EXHIBIT 99.1
Robert H. Brumley
President & CEO
Neil Hazard
Chief Operating Officer, Chief Financial Officer
December 7, 2006
Disclaimer
This presentation may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business and business strategy of the Company. Any such forward-looking statements are based on estimates, projections and assumptions made by the Company about circumstances and events that have not yet taken place which, although the Company believes them to be reasonable, are inherently uncertain. Therefore, undue reliance should not be placed upon these estimates and statements. No assurance can be given that any of these estimates or statements will be realized. Our actual results and the timing and occurrence of expected events could differ materially from our plans and expectations due to a number of factors. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations. |
2 |
Financial Overview
3 |
Key Investment Highlights
ü | 20MHz of contiguous spectrum position in the 2 GHz range in the U.S. and |
Canada held by TerreStar | |
|
|
ü | Significant market opportunity driven by government, commercial and |
enterprise customers | |
|
|
ü | Advanced network and rights to ATC intellectual property |
|
|
ü | Scalable business model: wholesale / carrier’s carrier |
|
|
ü | Substantial asset coverage |
|
|
ü | Experienced management team in place to develop and implement business plan |
4 |
Motient Structure
• | 70% ownership of TerreStar | |
• | 44.4 million shares of SkyTerra | |
• | $280 million of cash on hand2 | |
• | $798 million market capitalization3 | |
| ||
| ||
|
Note: The rest of TerreStar’s shares owned by TerreStar’s management |
1Includes 25.5 million shares of SkyTerra currently held and the right to exchange into 18.9 million additional SkyTerra shares |
2As of 9/30/06 and pro forma for the sale of 3.6 million SkyTerra shares on October 10, 2006 and issuance of $200 million senior secured notes due 2007 |
3As of 12/05/06 share price of $10.95 and 72.9mm basic shares outstanding |
5 |
Senior Secured Loan
$200 Million Senior Secured |
• | $200M Senior Secured Notes closed on November 28, 2006 |
• | 1 year term |
• | 12% initial coupon, increasing in months 5-12 |
• | 6 month cash escrow |
• | Non-callable for 2 months |
• | Proceeds to fund TerreStar’s Satellite and network construction costs and general corporate |
purposes |
6 |
Pro Forma Capitalization
As of September 30, 2006 | ||||
$ in millions | Actual | Pro Forma | ||
Cash and Cash Equivalents | $ | 931 | $ | 2802 |
Restricted Cash | 21 | 21 | ||
Escrow Satellite Payments / Interest | 34 | 473 | ||
Senior Secured Note | $ | 0 | $ | 200 |
Preferred Stock-Class A | 90 | 90 | ||
Preferred Stock-Class B | 319 | 319 | ||
Market Value of Common Equity4 | 798 | 798 | ||
Total Capitalization | $ | 1,207 | $ | 1,407 |
Note: | ||||
1Pro-forma for the sale of 3.6 million SkyTerra shares on October 10, 2006 | ||||
2Excludes the impact of transaction fees and expenses | ||||
3Pro forma to include 6 months of escrowed interest | ||||
4As of 12/05/06 share price of $10.95 and 72.9mm basic shares outstanding |
7 |
Attractive Spectrum Position
• | Strong Spectrum Property | ||
– | 20 MHz in the 2 GHz | ||
band | |||
– | Ubiquitous coverage in | ||
US and Canada | |||
– | ATC-eligible | ||
– | Adjacent to PCS and | ||
AWS operators | |||
– | Contiguous and | ||
unshared | |||
• | Regulatory clarity | ||
– | Path to ATC license | ||
clarified |
8 |
Substantial Underlying Spectrum Value
Implied TerreStar value | ICO value | ||||||||||
MHz / POP | $ | 0.17 | $ | 0.18 | $ | 0.19 | ICO closing share price1 | $ | 4.85 | ||
MHz/POP1 | 6,282 | 6,282 | 6,282 | Market Capitalization | $ | 961 | |||||
Spectrum Value | $ | 1,086 | $ | 1,149 | $ | 1,212 | Ownership in ICO US | 56.0 | % | ||
Add: Satellite Under Construction | 160 | 160 | 160 | Implied ICO US Equity Value | $ | 1,717 | |||||
Implied Firm Value | $ | 1,246 | $ | 1,309 | $ | 1,372 | Less: Cash & Equivalents2 | (331 | ) | ||
Add: Cash2 | 280 | 280 | 280 | Less: Satellite Under Construction | (288 | ) | |||||
Implied Equity Value | $ | 1,526 | $ | 1,589 | $ | 1,652 | Adjusted Firm Value | $ | 1,098 | ||
MHz POP3 | 6,000 | ||||||||||
1 Based on 100% ownership in 20MHz in the U.S. with 300mm population | FV/MHz POP | $ | 0.18 | ||||||||
and 47% ownership in Canadian 20MHz with 30mm population | |||||||||||
2 As of 9/30/06 and pro forma for the sale of 3.6 million SkyTerra shares | 1 As of 12/05/06 | ||||||||||
on October 10, 2006 and issuance of $200 million senior secured notes | 2 ICO 9/30/2006 public filings | ||||||||||
due 2007 | 3Based on 100% ownership in 20MHz in the U.S. with | ||||||||||
300mm population | |||||||||||
9 |
Significant Assets
Asset | Value | Highlights | ||
Spectrum | $1,149 million1 | TerreStar 20MHz of spectrum, assumes | ||
value of $0.18/MHzPOP | ||||
Satellite | $160 million | TerreStar satellite WIP as of 09/30/06 | ||
SkyTerra Shares | $628 million2 | 44.4 million shares owned, assuming | ||
conversion of MSV Units | ||||
Cash | $280 million3 | Cash balances pro forma for financing as | ||
of 9/30/06 | ||||
Total |
| $2,217 million |
|
|
1Based on ICO’s implied value per MHz POP of $0.18 |
2Includes 25.5 million of SkyTerra shares expected to be paid out as dividend to Motient common shareholders and 4.4 million shares |
expected to be paid out as dividend to preferred shareholders; using closing stock price as of 12/05/06 of $10.95 per share |
3As of 9/30/06 and pro forma for the sale of 3.6 million SkyTerra shares on October 10, 2006 and issuance of $200 million senior |
secured notes due 2007 |
10 |
Business Overview
11 |
TerreStar Networks Overview
• | Provider of advanced mobile satellite services based in Reston, VA |
• | 20MHz of contiguous spectrum in the 2GHz range, close to existing PCS |
frequencies | |
• | Unique MSS/ATC (Ancillary Terrestrial Components) architecture integrates |
satellite/ground-based systems allowing for seamless andubiquitous | |
mobile coverage | |
• | Geostationary satellite capable of delivering next generation voice, data |
and video mobile services | |
• | Network access via Universal Chipset compatible with small, lightweight |
and inexpensive handsets similar to today’s mobile devices | |
• | Simultaneously addresses growing consumer, enterprise and government |
demand for wireless mobile services |
12 |
Significant Market Opportunity
Government & Public Safety |
| Commercial |
| Enterprise | |||||
• | Significant demand from | • | Provide a complementary | • | Provide mobility and | ||||
federal, state and local | service offering for: | broadband to: | |||||||
governments – homeland | • | Incumbent wireless | • | Mobile professionals | |||||
security and emergency | carriers | • | Real estate, insurance, | ||||||
responders | • | Satellite vendors | banking, transportation | ||||||
• | Wholesale wireless | • | Remote measurement | ||||||
• | Reliable, uninterrupted, | operators | and control | ||||||
interoperable connectivity | • | Electric and telephony | |||||||
from integrated satellite and | cooperatives | • | Provide communications for | ||||||
terrestrial network | isolated communities in | ||||||||
• | Broadband will become the | rural and remote areas | |||||||
• | Priority provided to | standard in connectivity and | |||||||
government agencies during | data | ||||||||
emergencies | |||||||||
TerreStar will offer compelling market-specific service bundles |
13 |
Growth in Demand from Government
• | Government and military demand for commercial satellite bandwidth and services being |
spurred by disaster recovery and homeland security concerns | |
• | Need for backup or reserve capacity to address crisis situations represents additional demand |
• | Demand (in terms of revenues) is expected to grow at a CAGR of ~21% from |
2005 to 2012 |
TerreStar will seek an anchor government tenant for its network |
14 |
TerreStar’s Commercial and Enterprise
Market Opportunity
Segmentt | End Customers | Opportunity | ||
Enterprise | • | Corporate enterprises for | • | 16M+ subscribers |
employees requiring mobility | ||||
MNOs | • | Wireless service providers | • | 187M subscribers |
MVNOs | • | Operators without license | • | 16M subscribers |
spectrum or network | ||||
Rural Wireless | • | Carriers operating in low | • | 24M subscribers |
coverage/satellite only areas | ||||
Rural – | • | Rural wireless solutions | • | 15M wireline |
RLEC/ILEC | subscribers | |||
Metro & Int’l. | • | Urban and international | • | 500M subscribers |
Wireless | roaming carriers | |||
Cable | • | Wireless high speed data and | • | 65M subscribers |
“Quad Play” | ||||
DBS | • | Wireless high speed data and | • | 31M subscribers |
“Quad Play” | ||||
• | Corporate customers seeking | |||
Telematics | tracking/positioning | • | $3.4B in revenue | |
systems |
15 |
State of the Art MSS and ATC Architecture
• | Advanced satellite-based and terrestrial integrated architecture |
• | Satellite able to cover United States and Canada including Alaska, |
Puerto Rico and Hawaii | |
• | Integrated with an ATC network, the architecture can service |
millions of users–supports both mobile and fixed applications | |
• | IP centric technology that will support next generation |
communication services | |
• | Greater than 1.0 Mbps data transfer for terrestrial network |
• | Technology supports encryption and call prioritization for |
government requirements | |
• | Access to the Internet and proprietary/secure IP networks |
• | Capable of real-time mass distribution of data, including video |
16 |
TerreStar Satellite and ATC Integration
17 |
Best-in-Class Satellites
• | Largest commercial communications satellite to date; being built by | |
Loral | ||
• | TerreStar I expected launch in November 2007 | |
• | TerreStar II (spare) construction currently underway | |
• | Beam coverage: continental United States, Canada, Puerto Rico, Hawaii | |
and Alaska | ||
– | Capable of generating approximately 500 simultaneous spot beams |
18 |
Attractive Mobile Unit Form Factor
TerreStar’s technology will allow clients to enjoy comparable handset form factors to those used in the cellular industry |
19 |
Operating Milestones
TerreStar is on target to offer services in 2008 |
20 |
Regulatory Clarity
Event | Requirements | Timeline | Comments | |||
20 MHz License | Completed | 12/05 | Subject to completion and | |||
Reservation | launch of operational satellite | |||||
Awarded | ||||||
20 MHz License | Launch TerreStar I | 11/07 | Satellite must be launched | |||
Perfected | into assigned orbital location | |||||
Entire System | 11/08 | Demonstrates system | ||||
Operational | functionality | |||||
ATC License | Order Satellite #2 | Completed-08/06 | Primary gating item for ATC | |||
Application | license | |||||
ATC Application | 1stHalf 2007 | Provides ability to operate | ||||
Submitted | integrated satellite and | |||||
terrestrial network | ||||||
ATC Approval | 2ndHalf 2008 | Gating criteria includes: | ||||
Granted | •Full US coverage, including | |||||
Alaska and Hawaii | ||||||
•Spare satellite | ||||||
•Integrated ground/satellite | ||||||
system | ||||||
21 |
Key Investment Highlights
ü | 20MHz of contiguous spectrum position in the 2 GHz range in the U.S. |
and Canada held by TerreStar | |
ü | Significant market opportunity driven by government, commercial |
and enterprise customers | |
ü | Advanced network and rights to ATC intellectual property |
ü | Scalable business model: wholesale / carrier’s carrier |
ü | Substantial asset coverage |
ü | Experienced management team in place to develop and implement |
business plan |
22 |