Good day everyone and welcome to the Loral Space & Communications, year end earnings conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to Ms. Wendy Lewis, Director of Communications for Loral.

Good morning. As we proceed with the call, some of the remarks we make about our future expectations, plans and prospects, will be forward-looking statements under the Private Securities Litigation Reform Act of 1995. As you know, actual results may differ materially from those discussed here as a result of a wide variety of factors and conditions. Please refer to the most recent 10-K and 10-Q forms that we have filed with the SEC for information on those factors and conditions. Now, I would like to turn the call over to Michael Targoff, Chief Executive Officer of Loral Space & Communications.

Thank you and good morning everyone. With me today are some of Loral’s senior executives, including CFO, Harvey Rein; General Counsel, Avi Katz; Treasurer, Richard Mastoloni; and Controller, John Capogrossi. Yesterday we announced our year end and fourth quarter results and filed our 10-K for the year. As in the past, I would like to take this opportunity to review the year, to draw your attention to some of the important highlights and discuss our current status. At the conclusion we will take questions. In light of the difficult overall economic environment, I am pleased to report that our 2008 results are right on track with our expectations, at both base systems of Loral and Telesat. With seven satellite contracts, SS/L achieved more than 50% market share of its targeted market for the year. At Telesat, Nimiq 4 was successfully launched and commenced commercial service, albeit a few months behind our original expectations and our synergy objectives were achieved ahead of schedule. The accomplishments are reflected in Telesat’s reported pro forma EBITDA increase of approximately 24%. Liquidity is high on everyone’s minds these days. When we look at both SS/L and Telesat from a fundamental overall liquidity perspective, I’m gratified to say that neither company has a liquidity issue. Both companies remain well capitalized with operations and planned CapEx funded for the foreseeable future with available credit facilities and with no significant debt maturities until 2014. Going into more detail, in assessing our current liquidity, particularly at SS/L, it is important to understand the components of our cash uses in 2008. Largely to support growth at SS/L, we used approximately $250 million in cash for operations and capital investments. More specifically while SS/L had positive cash derived from its EBITDA, the cash was offset by a number of operating requirements.…

Thank you. (Operator Instructions) We will take our first question from Mr. Smith, Jeffrey Smith with UBS.

Mickey, in light of the recent criticism of executive compensation, do you think that your compensation is appropriate?

I think it could be higher, but I do think it’s appropriate, yes. I think it’s important to make sure everybody that understands that if you looked at my contract and you examined what the level of stock options would have been, had the compensation committee granted stock options in line with the contract numbers, it would have been a very large number. If you look at what I received, I received 175,000 share contract commitment, but only 85 now are restricted shares, but most importantly, those shares are worthless to me unless and until the stocks of Loral goes up to $25. So, I get zero value and my value creation with those grants is absolutely tied to the benefit to the shareholders. So, frankly I think it’s a terrific precedent for were CEO’s to consider in light of the trading levels of their stock, but I certainly do not have any embarrassment about the sensitivity to the grant that I just received.

Okay. Thank you.

Our next question comes from Nicole Torraco with Babson Capital.

Hi, good morning.

Good morning.

No, that part of it has nothing to do with FX changes. One second. Harvey?

Both the calculation involves the cost of the satellite going forward and being denominated in U.S. dollars, which is now strengthened versus the Canadian dollar, impacts the calculation some what.

What Harvey was saying, if you heard is that, in fact the calculation relates to the value of Telesat’s orbital-slots, and in calculating the orbital slots, the calculation is made as to what you have to do the popularity orbital-slots and in U.S. dollar terms for Telesat, the cost of a satellite and the launch and insurance is increased vis-à-vis dilutive. When you do that calculation under the current discount rates that are prevalent as a result of the economic times we are in, you get a result which in this case, was that the carrying value was reduced by, I think it’s a 455.

Right and I guess to ask a question in a different way, what I’m trying to figure out is what portion of that 455 is related to FX; what portion of that 455 is related to expected lower cash flows from the orbital-slots; and what portion is related to discount rates?

Okay, I would tell you that I’m not going to breakdown the portion for the first and the third item you mentioned, but I will tell you, I do not believe there is any calculation with respect to lower cash flows at the orbital-slots. In fact, the funny thing about the foreign exchanges calculations and it’s more prevalent in the FX charge on the U.S. denominated debt is that that’s calculated without any offset for the fact that a good part of Telesat’s revenue is in U.S. dollars and from a Canadian perspective, the U.S. dollar revenue actually generates more Canadian dollar EBITDA. That offset is ignored in making these calculations. So there was no element to the calculation of the impairment having anything to do with reduced cash flow from the satellites.

Okay and what is driving then the goodwill impairment, the $188 million at SS/L?

That’s just the calculation of cash flows and discount rates and in light of the environment where we find ourselves. When people do valuations and they look at companies, be it comparable or otherwise and they apply discount rates and not withstanding the improved result, you get a calculation that must be measured against goodwill and you have the impact.

Alright, on EchoStar, what are your forward contractual obligations related to that?

Well, when you say your, let’s be very careful, Loral has none. EchoStar as its entity has an obligation to lease certain of the capacity on Spainsat and that lease is about $23 million a year of expenditures for transponders. That’s the principal obligation EchoStar has. We see EchoStar’s business, which has been disappointing, and I’d like to say that I hope when we talk again next year at this time, that I won’t be saying that, but I’m not predicting anything right now, I’m just feeling better about the tenor of the marketplace for EchoStar.

Okay. My understandings from the 10-K was that Loral had to increase its investment in EchoStar by some $5 million.

No, that’s not correct. We did not have to, we chose to. EchoStar had an opportunity to purchase an obligation to Averion at a discount, and in order to realize the benefit of that, both Loral and Hispasat, the two partners, elected to contribute capital to EchoStar, to take advantage of the opportunity. There was not an obligation at all.

Okay, so there aren’t contractual obligations of that sort, like a required additional contribution or something like that.

That’s correct.

Okay and then what is the current underfunded status of the pension plan? The $24 million expected to be paid in 2009 seemed a little high. Is it expected to continue at that level?

Yes, I think the issue for us is no different from corporate America. The decline in the carrying values of the investments in the pension plan; I think we amortized it over seven years, Harvey. We amortized it over seven years, but we have to make up the short fall in the values and there is an expense charge, there is a cash charge, and in ‘09 the cash charge will be approximately $24 million, which actually is a bit less than what it was in ‘08; but over the years, we would expect the market does not change, that the cash requirements will go up, we don’t know yet, but I would not be surprised to see the cash requirements go up by $5 million to $10 million.

Okay and then one on SS/L, how many satellites are under construction, and do you have any expectation you want to give in terms of contract towards next year. You sort of mentioned in the 10-K, four to five is a bit of a threshold in terms of your operations, do you expect to have that many?

Okay, I think its about 13 in active construction, but remember what we mentioned in the 10-K is that we take an average of four to five depending on their size and throughput that’s required from the factory to cover our running costs and we had seven last year and they were large. So, we have as I said in my remarks that somewhat of a cushion, but going towards what the market will be, it’s very difficult to predict, because there are so few orders in general, but the replacements from the key emphasis providers generally should range between 10 to 15 satellites a year over the next number of years and a vast majority of those we would hope to be to the medium, large market size that would be suitable for us. So, we would hope that we will continue to have bookings that would support the business at a run level that will let us be successful. By the way, when I said before there are about 13 active, I think the total is about 18.

Okay. It’s 18?

Yes.

Alright, thank you.

Okay thank you. Thank you for joining us today. We appreciate your participation and look forward to our next opportunity to update you on our status and have a nice St. Patrick’s Day. Bye-bye.

Ladies and gentlemen that does conclude today’s conference call. We thank you for your participation. Have a wonderful day.