TSAT

A. Quantitative information about market risk. The information called for by this Item may be found in “Item 5. Operating and Financial Review and Prospects”. B. Qualitative information about market risk. The information called for by this Item may be found in “Item 5. Operating and Financial Review and Prospects”.

A. Reserved B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors RISK FACTORS Investing in our Telesat Public Shares involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Annual Report, including our consolidated financial statements and the related notes appearing at the end of this Annual Report, before deciding to invest in our Telesat Public Shares. Other risks and uncertainties that we do not presently consider to be material, or of which we are not presently aware, may become important factors that affect our future financial condition and financial performance. If any of those or the following risks actually occur, our business, financial condition, financial performance, liquidity and prospects could suffer materially, the trading price of our Telesat Public Shares could decline and you could lose all or part of your investment. See also “Special Note Regarding Forward-Looking Statements.” Summary of Risks Risks Relating to Telesat’s Liquidity and Capital Resources • Telesat may not be able to generate sufficient cash to service all of the Telesat Canada Debt and may be forced to take other actions to satisfy its obligations under its indebtedness, which may not be successful. If we cannot restructure the Telesat Canada Debt, your investment in Telesat Corporation could be substantially impacted. • Telesat’s level of indebtedness is expected to increase, reducing its financial flexibility and making it more difficult to repay or refinance its indebtedness. • Telesat’s business is capital intensive, and restrictions on its ability to incur additional debt and to take other actions may significantly impair its ability to obtain other financing. Risks Relating to the Business of Telesat • Significant and intensifying competition in the satellite industry, in particular due to the Starlink constellation, and from other providers of communications capacity is expected to result in a loss of revenues and a decline in profitability of Telesat if it fails to compete effectively. • Changes in technology could have a material adverse effect on Telesat’s results. • Telesat’s in-orbit satellites may fail to operate as expected due to operational anomalies resulting in lost revenues, increased costs, and/or termination of contracts. 8 Table of Contents • Telesat may be adversely impacted by anti-satellite weapons or other attacks, which could result in a material loss of revenues. • Changes in consumer demand for traditional television services and expansion of terrestrial networks have adversely impacted the number of subscribers to direct-to-home (“DTH”) television services in North America, which may continue to adversely impact Telesat’s revenues. Fluctuations in available satellite capacity could also adversely affect Telesat’s results. Additional Risks Relating to the Telesat Lightspeed Constellation • There are numerous risks and uncertainties associated with the Telesat Lightspeed constellation. The Telesat Lightspeed constellation network may not technically perform as designed. Failure to develop significant commercial and service operational capabilities in connection with the Telesat Lightspeed constellation could prevent it from achieving commercial viability. Competition from similar providers such as Starlink, Amazon LEO and Eutelsat OneWeb may impact the degree of adoption of Telesat Lightspeed services. Telesat may be unable to comply with the drawdown requirements in respect of the Telesat Lightspeed Financing, to complete the deployment of the Telesat Lightspeed constellation or be unable to raise sufficient capital to fund future expansion of the Telesat Lightspeed constellation, any of which could have a material adverse effect on Telesat’s results of operations, business prospects and financial condition. Risks Relating to Regulatory Matters • Telesat’s operations may be limited or precluded by the rules or processes of the International Telecommunication Union (“ITU”). • Telesat is required to coordinate its operations with those of other satellite operators, with government agencies and with terrestrial operators, depending on country-specific rules. If these agreements cannot be reached, Telesat’s ability to operate may be adversely impacted. • Telesat operates in a highly regulated industry and government regulations may adversely affect its ability to access certain markets, sell its services, increase the price of such services, or otherwise may limit its ability to operate or grow its business. • Telesat Lightspeed operations will depend on the use of spectrum and regulations governing NGSO spectrum, including requirements to share spectrum, which could materially impact the Telesat Lightspeed constellation’s system capacity. • Telesat Lightspeed operations will depend on the use of orbital resources and regulations (some of which are still being developed by national, regional and international bodies) governing the sustainable use of such resources, which could materially impact the Telesat Lightspeed constellation’s ability to access certain markets. • NGSO systems entering the market have triggered increased regulatory activity, including a draft EU Space Act. Existing regulations are changing quickly and new, sometimes stricter regulations, especially for NGSO systems, are being considered. There is a risk that new or revised rules could be adopted that could have a material adverse impact on the Telesat Lightspeed constellation. Risks Relating to Tax Matters • The acquisition, ownership and disposition of Telesat Public Shares and Telesat Partnership Units may have adverse U.S. tax consequences for shareholders of Telesat Corporation, including: Telesat Corporation may have been a passive foreign investment company (a “PFIC”) for 2021, 2022, 2023, 2024 or 2025 and could be classified as a PFIC in 2026 and subsequent taxable years; Telesat Corporation or Telesat Partnership could be treated as a U.S. corporation or as a surrogate foreign corporation for U.S. federal income tax purposes and Loral, an indirect wholly owned subsidiary of the corporation, could be treated as an expatriated entity; the IRS could recharacterize the receipt of Telesat Partnership Units as a receipt of Telesat Public Shares; and non-U.S. holders of Telesat Partnership Units will generally be subject to U.S. withholding with respect to dividends received by Telesat Partnership from Loral. 9 Table of Contents • The acquisition, ownership and disposition of Telesat Public Shares and Telesat Partnership Units may have adverse Canadian tax consequences for shareholders of Telesat Corporation and partners of Telesat Partnership. Risks Relating to the Ownership of Telesat Public Shares and Telesat Partnership Units • Telesat may raise additional equity capital to fund Telesat Lightspeed which could result in potential substantial ownership dilution to the shareholders of Telesat Corporation and holders of Telesat Partnership Units. • Each of MHR and PSP Investments have substantial governance rights over Telesat, and their interests may differ from the interests of the other Telesat Corporation shareholders. • Telesat has certain indemnification and post-Closing obligations to PSP Investments, which in certain circumstances are uncapped and may result in dilution to the other shareholders of Telesat Corporation and holders of Telesat Partnership Units. Risks Relating to Telesat’s Liquidity and Capital Resources Telesat may not be able to generate sufficient cash to service all of the Telesat Canada Debt and may be forced to take other actions to satisfy its obligations under its indebtedness, which may not be successful. If we cannot restructure the Telesat Canada Debt, your investment in Telesat Corporation could be substantially impacted. Telesat’s ability to make scheduled payments on or refinance the Telesat Canada Debt obligations depends on its financial condition and operating performance, which are subject to prevailing economic, industry and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond its control. Telesat may be unable to maintain a level of cash flow from operating activities sufficient to permit it to pay the principal, premium, if any, and interest on its indebtedness. The Telesat Canada Term Loan B and Senior Notes are scheduled to mature between December 2026 and October 2027, resulting in significant obligations that will require repayment or refinancing. These maturities will create liquidity pressure if not addressed. The Company has approximately $509.8 million of cash and cash equivalents of which $206.6 million is held within Telesat Canada and Guarantor entities as at December 31, 2025. The Company and Telesat Canada expect to generate sufficient cash flow to meet the requirements of their respective ongoing operations and debt servicing costs for the reasonably foreseeable future, including at least the one-year period following the date of the financial statements. However, the Company’s consolidated cash flows and cash resources alone, which includes those of Telesat Canada, are not expected to be sufficient to meet Telesat Canada’s debt maturity obligations as they come due. Management is therefore engaged in discussions with lenders’ advisors about refinancing the Telesat Canada Debt. However, there can be no assurance that these refinancing initiatives will be completed successfully. If Telesat Canada cannot refinance or restructure the Telesat Canada Debt, it will be in default and holders of the Telesat Canada Debt could declare all outstanding principal and interest to be due and payable. Its secured lenders (including the lenders under the Senior Secured Credit Facilities, the 2027 Senior Secured Notes and the 2026 Senior Secured Notes) could foreclose against the assets securing their borrowings and Telesat Canada could be forced into bankruptcy or liquidation (as and to the extent applicable to Telesat). A bankruptcy or insolvency by Telesat Canada could substantially impair your investment in Telesat Corporation. The debt obligations of Telesat Canada are guaranteed by certain direct and indirect subsidiaries of Telesat Canada (“Guarantor Entities”) and the obligation for repayment of the credit facilities and senior secured notes upon maturity does not extend beyond these Guarantor Entities. Other indirect wholly owned subsidiaries of Telesat Corporation, which are LEO Non-Guarantors that do not guarantee the Telesat Canada Debt, are building and intend to complete the deployment of, operate and commercialize our Telesat Lightspeed constellation. These LEO Non-Guarantor entities responsible for the Telesat Lightspeed project have a segregated funding source to permit the build out of the Telesat Lightspeed constellation that includes the ability to acquire any necessary intercompany services, such as certain personnel, occupancy, and information systems, currently provided to Telesat LEO ULC by Telesat Canada. In addition to the structural segregation of the LEO Non-Guarantors that own the Telesat Lightspeed business from Telesat Canada and the Guarantor Entities, in September 2025, Telesat Canada distributed 62% of the equity of the LEO Non-Guarantor Entities owning the Telesat Lightspeed business to a Non-Guarantor, wholly owned, indirect 10 Table of Contents subsidiary of Telesat Corporation. Accordingly, only 38% of the equity of the Telesat Lightspeed business is owned by Guarantors of the Telesat Canada Debt. Certain of the Telesat Canada debtholders have instituted legal proceeding to challenge the 62% distribution (See “Our Business — Legal Proceedings”). While we believe the debtholders’ lawsuit to be without merit, there can be no assurance that we will succeed. If the debtholders are successful in this litigation, the Telesat Lightspeed business could become up to 100% owned, directly or indirectly, by the Guarantor Entities or other entities obligated in respect of the Telesat Canada Debt and, in either case, this equity value would be subject to claims of Telesat Canada debtholders in the event of a default under the Telesat Canada Debt. Further, granting pledges of some or all of the 62% of the equity of the Telesat Lightspeed business that is owned by Non-Guarantor Entities to holders of Telesat Canada collateral for the Telesat Canada Debt obligations may be required as a condition of any consensual refinancing or restructuring of the Telesat debt, in which case a substantial portion or all of the value of the Telesat Lightspeed business could be subject to a future claim of Telesat Canada debtholders. In the event that there is a default under the Telesat Canada debt, the lenders under the Telesat Lightspeed Financing could, in certain circumstances, seek to foreclose on the Telesat Lightspeed assets, which itself would substantially impair or completely eliminate the value of your investment in Telesat Corporation. Further, if Telesat is unable to refinance or extend these facilities and Telesat’s cash flow and capital resources are insufficient to fund the Telesat Canada Debt service obligations, it could be forced to dispose of material assets or operations, seek additional debt or equity capital, issue additional equity, or otherwise restructure its indebtedness. Future issuances of equity would dilute the ownership position of shareholders of Telesat and unitholders of Telesat Partnership. Telesat may not be able to effect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow it to meet its scheduled debt service obligations. The terms of the Telesat Canada Debt restrict its ability to dispose of assets and use the proceeds from those dispositions and may also restrict its ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. Telesat may not be able to consummate those dispositions or obtain proceeds in an amount sufficient to meet any debt service obligations then due. Telesat’s level of indebtedness may increase and reduce its financial flexibility. Telesat Canada has a significant amount of debt. As at December 31, 2025, it had total debt of $2,944.6 million maturing in December 2026, June and October 2027. The terms governing the Telesat Canada Debt allow Telesat to incur additional debt, subject to certain limitations. Its borrowings, current and future, will require interest payments and need to be repaid or refinanced, could require it to divert funds identified for other purposes to debt service and could create additional cash demands or impair its liquidity position and add financial risk to it. Diverting funds identified for other purposes for debt service may adversely affect Telesat’s business and growth prospects. If it cannot generate sufficient cash flow from operations to service its debt, it may need to refinance its debt at higher rates, dispose of assets, reduce or delay expenditures or issue equity to obtain necessary funds. Telesat does not know whether it would be able to take any of these actions on a timely basis, on terms satisfactory to it or at all. Telesat Canada’s substantial amount of debt may have important consequences. For example, it may: make it more difficult for it to satisfy its obligations under the Telesat Canada Debt; increase its vulnerability to general adverse economic and industry conditions; require it to dedicate a substantial portion of its cash flow from operations to make interest and principal payments on its debt, thereby limiting the availability of its cash flow to fund future capital expenditures, working capital and other general corporate requirements; limit its flexibility in planning for, or reacting to, changes in its business and in the industries that it services; place it at a competitive disadvantage compared with competitors that have less debt; and limit its ability to borrow additional funds, even when necessary to maintain adequate liquidity. In addition to its debt service obligations, its operations require material expenditures on a continuing basis. Telesat’s ability to make scheduled debt payments, to refinance its obligations with respect to its indebtedness and to fund capital and non-capital expenditures necessary to maintain the condition of its operating assets and properties, as well as its capacity to fund the growth of its business, depends on its financial and operating performance. General economic conditions and financial, business and other factors affect operations and future performance. Many of these factors are beyond Telesat’s control. Telesat may not be able to generate sufficient cash flows to pay the interest on its debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. 11 Table of Contents The agreements governing Telesat Canada Debt, including the indentures governing its Senior Notes and the credit agreement governing its Senior Secured Credit Facilities (“Credit Agreement”), contain various covenants that impose restrictions on it that may affect its ability to operate its business. The agreements governing the Telesat Canada Debt, including the indentures governing its Senior Notes and the Credit Agreement, impose operating and financial restrictions on its activities. These indentures, the Credit Agreement and future debt agreements may also limit or prohibit Telesat Canada’s ability to, among other things: • incur additional debt and issue disqualified stock and preferred shares; • create liens; • pay dividends, acquire shares of capital stock, make payments on subordinated debt or make investments; • create or permit to exist specified restrictions on its ability to receive distributions from restricted subsidiaries; • make certain investments; • issue guarantees; • issue or sell the capital stock of restricted subsidiaries; • sell or exchange assets; • enter into certain transactions with affiliates; and • effect mergers, consolidations, amalgamations and transfers of all or substantially all assets. These restrictions on Telesat Canada’s ability to operate its business could seriously harm its business by, among other things, limiting its ability to take advantage of financing, merger and acquisition and other corporate opportunities. Various risks, uncertainties and events beyond Telesat’s control could affect its ability to comply with these covenants. Failure to comply with any of the covenants in its existing or future financing agreements could result in a default under those agreements and under other agreements containing cross-default provisions. A default would permit lenders to accelerate the maturity for the debt under these agreements and to foreclose upon any collateral securing the debt. Under these circumstances, Telesat Canada might not have sufficient funds or other resources to satisfy all of its obligations, including its obligations under the Senior Notes. Telesat LEO ULC and certain of its affiliates have a significant amount of debt and will incur substantial additional debt, all of which is secured by substantially all of the assets related to the Telesat Lightspeed constellation. Telesat is developing, funding, constructing and will operate and commercialize, its Telesat Lightspeed constellation, in Telesat LEO ULC. and its wholly owned subsidiaries which are parties to the Telesat Lightspeed Financing. As at December 31, 2025, borrowings under the Telesat Lightspeed Financing totaled $690 million and that amount will substantially increase over time as Telesat continues to draw down on the loans to finance the deployment of the Telesat Lightspeed constellation. The Telesat Lightspeed Financing debt is secured by substantially all of the assets related to the Telesat Lightspeed constellation. 12 Table of Contents The agreements governing the Telesat Lightspeed Financing contain various covenants that impose restrictions on it that may affect its Telesat’s ability to operate its LEO business. The agreements governing the Telesat Lightspeed Financing impose operating and financial restrictions on Telesat LEO ULC, its subsidiaries and the other guarantors thereunder in connection with their activities which include, among other things restrictions relating to: • the incurrence of additional debt; • creating any additional liens on the Telesat Lightspeed assets; • paying dividends, acquiring shares of capital stock, or making investments; • issuing guarantees; • pledging, issuing or selling capital stock; • selling assets; • entering into certain transactions with affiliates; • effecting mergers, consolidations, amalgamations and transfers of all or substantially all of its assets of the Telesat ULC and its subsidiaries supporting the Telesat Lightspeed Financing; • maintaining minimum levels of liquidity and leverage ratios which ratios reduce over time; • ensuring Telesat LEO ULC and its subsidiaries supporting the Telesat Lightspeed Financing operate with a significant degree of independence from Telesat Canada’s GEO business; • providing any financial assistance to any affiliates other than Telesat LEO ULC’s subsidiaries supporting the Telesat Lightspeed Financing; • compensation payable to senior management; • relocation of management or certain operations outside of Canada and/or Quebec; and • the creation and maintenance of employment, operating expense and capital expense levels in Canada and/or in Quebec; These restrictions may negatively impact Telesat’s business by, among other things, limiting its ability to take advantage of financing, merger and acquisition and other corporate opportunities. Various risks, uncertainties and events beyond Telesat’s control could affect its ability to comply with these covenants. Failure to comply with any of the covenants could result in a default under these agreements and under other agreements containing cross-default provisions. A default would permit lenders to accelerate the maturity for the debt under these agreements and to foreclose upon any collateral securing the debt. Under these circumstances, Telesat might not have sufficient funds or other resources to satisfy all of its obligations. The limitations imposed by financing agreements on Telesat’s ability to incur additional debt and to take other actions might significantly impair its ability to obtain other financing or refinancing. To service its debt, Telesat will require a significant amount of cash, which may not be available. Telesat’s ability to make payments on or repay or refinance its debt and to fund planned capital expenditures will depend largely upon its future operating performance. Telesat’s future performance, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond its control. In addition, Telesat’s ability to borrow funds in the future to make payments on and refinance its debt will depend on the satisfaction of the covenants in agreements governing the Telesat Canada Debt and the Telesat Lightspeed Financing and other agreements it may enter into in the future. These agreements contain limitations on its ability to incur additional debt. Telesat cannot assure you that its business will generate sufficient cash flow from operations or that future borrowings will be available to it to enable it to pay its debt or to fund its other liquidity needs. In addition, Telesat’s ability to raise additional capital to refinance its debt to fund its operations is also dependent on capital market conditions. 13 Table of Contents Telesat’s ability to restructure or refinance its debt will depend on the condition of the capital markets and its financial condition at such time. Any refinancing of its debt could be at higher interest rates and may require it to comply with more onerous covenants, which could further restrict its business operations. In addition, the terms of existing or future debt agreements, including those governing the Telesat Canada Debt, may restrict Telesat from adopting some of these alternatives. In the absence of such operating results and resources, it could face substantial liquidity problems and might be required to dispose of material assets or operations to meet its debt service and other obligations. It may not be able to consummate those dispositions for fair market value or at all. Furthermore, any proceeds that Telesat could realize from any such dispositions may not be adequate to meet its debt service obligations then due. The ratings assigned to Telesat’s debts by rating agencies, and any lowering or withdrawal thereof, may increase Telesat’s future borrowing costs and reduce Telesat’s access to capital. Telesat’s ability to access capital markets is important to its ability to operate its business Changes in Telesat’s financial performance and unfavorable conditions in the capital markets, including increased scrutiny of the satellite industry and the impact of regulation, could result in credit agencies reexamining Telesat’s credit ratings. The Senior Notes have a non-investment grade rating, and any rating assigned could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. A downgrade in Telesat’s credit ratings could restrict or discontinue Telesat’s ability to access capital markets at attractive rates and increase Telesat’s borrowing costs. There can be no assurance that any rating assigned to any of Telesat’s debt securities will remain in effect for any given period of time or that any such ratings will not be lowered, suspended or withdrawn entirely by a rating agency if, in that rating agency’s judgment, circumstances so warrant. The credit rating agencies have also previously denoted Telesat as being in “selective default” at the corporate level as a result of having repurchased a portion its debt and they may do so again in the future. Absent an improvement in our ratings, the lowering of Telesat’s credit rating, and any future lowering of Telesat’s credit ratings, may make it more difficult or more expensive for Telesat to obtain additional debt financing or refinance its current debt. Telesat’s variable rate indebtedness subjects Telesat to interest rate risk, which could cause Telesat’s debt service obligations to increase significantly. Borrowings under the Senior Secured Credit Facilities and the Telesat Lightspeed Financing are at variable rates of interest and will expose Telesat to interest rate risk. Telesat has entered into, and in the future Telesat may enter into, interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, Telesat may not maintain interest rate swaps with respect to all or any of its variable rate indebtedness, and any swaps Telesat enters into may not fully mitigate Telesat’s interest rate risk, may prove disadvantageous or may create additional risks. Risks Relating to the Business of Telesat Corporation Telesat is subject to significant and intensifying competition within the satellite industry and from other providers of communications capacity. A failure to compete effectively would result in a loss of revenues and a decline in profitability, which would adversely affect Telesat’s results of operations, business prospects and financial condition. Telesat provides point-to-point and point-to-multipoint services for voice, data and video communications and for high-speed internet access. Telesat competes against global competitors who are substantially larger than it in terms of both the number of satellites in orbit as well as in terms of revenues. Due to their larger sizes, these operators are able to take advantage of greater economies of scale, may be more attractive to customers, may have greater flexibility to restore service to their customers in the event of a partial or total satellite failure and may be able to offer expansion capacity for future requirements. Telesat also competes against regional satellite operators who may enjoy competitive advantages in their local markets. Telesat’s business is also subject to competition from ground-based forms of communications technology. For many point-to-point and other services, the offerings provided by terrestrial companies can be more competitive than the services offered via satellite. Increasing availability of capacity from other forms of communications technology 14 Table of Contents can create an excess supply of telecommunications capacity, decreasing the prices Telesat would be able to charge for its services under new service contracts and thereby negatively affecting profitability. New technology has rendered traditional satellite-based services less competitive by satisfying consumer demand in other ways. See: “Changes in technology could have a material adverse effect on Telesat’s results of operations, business prospects and financial condition”. Telesat also competes for local regulatory approval in places where more than one provider may want to operate, and with other satellite operators for scarce frequency assignments and a limited supply of orbital locations. A failure to compete effectively could result in a loss of revenues and a decline in profitability, a decrease in the value of Telesat’s business and a downgrade of Telesat’s credit rating, which would restrict its access to the capital markets. Changes in technology could have a material adverse effect on Telesat’s results of operations, business prospects and financial condition. The implementation of new technologies that can provide increased capacity to end-users at lower cost may reduce demand for Telesat’s services. Many of the GEO satellites deployed over the last decade are high throughput satellites (“HTS”), which are able to transmit substantially more data than pre-existing satellites or may include high throughput payloads. The introduction of more, and more capable, HTS by other operators into the markets in which Telesat participates could have a material adverse effect on results of operations, business prospects and financial condition. A number of NGSO satellite projects are in development, production, in the process of being deployed, or in operation, including Starlink and Amazon’s subsidiary Amazon LEO (referenced herein as “Amazon”), which have significant advantages over GEO satellite systems, in particular for latency sensitive applications. These NGSO networks have substantially increased the amount of available capacity in the marketplace, decreasing demand for GEO satellite services. Improvements in existing technologies could also adversely impact the demand for satellite services. For example, improvements in signal compression have allowed, and may continue to allow, Telesat customers to transmit the same amount of data using a reduced amount of capacity, decreasing demand for Telesat services. Telesat’s satellites may fail to operate as expected due to operational anomalies resulting in lost revenues, increased costs and/or termination of contracts. Satellites utilize highly complex technology and operate in the harsh environment of space and therefore are subject to significant operational risks while in orbit. These risks include equipment failures, malfunctions and other kinds of problems commonly referred to as anomalies. Some of Telesat Corporation’s satellites have had malfunctions and other anomalies in the past. Acts of war, terrorism, magnetic, electrostatic or solar storms, space debris, satellite conjunctions or micrometeoroids could also damage satellites. Satellite anomalies are likely to be experienced in the future. Despite working closely with satellite manufacturers to determine the causes of anomalies and mitigate them in new satellites and to provide for intra-satellite redundancies for certain critical components to minimize or eliminate service disruptions in the event of failure, Telesat cannot assure you that, in these cases, it will be possible to restore normal operations. Where service cannot be restored, the failure could cause the satellite to have less capacity available for sale, to suffer performance degradation or to cease operating prematurely, either in whole or in part. Any single anomaly or series of anomalies or other failure (whether full or partial) of any of Telesat’s satellites could cause revenues, cash flows and backlog to decline materially, could require Telesat to repay prepayments made by customers of the affected satellite and could have a material adverse effect on relationships with current customers and Telesat’s ability to attract new customers for satellite services. A failure could result in a customer terminating its contract for service on the affected satellite. Finally, the occurrence of anomalies may adversely affect Telesat’s ability to insure satellites at commercially reasonable premiums, if at all, and may cause insurers to demand additional exclusions in policies they issue. 15 Table of Contents A number of Telesat’s in-orbit satellites have experienced anomalies and may in the future experience further anomalies that may affect their performance. Past anomalies include: Nimiq Satellites: In January 2024, Nimiq 4 suffered a failure of a north/south thruster. Normal station-keeping operations continue utilizing a redundant thruster. If the redundant thruster were to fail, and alternative operational approaches cannot be developed, the satellite would need to transition to inclined operations. Telstar Satellites: Telstar 12 VANTAGE began to suffer from degraded performance of four channels in late December 2016 due to increased noise levels. Following an investigation with the satellite manufacturer, the root cause of the anomaly was determined. As a result of this degradation, two channels on T12V are no longer usable. In 2017, Telesat received insurance proceeds in connection with this anomaly. Degradation of performance was observed on additional channels in May 2018 due to increased noise levels. The satellite manufacturer investigation concluded that the root cause of the anomaly was similar to that of the 2016 anomaly. The channels continue to support service. In the event of further degradation, Telesat may lose the capability to continue to use two channels. Telstar 19 VANTAGE has suffered a number of failures of heaters that support the operation of two of the three battery packs on the satellite. There is a risk that the satellite may experience additional heater failures. The functionality of the batteries and services on Telstar 19 VANTAGE have not been impacted by the failures thus far. Tests performed in orbit and on the ground have validated operational workarounds that Telesat can implement to maintain battery function in the event Telstar 19 VANTAGE were to suffer additional heater failures on the batteries. The actual orbital maneuver lives of Telesat satellites may be shorter than it anticipates, and it may be required to reduce available capacity on its satellites prior to the end of their orbital maneuver lives. For all but one of Telesat’s GEO satellites, the current expected end-of-orbital maneuver life date goes beyond the manufacturer’s end-of-service life date. A number of factors will affect the actual commercial service lives of Telesat satellites, including: the amount of propellant used in maintaining the satellite’s orbital location or relocating the satellite to a new orbital location (and, for newly-launched satellites, the amount of propellant used during orbit raising following launch); the durability and quality of their construction; the performance of their components; conditions in space such as solar flares and space debris; operational considerations, including operational failures and other anomalies; and changes in technology which may make all or a portion of its satellite fleet obsolete. Telesat has been forced to remove satellites from service prematurely in the past due to an unexpected reduction in their previously anticipated end-of-orbital maneuver life. It is possible that the actual orbital maneuver lives of one or more of the existing satellites may also be shorter than currently anticipated. Further, on some of the satellites it is anticipated that the total available payload capacity may need to be reduced prior to the satellite reaching its end-of-orbital maneuver life. A reduction in the orbital maneuver life of any of the satellites could result in a reduction of the revenues generated by that satellite, the recognition of an impairment loss and an acceleration of capital expenditures. To the extent Telesat is required to reduce the available payload capacity prior to the end of a satellite’s orbital maneuver life, revenues from the satellite would be reduced. Insurance will not protect Telesat against all satellite-related losses. Further, Telesat may not be able to renew insurance on its existing satellites or obtain insurance on future satellites on acceptable terms or at all, and, for all but one of Telesat’s existing GEO satellites, Telesat has elected to forego obtaining insurance. Telesat’s current satellite insurance does not protect it against all satellite-related losses that it may experience, and Telesat only has in-orbit insurance coverage for one of the satellites in its fleet. Telesat’s insurance does not protect it against business interruption, loss of revenues or delay of revenues. Telesat’s in-orbit insurance policies typically include specified exclusions, deductibles and material change limitations, and future insurance policies are expected to continue to include such features. Typically, these insurance policies exclude coverage for damage or losses arising 16 Table of Contents from acts of war, antisatellite devices, electromagnetic or radio frequency interference and other similar potential risks for which exclusions are customary in the industry at the time the policy is written. In addition, they typically exclude coverage for satellite health-related problems affecting the satellites that are known at the time the policy is written or renewed. Any claims under existing policies are subject to settlement with the insurers and may, in some instances, be payable to Telesat’s customers. The price, terms and availability of satellite insurance has fluctuated significantly in recent years. These fluctuations may be affected by recent satellite launch or in-orbit failures and general conditions in the insurance industry. Launch and in-orbit policies on satellites may not continue to be available on commercially reasonable terms or at all. To the extent Telesat experiences a launch or in-orbit failure that is not fully insured, or for which insurance proceeds are delayed or disputed, Telesat may not have sufficient resources to replace the affected satellite. In addition, higher premiums on insurance policies increase costs, thereby reducing profitability. Future insurance policies may also have higher deductibles, shorter coverage periods, higher loss percentages required for constructive total loss claims and additional satellite health-related policy exclusions, all of which would reduce Telesat’s expected profitability. There can be no assurance that, upon the expiration of an in-orbit insurance policy, which typically has a term of one year, Telesat will be able to renew the policy on terms acceptable to it. Telesat may elect to reduce or eliminate insurance coverage, or elect not to obtain insurance policies for its future satellites, especially if exclusions make such policies ineffective, the costs of coverage make such insurance impractical or self-insurance is deemed more cost effective. Telesat is currently only carrying in-orbit insurance on its Telstar 19 VANTAGE satellite. Telesat derives a substantial amount of its revenues from only a few of its customers. A loss of, or default by, one or more of these major customers, or a material adverse change in any such customer’s business or financial condition, could materially reduce Telesat’s future revenues and contracted backlog. For the year ended December 31, 2025, Telesat’s top five GEO customers together accounted for approximately 64% of its revenues. As at December 31, 2025, Telesat’s top five backlog GEO customers together accounted for approximately 62% of its GEO backlog. If any of its major customers were to terminate, or choose not to renew, their contracts at the expiration of the existing terms or are able to negotiate concessions, particularly on price, it could have a material adverse effect on results of operations, business prospects and financial condition. Telesat customers could experience a downturn in their business, find themselves in financial difficulties, allege Telesat is in breach of its obligations to them and purport to terminate their contracts, any of which could result in their ceasing or reducing their use of Telesat services, becoming unable or refusing to pay for services they had contracted to buy. In addition, some of Telesat’s customers’ industries are undergoing significant consolidation, and Telesat customers may be acquired by each other or other companies, including by Telesat competitors. Such acquisitions could adversely affect Telesat’s ability to sell services to such customers and to any end-users whom they serve. Some customers have in the past defaulted, and customers may in the future default, on their obligations to Telesat due to bankruptcy, lack of liquidity, operational failure or other reasons. Such defaults could adversely affect revenues, operating margins and cash flows. If Telesat’s contracted revenue backlog is reduced due to the financial difficulties of, or disputes with, its customers, revenues, operating margins and cash flows would be negatively impacted. Telesat’s business is capital intensive and it may not be able to raise adequate capital to finance its business strategies, or it may be able to do so only on terms that significantly restrict its ability to operate its business. Implementation and maintenance of Telesat’s business strategy requires a substantial outlay of capital. As it pursues its business strategies and seeks to respond to developments in its business and opportunities and trends in its industry, Telesat’s actual capital expenditures may differ from expected capital expenditures. There can be no assurance that Telesat will be able to satisfy capital requirements in the future. In addition, if one of its satellites fails unexpectedly, there is no assurance Telesat will be able to obtain additional financing to replace the satellite. If Telesat determines it needs to obtain additional funds through external financing and is unable to do so, it may be prevented from fully implementing its business strategy. The availability and cost to Telesat of external financing depends on a number of factors, including its credit rating, financial performance, and general market conditions. Telesat’s ability to obtain financing generally may be influenced by the supply and demand characteristics of the telecommunications sector in general and of the satellite services sector in particular. Declines in Telesat revenues and the challenging business conditions faced by Telesat customers are among the other factors that may adversely affect Telesat’s credit, access to the capital markets and ability to refinance its existing debt. Other factors that could negatively impact Telesat’s credit, access to the capital markets 17 Table of Contents and ability to refinance its existing debt include the amount of debt in its current capital structure and the expected increase in its debt, activities associated with strategic initiatives, the health of its satellites, the success or failure of its planned launches, its expected future cash flows and the capital expenditures required to execute its business strategy. The overall impact on its financial condition of any transaction that it pursues may be negative or may be negatively perceived by the financial markets and rating agencies and may result in adverse rating agency actions with respect to Telesat’s credit rating and access to the capital markets. Long-term disruptions in the capital or credit markets as a result of uncertainty, inflation, rising interest rates or recession, changing or increased regulation or failures of significant financial institutions could adversely affect its access to capital. A credit rating downgrade or deterioration in Telesat’s financial performance or general market conditions could limit its ability to obtain financing or could result in any such financing being available only at greater cost or on more restrictive terms than might otherwise be available and, in either case, could result in Telesat deferring or reducing capital expenditures, including on new or replacement satellites, or being unable to refinance its debt. Telesat satellite launches may be delayed, it may suffer launch failures or its satellites may fail to reach their planned orbital locations. Any such issue could result in the loss of a satellite or cause significant delays in the deployment of the satellite which could have a material adverse effect on results of operations, business prospects and financial condition. Delays in launching satellites and in the deployment of satellites are not uncommon and result from construction delays, the unavailability of reliable launch opportunities with suppliers, delays in obtaining required regulatory approvals and launch failures. If satellite construction schedules are not met, a launch opportunity may not be available at the time the satellite is ready to be launched. Satellites are also subject to certain risks related to failed launches. Launch vehicles may fail. Launch failures result in significant delays in the deployment of satellites because of the need to construct replacement satellites and to obtain another launch vehicle. A delay or perceived delay in launching a satellite, or replacing satellites, may cause Telesat’s current or future customers to move to another satellite provider if they determine that the delay may cause an interruption in continuous service or a delay in the commencement of service. In addition, Telesat’s contracts with customers who purchase or reserve satellite capacity may allow the customers to terminate their contracts in the event of a delay. Any such termination would require Telesat to refund any prepayment it may have received, and would result in a reduction in its contracted backlog and would delay or prevent it from securing the commercial benefits of new satellites. As of the date of this Annual Report, Telesat has not received any prepayments from customers of its Telesat Lightspeed constellation that would need to be refunded in the event of significant delays in launching such satellites (nor would there be other contractual penalties or damages to such customers for such delays). It is possible that future agreements may include prepayments for services which would need to be repaid, or provide for other contractual penalties or damages, if the Telesat Lightspeed constellation is delayed. Telesat may choose not to, or be unable to, replace some or all of its satellites upon their end of life and, in the event it chooses to replace a satellite upon the end of its service life, it would require Telesat to make significant expenditures and may require it to obtain shareholder approval. In order to justify the cost of replacing a satellite at the end of its life, there must be sufficient demand for services, and sufficient spectrum available to Telesat to provide those services, such that a reasonable business case can be made for its replacement. If there is insufficient demand for a replacement, or if Telesat does not have sufficient spectrum available to it, as a result of the repurposing of C-band and/or Ka-band spectrum for terrestrial use or otherwise, Telesat may choose not to replace a satellite at the end of its life. In the event we are unable or choose not to replace a satellite at the end of its life and we want to maintain the revenues from customers on these satellites, we will need to provide them with alternate capacity and acquiring such alternate capacity may increase our costs of providing services. We do not intend to replace all our satellites that are nearing their end of life. There are technologies available that have the potential to extend the life of satellites nearing their end of life. There can be no assurance that we will acquire any life extension services or that such life extension services would be successful. For some of our GEO satellites, we intend to provide continuity of service to our customers at the end of life of those satellites by transitioning services to our Telesat Lightspeed constellation. Given that the entry into service of our Telesat Lightspeed constellation is expected to occur after certain of our GEO satellites have reached their end-of-life, we may be unable to provide many of our customers on satellites nearing their end of life with continuity of service. If we are unable to provide continuity of service to our customers by extending the life of such satellites or providing alternate capacity on other satellites, including our Telesat Lightspeed constellation, our revenue would decline. 18 Table of Contents In order to replace a GEO satellite prior to its end of service life, the construction of a replacement GEO satellite must commence approximately three to five years prior to the expected end of service life of the satellite then in orbit. Typically, the construction, launch and insurance of a GEO satellite costs in the range of US$200,000,000 to US$500,000,000. There is no assurance that Telesat will have sufficient cash, cash flow or be able to obtain third-party or shareholder financing to fund such expenditures on favorable terms, if at all. Moreover, the Telesat Articles provide that the power of Telesat’s board to issue securities of Telesat cannot be delegated to a committee, and, consequently, so long as designees of PSP Investments and MHR hold a combined majority of the seats on Telesat’s board, the approval of at least the designees of PSP Investments or of MHR is required for Telesat to issue securities. In the event that Telesat determines to finance expenditures to replace satellites by issuing securities, such designees could block such a financing. Should Telesat not have sufficient funds available to replace those satellites or Telesat be unable to finance such replacements, because of PSP Investments’ and MHR’s determining not to approve such financing or otherwise, it could have a material adverse effect on Telesat’s results of operations, business prospects and financial condition. Telesat may experience a failure of ground operations infrastructure or interference with its satellite signals that impairs the commercial performance of, or the services delivered over, its satellites or the satellites of other operators for whom it provides ground services, which could result in a material loss of revenues. Telesat operates an extensive ground infrastructure including its satellite control centre in Ottawa, its main earth station and back up satellite control facility at Allan Park, Ontario, nine other earth stations throughout Canada, two teleports in the U.S. and one teleport located in Brazil. These ground facilities are used for controlling Telesat’s GEO satellites and/or for the provision of end-to-end services to its customers. Telesat is also in the process of building a global network of landing stations to support the operation of the Telesat Lightspeed constellation. Telesat may experience a partial or total loss of one or more of these facilities due to natural disasters (tornado, flood, hurricane or other such acts of God), fire, vandalism, or other catastrophic events. A failure at any of these facilities could cause a significant loss of service for its customers. Additionally, it may experience a failure in the necessary equipment at the satellite control center, at the back-up facility, or in the communications links between these facilities and remote earth station facilities. A failure or operator error affecting tracking, telemetry and control operations might lead to a breakdown in the ability to communicate with one or more satellites or cause the transmission of incorrect instructions to the affected satellite(s), which could lead to a temporary or permanent degradation in satellite performance or to the loss of one or more satellites. Intentional or non-intentional electromagnetic or radio frequency interference could result in a failure of its ability to deliver satellite services to customers. A failure of any of Telesat’s facilities or in the communications links between facilities or interference with its satellite signal could cause revenues and backlog to decline materially and could adversely affect its ability to market its services and generate future revenues and profit. Telesat purchases equipment from third-party suppliers and depends on those suppliers to deliver, maintain and support these products to the contracted specifications in order for it to meet its service commitments to its customers. Telesat may experience difficulty if these suppliers do not meet their obligations to deliver and support this equipment. Telesat may also experience difficulty or failure when implementing, operating and maintaining this equipment, or when providing services using this equipment. This difficulty or failure may lead to delays in implementing services, service interruptions or degradations in service, which could cause revenues and backlog to decline materially and could adversely affect Telesat’s ability to market its services and generate future revenues and profit. Telesat may be adversely impacted by anti-satellite weapons or other attacks, which could result in a material loss of revenues. Anti-satellite weapons may be tested or employed upon Telesat’s satellites or third-party satellites, which could result in the direct loss of a Telesat satellite, intentional interference with its communications and/or may result in significant increases in orbital debris which may extend to the orbits utilized by Telesat satellites. Increased levels of orbital debris will increase the chance that Telesat satellites may be damaged or destroyed. Telesat’s ground facilities and operations may also be damaged or destroyed by acts of war or terrorism. Telesat’s current satellites provide services to governments, and it is expected that governments will be a significant user of Telesat Lightspeed services, in particular its military Ka-band (Mil-Ka) services. Utilization of Telesat services by governments could increase the risk of our satellites, ground facilities and operations being targeted. 19 Table of Contents Telesat’s dependence on third party suppliers could result in delays related to the design, manufacture and launch of new satellites, or could limit its ability to sell its services, which could adversely affect operating results and prospects. Any delays in the design, construction or launch of its satellites or the acquisition of ground technologies to operate its business could have a material adverse effect on Telesat’s results of operations, business prospects and financial condition. There are a limited number of manufacturers that are able to design and build satellites according to the technical specifications and standards of quality Telesat requires. Telesat also relies on the manufacturers of its satellites to provide support throughout the life of the satellite in the event it should suffer an anomaly. If any of its manufacturers’ businesses fail, it could adversely impact Telesat’s ability to overcome a satellite anomaly and maintain its satellites in service, in whole or in part. There is also a limited number of suppliers able to launch such satellites, including Arianespace, Blue Origin, ISRO, Mitsubishi Heavy Industries, Rocket Lab, SpaceX, and United Launch Alliance. Should any of its manufacturers’ or launch suppliers’ businesses fail, or should there be consolidation in the industry (such as the announced combination of certain of Airbus Defence and Space and Thales Alenia operations), it would reduce competition and could increase the cost of satellites and launch services. Adverse events with respect to any of Telesat’s manufacturers or launch suppliers could also result in the delay of the design, construction or launch of satellites. Certain launch providers may be unavailable to us either because they are unwilling to provide us with services, because they compete with us or for other reasons, or because we are unable to access their services for regulatory reasons, including as a result of government sanctions. There is also a limited number of suppliers of other technologies and services required for our operations. Many of these suppliers’ businesses have been adversely impacted by a downturn in the number of GEO satellites being deployed as the GEO satellite business has been negatively impacted by a number of factors, including the commercial success of NGSO constellations, the vertical integration of certain NGSO satellite operators, such as SpaceX and Amazon, which build their own satellites in addition to operating their NGSO constellations, as well as the decline in subscribers to Direct to Home (DTH) satellite televisions services. If these businesses were to fail, it could significantly increase our costs. Demand for technology and services from outside of the satellite industry may have an adverse impact on the availability and cost of technology and services Telesat requires for its business. For example, the surge in demand for certain components, including computer servers and networking gear, caused by the rapid construction of facilities to serve the Artificial Intelligence industry, has substantially increased the cost and has caused significant delays in Telesat acquiring, certain components Telesat requires for its current GEO business and for the construction and deployment of the Telesat Lightspeed constellation. General economic conditions, trade restrictions, and other disruptions due to geopolitical conditions and global health emergencies may also affect the ability of Telesat’s suppliers to provide services on commercially reasonable terms or to fulfil their obligations in terms of manufacturing schedules, delivery schedules, launch dates, pricing or other items. Even where alternate suppliers for such services are available, Telesat may have difficulty identifying them in a timely manner, or it may incur significant additional expense in changing suppliers, which could result in difficulties or delays in the design, construction or launch of satellites and the deployment and operation of our Telesat Lightspeed network. Changes in consumer demand for traditional television services and expansion of terrestrial networks have adversely impacted the number of subscribers to DTH television services in North America, which have adversely impacted current and may adversely impact future revenues. A substantial amount of Telesat’s GEO revenue is earned from customers who use its services to provide DTH television services to the public in North America. For the year ended December 31, 2025, approximately 93% of Telesat’s broadcast revenue was derived from North American DTH television services. For various reasons, the number of DTH subscribers to whom Telesat’s customers provide services has been decreasing. In many regions of the world, including North America, the terrestrial networks with which Telesat competes continue to expand. Terrestrial networks have advantages over traditional DTH services for the delivery of two-way services, such as on-demand video services or “over-the-top” (“OTT”) video distribution (e.g., Netflix). The growth of on-demand and OTT distribution 20 Table of Contents has had a negative impact on the demand for the services of Telesat’s large DTH customers, which has decreased, and is expected to continue to decrease, demand for Telesat’s broadcast satellite capacity. Moreover, two of Telesat’s largest DTH customers also have substantial terrestrial broadcast distribution networks that they are continuing to expand, which has led to certain of their own DTH customers migrating to their terrestrial networks. The migration of DTH customers to terrestrial networks, in order to access improved two-way services or for other reasons, is expected to continue to decrease the demand for Telesat’s services, adversely impacting future revenue and financial performance. Changes or developments with respect to domestic and international customs, tariffs, and trade policies and the corresponding or retaliatory actions by other countries and related uncertainties may adversely affect Telesat’s performance Significant changes or developments with respect to domestic and international customs, tariffs, and trade policies in the territories and countries where Telesat operates, any corresponding or retaliatory actions taken, and related uncertainties could have an adverse effect on the financial results and profitability of Telesat. The U.S. administration has imposed tariffs on imports from Canada and most other countries. The international trade disputes sparked by the tariffs imposed by the U.S. and any other future actions taken by the U.S. and other countries in response, including a further escalation in tariffs, and/or the withdrawal from, or changes to, international trade agreements or policies related to international commerce, have had, and are expected to continue to have, a negative impact on the Canadian economy and other markets where Telesat operates, and could adversely affect Telesat’s business operations and financial condition, including increasing the costs of procuring goods and services by Telesat and it suppliers, in particular goods and services related to the deployment of the Telesat Lightspeed constellation or even the availability of such goods and services. These disputes could also limit Telesat’s ability to sell its services in markets outside Canada or increase the costs of Telesat’s services to its prospective customers, which may make it more difficult or impossible for it to compete with services offered by its competitors in some markets. In addition, the uncertainty as to whether additional tariffs, trade policies or trade restrictions will be adopted domestically or internationally and the uncertainty of the impact of such tariffs and trade policies have and may continue to have a negative impact on the Canadian and global economy and may adversely affect Telesat’s business operations and financial condition. Reductions in government spending could reduce demand for Telesat’s services and Telesat may not receive the expected benefits of its announced strategic partnership with the GoC and MDA. Governments purchase a substantial amount of satellite services from commercial satellite operators, including Telesat. Spending authorizations for defense-related and other programs by governments, in particular the Canadian and U.S. governments, have fluctuated in the past, and future levels of expenditures and authorizations for these programs may decrease, remain constant or shift to programs in areas where Telesat does not provide services. To the extent governments and their agencies reduce spending on commercial satellite services, this could adversely affect Telesat’s revenue and operating margins. Many governments provide funding for satellite services that are used to provide broadband connectivity to rural and remote communities and those with limited terrestrial infrastructure. To the extent these governments reduce spending on satellite services, as a result of the need to reduce overall spending during periods of fiscal restraint, to reduce budget deficits or otherwise, demand for Telesat’s services could decrease, which could adversely affect revenue, the prices it is able to charge for its services and results of operations, business prospects and financial condition. Changes in governments and government priorities could negatively impact Telesat’s business. To the extent existing or newly elected governments were to implement policies or practices that require or favor the acquisition of satellite services from domestic suppliers, Telesat’s revenue from outside Canada could be adversely impacted. While Telesat announced a strategic partnership agreement among the GoC, Telesat Corporation and MDA Space in December 2025 to develop and deliver a multi-frequency, Arctic military satellite communications (MILSATCOM) capability to the Canadian Armed Forces which represents a multi-billion-dollar investment by Canada, definitive agreements regarding the partnership have not been executed. Accordingly, it remains uncertain what role Telesat will play in the delivery of the capability and what benefits, if any, it may receive. 21 Table of Contents Telesat’s failure to maintain or obtain authorizations under and comply with the U.S. export control and trade sanctions laws and regulations could have a material adverse effect on results of operations, business prospects and financial condition. The export of satellites and technical data related to satellites, earth station equipment and provision of services are subject to U.S. export control and economic sanctions laws, implemented by U.S. State Department, Department of Commerce and Department of the Treasury regulations. If Telesat does not maintain its existing authorizations or obtain necessary future authorizations under the export control laws and regulations of the U.S., it may be unable to export technical data or equipment to non-U.S. persons and companies, including to its own non-U.S. employees, as required to fulfil existing contracts. If it does not maintain its existing authorizations or obtain necessary future authorizations under the trade sanctions laws and regulations of the U.S., it may not be able to provide satellite capacity and related administrative services to certain countries subject to U.S. sanctions. Telesat’s ability to acquire new U.S.-manufactured satellites, procure launch services and launch new satellites, operate existing satellites, obtain insurance and pursue its rights under insurance policies or conduct its satellite-related operations and consulting activities could also be negatively affected if Telesat and its suppliers are not able to obtain and maintain required U.S. approvals or authorizations. The content of third-party transmissions over Telesat satellites could subject Telesat to sanctions by various governmental entities for the transmission of certain content. Telesat provides satellite capacity for transmissions by third parties. Telesat does not decide what content is transmitted over its satellites, although its contracts generally provide Telesat with rights to prohibit certain types of content or to cease transmission or permit it to require its customers to cease their transmissions under certain circumstances. A governmental body or other entity may object to some of the content carried over Telesat’s satellites, such as “adult services” video channels or content deemed political in nature. Issues arising from the content of transmissions by these third parties over Telesat’s satellites could affect its future revenues, operations or its relationship with certain governments or customers. Fluctuations in available satellite capacity could adversely affect Telesat’s results. The availability of satellite capacity has fluctuated over time, characterized by periods of undersupply of capacity, followed by periods of substantial new satellite construction which is, in turn, followed by an oversupply of available capacity. The industry appears to be currently experiencing a period of oversupply. Given the number of new satellites launched over the past several years, many of which contain high throughput payloads, as well as the number of satellite constellations being deployed and under development, if the demand for satellite capacity does not increase as expected, the next several years are likely to continue to be characterized by an oversupply of capacity. In addition, changes in technology could introduce a substantial amount of new capacity into the market, further exacerbating the oversupply problem. An oversupply of capacity leads to a decrease in rates charged for satellite services, which could adversely affect Telesat’s results of operations and cash flows. Developments that Telesat expects to support the growth in demand for satellite services, such as continued growth in corporate data and internet traffic, government defense and security requirements, and low earth orbit constellations expanding the total addressable market, may fail to materialize or may not occur in the manner or to the extent anticipated. Telesat is subject to risks associated with doing business internationally. Telesat’s operations internationally are subject to risks that are inherent in conducting business globally. It is subject to compliance with the U.S. Foreign Corrupt Practices Act (“FCPA”) and other similar anti-corruption laws, which generally prohibit companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business. While its employees and contractors are required to comply with these laws, Telesat cannot be sure that its internal policies and procedures will always protect it from violations of these laws, despite its commitment to legal compliance and corporate ethics. Violations of these laws may result in severe criminal and civil sanctions as well as other penalties and enforcement actions. The occurrence or allegation of these types of risks may adversely affect Telesat’s business, performance, financial condition, and results of operations. 22 Table of Contents Interruption or failure of, or cyber-attacks on, Telesat information technology and communication systems, data breaches, data theft, unauthorized access or hacking could materially harm Telesat’s reputation and ability to operate its business effectively, any of which could harm its business and operating results. Telesat’s success depends, in part, on the secure and uninterrupted performance of Telesat’s information technology and communications systems, which are an integral part of its business. Telesat relies on its information and communications systems, as well as on software applications developed internally and externally, to effectively manage its accounting and financial functions, including maintaining its internal controls, operate its satellites and satellites for third parties, provide consulting services to customers, transmit customer’s proprietary and/or confidential content and assist with other operations, among other things. An increasing number of companies have disclosed breaches of their security, some of which have involved sophisticated and highly targeted attacks on their computer networks. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems, change frequently and often are not recognized until launched against a target, Telesat may be unable to anticipate these techniques or to implement adequate preventative measures. If unauthorized parties gain access to Telesat’s information technology systems, they may be able to misappropriate assets, including confidential trade secrets and intellectual property assets, which could be used to compete against Telesat’s business and otherwise adversely impact its competitive position. They could also access sensitive information (such as personally identifiable information of Telesat’s customers, business partners and employees), cause interruption in Telesat’s operations, corruption of data or computers, or otherwise damage Telesat’s reputation and business. In such circumstances, Telesat could be held liable to its customers or other parties, or be subject to regulatory or other actions for breaching privacy rules. While Telesat continues to bolster its systems with additional security measures and, working with external experts, mitigate the risk of security breaches, its systems may be vulnerable to theft, loss, damage and interruption from a number of potential sources and events, including unauthorized access or security breaches, inclement weather, natural or man-made disasters, earthquakes, explosions, terrorist attacks, floods, fires, cyberattacks, computer viruses, malware, ransomware, phishing attacks, social engineering schemes, domain name spoofing, insider theft, power loss, telecommunications or equipment failures, transportation interruptions, accidents or other disruptive events or attempts to harm its systems. Telesat’s facilities are potentially vulnerable to break-ins, sabotage and intentional acts of vandalism. Its disaster recovery planning cannot account for all eventualities. Telesat’s business and operations could be adversely affected if, as a result of a significant cyber event or otherwise, its operations are disrupted or shutdown, confidential or proprietary information is stolen or disclosed, it loses customers, it incurs costs or is required to pay fines in connection with confidential or export-controlled information that is disclosed, it must dedicate significant resources to system repairs or increase cyber security protection or it otherwise incurs significant litigation or other costs as a result of any such event. A serious disruption to Telesat’s systems could significantly limit its ability to manage and operate its business efficiently, which in turn could have a material adverse effect on its business, reputation, results of operations and financial condition. Furthermore, any compromise of Telesat’s security could result in a loss of confidence in Telesat’s security measures, and subject Telesat to litigation, civil or criminal penalties, and negative publicity that could adversely affect Telesat’s financial condition and results of operations. Pandemics could have a material adverse effect on Telesat’s business, financial condition and results of operations. Telesat’s business and results of operation have been and may in the future be adversely affected by pandemics, and by measures taken to prevent their spread, including restrictions on travel, imposition of quarantines, cancellation of events, remote working, and closure of workplaces and other businesses. Telesat’s business and results of operations may also be negatively impacted by the adverse effect that pandemics have had, and may in the future have, on global economic activity, which may include continued inflation and/or a period of prolonged global or regional economic slowdowns or recessions. Pandemics could also impact Telesat’s ability to attract capital to finance business strategies, such as the expansion of the Telesat Lightspeed constellation and its related network, and also could increase Telesat’s cost of borrowing. 23 Table of Contents Telesat may pursue acquisitions, dispositions and strategic transactions which could result in the incurrence of additional costs, liabilities or expenses in connection with the implementation of such transactions. In the future, Telesat may pursue acquisitions, dispositions and strategic transactions, which may include joint ventures and strategic relations, as well as business combinations or the acquisition or disposition of assets. Acquisitions, dispositions and strategic transactions involve a number of risks, including: potential disruption of ongoing business; distraction of management; may result in Telesat being more leveraged; the anticipated benefits and cost savings of those transactions may not be realized fully or at all or may take longer to realize than expected; increasing the scope and complexity of Telesat operations; and loss or reduction of control over certain of its assets. The presence of one or more material liabilities of an acquired company that are unknown to Telesat at the time of acquisition could have a material adverse effect on its results of operations, business prospects and financial condition. A strategic transaction may result in a significant change in the nature of its business, operations and strategy. In addition, it may encounter unforeseen obstacles or costs in implementing a strategic transaction. Telesat continues to evaluate the performance of all of its businesses and may sell businesses or assets. Such a sale could include a strategic disposition of one or more of its satellites. In addition to the risks listed above that may occur with any acquisition, disposition or strategic transaction, a satellite divestiture could result in a loss of revenues or significant write-offs, including those related to goodwill and other intangible assets, which could have a material adverse effect on its financial condition, results of operations and cash flows. There can be no assurance that Telesat will be successful in addressing these or any other significant risks encountered. Telesat could experience the departure of key employees or may be unable to recruit the employees needed for its success. Telesat relies on a number of key employees, including members of management and certain other employees possessing unique experience in technical and commercial aspects of the satellite services business. If it is unable to retain these employees, it could be difficult to replace them. In addition, Telesat’s business, with its constant technological developments, must continue to attract highly qualified and technically skilled employees. In the future, if Telesat were unable to retain or replace its key employees, or if it were unable to attract new highly qualified employees, it could have a material adverse effect on results of operations, business prospects and financial condition. Telesat’s future reported net income and asset values could be adversely affected by impairments of the value of goodwill and intangible assets. Telesat’s consolidated balance sheet as at December 31, 2025 includes goodwill with a carrying value of approximately $2,214.6 million (allocated $214.6 million and $2,000.0 million, respectively, between GEO and LEO as at December 31, 2025 and other intangible assets with a carrying value of approximately $442.3 million (the most significant assets being orbital slots with a carrying value of approximately $311.0 million as at December 31, 2025). Goodwill and other intangible assets are qualitatively assessed for indicators of impairment. If the qualitative assessment concludes an indication of impairment, a quantitative impairment test of goodwill and other intangible assets with indefinite useful lives is undertaken. Telesat measures for the quantitative impairment test using a projected discounted cash flow method and confirms the assessment using other valuation methods. If the asset’s carrying value is more than its recoverable amount, the difference is recorded as a reduction in the amount of the asset on the balance sheet and an impairment charge in the statement of income. Quantitative testing for impairment requires significant judgment by management to determine the assumptions used in the impairment analysis. Any changes in the assumptions used could have a material impact on the impairment analysis and result in an impairment charge. Telesat cannot predict whether an event that triggers impairment will occur, when it will occur or how it will affect the reported asset values. A substantial amount of Telesat’s goodwill and intangible asset value is supported by the Telesat Lightspeed constellation which has not yet been deployed. If it were determined that the Telesat Lightspeed constellation program was unlikely to proceed as planned, it is likely that Telesat’s goodwill and intangible assets would be deemed to be impaired. If Telesat’s goodwill or other intangible assets are deemed to be impaired in whole or in part, it could be required to reduce or write-off such assets, which could have a material adverse effect on its financial condition. 24 Table of Contents Significant changes in exchange rates could have a material adverse effect on financial results. Telesat’s main foreign currency exposures as of December 31, 2025, lie in its U.S. dollar denominated debt financing and cash and cash equivalents. Approximately 47.1% of revenue, 51.6% of operating expenses, 100% of interest expense on the Telesat Canada Debt and the majority of Telesat Lightspeed capital expenditures were denominated in U.S. dollars for the year ended December 31, 2025. See Management Discussion and Analysis section for detailed foreign exchange sensitivity analysis. As at December 31, 2025, the Telesat Canada Debt, excluding deferred financing costs, loss on repayment and prepayment options was US$2,145.6 million. Changes in exchange rates impact the amount that Telesat pays in interest, and may significantly increase the amount that it is required to pay in Canadian dollar terms to redeem its 2027 Senior Secured Notes, 2026 Senior Secured Notes or 2027 Senior Unsecured Notes, either at maturity, or earlier if redemption rights are exercised or other events occur which require it to offer to purchase its 2027 Senior Secured Notes, 2026 Senior Secured Notes or 2027 Senior Unsecured Notes prior to maturity, and to repay funds drawn under the Senior Secured Credit Facilities. A portion of Telesat revenues comes from contracts which are denominated in Brazilian Reais. Any decrease in the value of the Brazilian Reais against the Canadian dollar would reduce revenues. Borrowings under the Telesat Lightspeed Financing are in Canadian dollars. However, in excess of 80% of Telesat’s expected capital investments in the Telesat Lightspeed program over the next two years are expected to be in currencies other than Canadian dollars, primarily U.S. dollars and Euros. Any decrease in the value of the Canadian dollar against the U.S. dollar or Euro will increase the Canadian dollar costs of the program, and Telesat may be required to raise additional funding to complete the program, which funding Telesat may not be able to raise or, even if Telesat is successful in raising additional funding, could adversely impact the business case for Telesat Lightspeed. Given that we expect a significant amount of our future revenue to be in U.S. dollars, an increase in the value of the Canadian dollar as compared to the U.S. dollar could adversely impact the ability Telesat LEO ULC to repay its Canadian dollar debt under the Telesat Lightspeed Financing. Because of the Telesat Canada Reorganization and Divestiture Act, a Canadian act uniquely applicable to Telesat Canada (but not the other entities in the Telesat corporate structure), Telesat’s GEO operating subsidiary may not have access to the usual protections from creditors and other rights available to insolvent persons and creditors, may not have recourse to the usual rights, remedies and protections under applicable bankruptcy and insolvency laws generally available to creditors of insolvent persons. Under the Telesat Canada Reorganization and Divestiture Act (“Telesat Divestiture Act”), Telesat Canada (as a corporate entity) is subject to certain special conditions and restrictions. The Telesat Divestiture Act provides that no legislation relating to the solvency or winding-up of a corporation applies to Telesat Canada and in no case shall Telesat Canada’s affairs be wound up unless authorized by an Act of the Parliament of Canada. As a result of such legislative provisions, Telesat Canada and its creditors may not have recourse to the usual rights, remedies and protections under applicable bankruptcy and insolvency laws, including the imposition of a stay of proceedings, or a regulated and orderly process to settle or compromise claims and make distributions to creditors, or recourse to fraudulent preference, transfer at undervalue or fraudulent conveyance laws, in Canada. The effect of the Telesat Divestiture Act upon Telesat Canada’s insolvency has not been considered by a Canadian court and, accordingly, the application of Canadian federal bankruptcy and insolvency laws and provincial receivership and fraudulent conveyance and assignment and preference laws, and the exercise by a Canadian court of any judicial discretion which could affect the enforcement of rights and remedies or other equitable relief against Telesat Canada in the context of an insolvency, is uncertain. To the extent bankruptcy and insolvency laws in Canada do not apply to Telesat Canada, its creditors may individually seek to pursue any available rights or remedies, as secured or unsecured creditors as the case may be, against Telesat Canada and its assets. Only Telesat Canada’s assets (including the shares in its subsidiaries) are subject to the Telesat Divestiture Act, but the assets of the other entities within the Telesat corporate structure, including the guarantors of the Telesat Canada Debt, are not. These restrictions may have a material impact on the sale of Telesat Canada or its assets in any bankruptcy or reorganization scenario and on any proceeding to realize value from Telesat Canada or its assets. 25 Table of Contents Additional risks Relating to the Telesat Lightspeed Constellation There are numerous technological risks and uncertainties associated with the Telesat Lightspeed constellation which may cause it to be unsuccessful and have a material adverse effect on Telesat’s results of operations, business prospects and financial condition. Telesat is currently building an advanced LEO satellite network consisting initially of over one hundred and up to several hundred satellites in NGSO. There are numerous risks and uncertainties associated with NGSO constellations generally and with Telesat’s Lightspeed constellation in particular. NGSO constellations are complex. In order to operate successfully and deliver a high-quality service, all components of the system, both on the ground and in space, must be integrated seamlessly and efficiently. Unlike most traditional GEO satellites currently in use, which rely on legacy, space-tested hardware and established ground equipment infrastructures, some of the technology necessary for the successful operation of a LEO constellation, in particular the Telesat Lightspeed constellation, is still in development. The Telesat Lightspeed constellation design incorporates leading-edge satellite technologies, including on-board data processing, multi-beam phased array antennas and optical inter-satellite links; these are technologies that Telesat has not previously developed or used for space applications at the scale, levels of performance and price points that are required for the successful operation and commercialization of the Telesat Lightspeed constellation. In addition, certain key suppliers are small, new companies that may not be well capitalized and for whom we are their largest customer. If these key suppliers’ businesses were to fail, the Telesat Lightspeed constellation could be materially delayed and/or its cost could materially increase. In order to provide a competitive service in certain of the customer segments Telesat plans to serve, it requires advances in ground terminal design and manufacturing, particularly electronic flat panel antennas capable of acquiring and tracking LEO satellites. If the Telesat Lightspeed constellation does not deliver the required quality of service at prices that are competitive relative to other satellite providers and alternative products, it may not be able to acquire customers and establish a successful business. It is possible that Telesat may not be able to overcome the technological hurdles required to complete the planned Lightspeed constellation, the start of service may be materially delayed, and/or due to technological issues the Telesat Lightspeed constellation may not operate as planned, any of which could have a material adverse effect on results of operations, business prospects and financial condition. The design of the Telesat Lightspeed satellites and network may change, as a result of technical difficulties, to respond to commercial opportunities or for other reasons. Any change could result in increased costs, delay the in-service date of the constellation, or impair or delay regulatory approval to obtain access to certain markets. For example, while Telesat has announced that it is adding Mil-Ka frequencies to the constellation, it requires the approval of the Telesat Lightspeed Financing lenders. While Telesat expects that approval to be forthcoming, there can be no assurance that it will be received in a timely manner or at all. In addition, the adding of the Mil-Ka frequencies can present regulatory challenges (see “Risks Related to Regulatory Matters”). The Telesat Lightspeed constellation may suffer launch failures or its satellites may fail to reach their planned orbital locations. Any such issue could result in the loss of a satellite or cause significant delays in the deployment of the satellite. Delays in launching satellites and in the deployment of satellites are not uncommon and result from construction delays, the unavailability of reliable launch opportunities with suppliers, delays in obtaining required regulatory approvals, launch failures and launch vehicle underperformance (in which case the satellite may be lost or, if it can be placed into service by using its onboard propulsion systems to reach the desired orbit, will have a shorter useful life). There is no guarantee that Telesat will be able to fully draw the committed funding under the Telesat Lightspeed Financing. On September 13, 2024, Telesat announced that it had completed securing the Telesat Lightspeed Financing. See “Business — Our GEO Business and Our LEO Opportunity — Overview of Telesat Lightspeed”. Telesat’s ability to draw the full amount of this funding is dependent on continuing to comply with various covenants and other obligations as well as reaching certain milestones in the Telesat Lightspeed development and production process, which, for various reasons, may not occur. 26 Table of Contents The exercise of the Telesat Lightspeed Financing Warrants granted in connection the Telesat Lightspeed Financing would be dilutive, and the Telesat Lightspeed Financing Warrants contain embedded derivatives which could adversely impact Telesat’s financial results. In connection with the loans from the GoC and GoQ for Telesat Lightspeed, Telesat has granted warrants to purchase a number of the limited partnership units of Lightspeed LEO Limited Partnership, a limited partnership which holds all of the shares of Telesat LEO ULC. Telesat’s indirect, wholly-owned subsidiary that owns and will operate and commercialize the Lightspeed constellation. Any exercise of such warrants would result in dilution of the interest of the shareholders of Telesat in the Telesat Lightspeed business. In addition, these warrants contain embedded derivatives, which can introduce additional complexities and risks. These embedded derivatives are subject to market fluctuations, interest rate changes, and other economic variables that can significantly impact their value. The valuation and accounting for these instruments require sophisticated models and assumptions, which may not always accurately predict future outcomes. The impact of misestimations or changes in market conditions relating to the valuation and accounting for these instruments could adversely affect Telesat’s financial position and results of operations. The Telesat Lightspeed constellation will require Telesat to develop significant commercial and service operational capabilities. Failure to effectively develop such operational capabilities could cause the Telesat Lightspeed constellation to fail to achieve commercial viability and could have a material adverse effect on Telesat’s operations, business prospects and financial condition. The Telesat Lightspeed constellation will offer an end-to-end data service such that Telesat will be responsible for system performance from the Point of Presence (where the constellation connects to either a customer’s private network or to the terrestrial internet) through the Telesat Lightspeed network to the end-user’s terminal. This contrasts with Telesat’s current GEO satellite services, from which Telesat currently derives a majority of its revenue, where Telesat primarily provides customers with access to its GEO satellites, and customers then combine this capacity with ground (hub) equipment to create a connectivity service. Telesat’s failure to develop new supporting technologies, processes and procedures, competencies, and other capabilities to support the Lightspeed constellation may materially impact its ability to commercialize the Telesat Lightspeed constellation. Additionally, Telesat’s Lightspeed constellation will require an advanced ecosystem to support LEO service installation and provisioning, including user terminals and related installs, which we currently do not possess at the scale that will be required. Telesat’s effective monetization of the Telesat Lightspeed constellation may require Telesat to provide ancillary services to combine with Telesat’s LEO services, as customers may demand these services to create a complete solution for their communications requirements. Some examples of ancillary services are trained third parties who can install and maintain Telesat’s LEO terminals. Telesat does not currently have these capabilities, and may be required either to develop such capabilities in house or partner with third parties to deliver these capabilities, and Telesat cannot assure you that it will be able to successfully establish such capabilities. A material part of Telesat’s anticipated revenues from the Telesat Lightspeed constellation are expected to come from geographies where Telesat does not have a significant presence today, including Europe, Africa and Asia, and the expansion of Telesat’s capabilities in other geographies where it currently has operations. Telesat’s failure to expand its sales and distribution capabilities in these geographies could cause the Lightspeed constellation to fail to achieve commercial viability. In order to effectively operate the Telesat Lightspeed constellation, Telesat will be required to develop and expand certain business operations capabilities, including management of inventory, tracking service installation and commissioning, network monitoring and customer call resolution. Telesat also will need to develop new network capabilities to provision terminals, manage bandwidth and monitor these services. If Telesat is unable to develop these capabilities, it may be unable to provide customers with a level of service sufficient to support the Telesat Lightspeed constellation’s adoption. Even if Telesat is able to successfully build and deploy the Telesat Lightspeed constellation, Telesat may nonetheless fail to generate anticipated revenues due to slow market adoption or because the total addressable market for the Telesat Lightspeed constellation may be smaller than Telesat expects. Telesat’s projected revenues from its Telesat Lightspeed constellation are based on the anticipated expansion of the market for satellite services, which assumes that the availability of higher quality, lower priced services will lead to increased uses of satellite services. However, there may be factors, both internal to and extraneous to Telesat’s development and deployment of its Telesat Lightspeed network, that slow market adoption of and cause Telesat Lightspeed’s revenues to be lower than anticipated. Telesat Lightspeed ground terminal antennas require a much greater field of view than GEO 27 Table of Contents antennas because LEO satellites are in constant motion from the perspective of the earth. This may mean that Telesat Lightspeed antennas are more difficult to install than anticipated, which could limit the adoption of Telesat Lightspeed. If we are unable to deploy a sufficient number of satellites needed to communicate with standard flat panel antennas, which require an even greater field of view than traditional ground terminal antennas, it may increase the costs of the antennas required to communicate with our satellites, which could increase our costs or adversely impact the addressable market for our services. We will operate the Telesat Lightspeed constellation using Ka-band frequencies while some of our competitors are using, or intend to use, Ku-band frequencies which are less susceptible to service outages during heavy rains. An increased level and frequency of outages at Ka-band may negatively impact the size of the market for the Telesat Lightspeed services. Additionally, given that Telesat Lightspeed relies on new technology, potential customers may not be willing to purchase its services until Telesat Lightspeed has been successfully deployed and in operation which could delay or decrease demand for its services. If sufficient terminals are not installed prior to the commencement of global service, it could lead to a failure to achieve anticipated revenues on a timeline that supports the Telesat Lightspeed constellation’s commercial viability. Moreover, certain users, particularly governments, may have requirements, including security requirements, that Telesat is unable to meet, leading to lack of access to important markets. Telesat’s business plan for the Telesat Lightspeed constellation is based on its own analysis of the total addressable market (“TAM”) for the constellation’s services. It is possible that Telesat’s analysis of the TAM for the Telesat Lightspeed constellation is inaccurate and the TAM could be materially smaller than Telesat’s analysis suggests. Even if Telesat’s analysis of the TAM for Telesat Lightspeed is accurate, those services may end up being provided by Telesat’s competitors, some of whom are larger, have greater access to capital and have deployed or will deploy their constellations before Telesat. Although Telesat believes there is a significant market for the services it expects to provide with the Telesat Lightspeed constellation, it may not be able to attract enough customers to make the project successful and earn a sufficient return on investment or support its indebtedness, which could have a material adverse effect on its business prospects and financial condition. Telesat faces robust competition to its Telesat Lightspeed constellation, and/or the pursuit of a LEO constellation may negatively impact Telesat’s existing business. The Telesat Lightspeed constellation will compete with NGSO satellite projects announced and/or in operation by other companies, including Eutelsat Group/OneWeb, SpaceX, SES/O3b, Amazon, Blue Origin’s TeraWave, as well as country and region-sponsored projects, including in China, Russia and Europe. Some of these potential competitors to Telesat’s system have greater access to capital than Telesat has and/or are at a more advanced stage of development. For example, China and Russia have access to larger amounts of capital and have government-owned satellite manufacturing and launch facilities at their disposal. SpaceX and Amazon are much larger than Telesat, have more diverse sources of revenue, and substantially greater financial resources than Telesat. SpaceX has also already deployed, and Amazon is in the process of deploying significantly greater numbers of satellites, and at lower orbits, than will be deployed in the Telesat LightSpeed constellation. The deployment of a greater number of satellites and at lower orbits may provide Telesat’s competitors with advantages, including being able to implement smaller and cheaper antennas than may be required by Telesat Lightspeed. The Eutelsat Group/OneWeb and SpaceX constellations have already commenced operations, which may make it more difficult for Telesat to attract customers for its constellation once it is deployed. SpaceX in particular has made meaningful inroads in the commercial aero and maritime markets. Further, to the extent any of the other constellations make use of Ka-band spectrum, as SpaceX, Amazon and Eutelsat Group/OneWeb do, it may limit Telesat’s access to sufficient Ka-band spectrum to operate the Lightspeed constellation efficiently and profitably. See “Risks Relating to Regulatory Matters.” Telesat also competes with Eutelsat Group/OneWeb, SpaceX, Amazon and other developers of NGSO satellite projects for human capital, and Telesat may fail to recruit and retain a workforce capable of developing and deploying the Telesat Lightspeed constellation, which may cause Telesat to fail to successfully commercialize the constellation. Some of Telesat’s competitors have greater access to launch capabilities than Telesat. SpaceX has its own in-house launch capability and Blue Origin, a company owned by Amazon’s Executive Chair and largest shareholder, Jeff Bezos, is significantly advanced in its development of launch vehicles. Each of Amazon’s and SpaceX’s greater access to launch vehicles for its own satellites may give it an advantage over Telesat since Telesat does not have in-house capability to launch its own satellites. In addition, SpaceX and Amazon manufacture their own satellites and user terminals, which may provide them with advantages over us since we are reliant on third parties for the supply of our Telesat Lightspeed satellites and user terminals. 28 Table of Contents If successfully implemented, the Telesat Lightspeed constellation may decrease demand for Telesat’s other satellite services. See “— Changes in technology could have a material adverse effect on Telesat’s results of operations, business prospects and financial condition.” Risks Relating to Regulatory Matters Telesat operates in a highly regulated industry and is required to comply with multiple, potentially conflicting, laws and regulations and obtain numerous governmental authorizations and approvals. If Telesat becomes subject to onerous regulations, or if it fails to obtain or maintain particular authorizations on acceptable terms, such regulatory obligations and/or such failure could delay or prevent it from offering some or all of its services and adversely affect its results of operations, business prospects and financial condition. Authorizations required to operate satellites Telesat operates satellites with frequency rights authorized by Canada, the U.S., Brazil, the U.K. and Tonga. The frequency rights are underpinned by ITU filings, technical documents that the operator, via the administration, submits to and maintains at the ITU. Canada, the U.S. and Brazil also issue associated licenses or grants with conditions as discussed below. In addition, most countries regulate transmission of signals to and from their territory, and Telesat is required to obtain and maintain authorizations to carry on business in the countries in which it operates. In particular, Telesat requires authorization (sometimes referred to as “landing rights” or as “market access”) for the space segment portion of its services in some countries around the world, while in other countries there is no formal authorization requirement (often referred to as “Open Skies”). Therefore, Telesat is subject to regulation by government authorities in Canada, the U.S. and Brazil, as well as by other governmental authorities in certain other countries in which it operates. The applicable domestic regulations may depend on whether the frequencies are reserved for commercial or military/government use. Telesat Lightspeed satellites carry frequencies in the “Commercial-Ka” and in the “Mil-Ka.” What is referred to as “Mil-Ka” (sometimes referred to as “Government-Ka”) are frequency bands immediately adjacent to what is referred to as “Commercial-Ka.” At the international (ITU) level the Mil-Ka and Commercial-Ka bands (for which there are no formal definitions) are similarly allocated to satellite services; however, at the domestic level, some administrations have limited the Mil-Ka bands to government/military use only (for example, Mil-Ka is a harmonized NATO band for defense/governmental purposes). As a result, for these administrations to access the Mil-Ka frequencies additional approvals would be required, but the exact process and nature of those approvals are not well established because of the limited use of these frequencies by commercial operators in the past. In terms of licensing by Canada, the ITU filings for the Mil-Ka would belong to ISED Canada and Telesat would need an agreement with ISED Canada, to access these filings. If these agreements cannot be reached, Telesat Lightspeed’s operations may be adversely affected. In Canada, operations are subject to regulation and licensing by Innovation, Science and Economic Development Canada (“ISED”) pursuant to the Radiocommunication Act (Canada), and by the Canadian Radio-television and Telecommunications Commission (“CRTC”) under the Telecommunications Act (Canada). Certain of Telesat’s satellites operate under spectrum authorizations issued by ISED, including the GEO Anik satellites F1R, F2, F3 and G1, the GEO Nimiq satellites 2, 4, 5 and 6, and the NGSO Telesat Lightspeed constellation. ISED also has the authority to establish policies and standards upon which Telesat’s satellites depend. The Minister of ISED has broad discretion in exercising this authority to issue licenses, establish and amend conditions of licenses, and to suspend or even revoke them. The CRTC implements the broadcasting policy for Canada and can direct the allocation of satellite capacity to particular broadcasting undertakings. Telesat is required to pay “universal service” charges in Canada and has certain research and development and public benefits obligations that do not apply to other satellite operators with which it competes. These obligations could change at any time. With respect to landing rights, ISED maintains a list of foreign satellites approved to provide Fixed Satellite Service (“FSS”) in Canada. Telesat’s Telstar 11N, Telstar 12 VANTAGE, Telstar 14R/Estrela do Sul 2 and Telstar 19 VANTAGE satellites are currently authorized to serve the Canadian market in accordance with these procedures. Telesat was granted a spectrum authorization on December 6, 2024, for Commercial-Ka bands. Telesat is also seeking access to the Mil-Ka frequencies, which are not included in that authorization. Telesat’s current deployment plan would meet the milestone obligations of the existing and any new authorization; however, there is no assurance this will be the case. 29 Table of Contents In the U.S., the Federal Communications Commission (“FCC”) regulates the provision of satellite services to, from or within the U.S. Certain of Telesat’s satellites are owned and operated through a U.S. subsidiary and are licensed by the FCC. This includes Telstar 11N and Telstar 12 VANTAGE. With respect to landing rights, operators can apply to have their satellites either placed on the FCC’s Permitted Space Station List (for certain frequencies) or be granted a declaratory ruling (for other frequencies). Telesat’s, Anik F1R, Anik F2, Anik F3, Anik F4, Telstar 14R/Estrela do Sul 2 and Telstar 19 VANTAGE satellites are currently authorized to serve the U.S. market in accordance with these procedures, and some of the frequencies on Telstar 18 VANTAGE have access to the U.S. market through an earth station authorization. With respect to the Commercial-Ka frequencies used by the Telesat Lightspeed constellation, Telesat was granted U.S. market access on November 3, 2017. If Telesat seeks access to Mil-Ka frequencies, which are not included in that grant, additional U.S. government approvals would be required, but the exact nature and number of those approvals are not well established because there has been limited use of these frequencies by commercial operators in the past. The parameters of Telesat’s current Ka-band Telesat Lightspeed constellation design differ from the parameters of the market access grant from the U.S., which grant was for 117 satellites, and the market access grant from the U.S. is subject to post-grant conditions, including a requirement for providing an updated showing on orbital debris mitigation based on final system design. Telesat has applied in the FCC’s second processing round for Ka-band systems, to modify its U.S. market access grant to match the parameters of the Telesat Lightspeed constellation design at the time, including an increase in the number of authorized satellites, and has subsequently filed for further amendments. In general, satellites authorized in a later processing round must protect satellites authorized in a previous processing round from interference. There is no assurance that Telesat’s application will be approved or, if approved, that it will not have conditions that preclude Telesat from being able to deliver an acceptable level of service in the U.S. There is also no assurance that the updated showing on orbital debris mitigation for the current design will be approved. In addition, Telesat’s U.S. first round market access grant for Telesat Lightspeed has deployment milestones that require a certain percentage of the authorized satellites to be in service by a specific date. See “Business — Regulation — United States Regulatory Environment.” As Telesat could not meet its first deployment milestone, on October 26, 2023 Telesat submitted a milestone extension request. If an extension is not granted, Telesat will lose its first processing round U.S. market access grant either entirely or as to any number of satellites above the number for which the extension is granted. If Telesat were to lose its first processing round grant and if Telesat is not granted access to the U.S. market under a second processing round application, Telesat could be prevented from offering its services in the United States, which could adversely affect results of operations, business prospects and financial condition. In Brazil, the national telecommunications agency, ANATEL, regulates the granting of landing rights (referred to as “exploitation rights”) to the operation of Brazilian and foreign satellites and their use to transport telecommunication signals. Two of Telesat’s satellites (Telstar 14R/Estrela do Sul 2 and Telstar 19 VANTAGE) are operated through a Brazilian subsidiary and are regulated by ANATEL pursuant to Concession Agreements. With respect to market access, ANATEL has also accredited the provision of service by foreign operators. Telesat’s Telstar 12 VANTAGE satellite, Anik G1 satellite and the Telesat Lightspeed constellation, are currently authorized to serve the Brazil market in accordance with these procedures. The parameters and in-service date of Telesat’s current Ka-band Telesat Lightspeed constellation design differ from the parameters of the previous authorization from ANATEL. Telesat has provided a technical update to ANATEL along with a request to extend the deadline for entry into operation of the Telesat Lightspeed constellation. ANATEL assigned new exploitation rights for Telesat Lightspeed on June 17, 2024. There is no assurance Telesat will meet the maximum period for Telesat Lightspeed to enter into operation. Telstar 18 VANTAGE operates at the 138° EL orbital location under agreements with APT Satellite Company Limited (“APT”), which has been granted the right to use frequencies at the 138° EL orbital location by The Kingdom of Tonga. The ViaSat-1 satellite at the 115° WL orbital location, which has been granted the right to use frequencies at the 115° WL orbital location by the United Kingdom regulatory agency, OFCOM, includes a payload that Telesat owns and operates. The rights to use certain frequencies on Telstar 12 VANTAGE, Telstar 18 VANTAGE and Telstar 19 VANTAGE have also been granted by OFCOM. 30 Table of Contents Coordination with other GSO networks/NGSO systems While some regulators impose successful coordination with domestic operators as a condition for market access by foreign satellite operators, other jurisdictions such as, for example, the U.S. and Brazil, have adopted different approaches. In addition, with respect to the Mil-Ka frequencies additional approvals would be required, but the exact process and nature of those approvals are not well established because of the limited use of these frequencies by commercial operators in the past. A ruling by Brazil effective November 1, 2021 gives domestic, or “national priority” status to foreign satellite operators based on date of receipt of a landing rights request. In relation to Telesat Lightspeed, Telesat will need to operate on a non-interference/non-protection basis with respect to NGSO networks with earlier applications for landing rights, which may lead to some restrictions on operations. Telesat will also be required to coordinate with GSO operators that have sought landing rights in Brazil at an earlier date than Telesat did in order to use part of the spectrum Telesat Lightspeed is capable of operating in. This could lead to some restrictions in the available capacity. The U.S. rules, which are agnostic to domestic versus foreign, require systems authorized in subsequent processing rounds to protect systems authorized in previous processing rounds. The FCC adopted specific degraded throughput methodology criteria that NGSO FSS systems licensed in a later processing round must include in compatibility analyses, in absence of a coordination agreement, to demonstrate that they can operate compatibly with and protect NGSO FSS systems authorized in earlier processing rounds that came into force on January 12, 2025 (with certain provisions delayed until July 31, 2025). There is no guarantee that Telesat will be able to demonstrate compliance with these criteria, or that other operators, when applying these criteria, will not cause interference to Telesat. It is possible that some jurisdictions may adopt the U.S. or the Brazilian approach, or some other alternative approach. In other jurisdictions, incomplete coordination with domestic GSO networks/NGSO systems may prevent access to some or all of the spectrum in which Telesat Lightspeed is capable of operating. Potential impacts of failure to obtain or maintain authorizations and approvals In addition to the authorization for the space segment required in some countries, authorizations/licenses are typically needed also for service provision and/or the ground segment portion of the services, in order for services to be provided to customers and user terminals/gateways to operate in a given frequency range. Furthermore, user terminals need type approval in some countries. Seeking authorization for Mil-Ka frequencies will require agreement with government agencies in countries where such frequencies are allocated for government use, but the exact process and nature of those agreements are not well established because of the limited use of these frequencies by commercial operators in the past. If Telesat and/or its partners fail to obtain or maintain specific authorizations on acceptable terms, such failure could delay or prevent it from offering some or all of its services and adversely affect results of operations, business prospects and financial condition. In particular, Telesat may not be able to obtain all the required regulatory authorizations for the construction, launch and operation of any of its future satellites, for the spectrum for these satellites and for its ground infrastructure, on acceptable terms or at all. Even if the necessary authorizations were obtained, they may impose significant operational restrictions, or not provide adequate protection from interference that could affect the use of the satellites, user terminals and gateways of the Telesat Lightspeed system. Countries or their respective regulatory authorities may adopt new laws, policies or regulations, or change their interpretation of existing laws, policies or regulations, that could cause Telesat’s existing authorizations to be changed or cancelled, require it to incur additional costs, impose or change existing pricing, or otherwise adversely affect operations or revenues. As a result, any currently held regulatory authorizations are subject to rescission and renewal and may not remain sufficient or additional authorizations may be necessary that it may not be able to obtain on a timely basis or on terms that are not unduly costly or burdensome. Further, because the regulatory schemes vary by country, Telesat may be subject to regulations in foreign countries of which it is not presently aware that it is not in compliance with, and, as a result, could be subject to sanctions by a foreign government. Other potential regulatory impacts Some of the spectrum utilized by the Telesat Lightspeed constellation is also allocated to other services, including terrestrial fixed and mobile services, or is limited, by domestic allocation, to government use. In a number of countries, regulators are considering and may adopt new spectrum allocations for terrestrial mobile broadband and 5G, including in bands that are currently allocated to satellite services. While some jurisdictions have established rules for sharing the spectrum, many jurisdictions have yet to address this issue. New spectrum allocations may require satellite operators to vacate or share spectrum and may limit the spectrum that is available for satellite services, which could adversely impact Telesat’s business. 31 Table of Contents There are certain risks that have been raised in connection with the deployment of LEO constellations, including ensuring equitable access to orbit and associated spectrum resources, the potential for increased orbital debris following impact with other small and large orbiting objects, “light pollution” associated with light reflecting off satellites in the night sky, the potential of increased risks to cause human casualty following uncontrolled satellite re-entry into the atmosphere, the potential of causing irreversible damage to the earth atmosphere (including its ozone layer) following the demise of large quantities of metals and other materials that LEO satellites are usually composed of and potential regulatory measures for protecting certain Radio-Astronomy sites worldwide that carry out observations in spectrum used by the Telesat Lightspeed satellites. In a number of countries and regions, regulators are considering and may adopt regulations to ensure the sustainable use of orbit and spectrum resources by satellites. Certain of these guidelines, laws and regulations address risks related to generating orbital debris, among other topics. Because of the altitude of the orbits used by Telesat Lightspeed, a failed Telesat Lightspeed satellite will take longer to de-orbit and re-enter the Earth’s atmosphere through natural atmospheric drag, than those of our competitors who have deployed, or will be deploying, their satellites in lower altitude orbits. The increased de-orbit time of the Telesat Lightspeed satellites could make it harder to comply with any new orbital debris regulations that may be developed at national, regional or international levels. To the extent that governments impose restrictions or additional regulations to address any of these concerns regarding LEO constellations, these may adversely impact Telesat’s ability to successfully deploy the Telesat Lightspeed constellation. Based on the designed concept of operations, the satellites composing the Telesat Lightspeed system will be launched into a low LEO orbit (at an altitude of around 400 km) to be tested before being raised to their operational orbit (at an altitude of around 1,300 km). Similarly, at the end of their mission, the same satellites will be actively de-orbited from their operational orbit to a low LEO orbit (again, at an altitude of around 400 km), before being passivated and let re-enter the Earth’s atmosphere for demise. The planned orbit raising and orbit descent phases are designed to last around six months each. During those phases, the Telesat Lightspeed satellites will cross the orbits of many other satellites and Telesat will make all reasonable efforts to avoid colliding with them. The absence of internationally-agreed procedures and/or “rules of the road” determining which satellite needs to maneuver to avoid possible collisions, public repositories of owners/operators’ contact details, and the absence of certain satellites from public repositories listing space objects, means that Telesat cannot guarantee that the Telesat Lightspeed satellites will not collide with any space object operated by a third-party. A collision involving a Telesat Lightspeed satellite could adversely impact Telesat’s business. Certain countries condition market access on an operator’s ability to satisfy those countries’ “lawful intercept” laws (lawful interception is a security process that allows law enforcement agencies to electronically monitor communications through telephone networks or telecommunications facilities with court orders or other legal authorization and requires a network operator/service provider to collect and provide the law enforcement agencies with the intercepted communications of private individuals or organizations). The specifics of lawful intercept laws, and hence the requirements on a network operator/service provider to comply, vary country by country and can involve discussions/negotiations with the relevant authorities. Satisfying lawful intercept requirements can impose costs, delays and network performance impacts. Recently, some countries that currently do not impose such requirements on satellite telecommunications have started to consider imposing them. An increase in the number of countries imposing these requirements could increase the adverse impacts from them on the Telesat Lightspeed system. Rapidly evolving regulatory environment In addition to the foregoing, NGSO systems entering the market have triggered increased regulatory activity, including a draft EU Space Act. Existing regulations are changing quickly and new, sometimes stricter regulations, especially for NGSO systems, are being considered. There is a risk that new or revised rules could be adopted that could have a material, adverse impact on the Telesat Lightspeed constellation. Telesat’s operations may be limited or precluded by ITU rules or processes, including deployment milestones and timelines, and/or by the requirement to coordinate its operations with those of other satellite operators, and/or by the requirement to meet power limits to protect GEO. ITU requirements and interaction with other operators’ filings The ITU, a United Nations specialized agency, regulates the global registration of radio frequency assignments. Only member states can apply for radio frequency assignments. Consequently, Telesat must rely on a member state to secure frequency assignments, and then obtain a licence to those frequency assignments from that member state. 32 Table of Contents Access to the radio frequency spectrum is governed by the ITU Radio Regulations (“RR”), established in accordance with an international treaty. The ITU RR are periodically reviewed and revised at World Radiocommunication Conferences, which take place typically every four years. Services other than satellites services also use the radio frequency spectrum, which can limit the availability of radio frequency spectrum for satellite services. For example, terrestrial operators are increasingly seeking additional radio frequency assignments, including frequencies currently designated for exclusive or shared use by satellite systems, to support the increasing demand for terrestrial services. As a result, Telesat cannot guarantee that the ITU rules will not change in the future in a way that could limit or preclude Telesat’s use of spectrum. The ITU RR define the coordination, notification and recording procedures to obtain rights to use frequencies, with the aim to secure entry of the frequencies in the Master International Frequency Register (“MIFR”), including those frequencies used by Telesat’s GEO satellites and the Telesat Lightspeed NGSO system. In most of the frequency bands used or intended to be used by Telesat, a “first-come, first-served” procedure applies among GEO networks, among NGSO systems, or between GEO networks and NGSO systems, whereby earlier-registered networks or systems are protected from interference due to later-registered networks or systems. To comply with the ITU rules, Telesat must coordinate its networks and systems with ITU priority networks and systems. Coordination may also be required with networks or systems that do not have ITU priority but have been identified by an administration where market access is being sought. The coordination process requires potentially lengthy and costly negotiations, and in the case of the Mil-Ka frequency bands, additional approvals would be required, but the exact process and nature of those approvals are not well established because of the limited use of these frequencies by commercial operators in the past. The failure to reach appropriate arrangements may render it impossible to secure entry of the frequencies into the MIFR, result in substantial restrictions on the use and operations of our existing satellites, or limit market access opportunities. In addition, while the approach and technical conditions for sharing spectrum among GEO networks is well established, the process for large NGSO systems that provide broadband services is still being developed. Because the coordination of NGSO systems is both technically complex and still under development, uncertainties exist about spectrum sharing, which may limit Telesat’s ability to operate and hence monetize its Telesat Lightspeed constellation. Consequently, Telesat’s ability to use shared spectrum for its Telesat Lightspeed constellation may be adversely impacted by new rules, the implementation of existing rules, or the absence of rules for spectrum sharing. In the event there is no coordination agreement, the ITU rules permit networks and systems to operate on a “non-interference, no-protection” basis, however if interference is experienced, the lower priority network or system must cease transmission (if it is causing interference) or accept the interference (if it is receiving the interference). Among GEO networks there exists at the ITU an agreed methodology to calculate the maximum allowed interference; however, when an NGSO system is involved, so far there is no agreed methodology to determine how much interference a lower priority system can cause and still qualify as operating on a “non-interference” basis. Thus, it is not yet known either how much interference higher priority systems will be subject to from lower priority systems operating on a non-interference basis nor how large an operating impediment it will be for lower priority systems to operate on a non-interference basis. In addition, while the ITU RR may require later-in-time systems to coordinate their operations with Telesat, it cannot guarantee that other operators will conduct their operations so as to avoid transmitting any signals that would cause harmful interference to the signals that Telesat, or its customers, transmit. In the extreme, this interference could require Telesat to take steps that could have a material adverse effect on results of operations, business prospects and financial condition. In some cases, NGSO must protect GEO regardless of the timing of the applications by not exceeding maximum power levels. Telesat Lightspeed can meet those power levels based on the current approach by the ITU to examine compliance; however, the approach to examine compliance may be updated following the results of technical studies commissioned by the 2023 World Radiocommunication Conference and to be completed in 2027. If certain proposed methods of testing compliance are adopted, Telesat Lightspeed could be obliged to reduce power levels, and, depending on the degree of required power reduction, the system capacity could be impacted. Finally, in the event disputes arise, the ITU RR do not contain mandatory dispute resolution or enforcement regulations and neither the ITU specifically, nor international law generally, provides clear remedies if the ITU coordination process fails. Failure to coordinate its satellites’ frequencies successfully or to obtain or maintain other required regulatory approvals could have an adverse effect on results of operations, business prospects and financial condition, as well as on the value of the business. 33 Table of Contents ITU deployment milestones and timelines In accordance with the ITU RR, governments have rights to use radio frequency assignments at certain GEO orbital locations and in NGSO orbits. Governments have, in turn, authorized operators, including Telesat, to use these radio frequency assignments. Under the ITU RR, frequencies must be brought-into-use (“BIU”) within a fixed period of time. Once brought into use, the ITU rules require that there not be a period longer than three years without a satellite on-station that is capable of operating under the orbital parameters of a filing. Telesat has been granted regulatory authorizations for certain spectrum at GEO locations or in NGSO orbits that is not currently implemented or in which the full complement of satellites has not yet been deployed. Under the ITU RR satellite deployment milestones apply for ITU NGSO systems. In general, there are milestone deadlines by which 10%, 50% and 100% of the satellites in the ITU filing must be deployed. In the case of the 10% and 50% milestones, if a deadline is missed it is still possible to take advantage of a deployment factor: if, at the 10% deadline, there are fewer than 10% of the total number of satellites in the ITU filing deployed, the modified total number of satellites shall not be greater than 10 times the number of satellites deployed; and if, at the 50% deadline, there are fewer than 50% of the total number of satellites in the ITU filing deployed, the modified total number of satellites shall not be greater than two times the number of satellites deployed. At the 100% milestone deadline, the number of satellites already deployed is the total number allowed for the ITU NGSO system. If Telesat is unable to implement frequencies at GEO locations or in NGSO orbits in a manner that satisfies the ITU RR and national regulatory requirements, or if the ITU or national regulatory requirements were to change, or if it is unable to maintain satellites or make use of all of the frequencies for which it has been authorized, Telesat may lose its rights to use these orbital resources and they would become available for other satellite operators to use. The loss of one or more of its orbital resources could negatively affect its plans and ability to implement its business strategy. If Telesat does not obtain required security clearances from, and comply with any agreements entered into with, the U.S. DoD, or if Telesat does not comply with U.S. law, Telesat may not be able to sell Telesat Lightspeed services to the U.S. government. To participate in classified U.S. government programs, Telesat may seek and obtain security clearances for one or more of its subsidiaries from the U.S. Department of Defense (“DoD”). Given Telesat is not domiciled in the U.S., Telesat has entered into agreements with the U.S. government that may limit its ability to control the operations of this subsidiary, as required under the national security laws and regulations of the U.S. If Telesat does not obtain and maintain these security arrangements, Telesat’s ability to sell Telesat Lightspeed services to the U.S. government will be limited. As a result, Telesat’s business could be materially and adversely affected. Risks Relating to Intellectual Property If we are unable to obtain, maintain, protect and enforce patent and other intellectual property protection for our technology and services, or if the scope of the patent and other intellectual property protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets. Our success may depend, in part, on our ability to obtain, maintain, protect and enforce patent and other intellectual property protection with respect to our services and technology we develop. If we fail to obtain, maintain, protect and enforce our intellectual property, third parties may be able to compete more effectively against us, we may lose our technological or competitive advantage, or we may incur substantial litigation costs in our attempts to recover or restrict use of our intellectual property. We may not be able to obtain and maintain intellectual property or other proprietary rights necessary to our business or in a form that provides us with a competitive advantage. For example, our trade secrets, data and know-how could be subject to unauthorized use, misappropriation or disclosure to unauthorized parties, despite our efforts to enter into confidentiality agreements with our employees, consultants, contractors, clients and other vendors who have access to such information, and could otherwise become known or be independently discovered by third parties. Despite our efforts to protect our intellectual property, unauthorized parties may be able to obtain and use information that we regard as proprietary. 34 Table of Contents Given that patent applications are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our services. The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability and our owned and in-licensed issued patents may be challenged in courts or patent offices in the United States and abroad. It is also possible that we will fail to identify patentable aspects of our research and development output in time to obtain patent protection. We cannot be certain that we were the first to make the inventions claimed in our owned or in-licensed issued patents or pending patent applications, or that we were the first to file for patent protection of such inventions. If a third party can establish that we or our licensors were not the first to make or the first to file for patent protection of such inventions, our owned or in-licensed patent applications may not issue as patents and even if issued, may be challenged and invalidated or rendered unenforceable. Third parties may also have blocking patents that could prevent us from marketing our own services and practicing our own technology. Failure to obtain and maintain patents, trademarks and other intellectual property rights necessary to our business and failure to protect, monitor and control the use of our intellectual property rights could negatively impact our ability to compete and cause us to incur significant expenses. which could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects. We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our services. We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents or the scope of patent claims, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our current and future services in any jurisdiction. The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market our services. We may incorrectly determine that our services are not covered by a third-party patent or may incorrectly predict whether a third party’s pending application will issue with claims of relevant scope. We may be subject to claims that we or our employees have misappropriated the intellectual property of a third party, including trade secrets or know-how, or are in breach of non-competition or non-solicitation agreements with our competitors and third parties may claim an ownership interest in intellectual property we regard as our own. Many of our employees and consultants were previously employed at or engaged by our competitors or potential competitors. Some of these employees, consultants and contractors, may have executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment. Although we try to ensure that our employees and consultants do not use the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may be subject to claims that we or these individuals have, inadvertently or otherwise, misappropriated the intellectual property or disclosed the alleged trade secrets or other proprietary information, of these former employers or competitors. Litigation may be necessary to defend against these claims, and if we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights. It may be necessary or we may desire to enter into a license to settle any such claim; however, there can be no assurance that we would be able to obtain a license on commercially reasonable terms, if at all. We may in the future also be subject to claims by our former employees, consultants or contractors asserting an ownership right in our patents or patent applications, as a result of the work they performed on our behalf. Although we generally require all of our employees, consultants, contractors and any other partners or collaborators who have access to our proprietary know-how, information or technology to assign or grant similar rights to their inventions to us, we cannot be certain that we have executed such agreements with all parties who may have contributed to our intellectual property, nor can we be certain that our agreements with such parties will be upheld in the face of a potential challenge, or that they will not be breached, for which we may not have an adequate remedy. 35 Table of Contents We may become a party to intellectual property litigation or administrative proceedings that could be costly and could interfere with our ability to sell and market our services. It is possible that U.S. and foreign patents and pending patent applications, copyrights, or trademarks controlled by third parties may be alleged to cover our services, or that we may be accused of misappropriating third parties’ trade secrets. Additionally, our services make use of components that we purchase from vendors, and may include design components that are outside of our direct control. Our competitors, some of which have substantially greater resources and have made substantial investments in patent portfolios, trade secrets, copyrights, trademarks and competing technologies, may have applied for or obtained, or may in the future apply for or obtain, patents, copyrights, or trademarks that will prevent, limit or otherwise interfere with our ability to make, use, sell and/or export our services or to use product names. We may in the future become party to adversarial proceedings or litigation where our competitors or other third parties may assert claims against us, alleging that our technology or services infringe, misappropriate or otherwise violate their intellectual property rights, including patents and trade secrets. The defense of these matters can be time consuming, costly to defend in litigation, divert management’s attention and resources, damage our reputation and brand and cause us to incur significant expenses or make substantial payments. Further, if patents, trademarks, copyrights, or trade secrets are successfully asserted against us, this may harm our business and result in injunctions preventing us from developing, manufacturing, marketing or selling our services, or result in obligations to pay license fees, damages, attorney fees and court costs, which could be significant. Although patent, copyright, trademark, trade secret and other intellectual property disputes in our industry have often been settled through licensing or similar arrangements, costs associated with such arrangements may be substantial and could include ongoing royalties. We may be unable to obtain necessary licenses on satisfactory terms, if at all. In addition, if any license we obtain is non-exclusive, we may not be able to prevent our competitors and other third parties from using the intellectual property or technology covered by such license to compete with us. If we do not obtain necessary licenses, we may not be able to redesign our services to avoid infringement. Any of these events could materially and adversely affect our business, financial condition and results of operations. Additionally, we may file lawsuits or initiate other proceedings to protect or enforce our patents or other intellectual property rights, which could be expensive, time consuming and unsuccessful. Competitors may infringe our issued patents or other intellectual property, which we may not always be able to detect. Even if resolved in our favor, litigation or other proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our personnel from their normal responsibilities. Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties. Because of the expense and uncertainty of litigation, we may conclude that even if a third party is infringing, misappropriating or otherwise violating our owned or in-licensed patents, any patents that may be issued as a result of our future patent applications, or other intellectual property rights, the risk-adjusted cost of bringing and enforcing such a claim or action may be too high or not in the best interest of our company or our shareholders. In such cases, we may decide that the more prudent course of action is to simply monitor the situation or initiate or seek some other non-litigious action or solution. Intellectual property rights do not necessarily address all potential threats to our ability to compete. The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative: • others may be able to make a product that is similar to our current services and future services we intend to commercialize and that is not covered by the patents that we own or exclusively in-license and have the right to enforce; • we and any of our current or future licensors or collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own, license or may own or license in the future; 36 Table of Contents • we or any of our current or future licensors or collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating our intellectual property rights; • it is possible that our current or future owned or in-licensed patent applications will not lead to issued patents; • issued patents that we own or in-license may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges, including as a result of legal challenges by our competitors; • we may not develop additional proprietary technologies that are patentable; and • we may choose not to file a patent for certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property. Risks Relating to the Ownership of Telesat Public Shares and Telesat Partnership Units Each of MHR and PSP Investments have substantial governance rights over Telesat, and their interests may conflict with or differ from the interests of the other Telesat shareholders. Telesat’s governing documents contain special rights of each of MHR and PSP Investments to veto or participate in certain activities of Telesat. Such rights include, without limitation, the ability of each of MHR and PSP Investments to veto certain proposed changes to be taken by Telesat, including making changes to its respective organizational documents, restructurings, the declaration and payment of non-pro rata dividends and certain tax elections. These documents also provide, among other things, for MHR and PSP Investments to each designate three directors to Telesat’s board of directors. See the sections of this Annual Report entitled “Composition of the Telesat Corporation Board and Committees” and “Related Party Transactions — Investor Rights Agreements” for additional information on the negotiated rights of MHR and PSP Investments. The interests of either or both of MHR and PSP Investments may diverge from those of other Telesat shareholders, and each may exercise its respective voting and other rights in a manner adverse to the interests of such other holders. Each of MHR and PSP Investments have significant voting power in Telesat and their interests may conflict with or differ from the interests of the other Telesat shareholders. Both MHR and PSP Investments, and their affiliates, maintain significant voting interests in Telesat. The voting interests of each of MHR and PSP Investments, along with their governance rights, provide MHR and PSP with substantial control over Telesat. As a result, MHR and PSP Investments will have the ability to influence many matters affecting Telesat and actions may be taken that other shareholders may not view as beneficial or align with their interests. Additionally, the market price of the Telesat Public Shares could be adversely effected due to the significant control exercised by MHR and PSP Investments. Such control may also discourage transactions involving an offer for control of Telesat in which an investor may otherwise receive a premium for its Telesat Public Shares over the then-current market price, or discourage competing proposals if a going private transaction or change of control transaction is proposed by either MHR or PSP Investments. The vote of the holders of Class B Variable Voting Shares voting with respect to a particular matter may be diluted by the Golden Share. In order to maintain Telesat’s status as Canadian, the Telesat Articles employ a variable voting mechanism by way of, amongst other controls, the “Golden Share,” as discussed further in Exhibit 2.6 under the section “Meetings of Shareholders and Voting Rights — Golden Share Mechanic.” The voting power attributed to the Golden Share will vary to ensure that the aggregate number of votes cast by Canadians, including Red Isle, with respect to a particular matter, will equal a simple majority of all votes cast in respect of such matter, resulting in the dilution of the voting power of Telesat’s non-Canadian shareholders. Moreover, if a person who is not Canadian controls one-third or more of the votes of the Telesat Corporation Shares and the Telesat Partnership Units, any voting power of that shareholder in excess of one-third of the voting power (less one vote) of the Telesat Corporation Shares will be attributed to the Golden Share and voted by the Trustee as provided in the Telesat Articles. 37 Table of Contents Telesat may issue additional equity, which may be highly dilutive, may include terms with preferences that could adversely affect the rights of the shareholders of Telesat and/or may cause the market price of Telesat Public Shares to decline. Telesat may raise additional equity capital to fund Telesat Lightspeed, including through the issuance of Telesat Corporation Shares or other equity interests of Telesat or any one or more of its subsidiaries. Telesat may also issue additional equity in order to refinance its existing debt. Any such future issuance by Telesat and/or its subsidiaries could result in potential substantial ownership dilution to the shareholders of Telesat, which is not reflected in the beneficial ownership calculations presented in this Annual Report. In addition, newly issued securities may include liquidation or other preferences that could adversely affect the rights of the shareholders of Telesat and/or holders of Telesat Partnership Units. Furthermore, the future issuance of additional securities, whether equity or debt, by Telesat and/or its subsidiaries, or the perception that these issuances may occur, may cause the market price of the Telesat Public Shares to decline. This could also impair the ability of Telesat and/or its subsidiaries to raise additional capital through the sale of securities. So long as the number of Class B Variable Voting Shares and Class B Units exceeds the number of Class A Shares, Class C Shares, Class A Units and Class C Units on matters submitted to a vote of the holders of equity in Telesat Corporation (but not with respect to Second Tabulation matters): (1) the issuance of additional Class B Variable Voting Shares would have the effect of diluting the voting power of the then existing holders of the Class B Variable Voting Shares and Class B Units, but not the voting power of the then existing holders of the Class A Shares, Class C Shares, Class A Units and Class C Units, and (2) the issuance of additional Class A Shares would have the effect of diluting the voting power of the then existing holders of the Class A Shares, Class C Shares, Class A Units and Class C Units, but not the voting power of the then existing holders of the Class B Variable Voting Shares and Class B Units. See Exhibit 2.6 “Meetings of Shareholders and Voting Rights — Golden Share Mechanic”, and “— Risks Relating to the Ownership of Telesat Public Shares and Telesat Partnership Units — The vote of the holders of Class B Variable Voting Shares voting with respect to a particular matter may be diluted by the Golden Share”. The exchange of Telesat Partnership Units for Telesat Public Shares is subject to certain restrictions and the value of Telesat Public Shares received in any exchange may fluctuate. Holders of Telesat Partnership Units may be unable to exit their position when desired. The governance documents of Telesat and Telesat Partnership provide for the holders of Telesat Partnership Units to elect to exchange their interests generally on a 1:1 basis (subject to the terms described in Exhibit 2.6 entitled “Meetings of Shareholders and Voting Rights — Golden Share Mechanic”) into the corresponding class of Telesat Corporation Shares at such holder’s election. Any such exchange will be facilitated by a third-party exchange agent engaged by Telesat for this purpose, and is expected to settle within two U.S. business days (T+2). Because the parties have no control over this third party but are relying on the exchange agent to complete each exchange, the timing of settlement cannot be guaranteed. Telesat Partnership Units are non-transferrable and need to be exchanged for Telesat Corporation Shares in order for the holder to monetize its interest in Telesat Partnership, which could delay or impede such holder’s ability to access liquidity in the market. The Telesat Public Shares into which Telesat Partnership Units may be exchanged may be subject to significant fluctuations in value for many reasons, as further described herein. As described in greater detail below under the section entitled “— Risks Relating to Tax Matters,” it is also expected that the exchange of Telesat Partnership Units for Telesat Public Shares will be an exchange upon which gain or loss is recognized for U.S. federal income tax purposes. Telesat has certain indemnification obligations and additional obligations to PSP Investments, which in certain circumstances will be uncapped and may result in dilution to the then other shareholders of Telesat. Telesat and Telesat CanHoldco have indemnified PSP Investments on a grossed-up basis for PSP Investments’ pro rata share of costs relating to: (a) certain losses and litigation proceedings related to the Transaction, (b) certain losses with regard to Loral and out-of-pocket expenses of Loral and (c) certain tax matters. This indemnification will be (i) independent of the accuracy of the underlying representations and warranties and (ii) subject to additional, customary limitations. In the case of indemnification for certain tax matters only, there will be a cap of US$50,000,000 (other than with respect to defense costs and gross-up payments) and all other indemnification obligations will be uncapped. In addition, as provided in the Transaction Agreement, these indemnification obligations may be satisfied in the form of cash, unless, upon the 38 Table of Contents determination of the board of directors of Telesat, making such cash payment would unduly constrain the liquidity needs of the go-forward business, in which case such indemnification obligations may be satisfied by issuing Class C Shares valued at the 30-day volume-weighted average price (“VWAP”) as of the date on which such payment is required to be made. Any such issuance of Class C Shares to Red Isle may result in dilution to the other shareholders of Telesat. There is no assurance that Telesat will pay any cash dividends or that investors will realize gains on Telesat Public Shares. Any determination to pay dividends in the future will be at the discretion of Telesat’s board of directors, as described in Exhibit 2.6 under “Dividend Entitlements,” and will depend upon results of operations, financial condition, contractual restrictions, including agreements governing its debt and equity financing and any future indebtedness it may incur, restrictions imposed by applicable law and other factors Telesat’s board of directors deems relevant. The current expectation is that in the near term Telesat will not pay dividends but will retain its cash on hand for the purpose of funding the Telesat Lightspeed constellation, funding other capital investments and/or paying down debt. Realization of a gain on the Telesat Public Shares will depend on the appreciation of the price of Telesat Public Shares, which may never occur. See “Dividend Policy.” In certain circumstances, a limited partner of Telesat Partnership may lose its limited liability status. The Limited Partnerships Act (Ontario) (“Limited Partnerships Act”) provides that a limited partner benefits from limited liability unless, in addition to exercising rights and powers as a limited partner, such limited partner takes part in the control of the business of a limited partnership of which such limited partner is a partner. Subject to the provisions of the Limited Partnerships Act and of similar legislation in other jurisdictions of Canada, the liability of each limited partner of Telesat Partnership for the debts, liabilities and obligations of Telesat Partnership will be limited to such limited partner’s capital contribution, plus such limited partner’s share of any undistributed income of Telesat Partnership. The limitation of liability conferred under the Limited Partnerships Act may be ineffective outside Ontario except to the extent it is given extraterritorial recognition or effect by the laws of other jurisdictions. There may also be requirements to be satisfied in each jurisdiction to maintain limited liability. If limited liability is lost, limited partners of Telesat Partnership may be considered to be general partners (and therefore be subject to unlimited liability) in such jurisdiction by creditors and others having claims against Telesat Partnership. The market price of the Telesat Public Shares may be volatile and may be affected by market conditions beyond Telesat’s control. The market price of the Telesat Public Shares is subject to significant fluctuations in response to, among other factors: • variations in Telesat’s operating results and market conditions specific to companies in the satellite services industry; • changes in financial estimates or recommendations by securities analysts; • announcements of innovations or new products or services by Telesat or its competitors; • the emergence of new competitors; • operating and market price performance of other companies that investors deem comparable; • changes in Telesat’s board or management; • sales or purchases of the Telesat Public Shares by insiders; • commencement of, or involvement in, litigation; • changes in governmental regulations; and • general economic conditions and slow or negative growth of related markets. 39 Table of Contents In addition, if the market for stocks in Telesat’s industry experiences a loss of investor confidence, the market price of the Telesat Public Shares could decline for reasons unrelated to Telesat’s business, financial condition or results of operations. The market price of the Telesat Public Shares may be adversely affected by market conditions affecting the stock markets in general. Market conditions may result in volatility in the level of, and fluctuations in, market prices of stocks generally and, in turn, result in sales (including sales following the exchange of Telesat Partnership Units for Telesat Corporation Shares) of substantial amounts of the Telesat Public Shares in the market that may cause the market price of the Telesat Public Shares to fall dramatically. A weak global economy or other circumstances, such as changes in tariffs and trade, geopolitical conditions, and global health emergencies, could also contribute to extreme volatility of the markets, which may also have an adverse effect on the market price of the Telesat Public Shares. In addition, if any of the foregoing occurs, it could not only cause the price of the Telesat Public Shares to fall but also may expose Telesat to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to the board of directors and management. As a “foreign private issuer” under the rules and regulations of the SEC, Telesat is permitted to file less or different information with the SEC than a company incorporated in the U.S. or otherwise subject to these rules, and will follow certain home country corporate governance practices in lieu of certain NASDAQ requirements applicable to U.S. issuers. Telesat is considered a “foreign private issuer” under the Exchange Act and is therefore exempt from certain rules under the Exchange Act, including the proxy rules, which impose certain disclosure and procedural requirements for proxy solicitations for U.S. and other issuers. Moreover, Telesat is not required to file periodic reports and financial statements with the SEC as frequently or within the same time frames as U.S. companies with securities registered under the Exchange Act. Telesat currently prepares its financial statements in accordance with IFRS Accounting Standards. Telesat is not required to file financial statements prepared in accordance with or reconciled to U.S. GAAP so long as its financial statements are prepared in accordance with IFRS Accounting Standards as issued by the IASB. Telesat is not required to comply with Regulation FD, which imposes restrictions on the selective disclosure of material information to shareholders. Telesat’s officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of Telesat’s securities. In addition, as a foreign private issuer, Telesat follows certain home country corporate governance practices in lieu of certain exchange requirements. A foreign private issuer must disclose in its Annual Reports filed with the SEC each exchange listing requirement with which it does not comply followed by a description of its applicable home country practice. Telesat could lose its status as a “foreign private issuer” under current SEC rules and regulations if more than 50% of Telesat’s outstanding voting securities become directly or indirectly held of record by U.S. holders and one of the following is true: (i) the majority of Telesat’s directors or executive officers are U.S. citizens or residents; (ii) more than 50% of Telesat’s assets are located in the U.S.; or (iii) Telesat’s business is administered principally in the U.S. If Telesat loses its status as a foreign private issuer, it will no longer be exempt from the rules described above and, among other things, will be required to file periodic reports and annual and quarterly financial statements as if it were a U.S. domestic issuer. If this were to happen, Telesat would likely incur substantial costs in fulfilling these additional regulatory requirements and members of Telesat’s management would likely have to divert time and resources from other responsibilities to ensuring these additional regulatory requirements are fulfilled. The Telesat Articles provide that the courts of British Columbia will be the sole and exclusive forum for certain shareholder litigation matters, which could limit the ability of holders of Telesat Shares to choose a judicial forum for disputes with Telesat or its directors and officers. Under the Telesat Articles, unless Telesat consents in writing to the selection of an alternative forum, the courts of British Columbia will be the exclusive jurisdiction for (a) any derivative action or proceeding brought on behalf of Telesat; (b) any action or proceeding asserting a breach of a fiduciary duty owed to Telesat by any director, officer, or other employee of Telesat; (c) any action or proceeding asserting a claim arising pursuant to any provision of the BCBCA 40 Table of Contents or the Telesat Articles; or (d) any action or proceeding asserting a claim otherwise related to the relationships among Telesat, its subsidiaries and its and their respective shareholders, directors and officers (but excluding claims related to the business of Telesat or its subsidiaries). The Telesat Articles further provide that if a shareholder commences an action outside of the courts of British Columbia, the shareholder will be deemed to consent to (i) the jurisdiction of the British Columbia courts and (ii) service on a shareholder being made by service on such shareholder’s counsel (in lieu of such shareholder), in respect of such action. While these provisions are intended to provide increased consistency in the application of law in the types of lawsuits to which it applies, as a result of these provisions, a U.S. shareholder may be forced to pursue such claims in the courts of British Columbia, which may entail added expense, compliance with an unfamiliar foreign legal regime, and difficulty in enforcing a judgment against non-Canadian persons. The foregoing provisions should not apply to other types of suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which United States federal courts have exclusive jurisdiction. Further, under the Securities Act, federal and state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and equity holders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Accordingly, a court may determine that this provision is unenforceable to the extent it relates to such laws, rules and regulations, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against Telesat’s directors and officers. The Telesat Articles include a renunciation of certain business opportunities which could enable related parties to benefit from business opportunities that might otherwise be available to Telesat. The Telesat Articles provide for the renunciation of certain enumerated business opportunities by Telesat and its subsidiaries. This includes an acknowledgement by Telesat that (i) its directors, (ii) its shareholders that employ, retain or are otherwise associated with, or designate or nominate, directors, and/or (iii) their affiliates, may become aware, from time to time, of certain business opportunities (such as investment opportunities) and may direct such opportunities to other businesses in which they have invested, with no obligation to make Telesat aware of any business opportunities that have been renounced by Telesat. Further, such businesses, including entities in which MHR and PSP Investments invest, may choose to compete with Telesat for renounced business opportunities and for business opportunities that have been separately discovered by the directors and their related parties, possibly causing these opportunities to not be available to Telesat or causing them to be more expensive for Telesat to pursue. These potential conflicts of interest could adversely impact Telesat’s business or prospects if attractive business opportunities are procured by such parties for their own benefit rather than for the benefit of Telesat. Risks Relating to Tax Matters U.S. Tax Risks Telesat or Telesat Partnership could be treated as a U.S. corporation for U.S. federal income tax purposes. Telesat and Telesat Partnership are classified as a non-U.S. corporation and a non-U.S. partnership, respectively, under general rules of U.S. federal income taxation. Unlike U.S. persons, who are generally subject to U.S. tax on worldwide income, non-U.S. persons are subject to U.S. income tax only on certain income from U.S. sources and from conducting business. Section 7874 of the Internal Revenue Code of 1986, as amended (the “Code”), and certain regulatory provisions promulgated under Section 7874, however, contain rules that, if applicable, could cause Telesat or Telesat Partnership to be taxed as a U.S. corporation for U.S. federal income tax purposes. This treatment would apply only if (i) Telesat or Telesat Partnership acquired substantially all of the stock or assets of Loral (the “Acquisition Requirement”), (ii) following the acquisition, former shareholders of Loral own at least 80% of Telesat or Telesat Partnership by reason of their ownership of stock of Loral (the “80% Ownership Test”), (iii) the level of business activities conducted by Telesat or Telesat Partnership and its affiliates in Canada did not satisfy a certain minimum threshold level of activity (“Substantial Business Activities”), and (iv) in the case of Telesat Partnership, it is treated as a publicly traded partnership. These statutory and regulatory rules are complex and there is little administrative guidance regarding their application. 41 Table of Contents Prior to consummation of the Transaction, Loral received an opinion from special tax counsel that upon consummation of the Transaction, neither Telesat nor Telesat Partnership should be taxed as a U.S. corporation. Such opinion, however, provides no assurance that the IRS may not take a position contrary to the opinion or that a court considering the issue may not hold otherwise. Further, such opinion does not consider any legislative proposals to lower the threshold for the 80% Ownership Test to 50% (or some other percentage). While the Transaction Agreement was entered into on November 23, 2020, it is possible that such legislative proposals, if enacted, might be applied on a retroactive basis, with no grandfather clause for transactions executed pursuant to a binding commitment entered into prior to such legislation’s enactment. If it were determined that Telesat or Telesat Partnership should be taxed as a U.S. corporation for U.S. federal income tax purposes, Telesat or Telesat Partnership, as applicable, would be subject to U.S. federal tax return filing requirements and would be subject to U.S. tax on its worldwide income. Any foreign taxes, including Canadian taxes, paid by it would be creditable subject to several limitations, which could be material limitations. Telesat or Telesat Partnership could be treated as a surrogate foreign corporation for U.S. federal income tax purposes and Loral could be treated as an expatriated entity, which might have adverse U.S. tax consequences for Loral and for shareholders of Telesat. Even if neither Telesat nor Telesat Partnership is treated as a U.S. corporation as described above, Section 7874 of the Code and the associated regulations contain an alternative set of rules that could result in Telesat or Telesat Partnership being treated as a “surrogate foreign corporation,” and Loral being treated as an expatriated entity, if (i) the Acquisition Requirement is satisfied, (ii) following the acquisition, former shareholders of Loral own at least 60% of Telesat or Telesat Partnership by reason of their ownership of Loral stock (the “60% Ownership Test”), (iii) Telesat or Telesat Partnership does not have Substantial Business Activities in Canada, and (iv), in the case of Telesat Partnership, it is treated as a publicly traded partnership. Prior to consummation of the transaction, Loral received an opinion from special tax counsel that, though it is not free from doubt, Telesat should not be treated as a surrogate foreign corporation. As mentioned above, Loral also received an opinion that Telesat Partnership should neither be treated as a publicly traded partnership, nor, accordingly, a surrogate foreign corporation. If Telesat Partnership were treated as a publicly traded partnership, it would be treated as a surrogate foreign corporation effective as of the consummation of the Transaction. Special tax counsel’s opinion described above does not provide assurance that the IRS will not take a contrary position or that a court considering the issue would not hold otherwise. If it were determined that Telesat and/or Telesat Partnership should be treated as a surrogate foreign corporation and Loral should be treated as an expatriated entity, Loral would be subject to limitation as to the use of net operating losses and foreign tax credits to offset certain gain recognized in periods on or after the date of the Transaction. It is not anticipated that Loral will realize any material amount of gain upon or subsequent to the Transaction. If it did, however, the limitation as to the use of net operating losses and foreign tax credits could increase its potential U.S. tax liability. Absent a change in facts and circumstances or law, it is anticipated that Telesat will eventually become a surrogate foreign corporation, and that Loral will become an expatriated entity, upon the exchange of a sufficient number of Telesat Partnership Units for Telesat Public Shares to cause both the 60% Ownership Test and the Acquisition Requirement to be satisfied. Moreover, if Loral were determined to be an expatriated entity before December 22, 2027, Loral would be required to recapture the deduction it claimed on its 2017 U.S. federal income tax return under Section 965(c) of the Code and to pay additional tax in an amount equal to 35% of the amount of such deduction. It is anticipated that the amount of such recapture would be US$38,500,000. Consequently, such recapture would substantially increase Loral’s U.S. federal income tax liability for the year in which it was determined to be an expatriated entity. Under the terms of the Transaction Agreement, PSP Investments may be entitled to a grossed-up indemnification payment for its pro rata share of such tax. In addition, if Telesat were determined to be a surrogate foreign corporation, dividends paid by Telesat would not be treated as qualified dividend income under Section 1(h)(11) of the Code. Accordingly, non-corporate U.S. shareholders of Telesat would be subject to tax on such dividends at ordinary income rates of up to 37%, and not at the preferential 20% rate applicable under Section 1(h)(11) of the Code. 42 Table of Contents Telesat may have been a passive foreign investment company (a “PFIC”) for 2021, 2022, 2023, 2024, and 2025 and could be classified as a PFIC in 2026 and subsequent taxable years, potentially resulting in adverse U.S. tax consequences to its U.S. shareholders. Generally, if for any taxable year 75% or more of a foreign corporation’s gross income is passive income, or at least 50% of the average percentage of assets held by such foreign corporation are held for the production of, or produce, passive income, the foreign corporation is classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes. Under the complex PFIC look-through rules, for purposes of determining whether a foreign corporation should be classified as a PFIC, such foreign corporation will generally be treated as if it owns a proportionate share of the assets of, and earns a proportionate share of the income earned by, any subsidiary corporation if the foreign corporation owns at least 25% (by value) of the stock of any such subsidiary corporation. Furthermore, similar look-through rules apply to partnerships in which a foreign corporation owns at least a 25% interest. During 2021 after the Transaction and during a portion of 2022, Telesat owned only approximately 24% of the Telesat Partnership Units. Telesat’s ownership interest in Telesat Partnership increased during 2022 and has further increased each year thereafter. As of December 31, 2022, December 31, 2023, December 31, 2024, and December 31, 2025, Telesat’s ownership interest in Telesat Partnership was 25.7%, 27.2%, 28%, and 29.1%, respectively. While not free from doubt, Telesat believes that, by virtue of additional value associated with its interest as general partner of Telesat Partnership, Telesat owned at least 25% of the total value of Telesat Partnership (and indirectly in the wholly owned corporate subsidiaries of Telesat Partnership) during 2021 and 2022. In addition, Telesat owned more than 25% of the total value of Telesat Partnership (and indirectly in the wholly owned corporate subsidiaries of Telesat Partnership) during 2023, 2024 and 2025. Based on the foregoing, Telesat believes it was not a PFIC for any of its 2021-2025 taxable years, taking into account the income and assets of the wholly owned corporate subsidiaries of Telesat Partnership. Telesat can provide no guarantee that the IRS will not successfully challenge this position upon any audit of a U.S. holder. The determination as to whether Telesat should be classified as a PFIC for 2026 and years thereafter will be a factual determination that must be made annually at the close of each taxable year and will be based upon the composition of Telesat’s income and assets (including certain entities in which Telesat holds at least a 25% interest), which may be subject to change. As a result, it is not possible to determine whether Telesat will be characterized as a PFIC for 2026 or any other future year until after the close of such future year. While Telesat intends to manage its business so as to avoid PFIC status to the extent possible and consistent with its other business goals, Telesat cannot predict whether its business plans will allow it to avoid PFIC status. In addition, because the market price of the Telesat Public Shares has fluctuated and is likely to fluctuate in the future, and because that market price may affect the determination of whether Telesat is a PFIC, there can be no guarantee that Telesat will not be a PFIC for any taxable year. U.S. holders of Telesat Public Shares could suffer adverse tax consequences as a result of the classification of Telesat as a PFIC, including (i) having gains realized on the sale of the shares treated as ordinary income, rather than capital gain, (ii) not qualifying for the preferential rate that may otherwise be applicable to dividends received on the Telesat Public Shares, (iii) having interest charges apply to certain distributions by Telesat and to the proceeds of the sale of Telesat Public Shares, and (iv) additional reporting requirements. Telesat will use reasonable efforts to provide to U.S. holders the information needed to report income and gain pursuant to a “qualified electing fund” election, which election may alleviate some of the adverse tax consequences of PFIC status. However, if the IRS were to determine that Telesat Corporation was a PFIC for a year with respect to which we have determined that we were not a PFIC, it may be too late for a U.S. holder to make a timely QEF (or Mark-to-Market) election. See “Passive Foreign Investment Company Status” for more information. You are urged to consult your tax advisors regarding the application of the PFIC rules. Distributions from Telesat Partnership may be insufficient to pay tax on the allocation of income and/or gain for U.S. tax purposes. While Telesat Partnership intends to make certain distributions to holders of Telesat Partnership Units, a holder of Telesat Partnership Units may receive allocations of income and/or capital gains in a year for U.S. tax purposes without receiving sufficient cash distributions from Telesat Partnership for that year to pay any U.S. or other tax the holder may owe because of such allocation. In addition, there can be no assurance that Telesat Partnership will in fact make cash distributions as intended. Even if Telesat Partnership is unable to distribute cash in amounts that are sufficient to fund a holder’s tax liability, such holder will nonetheless be required to pay any applicable income taxes. 43 Table of Contents Canadian Tax Risks Telesat Partnership may be liable to pay tax under the SIFT Rules which may reduce after-tax returns to holders of Telesat Partnership Units and holders of Telesat Public Shares. Telesat Partnership is a “SIFT partnership” for the purposes of the Income Tax Act (Canada) (the “Tax Act”). As such, Telesat Partnership is subject to SIFT tax on its “taxable non-portfolio earnings” (as defined in the Tax Act), if any, including income, other than taxable dividends, from “non-portfolio property” (as defined in the Tax Act). In particular, Telesat Partnership would generally be required to pay SIFT tax if its Loral stock were non-portfolio property and the unlimited liability company (“Can ULC”) formed under the laws of British Columbia by Loral Holdings Corporation (“Loral Holdings”) and Telesat CanHoldco paid a dividend to Loral Holdings, subject to any deductions that may be available to Telesat Partnership in computing the income from its Loral stock. In particular, provided Loral Holdings and Loral each pay corresponding dividends in the same taxation year as any dividend paid by Can ULC, Telesat Partnership may have available to it and intends to claim sufficient deductions so that it does not have net income from non-portfolio property. Although it is intended that Loral Holdings and Loral would each pay corresponding dividends in the same taxation year as any dividend paid by Can ULC, no assurance can be given that such dividends will be paid or that such deductions will be available. If Telesat Partnership were required to pay SIFT tax, after-tax returns to holders of Telesat Partnership Units and indirectly to holders of Telesat Public Shares may be reduced. Telesat may be liable to pay tax in respect of dividends paid by Can ULC to Loral Holdings. Loral Holdings is a controlled foreign affiliate of Telesat Partnership for purposes of the Tax Act. As such, Telesat Partnership is required to include in its income for a year its share of the “foreign accrual property income” or “FAPI” (as defined in the Tax Act) of Loral Holdings for such year, including its proportionate share of any dividends paid by Can ULC to Loral Holdings in such year. In turn, Telesat must include in income its share of the FAPI (including such dividends paid by Can ULC to Loral Holdings) of Telesat Partnership. However, if Loral Holdings and Loral each pay corresponding dividends in the same taxation year, and provided that Loral is a “foreign affiliate” of Telesat for relevant purposes of the Tax Act, Telesat may deduct in computing its taxable income a prescribed portion of such dividends received by it through Telesat Partnership. In determining the amount of such dividends from Loral that may be deducted in computing its taxable income, Telesat intends not to take into account any deduction claimed by Telesat Partnership pursuant to subsection 91(5) of the Tax Act. Telesat believes that such interpretation is consistent with the rationale expressed by the Canada Revenue Agency (“CRA”) for its published administrative position in this regard, but no assurance can be given. If the deduction that Telesat would otherwise claim were limited, or if a deduction claimed by Telesat were denied or otherwise not available, Telesat may be liable to pay tax on some or all of its share of FAPI resulting from any dividends paid by Can ULC to Loral Holdings and after-tax returns to holders of Telesat Public Shares may be reduced. Non-Canadian limited partners may be subject to Canadian federal income tax with respect to any Canadian source business income earned by Telesat Partnership and may be required to file Canadian tax returns. Telesat, as general partner, intends to manage the affairs of Telesat Partnership to the extent possible so that it does not carry on business in Canada for the purposes of the Tax Act. Nevertheless, because the determination of whether Telesat Partnership is carrying on business in Canada for the purposes of the Tax Act is a question of fact that is dependent upon the relevant circumstances, the CRA might successfully assert that Telesat Partnership carries on business in Canada for the purposes of the Tax Act. If Telesat Partnership were considered to carry on business for the purposes of the Tax Act, holders of Telesat Partnership Units who are not, and are not deemed to be, resident in Canada for purposes of the Tax Act (“non-Canadian residents”), (i) would be subject to Canadian federal income tax on their proportionate share of any Canadian source business income earned or considered to be earned by Telesat Partnership, subject to any relief that may be provided by any applicable income tax treaty or convention, and (ii) may be required to file a Canadian federal income tax return. 44 Table of Contents Payments of dividends by Telesat CanHoldco to Telesat Partnership will be subject to Canadian federal withholding tax and if CRA does not apply their administrative position Telesat CanHoldco may be liable for additional amounts of Canadian federal withholding tax plus any associated interest and penalties in certain circumstances. Dividends paid or credited or deemed to be paid or credited to a partnership that is not a “Canadian partnership” (as defined in the Tax Act) by a corporation resident in Canada are subject to withholding tax at a 25% rate. Telesat Partnership is not a “Canadian partnership” for purposes of the Tax Act. However, in determining the rate of Canadian federal withholding tax applicable to dividends paid by Telesat CanHoldco to Telesat Partnership, Telesat, as general partner, expects Telesat CanHoldco to look through Telesat Partnership to its partners and, having regard to the CRA’s administrative practice in similar circumstances, (i) not to withhold on that portion of a dividend attributable to partners of Telesat Partnership (including Telesat) who are residents of Canada for purposes of the Tax Act, and (ii) to take into account any reduced rates of Canadian federal withholding tax to which limited partners who are non-Canadian residents may be entitled under an applicable income tax treaty or convention. There is a risk that the CRA will not apply its administrative practice such that Telesat CanHoldco may be liable for additional amounts of Canadian federal withholding tax plus any associated interest and penalties if it withholds tax at less than the 25% rate under the Tax Act. Distributions from Telesat Partnership may be insufficient to pay tax on the allocation of income and loss for tax purposes. While Telesat Partnership intends to make certain distributions to holders of Telesat Partnership Units, a holder may receive allocations of income and/or capital gains in a year for purposes of the Tax Act without receiving sufficient distributions from Telesat Partnership for that year to pay any tax the holder may owe because of such allocation. In addition, there can be no assurance that Telesat Partnership will in fact make cash distributions as intended. Even if Telesat Partnership is unable to distribute cash in amounts that are sufficient to fund a holder’s tax liability arising from any such allocation, such holder will nonetheless be required to pay any applicable income taxes. Certain Canadian rules in respect of foreign tax credits may apply to Telesat Partnership. The Tax Act contains anti-avoidance rules to address certain foreign tax credit generator transactions (the “Foreign Tax Credit Generator Rules”). Under certain Foreign Tax Credit Generator Rules, the “foreign accrual tax” (which is a deduction which may be available under the Tax Act) applicable to a FAPI inclusion of Telesat Partnership may be denied in certain specified circumstances, including where the direct or indirect share of the income of any member of Telesat Partnership that is a person resident in Canada or a “foreign affiliate” of such a person is, under a “relevant foreign tax law” (within the meaning attributed to it in the Tax Act), less than such member’s share of such income for purposes of the Tax Act. Although the Foreign Tax Credit Generator Rules are not expected to apply to Telesat Partnership, no assurances can be given in this regard. If the Foreign Tax Credit Generator Rules apply, the “foreign accrual tax” applicable to a FAPI inclusion will be denied and after-tax returns to holders of Telesat Public Shares may be reduced. Canadian tax laws, or the interpretation thereof, could change in a manner which adversely affects Telesat Partnership, Telesat, and holders of Telesat Partnership Units and/or Telesat Public Shares. There is a risk that Canadian tax laws, or the interpretation thereof, could change in a manner that adversely affects Telesat Partnership, Telesat, or the holders of Telesat Partnership Units and/or Telesat Public Shares. Changes in tax laws and unanticipated tax liabilities could adversely affect profitability. Telesat is subject to taxes in Canada and numerous foreign jurisdictions. Telesat’s tax liabilities could be adversely affected in the future by a number of factors, including changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws (or the manner in which tax authorities interpret and administer them), and the outcome of tax audits in various jurisdictions around the world. Many of the countries in which Telesat does business have or are expected to adopt changes to tax laws as a result of the Base Erosion and Profit Shifting (“BEPS”) final proposals from the Organisation for Economic Co-operation and Development (“OECD”) and specific country anti-avoidance initiatives. In particular, legislation to implement Canadian interest expense deduction limitation rules, consistent with the OECD’s recommendations as a result of the BEPS final proposals, was enacted by Parliament in 2024. These rules apply starting in 2024 and generally limit Canadian interest deductions and financing expenses to 30% of tax EBITDA. Such tax law changes increase uncertainty and may adversely affect Telesat’s tax provision. Telesat regularly assesses all of these matters to determine the adequacy of its tax provision, which is subject to significant judgment. 45 Table of Contents

A. History and Development of the Company Telesat, as it exists today, is the result of the 2007 combination of Telesat Canada and Loral Skynet, although the company’s history dates to 1969, when the Canadian Parliament passed the Telesat Canada Act. In 1972, Telesat Canada launched the world’s first domestic commercial satellite in geostationary orbit and the Company has been a pioneer and leading innovator in satellite communications ever since. Telesat Canada launched the first commercial Ku-band satellite (officially, the DTH satellite television service) in 1978, Canada’s first direct broadcast satellite (“DBS”) in 1999 and the world’s first consumer 2-way Ka-band broadband internet service via satellite in 2004. Since the mid-1970s, Telesat Canada has provided advanced satellite services for voice, data and broadcast communications in the Americas, including in Canada’s far North. Loral Skynet traced its history to two early companies in the U.S. satellite communications industry: AT&T Skynet and Orion Satellite Corporation (“Orion”). AT&T Skynet and its predecessor organizations in AT&T’s Bell Laboratories effectively launched the commercial satellite communications industry by demonstrating the first trans-Atlantic satellite delivery of television on Telstar 1 in 1962. Through the 1970s, 1980s and 1990s, AT&T Skynet provided state-of-the-art telephone and television services in the U.S. for AT&T, as well as video distribution and contribution services for U.S. broadcasters and cable operators using the Comstar and Telstar series of satellites. Orion was formed in 1988 for the purpose of providing international data services. In 1994, Orion launched Orion 1, which provided early trans-Atlantic services between the U.S. and Europe. Orion was the second U.S. licensed “separate system” authorized to compete directly with the intergovernmental organization INTELSAT for certain types of international satellite services. In 1997, AT&T Skynet was acquired from AT&T by LSC Holdings, became Loral Skynet, and expanded its focus from the U.S. to become a global satellite operator. Orion was acquired by LSC Holdings in 1998, and its operations were integrated with those of Loral Skynet in 1999. On October 31, 2007, PSP Investments and Loral acquired 100% of the stock of Telesat Canada from BCE Inc., Canada’s largest communications company (the “Skynet Transaction”). Following the Skynet Transaction, the Loral Skynet and Telesat Canada businesses and assets were combined. On November 18, 2021 and November 19, 2021, Telesat Corporation, a corporation incorporated under the laws of the Province of British Columbia, Canada on October 21, 2020, along with the other parties to the Transaction Agreement consummated the Transaction. See “Related Party Transactions — The Transaction”. Telesat Corporation is the general partner of Telesat Partnership LP, which was formed under the Limited Partnership Act (Ontario) on November 12, 2020. Telesat Corporation directly or indirectly own 100% of all of its operating subsidiaries. The Transaction was effected in accordance with the Transaction Agreement through a series of transactions, including: (i) on November 18, 2021, Red Isle contributing 272,827 Telesat Canada Non-Voting Participating Preferred Shares to Telesat in exchange for Class C Fully Voting Shares of Telesat and the balance of its equity interest in Telesat Canada to Telesat Partnership in exchange for Class C Units of Telesat Partnership; (ii) on November 18, 2021 and pursuant to stockholder contribution agreements, the contribution by current and former members of management of Telesat Canada of their Telesat Canada Non-Voting Participating Preferred Shares to Telesat in exchange for newly issued Class A Common Shares of Telesat if such contributing shareholder is Canadian (as such term is defined in the Investment Canada Act) or newly issued Class B Variable Voting Shares of Telesat if such contributing shareholder is not Canadian (as such term is defined in the Investment Canada Act); (iii) on November 18, 2021 and pursuant to the director contribution agreement, the contribution by John Cashman and Clare Copeland of their Telesat Canada Director Voting Preferred Shares to Telesat Partnership in exchange for interests in Telesat Partnership, which were subsequently redeemed by Telesat Partnership for cash on November 19, 2021; (iv) on November 18, 2021 and pursuant to option holder exchange agreements, the exchange of options, tandem stock appreciation rights and restricted stock units in respect of Telesat Canada for corresponding instruments in Telesat with the same vesting terms and conditions; and (v) on November 19, 2021, the merger of Merger Sub with and into Loral, with Loral surviving the Merger as a wholly owned subsidiary of Telesat Partnership and the other Loral stockholders receiving shares of Telesat or units of Telesat Partnership as described below. 46 Table of Contents Under the terms of the Transaction Agreement, at the Effective Time, each share of Loral common stock outstanding immediately prior to the Effective Time was converted into the right to receive (a) if the Loral stockholder validly made a Unit Election, one newly issued Class A Unit of Telesat Partnership if such Loral stockholder was Canadian (as such term is defined in the Investment Canada Act), and otherwise one newly issued Class B unit of Telesat Partnership, (b) if the Loral stockholder validly made a Shares Election, one newly issued Class A Common Share if such Loral stockholder was Canadian (as such term is defined in the Investment Canada Act), or (c) if the Loral stockholder validly made a Shares Election and was not Canadian, or did not validly make a Unit Election or a Shares Election, one newly issued Class B variable voting share. Following the Transaction, Telesat Canada became an indirect wholly owned subsidiary of Telesat. In addition, on November 18, 2021, Telesat entered into the trust agreement and trust voting agreement with Telesat Partnership, TSX Trust Company as the trustee of Telesat Corporation Trust and, in the case of the trust agreement, the settlor of the trust, effectuating the voting trust relating to the voting rights of units of Telesat Partnership. Following the completion of the Transaction, our authorized share capital includes Class A Common Shares, Class B Variable Voting Shares, Class C Fully Voting Shares, Class C Limited Voting Shares, a Class A Special Voting Share, a Class B Special Voting Share, a Class C Special Voting Share, the Golden Share and Class A Preferred Shares. The Special Voting Shares and the Golden Share have no material economic rights. The Telesat Public Shares commenced trading on the Nasdaq Stock Market and the Toronto Stock Exchange under the ticker symbol “TSAT” on November 19, 2021. The Telesat Partnership Units are not listed on an exchange. In March 2022, Telesat established Telesat Government Solutions (TGS), a wholly-owned subsidiary of Telesat Canada. TGS has been approved by the U.S. Government Defense Counterintelligence and Security Agency as a Foreign Ownership, Control, or Influence-mitigated entity and operates under a Special Security Agreement with the U.S. Government. In September 2025, Telesat Canada distributed 62% of the equity of its Telesat Lightspeed business to an indirect subsidiary of Telesat Corporation. The indirect subsidiary is wholly-owned by Telesat Canada’s parent entities and is a Non-Guarantor under Telesat Canada’s debt documents. Our fiscal year ends on December 31 of each calendar year. Our agent for service of process in the United States is Puglisi & Associates, whose address is 850 Library Avenue, Suite 204, Newark, Delaware 19711. The registered office of Telesat Corporation is located at 200 Burrard St. #1200, Vancouver, BC V7X 1T2 and our head office is located at 160 Elgin Street, Ottawa, Ontario, Canada K2P 2P7. The head office of Telesat Partnership is located at 160 Elgin Street, Ottawa, Ontario, Canada K2P 2P7. Our telephone number at our head and registered office is (613) 748-8700. Our website address is https://www.telesat.com. Information contained on, or accessible through, our website is not part of this Annual Report and the inclusion of our website address in this Annual Report is an inactive textual reference. Additional Information on the Company The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at https://www.sec.gov. Our filings with the SEC can be accessed free of charge at this website. B. Business Overview The following discussion of the business of Telesat is qualified by reference to, and should be read in conjunction with, the “Risk Factors” starting on page 8 of this Annual Report. Business Overview Telesat is a leading global satellite operator, providing its customers with mission-critical communications services since the start of the satellite communications industry in the 1960s. Through a combination of advanced satellites and ground facilities and a highly expert and dedicated staff, our communications solutions support the requirements of sophisticated satellite users throughout the world. Throughout our lengthy operating history, we have demonstrated a deep commitment to customer service and led the way on many of the industry’s most ground-breaking innovations. 47 Table of Contents After decades of developing and successfully operating our GEO satellite services business, we are building what we believe will be one of the world’s most advanced constellations of LEO satellites and integrated terrestrial infrastructure, called “Telesat Lightspeed” — a state-of-the-art network designed to provide global broadband connectivity to enterprise and government customers. Telesat Lightspeed has the potential to dramatically increase the Company’s addressable market and significantly expand its growth potential. Industry Overview and Trends We compete in the market for the provision of voice, data, video and internet connectivity services worldwide. Services of this type are provided using various technologies, including satellite networks. We provide communications links between fixed points on the earth’s surface, referred to as point-to-point services, and from one point to multiple points, referred to as point-to-multipoint services. We also provide services to mobile platforms, such as ships and airplanes. Over the last several decades, deregulation and privatization have significantly reshaped the satellite sector. In addition, the sector has undergone consolidation, with regional, national and global operators being acquired by larger companies or seeking to partner with other providers. There have also been many new, smaller entrants, including many governmental operators, launching national or regional satellite programs. More recently, non-geostationary satellite systems have been announced and are in various stages of development, deployment and operation. Satellite Systems A generic satellite system consists of a space segment and an earth segment. The “space segment” is comprised of the satellites and the Telemetry, Tracking and Control (“TT&C”) systems and facilities used to control and monitor the satellites. The “earth segment” is made up of all of the communication earth stations and other devices that access operational satellites. A satellite has two primary subsystems: the communications payload and the spacecraft bus. In its simplest form, the communications payload consists of components that receive the signals from earth and process them for transmission back to earth or to another satellite via an intersatellite link. The spacecraft bus is essentially comprised of all of the non-communications equipment, including the electrical and TT&C subsystems, the propulsion and thermal subsystems and the spacecraft structure itself. GEO satellites circle the earth from orbital locations approximately 22,300 miles (35,700 kilometers) above the equator. The speed at which they orbit the earth corresponds to the speed of the earth’s rotation. As a result, each GEO satellite appears fixed over a geographic area and in essence “blankets” that area with its signals, and an earth station antenna located in that area can communicate continuously with a particular satellite if it is pointed to, and has an unobstructed view of, that satellite’s orbital location. An individual satellite can be designed to communicate with major portions of the earth via large, geographically dispersed beams, to focus its coverage more specifically on particular markets or regions through regional or spot beams, or to use a portion of its total capacity for each type of coverage. The non-geostationary orbit, or NGSO, includes satellites operating in LEO, with an altitude typically between 200 and 870 miles (325 to 1,400 kilometers) and satellites operating in Medium Earth Orbit, or MEO, that is between the LEO and GEO orbits. Unlike geosynchronous satellites that operate in a fixed orbital location above the equator, LEO and MEO satellites travel around the earth at high velocities requiring antennas on the ground to track their movement. LEO satellite systems offer a number of advantages over GEO satellites to meet growing requirements for broadband services, both consumer and enterprise, by providing increased data speeds and capacity, global coverage, and latency on par with or, in some circumstances, better than terrestrial services. Our Competitive Strengths Telesat continues to be at the forefront of the satellite services industry, leading with outstanding customer service and a culture of engineering excellence and technological innovation. We are leveraging this experience as we build our Telesat Lightspeed constellation with the aim of creating a transformative and industry-leading fiber-like broadband network from space for commercial and government users globally. Today, we have a leading GEO business with satellites occupying attractive orbital locations delivering services to hundreds of customers worldwide. The average expected remaining commercial life of our satellite fleet is approximately four years. Additionally, we currently have a fleet utilization rate of 59%. 48 Table of Contents The following competitive strengths characterize our business today and provide a strong foundation for Telesat Lightspeed: Leading Global Satellite Operator with Over 55 Years of Heritage and a Blue Chip Customer Base We are a leading global satellite operator with over 55 years of operating experience. Our GEO satellite fleet is comprised of 14 satellites and offers global satellite coverage with a concentration over the Americas. Through our deep commitment to customer service and focus on innovation and engineering excellence, we have developed strong and long-standing relationships with a diverse range of customers globally. Commercial Success and Industry-Leading Engineering Expertise Driving Continuous Innovation and Advancement We have a long-standing track-record of innovation, “firsts,” and commercial success in the global satellite industry, guided by one of the most experienced management teams in the industry. Our deep technical expertise and commercial focus has enabled us to pioneer many of the industry’s most ground breaking innovations and commercial successes, including: 1962 Telstar 1, built by Telesat’s predecessors at AT&T and Bell Laboratories, successfully delivered the first live intercontinental satellite TV transmission between Europe and the United States; 1972 Telesat launched Anik A1, the world’s first commercial domestic communications satellite in geostationary orbit; 1978 Telesat launched the first commercial Ku-band satellite on which was offered the first DTH television service, laying the groundwork for the global DTH industry; 1981 Telesat co-located two satellites in a single orbital slot for the first time, now a widely-used industry practice; 1996 Telesat was the first to provide internet access to Internet Service Providers (“ISPs”) over satellite; 2004 Telesat launched Anik F2, the first satellite to successfully commercialize DTH consumer Ka-band broadband services; 2009 Telesat launched Telstar 11N, the first satellite to provide Ku-band coverage of the Atlantic Ocean from the Arctic Circle to the Equator; 2013 Telesat launched Anik G1, the first commercial satellite with substantial X-band coverage of the Pacific Ocean, including Hawaii, to serve government users; 2015 Telesat launched Telstar 12 VANTAGE, the first satellite combining high-throughput satellite (“HTS”) spot beams and conventional broad beams, giving customers the ability to maximize throughput, lower cost per bit and meet growing demand for bandwidth intensive applications; 2018 Telesat launched its Phase 1 LEO satellite (“LEO 1”), the start of Telesat Lightspeed, leveraging Telesat’s innovative, patented design, and provided the first high-speed broadband connectivity from LEO; 2019 Telesat conducted the world’s first 5G backhaul demonstration over LEO satellite in partnership with Vodafone and the University of Surrey; 2020 Telesat and the GoC finalized $600 million agreement to bridge Canada’s digital divide with Telesat’s Low Earth Orbit satellite constellation; 2023 Telesat successfully launched another Phase 1 LEO satellite (“LEO 3”) that is currently being used for innovative demonstration purposes; 2023 Telesat contracts MDA Ltd. as prime satellite manufacturer for its advanced Telesat Lightspeed LEO constellation; 49 Table of Contents 2024 Telesat secured funding from the Canadian federal and Quebec provincial governments in the combined amount of approximately US$2 billion. This funding, combined with Telesat’s own approximately US$1.6 billion equity contribution, as well as certain vendor financing, provides the Telesat Lightspeed program with sufficient funds to launch global service; 2024 Telesat, in collaboration with the European Space Agency (ESA), reported a groundbreaking milestone in telecommunications technology by successfully establishing the world’s first 3GPP Non-Terrestrial Network (NTN) link over Low Earth Orbit (LEO) in the Ka-band between the ESTEC 5G Laboratory and the Telesat LEO 3 satellite; 2025 Telesat secures substantial multi-year contract with Viasat for Telesat Lightspeed services; 2025 Telesat entered a strategic partnership with the GoC and MDA Space to develop and deliver a multi-frequency, Arctic military satellite communications capability to the Canadian Armed Forces; and 2026 Telesat announced the addition of Mil-Ka frequences to its advanced Telesat Lightspeed network to meet the anticipated global demand for mission critical Mil-Ka capacity in LEO. We believe our accumulated experience and expertise in the design, procurement, launch, operation and commercialization of satellites and satellite networks is unparalleled and will continue to drive our success into the future. Positioned to Provide Global Broadband Connectivity with Telesat Lightspeed We are positioned to provide global broadband internet connectivity to enterprise and government customers with Telesat Lightspeed, which we believe will be one of the world’s most advanced constellations of LEO satellites and integrated terrestrial infrastructure. Our Telesat Lightspeed architecture is designed to offer a powerful combination of capacity, speed, security, reach, flexibility, resiliency and affordability, with low latency that is on par with terrestrial networks. We have strong government participation, including an anchor contract with the GoC for $600 million over 10 years. Portfolio of Strategic and Valuable Orbital Real Estate Our GEO satellites occupy orbital locations that provide us with an advantageous position in the markets in which we operate. Access to these orbital locations, coupled with the high capital intensity of the satellite industry, creates barriers to entry in those markets. We are licensed by ISED to occupy a number of key orbital locations that are well-suited to serve the Americas and support our strong position in North America. Internationally, our satellites occupy advantageous orbital locations that enable broad pan-regional service with interconnectivity between regions, promoting both intra- and inter-regional services. We also have rights to additional spectrum, including at certain existing orbital locations. We have decades of experience in obtaining and maintaining the licenses and approvals required to operate our existing global satellite and ground station network. We have secured a license from the GoC to launch and operate Telesat Lightspeed using ~4 GHz of Ka-band spectrum, for which Telesat has international spectrum rights in accordance with filings made through the International Telecommunication Union. Ka-band spectrum is particularly well suited for high performance global broadband networks because it allows wider bandwidth, high data and efficient frequency reuse for user-beam services, as well as the feeder-link beams required to connect the satellites to landing stations. As described in the “Regulation” section below, we have received a number of licenses and approvals for Telesat Lightspeed and are progressing in securing market access in additional countries. 50 Table of Contents Contracted Revenue Backlog and Disciplined Management Supports Strong Revenue Visibility Because of the mission-critical nature of our services and long-term contractual agreements, we have significant revenue visibility. Our GEO contracted revenue backlog is $0.8 billion as at December 31, 2025. We have entered into customer agreements to provide service on Telesat Lightspeed that aggregate to $1.0 billion in cash inflows as at December 31, 2025. For the last three years, we have had, on average, approximately 80% of each year’s total revenue already under contract at the beginning of the year. 100% of our backlog is non-cancellable or cancellable on economically prohibitive terms, except in the event of a continued period of service interruption or, in the case of Telesat Lightspeed, a delay in service commencement. We generate attractive operating margins. For the year ended December 31, 2025, we generated an Adjusted EBITDA of $220.8 million, representing an Adjusted EBITDA margin of 52.8%1 which has decreased in recent years but we expect it to rebound as Telesat Lightspeed enters commercial service. Our Growth Strategy We plan to grow our business and profitability by supporting our existing customers and services and by building and deploying Telesat Lightspeed. Telesat Lightspeed is a highly advanced, global, enterprise-grade, integrated satellite and terrestrial network optimized to capture the growing demand for broadband connectivity in certain key market verticals around the world. Core to our growth strategy is leveraging our longstanding customer relationships, our deep technical, operating and regulatory expertise and our culture of outstanding customer service and continuous innovation. The principal elements of our growth strategy are the following: Capture the Explosive Demand for Global Broadband Connectivity with Telesat Lightspeed Telesat Lightspeed has been designed to provide fast, affordable, reliable and secure broadband connectivity everywhere on Earth, giving Telesat and our customers a significant competitive advantage in the markets we serve. The network design is optimized to serve enterprise and government users that require fiber-like connectivity beyond the reach of high-capacity terrestrial networks. We believe our advanced constellation design, leading network capabilities and decades of deep commercial, technical, operational and regulatory experience put us in a strong position to capture the growing demand for affordable, high-capacity broadband connectivity around the world allowing us to grow our business. ____________ ​1 Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS Accounting Standards measures. For the definition and a reconciliation of Non-IFRS Accounting Standards measures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-IFRS Accounting Standards Measures”. 51 Table of Contents Follow a Disciplined GEO Satellite Operating Strategy We will continue to seek to maintain the utilization of our existing GEO satellite capacity, maintain our operating efficiency and, in a disciplined manner, use our cash flows to strengthen our business. We will continue to be disciplined in our satellite replacement and expansion program, seeking to secure high-quality, long-term customers to anchor any new or replacement geostationary satellites in advance of committing to the construction of such satellites, should such opportunities arise. Opportunistically Engage in M&A Activity to Enhance our Competitive Position and Shareholder Value The satellite industry has, historically, undergone periods of consolidation, both horizontal and vertical. A number of satellite operators have publicly discussed the benefit of, and potential for, consolidation among satellite operators. Our competitor and global satellite operator, SES, has acquired another global satellite operator, Intelsat. Viasat has acquired Inmarsat, a leading provider of global mobile satellite communications services, and Eutelsat has acquired OneWeb. We will be alert to, and will evaluate, merger and acquisition opportunities in a thoughtful and disciplined manner as they arise with the aim of enhancing our competitive position and shareholder value. Our GEO Business and Our LEO Opportunity Below, we describe in detail our existing GEO business and the compelling opportunity presented by our Telesat Lightspeed network. Background and Overview of Our GEO Business Satellite operators compete with terrestrial network operators (e.g., cable, DSL, fiber optic, cellular/wireless and microwave transmission) in the market for video, data and voice communication services. We believe that satellite services have several advantages over these competing communication platforms, including the following: • Satellites are a relatively cost-effective and efficient means to deliver a signal (e.g., TV, radio) to hundreds of millions of locations in a large geographic area, in particular in remote areas; • The capacity to provide extensive coverage over a large geographic region allowing for the addition of sites at a lower marginal cost. Unlike cable and fiber lines, satellites can readily provide broadcast and communication services over large areas and to remote locations where the population density may not be high enough to warrant the expense of building a terrestrial-based communications network; • The ability to deploy communications quickly in locations where little or no infrastructure is available, for example in the case of natural disaster response; and • The capability to bypass shared and congested terrestrial links, further enhancing network performance, resiliency and security. Traditionally, satellite communications services have principally been delivered by GEO satellites, such as those in our fleet, which circle the earth from orbital locations approximately 22,300 miles (35,700 kilometers) above the equator. Each GEO satellite in essence “blankets” a fixed geographic area with its signals and can communicate continuously with an earth station antenna if it is pointed to, and has an unobstructed view of, that satellite’s orbital location. An individual satellite can be designed to cover large geographic areas, to focus its coverage more specifically on particular markets or regions, or to use a portion of its total capacity for each type of coverage. This contrasts with NGSO satellites, which include LEO satellites with an altitude typically between 200 and 870 miles (325 to 1,400 kilometers) and satellites operating in MEO that stand between the LEO and GEO orbits. Unlike GEO satellites that operate in a fixed orbital location above the equator, LEO and MEO satellites continuously travel around the Earth at high velocities and, depending on their orbits, may cover higher latitude parts of the Earth that GEO satellites may not be able to reach. 52 Table of Contents Overview of Our GEO Satellite Business Our GEO satellite fleet is comprised of 14 satellites and offers global coverage with a concentration over the Americas. We have a significant position in the North American satellite video distribution market. Our GEO satellite fleet and ground infrastructure provide a platform supporting (i) video distribution and DTH in North America with large telecommunications customers and significant contracted backlog, and (ii) connectivity satellite services for customers around the world for backhaul of telephone and internet traffic, corporate networks, maritime and aero broadband connectivity services, and video distribution and contribution. We offer our suite of GEO satellite services to customers worldwide, which include some of the world’s leading DTH service providers, ISPs, network service integrators, telecommunications carriers, corporations and government agencies. We have established long-term, collaborative relationships with our customers and have developed a reputation for innovation, reliability, and outstanding customer service. We believe our global satellite fleet, access to desirable orbital locations and spectrum rights and strong relationships with our customers position us to maintain a leading position as a provider of GEO satellite services. GEO Business Model The majority of our revenue comes from service agreements. These cover the provision of satellite capacity, ground services and/or end-to-end managed services. In our service agreements, a customer commits to purchase a specific type of capacity or service. Typically, our service agreements are non-cancellable, except in the event of a continued period of service interruption. Our sales efforts are organized by region. We sell our services worldwide primarily through a direct sales force located at our headquarters in Ottawa and in London, Singapore, Rio de Janeiro, Washington D.C.. Some of our sales representatives work remotely from different locations in North America or Europe. Our GEO Services We earn the majority of our revenues by providing satellite-based services to customers who use these services for their own communications requirements or to provide video and data service solutions to customers further down the distribution chain. We also earn revenue by providing ground-based transmit and receive services, selling equipment and installing, managing and maintaining satellite networks. We currently derive revenues from the following services: • Broadcast: Our broadcast services business provided approximately 47% of our revenues for the year ended December 31, 2025. Our broadcast customers include North American DTH providers Bell TV, Shaw Direct, DISH Network, and leading telecommunications and media firms. These services include: • DTH: The two major DTH service providers in Canada (Bell TV and Shaw Direct) exclusively use Telesat satellites as a distribution platform for satellite-delivered television programming, audio and information channels directly to their customers’ homes. In addition, one of our satellites is used by DISH Network for DTH services in the U.S. • Video distribution and contribution: Broadcasters, cable networks and DTH service providers use our satellites for the full-time transmission of television programming. • Enterprise: Our enterprise services provided approximately 49% of our revenues for the year ended December 31, 2025. Our enterprise customers include Bell Canada, Hughes Network Systems, iForte, Marlink, Northwestel, Telespazio, Viasat and Vodafone. These services include: • Telecommunication carrier and integrator services: We provide satellite capacity and end-to-end services for data and voice transmission to telecommunications carriers and integrators located throughout the world. These services include space segment services and terrestrial facilities for enterprise connectivity, internet backhaul, cellular backhaul and services such as rural telephony to telecommunications carriers and network services integrators around the world. 53 Table of Contents • Maritime and aeronautical services: We provide satellite capacity to customers serving the maritime and aeronautical markets, bringing broadband communications services to commercial airplanes and vessels. • Government services: We are a significant provider of satellite services to the Canadian government and also provide services to the U.S. and other allied governments through government service integrators. • Direct-to-consumer broadband services: We provide satellite capacity to Xplore in Canada, and to Hughes Network Services in South America, who each, in turn, use it to provide two-way broadband internet services directly to consumers. • VSAT services: We operate satellite and terrestrial networks that support enterprise and retail activities in Canada¸ including point-of-sale and other applications. These services include installation and maintenance of the end user terminal as well as the provision of satellite capacity and other network elements. • Resource services: We provide communications services to geographically diverse locations, both on and off shore, for the oil and gas and mining industries. • Consulting and other: Our consulting and other category provided approximately 4% of our revenues for the year ended December 31, 2025. We operate satellites for third parties and provide technical consulting services. The combination of our North American broadcast, enterprise and government services businesses, and our international business offers diversity in terms of both the customers, end markets and regions served as well as the services provided. Our GEO Infrastructure In-Orbit GEO Satellite Fleet Our GEO satellite fleet is comprised of 14 satellites offering global coverage with a concentration over the Americas. Owned in-orbit GEO satellites as of December 31, 2025 Orbital Location Regions Covered Launch Date Manufacturer’s End-of-Service Life End-of-Orbital Maneuver Life(1) Model Anik F1R 107.3° WL North America Sep 2005 2020 2029(2) E3000 (EADS Astrium) Anik F2 111.1° WL Canada, Continental United States Jul 2004 2019 2027(2)(5) BSS702 (Boeing) Anik F4 111.1° WL Canada May 2004 2019 2026 A2100 (Lockheed Martin) Anik F3 118.7° WL Canada, Continental United States Apr 2007 2022 2030(2) E3000 (EADS Astrium) Anik G1 107.3° WL Canada South America Apr 2013 2028 2039 SS/L 1300 Nimiq 2(3) 109.2° WL North America Dec 2002 2015 2026(2) A2100 AX (Lockheed Martin) Nimiq 4 82° WL Canada Sep 2008 2023 2027(6) E3000 (EADS Astrium) Nimiq 5 72.7° WL Canada, Continental United States Sep 2009 2024 2036 SS/L 1300 Nimiq 6 91.1° WL Canada May 2012 2027 2046 SS/L 1300 54 Table of Contents Orbital Location Regions Covered Launch Date Manufacturer’s End-of-Service Life End-of-Orbital Maneuver Life(1) Model Telstar 11N 37.55° WL North and Central America, Europe, Africa and the maritime Atlantic Ocean region Feb 2009 2024 2027 SS/L 1300 Telstar 12 VANTAGE 15° WL Eastern United States, SE Canada, Europe, Russia, Middle East, South Africa, portions of South and Central America Nov 2015 2030 2032 E3000 (Airbus) Telstar 14R/Estrela do Sul 2 63° WL Brazil and portions of Latin America, North America, Atlantic Ocean May 2011 2026 2026 SS/L 1300 Telstar 18 VANTAGE(4) 138° EL India, South East Asia, Indonesia/Malaysia, China, Australia/New Zealand, North Pacific and Hawaii Sep 2018 2033 2040 SS/L 1300 Telstar 19 VANTAGE 63° WL Brazil and portions of Latin America, North America, Atlantic Ocean, Caribbean Jul 2018 2033 2037 SS/L 1300 ____________ (1) Our current estimate of when each satellite will be decommissioned, taking account of anomalies and malfunctions the satellites have experienced to date and other factors such as remaining fuel levels, consumption rates and other available engineering data. These estimates are subject to change and it is possible that the actual orbital maneuver life of any of these satellites will be different than we currently anticipate. Further, it is anticipated that the payload capacity of each satellite may be reduced prior to the estimated End-of-Orbital Maneuver life. (2) End-of-Orbital Maneuver life for these satellites has been extended through inclined orbit operations which reduces fuel consumption through the elimination of north-south station-keeping. (3) Our Nimiq 2 satellite is primarily used to provide short-term services to other operators who use the satellite at their designated orbital locations to preserve their spectrum rights. (4) Telesat International Limited (“TIL”), a subsidiary of Telesat Canada, and APT have entered into agreements relating to the Telstar 18 VANTAGE satellite, which are accounted for as a joint operation, whereby TIL’s interest is 42.5%. (5) Anik F2 was placed into inclined operations in December 2022. A C-band satellite acquired from a third party (renamed “Anik F4”) was collocated at the orbital location and commenced providing station-kept service in January 2023. (6) It is our intention to place Nimiq 4 in inclined orbit in late 2026 which is expected to extend the operational lifetime to 2030. Rights to Other Satellites In addition, we have rights to the entire Ka-band Canadian payload, consisting of nine user beams, on ViaSat-1. GEO Satellite Control Center, Network Operations Center and Earth Station Facilities Our primary Satellite Control Center (“SCC”) is located at our headquarters in Ottawa, Ontario. The SCC is the hub for our satellite-related activities. The facility is staffed 24 hours per day and currently operates 11 Telesat owned satellites: Anik F1R, Anik F2, Anik F3, Anik G1, Nimiq 2, Nimiq 4, Nimiq 5, Nimiq 6, Telstar 11N, Telstar 12 VANTAGE, and Telstar 18 VANTAGE. We also operate other satellites for third parties from our SCC in Ottawa. We operate our Telstar 14R/Estrela do Sul 2 satellite and our Telstar 19 VANTAGE satellite from our SCC in Rio de Janeiro, Brazil. The Anik F4 satellite is operated on our behalf by SES. Our headquarters is located at 160 Elgin Street, Ottawa where we lease approximately 75,900 square feet. The lease expires on July 31, 2029, and we have two options to extend for an additional five years each. 55 Table of Contents The Allan Park earth station, located northwest of Toronto, Ontario on approximately 65 acres of owned land, houses a customer support center and a technical control center. This facility is the single point of contact for our customers internationally and is also the main earth station complex providing Telemetry, Tracking and Control services for the satellites that we operate. The Allan Park earth station also houses our back-up satellite control center for the Nimiq and Anik satellites. The back-up satellite control center for the Telstar satellites is located at the Mount Jackson earth station. We have the functional ability to restore satellite control services via the Allan Park and Mount Jackson back-up control centers if our primary SCCs became disabled. In addition to the Ottawa headquarters and the Allan Park earth station, we operate a number of other earth stations, including the following: Overview of Telesat GEO Earth Stations (Other than the SCC and Allan Park) Earth stations Owned or leased property Victoria, British Columbia, Canada Leased Fort McMurray, Alberta, Canada Leased Calgary, Alberta, Canada Owned Hague, Saskatchewan, Canada Leased Saskatoon, Saskatchewan, Canada Leased Winnipeg, Manitoba, Canada Owned Montreal, Quebec, Canada Owned Iqaluit, Nunavut, Canada Leased St. John’s, Newfoundland, Canada Leased Yellowknife, Northwest Territories, Canada Owned Mount Jackson, Virginia, U.S. Owned Middleton, Virginia, U.S. Leased Belo Horizonte, Brazil Owned Kapolei, Hawaii, U.S. Third party site Aflenz, Austria Third party site Perth, Australia Third party site Jakarta, Indonesia Third party site In addition to these facilities, we lease facilities for administrative and sales offices in various locations throughout Canada and the U.S. as well as in Brazil, England and Singapore. Background and Overview of Telesat Lightspeed A key growth opportunity is our deployment of Telesat Lightspeed. We believe that the global broadband internet connectivity provided by Telesat Lightspeed will allow Telesat to rapidly and profitably grow its business. For this reason, we have invested significant time and resources to develop and build this innovative constellation of LEO satellites, which we believe will be among the most capable and technologically advanced satellite-based enterprise grade networks in the world. The success of Telesat Lightspeed is expected to be driven by the compelling value proposition it represents in the market, as well as our deep familiarity with our customers, their markets, use cases and needs. Broadband from LEO has moved well beyond the developmental phase into a period of rapid commercial scaling and global adoption. As of late 2025, the viability of LEO technology is underscored by the massive scale of existing constellations. SpaceX’s Starlink in particular has demonstrated the value proposition of LEO to commercial and government users, now servicing more than 10 million active customers. This growth includes significant expansion into high-value enterprise segments; maritime, including major cruise lines and commercial fleets and aero as well as the burgeoning defense and security markets. 56 Table of Contents Overview of Telesat Lightspeed As discussed in greater detail below, the Telesat Lightspeed design has been optimized to serve the fast-growing broadband connectivity requirements of fixed and mobile network operators, aeronautical and maritime users, enterprise customers and governments. Telesat Lightspeed will combine state-of-the-art interconnected LEO satellites coupled with a sophisticated and integrated terrestrial infrastructure to create a global fiber-like broadband network for commercial and government users worldwide. Our fleet of satellites will operate in orbits designed to optimize coverage and capacity, providing full global coverage while concentrating capacity over geographic regions of highest demand. Additional satellites and ground facilities can be added to the network over time to meet increased user demand as and when required. MDA Space is the prime satellite manufacturer for the advanced Telesat Lightspeed LEO constellation. SpaceX is contracted to provide launch services, and a number of other suppliers are under contract to provide various other elements of the service including landing stations, user terminals and software. In September, 2024, Telesat announced that it had entered into definitive agreements with respect to its Telesat Lightspeed Financing in the amount of up to approximately US$2 billion and that this funding, combined with Telesat’s own approximately US$1.6 billion equity contribution, as well as certain vendor financing, would provide the Telesat Lightspeed program with sufficient funds to launch global service. The GoC will also contribute up to $85 million to Telesat through the GoC’s Strategic Innovation Fund (“SIF”). We have entered into an agreement with the GoC to bring affordable, high-speed internet connectivity across rural, underserved areas of Canada. Under the terms of our agreement, Telesat will receive $600 million from the GoC over a ten-year period commencing when the Telesat Lightspeed network begins commercial service, which will enable internet and mobility service providers to acquire Telesat Lightspeed capacity at reduced rates to bring universal broadband connectivity to rural, Northern and Indigenous communities across Canada. We have also entered into a substantial multi-year contract with Viasat Inc. for Telesat Lightspeed services. Under its multi-orbit strategy, Viasat plans to integrate Telesat Lightspeed into its services portfolio for aviation, maritime, enterprise and defense markets. In 2025, Telesat entered a strategic partnership with the GoC and MDA Space to develop and deliver a multi-frequency, Arctic military satellite communications capability to the Canadian Armed Forces (CAF) for a fifteen-year term. This partnership is part of the Enhanced Satellite Communications Project — Polar (ESCP-P), one of the key procurements being led by the newly formed Defence Investment Agency. It will provide reliable wideband and narrowband connectivity to support CAF operations in the Arctic. This project is leveraging Canadian industry to create high-quality jobs across the country, while unlocking a multi-billion dollar investment in Canada’s defense sector. In 2026, Telesat announced the addition of Mil-Ka to its advanced Telesat Lightspeed network to meet the anticipated global demand for mission critical Mil-Ka capacity in LEO. Specifically, Telesat is replacing 500 MHz of commercial Ka spectrum with 500 MHz of Mil-Ka spectrum. Secure Mil-Ka satellite communications has become the essential backbone of modern armed forces, the connective tissue binding warfighters, decision makers, defense platforms, weapon systems, sensors, military intelligence, and Command & Control into a coherent, integrated system of systems. In an era defined by great power competition and rapid technological change, the ability to project military power, coordinate joint operations, and respond decisively at any moment depends on access to resilient, secure, and high-throughput communications. Yet as adversaries develop increasingly sophisticated capabilities to contest, degrade, and deny these links, guaranteed access to trusted mission-critical SATCOM capacity has evolved from a tactical advantage into a strategic imperative. Telesat Lightspeed Mil-Ka services extend the design principles of the network’s original Commercial Ka-band architecture, which was developed to support mission critical enterprise and government connectivity requirements. Mil-Ka provides an additional layer of operational utility and resilience for defense users, while leveraging a secure, resilient and flexible transport framework. Customer encrypted data can traverse the optically linked mesh network in space and bypass third-party terrestrial infrastructure to maintain sovereign data control and reliable communications 57 Table of Contents in demanding operational environments where communications superiority is a precondition for mission success. With this change to our spectrum configuration, Telesat Lightspeed is expected to deliver significantly more Mil-Ka capacity on its state-of-the-art network than all Mil-Ka capacity in orbit today and will deliver the sovereign, resilient, and trusted capacity that Canada and allied defense users require. Telesat Lightspeed Infrastructure Since January 2018, we used the LEO 1 satellite to validate and de-risk key features of our LEO system design, specifically the capability of the satellite and customer terminals to deliver a low latency broadband experience. The LEO 1 Satellite was removed from service in July 2023 and was replaced by the LEO 3 satellite to continue the mission. With industry partners and customers, we have conducted successful validations in each of the key vertical markets we are targeting. • Enterprise and Telecom: In partnership with Vodafone and the University of Surrey, we demonstrated that LEO satellites can provide effective backhaul transport for mobile network operators, including advanced backhaul solutions for 5G, based on round trip latency of 18-40 milliseconds during testing, among the lowest ever for a satellite broadband connection. Additional commercial LEO tests have been conducted with Telefonica, Optus, Motorola Solutions and PLDT. Microsoft Azure used the LEO 1 satellite to test throughput, latency and jitter, and also successfully demonstrated application functionality such as Office 365, Teams conferencing, file transfers to OneDrive, streaming videos and playing cloud hosted games on Xbox Cloud. 58 Table of Contents • Aviation: We have successfully demonstrated Telesat Lightspeed network’s IFC service capabilities via our LEO satellite with Honeywell and Anuvu, significantly mitigating the performance risk of LEO connectivity over Ka-band to commercial airplanes. • Maritime: We have successfully demonstrated Telesat Lightspeed network’s fit for maritime satellite communications services via our LEO 1 satellite with NSSL Global and OmniAccess, leaders in maritime connectivity solutions. • Government: Telesat Lightspeed is particularly attractive to governments because of its resilient distributed nature, secure, low latency, and truly global service. In 2018, we were awarded a contract by DARPA to demonstrate capabilities of Telesat Lightspeed with DARPA’s experimental “Blackjack” constellation. In October 2020, DARPA awarded us a contract for the development and in-orbit demonstration of commercial spacecraft buses in a LEO constellation network with robust low latency communications features. As part of this follow-on contract, we have delivered two spacecraft buses to DARPA for a “risk reduction” flight to test optical inter-satellite link (OISL) communications with government payloads in orbit and to demonstrate OISL interoperability with different hardware. In July 2022, Telesat was one of the recipients of the DARPA Space-Based Adaptive Communications Node (Space-BACN) contract to demonstrate the architecture of inter-connecting commercial LEO constellations and their OISL enabled mesh networks with heterogeneous U.S. government networks. We also have contracts in place with prime contractors L3 Harris and General Dynamics Mission Systems for demonstrations and studies with Air Force Research Labs and NASA. In October 2020, Telesat U.S. Services was selected to become part of the Lockheed Martin team, which was recently awarded the Space Transport Layer Tranche 0 contract by the U.S. Space Development Agency.Taken together, these developing relationships and contract awards demonstrate that the U.S. government is investing significant resources to bring about its “pivot” from GEO- to LEO-based satellite systems and its demonstrated interest in Telesat Lightspeed as a commercial satellite solutions provider. Telesat’s addition of Mil-Ka frequencies, coupled with its advanced security features, further bolsters Telesat’s ability to serve government users. Satellites Telesat Lightspeed was designed to optimally serve the key market verticals on which we are focused. It will allow Telesat to provide secure, high throughput and cost-effective broadband services for users in rural and remote areas, aero and maritime customers and government users. Telesat Lightspeed satellites incorporate leading-edge technologies and features, including: • Advanced phased array antennas instantly match capacity to demand: The antennas on each satellite are combined with advanced, digital beam forming technology that can create hundreds of thousands of logical beams and dynamically focus multiple Gbps of capacity into demand hot spots like remote communities, large airports or major seaports; • Interlinked satellite mesh network in space for high resilience and new applications: Each satellite will have high capacity optical links that combine to create a highly resilient, flexible and secure space-based network, moving data across the network and around the world at the speed of light; • Data processing in space provides most efficient traffic routing: Full digital modulation and demodulation occurs on the satellite which, coupled with an end-to-end constellation network operating system, improves link performance and gives customers a high degree of flexibility for routing traffic, eliminating gateway hops for fast, secure, end-to-end delivery of data; and • Efficient orbital configuration maximizes network performance: Telesat Lightspeed satellites operate in an innovative orbit designed to optimize coverage and capacity, with true pole-to-pole global coverage. LEO Satellite Control Center, Network Operations Center and Earth Station Facilities An SCC, along with a Network Operation Center (“NOC”), from which we will operate Telesat Lightspeed and manage and support customer services are under construction in Gatineau, Quebec. The NOC will monitor and control the various non-spacecraft elements of the Telesat Lightspeed network. It will respond to faults and alarms generated 59 Table of Contents across the network whether relating to hardware, software or hosted services. It will also respond to customer service network issues and requests. Change management on the Telesat Lightspeed system will be controlled and coordinated by NOC personnel. The facility will be staffed 24 hours per day with rotating shifts. Overview of Telesat LEO Earth Stations Under Construction Earth stations Owned or leased property Papineauville, Quebec, Canada Owned Timmins, Ontario, Canada Owned Estevan, Saskatchewan, Canada Owned Shaunavon, Saskatchewan, Canada Leased Bercenay-en-Othe, France Third party site Berry Jerry, New South Wales, Australia Third party site Rugby, United Kingdom Third party site Ground-Based Infrastructure The ground-based infrastructure of Telesat Lightspeed will consist of the landing stations (“Landing Stations”) and terrestrial network (“Terrestrial Network”) segments. Telesat Lightspeed is designed to make it easy for customers to connect to the network and communicate through it. Metro Ethernet Forum standards-compliant services are expected to simplify the integration of Telesat Lightspeed into customer provisioning, operations and billing systems. • Landing Stations: We are deploying widely distributed Landing Stations around the world to provide connectivity to Telesat Lightspeed. The Landing Stations provide the links that connect the satellites to our ground system. • Terrestrial Network: The Terrestrial Network consists of Points of Presence (“PoPs”) and the global fiber network that interconnects all elements of the network, including the Landing Stations and PoPs. PoPs will host customer facing network interfaces and will relay customer traffic to Landing Stations. One or more Landing Stations may connect to a regional PoP. Telesat Lightspeed Performance Features Telesat Lightspeed will provide critical features and functionality that will make it a highly compelling value proposition in the market verticals it has been optimized to serve, including: • High throughput: Individual links will be at speeds in the gigabits per second and Telesat Lightspeed will have multiple terabits per second of total usable capacity; • Low latency: Data will travel from the customer location to the internet (or the customer’s network) roughly 20 times faster than the latency that GEO satellites can provide; • Low cost: With its highly innovative design, Telesat Lightspeed is expected to have a cost advantage over many other satellite broadband solutions, enhancing its competitiveness and expanding the addressable market for satellite-delivered connectivity solutions; • Focused and flexible capacity: The network will be able to dynamically allocate high capacity where and when customers require it, and will be able to reconfigure that capacity distribution as customer demand changes and evolves. Telesat Lightspeed also supports mesh connectivity enabling efficient remote to remote communications without having to transit the landing station; • True global coverage: Telesat Lightspeed will provide coverage of the Earth’s entire surface, from pole to pole, fulfilling the needs of governments and mobility markets, such as aviation and maritime for global network coverage and providing a uniform connectivity experience; 60 Table of Contents • Interoperability with terrestrial networks: Customers want to connect to a satellite network as seamlessly as they do to terrestrial fiber networks today. Telesat Lightspeed leverages MEF 3.0 industry-wide network interface standards which enable simple, seamless integration with customers’ terrestrial networks, without the need to integrate proprietary hardware or software. Through MEF 3.0 underlay connectivity service standards, customers can easily understand the capabilities provided by Telesat Lightspeed and how these software-defined digital services can be procured and integrated into their networks; and • High level security and resiliency: With a constellation of interconnected satellites and advanced satellite technologies such as narrow, steerable beams, beam hopping, and fast frequency hopping, Telesat Lightspeed has been designed to ensure that communications are extremely difficult to intercept, decipher, or jam. We believe Telesat Lightspeed will provide a high level of resiliency and protection against interference never before available in satellite communications. Telesat Lightspeed is based on a zero-trust architecture with stringent cybersecurity controls supporting end-to-end data encryption with government-owned key management cryptographic systems providing a high-level of security. Overview of The Telesat Lightspeed Market Opportunity: Growing Demand for High-Capacity, Fiber-like Broadband Connectivity Everywhere Global broadband demand is increasing exponentially as the world is becoming increasingly digital, a trend that was accelerated by the global COVID pandemic. Applications and programs that are critical to individuals, businesses and governments are built to run on the fast, low latency terrestrial networks that serve the majority of users in developed economies. Forecasted rates in IP-traffic are expected to grow from 160 exabytes per month in 2023 to 563 exabytes per month in 2029, a 23% compound annual growth rate, on a global basis.2 However, there is a major gap in access to global broadband connectivity, with more than three billion people who live outside of urban areas either poorly connected or not connected at all. These unserved and underserved areas include over one million mobile sites (where legacy 2G/3G equipment is installed but cannot provide broadband data without affordable high capacity backhaul), 600,000 schools, hospitals and offices, 550,000 ships at sea and almost four billion aviation passengers each year. Significant investments in LEO by Starlink, Eutelsat and Amazon, coupled with Starlink’s rapid growth in users (surpassing 10 million) have confirmed there is a massive addressable market for “fiber-like” LEO broadband in unserved regions. LEO technology is emerging as the primary solution for bridging the global “digital divide,” offering the capacity and performance required to replace or augment terrestrial networks where such networks are geographically or economically unfeasible. LEO is also proving transformational for aero, maritime and government. Traditional Terrestrial and Satellite Solutions Cannot Meet This Growing Demand, but LEO Satellites Can Expanding the availability of the digital world to unserved and underserved areas requires bringing to these areas the same type of broadband, fiber-quality connectivity that is available in well-connected areas. It is, however, either prohibitively expensive to install fiber in certain geographic areas or simply physically impossible (e.g., to planes and ships). Historically, the primary options for these markets have been traditional GEO satellites. While these satellites can provide coverage in most areas, because of the vast distances between the Earth’s surface and the orbital positions above the Earth occupied by GEO satellites, the user experience suffers due to high latency (the round-trip time delay between the data source and the data destination), which is prejudicial and, at times, prohibitive for certain consumer and enterprise broadband applications. While MEO offers lower latency than GEO, the latency is still higher than terrestrial networks, undermining the user experience. ____________ 2 Ericsson Mobility Report November 2023 61 Table of Contents • Consumer applications: Real-time communications services (e.g. Zoom and FaceTime) show disruptive lag, multi-player gaming experiences are degraded, and encrypted applications such as Virtual Private Networks (remote work access tools) and encrypted websites can experience significant lags or fail altogether. • Enterprise applications and real-time communications and controls: Highly latency-sensitive enterprise applications cannot operate on systems that have a meaningful delay in sending and receiving a signal. Advanced mobile networks, like 5G, cannot operate as intended over high latency backhaul. LEO satellites are 35 times (or more) closer to the Earth than GEO satellites and 8 times (or more) closer than MEO satellites, thereby solving latency issues that exist with GEO and MEO satellites. In addition to offering low latency, however, any potential LEO solution must also be significantly flexible and technologically advanced to dynamically deliver high capacity connectivity where users require it and minimize the amount of capacity that is idled because it cannot effectively be put to use in the network at any given time. A next-generation satellite broadband network must meet other market requirements for commercial broadband services: • High capacity: Capable of coping with high demand and network congestion. Since demand for connectivity tends to be concentrated, LEO networks must be able to dynamically concentrate very high amounts of capacity to high demand areas such as airports and seaports. • Affordable: Global broadband services provided over a LEO satellite network must be affordable, transforming the economics of the existing marketplace and expanding the addressable market. • Global coverage: Provide services everywhere, including to high latitude areas like the poles (a critical feature for large airlines, global shipping fleets and governments) as well as non-urban areas. • Simple to use: Plug and play with existing infrastructure by having simple, standards-based interfaces to the terrestrial network and the Internet. • Resilient and Secure: Mission-critical level of reliability of service. Online activities are now critical for the well-being of individuals, businesses and government users, increasing the emphasis on the resiliency and security of the communications network supporting them. A LEO satellite network is a distributed, multi-node network, making it more resilient to service outages. Further, multiple satellites and multiple beams from a satellite makes it complex to intercept, decipher and jam communications from a LEO constellation unlike traditional GEO satellites, thereby improving the overall security posture. LEO networks with advanced encryption and compliance with government cybersecurity standards (e.g., NIST, IAPRE, etc.) deliver highly secure satcom. As discussed further below, Telesat Lightspeed has been specifically designed and optimized to meet these requirements. The Market Opportunity for Telesat Lightspeed in Key Vertical Markets We estimate that the total addressable market, or TAM, for our GEO business was approximately US$15.6 billion at the end of 2025.3 Telesat Lightspeed is expected to significantly increase our TAM. The estimated TAM for LEO was approximately US$425 billion in 2025, which we project will nearly double by 2032 in light of the demand drivers that exist today (e.g., 5G backhaul in terrestrial vertical or passenger connectivity in aviation vertical, and IoT). The Telesat Lightspeed design has been specifically optimized to serve vertical markets that require fiber-like connectivity beyond the reach of terrestrial networks. Our target markets span four verticals: (i) enterprise and telecom, (ii) aviation, (iii) maritime, and (iv) government. These target markets require all of the features of Telesat Lightspeed, but each also have their own unique requirements, making certain features of Telesat Lightspeed particularly compelling to each of them. ____________ 3 NSR Global Satellite Capacity Supply and Demand Study, 19th Edition. 62 Table of Contents Enterprise and Telecom We estimate that the enterprise and telecom market opportunity that can be addressed by LEO was approximately US$415 billion in 2025 and will grow at 7% annually until 2030 to reach approximately US$575 billion. Of the US$415 billion, we estimate that about US$235 billion is the direct-to-consumer market opportunity and about US$180 billion is the enterprise market opportunity. Our estimates are derived from information on the enterprise and telecom data market obtained from a variety of sources, including OECD Broadband statistics, World Bank Country Indicators, Landscan (with respect to population distribution) and management’s analysis and estimates as to the portion of the enterprise and telecom data market that Telesat Lightspeed could address. Enterprise applications include fixed wireless and mobile backhaul, remote enterprise, and health and education. Telesat Lightspeed will initially focus on addressing the enterprise market. This market is underpinned by the approximately four billion people who are digitally underserved or unconnected. Key demand areas are backhaul from mobile wireless sites, fixed wireless backhaul for remote communities, remote enterprise and emergency services, and broadband for institutions (schools, hospitals, etc.). In many of these areas, there is simply no economical fixed or terrestrial wireless (e.g., microwave) backhaul solution for delivery of high-speed broadband connectivity. There also tends to be no quality terrestrial access in remote areas for enterprise cloud applications, meaning that schools, hospitals and other public institutions in those areas are unable to take advantage of broadband applications and cloud-based services over terrestrial networks. Satellites allow telecom operators to expand the reach of their fixed and mobile networks to locations not served, or underserved, by terrestrial networks by connecting these off-network locations to their main networks. Telesat Lightspeed is designed to provide an optimal, low-cost solution that can become the primary connectivity solution in remote areas and a secondary connectivity solution in urban areas. The Telesat Lightspeed “plug & play” versatility is expected to seamlessly integrate with terrestrial networks, vastly simplifying operations as compared to traditional satellite networks. The low latency of our network will enable customers to seamlessly transport encrypted traffic between terrestrial and satellite networks at high data rates, something that is not possible with traditional GEO satellite networks. The network is also expected to provide high throughput for large trunking links in remote regions (e.g., Northern Canada and island nations). Importantly, given our strong reputation and existing customer relationships providing backhaul solutions for telecommunications companies and Mobile Network Operators (“MNOs”) in underserved or unconnected areas, as well as the high growth potential of this market, we are not focused on direct-to-consumer services at this time. It is possible, however, that evolution in antenna technology and other market developments may cause Telesat to offer direct-to-consumer services in the future. Growing demand for fixed and mobile data, accelerated by the global rollout of 5G services and the universal service coverage requirements of many MNO licenses, is anticipated to drive growth for satellite backhaul services. Another growth driver for satellite services is expected to come from increased demand in the resource sector, largely driven by oil and gas exploration, the level of which has been driven principally by global economic growth. In addition, the current and increasing focus on safety concerns in the resource sector is leading to the implementation of diverse, redundant communications for monitoring and control of resource infrastructure (e.g., automated rigs and pipelines), including video, which may drive demand for low latency satellite services. Other demand drivers in the enterprise and telecom market include: • Corporate networks: As economic growth accelerates in parts of the world with poor terrestrial infrastructure, corporate enterprises expanding their activities in these regions will drive demand for increased satellite capacity. • Government-sponsored universal connectivity programs: Universal connectivity projects (government supported initiatives to bring broadband services to rural and remote communities and those with limited terrestrial infrastructure) are growing in both developed and developing nations. Governments are increasingly focused not just on basic connectivity but on enabling high quality connectivity, including 5G, to rural areas, similar to that in urban areas. 63 Table of Contents Telesat Lightspeed, which is expected to provide affordable, fiber-like connectivity and backhaul to remote areas, stands to benefit from the expansion of networks and growing demand for high-speed, low latency connectivity resulting from such government-funded digital inclusion programs. Aviation As broadband connectivity has become increasingly important to businesses and individuals, the need to stay connected has spread to locations that cannot readily access terrestrial networks. In aeronautical markets, satellite broadband for passenger and crew communications has become a significant driver of demand and a competitive differentiator as airlines and business jet operators around the world compete for passengers and staff. In addition, aircraft manufacturers and key parts suppliers (e.g., aircraft engine manufacturers) seek improved broadband connectivity to better monitor aircraft health, weather conditions and to optimize airline operations. For example, better and real-time data from the aircraft to the ground will help optimize flight paths and improve maintenance planning, all leading to lower operating cost for the airlines. We estimate the aviation market opportunity addressable by LEO was US$7 billion in 2025, and will grow by 15% annually to US$15 billion by 2030. The market opportunity includes delivering connectivity services to commercial aircraft and business jets. Airlines are looking to provide value-added and differentiated services to customers, such as free in-flight Wi-Fi and on-demand video streaming. IFC service providers are facing network capacity constraints in the U.S., especially around demand hotspots such as large airports, and may not have the necessary capacity to support the expected surge in demand as airlines start adopting free in-flight Wi-Fi. Airlines are also increasingly demanding the low latency solutions provided by LEO which has driven the success of Starlink in this market and, in part, led to the agreement with Viasat for Telesat Lightspeed services. The flexible architecture of Telesat Lightspeed is designed to deliver high throughput services to high demand air traffic corridors at speeds and costs that will allow airlines to unlock the benefits of IFC. We plan to offer full global coverage with the flexibility for the airlines and their IFC service providers to dynamically allocate capacity to any plane globally, allowing them to efficiently manage their capacity pools. Telesat Lightspeed is planned as a fully integrated satellite and ground segment network, relieving IFC service providers of the burden and cost of managing their own global hub infrastructure. Maritime We estimate the maritime market opportunity that can be addressed by LEO satellite constellations reached about US$3 billion in 2025 and will grow at a 7% annual rate to US$5 billion by 2030. This market includes connectivity to merchant vessels, oil & gas sites, yachts and cruise ships. Currently, GEO satellite operators provide maritime connectivity networks, but these systems suffer from low capacity, high latency and high cost and fail to deliver the connectivity experience desired by passengers and crew members at sea. Cruise lines compete with terrestrial holiday options and greatly benefit from the ability to deliver an at-home-type connectivity experience to customers at sea. We believe Telesat Lightspeed will be well positioned to deliver high throughput and low latency to cruise ships anywhere in the world, ensuring a compelling connectivity experience. Similarly, yacht owners want to enjoy the same high-quality broadband experience that they have in their homes and offices. For the merchant shipping lines and large oil and gas offshore platform operators, quality and fully global connectivity are a key “ask” of the crew and influences the ability to attract and retain employees. Real-time ship-to-shore connectivity also enables important operational efficiencies (e.g., optimal sea routes reduce vessel fuel costs). Similar to aviation services, the flexible architecture of Telesat Lightspeed will deliver high throughput services to high demand ports and full global coverage with the flexibility to allocate capacity to any maritime vessel globally, meaning that commercial and passenger fleets alike can ensure consistent fiber-like connectivity throughout the duration of their journeys. 64 Table of Contents Government We estimate the government market opportunity addressable by Telesat Lightspeed reached approximately US$1 billion in 2025 and will grow at about 50% annually until 2030 to reach approximately US$11 billion.7 Telesat will focus on the government demand addressed by commercial satellite operators. The addition of Mil-Ka frequencies to Telesat Lightspeed further enhances Telesat’s ability to serve the defense market. Key applications initially include connectivity to government aircraft, naval vessels and deployed sites. The global defense landscape is undergoing a historic transformation. NATO allies are committing to increase defense spending of 2% of GDP, with several nations now targeting 5%, unlocking massive investments in capabilities including satellite communications. Canada has committed to these increased spending targets and its new Defence and Industrial Strategy (DIS) identifies sovereign space-based communications as foundational to national security. Telesat’s selection as a strategic partner for Canada’s Enhanced Satellite Communications Project (ESCP) is a powerful proof point of this commitment, further positioning Telesat as a critical mission partner in defense operations. Allied nations globally are investing in sovereign and diverse LEO satellite communication systems to reduce strategic dependence and ensure resilient connectivity. The European Union is developing the Infrastructure for Resilience, Interconnectivity and Security by Satellite (IRIS²), Germany and Italy are both pursuing national LEO network initiatives, and South Korea is advancing its kLEO program. The U.S. government, the single largest user of commercial satellite communications, is moving toward proliferated LEO architectures through programs, including Golden Dome and United States Space Force’s pLEO initiative. The defense segment is expected to drive increased global demand for commercial satellite communications to supplement traditional bespoke MILSATCOM capabilities. Commercial satellites increasingly support secure communications, surveillance, reconnaissance, and mobile communications, which includes support for unmanned aerial vehicles, logistics, troop welfare and a host of other services. The benefits and utility of LEO constellations are being demonstrated in Ukraine following the Russian invasion where SpaceX’s Starlink has been critical in connecting the Ukrainian government, military, NGOs and civilians. Government space architectures recognize the operational benefits of multi-orbit “proliferated” constellations, particularly those based on LEO. As more nations demonstrate counter-satellite systems and communications jamming capability, governments are expected to seek LEO constellations made up of hundreds of advanced, interconnected satellites in an inherently more distributed, resilient and secure network than a network comprised of a handful of high-value GEO satellites. LEO constellations also offer real-time low latency connectivity, and global coverage (including the poles). Global low latency communications are a key goal for the unmanned, remotely controlled, sensor platforms, which are vital to government environmental observation, meteorology, and defense. The DoD has made the development of multi-orbit, “hybrid” commercial/government constellations a priority for the new U.S. Space Force. In an operational domain where the integration of commercial capabilities into defense activities is becoming more widely accepted and desired, it is critical for industry partners to recognize the unique operational military requirements they are required to support. The addition of Mil-Ka spectrum to Telesat Lightspeed is just such a recognition, and positions Telesat to serve the defense market in a highly compelling manner. Another application in the government vertical market is for “space relay” services. Simply described, government-owned spacecraft could transmit data they collect directly to Telesat Lightspeed satellites in space through optical inter-satellite links, using Telesat Lightspeed as a communications relay network to route such data quickly and securely anywhere on Earth. We anticipate that the U.S. and other governments may launch their own satellites that interface with the Telesat Lightspeed network in that manner. Such a “space relay” service would simplify the design ____________ 7 International Defense Budgets, US Department of Defense Budgets, Management’s analysis and estimates. 65 Table of Contents and lower the cost of government spacecraft and enable a more rapid technology refresh cycle than is currently the case, a capability that will be particularly attractive for national security applications in a rapidly changing world with budgetary constraints. Additional Drivers of Demand Across Verticals and Markets for LEO Services In addition to the factors driving the projected TAM growth in the key verticals described above, we believe the following trends can be expected to drive satellite services growth in the coming decade: • Internet of Things: A vast number of physical objects (e.g., factories, appliances, machinery, electric grids and other infrastructure) now have the capability to monitor their environment, report status, receive instructions, and take action based on information they receive. This is all part of the Internet of Things, or IoT, that already comprises billions of devices in use worldwide and which is forecasted to grow at an approximately 16% average yearly rate until 2029. Reliable communications are essential for IoT to work and, while most IoT connections will likely be by terrestrial wireless, the growth in the number of connected devices is expected to drive increased demand for satellite services. • Emerging industries: As developments in technologies like artificial intelligence and automated services progress, future applications such as autonomous driving and the connected car will require more than one communication link to ensure fully redundant connectivity at all times. Telesat Lightspeed is designed to support these developing technologies in an economically feasible manner as they evolve and come to increasingly rely on secure, reliable, low latency communications networks. The Competitive Landscape for Our Services We compete against other global, regional and national satellite operators and with providers of terrestrial-based communications services. Telesat is a leading global satellite operator. Other scaled, global satellite operators include SES S.A. (“SES”), Eutelsat Group (“Eutelsat”), Viasat, and SpaceX. We also compete against a number of nationally or regionally focused satellite operators around the world including Hispasat, Sky Perfect JSAT, kt sat and APT Satellite. Telesat competes with these operators based primarily on the quality of our services, location of our orbital slots relating to the GEO business, performance characteristics of our satellites, price, and overall client needs. SpaceX and Eutelsat Group/OneWeb have LEO satellite systems that are now in service, and they continue to add satellites and capacity. There are a number of other LEO satellite systems that have been announced, including Amazon and Blue Origin TeraWave. We believe that the innovative architecture and advanced technology of Telesat Lightspeed, as well as the market dynamics in the verticals we plan to serve, will allow us to compete effectively against any of the current and proposed systems. More recently, direct-to-device satellite technology is being introduced by various providers, including Starlink, Globalstar and AST Mobile, targeting 5G service offerings to low population density areas and remote regions. We believe the combination of the following attributes positions us favorably to commercialize Telesat Lightspeed successfully, notwithstanding competitors in the LEO marketplace: • Enterprise-class system: Telesat Lightspeed is focused on enterprise and government solutions and optimized for that purpose. Our constellation design, features and functionality, built to government standards and security requirements, including Mil-Ka frequencies, will deliver a highly compelling satellite-based enterprise class network. • Vast technical expertise, experience and relationships: As a trusted satellite operator with a highly experienced management team, we have longstanding relationships at the most important levels of the industry (e.g., customers, suppliers and regulators), and an established eco-system of partners to design a technologically-advanced and economical ground infrastructure. 66 Table of Contents • Existing, engaged customer base: We are known and trusted by key customers and have a deep understanding of their requirements. Telecommunications, enterprise, and government customers around the world today rely on Telesat to help plan their future mission critical infrastructure needs. • Global regulatory experience: Regulatory compliance is a critical aspect of operating and commercializing a satellite network. Obtaining rights to use spectrum and to gain access to provide service in countries around the world is a complex process. National governments have viewed space, and access to their markets from space, as a critical asset and require compliance with their regulations. The framework for NGSO spectrum rights, both at an individual country level and internationally at the ITU, is evolving, and it is critical to be an active participant in, and have deep knowledge of, these processes. Telesat has extensive experience in all of these areas, as well as credibility with regulators and other industry participants. For further regulatory detail, see “— Regulation.” • Strong government alignment: Telesat has received strong participation in Canada at the federal and provincial levels as evidenced by its selection as a strategic partner for the Enhanced Satellite Communications Project (ESCP), the Telesat Lightspeed capacity agreement executed with the GoC to bridge the digital divide and the approximately US$2 billion in Telesat Lightspeed Financing — reflecting the GoC’s and GoQ’s confidence in Telesat Lightspeed as a platform to advance domestic priorities and allied capability goals under the DIS. Employees As of December 31, 2025, we and our subsidiaries had approximately 711 permanent full and part-time employees. Approximately 1.6% of our employees are subject to collective bargaining agreements. Our employee body is primarily comprised of professional engineering, sales and marketing staff, administrative staff and skilled technical workers. We consider our employee relations to be strong. Intellectual Property Our success depends in part on our ability to obtain, maintain, protect, and enforce our intellectual property rights. We rely on a combination of patent, trademark, trade secret, copyright and other intellectual property rights and measures to protect the services and technology that we consider important to our business. We also rely on know-how, trade secrets and continuing technological innovation to develop and maintain our competitive position. Our policy is to seek to protect our proprietary position by, among other methods, pursuing and obtaining patent protection in Canada and the United States and in jurisdictions outside of Canada and the United States related to our technology, inventions, improvements and services that are important to the development and implementation of our business. As of December 31, 2025, we owned a total of 65 issued patents, six of which were in the United States. These patents expire between 2030 and 2039. Seventeen of the issued patents are LEO-related, three of which are in the United States, and they expire between 2034 and 2039. Forty-eight of the issued patents are not LEO-related, three of which are in the United States, and they expire between 2030 and 2036. We also have several pending Canadian, U.S., and international patent applications. The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. Generally, in the United States, issued patents are granted a term of 20 years from the earliest claimed non-provisional or Patent Cooperation Treaty filing date. In certain instances, a patent term can be adjusted to recapture a portion of delay by the U.S. Patent and Trademark Office in examining the patent application. Additionally, a patent term may be shortened if a patent is terminally disclaimed over an earlier filed patent. However, the life of the patent, and the protection it affords, is limited. In addition, we cannot provide any assurance that any patents will be issued from our pending or future applications or that any issued patents will adequately protect our current and future services. We also cannot predict the breadth of claims that may be allowed or enforced in our owned or in-licensed patents or whether such claims, if issued, will cover our services, provide sufficient protection from competitors or otherwise provide any competitive advantage. Any issued patents that we may own or in-license in the future may be challenged, invalidated, narrowed, held unenforceable, infringed or circumvented. 67 Table of Contents There can be no assurance that infringement of existing third party patents has not occurred or will not occur. Additionally, because the patent application process is confidential, there can be no assurance that third parties, including competitors, do not have patents pending that could result in issued patents which we may infringe. In such event, we may be restricted from continuing the infringing activities, which could adversely affect our business, or we may be required to obtain a license from a patent holder and pay royalties, which would increase our cost of doing business. We believe that we have certain know-how and trade secrets relating to our technology and current and future services. We rely on trade secrets to protect certain aspects of our technology related to our current and future services. However, trade secrets and know-how can be difficult to protect. We seek to protect our trade secrets and know-how, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors, service providers, and contractors but these agreements may not provide meaningful protection, and we cannot guarantee that we have executed such agreements with all applicable counterparties. These agreements may also be breached, and we may not have an adequate remedy for any such breach. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. Although we take steps to protect our trade secrets and know-how, third parties may independently develop or otherwise gain access to our trade secrets and know-how. For more information, please see “Risk Factors — Risks Relating to Intellectual Property”. Research & Development Our research and development expenditures are incurred for the studies associated with advanced satellite system designs, and experimentation and development of space, satellite and ground communications services. This includes the planned development of Telesat Lightspeed. Regulation We are subject to regulation by government authorities in the countries in which we operate. Specific details are provided for Canada, the U.S., the United Kingdom and Brazil, countries in which Telesat has ITU frequency rights authorized. We are also subject to the ITU radio regulations including the frequency coordination process defined therein, and to domestic regulation by government authorities in countries in which it operates. The applicable domestic regulations may depend on whether the frequencies are reserved for commercial or military/government use. Telesat Lightspeed satellites carry frequencies in the “Commercial-Ka” and in the “Mil-Ka.” At the international (ITU) level the Mil-Ka and Commercial-Ka bands (for which there are no formal definitions) are similarly allocated to satellite services; however, at the domestic level, some administrations have limited the Mil-Ka bands to government/military use only. As a result, for these administrations, to access the Mil-Ka frequencies additional approvals would be required, but the exact process and nature of those approvals are not well established because of the limited use of these frequencies by commercial operators in the past. Canadian Regulatory Environment Telesat Divestiture Act Telesat was originally established by the GoC in 1969 under the Telesat Canada Act. As part of the Canadian government’s divestiture of its shares in Telesat, pursuant to the Telesat Reorganization and Divestiture Act (1991) (“Telesat Divestiture Act”), Telesat was continued on March 27, 1992 as a business corporation under the Canada Business Corporations Act, the Telesat Canada Act was repealed and the Canadian government sold its shares in Telesat. The Telesat Divestiture Act provides that no legislation relating to the solvency or winding-up of a corporation applies to Telesat and that its affairs cannot be wound up unless authorized by an Act of Parliament. For further detail, see “Risk Factors — Risks Relating to the Business of Telesat Corporation.” In addition, Telesat and its shareholders and directors cannot apply for Telesat’s continuation in another jurisdiction or dissolution unless authorized by an Act of Parliament. 68 Table of Contents Telecommunications Act Telesat is a Canadian carrier under the Canadian Telecommunications Act (“Telecom Act”). The Telecom Act authorizes the Canadian Radio-Television and Telecommunications Commission (“CRTC”) to regulate various aspects of the provision of telecommunications services by us and other telecommunications service providers. Telesat is currently not subject to detailed rate regulation, however the CRTC has retained its powers under the Telecom Act to impose price regulation or other regulatory measures on Telesat in the future, as necessary. In addition, Section 28(2) of the Telecom Act provides that the CRTC may allocate satellite capacity to particular broadcasting undertakings if it is satisfied that the allocation will further the implementation of the broadcasting policy for Canada. Radiocommunication Act Our operations are subject to regulation and licensing by ISED pursuant to the Canadian Radiocommunication Act. ISED has the authority to issue spectrum and earth station licenses and establish policies and standards related to the radio frequencies upon which our satellites and earth stations depend. The Minister responsible for ISED has broad discretion in exercising this authority to issue licenses, fix and amend conditions of licenses, and to suspend or even revoke them. Some of the spectrum licenses under which we operate the Anik and Nimiq satellites require us to comply with research and development and other industrial and public benefit commitments, to pay annual spectrum license fees and to provide pan Canadian satellite coverage. FSS and BSS licenses are awarded to qualified applicants on a first-come, first-served basis. The term of spectrum licenses is 20 years, with a high expectation of renewal. ISED may, however, issue licenses with a shorter term. Spectrum licenses include standard conditions of license, including milestones for construction, launch and deployment of satellite(s). The Canadian Government opened Canadian satellite markets to foreign satellite operators as part of its 1998 WTO commitments to liberalize trade in basic telecommunications services, with the exception of DTH television services provided through FSS or DBS facilities. In September 2005, the Canadian Government revised its satellite-use policy to permit the use of foreign-licensed satellites for digital audio radio services in Canada. Contribution Collection Since November 2000, pursuant to the CRTC’s Decision CRTC 2000-745, telecommunications service providers that exceed a Canadian telecom revenue threshold are required to pay contribution charges, which are fees paid into a central fund used to support the provision of video relay service, and to subsidize the cost of providing cell phone and broadband service in rural, remote and underserved and high-cost serving areas. The charges payable by a telecom service provider are calculated as a percentage of its Canadian telecommunications service revenues, minus certain deductions (e.g., terminal equipment sales and inter-carrier payments). The rate for 2025 has been finalized at 0.46%. An interim rate of 0.11% has been established effective January 1, 2026 with a revised interim rate decision expected in the first half of 2026. United States Regulatory Environment The FCC regulates the provision of satellite services to, from, or within the U.S. Our U.S.-licensed satellites operate on a non-common carrier basis. Consequently, they are not subject to rate regulation or other common carrier regulations enacted under the Communications Act of 1934. We pay FCC filing fees in connection with our space station and earth station applications and annual license and market fees to defray the FCC’s regulatory expenses. Annual and quarterly reports must be filed with the Universal Service Administrative Company (“USAC”) covering interstate/international telecommunications revenues. Based on these reports, USAC assesses us for contributions to the FCC’s Universal Service Fund (“USF”). Payments to the USF are made on a quarterly and annual basis. The USF contribution rate is adjusted quarterly, was set at 38.1% for the fourth quarter of 2025 and 37.6% for the first quarter of 2026. At the present time, the FCC does not assess USF contributions with respect to bare transponder capacity (i.e., agreements for space segment only). 69 Table of Contents The FCC currently grants geostationary-like satellite authorizations on a first-come, first-served basis to applicants who demonstrate that they are legally and technically qualified and that the public interest will be served by the grant. To facilitate the provision of FSS in C-, Ku-, Ka- and V-band frequencies in the U.S. market, foreign licensed operators can apply to have their satellites either placed on the FCC’s Permitted Space Station List (for certain frequencies) or be granted a declaratory ruling (for other frequencies). In contrast, applications for non-geostationary-like satellite authorizations are generally dealt with through processing rounds, initiated by public notice or the submission of a lead application. Grants include conditions of license including deployment milestones. If more than one non-geostationary system from the same processing round intends to use the same frequencies, coordination is required; however, if coordination cannot be reached, the U.S. rules require that band splitting be applied. Non-geostationary systems from a later processing round must protect systems from earlier processing rounds. The bond and milestone requirements for U.S.-licensed satellites apply equally to foreign-licensed satellites granted U.S. market access. Under these licensing and market access rules, a bond must be posted, starting at US$1 million when a geostationary satellite or non-geostationary satellite constellation authorization is granted and escalating to up to US$3 million in the case of a geostationary satellite and US$5 million in the case of a non-geostationary satellite constellation. The entire amount of the bond may be forfeited if there is failure to meet the FCC’s milestone for the launch and commencement of operations of a geostationary satellite by the fifth anniversary of the grant date or the milestone for the deployment of 50% of the satellites in a non-geostationary satellite constellation by the sixth anniversary of the grant date. In addition to the loss of the bond, if the 50% non-geostationary milestone is not met, the license or market access authorization is reduced to the number of satellites in the constellation that were in their assigned orbit by the deadline. Similarly, if a non-geostationary operator meets the 50% milestone, it must deploy 100% of its authorized satellites by the ninth anniversary of the grant date, and if that milestone is missed, the license or market access authorization is reduced to the number of satellites that were in their assigned orbit by the deadline. According to current licensing rules and policies, the FCC will issue new satellite licenses for an initial 15-year term and will provide a licensee with an “expectancy” that a subsequent license will be granted for the replacement of an authorized geostationary satellite using the same frequencies. At the end of the 15-year term, a geostationary satellite that has not been replaced, or that has been relocated to another orbital location following its replacement, may be allowed to continue operations for a limited period of time subject to certain restrictions. As in other jurisdictions, the FCC is considering and may adopt new spectrum allocations for terrestrial mobile broadband and 5G, including in bands that are currently allocated to satellite services. The U.S. made no WTO commitment to open its DTH, DBS or digital audio radio services to foreign competition, and instead indicated that the provision of these services by foreign operators would be considered on a case-by-case basis, based on an evaluation of the effective competitive opportunities open to U.S. operators in the country in which the foreign satellite was licensed (“ECO-sat test”) as well as other public interest criteria. While Canada currently does not satisfy the ECO-sat test in the case of DTH and DBS service, the FCC has found, in a number of cases, that provision of these services into the U.S. using Canadian-licensed satellites would provide significant public interest benefits and would therefore be allowed. In order to secure FCC consent for the consummation of the Transaction Agreement, Telesat Canada, Telesat Corporation and several affiliated entities entered into a letter agreement under which they made commitments to the United States Department of Justice relating to such matters as cybersecurity; the access of non-U.S. persons or entities to certain facilities or information; the principal equipment that supports their core telecommunications or information services, functions, or operations; and the availability of certain records and communications in response to lawful U.S. law enforcement requests. This letter agreement replaces an earlier letter agreement that Telesat had entered into with the United States Department of Justice in order to secure FCC consent to the Skynet Transaction. The export of U.S.-manufactured satellites and technical information related to satellites, earth station equipment and provision of services to certain countries are subject to State Department, Commerce Department and Treasury Department regulations. 70 Table of Contents Brazil Regulatory Environment The Brazilian national telecommunications agency, ANATEL, grants exploitation rights for Brazilian satellites to companies incorporated and existing in Brazil. Landing rights of foreign satellites are granted to the owner of the space segment or the company that holds the right to operate it, in whole or in part, but the satellite capacity may only be commercialized in Brazil through the local legal representative. For Brazilian or foreign GEO satellites, the rights are granted conditional on payment of applicable fees, are valid for up to 15 years for additional periods limited by the life of the satellite and provided that the obligations already assumed are fulfilled. For NGSO, the term can be extended for additional 15 year periods regardless of the satellites’ lifetime. ANATEL has authorized us, through our subsidiary, Telesat Brasil Capacidade de Satélites Ltda. (“TBCS”), to operate FSS satellites at the 63° WL orbital location in Ku-band and Ka-band. In December 2008, TBCS entered into a 15-year Concession Agreement with ANATEL which obligates TBCS to operate a Ku-band satellite in accordance with Brazilian telecommunications law and contains provisions to enable ANATEL to levy fines for failure to perform according to the Concession Agreement terms. In May 2015, TBCS was the successful bidder in an ANATEL auction for Ka-Band and Ap30B Planned Ku-band frequency rights at the 63° WL orbital location and the associated 15-year Concession Agreements were signed on March 2, 2016. In November 2023, the aforementioned Ku-band rights granted at 63° WL were renewed for the usage by the Estrela do Sul 2 satellite until December 2026, and for the usage by the Telstar 19 VANTAGE satellite until December 2037. In addition, ANATEL has accredited TBCS as legal representative in Brazil of two non-Brazilian satellites: Telstar 12 VANTAGE at 15oWL and Anik G1 at 107.3oWL. Telesat Lightspeed is also authorized by ANATEL in Brazil via TBCS. United Kingdom Regulatory Environment We own and operate the portion of the ViaSat-1 satellite (115° WL) payload that is capable of providing service within Canada. ViaSat-1 operates in accordance with a license granted by the FCC in the U.S. However, by virtue of an intergovernmental arrangement between the U.S. and the United Kingdom, ViaSat-1 operates in accordance with ITU networks filed by the United Kingdom regulatory agency, OFCOM, on behalf of the Isle of Man. The Isle of Man is a British Crown Dependency and Isle of Man satellite frequency filings are filed with the ITU by OFCOM. ManSat Ltd. has been granted rights by the Isle of Man Government to manage Isle of Man satellite frequency filings. Both Telesat and Viasat have a commercial relationship with ManSat. Viasat and Telesat have agreed to cooperate in their dealings with ManSat with respect to the ViaSat-1 satellite for OFCOM and ITU purposes. The Ka-band and portions of the Ku-band frequencies on Telstar 12 VANTAGE, portions of the Ka-band frequencies on Telstar 18 VANTAGE and the Ka-band frequencies on Telstar 19 VANTAGE, are also filed with the ITU by ManSat on behalf of Telesat. Telesat also received its Satellite (Earth Station Network) license for Telesat Lightspeed from OFCOM. Landing Rights and Other Regulatory Requirements Many countries regulate satellite transmission signals to and from their territory. Telesat has been granted authorization for the space segment portion (often referred to as “landing rights”) of its GSO services in major market countries worldwide where this requirement applies. More specifically, in addition to the U.S., Canada, and Brazil, Telesat holds Landing Rights for its GSO satellites in Argentina, Bolivia, Dominican Republic, Ecuador, Egypt, Guatemala, Honduras, Nicaragua, Nigeria, Paraguay, Peru and Uruguay. In other countries, there is no such formal authorization requirement (sometimes referred to as “Open Skies”). Telesat also has authorizations for its GSO earth stations in Canada, Brazil and the U.S. Telesat Lightspeed regulatory approval Telesat has a deep understanding of international, regional and domestic regulatory/licensing framework applicable to a NGSO system operating in Ka-band. A comprehensive and methodical approach has been adopted to obtain all required authorizations in synergy/collaboration with partners prior to entry into service. 71 Table of Contents Telesat has already started acquiring landing rights and other approvals pertaining to a satellite operator. In particular, Telesat has already secured the equivalent of landing rights in the U.S., Canada, Bolivia, Brazil, Ghana, Peru, Nigeria, Paraguay, Guatemala and Mexico. Additional applications have been submitted in other countries where landing rights are required (e.g. Kenya), with more applications planned for 2026 based also on commercial priorities. Telesat has also been included in the Australian Foreign Space Objects Determination in May 2022, which paves the way for other licenses for Telesat Lightspeed in Australia. Furthermore, Telesat already holds licenses for Telesat Lightspeed landing stations (i.e. Telesat Lightspeed Earth Stations gateways) in Canada and has applied for a Landing Station License in France. Telesat is collaborating with Vocus on the application to acquire a Landing Station License in Australia and is engaging with regulators in other jurisdictions for additional landing station licenses. Finally, Telesat is engaging with regulators towards suitable licensing frameworks in a variety of countries/regions. In particular, the 2020 revision of European Decision ECC/DEC(15)041, which grants free circulation and exemption for individual licensing for user terminals like Telesat Lightspeed. Implementation of this Decision2 is all that is needed in most European countries for the user terminals authorization. Telesat also holds a Network License (covering operation of both the satellites and the user terminals) in the UK, a General Authorization for Satellite Electronic Communications Networks and Services in Italy and has applied for similar licenses in Germany and France. International Regulatory Environment — International Telecommunication Union The ITU, a Specialized Agency of the United Nations, is responsible for administering access by member states to frequencies in the radio portion of the electromagnetic spectrum. The ITU Radio Regulations set forth the process that member states must follow to secure rights for geostationary satellite networks and non-geostationary satellite systems to use frequencies, and the obligations and restrictions that govern such use. The process includes, for example, a “first-come, first-served” system for gaining access to certain frequencies and time limits for bringing the frequencies into use. Once brought into use, the ITU rules require that there not be a period longer than three years in which a satellite is not operating under the orbital parameters of a filing. In the case of non-geostationary satellite systems there are milestones associated with the deployment of additional satellites in the system. Canada, the U.S. and other member states have rights to use certain frequencies. Telesat has been authorized by its ITU filing administrations Canada, USA, Brazil and the United Kingdom of Great Britain and Northern Ireland to use certain frequencies. In addition, through a commercial arrangement with satellite operator APT, Telesat has the right to use certain frequencies for which the Kingdom of Tonga has the rights. Authorized frequencies include those already used by our current satellites, and additional frequencies at geostationary orbital locations or in non-geostationary constellations that have yet to be implemented. The ITU Radio Regulations also govern the process used by satellite operators to coordinate their operations with other satellite operators to avoid harmful interference. Each member state is required to give notice of, coordinate and register its proposed use of radio frequency assignments with the ITU. The filing and registration process is administered by the ITU Radiocommunications Bureau (“ITU-BR”). Once a member state has filed its proposed use of frequencies with the ITU, the ITU-BR examines the filing with respect to the various provisions of the International Radio Regulations (RR) to determine the administrations with which coordination is required. Member states are also invited to inform the other member states and the ITU-BR of any intended use that has the potential to cause interference to either existing operations. The member states are then obligated to negotiate with each other in an effort to coordinate the proposed uses and resolve interference concerns. If all outstanding issues are resolved in accordance with the various provisions of the RR, the frequencies are entered into the ITU’s Master International Frequency Register. Registered frequencies are entitled under international law to interference protection from subsequent or nonconforming uses. ____________ 1 https://docdb.cept.org/document/447 2 Currently implemented in 39 out of 46 CEPT countries: Albania, Austria, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Check Republic, Croatia, Cyprus, Denmark, Estonia, Finland, France, Georgia, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lichtenstein, Lithuania, Luxembourg, Malta, Moldova, Montenegro, Netherlands, North Macedonia, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, UK, Ukraine 72 Table of Contents Under the ITU Radio Regulations, a member state that places a satellite or any ground station into operation without completing coordination could be vulnerable to interference from other systems and may have to alter the operating parameters of its satellite or ground station if harmful interference occurs. The process of ITU filing and notification in the MIFR of frequencies spans a period of seven years, or longer, depending upon the frequency band and the various provisions of the ITU Radio Regulations that may be invoked. Telesat’s authorized frequencies are in various stages of the coordination and notification process. Many frequencies have completed the process and have been registered in the MIFR. In other cases, coordination is on-going so that entry into the MIFR is pending or provisional. This is typical for satellite operators. Depending upon the outcome of coordination discussions, satellite operators may need to make concessions in terms of how a frequency may be used. The failure to reach an appropriate arrangement with such satellite operators may render it impossible to secure entry into the MIFR and result in substantial restrictions on the use and operations of our existing satellites. In the event disputes arise during the coordination process or thereafter, the ITU Radio Regulations set forth procedures for resolving disputes but do not contain a mandatory dispute resolution mechanism or an enforcement mechanism. Rather, the rules invite a consensual dispute resolution process for parties to reach a mutually acceptable agreement. Neither the rules nor international law provide a clear remedy for a party where this voluntary process fails. Other Orbital Spectrum We have been authorized by governments to additional frequencies in NGSO orbits or at GSO orbital locations that could be exploited in the future but for which currently there is no operational satellite. In general, our satellites are subject to various regulatory authorities, and associated obligations to respect the rights of other operators. Telesat’s operations may be limited or precluded by ITU rules or processes, and it is required to coordinate its operations with those of other satellite operators. See “Risk Factors — Risks Relating to Regulatory Matters” for more information about these risks. Satellite Operations To ensure continuity of service to our customers, we engineer satellites with on-board redundancies by including spare equipment on the satellite, and conducting standard testing programs that provide high confidence of performance levels. Our operations and engineering personnel are actively involved in all stages of the lifecycle of a satellite from the design through the deorbiting of the satellites that we procure. Our personnel work directly with our contractors at the contractor’s site to provide technical input and monitor progress during the satellite’s design, construction and launch phases. We monitor earth station operations and around-the-clock satellite control and network operations so that we can respond when problems occur. In addition, we have in place contingency plans, which we review on a regular basis, for technical problems that may occur during the life of a satellite. We also work closely with earth station manufacturers to test and implement the earth stations that we procure, and to resolve technical problems as they arise. Our primary consideration in managing our satellite telecommunications systems is to provide reliable and cost-effective services to our customers. We endeavor to limit the assumption of risk to activities under our control. Our space risk management program has been designed to achieve these objectives. Insurance and Risk Management Program Non-Insurance Risk Management Initiatives The risk management program begins at the technical analysis and design stage of the satellites. We implement certain redundancies on-board every satellite. Furthermore, we are involved in overseeing the manufacturing of all of our satellites. We require the manufacturer and its major subcontractors to follow assembly and quality assurance programs. We secure and maintain access to work performed by the satellite manufacturer and its subcontractors for the purpose of observing the quality and progress of such work. 73 Table of Contents Comprehensive testing is conducted at the manufacturer’s or a major subcontractor’s plant, which must meet industry standards and, in many cases, be supervised by our engineering personnel. Our engineering personnel review program management and construction schedules, engineering, design, manufacturing and integration and testing activities at both the manufacturer’s and major subcontractor’s sites. After construction is complete, we conduct final acceptance inspections of deliverable items. We believe it is crucial to have knowledge and insight into the launch vehicles being used to launch our satellites. Our engineering personnel are on site during all phases of the launch campaigns to observe launch preparations and launch operations. We believe that these quality assurance and manufacturing process monitoring programs help us reduce the risk of satellite failures and anomalies and result in lower launch and in-orbit insurance costs. Satellite Insurance Satellite insurance falls into three categories: Pre-Launch Insurance, Launch Insurance and In-Orbit Insurance. Pre-launch insurance: Pre-launch insurance has historically been purchased by the satellite manufacturer. Historically, we managed our pre-launch risks (i.e., risks during the manufacturing and transport phase) primarily through our contractual arrangements with the satellite manufacturer. For our Telesat Lightspeed program, we will purchase the transport insurance necessary to cover the satellites after they are shipped from the satellite manufacturer’s facilities. Launch insurance: The procurement of satellite launch insurance is, and has been, an integral part of our risk management program. It has been our practice to insure our launches where we bear the risk of loss. Typically, our launch insurance has covered the following events during the period of coverage: (i) delivery from the launch pad to orbit; (ii) separation from the launch vehicle; (iii) drift orbit maneuvers; (iv) solar array and antenna deployment; and (v) testing and commissioning. In-orbit insurance: In-orbit (life) insurance provides coverage for total and/or partial losses during the operating phase of a satellite. In-orbit insurance may be purchased at the same time launch insurance is procured (for new satellites) or once the satellite is in orbit, in the case of existing satellites, subject to functionality and insurance market conditions. Premium rates are dependent on the operating condition of the satellite and other satellites of the same design or using the same components as well as prevailing insurance market conditions. Typically, these insurance policies exclude coverage for damage arising from acts of war, anti-satellite devices, lasers and other similar potential risks for which exclusions are customary in the industry at the time the policy is written. In addition, they typically exclude coverage for satellite health-related problems affecting our satellites and other satellites of the same design or using the same components that are known at the time the policy is written. During 2024, satellite insurance market terms and conditions continued to deteriorate. Insurance underwriters sought significant premium rate increases and additional coverage restrictions. Accordingly, we determined that insurance was not available on commercially reasonable terms for most of our satellites. Since December 2025, only our T19V satellite is covered by In-Orbit insurance. Emergency Committee Protecting and maintaining service to customers is of vital importance to us. Our emergency committee is responsible for managing the restoration of services in the event of an actual or threatened critical condition, such as a satellite failure, the loss of telemetry and tracking ability or the loss of earth station functionality. Despite our efforts, satellite failures or other anomalies may occur. See “Risk Factors — Risks Relating to the Business of Telesat — Telesat’s satellites may fail to operate as expected due to operational anomalies resulting in lost revenues, increased costs and/or termination of contracts.” We may also experience a failure of our ground operations infrastructure. See “Risk Factors — Risks Relating to the Business of Telesat — Telesat may experience a failure of ground operations infrastructure or interference with its satellite signals that impairs the commercial performance of, or the services delivered over, its satellites or the satellites of other operators for whom it provides ground services, which could result in a material loss of revenues.” 74 Table of Contents Legal Proceedings We frequently participate in proceedings before national telecommunications regulatory authorities. For more detail, see “— Regulation.” In addition, we may also become involved from time to time in other legal proceedings arising in the normal course of our business. On January 21, 2026, Wilmington Savings Fund, FSB (the “Plaintiff”), in its capacity as Administrative Agent under the Credit Agreement dated as of March 28, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) by and among Telesat Canada, Telesat LLC, and the guarantors party thereto, at the direction of the holders of a majority of the outstanding term loans under the Credit Agreement (the “Term Lenders”), issued claims in the State of New York against Telesat Canada and Telesat LEO CanHold Corporation and in the Province of Ontario against these same defendants along with Telesat Corporation, Telesat LEO Holdings ULC and the Directors of Telesat Canada. The claim relates to the transaction Telesat completed and announced on September 12, 2025, in which Telesat completed the distribution of 62% of the equity of its Telesat Lightspeed business (the “Transferred Equity”) from Telesat Canada to Telesat LEO CanHold Corporation, an indirect subsidiary of Telesat Corporation (“SpinCo” and the transaction, the “Transaction”). The Plaintiffs allege that Transaction (i) was in violation of sections 34 or 36 of the Canada Business Corporations Act (the “CBCA”); (ii) effected a result that was oppressive to, unfairly prejudicial to, or unfairly disregarded the reasonable expectations of the Term Lenders; (iii) breached Section 6.03 of the Credit Agreement claiming that the Transaction resulted in Telesat Canada transferring all or substantially all of its value (specifically the 62% of equity in Telesat Lightspeed) to SpinCo; and (iv) violated section 2 of the Ontario Fraudulent Conveyances Act, claiming that Telesat Canada was insolvent at the time of the Transaction and undertook the Transaction with the intent to harm and prejudice the Term Lenders. The Plaintiffs seek various relief including (a) remedying the effects of the Transaction on the Term Lenders, including but not limited to an order providing the Term Lenders with an interest in Telesat Corporation, SpinCo, and/or Telesat LEO Holdings ULC (along with its predecessor Telesat LEO Holdings Inc.) equal to the value of the Transferred Equity; (b) damages in an amount to be determined; (c) a declaration that the Transaction is void as against the Term Lenders; (d) an order pursuant to section 118(2) of the CBCA to restore to Telesat Canada any amounts distributed or paid to SpinCo pursuant to the Transaction and not otherwise recovered by Telesat Canada; and (e) costs of the proceedings. Telesat believes the lawsuits, filed at the direction of a group of distressed debt hedge funds, are without merit and intends to defend itself vigorously. Telesat Canada is in a contract dispute with its customers Shaw Satellite G.P. and Shaw Satellite Services Inc. (collectively, “Shaw”), regarding payments for services provided to Shaw on the Anik F2 satellite and related ground services pursuant to two agreements with terms that ended December 31, 2025. Shaw has purported to terminate both agreements alleging that the Anik F2 RF channel services failed to meet the required performance parameters. While the Anik F2 satellite experienced a North-South thruster failure in late 2021, and was transitioned to inclined operations in late 2022, the Anik F2 satellite remains capable of meeting the performance parameters in the agreements. Telesat Canada commenced an action against Shaw in the Ontario Superior Court of Justice on September 26, 2024 seeking, among other things, damages for breach of contract and breach of the duty of good faith in the amount of $45 million. Shaw has denied that Telesat is entitled to the damages claimed and, among other things, claimed damages against Telesat in the amount of $14 million for breach of contract. While we believe we have a strong position in this contract dispute with Shaw, no assurances can be made on a successful outcome to the dispute and, further, no assurances can be made on recovery of any amounts in connection therewith. We are subject to audits by taxing authorities in the various jurisdictions in which we operate. In Brazil, we are currently involved in a number of disputes with Brazilian tax authorities alleging that additional taxes are owed on revenue earned for the period 2002 to 2021. The total disputed amount for the period 2002 to 2021, including interest and penalties, is now $109.4 million. The disputes relate to the Brazilian tax authorities’ characterization of revenue. We have challenged the assessments. We believe the likelihood of a favorable outcome in these disputes is more likely than not and, as such, no reserve has been established. The Canadian tax authorities have reassessed the Company for $11.6 million relating to its Scientific Research and Experimental Development claims for the years 2016 and 2017. The Company has challenged the reassessments and paid 50% of the outstanding amounts in order to formally object. The Company believes the likelihood of a favorable outcome in these disputes is more likely than not and, as such, no reserve has been established. 75 Table of Contents Other than the above, we are not aware of any proceedings outstanding or threatened as of the date hereof by or against us or relating to our business which may have, or have had in the recent past, significant effects on our financial position or profitability. Environmental Matters We are subject to various laws and regulations relating to the protection of the environment and human health and safety (including those governing the management, storage and disposal of hazardous materials). Some of our operations require continuous power supply, and, as a result, current and past operations at our earth stations and other technical facilities include fuel storage, and batteries for back-up generators and uninterruptible power systems. As an owner or operator of property and in connection with current and historical operations at some of our sites, we could incur costs, including cleanup costs, fines, sanctions and third-party claims, as a result of violations of or liabilities under environmental laws and regulations. We are not aware, however, of any environmental matters outstanding or threatened as of the date hereof by or against us or relating to our business which would be material to our financial condition or results of operations. In a number of countries, regulators are considering and may adopt regulations to ensure the sustainable use of orbit and spectrum resources by satellites. For example, the European Commission is developing an EU Space Law which may contain design requirements for satellites, the compliance with which would be needed for obtaining the right to serve a country within the EU; the United States has an open proceeding (“Mitigation of Orbital Debris in the New Space Age”, see IB Docket No. 18-313) through which new requirements aimed at reducing orbital debris may be applied to NGSO satellite systems seeking US market access; and, the United Nations Office for Outer Space Activities (UNOOSA), through its Committee on the Peaceful Uses of Outer Space (COPUOS), is expected to further develop its “Guidelines for the Long-Term Sustainability of Outer Space Activities” first published in 2019. Certain of these laws and regulations address risks related to generating orbital debris. 76 Table of Contents C. Organizational Structure The following chart reflects our organization structure (including the jurisdiction of formation or incorporation of our material subsidiaries.) 77 Table of Contents D. Property, Plants and Equipment For a description of our property, plants and equipment, see Item 4.B. “Business Overview”.

A. Operating results MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following management’s discussion and analysis (the “MD&A”) for Telesat Corporation is dated March 16, 2026 and provides information concerning our financial condition and results of operations for the year ended December 31, 2025. You should read this MD&A together with Telesat Corporation’s audited consolidated financial statements and the related notes for the year ended December 31, 2025. As used in this MD&A, unless the context states or requires otherwise, references to “Telesat,” “Company,” “we,” “our” and “us” refer to Telesat Corporation and its subsidiaries. Unless the context states or requires otherwise, reference herein to “the consolidated financial statements” or “the financial statements” or similar terms refer to Telesat Corporation’s audited financial statements included herein. References to Non-Guarantor(s) refers to entities which are not guarantors under the Telesat Canada credit agreement and indentures, which are Telesat Corporation and its subsidiaries excluding Telesat Canada and its Restricted Subsidiaries (as defined under the Telesat Canada credit Agreement and indentures). References to LEO Non-Guarantor(s) refers to the Non-Guarantors that own all of the assets related to the Telesat Lightspeed business and are developing and will deploy, operate and commercialize, the Telesat LightSpeed Constellation. LEO Non-Guarantors include Telesat LEO Holding ULC, Lightspeed LEO Limited Partnership, Telesat LEO ULC (formerly known as Telesat LEO Inc.) (“Telesat LEO”) and all of Telesat LEO’s subsidiaries. All figures reported in this MD&A are in Canadian dollars, except where we indicate otherwise, and are referenced as “$” and “dollars”. This MD&A contains a translation of some Canadian dollar amounts into United States dollars at specified exchange rates solely for your convenience. All references to “US$” and “U.S. dollar” refer to United States dollars. Certain totals, subtotals and percentages may not reconcile due to rounding. The information contained in this MD&A takes into account information available up to March 16, 2026, unless otherwise noted. This MD&A makes reference to certain non-IFRS Accounting Standards measures, namely, Adjusted EBITDA, Adjusted EBITDA margin and Consolidated EBITDA. These measures are not recognized measures under IFRS® Accounting Standards and do not have a standardized meaning prescribed by the IFRS Accounting Standards and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS Accounting Standards. Rather, these non-IFRS Accounting Standards measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS Accounting Standards measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS Accounting Standards measures in the evaluation of issuers. Our management also uses non-IFRS Accounting Standards measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. For a reconciliation of the non-IFRS Accounting Standards measure to the most closely comparable IFRS Accounting Standards measure, see below under the heading “Non-IFRS Accounting Standards Measures”. 78 Table of Contents FORWARD-LOOKING STATEMENTS This MD&A contains statements that are not based on historical fact and are “forward-looking statements” and forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995 and Canadian securities laws. When used in this MD&A, statements which are not historical in nature, or which contain the words “believe,” “expect,” “plan,” “may,” “will,” “would,” “could,” “should,” “anticipate,” “estimate,” “project,” “intend” or “outlook”, or similar expressions, are forward-looking statements. In addition, Telesat or its representatives have made or may make forward-looking statements, or provide forward-looking information, orally or in writing, which may be included in, but are not limited to, various filings made from time to time with the U.S. Securities and Exchange Commission (“SEC”) and Canadian securities regulatory authorities, and press releases or oral statements made with the approval of an authorized executive officer of Telesat. Actual results may differ materially from the expectations expressed or implied in the forward-looking statements and forward-looking information as a result of known and unknown risks and uncertainties. All statements made in this MD&A are made only as of the date of this MD&A. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data. Telesat undertakes no obligation to update the statements made in this MD&A in the event facts or circumstances subsequently change after the date of this MD&A. These forward-looking statements and this forward-looking information are not guarantees of future performance, are based on Telesat’s current expectations and are subject to a number of risks, uncertainties, assumptions, and other factors, some of which are beyond Telesat’s control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements and forward-looking information. Known risks and uncertainties include but are not limited to: risks associated with financial factors, including swings in the global financial markets, access to capital to construct our LEO satellite constellation and refinance our GEO debt, the outcome of litigation related to the Telesat Canada Debt, volatility of securities values in an industry sector where values may be influenced by economic and other factors beyond Telesat’s control, inflation, rising or prolonged elevated interest rates, fluctuations in foreign exchange rates, and tariffs; risks associated with operating satellites and providing satellite services, including satellite construction or launch delays, launch failures, in-orbit failures, impaired satellite performance or dependence on large customers; the ability to deploy successfully an advanced global LEO satellite constellation and the timing of any such deployment; Telesat’s ability to meet the conditions for advance of the loans under the funding agreements for the constellation; technological hurdles, including Telesat’s and Telesat’s contractors’ development and deployment of the new technologies required to complete the constellation in time to meet Telesat’s schedule, or at all, the availability of services and components from Telesat’s and Telesat’s contractors’ supply chains; competition, including with other LEO systems, deployed and yet to be deployed; risks associated with domestic and foreign government regulation, including government restrictions and regulations, access to sufficient orbital spectrum to be able to deliver services effectively and access to sufficient geographic markets in which to sell those services; Telesat’s ability to develop significant commercial and operational capabilities; and the ability to expand Telesat’s existing satellite utilization. The foregoing list of important factors is not exhaustive. In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section of our Annual Report entitled “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. Any references to forward-looking statements in this MD&A include forward-looking information within the meaning of applicable Canadian securities laws. Additional information regarding the Company, including results of operations and variances between the year ended December 31, 2024 and 2023, can be obtained in our Annual Report on Form 20-F for the year ended December 31, 2024 filed on March 27, 2025, on the SEC’s website at https://www.sec.gov and on SEDAR+ at https://www.sedarplus.ca. 79 Table of Contents HIGHLIGHTS Telesat enters strategic partnership with Government of Canada In December 2025, we announced a strategic partnership with the Government of Canada (“GoC”) and MDA Space to develop and deliver a multi-frequency, Arctic military satellite communications (“MILSATCOM”) capability to the Canadian Armed Forces. Leveraging over 55 years of satellite engineering and operations excellence, we will play a pivotal role in delivering a state-of-the-art MILSATCOM architecture for Canada’s Enhanced Satellite Communications Project — Polar (“ESCP-P”). The narrowband and wideband solution will strengthen and safeguard Canada’s Arctic sovereignty while bolstering Canada’s NORAD and NATO commitments. The ESCP-P procurement is being led by the newly formed Defence Investment Agency (“DIA”), leveraging a strategic partner model that will harness industry and government expertise in the design, development and delivery of advanced defence programs on a meaningfully accelerated timeline. Our collaboration with the GoC will increase economic benefits and further strengthen Canada’s capabilities in space and defence. Telesat adds Mil-Ka to the Telesat Lightspeed constellation In 2026, Telesat announced the addition of Mil-Ka to its advanced Telesat Lightspeed network to meet the anticipated global demand for mission critical Mil-Ka capacity in LEO. Telesat Lightspeed Mil-Ka services extend the design principles of the network’s original Commercial Ka band architecture, which was developed to support mission critical enterprise and government connectivity requirements. Equity distribution of Telesat Lightspeed business In September 2025, Telesat Canada distributed 62% of the equity of its Telesat Lightspeed business to an indirect subsidiary of Telesat Corporation. The indirect subsidiary is wholly-owned by Telesat Canada’s parent entities and is a LEO Non-Guarantor (i.e. a non-guarantor under Telesat Canada’s debt documents). There were no changes to the Company’s operations as a result of this transaction. The distribution provides more flexibility to Telesat Corporation to raise capital in the future. Funding for Telesat Lightspeed Satellite constellation In 2025, we began receiving advances, pursuant to the financing agreements with the GoC and Government of Quebec (“GoQ”) for the Telesat Lightspeed constellation (“Telesat Lightspeed Financing”). The Telesat Lightspeed Financing total $2.54 billion and carry a floating interest rate of 4.75% over CORRA and will mature in 2040. Interest will be capitalized to the loan until 12 months after the in service date. The loan is secured by substantially all present and future value of the assets of Telesat Lightspeed. In total, during the year, we received $690.0 million in advances pursuant to the Telesat Lightspeed Financing to fund the development of the Telesat Lightspeed constellation. As of December 31, 2025, $1.85 billion was still available on the Telesat Lightspeed Financing to cover future project development and deployment costs of the Telesat Lightspeed constellation. Progress of Telesat Lightspeed Satellite constellation development We made important progress in 2025 on the development of the Telesat Lightspeed constellation. We continue to expect to launch the first Telesat Lightspeed satellites in late 2026 and expect to be in commercial operation around the end of 2027. We have increased our workforce by approximately 160 employees, or 36%, in the last 12 months with capital expenditures of $704.7 million. In 2025, we held further design reviews with our satellite and dispenser manufacturers, and we progressed our work on user terminals, software development for network and satellite operation, and ground station deployment. 80 Table of Contents Repurchase of Notes During the year ended December 31, 2025, we repurchased $11.4 million (US$8.2 million) of the 6.5% Senior Unsecured Notes for cash consideration of $4.5 million (US$3.3 million), resulting in a gain on repurchase of debt of $6.9 million (US$5.0 million). Since 2021 we have reduced the amount of total Telesat Canada indebtedness outstanding by US$857 million at a cost of US$450 million by repurchasing part of Telesat Canada’s debt in the market at a material discount to par. Backlog Our backlog represents future cash inflows from capacity allocation or service delivery contracts. As of December 31, 2025, GEO backlog was $0.8 billion and represents our expected future revenue from existing GEO service contracts (without discounting for present value) including any deferred revenue that we will recognize in the future in respect of cash already received. As of December 31, 2025, we have entered into customer agreements to provide service on Telesat Lightspeed that aggregate to $1.0 billion in cash inflows. In 2025, we secured multi-year agreements with Viasat and Orange for Telesat Lightspeed connectivity services. Liquidity and going concern Our Term Loan B and Senior Notes, held in Telesat Canada, are scheduled to mature between December 2026 and October 2027, resulting in substantial obligations at the end of 2026 of approximately $2.3 billion, that will require repayment or refinancing. Based on current projections, cash flows from operations and assets of the Company are expected to be sufficient to meet the Company’s contractual obligations as they become due prior to the date of debt maturity. However, these cash flows alone are not expected to be sufficient to satisfy the obligations related to the settlement of the debt instruments as they become due in December 2026 and October 2027. Management is therefore actively engaged in discussions with lenders’ advisors about refinancing the Telesat Canada Debt and at the time of issuing the financial statements, management expects to refinance the existing debt obligations before they become due. However, these refinancing activities are dependent on a number of factors outside of the Company’s control. As such, there can be no assurance that these refinancing initiatives will be completed successfully. This material uncertainty, which relates solely to the upcoming Telesat Canada Debt maturities in December 2026, casts substantial doubt as to Telesat Canada’s ability to meet its obligations as they come due. Accordingly, this material uncertainty raises substantial doubt for the Company in these consolidated financial statements. Should Telesat Canada not be able to refinance its debt obligations prior to maturity, these financial statements may require significant adjustments. Such adjustments would have a material impact to the carrying amount and classification of reported assets, liabilities, revenues or expenses in these financial statements. For further discussion on management’s activity to manage liquidity risk, refer to Liquidity & Capital Resources Note – Liquidity. OVERVIEW OF THE BUSINESS We are a leading global satellite services operator, providing our customers with mission-critical communications services since the start of the satellite communications industry in the 1960s. Through a combination of advanced satellites and ground facilities and a highly expert and dedicated staff, our communications solutions support the mission-critical requirements of companies and governments throughout the world. We report under two operating segments, which are GEO and LEO. Transactions that do not belong to a particular operating segment, such as certain corporate entities, are reported within “Other”. Our LEO business segment is still in its development phase, and we expect satellites offering Telesat Lightspeed global services to be in commercial operation around the end of 2027. The satellite services business is capital intensive, and the build-out of a satellite fleet requires substantial time and investment. Once the investment in a satellite is made, the incremental costs to maintain and operate the satellite are relatively low over the life of the satellite. Telesat and its affiliates operate their GEO satellites pursuant to authorizations granted by governments, including those of Canada, the United States, Brazil, the Kingdom of Tonga and the United Kingdom, to access and use certain geostationary orbital locations and associated spectrum resources. The use of these orbital locations, as well as our other operations, is subject to a variety of Canadian and international regulations. As at December 31, 2025, the GEO business segment provided satellite services to customers from our fleet of 14 in-orbit geostationary satellites, as well as our Canadian payload on the ViaSat-1 satellite. We also manage the operations of additional satellites for third parties. 81 Table of Contents We are building, in our LEO business segment, what we believe will be one of the world’s most advanced constellations of low earth orbit satellites and integrated terrestrial infrastructure, called “Telesat Lightspeed” — a platform designed to revolutionize the provision of global broadband connectivity. In September 2024, Telesat LEO completed the Telesat Lightspeed Financing with the GoC and GoQ for loans of $2.14 billion and $400 million, respectively, for the Telesat Lightspeed constellation. See “— Debt — Telesat Lightspeed Financing — Senior Secured Term Loan Facilities”, below. Revenue We currently earn most of our revenue by providing video and data services using geostationary satellite transponder capacity. We also earn revenue by providing ground-based transmit and receive services, selling equipment, managing satellite networks, and providing consulting services in the field of satellite communications. We recognize revenue from satellite services on a monthly basis as services are performed in an amount that reflects the consideration we expect to receive in exchange for those services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability is considered probable. Consulting revenue for cost plus contracts is recognized as the approved time and labor is completed by Telesat. We recognize consulting revenue for fixed price contracts using the input method to determine the progress towards complete satisfaction of the performance obligation. Equipment sale revenue is recognized when the customer obtains control of the equipment, being at the time the equipment is delivered to and accepted by the customer. Expenses Our operating expenses consist of labor and operating expenses which include direct-billed expenses such as third-party contractor services. As we progress our Telesat Lightspeed program, we are significantly increasing the number of employees that will engage in the successful deployment of the constellation. We anticipate that our labor costs will continue to increase, with a significant portion of the labor cost capitalized to the project. Interest expense is significant and arises principally from our indebtedness, as elaborated in the “Debt” section. Interest expense relating to Telesat Lightspeed Financing is capitalized against the cost of the constellation until the constellation is in service. Other significant operating expenses include the straight-line depreciation of the cost of each of our satellites over their useful lives and amortization expense related to various finite-life intangible assets. FUTURE OUTLOOK After decades of developing and successfully operating our GEO satellite services business, we are now poised to revolutionize the provision of global broadband connectivity by building what we believe will be one of the world’s most advanced constellations of LEO satellites and integrated terrestrial infrastructure, Telesat Lightspeed. Our commitment to providing the highest level of customer service, deep technical expertise and culture of innovation have enabled us to successfully develop our business to date. Leveraging these strengths, our focus is on profitably maximizing the utilization of our existing in-orbit satellites and on deploying our Telesat Lightspeed constellation. RESULTS OF OPERATIONS Review of financial performance Telesat’s net loss for the year ended December 31, 2025, was $530.2 million compared to net loss of $302.5 million for the prior year. The variation of $227.8 million was primarily due to a lower gain on repurchase of debt, loss on changes in fair value of the Telesat Lightspeed Financing Warrants, a reduction in revenue and higher impairment recognized on our orbital slots, satellites and goodwill. This was partially offset by variation in foreign exchange gain (loss) on the conversion of U.S. dollar debt into Canadian dollars. 82 Table of Contents For a discussion of our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to the “Operating and Financial Review and Prospects” section of our Annual Report on Form 20-F for the year ended December 31, 2024, filed with the SEC on March 27, 2025. Revenue Years ended December 31, % Increase (Decrease) ($ millions except percentages) 2025 2024 Broadcast $ 196.2 $ 274.4 (28.5 )% Enterprise 206.6 267.8 (22.8 )% Consulting and other 15.1 28.9 (47.6 )% Revenue $ 418.0 $ 571.0 (26.8 )% Total revenue for the year ended December 31, 2025, as expected, decreased by $153.1 million to $418.0 million compared to $571.0 million for the prior year as Broadcast revenue decreased by $78.2 million and Enterprise revenue decreased by $61.1 million. The decrease in Broadcast revenue was primarily due to the full year impact of a lower rate on the renewal of a long-term agreement with a direct-to-home (“DTH”) customer in the fourth quarter of 2024, the non-renewal of an agreement with that same customer in the second quarter of 2025 on a satellite that reached the end of its station kept life, and the full year impact of the termination of service from another DTH customer in the third quarter of 2024, impacting our GEO business segment. The decrease in Enterprise revenue was primarily due to reductions of services to certain customers, in particular services for an Indonesian rural broadband program as well as lower revenue from aero and maritime markets, impacting our GEO business segment. The full year impact of the sale of our Infosat subsidiary in August 2024 also negatively impacted our revenue in 2025 in our GEO business segment. Consulting and other revenue decreased by $13.7 million for the year ended December 31, 2025, when compared to the prior year primarily due to reduced consulting services provided to NASA Goddard Space Flight Center by our LEO business segment. Expenses Years ended December 31, % Increase (Decrease) ($ millions except percentages) 2025 2024 Depreciation $ 104.7 $ 127.3 (17.7 )% Amortization 44.2 11.3 289.7 % Operating expenses 211.8 207.8 1.9 % Other operating (gains) losses, net 361.2 264.9 36.3 % Total expenses $ 721.8 $ 611.3 110.5 % Depreciation Depreciation of satellites, property and other equipment decreased by $22.6 million for the year ended December 31, 2025, when compared to the prior year. The decrease resulted from our Telstar 11N satellite and Nimiq 5 satellite reaching the end of their useful lives, for accounting purposes, in 2024. Amortization Amortization of intangible assets increased by $32.8 million for the year ended December 31, 2025, when compared to the prior year as we started to amortize orbital slots, which were transferred from indefinite life assets to finite life assets effective January 1, 2025. 83 Table of Contents Operating Expenses Years ended December 31, % Increase (Decrease) ($ millions except percentages) 2025 2024 Compensation and employee benefits $ 92.6 $ 110.3 (16.1 )% Other operating expenses 96.4 59.5 62.2 % Cost of sales 22.7 38.0 (40.1 )% Operating expenses $ 211.8 $ 207.8 1.9 % Compensation and employee benefits decreased by $17.7 million for the year ended December 31, 2025, in comparison to the prior year. The decrease was primarily due to higher capitalized engineering relating to LEO and lower share-based compensation, partially offset by an increase in wages and benefits relating to 170 employees and contractors added during the year, primarily in the LEO business segment. Other operating expenses increased by $37.0 million for the year ended December 31, 2025, in comparison to the prior year. The increases were primarily due to higher legal and other professional fees in our GEO business segment resulting from the equity distribution of the Telesat Lightspeed business and activities associated with the upcoming Telesat Canada Debt maturities. Cost of sales decreased by $15.2 million for the year ended December 31, 2025, when compared to the prior year. The decrease was primarily due to lower consulting costs in our LEO business segment tied to lower consulting revenue from NASA Goddard Space Flight Center. Other Operating Gains (Losses), Net Years ended December 31, ($ millions) 2025 2024 Impairment $ (365.2 ) $ (267.0 ) Gain on disposal of subsidiaries 0.2 2.6 Other 3.8 (0.5 ) Other operating gains (losses), net $ (361.2 ) $ (264.9 ) Other operating gains (losses), net for the year ended December 31, 2025 primarily related to the impairment of goodwill, orbital slots and satellites related to our GEO business segment. Other operating gains (losses), net for the year ended December 31, 2024 primarily related to the impairment on certain orbital slots and the Telstar 18 VANTAGE and Telstar 19 VANTAGE satellites. Interest Expense Years ended December 31, % Increase (Decrease) ($ millions except percentages) 2025 2024 Debt service costs $ 232.8 $ 227.4 2.4 % Interest on significant financing component 12.3 13.8 (11.1 )% Interest on satellite performance incentive payments 0.9 1.1 (18.4 )% Interest on employee benefit plans, net (1.1 ) (0.2 ) 612.0 % Interest on leases 2.1 1.5 38.8 % Capitalized interest (29.4 ) — 100.0 % Interest expense $ 217.7 $ 243.8 (10.7 )% Interest expense included interest related to our debt, as well as interest related to our derivative instruments, significant financing components on certain revenue agreements, satellite performance incentive payments, employee benefit plans, leases and capitalized interest. Debt service costs increased by $5.4 million for the year ended December 31, 2025 when compared to the prior year. The increases were primarily due to $29.4 million of interest on the Telesat Lightspeed Financing under which first draws occurred in 2025, partially offset by lower interest rates on the Term Loan B and lower amount of debt 84 Table of Contents outstanding due to our repurchases of US$270.2 million of the Telesat Canada Debt in 2024 and 2025. In total, since 2023, we have repurchased US$697.2 million of outstanding Telesat Canada Debt. All interest expense incurred on the Telesat Lightspeed Financing was capitalized to the Telesat Lightspeed constellation. Interest expense on significant financing component decreased by $1.5 million for the year ended December 31, 2025, when compared to the prior year as the balance of revenue agreements with a significant financing component is lower. Gain on Repurchase of Debt Years ended December 31, ($ millions) 2025 2024 Gain on repurchase of debt $ 6.9 $ 202.5 The gain on repurchase of debt for the year ended December 31, 2025 resulted from our repurchases of 2027 Senior Unsecured Notes with a principal amount of $11.4 million (US$8.2 million) in exchange for $4.5 million (US$3.3 million). The gain on repurchase of debt for the year ended December 31, 2024 resulted from our repurchases of: 2027 Senior Unsecured Notes with a principal amount of $100.4 million (US$73.8 million) in exchange for $30.4 million (US$22.3 million); 2027 Senior Secured Notes with a principal amount of $103.3 million (US$75.0 million) in exchange for $48.4 million (US$35.1 million); 2026 Senior Secured Notes with a principal amount of $16.4 million (US$12.0 million) in exchange for $8.0 million (US$5.9 million); and a portion of the Term Loan B with a principal amount of $137.9 million (US$101.2 million) in exchange for $69.1 million (US$50.7 million). Interest and Other Income Years ended December 31, ($ millions) 2025 2024 Interest and other income $ 26.2 $ 23.3 Interest and other income increased by $2.9 million for the year ended December 31, 2025, when compared to the prior year. The increase was primarily due to changes in our Other Post-Employment Benefit plans positively impacting our liability. Foreign Exchange and Derivatives Years ended December 31, ($ millions) 2025 2024 Gain (loss) on changes in fair value of financial instruments $ (215.3 ) $ (12.8 ) Gain (loss) on foreign exchange $ 106.2 $ (244.5 ) The loss on changes in fair value of financial instruments for the year ended December 31, 2025 was $215.3 million compared to loss of $12.8 million for the year ended December 31, 2024, an increase of $202.6 million. The variation is related to the changes in the fair value of the derivative liabilities associated with the warrants issued in conjunction with the Telesat Lightspeed Financing. The foreign exchange gain for the year ended December 31, 2025 was $106.2 million compared to a foreign exchange loss of $244.5 million for the year ended December 31, 2024, resulting in a favorable change of $350.7 million. The gain for the year ended December 31, 2025, resulted from the weakening of the U.S. dollar compared to Canadian dollar at year end compared to December 31, 2024 and the resulting primarily from the impact of the translation of our U.S. dollar and Canadian dollar denominated indebtedness and our Canadian dollar derivative warrant liabilities. The loss for the year ended December 31, 2024 was mainly the result of a stronger U.S. dollar to Canadian dollar compared to December 31, 2023 and the resulting unfavorable impact on the translation of our U.S. dollar denominated Telesat Canada Debt. 85 Table of Contents Below are the foreign exchange rates used for our audited consolidated financial statements and this MD&A: 2025 2024 2023 US$ to $ spot rate as at December 31, 1.3724 1.4384 1.3243 US$ to $ average rate for the year ended December 31, 1.3975 1.3700 1.3493 Income Taxes Years ended December 31, ($ millions) 2025 2024 Current tax expense $ 13.0 $ 50.9 Deferred tax expense (recovery) (80.3 ) (64.0 ) Tax expense (recovery) $ (67.4 ) $ (13.0 ) The tax recovery for the year ended December 31, 2025, was $54.3 million higher than the prior year. The variation was primarily due to lower operating income, higher asset impairment charges, and a reduced gain on debt repurchases, partially offset by lower interest expense and favorable foreign exchange gains. Backlog Our backlog represents future cash inflows from capacity allocation or service delivery contracts. As of December 31, 2025, GEO backlog was $0.8 billion (December 31, 2024 - $1.1 billion) and represents our expected future revenue from existing GEO service contracts (without discounting for present value) including any deferred revenue that we will recognize in the future in respect of cash already received. As at December 31, 2025, we have entered into customer agreements to provide service on Telesat Lightspeed that aggregate to $1.0 billion in cash inflows. Generally, following the successful launch of a satellite, if the satellite is operating nominally, our customers may only terminate their service agreements for satellite capacity by paying us all, or substantially all, of the payments that would have otherwise become due over the term of the service agreement. However, if certain of our existing satellites were to experience an in-orbit failure, or otherwise fail to operate as anticipated, our customers may be entitled to terminate their agreement, and we may be obligated to return all or a portion of the customer prepayments made under service agreements for that satellite and reduce the associated backlog. Any repayments under such conditions would be funded by insurance proceeds we may receive, cash on hand and short-term investments. We expect our GEO backlog as at December 31, 2025 to be recognized as follows: ($ millions) 2026 2027 2028 2029 2030 Thereafter Backlog $ 283.4 $ 191.0 $ 104.0 $ 79.7 $ 55.9 $ 112.7 LIQUIDITY AND CAPITAL RESOURCES Cash and Available Credit As at December 31, 2025, we had $509.8 million of cash and short-term investments, including $303.2 million held in Non-Guarantor subsidiaries. We also have in aggregate $1.85 billion of Telesat Lightspeed Financing available to draw, subject to certain conditions, to finance the deployment of the Telesat Lightspeed constellation. Cash Flows generated from Operating Activities Cash generated from operating activities for the year ended December 31, 2025 was $66.7 million, a $4.2 million increase compared to the prior year as the reduction in adjusted EBITDA was more than offset by the receipt of certain other receivables outstanding as of December 31, 2024. Cash Flows (used in) generated from Investing Activities Cash used in investing activities for the year ended December 31, 2025 was $761.2 million, down from $1,091.6 million in 2024. This consisted primarily of capital expenditures associated with the Telesat Lightspeed constellation in both years. 86 Table of Contents Cash Flows (used in) generated from Financing Activities Cash generated in financing activities for the year ended December 31, 2025 was $672.4 million. This was primarily due to $689.8 million of drawings under the Telesat Lightspeed Financing to fund capital expenditures associated with the Telesat Lightspeed constellation. In the prior year, cash used in financing activities was $170.2 million primarily due to the repurchase of US$262.0 million of our Telesat Canada Debt for cash $155.9 million in cash. Government Grant In 2019, we entered into an agreement with the GoC pursuant to which the GoC would contribute up to $85.0 million to support the development of the Telesat Lightspeed constellation through the GoC Strategic Innovation Fund. In return for the grant, Telesat has made a number of commitments to the GoC, including commitments to conduct over $200.0 million of research and development activities in Canada as well as to expand its Canadian workforce. The costs that were incurred in connection with this program to date are summarized below: Years ended December 31, ($ millions) 2025 2024 2023 Satellites, property and other equipment $ 686.2 $ 1,088.4 $ 106.9 Intangible assets — — 16.4 Operating expenses 69.3 77.4 48.3 Total costs incurred $ 755.5 $ 1,165.8 $ 171.6 Total research and development costs for Telesat Lightspeed for the year ended December 31, 2025 decreased by $410.3 million to $755.5 million, when compared to the prior year. The variation was primarily driven by our investment activities in the Telesat Lightspeed program. The following claims against the government grant have been made against the costs incurred associated with the program: Years ended December 31, ($ millions) 2025 2024 2023 Satellites, property and other equipment $ — $ 5.4 $ 15.0 Operating expenses 3.6 8.0 4.5 Total claims $ 3.6 $ 13.4 $ 19.5 Liquidity A large portion of our annual cash receipts are reasonably predictable because they are primarily derived from an existing backlog of long-term customer contracts. We believe cash and short-term investments as at December 31, 2025 and cash flows from operating activities expected to be generated in 2026 will be adequate to meet our expected cash requirements for at least the next twelve months for activities in the normal course of business, including required interest on our indebtedness. Similarly, we believe our drawings on our Telesat Lightspeed Financing will be adequate to cover the cost of the operating activities and ongoing development, construction and global service deployment of the Telesat Lightspeed constellation for our LEO business. The Telesat Canada Term Loan B and Senior Notes are scheduled to mature between December 2026 and October 2027, resulting in significant obligations that will require repayment or refinancing. These maturities will create liquidity pressure if not addressed. The Company has approximately $509.8 million of cash and cash equivalent of which $206.6 million is held within Telesat Canada as at December 31, 2025. The Company and Telesat Canada expect to generate sufficient cash flow to meet the requirements of their respective ongoing operations and debt servicing costs for the reasonably foreseeable future, including at least the one-year period following the date of the financial statements. However, the Company’s consolidated cash flows and cash resources alone, which includes those of Telesat Canada, are not expected to be sufficient to meet Telesat Canada’s debt maturity obligations as they come due. 87 Table of Contents Management is therefore actively engaged in discussions with lenders’ advisors about refinancing the Telesat Canada Debt. However, these refinancing activities are dependent on a number of factors outside of the Company’s control. As such, there can be no assurance that these refinancing initiatives will be completed successfully. This material uncertainty, that relates solely to the upcoming Telesat Canada Debt maturities in December 2026, casts substantial doubt as to Telesat Canada’s ability to meet its obligations as they come due. The debt obligations of Telesat Canada are guaranteed by certain direct and indirect subsidiaries of Telesat Canada (“Guarantor Entities”) and the obligation for repayment of the credit facilities and senior secured notes upon maturity does not extend beyond these Guarantor Entities. Other entities within the Telesat group, other than Guarantor Entities (“Non-Guarantor Entities”) are primarily focused on the Telesat Lightspeed project. The entities responsible for the Telesat Lightspeed project have a segregated funding source to permit the build out of that project that includes the ability to acquire any necessary intercompany services, such as personnel, occupancy, and information systems, currently provided to Telesat LEO ULC by Telesat Canada up to a specified maximum. We are building our Telesat Lightspeed constellation in Telesat LEO ULC and intend to complete the deployment of, operate and commercialize our Telesat Lightspeed constellation through this entity. Telesat LEO ULC is an indirect wholly owned subsidiary of Telesat Corporation. Telesat LEO ULC is not a guarantor of the Telesat Canada Debt. The construction of any satellite replacement or expansion program, including expansion of the Telesat Lightspeed constellation, will require significant capital expenditures and is expected to be fully funded by Telesat Lightspeed Financing, vendor financing, equity investments, including through the issuance of public equity, additional secured or unsecured debt financing, and government sources. We may also raise additional funding for expansion of the Telesat Lightspeed constellation through the issuance of additional equity of, or debt at, our LEO Non-Guarantor subsidiaries which own, and will operate and commercialize, the Telesat Lightspeed constellation. However, our ability to access these sources of funding is not guaranteed. Debt Debt held in Telesat Canada consisted of: Senior Secured Credit Facilities comprised of two outstanding secured credit facilities, which included a revolving facility that matured and extinguished in 2024 and a Term Loan B maturing in December 2026; 6.5% senior unsecured notes due in October 2027 (“2027 Senior Unsecured Notes”); 4.875% senior secured notes due in June 2027 (“2027 Senior Secured Notes”); and 5.625% senior secured notes due in December 2026 (“2026 Senior Secured Notes”), collectively known as “Telesat Canada Debt”. Senior Secured Credit Facilities The obligations under the credit agreement governing our Senior Secured Credit Facilities (the “Credit Agreement”) and the guarantees of those obligations are secured, subject to certain exceptions, by a first priority security interest in the assets of Telesat Canada and certain of its subsidiaries (“Guarantors”). The Credit Agreement contains covenants that restrict the ability of Telesat Canada and the Guarantors to take specified actions, including, among other things and subject to certain significant exceptions: creating liens, incurring indebtedness, making investments, engaging in mergers, selling property, paying dividends, entering into sale-leaseback transactions, creating subsidiaries, repaying subordinated debt or amending organizational documents. The Credit Agreement contains customary events of default and affirmative covenants, including an excess cash sweep, that may require us to repay a portion of the outstanding principal under our Senior Secured Credit Facilities prior to the stated maturity. As of December 31, 2025, our Senior Secured Credit Facilities are comprised only of the following: Term Loan B Telesat Canada’s Term Loan B is a US$1,908.5 million facility maturing in December 2026. As at December 31, 2025, the outstanding balance was US$1,320.5 million. The Term Loan B bear interest, at Telesat Canada’s option, at either (i) a floating rate based on the base rate, plus an applicable margin of 1.75% or (ii) a floating rate based on SOFR, plus an applicable margin of 2.75% plus a small credit spread adjustment. 88 Table of Contents Senior Notes Telesat Canada’s Senior Notes comprise the 2026 Senior Secured Notes, the 2027 Senior Secured Notes and the 2027 Senior Unsecured Notes. The 2027 Senior Secured Notes, initially in the amount of US$400.0 million, bear interest at an annual rate of 4.875% and are due in June 2027. As at December 31, 2025, the balance outstanding was US$225.0 million. The 2026 Senior Secured Notes, initially in the amount of US$500.0 million in aggregate bear interest at an annual rate of 5.625% and are due in December 2026. As at December 31, 2025, the balance outstanding was US$387.0 million. Our 2027 Senior Secured Notes and 2026 Senior Secured Notes are secured by substantially all of our assets, excluding the assets relating to the Telesat Lightspeed business, which assets are held by the LEO Non-Guarantors. The 2027 Senior Unsecured Notes in the original principal amount of US$550.0 million, bear interest at an annual rate of 6.5% and are due in October 2027. As at December 31, 2025, the balance outstanding was US$213.0 million. The indentures governing the Senior Notes include covenants and terms that restrict our ability to, among other things, incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments, investments or acquisitions, enter into certain transactions with affiliates, modify or cancel its satellite insurance, and effect mergers with another entity, in each case subject to exceptions provided in such indentures. During the year ended December 31, 2025, we repurchased principal amount of $11.4 million (US$8.2 million) of 2027 Senior Unsecured Notes for consideration of $4.5 million (US$3.3 million). The repurchase resulted in a gain on repurchase of debt of $6.9 million (US$4.9 million). The repurchase also resulted in a write-off of the related debt issue costs and prepayment options. Term Loan B and 2026 Senior Secured Notes Refinancing Our Term Loan B and 2026 Senior Secured Notes issued by Telesat Canada, are scheduled to mature in December 2026, resulting in substantial obligations that will require repayment or refinancing. The Company and Telesat Canada’s current projections indicate that cash flows from operations and assets of the company are expected to be sufficient to meet the company’s contractual obligations (other than the aforementioned debt maturities) for the reasonably foreseeable future, including at least the one-year period following the date of the financial statements. However, the Company’s consolidated cash flows alone, which includes those of Telesat Canada, are not expected to be sufficient to satisfy the obligations related to the settlement of the debt instruments as they become due in December 2026. For further discussion on management’s activity to manage liquidity & capital resources risk, refer to Liquidity & Capital Resources Note – Liquidity. Telesat Lightspeed Financing — Senior Secured Term Loan Facilities To fund Telesat Lightspeed, on September 13, 2024, Telesat LEO, (a LEO Non-Guarantor and wholly-owned subsidiary of Telesat), entered into the Telesat Lightspeed Financing with the GoC and GoQ for senior secured non-revolving delayed draw term loan facilities in the principal amount of $2,140 million and $400 million, respectively. The Telesat Lightspeed Financing carries a floating interest rate of 4.75% above the 3-month term CORRA on the outstanding drawn loan amount with a 15-year maturity. All interest accrued on the Telesat Lightspeed Financing until six months after the initial project completion date (a date upon which a certain number of satellites under the LEO project have been launched, with a certain number of satellites made operational and certain other milestones under the agreement being met) shall be added to the principal amount. Unless accelerated on an event of default as defined in the Telesat Lightspeed Financing, principal repayment of the loan is required on a semi-annual installment basis in 10 years commencing one year after initial project completion date subject to the mandatory repayment of the full amount by the 15th anniversary of the initial draw on the loan. The amount of each semi-annual installment will be calculated as a percentage of the total loan amount as prescribed in the loan agreement. In addition to the regular repayment, we will also be required to make mandatory prepayment or repayment under certain circumstances including in cases when Telesat LEO has excess cash flow. The Telesat Lightspeed Financing also provides a full or partial prepayment option to Telesat LEO. 89 Table of Contents The Telesat Lightspeed Financing includes both financial and non-financial covenants, with which we must comply. As consideration for the Telesat Lightspeed Financing, Telesat LEO, before the initial draw on the loan, on November 15, 2024, entered into an agreement with the GoC and the GoQ which irrevocably granted warrants equivalent to 11.87% of common shares in the equity of Telesat LEO on a fully diluted basis (“Telesat Lightspeed Financing Warrants”). The Telesat Lightspeed Financing Warrants are exercisable in whole or in part, at any time after the second anniversary of the date of their original issuance (November 15, 2026) and up to 10 years from the issuance date (November 15, 2034) subject to certain terms and conditions of the warrant agreement based upon an equity valuation of US$3 billion for Telesat LEO. In connection with a corporate reorganization of Telesat LEO completed in September 2025, the Telesat Lightspeed Financing Warrants became exercisable for 11.87% of the limited partnership units of Lightspeed LEO Limited Partnership, a limited partnership which holds all of the Telesat LEO shares. On initial recognition, the Telesat Lightspeed Financing Warrants were recorded against other current and long-term assets with the derivative recorded against other current and long-term financial liabilities. The initial fair value impact, as at November 15, 2024, of the Telesat Lightspeed Financing Warrants was $604.3 million. As the drawdowns are made against the Telesat Lightspeed Financing, the proportional amount of the current and long-term assets are transferred to the debt issue costs against the long-term indebtedness. These balances are amortized to the statement of income (loss) using the effective interest method. The carrying amount against the indebtedness as of December 31, 2025 was $157.1 million. Debt issue costs of $37.5 million were incurred in connection with the Telesat Lightspeed Financing. These balances are recorded against prepaid expenses and other current assets and long-term assets. As the drawdowns are made against the Telesat Lightspeed Financing, the proportional amount of the prepaid expenses and other current assets and long-term assets are transferred to the debt issue costs against the long-term indebtedness. The liability is subsequently amortized using the effective interest method. The carrying amount against the indebtedness as of December 31, 2025 was $9.8 million. For the derivatives recorded against the current and long-term financial liabilities, the balances are marked to market at each reporting date thereafter in the statement of income (loss) as part of the gain (loss) on changes in fair value of financial instruments. The Telesat Lightspeed Financing is secured by substantially all of the assets relating to the Telesat Lightspeed business, which assets are held by the LEO Non-Guarantors. As at November 15, 2024, all conditions precedent to drawdown of the loans under the Telesat Lightspeed Financing were met. As at December 31, 2025, $716.2 million of the Telesat Lightspeed Financing was outstanding of which $603.4 million and $112.8 million was outstanding with the GoC and GoQ, respectively. The balance consists of $690.0 million of draws combined with $26.1 million of interest which was capitalized to the principal on the loan facility. The interest capitalized against the loan facility was split between $22.0 million and $4.1 million with the GoC and GoQ, respectively. Covenant Compliance As of the date hereof, we were in compliance with the financial covenants of our Telesat Canada Debt and the Telesat Lightspeed Financing. As at December 31, 2025, the Consolidated Total Debt for Covenant Purposes to Consolidated EBITDA ratio, for the purposes of our Senior Secured Credit Facilities was 9.63:1.00. The Consolidated Total Secured Debt to Consolidated EBITDA for Covenant Purposes ratio, for the purposes of our Senior Secured Credit Facilities, was 8.64:1.00. 90 Table of Contents Debt Service Cost The interest expense on our Telesat Canada Debt for the year ended December 31, 2025 was $202.1 million (December 31, 2024 — $226.6 million). The interest expense on our Telesat Lightspeed Financing for the year ended December 31, 2025 was $29.4 million, which was capitalized against the assets under construction. Interest expense excludes the amortization of our deferred financing costs, prepayments options, warrants and loss on repayment. Derivatives We use, from time to time, interest rate and currency derivatives to manage our exposure to changes in interest rates and foreign exchange rates. As at December 31, 2025, there were no interest rate or currency derivatives that were outstanding. We have embedded derivatives on certain of our Telesat Canada Debt that are accounted for separately at fair value. These embedded derivatives are related to the prepayment option on our 2027 Senior Unsecured Notes, the prepayment option on our 2027 Senior Secured Notes and the prepayment option on our 2026 Senior Secured Notes. As at December 31, 2025 and 2024, the fair value of the embedded derivatives related to the prepayment option on our 2027 Senior Unsecured Notes, 2027 Senior Secured Notes and 2026 Senior Secured Notes was $Nil. In addition, we have embedded derivatives associated with the Telesat Lightspeed Financing with the GoC and GoQ. As part of the Telesat Lightspeed Financing, Telesat LEO issued the Telesat Lightspeed Financing Warrants representing 11.87% of its total shares on a fully diluted basis, with standard anti-dilution adjustments. In connection with a corporate reorganization of Telesat LEO completed in September 2025, the Telesat Lightspeed Financing Warrants became exercisable for 11.87% of the limited partnership units of Lightspeed LEO Limited Partnership, a limited partnership which holds all of the Telesat LEO shares. As at December 31, 2025, the fair value of the embedded derivatives with respect to the Telesat Lightspeed Financing Warrants were $832.4 million (December 31, 2024 — $617.1 million). As the warrants could be exercised at any time after November 15, 2026, we presented the derivative liabilities as current. We believe it is highly unlikely that the warrants will be exercised by the GoC and GoQ over the next twelve months as the underlying units of Lightspeed LEO Limited Partnership are illiquid and contain limitations to the unitholder’s ability to further monetize their investment. The changes in the fair value of these embedded derivatives are recorded on our consolidated statements of income as a gain or loss on changes in fair value of financial instruments and are non-cash. All derivative instruments are measured at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market under current market conditions at the measurement date. Where possible, fair values are based on the quoted market values in an active market. In the absence of an active market, we determine fair values based on prevailing market rates (bid and ask prices, as appropriate) for instruments with similar characteristics and risk profiles or internal or external valuation models, such as option pricing models or frameworks and discounted cash flow analysis, using observable market-based inputs. These estimates are affected significantly by the assumptions for the amount and timing of estimated future cash flows and discount rates, which all reflect varying degrees of risk. Potential income taxes and other expenses that would be incurred on disposition of our derivative instruments are not reflected in the fair values. The fair values also include an adjustment related to the counterparty credit risk. As a result, the fair values are not necessarily the net amounts that would be realized if these instruments were actually settled. 91 Table of Contents MATERIAL CASH REQUIREMENTS A summary of the material cash requirements that are due in each of the next five years and after 2030 are summarized the table below: ($ millions) 2026 2027 2028 2029 2030 Thereafter Total Satellite performance incentive payments, including interest(1) $ 4.1 $ 2.6 $ 2.5 $ 2.5 $ 2.5 $ 0.6 $ 14.8 Telesat Canada Debt(2) $ 2,343.5 $ 601.2 $ — $ — $ — $ — $ 2,944.7 Interest on Telesat Canada Debt(2) $ 181.4 $ 26.5 $ — $ — $ — $ — $ 207.9 Telesat Lightspeed Financing(3) $ — $ — $ 115.2 $ 288.0 $ 403.1 $ 2,073.3 $ 2,879.6 Interest on Telesat Lightspeed Financing(3) $ — $ — $ 101.2 $ 190.2 $ 169.3 $ 477.9 $ 938.6 Lease liabilities(4) $ 4.8 $ 4.8 $ 4.6 $ 4.9 $ 4.7 $ 33.5 $ 57.3 Property lease commitments(5) $ 1.2 $ 1.2 $ 1.2 $ 1.2 $ 1.2 $ 11.7 $ 17.7 Commitments for capital expenditures(6) $ 506.1 $ 6.2 $ — $ — $ — $ — $ 512.3 Other operating commitments(7) $ 23.7 $ 13.3 $ 12.6 $ 13.6 $ 12.3 $ 35.4 $ 110.9 Contributions to defined benefit plans(8) $ 2.2 $ — $ — $ — $ — $ — $ 2.2 ____________ (1) Satellite performance incentive payments are obligations payable to satellite manufacturers over the lives of certain satellites. Satellite performance incentive payments will be paid through the usage of cash and short-term investments or cash flows from operating activities. (2) Balance relates to our Telesat Canada Debt and all corresponding interest thereon, excluding the impact of the amortization of deferred financing costs, loss on repayment and prepayment options. Over the next twelve months, the payments will be made through the usage of cash and short-term investments or cash flows from operating activities. As of the date of this report, the Term Loan B and 2026 Senior Secured Notes are scheduled to mature in December 2026, resulting in substantial obligations that will require repayment or refinancing. For further discussion, refer to Liquidity & Capital Resources Note – Liquidity. (3) Balance relates to our Telesat Lightspeed Financing and all corresponding interest thereon, excluding the impact of the amortization of deferred financing costs and warrants. No payments are required over the next twelve months. The contractual cash flows for Telesat Lightspeed Financing include anticipated future drawings and mandatory repayments against the loan. (4) Balance relates to payments to be made in connection with leases. Over the next twelve months, the payments will be made through the usage of cash and short-term investments or cash flows from operating activities, or funds available under Telesat Lightspeed Financing. (5) Property lease commitments consist of off-balance sheet contractual obligations for land or building usage. Over the next twelve months, the payments will be made through the usage of cash and short-term investments, cash flows from operating activities, or funds available under Telesat Lightspeed Financing. (6) We have entered into contracts for the development of our Telesat Lightspeed constellation and other capital expenditures. These expenditures may be funded from some or all of the following: cash and short-term investments, cash flow from operating activities, cash flow from customer prepayments or funds available under Telesat Lightspeed Financing. (7) Other operating commitments consisted of third-party satellite capacity arrangements as well as other commitments that are not categorized as property leases or capital commitments. Over the next twelve months, the payments will be made through the usage of cash and short-term investments, cash flows from operating activities or funds available under the Telesat Lightspeed Financing. (8) Over the next twelve months, contributions to the defined benefit pension plans will be made through the usage of cash and short-term investments and cash flows from operating activities. Certain contributions subsequent to 2026 are not quantifiable as they are largely dependent on the result of actuarial valuations that are performed periodically and on the investment performance of the pension fund assets. 92 Table of Contents MARKET RISK Credit Risk Related to Financial Instruments Financial instruments that potentially subject us to a concentration of credit risk consist of cash and short-term investments, accounts receivable, derivative assets and other assets. Cash and short-term investments are invested with high quality financial institutions and are governed by our corporate investment policy, which aims to reduce credit risk by restricting investments to high-grade, mainly U.S. dollar and Canadian dollar denominated investments. Credit checks are performed to minimize exposure to any one customer. We are exposed to credit risk if counterparties to our derivative instruments are unable to meet their obligations. It is expected that these counterparties will be able to meet their obligations as they are institutions with strong credit ratings, but we continue to periodically monitor their credit risk and credit exposure. Foreign Exchange Risk Our operating results are subject to fluctuations as a result of exchange rate variations to the extent that transactions are made in currencies other than Canadian dollars or in cases where transactions are in Canadian dollars where the functional currency is other than Canadian dollars. The most significant impact of variations in the exchange rate is on our U.S. dollar denominated indebtedness and cash and short-term investments combined with the Canadian dollar indebtedness and derivative liabilities held in a subsidiary with other than a Canadian functional currency. In addition, a portion of our revenue and expenses, as well as the majority of our capital expenditures are denominated in U.S. dollars. As a result, the volatility of the U.S. currency, and in certain cases Canadian currency, exposes us to foreign exchange risks. The approximate amount of our revenue and certain expenses denominated in U.S. dollars, as a percentage of their overall balance, is summarized in the table below: Years ended December 31, 2025 2024 Revenue 47.1 % 52.6 % Operating expenses 52.1 % 45.0 % Interest on our indebtedness 87.4 % 100.0 % We use, from time to time, currency derivative instruments to hedge the foreign exchange risk on our U.S. dollar denominated indebtedness. Our policy is that we do not use derivative instruments for speculative purposes. As at December 31, 2025, we have no currency derivative instruments. A five percent increase (decrease) in the value of the U.S. dollar against the Canadian dollar would have (decreased) increased our net income (loss) as at December 31, 2025 by $113.0 million and increased (decreased) our other comprehensive income by $34.2 million. This would have also increased (decreased) our indebtedness by $147.2 million. A five percent increase (decrease) in the value of the U.S. dollar against the Canadian dollar would have increased (decreased) our cash and cash equivalents by $14.5 million, increased (decreased) our net income by $0.9 million and increased (decreased) our other comprehensive income by $15.5 million as at and for the year ended December 31, 2025. A five percent increase (decrease) in the value of the U.S. dollar against the Canadian dollar would have increased (decreased) our revenue and certain expenses for the year ended December 31, 2025, as summarized in the table below: ($ millions) Revenue $ 9.8 Operating expenses $ 5.3 Interest on our indebtedness $ 10.2 The sensitivity analyses above assume that all other variables remain constant. 93 Table of Contents Through our Telesat Canada U.S. dollar denominated indebtedness, we are exposed to foreign exchange fluctuations. The following table contains our existing U.S. dollar denominated indebtedness balances at the beginning of each respective year, which are net of our scheduled debt repayments, and based on the foreign exchange rate as at December 31, 2025. ($ millions, beginning of year) 2026 2027 2028 2029 2030 Term Loan B $ 1,812.3 $ — $ — $ — $ — 2027 Senior Unsecured Notes 292.4 292.4 — — — 2026 Senior Secured Notes 531.2 — — — 2027 Senior Secured Notes 308.8 308.8 — — — U.S. dollar denominated debt balances $ 2,944.7 $ 601.2 $ — $ — $ — Through our Telesat LEO Canadian dollar denominated indebtedness, we are exposed to foreign exchange fluctuations, as Telesat LEO has a U.S. dollar functional currency. The following table contains our existing and anticipated drawings on the Canadian dollar denominated indebtedness balances at the beginning of each respective period. The balances are net of our scheduled debt repayments. ($ millions, beginning of period) 2026 2027 2028 2029 2030 Thereafter Telesat Lightspeed Financing $ 716.1 $ 1,699.5 $ 2,781.0 $ 2,764.3 $ 2,476.4 $ 2,073.3 Interest Rate Risk We are exposed to interest rate risk on our cash, short-term investments and on our Term Loan B and Telesat Lightspeed Financing, which have variable interest rates. Changes in the interest rates could impact the amount of interest that we receive or are required to pay. We use, from time to time, interest rate swaps to hedge the interest rate risk related to our indebtedness. Our policy is that we do not use derivative instruments for speculative purposes. In the past, we entered into interest rate swaps to hedge the interest rate risk associated with the variable interest rate on the U.S. denominated Term Loan B. There were no outstanding interest rate swaps as at December 31, 2025 or as at December 31, 2024. If the interest rates on our variable rate debt increased (decreased) by 0.25%, the result would be a decrease (increase) of $5.5 million to our net income for year ended December 31, 2025, excluding any impact from interest which would be capitalized against the Telesat Lightspeed constellation. The following table contains the balance of the Term Loan B and Telesat Lightspeed Financing at the beginning of each respective year, net of our scheduled repayments, and based on the foreign exchange rate as at December 31, 2025. ($ millions, beginning of period) 2026 2027 2028 2029 2030 Thereafter Term Loan B $ 1,812.3 $ — $ — $ — $ — $ — Telesat Lightspeed Financing(1) 716.1 1,699.5 2,781.0 2,764.3 2,476.4 2,073.3 Debt balances exposed to interest rate fluctuation $ 2,528.4 $ 1,699.5 $ 2,781.0 $ 2,764.3 $ 2,476.4 $ 2,073.3 ____________ (1) The contractual cash flows for Telesat Lightspeed Financing include anticipated future drawings and mandatory repayments against the loan. Guarantees In the normal course of business, we enter into agreements that provide for indemnification and guarantees to counterparties in transactions involving sales of assets, sales of services, purchases and development of assets, securitization agreements and operating leases. The nature of almost all of these indemnifications prevents us from making a reasonable estimate of the maximum potential amount that we could be required to pay counterparties. As a result, we cannot determine how they could affect future liquidity, capital resources or our credit risk profile. We have not made any significant payments under these indemnifications in the past. For more information, see Note 34 of our audited consolidated financial statements. 94 Table of Contents NON-IFRS ACCOUNTING STANDARDS MEASURES Adjusted EBITDA Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS Accounting Standards measures. EBITDA is defined as “Earnings Before Interest, Taxes, Depreciation and Amortization.” Adjusted EBITDA is used by management to measure our financial performance. Adjusted EBITDA is defined as operating income (excluding certain operating expenses such as share-based compensation expenses and unusual and non-recurring items, including restructuring related expenses) before interest expense, taxes, depreciation and amortization. Adjusted EBITDA margin is used by management to measure our operating performance. Adjusted EBITDA margin is defined as the ratio of Adjusted EBITDA to revenue. Adjusted EBITDA and Adjusted EBITDA margin are not standardized financial measures under IFRS Accounting Standards and might not be comparable to similar financial measures disclosed by other issuers. Adjusted EBITDA allows investors and us to compare our operating results with that of competitors exclusive of depreciation and amortization, interest and investment income, interest expense, taxes and certain other expenses. Financial results of competitors in the satellite services industry have significant variations that can result from timing of capital expenditures, the amount of intangible assets recorded, the differences in assets’ lives, the timing and amount of investments, the effects of other income (expense), and unusual and non-recurring items. The use of Adjusted EBITDA assists investors and us to compare operating results exclusive of these items. Competitors in the satellite services industry have significantly different capital structures. We believe that the use of Adjusted EBITDA improves comparability of performance by excluding interest expense. We believe that the use of Adjusted EBITDA and the Adjusted EBITDA margin along with IFRS Accounting Standards financial measures enhances the understanding of our operating results and is useful to investors and us in comparing performance with competitors, estimating enterprise value and making investment decisions. Adjusted EBITDA and Adjusted EBITDA margin as used here may not be the same as similarly titled measures reported by competitors. Adjusted EBITDA and Adjusted EBITDA margin should be used in conjunction with IFRS Accounting Standards financial measures and are not presented as a substitute for cash flows from operations as a measure of our liquidity or as a substitute for net income (loss) as an indicator of our operating performance. The following table provides a quantitative reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA margin, each of which are non-IFRS Accounting Standards measures. Years ended December 31, ($ millions) 2025 2024 Net income (loss) $ (530.2 ) $ (302.5 ) Tax expense (recovery) (67.4 ) (13.0 ) (Gain) loss on changes in fair value of financial instruments 215.3 12.8 (Gain) loss on foreign exchange (106.2 ) 244.5 Interest and other income (26.2 ) (23.3 ) Interest expense 217.7 243.8 Gain on repurchase of debt (6.9 ) (202.5 ) Depreciation 104.7 127.3 Amortization 44.2 11.3 Other operating (gains) losses, net 361.2 264.9 Non-recurring compensation expenses(1) 2.3 2.9 Non-cash expense related to share-based compensation 4.1 17.6 Adjusted EBITDA $ 212.7 $ 383.7 Revenue $ 418.0 $ 571.0 Adjusted EBITDA Margin 50.9 % 67.2 % ____________ (1) Includes severance payments, special compensation and benefits for employees. 95 Table of Contents Adjusted EBITDA for Telesat Corporation decreased by $171.0 million for the year ended December 31, 2025, when compared to the prior year. The decrease was primarily due to a decrease in revenues. Consolidated EBITDA for Covenant Purposes Consolidated EBITDA for Covenant Purposes is not a presentation made in accordance with IFRS Accounting Standards, is not a measure of financial condition or profitability, and should not be considered as an alternative to (1) net income (loss) determined in accordance with IFRS Accounting Standards or (2) cash flows from operating activities determined in accordance with IFRS Accounting Standards. Additionally, Consolidated EBITDA for Covenant Purposes is not intended to be a measure of free cash flow for management’s discretionary use as it does not include certain cash requirements for such items as interest payments, tax payments and debt service requirements. We believe that the inclusion of Consolidated EBITDA for Covenant Purposes herein is appropriate to provide additional information concerning the calculation of the financial ratio maintenance covenant and other covenants on our Senior Secured Credit Facilities. Consolidated EBITDA for Covenant Purposes is a material component of these covenants. Non-compliance with the financial ratio maintenance covenant contained in our Senior Secured Credit Facilities could result in the requirement to immediately repay all amounts outstanding. This presentation of Consolidated EBITDA for Covenant Purposes is not comparable to other similarly titled measures of other companies because not all companies use identical calculations of EBITDA. We believe the disclosure of the calculation of Consolidated EBITDA for Covenant Purposes provides information that is useful to an investor’s understanding of our liquidity and financial flexibility. The following is a reconciliation of net income (loss), which is an IFRS Accounting Standards measure of our operating results, to Consolidated EBITDA for Covenant Purposes, as defined in the Credit Agreement and the calculation of the ratio of Consolidated Total Secured Debt to Consolidated EBITDA for Covenant Purposes as defined in the Credit Agreement. The terms and related calculations are defined in the Credit Agreement, a copy of which is publicly available at https://www.sec.gov and at https://www.sedarplus.ca. ($ millions) Year Ended December 31, 2025 Year Ended December 31, 2024 Net income (loss) $ (530.2 ) $ (302.5 ) Impact of unrestricted subsidiaries (59.3 ) 58.6 Consolidated income (loss) for Covenant Purposes (589.5 ) (243.9 ) Plus: Income taxes (Note 1) (66.2 ) (22.3 ) Interest expense (Note 1) 195.4 219.6 Depreciation and amortization expense (Note 1) 144.7 136.5 Non-cash share-based compensation and pension expense (Note 1) 6.7 20.0 Impairment 365.2 267.0 Other 13.9 16.6 Increased (decreased) by: (Gain) loss on repurchase of debt (6.9 ) (202.5 ) Loss on disposal of assets related to amalgamation of unrestricted subsidiaries 379.5 — Non-cash (gains) losses resulting from changes in foreign exchange rates (Note 1) (148.4 ) 255.9 Consolidated EBITDA for Covenant Purposes $ 294.4 $ 446.9 ____________ Note 1: Some adjustments for covenant purposes excludes certain specific expenses as defined in the Credit Agreement. As a result, these items in the covenant calculation do not reconcile to the financial statement line items. Consolidated Total Secured Debt and Consolidated Debt for Covenant Purposes Consolidated Total Debt for Covenant Purposes and Consolidated Total Secured Debt for Covenant Purposes are non-IFRS Accounting Standards measures. We believe that the inclusion of Consolidated Total Debt for Covenant Purposes and Consolidated Total Secured Debt for Covenant Purposes herein are appropriate to provide additional information concerning the calculation of the financial ratio maintenance and other covenants under our Senior Secured Credit Facilities and provides information that is useful to an investor’s understanding of our compliance with these financial covenants. 96 Table of Contents The following is a reconciliation of our Consolidated Total Debt for Covenant Purposes and Consolidated Total Secured Debt for Covenant Purposes to Indebtedness: (in $ millions) As at December 31, 2025 As at December 31, 2024 Senior Secured Credit Facilities & Telesat Canada Debt: Term Loan B $ 1,812.3 $ 1,889.5 2027 Senior Unsecured Notes 292.4 318.2 2026 Senior Secured Notes 531.2 566.7 2027 Senior Secured Notes 308.8 323.6 2,944.6 3,098.0 Adjustments for covenant purposes: Add: lease liabilities 29.7 31.6 Consolidated Total Debt 2,974.4 3,129.9 Less: Cash and cash equivalents (max. US$100 million) (137.2 ) (143.8 ) Consolidated Total Net Debt for Covenant Purposes $ 2,837.2 $ 2,985.8 Consolidated Total Debt $ 2,974.4 $ 3,129.9 Less: Unsecured debt (2027 Senior Unsecured Notes) (292.4 ) (318.2 ) Consolidated Total Secured Debt 2,682.0 2,811.6 Less: Cash and cash equivalents (max. US$100 million) (137.2 ) (143.8 ) Consolidated Total Secured Net Debt for Covenant Purposes $ 2,544.8 $ 2,667.6 As at December 31, 2025, the Consolidated Total Debt for Covenant Purposes to Consolidated EBITDA ratio, for the purposes of our Senior Secured Credit Facilities was 9.63:1.00. The Consolidated Total Secured Debt to Consolidated EBITDA for Covenant Purposes ratio, for the purposes of our Senior Secured Credit Facilities, was 8.64:1.00. Condensed Consolidating Financial Information The condensed consolidating financial information reflects the investments, using the equity method of accounting, of Telesat in the Issuers, of the Issuers in their respective Guarantor and Non-Guarantor subsidiaries, and of the Guarantors in their Non-Guarantor subsidiaries. The financial information for the Non-Guarantor subsidiaries is in all material respects the financial information of the LEO Non-Guarantors, except as otherwise noted. Telesat Corporation includes Telesat Partnership, Telesat CanHold Corporation, Telesat Can ULC, Loral Space & Communications Inc. and Loral Skynet Corporation. 97 Table of Contents Condensed Consolidating Statements of Income (Loss) For the year ended December 31, 2025 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Revenue $ — $ 326,389 $ 215,457 $ 5,202 $ (129,092 ) $ 417,956 Operating expenses (4,017 ) (225,429 ) (38,003 ) (73,415 ) 129,092 (211,772 ) Depreciation — (13,639 ) (81,688 ) (3,871 ) (5,516 ) (104,714 ) Amortization — (261 ) (40,194 ) (336 ) (3,388 ) (44,179 ) Other operating gains (losses), net 4,834,103 396,231 (1,162,339 ) (4,455,056 )(1) 25,894 (361,167 ) Operating income (loss) 4,830,086 483,291 (1,106,767 ) (4,527,476) 16,990 (303,876 ) Income (loss) from equity investments (5,388,635 ) (2,258,789 ) 1,017,643 — 6,629,781 — Interest expense (172 ) (204,818 ) (16,903 ) (730 ) 4,954 (217,669 ) Gain on repurchase of debt — 6,896 — — — 6,896 Interest and other income (expense) 305 65,796 5,792 13,596 (59,306 ) 26,183 Gain (loss) on changes in fair value of financial instruments — — — (215,338 ) — (215,338 ) Gain (loss) on foreign exchange (203 ) 139,080 271 (41,884 ) 8,945 106,209 Income (loss) before income taxes (558,619 ) (1,768,544 ) (99,964 ) (4,771,832 ) 6,601,364 (597,595 ) Tax (expense) recovery 1,338 66,915 (597 ) (206 ) (72 ) 67,378 Net income (loss) $ (557,281 ) $ (1,701,629 ) $ (100,561 ) $ (4,772,038 ) $ 6,601,292 $ (530,217 ) ____________ (1) Includes $2,035.6 million in Non-Guarantor subsidiaries not related to LEO. Condensed Consolidating Statements of Comprehensive Income (Loss) For the year ended December 31, 2025 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Net income (loss) $ (557,281 ) $ (1,701,629 ) $ (100,561 ) $ (4,772,038 ) $ 6,601,292 $ (530,217 ) Other comprehensive income (loss) Items that may be reclassified into profit or loss Foreign currency translation adjustments (76 ) (41,405 ) (5,670 ) (99,745 ) (64,425 ) (211,321 ) Other comprehensive income (loss) from equity investments (146,820 ) (37,285 ) (41,945 ) — 226,050 — Items that will not be reclassified into profit or loss Actuarial gain (loss) on defined benefit plans 3,395 11,252 77 — — 14,724 Income tax on items that will not be reclassified to profit or loss — (2,969 ) — — — (2,969 ) Total other comprehensive income (loss) from equity investments 8,360 77 — — (8,437 ) — Total other comprehensive income (loss) (135,141 ) (70,330 ) (47,538 ) (99,745 ) 153,188 (199,566 ) Total comprehensive income (loss) $ (692,422 ) $ (1,771,959 ) $ (148,099 ) $ (4,871,783 ) $ 6,754,480 $ (729,783 ) 98 Table of Contents Condensed Consolidating Statements of Income (Loss) For the year ended December 31, 2024 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Revenue $ — $ 438,711 $ 304,889 $ 19,598 $ (192,154 ) $ 571,044 Operating expenses (2,231 ) (273,462 ) (49,364 ) (74,864 ) 192,154 (207,767 ) Depreciation — (13,225 ) (104,000 ) (1,821 ) (8,228 ) (127,274 ) Amortization — (242 ) (2,548 ) (330 ) (8,217 ) (11,337 ) Other operating gains (losses), net — (4,847 ) (238,609 ) — (21,475 ) (264,931 ) Operating income (loss) (2,231 ) 146,935 (89,632 ) (57,417 ) (37,920 ) (40,265 ) Income (loss) from equity investments 9,822 (147,122 ) 1,609 — 135,691 — Interest expense (552 ) (233,108 ) (12,818 ) 370 2,351 (243,757 ) Gain on repurchase of debt — 202,493 — — — 202,493 Interest and other income (expense) (3,040 ) 269,878 6,198 14,841 (264,563 ) 23,314 Gain (loss) on changes in fair value of financial instruments — — — (12,761 ) — (12,761 ) Gain (loss) on foreign exchange 152 (255,380 ) (524 ) 11,135 90 (244,527 ) Income (loss) before income taxes 4,151 (16,304 ) (95,167 ) (43,832 ) (164,351 ) (315,503 ) Tax (expense) recovery (5,937 ) 26,126 (3,181 ) (3,333 ) (638 ) 13,037 Net income (loss) $ (1,786 ) $ 9,822 $ (98,348 ) $ (47,165 ) $ (164,989 ) $ (302,466 ) Condensed Consolidating Statements of Comprehensive Income (Loss) For the year ended December 31, 2024 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Net income (loss) $ (1,786 ) $ 9,822 $ (98,348 ) $ (47,165 ) $ (164,989 ) $ (302,466 ) Other comprehensive income (loss) Items that may be reclassified into profit or loss Foreign currency translation adjustments (308 ) 20,636 11,660 178,114 161,918 372,020 Other comprehensive income (loss) from equity investments 210,410 189,774 49,668 — (449,852 ) — Items that will not be reclassified into profit or loss Actuarial gain (loss) on defined benefit plans 4,277 18,411 (60 ) — — 22,628 Income tax on items that will not be reclassified to profit or loss — (4,857 ) 13 — — (4,844 ) Total other comprehensive income (loss) from equity investments 13,507 (47 ) — — (13,460 ) — Total other comprehensive income (loss) 227,886 223,917 61,281 178,114 (301,394 ) 389,804 Total comprehensive income (loss) $ 226,100 $ 233,739 $ (37,067 ) $ 130,949 $ (466,383 ) $ 87,338 99 Table of Contents Condensed Consolidating Statements of Income (Loss) For the year ended December 31, 2023 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Revenue $ — $ 598,083 $ 372,844 $ 14,850 $ (281,616 ) $ 704,161 Operating expenses (1,721 ) (360,514 ) (72,632 ) (51,301 ) 281,616 (204,552 ) Depreciation — (36,190 ) (146,087 ) (1,396 ) 1,004 (182,669 ) Amortization — (781 ) (2,669 ) (324 ) (9,319 ) (13,093 ) Other operating gains (losses), net — (11,466 ) (534,146 ) (2,039 ) 812,650 264,999 Operating income (loss) (1,721 ) 189,132 (382,690 ) (40,210 ) 804,335 568,846 Income (loss) from equity investments 28,873 (391,196 ) 634 — 361,689 — Interest expense (74 ) (259,223 ) (13,767 ) 4 2,710 (270,350 ) Gain on repurchase of debt — 230,080 — — — 230,080 Interest and other income (expense) 726 106,710 2,831 44,663 (88,398 ) 66,532 Gain (loss) on foreign exchange (626 ) 75,667 632 1,939 146 77,758 Income (loss) before income taxes 27,178 (48,830 ) (392,360 ) 6,396 1,080,482 672,866 Tax (expense) recovery 2,362 77,703 (576 ) (4,022 ) (165,063 ) (89,596 ) Net income (loss) $ 29,540 $ 28,873 $ (392,936 ) $ 2,374 $ 915,419 $ 583,270 Condensed Consolidating Statements of Comprehensive Income (Loss) For the year ended December 31, 2023 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Net income (loss) $ 29,540 $ 28,873 $ (392,936 ) $ 2,374 $ 915,419 $ 583,270 Other comprehensive income (loss) Items that may be reclassified into profit or loss Foreign currency translation adjustments 904 (4,559 ) (10,306 ) (18,236 ) (18,788 ) (50,985 ) Other comprehensive income (loss) from equity investments (33,101 ) (28,542 ) (13,926 ) — 75,569 — Items that will not be reclassified into profit or loss Actuarial gain (loss) on defined benefit plans 1,246 (6,119 ) (177 ) — — (5,050 ) Income tax on items that will not be reclassified to profit or loss — 1,628 37 — — 1,665 Total other comprehensive income (loss) from equity investments (4,631 ) (140 ) — — 4,771 — Total other comprehensive income (loss) (35,582 ) (37,732 ) (24,372 ) (18,236 ) 61,552 (54,370 ) Total comprehensive income (loss) $ (6,042 ) $ (8,859 ) $ (417,308 ) $ (15,862 ) $ 976,971 $ 528,900 100 Table of Contents Condensed Consolidating Balance Sheets As at December 31, 2025 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Assets Cash and cash equivalents $ 11,756 $ 166,211 $ 38,948 $ 292,883 $ — $ 509,798 Trade and other receivables 1,136 28,383 7,282 21,621 — 58,422 Other current financial assets — 2,274 187 35 (2,066 ) 430 Intercompany receivables 11,240 228,848 71,194 188 (311,470 ) — Current income tax recoverable 5,114 — 1,622 128 (912 ) 5,952 Prepaid expenses and other current assets 3,034 5,801 1,776 246,799 46 257,456 Total current assets 32,280 431,517 121,009 561,654 (314,402 ) 832,058 Satellites, property and other equipment — 70,373 314,349 2,330,533 1,453 2,716,708 Deferred tax assets — — 13,561 — (9,330 ) 4,231 Other long-term financial assets — 39,120 3,950 87 (24,874 ) 18,283 Long-term income tax recoverable — 6,993 — — — 6,993 Other long-term assets 26,356 110,122 — 232,937 (758 ) 368,657 Intangible assets — 1,342 316,315 151,844 (27,223 ) 442,278 Investment in affiliates (287,590 ) 1,037,827 (71,057 ) — (697,180 ) — Goodwill — 218,381 — — 1,996,194 2,214,575 Total assets $ (228,954 ) $ 1,915,675 $ 698,127 $ 3,277,055 $ 941,880 $ 6,603,783 Liabilities Trade and other payables $ 275 $ 18,868 $ 6,193 $ 32,111 $ — $ 57,447 Other current financial liabilities — 21,564 5,707 832,432 (2,066 ) 857,637 Intercompany payables 2,535 73,895 231,413 3,626 (311,469 ) — Income taxes payable — 3,757 — 589 (1,574 ) 2,772 Other current liabilities 118 35,202 16,589 6,476 46 58,431 Current indebtedness — 2,341,145 — — — 2,341,145 Total current liabilities 2,928 2,494,431 259,902 875,234 (315,063 ) 3,317,432 Long-term indebtedness — 603,213 — 549,249 — 1,152,462 Deferred tax liabilities — 72,446 — 26,467 (6,922 ) 91,991 Other long-term financial liabilities 199 16 34,751 — (24,875 ) 10,091 Other long-term liabilities — 116,526 136,845 9,598 (758 ) 262,211 Total liabilities 3,127 3,286,632 431,498 1,460,548 (347,618 ) 4,834,187 Total shareholders’ equity (232,081 ) (1,370,957 ) 266,629 1,816,507(1) 1,289,498 1,769,596 Total liabilities and shareholders’ equity $ (228,954 ) $ 1,915,675 $ 698,127 $ 3,277,055 $ 941,880 $ 6,603,783 ____________ (1) Includes $928.0 million in Non-Guarantor subsidiaries not related to LEO. 101 Table of Contents Condensed Consolidating Balance Sheets As at December 31, 2024 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Assets Cash and cash equivalents $ 5,893 $ 150,425 $ 59,066 $ 336,680 $ — $ 552,064 Trade and other receivables 1,128 34,557 16,769 106,476 — 158,930 Other current financial assets — 226 333 6 — 565 Intercompany receivables 2,017 237,804 12,885 284 (252,990 ) — Current income tax recoverable 1,817 26,602 823 526 (515 ) 29,253 Prepaid expenses and other current assets — 4,735 6,716 273,836 (4,827 ) 280,460 Total current assets 10,855 454,349 96,592 717,808 (258,332 ) 1,021,272 Satellites, property and other equipment — 81,255 467,204 1,721,521 7,163 2,277,143 Deferred tax assets — — 12,837 — (9,778 ) 3,059 Other long-term financial assets — 48,301 4,537 81 (43,152 ) 9,767 Long-term income tax recoverable — 6,993 — — — 6,993 Other long-term assets — 99,987 — 416,520 — 516,507 Intangible assets — 362 363,320 188,774 (54,990 ) 497,466 Investment in affiliates 471,533 2,719,014 178,010 — (3,368,557 ) — Goodwill — 549,162 — — 2,063,810 2,612,972 Total assets $ 482,388 $ 3,959,423 $ 1,122,500 $ 3,044,704 $ (1,663,836 ) $ 6,945,179 Liabilities Trade and other payables $ 44 $ 21,409 $ 7,132 $ 129,691 $ — $ 158,276 Other current financial liabilities — 23,459 3,024 — — 26,483 Intercompany payables 679 10,259 236,319 5,733 (252,990 ) — Income taxes payable 5,851 — — 577 (515 ) 5,913 Other current liabilities — 38,734 31,234 766 (4,828 ) 65,906 Total current liabilities 6,574 93,861 277,709 136,767 (258,333 ) 256,578 Long-term indebtedness — 3,096,615 — — — 3,096,615 Deferred tax liabilities — 156,000 — 27,742 (8,198 ) 175,544 Other long-term financial liabilities 209 19 56,345 617,135 (43,152 ) 630,556 Other long-term liabilities 3,217 123,382 160,800 1,782 — 289,181 Total liabilities 10,000 3,469,877 494,854 783,426 (309,683 ) 4,448,474 Total shareholders’ equity 472,388 489,546 627,646 2,261,278 (1,354,153 ) 2,496,705 Total liabilities and shareholders’ equity $ 482,388 $ 3,959,423 $ 1,122,500 $ 3,044,704 $ (1,663,836 ) $ 6,945,179 102 Table of Contents Condensed Consolidating Statements of Cash Flows For the year ended December 31, 2025 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Cash flows from (used in) operating activities Net income (loss) $ (557,281 ) $ (1,701,629 ) $ (100,561 ) $ (4,772,038 ) $ 6,601,292 $ (530,217 ) Adjustment to reconcile net income (loss) to cash flows from operating activities Depreciation — 13,639 81.688 3,871 5,516 104,714 Amortization 261 40,194 336 3,388 44,179 Tax expense (recovery) (1,338 ) (66,915 ) 596 206 73 (67,378 ) Interest expense 172 204,818 16,903 730 (4,954 ) 217,669 Interest income (398 ) (11,534 ) (3,044 ) (13,882 ) 5,061 (23,797 ) (Gain) loss on foreign exchange 203 (139,080 ) (271 ) 41,885 (8,946 ) (106,209 ) (Gain) loss on changes in fair value of financial instruments — — — 215,338 — 215,338 Share-based compensation 447 2,422 1,204 72 4,145 (Income) loss from equity investments 5,388,635 2,258,789 (1,017,643 ) — (6,629,781 ) — (Gain) loss on disposal of assets (4,834,103 ) (698,479 ) 1,099,593 4,455,056(1) (25,894 ) (3,827 ) Gain on disposal of a subsidiary — — (230 ) — — (230 ) Gain on repurchase of debt — (6,896 ) — — — (6,896 ) Impairment — 302,248 62,976 — — 365,224 Deferred revenue amortization — (17,620 ) (38,601 ) — — (56,221 ) Pension expense 540 3,015 — 1,897 — 5,452 Other — 1,900 6,112 — — 8,012 Income taxes paid, net of income taxes received (7,649 ) 18,678 (2,380 ) (429 ) — 8,220 Interest paid, net of interest received 282 (194,745 ) (3,739 ) 13,415 — (184,787 ) Operating assets and liabilities (19,198 ) 66,526 (63,320 ) 97,827 (8,522 ) 73,313 Net cash from (used in) operating activities (29,688 ) 35,398 79,477 44,284 (62,767 ) 66,704 Cash flows (used in) generated from investing activities Cash payments related to satellite programs — — — (624,597 ) — (624,597 ) Cash payments related to property and other equipment — (3,028 ) (90 ) (137,408 ) — (140,526 ) Net proceeds from disposal of subsidiaries — — 235 — — 235 Proceeds from disposal of assets — 4,519 — — — 4,519 Return of capital to shareholder 35,501 40,566 — — (76,067 ) — Investments and other — — (858 ) — (858 ) Investment in affiliates — (11 ) — — 11 — Net cash (used in) generated from investing activities 35,501 42,046 145 (762,863) (76,056 ) (761,227 ) Cash flows (used in) generated from financing activities Proceeds from indebtedness — — 689,789 — 689,789 Repurchase of indebtedness — (4,501 ) — — — (4,501 ) Payment of principal on lease liabilities — (1,500 ) (582 ) (627 ) — (2,709 ) Satellite performance incentive payments — — (2,035 ) — — (2,035 ) Return of capital to shareholder — (35,501 ) (40,566 ) — 76,067 — Proceeds from exercise of stock options 550 — — — — 550 Tax withholdings on settlement of restricted share units (224 ) (7,614 ) (491 ) (405 ) — (8,734 ) Proceeds from issuance of share capital — — — 11 (11 ) — Dividends paid — (8,381 ) (54,386 ) — 62,767 — Net cash (used in) generated from financing activities 326 (57,497 ) (98,060 ) 688,768 138,823 672,360 Effect of changes in exchange rates on cash and cash equivalents (276 ) (4,161 ) (1,680 ) (13,986 ) — (20,103 ) Changes in cash and cash equivalents 5,863 15,786 (20,118 ) (43,797 ) — (42,266 ) Cash and cash equivalents, beginning of year 5,893 150,425 59,066 336,680 — 552,064 Cash and cash equivalents, end of year $ 11,756 $ 166,211 $ 38,948 $ 292,883 $ — $ 509,798 ____________ (1) Includes $2,035.6 million in Non-Guarantor subsidiaries not related to LEO. 103 Table of Contents Condensed Consolidating Statements of Cash Flows For the year ended December 31, 2024 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Cash flows from (used in) operating activities Net income (loss) $ (1,786 ) $ 9,822 $ (98,348 ) $ (47,165 ) $ (164,989 ) $ (302,466 ) Adjustment to reconcile net income (loss) to cash flows from operating activities Depreciation — 13,225 104,000 1,821 8,228 127,274 Amortization — 242 2,548 330 8,217 11,337 Tax expense (recovery) 5,937 (26,126 ) 3,181 3,333 638 (13,037 ) Interest expense 552 233,108 12,818 (370 ) (2,351 ) 243,757 Interest income (240 ) (7,005 ) (6,414 ) (54,688 ) 2,351 (65,996 ) (Gain) loss on foreign exchange (152 ) 255,380 524 (11,135 ) (90 ) 244,527 (Gain) loss on changes in fair value of financial instruments — — — 12,761 — 12,761 Share-based compensation — 14,859 2,578 120 — 17,557 (Income) loss from equity investments (9,822 ) 147,122 (1,609 ) — (135,691 ) — (Gain) loss on disposal of assets — 216 318 — — 534 Gain on disposal of a subsidiary 4,631 — — (7,251 ) (2,620 ) Gain on repurchase of debt — (202,493 ) — — — (202,493 ) Impairment — — 238,291 — 28,726 267,017 Deferred revenue amortization — (21,294 ) (36,750 ) — — (58,044 ) Pension expense 712 4,936 — — — 5,648 Non-cash other income (expense) 3,281 425 — 30,196 — 33,902 Other — 951 6,529 31 — 7,511 Income taxes paid, net of income taxes received (227 ) (52,005 ) (2,585 ) (5,693 ) — (60,510 ) Interest paid, net of interest received 114 (223,857 ) 5,040 57,108 — (161,595 ) Government grant received — — — 2,520 — 2,520 Operating assets and liabilities (1,152 ) (116,920 ) 100,272 (27,056 ) (264 ) (45,120 ) Net cash from (used in) operating activities (2,783 ) 35,217 330,393 (37,887 ) (262,476 ) 62,464 Cash flows (used in) generated from investing activities Cash payments related to satellite programs — — — (1,045,671 ) — (1,045,671 ) Cash payments related to property and other equipment — (3,446 ) (388 ) (61,765 ) 795 (64,804 ) Purchase of intangible assets — — (52 ) (4,995 ) 4,995 (52 ) Net proceeds from disposal of subsidiaries — 3,613 — — — 3,613 Proceeds from disposal of assets — 5,790 — — (5,790 ) — Government grant received — — — 15,359 — 15,359 Return of capital to shareholder — 151,274 — — (151,274 ) — Investment in affiliates — (163,224 ) — — 163,224 — Net cash (used in) generated from investing activities — (5,993 ) (440 ) (1,097,072 ) 11,950 (1,091,555 ) Cash flows (used in) generated from financing activities Repurchase of indebtedness — (155,903 ) — — — (155,903 ) Payment of principal on lease liabilities — (1,492 ) (563 ) (367 ) — (2,422 ) Satellite performance incentive payments — (2,321 ) (2,251 ) — — (4,572 ) Return of capital to shareholder — — (151,274 ) — 151,274 — Proceeds from exercise of stock options — 426 — — — 426 Tax withholdings on settlement of restricted share units (346 ) (6,918 ) (378 ) (90 ) — (7,732 ) Proceeds from issuance of share capital — — — 163,224 (163,224 ) — Dividends paid — — (262,476 ) — 262,476 — Net cash (used in) generated from financing activities (346 ) (166,208 ) (416,942 ) 162,767 250,526 (170,203 ) Effect of changes in exchange rates on cash and cash equivalents 514 6,550 5,494 69,711 — 82,269 Changes in cash and cash equivalents (2,615 ) (130,434 ) (81,495 ) (902,481 ) — (1,117,025 ) Cash and cash equivalents, beginning of year 8,508 280,859 140,561 1,239,161 — 1,669,089 Cash and cash equivalents, end of year $ 5,893 $ 150,425 $ 59,066 $ 336,680 $ — $ 552,064 104 Table of Contents Condensed Consolidating Statements of Cash Flows For the year ended December 31, 2023 Telesat Corporation Telesat Canada Guarantor subsidiaries Non- guarantor subsidiaries Adjustments Consolidated Cash flows from (used in) operating activities Net income (loss) $ 29,540 $ 28,873 $ (392,936 ) $ 2,374 $ 915,419 $ 583,270 Adjustment to reconcile net income (loss) to cash flows from operating activities Depreciation — 36,190 146,087 1,396 (1,004 ) 182,669 Amortization — 781 2,669 324 9,319 13,093 Tax expense (recovery) (2,362 ) (77,703 ) 576 4,022 165,063 89,596 Interest expense 74 259,223 13,767 (4 ) (2,710 ) 270,350 Interest income (112 ) (17,043 ) (4,726 ) (44,667 ) 2,710 (63,838 ) (Gain) loss on foreign exchange 626 (75,667 ) (632 ) (1,939 ) (146 ) (77,758 ) Share-based compensation (692 ) 32,473 3,774 (2,540 ) — 33,015 (Income) loss from equity investments (28,873 ) 391,196 (634 ) — (361,689 ) — (Gain) loss on disposal of assets — 11,466 (36 ) 2,039 (13,528 ) (59 ) Gain on repurchase of debt — (230,080 ) — — — (230,080 ) Impairment — — 534,182 — (454,442 ) 79,740 Deferred revenue amortization — (28,284 ) (30,080 ) (973 ) — (59,337 ) Pension expense 684 4,990 — — — 5,674 Other — 1,299 1,659 — — 2,958 C-band clearing income — — — — (344,892 ) (344,892 ) Income taxes paid, net of income taxes received (186 ) (58,227 ) (5,748 ) (2,680 ) — (66,841 ) Interest paid, net of interest received 48 (255,642 ) 3,110 43,223 — (209,261 ) Government grant received — — — 972 — 972 Operating assets and liabilities (6,752 ) (8,344 ) (1,800 ) (17,328 ) (4,988 ) (39,212 ) Net cash from (used in) operating activities (8,005 ) 15,501 269,232 (15,781 ) (90,888 ) 170,059 Cash flows (used in) generated from investing activities Cash payments related to satellite programs — (8,934 ) — (74,385 ) — (83,319 ) Cash payments related to property and other equipment — (12,297 ) (635 ) (29,988 ) — (42,920 ) Purchase of intangible assets — (13,211 ) (56 ) — — (13,267 ) Return of capital to shareholder 11,807 172,074 — — (183,881 ) — Investment in affiliates — — (750 ) — 750 — Government grant received — — — 117 — 117 C-band clearing proceeds — — — 351,438 — 351,438 Net cash (used in) generated from investing activities 11,807 137,632 (1,441 ) 247,182 (183,131 ) 212,049 Cash flows (used in) generated from financing activities Repurchase of indebtedness — (344,014 ) — — — (344,014 ) Payment of principal on lease liabilities — (1,277 ) (492 ) (402 ) — (2,171 ) Satellite performance incentive payments — (4,437 ) (1,948 ) — — (6,385 ) Return of capital to shareholder — (11,807 ) (172,074 ) — 183,881 — Proceeds from exercise of stock options — 27 — — — 27 Tax withholdings on settlement of restricted share units — (2,883 ) (247 ) (68 ) — (3,198 ) Proceeds from issuance of share capital — — — 750 (750 ) — Dividends paid — (10 ) (85,545 ) (5,333 ) 90,888 — Net cash (used in) generated from financing activities — (364,401 ) (260,306 ) (5,053 ) 274,019 (355,741 ) Effect of changes in exchange rates on cash and cash equivalents (54 ) (3,979 ) (3,637 ) (27,400 ) — (35,070 ) Changes in cash and cash equivalents 3,748 (215,247 ) 3,848 198,948 — (8,703 ) Cash and cash equivalents, beginning of year 4,760 496,106 136,713 1,040,213 — 1,677,792 Cash and cash equivalents, end of year $ 8,508 $ 280,859 $ 140,561 $ 1,239,161 $ — $ 1,669,089 105 Table of Contents CURRENT SHARE INFORMATION The number of shares and stated value of the outstanding Class A common shares and Class B variable voting shares (“Telesat Public shares”), and Class C fully voting shares and Class C limited voting shares (together, the “Class C shares”) as at December 31, 2025, were as follows: (in thousands of $, except number of shares) Number of shares Stated value Telesat Public Shares 14,730,782 $ 63,657 Class C Shares 112,841 6,340 14,843,623 $ 69,997 The breakdown of the number of Telesat Public Shares, as at December 31, 2025, was as follows: Telesat Public shares Class A Common shares 4,383,668 Class B Variable voting shares 10,347,114 Total Telesat Public shares 14,730,782 The split between the Class A Common shares and Class B Variable Voting shares in the table above is based on information available to us as at December 31, 2025. In addition, we have one Class A Special Voting Share, one Class B Special Voting Share, one Class C Special Voting Share and one Golden Share outstanding, each with a nominal stated value as at December 31, 2025 and 2024. The number of outstanding stock options, restricted share units (“RSUs”), performance share units (“PSUs”) and deferred share units (“DSUs”) issued under our Omnibus Plan and Historic Plans as at December 31, 2025 were as follows: Historic Plan Omnibus Plan Stock Options 49,526 699,159 RSUs with time criteria — 707,466 PSUs with time and performance criteria — 530,056 DSUs — 232,163 49,526 2,168,844 Each of the foregoing securities can be settled or exercised, as applicable, for Telesat Public Shares. The number and stated value of the outstanding LP Units issued by Telesat Partnership LP as at December 31, 2025, were as follows: (in thousands of $, except number of units) Number of units Stated value Class A and Class B LP Units 18,061,284 $ 49,428 Class C LP Units 18,098,362 38,893 36,159,646 $ 88,321 On consolidation into Telesat Corporation, the stated value of the LP Units is included in non-controlling interest. CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATES The preparation of financial statements in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board (“IASB”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements, and the amounts of revenue and expenses reported for the year. Actual results could differ from these estimates under different assumptions and conditions. For more details on these estimates, refer to Note 4 of our audited consolidated financial statements. 106 Table of Contents Critical judgments in applying accounting policies Telesat Canada liquidity considerations The ability and likelihood of Telesat Canada, a subsidiary consolidated by Telesat Corporation, to refinance its debt obligations at maturity that fall due within 12 months of the balance sheet date requires management judgment. The Company has approximately $509.8 million of cash and cash equivalent of which $206.6 million is held within Telesat Canada as at December 31, 2025. The Company and Telesat Canada expect to generate sufficient cash flow to meet the requirements of their respective ongoing operations and debt servicing costs for the reasonably foreseeable future, including at least the one-year period following the date of these financial statements. However, the Company’s consolidated cash flows and cash resources alone, which includes those of Telesat Canada, are not expected to be sufficient to meet Telesat Canada’s debt maturity obligations in December 2026. Deferred revenue Certain of our revenue agreements were noted to have a significant financing component. Judgment by management is required to determine the discount rate used in the significant financing component calculation. There were no new agreements entered into in 2025 which included a significant financing component. Lease liabilities Judgment by management is required in the determination of the likelihood that the lease renewal periods will be exercised as well as the determination of the incremental borrowing rate. There were no new material lease agreements in 2025. Uncertain income tax positions We operate in numerous jurisdictions and are subject to country-specific tax laws. We use significant judgment when determining the worldwide provision for tax and estimate provisions for uncertain tax positions as the amounts expected to be paid based on a qualitative assessment of all relevant factors. In the assessment, we consider risk with respect to tax matters under active discussion, audit, dispute or appeal with tax authorities, or which are otherwise considered to involve uncertainty. We review the provisions at each balance sheet date. Software as a service arrangements Judgment by management is required to determine whether configuration or customization of a software results in an intangible asset for Telesat. Critical accounting estimates and assumptions Derivative financial instruments measured at fair value Derivative financial assets and liabilities are measured at fair value. When quoted market values are unavailable for our financial instruments, and in the absence of an active market, we determine fair value for financial instruments based on prevailing market rates (bid and ask prices, as appropriate) for instruments with similar characteristics and risk profiles or we make use of internal or external valuation models, such as option pricing models and discounted cash flow analysis, using observable market-based inputs. The determination of fair value is significantly impacted by the assumptions used for the amount and timing of estimated future cash flows and discount rates. As a result, the fair value of financial assets and liabilities, and the amount of gains or losses on changes in fair value recorded to net income could vary. The discount rates used to discount cash flows as at December 31, 2025 ranged from 3.74% to 3.97% while as at December 31, 2024 the discount rates ranged from 4.37% to 4.63%. Impairment of goodwill Goodwill represented $2,214.6 million of our total assets as at December 31, 2025, of which $214.6 million was allocated to the GEO cash generating unit and $2,000.0 million was allocated to the LEO cash generating unit. As at December 31, 2024, goodwill represented $2,613.0 million of our total assets of which $516.9 million was allocated to the GEO cash generating unit and $2,096.1 million was allocated to the LEO cash generating unit. 107 Table of Contents Determining whether goodwill is impaired using a quantitative approach requires an estimation of our fair value, which requires us to estimate the future cash flows expected to arise from operations and to make assumptions regarding the underlying business plan, discount rates, and growth rate assumptions. Actual operating results and our related cash flows could differ from the estimates used for the impairment analysis. The discount rate utilized on the goodwill impairment assessment ranged from 9.75% to the midpoint between 15% and 19% in 2025 (2024 – 10.0% to the midpoint between 15% and 20%). During the year ended December 31, 2025, a $302.2 million impairment loss was recognized against goodwill. The goodwill impairment was driven by a reduced number of GEO contract renewals arising from increased competition from newer LEO technology, coupled with sustained pricing pressure in broadcast services. Following the goodwill impairment, the recoverable amount of the GEO CGU approximates its carrying amount. Accordingly, any reasonably possible adverse change in key assumptions would result in further impairment. Impairment losses recognised in respect of goodwill are not reversed in subsequent periods. For additional details of the impairment that was recorded, refer to Notes 18 of our consolidated financial statements for the year ended December 31, 2025. Impairment of intangible assets Intangible assets represented a significant portion of our total assets as at December 31, 2025. Intangible assets with an indefinite useful life and intangible assets not yet available for use are tested for impairment annually and whenever indicators arise. All other intangible assets are tested when indicators of impairment exist. The quantitative impairment analysis requires us to estimate the future cash flows expected to arise from operations, and to make assumptions regarding the underlying business plan, discount rates, growth rate assumptions and royalty rate. Significant judgments are made in establishing these assumptions. Actual operating results and our related cash flows could differ from the estimates used for the impairment analysis. The discount rate utilized on the intangible assets impairment assessment ranged from 9.50% to the midpoint between 15% and 19% in 2025 (2024 — ranged from 10% to the midpoint between 15% and 20%). Indefinite life intangible assets are tested for impairment at the individual CGU level. During 2025, we revised our CGU structure given the adoption of a finite life estimate for all orbital slots on January 1, 2025, such that impairment testing is now performed at the disaggregated GEO CGU level (excluding goodwill), comprising four CGUs: Media Distribution Satellite Services, Data Connectivity Satellite Services, Regionally Focused Satellite Services, and Dedicated Satellite Program Services. Impairment testing is also performed at the LEO CGU level, consistent with the LEO operating segment. During the year ended December 31, 2025, as a result of impairment testing of the CGUs, there was an impairment of $7.1 million recorded against intangible assets and $55.9 million recorded against satellites, property and other equipment (2024 — $191.0 and $36.3 million respectively). For additional details of the impairment that was recorded, refer to Note 16 and Note 17 of our consolidated financial statements for the year ended December 31, 2025. Employee benefits The cost of defined benefit pension plans, other post-employment benefits, and the present value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates, future pension increases and return on plan assets. Due to the complexity of the valuation, the underlying assumptions, and its long-term nature, the defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed annually. See Note 32 of our audited consolidated financial statements for a sensitivity analysis of the assumptions used in the actuarial valuation. Share-based compensation The expense for stock options is based on the fair value of the awards granted using the Black-Scholes option pricing model. The Black-Scholes option pricing model includes estimates of the dividend yield, expected volatility, risk-free interest rate and the expected life in years. Any changes in these estimates may have a significant impact on the amounts reported. Determination of useful life of satellites and finite life intangible assets The estimated useful life and depreciation method for satellites and finite life intangible assets are reviewed annually, with the effect of any changes in estimate being accounted for on a prospective basis. Any change in these estimates may have a significant impact on the amounts reported. Other than the change in estimated useful lives of our GEO orbital slots, there were no changes in the estimated useful lives of satellites and intangible assets during 2025. 108 Table of Contents Prior to January 1, 2025, our accounting estimates concerning the appropriate useful economic lives of GEO orbital slots have been that they have indefinite lives as it was expected, with a relatively high level of certainty, that we would maintain continued occupancy of an assigned GEO orbital slot either during the operational life of an existing orbiting satellite or upon replacement by a new satellite once the operational life of the existing orbiting satellite is over. To respond to market dynamics, we are focused on developing our constellation of LEO satellites. A large part of our current and future capital expenditures is expected to be related to this constellation. In light of market developments, the number of occupied operational GEO orbital slots is likely to decline over time, and we no longer believe that the existing GEO orbital slots will continue to be utilized for an indefinite period of time. As a result, we have updated our estimates in this area such that all GEO orbital slots are now presented as finite life assets. For those orbital slots which were formerly presented as indefinite life assets, their residual carrying values will generally be amortized over the remaining life of the on-station satellite operating at that orbital position in accordance with the provisions of International Accounting Standard 38, Intangible Assets (“IAS 38”). Where more than one satellite is co-located at one position then the latest end of life amongst those satellites is used. Where the likelihood of procuring a new or replacement satellite is probable, we calculate the end of life of that uncommitted replacement and apply it in computing the amortization life of the relevant orbital slot. The useful lives applied in the amortization of orbital slots range from 1 to 34 years. The change resulted in additional amortization expense of $33.9 million in the current year. The impact on future periods will largely depend on asset usage amongst other factors. For the upcoming year ending December 31, 2026, the expected amortization is approximately $26.6 million. Income taxes We assess the recoverability of deferred tax assets based upon an estimation of our projected taxable income using enacted or substantially enacted tax laws, and our ability to utilize future tax deductions before they expire. Actual results could differ from expectations. Telesat Lightspeed Financing Warrants Lightspeed LEO Limited Partnership issued the Telesat Lightspeed Financing Warrants as part of the Telesat Lightspeed Financing. The Telesat Lightspeed Financing Warrants are measured at fair value. The determination of fair value is significantly impacted by the assumptions used for the amount and timing of estimated future cash flows, value of Telesat Lightspeed operations and discount rates. As a result, the fair value of financial liabilities, and the amount of gains or losses on changes in fair value recorded to net income could vary. The discount rate used as at December 31, 2025 was 4.09% (December 31, 2024 – 4.58%). ACCOUNTING STANDARDS Future Changes in Accounting Policies The IASB periodically issues new and amended accounting standards. The new and amended standards determined to be applicable to us are disclosed below. The remaining new and amended standards have been excluded as they are not applicable. IFRS 18, Presentation and Disclosures in Financial Statements In April 2024, the IASB issued IFRS 18, Presentation and Disclosures in Financial Statements (“IFRS 18”) with the aim of improving companies’ reporting of financial performance and give investors a better basis for analyzing and comparing companies. IFRS 18 introduces three new sets of requirements: 1) Improved comparability in the statement of profit or loss (income statement) which introduces three defined categories for income and expenses: operating, investing and financing. These changes would require all companies to use the same structure of the income statement, and provide new defined subtotals, including operating profit. 109 Table of Contents 2) Enhanced transparency of management-defined performance measures which would require companies to disclose explanations of those company specific measures that are related to the income statement. 3) More useful grouping of information in the financial statements which provides enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted. We are currently evaluating the impact of this new standard.