Telesat (NASDAQ and TSX: TSAT), one of the world’s largest and most
innovative satellite operators, today announced its financial
results for the three-month and one-year periods ended December 31,
2021. All amounts are in Canadian dollars and reported under
International Financial Reporting Standards (“IFRS”) unless
otherwise noted.
“I am pleased to report our 2021 fourth quarter
and full year results as a dual-listed, public company,” commented
Dan Goldberg, Telesat’s President and CEO. “Despite modestly lower
year-over-year revenues and Adjusted EBITDA, adjusted for foreign
exchange rate changes, Telesat continued to generate strong cash
flows, ending the year with over $1.4 billion in cash. We also
continued to deliver industry-leading Adjusted EBITDA margins1 with
high capacity utilization and have a substantial contractual
backlog of $2.1 billion, providing high visibility into our future
cash flows.”
Goldberg added: “I am also pleased that we made
significant progress last year on our revolutionary Telesat
Lightspeed constellation, including announcing $1.44 billion and
$400 million of investment in the project by the Government of
Canada and the Government of Quebec, respectively; making strong
progress on the advanced technologies and systems underpinning the
constellation; and concluding an agreement with the Government of
Ontario to use Telesat Lightspeed to help bridge the Digital
Divide, which, along with our Government of Canada agreement
previously announced, contributes to the over $750 million in
contractual backlog we had in place for Telesat Lightspeed at the
end of 2021. Our focus now is completing the financing of Telesat
Lightspeed and commencing the full-scale construction of the
program. Although the program has been delayed as a result of
certain supply chain issues, we remain bullish that Telesat
Lightspeed will position Telesat and its customers for strong
future growth.”
For the year ended December 31, 2021, Telesat
reported consolidated revenue of $758 million, a decrease of 8%
($62 million) compared to the same period in 2020. When adjusted
for changes in foreign exchange rates, revenue declined 4% ($32
million) compared to 2020. The revenue decrease was primarily due
to a reduction of service for one of Telesat’s North American
direct-to-home customers, the reduction or non-renewal of certain
services in the enterprise segment, including as a result of the
full-year effect of contract restructurings in 2020 for a mobility
customer as a result of COVID-19, and lower consulting revenue. The
revenue decline was partially offset by an increase in revenue
associated with short-term services provided to another satellite
operator in 2021, which had not occurred in 2020, as well as
increased services provided to customers in the mobility market as
it began to recover from the impact of COVID-19.
Operating expenses for full year 2021 were $234
million, an increase of $53 million from 2020. When adjusted for
changes in foreign exchange rates, operating expenses increased by
$59 million from 2020. The increase was principally due to higher
non-cash share-based compensation combined with higher wages due to
the hiring of additional employees, primarily to support the
Telesat Lightspeed program. This was partially offset by higher
capitalized engineering costs.
Adjusted EBITDA1 for full year 2021 was $603
million, a decrease of 8% ($50 million) or, when adjusted for
foreign exchange rates, a decrease of 4% ($25 million). The
Adjusted EBITDA margin1 was 79.6%, unchanged from 2020.
For the year ended December 31, 2021, net income
was $158 million, compared to $246 million for 2020. The decline
was the result of lower revenues, higher (mostly non-cash)
operating expenses, and an increase in tax expense, driven by lower
deferred tax recovery in 2021, partially offset by recognition of
Phase I accelerated clearing payments for repurposing of U.S.
C-band spectrum.
For the quarter ended December 31, 2021, Telesat
reported consolidated revenue of $187 million, a decrease of 7%
($14 million) compared to the same period in 2020. When adjusted
for changes in foreign exchange rates, revenue declined 5% ($9
million) compared to 2020. The revenue decrease was primarily due
to lower equipment sales from certain government customers, the
reduction or non-renewal of certain services in the enterprise
segment, and a reduction of services for one of Telesat’s North
American direct-to-home customers.
Operating expenses for the quarter were $87
million, an increase of $40 million from 2020. When adjusted for
changes in foreign exchange rates, operating expenses increased by
$42 million. The increase in operating expenses was primarily due
to higher non-cash share-based compensation.
Adjusted EBITDA1 was $145 million, a decrease of
9% ($15 million) or, when adjusted for foreign exchange rates, a
decrease of 7% ($12 million). The Adjusted EBITDA margin1 for the
fourth quarter was 77.5%, compared to 79.5% in 2020.
For the quarter ended December 31, 2021, net
income was $97 million, compared to net income of $255 million for
2020. The decline was the result of lower revenues, higher
expenses, a significantly lower non-cash foreign exchange gain in
2021 compared to the gain in 2020, arising from the translation of
Telesat’s U.S. dollar denominated debt into Canadian dollars, and
higher tax expense, driven by a deferred tax expense compared to a
deferred tax recovery in 2020, partially offset by recognition of
Phase I accelerated clearing payments for repurposing of U.S.
C-band spectrum.
Preliminary 2022 Financial
Outlook
Telesat expects its full year 2022 revenues
(assuming a foreign exchange rate of US$1 = C$1.30) to be between
$720 million and $740 million.
Telesat expects its Adjusted EBITDA (assuming a
foreign exchange rate of US$1 =C$1.30) to be between $525 million
and $545 million in 2022.
For 2022, Telesat expects its cash flows used in investing
activities to be in the range of $100 USD million to $120 USD
million. Once Telesat has greater visibility around the
construction and financing of its Telesat Lightspeed program, it
will provide a further update on the anticipated capital
expenditures for the year, which could increase substantially.
Business Highlights
- At December 31, 2021:
- Telesat had contracted backlog2 for future services of
approximately $2.1 billion (excluding contractual backlog
associated with Telesat Lightspeed).
- Fleet utilization was 80%.
- Became a Public Company:
- On November 19, 2021, Telesat Corporation began trading on the
Nasdaq Global Select Market (“NASDAQ”) and the Toronto Stock
Exchange (“TSX”) under the ticker symbol “TSAT”.
- This followed the closing of Telesat Canada’s previously
announced transaction with Loral Space and Communications Inc.
(“Loral”) and Public Sector Pension Investment Board (“PSP
Investments”) (the “Transaction”), in which Loral’s stockholders
and Telesat Canada’s other equity holders have exchanged their
interests for equity in the new public holding structure.
- Telesat Lightspeed Constellation:
- On February 18, 2021, Telesat announced that it had entered
into a Memorandum of Understanding (“MOU”) with the Government of
Québec for an investment of $400 million into Telesat Lightspeed.
Under the terms of the MOU, the investment by the Government of
Québec will consist of $200 million in preferred equity of Telesat
LEO Inc. as well as a $200 million loan. The Government of Québec’s
$400 million investment is subject to a number of conditions,
including financing and the entering into of a definitive
agreement.
- On August 9, 2021, Telesat and the Government of Ontario
announced that they have partnered to bridge the digital divide in
Ontario by leveraging Telesat’s planned advanced, state-of-the-art
Low-Earth Orbit satellite network, Telesat Lightspeed. Under this
$109 million, 5-year partnership, a dedicated Telesat Lightspeed
capacity pool will be made available at substantially reduced rates
to Canadian Internet service providers (“ISPs”), including
Indigenous owned and operated ISPs, as well as mobile network
operators to expand high-speed Internet and LTE/5G networks to
Ontario’s unserved and underserved communities.
- On August 12, 2021, Telesat announced that it expects to
receive a $1.44 billion investment from the Government of Canada to
support Telesat Lightspeed. Under the terms of the agreement, the
Government of Canada would provide a loan of $790 million and make
a $650 million preferred equity investment in Telesat LEO Inc., an
indirect operating subsidiary that will hold substantially all of
the assets of Lightspeed. In return, Telesat would commit to make
certain minimum capital and operating expenditures in Canada in
connection with the program and to create hundreds of Canadian
high-quality, full-time jobs and co-ops and provide academic
scholarships.
- Repurposing of C-band Spectrum
- In 2020, the United States Federal Communications
Commission adopted a Report and Order in connection with the
clearing of 300 MHz band of C-band spectrum to support the
deployment of terrestrial 5G services in the
United States.
- In May 2020, Telesat Canada committed to an accelerated
version of the C-band clearing program and is expected to receive a
total of US$344.4 million (US$84.8 million for
Phase I and US$259.6 for Phase II), as accelerated
payments.
- An amount of $108.5 million (US$84.8 million) was
recognized for the year ended December 31, 2021, relating to
Phase I; $42.9 million of which was received in 2021 with
the balance received in early 2022.
Telesat’s annual report on Form 20-F for the
year ended December 31, 2021, has been filed with the United States
Securities and Exchange Commission (“SEC”) and the Canadian
securities regulatory authorities at the System for Electronic
Document Analysis and Retrieval (“SEDAR”), and may be accessed on
the SEC’s website at www.sec.gov and SEDAR’s website at
www.sedar.com.
Conference Call
Telesat has scheduled a conference call on
Friday, March 18, 2022, at 10:30 a.m. ET to discuss its financial
results for the three month and one year periods ended December 31,
2021. The call will be hosted by Daniel S. Goldberg, President and
Chief Executive Officer, and Andrew Browne, Chief Financial
Officer, of Telesat.
Dial-in Instructions:
The toll-free dial-in number for the
teleconference is +1 800 806 5484. Callers outside of North America
should dial +1 416 340 2217. The participant passcode is 8775427
followed by the number sign (#). Please allow at least 15 minutes
prior to the scheduled start time to connect to the teleconference.
In the event of technical issues, please dial *0 and advise the
conference call operator of the company name (“Telesat”) and the
name of the moderator (Michael Bolitho).
Webcast:
The conference call can also be accessed, as a
listen in only, at https://edge.media-server.com/mmc/p/69nxycdo. A
replay of the webcast will be archived on Telesat’s website under
the tab “Investors”.
Dial-in Audio Replay:
A replay of the teleconference will be available
one hour after the end of the call on March 18, 2022 until 11:55
p.m. ET on April 1, 2022. To access the replay, please call +1 800
408 3053. Callers from outside North America should dial +1 905 694
9451. The access code is 5806170 followed by the number sign
(#).
About Telesat
Backed by a legacy of engineering excellence,
reliability and industry-leading customer service, Telesat (NASDAQ
and TSX: TSAT) is one of the largest and most successful global
satellite operators. Telesat works collaboratively with its
customers to deliver critical connectivity solutions that tackle
the world’s most complex communications challenges, providing
powerful advantages that improve their operations and drive
profitable growth.
Continuously innovating to meet the connectivity
demands of the future, Telesat Lightspeed, the company’s Low Earth
Orbit (“LEO”) satellite network, will be the first and only LEO
network optimized to meet the rigorous requirements of telecom,
government, maritime and aeronautical customers. Operating under
its international priority Ka-band spectrum rights, Telesat
Lightspeed will redefine global satellite connectivity with
ubiquitous, affordable, high-capacity links with fibre-like speeds.
For updates on Telesat, follow us on Twitter, LinkedIn, or visit
www.telesat.com.
Contacts:Investor Relations |
|
Hugh Harley+1 613 748 8424ir@telesat.com |
Michael Bolitho +1 613 748 8828ir@telesat.com |
|
|
Forward-Looking Statements Safe Harbor
This news release contains statements that are
not based on historical fact, including financial outlook for 2022,
and are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995 and Canadian
securities laws. When used herein, statements which are not
historical in nature, or which contain the words “will,”
“expected,” “plans,” “considering,” or similar expressions, are
forward-looking statements. 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. All statements made in this press release are made
only as of the date set forth at the beginning of this release.
Telesat Corporation undertakes no obligation to update the
information made in this release in the event facts or
circumstances subsequently change after the date of this press
release.
These forward-looking statements are based on
Telesat Corporation’s current expectations and are subject to a
number of risks, uncertainties and assumptions. These statements
are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond Telesat
Corporation’s control, are difficult to predict, and could cause
actual results to differ materially from those expressed or
forecasted in the forward-looking statements. 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; the impact of COVID-19
on Telesat Corporation’s business and the economic environment; the
ability to deploy successfully an advanced global LEO satellite
constellation, and the timing of any such deployment; the
availability of government and/or other funding for the LEO
satellite constellation; the receipt of proceeds in relation to the
re-allocation of C-band spectrum; volatility in exchange rates; the
ability to expand Telesat Corporation’s existing satellite
utilization; and risks associated with domestic and foreign
government regulation. The foregoing list of important factors is
not exhaustive. Investors should review the other risk factors
discussed in Telesat Corporation’s annual report on Form 20-F for
the year ended December 31, 2021, that was filed on March 18, 2022,
with the United States Securities and Exchange Commission (“SEC”)
and the Canadian securities regulatory authorities at the System
for Electronic Document Analysis and Retrieval (“SEDAR”), and may
be accessed on the SEC’s website at www.sec.gov and SEDAR’s website
at www.sedar.com.
Telesat
Corporation |
|
|
|
|
|
|
Consolidated Statements of Income |
For the
periods ended December 31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
Twelve Months |
(in thousands of Canadian dollars) |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenue |
|
$ |
187,497 |
|
|
$ |
201,908 |
|
|
$ |
758,212 |
|
|
$ |
820,468 |
|
Operating expenses |
|
|
(87,133 |
) |
|
|
(47,162 |
) |
|
|
(234,054 |
) |
|
|
(180,874 |
) |
Depreciation |
|
|
(50,370 |
) |
|
|
(50,066 |
) |
|
|
(203,772 |
) |
|
|
(216,885 |
) |
Amortization |
|
|
(4,090 |
) |
|
|
(4,289 |
) |
|
|
(16,141 |
) |
|
|
(17,195 |
) |
Other operating gains (losses), net |
|
|
108,392 |
|
|
|
31 |
|
|
|
107,615 |
|
|
|
(215 |
) |
Operating income |
|
|
154,296 |
|
|
|
100,422 |
|
|
|
411,860 |
|
|
|
405,299 |
|
Interest expense |
|
|
(48,841 |
) |
|
|
(47,843 |
) |
|
|
(187,994 |
) |
|
|
(203,760 |
) |
Interest and other income (expense) |
|
|
632 |
|
|
|
(1,471 |
) |
|
|
3,418 |
|
|
|
5,196 |
|
Gain (loss) on changes in fair value of financial instruments |
|
|
1,673 |
|
|
|
25,769 |
|
|
|
(18,684 |
) |
|
|
(13,115 |
) |
Gain on foreign exchange |
|
|
20,196 |
|
|
|
146,693 |
|
|
|
27,539 |
|
|
|
47,605 |
|
Income before tax |
|
|
127,956 |
|
|
|
223,570 |
|
|
|
236,139 |
|
|
|
241,225 |
|
Tax (expense) recovery |
|
|
(30,786 |
) |
|
|
31,453 |
|
|
|
(78,377 |
) |
|
|
4,353 |
|
Net income |
|
$ |
97,170 |
|
|
$ |
255,023 |
|
|
$ |
157,762 |
|
|
$ |
245,578 |
|
Telesat Corporation |
|
|
|
|
|
|
Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
(in
thousands of Canadian dollars) |
|
December 31, 2021 |
|
December 31, 2020 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,449,593 |
|
$ |
818,378 |
Trade and other
receivables |
|
|
122,698 |
|
|
51,928 |
Other current financial
assets |
|
|
861 |
|
|
448 |
Current income tax
recoverable |
|
|
3,219 |
|
|
3,116 |
Prepaid expenses and other
current assets |
|
|
41,064 |
|
|
19,745 |
Total current
assets |
|
|
1,617,435 |
|
|
893,615 |
Satellites, property and other
equipment |
|
|
1,431,775 |
|
|
1,318,526 |
Deferred tax assets |
|
|
46,187 |
|
|
79,912 |
Other long-term financial
assets |
|
|
16,348 |
|
|
53,425 |
Long-term income tax
recoverable |
|
|
12,277 |
|
|
8,418 |
Other long-term assets |
|
|
31,254 |
|
|
1,504 |
Intangible assets |
|
|
764,078 |
|
|
779,190 |
Goodwill |
|
|
2,446,603 |
|
|
2,446,603 |
Total
assets |
|
$ |
6,365,957 |
|
$ |
5,581,193 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Trade and other payables |
|
$ |
54,628 |
|
$ |
30,091 |
Other current financial
liabilities |
|
|
36,647 |
|
|
35,880 |
Income taxes payable |
|
|
5,622 |
|
|
7,326 |
Other current liabilities |
|
|
85,058 |
|
|
88,829 |
Current indebtedness |
|
|
— |
|
|
— |
Total current
liabilities |
|
|
181,955 |
|
|
162,126 |
Long-term indebtedness |
|
|
3,792,597 |
|
|
3,187,152 |
Deferred tax liabilities |
|
|
296,318 |
|
|
325,893 |
Other long-term financial
liabilities |
|
|
23,835 |
|
|
35,499 |
Other long-term
liabilities |
|
|
371,453 |
|
|
410,587 |
Total
liabilities |
|
|
4,666,158 |
|
|
4,121,257 |
|
|
|
|
|
|
|
Shareholders'
Equity |
|
|
|
|
|
|
Share capital |
|
|
42,841 |
|
|
155,698 |
Accumulated earnings |
|
|
350,876 |
|
|
1,266,514 |
Reserves |
|
|
22,807 |
|
|
37,724 |
Total Telesat
Corporation/Telesat Canada shareholders’ equity |
|
|
416,524 |
|
|
1,459,936 |
Non-controlling interest |
|
|
1,283,275 |
|
|
— |
Total shareholders’
equity |
|
|
1,699,799 |
|
|
1,459,936 |
Total liabilities and
shareholders' equity |
|
$ |
6,365,957 |
|
$ |
5,581,193 |
Telesat
Corporation |
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows |
|
|
|
|
|
|
|
|
For the years ended
December 31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands of Canadian dollars) |
|
2021 |
|
2020 |
Cash flows from
operating activities |
|
|
|
|
|
|
Net income |
|
$ |
157,762 |
|
|
$ |
245,578 |
|
Adjustments to reconcile net
income to cash flows from operating activities |
|
|
|
|
|
|
Depreciation |
|
|
203,772 |
|
|
|
216,885 |
|
Amortization |
|
|
16,141 |
|
|
|
17,195 |
|
Tax expense (recovery) |
|
|
78,377 |
|
|
|
(4,353 |
) |
Interest expense |
|
|
187,994 |
|
|
|
203,760 |
|
Interest income |
|
|
(4,392 |
) |
|
|
(7,668 |
) |
Gain on foreign exchange |
|
|
(27,539 |
) |
|
|
(47,605 |
) |
Loss on changes in fair value of financial instruments |
|
|
18,684 |
|
|
|
13,115 |
|
Share-based compensation |
|
|
73,723 |
|
|
|
12,500 |
|
Loss on disposal of assets |
|
|
848 |
|
|
|
215 |
|
Deferred revenue amortization |
|
|
(64,998 |
) |
|
|
(74,091 |
) |
Pension expenses |
|
|
8,133 |
|
|
|
7,333 |
|
C-Band clearing proceeds |
|
|
(42,860 |
) |
|
|
— |
|
Other |
|
|
(1,953 |
) |
|
|
7,974 |
|
Income taxes paid, net of
income taxes received |
|
|
(94,242 |
) |
|
|
(53,443 |
) |
Interest paid, net of interest
received |
|
|
(154,433 |
) |
|
|
(179,972 |
) |
Operating assets and
liabilities |
|
|
(58,625 |
) |
|
|
15,018 |
|
Net cash from
operating activities |
|
|
296,392 |
|
|
|
372,441 |
|
|
|
|
|
|
|
|
Cash flows used in
investing activities |
|
|
|
|
|
|
Satellite programs |
|
|
(279,941 |
) |
|
|
(75,902 |
) |
Purchase of property and other
equipment |
|
|
(34,620 |
) |
|
|
(17,060 |
) |
Purchase of intangible
assets |
|
|
(1,162 |
) |
|
|
(30 |
) |
C-band clearing proceeds |
|
|
42,860 |
|
|
|
— |
|
Net cash used in
investing activities |
|
|
(272,863 |
) |
|
|
(92,992 |
) |
|
|
|
|
|
|
|
Cash flows generated
from (used in) financing activities |
|
|
|
|
|
|
Repayment of indebtedness |
|
|
— |
|
|
|
(453,592 |
) |
Proceeds from
indebtedness |
|
|
619,900 |
|
|
|
— |
|
Payment of debt issue
costs |
|
|
(6,834 |
) |
|
|
— |
|
Payments of principal on lease
liabilities |
|
|
(2,178 |
) |
|
|
(1,793 |
) |
Satellite performance
incentive payments |
|
|
(6,914 |
) |
|
|
(9,031 |
) |
Proceeds from exercise of
stock option |
|
|
16 |
|
|
|
— |
|
Government grant received |
|
|
— |
|
|
|
14,185 |
|
Initial costs from
Transaction |
|
|
1,260 |
|
|
|
— |
|
Dividends paid on Director
Voting Preferred shares |
|
|
(10 |
) |
|
|
(10 |
) |
Net cash generated
from (used in) financing activities |
|
|
605,240 |
|
|
|
(450,241 |
) |
|
|
|
|
|
|
|
|
Effect of changes in exchange
rates on cash and cash equivalents |
|
|
2,446 |
|
|
|
(38,052 |
) |
|
|
|
|
|
|
|
|
Increase (decrease) in cash
and cash equivalents |
|
|
631,215 |
|
|
|
(208,844 |
) |
Cash and cash equivalents,
beginning of year |
|
|
818,378 |
|
|
|
1,027,222 |
|
Cash and cash
equivalents, end of year |
|
$ |
1,449,593 |
|
|
$ |
818,378 |
|
Telesat’s Adjusted EBITDA margin(1):
|
|
Three months ended December 31, |
|
Twelve months ended December 31, |
(in
thousands of Canadian dollars)(unaudited) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net income |
|
$ |
97,170 |
|
|
$ |
255,023 |
|
|
$ |
157,762 |
|
|
$ |
245,578 |
|
Tax expense (recovery) |
|
|
30,786 |
|
|
|
(31,453 |
) |
|
|
78,377 |
|
|
|
(4,353 |
) |
(Gain) loss on changes in fair value of financial instruments |
|
|
(1,673 |
) |
|
|
(25,769 |
) |
|
|
18,684 |
|
|
|
13,115 |
|
Gain on foreign exchange |
|
|
(20,196 |
) |
|
|
(146,693 |
) |
|
|
(27,539 |
) |
|
|
(47,605 |
) |
Interest and other (income) expense |
|
|
(632 |
) |
|
|
1,471 |
|
|
|
(3,418 |
) |
|
|
(5,196 |
) |
Interest expense |
|
|
48,841 |
|
|
|
47,843 |
|
|
|
187,994 |
|
|
|
203,760 |
|
Depreciation |
|
|
50,370 |
|
|
|
50,066 |
|
|
|
203,772 |
|
|
|
216,885 |
|
Amortization |
|
|
4,090 |
|
|
|
4,289 |
|
|
|
16,141 |
|
|
|
17,195 |
|
Other operating (gains) losses, net |
|
|
(108,392 |
) |
|
|
(31 |
) |
|
|
(107,615 |
) |
|
|
215 |
|
Non-recurring compensation expenses(3) |
|
|
5,049 |
|
|
|
385 |
|
|
|
5,423 |
|
|
|
1,261 |
|
Non-cash expense related to share-based compensation |
|
|
39,966 |
|
|
|
5,340 |
|
|
|
73,723 |
|
|
|
12,500 |
|
Adjusted EBITDA |
|
$ |
145,379 |
|
|
$ |
160,471 |
|
|
$ |
603,304 |
|
|
$ |
653,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
187,497 |
|
|
$ |
201,908 |
|
|
$ |
758,212 |
|
|
$ |
820,468 |
|
Adjusted EBITDA Margin |
|
|
77.5 |
% |
|
|
79.5 |
% |
|
|
79.6 |
% |
|
|
79.6 |
% |
End Notes
1 The common definition of EBITDA is “Earnings
Before Interest, Taxes, Depreciation and Amortization.” In
evaluating financial performance, Telesat uses revenue and deducts
certain operating expenses (including share-based compensation
expense and unusual and non-recurring items, including
restructuring related expenses) to obtain operating income before
interest expense, taxes, depreciation and amortization (“Adjusted
EBITDA”) and the Adjusted EBITDA margin (defined as the ratio of
Adjusted EBITDA to revenue) as measures of Telesat’s operating
performance.
Adjusted EBITDA allows Telesat and investors to
compare Telesat’s operating results with that of competitors
exclusive of depreciation and amortization, interest and investment
income, interest expense, taxes and certain other expenses.
Financial results of competitors in the satellite services industry
have significant variations that can result from timing of capital
expenditures, the amount of intangible assets recorded, the
differences in assets’ lives, the timing and amount of investments,
the effects of other income (expense), and unusual and
non-recurring items. The use of Adjusted EBITDA assists Telesat and
investors to compare operating results exclusive of these items.
Competitors in the satellite services industry have significantly
different capital structures. Telesat believes the use of Adjusted
EBITDA improves comparability of performance by excluding interest
expense.
Telesat believes the use of Adjusted EBITDA and
the Adjusted EBITDA margin along with IFRS financial measures
enhances the understanding of Telesat’s operating results and is
useful to Telesat and investors in comparing performance with
competitors, estimating enterprise value and making investment
decisions. Adjusted EBITDA as used here may not be the same as
similarly titled measures reported by competitors. Adjusted EBITDA
should be used in conjunction with IFRS financial measures and is
not presented as a substitute for cash flows from operations as a
measure of Telesat’s liquidity or as a substitute for net income as
an indicator of Telesat’s operating performance.
2 Remaining performance obligations, which
Telesat refers to as contracted revenue backlog (‘‘backlog’’),
represents Telesat’s expected future revenue from existing service
contracts (without discounting for present value) including any
deferred revenue that Telesat will recognize in the future in
respect of cash already received. The calculation of the backlog
reflects the revenue recognition policies adopted under IFRS 15.
The majority of Telesat’s contracted revenue backlog is generated
from contractual agreements for satellite capacity.
3 Includes severance payments and special compensation and
benefits for executives and employees and one-time bonus as a
result of the close of the Transaction.
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