Final-Boeing REVISED

TEAM: DELTA

MISSION

SataLink, Incorporated.

CURRENT SITUATION 10 of our 15 satellites are projected to reach the end of

their useful lives between 2019 and 2023

GOALSDevelop a satellite replacement plan and a

corresponding high-level business strategy that addresses the anticipated current and future conditions the company will face in the satellite communication market

AGGRESSIVE CONSERVATIVE

CONSERVATIVE

Pricing Strategy

• High Revenue• High Growth

• Defensive Market Positioning

• 30% Lease• 70% Spot

• High Revenue• High Growth

• 30% Lease• 70% Spot Rate

• Defensive Market Positioning


• Diversified Market Positioning


• 70% Lease• 30% SpotAGGRESSIVE

Market Strategy

Defensive

Expansionary

Diversified

PROPOSED SOLUTIONS:Expansionary Diversified Defensive

Satellite Locations:1. Europe2. Asia & Middle East3. America 4. Europe & Middle

East; 50/50%5. Asia; 100%

Market Position Strategy:• High Revenue • High Growth

Pricing Strategy:• 70% Lease (20%

Discount)• 30% Spot

Market Position Strategy:• Diversified • Multi-coverage

Satellite Locations:1. Europe 2. Asia & Middle East 3. America 4. Asia & Middle East;

60/40%5. America

Pricing Strategy:• 50% Lease (20% Discount)• 50% Spot

Satellite Locations:1. America2. Europe 3. Asia4. America5. Asia

Market Position Strategy:• Conservative Revenue• Market Maintenance

Pricing Strategy:• 30% Lease (20%

Discount)• 70% Spot

SPACECRAFTS1000L 800M & 600S 600SDL

Provides the largest magnitude of “Economies of Scale”

Lowest Fixed Cost per Transponder ($1.82 Mn.)

220 Transponders

Highest fix cost per transponder compared to 800M & 600S

Has not been tested and the potential risk of failure is too high

Higher fixed cost per transponder

$2.08 Mn (800M) 2.43 Mn (600S)

130 Transponders (800M)

70 Transponders (600S)

1000 L

600 SDL600 S800 M

SOLUTION 1ExpansionaryBenefits: Risks: Higher Fill Rates Forward Looking Hedged Risk Reliable Cash Flow

Geo-Political Market Saturation Under Developed Infrastructure Lower Avg. Rev/ Transponder

(1) Europe (1) Asia & Middle East(1) America

(1) Europe & Middle East(1) Asia

SOLUTION 2Diversified ModerateBenefits: Risks:

Higher Revenue Potential Lower Market Saturation Moderate Distribution of Risk Balanced Revenue Stream

Lower Future Growth Increased Market Exposure More Volatile Cash Flow

(1) Europe (1) Asia & Middle East(1) America

(1) Asia& Middle East(1) America

SOLUTION 3Defensive Moderate Benefits: Risks:

High Market Exposure Lower Market Diversification No Exposure to High Growth Market Most Volatility In Cash Flows

(1) Europe (1) Europe(1) Asia

(1) America(1) Asia

Preserve Current Market Share Maintain Client Relationships No market Saturation

PRICING STRATEGY Expansionary Diversified Defensive

• 70% Lease (20% Discount) • 30% Spot

• 80% Fill Rate

• Average Rev/Trans: $1.65 Mn.

• Most Secure Cash Flows

• 30% Lease (20% Discount)• 70% Spot

• 70% Fill Rate

• Average Rev/ Trans: $1.70 Mn.

• Volatile Cash Flows

• 50% Lease (20% Discount) • 50% Spot

• 75% Fill Rate

• Average Rev/Trans: $1.67 Mn.

• Balanced Cash Flow

Expansionary Diversified DefensiveFINANCING

15 Year Capital Lease PMT: $58.7 Mn

Debt Paid 2015 - $150 Mn Debt Paid 2016 - $100 Mn

Loan 2018 $96.9 Mn

2020-2027 Debt Repayment:

Debt PMT: $150 Mn Total Paid: $1.21 BN

15 Year Capital Lease PMT: $58.7 Mn

Debt Paid 2015 - $150 Mn Debt Paid 2016 - $100 Mn

Loan 2018 – $88.09 Mn Loan 2019 – $176.19 Mn


Debt PMT: $150 Mn Total Paid: $1.19 Bn.

15 Year Capital Lease PMT: $58.7 Mn.

Debt Paid 2015- $150 Mn Debt Paid 2016 - $100 Mn

Loan 2019 - $102.77 Mn

Sale of Satellite 2018 Value: $306.93 Mn

2018 - $150 Mn 2019 - $150 Mn


Debt PMT: $150 Mn Total Paid: $1.20 Bn

FINANCIAL HIGHLIGHTSExpansionary Diversified Defensive

• NPV: $4.00 Bn.

• Debt Paid: $1.21 Bn.• Ending: $2.04 Bn.

• Ending Cash: $6.46 Bn.

• NPV: $3.57 Bn.


• Ending Cash: $5.70 Bn

• NPV: $2.87 Billion


• Ending Cash: $4.68 Bn.

Expansionary Diversified DefensiveSENSITIVITY ANALYSIS

DefensiveChange in Fill Rate NPV %Change

10% $ 5,216 63%5% $ 4,204 32%

Current $ 3,192 -5% $ 2,181 -32%

-10% $ 1,169 -63%

DefensiveChange in Price NPV %Change

10% $ 4,433 39%5% $ 3,813 19%

Current $ 3,192 -5% $ 2,572 -19%

-10% $ 1,952 -39%

Diversified

Change in Fill Rate NPV %Change10% $ 5,589 56%5% $ 4,582 28%

Current $ 3,574 -5% $ 2,566 -28%

-10% $ 1,559 -56%

DiversifiedChange in Price NPV %Change

10% $ 4,666 31%5% $ 4,120 15%

Current $ 3,574 -5% $ 3,028 -15%

-10% $ 2,482 -31%

ExpansionaryChange in Fill Rate NPV %Change

10% $ 5,985 50%5% $ 4,993 25%

Current $ 4,001 -5% $ 3,008 -25%

-10% $ 2,016 -50%

ExpansionaryChange in Price NPV %Change

10% $ 4,892 22%5% $ 4,446 11%

Current $ 4,001 -5% $ 3,555 -11%

-10% $ 3,109 -22%

POTENTIAL SYSTEMATIC RISK

Failed Satellite Launch

Manufacturing Delays

Delayed Satellite Launch

Defective Transponders

Interest Rate Risk

Satellite Obsolescence

RECOMMENDATIONSolution 1:

Expansionary

Highest NPV: $3.90 Billion

37% Debt Reduction

Reliable Cash Flow

Minimized Risk Profile

Forward Looking

Balanced

Final-Boeing REVISED

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