ViaSat, Inc.

Good morning. My name is Lawrence, and I will be your conference facilitator. Welcome to Viasat's conference call to discuss its announced combination with Inmarsat. As a reminder, this conference is being recorded. Now I would like to turn the call over to Mr. Robert Blair, General Counsel of Viasat. Sir, please go ahead.

Thank you, and thanks for joining us. We'll start with our safe harbor disclosure. This discussion will contain forward-looking statements. This is a reminder that factors could cause actual results to differ materially. Additional information concerning these factors is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q. Copies are available from the SEC or from our website. And I'll turn it over to Rick.

Okay, thanks, Robert. Good morning, and thanks, everyone, for joining our conference call. I'm Rick Baldrige, the CEO of ISAP. Participating on our call today are Mark Dankberg, our executive chairman, Sean Duffy, the CFO of Viasat, Rajiv Shree, the CEO of MRSAT, and Tony Bates, the CFO of MRSAT, and myself. First of all, we're pleased and excited to announce that Viasat has entered into a combination agreement with MRSAT. We believe this transaction is a major moment, not just for the industry, but for global broadband services. Our team will go into detail in a moment, but first I'd like to cover our earnings announcement that was also released this morning. Today we released our 2Q FY 2022 financial results and shareholder letter. In summary, our financial performance in the second quarter was quite strong as we continued to execute well. We delivered revenue of $701 million, up 27% year-over-year. Adjusted EBITDA of $155 million, up 19% year-over-year. The results were driven by strong product sales, service revenue growth across all of our segments. Our prior acquisitions partially offset by higher costs and expenses, including new market entry, research and development, and sales and marketing. Total consolidated awards were $832 million, up 14% year over year, and we ended the quarter with a backlog of $2.3 billion, slightly higher compared to the prior period backlog. Backlog does not include $3.8 billion of indefinite delivery and indefinite quantity or IDIQ awards. These strong results reinforce our confidence and our ability to meet our standalone near-term guidance, and five-year financial targets, as discussed in our previous calls. In addition, the launch of Biosat 3 Americas, the first of our three Biosat 3 satellites, remains on track for the first half of calendar year 2022. So now let's turn to the transaction presentation that's available on our investor relations website. You guys should have access to that. Turning to slide three in that transaction overview, BISAT is paying approximately $7.34 billion in cash, stock, and assumed debt. The assumed debt for MRSAT ends at the end of September, which represents approximately nine times projected calendar 2021 adjusted EBITDA, including the annual run rate cost synergies. The transaction is expected to close in the second half of the calendar year of 2022, assuming all relevant regulatory approvals and occurrences. At the time of close and a fully diluted basis, Biosat shareholders are expected to own approximately 62.5% of the outstanding shares with MRSAT shareholders holding approximately 37.5%. No existing MRSAT shareholder will receive shares equal to or greater than 10% of the combined company. Committed funding for the transaction has been secured from Tier 1 Money Center banks. After closing, we expect to deleverage at an accelerated rate, given our mid-teens adjusted EBITDA growth and increased free cash flow, while peak leverage is expected to be approximately about a half a turn or so higher than it would be on a standalone basis. Assuming the second half of 2022 closes, the pro forma net leverage at December 31, 22 is expected to be approximately 5%, might be able to do a little bit better than that. We believe this will be our peak leverage, net leverage ratio. And leverage is expected to decline more than one term during the first 24 months and continue to decline rapidly thereafter. BICET has a heritage of international cooperation and mutual benefit of our customers. We're committed to grow our UK presence and support UK national space ambitions. We think together we're stronger. On slide four, on this slide, you'll get a view of the combined company. It will have more than $4 billion in revenue and approximately $1.4 billion in adjusted EBITDA. if it were to have been combined in calendar 2021. The takeaway is we have the scale to invest even more effectively in R&D and network infrastructure to further increase the pace of innovation that drives new and better services for our customers and opportunities for our employees, and it's good for investors. On slide five, our transaction rationale, Let's talk about why we're so excited about this deal. There are four key points. One, enhanced growth and innovation opportunities. The combined company brings together very complementary assets and capabilities, including narrowband, broadband, space, and ground assets. When integrated, these assets can better enable the service characteristics that the mobility customers need. We intend to increase the pace and scale of innovation in the mobile communications sector, targeting a multi-layered hybrid network architecture which combines the best characteristics of each frequency band, orbit, and can include terrestrial augmentation for the lowest latency at the lowest total cost. Then we'll have immediate global coverage to start with enhanced speed and coverage density as each bias at three that brought into service. Second thing is our ability to offer new and better services to our customers. Having global coverage and enhanced depth of coverage means better option for customers across more verticals, transforming our offerings from regional to virtually anywhere and everywhere in multiple mobility markets. We'll have redundancies in space, which drives resiliency and reliability. Customers will benefit much more from the buying company in a way that would be difficult for either of our companies on a standalone basis. We'll give you examples of this as we go through the presentation today, including in rapidly transforming and growing the IoT market. As to why we're doing it, we're doing it to create the best and most efficient communication solutions for our customers, and we're very excited about the many ways we can enhance and grow with greater innovations. And it makes sense financially. Our increased financial strength supports innovation, investors, customers, and our combined workforce. Together we have a foundation for rapid double-digit top and bottom line growth, driven by a very diverse set of fast-growing businesses, including mobility and government. A higher percentage of our revenue will be recurring, which we think is great. We'll have a fully funded path to positive free cash flow which lowers risk. When free cash flow turns positive, we'll generate a lot more, more than two times of the free cash flow, and we'll be accretive not only in EBITDA, but free cash flow, the transaction will be. There's a potential upside from a revitalization of L-band and IoT growth. We'll have greater presence in a broader range in the $1.6 trillion broadband and IoT market. The portfolio of offers greater resilience to geopolitical uncertainty and black swan events like COVID. You guys saw what we experienced this last year. Having the diversity really helped us offset some of the headwinds in other areas. Sean will cover the financial aspects in greater detail in a later presentation. We build on the heritage of cooperation that both companies have established. MRSAT is a heritage of international aviation and maritime safety that yield responsibility and opportunity. BISAT has a commitment to the space sustainability and peaceful cooperation among all nations. Together, we're committed to sustain and grow our UK presence and to support UK national space ambitions. We already have a critical presence in the UK. Our second satellite, the BISAT-3 fleet, will be controlled from facilities in the UK and And we plan to invest in technical talent, space-related development in the UK, which will provide growth and high-value employment. We'll continue to build on Biosat's unique relationships with leading regional broadband satellite partners in Australia, Brazil, Europe, and more key geographies as we come. We're a strong advocate for sustainable space policy and regulations and cooperation that can help ensure a place in space for all nations. that aspire to that goal and to aim to achieve the technology, economic, national security, sovereignty, and high paying jobs space can enable. We believe in Marset's heritage and strong international relations can help us achieve those goals. So now I'd like to introduce Rajeev to share his thoughts on the transaction. So over to you Rajeev. Yeah, thanks.

Thanks, Rick. Locking him. Thank you, Rick. It will be my pleasure. I can start by saying with full confidence that this is the right combination at the right time. It is the right combination because it takes two strong companies and give them an even stronger future together. The long-term industrial logic is compelling. The two companies have complementary capabilities, complementary regions, with Biasat gaining true global reach from Inmarsat's assets and footprint. And so a sharp focus on the growing segments of the satellite communications market, building on Inmarsat's powerful distribution channel. Superb technology and innovation capabilities, significant synergy opportunities, New launches coming that will ensure a modern fleet and, importantly, an excellent cultural fit. Once combined, we will be well-positioned to help address the future of the industry, which gets me to the point about this being the right time. It is clear the satellite communications sector is entering an era of dynamic new market demands. It is going fast, remains highly fragmented, and is attracting new entrants who see new opportunities. Given these factors, scale and scope are important, and that is exactly what this transaction offers. It offers better options for customers around the world, enhanced scope for partners, new opportunities for our amazing employees, and for the UK, an industry-leading company that will maintain a strong and sustainable presence in the critical space sector. To be clear, we have been moving fast at Inmarsat since I joined as CEO in March, building stronger commercial capabilities, deepening our customer focus, targeting the largest growth opportunities, and accelerating our technology with the recent announcements of Orchestra, a dynamic mesh network of the future that seamlessly integrates Geo, Heo, Leo, and 5G, and Alera, the global network for IoT safety and mission-critical connectivity. Overall, I'm pleased with what we've accomplished, and the results are starting to show. Our most recently reported quarter, second quarter of 2021, We saw year-on-year revenues up 24%, even better EBITDA performance and excellent cash generation. We are on track to deliver on our goal of robust growth for full year 2021 with all our business units performing well and with particularly strong growth in aviation. In short, this is the right combination at the right time. With that, I would like to hand it over to Mark Dankberg, Executive Chairman of Biaset. Mark?

Okay, thanks, Rajiv. So, On the next slide, I'll start with four really powerful dynamics that are driving the satellite broadband and data markets and why BISAT and NMARSAT have assets and resources to address those trends in a unique way. So those key dynamics include especially this compounding growth and aggregate demand for bandwidth and mobility that's driven by more passengers and all modes of transportation consuming more data, especially for video. A rapidly evolving technology, including multi-orbit space solutions and the new beamforming technology that goes with that to match highly geographically concentrated user demand to supply. And then the increased reuse of spectrum for space and terrestrial, including air-to-ground opportunities. We've got a rapidly growing Internet of Things, IoT opportunity, including space augmentation of terrestrial 5G. And that adds to the imputed value of mobile space spectrum and the assets that go with it. And there's newly, we think, newly emerging growth segments such as land mobile broadband and the potential for unmanned aerial vehicles such as air taxis or delivery drones. We think the best competitors are going to have a portfolio of orbital resources, spectrum, ground network infrastructure, licenses and market access, product distribution and support, And most importantly, the customer relationships to help shape products and services to solve the unique problems of each vertical or geographic region. And that's the challenge in mobility, including for government. We believe together we can bring to customers a superior service across multiple dimensions of value, including global coverage, greater affordability, faster speeds, more bandwidth, lower latency with greater reliability and resiliency. And we can do that with unique technology, assets, and talented people that each bring to this combined company. You can see our total addressable market. It's already very large at close to $1 trillion, and it's expected to grow to nearly $1.6 trillion by 2030. Collectively, that's good secular growth at a 5% compounded annual growth rate, and we believe we can grow faster than that. because so much of this market is either underserved or totally unserved now. While Viasat was well positioned before, now we're even stronger in the fast-growing space-centric global mobility and government markets. Together, we'll combine our unique assets, capabilities, and people to improve our offerings. We'll provide global coverage sooner at higher speeds with more bandwidth, lower latency, more affordably with greater redundancy and resilience. And we'll have the local customer support to address more of these markets. And we can add narrowband to our broadband TAM estimates. So we think that's a good combination. The next slide shows what the combination is in terms of orbital resources, spectrum, landing rights and service licenses, and associated ground network infrastructure. Each company's contributing critical elements to that global multi-layered hybrid network. We'll have instant global coverage and high-density, ultra-high capacity regional coverage to serve fixed and mobile geographic hotspots with multiple layers of redundancy and resilience everywhere. Plus, now we'll be able to add weather resilience with LBRAND, and that's critical for maritime users and safety applications for airborne and government applications. Inmarsat also brings multi-orbit polar coverage. We at Viasat have experience in L-band LEO, and we're working with partners and our own solutions for LEO augmentation. Together, we're positioned to expand the market and increase the availability of affordable premium services for customers in fast-growing sectors. Another really key part of our hybrid multi-orbit network is Inmarsat's L-band globally coordinated space spectrum. BISAT has a lot of experience in state-of-the-art space and ground L-band technology for the government with LINK-16 and Blue Force Tracking, and for commercial markets with what we've done in ground-based beamforming technology for Legato and other very high-capacity L-band mobile satellites, and in commercial applications of the Blue Force Tracking technology. Our state-of-the-art KA-band beamforming and network technology is portable to L-band, too. We think we can leverage historic R&D investments and revitalize L-band for UAV and aviation, air-to-ground augmentation, emerging L-band mobile verticals, high-connected vehicles, and the Internet of Things. Our combined spectrum position can support high-growth IoT, industrial IoT, Internet of Battle things, all those applications with small, low costs. battery-operated terminals for real-time sensing and control applications. Customers will have more choices as we deliver more bandwidth, more affordably, more securely at higher speeds around the globe, and especially in the places with the highest demand. We'll do it in a way that's sustainable and respectful of the rights of all nations that aspire to share space, including LEO, for their own sovereign purposes in an equitable manner. In terms of government business, it accelerates our objective of increasing the proportion of our revenue from recurring services, which become more balanced with equipment revenue and are expected to grow much faster. Jointly, we'll have 10 satellites currently under construction to be launched over the next three years that will increase resiliency and depth of coverage, especially in high-demand hotspots. Our space assets converge well with our defense terminals, tactical data links, and existing services business. Inmarsat reinforces our strong government business and our customer relationships. Inmarsat's also bringing a compelling maritime franchise. It's very diverse with over 100,000 safety-equipped vessels, 41,000 connectivity vessels, and it includes 11,000 vessels on deployed multi-band hybrid solutions. As VASAT 3 enters service, we can enter adjacent maritime verticals including cruise, ferry, and government applications that are much more bandwidth-intensive, primarily because of the large numbers of people on those vessels. The ultra-high bandwidth and beamforming flexibility of ISAT-3 are ideal for those markets. We see this as a natural complement to our ongoing energy business. Our aviation businesses are highly complementary. ISAT's been very successful in regional in-flight connectivity, especially in North America, and where we have regional partners. Inmarsat brings international long-haul in-flight connectivity plus essential cockpit and safety communications that are largely dependent on highly resilient and weatherproof L-band. And that includes creating relationships with a lot more global airlines. InMarsat also serves business and general aviation with a combination of low-cost, narrowband, and broadband, which will also benefit from the depth and geographic focus of VISAAT 3. This next slide on geographic distribution of demand we think is one of the most important in our presentation because it helps reinforce that we're starting with customer needs and not trying to force fit customers into a predetermined space solution. And we've made the point that fixed user demand is highly concentrated, with close to 95% of all demand located on less than 5% of the Earth's surface. While people might think that global air traffic is distributed more uniformly or evenly around the globe, there's actually a very similar geographic distribution of demand for global commercial air passengers, as we show on this slide. So what we did is we used actual flight paths recorded by FlightAware pre-COVID to show the geographic density of demand for global air traffic. And what you're seeing here is the dwell time or the aggregate total demand in terms of passenger times minutes over about a week. And that represents, you know, if you put that over a year, about 3 billion annual passenger each year. Not surprisingly, you can see that just like fixed demand, it's very highly concentrated in places with the most people and the greatest economic activity. The heights and colors show demand over hub airport cities is around 100 times that of the ocean air routes. This shows a couple of things, including why the combination of Viasat and Inmarsat is so timely. Inmarsat was formed to serve demand that was primarily over oceans, because there's no other way to reliably connect ships and planes there. And the original mission was focused on safety and narrowband. But now there's huge growth in broadband demand on all aircraft, not just those that transit oceans. And it's driven really by the passengers consuming more internet content and more video. As a result, the global air travel satellite bandwidth demand is becoming very concentrated over major hub cities. And you can Take an example like New York, where you can have as many as 500 to 1,000 planes converging on the three major airports there from all over the world. That's where Viasat's current and future satellites provide enormous benefit to airlines and passengers alike. Yep, we need ocean coverage for intercontinental flights, but the airlines are really learning that the most difficult challenge to excellent in-flight connectivity occurs when their aircraft and everybody else's converge at these hub airports. Together we've got a really compelling solution. The inset in the lower left shows LEO satellites are very evenly distributed and don't match this demand as well from a geographic perspective. The same issue about the geographic concentration of demand is also true for other key mobility markets like business aviation, and certainly for land mobile, like trains or buses and connected cars. So now we'll be able to combine KA band, L band, S band, with similar geographic concentration effects using our technology. When you consider people consuming bandwidth as a dominant source of demand, maritime is, of course, more skewed to oceans than aviation, but it's also highly concentrated near major land ports, and the total number of people or demand is actually an order of magnitude smaller than for aviation. Since the vast majority of air traffic is over land and concentrated around hub airports like Heathrow, it shows that leveraging air-to-ground as a low-cost, more efficient, low-latency augmentation is a really interesting option. While air-to-ground is not sufficient to serve all the bandwidth needed on all the planes, the low-latency portion of the total traffic is so small that air-to-ground is a really good fit for that. It's much less expensive and has much lower latency than low Earth orbit. LEO is still good where air to ground doesn't reach. Also, Inmarsat has two polar satellites under construction to serve commercial and government customers that go over the poles. We think that if there's one critical thing people should remember about the mobility opportunities, it's understanding both the geographic distribution of demand and the implications for how to architect networks to serve that demand. That's why we put our satellites in orbits that always see the greatest amount of demand, which, by definition, that only happens at GEO. You only get revenue for bandwidth that's located where your customers are. The next slide shows, you know, Viasat's success has been due to our culture of innovation, and Viasat brings innovation in complementary spheres. Even more importantly, it brings greater scope and scale to our joint innovation opportunity. We have more tools and choose the right technology in the right place for the right application and can tailor broadband and narrowband IoT solutions. We've got spectrum and orbital resources to utilize. And the increased scale means we'll get greater use, efficiency, and value from our R&D. Our patent portfolio is a good indicator of our level of innovation. And finally, I do want to go back to this heritage issue about sustainable and equitable access to space. Everybody should be aware it's becoming a front-page headline issue. Viasat has a history of partnering with regional space players to help each country obtain the benefits of their own space investments, including in Australia, Brazil, and other places that are underway. And we've been a leading voice in helping people understand and learn about sustainable space regulations and policies that are critical to preserve access to space for every nation and every orbit. And Marsat has been a leading global space player for over four decades. They were founded on the notion of cooperation in space for the benefit of all nations. We believe that that heritage fits with our ambition to shape global cooperation in space for today's complex issues in this new space age. So with that, I'd like to hand it over to Sean Duffy, VICEAT CFO.

Sean, we can't hear you. You guys, unmute.

Sorry about that, folks. Thanks, Mark. Let's jump to slide 18, and we'll discuss the combination from a financial perspective. While the transaction is about driving innovation with complementary assets to offer new and better services for our customers, there's also a strong financial logic underpinning the deal, and we believe the financial model is quite compelling. we expect the combined company to grow revenue in the mid-teens and grow adjusted EBITDA even faster. This reflects a continuation of the strong growth ahead of us supported by the launch and increased utilization of 10 additional satellites over the next two to three years. After that, we expect CapEx to taper as each company is in the midst of an unusually heavy CapEx cycle. And finally, while our opportunities are wide, we do expect the mobility and government sectors to be the most significant users of our expanded combined network. From a free cash flow perspective, there are two important points. First, the timing of our turning free cash flow positive is essentially the same as on a standalone basis, approximately two to three quarters after our BISAP3 EMEA satellite. Secondly, when we turn positive, We expect to generate significantly more free cash flow on a larger, more diverse business, at more than 2x our free cash flow as a standalone company in the first couple years after turning positive. Finally, as Rick mentioned up front, we expect to be levered about 5x at the end of calendar year 2022, which is inclusive of the cash portion of the acquisition and the related expenses. This is a bit higher than our standalone model, but keep in mind we plan to collectively launch 10 satellites in a two- to three-year window alongside funding acquisition completion. We don't expect to stay at those levels for very long. We expect our adjusted EBITDA to grow rapidly with meaningful free cash flow generation, bringing accelerated deleveraging. On this next slide, we have some highlights of what the combined company looks like financially. Together, we're generating approximately $4 billion in revenue today and about $1.4 billion of adjusted EBITDA with healthy margins of a strong recurring service base. Post-close, our businesses will be reflecting a much wider diversified foundation to grow from with a significantly increased deployment of capacity coming online over the next few years. But more importantly, it will be well-suited to match the demand of our key markets. In this next chart, we have another view showing our combined businesses enhance our global reach and strength worldwide. We mentioned in the beginning that Inmarsat accelerates the realization of our global footprint with immediate global satellite coverage, ground networks, operational expertise, and customer service presence. Here we can see that both premiered in the revenue by geography data. It's clear to see the mature and skilled reach that MRSA already has in the European and Asia Pacific regions and the complementing strength it brings to our business with more concentration in the Americas. In the second series of data at the bottom of the chart, you can see how our fast-growing mobility businesses, which include aviation and maritime, become the second largest contributor of revenue on a pro forma basis, with fixed broadband now sitting at approximately 21% of the combined company. Our overall exposure to the government sector does not change significantly, but the mix of recurring StatCom as a service revenue does increase meaningfully. As a result, through both series of data, you can see that we will be a much more diverse company with resilient revenue streams, plus significant opportunities outside these markets, some of which we touched upon a little bit earlier. So, before we walk through the expected synergies, a quick reminder that this transaction is about putting together complementary assets, growth, and bringing customers more options. That being said, we expect to benefit from about $1.5 billion of synergies on an after-tax, net present value basis, with potential upside from revenue synergies that were not included in the calculation. In OpEx, we expect approximately $80 million of annual cost synergies to occur across the business from cost of sales through SG&A. The majority of these savings come from the increased scale of the business, such as network integrations, ground station consolidation, and other network-related costs, such as within our procured bandwidth portfolios. We also expect to gain efficiencies in go-to-market activities, such as advertising and distribution, in addition to the benefits from integrated development roadmaps. We won't achieve all these in the first year, and we'll have to incur some integration costs. But a couple years out, we expect to see a more efficiently scaled business against our existing business lines and feel confident we can achieve it. In CapEx, we also expect to see synergies in the near term. with even more in the long-term range of approximately $110 million on an annual basis. Having a larger, global, and more diverse satellite fleet means that we can improve utilization rates on these assets, so less capacity is stranded or underutilized. Over the longer term, that will lead to more efficient spending on CapEx. In the near term, the savings are more low-lying food items, such as rationalized cap software, STC investments, ground infrastructure, as well as back office systems and platforms. Finally, we understand that analysts feel like management teams often give the lip service to revenue synergies. But nonetheless, we believe there's a lot of opportunities here for us. For example, there are aircraft installed and in service that have routes outside of our coverage. MRSAT also brings an expanded business aviation footprint. And we think collectively we can introduce new capabilities there, as we have in the IOC sector, with improved innovation, enhancing customer and passenger experiences and the value. Plus, we see strong upside opportunity in L-band and the IoT market, coupling our products and technology suite with Inmarsat's unique assets. So together, we can generate meaningful synergies as a combined company. On the capital side of the equation, we're excited to announce with the $2.3 billion in new financing commitments, we're fully funded to close the acquisition, plus provide the additional liquidity to the business as we complete our BIAS Act III consolation. We also have about $3 billion in backstop agreements in place to support any required amendments for existing facilities that we anticipate to stay in place at closing. the credit profile of the combined company will be quite attractive. We will have resilient revenue with an emphasis on recurring revenues. We will have a fully funded path through positive free cash flow inflection point fueled by the rapid growth in adjusted EBITDA and the free cash flow we expect, collectively deleveraging the business quickly at more than one turn over the 24 months following the close. And our balance sheet is supported by the larger fleet of satellites, more redundancy, and valuable spectrum rights. In summary, we think the transaction has strong financial logic, strong revenue, and adjusted EBITDA growth built on a strong recurring revenue base, aside from the revitalization of the LBAN assets, a tapering of CapEx once we are through our respective investment cycles, and more free cash flow on the same timetable. So with that, I'll turn it back over to you, Mark.

Thanks, Sean. So, just to wrap up our prepared remarks, you can tell we are really excited about the combination. We'll have a very complementary set of assets across very, very big markets. With the diversity of those assets, we're going to have pretty unique capabilities, and we can innovate over a much broader playing field. We plan on deploying a multilayered hybrid network architecture, which accentuates the strengths of each transmission media. We'll have global coverage that can deliver an in-home experience with very low latency and do it affordably, securely, and reliably. We think that gives customers better options in multiple sectors. Customers will benefit from the combined company. It will be very difficult for either company on a standalone basis. We're really data-driven. We'll develop the best and most efficient communications assets and solutions for the specific needs of each sector. So with that, I'd like to open it up to questions from the participants.

At this time, if you would like to ask a question, please press star 1 on your telephone keypad. Again, that is star 1 on your telephone keypad. Your first question comes from the line of Philip from JP Morgan. Your line is open.

Yes, thanks. Congratulations. A couple if I can. First, how does this combination change your view on potential LEO efforts? And second, for the 10 satellites in process, does it make sense to slow these down at all to make sure they work well together or are they inter-satellite linked, or does everything just go as planned? Thanks very much.

I'm sorry. Phil, could you repeat the second part of your question, please?

Of course. Sorry. For the 10 satellites in process, Does it make sense to slow these down at all to make sure they work well together or to create any kind of inter-satellite links? Or does everything just go along as planned?

Okay. Okay, so I think for the first part, in terms of our view of why to do this is really based on the market. We're doing this based on the things that we've learned from the customer interactions that we've had in each of the sectors in which we participate. And, you know, we've been really open-minded about how we go about each of these, you know, serving each of these sectors. And it's, you know, what we think is it reinforces the things that have worked for us in the market. And so, just to go Just to go into one particular example, for instance, if you look at what's happened in in-flight connectivity in the U.S., I think the airlines have learned over the last few years that the hardest part of providing a good in-flight experience comes at hub airports where they may have very large numbers of planes converging. Atlanta, New York, Dallas, Chicago, Los Angeles, San Francisco, that's the hard parts, and it's Really, I think the best way to provide the density of coverage is the way that we're doing it. I think that's what reinforces what we're, you know, the combination is just really about delivering on what our customers want, which is evolving as well. they learn and passengers learn about the advantages of, for instance, everybody being connected on a plane as opposed to just a small fraction being connected at high prices. In terms of the second part of your question about whether or not we would slow down any of the satellites under construction in order to better integrate them, we took that into account in determining what the value of the combination would be. And the good things are Just to highlight, on the KA band side, what we get is a very high level of redundancy across the satellites. The other big thing is by having multiple satellites in different orbital slots, that helps deal with some of the specific technical issues around seams of coverage or dealing with certain types of antennas. So we do feel like they complement each other well. The other thing I'd like to point out is several of the new InBAR-SAT satellites that are coming are more software programmable and flexible and can be targeted at specific, again, geographic hotspots in a way that we believe complements what we'll have with PHYSAT-3 in our regional coverage and the regional satellites that we work with from partners. So we think they're largely going to go on the schedule that they were on, but we're always going to be constantly reevaluating what we're doing in the context of the overall market.

So, Phil, this is Rick. The only thing I would add to that, Mark, is that you can imagine in the future that the two companies together will build a different type of when you think about future capital than the two would have done separately. So we can take this fleet into consideration and then think it would be far more efficient going forward in terms of how we think about future production.

And that, Mark, is sort of where I was going with more scale. Yeah. Rick, you and Mark have talked about LEO in the past. Has this become a bigger focus or is it still not a big effort for the company?

For ourselves, we've put a lot of work into the LEO space. Inmarsat has as well with their orchestra architecture. What we're thinking is that LEO makes a good augmentation for GEO for dealing with primarily the latency advantage that it has for low latency traffic. And as we mentioned during the call, there's a lot of opportunity to do even better than LEO over the land where most of the demand is using air to ground. And that's something that's really enabled by the spectrum assets that NMARSAT has. So, you know, we're going to be open-minded and we're going to be very cost conscious and we're going to be very tuned into to what our customers want, but we think that this gives us a lot of optionality. So I think, you know, the main way I'd put it is we think there's a place for Leo. We will have a way to deal with it either through working with partners or using our own assets, but we're not going to try to fit everything into a one-size-fits-all or one-technology-fits-all solution. Got it. Thanks, Mark. Thanks.

Thanks.

Your next question comes from the line of Matthew Robillard from Barclays. Your line is open.

Yes, good morning. Again, congratulations on the deal. First, I had a question about the regulatory approval process. I mean, how confident are you that this will be considered constructively and positively by the different public authorities? In some cases, space can seem a critical sector for for some countries, so I don't know if you can comment on that. Second, I just wanted to confirm that the leasing of Spectrum to Legado, there's no change in this and it comes together within Marsat. And then in terms of the synergies, I'm just curious maybe if you could give a little bit more detail on the IFC business because obviously Both you guys are super strong players in this segment, but with a different architecture. So I was wondering how you're looking at the combination. Is it going to be antennas that are going to be compatible for both constellations? Anything that could give us a little bit more visibility on the integration there would be great. Thank you. OK.

So Robert, do you want to take the regulatory question up front?

Sure. Thanks, Rick. This is a global transaction, and we're going to be talking to a number of regulators worldwide, including in the U.S., U.K., and others. We're really excited to have the opportunity to talk to regulators and tell them our vision and our view of the transaction. We think it's a really positive one, that together Viasat and Inmarsat are going to be able to deliver more attractive communication officers to customers globally, and that we're going to be well-positioned to accelerate innovation, deliver enhanced quality of service, and provide more product choice, all along while delivering greater value to existing and new customers in what's already a very competitive marketplace that features a lot of large and capable suppliers with additional satellite capacity coming online regularly. So we feel really good about that story and are looking forward to having those discussions continued. You know, we think it's, you know, a nine to 18-month process that we hope will be on the shorter end of that. Again, looking forward to having those conversations with the regulators and talking to them about how we see this transaction unfolding and the benefits it brings to end users and consumers.

Okay, thanks.

And then I'm going to jump to the synergies on IFC next, Liz. One of the really attractive things about this combination is that our networks, the satellite systems are essentially interoperable. We both use KA band, and terminals from one network can be made to interoperate on the others. So that is a big advantage when you consider the synergies that can be had by different combinations in this sector. As a matter of fact, we've already done some work with government customers where we've done just what I described. That is, have KA band user terminals that operate on each network. Could you please say your legato question again? I just want to make sure we understand it.

Oh, sure. Sorry. So, no, I just wanted to know if there was any change to the contract you have with Legado that could be brought by this deal or things remain as they are and the whole spectrum and contract with Legado comes along within Marsup in the deal.

No, but Rajiv, would you like to comment on that?

Yes, sure. Thanks, Mark. Yeah, there's no change to that and that contract will become part of ISAT contract. And, you know, spectrum transfer will take place as is planned. And so also the funds that have to come from Legata.

Great. Thank you very much.

Thank you.

Your next question comes from the line of Chris Quilty from Quilty Analytics. Your line is open.

Thanks. Obviously, a lot of excitement in the deck around the IoT opportunity. And clearly, Inmarsat has talked about some of their plans with the orchestra. I guess my question for you is that Inmarsat's IoT has always been limited by the fact that they're operating from geo orchestra, which would add a Leo component, would help resolve some of those issues. Are there plans to accelerate that beyond what they had previously indicated, which is more like five years out? And if so, is that multi-billion dollar investment included in the CapEx plan and NPV savings that you've put forth?

Okay. So one is, you know, both of us have been involved in LBAND. Remember, Biosat's been very involved in what's called ground-based beamforming, using the Legato satellites, which originally started as MSV and with other satellites around the world. Those satellites, when you combine them with the antenna apertures that they have and the beamforming, are, we believe, able to close links with less power, smaller, less expensive terminals than any other solutions. And the Inmarsat satellites that exist and are coming, they're not that far behind. And there are things that we can do on the ground that help also allow us to provide IoT solutions at very low cost with very inexpensive terminals. It's a good example of the synergy that comes from sort of Viasat's technology experience and Inmarsat's services and space assets. The other thing is, again, we have very, very good experience with high volumes of IoT applications in the government with our Blue Force tracking business. So I think the biggest issues that we're really looking at in the IoT market is just making sure that we understand it, what the dominant applications will be, what the right form factors are that are specific to specific market segments and to make sure that we're doing it in a way that's, I would say, consistent with and compatible with the growing terrestrial IoT market. Those are the main things that we're focused on. I think we're very excited and confident in the assets that we have and the technology that we have. Just to be clear, the last part of your thing, which is that we don't think that requires billions of dollars in new investment. I just wanted to be clear about that. That is not... That's not necessary in order for us to have a very, very strong presence in that market as it evolves.

I understand. But is it necessary to add the NEO component to have a truly global IoT solution? Because the fundamental issue is with the geo, you know, you have look angle issues where if there's something blocking the path, regardless of how cheap or beamforming that you put on it, it just doesn't solve those physical constraints. And the LEO resolves that by giving a multi-path to the device.

Okay, so that's a point. I mean, that's a way to solve a particular problem, but there are other ways to solve those problems as well. As a matter of fact, if you look at what's going on in the market, there are you know, more, let's say, taking out the satellite operators themselves, if you look at the resellers, there's been more focus on how to leverage existing geo-resources, you know, and Rajiv, you might comment on that, but in our assessments, just made an agreement around that as well. Again, you know, we're not saying that we have we're only going to do geo or we're only going to do Leo. I think what we're going to do is those things that work best in the market. And I really, if you like, might add your color to that.

I'll just add that, uh, on Cholera recently, which is a reinvigoration of our began, uh, you know, L band portfolio, which means that, you know, we can do this with ever smaller terminals, probably the smallest form factor terminals for global mobile connectivity, also very low cost. And that is combined with our imminent launch of the sixth generation ISIC satellites, the dual payload satellites. Part of the payload is LBAN. And what we've done recently is to partner with a bunch of IoT players that have the technology and that are trying to crack this problem with low-cost terminals, long battery life, 5 to 10 years. You don't want to touch those devices. It's ideally suited for agriculture, railways, utilities, and a number of those markets. And Skype is one example of that. It's another example of that. And that's how I think that market will play out. We've got very good technology to play well in the industry.

Yes, and Just the last thing on this is that IoT market is going to be a very cost-sensitive market. It's going to be very price-sensitive. It's going to be very elastic. And so we're really focused on low cost and high performance, however is the best way to achieve that.

And your next question comes from the line of Arun Sheshadri from Credit Suisse. Your line is open.

Yes. Hi, everyone. Thanks for taking my questions. Just a couple from me. I just wanted to spend a second talking about leverage. Initial starting leverage is obviously relatively high, well into the fives, maybe close to six times. And free cash flow is obviously minimal early. Can you talk first about your free cash flow profile in the out years and sort of some assumptions underlying that expectation of free cash flow? That's the first question. And then second, in terms of the financing structure, Inmarsat is all secured structure today in terms of debt, and Viasat is mixed. Just a sense for these commitments that you've obtained and the final debt quantum statement, You know, a sense for how much would be secured versus unsecured, and would it be right to assume that most of the new debts raised would be on a secured basis? Thank you.

Hey, Arun.

Can you take that?

Yeah, no problem. Hey, Arun. This is Dawn. So, you know, just to touch on your first question, which was, you know, the overall leverage level. So, you know, we had been letting folks know just on a standalone basis that we were going to continue to move up a little bit in leverage as we finalize off on the Biosat 3 constellation and do the initial stacking and so forth to fill that network. And so when you think of that happening alongside the combination of the company and the investments where Inversat is also at the heavier point in their investment cycle as well, and then also add on the funding, the cash portion of the acquisition and the transaction. So all of those are kind of based on our assumptions and when we're closing, coalescing at around a similar time. And so we think and expect that the leverage is going to tick up about a half a basis point at closure after, you know, alongside funding the acquisition. But then it, of course, deleverages pretty rapidly as we talked about before. With respect to free cash flow, You know, I think the important point here is that on a combined basis, so in the back as we're finishing off these investments in our networks, on a combined basis, the free cash flow turning point is right about the same point in time, the bias that had a free cash flow turning point. The difference is, is that when we hit that, that we're generating is significantly larger on the combined company. So we mentioned earlier, it's going to be more than 2x. As you continue to pull out to the next year and the next year after that, the multitudes continue. So I think that that is just really important takeaway, just reminding that at close, approximately 5x on leverage, and then significant free cash flow that comes subsequent to that once we get that budget point. On the debt mix, yes, our assumptions are that we're going to be assuming their debt. It is, as you mentioned, more on the secure side of the offering. With our existing debt, we have the flexibility to be within the secured and unsecured mix, and we're going to be opportunistic within that portfolio. So when you think about you know, the secured leverage and what that looks like post-close, you know, it's around, I would say, maybe a 3x notional, you know, within a certain mix. But we have flexibility in the markets on either side with the commitments we have.

And I would just like just to add one thing. I mean, just on your question about what the underlying assumptions are around the deleveraging and our cash flow, probably a good example would be to look at what happened right after we deployed VISA2, or got VISA2 into service, where I believe we peaked at a leverage ratio of right about five there. And within several quarters, we're below four and got down to right around three. And some of that has to do with the timing of our capital investment cycles and the fact that our services business is high fixed costs, low variable costs, and those are the things that really contributed to the deleveraging, and that with this combination, the total proportion of our recurring service revenue will be higher than it was when we did that with FISAT II.

Thank you, Sean. Thank you, Rick. Congrats on the transaction.

Sure. Thanks. Your next question comes from the line of Landon Park from Morgan Stanley. Your line is open.

Thank you. Good morning, everyone. Thanks for taking the questions. I was just wondering if you could comment on, you know, where MRSAT's, you know, throughput or, you know, global capacity in terms of gigabits per second sits today and sort of where that goes with their satellites under construction and combined with your upcoming launches as well. And does this change the BISAP4 plan? in your minds? And then just secondarily, can we maybe get additional color on the timing of synergies and just maybe some of the underlying assumptions behind the 1.5 billion NPV?

Okay, I'll start with the first part on sort of the integration of the fleets. One of the... So there are a number of factors that go into that. One is that there are... absent the technology that we're introducing in BISAT-3, which has never been done before and required us to develop a whole unique payload system, there are clear trade-offs in pretty much every satellite that's done in terms of coverage versus capacity. And so the Inmarsat fleet is really biased towards coverage, like global coverage everywhere, and they have redundancy to do that. And what What they're augmenting are more flexible satellites that have higher capacity, more regional coverage, and a lot more flexibility to add capacity in areas that are somewhat congested. What I would say is if you look at, go back to those of you that followed us when we acquired Wild Blue, you know, Wild Blue had made kind of the same tradeoffs where they had satellites that were in the single-digit gigabits but had total U.S. coverage and bias satellites. was coming up with Viasat-1, which is 100 gigabit data, but was more focused on the areas of high demand. And that is the same logic that we're going to apply here, where we'll have very, very high amounts of coverage over the land areas where most of the demand is, including in the mobility space. And we'll also have a lot more flexible coverage over the oceans But within Marsat, we get a lot of resiliency, redundancy, and the ability to fit in some of their more programmable satellites into areas that we believe need more bandwidth at the time, either because of market opportunities or growth in either the fixed or mobile markets. That's kind of how we look at it. That's a formula that worked really well for us in the past. It's also worked well for us when we've partnered with other regional satellites from other regional partners. And what it allows us to do is to get kind of disproportionate value out of the coverage-based satellites relative to just simply what their gigabit capacity is. On the synergies, maybe, Sean, do you want to speak to that? Sure.

Yeah, sure, I can take that one. So, you know, I think probably looking at a couple different things and what I mentioned earlier, you know, obviously we need to integrate the companies. And so from the OpEx side, you know, we expect those to kind of step up. I'll say, you know, I gave that $80 million on a recurring annual basis. It probably steps up over a couple years to get to that point. I think, you know, we'll achieve a good part of it in that second year. You know, we are going to have to integrate companies. And there's going to be costs, you know, in doing that. So I think the first year, you're going to have a little bit more costs on a net basis, but we'll see meaningful amounts coming through on the second year. And then on the CapEx side, I think those are going to be more things that, you know, the smaller amounts, the things I called like the low-lying fruit that we're going to be able to do out the gate, those will start to come in in the first year. I don't think we'll get to that peak number until we're able to start to rationalize and revisit how the consolidated network investments are going to be, you know, say notionally a couple years out as well. So hopefully it gives you a little bit of a flavor. Okay.

And can you just confirm a specific timing on free cash flow? I know you said it was close to what the standalone would be.

Yeah. So what we said was it would be about two to three quarters after the aminothalite gets up and going. Okay.

And that is the same with... Yes, and that's the same.

Yes, it's about the same point in time, just creating a larger contribution.

Great. Thank you.

And your next question comes from the line of Mike Crawford from B Riley Securities. Your line is open.

Thank you. Regarding your approach to this multilayered, multiorbit regime, where does V-band fit into your equation, and what do you think of others' recent constellation proposals in that regard?

Mark, do you want to take that?

Yeah. So, you know, V-band's an interesting band. It has, you know, just like any band that's got pluses and minuses. The most obvious minuses are for fixed service, just the weather resilience for it and the availability. But right now, what we've found is we can get all the capacity, that we are not constrained by lack of V-band spectrum in Viasat-3 and Viasat-4. And I guess I didn't address that. And part of Landon's question is, you know, Viasat-4 is still really valuable in dealing with that geographic concentration of demand in the U.S. market that you saw in the in-flight space as well as in fixed space, and the same things will apply in Europe and in Asia Pacific. But right now, we can get there. We absolutely are doing work in V-band, and I think we'll introduce it at the appropriate time. I don't think there's anything mysterious to it. I think it's just an evolution of what we're doing, and we'll introduce it when we need it. Okay, thanks.

And then, Mark, you talked about potential revenue synergies, but not revenue destruction in the sense that Fiasat historically has come in and taken over markets by offering more abundant, superior solutions that would force others to either abandon or change strategy. Isn't there some level of that phenomenon going on here within Marsat, given the amount of bandwidth it is able to put down on some of the markets where it competes today?

Okay, so that's an interesting question. I think that the main thing you'd want to look at is the applications of the bandwidth in each of the sectors in which we'll be serving. So one of the things that's really interesting and good, we think is a good thing about the combination is, as an example, Inmarsat has a very good portfolio of safety services, cockpit services, maritime safety services, and a lot of their fleet are really things like cargo ships as opposed to passenger ships. So there, a lot of the value proposition is assured connectivity, availability, support, but they're not super bandwidth intensive, okay? But you look at other types of services where there are large numbers of people, and what's driving kind of this, you know, the strategy that's worked for us is that people that are consuming Internet bandwidth are consuming a lot more bandwidth every year, primarily because of video, right? So that's where we, I think we really had a big impact, whether it's residential, in-flight, and then in bringing more data high bandwidth and video applications in the government customers. So sort of what we've modeled going forward is that a lot of those bandwidth-intensive services will be served by the Viasat fleet as it's augmented on a global basis. And what the Inmarsat fleet does is it brings us a very strong base of more enterprise-oriented customers where we can market some of those services into them. That's where some of the revenue opportunities come and then also where we can combine the different bands and also the sort of the overlapping coverage when we talk about multi-layered, that we have multiple overlapping coverage where some of the InMarsat satellites can serve as redundancy or resilience to the high bandwidth value propositions of Viasat-3. And it's actually a very similar thing that we did when we merged with Wild Blue in the residential market.

So I just add, Mike, that when we looked at it, honestly, there's not a lot of overlap. I mean, it's a lot of complementary things, but the ability to bring new services to some of the markets where Inmarsat has a really strong position to and vice versa, they have assets we don't have right now and also prevents us in the future from having to launch similar type things to be able to serve the same market. So there's some capital savings in the future. Rajiv, I don't know if you have any, you want to add anything to this?

I think you've said it well. It's a very complimentary. I think Mark, you explained it super well. All right. Thank you.

All right. Thank you.

And your next question comes from the line of Caleb Henry from Quilty Analytics. Your line is open.

All right. Thanks, guys. Three questions. Sorry. Can you guys hear me okay?

Yes.

Okay. Three questions. The first wasn't a whole lot of discussion on the consumer broadband market. I'm just curious how this merger will affect that? Will Inmarsat help with providing or gaining consumer subs outside of North America, or just how is that being contemplated? Second is just a general question on maritime trends. I think it was mentioned that Inmarsat is big into container ships and things like that, and we've seen a lot of headlines about those being stuck out at sea for weeks. I assume that's driving up demand for connectivity. So here's about the trends that are being seen there and if those are being looked at as short-term or long-term. And then the third question is just about the consolidation and the $1.5 billion in synergies. Can you give some specific examples in terms of what that looks like for, I guess, consolidating facilities or headcount or things like that to reach that number?

Okay. Mark, I'll go on this one. There's not a lot, but what it will allow us to do is do what we've done in some other markets where we've started early with other people's satellites. So Brazil is a good example. Africa is another good example. So we can get started in markets ahead of ISAT-3 on a consumer side, but really where we are stronger, it really isn't. There's no overlap in competitive business. But enterprise and consumer, we can get started. with some of our tools and some of that capacity. So that is just really a pure growth opportunity using both sides. Maritime, this is where Inmarsat is really strong. And so our view, and this is where the UK is really going to be a key part of the future organization. And we think Inmarsat has a great brand in this market. They've got a really strong... a portfolio of customers in the maritime market. What we can bring there is some of the platform services we've been working on in flight and some of our other applications. We can help bring some capabilities into that that we think can help make those customers even more satisfied and more sticky. So that's how we're thinking about maritime. And on the Synergy side, Just in terms of facilities, we're going to maintain a very strong presence here in the UK. There could be some other global places where we have seen some overlap or the ability to use some common facilities, especially with the RigNet acquisition with that, and as we might have some places where we could do some facility consolidation. But there's not a tremendous amount of overlap. Of course, in operating our satellite, Second satellite over this region, that will be the core operations of that will be based out of the U.K., like we said in our other materials. So taking advantage of the two companies' capabilities here will help us, you know, in some ways utilize the resources we have in a more effective way.

I can give you just a little more detail on the synergies. As an example, the whole key to getting a lot more capacity in satellites is frequency reuse. You need to have way more beams in order to get a lot more throughput. That requires a lot more ground stations. And so one thing Viasat has is a very large ground infrastructure network. Being able to apply that ground infrastructure network to satellites which is fiber-connected, being able to apply that to MRSATs existing in future satellites is a big, big advantage in the cost synergies. That's just an example. One of the benefits that we've had, given the portfolio that we have, just giving an example where we may have, at the beginning of the life cycle of some of our satellites, a heavily consumer-orientated We may use the bandwidth for consumers because there's a lot of demand there, and we can fill up the satellites quickly. But then over time, we've migrated a lot of that application to government or mobility applications. Well, the Inmarsat satellites, as Rick said, we can use those if we wanted to for consumer applications, either on a pioneering basis or to get more utilization of those satellites when they're first launched. Those are just a couple of examples of some of the synergy opportunities that go into those savings.

And I guess I was wondering if Rajiv could just give any more color on the maritime market, what he's seeing there.

Yeah, I think, thanks for the question. So maritime... we're reaching the crossover point this year between our slow growth fleet broadband product that serves deep sea vessels to Fleet Express. And so as Fleet Express becomes a bigger part of portfolio, you know, growth resumes. And so we're seeing that inflection point this year. So growth is resuming. Second thing I'll add is that there is, you know, we have very strong distribution and a partner set up in maritime specific to, you know, the deep sea vessel space. Rick mentioned the opportunity of digital and IoT and customer platforms as one way to get synergy across the two companies because that's something that would be an attractive new market. And, you know, finally, I'll say that with the multi-orbital plan, there is a possibility to gain new adjacencies as well, you know, high-end cruising and so on. It's possible both either with our orchestra plan or the multi-orbit combined plan, Biosat 3 and so on. you know, it's about 40% of our business. This is going to be good news for Inmarsat standalone and eventually good news for the combined company. Thank you, guys.

Your next question comes from the line of Ryan Kuntz from Needham and Company. Your line is open.

I think, by the way, I think we're going to make this our last question, so make it a good one.

Got it. So I understand the great, you know, strategic synergy in the mobility segment. I kind of wanted to double down on your thoughts around, you know, fixed broadband and, you know, all the regulatory and kind of, you know, global subsidies that are flowing into that more terrestrial technologies. You know, how you think about that fixed market going forward and does this represent kind of a change in strategy for you? Thank you.

Michael Heaney- No, okay. No, I mean, what we're really looking for is optionality, right? That we can apply the resources we have across a broad range of markets. And I think we've been really consistent in that for quite a long time. You know, I would say that in the U.S. that, yes, there will be infrastructure investments, there will be ongoing subsidies, which will eat into the size of that market. And frankly, one of the benefits of this is that we have less exposure to the U.S. fixed market. Internationally, I think you don't see those trends on the same scale, especially in emerging markets where the dominant way that people connect is through smartphones that are on prepaid plans or through other similar things. We, you know, what we think is that overall that this broadens our portfolio. That's why we keep referring to this very, very large total addressable market. What we like is the ability to apply our assets and resources in those markets that are most rewarding, right? We stand by our commitments, but as we bring on more capacity, we tend to allocate those capacities in those places that create the greatest value for our customers and us and our investors. And I don't think this is a pivot away from it. I think it just creates more optionality for us, including over the U.S. And that's one of the reasons that I think that map that shows the distribution of demand for just the commercial aviation market in the U.S. where you see demand that will reach tens of gigabits per second over highly trafficked airports is just a good example of the multi-use applications or the utility that we can get from the satellites in these different sectors.

Sure. It sounds like I'm sure some of your experience you gained in the U.S. we've fixed. You can apply that to some of these newer developing areas.

Yes, we can. But the other thing that we've talked about doing is developing these shared markets like community Internet. And one of the things that we're doing, we talk about multiple transmission media. A lot of times the best way to reach people is through shared Wi-Fi or we're doing experiments in multiple markets where we're using shared terrestrial. That's another example where In Marsat L-band spectrum, when you think of ancillary terrestrial component, what's happening in the U.S., we think will spread to emerging markets. That gives us more tools there. We're even doing things with terrestrial fixed distribution based on satellite infrastructure feeds or satellite backhaul. So we're definitely not going to be a single trick pony. We're really looking for kind of the greatest utilization of the assets. That's the core of the strategy that we have, and having this diversification, these customer relationships, distribution, support, licenses, landing rights, all that stuff contributes to a lot more optionality in all these markets.

Super helpful. Thank you.

Thanks, Ron. Thanks. So that's the end of our call. I'd just like to thank everybody for dialing in and for your interest. Just to repeat, we think this is a very exciting combination of two companies that have very complementary pieces of business. We think the market size for what we're going to be able to address is even bigger than we were addressing alone, especially given the additional applications of IoT and a position in maritime. So we're a much bigger market, a company that's got more scale and resiliency that Mark pointed out. I think financially, this is a really good combination. We do have this leveraged peak up front that Sean talked about. We deliver faster. We get the free cash flow faster than we would have independently. And when we do, it's more than twice the size, like Sean mentioned. And really, the real beneficiary here, other than our employees, is our customers. The things that we can bring to both sets of customers, that's great. Lastly, I just want to say thanks to Rajiv and Tony and the team on the Inmarsat side who have been terrific to deal with. And it's been an arduous process, as they always are, but they've been a great team to deal with, and we want to We appreciate them throughout this process, and we look forward to working with those guys. Thank you.

This concludes today's conference call. You may now disconnect.