Business Context and Reporting Period
This Form 8-K filing by Gogo Inc. reports a material definitive agreement entered into on March 6, 2016, by its wholly owned subsidiary, Gogo LLC. The report was filed on March 10, 2016.
Key Financial Metrics
This filing does not contain financial statements, revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on the terms of a new commercial agreement.
Material Changes and Agreement Details
Gogo entered into an agreement with Intelsat Corporation to purchase Ku-band satellite capacity for its 2Ku and Ku in-flight connectivity systems. Key terms include:
- Scope: Widebeam and spotbeam capacity covering Africa, Europe, Asia, the Middle East, and portions of the Caribbean, Atlantic, and Pacific Oceans.
- Technology: Includes traditional wide beam services and high throughput spot beam services expected to enter service beginning in 2016.
- Future Capacity: Gogo agreed to purchase capacity on the OneWeb low earth orbit satellite constellation, expected to be in service in 2019, subject to conditions and availability.
- Pricing: Monthly fees apply to Intelsat capacity; OneWeb prices are to be negotiated.
- Term: Obligations expire on December 31, 2023, unless terminated earlier.
Outlook, Risks, and Contingencies
The filing includes standard forward-looking statements regarding the availability and performance of the satellite capacity. Management notes that there can be no assurance that the Company will be able to provide connectivity service to aircraft that fully utilize such capacity. Specific service level agreements and details will be set forth in future statements of work or separate agreements.
Investor Verification Checklist
- Verify the specific monthly fee amounts and total contract value, which are not disclosed in this summary.
- Review the detailed specifications and service level agreements to be filed as an exhibit to the Form 10-Q for the quarter ending March 31, 2016.
- Assess the risks associated with the OneWeb constellation, specifically the 2019 service entry date and conditional availability.
- Confirm the impact of this agreement on Gogo's existing satellite capacity portfolio and cost structure.