Mark D. Dankberg - Chairman & Chief Executive Officer Keven K. Lippert - Executive Vice President, General Counsel & Secretary Shawn Lynn Duffy - Chief Financial Officer & Senior Vice President Richard A. Baldridge - President & Chief Operating Officer

Richard Valera - Needham & Co. LLC Andrew DeGasperi - Macquarie Capital (USA), Inc. Mike Crawford - B. Riley & Co. LLC Andrew C. Spinola - Wells Fargo Securities LLC

Welcome to the ViaSat's FY 2017 First Quarter Earnings Conference Call. Your host for today's call is Mark Dankberg, Chairman and CEO. You may proceed, Mr. Dankberg. Mark D. Dankberg - Chairman & Chief Executive Officer: Okay. Thanks. Good afternoon, everybody, and thanks for joining our earnings conference call for our first fiscal quarter of 2017. So, I'm Mark Dankberg, Chairman and CEO. And I've got with me here, Rick Baldridge, our President, Chief Operating Officer; Shawn Duffy, our Chief Financial Officer; Keven Lippert, our General Counsel; and Bruce Dirks, our Treasurer. And before we start, Keven will provide our Safe Harbor disclosure. Keven K. Lippert - Executive Vice President, General Counsel & Secretary: Thanks, Mark. As you know, this discussion will contain forward-looking statements. This is a reminder that factors could cause actual results to differ materially. Additional information concerning these factors is contained in our SEC filings including our most recent reports on Form 10-K and Form 10-Q. Copies are available from the SEC or from our website. With that said, back to you, Mark. Mark D. Dankberg - Chairman & Chief Executive Officer: Okay. So, we'll be referring to slides that are available over the web. And I'll start with some highlights and a top level business overview and after that, Shawn will go through the consolidated and segment level financial results. And in this quarter, we thought we'd spend a little time reviewing how we think about our R&D investments in satellite broadband productivity, and give some color about how that productivity manifests itself in our key broadband services businesses, including an update on the R&D status on ViaSat-2 and ViaSat-3. And then, we will review our outlook and take questions. So, our first quarter was a pretty good start for the year. Overall, revenue was up 5% year-over-year, new orders were up 10% and Adjusted EBITDA grew 3%, all compared to the same quarter last year. As we said last quarter, we had significant growth in R&D spending in our commercial network segment on ViaSat-3 and success based commercial airborne Supplemental Type Certificates, or STCs. As a reminder, we are expensing the preflight payload engineering activities on the ViaSat-3 satellite as an artifact of building the payloads internally. Absent that growth in R&D expenses, Adjusted EBITDA companywide would have grown 16% year-over-year, and op earnings even more than that. Our Satellite Services segment was especially strong. ARPU increased 8% year-over-year due to a combination of packaging attractive higher bandwidth, higher-speed service plans, and increasing attachment rates on a growing portfolio of value-added services. Subscriber count was relatively flat. Sat costs have been trending down on a per subscriber basis. Commercial aircraft in-service is growing, and that led to a 32% year-over-year increase in Adjusted EBITDA in the Satellite Services segment. Overall, we continue to see strong demand for Satellite Services in target markets and later on, I'll go into more depth on our longer-term thinking on how we drive profitable growth there, leveraging ViaSat-2 and beyond. Our Government segment also had very good results. Adjusted EBITDA and operating earnings for the first quarter increased 13% year-over-year on flat revenue, though with a higher proportion of services than last year. Overall, our Government business seems well positioned for growth in revenues, orders and earnings due to favorable outlooks in satellite mobility services, Tactical Data Links, and some recently certified additions to our network security appliances portfolio. Government customers have been initially procuring satellite mobility terminals and then have been following that with the ongoing services contracts. And as those are executed, that helps provide visibility to our growth trajectory there. The handheld Link 16 radio that's shown on the slide is a good example of the way we've been growing our Government business. We've had end users support to develop a product that has strong market flow, even without there being in a program of record for it. A lot of our growth in the Government segment, including in mobility, has come from creating unique and growing markets for products and services that aren't served by the DoD acquisitions. We're very pleased and excited by two very significant aeronautical mobile contracts with American Airlines and the U.S. Government senior leadership fleet, including Air Force One. Obviously, those are really high profile customers, and we believe winning those awards speaks volumes about the market recognition of the quality and economics of services on our satellite networks. But even more importantly, they are strong endorsements of our very simple yet highly differentiated approach to satellite broadband infrastructure. So, on that note, Shawn will give some more detail on the financial results. And then I'll come back and give some more color on that differentiated broadband infrastructure topic. Shawn Lynn Duffy - Chief Financial Officer & Senior Vice President: Thanks, Mark. As Mark just highlighted, the Satellite Services and Government Systems segment drove the overall increase in Adjusted EBITDA, more than offsetting declines in Commercial Networks. Specifically, revenues were up 15% in Satellite Services and flat in Government Systems, yet Adjusted EBITDA was up 32% and 13%, respectively, in each of these segments. Once again, we reached record recurring Adjusted EBITDA of $72 million in Satellite Services, with EBITDA margin topping 47%, which is a 300 basis point increase sequentially from FY 2016 Q4 and a 600 basis point increase year-over-year. And I'll talk a little more about what drove those increases in a little bit. In Government Systems, our Adjusted EBITDA grew on flat revenue. This reflects the growth of our higher margin service offerings, as a scale (5:52) in this segment and higher product margin. This service revenue expansion was multidimensional, with strong growth from managed Wi-Fi services and military locations worldwide throughout ViaSat Wireless Service group, plus growth in government mobile broadband service revenue. We continue to make good strides in this part of our business, with our recent announcement around future services for Air Force One and other elite aircraft for the U.S. Government. In Commercial Networks, quarterly revenues were down slightly from the prior year period, with lower sales of ground infrastructure product, offset by ramping modem sales to (6:30). Our Adjusted EBITDA performance clearly reflects the strong ramping of our R&D on our ViaSat-3 satellite project we spoke about last quarter, and in-flight mobility STC activities, which in total doubled year-over-year and was the primary driver for our reduced segment profitability. So overall, we had a very good performance this quarter, with continued growth in Adjusted EBITDA despite the ramp in the ViaSat-3 program and STC activity associated with our Commercial business. Looking to the next slide, our income from operations was down slightly, with higher depreciation and other non-cash expenses offsetting our overall increase in Adjusted EBITDA, and our GAAP and non-GAAP net income follow the same relationship, both down slightly from the prior-year period. But, again, keeping in mind our R&D trends I noted earlier, each of these measures would have actually grown very sharply year-over-year, at levels of over 50% on a constant R&D level basis. Regarding cash flow, we more than tripled our cash flow from operations from the prior-year quarter with another quarter of solid EBITDA performance, plus strong collections on the large broadband infrastructure program wind-downs we discussed earlier, which reduced billed and unbilled accounts receivable balances by $23 million from the end of the last quarter. And if you look to our trailing 12 month cash flow from operations, you will see we generated $341 million of cash, which was over 20% higher than last year Q1 for the same period excluding the $40 million one-time Loral settlement, and more than doubled all of last year's satellite CapEx investment. So, clearly, our operations continue to fund a meaningful portion of our strategic growth activities. Our Q1 capital expenditures were up $55 million compared to last year with the additional two ViaSat-3 satellites under construction as well as higher quarterly expenditures on our ViaSat-2 project and related ground segments as we approach the beginning of the launch window at the end of this year. So we ended the quarter with $200 million outstanding on our revolver in $264 million drawn on our $387 million loan commitment from Ex-Im Bank. Overall net leverage was 3.1 times trailing 12 month Adjusted EBITDA, up modestly from 2.8 times in the fourth quarter of fiscal 2016 and our liquidity remains very strong. Last quarter, we spoke about our Q1 revolving credit agreement upsides of $300 million to a total of $800 million. This increase and the growing contributions from our operations got a significant lift in liquidity quarter-over-quarter to $689 million with combined availability on the revolver in Ex-Im loan commitment and the $47 million of cash on balance sheet. This next slide summarizes our key Satellite Service metrics. As you can see in the chart on the top left, Adjusted EBITDA increased pretty dramatically on a sequential basis, up 13% from the previous quarter on an essentially flat subscriber count. This earnings improvement was largely the result of another quarter of strong ARPU growth, up $1.50 per sub per month from Q4 last year. Since we launched ViaStat-1, we have grown ARPU nearly every single quarter. We have consistently grown our retail mix as well as tailoring plans and value-added services that are filling the dimensions our customers value. So in Q1, we saw evidence of this again with more customers selecting value-added services and more customer upgrades, especially in transition to our liberty plans. And remember, a large majority of that ARPU increase drops right to the bottom line and we think these trends will continue throughout FY 2017 as we are ready for our ViaStat-2 service launch next year. Another important notable is related to our stack per sub cost which this quarter reached the lowest point since our ViaStat-1 service launch, mostly as a result of lower advertising expense costs which are expense. So with the additional growth from our commercial air business, which I will hit on in a minute, our segment Adjusted EBITDA grew sharply and reflected a year-over-year revenue conversion of 87%. On the in-flight connectivity front, we added another 33 commercial aircraft during the quarter ended the period with 509 commercial aircraft on our Exede network. We expect total count to continue to grow with our existing customers and that will be further expanded with our newest customer addition, American Airlines, initially outfitting 100 new Boeing 737 MAX aircraft. We noted earlier that we are continuing to divest and obtaining Supplemental Type Certificates as airline relationships expand along with the types of aircraft approved for Exede service. So, year-over-year, we continue to grow our consumer broadband and in-flight Internet businesses and top-line revenue and EBITDA on an absolute and incremental margin basis. These results would not have been possible on our legacy WildBlue satellites with our limited capacity and higher capital cost per gigabit compared to the much more efficient ViaSat-1, and our upcoming ViaSat-2 and ViaSat-3 platform, which will take this efficiency to an all-new level. So, with that, I will turn it back over to you, Mark. Mark D. Dankberg - Chairman & Chief Executive Officer: Okay. Thanks, Shawn. So this next slide makes a relatively simple point but it's one that's really important to understanding our thinking about ViaSat's businesses and how we build competitive advantage. The charts are a reminder that broadband users keep demanding higher speeds and more bandwidth and that the revenues or ARPUs that service providers can earn from their users isn't growing as fast as the speeds and volumes. So service providers with stronger competitive positions like cable companies competing mostly with DSL have been able to earn ARPU gains, but customers still continue to get better and better values in terms of megabits per second per subscription dollar or gigabytes of consumption per dollar. In markets with greater competitive intensity like, say, cellular services, ARPUs could actually decrease even while speeds and volumes are increasing. So this race to deliver more output with the same or less capital input is essentially the definition of productivity and that's what we're going to focus on. The up-chart is a service providers with infrastructure, productivity advantages are going to do better than those with lower productivity. So cable, hybrid fiber coax networks, improve speeds and volumes more efficiently than copper or telephone plan (13:30) does, so they're winning those competitions. It's harder when cable companies compete with fiber. In mobile cellular, the major providers are using industry-standard networks, so competitive intensity is a bigger factor than relative productivity. We'd like to compete using assets like cable, hybrid fiber coax versus telephone copper are much more productive in dimensions that matter to customers. Absolute productivity gains relative to demand are really good, but relative productivity gains compared to the next best competitor also matter. So, even in times when usage demands might grow faster than productivity gains, you can still do well if your productivity is better than competitors. Also, one of the big advantages of the types of flexible satellites we're building is that our bandwidth is portable. We can move into those markets and applications where our productivity advantages are greatest. Productivity gains are valuable when per capita bandwidth consumption continues to grow. We believe that's absolutely the case as more users spend more time consuming more video in more ways on better devices with higher resolution screens whether that's live streaming, over-the-top, video-on-demand, embedded in social media or otherwise. If we can improve our bandwidth productivity faster than others, we can embrace bandwidth demand instead of fighting it and satellite broadband is very good at video. So when we decided to enter the Satellite Services businesses with ViaStat-1, our fundamental objective was to lead the industry in satellite network infrastructure productivity measured in useful gigabits per second of satellite bandwidth per million dollars of invested capital. Then what we want to do is use that ViaStat-1 on bandwidth and bandwidth intensive applications to turn that productivity into profits. We wanted to redefine the Satellite Services playing field to be technology driven where intent gains in productivity would yield significant competitive advantages in high markets. And we believe we are demonstrating that in residential broadband, commercial aeronautical mobile and government mobile broadband. Finally, in cases where our infrastructure productivity is better than – to rest of our alternatives and that can be compared to DSL, for instance, or air to ground aeronautical networks, we can take customers from those markets too. So this chart shows relative productivity of different classes of satellite networks in two ways. The right-hand or orange scale measures gigabits per second of bandwidth capacity per million dollars of infrastructure investment or gigabits per megawatt that's the term we've used. The left hand axis shows roughly how much a satellite operator would need to charge for that bandwidth in millions of dollars per gigabit per second per year to earn a 10% after-tax return based on a common set of assumptions on fill rates, EBITDA margins, and other factors. And be sure to note that the left-hand scale is logarithmic and that reflects the fact that there is orders of magnitude, differences in productivity among these different classes of satellites. The least productive in pure bandwidth are L-Band mobile satellites. L-Band enables handheld phones and it's relatively immune to weather but it is very expensive on a cost per bit. Productivity is improved from there for traditional C and Ku-Band Fixed Satellite Services, Global Mobile Ka-Bands what's called High Throughput Satellites for Ku-Band then there is Existing & Planned Ka-Band High Throughput Satellites. And finally, the most productive is ViaStat-1 and then the ViaStat-2 and ViaStat-3 series beyond. You can do your own spreadsheets that the lower your bandwidth manufacturing costs are the lower the selling price you can offer and still make a predefine return on investment other factors being equal. We also show a column for Resellers whose primary business is selling connectivity to users like airlines or maritime ships or government platforms by packaging and selling bandwidth purchased from the satellite owners. We show a range of prices that they would charge based on the type of bandwidth they are selling. Since their costs build on the prices that are charged by the satellite operators, you would expect that their sell prices for each asset class would be higher than the infrastructure's owners in order for them to earn a profit. So the charts are directionally really representative of bandwidth pricing among these asset classes. Think of productivity as destiny for the satellite broadband services. So using those same assumptions a ViaStat-1 class satellite could deliver a comparable return at an order of magnitude to lower pricing, which is just another way of expressing its order of magnitude productivity advantage and bandwidth manufacturing costs. Of course, we recognize that going in risk profile for ViaSat-1 was higher than that of a mature fixed satellite services or global mobile provider, so we aimed at commensurately higher returns. Our current revenue run rate on ViaStat-1 is multiples of the representative million dollars per gigabit per second per year value and that's directionally indicative of the returns that we are getting. Also note that even at that market price point ViaStat-1 pricing is much better than or competitive with other asset classes. So, as far as we are aware, we don't see any existing or planned satellite infrastructure projects with better productivity than ViaStat-1. So we can use the productivity gains of VaiStat-2 and VaiStat-3 to provide even better services to our customers, expand our addressable markets even more and still earn better margins. You don't have to understand all this math to tell the difference between the in-flight experience on a JetBlue flight compared to an air-to-ground Wi-Fi service. We believe we are seeing the effects of our productivity advantage in key markets and that we can scale them to create even more compelling competitive advantages and that's why we are investing at the pace that we are. So in the next two slides, we will show how those productivity improvements are manifested in the aero mobile and in the residential markets. So this slide shows a relatively recent snapshot of our commercial aeronautical mobile service and SatBeam maps of 2 Ku-Band, High Throughput Satellite and a Global Mobile Ka-Band Satellite network covering the Continental United States. Our SatBeam map is a composite of beams from ViaSat-1, WildBlue-1 and Anik F2 satellites each covering different parts of the U.S. and we can choose from about 140 different available user beams in total. The picture only shows the outlines of the larger beams around the edges of the United States, but there are lots of other beams inside throughout the country. So, productivity is the ratio of useful output and gigabits divided by cost input in mega bucks and since the cost in-orbit of all this classes of satellite systems is relatively comparable to each other and that means that orders of magnitude differences in productivity must be due to order of magnitude differences in the useful available bandwidth per satellite, and that effect is further magnified because our first three satellites are wholly focused on the U.S. and Canada, and the other systems are distributing their bandwidth over multiple geographic regions. So if you look at the pictures closely, you'll see each of the other alternative systems only has about five or six beams in total available to serve the entire U.S. market, and each of those five or six beams has a total throughput capacity in the range of about 50 megabits to maybe a few hundred megabits, depending on the satellite beam bandwidth, when those bandwidths are delivered to an aeronautical mobile terminal. In the upper picture, each of the green arrows in the ViaSat network image is one of hundreds of aircraft in-flight at that moment in time. Our network has so many beams and so much bandwidth per beam that we are currently able to deliver speeds of close to 100 Mbps per plane for those planes with that level of demand at each point in their flight. With ViaSat-2, we will more than triple our effective network capacity and we will be able to support substantial growth in the residential network plus, say, in the range of 2,000 or more aircraft at service levels as good as or better than we deliver now. But now imagine a network with only five or six spot beams trying to support even say 1,000 planes having to live with way less bandwidth per beam. When those aircraft congregate in high demand markets up and down the East Coast or at hub airports, there will be beams with hundreds of aircraft in them, even if an individual airplane could process 100 Mbps, the amount of bandwidth per beam divided by the number of airplanes per beam will often result in single digit megabits per second available per plane, which is about the same amount that's currently delivered by the air-to-ground networks. In that case, putting 100 megabit per second modem on a plane only moves the bandwidth bottleneck from the plane itself to the satellite network infrastructure that's serving those planes. And even that assumes that a single reseller can capture all the Ku-Band High-Throughput Satellite bandwidth available in the U.S. market. Finally, it's really important to note that the failure mode here is not that the bandwidth is so expensive; it's that there's just not enough of it, and the result is the same thing that's created the opportunity for us today, too much demand chasing too little bandwidth resulting in congestion, slow service, limited number of passengers per plane and limited online activities. So right now, competitive intensity in the aeronautical mobile market is really high, but in the long run, to the extent that passengers behave in the air as they do on the ground, we believe the battle will be won based on bandwidth productivity. While we've made great strides at improving the number of passengers using the Internet and the amount of bandwidth available to each passenger, we're still in the early innings of helping the airlines capitalize on this onboard Internet experience. We can help the airlines embrace the trends driving Internet bandwidth growth instead of fighting them. We believe the airlines are beginning to see the effects of this in their own business, as passengers express their preference for better and better connectivity, and we're confident of good growth going forward. So this next slide is one we've shown in the past. It was used by FCC Chairman Wheeler in September of 2014 to illustrate the state of competition in the U.S. residential broadband market as a function of four different speed tiers. Just like in the aero mobile market, we'd like to compete where we can have a productivity advantage relative to the competition and where competitive intensity is less. In this case, the bandwidth productivity advances of ViaSat-2 and ViaSat-3 are really important to separate ourselves from satellite competitors and to position ourselves better against less productive terrestrial networks. So the blue segments at the bottom of each speed tier column show the fraction of the market that has no terrestrial alternative at that speed. So if we can target the 25 megabits per second and 50 megabits per second portions of the market, then we can be the only viable alternative in about 20% of those total markets, compared to only about 5% to 7% at the 4 megabits per second and 10 megabits per second segments where we compete today. Furthermore, at those speeds, about 70% to 80% of the market has either zero or one choice of provider, compared to only 25% to 40% of the market with only zero or one choice at the lower speeds. So clearly, with the right assets, that's a better place to play. At higher speeds, we'll need to allocate more bandwidth per subscriber, but ARPUs will be higher, competitive intensity will be lower, and our bandwidth flexibility and portability will help us find those geographic markets with the best distribution channels, subscriber acquisition costs, and retention rates. We do expect that terrestrial speeds will increase and that more choices will be available in more geographic markets. So we also expect that subscribers will continue to migrate upward in speed to 100 megabits per second and higher; as long as we can improve our productivity faster relative to terrestrial alternatives in specific geographic areas, we've got attractive growth and earnings potential. That's pretty much the opposite of conventional wisdom, that satellite services are condemned to play at the low-end of the markets at price points associated with the least attractive mass market, terrestrial alternatives. So, since we are investing a lot in R&D and capital, we figured it would be good to give an update on progress in those areas. So ViaStat-2 satellite construction and integration is essentially complete, and the spacecraft is in the middle of environmental stress screening. All functional performance testing has been completed, and the satellite meets its performance objectives. We've also invested a lot in the new ground network system needed to achieve the broad geographic coverage and bandwidth flexibility that we expect will further improve the value and productivity of the network compared to alternatives, and that's also meeting its objectives. Some of our R&D investments in ground gateway technology are reducing system capital costs, so total capital investment is at the low-end of the range we anticipated at the start. That means our productivity improvement target of double ViaStat-1 looks really good. There is upside potential in capacity, so there is a good opportunity to do meaningfully better than our initial objective, just as we do with ViaStat-1. The upper right image shows one of our radar installations. We've been investing in STCs for retrofits on narrow bodies such as 737-800 and 737-900 we are beginning to serve in Europe with EL AL. Overall interest from both domestic and international airlines has been really good and their interest has led to good progress on factory retrofit and line fit options with both major airframe companies. And with ViaStat-2 launch nearing and ViaStat-3 under construction, we're seeing new and significant activity for installations on call wide bodies too. The lower right picture is our new facility in Tempe, Arizona, where we are building the ViaSat-3 payloads. It includes our high bay clean room for final assembly and integration with the payloads, which will be made to the high power Boeing platforms. So, at this point, we are building pre-flight engineering units and performing modules sub-assembly and payload system tests and characterizations. It's still early but so far things are on track for 2019 first launch and performance is consistent with our objectives. The bottom left shows Government and Commercial versions of our new 100 gigabit per second network infrastructure encryptor appliance. That generation is aimed at cloud and data center applications and it's the first Layer 2 device to market at that speed. So last year we invested in development certification of new infrastructure in Edge devices and we're seeing really good market interest in those products. Okay. So finally, I'll give some insight into factors that should drive our financial results going forward. Given the upcoming launch of ViaSat-2 and the substantial lift we expect that that can create across our businesses, we will consider each segment in a pre and post ViaSat-2 environment. For Satellite Services, it looks like current trends can continue prior to the ViaSat-2 launch and in-service states. We aim to continue to grow ARPU through higher value plans and additional value-added services, sat cost on a per sat basis have been trending down and churn is roughly steady. We'll continue to add newer aircraft and we'd expect that trends driving greater passenger engagement and bandwidth would continue. We're working with existing and new airline partners to help them better monetize our best-in-class passenger experience and also to use connectivity to help produce higher fee cost in-flight entertainment. So, with ViaSat-2 in service we expect a high speed plans without hard bandwidth caps can enable continued growth in ARPU. We'll be targeting faster subscriber growth probably with per subscriber sat costs growing to more historical level and aggregate sat expenses scaling with subscriber growth. And we'll also have some migration from existing plans. We expect churn to remain steady or possibly improve from current levels with the new plan. We also may see a higher installation rate for new aircraft once ViaSat-2 is in service and increased service availability due to the greater geographic coverage and ViaSta-2 can also benefit our business sat services as we migrate more of those from Ku-Band to Ka. In our Commercial segment, there is opportunities for modest revenue growth, especially related to mobile terminal equipment. As we said last quarter, we plan on continued elevated R&D expenses for ViaSat-3 preflight engineering and aircraft STCs especially. Post ViaSta-2 we see increasing opportunities for revenue growth especially in the mobile terminals and R&D expenses may flatten. For our Government segment, we're seeing long-term trends towards growth in both products and service revenues. That with the growing proportion of service revenues, we believe those trends would continue and given the lumpy nature of new orders could have opportunities for backlog expansion. We're also in the early stages of new product cycles on smaller Link 16 Tactical Data Links terminals and next-generation network security appliances. We believe ViaSat-2 entering into service lifts our prospects for growth in the Government segment in terms of revenue earnings and new orders. So, overall, we're really focused on what we believe is a very compelling longer-term story. I hope we've shown that starting with ViaSat-2 going into service and accelerating as ViaSat-3 comes into the picture, that we're building a sustainable competitive advantage in terms of asset productivity that greatly expands the opportunities for us both in our current businesses and a much larger addressable market. You'll hear us talk more in the future about opportunities. We're just now beginning to get into in the areas like maritime and global Wi-Fi access that have exciting potential growth – to deliver the growth that our ground breaking technology can enable. And that's why we're investing at the rate we are. And we'll look forward to sharing more as those elements mature. So, that's it for our prepared remarks and we'll be happy to take questions.

Thank you. And our first question comes from the line of Rich Valera from Needham & Company. Your line is now open. Richard Valera - Needham & Co. LLC: Thank you. I appreciate the color on the pre-and post ViaSat-2 with the different businesses, Mark. Just wondering if you thought that migration might become a factor again post launch of ViaSat-2 as they were when you initially launched ViaSat-1? Mark D. Dankberg - Chairman & Chief Executive Officer: Yes, we do. We listed that as one of the factors. I think that it's going to be much less of a factor than it was with ViaSat-1. For the main reason that the difference in the satellite productivity is narrower than it was between WildBlue-1 and in ViaSat-1. So they were looking at like a 10x, 20x increase in productivity and this is more or like double or maybe a little better than that. So there will be some but we think it ought to be more manageable based on the way we defined the services. Richard Valera - Needham & Co. LLC: Okay. Is there any way we could think about that? I think you peaked at like 60K a year in the first year of that transition, so sort of a significant factor less than that is how we should think about it when we think about the first year...? Mark D. Dankberg - Chairman & Chief Executive Officer: I think the way I'd think about it is one of the ways and we talked about this a couple of quarters ago is think about it as we improve the productivity, we can use some of that bandwidth gain to improve the surface as one of the big factor and then another part to improve our margins. So think of it as if we gave it all to our customers we'd have half the customers per unit bandwidth. If we kept it off ourselves we would have double the customers in total per satellite and we'll be in between. So what it really will mean is that the yield on ViaStat-1 will go down a little bit, but will grow subscribers on ViaStat-2 at a faster rate. And because a lot of the terminals are, I think, the terminals are capable of – a lot of the terminals are capable of the services that we offer, ViaStat-2 we won't have the SAT costs associated with the migrations that we did before. So that's a big benefit for us. So when we model migrations, think of it's a little more sort of normalizing productivity than it is stack expenses as it was last time. There will still be stack expenses associated with it but those will be moderated. Richard Valera - Needham & Co. LLC: Got it. Mark D. Dankberg - Chairman & Chief Executive Officer: Does that make sense? Richard Valera - Needham & Co. LLC: Yeah, that does. Just wanted to get your sense on how your message is resonating in the market. You presented a pretty compelling picture there of the relative bandwidth/cost benefit that you have versus pretty much anything else out there in the market and it seems like even in terms of the worst-case ViaStat-1 you are at least 10x better than pretty much anything else out there and then you can close up to kind of 100x. So when you present this to your prospective in-flight connectivity customers, how is this resonating or are they sort of getting it? And what would be the pushback they would have? I mean, it seems if they're looking at that it would be kind of a no-brainer to go with the guys, to go with the guy with sort 100x sort of bandwidth cost advantage, but what are some of the things you are sort of hearing and how is that resonating in the marketplace? Mark D. Dankberg - Chairman & Chief Executive Officer: So one thing – I mean, one thing that anybody can observe is just look at the language that is now around, what's going on in the airplanes, right? I mean, people are always talking about oh, we need 100 megabits per second per airplane, right or 200 megabits per second per airplane. So people are, one is, you are seeing an acknowledgment that the demand for bandwidth is going to be a lot higher than it was. So that's a good thing. I think another thing that you're seeing is more people talking about the things that drive bandwidth consumption, which is video streaming as an example, right, that you can see (38:22) we can do video streaming, or you don't need video streaming look at our IFE, who needs Netflix. I think one is that you're seeing more and more conversations around this. Another thing that I think is actually indicative of what's going on in the market is that more and more satellite operators or resellers are talking about capacity in satellite and gigabits. One of the things that we try to emphasize in our productivity chart is that you're going to see, look, when people know that gigabits are important, now I think they're kind of inflating the gigabits rankings of satellites compared to what they were talking about originally. One of the really good ways for people to reconcile that is to look at illuminated gigahertz of spectrum and then to think about you're not going to get 10 bits second per hertz or 4 bits per second per hertz on to an airplane with a small amount of illuminated gigahertz. So what's happening is I think that the playing field is toping to the point that we have made. I think that the competitors are trying to frame their offers more in the ways that we've framed ours. I think that I'd say industry consultants and customers are still wrestling with all the technical details that go into making that chart and people are, I think, still a little bit confused about it. But I would say, when we talk to airlines, they are more and more interested and concerned with how can their providers ensure that they will deliver the amounts of bandwidth that they say they well, much more focused around that. And that's why, I think you're seeing people put out one airplane or two airplanes and say, look, hey, we can stream Netflix or we can get 100 megabits. But I think the real issue is what happens when you have hundreds or thousand airplanes in a small number of beams. I think people are still little bit confused about that and so that's our current campaign. The flipside of that is especially when we've gotten some of the customers that we have, there are number of airlines – especially the long-haul international ones that are just saying we just want the best one and right now, I think, there's a lot more acknowledgment that that's us. And so that's one of the reasons that we've been so busy in the STC space and then working with air framers on the wide-body offer line fit and factory retrofits. Richard Valera - Needham & Co. LLC: Got it. Mark D. Dankberg - Chairman & Chief Executive Officer: I mean you are covering this space too. So I think you can weigh yourself on (41:27)... Richard Valera - Needham & Co. LLC: Fair enough. I appreciate that color. That was helpful, Mark. Thank you. Mark D. Dankberg - Chairman & Chief Executive Officer: Thanks, Rich.

And our next question comes from line of Andrew DeGasperi from Macquarie. Your line is now open. Andrew DeGasperi - Macquarie Capital (USA), Inc.: Thanks. Macquarie. First question, can you maybe clarify for us, what the FCC Spectrum Frontiers order impact is to ViaSat-2 or ViaSat-3 potentially in the 28 gigahertz band? Mark D. Dankberg - Chairman & Chief Executive Officer: Yeah. We obviously follow that. We paid a lot of attention to that. We have been probably the leading proponent of spectrum sharing in the satellite industry. I think that put us in kind of a leadership position and – in the discussions around that. And also, we've been probably ahead of the curve in taking advantage of spectrum sharing in that 28 gigahertz band. So at the end, I think that the statements that the FCC made around what their intentions were are good for 5G and for the satellite industry. They acknowledged the issues around grandfathering the teleport gateways for existing satellite systems, including for ViaSat-1 and ViaSat-2, and there are provisions for many thousands of new gateways throughout the U.S. for ViaSat-3 and beyond, using that 28 gigahertz spectrum band. The FCC also acknowledged that there was need for further study to deal with both the local interference levels associated with those gateways and the aggregate interference that may arise from 5G use of the 28 gigahertz band on the spacecraft itself. So I think we believe that there is a framework in place for a good outcome. There's still a lot of work to be done. Overall, we think the outcome is good and consistent with our plans. Andrew DeGasperi - Macquarie Capital (USA), Inc.: Great. And if you could just remind us what the backlog is currently on your commercial aircraft. I've seen that you keep adding planes, but where you essentially adding these from? Are they existing customers that, they are just giving you more aircraft or are there new fleets coming online? Can you maybe just comment on that? Mark D. Dankberg - Chairman & Chief Executive Officer: Yeah. We have – we are basically primarily adding aircraft from the fleets that we currently have, so that is adding aircraft for JetBlue – for instance, JetBlue completed its regional expansion. JetBlue has also talked about adding planes to its fleet. We've been adding to the United fleet, Virgin America, and EL AL, and then we have the single biggest lump of backlog is the American Airlines 737 MAX award. Andrew DeGasperi - Macquarie Capital (USA), Inc.: If we think about the rest of the year, till ViaSat-2 goes up in (44:28) American, that's when it will hit. But as far as your existing customers, how should we be thinking about net additions? Mark D. Dankberg - Chairman & Chief Executive Officer: I'd say – maybe not quite at the levels that we've been at in the last quarter, probably going down a little bit from that, based on what the current situation is. That could change, but I would say for the next couple of quarters or so, I'd think about it in those terms. Andrew DeGasperi - Macquarie Capital (USA), Inc.: Got it. And last question for me, retail business, based on dishNET numbers, it seems that your retail business more than made up for the weakness in wholesale. Can you maybe tell us what you're doing differently there? Mark D. Dankberg - Chairman & Chief Executive Officer: I don't think – I think we're doing the things that we've described over the last year or so. I think we've got – we are very happy with our retail distribution network. I think we've expanded that. I think that the plans that we're offering are good, they are more attractive. I think we're just grinding it out. I think we're getting operationally pretty good, and I think those are all good factors, pending the launch of ViaSat-2. Andrew DeGasperi - Macquarie Capital (USA), Inc.: Got it. Thank you.

And our next question comes from the line of Mike Crawford from B. Riley. Your line is now open. Mike Crawford - B. Riley & Co. LLC: Thank you. Can you give an update on the status of your JVs that you're forming with Eutelsat? Mark D. Dankberg - Chairman & Chief Executive Officer: Okay. Yeah. I think last – was it last – week before, they had their earnings conference call and that was one of the topics there, and I think our view of it is just like theirs, that we've got good top level agreement between us. There's a pretty fair amount of detail to go through to reach closure on the agreements. We don't see anything that's jumping out as threatening that, but there is work to do. I think they said, and we've kind of agreed, that probably this year is a reasonable target for completing it. Also, one thing I would like to point out, which is good in the meantime, is that we're cooperating with them on helping to think about the KA-SAT services. And one point we mentioned is that we now have our first joint European aircraft on KA-SAT, with EL AL. So that's exciting, and I think it's good progress. Mike Crawford - B. Riley & Co. LLC: Just one more question in that regard is that, Eutelsat sold its majority stake in this maritime service provider. So, does that mean that you will be able to service the maritime market with Eutelsat with one of the JVs? Mark D. Dankberg - Chairman & Chief Executive Officer: So the mobility services is definitely one of the targets in the JV. So that would be through KA-SAT and through the next-generation satellite. And I think we're a really good mobility partner. I think we would have to talk – you would have to ask Eutelsat what their overall plans are in serving that market, but I don't think that's – I'm not sure I'd read too much into that one particular issue. Mike Crawford - B. Riley & Co. LLC: Okay. And if I could just turn back to this productivity issue, Mark, one thing you stated in this call, I believe you said ViaSat-2 will more than triple effective network capacity for, I guess, airborne mobility? Mark D. Dankberg - Chairman & Chief Executive Officer: Yeah. If you think of ViaSat-1 having unit capacity of one and ViaSat-2 has double that capacity then, between the two of them, that makes three and that's – that triple the total capacity. Mike Crawford - B. Riley & Co. LLC: I thought you were referencing the more flexible beam architecture? Mark D. Dankberg - Chairman & Chief Executive Officer: No, I don't want to be ambiguous about that. Basically, what we've talked about is double the throughput. So that means we've got a lot more illuminated gigahertz on ViaStat-2 then on ViaStat-1. We've gone through this in the past. The infrastructure cost is like 20% to 25% higher so the total throughput must be more than double in order to get double the bandwidth economics and we have not counted flexibility as part of that. It is just raw bandwidth. Now we think that flexibility and portability is going to increase the yield on the satellite but we haven't factored that into that number. Richard A. Baldridge - President & Chief Operating Officer: The other thing is, this is Rick, with the increased coverage, I think they will have more time of the aircraft that are flying more time within the coverage area and so that's going to be a factor as well. Mark D. Dankberg - Chairman & Chief Executive Officer: . I think one of the things I said also is we think there's upside to our current numbers so we will report on that as some of the elements of that fall into place. But right now we're sort of, we think we are sort of doing well compared to what our original target was because the capacity numbers are holding and the capital costs are at the low end of the range. Mike Crawford - B. Riley & Co. LLC: Thank you. And then just to try to be absolutely clear on this. So with the Ku-Band satellite that one (50:36) has a wide beam and maybe only five beams over North America so what, in theory, could you do with things like antennas and modems and compression software to improve the volume of bits that you can deliver to one aircraft and then to hundreds of aircrafts like to use your example, up and down the East Coast? Mark D. Dankberg - Chairman & Chief Executive Officer: What you look at is illuminated, you look at illuminated gigahertz and there was a time, maybe they are not advertising it so much, but there is a time when you can look on the web and you can find the illuminated gigahertz for each of the satellites and then you divide that among the beams and it's not necessarily uniformly allocated among the beams, but it gives you a sense of order magnitude of the amount of gigahertz that you have to work with in each of these beams and then from there what you do is you just turn that into how many bits per second per hertz you can get and that's a function of the link budget. The antenna on an airplane is a factor, but it's basically it's a two-way link budget, so you have to look at, you can improve with the bigger antenna, you can improve the downlink portion of the link budget a little bit, but that's not the total link budget. You have to put that in context of the total link budget, and it's 20%, 30% increase in capacity relative to a smaller antenna. So you can make bigger and bigger antennas and you can get a little bit more gain and a little bit more throughput, but you're not going to go from 1.5 bits per second or 2 bits per second to 4 bits per second, you might go from 1.5 bits per second or 2 bits per second or 1.8 bits per second or 2.4 bits per second or something along those range. That's what you get. The rest of the stuff, things like compression, those are pretty much available to those people we think we have really good compression technology. A big part of that has to do with the way content is distributed by media companies. So there is domestic compression that are driven by end to end encryption that are available to any ISP. So our point is there's not a lot of maneuvering room, and it is sort of like we say which is like bandwidth productivity is kind of the destiny of these systems. Mike Crawford - B. Riley & Co. LLC: Okay. Thank you. And then just switching to Commercial Networks, you are talking about some opportunities to grow even though the types of gateways and architectures you are building and designing for yourself are different from what others seem to be considering unless that's changing. So is this more of a modem type opportunity with nbn and potentially others or what is it specifically that you are targeting for potential growth in Commercial Networks given the way that your business has shifted? Mark D. Dankberg - Chairman & Chief Executive Officer: Yes. One of the decision that we had to make was whether we wanted to build network infrastructure for sort of garden-variety "High Throughput Satellites" or whether we wanted to invest in those things that would drive productivity. And what we've chosen to do is to invest in things that would drive productivity. I think if we were only in the business of building and selling products that would be a tough decision, but when we are in the business of selling services and we have these enormous productivity gains that justifies the R&D investments that makes it an easy choice. So what we're doing is we're really building ground infrastructure for satellite networks that are using our unique technologies and we haven't seen any other operators really go for those. So nbn was a good opportunity for us because they used basically ViaSat-1 technology. I mean, what they want to is the ViaSat-1 in their market and KSAT was the same way. So those are good fits for us, but we're not investing in that type of infrastructure anymore. So we don't really model selling infrastructure going forward as a standalone product. What we are seeing, though, more and more are outside of satellite operators saying well, I think about this productivity issue. We would like to be on your side. And so, we are seeing more opportunities for things where in specific regions operators would partner with us building on our network infrastructure Eutelsat and KSAT, I mean, that's a really good example of that. So some of that might lead to network and infrastructure sales like, for instance, what we did with XCI on ViaSat-2. We have other opportunities for infrastructure product sales, but they are more based on our own sub satellites and on partnerships. Mike Crawford - B. Riley & Co. LLC: Okay. And thank you. And then final question relates to Government Systems where you have STT in this BATS terminal that represents potentially quite large program that as you mentioned came in not through normal program or record. Are there other opportunities like that like, say, what that Information Assurance products that you're targeting right now? Mark D. Dankberg - Chairman & Chief Executive Officer: Yes. Definitely. More and more we're seeing sort of a disconnect between the procurement system and what users want. And so that's what we're aiming for, especially things that are adjacent to or variances stuff we already do. So a great example of that is the STT terminal, which started out as basically as a R&D program with us with some customer support but then turned into the program of record for Apache helicopters and the others, quite a big market for helicopters both domestically and internationally and other small form factors for that. Our handheld really good sign. Recently, it was given radio designators by DoD which is indicative of its desire to turn that into essentially a new program of record for that type of application and we see more of those not only in the Tactical Data Links and security space but also in the satellite space. So that – I think that's a big part of why our revenues are still growing and we're sort of diverging from some of the other big defense aerospace command and control communications companies. Mike Crawford - B. Riley & Co. LLC: Okay. Thank you.

And our next question comes from the line of ... Mark D. Dankberg - Chairman & Chief Executive Officer: Okay, one more.

And our next question comes from the line of Andrew Spinola from Wells Fargo. Your line is now open. Andrew C. Spinola - Wells Fargo Securities LLC: Thanks. Mark. I wanted to ask you about, on slide 10, and I'm looking at the coverage maps of ViaSat-1 versus your competitors. The one thing that's clear to me is that you've obviously concentrated your capacity with ViaSat-1 over the United States while your competitors have opted for a lot more coverage. And I'm wondering, as you opt for a lot more coverage with ViaSat-2 and ViaSat-3 why won't you suffer the same or similar productivity declines that your competitors have with the existing satellites or will you? Mark D. Dankberg - Chairman & Chief Executive Officer: Yep, so that's a really good question. So there is really two factors. One is the total illuminated gigahertz that we will have with our satellite is much, much larger than the total illuminated gigahertz for those other ones. So if you look, if you go through and do some research you will see that the total illuminated gigahertz with those three others ranges from 5 gigahertz or 6 gigahertz to maybe 10 gigahertz or 12 gigahertz. ViaSat-1 was 100 and ViaSat-2 is quite a bit more than that and ViaSat-3 is a way more than that. So one is the illuminated gigahertz and that's really the factor that we have focused on and by illuminated gigahertz what I mean is take the bandwidth per beam, multiply that by the number of beams and you will get a total – it called total illuminated gigahertz. So number one is that's a really important metric of total productivity over the entire footprint. But the other really big factor is the one that Mike Crawford was sort of bringing up, which is this flexibility. And so, one thing that would be nice with the satellite and this is what we do with ViaSat-2 is you could say, hey, well the U.S. market, in fact, Wi-Fi is way bigger than all the rest of those coverage areas, how that if we move all of those illuminated gigahertz into the U.S. market. That would be really good if that's where the demand is and none of those other satellites have the ability to do that. That's a really important thing that we are doing on ViaSat-2 where we have a very big footprint. We cover Latin America down to South America, we cover the Atlantic Ocean, we cover the Caribbean, but if we wanted to we could bring all that bandwidth back into the U.S. So that doesn't increase the illuminated gigahertz, but it makes it a lot more useful when different market develop at different rates. So we think those are the two really big advantages that we have. Andrew C. Spinola - Wells Fargo Securities LLC: Got it. And I just wanted to ask one quick follow-up. You mentioned the maritime market is something that might be interesting to you longer-term and it's kind of a unique market given the predominance of L-Band and the strength of one competitor. And I'm just wondering, it seems like that ViaSat sort of likes to target areas that can be disruptive and have markets that have characteristics that would lend themselves towards being disrupted. And just wondering if you have a similar thought process about the maritime market and if that's one of the reasons why you think that's an opportunity. Mark D. Dankberg - Chairman & Chief Executive Officer: Yep, exactly. So the thing that's really interesting about the maritime market now is lots and lots of ships, tens of thousands of ships in total, but not very much bandwidth is used. All right. So the bandwidth per ship is not that high. And essentially what a lot of those ships are paying for is the ability to be connected if they need to be, but they're not really using a lot of bandwidth because there's not a lot of bandwidth to be had. At the other extreme of the market, there is a small number of ships with very, very large bandwidth demands, and for those, it doesn't mean that they'd have to cancel their L-Band subscription, they could still use that for safety and emergency communications but they have very high bandwidth needs, because they have a lot of passengers or they have a big crew or they have an exploration mission that requires collection of enormous amounts of data. So those are the ends of the market that we're going after, a small number of ships with very large bandwidth requirements because that's where we think most of the money is and that's what we're going to target. Andrew C. Spinola - Wells Fargo Securities LLC: Got it. Thank you. Mark D. Dankberg - Chairman & Chief Executive Officer: Okay. So I think that cover – my voice is gone – that covers a lot of the questions. So I think that will be it for this afternoon. Thanks a lot, everybody, for joining our call. Look forward to talking to you next quarter.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a wonderful day.