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ISCe 2005. John Stone, Jr. Director. May 31, 2005. Runup to takeouts – or, how we got here. FSS has always had high EBITDA margins and revenue visibility to support debt. Telecom boom produced significant infrastructure overcapacity in FSS too.

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isce 2005

ISCe 2005

John Stone, Jr.

Director

May 31, 2005

runup to takeouts or how we got here
Runup to takeouts – or, how we got here
  • FSS has always had high EBITDA margins and revenue visibility to support debt.
  • Telecom boom produced significant infrastructure overcapacity in FSS too.
  • Fed intervention in the credit markets produced low rates and economic recovery that collapsed credit spreads, making debt capital cheap.
  • Low cost of debt and reduced need for CapEx begged for recapitalization.
  • Bush tax policies made

dividends more attractive.

fss where we are today
FSS – Where we are today
  • PanAmSat – Model for success or crash test dummy?
    • Move to internally rationalize capacity supercharges cash flow
    • Restructuring leaves company highly levered
      • Increases equity returns
      • Floating rate debt => interest rate risk
      • Reduced liquidity => reduced flexibility
    • First out of the gate - up 9% since IPO
    • 7.8% dividend yield makes stock trade like a bond (sensitive to rates)
fss where we are today1
FSS – Where we are today
  • SES Global – the road less taken…
    • Substantial cash reserves and liquidity
    • Aggressive fleet expansion continues
    • Stated appetite for acquisitions
    • Projecting double digit growth in 2005 and 2006
    • Dividend yield of 3.1% - for now
    • Less financial risk, but more operational risk – plenty of rope
what lies ahead
What lies ahead?
  • Return of financial discipline
    • Tight capex budgets drive demand for “small” satellites
    • Capacity rationalization gradually eases transponder glut and drives increasing lease rates – growing EBITDA margins for all
  • Interest rate fluctuations affect the industry more than ever before
  • New Skies: eat or be eaten
  • Inmarsat: a different kind

of bird

paradigm shifts or did someone get the license on that truck
Paradigm shifts – or did someone get the license on that truck?
  • IPTV- based services
  • High Definition TV
  • Broadband to homes, aircraft, cars?
  • Ancillary Terrestrial Components
  • WiMax
  • Insurance – Do It Yourself
  • Satellites – one bird, many slots
  • SpaceX
near earth llc
Near Earth LLC
  • What we are: A boutique investment bank focused on satellite communications and related industries, member NASD
  • What we do:financings and advisory services to large and small companies
  • How we are different: Our industry focus allows us to be more more creative than larger Wall Street firms. Our small size allows us to be more flexible.
  • www.nearearthllc.com
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