Q4 2023 Telesat Corp Earnings Call
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Operator: This conference is being recorded. Good morning, ladies and gentlemen.
None: This conference is being recorded so it's culture, it's always you see.
Unknown Executive: Welcome to the conference call to report the fourth quarter 2020 financial results for today. Our speakers today will be Dan Goldberg, President and Chief Executive Officer. I would now like to turn the meeting over to Mr. Michael Bolitho, Senior Director of Treasury and Research. Go ahead. Thank you and good morning.
None: Good morning, ladies and gentlemen, welcome to the conference call to report the fourth quarter 'twenty 'twenty suite financial results virtually all the speakers.
None: To date would be Mr. Jon Goldberg, President and Chief Executive Officer of Kelly, and Andrew Brown, Chief Financial Officer.
None: I would like to turn it over to.
None: Mr. Michael delightful.
Michael: Treasury and risk management. Please go ahead.
Michael: Thank you and good morning.
Michael: Morning.
Michael Bolitho: We file our annual report for the year ending December 31, 2023 on Form 20-F with the SEC. Our remarks today may contain forward-looking statements. There are risks that Telesat's actual results may differ materially from the results contemplated as a result of knowing and unknowing risk. For a description of known risks, please see Telesat's annual report. I will now turn the call over to Dan Goldberg, Telesat's president. Okay, thanks, Michael.
Michael: Our annual report for the year ending December 31 2023.
Michael: D C C R.
None: Our remarks today.
None: Any forward looking statements there are risks.
None: Results may differ materially from the results contemplated.
None: As a result of Merrill Lynch.
None: For a description of known risks please see <unk> annual report.
None: C C.
None: That assumes no responsibility to update or revise these statements.
None: Turn the call over to Andrew.
None: Chris.
Andrew Martin Browne: Chief Executive Officer.
Andrew Martin Browne: Thanks, Michael I'll say, a few words this morning about our performance last year share some thoughts about our expectations for this year and then give an update us to progress to date on the Lightspeed program. I'll, then hand over to Andrew to speak to the numbers in more detail and then we'll open the call up to questions I'm very pleased with our performer.
Daniel S. Goldberg: I'll say a few words this morning about our performance last year, share some thoughts about our expectations for this year, and then give an update as to progress to date on the Lightspeed program. I'll then hand over to Andrew to speak to the numbers in more detail, and then we'll open the call up to questions. I am very pleased with our performance and the things we achieved in 2023. We did a really effective job of staying focused and beating our adjusted EBITDA guidance, maintaining our operating discipline and industry-leading operating margins, securing the CBAN clearing proceeds, and executing what I believe were some value-enhancing debt repurchases. But far and away, the most important thing we did last year was find an innovative and highly accretive path forward for Telesat Lightspeed, including landmark agreements with MDA and SpaceX, as The satellite user community, fully consistent with our long-standing expectations, is transitioning to LEO Network, and this transition will accelerate over time. For that reason, moving forward with our transformational telesatellite speed program is our highest priority.
Andrew Martin Browne: Some of the things we achieved in 2023, we did a really effective job in staying focused and beating our adjusted EBITDA guidance, maintaining our operating discipline and industry, leading operating margins securing the C band clearing proceeds and executing what I believe were some value enhancing.
Andrew Martin Browne: Debt repurchases, but far and away. The most important thing we did last year was finding innovative and highly accretive path forward for telesat lightspeed, including landmark agreements with M D, Gary and Spacex as well as important financing arrangements with our government partners in care.
Andrew Martin Browne: Canada, the satellite user community fully consistent with our longstanding expectations is transitioning to Leo networks and this transition will accelerate over time.
Andrew Martin Browne: That reason moving forward with our transformational Telesat Lightspeed program is our highest priority.
Daniel S. Goldberg: 2024 marks the first full year where Telesat starts to make that transition to LEO in earnest. And to help all of you track what we're doing, starting this year, we're breaking down our financials between GEO and LEO and showing consolidated numbers as well. As you can see in our top line guidance that we released this morning, we're expecting some significant revenue declines of around 150 million Canadian dollars in GEO this year, split pretty evenly between our video and non-video business. We're not giving guidance beyond 2024 today, though I would note we're not expecting to see this magnitude of annual top line decline in the coming year. On video, the expected decline comes primarily from the full-run rate impact of the lower rate on NMIC-IV from the renewal we secured last October with Bell, as well as a renewal we have with Echostar on Nimic 5 coming up in early Q4 this year.
Andrew Martin Browne: 2024 marks the first full year, where total starts to make that transition to Leo and Ernest.
Andrew Martin Browne: To help all of you track, what we're doing starting this year, we're breaking down our financials between Geo and Leo.
Andrew Martin Browne: <unk> consolidated numbers as well.
As you can see in our top line guidance that we released this morning, we're expecting some significant revenue declines around the $150 million Canadian dollars.
Andrew Martin Browne: This year.
Andrew Martin Browne: Split pretty evenly between our video and non video businesses, we're not giving guidance beyond 2024 today. So I would note we're not expecting to see this magnitude of annual top line decline in the coming years.
Andrew Martin Browne: On video you expected decline comes primarily from the full run rate impact of the lower rate on mimic for from the renewal we secured last October with Bell.
Andrew Martin Browne: As well as renewals, we have with Echostar anemic five coming up in early Q4 this year.
Daniel S. Goldberg: Over the past few years, we've talked about the headwinds we're facing in our DTH business, really driven by cord cutting and the rise in over-the-top video platforms, and the reductions we're expecting this year are very much a continuation of that trend. The other half of our expected revenue decline is coming from the enterprise side of our business, with the biggest contributor being the erosion of maritime services revenue.
Andrew Martin Browne: Over the past few years, we've talked about the headwinds we're facing in our dth business really driven by cord cutting and the rising over the top video platforms and the reductions we're expecting this year are very much a continuation of that trend.
Andrew Martin Browne: The other half of our expected revenue decline that's coming from the enterprise side of our business with the biggest contributor be erosion of maritime services revenues other meaningful expected reductions are from an arrow customer number of customers in Latin America, a universal service program, we support in India.
Daniel S. Goldberg: Other meaningful expected reductions are from an Aero customer, a number of customers in Latin America, a universal service program we support in Indonesia, and here in Canada, some point-of-sale retail networks and a number of government services. The biggest driver of lost revenue in the enterprise segment is the migration of customer requirements from Jio to Leo, namely to Starlink, as they're the first in the market with a disruptive Leo network. The reality is that enterprise customers want affordable, low latency broadband connectivity, which we've been talking about for quite some time. If anything, the transition to LEO is happening a little faster than we expect.
Andrew Martin Browne: In Asia and here in Canada, some point of sale retail networks in a number of government services.
Andrew Martin Browne: Biggest driver on the lost revenue in the enterprise segment is the migration of customer requirements from Geo to Leo namely to startling as they are the first in the market with a disruptive Leo network. The reality is that enterprise customers want affordable low latency broadband connectivity.
Andrew Martin Browne: Which we've been talking about for quite some time, if anything the transitioning is happening a little faster than even we expected.
Daniel S. Goldberg: And although we don't love seeing Starlink cannibalize some of our geocustomer requirements, it's a strong validation of the market embrace of LEO and the compelling path that we're on with Telesat Lights. We fully anticipated the transition to LEO, and it's precisely why we're building Lightspeed and why we're so bullish on it. Turning to OPEX, we expect to see an increase of roughly $40 million Canadian dollars year over year, which is all driven by the investments we're making in light. Perhaps the increase comes from headcount expansion. I'm happy to say, though not surprised, we're getting world-class professionals joining and wanting to join Telesat. Individuals who see where the industry is going and want to be part of building out and bringing to market a really advanced and revolutionary low-Earth orbit global satellite broadband. Project is a huge magnet for absolutely top-notch talent throughout our industry, to give you an idea.
Andrew Martin Browne: Although we don't love seeing Starwood cannibalize some of our G O customer requirements. It's a strong validation of the market embrace of Leo and the compelling path that we're on the Telesat Lightspeed, we fully anticipated the transition to Leo and it's precisely why we're building lightspeed and why we're so bullish on it.
Andrew Martin Browne: Turning to Opex, we expect to see an increase of roughly 40 million Canadian dollars year over year, which is all driven by the investments we're making in lightspeed.
Andrew Martin Browne: The increase comes from head count expansion.
Andrew Martin Browne: I'm happy to say, though not surprised we're getting world class professionals, joining and wanting to join tell us that individual's you see where the industry is growing and wants to be part of building out and bringing to market really advanced and revolutionary lower orbit Global satellite broadband network project.
Andrew Martin Browne: <unk> is a huge magnet for absolutely top notch talent throughout our industry.
Andrew Martin Browne: To give you a sense, we had a little less than 500 people across the company at the end of last year and around 35% of them were working on lightspeed by the end of this year, we expect to have roughly 740 employees roughly 50% increase.
Daniel S. Goldberg: We had a little less than 500 people across the company at the end of last year, and around 35% of them were working on light speed. By the end of this, we expect to have roughly 740 employees, a roughly 50% increase, with nearly two-thirds of the team working on lightspeed. Dedicated geoheads are actually coming down over 10% as we shift folks to lightspeed and more broadly take steps to right-size geopacks for a declining geobusiness. The rest of the OPEX increase is coming from higher lightspeed revenue-related costs, as well as costs associated with professional services, IT, travel, marketing, and regulatory activities, all tied to the development, implementation, and commercialization of lights.
Andrew Martin Browne: With nearly two thirds of the team working on Lightspeed dedicated Geo heads are actually coming down over 10% as we shift focus to lightspeed and more broadly take steps to rightsize G O opex for a declining geo business the rest of the Opex.
Andrew Martin Browne: <unk> is coming from higher lightspeed revenue related costs as well as costs associated with professional services.
Andrew Martin Browne: Key travel marketing and regulatory activities.
Andrew Martin Browne: All tied to the development implementation and commercialization of Lightspeed.
Daniel S. Goldberg: It's full steam ahead, and we're making great progress working with MDA and our other suppliers. We've completed the major system requirements review milestone with MDA and are progressing toward preliminary design review in the third quarter of this year. They're ramping up staff just as we are. We're also making great progress with our software. Developing the tools we need to dynamically manage the traffic on the network and the APIs and other interfaces our customers will use to purchase and manage Lightspeed services according to their users' requirements
Andrew Martin Browne: Full on and we're making great progress working with M D E and our other suppliers.
Andrew Martin Browne: Completed the major system requirements review milestone with MDA and are progressing toward preliminary design review in the third quarter. This year Theyre ramping up staff just as we are.
Andrew Martin Browne: We're also making great progress with our software partners developing the tools, we need to dynamically manage the traffic on the network and the API is in other interfaces, our customers will use to purchase and manage lightspeed services for their users requirements were.
Daniel S. Goldberg: We're also making really good strides with various antenna suppliers for the LEO user terminals for each of the verticals we're focused on, as well as the suppliers for our landing station. In short, we're moving fast on all the key workstreams necessary to bring Lightspeed into service. The customer community is enthusiastic about the approach we're taking and the services we'll be offering, and there's also great interest from potential strategic partners and governments around the world to leverage Lightspeed for their needs. Telcos, mobile network operators, satellite operators, service providers, and users in every vertical around the world for enterprise, for aero, maritime, and government services. They all recognize the transition to LEO that's underway in our industry, and everyone is actively looking Our CapEx guidance for this year has us investing roughly a billion dollars in light speed this year. We remain focused on launching our first satellites in June 2026, slightly more than two years from now, offering beta services shortly thereafter, and providing full global coverage and service by the end of 2027.
Andrew Martin Browne: Also making really good strides with various antenna suppliers for Leo user terminals for each of the verticals, we're focused on as well as with suppliers for our landing stations.
Andrew Martin Browne: In short, we're moving fast on all the key work streams necessary to bring light speed into service the.
Andrew Martin Browne: The customer community as enthusiastic with the approach we're taking in the services will be offering and there is great interest also with potential strategic partners and governments around the world to leverage lightspeed for their needs.
Andrew Martin Browne: <unk> mobile network operators satellite operators service providers and users in every vertical around the world for enterprise for Aero Maritime and government services. They all recognize the transition to Leo that's underway in our industry and everyone is actively looking for the best path.
Andrew Martin Browne: Our paths to ensure that they don't get left behind.
Andrew Martin Browne: Our capex guidance for this year has us investing roughly $1 billion Canadian into Lightspeed This year.
Andrew Martin Browne: We remain focused on launching our first satellites in June 2026, slightly more than two years from now offering data services shortly thereafter, and providing full global coverage and service by the end of 2027.
Daniel S. Goldberg: Let me now give a quick update on Lightspeed Fund. Over the past months, we've had extensive engagement with the government of Canada over funding for lights. We believe we've reached an understanding on detailed funding terms and expect to release a summary of those terms shortly, likely after markets close today. Suffice to say that we're very pleased we've reached this point.
None: Let me I'll give a quick update on lightspeed funding for.
None: Over the past months, we've had extensive engagement with the government of Canada over funding for Lightspeed. We believe we've reached an understanding on detail funding terms and expect to release a summary of those terms.
None: Shortly likely after market close today.
None: Suffice to say that we're very pleased we have reached this point as we've noted in our earnings release, we estimate that our total cost of borrowings is roughly 750 million U S dollars lower than our prior funding plan and that's on top of the U S $2 billion in cash.
Daniel S. Goldberg: As we've noted in our earnings release, we estimate that our total cost of borrowing is roughly $750 million U.S. dollars lower than our prior funding plan, and that's on top of the U.S. $2 billion in CapEx savings. We're very grateful for the strong support we've had from the Government of Canada on the Lightspeed program. And I'd also point out that the Government of Canada isn't just some inanimate object.
None: Opex savings.
None: We're very grateful for the strong support we've had from the government of Canada on the Lightspeed program and I'd note also that the government of Canada isn't just.
None: Inanimate object there are a ton of people throughout the government of Canada, who have worked really hard with telesat.
Daniel S. Goldberg: There are a ton of people throughout the Government of Canada who have worked really hard with Telesat and engaged closely with us over the past few years, and I just want to note that my colleagues and I appreciate all their hard work and commitment to the program. And I'd also note, not a huge surprise, given all the benefits that Telesat Lightspeed delivers to Canada, and I'd say the world. Whether that's bridging the digital divide, whether it's job creation, technology development, job creation, all of that, there are huge benefits that come from the Lightspeed program. And the Government of Canada and the people that work there recognize that, and we really appreciate it.
None: Engaged closely with us over the past few years and I just wanted to note that my colleagues and I appreciate all their hard work and commitment to the program and I'd note also not a huge surprise given all the benefits all of us at Lightspeed delivers to Canada, I would say that.
None: World, whether that's bridging.
None: The digital divide whether its job creation technology development job creation all of that there are huge benefits that come from the <unk> program and the government of Canada and the people that work there recognize that and we really appreciate that.
Daniel S. Goldberg: So in sum, we accomplished a great deal last year and have a very full 2024 as we accelerate our efforts and investment in bringing Lightspeed to market. Our industry is undergoing a significant transition as LEO Networks gains ascendancy and market share. To that end, our highest priority is on focused execution of the Lightspeed program, both technically and commercially.
None: So in sum, we accomplished a great deal last year and have a very full 2024, as we accelerate our efforts and investment in bringing light speed to market. Our industry is undergoing a significant transition as Leo networks gain ascendancy and market share to that end.
None: Our highest priority is on focused execution of the Lightspeed program, both technically and commercially we're hugely bullish on our prospects in the market as well as our ability to deliver an extraordinary value proposition for our customers and significant value creation for shareholders with that I'll hand it over.
Andrew Martin Browne: We're hugely bullish on our prospects in the market, as well as our ability to deliver an extraordinary value proposition for our customers and significant value creation for shareholders. With that, I'll hand over to Andrew and then look forward to addressing any questions. Thank you, Dan. Good morning, everyone.
None: Andrew and then look forward to addressing any questions for me.
Andrew Martin Browne: Thank you Dan Good morning, everyone I would now like to focus on highlights from this morning's press release and filings Telesat ended the year 2023, which reported revenues of $7 4 million adjusted EBITDA of 53, 4 million and generated cash from operations of 169 million with $1 7 billion of cash on the balance.
Andrew Martin Browne: I would now like to focus on highlights from this morning's press release and filing. Telesat ended the year 2023 with reported revenues of $7.04 million, adjusted EBITDA of $5.34 million, and generated cash from operations of $169 million, with $1.7 billion of cash on the balance sheet at year-end. As Don has mentioned, we outperformed our 2023 adjusted EBITDA guidance. In the fourth quarter of 2023, Telesat recorded revenues of $166 million, adjusted EBITDA of $123 million, and generated cash-from-operations of $13 million. For the fourth quarter of 2023 and compared to the same period in 2022, revenues decreased by $41 million to $166 million. Operating expenses decreased by $30 million to $49.9 million, and adjusted EBITDA decreased by $15.7 million to $123.3 million.
Andrew Martin Browne: Sheet at year end.
Andrew Martin Browne: As Todd has mentioned we outperformed our 2023 adjusted EBITDA guidance is at fault quarter of 2023, Telesat reported revenues of $166 million adjusted EBITDA of 123 million and generated cash from operations of Turkey.
Andrew Martin Browne: For the fourth quarter of 2023 and compared to the same periods of 2022 revenues decreased by 41 million to $166 million operating expenses decreased by Turkey visit to $49 9 million and adjusted EBITDA decreased by $58 7 million to $123 3 million the.
Andrew Martin Browne: The adjusted EBITDA margin was 74.3% as compared to 67.2% in 2022. However, when adjusted for changes in foreign exchange rates, revenues decreased by $41.2 million, operating expenses decreased by $30.2 million, and adjusted EBITDA decreased by $15.9 million. The revenue decrease for the quarter was primarily due to the completion of an equipment sale in 2022 to DARPA, which was not repeated in 2023, and a rate reduction on the renewal of a long-term agreement with a North American customer. The decrease in operating expenses was primarily due to lower non-cash share-based compensation and higher equipment sales in 2022, related to the DARPA program, as I just mentioned. Interest expense decreased by $2 million during the fall quarter compared to the same period in 2022.
Andrew Martin Browne: The adjusted EBITDA margin was 74, 3% as compared to 67, 2% in 2022.
Andrew Martin Browne: But adjusted for changes in foreign exchange rates revenues decreased by $41 2 million operating expenses decreased by <unk> 2 million and adjusted EBITDA decreased by $58 9 million.
Andrew Martin Browne: The revenue decrease for the quarter was primarily due to the completion of an equipment sale in 2022 of the DARPA, which was not repeated in 2023 and a rate reduction on the renewables up a long term agreement with a north American customer.
Andrew Martin Browne: The decrease in operating expenses is primarily due to lower noncash share based compensation and higher equipment sales in 2022 related to the DARPA program as I just mentioned.
Andrew Martin Browne: <unk> expense decreased by 2 million during the fourth quarter compared to the same period in 2022. The decrease was due to the repurchase of notes and term loan B. In 2020. This was partially offset by an increase in interest rates in the U S term loan b facility into.
Andrew Martin Browne: The decrease was due to the repurchase of notes and term loan B in 2023, although this was partially offset by an increase in interest rates in the U.S. term loan B facility. In the fall quarter, we recorded a gain in foreign exchange of $78 million, as compared to a gain of $72 million in the fall quarter of 2022. The gain for the three months ended December 31, 2023 was mainly the result of a weaker U.S. dollar to Canadian dollar spot rate as of December 31, compared to the spot rate as of September 30, 2023, and the resulting favorable impact on the translation of our U.S. Our net income for the quarter was $39 million, compared to a net income of $91 million for the same period in the prior year. Our net income for the year ended December 31, was $583 million, compared to a loss of $82 million for the prior year.
Andrew Martin Browne: In the fourth quarter, we recorded a gain in foreign exchange of $78 million as compared to we came in at $72 million into fourth quarter of 2022 decades for the trade month ended December 31st how do you trade was mainly the result of a weaker U S dollar to Canadian dollar spot rate as of December 31st compared to the spot rate as of September the targeted 23.
Andrew Martin Browne: And the resulting favorable impact on the translation of our U S denominated debt.
Andrew Martin Browne: Our net income for the quarter was $39 million compared to net income of 91 million for the same period in the prior year.
Andrew Martin Browne: Net income for the year ended December 31 was $5 3 million compared to a loss of 82 million for the prior year positive variation of <unk> hundred $65 million was principally due to C band clearing proceeds recognized in the second quarter of 2023 combined with the gain on the repurchase over the past at a foreign exchange gain on the conversion of <unk>.
Andrew Martin Browne: The positive variation of $665 million was principally due to CBAN clearing proceeds recognized in the second quarter of 2023, combined with the gain on the repurchase of our debt and the foreign exchange gain on the conversion of a U.S. dollar debt. This was partially offset by the booking of an impairment of $79.8 million in quarter four. For the year ended 31st of December, the cash inflows from operating activities were $169 million, and the cash flows generated from investing activities were $212 million.
Andrew Martin Browne: U S. Dollar debt. This was partially offset by the booking of an apartment with a $79 8 million in quarter four for.
Andrew Martin Browne: For the year ended 30 <unk> of December the cash inflows from operating activities was $69 million and the cash flows generated from investing activities were 212 million. The cash flows generated from investing activities was due to the proceeds received from the phase II C band theory as mentioned by that partially offset by capital expenditures.
Andrew Martin Browne: In terms of Capex incurred it was primarily related to a lower constellation Telesat light sweet and the newly acquired on a F. Four satellite.
Andrew Martin Browne: Turning to guidance as you would also have noted in our earnings release. This morning, we provided preliminary 2024 guidance. This guidance assumes a Canadian dollar to U S. Dollar exchange rate of <unk> 35.
Andrew Martin Browne: The cash flows generated from investing activities were due to the proceeds received from the Phase 2 Seabank Clearing, as mentioned by Dan, partially offset by capital expenditures. In terms of CapEx incurred, it was primarily related to a low-earth constellation, Telesat Lightspeed, and the newly acquired Anik F4 satellite. Turning to guidance, as you will also have noted in our earnings release this morning, we provided preliminary 2024 guidance. This guidance assumes a Canadian dollar to US dollar exchange rate of 1.35.
Andrew Martin Browne: We've had also a benches, we will look forward to reporting on a segmented basis, where we will breakout of lightspeed NGL business. As we go forward and this is really to provide transparency and understanding that everybody will be able to appreciate as both as both of our businesses develop.
Andrew Martin Browne: Turning to 'twenty four specific <unk> expects its full year revenues to be between $545 million or $5 65 billion.
Andrew Martin Browne: In terms of operating expenses, excluding share based comp we would like to point out that we have a range of $80 million to $90 million attributed to <unk> satellite state and also has mentioned this highlights represents an increase of $14 million year on year.
Andrew Martin Browne: As Pat also mentioned, we will look forward to reporting on a segmented basis, where we will break out our Lightspeed and Geo businesses as we go forward. And this is really to provide transparency and understanding that everybody will be able to appreciate as both our businesses develop. Turning to 2024 specifically, Telesat expects its full-year revenues to be between $545 million and $565 million. In terms of operating expenses, excluding share-based comp, we would like to point out that we have a range of $80 million to $90 million attributed to Telesat Lightspeed. And also, as mentioned, this highlight represents an increase of $40 million year-on-year. In terms of adjusted EBITDA, Telesat expects it to be between $340 million and $360 million.
Andrew Martin Browne: Terms of adjusted EBITDA, Telesat expects to be between $3 $40 million to $260 million.
Andrew Martin Browne: Turning to Capex in respect of capital expenditures for 2020 for use in investing activities. We anticipate this to be in a range of 1 billion to $1 4 billion, which is practically all related to tell us at light speed.
Andrew Martin Browne: As also highlighted the drivers to our 2024 financial outlook in terms of revenue declines were expecting that the <unk> business and the increase in operating expenses that are fundamentally unrelated to lightspeed as I had mentioned.
Andrew Martin Browne: The drivers of that Opex as a data is head count as we discuss marketing system professional fees and consulting.
Andrew Martin Browne: Turning to cash to meet our expected cash requirements for the next 12 months, including interest payments and capital expenditures, we have approximately $1 7 billion of cash and short term investments at the end of December as well as approximately 200 million U S dollars of borrowings available under our revolving credit facility.
Andrew Martin Browne: Turning to CapEx in respect of capital expenditures for 2024, using investing activities, we anticipate this to be in a range of $1 billion to $1.4 billion, which is practically all related to Telesat Lightspeed. Dan has also highlighted the drivers to our 2024 financial outlook in terms of revenue declines we're expecting at the geobusiness and the increase in operating expenses that are fundamentally related to Lightspeed, as I had mentioned. The drivers of that OPEX are indeed its headcount, as we discussed, marketing, IT systems, professional fees, and consulting. Turning to cash, to meet our expected cash requirements for the next 12 months, including interest payments and capital expenditures, we have approximately $1.7 billion of cash in short-term investments at the end of December, as well as approximately $200 million of borrowings available under a revolving credit facility. Additionally, approximately $1.25 billion of cash was held in our unrestricted subsidiaries.
Andrew Martin Browne: With the $1 billion to $5 billion of cash was held in our unrestricted subsidiaries.
Andrew Martin Browne: We continue to generate significant amounts of cash from our ongoing operating activities.
Andrew Martin Browne: At the end of the fourth quarter, the total leverage ratio as calculated under the terms of the amended senior secured credit facilities was 532 times.
Andrew Martin Browne: <unk> has complied with all covenants in our credit agreements on adventures.
Andrew Martin Browne: <unk>, including the repayment we made in 2020 of approximately $341 billion of the outstanding term loan B combined with our ongoing repurchase program. Our overall debt has been reduced by approximately 28% just to recap we week passes to date, a total amount of U S. Dollar was $587 million at an aggregate cost.
Andrew Martin Browne: Off the $332 7 million. In addition, this also resulted in interest savings figure of around $40 million.
Andrew Martin Browne: A reconciliation between our financial statements and financial Covenant calculations as provided in our report we filed this morning.
Andrew Martin Browne: <unk> provides the unaudited interim condensed consolidated financial information in the MD&A.
Andrew Martin Browne: <unk> gone through our subsidiaries shown are essentially unrestricted subsidiaries, it's minor differences.
Andrew Martin Browne: In addition, we continue to generate significant amounts of cash from our ongoing operating activities. At the end of the fourth quarter, the total leverage ratio, as calculated under the terms of the amended Senior Security Credit Facility, was 5.32 times... Telesat has complied with all covenants in its credit agreements and indentures. Sorter, including the repayment we made in 2020 of approximately $341 million of the outstanding term loan B, combined with our ongoing repurchase program, our overall debt has been reduced by approximately 28%. Just to recap, we've repurchased to date a total amount of US dollars $587 million at an aggregate cost of $332.7 million. In addition, this also results in interest savings per year of around $40 million. A reconciliation between our financial statements and financial covenant calculations is provided in the report we filed this morning. Our 20 Act provides unauthorized interim condensed consolidated financial information in the MD&A.
None: I think that concludes our prepared remarks for the call a very happy now to turn it back to the operator and address any questions. You may have thank you very much.
None: Thank you.
None: Take questions from the telephone lines.
None: Question. Please press star one.
None: Keybanc.
None: Jamie Jamie Vistaprint personal question.
None: King.
None: The first question is from Chris Quilty from Jefferies. Please go ahead.
Unknown Executive: Hi, Dan and congratulations on getting that financing done.
None.
None: It's been a long.
Unknown Executive: Trip over the years.
I can't decipher I mean can you remind us what was the last publicly stated.
Unknown Executive: Physician you had in terms of that range I think it was around $2 billion.
None: Hi, Chris Yes, that's about right that would be a U S number.
None: I think what we've said is well Andrew I'll.
Unknown Executive: I'll go ahead in fact.
Unknown Executive: That's why we have the investor presentations, we did a kind of a small road show in November 12 through the New York and waiting out from page 19, just for everyone.
At overall in terms of our of our sources and uses we have telesat equity of $1 6 billion Goldman and funding to fund one period, which is which was your question Chris vendor financing of $300 million.
Operator: The non-guarantor subsidiaries shown are essentially the unrestricted subsidiaries; that's my recommendation. So I think that concludes our prepared remarks for the call. I'm very happy now to turn back to the operator and, yes, address any questions you may have. Thank you very much.
Unknown Executive: Just just to round off in terms of our spending overall, we had $2 7 billion for our satellites operational expenditures of about $800 million and we also had contingency included roughly 48% to $400 million all contained within the overall program itself, let's just give you a quick refresher on that.
Operator: Thank you. Now, we take questions from the telephone lines. If you have questions, please press star 1 on your device's keypad.
Christopher David Quilty: If at any time you wish to cancel your question, please press star 1. And the first question is from Chris Quilty from Quilty Space. Please go ahead. Dan and Cruz, congratulations.
None: That's great thanks for the detail.
None: So.
None: Kind of jumped over it but congratulations on the.
None: Thank division you put forward here.
None: With a focus on the enterprise market and that brings up.
Daniel S. Goldberg: It's been a long... somebody I can't decipher, I mean, can you remind us what the last public transport around was? Yeah, hi Chris. Yep, that's about right. That'd be a U.S. phone number. I think what we've said is, well, Andrew, go ahead. Yeah, I'll go ahead. In fact, you know, on our website, we have the investor presentations. We did a kind of small roadshow in November in Toronto and New York, reading out from page 19, just for anyone, for reference. Overall, in terms of our sources and uses, we had Telesat equity of $1.6 billion, government funding of $2.1 billion, which is your question, Chris, and vendor financing of $300 million. And on, you know, just to round off in terms of our spending, overall, we had $2.7 billion for our satellites and operational expenditures of about $800 million. And we also had a contingency of roughly 14% of $400 million, all contained within the overall program itself. So just give you a quick refresher. Thanks.
None: <unk>.
None: Darling has obviously been a it's been hurting the maritime market and other.
None: Recent markets that haven't really have you seen them at all.
None: Target the traditional enterprise market and can you help us understand the differentiation of what you're trying to do versus Darling system.
None: Yeah, Chris Thanks.
None: So let's see yes, they are definitely having an impact.
In maritime there.
Unknown Executive: We're working hard to make inroads in aero, but it looks so far like they've had greater traction in maritime and Aero at this point.
Unknown Executive: But in truth, we're kind of we're seeing them everywhere.
Unknown Executive: We see them when you say enterprise, maybe less kind of corporate enterprise, but we are seeing them for backhaul requirements on certain networks. So that that's where we're seeing them.
Unknown Executive: And.
Unknown Executive: We said in our remarks.
Unknown Executive: Customers want.
Unknown Executive: Portable.
Unknown Executive: High throughput low latency.
Unknown Executive: Zillions connectivity and Spacex by now has launched a lot of satellites.
Unknown Executive: And it's a good product.
Unknown Executive: But our product is differentiated for the verticals that we're focused on which are.
Unknown Executive: Those enterprise verticals. So we've talked about telcos mobile network operators corporates governments Aero Maritime and I'd say it's.
Christopher David Quilty: Um, so, kind of jumped over it, but, you know, congratulations. Focus on the Enterprise. Starlink is on. Time-Mark, I haven't really, have you seen them at all?
Unknown Executive: A few things.
Unknown Executive: One of the key things that we do unlike a service thats kind of principally of consumer grade focused service, we've got the ability with our customers to do a bunch of things give them.
Daniel S. Goldberg: Yeah, well, Chris, thanks. So let's see, yeah, they're definitely having an impact in maritime. They're working hard to make inroads in aero, but it looks so far like they've had greater traction in maritime than aero at this point. But in truth, we're kind of, you know, we're seeing them everywhere.
Unknown Executive: <unk> make commitments around <unk>.
Unknown Executive: <unk>.
Unknown Executive: Give our customers the ability to have their own dedicated bandwidth pools, which then they can manage they can oversubscribe. If they can offer different service tiers, they can move their bit surround across their network.
Daniel S. Goldberg: We see them, when you say enterprise, maybe less the kind of corporate enterprise, but we are seeing them for backhaul requirements on certain networks. So that's where we're seeing them. And, you know, we said it in our remarks. Customers want affordable, high-throughput, low-latency, resilient connectivity. And, you know, SpaceX has launched a lot of satellites, and it's a good product. But our product is differentiated for the verticals that we're focused on, which are, you know, those enterprise verticals. So, you know, we talked about telcos, mobile network operators, corporates, governments, and air maritime, and I'd say, you know, it's a few things. One of the key things that we do, unlike a service that's kind of principally a consumer-grade-focused service, we've got the ability with our customers to do a bunch of things. Give them SLAs, make commitments around CIR, and give our customers the ability to have their own dedicated bandwidth pools, which they can manage. They can oversubscribe it.
Unknown Executive: For some of them could be the entire earth.
Unknown Executive: So it gives the massive flexibility massive control.
Over their bids over their network.
Unknown Executive: So I'd say that that's a big part of the differentiation from the customer standpoint.
Unknown Executive: I think from the Investor standpoint, what we're doing I think is also very capital efficient.
Unknown Executive: To cover the world with Terabytes and terabytes of this very high performing capacity.
Unknown Executive: With hundreds of satellites not thousands of satellites and satellites that last.
Unknown Executive: North of 10 years, so it gives us a long opportunity to earn the kind of returns that we need to.
Unknown Executive: On our invested capital so in any event and look again I think.
Unknown Executive: Spacex is.
Unknown Executive: Moving fast and being disruptive we don't get everything right around here to say the least but we definitely saw the transition from <unk> to Leo coming in what a powerful value proposition that is for our enterprise customers. So we've been all over that but I'd say as good as <unk>.
Daniel S. Goldberg: They can offer different service tiers. They can move their bits around across their network, which for some of them could be the entire earth. So it gives them massive flexibility, massive control over their bits and their network. So I'd say that's a big part of the differentiation from the customer standpoint. You know, from an investor standpoint, what we're doing, I think, is also very capital efficient. We're able to cover the world with terabits and terabits of this very high-performing capacity with hundreds of satellites, not thousands of satellites, and satellites that last, you know, north of 10 years.
Unknown Executive: <unk> isn't as fast as they are moving right no one's going to own this entire market. The market's huge it's growing fast achieved particularly for enterprise customers and we never want to put all their eggs in any one basket and so so in any event we're excited.
Unknown Executive: To get moving and get out there as fast as we can and as you probably picked up in my remarks. This morning.
Unknown Executive: Super focused on making big investments to get there as fast as we can.
Unknown Executive: Great.
Daniel S. Goldberg: So it gives us a long opportunity to earn the kind of returns that we need to on our invested capital. So, in any event, and look, again. I think, you know, SpaceX is moving fast and being disruptive. We don't get everything right around here, to say the least.
Unknown Executive: <unk> clearly has a pretty tough task ahead of them here over the next couple of years, but after listening to the Udalls at one web call I find myself asking you. The more important question, which is where are you in terms of your gateway filings.
Unknown Executive: Oh.
Unknown Executive: In terms of are you kind of a U S focused.
Daniel S. Goldberg: But we definitely saw the transition from Jio to Leo coming and what a powerful value proposition that is for our enterprise customers, so we've been all over that. But I'd say as good as SpaceX is and as fast as they're moving, no one's going to own this entire market. The market's huge. It's growing fast, and I'd say, particularly for enterprise customers, they never want to put all their eggs in any one basket. And so, in any event, we're excited to get moving and get out there as fast as we can, as you've probably picked up in my remarks this morning. We're just super focused on making big investments to get there as fast as we can. [inaudible] Where are you?
Unknown Executive: No I mean for the global deployment I mean.
Unknown Executive: <unk> had their constellation up and still not fully operational because they couldnt get their gateways installed either right yeah, yeah, yeah, yeah yeah.
Unknown Executive: I've tracked all that to say, here's what I'd say.
Unknown Executive: Few things about gateways, one for better or worse, we have been working on this for a long time. So we've identified we're starting off with.
Unknown Executive: At a minimum 25 landing stations around the world Bob.
Unknown Executive: Connected up and the like.
Unknown Executive: And then we will scale our landing station infrastructure from there and then for any given customer in any given country. We can kind of have sort of more bespoke landing stations as well with some of the flexibility that an advanced system like ours has the other thing I'd note about lightspeed, maybe unlike one web.
Daniel S. Goldberg: [inaudible] Are you kind of U.S. focused? Well, no, I mean, for the global deployment. One once had their constellation up.
Unknown Executive: As we've got the optical inter satellite links on our constellation and so what that means is you probably need never mind, probably you need fewer gateways in order to still have.
Daniel S. Goldberg: So here's what I'd say, a few things about gateways. One, for better or worse, we've been working on this for a long time, so we've identified, you know, we're starting off with at least 25 landing stations around the world. They'll all be, you know, connected up and the like, and then we'll scale our landing station infrastructure from there, and then for any given customer in any given country The other thing I'd note about Lightspeed, maybe unlike OneWeb, is that we have the optical and our satellite links in our constellation, and so what that means is you probably need, never mind probably, you need fewer gateways in order to still have full global coverage and connectivity and the opportunity to manage traffic around and to make sure that all of your satellites 24-7 are kind of on the network and able to contribute. So, yeah, we've identified the landing stations where we need to go. I think we'll be in good shape. Would you be interested in buying?
Unknown Executive: Full global coverage and connectivity and the opportunity to manage traffic around and to make sure that all of your satellites 24, seven are kind of on network enabled to.
Unknown Executive: Contribute so.
Unknown Executive: Yeah, we've identified maintenance stations, where we need to go I think we'll be in good shape there.
None: Would you be interested in buying a sterling optical cross link.
None: Okay.
None: Yes.
None: <unk>.
None: It's an interesting question.
None: And I'll share with you that we haven't had any conversations with starlink about that theyre, probably pros and cons of doing something like that.
<unk> bin space.
None: Spacex is building lots of them and it.
None: It would allow us to know.
I mean theoretically interconnect with their constellation, although they are flying lower than we are so.
None: Were we to interconnect with those guys probably do that in RF rather than optical.
None: Not sure that the Starlink optical link is SDA.
None: Client.
None: It would have to be something that we would take into consideration there are a number of <unk>.
Daniel S. Goldberg: You know what? It's an interesting question, and I'll share with you that we haven't had any conversations with Starlink about that. You know, there are probably pros and cons of doing something like that, the pro being, you know, SpaceX is building lots of them, and it would theoretically allow us to theoretically interconnect with their constellation, although they're flying lower than we are, so were we to interconnect with those guys, we'd probably do that in RF rather than optical. I'm not sure that the Starlink optical link is SDA compliant, so that would have to be something that we would take into consideration.
None: Good.
None: Cell optical inter satellite link provider.
None: Providers out there.
None: With heritage and the like so anyway stay stay tuned on that.
None: We've announced a good many of our suppliers, including MDA and Spacex, we announced alirio working with us on some of the software that's going to orchestrate the constellation.
None: And as we work with MDA and pick that kind of next level supply chain.
None: Folks we will learn more about the.
None: Maybe different component parts of.
Daniel S. Goldberg: There are a number of good OISL, optical inter-satellite link providers out there with Heritage and the like, so anyway, you know, stay tuned on that. We've announced a good number of our suppliers, including MDA and SpaceX; we announced Olerio working with us on some of the software that's going to orchestrate the constellation, and as we work with MDA and pick that kind of next-level supply chain, folks will learn more about the maybe different component parts of the network. Final question: NMIC 5, was that a one-year or a multiple-year program? NMIC 5.
None: Of the network.
None: Okay final question.
None: Five was that a one year or multiyear contract.
None: Mimic five.
None: Well it was up for renewal yeah, yeah, Yeah, it's coming up for renewal so.
None: So so it hasn't been renewed yet.
None: Targeted having conversations with echostar about it but.
None: You know it was a 15 year agreement that comes up.
None: October of this year, so stay tuned on that.
None: Got you thanks, Chris.
None: Thank you.
None: Thank you and the next question is from Mr. <unk>.
None: <unk> from BNP Paribas. Your line is now open.
None: Yes, hi, thanks for taking my questions.
None: First from me.
Daniel S. Goldberg: Well, it was a 15-year agreement. Yeah, yeah, yeah, it's coming up for renewal. So, you know, so, it hasn't been renewed yet.
BNP Paribas: I noticed this word like in your funding conditionality that the program is fully funded to a global service delivery subject to certain conditions to kind of outline what those conditions are would be helpful. And then separately on the funding plan itself clearly strong support from the government of Canada around the $750 million.
Daniel S. Goldberg: We've started having conversations with Echostar about it. But, you know, it was a 15-year agreement that comes up in October of this year. So stay tuned on that. Thanks, Chris.
Arun A. Seshadri: Thank you. Thank you. And the next question is for Mr. Arun Seshadri from BNP Paribas. Your line is now open.
BNP Paribas: Reduction being cheaper today can you sort of.
BNP Paribas: Tell us how you calculate that 750, so just to understand the puts and takes there.
Arun A. Seshadri: Yes, hi, thanks for taking my questions. First from me, I noticed this wording in your funding conditionality that the program is fully funded for global service delivery subject to certain conditions. If you can outline what those conditions are, it would be helpful.
None: Yes, Andrew.
None: Andrew do you want to start with that and then I'll, maybe talk about what some of the conditionality yeah, yeah absolutely.
Andrew Martin Browne: As you know that we were additionally, dealing with sort of.
Arun A. Seshadri: And then separately on the funding plan itself, clearly strong support from the Government of Canada, around the 750 million, you know, reduction and being cheaper, you know, today. Can you sort of tell us how you calculate that 750 so we just understand the puts and takes there? Yeah, Andrew, do you want to start with that and then I'll maybe talk about some of the conditionality? Yeah, yeah, no, absolutely not. You know, as you know, that we were initially dealing with sort of a, you know, palace and dealing with the export credit agencies, and I have to say, the export credit agencies are not necessarily cheap, right? And they have a lot of fees, a lot of upfront fees and premiums.
Andrew Brown: Palace.
Andrew Martin Browne: Dealing with the export credit agencies does that I have to say the export credit agencies are not necessarily cheap right and they have a lot of fees a lot of upfront fees and premiums and so when you calculate.
Andrew Martin Browne: The arrangements that we have come with the with the Canadian government and you do the math basically that's it just falls out of the equation at $750 million cheaper.
Andrew Martin Browne: And over to me on Conditionality.
Andrew Martin Browne: So.
None: I've gotta be definitely carefully here my general counsel is sitting across the table from me.
None: So.
None: What would I say on the conditionality that.
None: It doesn't.
None: My GCI rate.
None: I guess I would say the conditionality, it's kind of.
None: Typical stop with any funding agreement right. So we have to enter into definitive agreements. We've got multiple funding sources each funding source needs to make sure that the other one is there and Scott and that in the aggregate we have sufficient cash to fully fund the program. So it's it's.
Andrew Martin Browne: And so when you calculate, you know, the arrangements that we have made with the Canadian government, and you do the math, basically, that it just falls out of the equation at 750 million dollars cheap. Oh, and over to me on conditionality. I mean, so, you've got to be deathly careful here.
None: It's that kind of stuff.
None: As you can see.
Daniel S. Goldberg: My general counsel is sitting across the table from me. So what would I say on conditionality that doesn't affect my GCI rating? I guess I'd say, you know, the conditionality, it's kind of typical stuff with any funding agreement, right? So we have to enter into definitive agreements. We've got multiple funding sources. Each funding source needs to make sure that the other one is there and it's got, you know, and that, in the aggregate, we have sufficient cash to fully fund the program. So it's that kind of stuff. As you can see, I'm a big believer in action speaking louder than words.
None: I'm a big believer in actions speaking louder than words, we're confident.
None: <unk>.
None: Got the financing in place that we need to move our project forward, which is why we're hiring all of these people and spending all this money and entering into all of these contracts, but that's that's when.
None: When we referenced it.
Were kept on a tight leash share by our legal department and so it was mostly just to be.
None: Just careful to say, yeah, we still need to get those definitive agreements in place and the like.
None: I would think that would be just add Florida that we've got contingency as we mentioned a $400 million also within our within our program.
Daniel S. Goldberg: We've, you know, got the financing in place that we need to move our project forward, which is why we're hiring all these people and spending all this money and entering into all these contracts. But that's when we referenced it. We're kept on a tight leash here by our legal department. And so it was mostly just to be just careful to say, yeah, we still need to get those definitive agreements in place and the like. I would think I would just add further that we've got contingency, you know, as we mentioned a full hundred million also within our program. Got it. That's helpful. On that original, the 750 million, Dr. Arun Seshadri, Daniel Goldberg, Walter Piecyk, David McFadgen, Andrew Browne, Michael. I'll take that, Andrew.
None: Got it no that's helpful.
None: On the original 750 million glad I add the reduction so obviously understand Andrew.
None: Export agencies or not.
None: Necessarily that cheap, but just in terms of the assumptions in that 750 is that just you know kind of over the total debt costs over a certain period of time that are that it's lower by like can you just share those assumptions in advance of the disclosure thats going to come out Tonight.
None: Yeah I'll take that.
None: I mean fundamentally yeah like we've stared at what where our total cost of borrowings under the original plan with another vendor.
Andrew Martin Browne: I mean, fundamentally, yeah, like we've stared at what our total cost of borrowing under the original plan with another vendor and what it is now, and we took everything into account. We took into account what the total CapEx and other costs of the original program were versus the new one. We also took into account what our expected cost of borrowing would be over the life of the funding commitments, right? So the interest rate, any other, and this is relevant for the export credit agencies, premia, and stuff like that that you have to pay.
None: And what it is now and we took everything into account we took into account what the total capex and other costs of the original program were versus the new one we took into account what are expected.
None: Cost of borrowings would be over the life of the funding commitments right. So the interest rate any other and this is relevant for the export credit agencies, Premia and stuff like that that you have to pay and then we compare that to what our expectations are will be our.
None: Cost of borrowings for.
Andrew Martin Browne: And then we compared that to what our expectations are will be our cost of borrowing for what I'll call the new and improved approach. And yeah, that's the math we did, the $750 million savings over the course of the program. And it's my expectation that in the near term, we'll provide some additional details around our funding terms, and it'll allow folks to kind of, you know, make their own calculations about what our cost of borrowings is.
None: What I'll call, the new and improved approach.
None: Yeah.
None: That's enough for me there is a $750 million savings over the course of the program.
None: And it's my expectation that in the near term we will provide some.
None: Additional details around our funding terms and.
It will allow folks to kind of make their own calculations about what our cost of borrowings are a rigorous process that we've got.
Arun A. Seshadri: I understand. Thank you. And then separately, can you talk about broadcast revenue? It seems like even adjusting for the run rate bell and maybe a little bit from, you know, for the EchoStar. The broadcast revenue is still a little bit lower than we would have expected. If you could give any additional color there, and then also, how much in geo-OPEX reductions? are embedded in your EBIDTA guidance. Thank you. I'll let Andrew take the second one, but I'll start with the first one.
None: Got it understood. Thank you and then.
None: Separately.
None: Can you talk about broadcast revenue it seems like even adjusting for that run rate.
None: And maybe a little bit from you know for the Echostar.
None: You broke us revenue was still a little bit lower than you would have expected. If you could give any additional color. There and then also how much in Geo opex reductions.
None: Our embedded in your EBITDA guidance. Thank you.
None: I'll, let Andrew take the second one I'll start with the first one.
Daniel S. Goldberg: So, yeah, I mean, I said in my opening remarks the expected decline in video, overwhelmingly driven by one thing that's already happened, which was the renewal that we secured with Bell for NMIC. [inaudible] Yeah, sorry, I'm just keeping my NMIC straight. We had NMIC 4 last October, so we had, you know, nearly three months' impact of that lower rate last year, but, you know, we got the full run rate impact of it for this year. And we said at the time, and it was a significantly lower rate that we agreed with Bell to close that NMIC 4 renewal. So that's the biggest contributor to the expected decline in broadcast this year. And then, you know, there's ECHO.
Andrew Martin Browne: So yeah I mean.
Andrew Martin Browne: <unk> said it in my opening remarks, the expected decline in video.
Andrew Martin Browne: Overwhelmingly driven by.
Andrew Martin Browne: One thing that's already happened, which was the renewal that we secured with bell for NIM Mick.
Andrew Martin Browne: For yeah.
Andrew Martin Browne: Yes.
Andrew Martin Browne: <unk> Street.
Andrew Martin Browne: For last October So we had you know nearly.
Andrew Martin Browne: Nearly three months impact of that lower rate last year, but we got the full run rate impact of it.
Andrew Martin Browne: For this year and we said at the time there was a significant.
Andrew Martin Browne: Significantly lower rate.
Andrew Martin Browne: That we agreed with bell too.
Andrew Martin Browne: Close to that number for renewal. So that's that's the biggest contributor.
Andrew Martin Browne: Two.
Andrew Martin Browne: The expected decline in broadcast this year and then you know there's echo. So we've just started conversations with echo our guidance accommodates a range of different outcomes.
Daniel S. Goldberg: So we've just started conversations with ECHO. Our guidance accommodates, you know, a range of different outcomes with where we end up with them, from, you know, they don't renew anything to they renew just part of it, or they renew all of it. But no matter what, our expectation is, given what's going on in the market, given the other recent renewals we got, we are expecting, under any scenario, it's going to be materially less revenue from DISH on NMIC 5 than what we've been recognizing over the past 15 years. So anyway, and then, you know, there are, you know, other broadcast customers we have that we sort of take into account when we put our projections But fundamentally, it's the two that I've highlighted. Got it.
Andrew Martin Browne: Where we end up.
Andrew Martin Browne: With with them from they don't renew anything too they renew.
Andrew Martin Browne: Part of it for they renew all of it but no matter what our expectation is given what's going on in the market given the.
Andrew Martin Browne: Other recent renewals, we got we are expecting under any scenario. It is going to be mature materially less revenue from dish on mimic five than what we've.
Andrew Martin Browne: <unk> been recognizing over the past 15 years, so anyway and then.
Andrew Martin Browne: There you know.
Andrew Martin Browne: Other broadcast customers, we have that we sort of take into account when we put our projections together, but fundamentally it's the two that I've highlighted.
Arun A. Seshadri: Helpful. The last thing for me is, you know, how much do you plan on spending on Lightspeed before getting definitive documents from, I guess, the Canadian government on the funding? And, and you mentioned on the EBITDA side that for 2025, the step down will be less than 24. Anyway, you can quantify the OPEX, you know, within that, within 25 that you can expect, you know, today. That's all for now.
None: Got it helpful last thing for me is how much do you plan on spending.
None: I guess on lightspeed before getting definitive.
None: Docs from I guess, the Canadian government on the funding.
None: And do you.
None: Do you think about the Opex side, you kind of mentioned on EBITDA for 2025 to step down will be less than 24 any way you could quantify the opex within that within 25 that you can expect today.
None: That's all from me.
Andrew Martin Browne: I'll address some components of your questions indeed. I think your first question was relating to the step-down in our geo-OPEX. As you probably appreciate, our fixed costs are approximately, you know, 62%, 65%. And nonetheless, we've gone through in great detail, looking at our plans or the scale of plans that Dan has gone through, you know, the investment in Lightspeed City in the future. But so we've brought our geo-costs down now to approximately, I'd say 4% or so, notwithstanding the fact that our costs are pretty well fixed. And then when you look at light speed, that indeed about 65% to 70% of that increase is indeed fixed.
None: And all the practices some components of your questions. Indeed, I think the first question was related to the step down in adapting our jail Opex and as you probably appreciate are fixed or fixed cost or approximately <unk> <unk>.
None: 60% to 65% and nonetheless, we have gone through in great detail looking at our plans or scale of plans that that has gone through the investment in lightspeed feed the future, but somewhat broader geo costs down now approximately I think 4% or so notwithstanding the fact that our costs are pretty well fixed.
None: And then when you look at light speed.
None: That indeed about 65% to 70% of that increase is indeed fixed primarily it's coming from compensation as we scale up on the harp people coming in and then just coming back to us out of guidance adjusted EBITDA at 340 to 360, but just to compare if you take a look at.
Andrew Martin Browne: And primarily, it's coming from compensation as we scale up and we hire people coming in. And then, you know, just coming back to our sort of guidance and, you know, just leave it at 340 to 360. But just to compare, if you take a look at what we said, 80, 90 million for light speed. If you actually added that back to what the area is, just with even that guidance, we come to a margin of like 79 to 80%.
None: What we said 90 million.
None: $80 million to $90 million for Lightspeed, if you actually added that back to what the adjusted EBITDA guidance is we come to a market like 79% to 80%. So our costs are very very focused.
Andrew Martin Browne: So our costs are very, very focused. As for 2025, we probably, maybe, you know, as Dan had said, I think our expectations in terms of, you know, top line will not see the reductions that we're seeing now. And in OPEX, we probably wouldn't give any guidance right now specifically for 2025. So I hope that's kind of addressed your, you know, the variety of your question. Yes, thank you. Thank you. And the next question is for Mr. Walter Piecyk from Light Shed. Please go ahead. Yeah, hi, everybody. This is Joe on behalf of Walt.
None: After 2025, we publicly maybe with that said I think our expectations in terms of topline will not see the reductions that we're seeing now and in Opex, we probably wouldn't give any guidance right now specifically for 2025.
None: So I hope that kind of address Europe.
None: Variation of your questions.
None: Yes. Thank you.
None: Thank you and the next question comes from Mr. Walter Piecyk.
Walter Paul Piecyk: Please go ahead.
Yes, Hi, everybody. This is Joe for Walt.
Walter Paul Piecyk: You provide a capex range; I just want to kind of get a sense of what's the difference between hitting the high end versus coming in and at the low end of the range? Is there something, what's the limiting factor right now? Well, I mean, our suppliers need to hit milestones in order to get money from us. So, you know, we've got a nominal schedule that they need to achieve. But if they don't hit their milestones, we ain't going to pay them.
Joe: You provide a capex range I just wanted to kind of get a sense of what's the difference between hitting the high end versus coming in about 1 billion low end of the range is there something.
Joe: Like what's the limiting factor right now.
Walt: Well I mean.
Walt: Our suppliers need to hit milestones in order to get money from us. So you know.
Walt: We've got a nominal schedule that they need to achieve but if they don't hit their milestone we aren't going to pay them.
Daniel S. Goldberg: So, you know, we've built the range principally around that. OK. And then getting back to, I think it was Kristen's question about enterprise, could you, if you drill down a little further into that, just so I understand, were these customer contracts that were up for renewal, and they required having LEO as part of the solution going forward? So there's going to be a non-renewal? So how does that work with the kind of guide that comes down that much?
Walt: So you know we've.
Walt: <unk> built the range.
Walt: Principally around that.
Walt: Okay.
Walt: And then getting back to.
Walt: Sticking with Christian's question about enterprise, if you could if you.
Walt: Drill down a little further into that.
None: I understand.
None: Would these customers.
None: These customer contracts that were up for renewal.
None: They required having Leo as part of the solution going forward, so theres going to be a non renewal. So how does that work with the.
None: Kind of guide comes down that much.
Walter Paul Piecyk: Yeah, yeah, that's exactly it, Joe. I mean, we had contracts coming up for renewal. I said in my opening remarks that a big chunk of it, the biggest contributor was around maritime, and that was the cruise market. We've got customers that have been serving the cruise market, and they lost business to Starlin, and so they didn't renew their contracts with us. That's how it works. That's exactly what it was. And that was the biggest contribution. And then how long are those contracts generally?
None: Yeah, that's exactly it Joe I mean, we had contracts coming up for renewal I said in my opening remarks that a big chunk of it is the biggest contributor was around maritime it was crews.
None: We've got customers that had been serving the cruise market.
None: And they lost business to Starwood.
None: And so they didn't renew their contracts with us that that that's how it works. That's that's what it was.
None: That's exactly what it was.
None: And now to capital, where again that that was the biggest contributor.
None: Okay.
None: Are those are doing how long are those contracts generally like is there a chance.
Daniel S. Goldberg: Like, is there a chance? for, you know, let's say the next renewal, whenever that is, 2027 or 2026 or whatever, when you have something that's potentially, you know, on the horizon to be commercial with light speed, you could win that business back. Yeah, look, it's pretty, it's pretty fluid.
None: Four.
None: Let's say the next renewal whenever that is.
None: In 2007, or 2026 or whatever when you have.
None: Something that's potentially.
None: Yeah on the horizon to be commercial with light speed that you could win that business back.
None: Yes look it's pretty it's pretty fluid I mean, the the big enterprise customers are sophisticated about.
Daniel S. Goldberg: I mean, the big enterprise customers are sophisticated about, you know, what's happening out there in the market. They have quite a bit of flexibility to add networks or drop networks. They'll make some, I'd say maybe kind of medium-term commitments, maybe two or three years or something like that. And, you know, I don't have full visibility into exactly what they've committed to with Starlink. I know that Starlink has had a practice of often not signing long-term agreements with customers. It's almost kind of month to month in some ways. Whether they did something differently with the cruise customers, I don't know. But suffice to say that the cruise lines and the service providers that serve them are well aware of what we're working on with Lightspeed. They like what we can offer and the flexibility that we offer and our ability to concentrate capacity at ports and on key shipping lines.
None: What is happening out there in the market.
None: They have quite a bit of flexibility to add networks dropped networks.
None: We'll make some.
None: I'd say, maybe kind of medium term commitments may be two or three years or something like that.
None: And you know I don't have full visibility exactly what they've committed to the Starlink I know that <unk> has had a practice of oftentimes not signing long term agreements with customers. It's almost kind of month to month in some ways, whether whether they did something differently with the <unk>.
None: Cruise customers I don't know.
None: But suffice to say that.
None: The cruise lines and the service providers that serve them.
None: Our.
None: Well aware of what we're working on with Lightspeed they like what.
None: What we can offer and the flexibility that we offer and our ability to.
None: <unk> capacity at ports.
None: And on key shipping lines, they like to have a diversity of suppliers as I mentioned.
Daniel S. Goldberg: They like to have a diversity of suppliers, as I mentioned. So, yeah, I mean, we're, I hate losing any renewal. But, yeah, we're sure not, you know, kind of blocked out of the market on a go forward basis. And then my last question, on the funding, you mentioned the Canadian government and the provincial government. Is the Quebec Provincial Government still involved in the funding process? Yeah, our expectation is that Quebec will be a meaningful funding participant in our program, and Quebec will get great things out of this Lightspeed initiative.
None: So so yeah I mean, we're I.
None: I hate losing any renewal.
None: But yeah.
None: Yeah, we're sure not kind of blocked out of the market on a go forward basis.
None: Yeah.
None: And then my last question on the funding.
None: You mentioned.
None: The Canadian government as the provincial government.
None: The principal government still involved in the funding process, yeah, our expectation is that Quebec will be a meaningful funding participant.
None: In our program, Quebec gets great things from this light speed initiative, I think now more than ever that we're working with M. D. A.
Walter Paul Piecyk: I think now more than ever that we're working with MDA. When I think about the amount of investment that was going to be made in Quebec under the original plan when Quebec had agreed to certain funding commitments, now that MDA is our prime contractor, yeah, the amount of investment in Quebec has gone up, I'd say, dramatically. So yeah, our expectation is Quebec will be part, one of our funding partners. Okay, thanks, Joe. Thank you, and the next question is from Mr. Mike Pace from J.P. Morgan. Go ahead. Hi, good morning, guys.
None: I think about the amount of investment that.
None: What's going to be made in Quebec under the original.
None: Plan, when Quebec had agreed to Shouldnt.
None: Certain funding commitments now that MDA is our prime contractor yeah. The amount of investment in Quebec has gone up I'd say dramatically. So yes, our expectation is Quebec will be part.
None: One of our funding sources.
None: Okay. Thanks.
None: Thanks, Joe.
None: Thank you and the next question is from Mike <unk> from Jpmorgan. Please go ahead.
Mike: Hi, good morning, guys.
Michael Vincent Pace: And thank you for the added color on the guidance between the two segments. I guess just to dig down a little bit, you know Dan, you said that you don't expect the same type of decline. 25.
Mike: Thank you for the added color on the guidance between the two segments.
Mike: I guess just to dig down a little bit.
Mike: Dan You said you don't expect the same type of declines.
Mike: 25, and I guess I understand that on a total basis broadcast renewables.
Daniel S. Goldberg: And I guess I understand that on a total basis because of the broadcast. But from an enterprise point of view, would you continue to expect it to decline at that same kind of rate? And maybe another way to get at it is, and I think we've discussed this in the past, you know, how much of your enterprise is at risk for real alternatives, including your own. That's a great question.
Mike: But from an enterprise.
Mike: Would you continue to expect enterprise to decline at that same kind of rate.
Mike: Another way to get at it is nothing to discuss this in the past.
Mike: How much of your enterprise business.
Mike: Maintenance at risk.
Mike: We all alternatives, including your own eventual.
None: That's a great question.
Daniel S. Goldberg: I'm smiling because we had anticipated this question, but I'm still not sure we have a great answer for it. So what would I say?
None: I'm smiling because we were we had anticipated discretion. So I'm not sure we have a great answer for it.
None: And so.
Daniel S. Goldberg: Look, we've got a long-term plan. We gave our guidance obviously this morning for 2024. We have a decent amount of visibility. It's one of the nice things about our sector, a decent amount of visibility in terms of what our longer-term performance will probably be. We don't always get it exactly right, but we've got a decent track record, I think.
None: Uh huh.
None: What would I.
None: Say.
None: Look we've got a long term plan.
None: We.
None: Gave our guidance obviously this morning for 2024.
None: However.
None: Decent amount of visibility, it's one of the nice things about our sector a decent amount of visibility in terms of you know what our.
None: You know longer term performance.
None: We'll probably be you don't always get it exactly right but.
None: You've got a decent track record I think.
Daniel S. Goldberg: So we've done a pretty, I'd say for most companies, a super rigorous analysis. We've done a real kind of rounding up analysis looking out beyond 2024. And having done that, it's why we were able to say this morning that it wasn't our expectation, which is to say it is not our expectation that we're going to have the magnitude of top line decline in future years that we have had this year. We need to do a little bit more work, I think, to give a, you know, I don't know, substantive, for lack of a better word, answer to your question about We, we, we, we used to give some guidance about the percentage of... Our enterprise revenue, or maybe even our total revenue that we anticipated would migrate over to light speed over time. Like many things, I've forgotten what we said, but John, do you remember what we had said?
None: So we've done a pretty.
None: I would say for most companies are super rigorous analysis.
None: We've done a real.
None: Kind of rounds up analysis.
None: Looking out beyond 2024.
None: And having done that.
None: Why.
None: We're able to see this morning that it isn't our expectation which is to say it is not our expectation that we're going to have the magnitude of topline decline.
None: Decline.
None: In future years that we've had this year.
None: We need to do a little bit more work I think to give a.
None:
None: <unk>.
None: I dunno substantive lack of a better word answer to your question about.
None: Where are you more vulnerable.
None: Two for instance, starlink or even cannibalizing our own revenue.
None: <unk>.
None: We used to give some guidance about the percentage of <unk>.
None: Our enterprise revenue or maybe even our total revenue that we anticipated would migrate over to lightspeed over time.
None: Like many things I've forgotten, what we said, but John do you remember what we had said I wanted to say we had estimated it was around 55, I'm sorry, 50% of our enterprise revenues that we thought would be my gradable to.
Daniel S. Goldberg: I want to say we estimated it was around 50% of our enterprise revenues that we thought would be migratable to light speed over time. I think that's what we said. I believe it was in that zone.
John: Lightspeed over time I think that's what we said I believe it was and that there are some things that just arent suitable for yeah that are better served so so.
Daniel S. Goldberg: There are some things that just aren't suitable for that are better served. That was the estimate that we gave before. Again, we said that a little while ago, and already we've seen some move off, not to light speed, but to startling. But in many ways, it'd probably be a similar book of business that could move to Lightspeed, which would be more vulnerable to, you know, LEO competition writ large. I again think that Lightspeed is a better value proposition for enterprise users than the other LEO constellations.
John: That was kind of the estimate that we gave before.
John: And so I would say again, we said that a little while ago and already we've seen some move off.
John: If not for lightspeed, but historically, but in many ways it probably be a similar book of business that you know.
John: Could move.
John: So lightspeed that would be more vulnerable to Leo competition writ large.
John: Again think that lightspeed is a better value prop for enterprise users than the other Leo constellations, but I don't know if it's a long winded winded answer Mike.
Daniel S. Goldberg: But, I don't know, it's a long-winded answer, Mike, and as I said, we need to do a little bit more work on it. But, on a kind of order of magnitude, that's probably the book of business that's at risk, and I'm sure, looking at my colleagues who do the work of updating the long-term plan, I'm sure that's kind of how we thought about it. I mean, and to be clear, we assume in our forward projections that there are additional requirements that move to LEO, including before Lightspeed's available, which is to say So, yeah, I think we've captured that. Okay, a few more, and it can be quicker on my end.
John: As I said, we need to do a little bit more work on it but what kind of order of magnitude.
John: Probably the you know a book of business that's at risk.
John: And I'm sure looking at my colleagues, who do the work of updating the long term, but I'm sure that's kind of how we thought about.
John: And to be clear, we assume in our forward.
John: Forward projections that there is that there are additional requirements that new.
John: To Leo.
John: And including before Lightspeed is available which is to say we lose it.
None: So yeah, I think we've captured that.
None: Okay C.
None: A few more and they can be quicker on my end.
Michael Vincent Pace: Then, I just want to make sure I understand. So if I take your consolidated EBITDA guidance for 24 and I add back the light speed off X, is that basically the GL business or the restricted group in terms of EBITDA? Yeah, yes, correct. Absolutely. Yeah. Okay, and then can you share what the light speed op-ex was in 2023, please? In 2023, it was approximately just under, under, under, under 50 minutes, 48 to be precise. Canadian.
None: I just want make sure I understand so if I take your consolidated EBITDA guidance for 'twenty four.
None: Add back the Lightspeed Opex is that basically the geo business or the restricted group in terms of EBITDA.
C: Yes, yes, yes.
C: Okay, and then can you share what the lights and Opex loves in 2020 basis.
C: In 2023, it was approximately just under there.
C: <unk> 48 to be precise Canadian dollars Canadian.
Andrew Martin Browne: Yeah, Canadian. Yep, yep. Thank you. And then I think I have got the map here. You did not repurchase any debt in the fourth quarter.
None: Yep Yep, Thank you and then I.
None: I think I got the math, you're did not repurchase any debt in the fourth quarter can you confirm that and anything subsequent to the end of the quarter.
Michael Vincent Pace: Can you confirm that? And anything subsequent to the end of the quarter? That's correct, yes. Okay, and then I believe you still have a U.S. $150 million basket, I don't recall if it's RP or committed investments, that you can move from G or restricted group to an unrestricted group. Has that happened?
None: That's correct yes.
None: Okay, and then I believe you still have the U S $150 million basket I don't recall, if its RP are committed investments.
You can move from G or restricted group's on which the group has that happened.
Michael Vincent Pace: If not, when should we expect that to happen, if it has not happened already? We would expect to do that. Okay, great. Thanks, guys. Thanks, Mike. Thank you. And the next question is from Maxilou and Marcello Chermisqui from ARIN. Hey guys, thanks so much for taking the question. I wanted to ask a couple questions about the guidance.
None: If not when should we expect that to happen.
None: It is it has not happened we would expect to do that.
None: Soon.
None: Okay, great. Thanks, guys.
None: Thanks, Mike.
None: Okay.
None: The next question is from Mark Sue.
None: Sue.
Mark Sue: Sure Keith.
Mark Sue: From.
Mark Sue: Please go ahead.
Mark Sue: Hey, guys. Thanks, so much for taking the question.
Mark Sue:
Keith: I wanted to ask a couple questions on the guidance.
Marcello Chermisqui: My understanding is maritime and aerospace represent about 20% of enterprise sales, so about 70 million of 2023 enterprise sales. So it seems like, between like the cruise business and the aerospace customer, it could be down 50% in 2024. So in line with what you're saying, the Starlink competition risk, is that the right way to think about that? Hold on, John's just going to confirm...
None: My understanding is New York time in aerospace represented about 20% of enterprise sales, so about $70 million of the 2023 enterprise sales. So it seems like.
None: Between like the cruise business in aerospace customer it could be down 50% in 2024. So in line with what you were saying.
Sterling competition is that the right way to think about that.
Oh on Johns.
None: It's going to confirm.
Daniel S. Goldberg: So, let's see. The sheet that I'm looking at has Aero and Maritime being a little bit less than 20% of our total revenue. I forget what you would kind of like.
None: Uh huh.
None: So so let's see so.
None: She said I'm looking at has arrow in maritime being a little bit less than 20% of our total revenue I forget what you.
None: You would kind of.
None: Characterized as a percentage of our enterprise revenue.
unknown: [inaudible] So, I'm sorry, so the question again. Yeah, so it seems like aerospace maritime is down 50% under your guidance. Is that the right way to think about it? or staring at something.
Some of the backward math on that but roughly half and half so.
None: Yes.
None: So I'm sorry, so the question again.
None: Yes, it seems like aerospace and maritime is down 50% in your guidance is that is that the right way to think about it.
Daniel S. Goldberg: Hold on. Yeah, it would be roughly. Yeah. Yeah. You've done good math there, it sounds like, I appreciate it. So, it seems like given your earlier comment about 50% of the potential loss of Star Lake, you think that there's not much more risk there?
None: We're staring at something called on.
None: Yeah, It will be roughly yeah yeah.
None: Good math there it sounds like.
None: I appreciate it.
None: So it seems like.
None: Given your earlier comment about 50%.
None: Potential lots of sounds like you think that there's not much more risk.
Marcello Chermisqui: Or do you think that that segment might have incrementally more than 50%? That segment would probably have incrementally more, maybe less aero and more maritime, is how we would think about it. Thanks, Starlink, Salvain. Yeah, of all the verticals, probably having the biggest impact on maritime from what we've felt so far. Okay, I know that's helpful. And then on the broadcast revenue side, it seems like you're guiding to 50% of the total revenue declines to about $75 million. If I look at the decline from the fourth quarter versus the third quarter of 2023, it seems like a $10 million decline, likely mostly due to MIMIC-IV, like the Bell contract renewal. So that would imply about $30 million of decline baked into the 2024 numbers. So the remaining, say, $45 million of broadcast revenue decline outside of MIMIC 4, is that all MIMIC 5? Because I think that one is only two months remaining.
None: Now or do you think that that that segment might have incrementally more than 50%.
None: That segment would probably have incrementally more maybe less arrow and more maritime is how we would think about it I think starlink solving.
None: Of all the verticals.
None: Right now probably having the biggest impact.
None: In marathon for what we felt so far.
Okay. No that's helpful and then on the broadcast revenue side.
It seems like you're guiding to 50% of that.
None: Total revenue declines of about $75 million.
None: If I look at the decline from.
None: Fourth quarter versus the third quarter of 2023, it seems that a $10 million decline likely mostly need a minute for.
None: The bell contract renewal.
None: That would imply about $30 million of decline baked into 2024 numbers. So.
None: So doing.
None: The remaining say $45 million of broadcast revenue decline outside of minute four.
None: Is that all mimic five because I think that one is only two months remaining even if you assume zero. It seems like there might be other stuff that's going on.
Daniel S. Goldberg: Even if you assume zero, it seems like there might be other stuff that's going on. So, I think your map around the impact of NMIC4 is kind of directionally right. There might have been some other stuff in there as well.
None: So.
None: I think your math around the impact of mimic for which kind of directionally.
None: Right there might have been some other stuff in there as well.
Daniel S. Goldberg: Then, as I mentioned, the other big, I would say, anticipated contributor would be DISH. And by DISH, I mean Echostar. And there, yeah, I mean, it comes up in early October, and it's just too early to say whether that gets renewed at all, or it's just some partial renewal, so it's that. And then beyond that, yeah, just kind of making provision for any other erosion that we could potentially have, and yeah, so those are the component parts of that. Okay, I know that's helpful. And I noticed in the disclosures, you mentioned something about Mimic 4 that happened earlier this year. So, what are your contingency plans with Bell in case something more permanent happens to Mimic 4?
None: Then as I mentioned, the other big I would say anticipated contributor would be.
None: Dish.
None: And by dish and Echostar.
None: And there yeah, I mean that it comes up.
None: In early October and we just it's just too early to say whether that.
None: Gets renewed at all.
None: Or it's just some partial renewal so so what's that.
None: And then beyond that.
None: Yeah, just trying to making provision for.
None: Any other erosion that we could potentially have an yeah. So those are the component parts of that.
None: Okay now that's helpful and then I.
None: I noticed in the disclosure.
None: You mentioned something about Nick for.
None: That happened earlier this year. So what are your contingency plans with valor in case, something more permanent happens to mimic for and is it correct that the insurance only lasts until November 2024.
Daniel S. Goldberg: And is it correct that the insurance only lasts until November 2024? So we're taking insurance when there's Mimic Four is at the end of its life or near the end of its orbital maneuver life. So it has very little book value.
None: So we're thinking of insurance.
None: Mimic for us at the end of its life primary candidates.
None: Orbital maneuver light. So it has very little book value. So it has great rental insurance.
Daniel S. Goldberg: So it has very little insurance, and what insurance there expires in November. And then as far as, you know, kind of contingency for Bell, so right now, they use NMIC 4, and they use NMIC 5. I think the first thing I'd say is, I'm sorry, NMIC 6. Thank you, David. You know, we highlighted the issue that we had with NMIC 4. It's the right thing to do to highlight it for everyone. My own expectation is that NMIC 4 makes it to its anticipated end of life. But you never know.
None: Insurance is there expires in November 2024.
None: And then as far as kind of a contingency for bell so right now, they're using <unk> for and they used <unk>.
None: The first thing I'd say is I'm trying to make sense. Thank you Dave.
None: You know we highlighted the issue that we had with mimic for you now.
None: It's the right thing to do to highlight it for everyone.
None: My own expectation is that.
None: Mimic four makes it to its anticipated end of life.
None: No if it didn't.
Daniel S. Goldberg: If it doesn't, Bell has NMIC 6, and they're using that. And beyond that, you know, we'll see where we land with EchoStar on the NMIC 5 renewal. You know, maybe there's, you know, some ability to use NMIC 5 to look after Bell if they needed it. So certainly, I'd say those are kind of the things that we think about. And those are sophisticated customers. I mean, they understand, you know, how the networks work.
None: Bell Scott mimic six and.
None: They are usually not and beyond that you know well.
None: So who are we land with Echostar.
None: Echostar and the NIM of five renewal.
None: Maybe there is.
None: Some ability to use limit five.
None: To look after though if they needed. It so certainly I'd say those are kinds of things that we think about.
None: And those are sophisticated customer I mean, they understand.
None: Now how the networks work.
Marcello Chermisqui: I really appreciate it. Sorry, on MIMIC 5, on the scale of assumptions, are you assuming no revenue for that in the 2024 guide? No, I just say we, like, you know, we gave a range of guidance that can accommodate a range of different outcomes if, you know. So yeah, it accommodates all kinds of different outcomes with EchoStar. My own guess is we get a partial renewal with them, but it's just too early to say. They've got work to do on their side in terms of how they go about distributing all the channels that they need to distribute. And so they've got work to do with them. We've known those guys for a long, long time.
None: I'm really sorry in just a minute five like are you will see on the scale of assumptions are you assuming no revenue for that in the 'twenty one guidance.
None: Just say, we like you know we've we gave a range of guidance you can accommodate a range of different outcomes. If you know.
None: So so yeah, it accommodates all kinds of different outcomes.
None: With Echostar my own guess is we get a partial renewal with them, but it's just too early to say they've got work to do on their side.
None: In terms of you know.
None: How they go about distributing all the channels that they need to distribute and so.
None: They've got work to do with them. We've known these guys for a long long time, we have a good relationship with them.
Daniel S. Goldberg: We have a good relationship with them, but it's still some months away, and we developed a guidance range that accommodates just a whole range of different outcomes with them. But that that satellite does that represent a significant amount, much like much more revenue versus other mimic satellites or other satellites you have, or is it pretty consistent with, in terms of the size scale of other ones. I'd say of the NMICs, kind of the same order of magnitude with, you know, NMIC 4, NMIC 5, NMIC 6, recognizing, I should say, if you go back to the original rate, on because NMIC 4 and NMIC 5 have been renewed at lower rates, much lower rates than their first 15 years of life.
None: But it's still some months away and we.
None: We developed a guidance range that accommodates just a whole range of different outcomes.
And that satellite does that represent a significant.
None: I think much more revenue versus other mimic satellites or other sound like you have or is it pretty consistent with.
In terms of the size scale of other ones.
None: I'd say of the Nymex.
None: Kind of the same order of magnitude with him.
None: Moving forward to make five new matrix recognizing.
None: I should say if you go back to the original rates on cosmic <unk> five had been renewed at lower rates much lower rates than.
None: Then their first 15 years of life, but if you went back and looked at the rates on the original rates on NIM of four <unk> five <unk> six yeah, they're kind of all in the same ballpark.
Daniel S. Goldberg: But if you went back and looked at the rates on NMIC, the original rates on NMIC 4 and NMIC 5 and NMIC 6, yeah, they're kind of all in the same ballpark. Very helpful. Thanks so much for answering the questions. You're welcome. Okay, we have one more.
None: Very helpful. Thanks, so much for answering the questions Youre welcome.
None: Okay, and one more if we have time for one more brief question.
Operator: We have time for one more brief question. Thank you. And the last question is from Mr. Joe Geprobich from... Please go ahead. Hi, thanks for squeezing me in here. Most of my questions have been answered. I guess, just one on the fourth quarter performance. Ibiza coming in better than expected.
Mr. Zhu: Thank you and the last question is from Mr. Zhu guests, who are beach from 16. Please go ahead.
Mr. Zhu: Hi, Thanks for squeezing me in here most of my questions have been answered I guess, just one on the fourth quarter performance EBITDA coming in better than expected was there were there any one time items in there or what was what was driving that.
Andrew Martin Browne: Were there any one-time items in there, or what was driving it? And overall, I think it's just sort of timing, the timing of our expenditures, particularly as we invest in sort of light speed going forward. As you can probably tell, we control OPEX pretty, pretty tightly. And so, you know, with the program, as soon as we get going in 2024, that's when we'll set up our guidance. So I'd say that's kind of one of the main contributing elements in addition to the frugality of how we manage.
Mr. Zhu: And overall I think it's still sort of timing the timing of our expenditures, particularly as we invest in southern lights fee going forward as you can probably tell with control of the opex pretty pretty tightly and so you know with the program as soon as we get going in 'twenty 'twenty four that fog acceptable for our guidance. So I'd say, that's that's kind of one of them.
Mr. Zhu: The main contributing element in addition to the frugality of how we manage.
Joe Geprobich: Got it. And then just one more. So just to be clear, the $700 million of government funding that you were in advanced discussions for as of last quarter, are you saying now that the whole $2.1 billion of U.S. government funding is now secured, and you expect to release details after the close? I don't know what the $700 million reference is to. We had noted in the earnings release and I reiterated it in my remarks that we expect to have about 750 million dollars of savings relative to what And then as far as that 2.1, so there I'd say stay tuned, the Government of Canada would likely be a meaningful amount of our government partner funding sources. We expect that Quebec, as I mentioned earlier, will also be part of that. And so I would just say, stay tuned. We expect to make some information available in the near term around Government of Canada funding.
None: Got it and then just one more.
None: So just to be clear the 700 million of government funding that you were in advanced discussions.
None: Or as of last quarter are you, saying now that the hold $2 1 billion in the U S. Government funding is now secured and you expect to release detailed after the close.
None: I don't know what the 700 million reference.
None: Is to we had noted in the earnings release and I reiterated it in my remarks that debt.
None: We expect to have about $750 million U S.
None: Savings.
None: Sure.
None: Relative to what our original funding plan was and by savings I mean savings in terms of our cost of borrowings. In addition to the $2 billion U S. Capex.
None: Savings.
None: And then as far as that two one so there I would say stay tuned.
None: Government of Canada.
None: Would expect would be a meaningful amount of our.
None: The government partner funding sources.
None: <unk>.
None: Expect that Quebec.
As I mentioned earlier will will also be part of that and so I would just say.
None: Stay tuned.
None: We expect to make some.
None: Information available in the near term around the government of Canada.
None: Financing.
Daniel S. Goldberg: And then it's not going to be too long till we do our Q1 call, so we'll probably be able to provide a bit of an update there as well. Thank you very much for your time.
None: And then if it's not going to be too long until we do our Q1 call. So we'll probably be able to provide a bit of an update there as well.
None: Okay. Thank you very much for the time Yep. Thank you, Joe Alright, well listen everyone. Thank you very much for.
Operator: Thank you, Joe. All right. Well, listen, everyone. Thank you very much for joining us this morning. As I mentioned, our Q1 call is kind of around the corner.
None: Joining us this morning as I mentioned.
None: Q1 call is.
None: It's kind of around the corner. So we look forward to speaking with everyone again. Thank you very much. Thank you very much.
Operator: So we look forward to speaking with everyone again then. Thank you very much. Thank you very much. Here we go. Thank you. The conference has now ended. Thank you for joining us. Thank you.
None: Thank you. The conference has now ended please disconnect your lines at this time. Thank you for your participation.