Telesat Reports Results for the Quarter Ended March 31, 2014

May 1, 2014

Telesat Holdings Inc. announced its financial results for the three month period ended March 31, 2014. All amounts are in Canadian dollars and are reported under International Financial Reporting Standards (“IFRS”) unless otherwise noted.

For the quarter ended March 31, 2014, Telesat reported consolidated revenue of $242 million, an increase of 11% ($23 million) compared to the same period in 2013. During the quarter, the U.S. dollar was 9% stronger than it was during the first quarter of 2013 and, as a result, there was a positive impact on the conversion of U.S. dollar denominated revenue and a negative impact on the conversion of U.S. dollar denominated expenses. Accordingly, revenue increased by 7% ($16 million) compared to the same period in 2013 when adjusted for foreign exchange rate changes. Revenue growth was principally the result of revenue earned on the Anik G1 satellite, which entered into commercial service in May 2013, and the provision of short-term satellite services to another satellite service provider. The growth was partially offset by lower broadcast services revenue earned on Telesat’s Nimiq 2 satellite and lower revenue from equipment sales.

Operating expenses of $47 million were 6% ($3 million) lower than the same period in 2013 or 9% ($5 million) lower when taking into account changes in foreign exchange rates. This reduction was primarily due to lower cost of equipment sales partially offset by an increase in share-based compensation expense as a result of stock options granted during the second quarter of 2013. Adjusted EBITDA¹ was $198 million, an increase of 16% ($28 million) compared to the same period in 2013 and an increase of 13% ($22 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin¹ was 82% for the first quarter of 2014 compared to 78% for the same period in 2013.

Telesat’s net loss for the quarter was $28 million compared to a net loss of $97 million for the quarter ended March 31, 2013. Results were positively impacted by improved operating income and lower interest expense in 2014, partially offset by a non-cash loss on foreign exchange arising from the translation of Telesat’s U.S. dollar denominated debt into Canadian dollars and higher tax expense. The favorable variation was also due to the recognition, in the first quarter of 2013, of a loss on changes in fair value of financial instruments and a loss on financing related to the irrevocable notice to redeem Telesat’s 12.5% Senior Subordinated Notes.

“I am very pleased with our performance in the first quarter of 2014” commented Dan Goldberg, Telesat’s President and CEO. “Anik G1 made important contributions to our results and we continue to execute well across the various markets in which we operate. Our investments in additional satellite capacity combined with our industry-leading contractual backlog provide visibility into the stability of our future revenue and cash flow and position us well for the balance of 2014 and beyond.”