New Skies
Satellites N.V. (AEX, NYSE: NSK), the global satellite communications
company, today reported financial results for the three- and six-month
periods ended June 30, 2004. Revenues for the quarter were $83.3
million, EBITDA(A) was $56.5 million, and net income was $19.5
million, or $0.16 diluted earnings per share.

The 2004 performance includes two non-recurring events(B): (i) the
orbital slot coordination agreement with Intelsat disclosed last
quarter and the corresponding receipt of a one-time cash payment of
$32.0 million in the second quarter 2004 and (ii) costs incurred
relating to the purchase of the Company by affiliates of The
Blackstone Group of $0.7 million and $2.8 million, in the first and
second quarters of 2004, respectively.

Commenting on the results, New Skies CEO Dan Goldberg said:

The second quarter represented yet another solid performance for
New Skies, with revenues, EBITDA and free cash flow coming in at
significantly higher levels, primarily as a result of the recognition
of a one-time cash payment from Intelsat of $32 million. If we exclude
this one-time payment, revenues were consistent with the previous
quarter, but down from the same period last year. Although we secured
a number of important commercial opportunities for a range of video,
data, IP and government services, excess satellite capacity continues
to place downward pressure on transponder rates.

Notwithstanding the challenging operating environment, we were
able to substantially increase free cash flow© to $86 million for
the six-month period, and we continue to leverage the strengths of our
global network to attract new business, increasing the fleet-wide fill
rate during the quarter and growing backlog modestly.

In particular, the DTH and video capabilities of our newer
satellites, NSS-6 and NSS-7, continue to be in strong demand by
broadcasters. During the quarter, we concluded a major contract with
India’s Department of Space to provide NSS-6 capacity for Zee
Television’s DTH service in India. Adding to the agreement secured
last quarter for the DTH platform of Doordarshan, India’s national
broadcaster, this latest contract firmly establishes NSS-6 as the
premier DTH satellite for the Indian subcontinent.

Additionally, we signed a significant agreement with Globecast for
the distribution of a number of Algerian channels throughout the
Middle East and North Africa, further strengthening NSS-7’s position
as the leading satellite for video distribution throughout the whole
of Africa.

Finally, I’m pleased to report that our agreement for the sale of
the company to affiliates of The Blackstone Group is on track and we
now expect the transaction to be completed by the end of this year.

Financial highlights:

For the three- and six-month periods ended June 30, 2004, New
Skies achieved the following financial results:

  • Revenues for the three months ended June 30, 2004 were $83.3
    million, an increase of $28.6 million, or 52 percent, from
    $54.7 million in the same period in 2003. For the first six
    months of the year, revenues were $135.1 million, up $28.4
    million, or 27 percent, compared to $106.7 million in 2003.
    Revenues for the current quarter and six-month period include
    the orbital location coordination agreement signed with
    Intelsat resulting in a corresponding one-time cash receipt of
    $32.0 million. Excluding this agreement, revenues were $51.3
    million for the quarter and $103.1 million for the first six
    months of the year.
  • Operating expenses, excluding depreciation, increased $2.8
    million for the quarter, and $5.2 million for the six months
    ended June 30, 2004, as compared to the same periods in 2003.
    These net increases are primarily due to certain costs
    relating to the currently undertaken purchase of New Skies by
    affiliates of The Blackstone Group ($2.8 million for the
    quarter and $3.5 million for the six-month period), increased
    in-orbit insurance costs ($0.8 million for the quarter and
    $2.3 million for the six-month period) and increased stock
    compensation expense ($0.4 million for the six-month period),
    partially offset by savings rising from careful management of
    our discretionary costs.
  • Net income for the second quarter 2004 was $19.5 million
    compared to $3.1 million in the same period in the prior year,
    while the net income for the six-month period ended June 30,
    2004 was $19.6 million compared to $6.7 million in the same
    period in the prior year. Net income for the three months
    ended June 30, 2004 reflected the orbital location
    coordination agreement and corresponding receipt of a one-time
    cash payment of $32.0 million and the incurrence of
    acquisition-related expenses of $2.8 million ($3.5 million for
    the six month period ended June 30, 2004). Excluding these two
    non-recurring events, net income for quarter was $0.8 million,
    and $1.4 million for the six-month period.
  • In the second quarter 2004, EBITDA was $56.5 million, compared
    to $30.7 million for the same period in the prior year. EBITDA
    for the six months ended June 30, 2004 was $82.9 million, as
    compared to $59.7 million for the same period in 2003.
    Excluding the two non-recurring events previously mentioned,
    EBITDA for the second quarter 2004 was $27.3 million, and
    $54.4 million for the six-month period ended June 30, 2004.
  • The company achieved positive free cash flow position of $58.8
    million in the second quarter 2004 compared to $26.3 million
    in 2003. Free cash flow for the six months ended June 30, 2004
    was $86.0 million compared to free cash flow of $36.1 million
    in the same period in the prior year. Excluding the two
    non-recurring events previously mentioned, free cash flow for
    the second quarter 2004 was $29.6 million, and $57.5 million
    for the six-month period ended June 30, 2004.
  • Backlog at the end of the second quarter 2004 was $649
    million, approximately three times annual revenues, compared
    to $700 million in the same period last year, and to $645
    million at the end of the first quarter 2004.

Operating highlights:

  • New Skies secured several major video-related opportunities in
    the quarter, including agreements with:
            --  The commercial arm of India's Department of Space, Antrix
                Corporation, for multiple transponders on the NSS-6
                satellite to support the expansion of Zee Telefilms'
                direct-to-home television service DISH TV in India.
    
            --  Globecast for capacity to distribute several Algerian
                television channels throughout North Africa and the Middle
                East over the NSS-7 satellite.
    
  • The company also concluded a number of important data, IP and
    voice services contracts with:
            --  Com-ToNet S.A., a leading Greek IP service provider and
                teleport operator, for a full transponder on NSS-6 to
                offer broadband connections to the European Internet
                backbone for corporations, government agencies,
                telecommunications companies and Internet service
                providers operating throughout the Middle East.
    
            --  Streamlink Communications, a Kuwaiti-based broadband
                service provider, to support a new two-way IP network
                using multiple transponders on the high-powered NSS-6
                satellite.
    
            --  Nursat, a leading private telecommunications operator in
                Kazakhstan, for capacity on the NSS-703 Indian Ocean
                region satellite to support rural telecommunications
                throughout the Central Asian country.
    
    • Government services continued to play an important role as New
      Skies signed significant contracts with AT&T and the
      International Broadcasting Bureau.
    • During the quarter, New Skies also announced two new Internet
      offerings, IPsys® Broadband(sm) for Asia and IPsys®
      Bandwidth on Demand(sm) for Latin America. The services are
      designed to deliver next-generation two-way satellite
      broadband services, such as virtual private networks and
      high-speed Internet connectivity, video conferencing, rural
      telecommunications, Voice over IP, and distance learning
      networks.
    • Additionally, New Skies supported special events programming,
      including UEFA Euro 2004, Wimbledon, the French Open and
      Formula One Racing for ABC, BT Broadcast Services, CNN, EBU,
      NHK, NTL, RAI, Reuters, and TV Globo among others.

    Recent developments:

  • On June 5, 2004, New Skies signed a definitive agreement for
    the sale of the company to affiliates of The Blackstone Group,
    a leading private investment firm, for $956 million in cash,
    equivalent to approximately $7.96 per fully diluted share. New
    Skies and The Blackstone Group have received certain
    regulatory and shareholder approvals necessary for the
    completion of the transaction, including:
            --  On July 2, 2004, New Skies and The Blackstone Group
                received early termination of the required waiting period
                under the U.S. Hart-Scott-Rodino Antitrust Improvements
                Act of 1976 for Blackstone's acquisition of New Skies.
    
            --  On July 19, 2004, New Skies' shareholders overwhelmingly
                approved the sale of the company, with 92.4 percent of
                shares in attendance voting for the acquisition.
    
            --  The Netherlands' Ministry of Economic Affairs formally
                approved the transaction on July 28, 2004.
    

    New Skies anticipates that the transaction will be completed by
    the end of 2004, following the receipt of the remaining approvals and
    satisfaction of other customary closing conditions.

    About New Skies Satellites (AEX, NYSE: NSK)

    New Skies Satellites is one of only four fixed satellite
    communications companies with truly global satellite coverage,
    offering video, data, voice, and Internet communications services to a
    range of telecommunications carriers, broadcasters, large
    corporations, Internet service providers and government entities
    around the world. New Skies has five satellites in orbit, ground
    facilities around the world and one additional spacecraft under
    construction. The company also has secured certain rights to make use
    of additional orbital positions for future growth. New Skies is
    headquartered in The Hague, the Netherlands, and has offices in
    Beijing, Hong Kong, New Delhi, Sao Paulo, Singapore, Sydney and
    Washington, D.C. Additional information is available at
    www.newskies.com.

    Conference call:

    CEO Dan Goldberg and CFO Andrew Browne will host a conference call
    today at 5 p.m. (CET). To listen in please dial +44 20 7162 0025,
    passcode “New Skies.”

    The call will also be webcast live on the New Skies web site at:
    http://www.newskies.com/ir.

    The conference call will be available for replay, 24 hours a day
    for the subsequent 5 working days and will also be archived on New
    Skies’ website. The international dial-in number for the replay is +44
    20 8288 4459 (callers in the United States may dial +1 334 323 6222;
    for the UK only on free phone number: 0500 637 880) Passcode: 737852.

        (A) See definition of EBITDA and "Reconciliation of EBITDA to net
            income" in Note 3 of "Notes to the consolidated quarterly
            financial information".
    
        (B) See Note 2 of "Notes to the consolidated quarterly financial
            information".
    
        (C) See definition of free cash flow and "Reconciliation of net
            cash provided by operating activities to free cash flow from
            operations" in Note 4 of "Notes to the consolidated quarterly
            financial information".
    

    Safe Harbor

    Section 27A of the U.S. Securities Act of 1933 and Section 21E of
    the U.S. Securities Exchange Act of 1934 provide a “safe harbor” for
    forward-looking statements made by an issuer of publicly traded
    securities and persons acting on its behalf. New Skies Satellites N.V.
    has made certain forward-looking statements in this document in
    reliance on those safe harbors. A forward-looking statement concerns
    the company’s or management’s intentions or expectations, or are
    predictions of future performance. These statements are identified by
    words such as “intends”, “expects”, “anticipates”, “believes”,
    “estimates”, “may”, “will”, “should” and similar expressions. By their
    nature, forward-looking statements are not a matter of historical fact
    and involve risks and uncertainties that could cause New Skies’ actual
    results to differ materially from those expressed or implied by the
    forward-looking statements for a number of reasons. Factors which may
    affect the future performance of New Skies include: delays or problems
    in the construction or launch of future satellites; technical
    performance of in-orbit satellites and earth-based infrastructure;
    increased competition and changes in technology; growth of and access
    to the company’s target markets; legal and regulatory developments
    affecting the company’s business; and worldwide business and economic
    conditions, among other things. These risks and other risks affecting
    New Skies’ business are described in the company’s periodic filings
    with the U.S. Securities and Exchange Commission, including but not
    limited to New Skies’ Annual Report on Form 20-F for the year ended
    December 31, 2003. Copies of these filings may be obtained by
    contacting the SEC. New Skies disclaims any obligation to update the
    forward-looking statements contained in this document.

    New Skies Satellites N.V. and Subsidiaries
    Consolidated Balance Sheets
    
    June 30, 2004 and December 31, 2003
    (In thousands of U.S. Dollars, except share data)
    ----------------------------------------------------------------------
                                                   June 30,   December 31,
                                                      2004         2003
                                                 ------------ ------------
                                                  (unaudited)
    Assets
    Current Assets
    Cash and cash equivalents                    $   102,917  $    23,253
    Trade receivables                                 43,339       41,870
    Prepaid expenses and other assets                 11,740       14,782
                                                 ------------ ------------
    Total Current Assets                             157,996       79,905
    
    Communications, plant and other property,
     net                                             978,441    1,026,580
    Deferred tax asset                                 8,620        8,748
    Other assets                                         258          603
                                                 ------------ ------------
    
    TOTAL                                        $ 1,145,315  $ 1,115,836
                                                 ============ ============
    
    Liabilities and Shareholders' Equity
    
    Current Liabilities
    Accounts payable and accrued liabilities     $    23,430  $    17,518
    Income taxes payable                              42,282       32,346
    Deferred revenues and other liabilities            8,745        8,138
    Satellite performance incentives                   6,561        6,429
                                                 ------------ ------------
    Total Current Liabilities                         81,018       64,431
    
    Long Term Liabilities                             46,070       49,615
    
    Shareholders' Equity
    Governance preference shares (227,530,000
     shares   authorized, par value EUR 0.05;
     none issued)                                          -            -
    Cumulative preferred financing shares
     (22,753,000 shares   authorized, par value
     EUR 0.05; none issued)                                -            -
    Ordinary Shares (204,777,000 shares
     authorized, par value EUR 0.05; 118,096,572
     and 117,668,652 shares issued,
     respectively)                                     5,458        5,431
    Additional paid-in capital                       928,122      926,109
    Retained earnings                                 82,758       67,854
    Unearned compensation                                (82)        (179)
    Accumulated other comprehensive income             1,971        2,575
                                                 ------------ ------------
    Total Shareholders' Equity                     1,018,227    1,001,790
                                                 ------------ ------------
    
    TOTAL                                        $ 1,145,315  $ 1,115,836
                                                 ============ ============
    

    -0-

    New Skies Satellites N.V. and Subsidiaries
    Consolidated Statements of Income
    
    Three-month periods ended June 30, 2004 and 2003 (unaudited)
    (In thousands of U.S. Dollars, except share data)
    
                                                            Three-month
                                                            periods ended
                                                               June 30
                                                            2004     2003
                                                         -------- --------
    
    Revenues (See Note 2)                                $83,253  $54,650
                                                         -------- --------
    
    Operating expenses:
    Cost of operations                                    13,623   13,114
    Selling, general and administrative (See Note 2)      13,151   10,874
    Depreciation                                          25,775   25,701
                                                         -------- --------
    Total Operating Expenses                              52,549   49,689
    
                                                         -------- --------
    Operating Income                                      30,704    4,961
    
    Interest expense, net                                    258       68
                                                         -------- --------
    Income Before Income Tax Expense                      30,446    4,893
    
    Income tax expense                                    10,961    1,761
                                                         -------- --------
    Net Income                                           $19,485   $3,132
                                                         ======== ========
    
    Earnings Per Share:
     Basic                                               $  0.17   $ 0.03
     Diluted                                                0.16     0.03
                                                         ======== ========
    
    Six-month periods ended June 30, 2004 and 2003 (unaudited)
    (In thousands of U.S. Dollars, except share data)
    
                                                        Six-month periods
                                                           ended June 30
                                                           2004      2003
                                                       --------- ---------
    
    Revenues (See Note 2)                              $135,108  $106,661
                                                       --------- ---------
    
    Operating expenses:
    Cost of operations                                   27,375    25,694
    Selling, general and administrative (See Note 2)     24,838    21,307
    Depreciation                                         51,643    48,626
                                                       --------- ---------
    Total Operating Expenses                            103,856    95,627
    
                                                       --------- ---------
    Operating Income                                     31,252    11,034
    
    Interest expense, net                                   588       549
                                                       --------- ---------
    Income Before Income Tax Expense                     30,664    10,485
    
    Income tax expense                                   11,039     3,775
                                                       --------- ---------
    Net Income                                         $ 19,625    $6,710
                                                       ========= =========
    
    Earnings Per Share:
     Basic                                             $   0.17     $0.06
     Diluted                                               0.16      0.06
                                                       ========= =========
    

    -0-

    New Skies Satellites N.V. and Subsidiaries
    Consolidated Statements of Cash Flows (unaudited)
    
    Six-month periods ended June 30, 2004 and 2003
    (In thousands of U.S. Dollars)
    ----------------------------------------------------------------------
                                                        Six-month periods
                                                           ended June 30
                                                            2004     2003
                                                        --------- --------
    Cash flows from operating activities:
    Net income                                          $ 19,625   $6,710
    
    Adjustments for non-cash items:
     Depreciation                                         51,643   48,626
     Deferred taxes                                          775      641
     Stock compensation expense                            1,396      968
    
    Changes in operating assets and liabilities:
     Trade receivables                                    (1,573)  (3,048)
     Prepaid expenses and other assets                     2,297    1,476
     Accounts payable and accrued liabilities              5,428    1,776
     Income taxes payable                                  9,846    1,563
     Other liabilities                                       453   (2,449)
                                                        --------- --------
    Net Cash Provided By Operating Activities             89,890   56,263
                                                        --------- --------
    
    Cash flows from investing activities:
     Payments for communication, plant and other
       property                                           (3,859) (20,210)
                                                        --------- --------
    Net Cash Used In Investing Activities                 (3,859) (20,210)
                                                        --------- --------
    
    Cash flows from financing activities:
     Repayment of short-term borrowings                        -   (5,000)
     Treasury stock acquired                                   -  (32,162)
     Stock options exercised                                 741        -
     Dividends paid                                       (3,985)       -
     Satellite performance incentives and other           (2,838)  (2,421)
                                                        --------- --------
    Net Cash Used In Financing Activities                 (6,082) (39,583)
                                                        --------- --------
    
    Effect of exchange rate differences                     (285)     310
                                                        --------- --------
    
    Net change in cash and cash equivalents               79,664   (3,220)
    Cash and cash equivalents, beginning of year          23,253    8,329
                                                        --------- --------
    Cash and cash equivalents, end of period            $102,917   $5,109
                                                         ========   ======
    
        Cash payments for interest (net of amounts capitalized) were nil
    for the six-month periods ended June 30, 2004 and 2003. Income taxes
    paid amounted to $1.1 million and $1.8 million for the six-month
    periods ended June 30, 2004 and 2003, respectively.
    

    New Skies Satellites N.V. and Subsidiaries

    Notes to the consolidated quarterly financial information

    Three- and six-month periods ended June 30, 2004 and 2003
    (unaudited)

        (1) Acquisition of the Company
    
            On June 5, 2004, the Company signed a definitive agreement for
            the sale of the Company to affiliates of The Blackstone Group
            ("Purchaser"), a private investment firm, for $956 million in
            cash, equivalent to approximately $7.96 per fully diluted
            share ("Blackstone Transaction"). According to the agreement,
            the sale of the Company involves the transfer of New Skies'
            business and operations to certain wholly-owned subsidiaries
            of Cayman Islands private equity funds affiliated with The
            Blackstone Group and the distribution of the cash proceeds to
            our shareholders. The sale would be structured as the sale of
            substantially all assets to, and the assumption of
            substantially all liabilities by, the Purchaser.
    
            On July 19, 2004, New Skies' shareholders approved the sale of
            the company, with 92.4 percent of shares in attendance voting
            for the acquisition. It is expected that the transaction will
            be completed once the applicable regulatory approvals have
            been received and certain financing and other customary
            conditions have been satisfied. After the closing of the
            Blackstone Transaction, a liquidation of New Skies is
            contemplated, pursuant to which two liquidation distributions
            will be paid to shareholders: (i) an initial liquidation
            distribution which is expected to consist of approximately 95
            percent of the cash proceeds of the asset sale shortly after
            the closing of the Blackstone Transaction; and (ii) a final
            liquidation distribution of the remaining cash proceeds
            approximately ten weeks after the initial distribution. This
            process is expected to conclude by approximately the end of
            2004 or early 2005.
    
        (2) Additional information
    
            The second quarter and year-to-date 2004 performance includes
            two non-recurring events:
    
            (i) a comprehensive agreement with Intelsat relating to
                certain longstanding orbital slot coordination matters,
                whereby New Skies agreed not to bring a satellite into use
                at the 120.8 degrees west longitude location in order to
                ensure Intelsat's IA-13 satellite will be able to operate
                at 121 degrees west longitude without interference. In
                return, Intelsat made a one-time payment to New Skies of
                $32 million. Both parties also resolved all outstanding
                coordination issues regarding operations at 340 degrees
                east longitude and 57 degrees east longitude, safeguarding
                New Skies' planned operations in the Atlantic Ocean region
                and for our NSS-8 satellite, planned for operation in the
                Indian Ocean region, and
    
            (ii) costs incurred relating to the purchase of the Company by
                affiliates of The Blackstone Group of $0.7 million and
                $2.8 million, in the first and second quarters of 2004,
                respectively.
    
        (3) Reconciliation of EBITDA to net income
    
            New Skies believes earnings before interest, taxes,
            depreciation, amortization and other expenses, primarily
            financing costs relating to the revolving credit facility,
            (EBITDA) is a measure of performance used by some investors,
            equity analysts and others to make informed investment
            decisions. EBITDA is not presented as an alternative measure
            of operating results or cash flow from operations, as
            determined in accordance with generally accepted accounting
            principles in the U.S. EBITDA as presented herein may not be
            comparable to similarly titled measures reported by other
            companies. EBITDA is reconciled to net income as follows:
    
    (in thousands of U.S. dollars)        Three-month        Six-month
                                         periods ended     periods ended
                                           June 30,          June 30,
                                          2004     2003     2004     2003
                                       -------- -------- --------  -------
    
    Net income                         $19,485  $ 3,132  $19,625  $ 6,710
    Income tax expense                  10,961    1,761   11,039    3,775
    Interest expense                       382      696      784    1,187
    Interest expense capitalized          (382)    (696)    (784)  (1,187)
    Interest-financing costs               258       68      588      549
    Depreciation                        25,775   25,701   51,643   48,626
                                       -------- -------- --------  -------
    EBITDA                             $56,479  $30,662  $82,895  $59,660
                                       ======== ======== ======== ========
    
        (4) Reconciliation of net cash provided by operating activities to
            free cash flow from operations
    
            New Skies believes free cash flow from operations is a measure
            of performance used by some investors, equity analysts and
            others to make informed investment decisions. Free cash flow
            from operations is not presented as an alternative measure of
            cash flow from operations, as determined in accordance with
            generally accepted accounting principles in the U.S. Free cash
            flow from operations as presented herein may not be comparable
            to similarly titled measures reported by other companies. Free
            cash flow from operations is reconciled to net cash provided
            by operating activities as follows:
    
    (in thousands of U.S. dollars)   Three-month periods Six-month periods
                                        ended June 30,     ended June 30,
                                        2004      2003     2004     2003
                                       -------- -------- -------- --------
    
    Net cash provided by operating
     activities                        $60,479  $31,102  $89,890  $56,263
    Payments for communication, plant
     and other property                 (1,674)  (4,776)  (3,859) (20,210)
                                       -------- -------- -------- --------
    Free cash flow from operations     $58,805  $26,326  $86,031  $36,053
                                       ======== ======== ======== ========
    
        (5) Stock based compensation
    
            Effective January 1, 2003, New Skies adopted the fair value
            based method of accounting for stock compensation under SFAS
            123, Accounting for Stock-Based Compensation, transitioning
            via the prospective method. The following table illustrates
            the effect on net income and earnings per share if New Skies
            had applied the fair value recognition provisions of SFAS 123
            for all stock-based compensation awards.
    
                                          Three-month        Six-month
    (in thousands of U.S. dollars,        periods ended     periods ended
    except earnings per share data)         June 30,          June 30,
                                           2004     2003     2004    2003
                                        -------- -------- -------- -------
    
    Net income, as reported             $19,485  $ 3,132  $19,625  $6,710
    Add: Stock-based employee
     compensation expense included in
     reported net income, net of taxes      521      425      991     666
    Less: Total stock-based employee
     compensation expense determined
     under fair value based
        Method for all awards, net of
         taxes                             (876)  (1,270)  (1,871) (2,632)
                                        -------- -------- -------- -------
    Pro forma net income                $19,130  $ 2,287  $18,745  $4,744
                                        ======== ======== ======== =======
    

    -0-

                                                Three-month    Six-month
                                                  periods       periods
                                                   ended         ended
                                                  June 30,      June 30,
                                                2004   2003   2004   2003
                                               ------ ------ ------ ------
    
    Earnings per share:
       Basic, as reported                      $0.17  $0.03  $0.17  $0.06
       Basic, pro forma                         0.16   0.02   0.16   0.04
       Diluted, as reported                     0.16   0.03   0.16   0.06
       Diluted, pro forma                       0.16   0.02   0.16   0.04
                                               ====== ====== ====== ======
    

    Contact:

         New Skies Satellites
         Corporate Communications
         Jeff Bothwell, +31 70 306 4239
         +31 6 1131 0183
         Jbothwell@newskies.com
         or
         New Skies Satellites
         Investor Relations
         Boris Djordjevic, +31 70 306 4183
         bdjordjevic@newskies.com
         or
         SPJ
         Leon Melens, +31 20 647 8181
         lmelens@spj.nl