Mark Dankberg - Chairman and CEO Rick Baldridge - President and COO Shawn Duffy - Chief Accounting Officer Keven Lippert - General Counsel

Matthew Robison - Wunderlich Securities Rich Valera - Needham & Company Andrew Spinola - Wells Fargo

Welcome to ViaSat Fiscal Year 2014 Fourth Quarter Earnings Conference Call. Your host for today's call is Mark Dankberg, Chairman and CEO. You may proceed, Mr. Dankberg.

Okay, thanks. Good afternoon, everybody, and welcome to the ViaSat earnings conference call for our fourth quarter fiscal year 2014. So I'm Mark Dankberg, Chairman and CEO, and I've got with me Rick Baldridge; our President and Chief Operating Officer; Bruce Dirks, our Vice President and Chief Financial Officer; Shawn Duffy, our Chief Accounting Officer; and Keven Lippert, our General Counsel. And before I start, Keven will provide our Safe Harbor disclosure.

Thanks, Mark. As you know, this discussion will contain forward-looking statements. This is simply 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 of Form 10-K and Form 10-Q. Copies are available from the SEC or from the website.

Okay, thanks, Keven. So as usual we will be referring to slides that are available over the web, and I'll start with some highlights on top of our business overview. And then, Shawn will discuss our consolidated -- financial results and then I'll give a little more color on our consumer business and some strategic talk on market opportunities and [some other] outlook, and then we'll take questions. We have plenty of time for questions. So overall our fourth quarter and full fiscal 2014 results are really strong. A double digit gains in revenues and adjusted EBITDA for both the quarter and the fiscal year as a whole. Adjusted EBITDA was up pretty impressive 41% for the quarter and 35% for the year as a whole. As we mentioned in the press release, our legal expenses for fiscal ‘14 and carrying through the first SSL lawsuit through trial were about $25 million. We also increased our R&D spending by about $25 million compared to fiscal ‘13. So, in that light, we are really happy with the profitability of our business. I will discuss the thinking behind our spending in some more depth a little later in the call. Awards for the fourth quarter were at [$454 million], and for the year awards totaled $1.4 billion. The awards for the year as a whole are up somewhat over last year, and it is a positive book to bill even with 20% revenue growth year-over-year. In general, we are seeing more large opportunities and expect to see continued lumpiness in new awards. Our Exede service offerings are still leading our growth. We installed a total of about 75,000 plus terminals adding about [21,000] net subscribers in the quarter ending with about 641,000 in total. We are continuing to improve unit economics and profitability for Exede in terms of subscriber acquisition costs, churn, and revenue per subscriber. In the near term, that's all contributing to reducing our gross add rate, and we'll talk later about growth strategy in that respect. We are really happy with progress on the Exede in-flight WiFi service. We're now up to 100 aircraft in service between JetBlue and United. Feedback on the service has been very, very good. We're delivering speeds of 12 megabytes per second per passenger, well over 90% of the time. Passenger usage is much higher than for any other in-flight WiFi service. There are a number of passengers with well over a 100 active devices on a single airplane. That's pretty remarkable since there has been very little marketing and promotion around the service, since it is still on only a relatively small percentage of each of the carrier’s fleets. We're working with the airlines on the strategies to leverage the higher levels of passenger engagement that we're all seeing. We’re also working on a number of opportunities for additional airlines as a result of the performance we've demonstrated so far. We're very excited about our relationship with EL AL also in terms of reaching the European market and the opportunities to introduce even more new and innovative service variants. We got about 7% year-over-year revenue growth in our government business. We are seeing some of the effects of the draw downs in the Middle East on some of our products and services, but as we are aiming, we have been able to transition many of our government aeronautical broadband capabilities beyond applications in Iraq and Afghanistan into a broader global applicability for more sort of regular forces. That's opening up opportunities that are much larger than we’ve had to-date. There will be lumpiness involved in the transition, but so far we see it as quite positive. We're also seeing significant growth in both our tactical data links business and in information security. Tactical data links in particular is going through a growth spurt in funded development that will translate into production growth in three or four years. Our information security efforts on mobility are gaining momentum for both government and enterprise applications, with our new relationship with Samsung creating some exciting opportunities. Critical infrastructure security is beginning a transition from development to deployments too. Our largest individual opportunity is centered around high capacity satellite networks. We're making very good progress on deploying the NBN infrastructure in Australia, and that's our single largest and most complex contract ever. We recently also announced a new agreement with Xplornet in Canada valued at over $225 million for integrated space and ground networking on ViaSat-2. The underwriting team unifying all of our growth markets is constantly increasing demand from more and more bandwidth with lower unit costs. We believe that’s where we can be the best in the world for satellite and make continued relative progress compared to terrestrial wireless. We're making very good progress on ViaSat-2 with Boeing. ViaSat-2, the state of the art capacity, coverage, unit economics, and flexibility. We're seeing more international opportunities with partners that want to apply that capability. We believe ViaSat-1 has shown the value of the technology in multiple domains, so we're investing a lot into pushing the state of the art even beyond ViaSat-2. Our first Ka-band payloads are going into production on third party commercial satellites, and we are also building and testing prototypes of our own next generation Ka-band payloads. Fundamentally, we feel like we are inventing the future of broadband satellite, that’s why we have been so committed to defending our intellectual property even through litigation if we have to. Our suite with SSL turned out very well. It was expensive and we recognized the risks associated with jury trials on advanced technologies, but it was absolutely the right thing to do. The trial was held in federal district court in front of a judge with significant experience in patent and intellectual property litigation, and trial lasted almost three weeks with an additional eight days of jury deliberation. The jury was very attentive and thorough and worked its way to a detailed 13 page verdict form. Our $283 million award was allocated among lost profits and reasonable royalties for all of the three patents found valid and infringed as well as for breach of the build contract and our non-disclosure agreement with SSL. While we recognize there is still risk, we believe the verdict is a very strong and clear indicator of the value of our intellectual property, and we’ll continue our vigorous defense through final resolution. Keep in mind that suite was centered on the Jupiter I clone of ViaSat-1. It only had three of our earliest patents at issue. We have many, many more patents on these core broadband technologies, but six of those that issued as a second case we filed against SSL. We think about IP protection as a necessary aspect of our objective of innovating and building our business through the technology centric strategy. So that’s it for the upfront overview, and now I would turn it over to Shawn for an overview of the financials.

Thanks Mark. As Mark mentioned our fiscal 2014 performance was very strong, revenues increased 21% to $1.4 billion with each of our business segments contributing to this growth. Our fourth quarter revenue of $344 million was also up, increasing 11% year-over-year primarily within our Satellite Services and Commercial Networks segments. The year-over-year growth in adjusted EBITDA was equally impressive, reflecting the significant operating leverage we have achieved as our Satellite Service offerings widen and scale across fixed and mobile markets. Fiscal 2014 adjusted EBITDA was $221 million, which reflects the strong increase from last year of over 35%. For the fourth quarter, adjusted EBITDA was up 31% year-over-year setting a new quarterly record of $57 million for the period. Turning to the income statement and looking at the sources of the revenue, we saw both our product and service revenues grow. The chart on the page shows the year-over-year growth for the fourth quarter, but on an annual basis, the growth was more pronounced with product and service revenues increasing 18% and 24% respectively from fiscal 2013. This year’s product revenue growth was concentrated in our consumer and mobile broadband products and antenna system products within our commercial segment and information assurance and tactical data link market within our government segment. The main driver of this service revenue increase was our residential broadband services. Fueled particularly through our retail channel successors. As we turn to the rest of the P&L, our cost of revenues as a percent of revenues was down for the year representing a gross margin improvement of 2.4 percentage points. SG&A as a percent of revenues was down slightly in spite of the significant labor cost we incurred defending our intellectual property. Q4 was an important period for us with nearly $9 million in litigation expenses as we entered the pivotal point of pivotal point of trial activities in late March. That drove our total fiscal 2014 spend in this area to nearly $25 million. So, year-over-year, it is clear to see that this represents the majority of the SG&A increase. Our R&D spending also increased consistent with our previous guidance. So taking all of this into account, income from operations for the year improved $24 million reflecting a much more significant underlying operations improvement. Below the line, our net interest expense was down with year-over-year lowered interest rate and higher amount of capitalized interest associated with the ViaSat-2 bills. Looking into taxes. Our fiscal 2014 taxes reflected benefit reductions as our income generation trends gained momentum significantly reducing pretax losses along with the effect of reduced federal R&D tax credits upon the expiration of that legislation in December 2013. So, overall we substantially improved our earnings performance driving our fiscal 2014 pro forma net income to over $20 million and non-GAAP earnings per share to $0.44, which reflects a fourfold increase from last year. Turning to our balance sheet and fiscal 2014 cash activities. Our cash flow from operations for the year was $205 million reflecting year-over-year growth of over a $100 million. Substantially higher adjusted EBITDA and vigilant working capital management were the main contributors to this increase. Capital expenditures grew in line with our expectations as ViaSat-2 construction activities continued. During fiscal 2014, we made ViaSat-2 related payments about $119 million, which represents both of the year-over-year capital expenditure escalation. Our fourth quarter reflected another period of reduced capitals spend for subscriber acquisition investment, comprised of CPE and installation costs. We expect to see these trends continue as redeployment of our CPE equipment continues along with benefits derived from improving cost profile. So we ended the year with 58 million in cash and a 105 million drawn on our $500 million credit facility. Thus we closed out fiscal 2014 with significant headroom and credit flexibility as we look to other investment opportunities that enable future growth and our key strategic market areas. Before I hand it back to Mark, I wanted to provide some insight into our segment performance. As we noted, overall revenues were up 11% and 21% for the quarter and the fiscal year respectively. Adjusted EBITDA for the quarter was up 41% and for the year we were up 35%, with our satellite service segment clearly dominating the performance trend. Our satellite services fourth quarter revenues were up 35% year-over-year and for the full fiscal year increased 41%. In addition, adjusted EBITDA margins have been improving dramatically almost doubling in fiscal 2014 to 22% compared to 12% in last year. In the fourth quarter, our segment adjusted EBITDA exceeded 25 million, representing a 24% margin and 100 million plus annualized run rate. It's important to note that both the quarter and year reflect significant uptake in Loral litigation related to legal expenses which we do capture in this segment. In FY14, we spent about 25 million on these efforts. So taking that into account, compounding strength of our satellite service performance is pretty clear. We also had a very strong year in our commercial network segment with fourth quarter revenues up 15% and full year revenues up over 25%, reaching a record of 396 million. Growth was spread across our product areas including consumer broadband products and infrastructure, in-flight mobile broadband systems, ground antenna systems and our satellite payload technology development programs. Our fourth quarter commercial networks adjusted EBITDA was down slightly year-over-year. However, our fiscal year 2014 results reflected a 75% increase from 2013, coming in at 24 million. This increase was the result of the higher revenues and improved gross margins offset by our R&D investments and next generation high capacity Ka-band technologies which were very instrumental in securing the next generation Ka-system contract from Xplornet in Canada for an initial award of 228 million. Overall our NBN Co. satellite network project is at the peak of period program performance and we’re delivering strong execution as the largest infrastructure project in Australia’s history progresses forward. As I noted, in-flight broadband was another driving force to fiscal 2014. Today, we are about a quarter of the way through JetBlue and United terminal deployment and we hope to approach 400 installed aircrafts by the end of this calendar year. Finally, looking to our government systems segment, performance has been strong the last [few years]. Revenues for the year were up 7% with strong product sales growth, especially in our information assurance and tactical data link products offsetting modest service revenue declines. Adjusted EBITDA was down slightly for the year and up for the quarter by approximately 2 million, primarily due to improved product margins from the prior periods. Overall, our government segment’s performance is pretty attractive, particularly as we look outward to the performance of other top defense contractors in this increasingly challenged defense spending market. So with that I will turn it back over to Mark.

Okay, thanks Shawn. So at this point I will go into a little more depth on our growth strategy for Exede consumer services business. As I mentioned at the beginning of the call, we are really pleased with financial performance to-date on consumer broadband which is more clear in light of our legal expenses. We have been placing more emphasis on our own retail channels which are enabling steady improvements and ARPU in fact. We believe we are doing well in the retail market. As we’ve discussed in the past, churn has been higher than we want and we have been targeting that through a detailed analysis of all sources of both voluntary and involuntary churn. And we continue to make steady progress over the last couple of quarters, so I [want to] go. Given that we are well over half full in total on ViaSat-1 and much more so on highest demand beams, we’re being careful and selective in the way we are seeking new subscribers. So we are now comfortable with adding less than 90,000 to 100,000 quarterly installers that we were over a year ago because the subscribers we’re obtaining are more profitable and we they got a better experience with us. As long as we continue to lever that productivity into improving unit economics, we believe that’s a good trade off. Seasonally the first half of the calendar year is slower for us than the second half. And we are not trying to fight that seasonality by growing money at unprofitable marketing tactics; we’re aiming to invest in more enduring competitive advantages. Given our planned allocation of capacity to in-flight Wi-Fi and other applications, we are still aiming to roughly pull that side around the end of next year which would be four years from service launch. Overall we are seeing DISH net-adds [SKU] very strongly to use and that makes sense to us, in light of the ownership of that business. Longer term, we believe that the investments we are making in technology and customer experience creates a lot of opportunity for our home retail channels as well as with both DISH and DIRECTV. Our Exede 12 service has accomplished pretty much what we intended it to do. Now we think we can make a substantial improvement in several dimensions and the service. We can offer higher speeds, get much more bandwidth per user and get even faster response in this. Many of those attributes will come with ViaSat-2, but we're beginning to test some of them well before that. Of course, we are very aware of the benefits of powerful brand names and bundled distribution but also know that broadband is a very, very important service for many homes and that there is a great demand for great broadband technology. So, we are going to continue to strike the balance where we can still rapidly grow our earnings on ViaSat-1 as we have been and also focus our spending on achieving enduring competitive advantages compared to alternative technologies such as wireless and in learning all we can about go-to-market strategies, while we're still building ViaSat-1. The big picture, there has been a lot happening in our world in the last few months. So this was a good opportunity to reflect on all that. First of all, and it’s multiple times already. We think our core competency is technology and that’s the focus of our competitive strategy. We're focusing that technology in what we think a very sound fundamental economics that is driving down the capital and operating costs and delivering large amounts of bandwidth to number of challenging, but potentially very rewarding markets. We believe we're on our way to being the best in the world of broadband satellite. We're very highly integrated, vertically in the technologies needed to deliver the greatest amounts of bandwidth at the lowest costs and we're making more strides in that area on ViaSat-2 and beyond. One of the things that we're most excited about is the progress we're making in reducing our cost of bandwidth relative to terrestrial wireless. The pay out for that ought to be faster speeds, more bandwidth per user and ultimately greater customer utility and satisfaction. We think we're seeing that very clearly in the inside Wi-Fi market in some of our enterprise applications and in market tests and consumer services. In short, we think we're beginning to demonstrate that satellite can be much more than a last resort technology that doesn't compete with terrestrial alternative. And the satellite technology we're creating will be even more competitive. How these markets are big and so they're attracting more and more competition from start-ups from much bigger Telecom companies and even from Internet companies. And industry consolidation it is also competitive factor. We focus on the implication of developments activity but we like our position, we're finding receptive partners in multiple markets that understand what we're trying to do and we think they understand the power of these disruptive technologies. It takes time to disrupt the market, we have to build the technology and we have to show what the impact is in the market and then we can scale it and we feel like we're doing this just that. Even with more potential competition, we're not seeing fundamentally new technology enter these markets that challenges the economic benefits of what we're doing in the markets that we're targeting. And we're seeing more and bigger growth opportunities so we're more excited than ever about our growth [potential]. So [at that slide] it’s our fiscal year '14 revenue and EBITDA growth into some historical context. We are really happy with our growth track record. That growth overtime has been different by different combinations of commercial technology and service offerings and it's also been able to enter and compete successfully in successively larger markets and opportunities. The lumpiness associated with that growth makes it pretty hard to forecast timing and short-term rates of, but the long-term trend has been really good. We think that our growth outlook is stronger and broader now than ever is a very good foundation of technology, customers and market opportunities to build upon. Now to the offerings in-flight Wi-Fi government airborne applications, mobile security and infrastructure security are maturing and growing. We still anticipate very good growth in satellite services. And we are also focused on building value to our technology and intellectual property. ViaSat-1 has had significant impact on the satellite industry. As a favorable verdict from the SS/L litigation is an important validation of our role in inventing the technology behind it and value it created. We are really excited about the technology that’s coming next. We intend to continue to invest in creating independent technology and increasing the role of satellite broadband in government and commercial markets and we think that’s what’s creating value for our shareholders. So that’s the end of our prepared remarks and at this point we’d be happy to take questions.

(Operator Instructions). The first comes from Matthew Robison from Wunderlich Securities. Matthew Robison - Wunderlich Securities: Hey thanks for taking my question. First one on the bookings, was Xplornet in the bookings, and if so what was the split between satellite and commercial?

Yes, on the bookings, I think what we actually booked was about $230 million for the quarter and we are not breaking the split out between those. Matthew Robison - Wunderlich Securities: Okay thanks for that. Rick what CapEx in the quarter?

Shawn?

For Q4 or are you looking for year-to-date? Matthew Robison - Wunderlich Securities: I can work with either one.

Okay, Q4 was about $74 million in total. Matthew Robison - Wunderlich Securities: Okay. And of those installations, what were -- how many were migrations?

On our gross adds, we didn’t break that up. It’s becoming a small one, becoming a much smaller number, so we are… Matthew Robison - Wunderlich Securities: Yes. I know you didn’t break it out, so I am asking, I am just curious, did it go down from third quarter?

Yes. It has gone down sequentially. Matthew Robison - Wunderlich Securities: Okay. What was the satellite services revenue other than residential?

We are not breaking that out, but it is small. Matthew Robison - Wunderlich Securities: It’s been single digit, the high-single digit million . Is it still about like that?

Yes. Matthew Robison - Wunderlich Securities: And then can you comment on the split of traffic by time of day, what percentage you are getting in those hours where your [rate] caps were less meaningful?

No, I mean. I would say people do take advantage of the late night uncapped zone, and that’s actually probably our single biggest hour, it is midnight. So other than that, I don’t think we have not a breakout of peak busy hour versus off peak usage.

It’s been pretty consist with our model. Matthew Robison - Wunderlich Securities: The magnitude of the non-residential, was it small enough to imply that your ARPU went up sequentially?

Yes, it did, and we said that. Matthew Robison - Wunderlich Securities: Okay.

ARPU is still growing.

Yes. ARPU is still growing. Meanwhile, the non-residential will start growing, it is going to trail the deployment of the Wi-Fi terminals, and we started the quarter with like a dozen when we finished with closer to a 100, we are at 100 now. So it will start growing over the next few quarters. Matthew Robison - Wunderlich Securities: And that Xplornet bookings, some of it did go into commercial networks because some of it was for ground stations and customer premise equipment , is that the right way to look at it?

Yes. Ground segment, there is some service staff in there, that is when I say service, it’s maintenance and support, and there is bandwidth, there’s really been no CPE yet. Matthew Robison - Wunderlich Securities: Okay. Thanks a lot.

The next question comes from Rich Valera from Needham & Company. Rich Valera - Needham & Company: Thank you. Mark, wondering if you’d be willing to give any other color on your thoughts on both gross adds and churn as we move into the second kind of the calendar year. You seem to suggest that there would sort of be a natural seasonality for maybe higher gross adds in the back half of the year, I wonder if you cold elaborate on that. And then with the churn, it has been sort of inching downwards, so where do you think the natural level of churn is, if you are willing to sort of hazard a guess a guess at that and should we expect that to keep trending down as we move through this year? Thanks.

Okay. Yes, so in terms of the seasonality, a lot of that has to do with school year, family moving patterns, household formation and for us, there is kind of a the slowest parts are in the spring, sort of startling the end of the March quarter and into the June quarter, into most the June quarter. And then in the summer, things pick up and definitely in the holiday season things pick up for us. So, from our perspective, when we look at cost effectiveness of marketing and promotion, those we get waived or bank for -- in those time periods until we'll be spending more of our marketing and promotion dollars, where we sort of -- that's going behind us instead of fighting it. So, that's sort of what we expect. And the other thing is, the only other thing we sort of commented on in terms of the gross adds is the things that we're doing on churn what really looking to do is to parse all the points of churn due to all the ways that we interact with our customers. And that requires us being able to do some controlled experiments. And that is having some, as I mentioned, some depressing impact on the rate which were acquired doing gross adds because we're filtering enquiries and we’re filtering sales. As a result, the count of that is that we are getting pretty steady improvements in both involuntary and voluntary churn. And what we're expecting to do is incorporate the things that we’re learning there as we scale up our promotions and look at we should get both add rates and a reduction in churn. To kind of go and put churn thing is, first thing we're doing is we think we'd like to get more into like 2.5% a month churn rate and we're not there yet. And then once we get there then we're going to end below that but right now that’s sort of a good target for us given where things stand. Mark, maybe you’ve mentioned what we think the ultimate effects, what we think driving churn and the ultimate effects of -- and that's where we're spending some money on R&D, trying to make service better, which we think will have impact, maybe you could?

Yes. There is some of progress single, and we talked about this before. Progress single, most impactful thing that we can do to improve customer satisfaction and reduce churn and we’ve done trials on this, and gotten measurements is by substantially lifting or eliminating the volume usage caps and being able to do that with good unit economics. So, we're doing -- so we've been investing in that. We think that will be probably the most impactful thing on the product side. But the other thing that we're doing which are also impactful and may sound more (inaudible) in terms of how we are doing our credit screening, how we are doing our demographic screening, labor on-boarding, subscribers the way that we’re providing customer support to those subscribers once they are onboard all those things are having measurable impacts and a lot of them have to be parsed out separately. Rich Valera - Needham & Company: Great that’s helpful. Last question about the second case which you alluded to in your prepared remarks, it sounds like you have got addition of three patents that were upheld in the first case, you have got several others, just wondering what your thoughts are about the ability to work around them that seems to be what SS/L suggested, they would do if need be. Anything they are willing to say about the ability to work around your patents if you are building high throughput spot being satellite?

Yes. So there were three patents at issue in the first case, there are six different patents at issue in the second case. We think those patents are stronger and broader. SS/L asserted in the first case that they had worked around them good work around them and the that jury found otherwise. We think it’s going to be difficult for them to work around them with satellites that use those design techniques which are highly derived from ViaSat-1. Rich Valera - Needham & Company: Great, thank you. And final one from me, just on the government, the orders I know are lumpy but they were a bit late this quarter just wondering if you are willing to talk about government broadly for fiscal ‘15 how to think about that business on a year-over-year basis either in terms of orders or revenue that would be helpful? Thanks.

Okay. So government business, there is something that we mentioned that are sort of trending down but there are others that are trending up. Those trending down are things that were sort of product or Blue Force Tracking product oriented towards Afghanistan and Iraq, there a couple of other things that are sort of in that boat as well, so kind of like terminal products, but we other things that are trending up pretty markedly especially tactical data link, the information assurance and the transition of airborne mobile broadband products into sort of regular courses. So what I think in the short term they’re going to balance out a little bit but there is also some bigger things that we are doing that have big upside that we are pretty optimistic about but we don’t know the timing. And it’s hard to speculate on that. So, you could think of a sort of flat to up depending on the timing for revenue and margins I think are -- overall the base margins are good. You’ve seen us start to invest more and Shawn talked about that in last couple of quarters especially on the government aero. So that will have some impact on the margins, but the rest sort of aggregate kind of flat to up. Rich Valera - Needham & Company: Okay, thanks. That’s helpful. Thanks Mark.

Thanks Rich.

The next question comes from Amy Yong from Macquarie Capital.

Yes, hi. This is Andrew for Amy. I had a question on AT&T post the deal announcement on Monday or Sunday about transaction with DIRECTV and AT&T, AT&T said that they’re expand their project to the IP which is expansion into rural areas of the U.S. footprint. And I also wanted to ask you to any comments on the recent announcement into the in-flight business; do you see any risk from both?

Okay, well. Look they are both important. AT&T is obviously is in terms of capabilities. On the I'll start with the in-flight one first, one is I am not quite sure what it seems to be doing, I don't know if anybody is for sure they talk about using air to ground, I think there is some, there is still some more information that need to be surfaced about, what spectrum revenues, how much spectrum, it's the things like that. I think from our perspective, if you look at what we're doing today with our in-flight WiFi services, where we feel like from a bandwidth perspective, we've got an order of magnitude in some cases, substantially more than that advantage compared to pretty much any other technology. And we think that's why we are seeing the uptick with passenger engagement rates, we are able to deliver the speeds that we are, I think it's being noticed. And I think that's going to be really hard to do with air to ground from what we -- ground to air, sorry ground to air, obviously how that plays out. Then obviously the other really big advantage that satellite has is that it works over water and (inaudible) that are brand partially over water, large area of the water. And so we like our position and we just have to see more though, we are pretty surprised to see somebody come up with higher speeds, more passenger usage, better streaming video than the thing that we've been able to demonstrate on a 100 aircraft already and we'll have hundreds more in service this year then it's going to get only better or in ViaSat-2 that was up the next year. Okay. On the rural broadband expansion, again it seems we didn’t talk very much about what that means. From the language that they use what we sort of expect is that it would be an AT&T sort of equivalent of the Verizon Home Fusion which is outdoor antenna direct to home broadband that can rides on top of the LTE network. And Verizon Home Fusion, it is a good service, I think people like it, it hasn't been marketed super aggressively by Verizon. And we're aware of that. We would expect AT&T certainly capable doing the same considerably they could be more aggressive at it. We're also kind of understand sort of what the build out region will be. AT&T has been sort of interested in shrinking its DSL and [landline] telephone network footprint. So like to see sort of what that yield in terms of net increasing footprint. But one of the things that we talked about here is we believe that terrestrial wireless is a good enviable technology in that for us to have a place in the market, we need to be materially better than that. And we think we can be and that's ultimately what will determining our market penetration and our successors doing things that are meaningfully better. And then we think we can, some of that depends on these new satellites.

Yes. And your recent M2M announcement was to -- I know what ORBCOMM, and it really dominating that market. I was wondering if you could maybe expand or comment how you plan to penetrate it. Thanks.

Yes. So M2M market, we see, we do see ORBCOMM already been there. One of the main things that we're looking at doing and you can sort of connect what we are doing with Thuraya to some extent to what we announced last quarter with LightSquared is we see that there is in the M2M market just like there is in the broadband market there is advantages to higher speeds and lower cost of bandwidth. So I think that ORBCOMM is kind of at the opposite end of the market. And really it is pretty close to the ORBCOMM in terms of speed and unit at economics. So what we are trying to do is explore the sort of the other end of that market. And the work that we did with LightSquared on their advanced ground based speed forming swapping technology gives us really, really good inside into what’s possible there. And because of all of the focus on the terrestrial use of their spectrum there really hasn’t been any deployment in the market that take advantage of the capabilities of that LightSquared satellite. So I think you will see us cooperating with Thuraya partly in the North American market, partly in international markets to develop that M2M market in a way that’s kind of like we’ve gone after the broadband market. Matthew Robison - Wunderlich Securities: Great, thank you.

Thank you.

Your next question comes from Andrew Spinola from Wells Fargo. Andrew Spinola - Wells Fargo: Thanks. Mark you had made a comment in the prepared remarks that Ka-band payloads are going on to prototypes of third party satellites. And I didn’t understand the comment and I was wondering if that was an indication that you have some movement on your joint venture with Boeing of if that this is something else?

No it’s something else, we saw two things; one is we start talking about this a couple of years ago, one of the issues that we had one of big issue that we had with SS/L and ViaSat-1 is -- ViaSat-1 was designed out of our existing cable components, it reduced the risk but it meant that basically once we have the recipe, they can apply that to other customers. With Boeing, we reached a much better and clear and overall better understanding of what to do in ViaSat-2 which also builds off the shelf component. But we said beyond ViaSat-2 generation that to get another order of magnitude, improvement in capacity and bandwidth economics was going to take custom payload components. So we have been doing two things, one is developing those Ka-band custom payload components and we had prototypes in our labs that we’re testing. So that’s one path. The other path is that, we thought that we are really strong in Ka-band and that we could get -- we could use that in the commercial market. And look about a year and half two years ago we got a contract with TELUS on Iridium NEXT, the next generation of Iridium that has Ka-band feeder links and Ka-band cross links and the satellite. So we are building those Ka-band components. And what we are getting out of that is it’s a good contracts for us and we really agreed to work with TELUS and Iridium, we’re also going through all the certification process of our Ka-band components. And so that the third-party add on. And those are going into production kind of now. Andrew Spinola - Wells Fargo: Understood and then on gross add momentum, sort of two part question, I guess the first my memory with use in years past when they were a publically traded independent company, was that Q4 and Q1 were other calendar year really the seasonally strong quarters. So I am little confused by why it's different for you guys and maybe you can explain why it's weaker in Q1 and not stronger? And then what I'm thinking about getting to 900,000 subs and I assume you mean by the end of fiscal ‘16, I understand you can improve your churn and that’s certainly going to help. In terms of gross add momentum. Do you feel like you are going to need to do anything promotionally to drive growth in subs or do you think you can really just get there by fine-tuning your distribution? Thanks.

Okay. Yes, so one is our experience just in the seasonality in a way we've gotten adds is just different than using not quite sure why historically, so our experience is little over two years of operating on Exede and plus our WildBlue history. It’s kind of interesting, because historically WildBlue had kind of a wholesale band than that's retail. Now you use because of their ownership with EchoStar and DISH as a -- most of their and by far most of their adds are DISH now. I mean that's what’s driving that and that's a little bit different. As I mentioned DISH has few their mix of wholesale adds pretty heavily towards use and we think that that potentially accounts for all the difference between us and user in the market. Now, the other thing we made some changes to our processes in the last two quarters that have kind of I'd say filtered our gross adds especially in the DIRECTV channel and working with DIRECTV to accomplish goal through both and we may change that as we get the data that we both wanted there. But the bigger question is, are we going to use promotions? Yes, of course we're going to use promotions. So I think sort of what we talked about is what we've been trying to do is sort of optimize the effectiveness as all of our spending and what we found is that when we do promotions that tie with our view of seasonality, we get way better (inaudible). And so I think what you'll see is that we're going to take advantage of that over especially more into the summer month and then in the holiday month, those have been our strongest period. Andrew Spinola - Wells Fargo: Okay. And then just last one for me. Would you be willing to give an outlook for legal expenses in fiscal 2015 in any sort of broad sense? Thanks a lot.

No, I think there is a lot of different things that you have to keep in mind related to the timing in the legal expenses. We have motions that we may file, we may do more of those or less of those and we also have the timing on [the SS/L] case. So I think we expected next year would be notably less than this year but there are definitely different things on that timing that could pull things in. So overall though I’d say we can get should be notably less. Andrew Spinola - Wells Fargo: Great. Thank you.

The next comes from Matt Robison from Wunderlich Securities. Matthew Robison - Wunderlich Securities: Hi, thanks again. Am I correct in my understanding that most of the consumer contracts are about two years in link and maybe correct me if that’s not the case and give us sense for what the pattern has been for customers that have come off their contracts and the trend and continued service?

So, a lot of contracts are two years in length. We are just now at the point where our earlier [16] customers would be coming off contracts. we have -- it’s kind of the way we tend to look at it is like survivability trend and so we plot the particularly like what’s the half life of that subscriber, what’s the decay, people assume exponential decay rates. And those things are sort of like piece wise there is sort of mortality rate, then they tend to level off. And we don’t see big discontinuities when you cross the life of contract. It’s pretty steady. What to sort of understand what that exponential decay rate is, it’s a good measure of life of the subscriber. Matthew Robison - Wunderlich Securities: Okay. And so most, all the churn has been so far has been from WildBlue?

Most of the churn that when we talk about a higher churn other than a WildBlue stuff is in infant-mortality. And then we’ve talked about that in past, it really has to do with the things that we have talked about which is we’ve talked about this in the past. I think one example is if you were a cable customer and you were to switch to satellite TV, cable broadband price just went up pretty measurably $50 a months for 12 megabits what’s really attractive. And if the sales process doesn’t include a really good understanding of what the limits are of satellite broadband in terms this gigabyte usage especially, you can end up with disappointed customers who don’t stay long. There are other factors as well that go into the onboarding process, how people migrate their phone network from one technology to another whether its from cable to DSL or from cable to satellite, but basically it’s sort of making sure that the customers who buy the satellites. Sure this understand what they are getting and that they are good fit. And so that’s one of the thing that we have been doing is [nothing], every potential good customer’s a good one is trying to figure out, what likelihood of them to stay, how we go build to that, and it’s really been into mortality that’s been mortality meaning, it’s fibre that stay for a short period of time, and those things as we have talked about in the past can be tracked down to specific distribution channels generally, sometimes to the on-boarding or installed process, sometimes to the sales process. And so we have been renewing those down, we have dropped distribution partners that consistently don’t do a good job of that, we have work other distribution partners to improve it. There is also been -- we are getting results that we want, basically a little bit more selective on the front end and better retention. Matthew Robison - Wunderlich Securities: So just to be clear [infant] mortality means, subscribers that didn’t stay around long enough to engage their two year commitment?

Yes, right. That would leave relatively shortly. Matthew Robison - Wunderlich Securities: 30 days or…

Yes. It depends. And the other thing, the top everything is sort of interconnected. One, just sort of an interesting [discussion] we will follow on from another points we made is that people (inaudible) understand how the satellite stuff tend to stay longer. And so some of those things have to do with the onboarding process, but how we deal with them when they hit their limit, do they understand why they hit their limits, can we help them, so they get all the utility they want and not hit their limits. And we're finding that we can do quite a bit on that front as well. So, some of those things will and some of those techniques and scales will enable us to sort of open aperture as well. The only thing you have to remember when you think about the gross add rate in total is that as we fill up the satellite especially in the higher demand beings, cost could rise in the lower demand beings because you’re trying to cope demand and in prices for the level of product that we have now were also the naturally lighter. And I think that’s a matter of fact of the geographic distribution, demand and capacity. So, we're also -- I think we're learning a lot about how to deal with that as well. Matthew Robison - Wunderlich Securities: We're also making sure that we have enough capacity across all the satellite to have some ancillary services we're up in the mobile.

Yes, we talked about that right. Yes that sort of kind of taking sort of 1 million capacity that we talked about down to about 900,000 in cost of satellite. Matthew Robison - Wunderlich Securities: Thanks a lot for the details.

Sure. You're welcome. Okay, good. So I think that's all the questions and that's all our prepared remarks. And so, we thank a lot everybody for participating in our call and we talk to you next quarter.

Ladies and gentlemen, that does conclude the conference for today. And thank you for your participation. You may now disconnect. Have a good day.