Annual Report the Inflight Internet Company Dear Fellow Shareholders

2018Annual report The inflight internet company Dear Fellow Shareholders Inflight broadband connectivity well penetrated in North America, is only about 35% solutions are becoming an penetrated on a global basis. We believe there will be approximately 18,000 incremental commercial aircraft increasingly critical feature globally in the next ten years requiring connectivity for the aviation industry. and that there are currently 24,500 aircraft in the global business aviation market without connectivity. Passengers expect to be able to stay connected. Airlines recognize the importance of differentiating Our ultimate vision is to seamlessly integrate themselves through connectivity solutions. the passengers’ airborne-connected experience Additionally, owners and operators of business with their on-the-ground experience by providing aircraft are committed to providing inflight internet. immersive connectivity and entertainment on the With our advanced 2Ku product and industry-leading aircraft. In my first full year as your President and position in attractive markets, we have never been CEO, I am pleased to report that we have made more confident in Gogo’s ability to realize our tremendous progress toward our long-term goals. compelling growth and value creation opportunities. We achieved many key operational and financial We have significant runway as both our markets objectives while addressing a range of challenges. are largely underpenetrated. Business Aviation is Most importantly, we have positioned Gogo on roughly 25% penetrated in North America and only a more stable path to enhancing value as the 15% globally. Commercial Aviation, though fairly leading provider of inflight connectivity solutions for commercial and business aircraft. We delivered Our Business Aviation Division achieved tremendous strong execution on our priorities to improve growth in 2018, driven largely by the launch of our quality for airlines and passengers, sharpened our Avance platform, which was the most successful focus by implementing aggressive cost controls product launch in the history of the BA business unit. and prudently addressed the balance sheet. In addition to these operational improvements, First, we reorganized our corporate structure around we strengthened our balance sheet by effectively two market-facing business units – a Business extending the maturities on approximately $200 Aviation Division and a Commercial Aviation million of our convertible senior notes from March Division – each with their own P&Ls and end-to-end 2020 until May 2022. More recently, in April we issued responsibility for delivering quality product to their $905 million of new senior secured notes due 2024 in respective end markets. This initiative dramatically a private offering. The proceeds of this transaction will improved cross-functional coordination by putting be used to enhance our balance sheet by refinancing sales through delivery under one leadership. all of our outstanding 12.5% senior secured notes due 2022, address our 3.75% Convertible Senior Notes Second, we completed a comprehensive analysis due 2020 and for other general corporate purposes. of our business and implemented a multi-year Integrated Business Plan with approximately 100 Looking ahead, we are highly focused on executing initiatives designed to improve our operational and our long-term technology strategy to dramatically financial performance. The aggressive actions we increase bandwidth and lower costs. With our have implemented and will continue to implement strong foundation and the progress we made in have dramatically improved quality, streamlined 2018, we are confident in our ability to build upon business processes and significantly reduced our cost Gogo’s industry-leading position and unlock the structure, including an expected $50 million reduction value of connecting aircraft. On behalf of the Gogo in non-Satcom operating expenses for 2019. Board, our management team and all of our employees, thank you for your continued support. We experienced excellent 2Ku performance and our de-icing solutions delivered positive results. Sincerely, We achieved a milestone of more than 1,000 2Ku aircraft online and nearly 1,300 commercial aircraft installed with satellite IFC systems, and we still had approximately 1,000 2Ku aircraft contracted but not yet installed as of December 31, 2018. Oakleigh Thorne UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One): È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2018 OR ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission File Number: 001-35975 Gogo Inc. (Exact name of registrant as specified in its charter) Delaware 27-1650905 (State or other jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 111 North Canal St., Suite 1500 Chicago, IL 60606 (Address of principal executive offices) Telephone Number (312) 517-5000 (Registrant’s telephone number, including area code) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ‘ No È Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ‘ No È Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes È No ‘ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes È No ‘ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ‘ Accelerated filer È Non-accelerated filer ‘ Smaller reporting company ‘ Emerging growth company ‘ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ‘ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No È The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of June 30, 2018, the last business day of the registrant’s most recently completed second fiscal quarter, was $275,249,580 based upon the closing price reported for such date on the NASDAQ Global Select Market. As of February 19, 2019, 87,560,694 shares of $0.0001 par value common stock were outstanding. Documents Incorporated By Reference Portions of the registrant’s definitive Proxy Statement for its Annual Meeting of Stockholders scheduled to be held June 11, 2019 are incorporated by reference into Part III of this Form 10-K. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2018. Gogo Inc. INDEX Page Part I. Item 1. Business 2 Item 1A. Risk Factors 18 Item 1B. Unresolved Staff Comments 53 Item 2. Properties 53 Item 3. Legal Proceedings 53 Item 4. Mine Safety Disclosures 54 Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 55 Item 6. Selected Financial Data 57 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 59 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 95 Item 8. Financial Statements and Supplementary Data 97 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 144 Item 9A. Controls and Procedures 144 Item 9B. Other Information 144 Part III. Item 10. Directors, Executive Officers and Corporate Governance 146 Item 11. Executive Compensation 146 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 146 Item 13. Certain Relationships and Related Transactions, and Director Independence 146 Item 14. Principal Accounting Fees and Services 147 Part IV. Item 15. Exhibits, Financial Statement Schedules 148 Item 16. Form 10-K Summary 157 1 INTRODUCTORY NOTE Unless the context otherwise indicates or requires, as used in this Annual Report on Form 10-K for the fiscal year ended December 31, 2018 references to: (i) “we,” “us,” “our,” “Gogo,” or the “Company” refer to Gogo Inc. and its directly and indirectly owned subsidiaries as a combined entity, except where otherwise stated or where it is clear that the term means only Gogo Inc. exclusive of its subsidiaries; (ii)“CA,” “CA business” or “commercial aviation” refer to our Commercial Aviation North America, or CA-NA, segment and our Commercial Aviation Rest of World, or CA-ROW, segment, taken as a whole and (iii) “fiscal,” when used in reference to any twelve-month period ended December 31, refers to our fiscal year ended December 31. Unless otherwise indicated, information contained in this Annual Report is as of December 31, 2018.

Load more