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Team Titan DreamlinerBoeing Competition Case Study

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Luis G. Wilson Quang Victor Sophie

SataLink Team Members

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Market Research

Global Growth Strategy

Execution Plan

Risk Analysis

Financial Management

Executive Summary

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Market Research

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Expansion Across All Regions

Sustainable Revenue Growth

Increase Global Presence

Global Growth Strategy

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Continuous worldwide coverage Focus growth in all regions More emphasis on Africa/M.E

Expansion Across All Regions

CAGR 2025 Revenue

5%

$10351 M

6%

$13610 M

4.5% $14680 M

5%

$10744 M

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CAGR far exceeds industry growth across all regions Combined CAGR of 12.8% (50% more than industry growth)

Sustainable Revenue Growth

America Europe Africa/M.E Asia/Oceania Global

Satalink Satalink Satalink Satalink Satalink

Industry Industry Industry Industry Industry

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Increase market share across all regions Global market share increases to 6.1% Combined annual revenue doubles by 2025

Increase Global Presence Year 2016 2025 CAGR

Region Market Share

Revenue ($ M)

Market Share

Revenue ($ M)

America 8.2% 543.5 10.4% 1049.1 7.6%

Europe 6.3% 580.1 8.2% 1108.8 7.4%

Africa/M.E 0.9% 80.0 1.4% 201.2 10.8%

Asia/Oceania 5.3% 367.4 6.2% 669.1 6.9%

Global 5.0% 1571.7 6.1% 3028.3 7.6%

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Sustainable global growth Steady penetration into Africa/M.E

Global Market Growth

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Projected Growth

Satellite Configuration

Global Transponder Fill Rate

Execution Plan

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Projected Growth

Assumption: The current transponders are being used at maximum capacityGiven: Compound annual growth rate

12

Satellite Configuration

2017 2018 2019 2020 2021-200

0

200

400

600

800

1000

66.00%

68.00%

70.00%

72.00%

74.00%

76.00%

78.00%

430

750 750810 810

-120

0

-70

0

-50

440

0

130

0

70

750 750810 810 830

69.69%73.17%

71.14%

74.70%

76.54%

America

Start with Goes down Comes up End with Fill rate for region

Year

Tra

nsp

onders

Perc

ent

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Satellite Configuration

2017 2018 2019 2020 2021-200

-100

0

100

200

300

400

500

600

700

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

330

480

630 630 630

-70 -70

0 0 0

220 220

0 0 0

480

630 630 630 630

81.99%

65.28%68.21% 71.28%

74.49%

Europe

Start with Goes down Comes up End with Fill rate for region

Time

Tra

nsp

onders

Perc

ent

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Satellite Configuration

2017 2018 2019 2020 2021-60

-40

-20

0

20

40

60

80

100

120

140

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

160.00%

50 50 50 50

130

0 0 0

-50

00 0 0

130

0

50 50 50

130 130

126.25%133.82% 141.85%

57.83%

61.30%

Middle East/Africa

Start with Goes down Comes up End with Fill rate for region

Time

Tra

nsp

onder

Perc

ent

15

Satellite Configuration

2017 2018 2019 2020 2021-200

-100

0

100

200

300

400

500

600

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

280 280

440

390

520

0

-60 -50

0

-80

0

220

0

130

70

280

440

390

520 510121.55%

81.22%

96.21%

75.77% 81.12%

Asia/Oceania

Start with Goes down Comes up End with Fill rate for region

Time

Tra

nsp

onders

Perc

ent

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Satellite Configuration

2017 2018 2019 2020 20210

500

1000

1500

2000

2500

66.00%

68.00%

70.00%

72.00%

74.00%

76.00%

78.00%

80.00%

82.00%

84.00%

86.00%

13201384

14521523

15981560

1870 1880

2090 2100

84.59%

74.03%

77.24% 72.89%76.09%

Global

Total Transponders Needed Total Transponders Available Total Transponders Fill Rate

Time

Tra

nsp

onders

Perc

ent

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Total number of satellites - 10

Total cost of satellite launches - $1.57B

Average satellite launch cost - $157M

On average, one out of ten rockets fail

Takes three years to set up a new launch

Loss of Revenue due to Risk

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Total number of transponders – 1,500

Average revenue per transponder – $1.6M

Revenue lost per year - $23.9M

Loss as a percentage of Total Revenue – 0.29%

Minimal effect

Loss of Revenue due to Risk

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Current Financial Situation

Financial Objectives

Interest Rate Forecasting

Additional Financing

Projected Cash Flows

Financial Management

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Current Debt - $3.25B Current Interest cost - US Prime Rate plus 5.75% Debt terms Current Standard & Poor’s credit rating equivalent:

CCC+

Current Financial Situation

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Generating positive cash flows every year from 2017 to 2021

Having enough cash in the year 2023 to 2025

Paying off all the debts

Maximizing NPV

Financial Objectives

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Current US prime rate: 3.25%

Assume starting in 2015, the US prime rate will goes up 1%

every 3 years due to the economic recovery

US Prime Rate

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

US Prime rate assumption(in %)

3.25 3.25 3.55 3.85 4.25 4.55 4.85 5.25 5.55 5.85 6.25 6.55 6.85

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In 2014, 2015, 2016 and 2017, 51%, 80%, 94% and 3% of the capital expenditures are financed respectively

Payment plan

Additional Financing

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Old Debt ($3.25B)

-15% -15% -25% -40% -5%

Add’l Debt

$153M -50% -50%

Add’l Debt

$400M -50% -50%

Add’l Debt

$510M -50% -50%

Add’l Debt

$21M -100%

Payments

0 0 0 0 0 $564M $907M $1.26B $1.39B

Total Debt

$3250M

$3403M

$3803M

$4336M

$4358M

$3794M

$3030M

$1750M

$163M 0

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Year Operating Cash Flow

Debt US Prime Rate

Risk Premiu

m

Interest rate

CF After

Interest

Expense

Pay-off amoun

t

Ending CF of the year

NPV

2013 $464M $3250 M 3.25% 5.75% 9.00 % $171M - $171M $3288M

2014 $464M $3225 M 3.25% 5.75% 9.00 % $10M - $10M

2015 $464M $3605 M 3.55% 5.75% 9.30 % $10M - $10M

2016 $464M $4116 M 3.85% 5.75% 9.60 % $13M - $13M

2017 $1119M $4116 M 4.25% 5.50% 9.75 % $13M - $13M

2018 $1538M $4116 M 4.55% 5.25% 9.80% $639M $564M $75M

2019 $1563M $3585 M 4.85% 5.00% 9.85% $917M $764M $153M

2020 $1843M $2709 M 5.25% 4.75% 10.00 % $1335M $1279M $56M

2021 $1963M $1491 M 5.55% 4.50% 10.05 % $1717M $1588M $130M

2022 $2132M - 5.85% 4.25% 10.10 % $2116M $163M $1953M

2023 $2038M - 6.25% 4.00% 10.25 % $2038M - $2038M

2024 $1913M - 6.55% 4.00% 10.55 % $1913M - $1913M

2025 $1795M - 6.85% 4.00% 10.85 % $1795M - $1795M

Projected Cash Flows

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Questions?