount rate 5% Expected rate of return on assets 5% Future compensation increases 4% Inflation 2% Turnover of employees 6%

Various Group companies operate defined contribution retirement benefits scheme for all qualifying employees. The assets of the scheme are held separately from those of the Group in funds under the control of trustees. The retirement benefits costs charged to the profit and loss account represent contributions payable to the scheme by the Group at rates specified in the rules of the scheme. Where employees who leave the scheme prior to vesting fully in the contributions, the contributions payable by the Group are reduced by the amount of forfeited contributions.

Other provisions The equalisation provision amounting to EUR 45.625 million, set up by SES Ré S.A. (SES ASTRA’s captive re-insurance company) was reclassified to result brought forward in 2000.

Note 16 Deferred taxes The movements on the provisions are set out below: Provisions Provisions for deferred for deferred tax assets tax liability EUR 000 EUR 000 At December 31, 1999 7,492 11,481 Extension of consolidation scope 2,350 10,024 Provision for 2000 – 24,271 Reversal of provisions (4,122) – Impact of currency translation – 1,769 At December 31, 2000 5,720 47,545 Extension of consolidation scope – 471,133 Provision for 2001 1,845 64,473 Reversal of provisions (1,513) (12,533) Impact of currency translation – 2,540 At December 31, 2001 6,052 573,158

Deferred taxes Deferred tax provisions reflect temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same fiscal unity. Neither the Group nor the Company had any material unprovided deferred taxation for the year or at the balance sheet date.

Note 17 Subordinated loans On January 11, 1999, the Company arranged, a EUR 148.736 million subordinated loan facility with a group of its shareholders. This is an unsecured facility, which was fully drawn on January 14, 1999. It was repaid on January 11, 2002.

Note 18 Amounts owed to credit institutions On March 28, 2001, SES GLOBAL and SES ASTRA jointly arranged a Multi-currency Term and Revolving Facilities Agreement for the purposes of refinancing existing syndicated loan facilities and arranging acquisition finance for the transaction, concluded on November 9, 2001, to acquire SES AMERICOM. The new Facilities Agreement is made up of the following: 1. Facility A1 – USD 1,600.000 million term loan facility available for the purposes of the SES AMERICOM acquisition and repayable by March 28, 2006 2. Facility B1 – USD 900.000 million term loan facility available for the purposes of the SES AMERICOM acquisition and repayable by March 28, 2003 3. Facility C – EUR 1,000.000 million term loan facility available to refinance existing debt and for general corporate purposes. It is repayable by March 28, 2006 4. Facility D – EUR 400.000 million revolving loan facility available to refinance existing debt and for general corporate purposes. It is repayable by March 28, 2006

As at December 31, 2001, the facilities were drawn as follows. The interest rates represent the rates applying at the year-end: 1. Facility A1 – USD 1,552.000 million drawn by SES ASTRA at 3.19625% (LIBOR+1.25%) and USD 23.040 million drawn by SES GLOBAL at 3.1675% (LIBOR+1.25%) 2. Facility B1 – USD 383.000 million drawn by SES ASTRA at 3.09625% (LIBOR+1.15%) and USD 502.960 million drawn by SES GLOBAL – USD 490 million at 3.09625% (LIBOR+1.15%) and USD 12.960 million (LIBOR+1.15%) 3. Facility C – EUR 765.000 million at 4.592% (LIBOR+1.25%) and USD 110.000 million at 3.12% (LIBOR+1.25%) drawn by SES ASTRA 4. Facility D – no drawings outstanding

The Borrowers are committed in the Facilities Agreement to maintaining a number of financial ratios within agreed limits in order to provide sufficient security to the Lenders.

SES GLOBAL Annual Report 2001 53 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 54

NOTES TO THE CONSOLIDATED ACCOUNTS continued December 31, 2001

Note 18 Amounts owed to credit institutions continued On June 29, 1998 the Company arranged a Revolving Credit facility of EUR 49.579 million with a group of Luxembourg banks. On July 2, 1999, this facility was renewed for an amount of EUR 49.200 million. This facility is renewable on each expiry date for a period of 364 days. After a short period of unavailability following its expiry on June 29, 2001, it was renewed for a further period of 364 days from October 26, 2001. It is unsecured and can be drawn upon and repaid for limited periods.

On November 24, 2000, AsiaSat entered into a new loan agreement for an amount of USD 250.000 million. No drawdown had been made on this loan as at the year-end.

On November 4, 1997, NSAB entered into a syndicated Facility Agreement for an amount of SEK 770.000 million, whereof SEK 208.000 million is a revolving credit facility and SEK 562.000 million is a loan facility. The loan facility is repayable semi-annually with final repayment on December 15, 2003. The outstanding amount under the loan facility as at December 31, 2001 was SEK 204.000 million. The revolving credit facility was not used as at December 31, 2001. This Facility Agreement is secured by the pledge of certain assets and customer contracts.

Amounts outstanding Amounts outstanding 2001 2000 At the end of 2001 and 2000, the loan accounts for SES GLOBAL consolidated were as follows: EUR 000 EUR 000 Loan of July 15, 1996 (EUR 347.051 million) – 212,104 Loan of June 29, 1998 (EUR 285.078 million) – 285,078 Loan of January 11, 1999 (EUR 99.157 million) – 99,157 Loan of August 21, 2000 (EUR 250.000 million) – 235,702 Share of loan of November 4, 1997 (SEK 770.000 million) 10,828 17,269 Facilities Agreement of March 28, 2001 (EUR 1,400.000 million and USD 2,500.000 million) 3,653,764 – 3,664,592 849,310

Amounts outstanding Amounts outstanding 2001 2000 The maturity profile of these loans at December 31, 2001 and 2000 is as follows: EUR 000 EUR 000 Within one year 5,414 540,325 Between one and two years 1,171,470 179,282 Between two and five years 2,487,708 129,703 More than five years – – More than one year 3,659,178 308,985

Note 19 Other liabilities A capital lease obligation of EUR 25.058 million relating to a structured finance arrangement is shown at an amount of EUR 17.300 million in other liabilities payable within one year and EUR 7.758 million within other liabilities payable after one year. As disclosed in Note 26, cash at bank and on deposit includes restricted deposits, which, in substance defease the capital lease obligations. Both the debt and the deposits have floating interest rates which match equivalent published borrowing rates so there is no interest cost in the arrangements.

Note 20 Exceptional income The exceptional income of EUR 2.937 million relates to the final three months revenues arising through the ASTRA 1A in-orbit insurance claim due to partial loss of capacity. The prior year exceptional income of EUR 11.738 million arose under the same claim.

Note 21 Taxes Taxes have been provided in accordance with the relevant local fiscal requirements. Current and deferred taxes and franchise fees can be analysed as follows: 2001 2000 EUR 000 EUR 000 Current 61,066 156,604 Deferred 51,609 28,393 112,675 184,997

The prior year comparative figure contains charges paid to the Luxembourg government for the right of usage of the Luxembourg frequencies in the orbital positions of the geo-stationary arc from 45 degrees West to 50 degrees East for the period of January 1, 2001 to December 31, 2021. SES ASTRA historically paid the Luxembourg state a fee for the use of its orbital positions under a concession agreement. The payments were based upon SES ASTRA’s taxable income and as such were historically expensed under tax and franchise fees in the consolidated profit and loss account. Effective January 1, 2001, SES ASTRA and the Luxembourg government renegotiated the concession agreement under which SES ASTRA purchased the right of usage of the orbital position and frequency rights held by the Luxembourg government for a 21-year period. These rights have been capitalised as an intangible asset and the corresponding expense in 2001 is reported as amortisation rather than with the tax charge as in the prior year.

SES GLOBAL Annual Report 2001 54 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 55

Note 22 Basic and diluted earnings per share Basic earnings per share is calculated by dividing the net profit for the year attributable to ordinary shareholders of each category of shares by the weighted average number of shares outstanding during the year, for each category of share.

Diluted earnings per share is calculated by dividing the net profit for the year attributable to ordinary shareholders of each category of shares by the weighted average number of shares outstanding during the year, for each category of share, adjusted for the effects of dilutive options.

For the year 2001, earnings per share of EUR 0.69 per A share, EUR 0.19 per B share, and EUR 0.10 per C share, have been calculated on the following basis: 2001 2000 EUR 000 EUR 000 Profit of the Group 280,258 244,467 Weighted average number of shares for the purpose of calculating earnings per share: A shares 310,340,000 310,340,000 B shares 168,332,562 155,170,000 C shares 26,325,125 –

The weighted average number of shares is based on the capital structure of the Company as described in Note 14. In calculating the weighted average of the C shares, the Ordinary C shares and Preferred C shares have been grouped together. This reflects the fact that the fixed dividend on the Preferred C shares is deducted from the dividend rights of the Ordinary C shareholders, rather than representing an additional entitlement to a share of earnings. The prior year comparative figures have been restated in accordance with the share-split. Because the A and C shares have two and a half times the dividend entitlement of the B shares on a full year basis, the earnings per share of the A and C shares will normally be correspondingly higher than that of the B shares.

For the reasons set out in Note 25, no allowance has been made for potential dividends relating to founder shares.

Note 23 Employees The analysis of personnel as of December 31, 2001 was: 2001 2000 SES ASTRA 385 365 SES AMERICOM 292 – AsiaSat 80 75 Other 22 11 779 451

2001 2000 Staff costs can be analysed as follows: EUR 000 EUR 000 Wages and salaries 42,250 35,853 Social security costs 4,923 2,998 47,173 38,851

The average number of employees for 2001 was 513 (2000: 434).

Note 24 Board of Directors’ remuneration At the annual meeting of SES ASTRA held on April 17, 2001, payments to directors for attendance at Board and Committee meetings in 2001 were approved. These payments are computed on a fixed and variable basis, the variable part being based upon attendance at Board and Committee meetings. The decision taken by the annual meeting of SES ASTRA in relation to the Board of Directors’ remuneration was confirmed by an extraordinary general meeting of SES GLOBAL held on November 29, 2001.

Total payments arising in 2001 were EUR 0.945 million (2000: EUR 0.763 million).

Note 25 Founder shares In connection with the formation of SES ASTRA, 50 Founder Shares, without voting rights, were issued, subject to certain conditions. The Articles provide that for a period of 20 years from March 1, 1985, the date of formation of SES ASTRA, the Founder Shares are entitled to a 5 per cent participation in the net profits of the Company, after tax, resulting from television activities (except accessory provision of services) provided that the profits have been achieved exclusively within SES ASTRA’s purpose as defined in Article 2 of the Articles at the time of its incorporation in 1985, excluding all revenues resulting from an enlargement or extension of the initial purpose. These Founder Shares are redeemable by SES ASTRA at the end of the 20-year period at a value equal to the balance of profit entitlement of SES ASTRA not yet distributed.

At the annual general meeting of April 15, 1993, the shareholders were advised that there is evidence that the contractual agreements incumbent on the holder of the Founder Shares are not being adhered to by the holder of the Founder Shares. Pending resolution of this matter, which is before the Luxembourg Courts, it was decided neither to pay a dividend nor to make an allocation to the Founder Share reserve account.

The decision has been appealed against. The Court of Appeals of Luxembourg will hear the case at the end of May 2002. A Court decision is expected later in 2002.

SES GLOBAL Annual Report 2001 55 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 56

NOTES TO THE CONSOLIDATED ACCOUNTS continued December 31, 2001

Note 26 Off-balance-sheet items Capital commitments The Group had outstanding commitments in respect of contracted capital expenditure totalling EUR 606.374 million at December 31, 2001 (2000: EUR 433.000 million). These commitments largely reflect the purchase and launch of future satellites for the expansion and replacement of the Group satellite system, together with necessary expansion of the associated ground station and control facilities.

Forward foreign exchange contracts The Group has no forward foreign exchange contracts outstanding as of December 31, 2001.

Swap agreements As at December 31, 2001, NSAB had one outstanding interest rate swap agreement, for a notional amount of SEK 240.000 million. The swap notional amount is reduced in relation to repayments of the loan facility described in Note 18. At the Balance Sheet date the outstanding notional amount was SEK 160.000 million. Under the terms of this agreement, NSAB pays fixed interest of 6.085% and receives Stibor.

Restrictions on use of cash At December 31, 2001 there were restrictions on the use of cash balances totalling EUR 34.571 million (2000: EUR 1.000 million). Of this, EUR 25.058 million arises under the terms of a lease agreement for one of the satellites belonging to SES AMERICOM. For a further EUR 9.506 million, the restriction is that the funds only be used for settling acquisition costs relating to new loan facilities.

Option to increase participation in Star One As part of the agreement with Embratel to participate in the creation of Star One, the Group was granted the option to increase its holding to 29.99%.

Note 27 Related parties The State of Luxembourg holds a direct 11.58% voting interest in the Company and two indirect interests, both of 10.88%, through two state-owned banks, Banque et Caisse d’Epargne de l’Etat and Société Nationale de Crédit et d’Investissement. These shares constitute the Company’s B shares, which are described in more detail in Note 14.

GE Capital holds a 20.1% voting interest in the Company. The following transactions and balances with GE Capital and its subsidiaries and affiliates are included in the consolidated financial statements. Other debtors include a receivable from GE Capital of EUR 35.161 million. Revenues include EUR 2.521 million through sales to the GE Capital subsidiary NBC. External charges include an amount of EUR 1.224 million relating to the supply of a variety of services by GE Capital and its subsidiaries and affiliates.

The Group generated revenues of EUR 13.634 million from Deutsche Telekom AG (“DT”) in the year ended December 31, 2001. DT holds a voting interest of 10.52% in the Company. At the year-end there were no amounts outstanding. The Company also purchased, in the normal course of business, fixed assets from DT which are stated in the balance sheet at EUR 9.385 million.

Note 28 Subsequent events On February 7, 2002, the Company terminated construction of two satellites, GE-3i and GE-4i. The vendor has agreed to refund progress payments made through the termination date of USD 15.097 million in May 2002. The Company had made progress payments totalling approximately USD 13.860 million at December 31, 2001.

SES GLOBAL Annual Report 2001 56 Notes to the consolidated accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 57

SES GLOBAL S.A. ANNUAL ACCOUNTS REPORT OF THE STATUTORY AUDITOR

To the shareholders of SES GLOBAL S.A. Société Anonyme Betzdorf

Following our appointment by the Extraordinary General Meeting of the Shareholders on March 16, 2001, we have audited the accompanying annual accounts of SES GLOBAL S.A. for the period ended December 31, 2001. These annual accounts are the responsibility of the Board of Directors. Our responsibility is to express an opinion on these annual accounts based on our audit.

We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the annual accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the annual accounts. An audit also includes assessing the accounting principles used and significant estimates made by the Board of Directors, as well as evaluating the overall annual accounts presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the accompanying annual accounts give, in conformity with Luxembourg legal and regulatory requirements, a true and fair view of the financial position of SES GLOBAL S.A. as at December 31, 2001 and of the results of its operations for the period then ended.

Ernst & Young Société Anonyme Réviseur d’entreprises

Werner Weynand

March 28, 2002

SES GLOBAL Annual Report 2001 57 Report of the statutory auditor 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 58

SES GLOBAL S.A. BALANCE SHEET December 31, 2001

Assets Note EUR 000 Formation expenses 3 825 Financial assets Shares in affiliated undertakings 4 4,504,450 Current assets Debtors (amounts receivable in less than one year) – Amounts owed by affiliated undertakings 83,720 – Other receivables 4,021 Cash at bank and on hand 35,727 123,468 Prepayments 13,724 Total assets 4,642,467

Liabilities Note Capital and reserves Subscribed capital 5 175,809 Share premium 5 3,670,990 Legal reserve 6 17,581 3,864,380 Creditors Amounts payable after more than one year – Amounts owed to credit institutions 7 591,011 Amounts payable within one year – Trade creditors 73 – Amounts owed to affiliated undertakings 56 – Other creditors 2,627 2,756 Profit for the financial period 184,320 Total liabilities 4,642,467 The notes are an integral part of the annual accounts.

SES GLOBAL Annual Report 2001 58 Parent company balance sheet 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 59

SES GLOBAL S.A. BALANCE SHEET December 31, 2001

Note EUR 000 External charges (250) Other operating charges (305) Value adjustments in respect of formation expenses 3 (28) Income in respect of affiliated undertakings 190,000 Interest receivable and similar income 179 Interest payable and similar charges (5,276) Result on ordinary activities 184,320 Taxes – Profit for the financial period 184,320 The notes are an integral part of the annual accounts

SES GLOBAL Annual Report 2001 59 Parent company profit and loss account 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 60

SES GLOBAL S.A. BALANCE SHEET December 31, 2001

Note 1 General SES GLOBAL S.A. (the “Company”) was incorporated on March 16, 2001 as a limited liability company (Société Anonyme) under the law of the Grand Duchy of Luxembourg for an unlimited period of time.

The purpose of the Company is to take generally any interest whatsoever in electronic media and to be active, more particularly, in the communications area via satellites.

The accounting period of the Company is from January 1 to December 31, with the exception of the current year which runs from March 16, 2001 (date of incorporation) until December 31, 2001.

Note 2 Accounting practices The annual accounts are prepared in accordance with the generally accepted accounting principles and regulations in force in the Grand Duchy of Luxembourg.

Formation expenses The costs of formation of the company and the costs related to the increases in issued share capital are capitalised and amortised over five years.

Financial assets Financial assets are carried in the balance sheet at cost of purchase. An assessment is made at each balance sheet date to determine whether there is objective evidence that a financial asset may be impaired. If such evidence exists, the estimated recoverable amount of that asset is determined and any impairment loss recognised (being the difference between the estimated recoverable amount and the carrying amount) is recognised in the profit and loss account for the period.

Loan origination costs Loan origination costs are capitalised and included in prepaid expenses. They are amortised over the loan periods.

Translation of foreign currencies The Company maintains its accounting records in Euro (EUR) and the annual accounts are expressed in that currency.

The cost of formation expenses and financial assets is translated at the historical rate.

Assets expressed in other currencies are translated individually at the historical exchange rate or the rate prevailing at the balance sheet date, whichever is lower. For liabilities, the higher exchange rate is applied.

Income and charges expressed in other currencies are recorded on the basis of the exchange rates prevailing on the transaction dates.

Realised exchange gains and losses and unrealised exchange losses are reflected in the profit and loss account.

Note 3 Formation expenses The development of the formation expenses during the financial period 2001 is as follows: EUR 000 Cost at the beginning of the period – Additions 853 Cost at the end of the period 853 Accumulated amortisation at the beginning of the period – Amortisation (28) Accumulated amortisation at the end of the period (28) Net book value at the beginning of the period – Net book value at the end of the period 825

Note 4 Shares in affiliated undertakings EUR 000 Opening balance – Movements of the period 4,504,450 Closing balance 4,504,450

On November 8, 2001 the company acquired a 100% shareholding in SES ASTRA S.A. through a contribution in kind of 100% of the issued and outstanding share capital of SES ASTRA S.A. (formerly Société Européenne des Satellites S.A.).

On November 9, 2001, the company acquired a 100% shareholding in SES AMERICOM through a contribution in kind of all assets and liabilities of GE Capital Luxembourg Holdings Limited and 50 Series A and 50 Series B preferred shares of GE Subsidiary Inc. 22.

The principal activity of the above companies is the provision of satellite services.

On December 14, 2001, the Company acquired 299,999 shares in SES Finance, (a limited liability company established in Luxembourg) representing a 99.99% interest in that company. The principal activity of the company is to invest directly or indirectly in other companies that are actively involved in the satellite communication industry.

SES GLOBAL Annual Report 2001 60 Notes to the parent company accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 61

Note 4 Shares in affiliated undertakings continued As at December 31, 2001, the Company holds the following investments : Acquisition cost Participation EUR 000 SES ASTRA S.A. 100% 1,683,000 SES AMERICOM 100% 2,730,687 SES Finance S.A. 99.99% 90,762 SES Multimedia S.A. 0.01% 1

Article 248 paragraph (1) 2º of the Commercial Company Law of Luxembourg (the “law”) requires the disclosure of the amount of capital and reserves and profit and loss for the last financial year of each affiliated undertaking. In conformity with Article 250 (3) of the law these details have been omitted since the undertakings are included in consolidated accounts of SES GLOBAL S.A. and these consolidated accounts and the related consolidated annual report and auditors’ report thereon have been lodged with the Luxembourg Trade Registry.

Note 5 Subscribed capital Upon incorporation, the subscribed capital of the Company was EUR 0.09 million represented by 9,000 shares with no par value (6,000 A shares and 3,000 B shares). The authorised capital amounted to EUR 10,000.000 million.

Following a Board of Directors’ meeting held on November 8, 2001 the issued share capital was increased to EUR 111.068 million by the issue of 310,340,000 Class A ordinary shares and 155,170,000 Class B ordinary shares, with no par value, having the same rights and advantages as the former shares. The authorised share capital was also increased to EUR 10,134.000 million.

Following two Board of Directors’ meetings held on November 9, 2001, the issued share capital was increased to EUR 131.421 million by the issue of 85,376,910 Class B ordinary shares with no par value and further increased to EUR 175.899 million by the issue of 176,799,314 Class C ordinary shares, 4,496,358 Class C preferred shares and 5,270,926 Class B ordinary shares.

Following an Extraordinary General Meeting of the shareholders on November 29, 2001, the issued and fully paid share capital was reduced by EUR 0.090 million through the reimbursement of the original share capital on incorporation represented by 6,000 A shares and 3,000 B shares.

As at December 31, 2001 the issued and fully paid share capital amounted to EUR 175.809 million represented by 737,453,508 shares with no par value (310,340,000 Class A ordinary shares; 245,817,836 Class B ordinary shares and 176,799,314 Class C ordinary shares and 4,496,358 Class C preferred shares).

The Company did not acquire any of its own shares during the year.

Note 6 Legal reserve In accordance with Luxembourg legal requirements, a minimum of 5% of the yearly net profit is to be transferred to a legal reserve from which distribution is restricted. This requirement is satisfied when the reserve reaches 10% of the issued share capital.

Note 7 Amounts owed to credit institutions On March 28, 2001 the Company together with its 100% owned subsidiary SES ASTRA S.A. entered into a syndicated loan facility with a group of Luxembourg and foreign banks for a total amount of USD 2,500.000 million and EUR 1,400.000 million.

EUR 000 The maturity profile of the amounts drawn down is as follows as at December 31, 2001: Between one and two years 576,449 Between two and five years 14,562 591,011

The loan is guaranteed by cross guarantees from various affiliated companies.

SES GLOBAL Annual Report 2001 61 Notes to the parent company accounts 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 62

FIVE-YEAR FINANCIAL SUMMARY

2001 2000 1999 1998 1997 EUR million EUR million EUR million EUR million EUR million Total revenues 978.2 835.9 725.2 516.9 448.1 EBITDA 794.6 708.7 580.5 416.4 359.1 Depreciation and amortisation (270.3) (192.1) (173.5) (137.1) (114.7) Operating profit 524.3 516.6 407.0 279.3 244.4 Net financing charges (68.6)† (27.6) (32.5) (25.4) (21.1) Profit on ordinary activities 455.7 489.0 374.5 253.9 223.3 Extraordinary expenses 0.0 0.0 0.0 (8.2) 0.0 Taxes (112.6) (185.0) (146.4) (72.4) (66.8) Share of loss from associated companies (9.8) (6.6) 0.0 0.0 0.0 (Profit) loss attributable to minority interests (53.0) (52.9) (26.8) 2.9 2.3 Profit of the Group 280.3 244.5 201.3 176.2 158.8

Net operating cash flow 682.4 422.6 632.6 264.8 303.9 Capital expenditures 432.3 254.3 263.6 123.4 273.0 Net debt 3,140.0 834.6 559.6 503.1 476.7 Shareholders’ funds 3,917.4 1,040.1 847.9 719.7 668.2 Earnings per A-share (in EUR)* 0.69 0.66 0.54 0.47 0.43

Key performance ratios EBITDA margin 81.2% 84.8% 80.0% 80.6% 80.2% Net profit margin 28.7% 29.2% 27.8% 34.1% 35.4% Return on average equity 11.3% 25.9% 25.7% 25.4% 25.8% Debt to equity 80.2% 80.2% 66.0% 69.9% 71.3%

† Net financing charges for 2001 include value adjustments of EUR 20.8 million. * Prior years restated for 1:10 sharesplit on November 8, 2001

SES GLOBAL Annual Report 2001 62 Five-year financial summary 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 63

SHAREHOLDER INFORMATION

Registered office and Group Headquarters Château de Betzdorf, L-6815 Luxembourg

Luxembourg Trade Register N° RC Luxembourg 81 267

2002 Financial Calendar Announcement of preliminary results April 2, 2002 Annual General Meeting of Shareholders May 6, 2002 Dividend payment May 27, 2002 Announcement of first-half 2002 results Mid September 2002

Listed Security Fiduciary Depositary Receipts each in respect of one A Share of SES GLOBAL S.A. are listed on the Luxembourg and Frankfurt Stock Exchanges under the symbols SESG and SDSL respectively.

Fiduciary Agent Banque et Caisse d’Epargne de l’Etat, Luxembourg 1, Place de Metz, L-2954 Luxembourg Tel: (+352) 4015 1

Shareholder Enquiries For enquiries of a general nature regarding the Company or Investor Relations please contact:

SES GLOBAL S.A. Investor Relations Château de Betzdorf L-6815 Luxembourg Tel: (352) 710 725 490 www.ses-global.com

SES GLOBAL Annual Report 2001 63 Shareholder information 9356 SES A&R financials a/w 26/6/02 3:42 pm Page 64

COMPANIES OF THE GROUP

Contacts SES GLOBAL S.A. L-6815 Château de Betzdorf Luxembourg Tel (352) 710 725 1 Fax (352) 710 725 227 www.ses-global.com

Europe SES ASTRA S.A. L-6815 Château de Betzdorf Luxembourg Tel (352) 710 725 1 Fax (352) 710 725 227 www.ses-astra.com

Nordic Satellite AB Vretenvägen 10 SE-17154 Solna Sweden Tel (46) 8 505 645 00 Fax (46) 8 28 24 80 www.nsab.se

North America SES AMERICOM Inc. Four Research Way Princeton, NJ 08540-6684 USA Tel (1) 609 987 4000 Fax (1) 609 987 4517 www.ses-americom.com

COLUMBIA Communications Corp. 7200 Wisconsin Avenue Bethesda, MD 20814 USA Tel (1) 240 497 1330 Fax (1) 301 907 2420

Latin America Star One S.A. Rua de Assembléia 10 sala 2201 20119-900 Rio de Janeiro RJ Brazil Tel (55) 21 519 9116 Fax (55) 21 519 9163 www.starone.com.br

Nahuelsat S.A. Bouchard 680, 12th Floor Buenos Aires Argentina Tel (54) 11 5811 2600 Fax (54) 11 5811 2633 www.nahuelsat.com.ar

Asia Asia Satellite Telecommunications Holdings Ltd. 23F, East Exchange Tower 38 – 40 Leighton Road Hong Kong Tel (852) 2805 6666 Fax (852) 2504 3875 www.asiasat.com

AMERICOM ASIA-PACIFIC LLC 240 Tanjong Pagar Road 06-00 GE Tower Singapore, 088540 Tel (65) 326 3366 Fax (65) 326 3337 www.americom-ap.com

SES GLOBAL Annual Report 2001 64 Companies of the Group 9356 SES A&R Cover a/w 26/6/02 4:54 pm Page 5

CLASS SATELLITE COMMUNICATIONS WITH TRULY GLOBAL REACH OF OPERATIONAL EXCELLENCE.

Designed and produced by GA Design (UK) Ltd. 9356 SES A&R Cover a/w 26/6/02 4:54 pm Page 2 SES GLOB AL NULRPR 2001 REPORT ANNUAL

SES GLOBAL Château de Betzdorf L-6815 Luxembourg T (+352) 710 725 1 F (+352) 710 725 227 www.ses-global.com SES C/029/04.02 E Your Satellite Connection to the World