BOEING COMPLETING WORK ON XM-3 SATELLITE, 10-Q SAYS
Boeing is completing modifications on XM’s ground spare satellite, XM-3, and XM paid more than $100 million during the first quarter to prepare the bird for a 4th-quarter launch, XM said Mon. in a 10-Q report filed at the SEC.
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XM has said it plans to launch XM-3 into one orbital slot by year-end, and operate its existing 2 satellites, “Rock” and “Roll,” collocated in its other orbital slot. In 2007, the company plans to launch XM-4 to replace the collocated Rock and Roll, meaning XM will have replacement satellites in orbit and operating before Rock and Roll can no longer provide full service on their own, or half service in collocated mode. The strategy was made necessary by solar array degradation that has cut the useful life expectancy of Rock and Roll to less than 7 years. XM-3 is being modified to correct the solar array problem and incorporate other changes, including “optimizing” the satellite for the orbital slot into which it will be launched, XM said.
To pay for modifying XM-3, XM has deferred $15 million at an interest rate of 8% through Dec. 5, 2006, and borrowed $35 million from Boeing Capital in a separate loan to be repaid before launch of XM-3, the 10-Q said. The loan was prepaid this month by XM’s holding company, the report said. The costs include the launch itself and optimizing XM-3 for its specific orbital slot, plus “appropriate software and certain pre- and post-launch services,” the 10-Q said.
XM-4 will be available before Nov. 2005, for delivery to Sea Launch at a cost of $186.5 million -- including associated launch services, but excluding in-orbit performance incentives and financing charges on certain amounts deferred before launch, the 10-Q said. XM has an option to delay XM-4 if XM-3 is launched successfully and operates satisfactorily, the filing said. Under terms of its contract with Boeing, XM’s holding company has “fixed-price options” to acquire a 5th satellite, on pricing and performance incentive terms similar to those for XM-4, the 10-Q said.