Telesat Achieves Strong Growth in Third Quarter and First Nine Months of 2009

OTTAWA, Nov. 9, 2009 (GLOBE NEWSWIRE) -- Telesat Holdings Inc. (Telesat) today announced its unaudited financial results for the three and nine month periods ended September 30, 2009. Unless otherwise stated herein, all amounts are in Canadian dollars.

For the three month period ended September 30, 2009, Telesat reported consolidated revenues of $187 million, an increase of approximately 9% ($15 million) compared to the same period in 2008. The increased revenue was primarily the result of the commencement of service on Nimiq 4 and Telstar 11N as well as the impact of the stronger U.S. dollar on the conversion of our U.S. dollar denominated revenues into Canadian dollars, partially offset by the sale of Telesat's interest in Telstar 10. Adjusted EBITDA(1) for the third quarter was $129 million, an increase of $19 million (18%) compared to the same quarter last year. Adjusted EBITDA margin was 69% for the quarter, compared to 64% for the same period in 2008. Telesat reported net income for the three months ended September 30, 2009 of $203 million. The gain on the sale of Telesat's interest in Telstar 10 was $35 million. The impact on net income of a non-cash foreign exchange gain related to Telesat's U.S. dollar denominated debt, partially offset by non-cash losses on financial instruments, was $178 million.

For the nine month period ended September 30, 2009, consolidated revenues were $592 million. Adjusted EBITDA for the first nine months of 2009 was $416 million and the Adjusted EBITDA margin was 70%. Net income was $351 million. Revenues, Adjusted EBITDA, and net income increased by $88 million, $103 million, and $502 million respectively compared to the same period in 2008.

Dan Goldberg, Telesat's President and CEO, commented: "I'm very pleased with Telesat's strong financial and operating performance in the third quarter and first nine months of this year. We continue to achieve meaningful growth in revenue, Adjusted EBITDA and improvements to our Adjusted EBITDA margin compared to the same periods last year. With the recent entry into service of Nimiq 5, Telstar 14R under construction, and a recently announced new satellite, Nimiq 6, planned for Bell TV, Telesat remains well positioned for the balance of this year and beyond."

Business Highlights

  *  At  September 30, 2009:

     o Telesat had contracted backlog for future services of
       approximately $4.8 billion.

     o Fleet utilization was 84% for Telesat's North American
       fleet, and 72% for Telesat's international fleet. In the
       third quarter, Telesat sold its interest in Telstar 10,
       which reduced utilization in the international fleet.

  o On September 18, 2009, Telesat announced the successful launch of
    its Nimiq 5 satellite.  Nimiq 5 entered commercial service at the 
    72.7 degrees West orbital location on October 10, 2009. Telesat
    also announced that EchoStar Corporation, which had previously 
    contracted for half the capacity of Nimiq 5, has committed to 
    use all of the Nimiq 5 capacity for the 15-year manufacturer's 
    design life of the satellite.

  o On September 17, 2009, Telesat announced that Bell TV, the leading
    provider of direct-to-home services in Canada, has agreed to utilize
    a new Telesat direct broadcast satellite, Nimiq 6, which is planned
    to commence construction in the first quarter of 2010. Telesat is
    now in the process of procuring Nimiq 6 and expects to reflect the
    anticipated revenues from this new satellite in its contractual
    backlog once the agreement with the satellite manufacturer is

  o In July 2009, Telesat announced its decision to procure the Telstar
    14R/Estrela do Sul 2 replacement satellite which is expected to be
    operational in the 63 degrees West orbital location in the second
    half of 2011.

  o On July 9, 2009, Telesat sold its interest in the Telstar 10 
    satellite and transferred certain related customer contracts to 
    the satellite's owner in exchange for a total price of approximately
    US$69 million. Previously reported discussions regarding the 
    potential sale of Telesat's interests in another one of its  
    international satellites and related assets have terminated.

  o As of September 30, 2009, our estimate of the expected end-of- 
    commercial-service life for our Anik F1 satellite was 2016, as
    compared to our previous estimate, which was 2013.

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

Telesat will post its unaudited Quarterly Report for the three and nine month periods ended September 30, 2009 on its website at under the tab "Media Room" in the "Investor Relations" section. This information will also be furnished within the next week to the U.S. Securities and Exchange Commission by Telesat Canada on Form 6-K and may be accessed at the SEC's website at

Conference Call

Telesat has scheduled a conference call for Monday, November 9, 2009 at 10:30 a.m. EST to discuss its financial results for the three and nine month periods ended September 30, 2009 and other recent developments. The call will be hosted by Daniel S. Goldberg, President and Chief Executive Officer, and Michel Cayouette, Chief Financial Officer, of Telesat.

      Dial-in Instructions:

      The toll-free dial-in number for the teleconference is
      +1 (877) 240-9772.  Callers outside of North America
      should dial +1 (416) 340-8527.  The access code is 4032467.
      Please allow at least 15 minutes prior to the scheduled start
      time to connect to the teleconference.

      Dial-in Audio Replay:

      A replay of the teleconference will be available beginning at
      1:00 p.m. EST November 9, 2009, until 11:59 p.m. EST on
      November 23, 2009.  To access the replay, please call
      +1 (800) 408-3053.  Callers outside of North America should
      dial +1 (416) 695-5800.  The access code is 5486854 followed
      by the number sign (#).

Forward-Looking Statements Safe Harbour

This news release contains statements that are not based on historical fact and are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words "scheduled for", "planned", "will", or "expected" or other variations of these words or other similar expressions are intended to identify forward-looking statements and information. Actual results may differ materially from the expectations expressed or implied in the forward-looking statements as a result of known and unknown risks and uncertainties. Detailed information about some of the known risks and uncertainties is included in the "Risk Factors" section of Telesat Canada's final prospectus filed with the United States Securities and Exchange Commission (SEC) on June 29, 2009 as well as Telesat Canada's other filings with the SEC which can be obtained on the SEC's website at Readers are specifically referred to those documents. Known risks and uncertainties include but are not limited to: risks associated with operating satellites and providing satellite services, including satellite construction or launch delays, launch failures, in-orbit failures or impaired satellite performance and risks associated with domestic and foreign government regulation. The foregoing list of important factors is not exclusive. The information contained in this news release reflects Telesat's beliefs, assumptions, intentions, plans and expectations as of the date of this news release. Telesat disclaims any obligation or undertaking to update or revise the information herein.

About Telesat (

Headquartered in Ottawa, Canada, with offices and facilities around the world, Telesat is the fourth largest fixed satellite services operator. The company provides reliable and secure satellite-delivered communications solutions to broadcast, telecom, corporate and government customers. Telesat has a global state-of-the-art fleet comprised of 12 in-orbit satellites, has 1 more satellite presently under construction, and manages the operations of 13 additional satellites for third parties. Telesat is privately held. Its principal shareholders are Canada's Public Sector Pension Investment Board and Loral Space & Communications Inc. (Nasdaq:LORL).

 Telesat Holdings Inc.
 Consolidated Statements of Earnings (Loss)

 (in thousands of
  Canadian dollars)         Three Months              Nine Months
 (unaudited)             2009         2008         2009         2008
 ------------------------------------------      ----------------------
 Operating revenues
 Service revenues      181,984      166,660       578,228      483,741
 Equipment sales
  revenues               4,994        5,540        13,982       20,656
 ------------------------------------------      ----------------------
 Operating revenues    186,978      172,200       592,210      504,397
 ------------------------------------------      ----------------------

 Amortization           58,526       57,371       183,399      173,433
 Operations and
  administration        55,609       57,684       173,107      176,736
 Cost of equipment
  sales                  3,734        4,575        12,150       16,490
 ------------------------------------------      ----------------------
 Total operating
  expenses             117,869      119,630       368,656      366,659
 ------------------------------------------      ----------------------
 Earnings from
  operations            69,109       52,570       223,554      137,738
 Interest expense
                        67,134       64,083       204,933      185,120
 Other expense
                      (211,544)      55,712      (360,505)     107,527
 ------------------------------------------      ----------------------
 Earnings (loss)
  before income
  taxes                213,519      (67,225)      379,126     (154,909)
 Income tax expense
                        10,095       (5,121)       27,742       (3,801)
 ------------------------------------------      ----------------------
 Net earnings (loss)
  applicable to
  common shares        203,424      (62,104)      351,384     (151,108)
 ==========================================     =======================

 Telesat Holdings Inc.
 Consolidated Balance Sheets

 (in thousands of Canadian dollars)   September 30,       December 31,
 (unaudited)                               2009                2008
 Current assets
    Cash and cash equivalents             116,509             98,539
    Accounts receivable                    60,182             61,933
    Current future tax asset                1,877              2,581
    Other current assets                   29,110             49,187
 Total current assets                     207,678            212,240
 Satellites, property and other
  equipment, net                        1,930,862          1,883,576
 Other long-term assets                    40,267             42,303
 Intangible assets, net                   532,379            582,035
 Goodwill                               2,446,603          2,446,603
 Total assets                           5,157,789          5,166,757

 Current liabilities
    Accounts payable and accrued
     liabilities                           62,676             44,455
    Other current liabilities             141,974            142,432
    Debt due within one year               21,583             23,272
 Total current liabilities                226,233            210,159
 Debt financing                         3,065,723          3,513,223
 Future tax liability                     295,406            266,372
 Other long-term liabilities              601,640            566,136
 Senior preferred shares                  141,435            141,435
 Total liabilities                      4,330,437          4,697,325

 Shareholders' equity
    Common shares (74,252,460
     common shares issued and
     outstanding)                         756,414            756,414
    Preferred shares                      541,764            541,764
                                        1,298,178          1,298,178
    Accumulated deficit                  (475,068)          (826,452)

    Accumulated other
     comprehensive loss                    (5,762)            (7,742)
                                         (480,830)          (834,194)
    Contributed surplus                    10,004              5,448
 Total shareholders' equity               827,352            469,432
 Total liabilities and
  shareholders' equity                  5,157,789          5,166,757

 Telesat Holdings Inc.
 Consolidated Statements of Cash Flows

 (in thousands of
  dollars)                  Three Months              Nine Months
 (unaudited)            2009            2008       2009         2008
 -------------------------------------------    ----------------------
 Cash flows from
 Net earnings (loss)    203,424      (62,104)    351,384      (151,108)
 Adjustments  to
  reconcile net
  earnings (loss) to
  cash flows from
  operating activities:
    Amortization         58,526       57,371     183,399       173,433
    Future income
     taxes               10,525       (6,356)     30,970        (9,170)
     foreign exchange
     loss (gain)       (281,429)     136,542    (467,209)      211,355
     loss (gain)
     on derivatives      88,532      (79,514)    131,567      (119,728)
    Dividends on
     preferred shares     3,216        2,475      10,141         7,380
     expense              1,488           --       4,556            --
    Gain (loss) on
     disposal of assets (36,380)       3,425     (34,658)          695
    Other                 5,660      (10,206)    (10,716)      (30,675)
 Customer prepayments
  on future satellite
  services                1,039        2,809       4,348        23,180
 Operating assets
  and liabilities        29,057       43,753       6,937        31,102
 -------------------------------------------    ----------------------
                         83,658       88,195     210,719       136,464
 -------------------------------------------    ----------------------
 Cash flows (used in)
  from investing
 Satellite programs     (97,734)     (85,138)   (218,915)     (206,885)
 Property additions      (1,766)      (2,720)     (4,798)       (6,423)
 Insurance proceeds          --           --          --         4,006
 Proceeds on disposals
  of assets              70,769           24      71,294         4,632
 -------------------------------------------    ----------------------

                        (28,731)     (87,834)   (152,419)     (204,670)
 -------------------------------------------    ----------------------
 Cash flows from (used
  in) financing activities
 Debt financing
  and bank loans             --       50,924      23,880       183,482
 Repayment of bank
  loans and debt
  financing              (7,880)      (5,787)    (46,341)      (76,599)
 Capital lease
  payments              (10,302)     (22,464)    (13,816)      (27,905)
 Satellite performance
  incentive payments     (1,353)        (977)     (4,340)       (2,829)
 -------------------------------------------    ----------------------
                        (19,535)      21,696     (40,617)       76,149
 -------------------------------------------    ----------------------

 Effect of changes in
  exchange rates on
  cash and cash
  equivalents               321          781         287         1,659
 Increase (decrease)
  in cash and cash
  equivalents            35,713       22,838      17,970         9,602
 Cash and cash
  beginning of period    80,796       28,967      98,539        42,203
 -------------------------------------------    ----------------------
 Cash and cash
  end of period         116,509       51,805     116,509        51,805
 ===========================================    ======================

  disclosure of
  cash flow
    Interest paid        41,594       45,538     206,750       200,477
    Income taxes paid     1,823          245       5,818         1,077
 -------------------------------------------    ----------------------
                         43,417       45,783     212,568       201,554
 -------------------------------------------    ----------------------

 The following table reconciles our Net earnings (loss) applicable to
 common shareholders to our Adjusted EBITDA(1) and presents our Adjusted
 EBITDA margin(1):

 (in millions of
  Canadian dollars)           Three  Months            Nine Months
 (unaudited)                2009         2008       2009         2008
 --------------------------------------------      -------------------

 Net earnings (loss)
  applicable to common
  shares                    203.4       (62.1)      351.4      (151.1)
 Income Tax Expense          10.1        (5.1)       27.7        (3.8)
 Other expense (income)    (211.5)       55.7      (360.5)      107.5
 Interest Expense            67.1        64.1       204.9       185.1
 Amortization                58.5        57.4       183.4       173.4
 Restructuring charges        0.3         0.1         4.2         1.8
 Non cash expense
  related to stock
  compensation                1.5          --         4.6          --
 --------------------------------------------      -------------------
 Adjusted EBITDA            129.4       110.1       415.7       312.9
 ============================================      ===================

 Operating Revenues         187.0       172.2       592.2       504.4

 Adjusted EBITDA Margin       69%         64%         70%         62%

End Notes

(1) The common definition of EBITDA is "Earnings Before Interest, 
    Taxes, Depreciation and Amortization." In evaluating financial
    performance, we use revenues and deduct certain operating expenses
    (including making adjustments to operating expenses for stock 
    based compensation expense and unusual and non-recurring items, 
    including restructuring related expenses) to obtain operating 
    loss/income before depreciation and amortization ("Adjusted EBITDA")
    and Adjusted EBITDA margin (defined as the ratio of Adjusted 
    EBITDA to operating revenues) as measures of our operating 

    Adjusted EBITDA allows us and investors to compare our operating 
    results with that of competitors exclusive of depreciation and 
    amortization, interest and investment income, interest expense, and
    certain other expenses. Financial results of competitors in our
    industry have significant variations that can result from timing 
    of capital expenditures, the amount of intangible assets recorded, 
    the differences in assets' lives, the timing and amount of 
    investments, the effects of other income (expense), and unusual 
    and non-recurring items. The use of Adjusted EBITDA assists us 
    and investors to compare operating results exclusive of these 
    items. Competitors in our industry have significantly different 
    capital structures. The use of Adjusted EBITDA improves
    comparability of performance by excluding interest expense.

    We believe the use of Adjusted EBITDA and Adjusted EBITDA margin
    along with GAAP financial measures enhances the understanding 
    of our operating results and is useful to us and investors in 
    comparing performance with competitors, estimating enterprise 
    value and making investment decisions. Adjusted EBITDA as used 
    here may not be the same as similarly titled measures reported 
    by competitors. Adjusted EBITDA should be used in conjunction 
    with GAAP financial measures and is not presented as a substitute
    for cash flows from operations as a measure of our liquidity or 
    as a substitute for net income as an indicator of our operating 


Contact Data