HIGHLY CONFiDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`BUSINESS PLAN
`Originator: Clem Guillot
`Date : 08/03/06
`
`Project: DigiFIN
`Input Output Division: MISD
`
`Executive Summary
`
`DigiFlN addresses the towed marine seismic data acquisition needs for lateral control of stre amers on
`all existing marine seismic streamers. Streamer steerage provides spread stabilization and supports
`redu ced cros s line data sampling. DigiFlN has been well received by customers that have seen the
`presen tation given after the alpha test.
`Interest is so stro ng that some oil compani es will delay RFQs
`for surveys that requir e streamer steerage until DigiFlN is in the market. 10 has good visibility of the
`market opportunities and requirements . The compelling reason for 10 to enter into this market
`segment is the value that this device will bring to the existing marine seismic fleet. Th e overall
`position ing market is forecast to grow for the next few years. DigiFIN will allow existing customers
`to expand their offerings. By using DigiFfN existing customers will be able to compete in the
`proprietary "Q" marine systems market space. Time to marke t is critical since Sercel is known to be
`worki ng on a Bird device. Sercel's device will most likely have the capability to perform lateral
`stee rage
`
`The approach used to address the market opp ortu nities are as follows:
`1. 10 develops DigiFfN.
`a. This extern al device is backward compa tible with all marine seismic streamers.
`b. This device is driven by the priorities of time to market and backward comp atibility.
`c. This option relies heavily on the existing knowledge of Bird design and mounting.
`2. 10 develops a new dry end controller, Positioning Cont roller System, pes
`a. The design of this new hardw are is complete
`b. The PCS will be manufactured out of house.
`c. Pilot production is underway.
`3. 10 develops a Steerage Contro l System that works with the PCS
`a. The design is complete.
`b.
`In house testing is complete.
`4. M anufacturing of the DigiFfN will be in house.
`a. The first 250 units will be built exclusively in Harahan.
`b. After the initial 250 units are built, modular final assembly capacity will be added in
`Stafford.
`
`.i27o+1~+
`EXhibit NO.
`1
`WOrldwide~
`..... R~orters Inc.
`
`)
`
`The approac h is recommend based on the following reas ons :
`1. 10 is in the best position to develop an external backward compatible steerage device.
`2. This product will addre ss customer requirem ents in the time frame needed
`3. Create s a new product in the positioning product family.
`4. Provides pull through sales for DigiRANGE and ORCA.
`
`The net present value calculations for this project are $7 5.8M and $47.8M for the nominal case and
`worst case scenarios. This translates into a return on invest of OCF all pos itive and 1281%
`respectively (see attached charts below) . Th ere is a very good financial case to compl ete this project
`even consid ering wor se case rnetrics
`
`CONFJDEl\.'TIAI. andPROPRIETARY 10 lNPl IT Ol ffP l ff. lNr, ThilluOI..-umcrdcannot be copied byor lor anyone other tban the se ~flt:c lfical l}' euthco zcd by Input (Output.
`Jrc . The.inform ation contained 10 ~ document mil }"no: be disclosed to 30) "0111: outside cflnpUl 1 Output and may onI....be dis closed to those who iV t'; dir ectly involved in the
`subject mencr, a..,d these 10 "h oma....")' report.
`F1LE: G:\Dali'l\RDS\RDSon3\O-J...21 -10 files10 send to vc ndonl'roduction Files4-16.2CJ1 0illiglFJN PD&.C\D: hw r-Iblcs
`
`EXHIBIT
`
`ION016 360
`
`Defendant ION
`Trial Exhibit
`125
`
`4:09-cv -01827
`
`WESTERNGECO Exhibit 2117, pg. 1
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`Page: 2 of 18
`BUSINESS PLAN
`DigiFIN
`Date: 07113/06
`
`Financials
`
`"Prior·
`
`2007
`
`SALES REVENUE
`mHlioh$4.40
`38.21
`1-:-,..--..,."c-'-4~~-c.;.-+--c-c--~-I-~~---"'-+-'-'-'-'-+-~+---'-'-,-+-"-f~~~'--"-
`"OPE~ATINGCASJ,lFt.OW miIliOh$I1,15
`
`~.
`
`NPV(miUion$)::'j
`
`ill
`
`UZx<(cid:173)
`0::2:
`~
`
`Rim Cost @ 10% incr
`COGS
`@ 10% avgincf
`.'"
`q~le$\,Iol @;;10% ~v~
`,
`"'Ptice@~1 o%~vgdecr
`",
`.. ",.:>:., '::
`"
`.: .',SustCbst @1O%incr
`
`"
`
`..
`
`' , '
`
`.'
`
`IRR= il NIA~bcF<lJiposjti;Ve
`••'
`.:
`. '. ",
`t
`"
`.r
`·~,:'.c,:'·,.,·."i
`NPVS~~ndardRI$R ",.<
`Nominal NPV = .. $75.6 .. ' millions
`Nominal IRR =fqgF.~I!,PRsitive
`Worst Case NPV =':"$47.8
`Worst Case IRR =1~$1%)'
`
`millions
`
`"
`
`"~c.
`
`.,
`
`Product development and commercialization ofDigiFIN is relatively low risk. The biggest technical
`risks are the steerage controller and the mounting interface. The commercial risk is our ability to
`ramp up production to meet initial demand. Risk mitigation strategies are to have an extensive beta
`test and enhancement phase to address the technical issues. The commercial risk are being mitigated
`by shoring up vendor relationships and forward looking capacity planning with elasticity to meet
`changing demand.
`
`The DigiFIN Core Team recommends that this program continue to be fully funded and staffed for
`Phase 4 per the program metrics as summarized in the following table. Again, time to market is key to
`the success of this program TO must focus appropriate resources throughout all phases of
`~••~~~~~~a~n~d~~cioimmercialization to meet the market window=."""''''''':'2:'-?'=
`
`Core & Extended Team Labor (k$)
`Engineering-only Team Labor (k$)
`External Costs & Svcs (k$)
`Material (k$)
`Capital Expenditures (k$)
`
`COSTS
`
`DELIVERY METRICS
`
`Start Beta Test
`Betat Test Report
`Customer Acceptance Report
`Validation Gate Review
`
`REMAINING STAFFING THIS PHASE
`
`See Page 2: Staffing avg FTE (Note 6)
`
`TOTAL STAFFING this contract (Man Months)
`
`AVERAGE STAFFING per month (FTE)
`
`TOTAL (average) ENGINEERING FTE =
`
`$421
`$309
`$35
`$5
`$650
`
`TARGET
`
`10/25/06
`01/15/06
`01/15/06
`01/31/06
`TARGET
`FTE
`
`37.40
`
`7.68
`
`5.64
`
`+
`$42
`$31
`$4
`$1
`$65
`
`(change)
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`WAS
`(change)
`
`WAS
`(change)
`
`+ FTE
`
`-$42
`-$31
`-$4
`-$1
`-$65
`
`- weeks
`1
`1
`3
`3
`LIMIT
`
`- FTE
`
`n/a
`
`n/a
`
`n/a
`
`0.77
`0.56
`
`-0.77
`-0.56
`
`CONFIDENTIAL and PROPRIETARY to INPUT OUTPUT. INC This document cannot be copied b)"or for anyone other than those specifically authorized by Input I Output,
`Inc. The infcrmarion contained in the document may not be disclosed to anyone outside oflnpul i Output and may onlybedisclosed to those who eredirectlyinvolvedin the
`subject matter, and those 10 whom they report.
`
`ION016361
`
`WESTERNGECO Exhibit 2117, pg. 2
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`BUSINESS PLAN
`Page: 3 0[1&
`DigiFIN
`Date: 07/13/06
`
`Table ofContents
`
`EXECUTIVE SUMMARy
`
`TABLE OF CONTENTS
`
`PROJECT OVERVIEW
`
`PROJECT OBJECTIVES
`PRODUCT REQUIREMENTS
`PRODUCT / SOLUTION DESCRIPTION
`BUSINESS OPPORTUNITY
`STRATEGICFIT
`KEY RISKS AND RISK :tv1ITIGATION
`
`MARKET PLAN
`
`KEy OBJECTIVES
`MARKET OPPORTUNITY
`MARKET DRIVERS AND TRENDS
`COMPETITIVE ASSESSMENT
`COMPETITIVE ADVANTAGE
`PRICING STRATEGY
`SALES STRATEGY
`PROMOTION PLAN
`SALES FORECAST
`MARKETING RISKS AND MITIGATION
`
`DEVELOPlVIENTPLAN
`
`,
`
`'"
`
`DEVELOPMENT STRATEGY
`RESOURCE NEEDS, DEVELOPMENT COSTS AND PHASE MILESTONES
`.
`CURRENT STATUS AND PROPOSED SCHEDULE...................
`TECHNICAL I FEASIBILITY RISKS AND MITIGATION
`
`FINANCIAL ANALySIS
`
`ASSUMPTIONS
`P&LSTATEMENT
`RISK AND SENSITIVITY ANALYSIS
`
`OPERATIONS
`
`PRODUCTION PROCESS: STRATEGy
`PRODUCTION PROCESS: LABOR AND EXPENSES
`COGS SUMMARY
`CAPITALEXPENSEDETAlLS
`RISKS AND MlTIGATION STRATEGIES
`
`CONTACTS
`
`CORE TEAM
`CONTRIBUTING GROUP MANAGERS............
`SUBCONTRACTORS AND PARTNERS
`
`.
`
`1
`
`3
`
`4
`
`4
`4
`4
`4
`5
`5
`
`6
`
`6
`6
`6
`7
`7
`7
`7
`8
`8
`9
`
`10
`
`10
`10
`11
`12
`
`13
`
`13
`13
`14
`
`14
`
`14
`15
`15
`16
`16
`
`17
`
`17
`17
`18
`
`CONFIDENTIAL and PROPRlETAR Y to INPUT OUTPUT, INC. This document cannot be copied by or for anyone other than those specifically authorized by Input! Output,
`Inc. The information contained in tile document may not be disclosed (0 anyone outside of Input i Output and may only be disclosed to those who are directly involved in the
`subject matter, lind those to whom they rcpon
`
`ION016362
`
`WESTERNGECO Exhibit 2117, pg. 3
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`BUSINESS PLAN
`Page: 4 of 18
`DigiFIN
`Date: 07113106
`
`BUSINESS PLAN
`PROJECT OVERVIEW
`
`PROJECT OBJECTIVES
`The objective of this development and commercialization project is to provide a cost effective,
`horizontal streamer steering system for the marine seismic service contractor community. This is an
`addition to and established and mature business segment that IO has been servicing for many years.
`With this investment, IO will be in a position to capitalize on growing market needs / opportunities
`with the following goals:
`Gain 70% market share over the next 5 years of a growing steerage market.
`Be first to market an external steerage device.
`Command a market premium (price and margin) over competitors.
`Commercialize a reliable system before the February 2007.
`Position IO to capture additional DigiRANGE and ORCA sales.
`
`PRODUCT REQUIREMENTS
`Customers require an externally mounted device that will provide lateral steerage. This device should
`provide spread stabilization, and prevent streamer entanglement. The cable mounted device must
`communicate via the existing FSK communication coils. It must not have a negative effect on
`network depth control.
`It must not generate more noise in the seismic band than an existing
`externally mounted device. Once its basic functionality is proven customers would like to see the
`system accelerate deployment and retrieval, minimize the time required to complete line changes, and
`eventually reduce the feather angle of the network.
`
`PRODUCT / SOLUTION DESCRIPTION
`DigiFIN will be an external device similar to the existing 5011 DigiBIRD and the 5110
`AcousticBIRD The device will have weight in one wing and buoyancy in the other so that it rides on
`the starboard side of the streamer cable. It will have an enhanced motor module, wing module, and
`It will have a pitch and roll sensor so that it can self determine its attitude. The
`larger wings.
`DigiFIN will also be capable of reporting depth and will have an acoustic receiver similar to the
`AcousticBIRD.
`It will leverage the manufacturing process of the existing Bird and Acoustic product
`lines.
`
`BUSINESS OPPORTUNITY
`I/O Opportunities
`Strategically position 10 to create the external steerage market.
`•
`• To not develop DigiFIN strategically positions Sercel to capitalize on this market.
`• An enabler for additional sales ofDigiRANGE and ORCA.
`• A catalyst to leverage alliances between DigiCOURSE and Concept.
`• Capitalize on economy of scale and more efficient use of core experience talent in Bird
`hardware development and support.
`Benefits to Customer
`
`CONFIDENTIAL and PROPIUETAR Y to INPUT OUTPUT, INC, This document cannot be copied by or for <lnyon~ other than those specifically authorized by Input i Output,
`Inc. The informationcontainedin the documentmaynot be disclosed10 anyoneoutsideof lnput / Outputand rna)'only be: disclosedto those whoarc:directlyinvolvedin the
`subject matter. and those to whom they report.
`
`ION016363
`
`WESTERNGECO Exhibit 2117, pg. 4
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`BUSINESS PLAN
`Page: 5 of 18
`DigiFIN
`Date: 07/13/06
`
`•
`
`•
`
`Provides better 3D images and enables 4D, time-lapse seismic surveys. Both are proven tools
`to detect new hydrocarbons and additional hydrocarbons within a reservoir.
`Should be superior to other steerage alternatives both in economics and technical results based
`on it's compatibility with all streamer systems.
`
`STRATEGIC FIT
`Advances 10 corporate strategy
`• Enhances 10's diversified mix of products & services
`•
`Improves marine imaging
`Fits MISD strategic direction
`•
`Significant addition to MISD revenue
`Leverages DigiBIRD and DigiRANGE market penetration
`• Opportunities for pull through sales DigiRANGE and QuickCUFF
`
`KEY RISKS AND RISK MITIGATION
`
`Risk
`Description
`
`Risk
`Level
`H,M,L
`
`manufacturing
`capacity
`
`Cable
`consturction
`
`PGS
`acceptance
`
`Competitor
`develops a
`steerage
`device
`
`M
`
`H
`
`M
`
`M
`
`Risk Affects
`
`Risk Mitigation Strategies (Options)
`
`10 can not deliver
`DigiFIN
`
`Shore up supplier relations
`Plan capacity in excess of that needed
`Issue PO for first year's production
`Pro-actively manage vendors
`
`Determine if Cable construction meets 10 requirements
`DigiFINs stability Work with contractor/vendor to have cable construction meet 10 requirements
`and effectiveness
`Develop addaptor appliance to overcome errors in cable construction
`
`Through the users group proactively engage PGS
`Market acceptance Complet and pass all beta test
`Complete PGS enhancements as requested
`
`Sales does not
`meet the forecast
`
`Beat competition to market
`Identify and resolve all issues early in the Beta test phase
`Complete Beta test on schedule or earlier
`
`Cable accident
`
`L
`
`Market acceptance Phase in features with lowest risk features first
`
`CONFIDENTIAL and PROPRJET.'\R Y '0 INPUT OUTPUT, INC. This document cannot IN copied by or for anyone other than those specifically authorized by Input/ Output,
`Inc. The information contained inthedocument maynotbe disclosedto anyoneoutsideof Input I Output andmayonly be disclosedto thosewho aredirectly involvedinthe
`subject matter, and those to whom they report
`
`ION016364
`
`WESTERNGECO Exhibit 2117, pg. 5
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION ~ SUBJECT TO PROTECTIVE ORDER
`BUSINESS PLAN
`Page: 6 of18
`Date: 07/13/06
`DigiFIN
`
`MARKET PLAN
`
`KEY OBJECTIVES
`• Use the benefits of horizontal steering to command a market premium (price and margin) over
`competitors - Maintain gross margin in line with current Bird 68% .
`• Gain 70% market share, or better, of the growing steerage market over 5 years
`Position 10 to capture additional acoustic sales and upgrades
`•
`•
`Position 10 to capture additional ORCA sales and upgrades
`• Tout features and benefits to seismic contractors and oil companies
`•
`Trial product with a major seismic contractors (PGS) in order to leverage market acceptance
`
`MARKET OPPORTUNITY
`Customer Targets:
`PGS has been chosen as the launch partner for the product. This was done for several reasons. PGS
`has the most operational experience towing streamers at 50 meter spacing and less. DigiFIN
`complements their vision ofHD3D. PGS's total streamer length in service is more than any other
`contractor.
`
`Other traditional customers are potential customers for DigiFIN as well. CGG, Veritas, Western(cid:173)
`Geco, and Fugro have all expressed interest in the product.
`
`New players such as SCAN and Wavefield have expressed interest.
`
`The export market, COSL, SMNG, BGP all have expressed interest in the product.
`
`All companies operating 3D vessels are the potential customers for DigiFIN.
`
`Total Market Size:
`The potential DigiFIN market is made up of all 3D seismic vessels. Currently that is approximately
`62 vessels. DigiFIN units will be placed on the cables every 300 meters. Based upon the total
`streamer length in use this would be a potential of 5141 units. On top of that vessels usually carry
`20% spares. Historically over a 5 year period 40% of the bird fleet is replaced. Based on the above,
`the potential market for DigiFIN is 12,981 units. Based upon market feed back and initial customer
`interest it is believed that 70% of the total market, 9000 units, can be captured in 5 years. This is
`approximately $144M over 5 years. This product will pull through approximately $40M in acoustic
`revenue and $4M in shipboard controller revenue.
`
`MARKET DRIVERS AND TRENDS
`The increased demand in oil has required oil companies to become more efficient in their new field
`development and the extraction of oil from existing fields Both of these increases in efficiency
`require an increase in the fidelity of the seismic image. While some have used OBC to acquire these
`higher fidelity images, towed streamers remain the most cost effective means of imaging marine
`images. Currently only Western-Geco offers a towed marine system that is capable of producing
`
`CONFIDENTIAL and PROPRlETAR Y 10 iNPUT OUTPUT, INC. This document cannot be copied by or for anyone other than those specifically authorized by Input I Output,
`Inc. The information contained in the document may not be disclosed to anyone outside oflnput I Output and may only be:disclosed to those who are directly involved in the
`subject matter, and those to whom they report.
`
`ION016365
`
`WESTERNGECO Exhibit 2117, pg. 6
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`BUSINESS PLAN
`Page: 7 of 18
`DigiFIN
`Date: 07/13/06
`
`these higher fidelity images. Their system is proprietary and they demand a price premium over
`traditional towed marine systems that approach the cost of an OBC survey.
`
`Oil companies are looking for other alternatives that are more cost effective and widely available.
`Contractors are looking for a way to compete with OBC and Western-Geco.
`
`COMPETITIVE ASSESSMENT
`Currently the only competitor in the cable steerage market is Western-Geco, with their
`proprietary "Q" system. The "Q" system is currently available on only six vessels. In
`addition their device is an in-line device that only works on their proprietary cable. They
`have no intention of selling the system to other contractors.
`
`Sercel is in development of a "Bird" device. This device could be a cable leveler only,
`It is not known if this device will be an external device or
`steerage device, or combination.
`an in-line device. No more information is available at this time.
`
`COMPETITIVE ADVANTAGE
`The DigiFIN device is unique because it is an external device that is backwards compatible with all
`streamer cables. It is from the same DigiBIRD family so it is roughly the same size as the existing
`It is handled, stored, deployed, and retrieved like a Bird.
`DigiBIRD.
`
`The DigiFIN is backward compatible. This allows the contractor to keep their high dollar investment
`in streamers in place rather than spending more dollars to replace the streamers.
`
`Currently Western-Geco has a backlog for their "Q" vessels. Today the oil companies have no
`alternative to their "Q" vessels. The DigiFlN opens the door to all 3D vessels, 62 as of today, to
`compete in the market space that the Western-Geco has created.
`
`PRICING STRATEGY
`The list price for the DigiFIN device will be $ 17,500. The average sales price accounting for
`discounts should be $16,000. This price was based on the unit cost and the value the product brings
`to the customer. While some may argue that the price could be set higher, it is believed that by
`keeping the price point in line with other external devices 10 will accelerate market penetration even
`if another competitor arises.
`
`SALES STRATEGY
`Initially the major towed marine seismic contractors are the targeted customers. We have chosen
`PGS as the launch partner in part because they are the largest potential customer base and the
`DigiFIN is complimentary to their marketing strategy
`
`Other customers are anyone operating a towed marine 3D seismic vessel
`
`All of our customers are well known to 10 and vise versa. 10 must educate the customers on our
`plans, system capabilities, and production timelines so that this information can be used in their
`planning processes. This will require a direct, collaborative effort to understand their requirements to
`
`CONFiDENTIAL and PROPRIETAR Y to INPUT OUTPUT, INC. This document cannot be copied by or lor anyone other than those speciflcalfy authorized by Input i OUtput,
`Inc. The information containedIn the documentmay not be disclosed to anyoneoutside of lnput ZOutputand may only be disclosed to those who are directly involved inthe
`subject rnaucr. and those to whom they report
`
`ION016366
`
`WESTERNGECO Exhibit 2117, pg. 7
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`Page: 8 of 18
`BUSINESS PLAN
`Date: 07/13/06
`DigiFIN
`
`determine the desired system solution.
`
`IO will sell this device based on its ability to improve image quality and increase productivity.
`
`PROMOTION PLAN
`Strategy
`DigiFIN will be promoted through the SEG and other industry specific conventions. In addition we
`will hold client centric meetings to share beta results and other success stories.
`
`Method of Sales
`Sales will be handled directly with the customer. The sales interface will be both relational and
`technical based on providing system solutions. A high level of customer interaction on the technical
`front will be required. Therefore, the sales team must be adequately trained to support this activity.
`10 will use its existing regional and centralized infrastructure to address sales.>
`
`Advertising and Promotion
`Product information will be communicated directly to the end-users through normal sales contacts,
`workshops, user group meetings and industry trade shows.
`
`Oil company and investor communications will be addressed through presentations and advertising in
`trade shows and trade journals.
`
`SALES FORECAST
`Based on the information provided in the Market Plan section and the latest intelligence on near and
`mid term sales opportunities, the following table outlines projected sales that are expected to be
`captured.
`
`SALES FORECAST TABLE - ref: Project Financials Spreadsheet, sheet: Contract (2)
`SALES FORECAST
`
`·Prior
`
`2007
`
`2008
`
`2009
`
`2010
`
`2011
`
`PRODUCT NAME
`Dig/FIN ~ird
`AVG SALES PRICE
`SALES Total
`
`250
`$16000
`$4.000
`
`1800
`$16.000
`$28.800
`
`1800
`$16.000
`$28.800
`
`i VARIANCES
`+ %
`-%
`-10%
`10%
`10%
`-.10%
`$144
`
`CONFIDENTIAL and PROPRlETAR Y to INPUT OUTPUT, INC. This document cannot be copied by or for anyone other than those specifically authorized by Input I Output,
`Inc. TIle information contained in the document may not be disclosed to anyone outside of'Input z Output and may only be disclosed 10 those who are directlyinvolved in the
`subject matter, and those 10 whom they report.
`
`ION016367
`
`WESTERNGECO Exhibit 2117, pg. 8
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`Page: 9 of 18
`BUSINESS PLAN
`Date: 07113106
`DigiFIN
`
`MARKETING RISKS AND MITIGATION
`
`Risk
`Description
`
`Risk
`Level
`H,M, L
`
`manufacturing
`capacity
`
`Cable
`consturction
`
`PGS
`acceptance
`
`Competitor
`develops a
`steerage
`device
`
`M
`
`H
`
`M
`
`M
`
`Risk Affects
`
`Risk Mitigation Strategies (Options)
`
`10 can not deliver
`DigiFIN
`
`Shore up supplier relations
`Plan capacity in excess of that needed
`Issue PO for first year's production
`Pro-actively manage vendors
`
`Determine if Cable construction meets 10 requirements
`DigiFINs stability
`and effectiveness Work with contractor/vendor to have cable construction meet 10 requirements
`Develop addaptor appliance to overcome errors in cable construction
`
`Through the users group proactively engage PGS
`Market acceptance Complet and pass all beta test
`Complete PGS enhancements as requested
`
`Sales does not
`meet the forecast
`
`Beat competition to market
`Identify and resolve all issues early in the Beta test phase
`Complete Beta test on schedule or earlier
`
`Cable accident
`
`L
`
`Market acceptance Phase in features with lowest risk features first
`
`CONFIDENTiAL and PROPRlETA.RY to INPUT OUTPUT, INC. This document cannot be copied by or for anyone other than those specifically authorized by Input I Output,
`Inc. The information contained in the document may not be disclosed to anyone:outside of input I Output and may only be disclosed to those who are directly involved in the
`subject matter, and those to whom they report.
`
`ION016368
`
`WESTERNGECO Exhibit 2117, pg. 9
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`BUSINESS PLAN
`Page: 10 of 18
`Date: 07/13106
`DigiFIN
`
`DEVELOPMENT PLAN
`
`DEVELOPMENT STRATEGY
`Describe the recommended mix ofin-house design vs. outsource, viable options (ifapplicable) and the reasoning used
`to generate your strategy.
`The development of the DigiFIN device was done in-house. The development of the pes was done
`out of house.
`
`RESOURCE NEEDS, DEVELOPMENT COSTS AND PHASE MILESTONES
`Present and discuss a design and development budget for completing the work or service through the next Gate
`Review. . Be sure to include labor, materials, consulting fees, legal fees, cost ofpatents and other elements necessary
`to the production ofyour product or service.
`
`Insert the following table below [Paste Special, Picture (windows metafile)} from the sheet named Contract (1)
`located in the FINANCIALS spreadsheet.
`Delete this text box in final document
`
`-$42
`-$31
`-$4
`-$1
`-$65
`
`- weeks
`1
`
`1 3
`
`- FTE
`
`-0.77
`-0.56
`
`Core & Extended Team Labor (k$)
`Engineering-<>nly Team Labor (k$)
`External Costs & Svcs (k$)
`Material (k$)
`Capital Expenditures (k$)
`
`COSTS TOTAL
`
`DELIVERY METRICS
`
`Start Beta Test
`Betat Test Report
`
`$421
`$309
`$35
`$5
`$650
`
`TARGET
`
`10/25/06
`01/15/06
`
`+
`$42
`$31
`$4
`$1
`$65
`
`(change)
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`WAS
`(change)
`
`REMAINING STAFFING THIS PHASE
`
`TARGET
`FTE
`
`WAS
`(change)
`
`See Page 2: Staffing avg FTE (Note 6)
`
`TOTAL STAFFING this contract (Man Months)
`
`AVERAGE STAFFING per month (FTE)
`TOTAL (average) ENGINEERING FTE =
`
`37.40
`
`7.68
`5.64
`
`n/a
`n/a
`n/a
`
`0.77
`0.56
`
`Detailed Resource Needs this Phase
`See the Phase contract, page 2 for a detailed list of resource needs.
`
`CONFIDENTiAL and PROPRIET.llJ( Y to INPUT OUTPUT, INC. This document cannot be copied by or for anyone other than those specifically authorized by Input;' Output,
`Inc. The information contained in the document may not be disclosed to anyone outside oflnput / Output and may only be disclosed to those who are directly involved in the
`subject matter, and those to whom they report.
`
`ION016369
`
`WESTERNGECO Exhibit 2117, pg. 10
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`Page: 11 ofl8
`BUSINESS PLAN
`Date: 07/13/06
`DigiFIN
`
`CONTRACT for DiglFIN VALIDATION PHASE: 4
`STAFFING AVERAGP FTE (breakout)
`
`TARGET
`FTE
`
`WAS
`(change)
`
`+ FTE %
`
`DEVELOPMENT-DEVELOPMENT
`DOC_CTR - Nancy Vella
`DOC_DFTG - Judith Rinks
`DOC_WRIT - Jessica Yusuf
`EE~N - Kevin Rau
`EE_DIG - Chris Duggan
`EE_EGR - Ross Dessauer
`EEJIRM - Alfred Alvendia
`EEJIRM - Micah Wilson
`EE_HW - Adam Jackson
`ME_MFG - Chris Christensen
`ME_MFG - Eddie Faucheaux, Jr.
`ME_TEK - Eddie Faucheaux, Jr.
`ME_TEK - No Resource Assigned
`PJ_MGR - Dan Seale
`SE_EMB - Dan Seale
`SE_GUI - Doug Brown
`SE_SYS - Doug Brown
`SYS_EGR - Andre' Olivier
`SYS_EGR - Rob Rouquette
`SYS_EGR - David Cespedes
`OPS - No Resource Assigned
`PROC - No Resource Assigned
`MKTG - Clem Guillo!, III
`FS - Burke Campbell
`SALES - Rob Leger
`OPS - Jimmy Hebert
`FS - No Resource Assigned
`SUSTAINING - SUSTAINING
`EE_HW - Adam Jackson
`EE_DIG - Chris Duggan
`EE_EGR - Ross Dessauer
`ME_MFG - Chris Christensen
`EEJIRM - Alfred Alvendia
`EEJIRM - Micah Wilson
`ME_TEK - Eddie Faucheaux, Jr.
`MFG - Vincent Impastato
`
`DEVELOPMENT
`0.079
`0.123
`0.236
`0.079
`0.158
`0.000
`0.312
`0.336
`0.000
`0.394
`0.788
`0.788
`0.788
`0.473
`0.079
`0.079
`0.568
`0.158
`0.123
`0.079
`0.000
`0.158
`0.315
`0.079
`0.079
`0.158
`0.788
`SUSTAINING
`0000
`0.000
`0.000
`0.000
`0.000
`0.000
`0.000
`0.473
`
`n/a
`n/a
`n/a
`nla
`n/a
`nla
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`n/a
`
`n/a
`n/a
`n/a
`n/a
`
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`SUSTAINING SUSTAINING
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`10%
`-10%
`
`EE_DIG - Chris Duggan
`
`0.00
`
`TOTAL (average) FTE =
`7.68
`5.64
`TOTAL (average) ENGINEERING FTE =
`• For per month FTE specifics see: Project Financials Spreadsheet, Sheet: Input-ENGR
`
`CURRENT STATUS AND PROPOSED SCHEDULE
`Describe the current status ofthe product development and what remains to be done to deploy it into the market
`
`CONFIDENTJAL and PROPRlETA.RY to INPUT OUTPUT, INC. This document cannot be copied by or for anyone other than those specifically authorized by Input f Output,
`Inc. The information contained in the document may not be disclosed to anyone outside of Input I Output and may only be disclosed to those who are directly involved in the
`subject matter, and those Lawhom they report.
`
`ION016370
`
`WESTERNGECO Exhibit 2117, pg. 11
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`Page: 12 ofl8
`BUSINESS PLAN
`Date: 07/13/06
`DigiFIN
`
`place. Include key milestone information from the Design and Implementation Plan schedule detailing when the work
`will be completed.
`
`The development ofthe device is complete. In house testing is complete and this project is currently
`in moving into the validation phase.
`
`TECHNICAL / FEASIBILITY RISKS AND MITIGATION
`
`Use the following table to list all significant Developement risks & Insert [Paste Special, Picture (windows
`metafilel] the following table below click here for template
`Delete this text box in final
`document
`
`Risk
`Description
`
`Risk
`Level
`H,M,L
`
`10 Resource
`Availability
`
`Schedule Slips
`
`<manuf.
`Outsource>
`manufacturing
`capacity
`
`<design
`Outsource>
`assigns crit
`resources onto
`other projects
`
`System
`Reliability
`
`H
`
`M
`
`M
`
`L
`
`Risk Affects
`
`Risk Mitigation Strategies (Options)
`
`Missed Market
`Windows
`
`Thourough & realistic forward planning
`Senior management commitment
`Outsource design of <describe>
`Alliance with development partner <describe>
`Decreased Sales, Use Consultants to <describe>
`Revenue, NPV
`Hire senior reliability consultant to<describe>
`Utilize outside test services to <describe>
`
`Develop alternate supplier
`10 can not deliver Acquire <Outsource Name>
`<describe>
`Establish contractual terms by <date>
`Pro-actively manage outsource partner
`
`10 can not deliver
`to the time line
`established andlor
`deliver a product
`
`Establish contractual terms by <date>
`Issue purchase req by <date>
`Pro-actively program manage outsource partner
`
`Test Plan - <describe>
`10 can not deliver Field Tests - <describe>
`Use Consultant to <describe>
`on time andlor
`deliver a product Alliance with development partner to <describe>
`Hire senior reliability consultant to <describe>
`
`CONFIDENTIAL and PROPRIETARY to INPUT OUTPUT, INC. This document cannot be copied by or tor anyone other than those specifically authorized by Input! Output,
`Inc. The informationcontainedin the documentmaynor be disclosedto anyoneoutside ofInpU!/ Outputand mayonlybe disclosedto thosewhoare directlyinvolvedin the
`subject matter, and those 10 whom they report.
`
`ION016371
`
`WESTERNGECO Exhibit 2117, pg. 12
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`Page: 13 of 18
`BUSINESS PLAN
`Date: 07/13/06
`DigiFIN
`
`FINANCIAL ANALYSIS
`
`ASSUMPTIONS
`Generate a complete list of assumptions used to generate program tinenciels.
`
`The seismic towed marine marketing database was used to drive the assumptions, which are:
`•
`Total seismic fleet is 119 vessels
`• There are 62 3D vessels
`•
`Potential deployed devices based on streamer length towed are 6000.
`•
`Spares rate assumed at 20%
`• Replacement rate is 40% over 5 years
`• Total steerage market approximately 13,000 devices
`• Acoustic networks must be upgraded from a FrontlMid/Tail to Full acoustic crossbracing
`• Acoustic networks must be upgraded from DigiRANGE I or SIPS to DigiRANGE II
`
`P&L STATEMENT
`
`Insert thefollowing table below [Paste Special, Picture (windows metafilej] from the sheet named Decision P&L
`located in the FINANCIALS spreadsheet.
`Delete this text box in final document
`
`DEqlSION P&L- forWard looking
`2007
`First yliar Sales Begin in:
`
`PR{)JECTNAME:. DigifiN
`
`BUS1NESS UNIT: 'MISD
`
`'Prior
`
`2007
`
`2008
`
`2009
`
`2010
`
`2011
`
`ISALES REVENUE
`
`$4.4
`
`$38.2
`
`ISUSTAINING ENGINEERl\ljG
`
`n
`
`[CUSTOMER SERVICE EXPENSE
`
`COST OF GOODS SOLD
`AVG COGS (assumes 1 of each product)
`
`$38.2
`
`$0.34
`
`$38.2
`
`$0.34
`
`$38.2
`
`$0.34
`
`$38.2
`
`$0.34
`
`PROJECT
`TOTAL
`
`$195.5
`
`$1.59
`
`'" 75.82
`
`IRR=
`
`$117.6
`
`62%
`
`$117.6
`
`$23.4 '
`61%
`Nii>.- del"atlposltive
`
`RATES USED( Reference)
`
`1
`File: X:'io\PSl\qrt_review_071206\(FINANCIAlS_DigiFIN crern OaDaOOe.xls)Decision P&t
`
`DISCOUNT RATE =1
`
`12% 'I
`
`STD. SALES & ADMIN RATE =1
`
`6%
`
`CONFIDENTIAL and PROPRlETARY to I~PUT OUTPUT, INC. This document cannot be copied by or for anyone other than those specifically authorized by Input I Output,
`lnc. The information contained in the document may not be disclosed to anyone outside of Input I Output and may only be disclosed to those who are directly involved in the
`subject matter, end those to whom they report.
`
`ION016372
`
`WESTERNGECO Exhibit 2117, pg. 13
`PGS v. WESTERNGECO
`IPR2014-01478
`
`

`
`HIGHLY CONFIDENTIAL INFORMATION - SUBJECT TO PROTECTIVE ORDER
`Page: 14 of 18
`BUSINESS PLAN
`DigiFIN
`Date: 07/13/06
`
`RISK AND SENSITIVITY ANALYSIS
`
`Insert the following table below [Paste Special, Picture (windows metafile)} from the sheet named Sensitivity
`Delete this text box infinal document
`loc