Q4 2023 Telesat Corp Earnings Call
Participants
Michael Bolitho; Director of Treasury and Risk Management; Telesat Corp
Daniel Goldberg; President and Chief Executive Officer; Telesat Corp
Andrew Browne; Chief Financial Officer; Telesat Corp
Caleb Henry; Analyst; Quilty Space
Arun Seshadri; Analyst; BNP Paribas
Walter Piecyk; Analyst; LightShed
Michael Pace; Analyst; JP Morgan
Marcello Chermisqui; Analyst; Ares
Presentation
Operator
Good morning, ladies and gentlemen, and welcome to the conference call to report the fourth quarter 2023 financial results. Fortunately set out.
Speakers today will be Mr. Daniel Goldberg, President and Chief Executive Officer of Telesat, and Andrew Browne, Chief Financial Officer of Telesat. I would now like to turn the meeting over to Mr. Michael Bolitho, Senior Director of Treasury and Risk Management. Please go ahead, Mr. Bolitho,
Michael Bolitho
Thank you, and good morning. This morning, we file our annual report for the year ending December 31st, 2023, on Form 20F and PSEC. and OCDR. plus. Our remarks today may contain forward-looking statements. There are risks that Telesat's actual results may differ materially from the results contemplated by the forward-looking statements as a result of known and unknown risks and uncertainties for a discussion of known risks, please see Telesat's annual report filed with the SEC. Telesat assumes no responsibility to update or revise these forward-looking statements.
I will now turn the call over to Daniel Goldberg , Telesat's President and Chief Executive Officer.
Daniel Goldberg
Okay. 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 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, very pleased with our performance and the things we achieved in 2023.
We did a really effective job in staying focused in beating our adjusted EBITDA guidance, maintaining our operating discipline and industry leading operating margins, securing the C-band clearing proceeds and executing well I believe, were some value-enhancing debt repurchases but far and away the most important thing we did last year.
This find an innovative and highly accretive path forward for Telesat Lightspeed, including landmark agreements with MDA and Space X as well as important financing arrangements with our government partners in Canada, satellite user community fully consistent with our long-standing expectations is transitioning to LEO networks, and this transition will accelerate over time for that reason.
Moving forward with our transformational Telesat Lightspeed program is our highest priority. 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, breaking down our financials between GEO and LEO, 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 around CAD150 million in GEO this year, 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 the annual top line decline in the coming years.
On video, the expected decline comes primarily from the full run rate impact of the lower rate on Nimiq four from the renewal we secured last October with Bell as well as renewal. We have with EchoStar and Nimiq five coming up in early Q4 this year. 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, the biggest contributor being erosion of maritime services revenues, other meaningful expected reductions from an aero customer 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 on the lost revenue in the enterprise segment is the migration of customer requirements from GEO to LEO, namely to Starling, is there 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 in LEO is happening a little faster than even we expected.
And although we don't love seeing Sterling cannibalized some of our geo customer requirements. It's a strong validation of the market embrace of LEO and the compelling path that we're on with 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.
Turning to OpEx, we expect to see an increase of roughly CAD40 million year over year is all driven by the investments we're making in Lightspeed. For half 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 lower orbit global satellite broadband network project is a huge magnet for absolutely top-notch talent throughout our industry.
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, a roughly 50% increase with nearly two thirds of the team working on Lightspeed. Dedicated geo heads are actually coming down over 10% as we shift folks to Lightspeed and more broadly take steps to right-size geo OpEx. We're a declining geo business.
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 Lightspeed. It's full-on 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 partners, developing the tools we need to dynamically, manage the traffic on the network and the API.s and other interfaces. Our customers will use to purchase and manage Lightspeed services for their users' requirements for 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. In short, we're moving up fast on all the key work streams necessary to bring Lightspeed into service the customer communities enthusiastic with the approach we're taking in the services we'll be offering.
And there's great interest also with 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 for the best path or perhaps to ensure that they don't get left behind our CapEx guidance for this year.
Has us investing roughly CAD1 billion into Lightspeed this year. 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 in service by the end of 2027.
Let me now give a quick update on Lightspeed funding. 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 detailed funding terms and expect to release a summary of those terms shortly likely after markets closed today. Suffice to say that we're very pleased we've reached this point.
As we've noted in our earnings release, we estimate that our total cost of borrowings is roughly [USD750 million] lower than our prior funding plan, and that's on top of the USD2 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 note also that the government of Canada isn't just some in animate object. There are a ton of people throughout the government of Canada who have worked really hard with Telesat and engage 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 note also not a huge surprise, given all the benefits of Telesat Lightspeed delivers to Canada I take the world, whether that's bridging the digital divide, whether it's job creation, technology development, job creation, all of that. There's huge benefits that come from the Lightspeed program and the government of Canada and the people that work there recognize that we really appreciate that.
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 gain ascendancy and market share. To that end, our highest priority is on focused execution of the Lightspeed program. Both technically and commercially were 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 may have.
Andrew Browne
Thank you, Dan, and good morning, everyone. I would now like to focus on highlights from this morning's press release and filings. Telesat ended the year 2023 with reported revenues of $7.4 million, adjusted EBITDA of $534 million and generated cash from operations of $169 million with $1.7 billion of cash on the balance sheet at year end. As Dan has mentioned, we outperformed our 2023 adjusted EBITDA guidance in the fourth quarter of 2023. Telesat reported revenues of one $66 million.
Adjusted EBITDA was $23 million and generated cash from operations of $13 million for the fourth quarter of 2023 compared to the same period of 2022, revenues decreased by $41 million to $166 million. Operating expenses decreased by $30 billion to $49.9 million and adjusted EBITDA decreased by $15.7 billion to $123.3 million.
The adjusted EBITDA margin was 74.3% as compared to 67.2% in 2022 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 data, which was not repeated in 2023 and a rate reduction on the renewals of a long-term agreement with a North American customer. The decrease in operating expenses is primarily due to lower noncash share-based compensation and higher equipment sales in 2022 related to the DARP in program.
As I just mentioned, interest expense decreased by $2 million during the fourth quarter and compared to the same period in 2022 The decrease was due to the repurchase of notes and term loan B in 2023. This was partially offset by an increase in interest rates in the US, term loan B facility. In the fourth quarter, we recorded a gain on foreign exchange of $78 million as compared to a gain of $72 million in the fourth quarter of 2022. The gain for the three months ended December 31st, 2015, was mainly the result of the weaker US. dollar. The Canadian dollar spot rate as of December 31st compared to the spot rate as of September 30th, 2020, and the resulting favorable impact on the translation of our US-denominated debt.
Our net income for the quarter was $39 million compared to net income of $91 million for the same period in the prior year. And net income for the year ended December 31st was $583 million compared to a net loss of$ 82 million for the prior year. The positive variation of six $65 million was principally due to C-band clearing proceeds recognized in the second quarter of 2023, combined with the gain on the repurchase of our debt had a foreign exchange gain on the conversion of a US-dollar debt.
This was partially offset by the booking of an impairment of $79.8 million in Q4 for the year ended 31st of December, the cash inflow from operating activities was $69 billion and the cash flows generated from investing activities were$ 212 million. The cash flows generated from investing activities is due to the proceeds received from the Phase two C-band clearing, as mentioned by then partially offset by capital expenditures.
In terms of CapEx incurred to date was primarily related to a lower Constellation Telesat Lightspeed and the newly acquired Anik F. four satellites.
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.
As Todd also mentioned, we will look forward to reporting on a segmented basis where we will breakout or Lightspeed and GMI business as we go forward. And this is really to provide transparency and understanding that everybody would be able to appreciate and bolt as both our businesses develop.
Sorry, the 24. Specifically, Telesat expects its full year revenues to be between $45 million of five, $65 million. And 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 highlights yield represents an increase of $40 million year on year. In terms of adjusted EBITDA, Telesat expected to be between $340 million to $360 million.
Turning to CapEx in respect to capital expenditures for 2024 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 Telesat Lightspeed. That has also highlighted the drivers to our 2024 financial outlook in terms of revenue declines, we are expecting that the geo business and the increase in operating expenses that are fundamentally related to Lightspeed. As I had mentioned, the drivers of that more banks is indeed as 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 and short-term investments at the end of December as well as approximately $200 million of borrowings available under our revolving credit facility. Approximately $1.25 billion of cash was held in our unrestricted subsidiaries. In addition, we continued to generate significant amount 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 secured credit facilities was 5.32 times. Telesat has complied with all covenants in our credit agreements and indentures for including the repayment we made in 2020 of approximately $241 billion of the outstanding term loan B, combined with our ongoing repurchase program or overall debt, has been reduced by approximately 28% just to recap, we reported to date a total amount of $587 million at an aggregate cost of $332.7 million.
In addition, this also resulted 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 for 20 F provides the unaudited interim condensed consolidated financial information in the MD&A. The non-guarantor subsidiary showed are essentially the unrestricted subsidiaries had minor differences. So I think that concludes our prepared remarks.
For the call and very happy now to turn back to the operator and yes address any questions you may have. Thank you very much.
Question and Answer Session
Operator
(Operator Instructions)
Caleb Henry from Quilty Space
Caleb Henry
Dan and crew. Congratulations on getting that financing sub done, but it's been a long and I trip over the years and somebody I can't decipher, I mean, can you remind us of at was the last publicly stated of note position you had on terms of debt raised with, I think it was around [$2 billion]
Daniel Goldberg
Yes. Hi, Chris. Yes, that that's about right. That be a US number. I think what we said is Well, Andrew,
Andrew Browne
I'll go had effect on their on their website. We have the investor presentations. We did a kind of small roadshow in November and throughout the New York and put video from Page 19, just for everyone, at overall in terms of our sources and uses, we had Telesat equity of $1.6 billion, government funding $2.1 billion, which is which was requested UCaaS vendor financing of $300 million.
And on just to round off, in terms of our spending, overall, we had $2.7 billion for satellites, operational expenditures of about $800 million. And we also had contingency included of roughly 40% of $400 million are contained within the overall program itself. Just give you a quick refresher on that. That's great.
Caleb Henry
Thanks for the detail, Tom. So I kind of jumped over it, but congratulations on the I think the vision you put forward here. If you focus on the enterprise market and that brings up a question. Darling has obviously been been hurting the maritime market and other adjacent markets, but haven't really had you seen them at all. You target the traditional enterprise market? And can you help us understand the differentiation of what you're trying to do versus Darling system?
Daniel Goldberg
Yeah. Well, Chris, thanks. So let's see, yes, they're definitely having an impact are in maritime. They'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, putting in truth, we're kind of we're seeing them everywhere. We see them what when you say enterprise, maybe less kind of corporate enterprise, but we are seeing them for our backhaul requirements on uncertain network so that 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 space by now 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, we've talked about telcos, mobile network operators, corporates, governments, Aero maritime.
And I'd say 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 a SLAs. It make commitments around CIRI. give our customers the ability to have their own dedicated bandwidth pools, which then they can manage they can oversubscribe, but they can offer different service tiers.
They can move their bits around across their network of which for some of them could be the entire earth on. So it gives them massive flexibility, massive control over their bids over their network. So I actually that that's a big part of the differentiation from the customer standpoint. I think from the investor standpoint, what we're doing, I think is also very capital efficient.
We're able to cover the world with terabytes and terabytes of this very high-performing capacity with hundreds of satellites, not thousands of satellites and satellites that lasts, you know, north of 10 years. So gives us a long opportunity to earn the kinds of returns that we need to on our invested capital.
So in any event and look, again, I think Space X is moving fast and being disruptive. We don't get everything right around here to say the least. But we definitely saw the transition from GEO the LEO come in 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 a Space X isn't as fast as they're moving while no one's going to own this entire market, the market's huge. It's growing fast. It should, particularly for enterprise customers, 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. And as you've probably picked up in my remarks this morning, we're just super focused and making big investments to get there as fast as we can.
Caleb Henry
Phase two on NDA, clearly has a pretty tall task ahead of them here over the next couple of years. But after listening to the Eutelsat OneWeb call, I find myself asking you the more important question, which is where are you in terms of your gateway file all on in terms of insurance?
Daniel Goldberg
Are you kind of US. focused?
Caleb Henry
Well, no, I mean for the global deployment, and one was had or Constellation up and it's still not fully operational because they couldn't get their gateways installed, right?
Daniel Goldberg
Yeah. And yes, yes. No, I tracked all that to say. 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 that we're starting off with at a minimum 25 landing stations around the world will be 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, we can kind of have sort of more bespoke landing stations as well as some of the flexibility that an advanced system like ours has.
The other thing I'd note about Lightspeed, maybe unlike OneWeb is we've got the optical and or satellite links on our constellation. And so what that means is you probably need nine, probably you need fewer gateways in order two, still have our 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 contribute. So Yes, we've identified the main seasons where we need to go.
Caleb Henry
I think we'll be in good shape. But would you be interested in buying a StarLink optical cross-connect on?
Daniel Goldberg
You know it. It's a it's an interesting question and all share with you that we haven't had any conversations with StarLink about that. They're probably pros and cons of doing something like that on pros being space. X is building lots of them and it would allow us to grow.
No. I mean, theoretically interconnect with their constellation, although they're flying lower than we are so worried where we'd interconnect with those guys probably do that in our app rather than optical. I'm not sure that the StarLink optical link is as DA compliant that would have to be something that we would take into consideration. There are a number of a good OISL. optical into satellite link providers out there with Heritage and the like.
So anyway, stay tuned on that. We've we've announced a good many of our suppliers, including MDA and Space X we announced earlier, we are working with us on some of the software that's going to orchestrate the Constellation on and as we work with MDA and pick that kind of next level supply chain and folks will learn more about the maybe different component parts of the network.
Caleb Henry
Great. And a final question on Nimiq five. Is that a one year or multiyear contract?
Daniel Goldberg
Nimiq five on the well, it was a fit
Caleb Henry
One in the coming up for renewal.
Daniel Goldberg
Yeah, it's coming up for renewal. So you know, so it hasn't been renewed yet. We've started having conversations with EchoStar about it, but it it was a 15-year agreement that comes up in October of this year. So stay tuned on that, and
Thanks, Chris, for that one.
Caleb Henry
Thank you.
Operator
Arun Seshadri from BNP Paribas
Arun Seshadri
Yes, hi, thanks for taking my questions. First from me, I noticed this word like your funding conditionality that the program is fully funded to global service delivery, subject to certain conditions. If you can outline what those conditions are would be helpful.
And then separately on the funding plan itself, clearly strong support from the government of Canada for the $750 million reduction and to be cheaper today. Can you sort of tell us how you calculate that services piece, so just to understand the puts and takes there.
Daniel Goldberg
Yes. Yes, we have Andrew, do you want to start with that and then I'll maybe talk about what some of the conditionality.
Andrew Browne
Yeah. Again, I absolutely am. You know, as you know that we were initially dealing with sort of Talos and dealing with the export credit agencies and 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 it out, the arrangements that we have come with it with the Canadian government and you do the math basically that it just falls out of the equation, it's [$750 billion] cheaper.
Michael Bolitho
So, and over to me on conditionality, I mean, it show got to be definitely careful here. My General Counsel is sitting across the table from me on. So what would I say on the conditionality that it doesn't make my CCA rate? I guess I'd say, you know, the conditionality, it's kind of a typical stop with any a funding agreement, right? So we are entering into definitive agreements. We've got multiple funding sources, each funding source needs to make sure that the other one is there. And Scott, 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 actions speaking louder than words. We're confident we've 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 these contracts. But that's that's, you know, when we referenced it on were kept on a tight leash here by our legal department. And so it was mostly just to be it's just careful to say, yes, we still need to get those definitive agreements in place and the like and I'll take
Andrew Browne
I'll just add further that we've got contingency, you know, as we mentioned, the $400 million also within that, again, a lot of progress.
Arun Seshadri
Got it. That's helpful on that. On the original, the $750million, glad I had a reduction. So obviously I understand, Andrew, that the that the export agencies are not the necessarily that cheap. But just in terms of the assumptions in that seven 50, is that just, you know, kind of a two over the portal, the 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 that's going to come out tonight?
They are all ticked up and you just?
Michael Bolitho
Yeah, I mean, fundamentally, yes, like we've stared at what our total cost of borrowings under the original plan with another vendor on and what it is now, 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 our cost of borrowings will 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 we have to pay. And then we compare that to what our expectations are, will be our cost of borrowings for what I'll call the new and improved approach. And yes, that that's come up with 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 will allow folks to kind of make their own calculations about what our cost of borrowings are a good risk process that we've gone through.
Arun Seshadri
Got it. Understood. Thank you. And then then separately, can you talk about broadcast revenue? It seems like even adjusting for the run rate Bell and maybe a little bit from for the EchoStar, your 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 EBITDA guidance?
Daniel Goldberg
I'll let Andrew take the second one. I'll start with the first one. And so so yes, I mean, I said it in my opening remarks, the expected decline in video are overwhelmingly driven by one thing that's already happened, which was the renewal that we secured with Bell for Nick for.
Yes. So you just keep my Nymex straight with Nimiq four last October. So we had, you know, nearly three months impact of that lower rate last year, but we got the full run-rate impact of it. Our for this year. And we said at the time it was a significant, a significantly lower rate of that. We agreed with Bell to close that number for renewal. So that's that that's the biggest contributor, too, the expected decline in broadcast this year. And then there's Echo. So we've just started conversations with ECHO. Our guidance accommodates a range of different outcomes where we end up with a with them from, they don't renew anything to maybe renew just part of it for their new all of it.
But no matter what our expectation is given what's going on in the market given the and other recent renewals we got we are expecting under any scenario, it's going to be mature, materially less revenue from DISH on MiMagic five than what we've been recognizing over the past 15 years. So anyway, and then you know, there are no 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 Seshadri
Got it. Helpful. Last thing for me is how much do you plan on spending? I guess on Lightspeed before getting definitive data from, I guess, the Canadian government on the funding? And do you think about the OpEx side, you kind of mentioned on EBITDA for 2025, the step down will be less than 24. Any way you could quantify the OpEx within that within 25 that you can expect today? That's all from me.
Andrew Browne
I'll address this some components of your question indeed. I think the first question was relating to the step down in India or geo OpEx. And as you probably appreciate, are fixed our fixed costs are approximately, you know, 60% to 65%. And nonetheless, we've gone through in detail looking at our plans or scale-up plans is down and go through the investment in Lightspeed through the future for them sold broader geo cost-downs. Now approximately, I'd say 4% or so notwithstanding the fact that our costs are pretty well fixed and then when you look at Lightspeed and that indeed, about 65% to 70% of that increase is the fixed and primarily is coming from compensation as we scale out and we hire people coming in.
And then just coming back to our sort of guidance, as you know, adjusted EBITDA at three, 43, 60, but just to compare, if you take a look at what we said, $90 million, $89 million for Lightspeed. If you actually added that back to what the adjusted EBITDA guidance is, we come to a margin of like 79% to 80%. So our costs are very, very focused. And after 2025, we probably maybe you know that it says, I think our expectations in terms of top line was not to do 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 kind of addressed your variation of your questions.
Arun Seshadri
Yes, thank you.
Operator
Walter Piecyk from LightShed Partners
Yes, hi, everybody. This is Joe for Walt, you provide a CapEx range and just want to kind of get a sense of what's the difference between hitting the high end versus coming in at $1 billion low end of the range. Is there something like what's the limiting factor right now?
Andrew Browne
What 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 milestone, we're going to pay them. So, you know, we've built the range principally around that.
Okay. And then getting back to I think it was Chris's question about enterprise, if you could if you drill down a little further into that, just so I understand were these costs 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. How does that work with the it kind of guide come down that much?
Andrew Browne
Yes, 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. It was cruise. We've got customers that have been serving the cruise market and they lost business to start with and so they didn't renew their contracts with us that that adds how it works that's attached, but it was on exactly what it was. And now to capital again, that's obviously the biggest contributor.
Walter Piecyk
Okay. And then are those are those how long are those contracts generally like is there a chance for, let's say, the next renewal, whenever that is one in 2027 or 2026 or whatever, when you have something that's potentially down on the horizon to be commercial with Lightspeed that you could win that business back?
Andrew Browne
Yes. Look, it's pretty it's pretty fluid. I mean, the big enterprise customers are sophisticated about, you know, what's happening out there in the market and they have quite a bit of flexibility to add networks, dropped networks of both will make some what we've achieved maybe kind of medium-term commitments, maybe two or three years or something like that.
And I don't have full visibility exactly what they've committed to restoring. I know that Sterling 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 cruise customers, I don't know. But suffice to say that the cruise lines and the service providers that serve them some 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 our concentrate capacity at ports and on key shipping lines. They like to have a diversity of suppliers, as I mentioned on. So So yes, I mean, we're I hate losing any renewal on. But yes, we're sure not kind of blocked out of the market on a go forward basis.
Walter Piecyk
And then my last question on the funding. You mentioned the Canadian government is the provincial government, the Quebec provincial government still involved in the funding process?
Daniel Goldberg
Yeah, our expectation is that Quebec will be a meaningful funding participant in our program, Quebec. It's great things from this Lightspeed initiative. I think now more than ever that we're working with MDA are when I think about the amount of investment that was going to be made in Quebec under the original our plan when Quebec had agreed to certain funding commitments. Now that MDA is our prime contractor.
Yes, the amount of investment in Quebec is gone up, I'd say dramatically. So yes, our expectation is Quebec will be part one of our funding sources.
Walter Piecyk
Okay. Thanks
Daniel Goldberg
Thanks, John.
Operator
Michael Pace from JP Morgan
Michael Pace
Good morning, guys, and thank you for the added color on the guidance between the two segments. I guess just to dig down a little bit and you said you don't expect the same type of declines in '25. And I guess I understand that from a total basis versus a broad catchment area for us from an enterprise from which I continue to expect enterprise to decline at that same kind of rate and maybe another way to get at it is I think we've discussed this in the past. I know how much of your enterprise business do you think is at risk for real alternatives, including your own eventual?
Daniel Goldberg
That's a great question. If I'm smiling, because we were we were making We had anticipated this question. So I'm not sure we have a great answer for it on Passover holiday club where they are say, look, we've got a long-term plan. We have I gave our guidance obviously this morning for 2024, we have had a 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 longer-term performance, we'll probably be we don't always get it exactly right, but a nice little fishy track record,
I think so we've done pretty on, I'd say, for most companies a super rigorous analysis on. We've done a real kind of rounds up analysis looking out beyond 2024 and having done that, it's why we were able to say 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 top line decline in future years that that we've had this year and we need to do a little bit more work. I think to give a ah, you know, either a substantive lack of better word answer to your question about where you are more vulnerable to, for instance, Starlink or even cannibalizing our own revenue.
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 Lightspeed over time. And like many things, I've forgotten what we said, but John, remember what we had said I want to say we had estimated it was around 55, 50 I'm sorry, 50% of our enterprise revenues that we thought would be migrating people to Lightspeed over time.
Michael Pace
I think that's what we said, I believe it was in that zone and there are some things that just aren't suitable for, yes, that are better served.
Daniel Goldberg
So so that's the range that that was kind of the estimate that we gave before. And so I would say now again, we said a little while ago and already we see some move off on the if not for Lightspeed, but historically but in many ways, it probably be a similar book of business that, you know, it could move to Lightspeed that would be more vulnerable to LEO competition writ large.
I 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, and as I said, we need to do a little bit more work on it, but kind of order of magnitude, that's probably the, you know, a book of business that's at risk. And then and I'm sure looking at my colleagues who do the work of updating the long-term plan.
And I'm sure that's kind of how we thought about of where I mean to be clear, we assume in our forward projections that there is, but there are additional requirements that move to LEO in, including before Lightspeed's available, which is to say we lose it on. So yes, I think we've captured that.
Michael Pace
Okay. A few more, and they can be quick on my end on the I just want make sure I understand. So if I take your consolidated EBITDA guidance for 24 and I add back the Lightspeed OpEx, is that basically the GOL business or the restricted group in terms of EBITDA?
Andrew Browne
Yes, yes, absolutely, absolutely.
Michael Pace
Okay. And then can you share what the Lightspeed OpEx was in 2023 and 2023?
Andrew Browne
It was approximately just under under under under 50 move from 48 to be precise.
Michael Pace
The Canadian?
Andrew Browne
Yes, Canadian.
Michael Pace
Yes. Thank you. And then, Adam, I think I got the math. You did not repurchase any debt in the fourth quarter can you confirm that and anything subsequent to the end of the quarter?
Andrew Browne
That's correct, yes.
Michael Pace
Okay. And then I believe you still have a U.S. $150 million basket. I don't recall if it's our peer committed investments that you can move from G or restricted group to unrestricted group. Has that happened or if not, when should we expect that to happen, especially
Andrew Browne
It has not happened. We would expect to do that fairly soon. Okay, great. Thanks, guys.
Yes, thanks, Mike.
Operator
Marcello Chermisqui from Ares
Marcello Chermisqui
Hey, guys. Thanks so much for taking the question. I wanted to ask a couple of questions on the guidance. My understanding is maritime, and aerospace represent about 20% of enterprise sales, so about $70 million of the 2023 enterprise sales. So it seems like between like the cruise business and aerospace customer it could be down 50% in 2024. So in line with what you are saying, the Starling competition left, is that the right way to think about that on
Andrew Browne
John's just going to confirm a show so look to so the shift 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 characterize it as a percentage of our enterprise revenues, Ivan, then the backward math on that, but roughly half-and-half.
So costs.
Yes, there.
Daniel Goldberg
Yes.
Michael Bolitho
So I'm sorry, so the question again?
Marcello Chermisqui
Yes, it seems like aerospace Maritime is down 50% in your guidance. Is that the right way to think about it or and it's on Groupama, it will be roughly, yes to that.
Daniel Goldberg
Yes, but you've done good math there.
Marcello Chermisqui
It sounds like appreciate it. So that so it seems like, given your earlier comment about 50% of potential off the satellite. You think that there's not much more risk there, or do you think that that that segment might have incrementally more than the 50%
Daniel Goldberg
That segment would probably have incrementally more maybe less aero and more Maritime is how we would think about it think StarLink having. Yes, of all the verticals right now, probably having the biggest impact in maritime for what we felt so far.
Marcello Chermisqui
Okay. No, that's helpful. And then on the Broadcast revenue side, it seems like you're guiding to 50% of the total revenue decline. So that $75 million. If I look at the decline from fourth quarter versus the third quarter of 2023, it seems with a $10 million decline likely mostly due to the mix for the Bell contract renewal. So that would imply about $30 million of decline baked into 2024 numbers.
So doing the remaining, say, $45 million of broadcast revenue decline outside of minute four. Is that all mix by the way 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 Goldberg
So, I think your math around the impact of Nimiq four is kind of directionally right? There might have been some other stuff in there as well. Then as I mentioned, the other big, I would say, anticipated contributor would be DISH arm. And by addition in EchoStar on there, yes, I mean, it comes up in early October.
And we just it's just too early to say, you know, whether that it gets renewed at all or, you know, it's just some partial renewal. So so it's that. And then beyond that, yes, it's kind of making provision for any other erosion that we could potentially you have. And yes, so those are the component parts of that Okay.
No, that's helpful. And then I noticed in the disclosures, you mentioned something about minutes for that that happened earlier this year. So what are your contingency plans with Bell in case something more permanent happens to mimic for? And is it correct that the insurance only lasts until November 2024?
Marcello Chermisqui
So, we'll take the insurance when there's Nimiq four is at the end of its life for Myriad's inhibits its Orbital to maneuver life. So it has very little book value. So it has very little assurance what insurance is there expires in November 2024. And then as far as kind of contingency for Bell, so right now, they use
Nimiq four and they use the mic. So, I think the first thing I'd say is I'm trying to make six. Thank you, Dave. You know, we highlighted the issue that we have with Nimiq four. You know, it's the right thing to do to highlight it for everyone. My own expectation is that our Nimiq four makes it to its anticipated end of life in Evernote if it didn't, those got Nimiq six and they're using that. And beyond that, we'll see who remained with EchoStar and the Nimiq five renewal, you know, maybe there's some ability to use
Andrew Browne
Nimiq five and to look after those. If they needed it. So certainly, I'd say those are kind of the things that we think about and also sophisticated customer. I mean, they understand how the networks or it really brings a sorry, interest on Linux five, what are you assuming on the scale of assumptions? Are you assuming no revenue for that into 20 from Cordis?
Daniel Goldberg
Well, I would just say we like you know, we we gave a range of guidance. You can accommodate a range of different outcomes, if you know so. So yes, 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 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. We have a good relationship with them on. But, you know, it's still some months away and we develop the guidance range that accommodates just a whole range of different outcomes with them.
Andrew Browne
And that that satellite, does that represent a significant might be much more revenue versus other Minnick satellites or other satellites you have? Or is it pretty consistent with in terms of size scale of other ones, I'd say of the Nymex from kind of the same order of magnitude with a limit for Nimiq five Nymex recognizing. And I should say if you go back to the original rates on because Nimiq four and Nimiq five have been renewed at lower rates, much lower rates then than their first 15 years of life. But if you went back and looked at the rates on mimic the original rates on Nimiq four and Nimiq five mimics six.
Yes, they're kind of on the same ballpark.
Marcello Chermisqui
Very helpful. Thanks so much. For answering the questions.
Daniel Goldberg
You're welcome.
Michael Bolitho
Okay. We have one more. We have time for one more brief.
Operator
Thank you. And the last question is from Mr. Joe Pooler beach from IQstream Please go ahead.
Thanks for squeezing me in here. Most of my questions have been answered. I guess just one on the fourth quarter performance on EBITDA come in better than expected was there were there any one-time items in there or what was what was driving that?
Andrew Browne
And overall, I think it's just for the timing, the timing of our expenditures, particularly as we invest in sort of Lightspeed going forward, as you can probably tell, we control the OpEx pretty pretty tightly. And so, you know, with the program as soon as we get going in our 2024, the target set of guidance, I'd say that that's kind of one of the main contributing elements in addition to the frugality of how we manage money.
Yes. Got it. And then just one more on. So just to be clear, the $700 million of government funding that you are in advanced discussions for as of last quarter. Are you saying now that the whole $2.1 billion of US government funding is now secured and you expect to release detailed after the close?
Daniel Goldberg
And I do know what the $700 million reference is to we noted in the earnings release, and I reiterated it in my remarks that that we expect to have about $750 million of savings 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 CapEx, our savings. And then as far as that 2.1, so there I'd say stay tuned. The government of Canada we would expect would be a meaningful amount of our arm, our government partner funding sources. We expect that Quebec, as I mentioned earlier, will will also be part of that. And so I would just say stay tuned on we expect to make some information available in the near term around the government of Canada, our financing, 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's right. Well, guys. Thank you very much for the time you.
Daniel Goldberg
Thank you, Joe.
Operator
All right. Well, listen, everyone thanks you very much for joining us this morning. As I mentioned, our Q1 call is I'm kind of around the corner, so we look forward to speaking with everyone again, then thank you very much.
Andrew Browne
Thank you very much, cereal.
Operator
Thank you. The conference has now ended. Please disconnect your lines at this time. Thank you for patients.
