Space Commerce

Telesat Reports Results for the Quarter and Year Ended December 31, 2013

By Marc Boucher
Press Release
February 24, 2014
Filed under ,

Telesat Holdings Inc. (“Telesat”) today announced its financial results for the three month and one year periods ended December 31, 2013. All amounts are in Canadian dollars and are reported under International Financial Reporting Standards (“IFRS”) unless otherwise noted.
For the year ended December 31, 2013, Telesat reported consolidated revenues of $897 million, an increase of approximately 6% ($51 million) compared to 2012. When adjusted for foreign exchange rate changes, revenue increased by 5% ($43 million) compared to 2012. The increase was mainly due to revenue earned on the Nimiq 6 and Anik G1 satellites which entered into commercial service in June 2012 and May 2013, respectively. The increase was partially offset by a decrease in revenue earned on Nimiq 1 and Nimiq 2.

Operating expenses of $201 million were 18% ($45 million) lower than in 2012 or 19% ($47 million) lower when taking into account changes in foreign exchange rates. This reduction was primarily due to compensation expenses incurred in 2012 related to special payments to certain employees of the Company in connection with a cash distribution made to the Company’s shareholders, partially offset by an increase in share-based compensation expense in 2013 as a result of additional stock option awards made in the second quarter of 2013. Adjusted EBITDA1 was $711 million, an increase of 9% ($56 million) over 2012. The Adjusted EBITDA margin1 for 2013 was 79%, compared to 78% for 2012.

Telesat’s net income for 2013 was $68 million compared to net income of $24 million for 2012. The favorable variation was partly due to a gain on changes in the fair value of financial instruments and a lower loss on financing in 2013 compared to 2012 as losses were recognized in 2012 on the repurchase and redemption of the 11.0% Senior Notes. Telesat’s results were also positively impacted by increased revenue, lower operating expenses and lower interest expense due to refinancing activities. The favorable variation was partially offset by a non-cash loss on foreign exchange, which was principally driven by a stronger U.S. dollar to Canadian dollar spot rate at December 31, 2013, compared to December 31, 2012, and the resulting unfavorable impact on the translation of Telesat’s U.S. dollar denominated debt.

For the three month period ended December 31, 2013, consolidated revenues were $224 million, a decrease of approximately 2% ($4 million) compared to the same period in 2012. When adjusted for foreign exchange rate changes, revenue decreased by 4% ($9 million) compared to the same period in 2012, driven mainly by lower equipment sales revenues and lower revenues from Nimiq 1 and Nimiq 2. Operating expenses were $50 million, a decrease of 17% ($11 million) compared to 2012. The decrease was primarily due to lower cost of equipment sales in 2013 and additional revenue-related expenses associated with Nimiq 1 in 2012. Adjusted EBITDA1 for the fourth quarter of 2013 was $178 million, an increase of 3% ($5 million) compared to the fourth quarter of 2012 and an increase of 1% ($1 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin1 was 79% for the fourth quarter compared to 76% for the same period in 2012.

“Telesat achieved record revenues and Adjusted EBITDA in 2013” commented Dan Goldberg, Telesat’s President and CEO. “I am pleased with our strong financial performance, the successful entry into service of our Anik G1 satellite, the procurement of the Telstar 12 VANTAGE satellite and our ability to reduce borrowing costs by re-pricing and amending our credit facilities. Our substantial investment in satellite capacity combined with our industry-leading contractual backlog provides visibility into the stability of our future revenue and cash flow and positions us well for 2014 and beyond.”

Business Highlights

– In April 2013, Telesat Canada and Telesat LLC reduced their borrowing costs and increased their flexibility by re-pricing and amending their existing credit facilities. The changes included decreasing the interest rates and the interest rate floors on the Term Loan B and increasing the permitted leverage ratio to incur first lien debt. In May 2013, Telesat Canada and Telesat LLC completed the redemption of all of their 12.5% Senior Subordinated Note issued in June 2008.

– During the second quarter of 2013, Telesat announced the procurement of a powerful, multi-mission satellite from Airbus Defence and Space that will replace and expand on Telstar 12 at 15 degrees West Longitude. This new state-of-the-art satellite, called Telstar 12 VANTAGE, is expected to launch in late 2015 and will utilize high throughput capabilities that offer superior performance to meet the growing needs of broadcast, government and enterprise users, including demand for aeronautical and maritime services. The satellite will offer a high level of flexibility with coverage of Europe, the Americas, the Middle East and Africa, as well as the Caribbean, North Sea, Mediterranean and South Atlantic regions. In September 2013, Telesat entered into a contract with Mitsubishi Heavy Industries Ltd. to launch the Telstar 12 VANTAGE satellite.

– On May 8, 2013, commercial service began on Telesat’s new Anik G1 satellite, which was launched on April 15, 2013. Anik G1 is located at the 107.3 degrees West Longitude orbital location providing a range of communications services, using Ku-band for direct-to-home video services in Canada, X-band for government services in the Americas and Pacific Ocean Region, and C-band and Ku-band for a range of services in South America.

– At December 31, 2013:
— Telesat had contracted backlog for future services of approximately $4.9 billion.
— Fleet utilization was 90% for Telesat’s North American fleet and 82% for Telesat’s international fleet.

Telesat’s report on Form 20-F for the year ended December 31, 2013 has been filed with the U.S. Securities and Exchange Commission (SEC) and may be accessed on the SEC’s website at

Telesat has scheduled a conference call on Monday, February 24, 2014 at 9:30 a.m. ET
to discuss its financial results for the year ended December 31, 2013 and other recent developments. The call will be hosted by Daniel S. Goldberg, President and Chief Executive Officer, and Michel Cayouette, Chief Financial Officer, of Telesat.

Dial-in Instructions:

The toll-free dial-in number for the teleconference is +1 (866) 226-1792. Callers outside of North America should dial +1 (416) 340-2216. The conference reference number is 4181891. Please allow at least 15 minutes prior to the scheduled start time to connect to the teleconference.

Dial-in Audio Replay:

A replay of the teleconference will be available one hour after the end of the call on February 24, 2014, until 11:59 p.m. ET on March 6, 2014. To access the replay, please call +1 (800) 408-3053. Callers outside of North America should dial +1 (905) 694-9451. The access code is 9330944 followed by the number sign (#).

All Adjusted EBITDA and Adjusted EBITDA margins included in this release are non-IFRS financial measures, as described in the End Notes section of this release. For information reconciling non-IFRS financial measures to the most comparable IFRS financial measures, please see the consolidated financial information below.

Forward-Looking Statements Safe Harbor

This news release contains statements that are not based on historical fact and are ”forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words “expect”, “will”, “would”, “positions us well” or other variations of these words or other similar expressions are intended to identify forward-looking statements and information. Actual results may differ materially from the expectations expressed or implied in the forward-looking statements as a result of known and unknown risks and uncertainties. Detailed information about some of the known risks and uncertainties is included in the “Risk Factors” section of Telesat Holdings Inc.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2013 which can be obtained on the United States Securities and Exchange Commission (SEC) website at Known risks and uncertainties include but are not limited to: risks associated with operating satellites and providing satellite services, including satellite construction or launch delays, launch failures, in-orbit failures or impaired satellite performance, volatility in exchange rates and risks associated with domestic and foreign government regulation. The foregoing list of important factors is not exhaustive. The information contained in this news release reflects Telesat’s beliefs, assumptions, intentions, plans and expectations as of the date of this news release. Except as required by law, Telesat disclaims any obligation or undertaking to update or revise the information herein.

About Telesat (

Telesat is a leading global satellite operator, providing reliable and secure satellite-delivered communications solutions worldwide to broadcast, telecom, corporate and government customers. Headquartered in Ottawa, Canada, with offices and facilities around the world, the company’s state-of-the-art fleet consists of 14 satellites and the Canadian payload on ViaSat-1 with another satellite under construction. Telesat also manages the operations of additional satellites for third parties. Privately held, Telesat’s principal shareholders are Canada’s Public Sector Pension Investment Board and Loral Space & Communications Inc. (NASDAQ: LORL).

For further information:
Michael Bolitho, Telesat, +1 (613) 748-8700 ext. 2336 (

Full financials available on the Telesat web site.

SpaceRef co-founder, entrepreneur, writer, podcaster, nature lover and deep thinker.