Welcome to ViaSat’s Fiscal Year 2019 Third Quarter Earnings Conference Call. Your host for today’s call is Mark Dankberg, Chairman and CEO. You may proceed, Mr. Dankberg.

Yes, thanks. Good afternoon, everybody and welcome to ViaSat’s earnings call for our third fiscal quarter of 2019. I am Mark Dankberg, Chairman and CEO and I’ve got with me here, Rick Baldridge, our President and Chief Operating Officer; Shawn Duffy, our Chief Financial Officer; Robert Blair, General Counsel; Bruce Dirks, our Treasurer; and Paul Froelich, our VP of Corporate Development. Before we start, Robert will provide our Safe Harbor disclosure.

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 report on Form 10-K and Form 10-Q. Copies are available from the SEC or from our website. Back to you, Mark.

Okay, thanks. So, our primary goal entering this fiscal year was to capitalize on all the investments we have made in prior years in In-Flight Connectivity and Government Systems, the launch of ViaSat-2 by showing substantial growth in revenue and adjusted EBITDA. We have been progressing steadily towards this objective throughout fiscal 2019 and our results for the third quarter are another big step forward. Third quarter revenue was up 45% year-over-year driven by growth across all segments. Our third quarter adjusted EBITDA was up 93% year-over-year and 40% sequentially quarter-over-quarter. As you would expect, adjusted EBITDA growth generally translates into non-GAAP and GAAP earnings generation. In fact, third quarter non-GAAP earnings were $7 million, up over $9 million from a $2.4 million loss same quarter last year. We are achieving these results by executing on the growth drivers we described going into this fiscal year, in-flight connectivity equipment shipments and activations, government products and services growth and focused management in the fixed U.S. broadband. We are working hard to sustain the factors that set the stage for this year’s strong growth. A solid order book, significant competitive advantages in total bandwidth and bandwidth economics, large addressable markets, vertical integration and strong customer relationships, particularly with government organizations and airlines and we are continuing to develop nascent, but potentially very substantial new markets such as community Wi-Fi and broadband enterprise services. All these factors plus year-to-date orders being up 39% compared to this time last year supports sustained opportunities for growth into fiscal 2020 and beyond. The combination of strong adjusted EBITDA growth and receipt of the ViaSat-2 insurance proceeds is improving our balance sheet too. As expected, net leverage decreased significantly from 5.0 at the end of our second quarter to 4.0 as of the third quarter. We are…

Thanks Mark. To reiterate what Mark said, we had excellent financial results for the quarter and year-to-date periods posting both record revenues and adjusted EBITDA for the quarter and this growth was broad-based with top line and adjusted EBITDA increases in all three segments both year-over-year as well as sequentially for the second quarter in a row. Looking at our Q3 results, the 45% increase in revenues over the prior year period was driven by a 72% increase in product revenue and a 23% increase in service revenue. The exceptional product revenue growth was driven by record IFC terminals as well as strong sales across most of our government businesses. As Mark indicated, some of our sales growth was pulled forward from Q4 as we meet the strong installed pace at American Airlines, which is correspondingly should help the accelerated pace of our IFC service revenue growth in the upcoming quarters. We closed third quarter with $109 million in adjusted EBITDA reflecting very strong growth year-over-year, increasing $52 million or 93% and $31 million or 40% increase on a sequential quarter basis. Looking first at Government Systems, results continue to be impressive with revenues reaching a new high of $250 million, up 38% and adjusted EBITDA record, reaching $69 million, up 44% year-over-year and 11% sequentially. This performance was driven by a higher mix of NDI, or non-developmental item product revenues across our data links, information assurance, SATCOM and government mobile product suites versus those generated on a more traditional government funded development programs. In addition to the strong sales growth, we also saw improved adjusted EBITDA margins from scale efficiencies in our government service revenue base plus G&A and R&D activities, all reflecting lower cost as a percentage of revenues. Segment awards for the quarter were $156 million driving…

Okay. Thanks, Shawn. So as we described last quarter, we are very focused on growing our Satellite Services segment profitably. Cash flow from Satellite Services is anticipated to fund a large part of our global ViaSat-3 constellation. Third quarter Satellite Services revenues were up 9% sequentially quarter-over-quarter from $163 million to a record $178 million. Conversion from sequential revenue growth to sequential adjusted EBITDA growth was exceptional at about 87%. Consistent with our plan, in-flight connectivity, community Wi-Fi and other new broadband businesses contributed a little more to growth than fixed U.S. broadband. So as the chart in the lower left shows, our annualized year-to-date revenues grew significantly compared to the same chart that we showed last quarter and the proportion of revenue associated with other services increased from 20% to 21% also on a year-to-date annualized basis. U.S. fixed broadband subscribers were flat, but ARPU was up 14% year-over-year. On our last call, we explained how prioritizing ARPU growth over subscriber growth optimizes cash flow in the business. This quarter’s results were consistent with that as our subscriber mix continues to shift favorably to a greater proportion of retail and higher value plans. We continued to make progress in new emerging businesses in enterprise and community Wi-Fi. We are putting some emphasis on better understanding demand characteristics in these new markets, so we can get a better handle on the growth prospects and the factors that can drive sustained profitable growth in each. We mentioned that as of the end of third quarter we are already within walking distance of well over 1 million people in Mexico and still growing fast. The map gives a sense of the geographic reach we are attaining. In-flight connectivity is leading the charge in terms of growth of the other businesses. So we…

Thank you. [Operator Instructions] And your first question comes from Simon Flannery with Morgan Stanley. Your line is open.

Hi thank you. This is Landon Park on for Simon. I was just wondering if you can talk about the margin progression in Sat Services from here after the strong incremental flow through this quarter and when we might start to see ViaSat-3 costs begin to come online and what those might look like for each of the three different satellites?

Sure, so I think one is we had fantastic flow through this quarter and we’re going to we expect to see our, of course, next year, good revenue gains and EBITDA gains that outpace revenue gain, but I wouldn’t expect the margin flow throughs to be at the same levels that you saw this quarter. So, I think looking closer to what you saw in the earlier part of this year is a better look forward for the next two quarters.

And then longer-term, how should we think about the timing of the fixed cost for ViaSat-3 satellites, when those might start to come online and what magnitude those might be for at least the first two satellites?

Well, I think you’re going to see something as far as trend basis, similar to what you saw with ViaSat-1 and ViaSat-2 in the sense that, the year before the launch of service on the satellites, we tend to start having those fixed costs come on and they tend to grow right up to right before the service launch. So, you know, I think that we can provide a little bit more context to the magnitude of those based on as we sort out the ground network and the proportion that we’re lighting up when we go service but I would expect there to be some fixed cost and they tend to grow quarter-by-quarter right up to before launch.

Okay. And then just one last one on the residential ARPU side, can you talk about for the gross adds that you saw in the quarter, what the average ARPU loading was at and is there much remaining retail/wholesale shift that’s flowing through and impacting that number?

Well, I mean obviously because the ARPU grew so much, the incremental ARPU or the ARPU of the plans that we are selling is quite a bit higher. There’s kind of steady decline of the wholesale base mostly because the wholesale plans are older plans. They’re not the current ones. We are offering upgrades to those wholesale plans for wholesalers that are interested in that. So there’s still I guess the upshot is there is still room for ARPU growth based on the new plans we’re offering and as Shawn kind of alluded to in hers, we’re doing a pretty good job of selling the mid and higher tier plans as opposed to just the lower tier plans and that mix between the plans is another factor that’s been helping with ARPU growth, but I’d say there is an element of us learning the market, discovering the market and doing a better job of micro targeting those markets and I’d say it’s a little bit it’s a little bit hard for us to forecast what that mix will be, but to the extent that we can capitalize on demand for these more premium plans the point is we’d like to do that.

Okay. Have you started re-selling any capacity on ViaSat-1 or is that still not taking on new subscribers?

So, as there is churn on ViaSat-1 and we can then repackage that bandwidth into plans that we can offer, there is also some complex geographical considerations in what plans we offer, on which satellite, in which places and I would say, part of what happened what’s been going on through kind of the December quarter and give us a little more maneuvering room now is we have created more opportunity to sell plans on ViaSat-1. Now those are ViaSat-1 type plans and we’re still looking at what the best mix of those will be and so that that will or may change the trajectory of ARPU versus net subscribers during calendar year ‘19 and it takes a little while for all those things to take effect.

Great, thank you.

Sure. Thank you.

Thank you. Your next question comes from Philip Cusick with JPMorgan. Your line is open.

Hi, this is Sebastiano on for Phil. Thanks for taking the question. Just in regards to the ViaSat-1 to ViaSat-2, you’re migrating the subscriber base. Any color you can provide us on where you are in the transition of ramping down legacy ViaSat-1 offerings and trying to move subs over or and for those subs, I mean you did talk about, you’re still selling some legacy ViaSat-1 type plans, I think I heard you say that. Are you also at the same time, offering more you know ViaSat-2 like plans on that original satellite ViaSat-1 satellite, and if so, any color on churn characteristics for subs that do migrate to higher plans, anything like that?

Okay. So just to be clear, I think what I intended on the last question was to say, we have subscribers who are wholesale subscribers on ViaSat-1 plans and that’s the fact that they are the older plans is what’s leading to churn off of the wholesale base so that one of the factors driving ARPU gains is that the mix between wholesale and retail is shifting to be more retail, so that will drive ARPU. Now in terms of the new when we bring on new gross adds, the plans that we’re using are really more of the ViaSat-2 unlimited type, but on ViaSat-1, the top speeds are more capped by the network infrastructure on ViaSat-1. The and then as I mentioned, we’re basically learning what the market offers us in terms of demand for these higher-priced, higher value plans and that varies beam by beam and then more and more we are able to target more finely, more granularly on these beams and tap into demand for these higher-priced, higher value plans. So that’s basically what’s going on is we’re doing what we said last quarter, which is, and I’m just going to use this as a gross example is that if we can sell $100 plan, there is demand for that, that’s better than selling $250 plans and we like to do that as long as we can to the extent the market offers. So that’s the effect and it’s a little bit harder to predict or forecast exactly how that mix will play out over time, but right now we are happy the players were happy with the results, we’re happy with the flow through, it’s very capital efficient. So, to the extent that we continue to do that, we will, we can augment it with other plans in places that we need to, we will we’ll do that too.

And then just thank you for the color, apologize for the wholesale, getting confused there, just any incremental color or any thoughts you guys might have currently in regards to whether it be partnering on the residential broadband side, whether it’s with wireline providers to potentially try to sell into certain geographies or again just selling in partnering with the likes of an Amazon or Hulu and YouTube TV, things along those lines, any considerations or how you would think about it.

The answer is yes, we are looking at ways to partner with different terrestrial service providers in a way that could either improve our product offerings or increase our distribution. I think it’s a little premature to talk about that hopefully in the next quarter or two, we’ll have more color on it.

Thanks.

Thank you. Your next question comes from Ric Prentiss with Raymond James, your line is open.

Yes, hi, it’s Ric. Obviously, a big quarter for you guys beating estimates. We got pushed back, our numbers were too high, but you blew us away. Big question we got is where do you go from here? When we think about revenue and margins, Mark, you talked a little bit about Sat Services, but it’s getting harder to model you guys as far as what’s U.S. versus international? What’s residential versus enterprise? How should we think about modeling you guys going forward from the outside?

Okay. The one thing that we’ve talked about, which is a big factor this year is really just looking at things like our order backlog because you can see there was a lot of good growth in product shipments both in defense and in the commercial side. One of the things that I think people should be paying attention to is especially if it’s more straightforward on the commercial side, when we bring airplanes into service that you can model those as driving Satellite Services revenue. And we are not breaking out the details of all that, but in the past, we’ve said that you can think of it like getting an airplane is like 100 subscribers, that’s sort of the ballpark number we’ve used and what’s going on is we’re adding ancillary revenues to the in-flight connectivity space and we talked about especially on American Airlines adding live TV, now you have the Apple Music service, that’s good, but so even as ARPU has grown like 50-ish- plus 50%, 60% over the last several years, for that ratio to take hold, clearly you want to be doing better in the in-flight connectivity space as well. They’re not going to go in lockstep but that’s a way to think about how we can drive the services growth and then we’ve also given some view into what is the general progression in the trends as we turn these other satellite services, like in-flight conductivity, the international stuff, how does that relate to our total satellite services revenue, right and we’ve shown over the past few years, it’s grown from like 10% to 20% and it is still growing and that will give you some parametric ways to think about how to turn the product stuff which is a little more visible because the backlog into services stuff, which you know it depends on these blends and things that we’re still getting out the market. Does that help?

It does. And then on the government side, obviously it can be quite lumpy. How should we think about seasonality in that business and does the government shutdown have an impact or are you expecting any impact on the kind of your flow. I would expect not given how mission critical it is, but thought we’d ask.

Yes, the government side it is lumpy as we do well the September quarter, because it’s government fiscal year end is an opportunity for us to capture good awards and it’s really us capturing those awards is indicative of the demand associated with our non-developmental item products, especially, I think the other things that can help, when you think about government demand and it doesn’t deal with the lumpiness, but it gives you – when you think of things over a longer term, some of these ordering agreements or multi-year contracts, which don’t show up in backlog, but are multi-year agreements you can sort of anticipate. Our history has been very good at those agreements even though they’re not binding contracts in the out-years tend to be executed over that period of time. So that’s another way to help get some – at least some form of predictability underlying, not necessarily on a quarter basis, but on an annual basis.

So, Ric, this is Rick. One more thing I’d add to that is, Mark gave you some key fundamentals for considering longer term how these things flow from orders into revenue. But, one of the things I wanted to point out, remember we pulled some shipments forward from what we expected to ship in our Q4 into Q3, and so Q3 would come up relative to what we expected Q4 would be down for a similar amount. So just in the near-term, if you take that – factor that into consideration. The other one is back on this government stuff, we’ll see because of government funding things, we see some jigsaw effects a little bit, but definitely expect the trend to be up.

Yes. And then regarding the shutdown, we haven’t seen any short-term impacts of that. Well, I mean, it might take a little while, but right now it hasn’t – we’re not aware of material impacts.

Right. And the last one for me is, the wireless guys have been reporting results and we spent a lot of focus on 5G, it’s picking up a lot of buzz and several of the wireless carriers have talked about targeting a fixed wireless broadband solution. How do you think about that and what it might change in the competitive dynamics with your satellite offerings?

Well, so far, I mean based on all the work that we’ve done and we – basically, we voraciously consumed all the research that’s available on it. You know the – wireless even whether it’s 5G or any –5G call it millimeter wave spectrum, its basically LMDS, which has been around for a while. Those things only tend to work well in geographic markets, where household density is sufficiently high. Both household density is sufficiently high and ability to pay is sufficiently high. And so kind of our sense is that the biggest impact there, if there is any, we think there’s lots of issues with over builders in terms of any technology, but if there is to be an impact probably the place you’d see it first is in the cable market, not necessarily in the places where we are. And we find that when we go into those markets that have those levels of high density, those subscribers tend to churn more often, they are less valuable to us in the long run, and so we actively are seeking other geographic markets than those.

Yes, okay. It makes sense. Just we are getting a lot of questions on it obviously.

Yes, thanks.

Thank you. Your next question comes from Rich Valera with Needham and Company. Your line is open.

Thank you. I just wanted to follow up on the modeling aspect for the consumer business. Is there anything you’d be willing to say about where ARPU could go, sort of where are the high-end plans today and assuming you could convert a very significant percentage of your subs to these high-end plans, what’s sort of a theoretical high-end ARPU? And then Mark you alluded in your prepared remarks to the fact that it sounds like you do expect to have net adds in some quarters. Is there any more color you could give on that so from a modeling perspective, we could have any sense of how we should think about net adds over the next few quarters or couple of years as the case might be until VS-3?

Okay. So one, just on the ARPU, one of the things that we look at are measures of ARPU for other forms of broadband ISP services that come either from the government or from other providers – terrestrial. And I would say that our ARPUs are approaching, but not higher than indices that the government uses for trying to set subsidized broadband pricing in very rural areas. And those indices tend to be growing, increasing. So, we don’t have a number in mind and basically our subscriber base is a relatively small fraction less than 1% of the total subscriber base, so it can vary from that. But those are the things we look at, we’re not just trying – we’re looking to see what the market offers and especially in the time prior to ViaSat-3, we’re going to see what the market offers to us in the places that we have bandwidth and it wouldn’t be meaningful for us to make net sub forecasts in the next few quarters because we don’t really – we are responding to what we see in the market and we – I would say that if we can get to sustain the types of earnings growth that we have in flow-through, we’d be happy. We know – we are always looking to do better in every one of our segments, but we’re going with the market.

Sure. Fair enough. And then on the IFC front, first, the planes you mentioned in the prepared remarks, the ones you’d won with the United and Aeromexico, are those in the backlog that you reported for the quarter or those after the end of the quarter?

Those are – I don’t think that all of those are within the backlog in the quarter.

Definitely, Aeromexico is not.

Yes, for sure. So – and remember our backlog –

United is not either.

Yes.

I’m sorry, what was that last part? So, Aeromexico is not, is – are the United ones in as well or not?

No, they are not either.

Got it. And then just wondering if you could give a little color on the landscape in terms of sort of the pipeline for IFC opportunities, you sounded sort of optimistic there. I mean, one thing we’ve been hearing out there obviously is that, there is some re-bids going on. Can you guys just talk about the opportunities there in terms of going after things that might be re-bid and just in general how you kind of see the landscape for additional IFC wins?

So, yes, I mean, we’re – so one is, I’m glad that it comes across that we’re optimistic. I think the reasons we’re optimistic are, I think if you look at our growth rate and our – it’s the customer satisfaction in both passengers and the airlines. It’s a – technically, it’s a very challenging business. I think we’re doing well. I think that our vertical integration helped us. We feel like our reputation is strong. When we’ve been – when we can help some of our customers do things like this Apple Music thing, it can be really meaningful to airlines that are under intense cost and competitive pressures. So, I think airlines are looking at those. The big – and just to be clear, what’s gone on so far is in the markets, where we have all Ka-band and that is North America, now Central America, Europe, Australia, we’ve competed very, very well. What we’re really aiming to do is to get into the global market and so some of that will come with the timing of our satellite launches relative to airline acquisition of new planes. And so just to remember, one of the ways that we’ve been pretty successful in penetrating airlines and once we get in with them is in establishing good relationships as we get into their new planes and then based on them liking us or liking the service that we do or the reliability and the economics, that whole package, we get opportunities to go after retrofits and sometimes replacements of existing ones. So that’s kind of the way we’re going about the global market, which is as we look at the ViaSat-3 constellation and you look at the timeframe of that, airlines are seeing that line-up with their new orders and that’s clearly good fertile ground for us. Then the other thing that we’re doing is airlines can start looking at hey how much of their total seat miles are under our Ka-band satellites, can we augment that with our Ku-band global network and that’s also getting their interest both for new planes and retrofits. So those discussions are – have been going on, and I can tell you there is – we feel like there’s been good progress, but the execution of those contracts and the announcements are all going to be at the pleasure of the airlines and we’ve got to respect that. And so it’s hard for us to be specific about specific airlines or locations. One of the things Rich is, yes, I think you’re going to see some competitors making desperate attempts in some of these re-competes or competitions. And I think we’re trying to stay away from that and really, really focus on how do we help the airline accomplish what they want to accomplish and not just milk them for every last dollar, but don’t go in and do compete in a desperate way where we can’t deliver high-quality service.

Sure, makes sense. Just one more if I could, on the first ViaSat-3 launch delay. I wasn’t clear exactly what caused that and could you give a sense of the magnitude of that delay? Thank you.

Yes. So, we just said what we had been saying end of ‘20 – calendar ‘20 launch could be early ‘21 for launch. It’s – the thing we’re saying is there is a schedule includes multiple phases, some phases have lengthened, some we’re doing better. We’re – obviously, we’re trying to shorten the future phases to the extent we can. And I would think of it more as a probability distribution than I would a point estimate, and so what we’ve said is that probability distribution has shifted a few months more into early ‘21. There’s also – and that’s the launch, there’s other factors and it would be false precision for us to try to describe each phase in detail, but there’s other factors, things we’re also working on and I think we’re making progress on and we’ll discuss later is shortening the post-launch phases as well, things like orbit raising, in-flight testing as well. So right now, I would say, we talked about probably the potential of a few months or that increased likelihood of a few months delay.

Got it. Perfect. Thank you gentlemen.

Thank you. Your next question comes from Mike Crawford with B. Riley. Your line is open.

Thanks. Staying on launches, if ViaSat-3 Americas and then six months later, EMEA go as expected in say 2021 and then you launch the APAC satellite in the second half of 2022. Would you expect 2022 to already be a year where Viasat would be generating free cash flow?

I think – hey this is Shawn. So I think it’s highly based on the timing of these – of our activities and a little bit is reliant on the level of the ground network build-out that we do at in-service. But I think what we’ve been saying is that free cash flow should kind of be in that time a couple of years after our first ViaSat-3 launch. So, I think that’s the right point to look out right now and we’ll keep you updated.

Okay, thank you. And then also in a couple of weeks, there’s going to be the first few OneWeb, CubeSats launch. Now SoftBank has really stopped talking about OneWeb as one of its Vision Fund investments. They’ve listed a whole bunch of companies in their last couple of six months updates not OneWeb, I think they are about $1 billion short of equity needed to launch the kind of constellation they were initially talking about, but if that’s a reduced size constellation, how, if at all, do you see that impacting anything that Viasat might do or not impacting?

Okay. So first of all, one of our points and I think others have made this as well is that the amounts of bandwidth that we’re talking about in these constellations, which are low terabits per second represents less than 1% of the estimated access network bandwidth that would be in play in global markets in that time. So, one is, we don’t want to come across as a winner-take-all zero-sum game. We really like our position. I think our economics are really good. I think that if the – to the extent that costs are increasing for the LEO or people are recognizing low – higher constellation costs for the LEOs and total capacity is going down because they use fewer satellites or that the satellites have to cover a larger area on the ground, which reduces the average gain that they get, reduces bandwidth efficiency, all these things tend to degrade unit economics. That is what is their cost of unit of bandwidth and for us that’s the thing that we’re most likely to compete really favorably on and we think that’s the dominant metric that people look at in the market is how much bandwidth do I have and what’s the unit cost. So, we don’t see – in general, we don’t see our position eroding. I think as more things have come to light, I think our position looks stronger in terms of competing on the – those both the unit bandwidth basis and then also being able to deliver sufficient bandwidth into the highest demand places. So, we’re happy with our position. We think it’s improving, it doesn’t mean that all the others are doomed to fail. I do think that some of the things that we’re seeing in the market are making their unit economics more difficult though.

Okay, thank you. And then a final question is on your hotspot business. So, given rapid expansion in Mexico or maybe other markets to pursue in Central America, down in the South America maybe using your capacity in Brazil, how do we – how should we think about the cash conversion on the hardware that needs to be put in to all of these sites?

Okay. Yes, so far, the way we look at it is, think of it as a SAC cost except that now instead of having a subscriber acquisition cost devoted to a single residential subscriber, we choose a site, we invest it in that site and then we get a return from that site from the aggregate of all people that use that. And right now, those unit economics look more favorable than do our subscriber – individual subscriber economics. So, to the extent that we can sustain that and it looks like there is underlying demand. So, if we can sustain that in the sites that we have and then we can find more sites that have the same characteristics, that’s a good business, so we continue to do that as much as we could.

I think of that – think of that Mike as that starts what Mark’s talking about, that starts with connectivity and that’s good, but after you are in those places for a while, there’s other ways to monetize those highlights.

Yes.

Okay, great. Thanks.

But that’s on our – yes, that’s on our list, yes.

Thank you.

Thanks, Mike.

Thanks. Thank you. Your next question comes from Wilton Fry with Royal Bank of Canada. Your line is open.

Yes. Good evening. Your press release on December the 10th stated you just hit 1,000 aircraft mark, now that’s 102 aircraft in the first 70 days of the quarter, you end up doing 225, which means I guess you did 123 in the last 20 days of the year. I was wondering if you can explain that 400% increase in the installation rate per day as you hit sort of the last part of the –last part of the quarter Were there any sort of contractual, financial obligations you have to meet by the 31st December that help explain that? Thanks.

You’re talking about the press release, is that what he’s talking about, the 1,000 – press release –

Yes, you put out a press release on December the 10th.

Yes, you can’t measure those – the timing as absolute perfectly there. So, we start that process, we got to hit a milestone and start that process, but we have been preparing that, there were probably another – probably another couple dozen aircraft that were delivered, so it’s not that precise really.

Yes.

Okay, sorry, the press release did say it hit 1,000 mark that day, so I took it as a precise release. Okay. Were there any Q4 – were there any Q4 aircraft brought forward into Q3?

There were, yes. Aircraft that we had planned for Q4 that were delivered in Q3, yes.

Yes.

Also, I think we’ll have situations, especially with new airlines where they’ll be flying terminals for a while, but not declare them into service, right. So that – so i’s not like they were all literally installed in that time. But you’re right, there was a lot of pressure and it wasn’t from us, it was from our airline partners trying to get these aircraft in service. So American has done a phenomenal job of stepping that up, yes.

Okay, great. Thank you.

Okay. [indiscernible].

Thank you. And this concludes our question-and-answer session. I’d like to turn the call back over to Mr. Mark Dankberg for closing remarks.

Okay, thanks. Well, thanks very much everybody for dialing into our call today and we look forward to speaking again a quarter from now.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program, and you all may disconnect. Everyone have a wonderful day.