EX-99.1 2 dex991.htm INVESTOR PRESENTATION OF IRIDIUM COMMUNICATIONS INC. Investor Presentation of Iridium Communications Inc.
Iridium Communications Inc.
Business Update & Iridium NEXT
Financing Strategy
February 9, 2010
Includes selected financial data through Q3 2009
Exhibit 99.1

Disclaimer
Safe Harbor Statement
This
presentation
contains
statements
about
future
events
and
expectations
known
as
“forward-looking
statements”
within
the
meaning
of
Section
27A
of
the
Securities
Act
of
1933,
as
amended
(the
“Securities
Act”),
and
Section
21E
of
the
Securities
Exchange Act of 1934, as amended (the “Exchange Act”).  We have based these statements on our current expectations and
the information currently available to us.
The words “anticipates,”
“may,”
“can,”
“believes,”
“expects,”
“projects,”
“intends,”
“likely,”
“will,”
“to be”
and other
expressions that are predictions of or indicate future events, trends or prospects and which do not relate to historical matters
identify
forward-looking
statements.
Forward-looking
statements
in
this
presentation
include
statements
about
expected
Operational EBITDA, Operational EBITDA margins and the expected availability and potential sources of financing for Iridium
NEXT. All statements other than statements of historical fact are statements that could be deemed forward-looking
statements.
These forward-looking statements involve known and unknown risks, uncertainties and other factors that may
cause our actual results, performance or achievements to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not
limited to, uncertainties regarding levels of demand for mobile satellite services, expected Operational EBITDA, Operational
EBITDA margins, growth in subscribers and revenue, the development of future products, and the development and availability
of financing for Iridium NEXT, as well as industry and economic conditions, competitive, legal, governmental and technological
factors,
as
well
as
those
factors
listed
under
the
caption
“Risk
Factors”
of
our
Form
10-Q
for
the
quarter
ended
September
30,
2009, as filed with the SEC on November 16, 2009.  There is no assurance that our expectations will be realized.  If one or
more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect, actual results may vary
materially from those expected, estimated or projected.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date
hereof.  We undertake no obligation to release publicly any revisions to any forward-looking statements after the date they are
made, whether as a result of new information, future events or otherwise.
2

Basis of Presentation
•
Reporting
Entity
The financial / operating results (other than those included in the Appendix on page 20) are the consolidated results for Iridium
Holdings LLC only and do not include the separate operating results of GHL Acquisition Corp. (now called Iridium Communications
Inc.)
The
Iridium
Holdings
LLC
results
discussed
in
this
presentation
are
for
the
period
from
July
1
through
September
29,
2009
(Q309)
and
for
the
period
January
1
through
September
29,
2009
(YTD09),
the
day
on
which
GHL
Acquisition
Corp.
acquired
Iridium
Holdings
LLC
(the
“Acquisition”)
and
effectively
ended
Iridium
Holdings
LLC’s
third
quarter.
However,
the
Iridium
Communications
Inc.
results
discussed
in
the
Appendix
to
this
presentation
are
for
the
three
and
nine
months
ended
September
30,
2009
and
2008.
•
Non-GAAP Measures
In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles, or
GAAP, the Company discloses Operational EBITDA, which is a non-GAAP financial measure, as a supplemental measure to help investors
evaluate its fundamental operational performance. Operational EBITDA represents earnings before interest; income taxes; depreciation
and
amortization;
Iridium
NEXT
revenue
and
expenses
(for
periods
prior
to
the
deployment
of
Iridium
NEXT
only);
expenses
associated
with the transaction with GHL Acquisition Corp.; and stock-based compensation expenses.  In future periods, Operational EBITDA will
also
exclude
the
impact
of
purchase
accounting
adjustments
and
the
change
in
the
fair
value
of
the
warrants.
Operational
EBITDA
does
not represent and should not be considered an alternative to GAAP measurements, such as net income, and Iridium’s calculations
thereof may not be comparable to similarly entitled measures reported by other companies.  A reconciliation of Operational EBITDA to
net
income
(loss),
its
most
comparable
GAAP
financial
measure
is
included
in
the
Appendix
to
this
presentation.
By
eliminating
interest,
income taxes, depreciation and amortization, transaction expenses associated with the Acquisition, stock-based compensation
expenses, Iridium NEXT revenue and expenses (for periods prior to the deployment of Iridium NEXT only) and purchase accounting
adjustments,
the
Company
believes
the
result
is
a
useful
measure
across
time
in
evaluating
the
Company’s
fundamental
core
operating
performance. Management also uses Operational EBITDA to manage the Company’s business, including in preparing its annual operating
budget, financial projections and compensation plans.  The Company believes that Operational EBITDA is also useful to investors
because similar measures are frequently used by securities analysts, investors and other interested parties in their evaluation of
companies in similar industries. As indicated, Operational EBITDA does not include interest expense on borrowed money or depreciation
expense on its capital assets or the payment of income taxes, which are necessary elements of the company’s operations. It also
excludes
expenses
in
connection
with
the
development,
deployment
and
financing
of
Iridium
NEXT.
Because
Operational
EBITDA
does
not account for these and other expenses, its utility as a measure of the Company’s operating performance has material limitations.
Because of these limitations, the Company’s management does not view Operational EBITDA in isolation and also uses other
measurements,
such
as
net
income,
revenues
and
operating
profit,
to
measure
operating
performance.
3

Business Update

Our Company
•
Satellite voice and data solutions for
enterprise & government
•
The only provider offering 100% worldwide coverage
•
Unique, resilient mesh satellite architecture
•
66 satellite Low Earth Orbit (LEO) constellation
•
~359,000
subscribers
(1)
•
Anchor U.S. DoD
customer –
23% of revenue for
YTD09
(2)
•
Complements terrestrial wireless solutions
•
Less than 10% of the earth’s surface is served by
terrestrial wireless systems
•
Expanding portfolio of products & services sold
via a broad distribution network
•
Data services growing rapidly
5
1)
Of our 359,000 subscribers at September 29, 2009, 5.6% maintained a suspended account on
such date.
2)
Includes direct and indirect DoD revenues and revenues from certain other governmental
entities through the DoD gateway.

Our
Unique
Attributes
-
How
we compete
Iridium is a unique company with exciting growth opportunities
Only Mobile Communications Provider Capable of 100% Global Coverage
•
Geostationary Earth Orbit (GEOs) are limited in serving users above 70°
latitude
•
Other LEOs
have limitations, e.g. serving maritime customers
•
Most of the earth’s surface is not served by terrestrial wireless
Mission Critical to the DoD
•
Dedicated proprietary gateway
•
Significant investment in our equipment
•
Only handhelds offering Type 1 encryption
•
Long-term
relationship
/
up
to
5-year
contract
(1)
A High Quality Voice and Data Solution
•
LEO mesh design provides no unnatural delays
•
Fully mobile; well proven, modern and rugged design
We Deliver Cost-effective Satellite Communications
•
Inherent cost advantages versus GEOs
•
Cost-effective Machine to Machine (M2M) –
rapid growth opportunity
•
Iridium
OpenPort
–
raises
the
bar
in
maritime
communications
6
1)
As is customary for government contracts, Iridium’s DoD contract is structured as a one-year contract with
four one-year options to extend.  The contract currently is in the first one-year option period and three
option periods remain.

Q3 Summary (Iridium Holdings LLC)
•
Commercial and Gov’t
Revenue up 23.0% and
2.1%, respectively, over Q3 2008
•
Subscriber
Base
up
16.1%
from
Q3
2008
(2)
•
Equipment Revenue down 37.0%, or $12.4M,
from Q3 2008
•
Operational
EBITDA
up
28.4%
(3)
•
Strong Liquidity as of end of Q3 2009
•
Unrestricted cash and equivalents of $136M
7
Total Revenue
Service Revenue
Equipment Revenue
Operational EBITDA
Net Income
($M’s)
(1)
Total Revenue, Op
EBITDA & Net Income
1)
Iridium Holdings LLC results are presented as the predecessor company.  Iridium Communications Inc.’s
results of operations for the three and nine months ended September 30, 2008 and 2009 are set forth in the Appendix on page 20.
2)
Subscriber figures include suspended subscribers
3)
Operational EBITDA represents earnings before interest, income taxes, depreciation and amortization,
Iridium NEXT revenue and expenses, expenses associated with the recently completed transaction with
GHL Acquisition Corp. and stock based compensation expenses.  See page 19 for a reconciliation of
Operational EBITDA to Net Income.
Cumulative
Subscribers
(2):
Q3
08
–
309,000;
Q3
09
–
359,000    

Strong Subscriber
and Service Revenue Growth
•
Growing subscriber base driving
recurring service revenue
•
Enterprise and government
end-users
•
Service revenue is predictable
and growing
($M's)
(000's)
Robust Subscriber Growth
1)  Of our 359,000 subscribers at September 29, 2009, 5.6% maintained a suspended account on such date.
$177
$147
$201
$159
$129
Q1 03
Q3 09
8
(1)
Service Revenue

2010 Management Guidance & Valuation
•
Previously announced 2009
Operational EBITDA guidance of
between $126-130M
•
Currently expect 2010
Operational EBITDA between               
$145-155M
•
Played critical role in recent
Haiti rescue and recovery efforts
•
Positive partner sentiment
moving into new year
•
New 9602 M2M device
•
OpenPort
adoption
9
Current Iridium Trading Valuation
Management Guidance
($ in millions, except per-share data)
Share Price as of 2/5/2010
$6.75
x Shares Outstanding
70.2
Market Capitalization
$474.2
Less: Net Cash
(3)
($126.7)
Enterprise Value
$347.5
Divided by: 2010E Operational EBITDA
$150.0
Ent. Value / 2010E Operational EBITDA
2.3x
Comparison to Inmarsat
~10.0x
(Primary Competitor)
(5)
(2)
(4)
Note: Balance
sheet
data
as
of
9/30/09. 
1)
Iridium provided this guidance on  November 13, 2009 and it speaks only as of that date.  We have not yet completed our audit of 2009 financial results and therefore can
make no statement about our actual 2009 results.  We do not intend our inclusion of this guidance to be a reaffirmation or update. 
2)
Includes shares outstanding at 9/30/09 of 68.3M, plus 1.9M shares issued upon the conversion of a subordinated promissory note in October 2009.  
3)
Includes cash and restricted cash, less deferred acquisition consideration.
4)
Represents midpoint of management guidance.
5)
Source: Bloomberg as of 2/5/10.
(1)

Iridium NEXT Financing Strategy

Iridium NEXT Constellation
•
Iridium NEXT will upgrade & replace current
satellite fleet
•
Current fleet expected to provide commercially
acceptable service through transition to Iridium
NEXT
•
Initial launches expected in 2014
•
66 satellite LEO constellation
•
Compatibility with current fleet eases network
transition
•
Iridium NEXT advantages:
•
Will expand capacity to 3M subscribers
•
Higher data speeds
•
Capable of supporting future product
enhancements
•
Designed to host secondary payloads
•
Will maintain Iridium’s unique architecture
11
•
Iridium NEXT prime vendor
selection process provides
opportunity to obtain favorable
government-backed financing
through export credit agencies
(ECAs)

Putting Cost of Iridium NEXT in Perspective
•
$2.7B constellation (current estimated total cost)
•
Assumes
constellation
provides
commercially
acceptable
service
through
2025-2030
(1)
•
Large cash flow potential over constellation life justifies the investment:
•
Iridium expects to fund a substantial portion of Iridium NEXT costs through internally
generated funds, secondary payloads and net cash
•
Starting
net
cash
position
of
$127M
(4)
as
of
September
30,
2009
•
Iridium
NEXT
expenditures
peak
in
2014,
allowing
advance
funding
through
operational
cash
flow
12
1)
Design life is expected to be 7-10 years.  Historically, actual constellation life has significantly exceeded design life.
2)
The
Operational
EBITDA
CAGRs
are
for
illustrative
purposes
only
and
are
not
intended
to
be
and
should
not
be
relied
upon
as management guidance or projections.
3)
Cumulative Operational EBITDA based on midpoint of 2010 Operational EBITDA guidance previously provided by
management ($150M) and assuming Operational EBITDA grows at 10% and 15% per year, respectively.
4)
Represents
cash
and
restricted
cash,
net
of
deferred
acquisition
consideration
relating
to
GHQ
transaction.
5)
Does not include any proceeds from potential exercise of warrants.
6)
For periods after the deployment of Iridium NEXT, Operational EBITDA will not exclude revenues and expenses associated
with
Iridium
NEXT.
See
page
3
-
Basis
of
Presentation.
Illustrative Example
Operational EBITDA CAGR
(2)
:
10%
15%
2010 - 2030:
$9.6 BB
$17.8 BB
Cumulative Operational EBITDA
Generation
(3,6)
(5)

Iridium NEXT Financing Strategy
Target Sources of Debt Financing
•
ECA-Backed Debt Financing
•
Senior debt backed by a government export-financing agency
•
Would likely be issued in conjunction with signing with a
prime contractor to build Iridium NEXT constellation
•
Unsecured Debt
•
Additional unsecured/subordinated corporate debt to the
extent ECA financing not sufficient
Potential
Iridium
NEXT
Funding
Sources
(~$2.7B)
(1)
Internally-
Generated
Operational
Cash Flow
50%
External
Capital
35%
Cash On Hand
5%
Warrant
Proceeds
10%
+
<
•
Substantial portion of capex
for Iridium NEXT is expected to be financed from internal
sources
•
For
remainder
of
financing,
Iridium
is
in
active
discussions
with
two
large
ECAs
to
secure a financing package, including backing/guarantees
•
Seeking support for a facility of up to $1.5B with repayment anticipated to begin in 2017 with a
term of up to 10 years on favorable financing terms
13
(2)
1)
Based on $2.7B total estimated cost; potential warrant proceeds of $261M; and cash / restricted cash on hand as of 9/30/09 
(net of deferred acquisition consideration relating to GHQ transaction).
2)
There are currently outstanding 13.7M warrants with a $7.00 exercise price and 14.4M warrants with an $11.50 exercise price. 

What is ECA-Backed Financing?
•
Export credit agencies (“ECAs”) are private or quasi-governmental
institutions that act as intermediaries between national
governments and exporters to issue export financing
•
Financing can take the form of credits (financial support) or credit
insurance and guarantees (pure cover) or both, depending on the
mandate the ECA has been given by its government
•
ECA-backed financing is used extensively for large capital purchases
in the aerospace industry (i.e., satellites, aviation, etc.)
•
Aerospace ECA-backed financing tends to be longer-term
•
Recent precedents have included flexible, delayed draw-down
mechanisms
•
Nature of Iridium NEXT program creates opportunities for job creation in
line with ECA’s
mission
14

Case Study: Globalstar
ECA-Backed Financing
•
In
June
2009,
Globalstar
executed a
$738M financing plan, consisting of the
following components:
•
$586M ECA senior secured financing
backed by Coface
(~79% of total need)
•
$60M contingent equity (converted)
•
$46M debt service reserve
•
$45M new sub debt or equity
•
Fully funds construction of Globalstar’s
second generation constellation and
four launches
•
Low interest rate of approximately
LIBOR + 207bps through 2012 (rate
cap limits LIBOR exposure to 4%
through 2012)
•
Drawdown period permitted through
late 2011, followed by 8.5 year
repayment schedule
Summary of ECA-Backed Senior Loan
Amount:
$586M (79% of total need)
Coface
Cover:
95% loan guaranty supported by
French Ministry of Finance (Coface)
Interest Rate:
LIBOR + 207bps; rate cap limiting
LIBOR exposure to 4% through 2012
Tenor:
~10.5 year term
Repayment:
Mortgage-style with low-high
structure; interest-only payments
until 2011
Upfront Fee:
2.8% flat structuring fee
Coface
Cover Costs:
(Premium for Guarantee)
6.68% of loan amount
(1)
Covenants:
Maximum capex; minimum liquidity;
other customary covenants
Source:
Globalstar
investor
presentation
dated
1/27/10.
1)
Included in the financing amount of $586M.
15

Status/ Potential Timetable of Iridium-ECA Discussions
•
Separate
applications
have
been
made
to
two
large
ECAs
and
significant discussions held
•
Goldman Sachs, Societe
Generale
and Hawkpoint
are advising Iridium in
these discussions
•
Iridium NEXT prime contractor candidates (Lockheed Martin &
Thales Alenia
Space) are engaged and supporting the process
•
An important component in the contractor selection process will be level
of ECA support
•
Anticipated
closing
in
Summer
2010
in
conjunction
with
selection
of
Iridium
NEXT
prime
contractor
16

Appendix

Iridium Holdings LLC Summary Q3 Highlights
($M; except subscriber data)
Q3 09
Q3 08
% Change
YTD 09
YTD 08
% Change
Subscribers  (at end of period ) (1)
359,000
309,000
16.1%
Revenue
Commercial service
Voice
39.5
32.6
21.2%
108.2
89.3
21.2%
M2M Data
4.3
2.9
48.3%
12.1
7.6
59.2%
Other Revenue
0.1
0.2
-50.0%
0.4
0.7
-42.9%
Total Commercial Service
43.9
35.7
23.0%
120.7
97.6
23.7%
Government service
Voice
13.3
13.2
0.8%
39.6
39.1
1.3%
M2M Data
0.2
0.1
100.0%
0.5
0.2
150.0%
Other Revenue
5.9
5.7
3.5%
15.9
9.5
67.4%
Total Government Service
19.4
19.0
2.1%
56.0
48.8
14.8%
Equipment
21.1
33.5
-37.0%
66.2
97.8
-32.3%
Total Revenue
84.4
88.2
-4.3%
242.9
244.2
-0.5%
Operational EBITDA
38.4
29.9
28.4%
103.7
85.4
21.4%
Net Income
15.0
16.9
-11.2%
53.3
52.3
1.9%
18
1)
Of our 359,000 and 309,000 subscribers at September 29, 2009 and September 29, 2008, respectively, 5.6% and
3.2% maintained a suspended account.

Iridium Holdings LLC
Operational EBITDA Non-GAAP reconciliation
19
Q309
Q308
YTD09
YTD08
($ in Millions)
Net income
$              
15.0
$               16.9
$               53.3
$               52.3
Interest expense
3.6
4.6
12.8
14.3
Interest income
(0.2)
(0.3)
(0.3)
(1.0)
Depreciation and amortization
3.6
3.1
10.8
9.0
Stock-based compensation
expenses
4.4
0.9
5.4
2.1
Non-recurring transaction
expenses
10.6
1.8
12.5
2.4
Iridium NEXT expenses, net
1.4
2.9
9.2
6.3
Operational EBITDA
$                38.4
$              29.9
$            103.7
$              85.4

Iridium Communications Inc. 
Unaudited Condensed Consolidated Statements of Operations
20
2009
2008
2009
2008
Operating expenses:
Professional fees
$    5,725
$       28
$   6,244
$    104
Other operating expenses
372
78
645
196
Total operating expenses
6,097
106
6,889
300
Change in fair value of warrants
(34,117)
—
(34,117)
—
Other income -
interest
157
1,943
979
4,936
(Loss) earnings before provision (benefit) for
(40,057)
1,837
(40,027)
4,636
Income tax (benefit) provision
(629)
740
(616)
2,088
Net (loss) income
$(39,428)
$  1,097
$(39,411)
$ 2,548
Weighted
average
shares
outstanding
-
basic
48,929
48,500
48,645
41,512
Weighted
average
shares
outstanding
-
diluted
48,929
48,500
48,645
41,512
(Loss) earnings per share -
basic
$    (0.81)
$    0.02
$   (0.81)
$   0.06
(Loss) earnings per share -
diluted
$    (0.81)
$    0.02
$   (0.81)
$   0.06
Nine Months Ended
September 30,
Three Months Ended
September 30,