Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of James Ratcliffe from Barclays Capital. You may proceed.
James Ratcliffe - Barclays Capital
A couple questions. First off, if we can talk about international being a major growth engine for you guys, how does the recent strengthening of the U.S. dollar affect that business in terms of the way in which the contracts are executed, currencies and costs during the particular transponder lease contracts? Do those match to the currency of the contract, are they local currency? Can you give us a read on that?
Pradman P. Kaul
Most of our costs of our international subsidiaries are in the local currencies including transponder leasing costs. About the only major cost that is in dollars is typically the equipment they buy from us here in Germantown. In some cases, we are protected that way with forward contracts. We’ve not really had a cost problem with the strengthening of the dollar. The impact that you do see is when you convert the revenues and profits into dollars for our reporting purposes. There is obviously an impact on that because of the depreciation of the Euro over pound or Brazilian real over rupees, it reflects on our lower revenue and profit.
James Ratcliffe - Barclays Capital
Do you have any read how much of that 20% increase in international revenue in 3Q was currency-driven versus organic?
Grant A. Barber
In the year-over-year basis, James, the currency for Q3 for the entities that we operate on, primarily British pounds and the rupees, we’re actually down on a year-over-year basis. Most of the movement in the U.S. dollar was to the currencies that happened since September. So we had a slight tickup in Q1 and Q2 in revenue, we actually had a drop in Q3 on currency, modest in total.
James Ratcliffe - Barclays Capital
But currency was a drag in 3Q for you?
Grant A. Barber
Yes, it was a drag in Q3.
James Ratcliffe - Barclays Capital
Secondly, given the climate that we’re all aware of, how does that affect your thoughts for an incremental satellite? I know you have been talking about putting it up potentially this year, moving forward on one of those. How does it affect in terms of decision-making and potentially deployment and payment?
Pradman P. Kaul
Obviously, as we mentioned, we have the cash that we have on hand and the cash that we expect to generate from our businesses. We are very comfortable that we have the cash to invest for the next satellite. We are working hard on finalizing the arrangements and just because we are being prudent with dotting the ?i?s and crossing the ?t?s, I expect we will be making an investment on the new satellite somewhere by the end of the fourth quarter.
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