Rignet Inc (RNET) 2017年年度報告「NASDAQ」.pdf

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1、Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 10-K (Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2017or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES

2、 EXCHANGE ACT OF1934For the transition period from to Commission file number 001-35003 RigNet,Inc.(Exact name of registrant as specified in its charter)Delaware 76-0677208(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification No.)15115 Park Row Blvd,Suite 300Houst

3、on,Texas 77084-4947(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(281)674-0100Securities registered pursuant to Section 12(b)of the Act:Title of each class Name of each exchange on which registeredCommon Stock,$0.001 par value NASDAQ Global Select

4、 MarketSecurities registered pursuant to Section 12(g)of the Act:NONE Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Sectio

5、n 15(d)of the Act.Yes No 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 of1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has

6、been subject to such filingrequirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of

7、this chapter)during the preceding 12 months(or for such shorterperiod that the registrant was required to submit and post such files).Yes 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,andwill not be

8、 contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form10-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 fi

9、ler,a smaller reporting company or anemerging growth 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 Non-accelerated filer Smaller reporting

10、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 anynew or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mar

11、k whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No As of June 30,2017,which was the last business day of the registrants most recently completed second fiscal quarter,the aggregate market value of theregistrants common stock,$0.001 par value per share(the“Common

12、Stock”)held by non-affiliates of the registrant on such date was approximately$289.6million.For purposes of this calculation,only executives and directors are deemed to be affiliates of the registrant.At February 28,2018,there wereoutstanding 18,232,872 shares of the registrants Common Stock.DOCUMEN

13、TS INCORPORATED BY REFERENCEPortions of the Registrants definitive Proxy Statement for its 2018 Annual Meeting of Stockholders to be filed with the Commission within 120 daysof December 31,2017 are incorporated herein by reference in Part III of this Annual Report.Table of ContentsTABLE OF CONTENTS

14、Page PART I Item 1 Business 1 Item 1A Risk Factors 12 Item 1B Unresolved Staff Comments 22 Item 2 Properties 22 Item 3 Legal Proceedings 22 Item 4 Mine Safety Disclosures 22 PART II Item 5 Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 23 I

15、tem 6 Selected Financial Data 25 Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A Quantitative and Qualitative Disclosures about Market Risk 44 Item 8 Financial Statements and Supplementary Data 44 Item 9 Changes in and Disagreements with Account

16、ants on Accounting and Financial Disclosure 44 Item 9A Controls and Procedures 44 Item 9B Other Information 47 PART III Item 10 Directors,Executive Officers and Corporate Governance 48 Item 11 Executive Compensation 48 Item 12 Security Ownership of Certain Beneficial Owners and Management and Relate

17、d Stockholder Matters 48 Item 13 Certain Relationships and Related Transactions,and Director Independence 48 Item 14 Principal Accounting Fees and Services 48 PART IV Item 15 Exhibits,Financial Statement Schedules 49 Item 16 Form 10-K Summary 51 iTable of ContentsPART I Item 1.BusinessFor convenienc

18、e in this Annual Report on Form 10-K,“RigNet”,the“Company”,“we”,“us”,and“our”refer to RigNet,Inc.and its subsidiaries taken as awhole,unless otherwise noted.OverviewWe are a global technology company that provides customized communications services,applications and cybersecurity solutions enhancingc

19、ustomer decision making and business performance.We provide solutions ranging from fully-managed voice and data networks to more advanced networksand applications that include video conferencing,asset and weather monitoring,real-time data services and cybersecurity primarily under a multi-servicerec

20、urring revenue model.Customers use our private networks to manage information flows and execute mission-critical operations primarily in remote areas where conventionaltelecommunications infrastructure is either unreliable or unavailable.We provide our clients what is often the sole means of communi

21、cations for their remoteoperations.As of December 31,2017,we were the primary provider of remote communications and collaborative services to approximately 500 customersreaching over 1100 remote sites located in approximately 50 countries on six continents.For the year ended December 31,2017,our rev

22、enue generated fromcountries outside of the U.S.represented 69.0%of total revenue.The emergence of highly sophisticated processing and visualization systems has allowed our customers to make decisions based on real-timeinformation carried by our network from anywhere in the world.We deliver turn-key

23、 solutions and value-added services that simplify the management ofmultiple communications needs,allowing our customers to focus their attention on their core operations.Our customer solutions enable broadband data,voice and video communications with quality,availability,security and scalability.Key

24、 aspects of our services include:managed services solutions offered at a subscription rate generally through contracts with terms that typically range from one month to threeyears;secure end-to-end Multiprotocol Label Switching(MPLS)global network to ensure greater network availability,faster troubl

25、eshooting andservice restoration time,rapid integration of plug-and-play components and quality of service for various forms of data traffic;a network designed to accommodate multiple customer groups resident at a site,including drilling contractors,exploration and productionoperators and oilfield s

26、ervice providers;value-added services,such as wide-area network acceleration,remote presence and Wi-Fi hotspots,benefiting multiple tenants and customergroups at one site;proactive network monitoring and management through Global Customer Care centers that always actively manage network availability

27、 andserve as in-bound call centers for troubleshooting,24 hours per day,365 days per year;engineering and design services to develop solutions for customers;Applications and Internet-of-Things services delivered over-the-top of the Managed Services including Supervisory Control and DataAcquisition(S

28、CADA)and Software as a Service(SaaS)offerings including BlackTIE and CyphreLink encryption,weather monitoring primarilyin the North Sea(MetOcean)and Adaptive Video Intelligence(AVI);systems integration services to design,assemble,install and commission turn-key solutions for customer communications

29、systems;and maintenance and support through geographically deployed engineering and service support teams as well as warehoused spare equipmentinventories.We procure bandwidth from independent commercial satellite-services operators and terrestrial wireless and landline providers to meet the needs o

30、f ourcustomers for end-to-end IP-based communications.This allows RigNet to provide hybrid network solutions which greatly improves network up-time byusing multiple and diverse sources of 1Table of Contentsbandwidth.We generally own the network infrastructure and communications equipment we install

31、at remote sites as well as equipment co-located in third-party teleport facilities and data centers,all of which we procure through various equipment providers.By owning the network infrastructure andcommunications equipment on the customer premises,we are better able to select the optimal equipment

32、 for each customer solution as well as ensure thequality of our services.Our IndustryThe technology and remote telecommunications industry is highly competitive with a variety of companies and potential new entrants from adjacentvertical markets and the broader value chain.We serve customers with cu

33、stomized communications,applications and cybersecurity solutions that connect toremote locations via global“always-connected,always secure,always learning”networks,driving demand for reliable,managed communications services ina variety of environmental conditions.We are now seeking to expand our cus

34、tomer base beyond oil and gas drillers and exploration and production,andoilfield service companies to other markets including midstream pipelines,maritime,engineering and construction,disaster recovery services,banking andgovernments.The customers we serve depend on maximum reliability,quality and

35、continuity of products and services.Our Customers with geographically dispersedoperations are particularly motivated to use secure and highly reliable communications networks due to several factors:our customers rely on secure real-time data collection and transfer methods for the safe and efficient

36、 coordination of remote operations;technological advances in drilling techniques have enabled increased exploitation of offshore deepwater reserves and development ofunconventional reserves(e.g.,shales and tight sands)that require real-time data access by personnel in field and head offices to maint

37、ain safetystandards and optimize performance;transmission of increased data volumes and real-time data management and access to key decision makers enable customers to maximize safety,operational results and financial performance;and rig crews and other employees in remote areas increasingly demand

38、access to the internet to keep in communication with their friends and familyand for entertainment.While we experience competition in our markets,we believe that our Applications and Internet-of-Things offerings are a key differentiator and coupledwith our established relationships with customers an

39、d proven performance serve as significant barriers to entry.OperationsWe are a global technology company that provides customized communications services,applications and cybersecurity solutions enhancingcustomer decision making and business performance.Our business operations are divided into three

40、 reportable segments:Managed Services,Applicationsand Internet-of-Things and Systems Integration.For financial information about our reportable segments,see Note 12 “Segment Information”in ourconsolidated financial statements included in this Annual Report on Form 10-K.Managed Services.Our Managed S

41、ervices segment provides remote communications,telephony and technology services for offshore andonshore drilling rigs and production facilities,support vessels,and other remote sites.Applications and Internet-of-Things(Apps&IoT).Our Apps&IoT segment provides applications over-the-top of the Managed

42、 Servicesincluding Supervisory Control and Data Acquisition(SCADA)and Software as a Service(SaaS)offerings including BlackTIE and CyphreLinkencryption,weather monitoring primarily in the North Sea(MetOcean),real-time data monitoring and machine-to-machine learning and certainother value-added servic

43、es such as Adaptive Video Intelligence(AVI).Systems Integration.Our Systems Integration segment provides design and implementation services for customer telecommunications systems.Solutions are delivered based on the customers specifications,adhering to international industry standards and best prac

44、tices.Project servicesmay include consulting,design,engineering,project management,procurement,testing,installation,commissioning and maintenance.2Table of ContentsWe previously operated our business under two reportable segments:Managed Services and Systems Integration(previously called SI&A).Durin

45、g thethird quarter of 2017,after we completed the acquisition of Energy Satellite Services(ESS),we reorganized our business and reportable segments.Applications and Internet-of-Things is now managed and presented as a separate segment,and was previously presented in the Managed Services segment.All

46、historical segment financial data included herein has been recast to conform to the current year presentation.We now operate three reportable segments,which are managed as distinct segments by our chief operating decision-maker.For the periods referenced below,we were serving the following sites lis

47、ted in the table below:December 31,2017 2016 2015 Selected Operational Data:Offshore drilling rigs(1)182 175 238 Offshore Production 304 280 283 Maritime 172 122 121 International Land 149 104 115 Other sites(2)364 240 373 Total 1,171 921 1,130 (1)Includes jack up,semi-submersible and drillship rigs

48、(2)Includes U.S.onshore drilling and production sites,completion sites,man-camps,remote offices,and supply bases and offshore-related supply bases,shore offices,tender rigs and platform rigsOur StrategyThrough our engineering expertise,technical sales force and operational capabilities,we will conti

49、nue to position ourselves to capture new businessopportunities and offer a full range of solutions up the technology stack allowing our customers to be“always connected,always secure and always learning”with the suite of innovative solutions that we have acquired and developed.To serve our customers

50、 and grow our business,we intend to aggressively pursue the following:develop and market additional Applications and Internet-of-Things solutions;expand market share in all of our business segments;increase secondary and tertiary customer penetration of exploration and production operators and oilfi

51、eld service providers on our existingremote sites;enhance Systems Integration;and extend our market presence into complementary remote communications segments through organic growth and strategic acquisitions.Develop and market additional Applications and Internet-of-Things solutions:We intend to co

52、ntinue to serve our customers needs by developingand commercializing additional services that complement our wide array of available remote communications services.These Applications andInternet-of-Things solutions provide content Over-the-Top(OTT)of the Managed Service offering.We have developed an

53、d acquired solutions includingapplications(Apps),IP-enabled device connectivity or Internet-of-Things(IoT),including SCADA and SaaS offerings including BlackTIE and CyphreLinkencryption cyber security,weather monitoring primarily in the North Sea(MetOcean)and certain other solutions such as Adaptive

54、 Video Intelligence(AVI).In addition,when we close our recently announced acquisition of Intelie solues em Informtica SA(Intelie),we will offer real time data monitoring andmachine-to-machine learning in both the oil and gas industries and other markets.We expect that over the next several years our

55、 customer base will requireand we will develop a variety of advanced new services including solutions that improve safety,increase efficiency and enhance crew welfare.The serviceswe develop are complemented by our customized Managed Services offerings and Systems Integration solutions designed to me

56、et the communication needsof our customers.3Table of ContentsExpand market share in all of our business segments:We intend to expand our market share in all of our business segments.We intend to expand our Managed Service market share by increasing our penetration of the market for drilling rigs,pro

57、duction facilities and supportvessels,capturing existing rigs,facilities and vessels from competitors,pursuing fleet-wide opportunities with major customers,pursuing opportunities madeavailable as a result of industry consolidation and increasing penetration in new and underserved geographic markets

58、.Our goal is to make our offering morecost-competitive by lowering our cost structure while simultaneously increasing the technological capabilities of our services through the addition of ourproprietary applications.Because of established relationships with our customers,reliable and robust service

59、 offerings and high-quality customer service,webelieve that we are well-positioned to capture new build and reactivated stacked rigs that our customers add to their fleets as well as to organically gainmarket share against other providers.We intend to expand our Applications and IoT market share by

60、investing in new sales and marketing resources related to our offering of products andsolutions that we have developed and acquired.We are refocusing our sales force from selling solely managed communications services to selling a completetechnology solution to our customers,while leveraging distrib

61、ution channels to reach other industries.We intend to expand our Systems Integration market share by pursuing new Systems Integration customers and bids for projects globally to address thegrowing demand for buildout of large capital projects.Increase secondary and tertiary customer penetration:We i

62、ntend to continue to scale our initial capital investment with drilling contractors by usingour incumbent position at remote sites to serve the other users on the rig:the exploration and production operators and oilfield service providers.We willseek to increase revenue with low incremental capital

63、costs by up-selling our services to other parties on the rigs,production platforms and support vessels,including drilling contractors,operators and services companies.Enhance Systems Integration:We intend to enhance the Systems Integration segment and leverage our expertise at building reliable remo

64、tecommunications solutions to add recurring revenue opportunities through on-going maintenance and service support to the operators of the facility.Extend our market presence into complementary remote communications segments through organic growth and strategic acquisitions:Our marketpresence and pr

65、oven quality of service offer significant organic growth opportunities in targeted adjacent upstream energy segments where we are wellpositioned to deliver remote communications solutions.Targeted segments include energy and non-energy related vessels(including seismic and offshoresupport and supply

66、 vessels),offshore fixed and floating production facilities and international onshore drilling rigs and production facilities.In addition,we will continue to look for and review opportunities in other remote communications market adjacencies that offer significantopportunities for growth and where w

67、e are well positioned to take advantage of these opportunities such as aviation,government and mining.We are also focused on expanding our competitive market position through strategic acquisitions.As we continue to focus on expanding the targetmarkets for our services and solutions,we intend to pur

68、sue selective acquisitions of companies and/or technologies that would be complementary to ourexisting business.In 2018,we announced an agreement,subject to customary closing conditions,to acquire all of the capital stock of Intelie,a real-time,predictiveanalytics company that is an award-winning,ea

69、rly pioneer in deep machine learning and planning optimization.Intelie will allow us to offer our managedservices clients to transmit and analyze in real time data that will improve the efficiency and safety of their services.In addition,we intend to offer Inteliesproducts and services to customers

70、outside of the oil and gas industry primarily through distribution partners.In 2017,we acquired substantially all the assets of ESS.ESS is a supplier of wireless communications services via satellite networks primarily to themidstream sector of the oil and gas industry for remote pipeline monitoring

71、.The assets acquired enhance our product offering,add to our existing midstreamSCADA customer portfolio,and strengthen our IoT market position.4Table of ContentsIn 2017,we acquired substantially all the assets of Data Technology Solutions(DTS).DTS provides comprehensive communications and IT service

72、s tothe onshore,offshore,and maritime industries,as well as disaster relief solutions to global corporate clients.In 2017,we completed our acquisition of Cyphre Security Solutions(Cyphre).Cyphre is a cybersecurity company that provides advanced enterprisedata protection leveraging BlackTIE hardware-

73、based encryption featuring low latency protection for files at rest and in transit for both public and privatecloud.In 2016,we completed our acquisition of Orgtec S.A.P.I.de C.V.,d.b.a TECNOR(TECNOR).As a result of this acquisition,we expanded our servicesto include a wide array of equipment,voice a

74、nd data services,satellite coverage and bandwidth options in Mexico.These services are provided to industrial,commercial and private users in diverse activity segments from mission critical military and government applications,oil and gas operations,commercialfishing and leisure.Competitive Strength

75、sAs a global technology company that provides customized communications services,applications and cybersecurity solutions,our competitivestrengths include:secure mission-critical services delivered with a global network and operations;high-quality customer support with full time monitoring and regio

76、nal service centers;operational leverage and multiple paths to growth supported by a plug-and-play MPLS global platform;scalable telecoms systems using standardized equipment that leverage our global infrastructure;customized Systems Integration solutions provided by expert telecoms systems engineer

77、s;flexible,provider-neutral technology platform;long-term relationships with leading companies in the oil and gas,maritime,pipeline and engineering and construction industries;and the ability to design and implement a broad range of communication solutions using a range of frequencies and modes of c

78、ommunication.Mission-critical services delivered by a trusted provider with global operations:Our longstanding relationships with the customers we serve providesus with an in-depth understanding of the mission-critical needs of our customers that enables us to tailor our services to their requiremen

79、ts.Our networkavailability and responsive customer service,along with the high switching costs associated with changing remote communications providers,provide uswith a high rate of customer retention.Our global presence allows us to serve our clients around the world,except where government restric

80、tions may apply.Our global terrestrial network also allows us to provide quality of service to prioritize various forms of data traffic for a more effective way to prioritizenetwork traffic.Our ability to offer our customers global coverage sets us apart from regional competitors and allows us to ma

81、tch the breadth of their globaloperations and speed of deployment.The addition of Cyphre allows us to offer state-of-the-art encryption and network security services for the datacommunications necessary to safely and efficiently manage remote operations.In addition,our OTT offerings allow us to leve

82、rage our network to provideadditional offerings for safety,business productivity improvement and crew comfort.High-quality customer support with full-time monitoring and regional service centers:Our MPLS global network allows us to provide high qualitycustomer care by enabling us to monitor the netw

83、ork end-to-end so that we can easily and rapidly identify and resolve any network problems that ourcustomers may experience.As of December 31,2017,we had 33 service operations centers and warehouses to support and service our customers remote sites.We maintain field technicians as well as adequate s

84、pare parts and equipment inventory levels in these service operations centers.Our Global Customer Care(GCC)team staffs our Network Operations Center(NOC)24 hours per day,365 days per year and provides engineering,service delivery and changemanagement to customers globally.We provide non-stop,end-to-

85、end monitoring and technical support for every customer.This proactive networkmonitoring allows us to detect problems instantly and keep our services running at optimum efficiency.Fully managed technology is a key reason why wecan support solutions that deliver high performance and new technologies

86、that improve productivity.5Table of ContentsOperational leverage and multiple paths to growth supported by a plug-and-play MPLS platform:Our scalable,standardized communicationsplatform provides us with plug-and-play capabilities to easily expand or improve service offerings.Our MPLS global platform

87、 allows us the ability to addadditional services to our standard offerings or change our service offerings on a rig,production platform or energy support vessel with little incremental costonce installed onsite.We can offer these services to all users of the rig,production platform or energy support

88、 vessel,including drilling contractors,operatorsand service companies.We expect this operating leverage to increase profitability as we grow.Our MPLS global platform provides an important advantageby offering higher availability,scalability,flexibility and security than conventional switched transpo

89、rts and accounts for what we believe to be a key reasonfor the market share we have today of remote installations on offshore and onshore facilities with the potential that we can lift that market share over time.Scalable systems using standardized equipment that leverages our global infrastructure:

90、We have built our global satellite and terrestrial networkwith a sufficient amount of flexibility to support our growth without substantial incremental capital investment.Our knowledge and capabilities can beapplied to remote sites located anywhere in the world.We install standardized equipment at e

91、ach remote site,which allows us to provide support andmaintenance services for our equipment in a cost-efficient manner.Not all of the components of equipment that we install at each site are the same,but thecomponents that vary are limited in number and tend to be the same for rigs located in the s

92、ame geography.As of December 31,2017,we leased capacityfrom 41 satellites and are co-located at 19 teleports and 33 datacenters worldwide in order to provide our end-to-end solutions.By leasing rather than owningour network enablers and owning the on-site equipment at each site,we are able to both m

93、inimize the capital investment required by the base networkinfrastructure and maintain the flexibility to install high quality equipment at each site tailored to its locale and environmental conditions.We do own andmanage the IP layer end-to-end.The standardized nature of our equipment minimizes exe

94、cution risk,lowers maintenance and inventory carrying costs andenables ease of service support.In addition,we are able to remain current with technology upgrades due to our back-end flexibility.Customized systems integration solutions provided by expert telecoms systems engineers:Through our acquisi

95、tion of Nessco Group Holdings Ltd(Nessco)in 2012,Inmarsats Enterprise Energy business unit in 2014 and TECNOR in 2016 we provide global customized systems integration solutionsthrough our Systems Integration business.As the demand for additional telecommunications products and telecoms systems incre

96、ase with each newtechnological advance,the need for well-designed,efficient and reliable network infrastructures becomes increasingly vital to customers.Our solutions arecustom designed,built and tested by expert engineers based on the customers specifications and requirements,as well as internation

97、al industry standardsand best practices.For those customers requiring reliable remote communications services,maintenance and support services and customized solutions fortheir network infrastructures,RigNet provides a one-stop-shop to satisfy these demands.Flexible,provider-neutral technology platf

98、orm:Because we procure communications connections and networks and equipment from third parties,weare able to customize the best solution for our customers needs and reduce our required fixed capital investments.We aim to preserve the flexibility to selectparticular service providers and equipment s

99、o that we may access multiple providers and avoid downtime if any of our initial providers were to experienceany problems.By procuring bandwidth from a variety of communications providers instead of owning our own satellites,we are able to minimize capitalinvestment requirements and can expand our g

100、eographic coverage in response to customers needs with much greater flexibility.Our product and serviceportfolio offers best-in-class technology platforms using the optimal suite of communications and networking capabilities for customers.Long-term relationships with leading companies in the oil and

101、 gas,maritime,pipeline and engineering and construction industries:We haveestablished relationships with some of the largest companies in the oil and gas,maritime,pipeline and engineering and construction industries.Some of ourkey customers are the leading drilling contractors around the world,with

102、combined offshore fleets of hundreds of rigs,as well as leading oil and gas,oilfieldservice,maritime,pipeline and engineering and construction companies.In most cases,these customers have high standards of service that favor strategicproviders such as RigNet and work in partnership with us to serve

103、their remote operations.The ability to design and implement a broad range of communication solutions using a range of frequencies and modes of communication:We havethe ability to design and implement a broad range of communication solutions using a range of frequencies and modes of communication.The

104、se modes ofcommunication include wired,wireless satellite Ku,C and L frequency bands,as well as wireless WiMAX and Line-of-Sight(LOS)microwave.This range ofcommunications solutions allows us to offer competitive and reliable communications solutions in a broad range of remote geographic locations wh

105、ere ourcustomers operate.This helps us meet our customers requirements for choosing their provider(s)based on network availability while factoring in price.6Table of ContentsService OfferingsWe offer a comprehensive communications package of voice,data,video,networking and real-time data management

106、to offshore and land-basedremote locations.We are a single source solutions provider that links multiple offshore or remote sites with real-time onshore decision centers andapplications.Managed Communications ServicesThe Managed Communications Services we offer includes data,internet,Voice over Inte

107、rnet Protocol(VoIP)and technology solutions.We providethese services on our secure and resilient global terrestrial,satellite and wireless networks delivering high availability to remote locations including offshoreand onshore oil rigs,productions facilities and supply vessels.Additionally,our highl

108、y scalable networks enable us to offer private networking,wide area network(WAN)acceleration solutions,software-defined(SD-WAN)appliances,content filtering and Wi-Fi hotspots.As a result,our customers enjoy a near real-time experience on the corporate data and latencysensitive applications that impr

109、oves their productivity.The price for these solutions is generally included in the day rate and becomes the basis of therecurring revenue.Apps&IoTSupervisory Control and Data Acquisition(SCADA)SCADA systems provide the ability to monitor,gather and process data while interacting with machines and de

110、vices such as pipelines,valves,pumpsand motors.SCADA systems are connected to Human-Machine-Interface(HMI)software and logs events.Our customers deploy SCADA solutions to closelymonitor operations when the cost,location and complexity or frequency requirements make technology the best and most pract

111、ical means of monitoringoperations.Our SCADA systems allow us to market to pipeline customers in addition to our traditional drilling and production customers.Data AnalyticsAs the demand for Data Analytics expands,we offer our customers Data Analytics that leverage our AVI services to enhance custom

112、er productivity andsafety.We offer Data Analytics solutions that analyze AVI video and will alert if personnel fall or enter prohibited areas of drilling rigs,production sites,vessels and other mission critical remote sites.We continue to explore expansion(both organically and through acquisition)of

113、 our data analytics serviceofferings to support our customers safety and productivity.When we close our recently announced acquisition of Intelie,we will add powerful real-time dataanalysis tools that incorporate machine-to-machine learning and other applications that will increase both safety and e

114、fficiency of remote operations.MetOceanMetOcean provides accurate,reliable weather data monitoring primarily in the North Sea to support safe and efficient operations.Adaptive Video Intelligence(AVI)and Video Collaboration SolutionsOur two AVI services increase situational awareness by supporting a

115、live viewing application and are complemented by our Collaboration ServiceOffering,which utilizes wearable remote presence devices.These offerings enhance the safety and efficiency of our customers.These video services allow ourcustomers to leverage Data Analytics,monitor the performance of key func

116、tions and collaborate with crews at remote sites to troubleshoot equipment,whichcan save customers time and money.Remote presence devices such as the RigNet Helmet Cam,patent pending,can send video from remote locations toonshore engineers and experts.This allows for real-time decision making that r

117、educes operational downtime,saves travel costs and improves productivity.We continue to explore additional video-based service offerings supporting remote telemedicine,which supports crew well-being and welfare.7Table of ContentsCyphre BlackTIE plus Fornetix with Cyphres BlackTIE and CyphreLink Cybe

118、rsecurity OfferingsCyphre BlackTIE hardware-based encryption features low latency protection for files at rest and in transit for both public and private clouds,providinghigh levels of granularity and control that will provide unique protection for our customers data.As the demand for cybersecurity

119、and data protectionincreases,we offer our customers the ability to wrap our Managed Communications Services with the unique granular protection provided by ourCyphre BlackTIE hardware-based encryption.We also intend to offer Cyphre BlackTIE encryption to other industries and customers primarily thro

120、ughchannel partners.Fornetix Key Orchestration is an advanced key management ecosystem that takes traditionally long,manual encryption processes and transforms theminto automated,easy-to-use solutions.Benefits include reduced costs,process consistency,enhanced use of encryption,and enterprise modifi

121、ability.Fornetixs Key Orchestration appliance integrates with Cyphres BlackTIE-powered offerings to deliver high-performance security solutions that protect theintegrity of your encrypted data from continuously evolving threats.The integrated solutions are available immediately.CyphreLink brings a s

122、imilar level of data protection to the network that was previously only available to care for data at rest.CyphreLink protects thedata as it traverses network links in much the same way Cyphres BlackTIE service protects data at rest.Wi-Fi HotspotWe offer Wi-Fi hotspot solutions that facilitate acces

123、s to the Internet by personnel in remote facilities.This is advantageous for employers who seek toimprove the quality of life for employees by providing Internet access in the living quarters,and for service companies that seek office-like connectivity fortheir technicians and engineers.The Wi-Fi ho

124、tspot solutions provide ready access with a familiar user interface without requiring specialized equipment toconnect to the service.Systems IntegrationAs the demand for additional telecommunications products and telecoms systems increase with each new technological advance,the need for well-designe

125、d,efficient and reliable network infrastructures becomes increasingly vital to our customers.Our Systems Integration solutions provide a completepackage of communications infrastructure required to support onshore and offshore facilities for the oil and gas industry.Systems Integration services incl

126、udethe design,procurement,assembly and test,installation and commissioning of communications systems which can include WAN/LAN connectivity,ClosedCircuit Television(CCTV)for monitoring and security,access control,public address(PAGA)systems,microwave systems and monitoring and controlsystems.We also

127、 offer a complete package of on-site and remote support and on-going maintenance capabilities in support of our customers installedinfrastructure.In order to service customers on a global scale,Systems Integration Engineering and Procurement(EP)services are provided from facilities inAberdeen,Housto

128、n and Monterrey.We have the ability to facilitate the end-to-end process of telecoms systems mechanical fabrication,build and assemblythrough to final testing and Factory Acceptance Testing(FAT).Combining the engineering and service capabilities of our Systems Integration services with our other ser

129、vices and solutions such as our NOC services,OTT offerings,and other managed services allows us to offer our Systems Integration customers a long-term package of maintenance and support options.These offerings provide customers an opportunity to reduce their operational and support costs while ensur

130、ing a highly reliable communicationsinfrastructure.Customer ContractsIn order to streamline the addition of new projects and solidify our position in the market,we have signed contracts with most customers.The specificservices being provided are defined under individual service orders that generally

131、 have a term of one to three years with renewal options,while land-basedlocations are generally shorter term or terminable on short notice without penalty.Service orders are executed under the contracts for individual remote sitesor groups of sites,and generally may be terminated early on short noti

132、ce without penalty in the event of force majeure,breach of the agreement or coldstacking of a drilling rig.CustomersWe have an international customer base comprising many of the largest drilling,exploration and production and oilfield service,maritime,pipelineand engineering and construction compani

133、es.Although no single customer accounted for 10.0%or more of revenue in 2017,our top 5 customers accountedfor 26.8%of our total revenue for 2017.8Table of ContentsSuppliersAlthough we have preferred suppliers of technology,telecommunications and networking equipment,nearly all technology utilized in

134、 our solutions isavailable from more than one supplier.The standardized equipment may be deployed across any site in any geographic area.In addition,we do not rely on one satellite provider for our entire satellite bandwidth needs except for certain instances in which only one satellitebandwidth pro

135、vider is available in an operating location,which is typically due to licensing restrictions or only one satellite provider can offer a particularbandwidth.This approach generally allows us flexibility to use the satellite provider that offers the best service for specific areas and to change provid

136、ers ifone provider experiences any problems.CompetitionThe technology and remote telecommunications industry is highly competitive.We expect competition in the markets that we serve to persist,intensify and change.We face varying degrees of competition from a wide variety of companies,including new

137、potential entrants from providers to adjacentvertical markets and from forward integration by some of our suppliers deeper in the industry value chain,since successful service and system development isnot necessarily dependent upon substantial financial resources.Our primary global competitor is Spe

138、edcast International Ltd.In addition,there are a range of regional providers serving smaller customers.Specifically,in our U.S.onshore operations,we also face competition from:wireless network providers,drilling instrumentation providers,living quarterscompanies,and other pure-play providers like us

139、.Our customers generally choose their provider(s)based on the quality and availability of the service and the ability to restore service quickly whenthere is an outage.Pricing and breadth of service offerings is also a factor.Our customers depend on maximum availability,quality and continuity ofprod

140、ucts and service.Established relationships with customers and proven performance serve as significant barriers to entry.Government RegulationThe telecommunications industry is highly regulated.Most of the services we provide require approvals from national and local authorities andcompliance with la

141、ws and regulations from multiple authorities.In the United States,we are subject to the regulatory authority of the United States,primarilythe Federal Communications Commission(FCC).Regulation of the telecommunications industry continues to change rapidly.Our U.S.services are currentlyprovided on a

142、private carrier basis and are therefore subject to lighter regulation under the U.S.Communications Act of 1934,as amended(the Act),and therules and regulations of the FCC than if we were a common carrier.If the FCC or one or more state public utility commissions determine that these services orthe s

143、ervices of our subsidiaries or affiliates constitute common carrier offerings subject to common carrier regulations,we may be subject to significant coststo ensure compliance with the applicable provisions of those laws and regulations or we may have to materially alter our service offerings to main

144、tain ourprivate carrier status.We may be subject to enforcement actions including,but not limited to,fines,cease and desist orders,or other penalties if we fail tocomply with all applicable requirements.In 2014,we completed the purchase of Inmarsats Enterprise Energy business unit.As part of the acq

145、uisition Inmarsat transferred licenses with rights tothe electromagnetic spectrum,including fixed microwave licenses,very small aperture terminal(VSAT)earth station licenses,various private and commercialmobile radio service licenses,broadband radio licenses and leases for wireless communications se

146、rvice licenses.Failure to maintain appropriate licensescould subject RigNet to fines imposed by the FCC.The following is a summary of the regulatory environment in which we currently operate and does not describe all present and proposed international,federal,state and local legislation and regulati

147、ons affecting the communications industry,some of which may change the way the industry operates as a resultof administrative or judicial proceedings or legislative initiatives.We cannot predict the outcome of any of these matters or the impact on our business.As an evolving non-dominant internation

148、al and domestic carrier under the Act,among other requirements,RigNet must pay various fees includingcontribution of a percentage of its revenues from telecommunications services to the FCCs Universal Service Fund(USF)and other federal program funds tosubsidize certain user segments,file various rep

149、orts,and comply with rules that protect customer information and the processing of emergency calls.RigNetis also 9Table of Contentssubject to the Communications Assistance for Law Enforcement Act(CALEA)and associated FCC regulations that require telecommunications serviceproviders and VoIP providers

150、 to configure their networks to facilitate electronic surveillance by law enforcement authorities.Like the FCC,the state public utility commissions(PUCs)impose various regulatory fees,universal service requirements,reporting and prior approvalrequirements for transfer or assignments.The FCC and stat

151、e PUCs have jurisdiction to hear complaints regarding the compliance or non-compliance withthese and other common carrier requirements of the Act and the FCCs rules,and similar state laws and regulations.If the FCC or any state PUC determines that RigNet has not complied with federal and/or state re

152、gulatory requirements,we may be subject toenforcement actions including,but not limited to,fines,cease and desist orders,license revocation,or other penalties.Several proceedings pending before the FCC have the potential to significantly alter our USF contribution obligations.The FCC is considering:

153、(1)changing the basis upon which USF contributions are determined from a revenue percentage measurement,as well as increasing the breadth of the USFcontribution base to include certain services now exempt from contribution;(2)the classification of MPLS;and(3)the classification of various IP-enableds

154、ervices.Adoption of these proposals could have a material adverse effect on our costs of providing service.We are unable to predict the timing or outcomeof these proceedings.We cannot predict the application and impact of changes to the federal or state USF contribution requirements on the communica

155、tionsindustry generally and on certain of our business activities in particular.We generally have to register to provide our telecommunications services in each country in which we do business.The foreign laws and regulationsgoverning these services are often complex and subject to change with short

156、 or no notice.At times,the rigs or vessels on which our equipment is located andto which our services are provided will need to operate in a new location on short notice and we must quickly make regulatory provisions to provide ourservices in such countries.Failure to comply with any of the laws and

157、 regulations to which we are subject may result in various sanctions,including fines,loss of authorizations and denial of applications for new authorizations or for renewal of existing authorizations.We must comply with export control laws and regulations,trade and economic sanction laws and regulat

158、ions of the United States and other countrieswith respect to the export of telecommunications equipment and services.State and local regulation additionally apply to certain aspects of our business.Weare also subject to various anti-corruption laws,including the Foreign Corrupt Practices Act,that pr

159、ohibit the offering or giving anything of value togovernment officials for the purpose of obtaining or retaining business or for gaining an unfair advantage.EmployeesAs of December 31,2017,we had approximately 503 full time employees consisting of 55 employees in sales and marketing,77 employees in

160、financeand administration,360 employees in operations and technical support and 11 employees in management.Geographic InformationSee Note 12 “Segment Information,”in our consolidated financial statements included in this Annual Report on Form 10-K for more informationregarding revenues and assets at

161、tributable to our domestic and international operations.Other InformationCorporate Structure and HistoryWe were incorporated in Delaware on July 6,2004.Our predecessor began operations in 2000 as RigNet Inc.,a Texas corporation.In July 2004,ourpredecessor merged into us.The communications services w

162、e provide to the offshore drilling and production industry were established in 2001 by ourpredecessor,who established initial operations in the Asia Pacific region.We have since evolved into one of the leading global providers of remotecommunications services.10Table of ContentsOur organic growth ha

163、s also been complemented by several strategic acquisitions which have expanded our service offerings.In January 2018,we entered into an agreement to purchase Intelie.Intelie is a real-time,predictive analytics company that combines an operationalunderstanding with a machine learning approach.Intelie

164、 facilitates innovation via Intelie Pipes,a distributed query language with a complex event processorto aggregate and normalize real-time data from a myriad of data sources.This technology enables the Intelie LIVE platform to solve data integration,dataquality,data governance and monitoring problems

165、.Intelie LIVE is an operational intelligence platform that empowers clients to make timely,data-drivendecisions in mission-critical real-time operations,including drilling,and longer-term,data-intensive projects,such as well planning.The acquisition willleverage Intelies unique capabilities and mark

166、et position to distinguish and enhance our bundled communications services.Additionally,Intelies team ofdata scientists and software developers will accelerate our strategy to move up the technology stack,furthering the development of effective applicationspowered by data.The acquisition of Intelie

167、is subject to certain customary closing conditions,including certain approvals of the Brazilian government.Weexpect to close the acquisition of Intelie in the first quarter of 2018.In 2017,we acquired substantially all the assets of ESS,which expanded our product offering,added to our existing midst

168、ream SCADA customerportfolio,and strengthened our IoT market position.Additionally,in 2017,we acquired substantially all the assets of DTS,which enhanced ourcomprehensive communications and IT services to the onshore,offshore,and maritime industries,as well as disaster relief solutions to global cor

169、porateclients.Furthermore in 2017,we completed our acquisition of Cyphre,which expanded us into cybersecurity with advanced enterprise data protectionleveraging BlackTIE hardware-based encryption.In 2016,with the acquisition of TECNOR,we expanded our services to include a wide array of equipment,voi

170、ce and data services,satellite coverage and bandwidth options in Mexico serving military,government,maritime,oil and gas customers.Principal Executive OfficesIn January 2017,we signed and announced an eight-year lease for new headquarters space located at 15115 Park Row Blvd,Suite 300,Houston,Texas.

171、Our main telephone number is+1(281)674-0100.Company Website and Available InformationThe Companys internet website is .The information found on our website is not incorporated into this Annual Report on Form 10-K.TheCompany makes available free of charge on its website Annual Reports on Form 10-K,Qu

172、arterly Reports on Form 10-Q,Current Reports on Form 8-K,andamendments to those reports filed or furnished pursuant to Section 13(a)or 15(d)of the Securities Exchange Act of 1934,as amended(the Exchange Act).This information can also be found on the SEC website at www.sec.gov.In addition,in the“Gove

173、rnance”section of the Investors page on our web site,we make available our code of ethics and business conduct,ourcorporate governance guidelines,the charters for our audit,compensation,and corporate governance and nominating committees and various other corporategovernance policies and documents.Fo

174、rward-Looking StatementsThis Annual Report on Form 10-K contains forward-looking statements,within the meaning of Section 27A of the Securities Act of 1933,as amended,and Section 21E of the Exchange Act,as amended,that are subject to a number of risks and uncertainties,many of which are beyond the C

175、ompanys control.These statements may include statements about:new regulations,delays in drilling permits or other changes in the drilling industry;competition and competitive factors in the markets in which we operate;demand for our services and solutions;the advantages of our services compared to o

176、thers;changes in technology and customer preferences and our ability to adapt our product and services offerings;11Table of Contents our ability to develop and maintain positive relationships with our customers;our ability to retain and hire necessary employees and appropriately staff our marketing,

177、sales and distribution efforts;our cash needs and expectations regarding cash flow from operations and capital expenditures;our ability to manage and grow our business and execute our business strategy,including expanding our penetration of the U.S.andinternational onshore and offshore drilling rigs

178、 and expanding our business into remote communication market adjacencies;our strategy;our ability to offer our products and services to new markets through distribution partners,or otherwise;our ability to pursue,consummate and integrate merger and acquisition opportunities successfully,including ex

179、pectations regarding thepending acquisition of Intelie;our resource reallocation activities and related expenses;and our financial performance,including our ability to expand Adjusted EBITDA through our operational leverageThese forward-looking statements may be found in Item 1.“Business;”Item 1A.“R

180、isk Factors;”Item 7.“Managements Discussion and Analysis ofFinancial Condition and Results of Operations”and other items within this Annual Report on Form 10-K.In some cases,forward-looking statements can beidentified by terminology such as“may,”“could,”“should,”“would,”“expect,”“plan,”“project,”“in

181、tend,”,“will”,“anticipate,”“believe,”“estimate,”“predict,”“potential,”“pursue,”“target,”“continue,”the negative of such terms and other comparable terminology that convey uncertainty of future eventsor outcomes.All of these types of statements,other than statements of historical fact included in thi

182、s Annual Report on Form 10-K,are forward-lookingstatements.The forward-looking statements contained in this Annual Report on Form 10-K are largely based on Company expectations,which reflect estimatesand assumptions made by Company management.These estimates and assumptions reflect managements best

183、judgment based on currently known marketconditions and other factors.Although the Company believes such estimates and assumptions to be reasonable,they are inherently uncertain and involve anumber of risks and uncertainties beyond its control.In addition,managements assumptions may prove to be inacc

184、urate.The Company cautions that theforward-looking statements contained in this Annual Report on Form 10-K are not guarantees of future performance,and it cannot assure any reader that suchstatements will be realized or the forward-looking statements or events will occur.Future results may differ ma

185、terially from those anticipated or implied inforward looking statements due to factors listed in the“Risk Factors”section and elsewhere in this Annual Report on Form 10-K.If one or more of thesefactors materialize,or if any underlying assumptions prove incorrect,our actual future results,performance

186、 or achievements may vary materially from anyprojected future results,performance or achievements expressed or implied by these forward-looking statements.The forward-looking statements speak onlyas of the date made,and other than as required by law,the Company undertakes no obligation to publicly u

187、pdate or revise any forward-looking statement,whether as a result of new information,future events or otherwise.Item 1A.Risk FactorsFactors that could materially affect our business,financial position,operating results or liquidity and the trading price of our common stock aredescribed below.This in

188、formation should be considered carefully,together with other information in this report and other reports and materials we file withthe SEC.A large portion of our business is subject to the volatility of and is likely to fluctuate with the level of global oil and natural gas exploration,development

189、and production.Demand for our remote communication services and collaborative applications depends on our customers willingness to make operating and capitalexpenditures to explore,develop and produce oil and natural gas.Our business will suffer if these expenditures decline.Our customers willingnes

190、s toexplore,develop and produce oil and natural gas depends largely upon prevailing market conditions that are influenced by numerous factors over which wehave no control,including:the supply,demand and price expectations for oil and natural gas;12Table of Contents capital expenditure levels of dril

191、lers and producers of oil and natural gas;the addressable market and utilization rate for drilling rigs and oilfield services;the ability of the Organization of Petroleum Exporting Countries(OPEC)or non-OPEC countries to influence and maintain production levelsand pricing;the worldwide political,reg

192、ulatory and economic environment;the degree to which alternative energy sources displace oil and natural gas;and advances in exploration,development and production technology.Since 2014,oil and gas prices have declined significantly,resulting in reduced expenditures for exploration and production.As

193、 a result,we have seena material decline in the demand for our products and services and significant pressure on the prices we can charge.Furthermore,our customers haveexperienced declines in their cash flows which has led to delays in payment,or nonpayment,for our products and services.These condit

194、ions have had,andmay continue to have,a material adverse effect on our financial condition,results of operations and cash flows.The Global Xpress(GX)Dispute may have a material adverse effect on us.See a more complete discussion of the GX Dispute in Note 9 of the Notes to Consolidated Financial Stat

195、ements.The GX Dispute has and will continue to have an impact on us for the foreseeable future.Preparation for and participation in the arbitration willcontinue to divert Company resources and managements attention from our core operations.If the arbitration panel determines that we are liable forta

196、ke-or-pay obligation to Inmarsat,there could be a material adverse impact on our financial condition,results of operation and cash flows.Our industry is characterized by rapid technological change,and if we fail to keep pace with these changes or if access to telecommunications in remotelocations be

197、comes easier or less expensive,our business,financial condition and results of operations may be harmed.Recently some remote communications providers are offering the use of Ka-band satellite service,instead of or in addition to the Ku-band and C-bandsatellite space segments used today.Our business

198、may be harmed if our competitors are more successful than us in introducing Ka-band services to meetcustomer needs.If alternative telecommunications services to remote locations become more readily accessible or less expensive,our business will suffer.Newdisruptive technologies could make our VSAT-b

199、ased networks or other services obsolete or less competitive than they are today,requiring us to reduce theprices that we are able to charge for our services or causing us to undergo expensive transitions to new technologies.We may not be able to successfullyrespond to new technological developments

200、 and challenges or identify and respond to new market opportunities,services or solutions offered bycompetitors.In addition,our efforts to respond to technological innovations and competition may require significant capital investments and resources.Failure to obtain and retain skilled personnel cou

201、ld impede our business and growth strategy.Our operations depend on a highly qualified executive,sales,technical,development,service and management team.Failure to attract,recruit,retainand develop qualified personnel could have a material adverse effect on our business,financial condition and resul

202、ts of operations.In the event that our cyber security measures fail or are otherwise inadequate,our systems or reputation may be damaged which could harm ourbusiness,financial conditions and results of operations.We rely heavily on information systems to run our business.There can be no assurance th

203、at the systems we have designed to prevent or limit the effectsof cyber incidents or attacks will be sufficient to prevent or detect such attacks.If such incidents or attacks do occur,they could have a material impact on oursystems including degradation of service,service disruption,excessive call v

204、olume to call centers and damage to our facilities,equipment and data.Inaddition,we could be adversely affected by the theft or loss of confidential customer data or intellectual property.With the acquisition of Cyphre,we nowmarket our cybersecurity services as an expertise.A successful cyberattack

205、against us may create negative publicity resulting in reputation or brand damagewith customers.We may be required to expend significant resources to protect against these events or to alleviate problems,including reputational harm andlitigation,caused by these events or the failure or inadequacy of

206、our security systems,which could have a material adverse effect on our business,financialcondition and results of operations.13Table of ContentsWe have made and expect to continue to make acquisitions as a primary component of our strategy.We may not be able to identify suitable acquisitioncandidate

207、s or consummate acquisitions on acceptable terms,or we may be unable to successfully integrate acquisitions,which could disrupt ouroperations and adversely impact our business and operating results.A primary component of our strategy has been to acquire businesses to grow our product and service off

208、erings.We intend to continue to pursueacquisitions of complementary technologies,products and businesses as a primary component of our growth strategy.Acquisitions involve certain knownand unknown risks that could cause our actual growth or operating results to differ from our expectations.For examp

209、le:we may not be able to identify suitable acquisition candidates or to consummate acquisitions on acceptable terms;we may pursue international acquisitions,which inherently pose more risks than domestic acquisitions;we compete with others to acquire complementary products,technologies and businesse

210、s,which may result in decreased availability of,orincreased price for,suitable acquisition candidates;we may not be able to obtain the necessary financing,on favorable terms or at all,to finance any or all of our potential acquisitions;we may ultimately fail to consummate an acquisition even if we a

211、nnounce that we plan to acquire a technology,product or business;and acquired technologies,products or businesses may not perform as we expect and we may fail to realize anticipated revenues and profits.In addition,our acquisition strategy may divert managements attention away from our existing busi

212、ness,resulting in the loss of key customers oremployees,and expose us to unanticipated problems or legal liabilities,including responsibility as a successor for undisclosed or contingent liabilities oracquired businesses or assets.If we fail to conduct due diligence on our potential targets effectiv

213、ely,we may not identify problems at target companies or fail to recognizeincompatibilities or other obstacles to successful integration.Our inability to successfully integrate future acquisitions could impede us from realizing all ofthe benefits of those acquisitions and could severely weaken our bu

214、siness operations.The integration process may disrupt and,if new technologies,productsor businesses are not implemented effectively,may preclude the realization of the full benefits expected by us and could harm our results of operations.Inaddition,the overall integration of new technologies,product

215、s or businesses may result in unanticipated problems,expenses,liabilities and competitiveresponses.The difficulties in integrating acquisitions include,among other things:maintaining employee morale and retaining key employees;integrating the cultures of both companies;preserving important strategic

216、 customer relationships;consolidating corporate and administrative infrastructures and eliminating duplicative operations;and coordinating and integrating geographically separate organizations.In addition,even if we integrate successfully the operations of an acquisition,we may not realize the full

217、benefits of the acquisition,including thesynergies or growth opportunities we expect.These benefits may not be achieved within the anticipated time frame,or at all.Further,acquisitions may cause us to:issue common stock that would dilute our current stockholders ownership percentage;use a substantia

218、l portion of our cash resources;14Table of Contents increase our interest expense,leverage and debt service requirements if we incur additional debt or contingent consideration to pay for anacquisition;assume liabilities for which we do not have indemnification from the former owners or we have disp

219、uted or uncollectible indemnification fromthe former owners;record goodwill and non-amortizable intangible assets that are subject to impairment testing and potential impairment charges;experience volatility in earnings due to changes in contingent consideration related to acquisition earn-out liabi

220、lity estimates;incur amortization expenses related to certain intangible assets;lose existing or potential contracts as a result of conflict of interest issues;become subject to adverse tax consequences or deferred compensation charges;incur large and immediate write-offs;or become subject to litiga

221、tion.Our customers may terminate many of our contracts on short notice without penalty,which could harm our business,financial condition and results ofoperations.Customers may switch service providers without incurring significant expense relative to the annual cost of the service.Our contracts gene

222、rallyprovide that in the event of prolonged loss of service or for other good reasons,our customers may terminate service without penalty.In addition,some of ourcontracts may be terminated by our customers for no reason and upon short notice.Terms of contracts typically vary with a range from short-

223、term call outwork to three years.Work orders placed under such agreements may have shorter terms than the relevant customer agreement.As a result,we may not be ableto retain our customers through the end of the terms specified in the contracts,resulting in harm to our business,financial condition an

224、d results of operations.Our growth strategy requires substantial capital and acquisition expenditures.We may be unable to obtain required capital or financing onsatisfactory terms.To support our growth strategy,we expect to continue to make substantial capital expenditures and acquisitions.We expect

225、 to fund capitalexpenditures and acquisitions with cash generated by operations and borrowings under our revolving credit facility or capital markets transactions;however,our financing needs may require us to alter or increase our capitalization substantially through the issuance of debt or equity s

226、ecurities.The issuance ofadditional indebtedness would require that a portion of our cash flow from operations be used for the payment of interest and principal on our indebtedness,thereby reducing our ability to use cash flow from operations to fund working capital,capital expenditures and acquisit

227、ions.If additional capital is needed,we may not be able to obtain debt or equity financing on terms acceptable to us,if at all.Our strategy of moving up the technology stack entails entering new business lines that could fail to attract or retain users or generate revenue.A key element of our growth

228、 strategy is to move up the technology stack,that is to leverage our existing network to provide application layer solutionsto our network customers.In 2017,we began reporting a new segment,Apps&IOT,to capture results from these new over-the-top services,such as SCADA,MetOcean and Adaptive Video Int

229、elligence.In addition,in 2017,we acquired Cyphre which brings us a data protection offering,BlackTIE and CyphreLink.We continue to expect to invest in new lines of business,new products and other new initiatives to generate revenue,including our recently announcedagreement to acquire Intelie.We have

230、 limited or no experience in our new market segments,and our customers may not adopt our new offerings.Theseofferings may present new and difficult technology challenges,and we may be subject to claims if customers of these offerings experience service disruptionsor failures or other quality issues.

231、In addition,profitability,if any,in our newer activities may be lower than in our older activities,and we may not besuccessful enough in these newer activities to recoup our investments in them.Furthermore,efforts at establishing new lines of business could divertmanagement attention from our core M

232、anaged Services network and Systems Integration businesses.If any of this were to occur,it could damage ourreputation,limit our growth and negatively affect our operating results.15Table of ContentsWe rely on third parties,particularly satellite owners,to provide products and services for the operat

233、ion of our business.Failures by third-partyproviders have caused,and in the future could cause,service interruptions,harm our business and reputation and result in loss of customers andrevenue.A significant part of our operations and growth depends on third-party providers delivering reliable commun

234、ications connections,networks,equipment,maintenance,repair and satellite transponder capacity,subjecting our business,reputation and customer revenue to risks beyond our control,such as:telecommunications,satellite manufacturing,equipment or control system errors,faults or failures;saturation of com

235、munication connection points,networks and third-party facilities;in-orbit risks for satellites including malfunctions,commonly referred to as anomalies,and collisions with meteoroids,decommissionedspacecraft or other space debris;lack of communication service alternatives,including failure of satell

236、ite providers to timely replace aging satellites with more moderntechnology and updated capacities;human error;natural disasters;power loss;labor strikes or work stoppages;unauthorized access or security risks;and sabotage or other intentional acts of vandalism.Our results in 2017 were negatively im

237、pacted by a satellite outage by one of our providers in the second quarter.This incident caused RigNet to loseforecasted revenues and to experience increased costs as we had to make alternative arrangements for our customers.We cannot assure that we will not sufferfuture satellite outages or that an

238、y potential future outage will not have a material impact on our business,results of operations or financial condition.Undermost of our contracts with satellite service providers,our satellite service providers do not indemnify us for such loss or damage to our business resulting fromcertain risks,i

239、ncluding satellite failures.If any potential claims result in liabilities,we could be required to pay damages or other penalties.Failure of our microwave network could materially impact our results of operations.Our microwave network is a Line-of-Site(LOS)system that operates by relaying microwave c

240、ommunications from one microwave site to another thatmust be within visible sight.When a microwave site on a microwave relay is rendered inoperable subsequent dependent sites are also rendered inoperable.Assuch the risk of a microwave site being rendered inoperable by weather,technical failure or ot

241、her means will likely cascade to other dependent microwavesites.We do not insure for loss of a microwave site or business interruption caused by the loss of such a site as we believe the cost of such insuranceoutweighs the risk of potential loss,so the loss of a microwave site or any business interr

242、uption could harm our business,financial condition and results ofoperations.We are subject to anti-corruption and export control laws that have stringent compliance standards for us.We are subject to a number of applicable export control laws and regulations of the United States as well as comparabl

243、e laws of other countries.Wecannot provide services to certain countries subject to United States trade sanctions administered by the Office of Foreign Asset Control of the United StatesDepartment of the Treasury or the United States Department of Commerce unless we first obtain the necessary author

244、izations.If our customers move their sitesinto countries subject to certain sanctions,we may not be able to serve them,in which case,our revenues will be adversely impacted and we may haveadditional costs incurred as well.In addition,we are subject to the Foreign Corrupt Practices Act and other anti

245、-corruption laws that,generally,prohibitbribes or unreasonable gifts to governments or officials.Violations of these laws or regulations could result in significant additional sanctions includingfines,more onerous compliance requirements,and more extensive debarments from export privileges or loss o

246、f authorizations needed to conduct aspects ofour international business.In certain countries,we engage third-party agents or intermediaries to act on our behalf in dealings with government officials,suchas customs agents,and if these third-party agents or intermediaries violate applicable laws,their

247、 actions may result in penalties or sanctions being assessedagainst us.16Table of ContentsMany of our potential customers are resistant to new solutions and technologies which may limit our growth.Although there is a strong focus on technology development within the oil and gas industry,some of the

248、companies in the upstream oil and gasindustry are relatively conservative and risk averse with respect to adopting new solutions and technologies in the area of remote communications.As a resultof the sustained downturn in oil and gas prices,many of our customers focus on price rather than the value

249、 new technologies bring them,further slowing theuptake of new solutions and technologies.Some drilling contractors,oil and gas companies and oilfield service providers may choose not to adopt newsolutions and technology,such as our remote communications and collaboration applications solutions,which

250、 may limit our growth potential.Systems Integration projects are heavily dependent on cost,productivity,schedule and performance management.We account for Systems Integration contracts using accounting rules for construction-type contracts.Factors that may affect future project costs andmargins incl

251、ude the price and availability of labor,equipment and materials,productivity,as well as the time necessary to obtain approvals and permits.If wemake inaccurate estimates,or we find errors or ambiguities as to contract specifications or if circumstances change due to,among other things,unanticipatedt

252、echnical problems,changes in local labor conditions,weather delays,changes in the costs of equipment and materials,or our suppliers or subcontractorsinability to perform,or changes in foreign exchange rates,then cost overruns may occur.We may be required to pay liquidated damages upon our failure to

253、meet schedule or performance requirements of our contracts.In accordance with the accounting guidance,we would record a cumulative adjustment to reducethe margin previously recorded on the related project in the period a change in estimate is needed.If the contract is significant,or we encounter iss

254、ues thatimpact multiple contracts,cost overruns could have a material adverse effect on our business,financial condition and results of operations.The uncertainty of our contract award timing can also present difficulties in matching workforce size with contract needs.In some cases,we maintainand be

255、ar the cost of a ready workforce that is larger than necessary under existing contracts in anticipation of future workforce needs for expected contractawards.If an expected contract award is delayed or not received,we may incur additional costs resulting from reductions in staff or redundancy of fac

256、ilitieswhich could have a material adverse effect on our business,financial condition and results of operations.We have a new management team which may cause disruption in our business,particularly our core markets,and which could have a materiallyadverse effect on our results of operations.Our exec

257、utive officers have an average tenure with RigNet of approximately a year.Additionally,Charles“Chip”Schneider,Senior Vice President andChief Financial Officer,departed the Company effective December 27,2017.The high turnover in our executive ranks could negatively affect ourrelationships with key cu

258、stomers,particularly in our core managed services business,and our employee morale.Any such effects could materially andadversely affect our business and results of operations.A significant portion of our revenue is derived from a relatively small number of customers and the loss of any of these cus

259、tomers would materiallyharm our business,financial condition and results of operations.Although we continue to diversify our customer base,we still receive a significant portion of our revenue from a relatively small number of largecustomers,among them being Royal Dutch Shell Plc,Bechtel Corporation

260、,Ensco Plc,Noble Corporation Plc,Seadrill Ltd.,Chevron,Baker Hughes,Veripos,Halliburton and Petrofac.Although none of these customers represents more than 10%of our annual revenue,should one or more of these customersterminate or significantly reduce their business with us,our business,financial con

261、dition and results of operations would be materially harmed.RecentlyNoble Corporation indicated that they will transition the managed communications services we provide to Noble to one of our competitors.Noble continuesto be one of our top 5 customers,but we anticipate a loss of revenue from Noble a

262、ccelerating in the latter half of 2018.If we cannot replace this lost revenue,our financial condition and results of operations would be materially harmed.We may not be able to compete successfully against current and future competitors.We expect both product and pricing competition to persist and i

263、ntensify.Increased competition could cause reduced revenue,price reductions,reduced profits and loss of market share.Our industry is characterized by competitive pressures to provide enhanced functionality for the same or lower pricewith each new generation of 17Table of Contentstechnology.Our prima

264、ry global competitor is Speedcast International Ltd.Recently Panasonic,through its ITC Global subsidiary,as well as Tampnet havebegun to expand their presence as active providers of communications services to the oil and gas,mining and maritime markets.We also compete withregional competitors in the

265、 countries in which we operate.In addition,in certain markets outside of the U.S.,we face competition from local competitors thatprovide their services at a lower price due to lower overhead costs,including lower costs of complying with applicable government regulations and theirwillingness to provi

266、de services for a lower profit margin.Strong competition and significant investments by competitors to develop new and better solutionsmay make it difficult for us to maintain our customer base,force us to reduce our prices or increase our costs to develop new solutions.Furthermore,competition may e

267、merge from companies that we have previously not perceived as competitors or consolidation of our industry maycause existing competitors to become bigger and stronger with more resources,market awareness and market share.For example,we have experiencedcustomer projects where we have bid directly aga

268、inst some of our satellite bandwidth providers,either acting alone or in conjunction with one of our directcompetitors.Competition with our satellite bandwidth providers,either alone or in restrictive arrangements with our suppliers or competitors may materiallyand adversely affect the availability

269、and pricing of our products and services.As we expand into new markets we may experience increased competition from some of our competitors that have prior experience or other business inthese markets or geographic regions.In addition,some of our customers may decide to insource some of the communic

270、ations services and managed servicessolutions that we provide,in particular our terrestrial communication services(e.g.,LOS or WiMAX),which do not require the same level of maintenance andsupport as our other services.Our success will depend on our ability to adapt to these competitive forces,to ada

271、pt to technological advances,to develop moreadvanced services and solutions more rapidly and less expensively than our competitors,to continue to develop and deepen our global sales and businessdevelopment network,and to educate potential customers about the benefits of using our solutions rather th

272、an our competitors services or in sourcedsolutions.Our failure to successfully respond to these competitive challenges could harm our business,financial condition and results of operations.Our international operations are subject to additional or different risks than our United States operations,whi

273、ch may harm our business and financialresults.We operate in many countries around the world,including countries in Asia,the Middle East,Africa,Latin America and Europe and intend to continueto expand the number of countries in which we operate.However,because operations in some countries may be temp

274、orary,the total number of countries inwhich we operate fluctuates.There are many risks inherent in conducting business internationally that are in addition to or different than those affecting ourUnited States operations,including:legal,regulatory and cultural differences that may be vague or arbitr

275、ary,lack traditional concepts of due process or awareness of United Stateslaws,resulting in difficulty enforcing contracts or timely collection of receivables and may be subject to unexpected changes or interpretations;tariffs,import and export restrictions and other trade barriers;difficulty in sta

276、ffing and managing geographically dispersed operations and culturally diverse work forces in countries with varyingemployment laws and practices including restrictions on terminating employees;increased travel,infrastructure and legal compliance costs associated with multiple international locations

277、;differing technology standards;currency exchange rate fluctuation and currency controls;potential political and economic instability,which may include military conflict,nationalization or expropriation;potentially adverse tax consequences;difficulties and expense of maintaining international sales

278、distribution channels;and difficulties in maintaining and protecting our intellectual property.The authorities in the countries where we operate may introduce additional regulations for the oil and gas and communications industries.New rulesand regulations may be enacted or existing rules and regula

279、tions may be applied or interpreted in a manner which could limit our ability to provide ourservices.Amendments to current laws and 18Table of Contentsregulations governing operations and activities in the oil and gas industry and telecommunications industry could harm our operations and financial r

280、esults.Compliance with and changes in tax laws or adverse positions taken by taxing authorities could be costly and could affect our operating results.Compliance related tax issues could also limit our ability to do business in certain countries.Changes in tax laws or tax rates,the resolution of tax

281、assessments or audits by various taxing authorities,disagreements with taxing authorities over our tax positions and the ability to fully utilize our tax losscarry-forwards and tax credits could have a significant financial impact on our future operations and the way we conduct,or if we conduct,busi

282、ness in theaffected countries.Our intellectual property rights are valuable,and any failure or inability to sufficiently protect them could harm our business and our operating results.We own,and maintain certain intellectual property assets,including patents,patent applications,copyright and tradema

283、rks,trade secrets,and rights tocertain domain names,which we believe are collectively among our most valuable assets.We seek to protect our intellectual property assets through the lawsof the U.S.and other countries of the world,and through contractual provisions.However,the efforts we have taken to

284、 protect our intellectual property assetsand proprietary rights might not be sufficient or effective at stopping unauthorized use of those rights.If we are unable to protect our proprietary rights fromunauthorized use,the value of our intellectual property assets may be reduced.We compete for satell

285、ite capacity for our services and any capacity constraints could harm our business,financial condition and results of operations.In certain markets,the availability and pricing of capacity could be subject to competitive pressure.We may be unable to secure the capacity needed atcompetitive prices to

286、 conduct our operations,which could harm our business,financial condition and results of operations.In certain markets,theavailability of bandwidth may be restricted by local governments when needed to support military operations,and in the event of such an action,there is noguarantee that we will b

287、e able to secure the capacity needed to meet our contractual commitments to our customers.Restructuring activities may negatively impact the Company.Reductions in resources may adversely affect or delay various sales,marketing,product development and operational activities,which could have amaterial

288、 adverse effect on our financial results.Additionally,restructuring activities could have negative effects on our internal control over financialreporting and employee morale.Information technology infrastructure and systems are critical to supporting our operations,accounting and internal controls;

289、any potential failure ofour information technology infrastructure or systems could adversely affect our business,financial conditions and results of operations.We continue to update and enhance our information systems.If a problem occurs that impairs or compromises this infrastructure,systems upgrad

290、esand/or new systems implementations,the resulting disruption could impede our ability to perform accounting,invoice,process orders,generate managementreports or otherwise carry on business in the normal course.Any such events could cause us to lose customers and/or revenue and could require us to i

291、ncursignificant expense to remediate.Additionally,any such events could adversely harm our legal,accounting and compliance capabilities including but notlimited to:our ability to timely file reports with the SEC;timely file financial statements required by certain statutes;timely file compliance rep

292、orts with ourlenders under our credit agreement;and timely file income taxes with the IRS,foreign taxing authorities,and local taxing authorities.Bad weather in the Gulf of Mexico or other areas where we operate could harm our business,financial condition and results of operations.Certain areas in a

293、nd near the Gulf of Mexico and other areas in which our clients operate experience unfavorable weather conditions,includinghurricanes and other extreme weather conditions,on a relatively frequent basis.A major storm or threat of a major storm in these areas may harm our business.Our clients drilling

294、 rigs,production platforms and other vessels in these areas are susceptible to damage and/or total loss by these storms,which may causethem to no longer need our communication services.Our equipment on these rigs,platforms or vessels could be damaged causing us to have serviceinterruptions and lose

295、business or incur significant costs for the replacement of such equipment.Even the threat of a very large storm will sometimes causeour clients to limit activities in an area and thus harm our business.19Table of ContentsChanging weather conditions could impair satellite connectivity,cause more site

296、s to be shut down and generally cause activities to be limited so that ourbusiness may be harmed.This risk is more pronounced for LOS microwave service,as there is a likely loss of service for multiple subsequent microwave sitesin the network relay.Changes in the regulatory framework under which we

297、operate could adversely affect our business prospects or results of operations.Our U.S.services are provided on a private carrier basis.As such,these services are subject to light or no regulation by the FCC and state PUCs.If theFCC or one or more PUCs or any other telecommunications regulator deter

298、mine that these services or the services of our subsidiaries or affiliates constitutecommon carrier offerings or change the regulations applicable to private carriers,we may be subject to significant costs to ensure compliance with theapplicable provisions of those laws and regulations.We may be sub

299、ject to enforcement actions including,but not limited to,fines,cease and desist orders,orother penalties if we fail to comply with those requirements.Our international operations are also regulated by various non-U.S.governments and international bodies.These regulatory regimes frequently requiretha

300、t we maintain licenses for our operations and conduct our operations in accordance with prescribed standards and requirements.The adoption of new lawsor regulations,changes to the existing regulatory framework,new interpretations of the laws that apply to our operations,or the loss of,or a materiall

301、imitation on,any of our material licenses could materially harm our business,results of operations and financial condition.If we infringe,or if third parties assert that we infringe,third-party intellectual property rights we could incur significant costs and incur significantharm to our business.Th

302、ird parties may assert infringement or other intellectual property claims against us,which could result in substantial damages if it is ultimatelydetermined that our services infringe a third-partys proprietary rights.Even if claims are without merit,defending a lawsuit takes significant time,may be

303、expensive and may divert managements attention from our other business concerns.Many of our contracts are governed by the laws of countries that may make them difficult or expensive to interpret or enforce.Many of our contracts are governed by the laws of countries other than the U.S.,which may crea

304、te both legal and practical difficulties in case of adispute or conflict.We operate in regions where the ability to protect contractual and other legal rights may be limited.In addition,having to pursuearbitration or litigation in some countries may be more difficult or expensive than pursuing litig

305、ation in the United States.Some of our stockholders could exert control over our Company.As of February 20,2018,funds associated with Kohlberg Kravis Roberts&Co.L.P.,or KKR,owned in the aggregate shares representing approximately26.1%of our outstanding voting power.Additionally,as of February 20,201

306、8,funds associated with Arrowpoint Asset Management,LLC,owned in theaggregate shares representing approximately 15.4%of our outstanding voting power.As a result,any of these stockholders could potentially have significantinfluence over all matters presented to our stockholders for approval,including

307、 election or removal of our directors and change of control transactions.Theinterests of these stockholders may not always coincide with the interests of the other holders of our common stock.We are subject to fluctuations in currency exchange rates and limitations on the expatriation or conversion

308、of currencies,which may result insignificant financial charges,increased costs of operations or decreased demand for our services and solutions.During the year ended December 31,2017,9.3%of our revenues were earned in non-U.S.currencies,while a significant portion of our capital andoperating expendi

309、tures and all of our outstanding debt,was priced in U.S.dollars.In addition,we report our results of operations in U.S.dollars.Accordingly,fluctuations in exchange rates relative to the U.S.dollar could have a material effect on our reported earnings or the value of our assets.In the future,a greate

310、rportion of our revenues may be earned in non-U.S.currencies,increasing this risk of fluctuations in exchange rates.20Table of ContentsAny depreciation of local currencies in the countries in which we conduct business may result in increased costs to us for imported equipment and may,at the same tim

311、e,decrease demand for our services and solutions in the affected markets.If our operating companies distribute dividends in local currencies inthe future,the amount of cash we receive will also be affected by fluctuations in exchange rates.In addition,some of the countries in which we haveoperations

312、 do or may restrict the expatriation or conversion of currency making such cash unavailable for financing of our global operations and capitalinvestments.Furthermore,a majority of our cash balances are held outside of the United States.Were we to repatriate this cash to the United States we may have

313、 topay taxes in one or more countries making the cash available to us less than that reported in our financial statements.The average daily trading volume of our common stock is low which can cause volatility in its price unrelated to our actual operations andperformance.The average daily trading vo

314、lume of our stock is approximately 30 thousand shares.Due to the low trading volume our stock may be subject to moremarket volatility,without regard to our performance.Stock price volatility and sustained decreases in our share price could subject our stockholders to lossesand subject us to takeover

315、 bids or lead to action by NASDAQ.The trading price of our common stock has been,and may continue to be,subject tofluctuations in price in response to various factors,some of which are beyond our control,including,but not limited to:quarterly announcements and variations in our results of operations

316、 or those of our competitors,either alone or in comparison to analystsexpectations or prior Company estimates,including announcements of site counts,rates of churn,and operating margins that would result indownward pressure on our stock price;the cost and availability or perceived availability of ad

317、ditional capital and market perceptions relating to our access to this capital;announcements by us or our competitors of acquisitions,new products or technologies;recommendations by securities analysts or changes in their estimates concerning us;changes in the valuation of our deferred tax assets;an

318、y significant change in our board of directors or management;and perceptions of general market conditions in the technology and communications and oil and gas industries,the U.S.economy and global marketconditions.21Table of ContentsItem 1B.Unresolved Staff CommentsNot applicable.Item 2.PropertiesFa

319、cilitiesIn January 2017,we signed and announced an eight-year lease for new headquarters space,comprised of 28,808 square feet located at 15115 Park RowBlvd,Suite 300,Houston,Texas.The term of this lease runs through June 2025.We also own a custom built,approximately 26,000 square foot facility inAb

320、erdeen,Scotland,and a 13,000 square foot facility at 1300 N Berard St.,Breaux Bridge,Louisiana.We have other offices under lease in Lafayette,Louisiana;Stavanger,Norway;Doha,Qatar and Singapore,and additional leased offices,warehousesand service centers in the United States,Brazil,Mexico,Nigeria,Mal

321、aysia,Australia,United Arab Emirates and Saudi Arabia.We believe our currentfacilities are adequate for our current needs and for the foreseeable future.Item 3.Legal ProceedingsIn August 2017,the Company filed litigation in Harris County District Court and arbitration against one of its former Chief

322、 Executive Officers for,among other things,breach of fiduciary duty,misappropriation of trade secrets,unfair competition and breach of contract.Recently,that former executivefiled counterclaims against us and one of our independent directors.The Company is seeking repayment of certain severance bene

323、fits and injunctive relief.The Company has incurred legal expense of approximately$0.9 million in connection with this dispute for the year ended December 31,2017.TheCompany may continue to incur significant legal fees,related expenses and management time in the future.The Company cannot predict the

324、 ultimateoutcome of this dispute,the total costs to be incurred or the potential impact on personnel.Based on the information available at this time and managements understanding of the dispute,the Company does not deem the likelihood of amaterial loss related to this dispute to be probable,so it ha

325、s not accrued any liability related to the dispute.At this stage of the arbitration and litigation,therange of possible loss is not reasonably estimable.Inmarsat and the Company are in a dispute relating to a January 2014 take or pay agreement to purchase up to$65.0 million,under certain conditions,

326、of GX capacity from Inmarsat over several years.The parties are attempting to resolve the dispute through a contractually-stipulated arbitration process withthe International Centre for Dispute Resolution that began in October 2016.The parties dispute whether Inmarsat has met its contractual obligat

327、ions withrespect to the service under the agreement.In July 2017,pursuant to its contractual rights under the agreement,the Company delivered a notice oftermination of the agreement to Inmarsat.In addition,we have filed certain counterclaims against Inmarsat related to tortuous interference with con

328、tracts,misuse of confidential information and bad faith.The Company has incurred legal expenses of$1.6 million in connection with the GX dispute for the year ended December 31,2017.The Companymay continue to incur significant legal fees,related expenses and management time in the future.The Company

329、cannot predict the ultimate outcome of theGX dispute,the total costs to be incurred or the potential impact on personnel.Based on the information available at this time and managements understanding of the GX dispute,the Company does not deem the likelihood of amaterial loss related to this dispute

330、to be probable,so it has not accrued any liability related to the dispute.At this stage of the arbitration,the range ofpossible loss is not reasonably estimable,but could range from zero to the maximum amount payable under the contract for the services plus expenses.The Company,in the ordinary cours

331、e of business,is a claimant or a defendant in various other legal proceedings,including proceedings as to whichthe Company has insurance coverage and those that may involve the filing of liens against the Company or its assets.Item 4.Mine Safety DisclosuresNot applicable.22Table of ContentsPART II I

332、tem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity SecuritiesRigNets common stock,$0.001 par value,is traded on the NASDAQ Global Select Market(NASDAQ),under the ticker symbol RNET.The followingtable sets forth the high and low sales price of RigNet

333、s common stock by quarter,for the two most recent fiscal years.QUARTERLY COMMON STOCK SALES PRICE(HIGH&LOW SALES PRICE)High Low Year Ended December 31,2017 Fourth Quarter$18.15$14.30 Third Quarter$19.30$14.60 Second Quarter$22.65$15.70 First Quarter$23.70$17.55 Year Ended December 31,2016 Fourth Quarter$23.15$14.20 Third Quarter$15.12$11.31 Second Quarter$17.10$11.15 First Quarter$21.62$11.69 Ther