Telesat Reports Results for the Third Quarter Ended September 30, 2013

Telesat Reports Results for the Third Quarter Ended September 30, 2013

OTTAWA, Oct. 31, 2013 (GLOBE NEWSWIRE) -- Telesat Holdings Inc. ("Telesat")
today announced its financial results for the three and nine month periods
ended September 30, 2013. All amounts are in Canadian dollars and are reported
under International Financial Reporting Standards ("IFRS") unless otherwise
noted.

For the quarter ended September 30, 2013, Telesat reported consolidated
revenues of $238 million, an increase of approximately 8% ($18 million)
compared to the same period in 2012. 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. Operating expenses of $52 million were 4%
($2 million) higher than for the same period in 2012 related primarily to an
increase in non-cash stock based compensation expense arising from additional
stock options granted in 2013, partially offset by expenses incurred in
relation to special payments made in 2012. Adjusted EBITDA^1 was $192 million,
an increase of 10% ($17 million) over the same period in 2012. The Adjusted
EBITDA margin^1 for the third quarter of 2013 was 81%, compared to 80% in the
same period in 2012.

For the nine month period ended September 30, 2013, consolidated revenues were
$673 million, an increase of approximately 9% ($55 million) compared to the
same period in 2012. The increase was primarily the result of the addition of
the Nimiq 6 satellite in mid-2012, the addition of the Anik G1 satellite in
May 2013, the provision of short-term satellite services to another satellite
service provider, and higher equipment sales. The increase in revenue was
offset principally by a decrease in revenue earned on Telesat's Nimiq 1
satellite. Operating expenses were $151 million, a decrease of 18% ($34
million) compared to 2012 related primarily to compensation expense associated
with the special payments made in 2012. The Adjusted EBITDA margin^1 for the
first nine months of 2013 was 79%, compared to 78% for the same period in
2012.

Telesat's net income for the quarter was $102 million compared to net income
of $114 million for the quarter ended September 30, 2012. The unfavorable
variation was primarily due to a lower non-cash gain on foreign exchange,
which was principally a result of the U.S. dollar strengthening during the
quarter relative to the Canadian dollar and thus adversely impacting the
translation of Telesat's U.S. denominated debt into Canadian dollars. The
unfavorable variations were partially offset by increased revenue, a decrease
in the loss on changes in the fair value of financial instruments and lower
interest expense due to refinancing activities.

For the nine month period ended September 30, 2013, net income was $20
million, compared to a net loss of $31 million in 2012. Results were favorably
impacted by an increase in revenue, lower operating expenses, reduced losses
on refinancing and by non-cash gains on changes in the fair value of financial
instruments. These positive variations were partially offset by non-cash
losses on foreign exchange related to the translation of Telesat's U.S.
denominated debt into Canadian dollars.

"I am very pleased with the strong growth in revenue and Adjusted EBITDA we
achieved in the third quarter and first nine months of the year compared to
the same periods last year," commented Dan Goldberg, Telesat's President and
CEO. "In light of our favorable performance year to date, the recent entry
into service of our Anik G1 satellite, and our industry-leading contractual
backlog, we are well positioned to continue to grow our business this year and
beyond."

Business Highlights

  *During the quarter, Telesat announced the procurement of a powerful,
    multi-mission satellite from Astrium SAS that will replace and expand on
    Telstar 12 at 15 degrees west longitude. This new state-of-the-art
    satellite, called Telstar 12 VANTAGE and expected to launch in late 2015,
    will utilize high throughput capabilities that offer superior performance
    to meet the growing needs of broadcast, corporate, government and
    enterprise users, including demand for aero and maritime services. By
    using Ku-band across all coverage beams, Telstar 12 VANTAGE will be fully
    backwards compatible with existing Ku-band terminal equipment. The
    satellite will offer a high level of flexibility with coverage of Europe,
    the Americas, the Middle East, Africa, the Caribbean, North Sea,
    Mediterranean and South Atlantic regions.
    
  *In late September 2013, Telesat entered into a contract with Mitsubishi
    Heavy Industries Ltd. to launch the Telstar 12 VANTAGE satellite.
    
  *At September 30, 2013:

    *Telesat had contracted backlog for future services of approximately $5.0
      billion.
      
    *Fleet utilization was 90% for Telesat's North American fleet and 80% for
      Telesat's international fleet.

Telesat's report on Form 6-K for the quarter ended September 30, 2013 has been
filed with the U.S. Securities and Exchange Commission (SEC) and may be
accessed on the SEC's website at www.sec.gov.

Telesat has scheduled a conference call on Thursday, October 31, 2013 at 10:30
a.m. ET to discuss its financial results for the quarter ended September 30,
2013 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 (800)
  396-7098.Callers outside of North America should dial +1 (416) 695-7848.
  The conference reference number is 4154286.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 October 31, 2013, until 11:59 p.m. ET on November 14, 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 9330944 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 to" 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 Holdings Inc.'s Annual Report on Form 20-F
for the fiscal year ended December 31, 2012 as well as Telesat Canada's other
filings with the United States Securities and Exchange Commission (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 satellite 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 14 satellites and the Canadian payload on ViaSat-1 with another
satellite under construction. 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.
Condensed Consolidated Statements of Income (Loss)
For the period ended September 30
                                                               
                                    Three months        Nine months
(in thousands of Canadian dollars)   2013      2012 ^(2) 2013      2012 ^(2)
(unaudited)
Revenue                              $ 237,571 $ 219,544 $ 672,769 $ 617,715
Operating expenses                   (51,555)  (49,404)  (150,918) (185,155)
                                    186,016   170,140   521,851   432,560
Depreciation                         (54,300)  (54,530)  (156,878) (155,569)
Amortization                         (8,162)   (9,095)   (24,516)  (27,347)
Other operating losses, net          (31)      (54)      (1,593)   (130)
Operating income                     123,523   106,461   338,864   249,514
                                                               
Interest expense                     (54,723)  (60,906)  (170,602) (179,844)
Loss on financing                    --        --        (18,493)  (76,052)
Interest and other income            337       176       11,313    1,147
(Loss) gain on changes in fair value (5,689)   (11,534)  11,529    (100,551)
of financial instruments
Gain (loss) on foreign exchange      57,196    93,602    (110,878) 98,629
Income (loss) before tax             120,644   127,799   61,733    (7,157)
Tax expense                          (18,378)  (13,459)  (41,967)  (23,813)
Net income (loss)                    $ 102,266 $ 114,340 $ 19,766  $ (30,970)


Telesat Holdings Inc.
Condensed Consolidated Balance Sheets
                                                            
(in thousands of Canadian dollars) (unaudited) September 30, December 31,
                                               2013           2012
Assets                                                       
Cash and cash equivalents                      $ 235,280      $ 180,961
Trade and other receivables                    52,384         63,762
Other current financial assets                 7,397          6,799
Prepaid expenses and other current assets      21,591         22,946
Total current assets                           316,652        274,468
Satellites, property and other equipment       1,998,374      2,090,754
Other long-term financial assets               48,587         131,535
Other long-term assets                         2,838          4,692
Intangible assets                              834,137        858,697
Goodwill                                       2,446,603      2,446,603
Total assets                                   $ 5,647,191    $ 5,806,749
                                                            
Liabilities                                                  
Trade and other payables                       $ 45,669       $ 35,709
Other current financial liabilities            98,908         90,591
Other current liabilities                      117,803        77,930
Current indebtedness                           50,641         31,953
Total current liabilities                      313,021        236,183
Long-term indebtedness                         3,216,490      3,374,977
Deferred tax liabilities                       480,791        485,163
Other long-term financial liabilities          196,442        281,462
Other long-term liabilities                    386,681        402,232
Total liabilities                              4,593,425      4,780,017
                                                            
Shareholders' Equity                                         
Share capital                                  656,660        656,394
Accumulated earnings                           391,717        373,042
Reserves                                       5,389          (2,704)
Total shareholders' equity                     1,053,766      1,026,732
Total liabilities and shareholders' equity     $ 5,647,191    $ 5,806,749


Telesat Holdings Inc.
Condensed Consolidated Statements of Cash Flows
For the nine months ended September 30
                                                                 
(in thousands of Canadian dollars) (unaudited)         2013        2012 ^(2)
Cash flows from operating activities                              
Net income (loss)                                      $ 19,766    $ (30,970)
Adjustments to reconcile net income (loss) to cash                
flows from operating activities:
Amortization and depreciation                          181,394     182,916
Deferred tax expense                                   6,946       25,811
Unrealized foreign exchange loss (gain)                114,477     (106,991)
(Gain) loss on derivatives                             (11,529)    100,551
Share based compensation                               9,866       898
Loss on disposal of assets                             1,593       130
Loss on financing                                      18,493      76,052
Interest expense on employee benefit plans             2,683       2,412
Other                                                  (27,557)    (36,059)
Customer prepayments on future satellite services      --          40,345
Insurance proceeds                                     --          314
Repurchase of stock options and exercise of share      (1,196)     --
appreciation rights
Operating assets and liabilities                       65,572      25,619
Net cash from operating activities                     $ 380,508   $ 281,028
Cash flows used in investing activities                           
Satellite programs                                     $ (42,486)  $ (158,270)
Purchase of other property and equipment               (6,975)     (6,353)
Purchase of intangible assets                          (6)         (166)
Proceeds from sale of assets                           1,022       45
Net cash used in investing activities                  $ (48,445)  $ (164,744)
Cash flows used in financing activities                           
Proceeds from indebtedness                             $ --        $ 3,099,658
Proceeds from issue of promissory note                 --          145,466
Repayment of indebtedness                              (260,216)   (2,606,494)
Repayment of senior preferred shares                   --          (141,435)
Payment of premium on early retirement of indebtedness (13,793)    (39,444)
Payment of debt issue costs                            (810)       (48,984)
Return of capital to shareholders                      --          (656,546)
Proceeds from exercise of stock options                99          --
Dividends paid on preferred shares                     (10)        --
Satellite performance incentive payments               (3,524)     (2,727)
Net cash used in financing activities                  $ (278,254) $ (250,506)
                                                                 
Effect of changes in exchange rates on cash and cash   $ 510       $ (941)
equivalents
                                                                 
Increase (decrease) in cash and cash equivalents       $ 54,319    $ (135,163)
Cash and cash equivalents, beginning of period         180,961     277,962
Cash and cash equivalents, end of period               $ 235,280   $ 142,799
                                                                 
Supplemental disclosure of cash flow information                  
Interest received                                      $ 752       $ 902
Interest paid                                          $ 150,648   $ 170,604
Income taxes paid                                      $ 11,416    $ 3,045


Telesat's Adjusted EBITDA margin^1:
                                     Three months        Nine months
(in thousands of Canadian dollars)    2013      2012 ^(2) 2013      2012 ^(2)
(unaudited)
Net income (loss)                     $ 102,266 $ 114,340 $ 19,766  $ (30,970)
Tax expense                           18,378    13,459    41,967    23,813
Loss (gain) on changes in fair value  5,689     11,534    (11,529)  100,551
of financial instruments
Loss (gain) on foreign exchange       (57,196)  (93,602)  110,878   (98,629)
Interest and other income             (337)     (176)     (11,313)  (1,147)
Loss on financing                     --        --        18,493    76,052
Interest expense                      54,723    60,906    170,602   179,844
Depreciation                          54,300    54,530    156,878   155,569
Amortization                          8,162     9,095     24,516    27,347
Other operating losses, net          31        54        1,593     130
Special compensation, benefit expense 521       4,181     2,184     47,925
and severance payments
Non-recurring professional fees
associated with financing and special --        --        --        1,748
payments to independent directors
Non-cash expense related to share     5,023     300       9,866     898
based compensation
Adjusted EBITDA                       $ 191,560 $ 174,621 $ 533,901 $ 483,131
                                                                
Revenue                               $ 237,571 $ 219,544 $ 672,769 $ 617,715
                                                                
Adjusted EBITDA Margin                80.6%     79.5%     79.4%     78.2%

End Notes

^1The common definition of EBITDA is "Earnings Before Interest, Taxes,
Depreciation and Amortization." In evaluating financial performance, Telesat
uses revenue and deducts certain operating expenses (including share based
compensation expense and unusual and non-recurring items, including
restructuring related expenses) to obtain operating income before interest,
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 withIFRS 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.

^2A change in accounting policy has resulted in a change to the 2012
comparative figures.For more information on the impacts of the change, please
refer to note 3 of Telesat's condensed consolidated interim statements, filed
with the SEC on a Form 6-K dated today.

CONTACT: For further information:

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