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Telesat Reports Results for the Quarter and Year Ended December 31, 2012



Telesat Reports Results for the Quarter and Year Ended December 31, 2012

OTTAWA, Feb. 21, 2013 (GLOBE NEWSWIRE) -- Telesat Holdings Inc. ("Telesat")
today announced its financial results for the three month and one year periods
ended December 31, 2012. All amounts are in Canadian dollars and are reported
under International Financial Reporting Standards ("IFRS") unless otherwise
noted.

For the year ended December 31, 2012, Telesat reported consolidated revenues
of $846 million, an increase of approximately 5% ($37 million) compared to
2011. When adjusted for foreign exchange rate changes, revenue increased by 4%
($36 million) compared to 2011. Revenue growth was driven, in part, by the
successful deployment of the Nimiq 6 satellite in the second quarter of 2012
and a full year of revenue from the Canadian payload on the ViaSat-1
satellite, which entered commercial service in December 2011. Operating
expenses of $245 million were 31% ($58 million) higher than in 2011 or 30%
($57 million) higher when taking into account changes in foreign exchange
rates. Excluding one-time items totaling $54 million related primarily to
special compensation payments to executives and certain employees in
connection with the cash distributions made to Telesat's shareholders, 2012
operating expenses were just $4 million (2%) higher than in 2011. Adjusted
EBITDA^1 was $656 million, an increase of 5% ($33 million) over 2011. The
Adjusted EBITDA margin^1 for 2012 was 78% compared to 77% for 2011.

Telesat's net income for 2012 was $27 million compared to net income of $237
million for 2011, a decrease of $210 million. The 2012 net income was lower
than 2011 due in part to the recognition in 2011 of a $135 million gain from
insurance proceeds received in connection with an insurance claim filed for
the failure of a solar array on Telstar 14R/Estrela do Sul 2. Net income was
also adversely impacted by a loss on financing of $77 million in 2012, which
was the result of the repurchase and redemption of Telesat's 11.0% Senior
Notes as well as the write-off of deferred financing costs capitalized with
the carrying value of the previous senior secured credit facilities. Results
were also negatively impacted by increased operating expenses, an increase
relating primarily to the special compensation payments, partially offset by
an increase in revenue.

For the three month period ended December 31, 2012, Telesat had consolidated
revenue of $228 million, an increase of approximately 11% ($23 million)
compared to the same period in 2011. When adjusted for foreign exchange rate
changes over the period, revenue increased by 13% ($27 million) compared to
the same period in 2011, driven in part by Nimiq 6 and the Canadian payload on
ViaSat-1. Operating expenses in the quarter were $61 million, or an increase
of $12 million compared to 2011. The increase was primarily due to an increase
in the cost of equipment sales, the special compensation payments and an
increase in revenue-related expenses associated with the lease of transponders
on Nimiq 1. Adjusted EBITDA^1 for the fourth quarter of 2012 was $173 million,
an increase of 10% ($16 million) compared to the fourth quarter of 2011 and an
increase of 12% ($19 million) when adjusted for foreign exchange rate
changes. The Adjusted EBITDA margin^1 was 76% for the fourth quarter compared
to 77% for the same period in 2011. 

"I am very pleased with our strong performance in 2012," commented Dan
Goldberg, Telesat's President and CEO. "Compared to 2011, we experienced
meaningful growth in revenue and Adjusted EBITDA as well as continued
expansion of our Adjusted EBITDA margin. In addition to our favorable
financial performance, we refinanced our debt, brought our new Nimiq 6
satellite on line, and completed construction of our Anik G1 satellite. Anik
G1, which we expect to be launched in the first half of this year, has
considerable expansion capacity, a significant portion of which is already
contracted for the life of the satellite. In light of our strong growth in the
second half of last year, the anticipated near term launch of Anik G1, and our
industry-leading contractual backlog, we are well positioned for 2013 and
beyond."

Business Highlights

  * At December 31, 2012:

    * Telesat had contracted backlog for future services of approximately $5.1
      billion.
       
    * Fleet utilization was 91% for Telesat's North American fleet and 83% for
      Telesat's international fleet. 

  * On May 18, 2012, Telesat successfully launched its Nimiq 6 direct
    broadcast satellite,   which entered commercial service at the 91.1 degree
    West orbital location in June 2012. The entire capacity of Nimiq 6 is
    contracted for 15 years to Bell TV.
     
  * Telesat completed the construction of the Anik G1 satellite, which is
    expected to be launched in the first half of 2013. Anik G1's 16 extended
    Ku-band transponders have been contracted for 15 years to Shaw Direct for
    DTH services in Canada. Telesat also has entered into a 15 year contract
    with Paradigm Services for the full X-band payload of three transponders
    for government services. In addition, Anik G1 will double Telesat's
    existing capacity in South America from the 107.3 degree West orbital
    location.
     
  * Telesat completed a series of refinancing transactions in 2012:

    * On March 28, 2012, Telesat Canada entered into a new credit agreement
      for Senior Secured Credit Facilities which provided for the extension of
      credit in an approximate amount of USD $2,550 million. Telesat Canada
      simultaneously terminated and paid all outstanding amounts under its
      previously existing credit facilities. In connection with the
      refinancing, on March 28, 2012, Telesat declared a cash distribution to
      its shareholders, as a reduction in stated capital, in the amount of
      approximately $656 million. Approximately $586 million of the
      distribution was paid in the first quarter while the remaining $70
      million was paid in the third quarter.
       
    * On May 14, 2012, Telesat Canada issued, through a private placement, USD
      $700 million of 6.0% Senior Notes due May 15, 2017. The net proceeds of
      the offering, along with available cash on hand, were used to repurchase
      and redeem all of Telesat Canada's outstanding 11.0% Senior Notes due
      November 1, 2015. 
       
    * On October 29, 2012, Telesat issued an additional USD $200 million of
      6.0% Senior Notes due May 15, 2017. The net proceeds from the offering
      were used to fund the repayment of certain indebtedness owed to
      Telesat's principal shareholders, including accrued and unpaid interest
      thereon, and for general corporate purposes. 

  * Under Telesat's Unanimous Shareholders' Agreement, either Public Service
    Pension Investment Board ("PSP") or Loral Space & Communications Inc.
    ("Loral") can initiate the process of Telesat conducting an initial public
    offering of the equity shares of Telesat if an initial public offering has
    not been completed by October 31, 2011. In Q3 2012, PSP delivered to
    Telesat and Loral a notice initiating this process, which notice PSP
    subsequently withdrew.

Telesat's report on Form 20-F for the year ended December 31, 2012 has been
filed with the U.S. Securities and Exchange Commission and may be accessed on
the SEC's website at www.sec.gov. 

Telesat has scheduled a conference call on Thursday, February 21, 2013 at
10:30 a.m. ET to discuss its financial results for year ended December 31,
2012 and other recent developments. The call will be hosted by Daniel S.
Goldberg, President and Chief Executive Officer, and Michel Cayouette, Chief
Financial Officer, of Telesat. 

  Dial-in Instructions:

  The toll-free dial-in number for the teleconference is +1 (866)
  226-1792. Callers outside of North America should dial +1 (416) 340-2216.
  The access code is 4154246. Please allow at least 15 minutes prior to the
  scheduled start time to connect to the teleconference.

  Dial-in Audio Replay:

  A replay of the teleconference will be available one hour after the end of
  the call on February 21, 2013 until 11:59 p.m. ET on March 7, 2013. To
  access the replay, please call +1 (800) 408-3053. Callers outside of North
  America should dial +1 (905) 694-9451. The access code is 4062045 followed
  by the number sign (#).

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

Forward-Looking Statements Safe Harbor

This news release contains statements that are not based on historical fact
and are ''forward-looking statements'' within the meaning of the Private
Securities Litigation Reform Act of 1995. When used in this news release, the
words "expect", "will", "would", "well positioned for" 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 Annual Report on Form 20-F for the
fiscal year ended December 31, 2012 filed with the United States Securities
and Exchange Commission (SEC) on February 21, 2013 as well as Telesat Canada's
other filings with the SEC, which can be obtained on the SEC's website at
http://www.sec.gov. Known risks and uncertainties include but are not limited
to: risks associated with operating satellites and providing satellite
services, including satellite construction or launch delays, launch failures,
in-orbit failures or impaired satellite performance, volatility in exchange
rates and risks associated with domestic and foreign government regulation.
The foregoing list of important factors is not exhaustive. The information
contained in this news release reflects Telesat's beliefs, assumptions,
intentions, plans and expectations as of the date of this news release. Except
as required by law, Telesat disclaims any obligation or undertaking to update
or revise the information herein.

About Telesat (www.telesat.com)

Telesat is a leading global fixed satellite services operator providing
reliable and secure satellite-delivered communications solutions worldwide to
broadcast, telecom, corporate and government customers. Headquartered in
Ottawa, Canada, with offices and facilities around the world, the company's
state-of-the-art fleet consists of 13 satellites and the Canadian payload on
ViaSat-1, plus one satellite awaiting launch. Telesat also manages the
operations of additional satellites for third parties. Privately held,
Telesat's principal shareholders are Canada's Public Sector Pension Investment
Board and Loral Space & Communications Inc. (Nasdaq:LORL).

Telesat Holdings Inc.                                                 
Consolidated Statements of Income                                     
For the period ended December 31                                      
                                         Three months      Twelve months
(in thousands of Canadian dollars)       2012     2011     2012      2011
Revenue                                  $228,095 $204,739 $845,810  $808,361
Operating expenses                       (60,579) (48,618) (245,361) (187,765)
                                         167,516  156,121  600,449   620,596
Depreciation                             (53,116) (50,475) (208,685) (198,626)
Amortization                             (8,618)  (10,264) (35,965)  (41,021)
Other operating gains, net               6,020    114,912  5,890     114,068
Operating income                         111,802  210,294  361,689   495,017
                                                                      
Interest expense                         (64,774) (57,065) (242,206) (227,051)
Loss on financing                        (1,226)   --      (77,278)   -- 
Interest and other income                214      135      1,361     1,554
Gain (loss) on changes in fair value of  41,567   39,039   (58,984)  98,585
financial instruments
Gain (loss) on foreign exchange          (19,775) 78,478   78,854    (78,844)
Income before tax                        67,808   270,881  63,436    289,261
Tax expense                              (11,786) (29,063) (36,334)  (51,986)
Net income                               $56,022  $241,818 $27,102   $237,275

                                                          
Telesat Holdings Inc.                                     
Consolidated Balance Sheets                               
                                                          
                                           December 31,  December 31, 
(in thousands of Canadian dollars)         2012          2011
Assets                                                    
Cash and cash equivalents                  $180,961      $277,962
Trade and other receivables                63,762        46,789
Other current financial assets             6,799         7,010
Prepaid expenses and other current assets  22,946        22,126
Total current assets                       274,468       353,887
Satellites, property and other equipment   2,090,754     2,151,915
Other long-term financial assets           131,535       142,408
Other long-term assets                     4,692         5,536
Intangible assets                          858,697       896,078
Goodwill                                   2,446,603     2,446,603
Total assets                               $5,806,749    $5,996,427
                                                          
Liabilities                                               
Trade and other payables                   $35,709       $45,156
Other current financial liabilities        90,591        82,988
Other current liabilities                  77,930        67,877
Current indebtedness                       31,953        86,495
Total current liabilities                  236,183       282,516
Long-term indebtedness                     3,374,977     2,748,131
Deferred tax liabilities                   485,163       451,896
Other long-term financial liabilities      281,462       259,783
Other long-term liabilities                402,232       422,502
Senior preferred shares                     --           141,435
Total liabilities                          $4,780,017    $4,306,263
                                                          
Shareholders' Equity                                      
Share capital                              656,394       1,298,178
Accumulated earnings                       373,042       369,992
Reserves                                   (2,704)       21,994
Total shareholders' equity                 1,026,732     1,690,164
Total liabilities and shareholders' equity $5,806,749    $5,996,427

                                                                     
Telesat Holdings Inc.                                                
Consolidated Statements of Cash Flows                                
For the year ended December 31                                       
                                                                     
(in thousands of Canadian dollars)                      2012        2011
Cash flows from operating activities                                 
Net income                                              $27,102     $237,275
Adjustments to reconcile net income to cash flows from               
operating activities:
Amortization and depreciation                           244,650     239,647
Deferred tax expense                                    37,899      51,854
Unrealized foreign exchange (gain) loss                 (83,371)    67,706
Loss (gain) on derivatives                              58,984      (87,914)
Dividends on senior preferred shares                     --         1,650
Share-based compensation                                1,202       2,654
Loss on disposal of assets                              778         1,483
Impairment loss on intangible assets                     --         19,468
Reversal of impairment loss on intangible assets        (1,194)      -- 
Insurance proceeds                                       --         (135,019)
Loss on financing                                       77,278       -- 
Other                                                   (48,862)    (30,801)
Customer prepayments on future satellite services       40,345      57,768
Insurance proceeds                                      314         11,228
Repurchase of stock options and exercise of stock       (35,266)     -- 
appreciation rights
Operating assets and liabilities                        (26,507)    (13,113)
Net cash from operating activities                      $293,352    $423,886
Cash flows used in investing activities                              
Satellite programs                                      $(162,549)  $(356,199)
Purchase of other property and equipment                (7,611)     (17,566)
Purchase of intangible assets                           (166)       (12,618)
Insurance proceeds                                       --         135,019
Proceeds from sale of assets                            72          148
Net cash used in investing activities                   $(170,254)  $(251,216)
Cash flows used in financing activities                              
Proceeds from indebtedness                              $3,306,865   $ -- 
Proceeds from issue of promissory note                  145,466      -- 
Repayment of promissory note                            (145,466)    -- 
Repayment of Loral Notes                                (20,821)     -- 
Repayment of indebtedness                               (2,611,220) (108,741)
Repayment of senior preferred shares                    (141,435)    -- 
Payment of premium on early retirement of indebtedness  (39,444)     -- 
Payment of debt issue costs                             (52,030)     -- 
Return of capital to shareholders                       (656,546)    -- 
Dividends paid on preferred shares                       --         (10)
Satellite performance incentive payments                (4,582)     (5,928)
Net cash used in financing activities                   $(219,213)  $(114,679)
                                                                     
Effect of changes in exchange rates on cash and cash    $(886)      $(324)
equivalents
                                                                     
(Decrease) increase in cash and cash equivalents        $(97,001)   $57,667
Cash and cash equivalents, beginning of year            277,962     220,295
Cash and cash equivalents, end of year                  $180,961    $277,962
                                                                     
Supplemental disclosure of cash flow information                     
Interest received                                       $1,127      $2,121
Interest paid                                           $256,985    $242,905
Income taxes paid                                       $3,764      $2,329

The following table reconciles Telesat's net income to Telesat's Adjusted
EBITDA^1 and presents Telesat's Adjusted EBITDA margin^1:

                                         Three months       Twelve months
(in thousands of Canadian dollars)       2012     2011      2012     2011
(unaudited)
Net income                               $56,022  $241,818  $27,102  $237,275
Tax expense                              11,786   29,063    36,334   51,986
(Gain) loss on changes in fair value of  (41,567) (39,039)  58,984   (98,585)
financial instruments
Loss (gain) on foreign exchange          19,775   (78,478)  (78,854) 78,844
Interest and other income                (214)    (135)     (1,361)  (1,554)
Loss on financing                        1,226     --       77,278    -- 
Interest expense                         64,774   57,065    242,206  227,051
Depreciation                             53,116   50,475    208,685  198,626
Amortization                             8,618    10,264    35,965   41,021
Other operating gains, net               (6,020)  (114,912) (5,890)  (114,068)
Special compensation and benefit expense
for executives, employees and            4,688     --       53,511    -- 
independent Directors
Non-recurring professional fees           --       --       848       -- 
associated with financing
Non-cash expense related to share-based  304      664       1,202    2,654
compensation
Adjusted EBITDA                          $172,508 $156,785  $656,010 $623,250
                                                                      
Revenue                                  $228,095 $204,739  $845,810 $808,361
                                                                      
Adjusted EBITDA Margin                   75.6%    76.6%     77.6%    77.1%

End Notes

^1 The common definition of EBITDA is "Earnings Before Interest, Taxes,
Depreciation and Amortization." In evaluating financial performance, Telesat
uses revenue and deducts certain operating expenses (including making
adjustments to operating expenses for share-based compensation expense and
unusual and non-recurring items, including restructuring related expenses) to
obtain operating income before interest, taxes, depreciation and amortization
("Adjusted EBITDA") and the Adjusted EBITDA margin (defined as the ratio of
Adjusted EBITDA to revenue) as measures of Telesat's operating performance.

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

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

CONTACT: Michael Bolitho,
         Telesat,
         +1 (613) 748-8700 ext. 2336
         (ir@telesat.com)
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