Thank you, Paul, and good morning, everyone. This morning, we filed our quarterly report for the period ending June 30, 2024, on Form 6-K with the SEC and on SEDAR+. Our remarks today may contain forward-looking statements. There are risks that Telesat's actual results may differ materially from the results contemplated by the forward-looking statements, as a result of known and unknown risks and uncertainties. For a discussion of known risks, please see Telesat's annual report and update filed with the SEC. Telesat assumes no responsibility to update or revise these forward-looking statements. I will now turn the call over to Dan Goldberg, Telesat's President and Chief Executive Officer.

Hey, thanks, James, and good morning, everyone. Q2 in the first six months of this year have unfolded consistent with our expectations. As a result, we're reaffirming all of our guidance for the year and focusing to make sure we meet those objectives. When we hosted our first quarter call in early May, we indicated we were seeking to conclude our Lightspeed funding agreements with the governments of Canada and Quebec by the end of this summer. This is obviously a key priority for us. I'm happy to say that we've had good and sustained engagement with government representatives, and we are optimistic that we remain on track to achieve this timing. We'll make a separate announcement once the definitive funding agreements are concluded. Beyond that, we're making strong progress executing on the Lightspeed program as MDA, our Prime Satellite contractor, noted on its earnings call last week; they've now selected and onboarded 90% of the suppliers for the Lightspeed program, and they remain on track for their full-year ramp-up plan. We've increased our own headcount since the start of the year by nearly 20% as we ramp up to execute on Lightspeed, and the team is making excellent progress on the program. As we noted in today's earnings release, our focus this year remains twofold. For our GEO activities, the emphasis is on maximizing EBITDA and cash flow by doing what we can to mitigate anticipated revenue declines and rigorously managing our cost structure. And on LEO, it's all about execution, closing our funding agreements, staffing up, building out all the various elements of the Lightspeed network, including the satellites, the ground infrastructure, and the software that we need and commercializing it in the key verticals we're focused on. I'm very pleased with the progress we're making in all of those areas. We're hugely bullish on our prospects in the market as well as our ability to deliver an extraordinary value proposition for our customers and significant value creation for our shareholders. With that, I'll hand over to Andrew, and then look forward to taking any questions.

Thank you, Dan, and good morning, everyone. I would now like to focus on highlights in this morning's press release and filings. In the second quarter of 2024, Telesat reported consolidated revenues of $152 million and adjusted EBITDA of $103 million. In the first six months of 2024, the company generated $66 million in cash from operations, ending the second quarter with $1.4 billion of cash. For the second quarter of 2024 compared to the same period in 2023, revenues decreased by $27 million to $152 million. Operating expenses increased by $556 million, and adjusted EBITDA decreased by $35 million to $103 million. The adjusted EBITDA margin was 67.8% compared to 77.1% in the fourth quarter of 2023. The revenue decrease for the quarter was primarily due to a reduction in services and a low rate on the renewal of a long-term agreement with a North American direct-to-home customer as well as lower revenues from certain mobility and Latin American customers. The increase in operating expenses is primarily due to higher wages and benefits, our debt expense, and costs associated with consulting contracts, partially offset by lower non-cash share-based compensation and higher capitalized engineering expense associated with Telesat lately. Interest expense decreased by $7 million during the second quarter compared to the same period in 2023. The decrease in interest expense was primarily due to the repurchase of notes and Term Loan B. This was partly offset by an increase in the interest rate in the US term loan facility. In the second quarter, we recorded a loss on foreign exchange of $34 million as compared to a gain of $67 million in the second quarter of 2023. The loss for the three months ended June 2024 was mainly the result of the strengthening US dollar, the Canadian dollar spot rate through the quarter compared to the spot rate as of December 31, 2023, and the resulting unfavorable impact on the translation of our US dollar-denominated debt. Our net income for the second quarter was $129 million compared to net income of $19 million for the same period in the prior year. The change was primarily due to the one-time recognition of C-band clearing income in the second quarter of 2023, along with the impact of the foreign exchange loss, as I have mentioned earlier. For the six months ended June 30, 2024, cash inflows from operating activities were $66 million, and capital expenditures were $334 million in the same period, almost all of which were related to Telesat Lightspeed. Actual cash used in investment activities was $220 million in the first six months of the year. Certain capital expenditures were incurred late in the second quarter and subsequently accrued; this is reflected in the increase in trade and other payables at quarter end. Guidance: As you will also have noted in our earnings release this morning, we have reaffirmed the 2024 guidance. This guidance assumes a Canadian dollar to US dollar exchange rate of CAD 1.35. For 2024, Telesat expects its full-year revenues to be between $545 million and $565 million in terms of operating expenses, excluding share-based compensation. We are still looking to spend between $80 million to $90 million attributed to Telesat Lightspeed. Adjusted EBITDA, Telesat expects to be between $340 million to $360 million. As promised, we are also showing our GEO and LEO results rapidly... In respect to expected capital expenditures, we continue to expect the 2024 cash flows used in investing activities to be in the range of $1 billion to $1.4 billion, which is nearly all related to expected Telesat Lightspeed CapEx. To meet our expected cash requirements for the next 12 months, including interest payments and capital expenditures, we have approximately $1.4 billion of cash and short-term investments at the end of June, as well as approximately US$200 million of borrowing capacity available on the revolving credit facility. Approximately $1.2 billion in cash was held in our unrestricted subsidiaries at the end of the quarter. In addition, we continue to generate a significant amount of cash from our ongoing operating activities. At the end of the second quarter, total leverage ratio as calculated on the terms of the amended senior secured credit facilities was 5.6%. Telesat is in compliance with all the covenants in our credit agreement and indentures. In terms of our debt repurchases, we have reported year-to-date, an amount of US$262 million at a cost of US$120 million including accrued interest. This includes an amount of US$43 million purchased after the quarter end. Combined with the debt repurchases completed in 2022 and 2023, we've now repurchased a total principal amount of US$849 million at a cost of $459 million including accrued interest. This also results in interest savings of approximately $55 million annually. Including the repayment in 2020 of approximately US$356 million of Term Loan B, our overall debt has been reduced now by approximately 36% or $1.2 billion. A reconciliation between our financial statements and financial covenant calculations is provided in the report we filed this morning. Our 6-K provides the unaudited interim condensed consolidated financial information in MD&A. The non-guarantor subsidiary shown are essentially the unrestricted subsidiaries with minor differences. So that concludes our prepared remarks for the call, and now we'll be very happy to answer any questions you may have. So with that, I will turn back to the operator for the question-and-answer session. Thank you.

Thank you very much. We will now take questions from the telephone lines. We have the first question from Edison Yu from Deutsche Bank. Please go ahead. Your line is open.

Good morning. Thank you for taking our questions. First, I just want to clarify that the negotiations are on track. Are you basically saying that it will conclude in the next couple of weeks based on your kind of end of summer timeline?

Yes, that's effectively right. Our expectation is that in the next couple of weeks, we will conclude the agreements and make a separate announcement about that.

Understood. And I guess, is there anything that still needs to be worked out? Or is this sort of more the right people got to make the right signatures? Or is there anything kind of outstanding?

No. As I've said in my prepared remarks, we've had really good engagement with the government representatives. These are representatives from the government of Canada and the government of Quebec. There are a good number of agreements that need to get concluded in order to document all the different features of the funding arrangements. At this point in time, I don't see any significant impediments or obstacles in getting this done in the coming weeks. And so yes, it's a big funding arrangement with multiple agreements, and we're just working through all that, but there's nothing extraordinary about what remains to get done.

Got you. Switching to the guidance on the CapEx, obviously implies a pretty substantial step-up even at the low end of the range. I guess how do we think about what determines if you end up close to $1 billion, close to $1.4 billion?

Andrew, do you want to take that?

Yes, sure. But if you look at our flow of CapEx, in the second quarter, it's approximately about $309 million or so. So, if you kind of multiply that by 3, you actually get to $1 billion from a mathematical perspective. So that's why we feel pretty comfortable where we are with the range.

Yes. And maybe I would just add that it's a sign that the program is on track. I mentioned again in my prepared remarks, that MDA, who is the prime and is going to be the beneficiary of so much of our capital spending this year and next, they've done a great job of getting all their suppliers online. They're placing orders, and they're moving out exactly as we would like them to. And so yes, we felt everything we're seeing tells us that we're going to be tracking the guidance. And as Andrew said, there was a big spend in Q2, and everything we're seeing is showing good progress and that our suppliers will achieve the milestones they need to achieve in order to unlock the payments that we've sort of budgeted for.

Thank you all. I'll get back in the queue.

Okay. Thanks.

Thank you. The next question is from David McFadden from Cormark Securities. Please go ahead. Your line is open.

All right. Thank you. A couple of questions. Can you just give us an update on where you stand with respect to negotiating that one DTH customer to the contract that we're early this fall?

Yes. Thanks, David. So just for everyone's benefit, we've got a renewal with EchoStar on our Nimiq-5 satellite that comes up in early October, and we've said that on our last two calls, I think, that we've been engaged with EchoStar. So we're not done yet. I've mentioned before, we know EchoStar well. We have a good relationship with them. We've done business with them for a very long time. So, we've certainly had a number of exchanges, but we're not done yet. So my expectation, obviously, this renewal coming up in about two months' time, we'll be landing on a resolution pretty soon. Certainly, I think that by the time we do our Q3 call, we'll be able to provide a lot of details around where we landed, but at this point in time, still having discussions with them.

Okay. And maybe a couple of questions on Lightspeed. So in terms of definitive agreements, you've talked that you signed by the end of summer. Is that with both the government of Canada and the government of Quebec, because I think in the past, you were primarily referring to the Government of Canada?

Yes. No. It's our expectation that it will be with both of them. And again, that's why it's taken a little while. Again, we're tracking the time frame that we had envisioned a few months ago when we put out our Q1 numbers. But because it is the Government of Canada, it is the Government of Quebec. We also have this vendor financing and so the all of that needs to get done. It takes a little bit longer than if it were just a purely commercial kind of funding syndicate. And two, yeah, with this government funding there are kind of special considerations. So yeah, it will be with the Government of Canada, with the Government of Quebec, and it all feels like it's moving in the right direction. I have to say, just because I'm a former lawyer, it ain’t over till it's over, but we're highly confident that we're going to get there in the coming weeks.

Okay. And then can you update us on your total spend to date on HP?

Andrew?

Looking at the half year, as we said, we've spent CAD334 million in total, of which cash is CAD220 million as a balance has indeed been reflected in the accounts payable that we see on the balance sheet.

So I think the budget for HP is CAD2.5 billion. Well, that's your last number. And so that's – so you spent CAD334 million so far on the project all there?

Yeah.

No, no, no. That's just what we've done so far this year. Yes, we've been making investments in the program for the past few years, including payments with launch providers, a lot of the nonrecurring engineering investment that was made, user terminal development, just kind of across the board. Andrew, I don't know if you want to say anything more about that?

Yeah. No, I can. If you go all the way back to the development back to 2020, on the Canadian dollar basis, looking at CapEx, it's about CAD980 million CapEx is what we have spent doing all of the work that we have done to get where we are today…

In currency?

Yes, correct. Canadian dollars. Correct.

Okay. All right. That’s great. Thank you.

Thank you.

Thank you. The next question is from Chris Quilty from Space. Please go ahead your line is open.

So congratulations, you put up better results than I was expecting for Q2, but that we get the question, you maintain full-year guidance. And so did you see anything that was pulled forward into Q2, maybe just first question.

No. No, the quarter unfolded like we expected.

All right. So I, therefore, kind of didn't model back half down as much as perhaps I should have to stay at the kind of midpoint of the guidance. But putting aside MIMIC 5, which I had already accounted for, when you look at the base of the business, are there any other large contract roll-offs or the other issues you've identified maritime in Latin America? Are those getting better or worse?

I think, look, we gave guidance at the outset of the year, like in any year, there are always puts and takes. In the main, the year has been unfolding like we expected. There were some renewals that we didn't think we were going to get that we did. There were some things that we thought would roll off in a certain time frame. We still think they're going to roll off, but they're rolling off a little bit later. And then equally, there are some things that played out in a way that was probably worse than what we thought. One of the things I'd note, and we flag it in the 6-K is our customer Xplore, which is a Canadian world broadband provider that serves its customers with a mix of satellite, terrestrial wireless and fiber. Xplore is going through a restructuring process right now. And as a result, we've bumped up our bad debt provision in the quarter, and we're trimming our expectations for what we'll do with them for the rest of this year. So I'd say that was one that we didn't anticipate when we gave our guidance at the outset of the year, but that's something that will be a bit of a headwind in the second half of the year and potentially next year as well.

Could you clarify for me, Dan, whether you were involved in the deal where they purchased all the Canadian payloads from ViaSat and Hughes for ViaSat-1? If I recall correctly, you were somewhat of a middleman in that contract. I wasn't anticipating any revenue or margin contribution from Hughes in that case.

Yes, you're correct that Explorer utilizes satellite capacity from Telesat, ViaSat, and Hughes. However, we didn't act as an intermediary in that process. We own the Canadian payload for ViaSat-1 and entered into a long-term agreement with Explorer to utilize that payload. Explorer independently negotiated deals with Hughes and ViaSat for their additional capacity, so those transactions do not impact our profit and loss.

Okay. I got it partly right.

Well, that's...

Okay.

Usually better than I do. So that's pretty good.

Second question for Andrew, spending $1 billion in the latter half of the year is a significant commitment for the government, but for Telesat, it's a substantial amount. Clearly, people are not constructing at that pace. How much of that should we consider as prepayments and how does that impact MDA in terms of revenue contribution to the supplier base on the other side?

So maybe, Chris, I'll take this one. I won't comment on MDA's revenue recognition, but our suppliers need the money. They're ordering equipment right now. Don't forget, we're launching satellites two years from now, which means those satellites will be built in the coming months. So they're ordering items like solar arrays. I'm here with my CTO, help me out, Dave.

All of the various components of the spacecraft that people are anecdote, the propulsion system, solar arrays, out to control…

100%. People are building stuff. All the supply chain is building stuff. They're ramping up, they're spending money. And as much as I would like to think that everyone wants to do Telesat a great big favor. In my experience, all these companies want money before they start spending money. So that's the flow of funds. And here again, and I'm somebody that is really squeamish about spending money. But the reality is, we're hitting the schedule, and they're moving out. And the worry would be if we weren't spending the money, then our schedule to me, and to other people that know this industry, it wouldn't be credible. The reality is, yes, we're spending a lot of money over the next 24 months because people are buying stuff and building stuff, and that's exactly what's going on.

Great. And speaking of stuff, I have to ask, it's the company but also an industry question around your selection of PSAT for your optical terminal, I think you were involved with Inerac on a couple of phases of. And obviously, that technology is absolutely critical to the sort of performance and economic returns you expect. Can you perhaps give us a little solely on the process there?

Yes. Sue, I'll start off and then our experienced CTO, Dave Wendling, can join in. These optical inter-satellite links are essential to the constellation, and for all components—like the onboard processor, antennas, and digital antennas—we're consistently evaluating the best balance of cost, capability, reliability, and heritage. We have many companies currently presenting strong optical technology in space, and we collaborated with MDA on our selection. It was a joint decision between Telesat and MDA. Ultimately, we chose PSAT because they met our criteria in terms of performance, reliability, cost, and schedule. PSAT has a solid track record in this area and offers a highly effective optical link. The selection process was competitive, and we, along with MDA, determined that PSAT was the optimal choice. This is not a negative reflection on other companies producing optical links; we felt there were several good options. However, PSAT ultimately stood out for us. Dave, do you have anything to add?

No, I think you said it well, Dan. I just note that it was a very disciplined down selection and selection process in the final analysis in. So, as you said, key sat note on time and a very comfortable.

In the recent MDA call, it was clear that you are leading, but it seems they have a new undisclosed customer that has rapidly expanded. This might suggest it is a government client, which tends to take precedence. Although I am just speculating, these scenarios have occurred in the past. Are you concerned about this? I understand they are increasing their capacity to around 2,000 satellites annually, but is there an expanding business opportunity for you?

So, the short answer is no. They're located about an hour and a half from us, and we know MDA well. Our teams work closely together, and we have many former MDA employees here. They likely have a few former Telesat employees as well. We maintain a strong working relationship with MDA at all levels within our organizations. We've collaborated with them for decades, primarily on antenna-related projects, though they have been building satellites for many years. We have no concerns. We are in regular contact with them as they increase their staff and supply chain capabilities, and I meet with them frequently. This doesn't mean we're complacent; this is a significant program for both of us, and we both need it to succeed. I appreciate that we both have significant stakes in the project. Currently, I feel positive about their progress in ramping up and how our teams are collaborating. If our perspective changes, we will inform you.

Thanks.

Thanks, Chris.

Thank you. The next question is from Walter Piecyk from Lightshed. Please go ahead. Your line is open.

Thanks, Dan. I have a quick follow-up on one of Chris' questions regarding your revenue strength in the first half of the year compared to guidance. Are you essentially considering EchoStar's revenue to be zero for the fourth quarter as they navigate their cash issues? Is there any probability factored into your guidance related to that?

Well, when we put together our guidance and we said this before, it captured a range of outcomes with EchoStar. And we haven't changed any of those assumptions in terms of what those range of outcomes could be. So no, the back half of the year and our thinking about it hasn't deteriorated because we've learned something new or our thinking has changed about EchoStar from where we stood at the outset of the year when we gave the guidance. And I guess the other thing I'd say is, yeah, we all track what's going on in the sector, including what's going on with EchoStar. The reality is, to date, the direct home satellite business is obviously still generating a significant amount of cash flow at EchoStar. To date, Nimiq-5 is being fully used by EchoStar. My expectation is to the extent that they renew with us, then that will be a reflection that Nimiq-5 is still an important part of their distribution infrastructure and they'll find a way to pay for that because it's important that they continue to provide service to their DTH customers and continue to enjoy the benefit of that cash flow. And so my expectation is that they'll find a way to make sure that their payments. So I'm just pausing here. Are we still online? Okay. Sorry, there. Our stream was flickering here. I wasn't sure if we had lost the line. So...

That was a good response. It was just flickering positive receive. Yes, I agree, look, to generate some level of free cash flow in one part of the business, and they can't simply turn off the pricing mimic, so why not just hold them accountable for a lower renewal?

Well, I mean, look, with all of our customers, we try to frame things in a win-win way as best we can. You don't always get there, but we've been working with EchoStar for nearly 20 years now, and we have a good relationship with them. We've discussed this before, and we all know that the direct-to-home satellite business is facing significant challenges. We try to collaborate with companies like Bell or EchoStar or Shaw to support that business because there are still millions of households across North America that depend on those services.

I just feel like on this renewal, however, many years it's going to be also longevity of the staff itself. So it's like this is the last one, five years from now, if there are a couple of million subs lower than they're not going to be maybe as nice to you as you're sounding like you want to be nice to them in this degree. In other words, like this could be the last negotiation of the 20-year relationship. So why not like just squeeze in for everything you can.

Yes, I don't know. We've been doing this for a long, long time. It's not how we approach our customers in the market. And so anyway, so stay tuned, we're going to conclude one way or another, our renewal discussions with them, and then we'll be able to provide an update on that in a couple of months' time.

I think that's also on the LEO, now the NDA is kind of talking about it more. Obviously, there's seemingly more confidence in the market that the project's moving forward. Has this opened up any additional pre-sales on the enterprise side? I realize, obviously, the launch is still a couple of years out, but wondering if you've got any kind of additional commitment. And to that end, in terms of the market size beyond enterprise, with Globalstar and Apple have done this recent phone, again, getting back to the directed device, I know this is not the target market that you want, but is there any rethinking in that in terms of directed device? I mean, I think Sky Go announcement yesterday with the new Pixel phone, it seems to be a market developing. I mean using the Globalstar stuff. It's been great in the whole of coverage that exists. Just curious if the thought process has changed in terms of trying to attack that market.

It's a great question. However, the current spectrum that Lightspeed uses, the Ka-band spectrum, is perfect for broadband connectivity but not suitable for providing a broadband or even a narrowband connection to handheld smartphones. We believe the markets and verticals we are targeting present significant opportunities. They are large, expanding rapidly, and we've optimized our constellation to meet their needs. The frequencies we use are well matched for this purpose, so our focus remains there. Regarding presale activities, Lightspeed is making progress. We are actively investing, placing orders, and increasing our staffing. Our customer base is aware of our advancements. Our sales and business development teams are actively engaging with familiar customers across various verticals. While there's nothing to announce at this moment, we are moving forward.

I understand you only mentioned major contracts, but could you at least provide some insight on whether there have been additional bookings that may not be significant enough to highlight since the last earnings call?

No, but it wasn't our expectation that there would be any. We're experiencing strong engagement with promising prospective users in our key focus areas, including aerospace, marathon, government, and enterprise. I didn't anticipate announcing anything since releasing our Q1 numbers. However, the market is aware of what we're developing, and users are enthusiastic about it. There is clear validation that the customer community is very receptive to LEO. You can see the traction that Starlink is gaining, and we believe we are bringing something very attractive to the market. So, stay tuned, and we will be very open about the orders we are currently receiving. We have about $750 million in take-or-pay commitments related to Lightspeed, which we don't factor into the CAD 1.1 billion backlog we reported in our earnings release; the Lightspeed backlog is distinct from that. As developments occur, we will provide updates and share our successes.

Great. Thank you.

Thanks.

Thank you. The next question is from Sean Mahoney from Bank of America. Please go ahead. Your line is now open.

Yes. Hi. Thanks for taking the question. First, I noticed a large working capital outflow for the restricted group and a large working capital benefit for the unrestricted group in the quarter. So just wondering, does that reflect any intercompany flows? Or is it just a coincidence that those numbers largely offset? Or did you use the remaining unsub investment capacity, as you indicated you would on the last call?

Yes. So that's the investment down from Telesat Canada as the unrestricted group. And from a timing perspective, it's just showing up top in operations. But next quarter, you'll see it down as an investment in.

Okay. Got it. Thank you. And then for GEO OpEx, Q2 was up sequentially. It seems like at least part of that was due to the bad debt expense associated with Xplore that you expand as well as higher professional fees. How should we think about run rate GEO OpEx? Should we look more sort of like Q1? Or do you expect to continue to incur higher bad debt expense with Xplore or higher professional fees for some time?

If you look at other GEO business overall, I will point out our actual EBITDA margin is 80%, which is pretty high, pretty significant. And we said on our last call, we were expecting GEO OpEx to be down 4% in our plans, and that's contained within the guidance, and that's still what we are actually sticking to now. On the bad debt, I just shared the bad debt amount is about $2 million to $3 million. So on the grand scale, it's not that sort of material. But as we said on our last call, in terms of OpEx, and as Dan has alluded to in spending money, we are pretty judicious on what we do and how we spend money and which is good. So as I say, that's what we said in our call, but that's review a few OpEx.

Okay. Got it. And then on the bad debt expense that you mentioned, yes, listening, it went up like $3.3 million in the quarter, so call it $1.1 million a month. Are you still recognizing revenues from Xplore and just kind of offsetting that with bad debt expense?

Yes. We are currently recognizing revenue at Xplore. They're making partial payments. So we continue to recognize revenue until we know more about what their plan is going forward.

Can you quantify what the remaining obligations are under the contract, specifically how much of your backlog includes the Xplore obligations?

Yes, we'll help you out there. So John, remind me, it goes up until.

January 2027.

Yes, it would be 25 and 26. The backlog in that $1.1 billion is approximately CAD 40 million. It's important to note that about one-third of that was prepaid. Therefore, when we recognize revenue from Xplore each quarter, approximately one-third is non-cash deferred revenue. That's the situation, Sean.

Okay. And then the last one. I know a few people have asked, so I'll just try one more time on the guidance. So the low end of the guidance implies second half revenues of about $240 million to be $40 million a month, and you did $305 or about just north of $50 million per month in the first half. I know that there's the renewal with EchoStar that comes up, I think I can't remember September, October. But in the past, you've said that those DTH spuds are about $70 million a year, could be more could be less. But just wondering if you could help us understand like the drop-off of at least or I guess even if you lost 100% of that EchoStar contract, it seems like you're still assuming some pretty steep declines in the rest of the business in the second half of the year. Thanks.

I'm looking at Andrew, maybe I'll take this. Yes. Regarding our outlook for the year, even if this renews, we anticipate it will be at a significantly lower rate. We have taken into account various scenarios with DISH that explain part of the decline. We're dealing with an issue with Xplore, and we'll find out how that plays out. We also periodically evaluate all our business activities. We are considering the sale of a non-core business that we own, which could potentially happen in the near term and may have a significant impact. This year, while it generates revenue, it does not contribute significantly to our EBITDA. However, if we proceed with the sale, it would have some negative effect on our top line. So, these are the factors at play. Additionally, we provided a range; there is a low end and a high end to that range. Andrew, do you want to add anything to that?

Yeah, indeed. If you look at the OpEx, as we know, we're hiring people, so our OpEx will be in LEO. Our investment in LEO from the people’s perspective is going to increase. If you look at our segmentation, operating expenses for the six months were about $32.8 million, and our guidance we've given for OpEx in LEO is between $80 million to $90 million. So, that will also kind of play into the overall potential increase in OpEx in the second half versus the first half. So, that plays right down to the adjusted EBITDA as well. And I will say we are prudent in what we do.

And maybe one other thing, James pointed out to me that now that we've separated our GEO and LEO numbers, it's easier for you all to see. We recognized revenue in LEO for the first half of the year, which is significant and non-linear, due to the consulting contract we had, which I believe was with NASA.

NASA. Correct.

There was more revenue recognition in the first part of the year compared to the latter part. While this doesn't significantly contribute to EBITDA, it will affect the top line. So, Sean, it's all of those factors. Aside from the ongoing exploration restructuring, which is uncertain, there isn't anything in our outlook for the second half of the year that differs from what we anticipated when we provided our guidance at the beginning of the year.

And if you look at the segmentation breakout with Dan, which I think is very useful and very transparent, the numbers and the issues we just mentioned about the OpEx and the revenues in LEO, you can actually see that quite clearly, particularly pertaining to the first three months.

Okay. Got it. Thank you. And then just the last one for me, based on what you said about the net non-core assets that you mentioned, is that in the restricted group? And can you give us any sense for the order of magnitude of what you expect to sell that for? Is that like $5 million, $10 million? Or are we talking $100 million or...

It is part of a restricted group. It’s not significant in terms of EBITDA, as it is essentially EBITDA neutral for us. Regarding top line contribution, it is approximately a contribution of over ten million. As for proceeds, we are unable to provide any details at this time, but they are not expected to be material. Any proceeds from a potential sale will be included in the restricted group.

Okay. Thanks, Dan and Andrew.

Okay. Thank you.

Thank you. There are no further questions registered at this time. I will turn the call back to Dan Goldberg.

Okay. Operator, thank you very much. And thank you all for joining us this morning. We look forward to chatting with you again when we release our Q3 numbers. So, thank you very much.

Thank you very much.

The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.