Iridium Communications

Iridium Communications Inc. 
2009 Annual Report 
to Stockholders

Dear Fellow Shareholder,

In 2009, the Iridium team delivered on its most critical strategic initiatives and continued to
affirm the strength of our business model and the value of Iridium products and services. We
successfully concluded the transaction between Iridium Holdings LLC and GHL Acquisition
Corp., resulting in our becoming Iridium Communications Inc. and being listed on NASDAQ.
This transaction paved the way to Iridium’s future, allowing us to pay off our credit facilities
and pursue Iridium NEXT, our next generation satellite constellation.

Before I report on the year past, let me speak to what is in the forefront of our minds today –
the deployment of Iridium NEXT. We anticipate selecting our prime contractor and securing
necessary financing soon, which will enable us to move into the next phase of Iridium NEXT.
This will keep us on track for a seamless transition from the current satellite network to a new
one with even more capability and flexibility. Iridium NEXT is being designed to be fully
compatible with all the devices and services that Iridium offers today, while also enabling
more technologically advanced and efficient services. We expect
to remain the only
communications network that works everywhere in the world for a long time to come.

We are very enthusiastic about Iridium – today, tomorrow and into the future. During a very
tough year for the global economy, Iridium excelled across the board. The numbers tell the
story: We achieved our core measure of financial success, turning in Operational EBITDA of
slightly more than $133.9 million, an increase of just over 20 percent from 2008; and the
Iridium subscriber base grew to approximately 369,000 subscribers globally at the end of
2009, up from approximately 320,000 at the end of 2008, an increase of 15.3 percent. While
our total revenue for 2009 decreased by less than one percent to $318.9 million on weaker
subscriber equipment revenues due to the effects of the lagging economy, our commercial
service voice and machine-to-machine (M2M) data revenue increased 20.5 percent to $159.6
million. Our government voice and M2M data service revenue also increased in 2009 by 2.4
percent to $53.7 million. For the full year, subscriber equipment revenue declined 30.4 percent
to $83.5 million.

In 2009, we entered the growing Mexican market, which represents substantial long-term
opportunity given the relatively limited communications infrastructure available to serve the
country’s significant industries across vast landmasses and expansive shorelines. In 2010, we
will continue to pursue entry into other countries that will support further geographic
expansion.

Across the board, we continue to hear strong positive indications about Iridium-based service
and product offerings. Iridium OpenPort®, our game-changing voice and data offering for the
maritime market, gained traction and the early returns already point to prospects for great
success. We ramped up adoption of the Iridium 9555™ satellite phone and continue to hear
positive feedback – and receive excellent reviews – on this handset, even as we look at future
enhancements that will help us maintain our leadership in the mobile satellite handset market.

In 2009, we staked a claim to industry leadership on two-way, global communications devices
for personal safety with the ProTECTS Alliance, in which many in our global ecosystem of
partners are participating. In concert with our partners, we expect to show the market the

power and value of two-way solutions that pinpoint individuals who need help, and allows
them to interact with their rescuers, anywhere in the world. To this end, we plan to deliver the
Iridium 9602™ in June 2010 and expect to see a rollout of new devices for a broad range of
industries and applications beginning almost immediately. Our partners took delivery of the
first prototypes in December 2009 and they anxiously await its introduction. The matchbox-
sized Iridium 9602 satellite data transceiver is 69 percent smaller, 74 percent lighter and
considerably less expensive than the first-generation modem. It will provide a cost-effective
connection to the Internet to all kinds of new devices – anywhere on the planet.

While our commercial business has grown significantly, the U.S. Government continues to be
Iridium’s single largest customer, representing approximately 24 percent of our revenue in
2009. This is a customer for whom we also continue to drive innovation and value. In 2009,
Iridium rolled out the Distributed Tactical Communications System, DTCS, or – as we also
call it, “Netted Iridium” – which provides an important communications service to U.S.
Department of Defense customers. We also demonstrated iGPS for the U.S. Naval Research
Lab with Boeing – a potentially groundbreaking development that improves GPS accuracy
and protects against jamming.

Last year, we also continued our investments in our infrastructure, our systems and our
people. We are investing in our ground infrastructure – upgrading our gateway switching
system, updating many of our earth terminal components, and modernizing our ground
network and infrastructure in readiness for Iridium NEXT and the powerful new services it
will enable. We are investing in our billing system to enable greater flexibility for our
customers. Our workforce is among the most experienced in the industry and we recognized
the critical role played by each member of the Iridium team by including all of our employees
in the initial grant of stock options after the GHL transaction last year. In 2009, we also
conducted our first employee opinion survey which confirmed that our very talented Iridium
team is extremely enthusiastic about the work we are doing and the “can-do” culture that we
are creating.

In closing, 2009 was another strong year for Iridium and continued to affirm that our business
is on the right track. The year ahead is looking bright and showing great promise, and we are
excited about the future and confident about what is to come. As our shareholders, we are
grateful to you for your continued support and enthusiasm and we look forward to delivering
on the unique promise that is Iridium.

Sincerely,

Robert H. Niehaus
Chairman

Matthew J. Desch
Chief Executive Officer

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 2009

OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

Commission File Number 001-33963

Iridium Communications Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

26-1344998
(I.R.S. Employer
Identification No.)

6707 Democracy Boulevard, Suite 300, Bethesda, Maryland 20817
(Address of principal executive offices, including zip code)

301-571-6200
(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Common Stock, $0.001 par value
Units, each consisting of one share of Common Stock and one
Warrant
Warrants, exercisable for Common Stock at an exercise price of
$7.00 per share
Warrants, exercisable for Common Stock at an exercise price of
$11.50 per share

Name of Each Exchange on Which Registered
NASDAQ Global Market
NASDAQ Global Market

NASDAQ Global Market

NASDAQ Global Market

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ‘ No È
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ‘ No È

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes È No ‘

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes ‘ No ‘

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. ‘

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer ‘
Non-accelerated filer ‘ (Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No È

È
Accelerated filer
Smaller Reporting Company ‘

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the
common equity was last sold as of June 30, 2009 was approximately $385,230,160. Aggregate market value excludes an aggregate of 9,190,800
shares of common stock held by officers and directors and by each person known by the registrant to own 5% or more of the outstanding common
stock on such date. Exclusion of shares held by any of these persons should not be construed to indicate that such person possesses the power, direct
or indirect, to direct or cause the direction of the management or policies of the registrant, or that such person is controlled by or under common
control with the registrant.

The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding as of March 12, 2010 was 70,247,701.

None

DOCUMENTS INCORPORATED BY REFERENCE

IRIDIUM COMMUNICATIONS INC.

ANNUAL REPORT ON FORM 10-K
Year ended December 31, 2009

TABLE OF CONTENTS

PART I

Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 2.

Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 3.

Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 4. Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 6.

Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . .

Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 8.

Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page
No.

1

24

43

43

44

44

45

46

49

69

70

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . .

138

Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

138

Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

141

PART III

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

141

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

151

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

168

Item 13. Certain Relationships and Related Transactions and Director Independence . . . . . . . . . . . . . . . . .

170

Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

174

PART IV

Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

175

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

179

i

Item 1.

Business

Corporate Background

PART I

We were formed as GHL Acquisition Corp., a special purpose acquisition company, in November 2007, for the
purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other
similar business combination. On February 21, 2008, we consummated our initial public offering and on
September 29, 2009, we acquired, directly and indirectly, all the outstanding equity of Iridium Holdings LLC, or
Iridium Holdings, and we changed our name from GHL Acquisition Corp. to Iridium Communications Inc. We
refer to this transaction as the Acquisition.

Iridium Holdings was formed under the laws of Delaware in 2000 and on December 11, 2000, Iridium Holdings,
through its wholly owned subsidiary Iridium Satellite LLC, or Iridium Satellite, acquired certain satellite assets
from Iridium LLC, a non-affiliated debtor in possession, pursuant to an asset purchase agreement. We refer to
Iridium Holdings, together with its direct and indirect subsidiaries, as Iridium.

Throughout this section, when we refer to statistical or financial data for the year ended December 31, 2009, such
as revenues, percentages of revenues and number of subscribers, we are referring to Iridium Holdings prior to the
Acquisition and Iridium Holdings combined with our company after the Acquisition. Statistical and financial
data for years prior to 2009 refer to Iridium Holdings.

Business Overview

We are the second largest provider of mobile voice and data communications services via satellite, and the only
provider of mobile satellite communications services offering 100% global coverage. Our satellite network
provides communications services to regions of the world where existing wireless or wireline networks do not
exist or are impaired, including extremely remote or rural land areas, open ocean, the polar regions and regions
where the telecommunications infrastructure has been affected by political conflicts or natural disasters.

We offer voice and data communications services to businesses,
the U.S. and foreign governments,
non-governmental organizations and consumers via our constellation of 66 in-orbit satellites, in-orbit spares and
related ground infrastructure,
including a primary commercial gateway. We utilize an interlinked mesh
architecture to route traffic across our satellite constellation using radio frequency crosslinks between satellites.
This unique architecture minimizes the need for ground facilities to support the constellation, which facilitates
the global reach of our services and allows us to offer services in countries and regions where we have no
physical presence.

Our commercial end-user base, which we view as our primary growth engine, is diverse and includes markets
such as emergency services, maritime, government, utilities, oil and gas, mining, leisure, forestry, construction
and transportation. Many of our end-users view our products and services as critical to their daily operations and
integral to their communications and business infrastructure. For example, multinational corporations in various
sectors use our services for business telephony, e-mail and data transfer services and to provide mobile
communications services for employees in areas inadequately served by terrestrial networks. Ship crews and
passengers use our services for ship to shore telephony as well as to send and receive e-mail and data files and
facsimiles, and to receive electronic newspapers, weather reports, emergency bulletins and electronic charts.
Shipping operators use our services to manage operations on board ships and to transmit data, such as course,
speed and fuel stock. Aviation-based end-users use our services for air-to-ground telephony and data
communications.

The U.S. government, directly and indirectly, has been and continues to be our largest customer, generating
$75.2 million in service, contract and study revenue, or 23.6% of our total revenues, for the year ended

1

December 31, 2009. The U.S. Department of Defense, or DoD, owns and operates a dedicated gateway that is
only compatible with our satellite network. The U.S. armed services, State Department, Federal Emergency
Management Agency, or FEMA, and other U.S. government agencies, as well as other nations’ governmental
agencies, use our voice and data services for a variety of applications. Our voice and data products are used for a
variety of primary and backup communications solutions, including logistical, administrative, morale and welfare
and emergency communications. In addition, our products and related applications are installed in ground
vehicles, ships, helicopters and fixed-wing aircraft and are used for command and control and situational
awareness purposes. Our satellite network provides increased network security to the DoD because traffic is
routed across our satellite constellation before being brought down to earth via the dedicated, secure DoD
gateway, thus reducing the vulnerability to electronic jamming and interception. Since 2000, the DoD has made
significant investments to build and upgrade its dedicated gateway in Hawaii and to purchase our handsets and
voice and data devices, all of which are only compatible with our satellite network. In addition, the DoD, directly
and indirectly with private companies, continues to invest in additional applications on our network such as high
integrity GPS, or iGPS, and Distributed Tactical Communications Services, which we refer to as Netted Iridium.
The DoD would have to incur significant expense to replicate our network architecture and replace our voice and
data services with a competing service provider.

We sell our products and services to commercial end-users exclusively through a wholesale distribution network,
encompassing approximately 65 service providers, 130 value-added resellers, or VARs, and 45 value-added
manufacturers, or VAMs, which sell either directly to the end-user or indirectly through other service providers,
VARs or dealers. These distributors often integrate our products and services with other complementary
hardware and software and have developed a broad suite of applications for our products and services targeting
specific vertical markets. We expect that demand for our services will increase as more applications are
developed for our products and services.

At December 31, 2009, we had approximately 369,000 subscribers worldwide, representing a 15.3% increase
compared to December 31, 2008. Our subscriber count includes machine-to-machine, or M2M, data subscribers
who elected to suspend their accounts and as a result were not generating any fees at such time. These suspended
accounts represented 3.8% and 7.2% of our total subscribers at December 31, 2008 and 2009, respectively. Total
revenues decreased from $320.9 million in 2008 to $318.9 million in 2009.

Industry

We compete in the mobile satellite services sector of the global communications industry. Mobile satellite
services operators provide voice and data services to people and machines on the move or in fixed locations
using a network of satellites and ground facilities. Mobile satellite services are usually complementary to, and
interconnected with, other forms of terrestrial communications services and infrastructure and are intended to
respond to users’ desires for connectivity in all locations. Customers typically use satellite voice and data
communications in situations where existing terrestrial wireline and wireless communications networks do not
exist or are impaired. Further, many regions of the world benefit from satellite networks, such as rural and
lack adequate wireless or wireline networks, ocean and polar regions where few
developing areas that
alternatives exist, and regions where the telecommunications infrastructure has been affected by political
conflicts or natural disasters.

Worldwide, government organizations, military and intelligence agencies, natural disaster aid associations,
event-driven response agencies and corporate security teams depend on mobile and fixed voice and data satellite
communications services on a regular basis. Businesses with global operations require reliable communications
services when operating in remote locations around the world. Mobile satellite services users span many sectors,
including emergency services, maritime, government, utilities, oil and gas, mining, leisure, forestry, construction
and transportation, among others. Many of our customers view satellite communications services as critical to
their daily operations.

2

We believe that increasing penetration and continued growth of the terrestrial wireless industry will provide a
significant market opportunity for the mobile satellite services industry. According to a report produced by
Europa Technologies Ltd. for the GSM Association, there were 3.5 billion global cellular subscribers served by
1,050 networks throughout the world as of January 2009. We believe that growth in the terrestrial wireless
industry has increased awareness of the need for reliable, mobile voice and data communication services among
customers. In addition, despite significant penetration and competition, terrestrial wireless systems only serve a
small fraction of the earth’s surface and are focused mainly in those areas where people live, excluding oceans
and other remote regions where ships, airplanes and other remote assets transit or are located. By offering mobile
communications services with global voice and data coverage, mobile satellite service providers address the
demand from businesses, governments and individuals for connectivity and reliability in locations not
consistently served by wireline and wireless terrestrial networks. In a 2009 report, Northern Sky Research
indicated that it expected mobile satellite services wholesale revenues to grow at a compound annual growth rate
of 12% over the five-year period from 2010 to 2015.

The mobile satellite services industry also benefits from the continued development of innovative, lower cost
technology and applications integrating mobile satellite products and services. We believe that growth in demand
for mobile satellite services is driven in large part by the declining cost of these services, the diminishing size and
lower costs of voice, data and machine-to-machine devices, as well as the rollout of new applications tailored to
the specific needs of customers across a variety of markets.

Communications industry sectors include:

• mobile satellite services, which provide customers with voice and data connectivity to mobile and fixed
devices using ground facilities and networks of geostationary, or GEO, satellites, which are located
approximately 22,300 miles above the earth’s surface, medium earth orbit satellites, which are located
between approximately 6,400 and 10,000 miles above the earth’s surface, or low earth orbit, or LEO,
satellites, such as those in our constellation, which are located between approximately 300 and
1,000 miles above the earth’s surface;

•

•

fixed satellite services, which use GEO satellites to provide customers with broadband communications
links between fixed points on the earth’s surface; and

terrestrial services, which use a terrestrial network to provide wireless or wireline connectivity and are
complementary to satellite services.

Within the major satellite sectors, fixed satellite services and mobile satellite services operators differ
significantly from each other with respect to size of antenna, types of services offered and quality of services.
Fixed satellite services providers, such as Intelsat Ltd., Eutelsat S.A. Communications and SES S.A. are
characterized by large, often stationary or fixed, ground terminals that send and receive high-bandwidth signals
to and from the satellite network for video and high speed data customers and international telephone markets.
By contrast, mobile satellite services providers, such as us, Inmarsat Finance plc, or Inmarsat, Globalstar, Inc., or
Globalstar, and Orbcomm, Inc., or ORBCOMM, focus more on voice and data services, where mobility or small
sized terminals are essential.

A LEO system, such as the system we operate, has lower transmission delays than a GEO system such as that
operated by Inmarsat due to the shorter distance signals have to travel, which enables the use of smaller antennas
on devices. We believe the interlinked mesh architecture of our constellation combined with the global footprint
of our satellites distinguishes us from other regional LEO satellite operators like Globalstar and ORBCOMM,
allowing us to route voice and data transmissions to and from anywhere on the earth’s surface via a single
gateway. As a result, we are the only mobile satellite services operator offering real-time, low latency services
with 100% global coverage. Furthermore, we are the only mobile satellite service provider with full coverage of
the polar regions.

3

Our Competitive Strengths

• Only provider with 100% global coverage. Our LEO satellite network offers 100% global coverage.
None of our LEO or GEO competitors offer such coverage. Our satellite network relies on an
interlinked mesh architecture to transmit signals, which reduces the need for multiple ground stations
and facilitates the global reach of our services. Other satellite service providers use an architecture
commonly referred to as bent pipe, which requires voice and data transmissions to be immediately
routed to nearby ground stations, thereby limiting their ability to provide global coverage. As a result,
we believe that we are well-positioned to capitalize on the growth in our industry from end-users who
require reliable communications service in all locations.

• High quality and reliable voice and data services. We believe we offer high quality and reliable voice
and data services. The LEO design of our satellite constellation produces minimal transmission delays
relative to GEO systems due to its comparatively close proximity to earth and the shorter distance our
signals have to travel. Additionally, LEO systems have smaller handset antenna requirements and are
less prone to signal blockage caused by terrain than GEO satellite networks. Our primary LEO-based
competitor has publicly announced that
it has experienced satellite failures and other problems
its ability to provide
impacting its constellation that are affecting and will continue to affect
commercially acceptable two-way voice and data service until the deployment of its next generation
system.

•

•

•

Solutions for a broad range of vertical markets. We have created additional demand for our products
and services and expanded our target market by partnering with our distributors to develop new
products, services and applications. The specialized needs of our global end-users span many markets,
including emergency services, maritime, government, utilities, oil and gas, mining, leisure, forestry,
construction and transportation. Our communication solutions have become an integral part of the
communications and business infrastructure of many of our end-users. In many cases, our service
provides the only connectivity solution for these applications, and our products are often integrated by
the original manufacturers or in the aftermarket into expensive machinery, such as military equipment
and sophisticated monitoring devices.

Strategic relationship with the DoD. The U.S. government is our largest single customer, and we have
had a relationship with the DoD since 2000. We provide the DoD, as well as other U.S. government
agencies, with mobile satellite products and services. Our 9505A satellite handset
is the only
is capable of Type I
commercial mobile handheld satellite phone available on the market
encryption accredited by the U.S. National Security Agency for Top Secret voice communications. In
addition, the DoD has made significant investments to build a dedicated gateway in Hawaii to provide
operational security and allow DoD handset users to communicate with other U.S. government security
communications equipment. This gateway is only compatible with our satellite network.

that

Large, value-added wholesale distribution network. We sell our products and services to commercial
end-users exclusively through a wholesale distribution network of approximately 65 service providers,
130 VARs and 45 VAMs. By relying on distributors to manage end-user sales, we believe that our
distribution model leverages their expertise in marketing to their target customers while lowering
overall customer acquisition costs and mitigating certain risks such as consumer credit risk. Our
distributors further support our growth by developing new applications and solutions for our products
and services, often combining our products with other technologies, such as GPS and terrestrial
wireless technology, to provide integrated communications solutions for their target customers.

Our Business and Growth Strategies

• Develop new products and services for commercial markets to further expand and penetrate our target
markets. We expect that our current and future value added partners will continue to develop tailor-
made products, services and applications targeted to the land-based handset, maritime, aviation and

4

machine-to-machine markets. We believe these markets represent an attractive opportunity for
subscriber growth and increased airtime usage. We expect the development of a new service, Netted
Iridium, which provides beyond line-of-sight push-to-talk capability for user-defined groups, or nets, to
provide us in the future with potential new commercial applications in public safety, fishing and field
worker communications. The iGPS technology we have developed with a partner may enable new
commercial applications in enhanced navigation services such as precision farming, high accuracy
navigation for oil and gas exploration and construction services. In addition, our partners regularly
develop specialized end-user applications targeted at specific markets.

• Develop new services for the DoD. We are developing additional capabilities for our network to
enhance its utility to the DoD. In conjunction with the U.S. Navy, we have developed and introduced
Netted Iridium, which provides beyond line-of-sight push-to-talk voice services to a user-defined group
of DoD users. Netted Iridium allows over-the-horizon netted radio communications. We are also
developing capabilities that will enable iGPS service, which is expected to provide enhanced accuracy
and anti-jamming capabilities. These and other services in development provide us with opportunities
to increase revenue from the DoD.

•

Leverage our largely fixed cost infrastructure by growing our service revenues. Our business model is
characterized by high capital costs, primarily incurred every 10 to 15 years, in connection with
designing, building and launching our satellite constellation. However,
the incremental cost of
providing service to additional end-users is relatively low. We believe that service revenues will be our
largest source of future growth and profits and we intend to focus on growing both our commercial and
government service revenues in order to leverage our largely fixed cost infrastructure.

• Expand our geographic sales reach. Our products and services are offered in over 100 countries. While
our network can be used throughout the world, we are not currently licensed to sell our products and
services directly in certain countries, including Russia, China, South Africa and India. We are currently
in discussions with regulatory officials in these and other countries to obtain licenses and, to the extent
we are successful in obtaining such licenses, we believe the expanded reach of our product and service
distribution platform will contribute to our growth.

• Develop Iridium NEXT constellation. We are developing our next-generation satellite constellation,
Iridium NEXT, which we expect to begin launching in late 2014. Iridium NEXT will be backward
compatible with our current system and will replace the existing constellation with a more powerful
satellite network. Iridium NEXT will maintain our current system’s key attributes, including the
capability to upload new software, while providing new and enhanced capabilities, such as higher data
speeds and increased capacity. In addition, Iridium NEXT will be designed to host secondary payloads,
which have the potential to generate cash and deferred revenue during the construction phase of
Iridium NEXT and the potential to generate recurring revenues once Iridium NEXT is launched. We
believe Iridium NEXT’s increased capabilities will expand our target markets by enabling us to
develop and offer a broader range of products and services, including a wider array of cost-effective
and competitive broadband data services.

Distribution Channels

We sell our products and services to our commercial customers exclusively through a wholesale distribution
network of approximately 65 service providers, 130 VARs and 45 VAMs. These distributors sell our products
and services to the end-user, either directly or indirectly through service providers, VARs or dealers. Our
distributors often integrate our products and services with other complementary hardware and software and have
developed individual solutions targeting specific vertical markets. We also sell our services directly to
U.S. government customers, including the DoD. The U.S. government and international government agencies
purchase additional services as well as our products and related applications through our network of distributors.

5

We provide our distributors with certain support services, including assistance with coordinating end-user sales,
strategic planning and training and second tier customer support, as well as helping them respond to new
opportunities for our products and services. We have representatives covering three regions around the world to
better manage our distributor relationships: the Americas, which includes North, South and Central America;
Asia Pacific, which includes Australia and Asia; and Europe, the Middle East, Africa and Russia. We also
maintain various online management tools that allow us to communicate efficiently with our distributors. By
relying on our distributors to manage end-user sales, we believe that we reduce certain risks and costs related to
our business, such as consumer credit risk and sales and marketing costs, while providing a broad and expanding
distribution network for our products and services with access to diverse and geographically dispersed niche
markets. We are also able to rely on the specialized expertise of our distributors, who continue to develop
innovative and improved solutions and applications integrating our product and service offerings, providing us
with an attractive platform to support our growth.

Commercial Markets

We view our commercial end-user base as our primary growth engine. Our service providers and VARs are the
main distribution channel for our products and services in the commercial markets. Service providers and
resellers purchase our products and services and market them directly to their customers or indirectly through
independent dealers. They are each responsible for customer billing, end-user customer care, managing credit
risk and maintaining all customer account information. If our service providers or VARs provide our services
through dealers, these dealers will often provide such services directly to the end-user. Service providers
typically purchase our most basic products and services, such as mobile voice services and related satellite
handsets, and offer additional services such as voice mail. Unlike service providers, our resellers provide a
broader array of value-added services specifically targeted to the niche markets they serve, integrating our
handsets, transceivers, high-speed data devices and short burst data modems with other hardware and software to
create packaged solutions for end-users. Examples of these applications include cockpit voice and data solutions
for use by the aviation sector and voice, data and tracking applications for industrial customers, the DoD and
other U.S. and international government agencies. Many of our resellers specialize in niche vertical markets such
as maritime, aviation, machine-to-machine and government markets where high-use customers with specialized
needs are concentrated. Our principal service providers include dedicated satellite service providers such as
Vizada Inc., or Vizada, and Stratos Global Wireless Inc., or Stratos, as well as some of the largest
telecommunications companies in the world, such as Telstra Corporation Limited, KDDI Corporation and
Singapore Telecommunications Limited. Our VARs include ARINC Incorporated, Blue Sky Network LLC,
EADS N.V., General Dynamics Corporation, or General Dynamics, NAL Research Corporation, Zunibal S.A.
and Globe Wireless LLC.

We also sell our products to VAMs, who integrate our transceivers and short burst data devices into their
propriety hardware and software. These manufacturers produce specialized equipment, including integrated ship
communication systems and secure satellite handsets, such as our Iridium 9505A handset coupled with U.S.
National Security Agency Type I encryption capability, which they offer to end-users in maritime, government
and M2M markets. As with our service providers and resellers, manufacturers sell their product solutions either
directly or through other distributors, including some of our service providers and resellers. VAMs sell services
on the product solutions to end-users only through other distributors. Our VAMs include AirCell Inc., ITT
Corporation, General Dynamics and Thrane & Thrane A/S.

In addition to resellers and VAMs, we maintain relationships with approximately 35 value-added developers. We
typically license technical information to these companies on our products, which they then use to develop new
software and hardware that complements our products and services in line with the specifications of our resellers
and manufacturers. These products include handset docking stations, airline tracking and flight management
applications and crew e-mail applications for the maritime industry. We believe that working with value-added
developers allows us to create new platforms for our products and services and increases our market opportunity

6

while reducing our overall research and development expenses. Our value-added developers include Honeywell
International Inc., Active Web Solutions Inc. and Ontec Inc.

We maintain a pricing model for our commercial products and services with a consistent wholesale rate structure.
Under our distribution agreements, we charge our distributors wholesale rates for commercial products and
services, subject to discount and promotional arrangements and geographic pricing. We also charge fixed
monthly access fees per subscriber for certain services. Our distributors are in turn responsible for setting their
own pricing to their customers. Our agreements with distributors typically have terms of one year and are
automatically renewable for additional one year terms, subject to termination rights. We believe this business
model provides incentives for distributors to focus on selling our commercial product and service portfolio and
developing additional applications. An additional benefit of this model is simplicity. This model lessens back
office complexities and costs and allows distributors to remain focused on revenue generation.

Our two largest distributors, Vizada and Stratos, represented 11.3% and 10.7% of our revenue for the year ended
December 31, 2009. During April 2009, Inmarsat, one of our main competitors, acquired Stratos. No other
distributor represented more than 10.0% of our revenue for the year ended December 31, 2009.

Government Markets

We provide mission critical mobile satellite products and services to all military branches of the DoD as well as
other U.S. government customers. These users require voice and two way data capability with global coverage,
low latency, mobility and security and often have no alternate terrestrial communication capability, or rely on
mobile satellite services as an important backup system. We believe we are well positioned to take advantage of
increased demand from such users. Our 9505A satellite handset is the only commercial mobile handheld satellite
phone available on the market that is capable of Type I encryption accredited by the U.S. National Security
Agency for Top Secret voice communications. In addition, the DoD has made significant investments to build a
dedicated gateway in Hawaii to provide operational security and allow DoD handset users to communicate with
other U.S. government security communications equipment. This gateway is only compatible with our satellite
network.

We provide airtime and airtime support to U.S. government customers pursuant to an Enhanced Mobile Satellite
Services, or EMSS, contract managed by the Defense Information Systems Agency, or DISA, which administers
the contract on behalf of DoD and other U.S. government and international customers authorized by DoD to use
EMSS services. The contract, entered into in April 2008, provides for a one-year base term and up to four
additional one-year options exercisable at the election of the U.S. government. The current term of the EMSS
contract will expire on March 31, 2010, subject to further extension by the U.S. government. The U.S.
government has notified us that it intends to exercise the second additional one-year option,which will extend the
term through March 2011. Under this agreement, we provide U.S. government customers bulk access to our
airtime services through the DoD’s dedicated gateway, receiving from subscribers (i) fixed monthly fees on a per
user basis for airtime services and voice usage, (ii) fixed monthly fee per user for paging services, (iii) a tiered
pricing plan, based on usage per device, for data services, and (iv) a fixed monthly fee for Netted Iridium usage.
In addition, the EMSS contract provides for monthly fees for active user-defined groups using Netted Iridium.
The U.S. government is not required to guarantee a minimum number of users pursuant to this agreement.
Services furnished under the agreement include voice, netted voice, data, messaging and paging services. We do
not sell our products and related accessories directly to U.S. government customers under the existing agreement.
These products are sold to U.S. government customers through our network of distributors, which typically
integrate them with other products and technologies.

We also provide maintenance services to the DoD’s dedicated gateway in Hawaii pursuant to the Gateway
Maintenance and Support Services Agreement, or GMSSA, a separate contract managed by DISA, which also
was entered into in April 2008. As with the EMSS contract, the GMSSA provides for a one-year base term and
up to four additional one-year options exercisable at the election of the U.S. government. The current term of the

7

maintenance contract will expire on March 31, 2010, subject to further extension by the U.S. government. The
U.S. government has notified us that it intends to exercise the second additional one-year option, which will
extend the term through March 2011. The U.S. government may terminate either of these contracts, in whole or
in part, at any time.

U.S. government services accounted for approximately 23.6% of our total revenues for the year ended
December 31, 2009. Our U.S. government revenue includes only revenue derived from our two agreements with
the DISA as well as other contract revenue related to research and development projects with the DoD. Such
revenues do not include equipment or services to U.S. government agencies, including the DoD and FEMA,
purchased through our distributors and offered through our commercial gateway. They also do not include
revenues from services to most non-U.S. government agencies worldwide, including defense agencies. We
consider such services commercial services, as they are provided through our commercial gateway. Although we
cannot determine the amount of U.S. government revenues derived from our commercial gateway, we do not
believe that such revenues are material.

Vertical Markets

The specialized needs of our global customers span many markets. Our system is able to offer our customers
cost-effective communications solutions with 100% global coverage in areas underserved or unserved by existing
telecommunications infrastructures. Our mission critical communications solutions have become an integral part
of the communications and business infrastructure of many of our end-users. In many cases, our service is the
only connectivity for these critical applications or is used to complement terrestrial communications solutions.

Our current principal vertical markets include land-based handset, maritime, aviation, M2M and government.

Land-based Handset

We are one of the leading global providers of mobile satellite communications services to the land-based handset
inconsistently served by existing terrestrial
sector, providing handset services to areas not served or
communications networks. As of November 2009, TMF Associates estimates that approximately 622,000
satellite handsets were in operation worldwide. Mining, forestry, construction, oil and gas, utilities, heavy
industry and transport companies as well as public safety and disaster relief agencies constitute the largest
portion of our land-based handset end-users. We believe that demand for mobile communications devices
operating outside the coverage of terrestrial networks, combined with our small, lightweight, durable handsets
with 100% global coverage, will allow us to capitalize on growth opportunities among such users.

Our land-based handset end-users utilize our satellite communications services for:

• Voice and data: Multinational corporations in various sectors use our services for business telephony,
e-mail and data transfer services and to provide pay telephony services for employees in areas
inadequately served by terrestrial networks. Oil and gas and mining companies, for example, provide
their personnel with our equipment solutions to survey new drilling and mining opportunities and for
conducting routine operations in remote areas that are not served by cellular communications networks.
In addition, a number of recreational, scientific and other outdoor segments rely on our mobile
handheld satellite phones and services for use when beyond terrestrial wireless coverage.

• Mobile and remote office connectivity: A variety of enterprises use our services to access voice calls,

data, e-mail, internet and corporate network connections.

• Public safety and disaster relief: Relief agencies, such as FEMA, and other agencies such as the
Department of Homeland Security have built our products and services into their emergency response
plans, particularly in the aftermath of Hurricanes Katrina, Rita, Wilma and Ike, the Asian tsunami, the
Haitian and Chilean earthquakes and other natural disasters. These agencies generate significant

8

demand for both our voice and data products, especially during the late summer months in anticipation
of the hurricane season in North America.

• Public telephone infrastructure: Telecommunications service providers use our services to satisfy
regulatory mandates to provide communications services to rural populations currently not served by
terrestrial
infrastructure. Telstra Corporation, for example, uses our services to comply with its
obligations to provide communications services to customers in certain remote parts of Australia.

Maritime

The maritime market is one of our most significant market opportunities. Currently, our principal competitor in
this market is Inmarsat. End-users of our services in the maritime sector include companies engaged in merchant
shipping, passenger transport, fishing, energy and leisure. Merchant shipping accounts for a significant portion of
our maritime revenues, as those ships spend the majority of their time at sea away from coastal areas and out of
reach of terrestrial communication services. Our products and services targeting the maritime market typically
have high average revenue per subscriber with multiple users utilizing a single device. Once a system is installed
on a vessel, it often generates a long-term recurring revenue stream from the customer. As a consequence, from
time to time we may offer equipment below our costs to promote new activations.

We believe increased regulatory mandates and increased demand for higher-speed, low-cost data services will
allow us to capitalize on significant growth opportunities in this market. We believe our high-speed data service,
Iridium OpenPort, which offers speeds of up to 128 kbps and up to three voice lines, presents a cost competitive,
high speed communication alternative to end-users in the maritime market, which we believe will allow us to
more effectively compete with Inmarsat’s strong position in the maritime data sector.

Maritime end-users utilize our satellite communications services for the following:

• Data and information applications: Ship operators and crew use our services to send and receive
e-mail and data files as well as facsimiles, and to receive other information services such as electronic
newspapers, weather reports, emergency bulletins and electronic charts. We believe Iridium OpenPort
provides an attractive alternative for shipping operators and fishing fleets looking for cost savings, as
well as for yachts, work boats and other vessels for which traditional marine satellite systems have
typically been costly and underperforming.

• Voice services for crew: Maritime global voice services are used for both vessel operations and
communications for crew welfare. Merchant shipping operators use pre-paid phone cards for crew use
at preferential around-the-clock flat rates.

• Vessel management, procurement and asset

tracking: Shipping operators,

such as Exmar
Shipmanagement N.V., Lauritzen Fleet Management A/S and Zodiac Shipping Ltd., use our services to
manage operations on board ships and to transmit data, such as course, speed and fuel stock. Our
services can be integrated with a global positioning system to provide a position reporting capability.
Many fishing vessels are required by law to carry terminals using approved mobile satellite services for
tracking purposes as well as to monitor catches and to ensure compliance with geographic fishing
restrictions. European Union regulations, for example, require EU-registered fishing vessels of over 15
meters to carry terminals for the purpose of positional reporting of those vessels. Furthermore, new
security regulations in certain jurisdictions are expected to require tracking of merchant vessels in
territorial waters, which would provide an additional growth opportunity.

•

Safety applications: Ships in distress, including as a result of potential piracy, hijack or terrorist
activity, rely on mobile satellite voice and data services. The Ship Security and Alert Systems, or
SSAS, regulations were adopted by the International Maritime Organization, or IMO, to enhance
maritime security in response to the threat from terrorism and piracy. After July 1, 2004, most deep-sea
passenger and cargo ships must be fitted with a device that can send an alert message containing the

9

ship’s ID and position whenever the ship is under threat or has been compromised. We and our partners
are developing several solutions to meeting this requirement for merchant vessels. The Global
Maritime Distress and Safety System, or GMDSS, is an application built to alert a maritime rescue
coordination center of their situation and position, which then coordinates rescue efforts among ships
in the area. The IMO requires all cargo vessels over 300 gross tons and certain passenger vessels,
irrespective of size, that travel in international waters to carry distress and safety terminals that use
GMDSS applications. Our products and services are currently not certified to be used in GMDSS
applications. However, we are currently exploring obtaining such certification and expect to offer such
services if these are obtained.

Aviation

We are one of the leading global providers of mobile satellite communications services to the aviation sector. In
the aviation sector, our satellite communications services are used principally by corporate jets, corporate and
government helicopter
fleets, specialized general aviation fleets, such as medevac companies and fire
suppression and other specialized transport fleets, and high-end personal aircraft. Our services are also being
employed by airline operators for passenger and cockpit voice services and safety applications. Our voice and
data devices from our manufacturers and developers have become factory options for a range of airframe
manufacturers and fractional operators in business aviation and air transport, such as NetJets Inc., Gulfstream
Aerospace Corporation, Bombardier Inc., Cessna Aircraft Company and Empresa Brasileira de Aeronautica S.A.,
and have become standard equipment on some of their aircraft fleets. Our devices are also installed in the
aftermarket on a variety of aircraft.

Aviation end-users utilize our satellite communications services for:

• Aviation operational communications: Aircraft crew and airline ground operations use our services for
air-to-ground telephony and data communications. This includes the automatic reporting of an
aircraft’s position and mission critical condition data to the ground and controller-pilot data link
communication for clearance and information services. We provide critical communications
applications for airlines and air transport customers such as Continental Airlines, Cathay Pacific
Airways and El Al Airlines. Many of these operators rely on our services and applications because
there is no other communications service available to them in areas such as the polar regions. We
maintain relationships with ARINC Incorporated and SITA, SC, two of the leading providers of voice
and data network communications service and applications to the airline sector, which integrate our
products and services into their offerings.

• Aviation passenger communications: Commercial and private fleet aircraft passengers use our services
for air-to-ground telephony, fax services and data communications. Operators are currently using our
services to allow passengers to e-mail using their own Wi-Fi enabled mobile phones, including
Blackberry devices or other similar smartphones, without causing interference with aircraft controls.
We believe our distributors’ small, lightweight cost-effective solutions offer an attractive alternative
for airlines and operators, particularly small fleet operators.

• Rotary and general aviation applications: We are also a major supplier for rotary aviation applications
to end-users including medevac, law enforcement, oil and gas, and corporate work fleets, among
others. Companies such as Air Logistics, EagleMed and Air Evac Lifeteam rely on applications from
our distributors for traditional voice communications, fleet monitoring and management and real time
flight diagnostics.

• Air traffic control communications, or safety applications: In November 2007, the International Civil
Aviation Organization, or ICAO, approved standards and recommended practices allowing us to
provide Aeronautical Mobile Satellite (Route) Services to commercial aircraft on long-haul routes,
many of which fly over the polar regions. The ICAO decision permits member states to approve our

10

equipment for communications on transoceanic flights, pending certification. The first certification
trials are currently underway. Upon receiving such certification, aircraft crew and air traffic controllers
will be able to use our services for data and voice communication between the flight deck and ground
based control facilities. We are the only provider capable of offering such critical flight safety
applications around the entire globe, including the polar regions. We believe this particular sector of
the market will present us with significant growth opportunities, as our services and applications will
serve as a lower cost alternative to the current aging high frequency radio systems that are more
expensive to operate.

Machine-to-Machine

We are one of the leading providers of satellite-based M2M services. We believe the significant under-
penetration of this market presents opportunities for future growth. As with land-based handsets, our largest
M2M users include mining, construction, oil and gas, utilities, heavy industry, forestry and transport companies,
as well as public safety and disaster relief agencies. We believe increasing demand for automated data collection
processes from mobile and remote assets operating outside the coverage of terrestrial wireline and wireless
networks, as well as the continued push to integrate the operation of such assets into enterprise management and
information technology systems, will likewise increase demand for our M2M applications.

Our M2M services are used for:

•

Transportation fleet management: Our global coverage permits our products and services to be used to
monitor the location of transport fleets, hours of service and engine telemetry data, as well as to
conduct two-way communications with drivers around the entire world. Long distance drivers need
reliable communication with both dispatchers and their destinations to coordinate changing business
needs, and our satellite network provides continuous communications coverage while they are in
transit. We expect the push for more efficient, cost-effective and safer fleet operations as well as the
imposition of regulatory mandates related to driver safety, such as drive time monitoring, will drive
demand for our services in this area.

• Fixed-asset monitoring: Multinational corporations,

like
Schlumberger Limited and Conoco Phillips, use our services to run applications that allow remote
monitoring and operation of equipment and facilities around the globe, such as oil pipelines and
off-shore drilling platforms.

such as oil-field service companies

• Asset tracking: Leveraging M2M applications developed by several of our distributors, companies use
our services and related devices to track assets, including personnel, for logistics, theft-prevention and
safety purposes. Transportation companies, such as Horizon Lines, Inc., for example, employ M2M
applications developed by Impeva Labs, Inc. to track containers while in transit. Premier GPS Inc.
similarly develops applications that allow companies to monitor the safety of personnel operating in
remote regions of Canada.

• Resource management: Our global coverage and data throughput capabilities support natural resource
management applications such as fishing management systems. Zunibal S.A., one of our resellers, has
developed applications for the fishing industry to assist fishing fleets in pursuing more efficient fishing
practices.

•

Scientific data monitoring: The global coverage of our network supports many scientific data collection
applications such as the Argo float program of the National Oceanographic and Atmospheric
Administration, or NOAA. This program relies on our M2M services to collect climate data from
buoys located throughout the world’s oceans for monitoring and analysis. We believe the increased
need for monitoring climate and environmental data associated with global climate change and human
impact on the planet will increase demand for such services.

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Government

We are one of the leading global providers of mobile satellite communications services to the U.S. government,
principally, the DoD. We provide mobile satellite products and services to all branches of the U.S. armed forces.
Our voice products are used by soldiers for a variety of primary and backup communication solutions, including
logistical, administrative, morale and welfare and emergency communications. In addition, our products and
related applications are installed on ground vehicles, ships, helicopters and fixed-wing aircraft, embedded in
unattended sensors and used for command and control and situational awareness purposes. Global security
concerns are among the factors driving demand for our products and services in this sector. See
“—U.S. Government Services” for more information.

Services and Products

At December 31, 2009, we had approximately 369,000 subscribers worldwide. Of these, 7.2% were M2M
subscribers who elected to suspend their accounts and as a result were not generating any fees at such time.
While certain of these are due to the seasonal nature of usage, if in the future we elect to charge a fee for
maintenance of a suspended account, we expect that a substantial number of these suspended accounts will
ultimately be deactivated. Our principal services are mobile satellite services, including mobile voice and data
services and M2M services. Sales of our commercial services collectively accounted for approximately 50.2% of
our total revenue for the year ended December 31, 2009. We also sell related voice and data equipment to our
customers, which accounted for approximately 26.2% of our total revenue for the year ended December 31,
2009. In addition, we offer services to U.S. government customers, including the DoD. U.S. government services
accounted for approximately 23.6% of our total revenue for the year ended December 31, 2009.

Our Commercial Services

Post-paid Mobile Voice and Data Satellite Communications Services

We sell our mobile voice and data services to service providers and resellers who in turn offer such services to
end-users, either directly or indirectly through dealers, through various packaged solutions such as monthly plans
with differing price levels that vary depending upon expected usage. In exchange for these services, we typically
charge service providers and resellers a monthly access fee per subscriber as well as usage fees for airtime
minutes used by their respective subscribers. A small number of our post-paid customers purchase monthly
blocks of airtime minutes which must be used in a given month or are forfeited.

Prepaid Mobile Voice Satellite Communications Services

We also offer mobile voice services to service providers and resellers through prepaid plans. Service providers
and resellers pay us in advance for blocks of airtime minutes with expiration periods in various configurations,
typically one year. Unused minutes are forfeited at the applicable expiration date. These services are then
typically sold to subscribers in the form of prepaid scratch cards and e-vouchers that enable subscribers to use
our services on a per minute basis. We believe service providers and resellers are drawn to these services as they
enable greater cost control, since they eliminate the need for monthly billings and reduce collection costs, and
can be sold in cash economies where credit is not readily available. Our distributors often offer our prepaid voice
services through fixed devices to subscribers in rural villages, at remote industrial, commercial and residential
sites and on ships at sea, among other places. Fixed voice satellite communications services are in many cases an
attractive alternative to handheld mobile satellite communications services in situations where multiple users will
access the service within a defined geographic area and terrestrial wireline or wireless service is not available.
Fixed phones, for example, can be configured as pay phones that accept prepaid scratch cards and e-vouchers and
can be installed at a central location, for example in a rural village or maritime vessel.

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High-Speed Data Services

In October 2008, we introduced our high-speed data maritime service, Iridium OpenPort, which offers maritime
end-users speeds of up to 128 kbps and up to three voice lines which can be used simultaneously without
interference. Data rates on this service can be adjusted up or down at any time without making hardware or
software changes, giving subscribers options that allow them to balance needs for data transmission speeds
against cost considerations on a real-time basis. In conjunction with our distributors, we offer additional services
that permit service providers and resellers to offer complete integrated solutions for ship-to-shore crew calling,
e-mail and IP-based data communications. We believe Iridium OpenPort, our first high-speed data service in the
maritime market, offers a competitive alternative to other marine satellite services that offer fewer features at
higher costs. For our Iridium OpenPort service, we typically charge service providers and resellers a monthly
access fee per subscriber as well as usage fees for airtime minutes used by the respective subscribers above their
monthly quotas. We plan to introduce additional high-speed data products and services in the future.

Machine-to-Machine Services

Introduced in 2003, our M2M services are designed to address the market need for a small and cost-effective
solution for sending and receiving data, such as location, from fixed and mobile assets in remote locations to a
central monitoring station. This service operates through a two-way short burst data transmission between our
network and a telemetry unit, which may be located, for example, on a container in transit or a buoy monitoring
oceanographic conditions. The small size of the units makes them attractive for use in applications such as
tracking asset shipments, monitoring unattended remote assets, including oil and gas assets, vehicle tracking and
mobile security. We sell our M2M services to our distributors who in turn offer such services to end-users such
as various U.S. and international governmental agencies, including NOAA, as well as commercial and other
entities such as Schlumberger Limited, Continental Airlines and Conoco Phillips. As with our mobile voice and
data offerings, we typically charge service providers and resellers a monthly access fee per subscriber as well as
usage fees for airtime minutes used by their respective subscribers.

Other Services

In addition to access and usage fees, we generate revenue from several ancillary services related to our core
service offerings, such as inbound connections from the public switched telephone networks, or PSTN, short
message services, or SMS, subscriber identity module, or SIM, activation, customer reactivation and other
peripheral services. We also provide research and development services to assist customers in developing new
technologies compatible with our system which we may leverage for use in commercial service and product
offerings in the future. We charge our distributors fees for these services.

In the future, we anticipate the ability to provide secondary payload services to customers during the life of our
next-generation constellation, Iridium NEXT, which will replace our current satellite constellation. Currently, we
are providing research and development services to potential secondary payload customers.

U.S. Government Services

We provide U.S. government customers bulk access to our services, including voice, netted voice, data,
messaging and paging services, as well as maintenance services for the DoD’s dedicated gateway in Hawaii. We
provide airtime to U.S. government subscribers through (i) fixed monthly fees on a per user basis for airtime
services and usage for voice, (ii) fixed monthly fee per user for paging services, (iii) a tiered, usage-based pricing
plan per device for data services and (iv) a fixed monthly fee for Netted Iridium usage. U.S. government
customers also rely on our voice and data products, which they purchase from our network of distributors. To
comply with U.S. government regulations, we ensure handsets sold for use in certain U.S. government
applications are manufactured wholly in the United States. Resellers and manufacturers typically integrate our

13

products with other products, which they then offer to U.S. government customers as customized product
solutions. Such customized voice and data solutions include:

•

•

•

•

•

•

personnel tracking devices, such as personal locator beacons;

asset tracking devices for equipment, vehicles and aircraft;

over-the-horizon (beyond line of sight) aircraft communications applications;

submarine communications applications;

specialized communications solutions for high-value individuals; and

specialized, secure, mobile communications and data devices for the military and intelligence
community, such as secure satellite handsets with U.S. National Security Agency Type I encryption
capability.

With funding support from the DoD, we continue to invest in research and development to develop new products
and applications for use by all branches of the U.S. armed forces. In conjunction with the U.S. Navy, we and our
partners recently introduced Netted Iridium, which uses a new line of radio-only satellite devices which permit
over-the-horizon push-to-talk group calling services for a user-defined group, or net. We expect the introduction
of Netted Iridium to provide us with the potential for future new commercial applications in public safety, fishing
and field worker communications. In conjunction with The Boeing Company, or Boeing, and with funding from
the U.S. government, we are also developing a high integrity iGPS service, which may be used as an embedded
component in various DoD applications. Our iGPS technology is expected to provide centimeter level accuracy
and important anti-jamming capability for GPS signals.

Our Products

We offer a broad array of voice and data equipment products for customers that work worldwide. Our devices or
an antenna must be outside, within direct view of a satellite, to be able to properly access our network.

Satellite Handsets

Historically, our principal product offering was our Iridium 9505A satellite handset phone, which is similar in
functionality to an ordinary cellular phone but with the solid, durable feel that many satellite phone users
demand. This phone weighs 13.2 ounces and is capable of up to three hours of talk time without being recharged.
The Iridium 9505A provides voice, SMS and data connectivity. We believe our reputation for industrial strength
products is critical for customers, many of whom are located in the most inhospitable spots on the planet and
require tough and reliable communications equipment.

In October 2008, we launched our next generation satellite handset, the Iridium 9555. This new model introduces
several new features, including a larger, brighter screen, improved SMS and e-mail capabilities, an integrated
antenna and speakerphone and is smaller, lighter (weighing 9.4 ounces) and more user-friendly than the Iridium
9505A model. The Iridium 9555 also offers up to four hours of talk time. The new model maintains the industrial
feel of its predecessor, with a rugged housing to protect its sophisticated satellite transceiver. We believe the
Iridium 9555 satellite handset offers significant improvements over our earlier-generation equipment and that it
will drive increased adoption from prospective users. At this time, the government has not requested a version of
the Iridium 9555, which under applicable regulations would be required to be U.S.-manufactured.

Voice and Data Modems

We also offer a combined voice transceiver and data modem, which our distributors integrate into a variety of
communications solutions that are deployed in different applications around the world. Historically, our principal
modem was our Iridium 9522A L-Band transceiver, which is effectively the core of our Iridium 9505A satellite

14

handset without a key pad, display, earpiece and microphone. In November 2008, we launched our next
generation transceiver, our Iridium 9522B L-Band transceiver. This new model is smaller and less expensive than
our previous Iridium 9522A model, which allows our customers to integrate it into smaller devices while
improving our margins as well as the margins of our distributors. The Iridium 9522B is functionally equivalent to
the Iridium 9522A, which will allow our distributors to easily integrate it into existing applications.

Our principal customers for our L-Band transceivers are VAMs who integrate it into specialized devices that
access our network. These specialized products are often the highest generators of traffic on our network.
On-board crew calling terminals built around the Iridium 9522A, which are used as payphones on maritime
vessels, for example, have 10 to 20 times the average usage of a handheld phone, in part because they are shared
across a large group of users. These products have also been integrated into mobile data applications providing
e-mail services on maritime vessels.

High-Speed Data Devices

In October 2008, we introduced our Iridium OpenPort high-speed data terminal. This device provides dynamic
allocation of three independent telephone lines and a high-speed data port configurable from 9.6 to 128 kbps. All
voice and data capabilities can be used at the same time. The terminal relies on a relatively compact omni-
directional antenna array about the size of a typical small-boat radar dome and contains no moving parts, which
greatly reduces cabling, maintenance and repair costs. Our principal customers for Iridium OpenPort are our
VARs who integrate the device with their own hardware and software products to provide a suite of customer-
focused voice and IP-based data packages for ship business, crew calling and e-mail. We believe the low cost of
our OpenPort terminal, combined with our high bandwidth and flexible configuration options, will allow us to
grow our share of the existing maritime market while opening up new market sectors, such as luxury yachts, tug
boats and other fishing and cruising vessels for which traditional marine satellite systems have typically been too
costly. We expect to launch additional high-speed data devices for non-maritime markets in the future.

Machine-to-Machine Data Devices

In 2006, we introduced our Iridium 9601 short burst data modem, which provides our M2M services. The
Iridium 9601 is a small data device with two-way transmission capable of sending packet data to and from any
point in the world with low latency. Our principal customers for our Iridium 9601 data modems are VARs and
VAMs, who embed the Iridium 9601 into their tracking, sensor, and data applications and systems, such as asset
tracking systems. The Iridium 9601 is often combined with a GPS receiver to provide location information across
our system to customer applications. In addition, an increasing number of resellers and manufacturers are
including a terrestrial global system for mobile communication, or GSM, packet radio service modem in their
applications to provide low cost cellular data transmission when available. These applications are used by
end-users that require the ability to transfer large volumes of data but operate in areas with inconsistent cellular
coverage. We provide gap-filler coverage for such applications allowing such users to operate anywhere on the
globe in locations where cellular coverage is unavailable or unreliable.

In January 2010, we announced the development and anticipated introduction of the Iridium 9602 full-duplex
short burst data transceiver, which is designed to replace the Iridium 9601. The Iridium 9602 is smaller, lighter
and less expensive that the Iridium 9601, and we expect it to be available for commercial delivery in June 2010.
Our phase-out program for the Iridium 9601 will ensure that our VARs and VAMs will be able to transition
seamlessly to the new technology.

Device Development and Manufacturing

Currently, we contract with Cambridge Consulting Ltd., or Cambridge, and certain other suppliers to develop all
of our devices, and with Celestica Corporation, or Celestica, a contract manufacturer, to manufacture our devices
in facilities in Malaysia and the United States. We maintain agreements with a number of suppliers, including

15

Cambridge and Celestica. Pursuant to the contract with Celestica, we may be required to purchase excess
materials from Celestica at cost plus a contractual markup if the materials are not used in production within the
periods specified in the agreement. Celestica will then generally repurchase such materials from us at the same
price paid by us, as required for the production of the devices. Our agreement with Celestica is automatically
renewable for additional one year terms unless terminated by either party. We generally provide our distributors
with a warranty on subscriber equipment for one to two years from the date of activation, depending on the
product. We also utilize other suppliers, some of which are sole source, to manufacture certain component parts
of our devices.

In addition to our principal products, we also offer a selection of accessories for our devices, including holsters,
earbuds, portable auxiliary antenna, antenna adaptors, USB data cables and charging units, among others. We
purchase these products from several third-party suppliers either pursuant to contractual agreements or off the
shelf at market prices.

Our Spectrum

We hold licenses to use 8.725 MHz of continuous spectrum in the L-Band, which operates at 1.6 GHz, and
allows for two-way communication between our devices and our satellites. In addition, for feeder and inter-
satellite links, we are authorized to use 600 MHz of Ka-Band and K-Band spectrum. Of this spectrum, we use
200 MHz of K-Band spectrum for satellite-to-satellite communications, and 400 MHz of Ka-Band spectrum for
two-way communication between our satellites and our gateways. Our spectrum position is globally coordinated
and recorded by the International Telecommunication Union, or ITU. Our products and services are offered in
over 100 countries and we continue to seek authorizations in additional countries. Access to this spectrum
enables us to design satellites, network and terrestrial infrastructure enhancements cost effectively because each
product and service can be deployed and sold worldwide. This broad spectrum assignment also enhances our
ability to capitalize on existing and emerging wireless and broadcast applications.

The Federal Communications Commission, or FCC, initially licensed us to operate on 5.15 MHz of the
10.5 MHz of spectrum which Motorola Inc., or Motorola, originally designed our system to operate within and
later increased our license spectrum to include an additional 3.1 MHz on a shared basis with Globalstar. In
November 2007, an FCC order increased our exclusive spectrum to 7.775 MHz with an additional 0.95 MHz
shared with Globalstar. On May 1, 2009, the U.S. Court of Appeals for the D.C. Circuit denied a petition for
review filed by Globalstar of the FCC’s decision to reallocate L-band spectrum from Globalstar to us. The
decision of the U.S. Court of Appeals for the D.C. Circuit became final and non-reviewable on July 30, 2009,
because Globalstar did not seek rehearing en banc with the U.S. Court of Appeals for the D.C. Circuit or file a
petition for certiorari with the U.S. Supreme Court. Globalstar has also filed a petition before the FCC asking for
reconsideration of the global effects of the license modification, contending that the FCC’s decision should not
have affected Globalstar’s operations outside of the United States. We have opposed the reconsideration request
as without merit, and no decision has been issued by the FCC. The disposition by the U.S. Court of Appeals for
the D.C. Circuit does not directly impact Globalstar’s pending petition for reconsideration of the FCC decision to
modify Globalstar’s license on a global basis. Notwithstanding these challenges by Globalstar at the FCC,
modifications to our and Globalstar’s licenses consistent with the November 2007 spectrum change took effect
on a global basis on December 14, 2008, in accordance with federal law. After the modifications became
effective, Globalstar filed before the FCC a request for waivers and special temporary authority to continue
operating on spectrum licensed to us in certain gateways outside of the United States. Thereafter, Globalstar
modified its request. We opposed Globalstar’s request, but the FCC has not yet taken any action.

Our use of satellite spectrum is subject to the frequency rules and regulations of the ITU. The ITU is the United
Nations organization responsible for worldwide co-operation in the telecommunications sector. In order to
protect satellite systems from harmful radio frequency interference from other satellite systems, the ITU
maintains a Master International Frequency Register of radio frequency assignments. Each ITU administration is

16

required to give notice of, coordinate and record its proposed use of radio frequency assignments with the ITU’s
Radiocommunication Bureau. The coordination negotiations are conducted by the national administrations with
the assistance of satellite operators. When the coordination process is completed, the ITU formally notifies all
proposed users of frequencies and orbital locations in order to protect the recorded assignments from subsequent
nonconforming or interfering uses by member states of the ITU. Only member states have full standing within
this inter-governmental organization.

Filings to the ITU for our current constellation have been made on our behalf by the United States. We have
coordinated frequencies in the mobile satellite services spectrum at L-band (1.6 GHz) for communication
between our satellites and end-user devices, frequencies in the Ka-Band (19.4 GHz to 19.6 GHz and 29.1 to
29.3 GHz) for communications between us and the gateways and our satellites, as well as frequencies in the
K-Band (23 GHz) for our inter-satellite links.

The ITU controls the assignment of country codes used for placing telephone calls between different countries.
Our network is assigned the 8816 and 8817 country codes, and uses these numbers for calling and
communications between terminals.

Domestic and Foreign Revenue

We supply services and products to customers in a number of foreign countries. We allocate revenues
geographically based on where we invoice our distributors, whom we bill for mobile satellite services and related
equipment sales, and not according to the location of the end-user. These distributors sell services directly or
indirectly to end-users, who may be located elsewhere. It is not possible for us to provide the geographical
distribution of end-users, as we do not contract directly with them. The majority of our revenues are invoiced in
U.S. dollars. U.S. revenues accounted for approximately 48.1% of our revenues between 2007 and 2009. The
table below sets forth the percentage of our revenues by country for the period indicated:

Year ended
December 31,
2007

Year ended
December 31,
2008

Year ended
December 31,
2009

United States . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . .
Other Countries(1) . . . . . . . . . . . . . . . . . . . . . . .

48.0%
16.9%
8.0%
27.1%

48.6%
17.2%
8.0%
26.2%

47.6%
14.8%
10.1%
27.5%

(1) No other single country represents more than 10% of our revenue for any of the periods indicated.

For more information about our revenue from sales to foreign and domestic customers, see Note 12 to our
consolidated financial statements and Note 12 in Iridium Holdings’ financial statements contained herein.

Traffic Originating Outside the U.S.

A significant portion of our voice and data traffic originates outside the United States. The table below estimates
the percentage of our commercial voice and data traffic originating outside the United States for the years ended
December 31, 2007, 2008 and 2009.

Commercial voice traffic (minutes)
Commercial data traffic (kilobytes)

. . . . . . . . .
. . . . . . . . .

92.1%
52.4%

90.1%
74.7%

90.2%
68.9%

Year ended
December 31,
2007

Year ended
December 31,
2008

Year ended
December 31,
2009

17

Our Network

Current Constellation

Our satellite network includes 66 in-orbit LEO satellites, in addition to in-orbit spares. We also maintain a
non-service in-orbit spare which we use for testing purposes. The satellites operate in six orbital planes of eleven
vehicles each in nearly circular polar orbits. Our satellites orbit at an altitude of approximately 483 miles (778
kilometers) above the earth and travel at 16,689 mph resulting in a complete orbit of the earth approximately
every 100 minutes. The design of our constellation ensures that generally at least one satellite is visible to
subscribers from any point on the earth’s surface, covering all of the world’s population. While our constellation
offers 100% global coverage, satellite services are not available in locations where a satellite signal cannot be
transmitted or received or when the device or antenna does not have a direct line of sight to a satellite, such as
inside a building.

Our constellation is unique in its usage of radio frequency crosslinks between our satellites. These crosslinks
enable each satellite to communicate with up to four other satellites in space—two in the same orbital plane and
two in adjacent planes. Our traffic is generally routed between satellites, which minimizes the ground
infrastructure necessary to support the constellation. This interlinked architecture enables a single ground station
gateway to support all commercial traffic globally. This design allows the satellite that is then passing over the
ground station to transmit all traffic to and from the rest of the satellite constellation to terrestrial-based networks
such as the PSTN.

We believe our interlinked satellite infrastructure provides several advantages over networks that rely on
terrestrial gateways like Globalstar’s and ORBCOMM’s networks. We have the only satellite network with 100%
global coverage, and our constellation is less vulnerable to single points of failure, since traffic can be routed
around any one satellite problem to complete the communications path. In addition, the small number of ground
stations increases the security of our constellation, a factor that makes our network particularly attractive to
government institutions and large enterprises that desire secure voice and data communications. The low orbit of
our constellation also allows our network to operate with low latency due to the proximity of our satellites to the
earth.

Our satellites are similar in design and functionality, which allows satellite diversity for mitigation of service
gaps from individual satellite outages. Each satellite has a high degree of on-board subsystem redundancy, an
on-board fault detection system and isolation and recovery for safe and quick risk mitigation. Our ability to
reconfigure the orbital location of each satellite provides us with operating flexibility and enhances our ability to
maintain commercially-acceptable level of service. If a satellite should fail or become unusable, in most cases,
we can reposition one of our in-orbit spare satellites to take over its functions. If there is an in-orbit spare located
in the orbital plane of the failed satellite, such repositioning can often be accomplished within days with minimal
impact on our services. If there is no in-orbit spare located in the relevant orbital plane, redeploying an in-orbit
spare into the affected plane will take at least one year. The design of our space and ground control system
facilitates the real time intervention and management of the satellite constellation and service upgrades via
software enhancements.

Our commercial gateway is located in Tempe, Arizona. This gateway has multiple antennas that communicate
with our satellites and pass calls seamlessly between gateway antennas and satellites as the satellites traverse the
gateway, thereby connecting signals from the terminals of end-users to our gateway. Additional gateways can be
added to the network to enable dedicated communications links that are not dependant on localized terrestrial
telecommunications infrastructure where subscribers are using our services. Such gateways would be able to
generate and control all user information pertaining to our registered users, such as user identity, geo-location
and call detail records. The DoD owns and operates a dedicated gateway in Hawaii for U.S. government users to
take advantage of this capability. This gateway provides an interface between voice and data devices and the
Defense Information Systems Network, providing DoD users with secure communications capabilities. We are
also in discussions with parties in countries that require physical gateways within their jurisdiction to build or

18

reactivate additional gateways to connect the traffic to the constellation coming to and from their territory,
including China and Russia.

We operate our satellite constellation from our satellite network operations center in Leesburg, Virginia. This
facility manages the performance and status of each of our satellites, developing and distributing routing tables
for use by the satellites and gateways, directing traffic routing through the network and controlling the formation
of coverage areas by the satellites’ main mission antennas. We also operate telemetry, tracking, and control
stations, or TTACs, and satellite earth station facilities in Fairbanks, Alaska and Chandler, Arizona in the United
States, and in northern Canada and Norway. The Alaskan ground station also provides earth terminal backup
capability for the Tempe gateway.

From time to time, individual satellites in our constellation experience operating problems that may result in a
temporary satellite outage, but due to satellite diversity within our constellation, the individual satellite outages
typically do not negatively affect our customers’ use of our system for a prolonged period. In addition, most
system processing related to our service is performed using software onboard each satellite instead of on the
ground. We believe this has provided us with significant flexibility and has contributed to the longevity of the
system by enabling engineers to develop additional functionality and software-based solutions to occasional
faults and anomalies in the system.

We have experienced seven satellite losses since we reintroduced commercial satellite services in 2001 that have
resulted in the complete loss of the affected satellites or the loss of the ability of the satellite to carry traffic on
the network. Six of these losses were from satellites that failed in orbit and one satellite was lost as a result of a
collision with a non-operational Russian satellite. To date, each time we have lost a satellite we have been able to
replace it with an in-orbit spare.

Based on the failures and anomalies we have experienced to date, and considering the potential for future
anomalies, we believe our current constellation will provide commercially acceptable level of service through
approximately 2014. In addition, we believe our constellation can be operationally functional with less than 66
satellites while experiencing some service degradation. We expect to be able to mitigate most satellite failures
through the use of the remaining in-orbit spares, the implementation of software solutions, and by landing
communications traffic at our ground station in Alaska and backhauling traffic to the Tempe gateway for
processing and termination. However, there can be no assurance that our satellites will not fail faster than
expected or that we will be able to mitigate any future failures.

In addition to our in-orbit spare satellites, we own spare parts for certain equipment in our gateway and TTACs.
We selectively replace parts for our gateway and TTACs as necessary and maintain an inventory of spare parts
which we continuously monitor. In addition, when we do not have necessary spares in inventory or such spares
become obsolete, we rely on third parties to develop necessary parts.

We contract with Boeing to operate our constellation pursuant to a long-term operations and maintenance
agreement, which we refer to as the O&M Agreement. Under the terms of this agreement, Boeing provides
operations and maintenance services with respect to our satellite network, including engineering, systems
analysis and operations and maintenance services, from our technical support center in our Chandler, Arizona
control station and our satellite network operations center in Leesburg, Virginia. The life of the agreement runs
concurrent with the estimated useful life of our constellation.

Pursuant to a transition services, products and asset agreement, or the TSA, by and among Motorola, Iridium
Holdings and Iridium Satellite and a separate agreement by and among Iridium Satellite, Boeing, Motorola and
the U.S. government, Iridium Satellite is required to maintain an in-orbit liability insurance policy with a
de-orbiting endorsement to cover the de-orbiting of our satellite constellation in the amount of $500.0 million per
occurrence, and $1.0 billion in the aggregate. The current policy together with the de-orbiting endorsement
covers amounts that we and certain other named parties may become liable to pay for bodily injury or property

19

damages to third parties related to processing, maintaining and operating our satellite constellation and, in the
case of the de-orbiting endorsement, de-orbiting the satellite constellation, although it contains exceptions for
third-party damages which may result from the 2009 in-orbit satellite collision. The policy covers us, the
U.S. government, Boeing, as operator of our system, Motorola and other named beneficiaries. The policy has
been renewed annually since the expiration of the original policy’s three-year term in 2003. The current policy
has a one-year term, which expires December 12, 2010. In addition, Motorola maintains a separate $1.0 billion
product liability policy to cover its potential liability as manufacturer of the satellites. We pay the premium for
Motorola’s policy. We do not maintain in-orbit insurance covering losses from satellite failures or other
operational problems affecting our constellation.

Constellation De-Orbiting Obligations

When Iridium Satellite purchased the assets of Iridium LLC out of bankruptcy, Boeing, Motorola and the U.S.
government required certain de-orbit rights as a way to control potential liability risk arising from future
operation of the constellation and provide for the U.S. government’s obligation to indemnify Motorola. As a
result, an agreement was entered into by Iridium Satellite, Boeing, Motorola and the U.S. government, whereby
the U.S. government obtained the right to, in its sole discretion, require us to de-orbit our constellation upon the
occurrence of any of the following: (a) Iridium Satellite’s failure to pay certain insurance premiums or maintain
insurance; (b) Iridium Satellite’s bankruptcy; (c) Iridium Satellite’s sale or the sale of any major asset in its
satellite system; (d) Boeing’s replacement as the operator of Iridium Satellite’s satellite system; (e) Iridium
Satellite’s failure to provide certain notices as contemplated by the agreement; or (f) at any time after June 5,
2009, unless extended by the U.S. government. The U.S. government also has the right to require us to de-orbit
any of our individual functioning satellites, including in-orbit spares, that has been in orbit for more than seven
years, unless the U.S. government grants a postponement. As of August 2009, all of our functioning satellites had
been in orbit for more than seven years. We are currently in discussions with the U.S. government to extend the
2009 deadline.

Motorola also has the right to de-orbit our constellation pursuant to the TSA and pursuant to the O&M
Agreement between Boeing and Iridium Constellation LLC, or Iridium Constellation, a subsidiary of Iridium
Satellite. Under these agreements, Motorola may require the de-orbit of our constellation upon the occurrence of
any of the following: (a) Iridium Holdings’ bankruptcy or the bankruptcy of Iridium Constellation or Iridium
Satellite; (b) Iridium Holdings’ breach of the TSA; (c) Boeing’s breach of the O&M Agreement or a related
agreement between Boeing and Motorola; (d) an order from the U.S. government requiring the de-orbiting of our
satellites; (e) Motorola’s determination that changes in law or regulation may require it to incur certain costs
relating to the operation, maintenance, re-orbiting or de-orbiting of our constellation; or (f) Motorola’s failure to
obtain, on commercially reasonable terms, product liability insurance to cover its position as manufacturer of the
satellites, provided the U.S. government has not agreed to cover what would have otherwise been paid by such
policy. Motorola recently filed a complaint against us in Illinois state court. This complaint is described in more
detail under “Legal Proceedings” elsewhere in this report.

Pursuant to the O&M Agreement between Iridium Constellation and Boeing, Boeing similarly has the unilateral
right to de-orbit our constellation upon the occurrence of any of the following events: (a) Iridium Constellation’s
or Iridium Satellite’s bankruptcy; (b) the existence of reasonable grounds for Boeing to question the financial
stability of Iridium Constellation; (c) Iridium Constellation’s failure to maintain certain insurance policies;
(d) Iridium Constellation’s failure to provide Boeing certain quarterly financial statements; (e) Iridium
Constellation’s breach of the O&M Agreement, including its payment obligation thereunder; or (f) changes in
law or regulation that may increase the risks or costs associated with the operation and/or re-orbit process or the
cost of operation and/or re-orbit of the constellation.

In addition, we have certain de-orbit obligations under our FCC licenses, Specifically, pursuant to an orbital
debris mitigation plan filed with the FCC and incorporated into our space station license in 2001, we are required

20

to lower each satellite to an orbit with a perigee of approximately 250 kilometers as it reaches the end of its
useful life and coordinate these orbit-lowering maneuvers with the United States Space Command. We have
applied to modify our license to conform these requirements to the less stringent de-orbit standards adopted by
the FCC in 2004 for all new satellite applications. Our modification application remains pending.

Iridium NEXT

Our satellites have so far exceeded their original design lives and we are currently developing our next-
generation satellite constellation, Iridium NEXT, which we expect to commence launching in late 2014. The
current constellation is expected to provide commercially acceptable level of service through approximately
2014. The new satellite constellation will be backward compatible with our first generation system and will
replace the existing constellation with what we believe will be a more powerful and capable satellite network.
We believe Iridium NEXT’s increased capabilities will expand our target markets by enabling us to develop and
offer a broader range of products and services, including a wider array of cost-effective and competitive
broadband data services.

Iridium NEXT will maintain the current system’s key attributes, including LEO architecture, the capability to
upload new software, global coverage, low latency and high network availability, and will continue to support
existing applications and equipment. In addition, Iridium NEXT will allow us to develop and provide new and
enhanced capabilities, such as:

•

•

•

higher speeds and greater flexibility for core voice and data services;

the ability to host lower cost, private network gateways, providing greater control of voice and data
traffic; and

regional broadcast capabilities, enabling global paging and point-to-multi-point broadcasting of data
services to select groups.

In addition, Iridium NEXT will be designed to host secondary payloads for U.S. and international government
and commercial customers, including remote sensing and climate monitoring applications. If such secondary
payloads were in fact built on Iridium NEXT, they have the potential to generate cash and deferred revenue
during the construction phase of Iridium NEXT and the potential to generate recurring revenue once Iridium
NEXT is launched.

In 2007, we conducted a request for information with over 60 companies for the development and launch of
Iridium NEXT. We have since narrowed our search for a prime system contractor to two companies, Lockheed
Martin Corporation Space Systems Company and Thales Alenia Space France. These companies are currently
working with input from our engineers to design a system that satisfies our technical,
timing and cost
requirements. We expect to enter into a definitive agreement with a prime contractor for the design, manufacture
and deployment of our new constellation in 2010. We estimate the aggregate costs associated with the design,
build and launch of Iridium NEXT and related infrastructure upgrades through 2016 to be approximately
$2.7 billion. We expect to fund a substantial portion of these costs from internally generated cash flows,
including potential revenues from secondary payloads and warrant proceeds. We expect to finance the remaining
cost by raising additional debt or equity financing.

Competition

The global communications industry is highly competitive. We currently face substantial competition from other
service providers that offer a range of mobile and fixed communications options. Our most direct competition
comes from other global mobile satellite services providers. Currently, our principal global mobile satellite

21

services competitors are Inmarsat, Globalstar and ORBCOMM. We compete primarily on the basis of coverage,
quality, mobility and pricing of services and products.

Our main competitor, United Kingdom-based Inmarsat, has been a provider of communications services,
including voice and data services, since 1982. Inmarsat owns and operates a fleet of GEO satellites. Unlike LEO
satellites, GEO satellites orbit the earth at approximately 22,300 miles above the equator. GEO operators require
substantially larger and more expensive antennas, and typically have higher transmission delays than LEO
operators. Due to its GEO system, Inmarsat’s coverage area extends and covers most bodies of water except for a
majority of the polar regions. Accordingly, Inmarsat is the leading provider of satellite communications services
to the maritime sector. Inmarsat also offers land-based and aviation communications services. Immarsat has
announced the development of a new handset which when introduced will compete with our products. During
April 2009, Inmarsat acquired Stratos, one of our main distributors. Inmarsat generally does not sell directly to
end-users.

U.S.-based Globalstar owns and operates a fleet of LEO satellites. Globalstar began commercial services in 2000.
In addition, Globalstar’s service is available only on a multi-regional basis as a result of its bent pipe architecture,
which requires that voice and data transmissions be routed from satellites immediately to nearby ground stations.
This design requires the use of multiple ground stations, which are impractical in extreme latitudes or over
oceans. Unlike Inmarsat and us, Globalstar sells a higher percentage of its products and services directly to
end-users. Globalstar has indicated that satellite failures and other problems affecting its constellation are
affecting and will continue to affect its ability to provide two-way services in the future. Globalstar is also in the
process of building its second-generation satellite constellation, which is expected to be launched between 2010
and 2012. It is currently planning to replace only 24 of the original 48 satellites during this time. In July 2009,
Globalstar announced it has completed the financing of approximately $738.0 million for its second generation
satellite constellation, supported by credit insurance from Compagnie Française d’Assurance pour le Commerce
Extérieur S.A., or Coface, the export credit agency acting on behalf of the French government.

U.S.-based ORBCOMM also provides commercial services using a fleet of LEO satellites. Like Globalstar,
ORBCOMM’s network also has a bent pipe architecture, which limits its coverage area. ORBCOMM’s principal
focus is low-cost data and M2M services, where it directly competes with our M2M offerings. ORBCOMM’s
services generally have a certain amount of latency, which may limit their use in certain mission critical
applications. It does not offer voice service or high-speed data services. ORBCOMM is similarly developing its
second-generation satellite constellation.

We also compete with regional mobile satellite communications services in several geographic markets. In these
cases, the majority of our competitors’ customers require regional, not global, mobile voice and data services, so
our competitors present a viable alternative to our services. All of these competitors operate GEO satellites. Our
regional mobile satellite services competitors currently include Thuraya Telecommunications Co., or Thuraya,
principally in Europe, the Middle East, Africa, Australia and several countries in Asia; and SkyTerra in North
including ICO Global
America.
and SkyTerra
Communications
Communications, Inc. or SkyTerra, are attempting to exploit their spectrum positions into a U.S. consumer
mobile satellite services business; however such operators currently offer limited or no services. In July 2009,
TerreStar launched its satellite TerreStar 1 is expected to launch its first handset during 2010.

regional mobile satellite services companies,

ICO, TerreStar Corporation, or TerreStar,

(Holdings) Limited, or

In addition,

several

We compete indirectly with terrestrial wireline (landline) and wireless communications networks. We provide
service in areas that are inadequately covered by these ground systems. To the extent
terrestrial
communications companies invest in underdeveloped areas, we will face increased competition in those areas.
We believe that local telephone companies currently are reluctant to invest in new switches, landlines and
cellular towers to expand their networks in rural and remote areas due to high costs and limited usage. Many of
the underdeveloped areas are sparsely populated so it would be difficult to generate the necessary returns on the

that

22

capital expenditures required to build terrestrial wireless networks in such areas. We believe that our solutions
offer a cost-effective and reliable alternative to terrestrial-based wireline and wireless systems.

We will also face competition for our land-based services in the United States from incipient ancillary terrestrial
component, or ATC, service providers. In February 2003, the FCC adopted rules that permit satellite service
providers to establish ATC networks. ATC authorization enables the integration of a satellite-based service with
terrestrial wireless services, resulting in a hybrid mobile satellite services/ATC network designed to provide
advanced services and broad coverage throughout the United States. The ATC network would extend satellite
services to urban areas and inside buildings where satellite services currently are impractical. Outside the United
States, other countries are considering implementing regulations to facilitate ATC services.

The mobile satellite services industry has significant barriers to entry, including the cost and difficulty associated
with obtaining spectrum licenses and successfully building and launching a satellite network. In addition to cost,
there is a significant amount of lead-time associated with obtaining the required licenses, building and launching
the satellite constellation and deploying the ground network technology. We are aware of no other companies
currently planning to enter the mobile satellite services industry.

Employees

As of December 31, 2009, we had 166 full-time employees, none of whom is subject to any collective bargaining
agreement. We consider our employee relations to be good.

Intellectual Property

At December 31, 2009, we held eight U.S. patents with no additional U.S. patents pending and no foreign patents
with one foreign patent pending. These patents cover several aspects of our satellite system, our global network
and our devices. We continue to maintain all of our important patents.

In addition to our owned intellectual property, we also license critical system technology from Motorola,
including software and systems to operate and maintain our network as well as technical information for the
design and manufacture of our devices. This intellectual property is essential to our ability to continue to operate
our constellation and sell our handsets. We maintain our licenses with Motorola pursuant to several agreements.
Pursuant to one of these agreements, we pay a royalty equal to 2% of the manufacturing costs of subscriber
equipment. One or more of these agreements can be terminated by Motorola upon: (i) any material change to
certain portions of the certificate of formation and operating agreement of our subsidiary that is party to the
agreements; (ii) any change of control, as defined; (iii) the commencement by or against Iridium Satellite of any
bankruptcy proceeding or other specified liquidation proceedings; or (iv) the material failure of Iridium Satellite
to perform or comply with any provision of certain of the agreements between Iridium Satellite and Motorola. In
addition, Motorola has an annual right of non-renewal in respect of one of the intellectual property license
agreements. Motorola has assigned a portion of the patents that comprise these licenses to a third-party.

Motorola recently filed a complaint against us in Illinois state court alleging that the Acquisition constituted a
change of control. This complaint is described in more detail under “Legal Proceedings” included elsewhere in
this report. If the court were to hold that the Acquisition constituted a change of control, and the case were not
settled, then Motorola would also have the right to terminate our intellectual property licenses.

We also license other system technology from additional third parties. We expect to license technology from
Motorola and other third parties in connection with the development of Iridium NEXT and related ground
infrastructure, products and services.

If Motorola or any such third party were to terminate any license agreement or cease to support and service this
technology, or if we are unable to renew such licenses on commercially reasonable terms or at all, it may be

23

difficult, more expensive or, in the case of Motorola, impossible to obtain such services from alternative vendors.
Any substitute technology may also have lower quality or performance standards, which would adversely affect
the quality of our products and services. For more information, see “Risk Factors—Our agreements with
Motorola contain potential payment provisions that may apply to the Acquisition; and Motorola has filed a
complaint in Illinois state court seeking to compel us to make those payments” and “Risk Factors—We are
dependent on intellectual property licensed from Motorola and other third parties.”

Available Information

Copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments, if any, to those reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended, or the Exchange Act, are available free of charge through our website at www.iridium.com
and on the website of the Securities and Exchange Commission, or SEC, at www.sec.gov. A request for any of
these reports may also be submitted to us by writing: Investor Relations, Iridium Communications Inc., 6707
Democracy Boulevard, Suite 300, Bethesda, MD 20817, or by calling our
relations line at
301-517-6297.

investor

ITEM 1A. Risk Factors

Throughout this section, when we refer to percentages of revenues or traffic for the year ended December 31,
2009, we are referring to the revenues or traffic of Iridium Holdings prior to the Acquisition and Iridium
Holdings combined with our company after the Acquisition.

Our business plan depends on both increased demand for mobile satellite services and our ability to
successfully implement it.

Our business plan is predicated on growth in demand for mobile satellite services. Demand for mobile satellite
services may not grow, or may even contract, either generally or in particular geographic markets, for particular
types of services or during particular time periods. A lack of demand could impair our ability to sell products and
services, develop and successfully market new products and services and could exert downward pressure on
prices. Any decline in prices would decrease our revenues and profitability and negatively affect our ability to
generate cash for investments and other working capital needs.

Our ability to successfully implement our business plan will also depend on a number of other factors, including:

•

•

•

•

•

•

•

•

our ability to maintain the health, capacity and control of our existing satellite constellation;

our ability to contract for the design, build and launch of Iridium NEXT and related ground
infrastructure, products and services, including the financing thereof and, once launched, our ability to
maintain the health, capacity and control of such satellite constellation;

the level of market acceptance and demand for our products and services;

our ability to introduce innovative new products and services that satisfy market demand;

our ability to obtain additional business using our existing spectrum resources both in the United States
and internationally;

our ability to sell our products and services in additional countries;

our ability to maintain our relationship with U.S. government customers, particularly the DoD;

the ability of our distributors to market and distribute our products, services and applications
effectively and their continued development of innovative and improved solutions and applications for
our products and services;

24

•

•

•

our ability to successfully resolve a dispute with Motorola regarding fees they allege that we owe to
them and to license the required intellectual property for Iridium NEXT;

the effectiveness of our competitors in developing and offering similar services and products; and

our ability to maintain competitive prices for our products and services and control costs.

We will need additional capital to design, build and launch Iridium NEXT and related ground infrastructure,
products and services, and pursue additional growth opportunities. If we fail to obtain sufficient capital, we
will not be able to successfully implement our business plan.

Our business plan calls for the development of Iridium NEXT, the development of new product and service
offerings, upgrades to our current services, hardware and software upgrades to maintain our ground infrastructure
and upgrades to our business systems. We estimate the aggregate costs associated with the design, build and
launch of Iridium NEXT and related infrastructure upgrades through 2016 to be approximately $2.7 billion,
although we have not yet entered into definitive agreements for these activities and our actual costs could
substantially exceed this estimate. We expect to fund a substantial portion of these costs from internally
generated cash flows, including potential revenues from secondary payloads and warrant proceeds. We expect to
finance the remaining cost by raising additional debt or equity financing. However, there can be no assurance that
our internally generated cash flows will meet our current expectations or that we will be able to obtain sufficient
external capital to fund Iridium NEXT and implement other elements of our business plan, due to increased
costs, lower revenues or inability to obtain additional financing. Among other factors leading to this uncertainty,
some of the warrants whose proceeds we expect to use to fund a portion of Iridium NEXT are currently “under
water,” meaning they have an exercise price per share that is significantly higher than the current price at which
our common stock is trading. In addition, none of the warrants are callable by us until such time as our stock
trades at a per share price greater than $14.25 for our $7.00 warrants, or $18.00 for our $11.50 warrants, for an
extended period of time. As of March 12, 2010 the closing price of our common stock was $8.22 per share.
Unless our stock price increases significantly, we would not expect the under-water warrants to be exercised and
we will not be able to call any of the warrants. If we do not obtain such funds from internally generated cash
flows, or from the net proceeds of future debt or equity financings, our ability to maintain our network, design,
build and launch Iridium NEXT and related ground infrastructure, products and services, and pursue additional
growth opportunities will be impaired.

The recent global economic crisis and related tightening of credit markets has also made it more difficult and
expensive to raise capital. Our ability to obtain additional capital to finance Iridium NEXT and related ground
infrastructure, products and services, and other capital requirements may be adversely impacted by the
continuation of these market conditions. We have engaged Goldman, Sachs & Co. as our lead global advisor to
help secure the funding necessary to design, build and launch Iridium NEXT, although we cannot assure you that
we will have access to sources of financing on reasonable terms, or at all. If we are unable to obtain sufficient
financing on acceptable terms, we may not be able to fully implement our business plan as currently projected, if
at all, which would significantly limit the development of our business and impair our ability to provide a
commercially acceptable level of service.

In addition, in the event that we are able to obtain financing, our future agreements governing our indebtedness
may require us to carry in-orbit insurance which we do not currently have and may contain a number of
significant restrictions and covenants that limit our ability to, among other things:

•

•

incur or guarantee additional indebtedness;

pay dividends or make distributions to our stockholders;

• make investments, acquisitions or capital expenditures;

•

grant liens on our assets;

25

•

enter into transactions with our affiliates;

• merge or consolidate with other entities or transfer all or substantially all of our assets; and

•

otherwise transfer or sell assets.

We may also be required to maintain compliance with specified financial covenants. Complying with these
restrictive covenants may impair our ability to finance our operations or capital needs or to take advantage of
other favorable business opportunities. Our ability to comply with these restrictive covenants will depend on our
future performance, which may be affected by events beyond our control. If we violate any of these covenants
and are unable to obtain waivers, we would be in default under the agreement and payment of the indebtedness
could be accelerated. The acceleration of our indebtedness under one agreement may permit acceleration of
indebtedness under other agreements that contain cross-default or cross-acceleration provisions.
If our
indebtedness is accelerated, we may not be able to repay our indebtedness or borrow sufficient funds to refinance
it. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms that
are acceptable to us. In addition, complying with these covenants may cause us to take actions that are not
favorable to holders of our securities and may make it more difficult for us to successfully execute our business
plan and compete against companies who are not subject to such restrictions.

Our satellites have a limited life and may fail prematurely, which would cause our network to be compromised
and materially and adversely affect our business, prospects and profitability.

Since we introduced commercial services in 2001, we have experienced seven satellite losses. Six of our
satellites have failed in orbit, which has resulted in either the complete loss of the affected satellites or the loss of
the ability of the satellite to carry traffic on the network, and one satellite was lost as a result of a collision with a
non-operational Russian satellite. While we expect our current constellation to provide a commercially
acceptable level of service through approximately 2014, we cannot guarantee we will be able to provide such
level of service through the transition period to Iridium NEXT. Also, our satellites have already exceeded their
original design lives and the actual useful lives of our satellites may be shorter than we expect. In addition,
additional satellites may fail or collide with space debris or other satellites in the future, and we cannot assure
you that our in-orbit spare satellites will be sufficient to replace such satellites or that we will be able to replace
them in a timely manner.

In-orbit failure may result from various causes, including component failure, loss of power or fuel, inability to
control positioning of the satellite, and solar or other astronomical events, including solar radiation and flares and
space debris. Other factors that could affect the useful lives of our satellites include the quality of construction,
gradual degradation of solar panels and the durability of components. Radiation-induced failure of satellite
components may result in damage to or loss of a satellite before the end of its expected life. As our constellation
has aged, some of our satellites have experienced individual component failures affecting their coverage or
transmission capacity and other satellites may experience such failures in the future, which could adversely affect
the reliability of their service. As a result, fewer than 66 of our in-orbit satellites will be fully functioning at any
time. Although we do not incur any direct cash costs related to the failure of a satellite, if a satellite fails, we
record an impairment charge in our statement of operations reflecting the remaining net book value of that
satellite, which could significantly depress our net income for the period in which the failure occurs.

From time to time, we are advised by our customers and end-users of temporary intermittent losses of signal
cutting off calls in progress, preventing completions of calls when made or disrupting the transmission of data. If
the magnitude or frequency of such problems increase and we are no longer able to provide a commercially
acceptable level of service, our business and financial results and our reputation would be hurt and our ability to
pursue our business plan would be compromised.

We may be required in the future to make further changes to our constellation to maintain or improve its
performance. Any such changes may require prior FCC approval and the FCC might not give such approval or

26

may subject the approval to other conditions that could be unfavorable to our business. In addition, from time to
time we may reposition our satellites within the constellation in order to optimize our service, which could result
in degraded service during the repositioning period. Although there are some remote tools we use to remedy
certain types of problems affecting the performance of our satellites, the physical repair of our satellites in space
is not feasible.

Our products could fail
to perform or perform at reduced levels of service because of technological
malfunctions or deficiencies or events outside of our control which would seriously harm our business and
reputation.

services,

satellites,

Our products and services are subject to the risks inherent in a large-scale, complex telecommunications system
employing advanced technology. Any disruption to our
information systems or
telecommunications infrastructure could result in the inability of our customers to receive our services for an
indeterminate period of time. These customers include government agencies conducting mission-critical work
throughout the world, as well as consumers and businesses located in remote areas of the world where traditional
telecommunications services may not be readily available. Any disruption to our services or extended periods of
reduced levels of service could cause us to lose customers or revenue, result in delays or cancellations of future
implementations of our products and services, result in failure to attract customers or result in litigation,
customer service or repair work that would involve substantial costs and distract management from operating our
business. The failure of any of the diverse elements of our system, including our satellites, our commercial
gateway, or our network operations center to function as required could render our system unable to perform at
the quality and capacity levels required for success. Any system failures or extended reduced levels of service
could reduce our sales, increase costs or result in liability claims and seriously harm our business.

Additional satellites may collide with space debris or another spacecraft, which could adversely affect the
performance of our constellation and business.

In February 2009, we lost an operational satellite as a result of a collision with a non-operational Russian
satellite. Although we have some ability to actively maneuver our satellites to avoid potential collisions with
space debris or other spacecraft, this ability is limited by, among other factors, various uncertainties and
inaccuracies in the projected orbit location of and predicted conjunctions with debris objects tracked and
cataloged by the U.S. government. Additionally, some space debris is too small to be tracked and therefore its
orbital location is completely unknown; nevertheless this debris is still large enough to potentially cause severe
damage or a failure of our satellites should a collision occur. If our constellation experiences additional satellite
collisions with space debris or other spacecrafts, our ability to operate our constellation may be impaired.

The space debris created by the February 2009 satellite collision may cause damage to other spacecraft
positioned in a similar orbital altitude.

The collision of one of our satellites with a non-operational Russian satellite created a space debris field
concentrated in the orbital altitude where the collision occurred, and thus increased the risk of space debris
damaging or interfering with the operation of our satellites, which travel in this orbital altitude, and satellites
owned by third parties, such as U.S. or foreign governments or agencies and other satellite operators. Although
there are tools used by us and providers of tracking services, such as the U.S. Joint Space Operations Center, to
detect, track and identify space debris, we or third parties may not be able to maneuver the satellites away from
such debris in a timely manner. Any such collision could potentially expose us to significant losses and liability.

As our product portfolio expands, our failure to manage growth effectively could impede our ability to execute
our business plan and we may experience increased costs or disruption in our operations.

We currently face a variety of challenges, including maintaining the infrastructure and systems necessary for us
to operate as a public company and managing the growth of our business. As our product portfolio continues to

27

expand, the responsibilities of our management team and the company resources also grow. Consequently, we
may further strain our management and the company resources with the increased complexities and
administrative burdens associated with a larger, more complex product portfolio. Our failure to meet these
challenges as a result of insufficient management or other resources could significantly impede our ability to
execute our business plan. To properly manage our growth, we may need to hire and retain personnel, upgrade
our existing operational management and financial and reporting systems and improve our business processes
and controls. Failure to effectively manage the expansion of our product portfolio in a cost-effective manner
could result in declines in product and service quality and customer satisfaction, increased costs or disruption of
our operations.

If we experience operational disruptions with respect to our commercial gateway or operations center, we may
not be able to provide service to our customers.

Our commercial satellite network traffic is supported by a primary ground station gateway in Tempe, Arizona. In
addition, we operate our satellite constellation from our satellite network operations center in Leesburg, Virginia.
Currently, we do not have a back-up facility for our gateway and we would not be able to implement our backup
to the Virginia operations center in real time if either of those facilities experienced a catastrophic failure. Both
facilities are subject to the risk of significant malfunctions or catastrophic loss due to unanticipated events and
would be difficult to replace or repair and could require substantial lead-time to do so. Material changes in the
operation of these facilities may be subject to prior FCC approval and the FCC might not give such approval or
may subject the approval to other conditions that could be unfavorable to our business. Our gateway and
operations center may also experience service shutdowns or periods of reduced service in the future as a result of
equipment failure, delays in deliveries or regulatory issues. Any such failure would impede our ability to provide
service to our customers.

If we are unable to effectively develop and deploy Iridium NEXT before our current satellite constellation
ceases to provide a commercially acceptable level of service, our business will suffer.

We are currently developing Iridium NEXT, which we expect to commence launching in late 2014. While we
expect our current constellation to provide a commercially acceptable level of service through approximately
2014, we cannot guarantee it will provide a commercially acceptable level of service through the transition
period to Iridium NEXT. If we are unable, for any reason,
including as a result of insufficient funds,
manufacturing or launch delays, launch failures, in-orbit satellite failures, inability to achieve or maintain orbital
placement or delays in receiving regulatory approvals, to deploy Iridium NEXT before our current constellation
ceases to provide a commercially acceptable level of service or if we experience backward compatibility
problems with our new constellation once deployed, we will likely lose customers and business opportunities to
our competitors, resulting in a material decline in revenues and profitability and inability to service debt as our
ability to provide a commercially acceptable level of service is impaired.

Iridium NEXT may not be completed on time, and the costs associated with it may be greater than expected.

We estimate the aggregate costs associated with the design, build and launch of Iridium NEXT and related
infrastructure upgrades through 2016 will be approximately $2.7 billion although we have not yet entered into
definitive agreements for these activities and our actual costs could substantially exceed this estimate. We may
not complete Iridium NEXT and related infrastructure, products and services on time, on budget or at all. The
design, manufacture and launch of satellite systems are highly complex and historically have been subject to
delays and cost over-runs. Development of Iridium NEXT may suffer from additional delays, interruptions or
increased costs due to many factors, some of which may be beyond our control, including:

•

•

lower than anticipated internally generated cash flows;

lower than expected secondary payload funding;

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•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

the failure to receive proceeds from the exercise of our outstanding warrants, some of which are
currently significantly under water;

our inability to obtain capital to finance Iridium NEXT and related ground infrastructure, products and
services on acceptable terms or at all;

requirements imposed by financing sources;

engineering or manufacturing performance falling below expected levels of output or efficiency;

denial or delays in receipt of regulatory approvals or non-compliance with conditions imposed by
regulatory authorities;

the breakdown or failure of equipment or systems;

non-performance by third-party contractors, including the prime system contractor;

the inability to license necessary technology on commercially reasonable terms or at all;

use of a new or unproven launch vehicle;

launch delays or failures or in-orbit satellite failures once launched or the decision to manufacture
additional replacement satellites for future launches;

labor disputes or disruptions in labor productivity or the unavailability of skilled labor;

increases in the costs of materials;

changes in project scope;

additional requirements imposed by changes in laws; or

severe weather or catastrophic events such as fires, earthquakes, storms or explosions.

While we expect to fund a substantial portion of the costs associated with Iridium NEXT from internally
generated cash flows, including potential revenues from secondary payloads and warrant proceeds, we will need
to raise additional debt or equity to finance the rest of such costs, including amounts arising from cost-overruns
or if internally generated funds, secondary payload funding or warrant proceeds are less than anticipated. Such
capital may not be available to us on acceptable terms or at all.

If any of the above events occur, they could have a material adverse effect on our ability to continue to develop
Iridium NEXT and related infrastructure, products and services.

Loss of any Iridium NEXT satellite during launch could delay or impair our ability to offer our services, and
launch insurance, to the extent available, will not fully cover this risk.

The launch of our Iridium NEXT satellites could be subject to delays and risks. See “—If we are unable to
effectively develop and deploy Iridium NEXT before our current satellite constellation ceases to provide a
commercially acceptable level of service, our business will suffer” above for more information. We expect to
insure a portion of the launch of our Iridium NEXT satellites and self-insure the remaining portion. Launch
insurance currently costs approximately 12% to 20% of the insured value of the satellites launched, including
launch costs, but may vary depending on market conditions and the safety record of the launch vehicle. In
addition, we expect any launch insurance policies that we obtain to include specified exclusions, deductibles and
material change limitations. Typically, these insurance policies exclude coverage for damage arising from acts of
war, lasers and other similar potential risks for which exclusions are customary in the industry. If launch
insurance rates were to rise substantially, our future launch costs could increase. It is also possible that insurance
could become unavailable or prohibitively expensive, either generally or for a specific launch vehicle or that new
insurance could be subject to broader exclusions on coverage or limitations on losses, in which event we would
bear the risk of launch failures. Even if a lost satellite is fully insured, acquiring a replacement satellite may be

29

difficult and time consuming and could delay the deployment of Iridium NEXT. Furthermore, launch insurance
typically does not cover lost revenue.

We may be unable to obtain and maintain in-orbit liability insurance, and the insurance we obtain may not
cover all liabilities to which we may become subject.

Pursuant to the TSA with Motorola and pursuant to the agreement between Iridium Satellite, Boeing, Motorola
and the U.S. government, Iridium Satellite is required to maintain an in-orbit liability insurance policy with a
de-orbiting endorsement. The current policy together with the de-orbiting endorsement covers amounts that
Iridium Satellite and other named parties may become liable to pay for bodily injury and property damages to
third parties related to processing, maintaining and operating our satellite constellation and, in the case of the
de-orbiting endorsement, de-orbiting our satellite constellation. The current policy has a one-year term, which
expires December 12, 2010 and excludes coverage for all third-party damages relating to the 2009 collision of
our satellite with a non-operational Russian satellite. The price, terms and availability of insurance have
fluctuated significantly since we began offering commercial satellite services. The cost of obtaining insurance
can vary as a result of either satellite failures or general conditions in the insurance industry. Higher premiums on
insurance policies would increase our cost. In-orbit liability insurance policies on satellites may not continue to
be available on commercially reasonable terms or at all. In addition to higher premiums, insurance policies may
provide for higher deductibles, shorter coverage periods and additional policy exclusions. For example, our
current de-orbit insurance covers only twelve months from attachment and therefore would not cover losses
arising outside that timeframe. Our failure to renew Iridium Satellite’s current in-orbit liability insurance policy
or obtain a replacement policy would trigger de-orbit rights held by the U.S. government, Motorola and Boeing,
which, if exercised, would eliminate our ability to provide mobile satellite communications services. See “—The
U.S. government, Motorola and Boeing may unilaterally require us to de-orbit our current constellation upon the
occurrence of certain events” below for more information. In addition, even if Iridium Satellite continues to
maintain any in-orbit liability insurance policy, the coverage may not protect us against all third-party losses,
which could be material.

Iridium Satellite’s current in-orbit liability insurance policy contains, and we expect any future policies would
likewise contain, specified exclusions and material change limitations customary in the industry. These
exclusions may relate to, among other things, losses resulting from in-orbit collisions such as the one we
experienced in 2009, acts of war, insurrection, terrorism or military action, government confiscation, strikes,
riots, civil commotions, labor disturbances, sabotage, unauthorized use of the satellites and nuclear or radioactive
contamination, as well as claims directly or indirectly occasioned as a result of noise, pollution, electrical and
electromagnetic interference and interference with the use of property.

In addition to Iridium Satellite’s in-orbit liability insurance policy, Motorola maintains product liability insurance
to cover its potential liability as the manufacturer of the satellites. Motorola may not in the future be able to
renew its product liability coverage on reasonable terms and conditions, or at all. Any failure by Motorola to
maintain its insurance, if not maintained by us on its behalf, could increase our exposure to third-party damages
that may be caused by any of our satellites.

We do not maintain in-orbit insurance covering losses from satellite failures or other operational problems
affecting our constellation.

We do not maintain in-orbit insurance covering losses that might arise as a result of a satellite failure or other
operational problems affecting our constellation and our future lenders may require us to obtain and maintain
such insurance. We may not be able to obtain such insurance on acceptable terms, if at all. If we are not able to
obtain in-orbit insurance in the face of a covenant requiring us to do so, we may be unable to obtain a waiver
which would trigger an event of default and would likely accelerate repayment of all outstanding borrowings.
Even if we obtain in-orbit insurance in the future, the coverage may not be sufficient to compensate us for

30

satellite failures and other operational problems affecting our satellites. As a result, a failure of one or more of
our satellites or the occurrence of equipment failures and other related problems would constitute an uninsured
loss and could harm our financial condition.

We may be negatively affected by current global economic conditions.

Our operations and performance depend significantly on worldwide economic conditions. Uncertainty about
current global economic conditions poses a risk as individual consumers, businesses and governments may
postpone spending in response to tighter credit, negative financial news, declines in income or asset values or
budgetary constraints. For example, one of our VARs, which represented approximately 20% of our total M2M
data revenue for the year ended December 31, 2009, is currently substantially behind on payment. If we choose
these end-user
to terminate our relationship with this VAR for non-payment,
subscribers, with whom we do not have a direct relationship, will migrate to another of our service providers or
VARs to purchase our products and services. If these customers do not continue to purchase our products and
services, it would dramatically decrease our subscriber growth rate. Reduced demand would cause a decline in
our revenues and make it more difficult for us to operate profitably, potentially compromising our ability to
pursue our business plan. While we expect the number of our subscribers and revenues to continue to grow, we
expect the future growth rate will be slower than our historical growth and may not continue in every quarter of
every year. We expect our future growth rate will be impacted by the current economic slowdown, increased
competition, maturation of the satellite communications industry and the difficulty in sustaining high growth
rates as we increase in size. Any substantial appreciation of the U.S. dollar may also negatively impact our
growth by increasing the cost of our products and services in foreign countries.

there is no guarantee that

We could lose market share and revenues as a result of increasing competition from companies in the wireless
communications industry, including cellular and other satellite operators, and from the extension of land-
based communication services.

We face intense competition in all of our markets, which could result in a loss of customers and lower revenues
and make it more difficult for us to enter new markets. We compete primarily on the basis of coverage, quality,
portability and pricing of services and products.

There are currently six other satellite operators providing services similar to ours on a global or regional basis:
Inmarsat, Globalstar, ORBCOMM, SkyTerra, Thuraya and ACeS International Limited, or Asia Cellular
Satellite. In addition, several regional mobile satellite services companies,
including ICO, TerreStar and
SkyTerra, are attempting to exploit their spectrum positions into a U.S. consumer mobile satellite services
business. The provision of satellite-based services and products is subject to downward price pressure when
capacity exceeds demand or as a result of aggressive discounting by some operators under financial pressure to
expand their respective market share. Some satellite operators, for example, subsidize the prices of their
products, such as satellite handsets and we expect two new handsets to enter the market during 2010. In addition,
we may face competition from new competitors or new technologies. For example, we may face competition for
our land-based services in the United States from incipient ATC service providers who are currently raising
capital and designing a satellite operating business and a terrestrial component around their spectrum holdings. In
addition, some of our competitors have announced plans for the launch of additional satellites. As a result of
competition, we may not be able to successfully retain our existing customers and attract new customers.

In addition to our satellite-based competitors, terrestrial voice and data service providers, both wireline and
wireless, are expanding into rural and remote areas and providing the same general types of services and products
that we provide through our satellite-based system. Although satellite communications services and terrestrial
communications services are not perfect substitutes, the two compete in some markets and for some services.
Consumers generally perceive terrestrial wireless voice communication products and services as cheaper and
more convenient than those that are satellite-based. Many of our terrestrial competitors have greater resources,

31

wider name recognition and newer technologies than we do. In addition, industry consolidation could hurt us by
increasing the scale or scope of our competitors and thereby making it more difficult for us to compete.

Much of the hardware and software we use in operating our gateway was designed and manufactured over ten
years ago and portions are becoming more difficult and expensive to service, upgrade or replace.

Much of the hardware and software we use in operating our gateway was designed and manufactured over ten
years ago and portions are becoming obsolete. As they continue to age, they may become less reliable and will be
more difficult and expensive to service, upgrade or replace. Although we maintain inventories of some spare
parts, it nonetheless may be difficult or impossible to obtain all necessary replacement parts for the hardware.
Our business plan contemplates updating or replacing some of the hardware and software in our network, but the
age of our existing hardware and software may present us with technical and operational challenges that
complicate or otherwise make it not feasible to carry out our planned upgrades and replacements, and the
expenditure of resources, both from a monetary and human capital perspective, may exceed our estimates.
Without upgrading and replacing our equipment, obsolescence of the technologies that we use could have a
material adverse affect on our revenues, profitability and liquidity.

Rapid and significant
competitive position and require us to make significant additional capital expenditures.

technological changes in the satellite communications industry may impair our

The satellite communications industries are subject to rapid advances and innovations in technology. We may
face competition in the future from companies using new technologies and new satellite systems. New
technology could render our system obsolete or less competitive by satisfying customer demand in more
attractive ways or through the introduction of incompatible standards. Particular technological developments that
could adversely affect us include the deployment by our competitors of new satellites with greater power,
flexibility, efficiency or capabilities than our current constellation or Iridium NEXT, as well as continuing
improvements in terrestrial wireless technologies. For us to keep up with technological changes and remain
competitive, we may need to make significant capital expenditures. Customer acceptance of the products and
services that we offer will continually be affected by technology-based differences in our product and service
offerings compared to those of our competitors. New technologies may be protected by patents or other
intellectual property laws and therefore may not be available to us. Any failure by us to implement new
technology within our system may compromise our ability to compete.

Use by our competitors of L-band spectrum for terrestrial services could interfere with our services.

In February 2003, the FCC adopted rules that permit satellite service providers to establish ATC networks. ATC
frequencies are designated in previously satellite-only bands. The implementation of ATC services by satellite
service providers in the United States or other countries may result in increased competition for the right to use
L-band spectrum in the 1.6 GHz band, which we use to provide our services, and such competition may make it
difficult for us to obtain or retain the spectrum resources we require for our existing and future services. In
addition, the FCC’s decision to permit ATC services was based on assumptions relating to the level of
interference that the provision of ATC services would likely cause to other satellite service providers that use the
L-band spectrum. If the FCC’s assumptions prove inaccurate, or the level of ATC services provided exceeds
those estimated by the FCC, ATC services could interfere with our satellites and devices, which may adversely
impact our services. Outside the United States, other countries are actively considering implementing regulations
to facilitate ATC services.

Our networks and those of our third-party service providers may be vulnerable to security risks.

We expect the secure transmission of confidential information over public networks to continue to be a critical
element of our operations. Our network and those of our third-party service providers and our customers may be
vulnerable to unauthorized access, computer viruses and other security problems. Persons who circumvent

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security measures could wrongfully obtain or use information on the network or cause interruptions, delays or
malfunctions in our operations, any of which could harm our reputation, cause demand for our products and
services to fall and compromise our ability to pursue our business plans. Recently, there have been reported a
number of significant, wide-spread security breaches that have compromised network integrity for many
companies and governmental agencies, in some cases reportedly originating from outside the United States in
countries such as China. In addition, there are reportedly private products available in the market today which
attempt to unlawfully intercept communications made on our network. We may be required to expend significant
resources to protect against the threat of security breaches or to alleviate problems, including reputational harm
and litigation, caused by any breaches. In addition, our customer contracts, in general, do not contain provisions
which would protect us against liability to third-parties with whom our customers conduct business. Although we
have implemented and intend to continue to implement industry-standard security measures, these measures may
prove to be inadequate and result in system failures and delays that could lower network operations center
availability which could harm our business.

Sales to U.S. government customers, particularly the DoD, represent a significant portion of our revenues.

The U.S. government, through a dedicated gateway owned and operated by the DoD, has been and continues to
be, directly and indirectly, our largest customer, representing 23.6% of our revenues for the year ended
December 31, 2009. We provide the majority of our services to the U.S. government pursuant to two contracts,
both of which were entered into in April 2008, that provide for a one-year base term and up to four additional
one-year options exercisable at the election of the U.S. government . The U.S. government has notified us that it
intends to renew for the second additional one-year term, which will extend the term through March 2011. The
U.S. government may terminate these agreements, in whole or in part, at any time. If the U.S. government
terminates its agreements with us or fails to renew such agreements, we would lose a significant portion of our
revenues.

Our relationship with the U.S. government is subject to the overall U.S. government budget and appropriation
decisions and processes. U.S. government budget decisions, including with respect to defense spending, are
based on changing government priorities and objectives, which are driven by numerous factors, including
geopolitical events and macroeconomic conditions, and are beyond our control. Significant changes to U.S.
defense spending, including as a result of the resolution of the conflicts in Iraq and Afghanistan, or a significant
reduction in U.S. personnel in those countries, could reduce demand for our services and products by the U.S.
government.

We are dependent on third parties to market and sell our products and services.

We rely on third-party distributors to market and sell our products and services to end-users and to determine the
prices end-users pay. We also depend on our distributors to develop innovative and improved solutions and
applications integrating our product and service offerings. As a result of these arrangements, we are dependent on
the performance of our distributors to generate substantially all of our revenues. Our distributors operate
independently of us, and we have limited control over their operations, which exposes us to significant risks.
Distributors may not commit the necessary resources to market and sell our products and services and may also
market and sell competitive products and services. In addition, our distributors may not comply with the laws and
regulatory requirements in their local jurisdictions, which may limit their ability to market or sell our products
and services. If current or future distributors do not perform adequately, or if we are unable to locate competent
distributors in particular countries and secure their services on favorable terms, or at all, we may be unable to
increase or maintain our revenues in these markets or enter new markets, and we may not realize our expected
growth, and our brand image and reputation could be hurt.

In addition, we may lose distributors due to competition, consolidation, regulatory developments, business
developments affecting our distributors or their customers or for other reasons. Any future consolidation of our
distributors or the acquisition of a distributor by a competitor, such as the April 2009 acquisition of Stratos

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Global Corporation, one of our largest distributors, by Inmarsat, one of our main competitors, would further
increase our reliance on a few key distributors of our services and the amount of volume discounts that we may
have to give such distributors. Our ten most active distributors for the year ended December 31, 2009, accounted
for, in the aggregate, 48.3% of total revenues. The loss of any of these distributors could reduce the distribution
of our products and services as well the development of new product solutions and applications.

We rely on a limited number of key vendors for timely supply of equipment and services.

Celestica is the manufacturer of all of our current devices, including our mobile handsets, L-Band transceivers
and short burst data modems. Celestica may choose to terminate its business relationship with us when its current
contractual obligations are completed in January 1, 2011, or at such earlier time as contemplated by our current
agreement with Celestica. If Celestica terminates this relationship, we may not be able to find a replacement
supplier. In addition, as our sole supplier, we are very dependent on Celestica’s performance. If Celestica has
difficulty manufacturing or obtaining the necessary parts or material to manufacture our products, we could lose
sales. In addition, we utilize other sole source suppliers for certain component parts of our devices. If such
suppliers terminated their relationships with us or were otherwise unable to manufacture our component parts,
Celestica would be unable to manufacture our products. Although we may replace Celestica or other sole source
suppliers with another supplier, there could be a substantial period of time in which our products are not
available and any new relationship may involve a significantly different cost structure, development schedule and
delivery times and we may encounter technical challenges in successfully replicating the manufacturing
processes.

In addition, we depend on Boeing to provide operations and maintenance services with respect to our satellite
network, including engineering, systems analysis and operations and maintenance services, from our technical
support center in Chandler, Arizona and our satellite network operations center in Leesburg, Virginia. Boeing
provides these services pursuant to the O&M Agreement, whose term is concurrent with the expected useful life
of our current constellation. Technological competence is critical to our business and depends, to a significant
degree, on the work of technically skilled employees, such as our Boeing contractors. If Boeing’s performance
falls below expected levels or if Boeing has difficulties retaining the employees or contractors servicing our
network, the operations of our satellite network could be compromised. In addition, if Boeing terminates its
agreement with us, we may not be able to find a replacement provider on favorable terms or at all, which could
impair the operations and performance of our network. Replacing Boeing as the operator of our satellite system
could also trigger de-orbit rights held by the U.S. government, which, if exercised, would eliminate our ability to
offer satellite communications services altogether. See “—The U.S. government, Motorola and Boeing may
unilaterally require us to de-orbit our constellation upon the occurrence of specified events” below for more
information.

Our agreements with Motorola contain potential payment provisions that may apply to the Acquisition; and
Motorola has filed a complaint in Illinois state court seeking to compel us to make those payments.

The TSA with Motorola provides for the payment to Motorola of up to $8.5 million plus accrued interest on
certain principal upon the occurrence of a “triggering event.” A “triggering event” means the first to occur of:
(a) a “change of control,” as defined below, (b) the consummation of an initial public offering by Iridium
Holdings or Iridium Satellite, (c) a sale of all or a material portion of the assets of Iridium Holdings or Iridium
Satellite or (d) December 11, 2010. A change of control means, subject to specified exceptions, the occurrence of
any of the following events: (i) any initial investor, together with such person’s affiliates, shall have acquired
beneficial ownership of interests entitling the holders thereof to more than 50% of the income of, or the
liquidation proceeds from, Iridium Holdings; (ii) any person who is not an initial investor, together with such
person’s affiliates and with other persons constituting a “group” as defined in U.S. securities laws, shall have
acquired beneficial ownership of interests entitling the holders thereof to more than 50% of the income of, or the
liquidation proceeds from, Iridium Holdings; or (iii) Iridium Holdings shall cease to own 100% of the equity

34

interests of Iridium Satellite. Iridium Holdings had been accruing the portion of the potential $8.5 million to
which it believes it is subject through December 31, 2009 in its historical financial statements and now our
company is doing the same.

The Senior Subordinated Term Loan Agreement, or the Note Agreement, with Motorola also has future payment
obligations. Under the Note Agreement, we are required to pay Motorola a commitment fee of $5.0 million upon
the earlier of December 11, 2010 and the occurrence of a “trigger event.”A “trigger event” means the first to
occur of: (a) a change of control as defined in the Note Agreement, (b) the consummation of an initial public
offering by Iridium Holdings or Iridium Satellite, or (c) the sale of all or a material portion of the assets of
Iridium Holdings or Iridium Satellite. Iridium Holdings has been accruing this future payment obligation in its
historical financial statements through December 31, 2009 and now our company is doing the same.

Furthermore, under the Note Agreement, in the event of a “distribution event,” we are required to pay Motorola a
loan success fee equal to the amount that a holder of Class B units in Iridium Holdings constituting 5% of the
total number of issued and outstanding units, both Class A and B, would have received in the distribution event.
A distribution event means the (a) direct or indirect (i) payment of any dividend or other distribution, in the form
of cash or otherwise, in respect of the equity interests of Iridium Holdings or (ii) purchase, conversion,
redemption or other acquisition for value or otherwise by Iridium Holdings of any equity interest in Iridium
Holdings or (b) initial public offering or any secondary public offering by Iridium Holdings or Iridium Satellite
in which any holders of equity interests in Iridium Holdings are afforded the opportunity to participate as a
selling equity holder in such offering.

In addition to the above obligations, upon the first to occur of (a) any change of control, as defined in the Note
Agreement, or (b) the sale of all or a material portion of the assets of Iridium Holdings or Iridium Satellite, we
are required to pay a cash amount equal to the lesser of (i) an amount to be determined based on a multiple of
earnings before interest, taxes, depreciation, and amortization less capital contributions not returned to Class A
Unit holders of Iridium Holdings and the amount of the $5.0 million commitment fee discussed above which has
been or is concurrently being paid and (ii) the value of the consideration that a holder of Class B Units in Iridium
Holdings constituting 5% of the total number of issued and outstanding units, both Class A and B, would receive
in the transaction.

On February 9, 2010, Motorola filed a complaint against our wholly owned subsidiaries Iridium Holdings and
Iridium Satellite in Illinois state court. In this action, Motorola alleges that the closing of the Acquisition in
September 2009 constituted a change of control for purposes of the Note Agreement; that such change of control
triggered Iridium Satellite’s obligation to make the commitment fee and the success fee payments to Motorola
under the Note Agreement as described above; that pursuant to a guarantee agreement between Motorola and
Iridium Holdings, Iridium Holdings has guaranteed all payments to be made by Iridium Satellite under the Note
Agreement; and that Iridium Satellite has breached the Note Agreement by failing to make such payments and
Iridium Holdings has breached its guaranty by failing to make payment for such sums owed by Iridium Satellite.
Motorola is seeking a declaratory judgment that the Acquisition constituted a change of control for purposes of
the Note Agreement and damages of at least $24,680,000 relating to such change of control. See “Legal
Proceedings” appearing elsewhere in this report for more information about Motorola’s complaint.

We believe that it is unclear whether and how the provisions of the TSA and the Note Agreement were intended
to apply to a transaction such as the Acquisition. Notwithstanding Motorola’s filing of the complaint, we and
Motorola are continuing to discuss an appropriate resolution under the provisions of the TSA and the Note
Agreement, but there can be no assurances as to the manner in which this matter will be resolved, whether by
negotiation or in court, and what amount of fees, if any, we might be required to pay to Motorola.

If a declaratory judgment is granted that the Acquisition constituted a change of control, Motorola would also
have the right to terminate our intellectual property licenses and potentially the right to de-orbit our constellation.

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See “—We are dependent on intellectual property licensed from Motorola and other third parties” and “—The
U.S. government, Motorola and Boeing may unilaterally require us to de-orbit our constellation upon the
occurrence of specified events” for more information about these rights.

We are dependent on intellectual property licensed from Motorola and other third parties.

We license critical system technology, including certain software and systems to operate and maintain our
network as well as technical information for the design and manufacture of our devices, from Motorola. This
intellectual property is essential to our ability to continue to operate our constellation and sell our handsets. We
maintain our licenses with Motorola pursuant to several agreements. These agreements can be terminated by
Motorola upon: (i) any material change to certain portions of the certificate of formation and operating agreement
of our subsidiary that is party to the agreements; (ii) any change of control, as defined in the TSA; (iii) the
commencement by Iridium Satellite of any voluntary bankruptcy proceeding; or (iv) our material failure to
perform or comply with any provision of the agreements. Although Motorola’s recent complaint filed in Illinois
state court does not purport to implicate our license agreements with them, if the court were to hold that the
Acquisition constituted a change of control, then Motorola would also have the right to terminate certain of these
licenses. For more information, see “—Our agreements with Motorola contain potential payment provisions
which may apply to the Acquisition; and Motorola has filed a complaint in Illinois state court seeking to compel
us to make those payments” above. In addition, Motorola has an annual right of non-renewal in respect of one of
the intellectual property license agreements.

Motorola has assigned a portion of the patents comprising these licenses to a third-party. We also license
additional system technology from several other third parties. If Motorola or any such third party were to
terminate any license agreement or cease to support and service this technology, or if we are unable to renew
such licenses on commercially reasonable terms or at all, it may be difficult, more expensive or impossible to
obtain such services from alternative vendors. Any substitute technology may also have lower quality or
performance standards, which would adversely affect the quality of our products and services. In connection with
the design, manufacture and operation of Iridium NEXT and related ground infrastructure, products and services,
we may be required to obtain additional intellectual property rights from Motorola and other third parties,
including, potentially, a third party to whom Motorola has advised us that it has transferred some of the patents
rights associated with our existing network. We cannot assure you that we will be able to obtain such intellectual
property rights on commercially reasonable terms or at all. If we are unable to obtain such intellectual property
rights or are unable to obtain such rights on commercially reasonable terms, we may not complete Iridium NEXT
and related ground infrastructure, products and services on budget or at all.

We have been and may in the future become subject to claims that our products violate the patent or
intellectual property rights of others, which could be costly and disruptive to us.

We operate in an industry that is susceptible to significant intellectual property litigation. As a result, we or our
to intellectual property infringement claims or litigation. The defense of
products may become subject
intellectual property suits, even if frivolous, is both costly and time consuming and may divert management’s
attention from other business concerns. An adverse determination in litigation to which we may become a party
could, among other things:

•

•

•

•

subject us to significant liabilities to third parties, including treble damages;

require disputed rights to be licensed from a third party for royalties that may be substantial;

require us to cease using such technology; or

prohibit us from selling some or all of our products or offering some or all of our services.

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Conducting and expanding our operations outside the United States involves special challenges.

We have significant operations outside the United States. According to our estimates, commercial data traffic
originating outside the United States accounted for 74.7% of total data traffic for the year ended December 31,
2008 and 68.9% of total data traffic for the for the year ended December 31, 2009, while commercial voice
traffic originating outside the United States accounted for 90.1% of total voice traffic for the year ended
December 31, 2008 and 90.2% of total voice traffic for the year ended December 31, 2009. We cannot provide
the precise geographical distribution of end-users because we do not contract directly with them. Instead, we
determine the country in which we earn our revenues based on where we invoice our distributors. These
distributors sell services directly or indirectly to end-users, who may be located or use our products and services
elsewhere. We are also seeking authorization to offer to sell our services in China, Russia and South Africa.

Conducting operations outside the United States involves numerous special risks and, while expanding our
international operations would advance our growth, it would also increase these risks. These include:

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

difficulties in penetrating new markets due to established and entrenched competitors;

difficulties in developing products and services that are tailored to the needs of local customers;

lack of local acceptance or knowledge of our products and services;

lack of recognition of our products and services;

unavailability of or difficulties in establishing relationships with distributors;

significant investments, including the development and deployment of dedicated gateways as certain
countries require physical gateways within their jurisdiction to connect the traffic coming to and from
their territory;

instability of international economies and governments;

changes in laws and policies affecting trade and investment in other jurisdictions;

exposure to varying legal standards, including intellectual property protection in other jurisdictions;

difficulties in obtaining required regulatory authorizations;

difficulties in enforcing legal rights in other jurisdictions;

local domestic ownership requirements;

requirements that certain operational activities be performed in-country;

changing and conflicting national and local regulatory requirements; and

foreign currency exchange rates and exchange controls.

These risks could affect our ability to successfully compete and expand internationally.

The prices for our products are typically denominated in U.S. dollars. Any appreciation of the U.S. dollar against
other currencies will increase the cost of our products and services to our international customers and, as a result,
may reduce the competitiveness of our international offerings and make it more difficult for us to grow
internationally.

We are currently unable to offer service in important regions of the world due to regulatory requirements,
which is limiting our growth and our ability to compete.

Our ability to provide service in certain regions is limited by local regulations as some countries, including
China, India and Russia, have specific regulatory requirements such as local domestic ownership requirements or
requirements for physical gateways within their jurisdiction to connect traffic coming to and from their territory.

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While we are currently in discussions with parties in these countries to satisfy these regulatory requirements, we
may not be able find an acceptable local partner or reach an agreement to develop additional gateways or the cost
of developing and deploying such gateways may be prohibitive, which could impair our ability to expand our
product and service offerings in such areas and undermine our value for potential users who require service in
these areas. The inability to offer to sell our products and services in all major international markets could impair
our international growth. In addition, the construction of such gateways in foreign countries may require us to
comply with certain U.S. regulatory requirements which may contravene the laws or regulations of the local
jurisdiction.

The U.S. government, Motorola and Boeing may unilaterally require us to de-orbit our constellation upon the
occurrence of specified events.

When Iridium Satellite purchased the assets of Iridium LLC out of bankruptcy, Boeing, Motorola and the U.S.
government required specified de-orbit rights as a way to control potential liability risk arising from future
operation of the constellation, and provide for the U.S. government’s obligation to indemnify Motorola. As a
result, an agreement was entered into among Iridium Satellite, Boeing, Motorola and the U.S. government, and
the U.S. government obtained the right to, in its sole discretion, require us to de-orbit our constellation upon the
occurrence of any of the following: (a) Iridium Satellite’s failure to pay certain insurance premiums or maintain
insurance; (b) Iridium Satellite’s bankruptcy; (c) Iridium Satellite’s sale or the sale of any major asset in our
satellite system; (d) Boeing’s replacement as the operator of our satellite system; (e) Iridium Satellite’s failure to
provide certain notices as contemplated by the agreement; or (f) at any time after June 5, 2009, unless extended
by the U.S. government. The U.S. government also has the right to require us to de-orbit any of our individual
functioning satellites, including in-orbit spares, that have been in orbit for more than seven years, unless the U.S.
government grants a postponement. All of our functioning satellites have been in orbit for more than seven years
and we are currently in discussion with the U.S. government to extend the 2009 deadline.

Motorola also has the right to require us to de-orbit our constellation pursuant to the TSA and pursuant to the
O&M Agreement between our subsidiary and Boeing. Under these agreements, Motorola may require the
de-orbit of our constellation upon the occurrence of any of the following: (a) Iridium Holdings’ bankruptcy or the
bankruptcy of Iridium Constellation or Iridium Satellite; (b) Iridium Holdings’ breach of the TSA; (c) Boeing’s
breach of the O&M Agreement or a related agreement between Boeing and Motorola; (d) an order from the U.S.
government requiring the de-orbiting of our satellites; (e) Motorola’s determination that changes in law or
regulation may require it to incur specified costs relating to the operation, maintenance, re-orbiting or de-orbiting
of our constellation; or (f) Motorola’s failure to obtain on commercially reasonable terms, product liability
insurance to cover its position as manufacturer of the satellites, provided the U.S. government has not agreed to
cover what would have otherwise been paid by such policy. Although Motorola’s recent complaint filed in
Illinois state court does not purport to implicate the TSA or the O&M Agreement, if the court were to hold that
the Acquisition constituted a change of control, then Motorola would also have the right to de-orbit our
constellation. For more information, see “—Our agreements with Motorola contain potential payment provisions
which may apply to the Acquisition; and Motorola has filed a complaint in Illinois state court seeking to compel
us to make those payments” above.

Pursuant to the O&M Agreement, Boeing similarly has the unilateral right to de-orbit our constellation upon the
occurrence of any of the following events: (a) Iridium Constellation’s or Iridium Satellite’s bankruptcy; (b) the
existence of reasonable grounds for Boeing to question the financial stability of Iridium Constellation;
(c) Iridium Constellation’s failure to maintain certain insurance policies; (d) Iridium Constellation’s failure to
provide Boeing quarterly financial statements; (e) Iridium Constellation’s breach of the O&M Agreement,
including its payment obligation thereunder; or (f) changes in law or regulation that may increase the risks or
costs associated with the operation or re-orbit process or the cost of operation or re-orbit of the constellation.

We cannot guarantee that
the U.S. government, Motorola or Boeing will not unilaterally exercise their
de-orbiting rights upon the occurrence of any of the above events. A decision by any of the U.S. government,

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Motorola or Boeing to de-orbit our constellation would eliminate our ability to provide mobile satellite
communications services.

Wireless devices may pose health and safety risks and, as a result, we may be subject to new regulations,
demand for our services may decrease and we could face liability based on alleged health risks.

There has been adverse publicity concerning alleged health risks associated with radio frequency transmissions
from portable hand-held telephones that have transmitting antennae. Lawsuits have been filed against participants
in the wireless industry alleging various adverse health consequences, including cancer, as a result of wireless
phone usage. Although we have not been party to any such lawsuits, we may be exposed to such litigation in the
future. While we comply with applicable standards for radio frequency emissions and power and do not believe
that there is valid scientific evidence that use of our phones poses a health risk, courts or governmental agencies
could find otherwise. Any such finding could reduce our revenues and profitability and expose us and other
wireless providers to litigation, which, even if frivolous or unsuccessful, could be costly to defend.

If consumers’ health concerns over radio frequency emissions increase, they may be discouraged from using
wireless handsets. Further, government authorities might increase regulation of wireless handsets as a result of
these health concerns. The actual or perceived risk of radio frequency emissions could reduce the number of our
subscribers and demand for our products and services.

Our business is subject to extensive government regulation, which mandates how we may operate our business
and may increase our cost of providing services, slow our expansion into new markets and subject our services
to additional competitive pressures or regulatory requirements.

Our ownership and operation of a satellite communication system is subject to significant regulation in the
United States by the FCC and in foreign jurisdictions by similar local authorities. The rules and regulations of the
FCC or these foreign authorities may change and such authorities may adopt regulations that limit or restrict our
operations as presently conducted or as we plan to conduct such operations. Such authorities may also make
changes in the licenses of our competitors that impact our spectrum. Failure to provide services in accordance
with the terms of our licenses or failure to operate our satellites or ground stations as required by our licenses and
applicable laws and government regulations could result in the imposition of government sanctions on us,
including the suspension or cancellation of our licenses.

We and our affiliates must pay FCC filing and annual filing fees in connection with our licenses. One of our
subsidiaries, Iridium Carrier Services LLC, holds a common carrier radio license and is thus subject to regulation
as a common carrier, including limitations and prior approval requirements with respect to direct or indirect
foreign ownership. This subsidiary currently qualifies for exemptions from certain common carrier regulations,
such as being required to file certain reports or pay certain fees. A change in the manner in which we provide
service or a failure to comply with common carrier regulations or pay required fees can result in sanctions
including fines, loss of authorizations, or the denial of applications for new authorizations or the renewal of
existing authorizations.

Our system must be authorized in each of the markets in which we provide services. We may not be able to
obtain or retain all regulatory approvals needed for our operations. Regulatory changes, such as those resulting
from judicial decisions or adoption of treaties, legislation or regulation in countries where we currently offer
products and services or intend to offer products and services, including the United States, may also significantly
affect our business. Because regulations in each country are different, we may not be aware if some of our
distribution partners and/or persons with which we or they do business do not hold the requisite licenses and
approvals.

We are required to obtain homologation certifications from the national and local authorities in the countries in
which we operate in connection with the products that we currently sell or may wish to sell in the future. Failure

39

to obtain such homologation certifications or other industry standard certifications could compromise our ability
to generate revenue and conduct our business.

Our current regulatory approvals could now be, or could become, insufficient in the view of domestic or foreign
regulatory authorities, any additional necessary approvals may not be granted on a timely basis, or at all, in
jurisdictions in which we currently plan to offer products and services, and applicable restrictions in those
jurisdictions could become unduly burdensome.

Our operations are subject to regulations of the U.S. State Department’s Office of Defense Trade Controls
relating to the export of satellites and related technical data, the U.S. Treasury Department’s Office of Foreign
Assets Control relating to financial transactions and the U.S. Commerce Department’s Bureau of Industry and
Security relating to our handsets. We are also required to provide certain U.S. and foreign government law
enforcement and security agencies with call interception services. In the course of seeking regulatory approval of
the Acquisition, we discussed with the U.S. Department of Justice, or DOJ, procedures we used to satisfy our
respective call interception obligations under licenses issued by the Australian and Canadian authorities. We
have informed the DOJ and notified the Australian and Canadian authorities that we have discontinued such
procedures until such time as the DOJ expressly authorizes their use. There can be no assurance that the
discontinued procedures will be permitted to be reinstated or will not result in legal liability for us. We are
currently in discussions with the Australian and Canadian authorities to obtain amendments or waivers to our
licenses in those countries. Neither Australia nor Canada is obligated to grant such amendments or waivers and
there can be no assurance that Australian and Canadian authorities will not suspend or revoke our licenses or take
other legal actions.

These U.S. and foreign obligations and regulations may limit or delay our ability to offer products and services in
a particular country. As new laws and regulations are issued, we may be required to modify our business plans or
operations. If we fail to comply with these regulations in the United States or any other country, we could be
subject to sanctions that could make it difficult or impossible to operate in the United States or such other
country. In addition, changing and conflicting national and local regulatory requirements may cause us to be in
compliance with local requirements in one country, while not being in compliance with the laws and regulations
of another. Any imposition of sanctions, losses of licenses and failure to obtain the authorizations necessary to
use our assigned radio frequency spectrum and to distribute our products in certain countries could cause us to
lose sales, hurt our reputation and impair our ability to pursue our business plan.

Our business would be negatively impacted if the FCC revokes, modifies or fails to renew or amend our
licenses.

FCC licenses we hold, specifically a license for the satellite constellation, licenses for our U.S. gateway and other
ground facilities and blanket earth station licenses for U.S. government customers and commercial subscribers,
are subject to revocation if we fail to satisfy specified conditions or to meet prescribed milestones. The FCC
licenses are also subject to modification by the FCC. While our FCC satellite constellation license is valid until
2013, we are required in August 2010 to apply for a license renewal with the FCC. The U.S. gateway earth
station licenses expire between 2011 and 2022 and the U.S. government customer and commercial subscribers’
earth station licenses will expire in 2021. We must file renewal applications for earth station licenses between 30
and 90 days prior to expiration. There can be no assurance that the FCC will renew the FCC licenses we hold. If
the FCC revokes, modifies or fails to renew FCC licenses we hold, or if we fail to satisfy any of the conditions of
our respective FCC licenses, we may not be able to continue to provide mobile satellite communications services.

Pursuing strategic transactions may cause us to incur additional risks.

We may pursue acquisitions, joint ventures or other strategic transactions, although no such transactions that
would be financially significant to us are probable at this time. We may face costs and risks arising from any

40

such transactions, including integrating a new business into our business or managing a joint venture. These risks
may include adverse legal, organizational and financial consequences, loss of key customers and distributors and
diversion of management’s time.

In addition, if we were to choose to engage in any major business combination or similar strategic transaction, we
may require significant external financing in connection with the transaction. Depending on market conditions,
investor perceptions of our company and other factors, we might not be able to obtain capital on acceptable
terms, in acceptable amounts or at appropriate times to implement any such transaction. Any such financing, if
obtained, may further dilute existing stockholders.

Spectrum values historically have been volatile, which could cause our value to fluctuate.

Our business plan is evolving and it may in the future include forming strategic partnerships to maximize value
for our spectrum, network assets and combined service offerings in the United States and internationally. Values
that we may be able to realize from such partnerships will depend in part on the value ascribed to our spectrum.
Valuations of spectrum in other frequency bands historically have been volatile, and we cannot predict at what
amount a future partner may be willing to value our spectrum and other assets. In addition, to the extent that the
FCC takes action that makes additional spectrum available or promotes the more flexible use or greater
availability of existing satellite or terrestrial spectrum allocations, for example by means of spectrum leasing or
new spectrum sales, the availability of such additional spectrum could reduce the value of our spectrum
authorizations and the value of our business.

Prior to the Acquisition, we did not have any operations and Iridium Holdings never operated as a public
company. Fulfilling our obligations as a public company will be expensive and time consuming.

Prior to the Acquisition, we operated as a public company that did not have operations. Iridium Holdings, as a
private company, has not been required to prepare or file periodic and other reports with the SEC under
applicable federal securities laws, to comply with the requirements of the federal securities laws applicable to
public companies, or to document and assess the effectiveness of its internal controls in order to satisfy the
requirements of the Sarbanes-Oxley Act of 2002, as amended, or Sarbanes-Oxley. Although we maintained
disclosure controls and procedures and internal controls over financial reporting with respect to our activities, we
have not been required to establish and maintain internal control over financial reporting with respect to Iridium
Holdings. Deficiencies in controls may affect our ability to report our financial results on a timely basis or
accurately, which could adversely affect our financial results or investors’ confidence and our ability to access
external financing.

In addition, under Sarbanes-Oxley and the related rules and regulations of the SEC, we are required to implement
additional corporate governance practices and adhere to a variety of reporting requirements and accounting rules.
Compliance with these obligations require significant time and resources from our management, finance and
accounting staff and will significantly increase our legal, insurance and financial compliance costs. As a result
our costs as a percentage of revenue will likely be higher.

Our ability to operate our company effectively could be impaired if we lose members of our senior
management team or key technical personnel.

We depend on the continued service of key managerial and technical personnel, as well as our ability to continue
to attract and retain highly qualified personnel. We compete for such personnel with other companies,
government entities, academic institutions and other organizations. The unexpected loss or interruption of the
services of such personnel could compromise our ability to effectively manage our operations, execute our
business plan and meet our strategic objectives.

41

If any of the sellers of Iridium Holdings have breached any of their representations, warranties or covenants
set forth in the agreement relating to the Acquisition, our remedies for losses may be limited and we may be
limited in our ability to collect for such losses.

Each seller agreed to indemnify us for breaches of its individual representations, warranties and covenants,
subject to specified limitations, including that each seller’s maximum liability for all indemnification claims
against it will not exceed the sum of (i) the cash consideration received by such seller and (ii) the product of the
number of shares of our common stock received by such seller and $10.00. Except for the pledge arrangements
we have entered into with the sellers of the blocker holding companies described below, there are no escrow or
other similar arrangements with any of the sellers and, in the event we suffer losses from a breach of a seller’s
representations, warranties or covenants,
there can be no assurances that such seller will have the cash
consideration or shares of our common stock received by such seller, or other available assets, to compensate us
for our losses. Any losses realized in connection with the breach of any representation, warranty or covenant by
any seller may have a material adverse effect on our financial condition and results of operations.

Some of the sellers in the Acquisition held their interests in Iridium Holdings through two “blocker”
corporations, known as Baralonco N.V., or Baralonco, and Syncom-Iridium Holdings Corp., or Syncom, and in
those circumstances we purchased ownership of those blocker corporations instead of directly purchasing the
Iridium Holdings units they held. These blocker corporations are now our wholly owned subsidiaries. Each of the
sellers of Baralonco and Syncom agreed to indemnify us for the pre-closing tax liabilities of their respective
blocker corporation, subject to specified limitations. The maximum liability for the seller of Syncom cannot
exceed $3.0 million and the maximum liability for the seller of Baralonco cannot exceed $15.0 million. In
support of their respective tax indemnity obligations, the seller of Syncom pledged 300,000 shares of our
common stock it received in the Acquisition for a period of nine months after the closing and the seller of
Baralonco pledged 1.5 million shares of our common stock it received in the Acquisition for a period of two
years after the closing. The value of these pledged shares, and the amount of the sellers’ respective maximum
liability, may not fully cover all pre-closing tax liabilities of Baralonco and Syncom, in which case we would be
liable for any excess liability.

The market price of our common stock may be volatile.

The trading price of our common stock may be subject to substantial fluctuations. Factors affecting the trading
price of our common stock may include:

•

•

•

•

•

•

•

•

failure in the performance of our current or future satellites or a delay in the launch of Iridium NEXT;

failure to obtain adequate financing in a timely manner;

actual or anticipated variations in our operating results, including termination or expiration of one or
more of our key contracts, or a change in sales levels under one or more of our key contracts;

stockholders currently subject to lock-up agreements selling a significant number of their shares after
the expiration thereof in September 2010;

stockholders with registration rights exercising such registration rights and selling a large number of
shares of our common stock;

changes in financial estimates by industry analysts, or any failure by us to meet or exceed any such
estimates, or changes in the recommendations of any industry analysts that elect to follow our common
stock or the common stock of our competitors;

actual or anticipated changes in economic, political or market conditions, such as recessions or
international currency fluctuations;

actual or anticipated changes in the regulatory environment affecting our industry;

42

•

•

changes in the market valuations of our competitors; and

announcements by our competitors regarding significant new products or services or significant
acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives.

The trading price of our common stock might also decline in reaction to events that affect other companies in our
industry even if these events do not directly affect us. If the market for stocks in our industry, or the stock market
in general, experiences a loss of investor confidence, the trading price of our common stock could decline for
reasons unrelated to our business, financial condition or results of operations. In addition, the trading volume for
our common stock historically has been low. Sales of significant amounts of shares of our common stock in the
public market could lower the market price of our stock.

We do not expect to pay dividends on our common stock in the foreseeable future.

We do not currently pay cash dividends on our common stock and, because we currently intend to retain all cash
we generate to fund the growth of our business, we do not expect to pay dividends on our common stock in the
foreseeable future.

Item 1B. Unresolved Staff Comments

None.

Item 2.

Properties

Our principal headquarters are located in Bethesda, Maryland, where we currently lease 13,417 square feet of
office space. On August 17, 2009, we signed a lease for 21,573 square feet of office space in McLean, Virginia,
which will serve as our new principal headquarters. We expect to occupy the new headquarters during the second
quarter of 2010. We also own or lease the facilities described in the following table:

Location

Country

Approximate
Square Feet

Facilities

Chandler, Arizona . . . . . . . . .

USA

68,000

Technical Support Center,
Distribution Center and
Warehouse

Owned/Leased

Leased

Leesburg, Virginia . . . . . . . .

USA

40,000

Satellite Network

Owned

Operations Center

Tempe, Arizona . . . . . . . . . .

USA

31,000

Gateway Earth Station

Tempe, Arizona . . . . . . . . . .

USA

25,000

Operations and Finance

Office Space

Fairbanks, Alaska . . . . . . . . .

USA

4,000

Satellite Earth Station

Facility

Svalbard . . . . . . . . . . . . . . . . Norway

1,800

Satellite Earth Station

Facility

Yellowknife, Northwest

Territories . . . . . . . . . . . . . Canada

1,800

Telemetry, Tracking and

Control Station

Iqaluit, Nunavut

. . . . . . . . . . Canada

1,800

Telemetry, Tracking and

Control Station

43

Owned Building on
Leased Land

Leased

Owned

Owned Building on
Leased Land

Owned Building on
Leased Land

Owned Building on
Leased Land

Item 3.

Legal Proceedings

On February 9, 2010, Motorola filed a complaint against our wholly owned subsidiaries Iridium Holdings and
Iridium Satellite LLC, or Iridium Satellite, in the Circuit Court of Cook County, Illinois, County Department—
Chancery Division. In this action, captioned Motorola, Inc. vs. Iridium Satellite LLC and Iridium Holdings LLC,
Docket No. 10 CH 05684, Motorola alleges that the closing of the Acquisition in September 2009 constituted a
change of control for purposes of the Senior Subordinated Term Loan Agreement between Motorola and Iridium
Satellite dated December 11, 2000, which we refer to as the Note Agreement; that such change of control
triggered Iridium Satellite’s obligation to make specified commitment fee and success fee payments to Motorola
under the Note Agreement; that pursuant to a guarantee agreement between Motorola and Iridium Holdings,
Iridium Holdings has guaranteed all payments to be made by Iridium Satellite under the Note Agreement; and
that Iridium Satellite has breached the Note Agreement by failing to make such payments and Iridium Holdings
has breached its guaranty by failing to make payment for such sums owed by Iridium Satellite. Motorola is
seeking a declaratory judgment that the Acquisition constituted a change of control for purposes of the Note
Agreement and damages of at least $24,680,000 relating to such change of control.

If a declaratory judgment is granted that the Acquisition constituted a change of control, Motorola would also
have the right to terminate certain of our intellectual property licenses. See “Business—Intellectual Property” for
more information about these licenses. In addition, although the complaint does not purport to implicate the TSA
with Motorola, if the court were to issue a declaratory judgment holding that the Acquisition constituted a change
of control, we would also owe Motorola additional payments under that agreement of up to $8.5 million plus
accrued interest. More information about these rights is included under “Business—Our Network—Constellation
De-Orbiting Obligations.” See also, “Risk Factors—Our agreements with Motorola contain potential payment
provisions that may apply to the Acquisition; and Motorola has filed a complaint in Illinois state court seeking to
compel us to make those payments” and “Risk Factors—We are dependent on intellectual property licensed from
Motorola and other third parties.”

We believe that it is unclear whether and how the provisions of the Note Agreement were intended to apply to a
transaction such as the Acquisition. Notwithstanding Motorola’s filing of the complaint, we are engaged in
ongoing discussions with Motorola in an effort to resolve the issues between us.

From time to time, in the normal course of business, we are party to various pending claims and lawsuits. Other
than the Motorola action described above, we are not aware of any such actions that we would expect to have a
material adverse impact on our business, financial results or financial position.

Item 4.

Reserved

44

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities

Our common stock has been listed on the NASDAQ Global Market under the symbol “IRDM” since
September 24, 2009. Prior to this date, our common stock was listed on the NYSE Amex. The following table
sets forth, for the quarters indicated, the quarterly high and low sales prices of our common stock as reported on
the NASDAQ Global Market since our transfer of listing on September 24, 2009, and the NYSE Amex where our
common stock commenced public trading on March 20, 2008.

Period from March 20, 2008 to March 31, 2008 . . . . . . . . . . . . .
Quarter ended June 30, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quarter ended September 30, 2008 . . . . . . . . . . . . . . . . . . . . . . .
Quarter ended December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . .

Quarter ended March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . .
Quarter ended June 30, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quarter ended September 30, 2009 . . . . . . . . . . . . . . . . . . . . . . .
Quarter ended December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . .

Common Stock

High

Low

$ 9.10
9.35
9.64
9.20

9.45
9.87
12.00
11.66

$9.00
9.02
9.00
8.50

9.03
9.33
9.68
7.77

On March 12, 2010, the closing price of our common stock was $8.22. As of March 12, 2010, there were 173
holders of record of our common stock.

Dividend Policy

We have not paid any dividends on our common stock to date. Our Board of Directors currently intends to retain
any earnings for use in our business operations and, accordingly, we do not anticipate that our Board of Directors
will declare any dividends in the foreseeable future.

45

Stock Price Performance Graph

The graph below compares the cumulative total return of our common stock from March 20, 2008, the date that
our common stock first became separately tradable, through December 31, 2009 with the comparable cumulative
return of three indices, the S&P 500 Index, the Dow Jones Industrial Average Index and the NASDAQ
Telecommunications Index. The graph plots the growth in value of an initial investment of $100 in each of our
common stock,
the S&P 500 Index and the NASDAQ
Telecommunications Index over the indicated time periods, and assuming reinvestment of all dividends, if any,
paid on our the securities. We have not paid any cash dividends and, therefore, the cumulative total return
calculation for us is based solely upon stock price appreciation and not upon reinvestment of cash dividends. The
stock price performance shown on the graph is not necessarily indicative of future price performance.

Industrial Average Index,

the Dow Jones

$130
$125

$120

$115

$110

$105

$100

$95

$90

$85

$80

$75

$70

$65

$60

$55

3/20/2008 3/31/2008 6/30/2008 9/30/2008 12/31/2008 3/31/2009 6/30/2009 9/30/2009 12/31/2009

Iridium Communications Inc.

S&P 500 Index

Dow Jones Industrial Average Index

NASDAQ Telecommunications Index

3/20/2008 3/31/2008 6/30/2008 9/30/2008 12/31/2008 3/31/2009 6/30/2009 9/30/2009 12/31/2009

Iridium Communications Inc.
. . . . . . . . . $100.00 $100.22 $102.42 $101.32 $99.12 $103.19 $107.93 $125.66 $88.44
S&P 500 Index . . . . . . . . . . . . . . . . . . . . . $100.00 $ 99.49 $ 96.28 $ 87.73 $67.94 $ 60.01 $ 69.15 $ 79.51 $83.87
Dow Jones Industrial Average Index . . . . $100.00 $ 99.20 $ 91.82 $ 87.78 $71.00 $ 61.55 $ 68.33 $ 78.57 $84.36
NASDAQ Telecommunications Index . . $100.00 $101.83 $103.54 $ 89.47 $65.18 $ 67.23 $ 83.79 $ 94.67 $96.62

The information presented above in the stock performance graph shall not be deemed to be “soliciting material”
or to be “filed” with the SEC or subject to Regulation 14A or 14C, except to the extent that we subsequently
specifically request that such information be treated as soliciting material or specifically incorporate it by
reference into a filing under the Securities Act of 1933, as amended, or Exchange Act.

Item 6.

Selected Financial Data

Iridium Communications Inc.

The following selected historical financial data for the years ended December 31, 2009, 2008, and for the period
from November 2, 2007 (inception) to December 31, 2007 was derived from Iridium Communications Inc.
audited financial statements. The selected financial data below should be read in conjunction with Iridium
Communications Inc.’s financial statements and related notes, and “Management’s Discussion and Analysis of

46

Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K. The
selected financial data is historical data for Iridium Communications Inc. on a stand-alone basis and is not
necessarily indicative of future results of operations.

For the Year
Ended
December 31,
2009

For the Year
Ended
December 31,
2008

For the
Period from
November 2,
2007
(Inception) to
December 31,
2007

(In thousands, except per share amounts)

Statement of Operations Data:(a)

Revenue:

Services:

Government . . . . . . . . . . . . . . . . . . . . . . .
Commercial . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . .

Subscriber equipment

Total revenue . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . . . .

$ 19,159
39,537
17,293

$ 75,989
$ 88,301

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . .

$(12,312)
$(44,160)

$ —
—
—

$ —
$ 2,592

$ (2,592)
$ 1,656

$ —
—
—

$ —
$

4

$
$

(4)
(4)

Weighted average shares outstanding — basic and
diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Loss) earnings per share — basic and diluted . . . .

53,964
(0.82)

$

43,268
0.04

$

11,500
$ (0.00)

Balance Sheet Data:

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total long term obligations(b) . . . . . . . . . . . . . . . . .
Common stock, subject to possible conversion

(11,999,999 shares at conversion value) . . . . . . .
Total stockholders’ equity(c) . . . . . . . . . . . . . . . . . .

Other Data

Cash provided by (used in):

As of December 31,

2009

2008

$221,056
808,832
111,222

(In thousands)
$

143
403,150
—

—
627,700

119,988
270,263

2007

$184
500
—

—
21

For the Year Ended December 31,

2009

2008

2007

(In thousands)

Operating activities . . . . . . . . . . . . . . . . . . . . .
Investing activities . . . . . . . . . . . . . . . . . . . . . .
Financing activities . . . . . . . . . . . . . . . . . . . . .

$ 23,168
354,537
(230,656)

$

2,086
(401,838)
399,697

$—
—
184

(a) The year ended December 31, 2009 reflects the results of post-Acquisition activities for the three
months ended December 31, 2009 and a $34.1 million change in the fair value of warrants due to our
determination that the exchange agreements entered into with the holders of 26.8 million warrants
were derivative instruments. We conducted no material operating activities for the year ended
December 31, 2008 or the period from November 2, 2007 (inception) to December 31, 2007.

(b) Long-term obligations are presented net of an unamortized discount associated with a
commitment fee to Motorola in connection with the TSA. The balance of the unamortized
discount was $0.7 million at December 31, 2009 and $0 at December 31, 2008 and 2007.

(c) We have not declared or paid cash dividends on our common stock.

47

Iridium Holdings LLC – Predecessor Company

The following selected historical financial data for the period from January 1, 2009 to September 29, 2009 and
the years ended December 31, 2008 and 2007 was derived from Iridium Holdings’ audited financial statements
included elsewhere in this Annual Report on Form 10-K. The information for the years ended December 31,
2006 and 2005 was derived from Iridium Holdings’ audited financial statements that are not included in this
Annual Report on Form 10-K. The selected financial data below should be read in conjunction with Iridium
Holdings’ financial statements and related notes, and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K. The selected
financial data is historical data for Iridium Holdings on a stand-alone basis and is not necessarily indicative of
future results of operations.

Statement of Operations Data:(a)

Revenue:

For the Period
from January 1,
2009 to
September 29,
2009

For the Year Ended December 31,

2008

2007

2006

2005

(In thousands, except per unit amounts)

Government services . . . . . . . . . . . . . . . . . . .
Commercial services . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
Subscriber equipment

$ 56,039
120,706
66,206

$ 67,759
133,247
119,938

$ 57,850
101,172
101,879

$ 50,807
77,661
83,944

$ 48,347
60,690
78,663

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242,951

320,944

260,901

212,412

187,700

Operating expenses:

Cost of subscriber equipment sales . . . . . . . .
Cost of services (exclusive of depreciation

and amortization)

. . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . .
Research and development . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . .
Transaction costs . . . . . . . . . . . . . . . . . . . . . .
Satellite system development refund . . . . . .

33,265

67,570

62,439

60,068

62,802

58,978
44,505
17,432
10,850
12,478
—

69,882
55,105
32,774
12,535
7,959
—

63,614
46,350
13,944
11,380
—
—

60,685
33,468
4,419
8,541
—
—

56,909
30,135
4,334
7,722
—
(14,000)

Total operating expenses . . . . . . . . . . . . . . . . . . . .

177,508

245,825

197,727

167,181

147,902

Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . .

65,443

75,119

63,174

45,231

39,798

Other (expense) income:

Interest expense, net of capitalized

interest . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense recovered . . . . . . . . . . . . . .
Interest and other income . . . . . . . . . . . . . . .

Total other (expense) income, net . . . . . . . . . . . . .

(12,829)
—
670

(12,159)

(21,094)
—
(146)

(21,771)
—
2,370

(15,179)
—
1,762

(21,240)

(19,401)

(13,417)

(5,106)
2,526
2,377

(203)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 53,284

$ 53,879

$ 43,773

$ 31,814

$ 39,595

Net income attributable to Class A Units . . . . . . .
Weighted average Class A Units outstanding —

basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted average Class A Units outstanding —

diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings per unit — basic . . . . . . . . . . . . . . . . . . .
Earnings per unit — diluted . . . . . . . . . . . . . . . . .

$ 36,143

$ 36,456

$ 30,826

$ 22,692

$ 28,642

1,084

1,084

840

609

1,098
33.63
33.40

$
$

1,084
28.44
28.44

$
$

840
27.02
27.02

609
47.02
47.02

$
$

$
$

1,084

1,168
33.34
31.75

$
$

48

Balance Sheet Data:

2008

2007

2006

2005

Total current assets . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total long term obligations(b) . . . . . . . . . . . . . . . .
Total members’ deficit . . . . . . . . . . . . . . . . . . . . . .

$101,355
190,569
155,845
(62,230)

$ 80,342
167,581
178,324
(78,447)

$ 84,035
161,525
208,225
(121,189)

$ 65,385
129,397
53,848
(57,262)

(In thousands)

As of December 31,

Other Data:

Cash provided by (used in):

For the Period
from January 1,
2009 to
September 29,
2009

For the Year Ended December 31,

2008

2007

2006

2005

(In thousands)

Operating activities . . . . . . . . .
Investing activities . . . . . . . . .
Financing activities . . . . . . . . .

$ 64,230
(7,698)
(23,327)

$ 61,438
(13,913)
(44,820)

$ 36,560
(19,787)
(26,526)

$39,499
(9,467)
(8,032)

$ 30,742
(9,661)
(18,887)

(a)

Iridium does not have a full year of operations in 2009 since the Acquisition closed on September 29,
2009. Beginning on January 1, 2006, Iridium measured the cost of employee services received in
exchange for an award of equity units based on the fair value of the award at the date of grant. Iridium
previously used the intrinsic method to measure employee share-based compensation. Under the
intrinsic value method, compensation expense for the equity units was recorded only if on the date of
grant, the fair value of the underlying equity units exceeded the exercise price.

(b) Long-term obligations are presented net of an unamortized discount associated with a commitment fee
to Motorola in connection with the TSA. The balance of the unamortized discount was $1.3 million at
December 31, 2008, $1.8 million at December 31, 2007, $2.3 million at December 31, 2006 and $2.7
million at December 31, 2005.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion along with our consolidated financial statements and the consolidated
financial statements of Iridium Holdings LLC (our predecessor entity) included in this Form 10-K.

intent, contingency, goals,

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Such forward-looking statements include those that express plans,
anticipation,
targets or future development or otherwise are not statements of
historical fact. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “intends”
and similar expressions are intended to identify forward-looking statements. These forward-looking statements
are based on our current expectations and projections about future events and they are subject to risks and
uncertainties known and unknown that could cause actual results and developments to differ materially from
those expressed or implied in such statements. The important factors discussed under the caption “Risk Factors,”
presented above, could cause actual results to differ materially from those indicated by forward-looking
statements made herein. We undertake no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

Background and Recent Events

We were formed as GHL Acquisition Corp., a special purpose acquisition company, on November 2, 2007, for
the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or
other similar business combination. We closed an initial public offering of our common stock on February 21,
2008. All of our activity from November 2, 2007 (inception) through February 21, 2008 related to our formation
and initial public offering. From February 21, 2008 through September 29, 2009, our activities were limited to

49

identifying prospective target businesses to acquire and complete a business combination, and we were
considered to be in the development stage.

On September 29, 2009, we acquired, directly and indirectly, all the outstanding equity of Iridium Holdings LLC,
or Iridium Holdings. We refer to this transaction as the Acquisition. Iridium Holdings and its two principal
subsidiaries, Iridium Satellite LLC, or Iridium Satellite, and Iridium Constellation LLC, or Iridium Constellation,
were formed under the laws of Delaware in 2000 and were organized as limited liability companies pursuant to
the Delaware Limited Liability Company Act. We refer to Iridium Holdings, together with its direct and indirect
subsidiaries, as Iridium. On December 11, 2000, Iridium acquired satellite communication assets from Iridium
LLC, a non-affiliated debtor in possession, pursuant to an asset purchase agreement. Iridium and its affiliates
held, and following the Acquisition we hold, various licenses and authorizations from the FCC and from
international regulatory bodies that permit us to conduct our business, including the operation of our satellite
constellation.

Pursuant to the terms of the Acquisition, we purchased all of the outstanding equity of Iridium Holdings. Total
consideration included 29.4 million shares of our common stock and $102.6 million in cash, which included a
requirement to make a payment of $25.5 million in cash to some of the former members of Iridium Holdings for
tax benefits we received. This requirement was satisfied with payments subsequently made in December 2009
and January 2010. Upon closing of the Acquisition, we changed our name from GHL Acquisition Corp. to
Iridium Communications Inc.

We accounted for our business combination with Iridium Holdings as a purchase business combination and
recorded all assets acquired and liabilities assumed at their respective Acquisition-date fair values pursuant to
accounting guidance that was effective at the time. Pursuant to this guidance, we were deemed the legal and
accounting acquirer and Iridium Holdings the legal and accounting acquiree. Iridium is considered our
predecessor and, accordingly, its historical financial statements are deemed to be our predecessor financial
statements. Iridium’s historical financial statements are included in this Form 10-K but are presented separately
from our financial statements.

For the purposes of presenting consolidated financial statements as of and for the year ended December 31, 2009,
we determined that the results of Iridium’s operations for the one day period from the closing of the Acquisition
to September 30, 2009 were not material. Accordingly, our consolidated statements of operations and cash flows
for the year ended December 31, 2009 include the results of our pre-Acquisition operations for the nine months
ended September 30, 2009 and our post-Acquisition operations for the three months ended December 31, 2009.
All significant intercompany accounts and transactions have been eliminated in consolidation.

Overview

Following the Acquisition, we are now engaged primarily in providing mobile voice and data communications
services using a constellation of orbiting satellites. We are the second largest provider of satellite-based mobile
voice and data communications services, and the only provider of mobile satellite communications services
offering 100% global coverage. Our satellite network provides communications services to regions of the world
where existing wireless or wireline networks do not exist or are impaired, including extremely remote or rural
land areas, airways, open-ocean, the polar regions and regions where the telecommunications infrastructure has
been affected by political conflicts or natural disasters.

We offer voice and data communications services to businesses,
the U.S. and foreign governments,
non-governmental organizations and consumers using our constellation of in-orbit satellites and related ground
infrastructure, including a primary commercial gateway. We utilize an interlinked, mesh architecture to route
traffic across the satellite constellation using radio frequency crosslinks. This unique architecture minimizes the
need for ground facilities to support the constellation, which facilitates the global reach of our services and
allows us to offer services in countries and regions where we have no physical presence.

50

We sell our products and services to commercial end-users exclusively through a wholesale distribution network,
encompassing approximately 65 service providers, 130 value-added resellers, or VARs, and 45 value-added
manufacturers, who either sell directly to the end-user or indirectly through other service providers, VARs or
dealers. These distributors often integrate our products and services with other complementary hardware and
software and have developed a broad suite of applications for our products and services targeting specific vertical
markets.

At December 31, 2009, we had approximately 369,000 subscribers worldwide (7.2% were machine-to-machine,
or M2M, data subscribers who elected to suspend their accounts and as a result were not generating any fees at
such time), which represented a 15.3% increase over December 31, 2008. We have a diverse customer base,
including end-users in the following vertical markets: land-based handset; maritime; aviation; M2M; and
government.

We expect our future revenue growth rates will be slower than our historical growth rates and we expect future
growth will be affected by the current economic slowdown, increased competition, gradual maturation of the
satellite communications industry and the difficulty in sustaining high growth rates as we increase in size.

Our business plan calls for the development of Iridium NEXT, the development of new product and service
offerings, upgrades to our current services, hardware and software upgrades to maintain our ground infrastructure
and upgrades to our business systems. We estimate the aggregate costs associated with the design, build and
launch of Iridium NEXT and related infrastructure upgrades will be approximately $2.7 billion although we have
not yet entered into definitive agreements for these activities and our actual cost could substantially exceed this
estimate. We expect to fund a substantial portion of these costs from internally generated cash flows, including
revenues from secondary payloads and warrant proceeds. We expect to finance the remaining cost by raising
additional debt or equity financing. However, there can be no assurance that our internally generated cash flows
will meet our expectations or that we will be able to obtain sufficient external capital to fund Iridium NEXT and
implement other elements of our business plan, due to increased costs, lower revenues or inability to obtain
additional financing. Among other factors leading to this uncertainty, some of the warrants whose proceeds we
expect to use to fund a portion of Iridium NEXT are currently “under water,” meaning they have an exercise
price per share that is significantly higher than the current price at which our common stock is trading. In
addition, none of the warrants are callable by us until such time as our stock trades at a per share price greater
than $14.25 for our $7.00 warrants or $18.00 for our $11.50 warrants for an extended period of time. As of
March 12, 2010, the closing price of our common stock was $8.22 per share. Unless our stock price increases
significantly, we would not expect the under-water warrants to be exercised and we will not be able to call any of
the warrants. If we do not obtain such funds from internally generated cash flows, or from the net proceeds of
future debt or equity financings, our ability to maintain our network, design, build and launch Iridium NEXT and
related ground infrastructure, products and services, and pursue additional growth opportunities will be impaired.

The recent global economic crisis and related tightening of credit markets has also made it more difficult and
expensive to raise capital. Our ability to obtain additional capital to finance Iridium NEXT and related ground
infrastructure, products and services, and other capital requirements may be adversely impacted by the
continuation of these market conditions. We have engaged Goldman, Sachs & Co. as our lead global advisor to
help secure the funding necessary to design, build and launch Iridium NEXT, although we cannot assure you that
we will have access to sources of financing on reasonable terms, or at all. If we are unable to obtain sufficient
financing on acceptable terms, we may not be able to fully implement our business plan as currently projected, if
at all, which would significantly limit the development of our business and impair our ability to provide a
commercially acceptable level of service.

The impact of adding the fair value of Iridium’s assets and liabilities to our balance sheet has resulted in a
significant increase in the carrying value of our assets and liabilities. Because we estimated the fair value of the
acquired assets and liabilities, we may revise those estimates through a measurement period ending
September 29, 2010, the first anniversary of the Acquisition, if better information becomes available to us. When

51

comparing our results of operations to that of our predecessor, Iridium, the impact of the acquisition accounting
on the carrying value of inventory, property and equipment, intangible assets and accruals, increased by
approximately $19.8 million, $332.5 million, $91.9 million and $9.6 million, respectively compared to Iridium’s
balance sheet as of September 29, 2009. Similarly, Iridium’s deferred revenue decreased by $7.4 million. As a
result of accounting adjustments related to the Acquisition, our cost of subscriber equipment sales will increase
in 2010 as compared to those costs and expenses of Iridium in prior periods and the decrease in the carrying
value of deferred revenue will result in a decrease in revenue in 2010. In addition, the increase in accruals will
result in a reduction in cost of services (exclusive of depreciation and amortization) during 2010 and future
periods. The increase in property and equipment and intangible assets will result in an increase to depreciation
and amortization expense during 2010 and future periods.

Material Trends and Uncertainties

Iridium’s industry and customer base has historically grown as a result of:

•

•

•

•

•

•

•

•

demand for remote and reliable mobile communications services;

increased demand for communications services by the Department of Defense, or DoD, disaster and
relief agencies and emergency first responders;

a broad and expanding wholesale distribution network with access to diverse and geographically
dispersed niche markets;

a growing number of new products and services and related applications;

improved data transmission speeds for mobile satellite service offerings;

regulatory mandates requiring the use of mobile satellite services, particularly among maritime
end-users;

a general reduction in prices of mobile satellite services equipment; and

geographic market expansion through the receipt of licenses in additional countries.

Nonetheless, as we continue the Iridium business, we face a number of challenges and uncertainties, including:

•

•

•

•

•

•

•

•

•

our ability to obtain capital and external funding to meet our future capital requirements on acceptable
terms or at all, including, in particular, the funding for developing Iridium NEXT and related ground
infrastructure, products and services;

our ability to maintain the health, capacity, control and level of service of our satellite network during
transition to Iridium NEXT;

changes in general economic, business and industry conditions;

our reliance on a single primary gateway and a primary satellite network operations center;

the competition from other mobile satellite service providers and, to a lesser extent, from the expansion
of terrestrial based cellular phone systems and related pricing pressures;

our ability to maintain our relationship with U.S. government customers, particularly the DoD;

rapid and significant technological changes in the telecommunications industry;

reliance on our wholesale distribution network to market and sell our products, services and
applications effectively; and

our ability to successfully resolve a dispute with Motorola, Inc., or Motorola, regarding fees they have
alleged that we owe to them and to license the required intellectual property for Iridium NEXT.

52

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations and those of Iridium, as our
predecessor, is based upon our consolidated financial statements and those of Iridium, which have been prepared
in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The preparation
of these financial statements requires the use of estimates and judgments that affect the reported amounts of
assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing
basis, we evaluate our estimates including those related to revenue recognition, useful lives of property and
income taxes, stock-based
equipment,
compensation and other estimates. We base our estimates on historical experience and on various other
assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions.

long-lived assets, goodwill and other intangible assets,

inventory,

The accounting policies we believe to be most critical to understanding our financial results and condition and
those of Iridium, as our predecessor, and that require complex and subjective management judgments are
discussed below. Refer to the notes to our consolidated financial statements and those of Iridium for a full
discussion of these significant accounting policies.

Revenue Recognition

Iridium derived, and we now derive, our revenue primarily as a wholesaler of satellite communications products
and services. The primary types of revenue include (i) services revenue (access and usage-based airtime fees) and
(ii) subscriber equipment revenue. Additionally, we generate revenue by providing engineering and support
services to commercial and government customers.

Wholesaler of satellite communications products and services

Pursuant to wholesale agreements, we sell products and services to service providers who, in turn, sell the
products and services to other distributors or directly to the end-users. Generally, we recognize revenue when
the fee is fixed or
services are performed or delivery has occurred, evidence of an arrangement exists,
determinable, and collection is probable, as follows:

Contracts with multiple elements

At times, we sell subscriber equipment through multi-element contracts that bundle subscriber equipment
with airtime services. When we sell subscriber equipment and airtime services in bundled arrangements that
include guaranteed minimum orders and we determine that we have separate units of accounting, we
allocate the bundled contract price among the various contract deliverables based on each deliverable’s
relative fair value. We determine vendor specific objective evidence of fair value by assessing sales prices
of subscriber equipment and airtime services when they are sold to customers on a stand-alone basis.

Services revenue sold on a stand-alone basis

We generate services revenue from our service providers through usage of our satellite system and through
fixed monthly access fees per user charged to service providers. We recognize revenue for usage when the
usage occurs. We recognize revenue for fixed-per-user access fees ratably over the period in which the
services are provided to the end-user. We recognize revenue from prepaid services when usage occurs or, if
not used, when the customer’s right to access the unused prepaid services expires. We do not offer refund
privileges for unused prepaid services. Deferred prepaid services revenue and access fees are typically
earned and recognized as income within one year of customer prepayment. Based on historical information
for prepaid scratch card services that do not have an initial expiration date, we record breakage associated
with prepaid scratch card account balances for which the likelihood of redemption is remote, which is
generally determined after 36 months from issuance.

53

Subscriber equipment sold on a stand-alone basis

We recognize subscriber equipment sales and the related costs when title to the equipment (and the risks and
rewards of ownership) passes to the customer, typically upon shipment.

Services and subscriber equipment sold to the U.S. government

We provide airtime to U.S. government subscribers through (i) fixed monthly fees on a per user basis for
unlimited voice services, (ii) fixed monthly fees per user for unlimited paging services and (iii) a tiered pricing
plan (based on usage) per device, for data services. We recognize revenue related to these services ratably over
the periods in which the services are provided and we expense the related costs as incurred. The U.S. government
purchases its equipment from third-party service providers and not directly from us.

Government engineering and support services

We provide maintenance services to the U.S. government’s dedicated gateway in Hawaii. We recognize this
revenue ratably over the periods in which the services are provided. We expense costs as incurred.

Other government and commercial engineering and support services

We also provide certain engineering services to assist customers in developing new technologies for use on our
satellite system. We recognize the revenue associated with these services when the services are rendered,
typically on a percentage of completion method of accounting based on our estimate of total costs expected to
complete the contract, and we expense related costs as incurred. We recognize revenue on cost-plus-fixed-fee
contracts to the extent of estimated costs incurred plus the applicable fees earned. We consider fixed fees under
cost-plus-fixed-fee contracts to be earned in proportion to the allowable costs incurred in performance of the
contract.

Accounting for Stock-Based Compensation

We account for stock-based compensation at fair value; accordingly, we expense the estimated fair value of
stock-based awards made in exchange for employee services over the requisite employee service period. We
determine stock-based compensation cost at the grant date using the Black-Scholes option pricing model. We
recognize the value of the award that is ultimately expected to vest as expense on a straight-line basis over the
employee’s requisite service period and that expense is classified in the statement of operations in a manner
consistent with the statement of operations’ classification of the employee’s salaries and other compensation.

Business Combinations

We account for business combinations using the acquisition method of accounting. Under the acquisition method
of accounting, we record all assets acquired and liabilities assumed at their respective acquisition-date fair value.
We expense all acquisition-related costs as incurred.

Income Taxes

We account for income taxes using the asset and liability approach, which requires the recognition of tax benefits
or expenses on the temporary differences between the financial reporting and tax basis of our assets and
liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amount
expected to be realized. We also recognize a tax benefit from uncertain tax positions only if it is “more likely
than not” that the position is sustainable based on its technical merits. Our policy is to recognize interest and
penalties on uncertain tax positions as a component of income tax expense.

54

Recoverability of Long-Lived Assets

We assess the impairment of long-lived assets when indicators of impairment are present. We measure
recoverability of assets by comparing the carrying amounts of the assets to the future undiscounted cash flows
expected to be generated by the assets. Any impairment loss would be measured as the excess of the assets’
carrying amount over their fair value. Fair value is based on market prices where available, an estimate of market
value or various valuation techniques.

Goodwill and Other Intangible Assets

Goodwill

Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets
acquired. We perform impairment testing for goodwill annually or more frequently if indicators of potential
impairment exist. If the fair value of goodwill were to be less than the carrying amount of goodwill, we would
recognize an impairment loss.

Intangible Assets Not Subject to Amortization

A significant portion of our intangible assets are our spectrum and licenses, and trade names which are indefinite-
lived intangible assets. We reevaluate the useful life determination for these assets each reporting period to
determine whether events and circumstances continue to support an indefinite useful life. We test indefinite-lived
intangible assets for potential impairment annually or more frequently if indicators of impairment exist. If the fair
value of the indefinite-lived asset is less than the carrying amount, an impairment loss is recognized.

Intangible Assets Subject to Amortization

We amortize our intangible assets that do have finite lives, which consist of primarily customer relationships,
both government and commercial, core developed technology and software, over their useful lives and we review
them for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset
may not be recoverable. If any indicators were present, we would test for recoverability by comparing the
carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those
net undiscounted cash flows do not exceed the carrying amount, that is, if the asset is not recoverable, we would
perform the next step, which is to determine the fair value of the asset and record an impairment loss, if any. We
reevaluate the useful lives for these intangible assets each reporting period to determine whether events and
circumstances warrant a revision in their remaining useful lives.

Stock Purchase Warrants

We account for stock purchase warrants as equity securities unless, based on the underlying terms of the stock
warrant purchase agreement, the warrants are determined to be derivative instruments. At December 31, 2009, all
outstanding warrants were classified within stockholders’ equity.

Comparison of Our Results of Operations for the Years Ended December 31, 2009 and 2008

For the periods prior to the Acquisition, we did not engage in any significant operations or generate any revenues
from operations. For the year ended December 31, 2009, we had $76.0 million of revenue, which is entirely
attributable to the three months of operations after the Acquisition. We expect revenue to increase significantly in
2010 as we will have a full year of operations. See “Comparison of Combined Results of Operations” for
additional analysis.

Total operating expenses increased to $88.3 million for the year ended December 31, 2009 from $2.6 million for
the year ended December 31, 2008. This increase was primarily related to the three months of operations after the

55

Acquisition and an increase in transaction costs primarily due to legal and advisory fees associated with the
Acquisition.

Other expense changed to $33.2 million in the year ended December 31, 2009 from $5.6 million of other income
in the year ended December 31, 2008. This change was primarily due to our determination that the exchange
agreements entered into with the holders of 26.8 million warrants were derivative instruments and the change in
fair value of these warrants was $34.1 million, along with a decrease in other income as a result of lower
prevailing interest rates available on our cash, cash equivalents and short-term investment balances.

We had an income tax benefit of $1.3 million for the year ended December 31, 2009 compared to an income tax
provision of $1.4 million for the year ended December 31, 2008. In 2009, we had current tax expenses primarily
driven by the non-deductibility of the change in fair value of warrants and non-deductible transaction costs offset
by a favorable change in the deferred tax balances due to the change in basis as a result of the Acquisition. The
effective tax rate for the year ended December 31, 2009 was 2.90% compared to 45.02% in the equivalent period
in 2008 due to the non-deductibility of certain transaction costs and the change in fair value for the derivative
instruments associated with the warrant exchange and repurchase agreements. We do not expect the effective tax
rate to continue at this level as the non-deductible items related to the warrant exchange agreements and the
transaction costs are not expected to have a future impact.

Comparison of Our Results of Operations for the Year Ended December 31, 2008 and the Period from
November 2, 2007 (Inception) to December 31, 2007

Net income for the year ended December 31, 2008 was $1.7 million compared to a net loss of approximately
$4,000 for the period from November 2, 2007 (inception) to December 31, 2007. Operations in 2007 were
limited to minimal administrative costs, compared to 2008, which consisted of approximately $5.6 million of
interest income primarily from the trust account offset by approximately $2.1 million of transaction fees related
to due diligence work incurred in conjunction with our proposed business combination, as well as selling, general
and administrative expenses of $0.5 million and a provision for income taxes of approximately $1.4 million.

Comparison of Combined Results of Operations for the Year Ended December 31, 2009 and Iridium’s
Results of Operations for the Year Ended December 31, 2008

For comparison purposes, we have included the following discussion of our operating results and those of
Iridium on a combined basis for the year ended December 31, 2009. This presentation is intended to facilitate the
evaluation and understanding of the financial performance of our business on a year-to-year basis. Management
believes this presentation is useful in providing the users of our financial information with an understanding of
our results of operations because there were no material changes to the operations or customer relationships of
Iridium as a result of the Acquisition. The combined presentation is a simple mathematical addition of the
pre-Acquisition results of operations of Iridium for the period from January 1, 2009 to September, 29 2009 and
our results of operations for the year ended December 31, 2009. We had no material operating activities from the
date of formation of GHL Acquisition Corp. until the Acquisition. Accordingly, we are comparing the 2009
combined results to Iridium’s results of operations for the year ended December 31, 2008. There are no other
adjustments made in the combined presentation.

56

Iridium
Communications Inc.
Year Ended
December 31,
2009
As Reported

Iridium
Period from
January 1,
2009 to
September 29,
2009
As Reported

Combined
Year Ended
December 31,
2009
(In thousands)

Iridium
Year Ended
December 31,
2008

As Reported % Change

Revenue:

Services:

Government
Commercial

. . . . . . . . . . . .
. . . . . . . . . . . .
Subscriber equipment . . . . . . . . .

Total revenue . . . . . . . . . . .

$ 19,159
39,537
17,293

75,989

$ 56,039
120,706
66,206

$ 75,198
160,243
83,499

$ 67,759
133,247
119,938

242,951

318,940

320,944

11.0%
20.3%
(30.4)%

(0.6)%

Operating expenses:

Cost of subscriber equipment

sales . . . . . . . . . . . . . . . . . . . .

18,657

33,265

51,922

67,570

(23.2)%

Cost of services (exclusive of

depreciation and
amortization) . . . . . . . . . . . . . .
Research and development . . . . .
Depreciation and

amortization . . . . . . . . . . . . . .

Selling, general and

administrative . . . . . . . . . . . . .
Transaction costs . . . . . . . . . . . .

Total operating expenses . .

18,965
5,974

21,513

17,029
6,163

88,301

58,978
17,432

77,943
23,406

69,882
32,774

11.5%
(28.6)%

10,850

32,363

12,535

158.2%

44,505
12,478

61,534
18,641

55,105
7,959

177,508

265,809

245,825

11.7%
134.2%

8.1%

Operating (loss) profit

. . . . . . . . . . . .

(12,312)

65,443

53,131

75,119

(29.3)%

Other (expense) income:

Change in fair value of

warrants . . . . . . . . . . . . . . . . .

(34,117)

—

(34,117)

—

NM

Interest expense, net of
capitalized interest

. . . . . . . . .
Interest income and other income
. . . . . . . . . . . . .

(expense), net

(355)

(12,829)

(13,184)

(21,094)

(37.5)%

1,303

670

1,973

(146)

NM

Total other (expense)

income . . . . . . . . . . . . . .

(33,169)

(12,159)

(45,328)

(21,240)

113.4%

Earnings (loss) before (benefit)

provision for taxes . . . . . . . . . . . . .

Income tax (benefit) provision . . . . . .

(45,481)

(1,321)

53,284

7,803

53,879

(85.5)%

—

(1,321)

—

NM

Net (loss) income . . . . . . . . . . . . . . . .

$(44,160)

$ 53,284

$

9,124

$ 53,879

(83.1)%

NM = Not Meaningful

Revenue

Total revenue decreased by less than 1.0% to $318.9 million on a combined basis for the year ended
December 31, 2009 from $320.9 million for the year ended December 31, 2008, due principally to a significant
decrease in sales of subscriber equipment, offset by increased sales of commercial and government services.
Total subscribers increased by approximately 15.3% during the year ended December 31, 2009 to approximately

57

369,000 compared to an increase of approximately 36.6% during the year ended December 31, 2008. Subscriber
growth slowed in the year ended December 31, 2009 as compared to the year ended December 31, 2008,
primarily due to the economic environment.

Government Services Revenue

Government services revenue increased by 11.0% to $75.2 million on a combined basis for the year ended
December 31, 2009 from $67.8 million for the year ended December 31, 2008, primarily as a result of an overall
increase in work performed under engineering and support services contracts in 2009. In addition, voice services
revenue increased primarily due to the full year impact of price increases implemented in April 2008, and an
increase in M2M data revenue driven primarily by subscriber growth. The number of voice subscribers remained
constant from 2008 to 2009, because the increase in handset subscribers was offset by a decrease in paging
subscribers and voice average revenue per unit, or ARPU, increased by $5 to $150 in 2009 from $145 in 2008
primarily due to an increase in the monthly access fee. M2M data ARPU increased by $5 to $21 in 2009 from
$16 in 2008 primarily due to a mix change in our tiered pricing data plans. We expect government revenue to be
slightly lower in 2010 as compared to 2009 as engineering and support services contract work is expected to
decrease in 2010 as work curtails. Also, future growth in voice and M2M data subscribers and revenue may be
negatively affected by changes in U.S. defense spending and usage under our agreement with the U.S.
government, which accounts for a majority of our government services revenue and is subject to annual renewals.

Combined Year Ended
December 31, 2009

Government Services

Iridium Year Ended
December 31, 2008

Year over Year Change

(Revenue in millions and subscribers in thousands)
Revenue Subscribers(1) ARPU(2) Revenue Subscribers(1) ARPU(2) Revenue Subscribers ARPU

Voice . . . . . . . . . . . . . .
M2M data . . . . . . . . . . .
Engineering and

$53.0
0.8

support

. . . . . . . . . . .

21.4

Total . . . . . . . . . . . . . . .

$75.2

29.4
4.1

—

33.5

$150
21

$52.2
0.3

15.3

$67.8

29.4
1.9

—

31.3

$145
16

$0.8
0.5

6.1

$7.4

—
2.2

—

2.2

$5
5

(1) Subscriber numbers shown are at the end of the respective period.
(2) ARPU is calculated by dividing revenue in the respective period by the average of the number of subscribers
at the beginning of the period and the number of subscribers at the end of the period and then dividing the
result by the number of months in the period.

Commercial Services Revenue

Commercial services revenue increased by 20.3% to $160.2 million on a combined basis for the year ended
December 31, 2009 from $133.2 million for the year ended December 31, 2008, due principally to growth in
commercial voice service subscribers and a $5 increase per user in monthly access fees in January 2009. M2M
data revenue growth was driven principally by evolving applications developed by several of our distributors,
and an increase in the subscriber base slightly offset by a decline in usage related to the expiration of a special
customer promotion in 2008. M2M data ARPU decreased by $2 to $16 in 2009 from $18 in 2008, primarily due
to an increase in our suspended accounts in 2009, which did not have corresponding revenue.

In addition, we have a significant number of active M2M data subscribers who subscribe through a VAR who is
currently substantially behind on payment. If we choose to terminate our relationship with this VAR for
non-payment, there is no guarantee that these end-user subscribers, with whom we do not have a direct
relationship, will migrate to another of our service providers or VARs to purchase our products and services.

58

Although we do not expect that such a termination would have a material impact on our financial results of
operations, it would dramatically decrease our subscriber growth rate.

Combined Year Ended
December 31, 2009

Commercial Services

Iridium Year Ended
December 31, 2008

Year over Year Change

(Revenue in millions and subscribers in thousands)
Revenue Subscribers(1) ARPU(2) Revenue Subscribers(1) ARPU(2) Revenue Subscribers ARPU

Voice . . . . . . . . . . . . . . $143.1
16.5
M2M data(3)
. . . . . . . .
0.6
Other . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . $160.2

238.4
96.9
—

335.3

$52
16

$121.2
11.3
0.7

$133.2

217.6
71.0
—

288.6

$52
18

$21.9
5.2
(0.1)

$27.0

20.8
25.9
—

46.7

$—

(2)

(1) Subscriber numbers shown are at the end of the respective period.
(2) ARPU is calculated by dividing revenue in the respective period by the average of the number of subscribers
at the beginning of the period and the number of subscribers at the end of the period and then dividing the
result by the number of months in the period.

(3) 26.6 subscribers at December 31, 2009 and 12.0 subscribers at December 31, 2008 were M2M data

subscribers who elected to suspend their accounts and as a result were not generating any fees at such time.

Subscriber Equipment Revenue

Subscriber equipment sales decreased by 30.4% to $83.5 million on a combined basis for the year ended
December 31, 2009 from $119.9 million for the year ended December 31, 2008. Decreased subscriber equipment
sales were primarily due to lower volumes driven largely by reduced demand for satellite equipment caused by
the current economic downturn and customer defections from a competitor in 2008. In addition, we have
decreased unit prices in response to competitive pressures and also to incent future growth in services revenue.
Equipment volume could continue to be affected by increased competitive pressure and the economy in the near
through a non-government distributor may be
term. Subscriber equipment sales to the U.S. government
negatively affected by significant changes in U.S. defense spending and usage under our agreements with the
U.S. government, which are subject to annual renewals.

Operating Expenses

Total operating expenses increased by 8.1% to $265.8 million on a combined basis for the year ended
December 31, 2009 from $245.8 million for the year ended December 31, 2008. This increase was due primarily
increased cost of services (exclusive of depreciation and
to increased depreciation and amortization,
amortization) and increased transaction costs incurred to complete the Acquisition, offset by lower cost of
subscriber equipment due to a decrease in sales and lower research and development expenses.

Cost of Subscriber Equipment Sales

Cost of subscriber equipment sales generally includes the direct costs of equipment sold which are manufacturing
costs, allocation of overhead, warranty costs and royalties paid for the subscriber equipment intellectual property.

Cost of subscriber equipment sales decreased by 23.2% to $51.9 million on a combined basis for the year ended
December 31, 2009 from $67.5 million for the year ended December 31, 2008 due to a decrease in sales of
subscriber equipment and lower manufacturing costs, partially offset by an $8.9 million increase related to higher
inventory values due to the Acquisition. Equipment volume could continue to be impacted by increased
competitive pressure and the economy in the near term or changes in U.S. defense spending.

59

Cost of Services (exclusive of depreciation and amortization)

Cost of services (exclusive of depreciation and amortization) generally includes the cost of network engineering
and operations staff and subcontractors, software maintenance, product support services and cost of services for
government engineering and support revenue.

Cost of services (exclusive of depreciation and amortization) increased by 11.5% to $77.9 million on a combined
basis for the year ended December 31, 2009 from $69.9 million for the year ended December 31, 2008, primarily
due to increased engineering and support services related to government revenues, along with increased
operations and maintenance expenses from annual price escalations in the long-term operations and maintenance
agreement, or the O&M Agreement, between Iridium Constellation and the Boeing Company, or Boeing. We
expect cost of services to slightly decrease in 2010 as our level of effort under government engineering and
support services contracts decreases as work curtails.

Research and Development

Research and development expenses decreased by 28.6% to $23.4 million on a combined basis for the year ended
December 31, 2009 from $32.8 million for the year ended December 31, 2008, primarily as a result of a
significant decrease in expenses related to our L-Band Transceiver project and Iridium NEXT, and reduced
spending on Iridium OpenPort, the development of which was completed in 2008. These decreases were partially
offset by increases in expenses related to government handset upgrade projects and future gateway upgrade
projects.

Depreciation and Amortization

Depreciation and amortization expenses increased by 158.2% to $32.4 million on a combined basis for the year
ended December 31, 2009 from $12.5 million for the year ended December 31, 2008, primarily due to a $17.8
increase to depreciation and amortization due to increased asset values related to acquisition accounting, and
additional depreciation associated with new assets placed in service, primarily equipment and software for our
satellite network operations center, gateway and corporate systems. We expect depreciation and amortization
expense in 2010 to continue to be at levels significantly higher than in 2009 primarily due to higher asset values
as a result of the Acquisition.

Selling, General and Administrative

Selling, general and administrative expenses generally include sales and marketing costs as well as legal, finance,
information technology, facilities, billing and customer care expenses.

Selling, general and administrative expenses increased by 11.7% to $61.5 million on a combined basis for the
year ended December 31, 2009 from $55.1 million for the year ended December 31, 2008 primarily due to
accelerated vesting of employee share-based awards as a result of the Acquisition, an increase in bad debt
expense, higher licensing and regulatory fees, and non-Acquisition legal fees, partially offset by decrease in
travel expenses and consulting fees.

Transaction Costs

Transaction costs related to the Acquisition increased by 134.2% to $18.6 million on a combined basis for the
year ended December 31, 2009 from $8.0 million for the year ended December 31, 2008. This increase was due
to increased legal, accounting, and advisory fees for Iridium prior to the Acquisition.

60

Other (Expense) Income

Change in Fair Value of Warrants

Change in fair value of warrants was $34.1 million for the year ended December 31, 2009 on a combined basis
and was $0 for the year ended December 31, 2008. We determined that the exchange agreements entered into
with the holders of warrants to purchase an aggregate of 26.8 million shares of our common stock were
derivative instruments and the change in fair value of these warrants between the offer date and exchange date
was recorded in 2009. We do not expect a change in future periods as these agreements have been settled.

Interest Expense, Net of Capitalized Interest

Interest expense decreased by 37.5% to $13.2 million on a combined basis for the year ended December 31, 2009
from $21.1 million for the year ended December 31, 2008. This decrease resulted from lower prevailing interest
rates on the credit facilities and a lower outstanding balance on Iridium’s debt as mandatory prepayments on the
credit facilities were made in the fourth quarter of 2008 and the second quarter of 2009 pursuant to the
amendment of the credit facilities agreement, which was paid off on September 30, 2009. If we are successful in
obtaining third party debt financing to support a portion of our development of Iridium NEXT, our interest
expense in 2010 could be significantly higher than in 2009.

Interest Income and Other Income (Expense), net

Interest income and other income (expense), net increased by $2.1 million to $2.0 million on a combined basis
for the year ended December 31, 2009 from $(0.1) million for the year ended December 31, 2008. This increase
was primarily due to a reduction in the impact of foreign currency exchange transaction costs.

Income Tax Benefit

Prior to the completion of the Acquisition, Iridium was a limited liability company treated as a partnership for
income tax purposes; therefore, the members were subject to income taxation and Iridium did not have any
income tax benefit or provision for the period from January 1, 2009 to September 29, 2009 and for the year
ended December 31, 2008. For the year ended December 31, 2009, we had an income tax benefit of $1.3 million.
In 2009, we had current tax expenses primarily driven by the non-deductibility of the change in the fair value of
warrants and non-deductible transaction costs offset by a favorable change in the deferred tax balances due to the
change in basis as a result of the Acquisition.

Comparison of Iridium’s Results of Operations for the Years Ended December 31, 2008 and 2007

For comparison purposes, we have included a discussion of the operating results of Iridium (the predecessor
entity) for the years ended December 31, 2008 and 2007. Management believes this presentation facilitates the
evaluation and understanding of the results of Iridium’s operations since our company conducted no material
operating activities from the date of its formation as GHL Acquisition Corp. until the Acquisition.

Revenue

Total revenue increased by $60.0 million, or approximately 23.0%, to $320.9 million for the year ended
December 31, 2008 from $260.9 million for the year ended December 31, 2007, due principally to growth in total
subscribers, increased commercial services revenue, increased subscriber equipment sales and increased contract
revenue from the DoD as well as the renewal of its service agreements with the U.S. government and related fee
increases. Total subscribers increased 36.6% from approximately 234,000 at December 31, 2007 to
approximately 320,000 at December 31, 2008.

61

Government Services Revenue

Government services revenue increased by 17.3% to $67.8 million for the year ended December 31, 2008 from
$57.8 million for the year ended December 31, 2007. This growth was driven primarily by an increase in
engineering and support services revenue relating to several research and development agreements with the iGPS
contract and other U.S. government agencies, including secondary payload research studies. The remaining
growth was attributable to a 5.0% increase in user fees and higher gateway maintenance revenue as provided in
Iridium’s agreements with the U.S. government, which became effective April 1, 2008.

Iridium Year Ended
December 31, 2008

Government Services

Iridium Year Ended
December 31, 2007

Year over Year Change

(Revenue in millions and subscribers in thousands)
Revenue Subscribers(1) ARPU(2) Revenue Subscribers(1) ARPU(2) Revenue Subscribers ARPU

Voice . . . . . . . . . . . . . .
M2M data . . . . . . . . . . .
Engineering and

$52.2
0.3

support

. . . . . . . . . . .

15.3

Total . . . . . . . . . . . . . . .

$67.8

29.4
1.9

—

31.3

$145
16

$48.6
0.1

9.1

$57.8

30.7
1.0

—

31.7

$137
25

$ 3.6
0.2

6.2

$10.0

(1.3)
0.9

—

(0.4)

$ 8
(9)

(1) Subscriber numbers shown are at the end of the respective period.
(2) ARPU is calculated by dividing revenue in the respective period by the average of the number of subscribers at the
beginning of the period and the number of subscribers at the end of the period and then dividing the result by the number
of months in the period.

Commercial Services Revenue

Commercial services revenue increased by 31.6% to $133.2 million for the year ended December 31, 2008 from
$101.2 million for the year ended December 31, 2007, due principally to growth in subscribers and associated
usage and access fees resulting from increased overall demand for both voice and M2M data services as well as
customer defections from a competitor.

Iridium Year Ended
December 31, 2008

Commercial Services

Iridium Year Ended
December 31, 2007

Year over Year Change

(Revenue in millions and subscribers in thousands)
Revenue Subscribers(1) ARPU(2) Revenue Subscribers(1) ARPU(2) Revenue Subscribers ARPU

Voice . . . . . . . . . . . . . . $121.2
11.3
M2M data(3)
. . . . . . . .
0.7
Other . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . $133.2

217.6
71.0
—

288.6

$52
18

$ 95.0
5.5
0.7

$101.2

169.8
32.7
—

202.5

$52
21

$26.2
5.8
—

$32.0

47.8
38.3
—

86.1

$—

(3)

(1) Subscriber numbers shown are at the end of the respective period.
(2) ARPU is calculated by dividing revenue in the respective period by the average of the number of subscribers at the
beginning of the period and the number of subscribers at the end of the period and then dividing the result by the number
of months in the period.

(3) 12.0 subscribers at December 31, 2008 and 4.4 subscribers at December 31, 2007 were M2M data subscribers who

elected to suspend their accounts and as a result were not generating any fees at such time.

Subscriber Equipment Sales

Subscriber equipment sales increased by 17.7% to $119.9 million for the year ended December 31, 2008 from
$101.9 million for the year ended December 31, 2007. Increased subscriber equipment sales were driven
principally by subscriber growth and the related increase in sales of Iridium’s satellite handsets and Iridium 9601

62

data modem. Although the proportion of satellite handset sales relative to sales of Iridium’s other lower priced
devices decreased during the period, sales of Iridium’s higher priced handsets grew in absolute terms,
contributing significantly to growth in its revenue from subscriber equipment sales. Until the introduction of its
Iridium OpenPort terminals, Iridium’s satellite handsets had been its highest priced devices.

Operating Expenses

Total operating expenses increased by 24.3% to $245.8 million for the year ended December 31, 2008 from
$197.7 million for the year ended December 31, 2007. This increase was due primarily to increased costs of sales
resulting from a growth in sales of Iridium’s voice and data devices as well as increased research and
development expenses related to the development of new subscriber equipment and services and Iridium
NEXT. Total operating expenses for the period also increased as a result of higher selling, general and
administrative expenses resulting from increased personnel expenses from growth in total employees resulting
from its expansion and higher transaction costs as Iridium worked towards completing the Acquisition.

Cost of Subscriber Equipment Sales

Cost of subscriber equipment sales increased by 8.3% to $67.6 million for the year ended December 31, 2008
from $62.4 million for the year ended December 31, 2007, primarily as a result of subscriber growth and the
related increase in sales of Iridium’s voice and data devices, particularly its satellite handsets. Iridium’s handsets
have the highest production costs of all its devices, except for Iridium OpenPort. This increase in costs of sales
was offset by a decrease in the cost of recognizing previously deferred subscriber equipment sales of $8.4
million, or approximately 71.2%, to $3.4 million for the period ended December 31, 2008, from $11.8 million in
2007. Effective January 1, 2005, equipment sales and related costs are recognized when equipment title passes to
the customer.

Cost of Services (exclusive of depreciation and amortization)

Cost of services (exclusive of depreciation and amortization) expenses increased by 9.9% to $69.9 million for the
year ended December 31, 2008 from $63.6 million for the year ended December 31, 2007, primarily as a result of
increased maintenance expenses with respect to Iridium’s satellite network due to the annual price escalation
clause in the O&M Agreement, higher fees for software licensing and maintenance, increased expenses related to
engineering and support services related to the iGPS contract, and an increase in variable network costs,
including termination costs.

Depreciation and Amortization

Depreciation and amortization expenses increased by 9.6% to $12.5 million for the year ended December 31,
2008 from $11.4 million for the year ended December 31, 2007, primarily as a result of additional depreciation
associated with new equipment placed in service, including a new satellite earth station facility in Norway and
equipment for Iridium’s satellite network operations center and gateway.

Research and Development

Research and development expenses increased by 134.3% to $32.8 million for the year ended December 31, 2008
from $14.0 million for the year ended December 31, 2007, primarily as a result of increased expenses related to
investments in new subscriber equipment and services, including Iridium’s next generation satellite handset,
L-Band transceiver and short burst data modem and Iridium OpenPort, as well as the development of Iridium
NEXT.

63

Selling, General and Administrative

Selling, general and administrative expenses increased by 19.0% to $55.1 million for the year ended
December 31, 2008 from $46.3 million for the year ended December 31, 2007, primarily as a result of higher
legal, regulatory and accounting expenses in 2008 resulting from Iridium’s increased personnel and other
administrative expenses related to growth and pursuit of expansion opportunities.

Transaction Costs

Transaction costs were $7.9 million for the year ended December 31, 2008. Transaction costs primarily include
legal, accounting and consulting fees. There were no such costs for the year ended December 31, 2007.

Other (Expense) Income

Interest Expense, Net of Capitalized Interest

Interest expense decreased by 3.2% to $21.1 million for the year ended December 31, 2008 from $21.8 million
for the year ended December 31, 2007. This decrease resulted from lower outstanding balances on Iridium’s first
and second lien credit agreements.

Interest Income and Other Income (Expense), net

Interest and other income decreased by 104.2% to ($0.1) million for the year ended December 31, 2008 from
$2.4 million for the year ended December 31, 2007. This decrease was due to lower interest income resulting
from a decrease in the interest earned on Iridium’s cash and cash equivalents and short term investments offset
by increased foreign currency transaction losses.

Liquidity and Capital Resources

Our principal sources of liquidity are existing cash and internally generated cash flow. Our principal liquidity
requirements are to meet capital expenditure needs, including the development of Iridium NEXT, working
capital, and research and development.

We believe that our sources of liquidity will provide sufficient funds for us to meet our liquidity requirements for
2010, exclusive of requirements in connection with the continued development of Iridium NEXT. We anticipate
entering into contracts and making contractual commitments for the design, manufacturing and deployment of
Iridium NEXT, which will require substantial capital in 2010 and thereafter. Prior to entering into commitments,
we will need to secure financing.

We expect to fund a substantial portion of the costs associated with Iridium NEXT from internally generated
cash flows, including potential revenues from secondary payloads hosted on our Iridium NEXT satellites, and
from the proceeds generated from the exercise of outstanding stock purchase warrants. However, a portion of the
warrants whose proceeds we expect to use to fund a portion of Iridium NEXT are currently “under water,”
meaning they have an exercise price per share that, for certain of our warrants, is significantly higher than the
current price at which our common stock is trading. In addition, none of the warrants are callable by us until such
time as our stock trades at a per share price greater than $14.25 for our $7.00 warrants, or $18.00 for our $11.50
warrants, for an extended period of time. As of March 12, 2010 the closing price of our common stock was $8.22
per share. Unless our stock price increases significantly, we would not expect the under-water warrants to be
exercised and we will not be able to call any of the warrants. If we do not obtain such funds from internally
generated cash flows, or from the net proceeds of future debt or equity financings, our ability to maintain our
network, design, build and launch Iridium NEXT and related ground infrastructure, products and services, and
pursue additional growth opportunities will be impaired. If future internally generated cash flows and revenue

64

from hosting secondary payloads are below expectations, the cost of developing Iridium NEXT is higher than
anticipated or warrant proceeds are not realized, we will require even more external funding than planned. Since
we have not yet entered into an agreement with a prime contractor for Iridium NEXT, the exact amount and
timing of the payments to be owed under any such agreement is uncertain. If the timing or amount of our
payments under an agreement with our prime contractor are due sooner than expected or are larger than
anticipated, we may not have sufficient liquidity to make those payments. Our ability to obtain additional funding
for Iridium NEXT may be adversely impacted by a number of factors, including the global economic crisis and
related tightening of the credit markets. We cannot assure you that we will be able to obtain such additional
liquidity on reasonable terms, or at all. If we are not able to secure such financing, we would need to delay some
or all of the elements of our Iridium NEXT development. Our liquidity and our ability to fund our liquidity
requirements is also dependent on our future financial performance, which is subject to general economic,
financial, regulatory and other factors that are beyond our control.

Cash and Indebtedness

Our total cash and cash equivalents were $147.2 million at December 31, 2009 and we had $12.0 million of
external indebtedness to Motorola at December 31, 2009.

Cash Flows

The following section highlights our cash flows for the years ended December 31, 2009 and 2008, and for the
period from November 2, 2007 (inception) to December 31, 2007, and Iridium’s cash flows for the period from
January 1, 2009 to September 29, 2009, or the 2009 Period, and the years ended December 31, 2008 and 2007:

Our Cash Flows

The following table shows our consolidated cash flows from operating, investing and financing activities for the
years ended December 31, 2009 and 2008, and for the period from November 2, 2007 (inception) to
December 31, 2007 (in millions):

Statements of Cash Flows

Year ended
December 31,
2009

Year ended
December 31,
2008

For the Period
from November 2,
2007 (Inception) to
December 31, 2007

Cash flows provided by operating

activities . . . . . . . . . . . . . . . . . . . . . . . . .

$ 23.2

$

2.1

Cash flows provided by (used in)

investing activities . . . . . . . . . . . . . . . . .

354.5

(401.8)

Cash flows (used in ) provided by

financing activities . . . . . . . . . . . . . . . . .

(230.6)

399.7

Net increase in cash and cash

equivalents . . . . . . . . . . . . . . . . . . . . . . .

$ 147.1

$ —

$—

—

0.2

$ 0.2

Cash Flows from Operating Activities

Net cash provided by our operating activities for the year ended December 31, 2009 was $23.2 million resulting
from net income of $10.2 million after adjusting for $54.4 million of non-cash items and $13.0 million generated
from our working capital primarily due to a decrease in accounts receivable related to timing of collections, an
increase in our allowance for doubtful accounts for certain customers, and a decrease in inventory related to
inventory management.

65

Net cash provided by our operating activities for the year ended December 31, 2008 was $2.1 million resulting
from net income of $0.5 million after adjusting for $1.2 million of non-cash items, and $1.6 million generated
from our working capital.

There was no cash provided by or used in operating activities in the period from November 2, 2007 (inception) to
December 31, 2007.

Cash Flows from Investing Activities

Net cash provided by investing activities for the year ended December 31, 2009 was $354.5 million resulting
from $401.8 million of funds transferred from the trust account into operations and $58.0 million of cash
acquired from Iridium, offset in part by $98.0 million paid to the sellers resulting from the Acquisition and $7.4
million of capital expenditures related to equipment and software for our satellite and network operations,
gateway and corporate systems.

Net cash used in investing activities for the year ended December 31, 2008 was $401.8 million resulting
primarily from $400.0 million of funds from the initial public offering transferred to the trust account.

There was no cash provided by or used in investing activities in the period from November 2, 2007 (inception) to
December 31, 2007.

Cash Flows from Financing Activities

Net cash used in financing activities in the year ended December 31, 2009 was $230.6 million primarily resulting
from $164.9 million for the purchase of shares, a $91.7 million payment to holders of common stock who elected
to convert their shares into a pro rata portion of the trust account and repayments of all outstanding amounts
under Iridium’s credit facilities of $113.6 million, partly offset by $148.8 million in net proceeds from our public
offering on September 29, 2009.

Net cash provided by financing activities in the year ended December 31, 2008 was $399.7 million primarily
resulting from the proceeds of the public offering on February 1, 2008 of $400.0 million.

Net cash provided by financing activities in the period from November 2, 2007 (inception) to December 31, 2007
was $0.2 million.

Iridium’s Cash Flows

The following table shows Iridium’s consolidated cash flows from operating, investing and financing activities
for the 2009 Period, and the years ended December 31, 2008 and 2007 (in millions):

Statements of Cash Flows

2009
Period

Year ended
December 31,
2008

Year ended
December 31,
2007

Cash flows provided by operating activities . . . . . . . . . .
Cash flows used in investing activities . . . . . . . . . . . . . .
Cash flows used in financing activities . . . . . . . . . . . . . .

$ 64.2
(7.7)
(23.3)

$ 61.4
(13.9)
(44.8)

Net increase (decrease) in cash and cash equivalents . . .

$ 33.2

$ 2.7

$ 36.5
(19.8)
(26.5)

$ (9.8)

66

Cash Flows Provided by Operating Activities

Iridium’s net cash provided by operating activities for the 2009 Period increased to $64.2 million from $61.4
million for the year ended December 31, 2008. This increase of $2.8 million was primarily attributable to less
cash used by working capital due to the 2009 Period not including activity for the three months ended
December 31, 2009 as a result of the Acquisition, lower inventory balances as demand slowed for equipment in
the 2009 Period and inventory management processes, partially offset by timing of payments to vendors.

Net cash provided by operating activities for the year ended December 31, 2008 increased to $61.4 million from
$36.6 million for the year ended December 31, 2007. This increase was attributable primarily to a $10.1 million
increase in net income, an $11.1 million increase in working capital and a $3.6 million increase in non-cash
adjustments during the period. The increase in working capital primarily relates to a payment made to Boeing in
2007 in connection with Iridium’s purchase of their right to receive distributions, which consequentially reduced
its working capital for that period, as well as an increase in deferred revenue resulting from higher sales of its
prepaid services and an increase in accounts payable due to the timing of payments to vendors. The increase in
non-cash adjustments consists primarily of increases in depreciation and amortization and increases in other non-
cash amortization and accretion.

Cash Flows Used in Investing Activities

Net cash used in investing activities for the 2009 Period decreased to $7.7 million from $13.9 million for the year
ended December 31, 2008. This decrease was attributable primarily to lower capital costs related to equipment
and software for Iridium’s satellite and network operations, gateway and corporate systems, which were placed in
service in 2008.

Iridium’s capital expenditures consisted primarily of the hardware and software upgrades to maintain its ground
infrastructure and a portion of the expenses related to the development of Iridium OpenPort. These also include
upgrades to our billing system to enable customer billing of new products and services.

Net cash used in investing activities for the year ended December 31, 2008 decreased to $13.9 million from $19.8
million for the year ended December 31, 2007. This decrease was attributable primarily to lower development
expenses related to Iridium’s new high-speed data services, Iridium OpenPort.

Cash Flows Used in Financing Activities

Net cash used in financing activities for the 2009 Period decreased to $23.3 million from $44.8 million for the
year ended December 31, 2008, primarily due to no cash distributions to its investors made in 2009 compared to
$41.4 million in 2008, partially offset by $22.9 million of proceeds from the issuance of a convertible
subordinated note to Greenhill & Co. Europe Holdings Limited, or Greenhill Europe, in 2008.

Net cash used in financing activities for the year ended December 31, 2008 increased to $44.8 million from $26.5
million for the year ended December 31, 2007. This increase was attributable due to $41.4 million in
distributions to its investors, partially offset by $22.9 million of proceeds from the issuance of a convertible
subordinated note to Greenhill Europe.

67

Contractual Obligations and Commitments

The following table summarizes our outstanding contractual obligations as of December 31, 2009:

Contractual Obligations:

Less than
1 Year

1-3 Years

3-5 Years

(in millions)

More Than
5 Years

Total

Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . .
Unconditional purchase obligations(1) . . . . . . . . . . . . . . . . .
Motorola payment obligations(2) . . . . . . . . . . . . . . . . . . . . .
Deferred acquisition consideration(3) . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2.5
71.0
13.2
4.6

$91.3

$

6.3
105.6
—
—

$111.9

$ 5.2
92.4
—
—

$97.6

$ 8.2
—
—
—

$ 8.2

$ 22.2
269.0
13.2
4.6

$309.0

(1) Unconditional purchase obligations include payments under our O&M Agreement with Boeing, our
agreement with a supplier for the manufacturing of our devices and various commitments with other
vendors. Certain amounts related to Iridium NEXT are not included as they are terminable or contingent
upon the achievement of certain milestones, which may or may not be achieved. As a result, the minimum
commitment cannot be determined.

(2) The table above reflects obligations due on December 11, 2010 to Motorola pursuant to the transition
services, products and asset agreement, or the TSA, by and among Motorola, Iridium Holdings and Iridium
Satellite, and our Senior Subordinated Term Loan Agreement with Motorola, or the Note Agreement, which
may be accelerated if the Acquisition constitutes a triggering event. In addition, we may be required to make
an additional payment of cash if the Acquisition constitutes a triggering event, distribution event, change of
control or other specified transaction under the TSA and Note Agreement. Any such payment is not
reflected in the table above because it is uncertain whether we owe it or what the amount would be.
Motorola has recently filed a complaint in Illinois state court seeking payment of some of these payments.
For more information, see “Legal Proceedings” and “Risk Factors —Our agreements with Motorola contain
potential payment provisions that may apply to the Acquisition; and Motorola has filed a complaint in
Illinois state court seeking to compel us to make those payments.”

(3) Certain former members of Iridium deferred their tax benefit payments related to the Acquisition until 2010.

Payment was made to these former members in January 2010.

Off-Balance Sheet Transactions

We do not currently have, nor have we or Iridium had in the last
three years, any relationships with
unconsolidated entities or financial partnerships, such as entities referred to as structured finance or special
facilitating off-balance sheet
purpose entities, which would have been established for
arrangements or other contractually narrow or limited purposes.

the purpose of

Seasonality

Our results of operations have been subject to seasonal usage changes for commercial customers and our results
will be affected by similar seasonality going forward. April through October are typically the peak months for
commercial voice services revenue and related subscriber equipment sales. U.S. government revenue and
commercial M2M revenue are less subject to seasonal usage changes.

Related Party Transactions

For a description of related party transactions, see “Certain Relationships and Related Party Transactions and
Director Independence.”

68

Accounting Developments

In June 2009, the Financial Accounting Standards Board, or FASB, issued accounting guidance on financial
reporting by companies involved with variable interest entities. The new guidance requires a company to perform
an analysis to determine whether the company’s variable interest or interests give it a controlling financial
interest in a variable interest entity. Additionally, a company is required to assess whether it has implicit financial
responsibility to ensure that a variable interest entity operates as designed when determining whether it has the
power to direct the activities of the variable interest entity that most significantly impact the entity’s economic
performance. The new guidance also requires enhanced disclosures that provide more transparent information
about a company’s involvement with a variable interest entity. The new guidance is effective for us beginning
with 2010. We have not yet determined the impact of the adoption of the new guidance on our financial position
or results of operations.

In October 2009, the FASB issued Accounting Standards Update 2009-13, “Revenue Recognition (Topic 605)
Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force,” or ASU
2009-13. ASU 2009-13 amends existing accounting guidance for separating consideration in multiple-deliverable
arrangements. ASU 2009-13 establishes a selling price hierarchy for determining the selling price of a
deliverable. The selling price used for each deliverable will be based on vendor-specific objective evidence if
available, third-party evidence if vendor-specific evidence is not available, or the estimated selling price if
neither vendor-specific evidence nor third-party evidence is available. ASU 2009-13 eliminates the residual
method of allocation and requires that consideration be allocated at the inception of the arrangement to all
deliverables using the “relative selling price method.” The relative selling price method allocates any discount in
the arrangement proportionately to each deliverable on the basis of each deliverable’s selling price. ASU 2009-13
requires that a vendor determine its best estimate of selling price in a manner that is consistent with that used to
determine the price to sell the deliverable on a stand-alone basis. ASU 2009-13 is effective prospectively for
revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010,
with earlier adoption permitted. We have not yet determined the impact of the adoption of ASU 2009-13 on our
financial position or results of operations.

In October 2009, the FASB issued Accounting Standards Update 2009-14, “Software (Topic 985) Certain
Revenue Arrangements That Include Software Elements, a consensus of the FASB Emerging Issues Task Force,”
or ASU 2009-14. ASU 2009-14 changes the accounting for revenue arrangements that include both tangible
products and software elements. Tangible products containing software components and non-software
components, that function together to deliver the tangible product’s essential functionality, are no longer within
the scope of existing software revenue guidance. ASU 2009-14 requires that hardware components of a tangible
product containing software components always be excluded from the software revenue guidance, and provides
guidance on how to determine which software, if any, relating to the tangible product also would be excluded
from the scope of the software revenue guidance. ASU 2009-14 also requires that if software contained in the
tangible product is essential to the tangible product’s functionality, the software is excluded from the scope of the
software revenue guidance. This exclusion includes essential software that is sold with or embedded within the
tangible products essential software. ASU 2009-14 also provides guidance on how a vendor should allocate
arrangement consideration to deliverables in an arrangement that include both tangible products and software.
ASU 2009-14 is effective prospectively for revenue arrangements entered into or materially modified in fiscal
years beginning on or after June 15, 2010, with earlier adoption permitted. We have not yet determined the
impact of the adoption of ASU 2009-14 on our financial position or results of operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We believe we do not face any material interest rate risk, foreign currency exchange risk, equity price risk or
other market risk. Financial instruments that potentially subject us to concentrations of credit risk consist
primarily of cash and cash equivalents and receivables. The majority of this cash is swept nightly into a money
market fund with a diversified portfolio. We perform credit evaluations of our customers’ financial condition and

69

records reserves to provide for estimated credit losses. Accounts receivable are due from both domestic and
international customers. We maintain our cash and cash equivalents with financial institutions with high credit
ratings. We maintain deposits in federally insured financial institutions in excess of federally insured (FDIC)
limits.

Item 8.

Financial Statements and Supplementary Data

Iridium Communications Inc.:

Reports of Independent Registered Public Accounting Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income (Loss) . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Iridium Holdings LLC — Predecessor Company:

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Changes in Members’ Deficit and Comprehensive Income . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

71
73
74
75
76
77

105
106
107
108
109
110

70

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Iridium Communications Inc.

We have audited the accompanying consolidated balance sheets of Iridium Communications Inc. as of
December 31, 2009 and 2008, and the related consolidated statements of operations, changes in stockholders'
equity and comprehensive income (loss), and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Iridium Communications Inc. at December 31, 2009 and 2008, and the consolidated results
of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted
accounting principles.

As discussed in Notes 2 and 3 to the consolidated financial statements, the Company changed its method of
accounting for business combinations with the adoption of the guidance originally issued in FASB Statement
No. 141(R), Business Combinations (codified in FASB ASC Topic 805, Business Combinations) effective
January 1, 2009.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), Iridium Communications Inc.’s internal control over financial reporting as of December 31,
2009, based on criteria established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2010, expressed an
unqualified opinion thereon.

/s/ Ernst & Young LLP

McLean, Virginia
March 16, 2010

71

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholder of GHL Acquisition Corp.

We have audited the accompanying statements of operations, changes in stockholder’s equity and cash flows for
the period from November 2, 2007 (Inception) to December 31, 2007 of Iridium Communications Inc., formerly
known as GHL Acquisition Corp. (A Corporation in the Development Stage) (the “Company”). These financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. We were not engaged to perform and we did
not perform an audit of the Company’s internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal
control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the results of
operations and cash flows for the period from November 2, 2007 (Inception) to December 31, 2007 of Iridium
Communications Inc., formerly known as GHL Acquisition Corp. in conformity with United States generally
accepted accounting principles.

/s/ Eisner LLP

New York, New York
March 28, 2008

72

Iridium Communications Inc.

Consolidated Balance Sheets
(In thousands, except share and per share data)

Assets
Current assets:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net of allowance for doubtful accounts of $1,462 and $0,

respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments held in trust at broker, including accrued interest of $110 . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill

December 31,
2009

December 31,
2008

$147,178

$

129

41,189
25,656
2,600
4,433

221,056
386,737
15,520
—
—
88,953
1,127
95,439

—
—
—

14

143
—
—
401,839
1,168
—
—
—

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$808,832

$403,150

Liabilities and stockholders’ equity
Current liabilities:

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued compensation and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred acquisition consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred underwriter commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued satellite operations and maintenance expense, net of current portion . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies
Common stock subject to possible conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders’ equity:

Preferred stock, $0.0001 par value, 2,000,000 shares authorized and none issued
or outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock, $0.001 par value 300,000,000 shares authorized and 70,247,701

and 48,500,000 issued and outstanding at December 31, 2009 and 2008,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained (deficit) earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

7,865
30,893
6,489
20,027
4,636
—

69,910
15,300
94,999
923

181,132

—

—

70
670,116
(42,508)
22

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

627,700

$ —
1,611
—
—
—
11,288

12,899
—
—
—

12,899

119,988

—

48
268,563
1,652
—

270,263

Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$808,832

$403,150

See notes to consolidated financial statements

73

Iridium Communications Inc.

Consolidated Statements of Operations
(In thousands, except per share amounts)

Year Ended
December 31, 2009

Year Ended
December 31, 2008

For the Period from
November 2, 2007
(Inception) to
December 31, 2007

$ —
—
—

—

—

—
—
—

—

4

4

(4)

—
—
—

—

(4)

—

(4)

Revenue:

Services:

Government
Commercial

. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Subscriber equipment . . . . . . . . . . . . . . . . . . . . . . . .

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 19,159
39,537
17,293

75,989

Operating expenses:

Cost of subscriber equipment sales . . . . . . . . . . . . .
Cost of services (exclusive of depreciation and

amortization)

. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . .
Transaction costs . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total operating expenses . . . . . . . . . . . . . . . . .

18,657

18,965
5,974
21,513
17,029
6,163

88,301

$ —
—
—

—

—

—
—
—
490
2,102

2,592

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12,312)

(2,592)

Other (expense) income:

Change in fair value of warrants . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and other income (expense), net . . .

Total other (expense) income . . . . . . . . . . . . . .

(Loss) earnings before income tax (benefit) provision . .
Income tax (benefit) provision . . . . . . . . . . . . . . . . . . . . .

(34,117)
(355)
1,303

(33,169)

(45,481)
(1,321)

—
—
5,604

5,604

3,012
1,356

Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(44,160)

$ 1,656

$

Weighted average shares outstanding — basic and

diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Loss) earnings per share — basic and diluted . . . . . . . .

53,964
(0.82)

$

43,268
0.04

$

11,500
$ (0.00)

See notes to consolidated financial statements

74

Iridium Communications Inc.

Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income (Loss)
For the Period from November 2, 2007 (Inception) to December 31, 2009
(In thousands, except share data)

Common Stock

Shares

Amount

Additional
Paid-in
Capital

Accumulated
Other
Comprehensive
Income

Accumulated
Retained
Earnings
(Deficit)

Total
Stockholders’
Equity

Comprehensive
Income (Loss)

Balance at November 2, 2007

(Inception) . . . . . . . . . . . . . . . . . . . .

— $— $

Net proceeds from issuance of units . . 11,500,000

Net loss . . . . . . . . . . . . . . . . . . . . . . . . .

—

Balance at December 31, 2007 . . . . . . 11,500,000

11

—

11

Total for the year ended December 31,
2007 . . . . . . . . . . . . . . . . . . . . . . . . .

—

14

—

14

$—

—

—

—

$ —

$

—

—

(4)

(4)

25

(4)

21

$

$

(4)

(4)

$ 1,656

$ 1,656

—

260,586

—
—
1,656

1,652

8,000
—
1,656

270,263

—

—

—

—
—

—

—

—

—

—
—

—

6,982

(1,828)

148,750

333,448
28,289

(164,884)

—

(28,555)

47,110

12,449
436

19,378

Net proceeds from initial public

offering of units (excludes $119,988
of proceeds allocable to 11,999,999
shares of common stock subject to
possible conversion) . . . . . . . . . . . . . 40,000,000

Proceeds from sale of stock purchase

warrants . . . . . . . . . . . . . . . . . . . . . .
Forfeiture of common stock . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . .

—

(3,000,000)

—

Balance at December 31, 2008 . . . . . . 48,500,000

Total for the year ended December 31,
2008 . . . . . . . . . . . . . . . . . . . . . . . . .

40

260,546

—

(3)

—

48

8,000
3

—

268,563

Payment of deferred underwriters’

fees . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchase of stock purchase

warrants . . . . . . . . . . . . . . . . . . . . . .

Net proceeds from issuance of

—

—

common stock . . . . . . . . . . . . . . . . . 16,000,000

Fair value of stock issued in

Acquisition . . . . . . . . . . . . . . . . . . . . 29,443,500
(9,169,979)

Purchase of common stock . . . . . . . . .
Purchase of common stock under

—

—

16

29
(9)

6,982

(1,828)

148,734

333,419
28,298

forward purchase contracts . . . . . . . (16,325,196)

(16)

(164,868)

Forfeitures of stock options and

warrants . . . . . . . . . . . . . . . . . . . . . .

(1,441,176)

(1)

1

Reclassification of warrants to

derivative instruments . . . . . . . . . . .

Settlement of derivative instruments

for warrants . . . . . . . . . . . . . . . . . . .

Settlement of derivative instruments

for shares of common stock . . . . . . .
Stock-based compensation . . . . . . . . . .
Stock issued upon conversion of

—

—

1,244,923
—

subordinated convertible note . . . . .

1,995,629

Net loss . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative translation adjustments . . .

—
—

—

—

—

1

2

—
—

(28,555)

47,110

12,448
436

19,376

—
—

Balance at December 31, 2009 . . . . . . 70,247,701

$ 70

$ 670,116

Total for the year ended December 31,
2009 . . . . . . . . . . . . . . . . . . . . . . . . .

—

—
—
—

—

—

—

—

—
—

—

—

—

—

—
—

—

—

22

$ 22

(44,160)
—

(44,160)
22

$(44,160)
22

$(42,508)

$ 627,700

$(44,138)

See notes to consolidated financial statements

75

Iridium Communications Inc.

Consolidated Statements of Cash Flows
(In thousands, except share and per share data)

Year Ended
December 31, 2009

Year Ended
December 31, 2008

For the Period from
November 2, 2007
(Inception) to
December 31, 2007

$ (44,160)

$

1,656

$ (4)

Cash flows from operating activities:
Net (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating

activities:

Non-cash items included in net income:

Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in market value of warrants . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities: . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . .
Income tax receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other current liabilities . . . . . . . . . . . . . . .
Accrued compensation and employee benefits . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued satellite and network operations expense, net of current
portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by operating activities . . . . . . . . . . . . . . .

Cash flows from investing activities:
Changes in investment in trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid for acquisition, net of cash acquired . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by (used in) investing activities . . . . . . .

Cash flows from financing activities:
Proceeds from public offerings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Purchase) proceeds from issuance of private placement warrants . . . . . . .
Purchase of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of shares for no-votes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of underwriting fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of costs associated with offering . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred offering costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Payment) proceeds from note payable to related party . . . . . . . . . . . . . . . .
Proceeds from sale of founder units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments under credit facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash (used in) provided by financing activities . . . . . . .

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . .

(1,711)
34,117
21,513
436

5,382
15,044
(2,185)
—
35
3,584
(5,260)
(3,997)
2,127

(1,020)
(737)

23,168

401,838
(7,351)
(39,950)

354,537

149,600
(4,940)
(164,884)
(91,700)
(4,288)
(850)
—
—
—

(113,594)

(230,656)

147,049
129

Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 147,178

Supplemental cash flow information:
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplemental disclosure of non-cash investing activities:
Shares issued for the acquisition of Iridium Holdings (29,443,500 shares at
$11.325 per share) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrual of additional consideration for acquisition of Iridium Holdings . . . . .
Property and equipment received but not paid for at year-end . . . . . . . . . . .

Supplemental disclosure of non-cash financing activities:
Accrued deferred offering costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Reversal) accrual of deferred underwriter commissions . . . . . . . . . . . . . . .
Conversion of subordinated convertible note to equity . . . . . . . . . . . . . . . .

$
$

1,330
339

$ 333,448
4,636
$
3,200
$

—
$
$
(8,176)
$ (19,378)

See notes to consolidated financial statements

76

(1,168)
—
—
—

—
—
(12)
(3)

—
—
1,613
—
—

—
—

2,086

(401,838)

—
—

(401,838)

400,000
8,000
—
—
(6,900)
(1,147)
—
(256)
—
—

399,697

(55)
184

129

6
2,527

—
—
—

$

$
$

$
$
$

—

$
$ 11,288
—
$

—
—
—
—

—
—
—
—
—
—
4

—
—

—
—

—

—
—
—

—

—
—
—
—
—
—
(91)
250
25
—

184

184
—

$184

$—
$—

$—
$—
$—

$225
$—
$—

Iridium Communications Inc.

Notes to Consolidated Financial Statements
December 31, 2009

1. Organization and Basis of Presentation

Iridium Communications Inc. (the “Company”) was formed as GHL Acquisition Corp., a special purpose
acquisition company as further described below. The Company acquired, directly and indirectly, all
the
outstanding equity of Iridium Holdings LLC (“Iridium Holdings” and, together with its direct and indirect
subsidiaries, “Iridium”) in a transaction accounted for as a purchase business combination on September 29,
2009 (the “Acquisition”). In accounting for the Acquisition, the Company was deemed the legal and accounting
acquirer. On September 29, 2009, the Company changed its name to Iridium Communications Inc. For the
purposes of presenting consolidated financial statements as of and for the year ended December 31, 2009,
management has determined that the results of Iridium’s operations for the one-day period from the closing of
the Acquisition to September 30, 2009 was not material. Accordingly, the Company’s consolidated statements of
operations and cash flows for the year ended December 31, 2009 includes the Company’s pre-Acquisition
operations for the nine months ended September 30, 2009, which excludes any results of Iridium, and the
Company’s post-Acquisition operations for the three months ended December 31, 2009. The Company’s
consolidated statements of operations and cash flows for the year ended December 31, 2008 and for the period
from November 2, 2007 (inception) to December 31, 2007 include solely the results of the Company’s
pre-Acquisition operations, and do not include any results of Iridium. The Company’s consolidated balance sheet
as of December 31, 2009 includes the assets and liabilities of the Company and of Iridium, as further described
below. All significant intercompany accounts and transactions have been eliminated in consolidation.

Iridium is considered the predecessor of the Company and, accordingly, its historical financial statements are
separately presented as predecessor financial statements.

The Company was formed on November 2, 2007 for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or other similar business combination. All activity from
November 2, 2007 (inception) through February 21, 2008 relates to the Company’s formation and initial public
offering. From February 21, 2008 through September 29, 2009, the Company’s activities were limited to
identifying prospective target businesses to acquire and with which to complete a business combination. On
September 29, 2009, the Company consummated the Acquisition and, as a result, is no longer in the development
stage.

Iridium Holdings was formed under the laws of Delaware in 2000 as a limited liability company pursuant to the
Delaware Limited Liability Company Act. On December 11, 2000, Iridium Holdings acquired certain satellite
communication assets from Iridium LLC, a non-affiliated debtor in possession, pursuant to an asset purchase
agreement.

As a result of and subsequent to the Acquisition, the Company is a provider of mobile voice and data
communications services via satellite. The Company holds various licenses and authorizations from the Federal
Communications Commission (the “FCC”) and from international regulatory bodies that permit the Company to
conduct its business, including the operation of its satellite constellation. The Company offers voice and data
communications services and products to businesses, U.S. and international government agencies and other
customers on a global basis.

2. Significant Accounting Policies and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States (“U.S. GAAP”). The accompanying consolidated financial statements include the

77

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

accounts of the Company and its wholly-owned and majority-owned subsidiaries, and variable interest entities
for which the Company is the primary beneficiary. All intercompany transactions and balances have been
eliminated.

Reclassifications

Certain amounts presented as “professional fees” and “other operating expenses” in prior periods have been
reclassified to “selling, general and administrative” and “transaction costs” to conform to the current year
presentation. These reclassifications had no effect on the Company’s net
income for the years ended
December 31, 2009 and 2008, and the period from November 2, 2007 (inception) to December 31, 2007.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ materially from those estimates.

Financial Instruments

The consolidated balance sheets include various financial instruments (primarily cash and cash equivalents,
investments held in trust, restricted cash, accounts receivable, accounts payable, accrued expenses and other
liabilities, and other obligations). Fair value is the price that would be received from the sale of an asset or paid
to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date.
U.S GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability
of inputs used in measuring fair value. These tiers include:

• Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;

• Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets;
quoted prices in markets that are not active; or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities; and

• Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an

entity to develop its own assumptions.

Additional information regarding fair value is disclosed in Note 13.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of
cash and cash equivalents and receivables. The majority of this cash is swept nightly into a money market fund
with a diversified portfolio. The Company performs credit evaluations of its customers’ financial condition and
records reserves to provide for estimated credit losses. Accounts receivable are due from both domestic and
international customers (see Note 12). The Company maintains its cash and cash equivalents with financial
institutions with high credit ratings, although at times the Company maintains deposits in federally insured
financial institutions in excess of federally insured (FDIC) limits.

78

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash
equivalents. The cash and cash equivalents balances at December 31, 2009 and 2008 consisted of cash deposited
in institutional money market mutual funds and regular interest bearing and non-interest bearing depository
accounts and certificates of deposits with commercial banks.

Restricted Cash

Restricted cash of $15.5 million as of December 31, 2009, primarily relates to a letter of credit as collateral for
de-orbit costs.

Accounts Receivable

Trade accounts receivable are generally recorded at the invoiced amount and are subject to late fee penalties. The
Company had $1.5 million in its allowance for doubtful accounts at December 31, 2009. Management develops
its estimate of this allowance based on the Company’s experience with specific customers, aging of outstanding
invoices, its understanding of their current economic circumstances and its own judgment as to the likelihood
that the Company will ultimately receive payment. The Company writes off its accounts receivable when
balances are deemed uncollectible.

Foreign Currencies

The functional currency of the Company’s foreign consolidated subsidiaries is their local currency. Assets and
liabilities of its foreign subsidiaries are translated to United States dollars based on exchange rates at the end of
the reporting period. Income and expense items are translated at the weighted average exchange rates prevailing
during the reporting period. Translation adjustments are accumulated in a separate component of stockholders’
equity. Transaction gains or losses are classified as “Interest income and other income (expense), net” in the
consolidated statements of operations.

Inventory

Inventory consists primarily of finished goods including Iridium OpenPort
terminals, handsets, L-Band
transceivers, data devices, related accessories, and replacement parts to be sold to customers to access Company
services. The Company also has raw materials from third-party manufacturers (see Note 10). The Company
outsources manufacturing of subscriber equipment primarily to a third-party manufacturer and purchases
accessories from third-party suppliers. The Company’s cost of inventory includes an allocation of overhead
(including salaries and benefits of employees directly involved in bringing inventory to its existing condition,
scrap, tooling and freight). Inventories are valued using the average cost method, and are carried at the lower of
cost or market.

Accounting for Stock-Based Compensation

The Company accounts for stock-based compensation at fair value; accordingly the Company expenses the
estimated fair value of stock-based awards made in exchange for employee services over the requisite employee
service period. Stock-based compensation cost is determined at the grant date using the Black-Scholes option
pricing model. The value of the award that is ultimately expected to vest is recognized as expense on a straight-
line basis over the employee’s requisite service period and is classified in the statement of operations in a manner

79

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

consistent with the statement of operations’ classification of the employee’s salaries and other compensation as
follows:

Cost of services (exclusive of depreciation and

amortization) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . . .

Year Ended
December 31, 2009

(In thousands)

$ 26
410

$436

Property and Equipment

Property and equipment is carried at cost less accumulated depreciation. Depreciation is calculated using the
straight-line method over the following estimated useful lives:

Satellite system . . . . . . . . . . . . . . . . . . . . . .
Terrestrial system . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . .
Gateway system . . . . . . . . . . . . . . . . . . . . . .
Internally developed software and

purchased software . . . . . . . . . . . . . . . . .
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . .

Repairs and maintenance costs are expensed as incurred.

Long-Lived Assets

14 years
7 years
3 – 5 years
5 years

3 – 7 years
39 years
shorter of useful life or remaining lease term

The Company assesses the impairment of long-lived assets when indicators of impairment are present.
Recoverability of assets is measured by comparing the carrying amounts of the assets to the future undiscounted
cash flows expected to be generated by the assets. Any impairment loss would be measured as the excess of the
assets’ carrying amount over their fair value. Fair value is based on market prices where available, an estimate of
market value or various valuation techniques.

Goodwill and Other Intangible Assets

Goodwill

Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets
acquired. Impairment testing for goodwill is performed annually or more frequently if indicators of potential
impairment exist. If the fair value of goodwill is less than the carrying amount of goodwill, an impairment loss is
recognized.

Intangible Assets Not Subject to Amortization

A significant portion of the Company’s intangible assets are spectrum and licenses, and trade names which are
indefinite-lived intangible assets. The Company reevaluates the useful life determination for these assets each
reporting period to determine whether events and circumstances continue to support an indefinite useful life. The

80

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

Company tests its indefinite-lived intangible assets for potential impairment annually or more frequently if
indicators of impairment exist. If the fair value of the indefinite-lived asset is less than the carrying amount, an
impairment loss is recognized.

Intangible Assets Subject to Amortization

The Company’s intangible assets that do have finite lives (primarily customer relationships – government and
commercial, core developed technology and software) are amortized over their useful lives and reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not
be recoverable. If any indicators were present, the Company would test for recoverability by comparing the
carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those
net undiscounted cash flows do not exceed the carrying amount (i.e., the asset is not recoverable), the Company
would perform the next step, which is to determine the fair value of the asset and record an impairment loss, if
any. The Company reevaluates the useful lives for these intangible assets each reporting period to determine
whether events and circumstances warrant a revision in their remaining useful lives.

Asset Retirement Obligations

Liabilities arising from legal obligations associated with the retirement of long-lived assets are required to be
measured at fair value and recorded as a liability. Upon initial recognition of a liability for retirement obligations,
a company must record an asset, which is depreciated over the life of the asset to be retired.

Under certain circumstances, each of the U.S. government, The Boeing Company (“Boeing”) and Motorola, Inc.
(“Motorola”) has the unilateral right to require the de-orbit of the Company’s satellite constellation. In the event
the Company was required to effect a mass de-orbit, the Company, pursuant to the amended and restated
operations and maintenance agreement by and between Iridium Constellation LLC (“Iridium Constellation”) and
Boeing (the “O&M Agreement”), would be required to pay Boeing $16.0 million, plus an amount equivalent to
the premium for inception of Section B de-orbit insurance coverage ($2.5 million as of December 31, 2009). The
Company has concluded that each of the foregoing de-orbit rights meets the definition of a legal obligation and
currently does not believe the U.S. government, Boeing or Motorola will exercise their respective de-orbit rights.
As a result, the Company believes the likelihood of any future cash outflows associated with the mass de-orbit
obligation is remote. Accordingly, the Company has not recorded an asset retirement obligation relating to the
potential de-orbit rights in its consolidated balance sheet.

There are other circumstances in which the Company could be required, either by the U.S. government or for
technical reasons, to de-orbit an individual satellite; however, the Company believes that such costs would not be
significant relative to the costs associated with the ordinary operations of the satellite constellation.

Revenue Recognition

The Company derives its revenue primarily as a wholesaler of satellite communications products and services.
The primary types of revenue include (i) services revenue (access and usage-based airtime fees) and
(ii) subscriber equipment revenue. Additionally, the Company generates revenue by providing engineering and
support services to commercial and government customers.

Wholesaler of satellite communications products and services

Pursuant to wholesale agreements, the Company sells its products and services to service providers who, in turn,
sell the products and services to other distributors or directly to the end-users. Generally, the Company

81

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

recognizes revenue when services are performed or delivery has occurred, evidence of an arrangement exists, the
fee is fixed or determinable, and collection is probable, as follows:

Contracts with multiple elements

At times, the Company sells subscriber equipment through multi-element contracts that bundle subscriber
equipment with airtime services. When the Company sells subscriber equipment and airtime services in
bundled arrangements that include guaranteed minimum orders and determines that it has separate units of
accounting, the Company allocates the bundled contract price among the various contract deliverables based
on each deliverable’s relative fair value. The Company determines vendor specific objective evidence of fair
value by assessing sales prices of subscriber equipment and airtime services when they are sold to customers
on a stand-alone basis.

Services revenue sold on a stand-alone basis

Services revenue is generated from the Company’s service providers through usage of its satellite system
and through fixed monthly access fees per user charged to service providers. Revenue for usage is
recognized when usage occurs. Revenue for fixed-per-user access fees is recognized ratably over the period
in which the services are provided to the end-user. Revenue from prepaid services is recognized when usage
occurs or, if not used, when the customer’s right to access the unused prepaid services expires. The
Company does not offer refund privileges for unused prepaid services. Deferred prepaid services revenue
and access fees are typically earned and recognized as income within one year of customer prepayment.
Based on historical information for prepaid scratch card services that do not have an initial expiration date,
the Company records breakage associated with prepaid scratch card account balances for which the
likelihood of redemption is remote, which is generally determined after 36 months from issuance.

Subscriber equipment sold on a stand-alone basis

The Company recognizes subscriber equipment sales and the related costs when title to the equipment (and
the risks and rewards of ownership) passes to the customer, typically upon shipment.

Services and subscriber equipment sold to the U.S. government

The Company provides airtime to U.S. government subscribers through (i) fixed monthly fees on a per user basis
for unlimited voice services, (ii) fixed monthly fees per user for unlimited paging services and (iii) a tiered
pricing plan (based on usage) per device for data services. Revenue related to these services is recognized ratably
over the periods in which the services are provided, and costs are expensed as incurred. The U.S. government
purchases its equipment from third-party service providers and not directly from the Company.

Government engineering and support services

The Company provides maintenance services to the U.S. government’s dedicated gateway in Hawaii. This
revenue is recognized ratably over the periods in which the services are provided; costs are expensed as incurred.

Other government and commercial engineering and support services

The Company also provides certain engineering services to assist customers in developing new technologies for
use on the Company’s satellite system. The revenue associated with these services is recorded when the services

82

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

are rendered, typically on a percentage of completion method of accounting based on the Company’s estimate of
total costs expected to complete the contract, and costs are expensed as incurred. Revenue on cost-plus-fixed-fee
contracts is recognized to the extent of estimated costs incurred plus the applicable fees earned. The Company
considers fixed fees under cost-plus-fixed-fee contracts to be earned in proportion to the allowable costs incurred
in performance of the contract.

Warranty Expense

The Company generally provides its customers a warranty on subscriber equipment for one to two years from the
date of activation, depending on the product. A warranty accrual is made when it is estimable and probable that a
loss has been incurred. A warranty reserve is maintained based on historical experience of warranty costs and
expected occurrences of warranty claims on equipment. Costs associated with warranties are recorded as cost of
subscriber equipment sales and include equipment replacements, repairs and program administration.

Balance at beginning of the year . . . . . . . . . . . . . . . . .
Provision assumed from Acquisition . . . . . . . . . . . . .
Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended
December 31, 2009

(In thousands)
$ —
(661)
(185)
120

Balance at end of the year . . . . . . . . . . . . . . . . . . . . . .

$(726)

Research and Development

Research and development costs are charged as an expense in the period in which they are incurred.

Advertising Costs

Costs associated with advertising and promotions are expensed as incurred. Advertising expenses were
$0.3 million for the year ended December 31, 2009. There were no such costs in the year ended December 31,
2008 or for the period from November 2, 2007 (inception) to December 31, 2007.

Income Taxes

The Company accounts for income taxes using the asset and liability approach, which requires the recognition of
tax benefits or expenses on the temporary differences between the financial reporting and tax basis of its assets
and liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amount
expected to be realized. The Company also recognizes a tax benefit from uncertain tax positions only if it is
“more likely than not” that the position is sustainable based on its technical merits. The Company’s policy is to
recognize interest and penalties on uncertain tax positions as a component of income tax expense.

Earnings Per Share

The Company calculates basic earnings (loss) per share by dividing net income (loss) by the weighted-average
number of shares of Common Stock outstanding during the period. Diluted earnings (loss) per share takes into
account the effects of potential dilutive common shares when they are dilutive. Potential dilutive common shares

83

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

consisting of common stock issuable upon exercise of outstanding stock options and warrants are computed using
the treasury stock method.

Accounting Developments

In December 2007, the Financial Accounting Standards Board (“FASB”) issued accounting guidance on business
combinations that requires the acquiring entity to record all assets acquired and liabilities assumed at their
respective acquisition-date fair values, changes the recognition of assets acquired and liabilities assumed arising
from contingencies, changes the recognition and measurement of contingent consideration, and requires the
expensing of acquisition-related costs as incurred. The accounting guidance also requires additional disclosure of
information surrounding a business combination, such that users of the entity’s financial statements can fully
understand the nature and financial impact of the business combination. The Company adopted the accounting
guidance for business acquisitions effective January 1, 2009.

In August 2009, the FASB issued Accounting Standards Update 2009-05, “Fair Value Measurements and
Disclosures (Topic 820) Measuring Liabilities at Fair Value” (“ASU 2009-05”). ASU 2009-05 clarifies that in
circumstances in which a quoted market price in an active market for the identical liability is not available; a
reporting entity is required to measure fair value using one of several acceptable valuation techniques. ASU
2009-05 also clarifies (i) that when estimating the fair value of a liability, a reporting entity is not required to
include a separate input or adjustments to other inputs relating the existence of a restriction that prevents the
transfer of the liability and (ii) that both a “quoted price in an active market for the identical liability at the
measurement date” and the “quoted price for the identical liability when traded as an asset in an active market
when no adjustments to the quoted price of the asset are required” are Level 1 fair value measurements. ASU
2009-05 is effective in the fourth quarter of 2009. The Company adopted ASU 2009-05 in the fourth quarter of
2009 with no material impact on its financial position or results of operations.

3. Business Combination

On September 22, 2008, the Company entered into a transaction agreement, as amended on April 28, 2009 (the
“Transaction Agreement”), with Iridium Holdings and its members whereby it agreed to purchase, directly or
indirectly, all of the outstanding equity of Iridium Holdings. The Acquisition closed on September 29, 2009. For
the purpose of acquisition accounting, total consideration of approximately $436.0 million included 29.4 million
shares of the Company’s common stock (“Common Stock”) valued at $333.4 million and $102.6 million in cash
(which included a requirement to make a payment of $25.5 million in cash to some of the former members of
Iridium Holdings for tax benefits the Company received, payable on December 29, 2009). At December 31,
2009, approximately $4.6 million of such future tax benefit cash payment was still an outstanding payable to
certain former members of Iridium Holdings who deferred the payments until 2010. This amount was paid in
January 2010. The Company accounted for its business combination with Iridium Holdings by recording all
assets acquired and liabilities assumed at their respective fair values on the date of Acquisition. The Company
recognized deferred tax assets and liabilities for the tax effects of the differences between assigned book values
and tax bases of assets acquired and liabilities assumed in the Acquisition. As a result, the Company recorded a
net deferred tax asset — current of $3.0 million and a net deferred tax liability — non-current of $98.2 million.

84

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

The fair value was based on the market price of the Company’s Common Stock on September 29, 2009. The total
consideration for Iridium Holdings was $436.0 million, as follows:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash related to tax benefit . . . . . . . . . . . . . . . . . . . . . . . . .

$ 77,100
333,448
25,500

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$436,048

(In thousands)

After the September 30, 2009 financial statements were issued, the Company received and relied in part on a
valuation report from a third-party valuation firm. After considering the results of that valuation report and
further analysis, the Company has retrospectively updated the estimated fair value of the assets and liabilities
assumed in the Acquisition on September 29, 2009. The fair values are based on the Company’s estimates and
may be further adjusted from time to time but no later than September 29, 2010, as better information becomes
available. The following represents the allocation of the purchase price:

Estimated Fair Value

As Reported on
September 30, 2009

As of
December 31, 2009

(In thousands)

Assets:
Cash and cash equivalents . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment
. . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . .

Total assets . . . . . . . . . . . . . . . . . . . . .

Liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . .
Accrued satellite operations and

maintenance . . . . . . . . . . . . . . . . . . . . . .
Credit facility . . . . . . . . . . . . . . . . . . . . . . .
Convertible subordinated note . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . .

Total liabilities . . . . . . . . . . . . . . . . . .

$ 58,015
15,520
46,571
2,236
32,045
394,709
87,758
75,464
3,781
1,161

717,260

4,281
42,686
10,593

15,218
113,593
16,723
75,879
2,239

281,212

$ 58,015
15,520
46,571
2,236
40,700
394,800
91,852
95,439
2,972
1,162

749,267

4,281
37,917
17,900

20,400
113,594
19,300
98,249
1,578

313,219

Net assets acquired . . . . . . . . . . .

$436,048

$436,048

85

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

Property and Equipment. Property and equipment acquired in the Acquisition is depreciated using the straight-
line method as follows:

Estimated Fair
Value

(In thousands)

Useful Lives

Depreciable assets:

Satellite system . . . . . . . . . . . . . . . . . . . . . . . . .
Terrestrial system . . . . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gateway system . . . . . . . . . . . . . . . . . . . . . . . . .
Internally developed software and purchased

software . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building improvements . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . .

$333,450
3,963
10,349
2,568

1,043
20,021
2,408
2,446

5 years
5 years
1 – 5 years
5 years

1 year
39 years
5 years
6.5 years

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$376,248

Additional asset categories not included above:

Construction in progress . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,608
7,944

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$394,800

Goodwill. The total consideration paid in the Acquisition exceeded the estimated fair value of the tangible and
identifiable intangible assets acquired and liabilities assumed, resulting in approximately $95.4 million of
goodwill.

Pre-Acquisition Contingency. Iridium had certain contractual contingencies under agreements in effect as of the
date of the Acquisition that the Company has recorded at their estimated fair value at the time of the Acquisition.
Some of the contingencies relate to potential payments pursuant to the occurrence of a distribution event,
change of control or other specified transactions, and other matters. The Company believes that it is unclear
whether the foregoing provisions were intended to apply to a similar transaction such as the Acquisition (see
Note 6). The estimated fair value of the pre-Acquisition contractual contingencies at the date of the Acquisition
was $11.7 million and was reflected as a liability in the consolidated balance sheet on the Acquisition date.

Transaction Costs

An acquirer is required to recognize as expense the direct costs of a business combination in the period in which
the expense is incurred. Accordingly, the Company has been expensing Acquisition-related costs as they have
been incurred during the pre-Acquisition periods presented. The Company incurred a total of approximately
$8.3 million of Acquisition-related costs, including $6.2 million in 2009.

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Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

Revenue and Loss of Iridium

The amount of revenue and loss of Iridium included in the Company’s consolidated statement of operations for
the period from the date of the Acquisition to December 31, 2009 are as follows (in thousands):

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$75,989
$ (4,749)

Pro Forma Information (Unaudited)

The following table contains unaudited pro forma consolidated statements of operations information of the
Company for years ended December 31, 2009 and 2008 as if the Acquisition had occurred as of January 1, 2009
and January 1, 2008, respectively:

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic and diluted net loss per common share . . . . . . . . . .
Weighted average shares outstanding — basic and

For the Year Ended
December 31,

2009

2008

(In thousands, except
per share amounts)

$320,616
$ (38,986)
(0.57)
$

$320,944
$ (8,367)
(0.12)
$

diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68,252

68,252

The pro forma information may not be indicative of the results of operations that would have actually occurred
had the Acquisition occurred as presented. Also, future results may vary significantly from the results reflected in
such pro forma information.

4. Equity Transactions

2007 Private Unit Offering

In November 2007, the Company issued 11.5 million units for an aggregate purchase price of $25,000 to its
founding stockholder. Each unit consisted of one share of Common Stock and one Common Stock purchase
warrant. Each warrant entitled the holder to purchase from the Company one share of Common Stock at a price
of $7.50 per share commencing on the later of the completion of a Business Combination (as defined in the
warrant agreements) or 12 months from the effective date of a Public Offering (as defined in the warrant
agreements), subject to certain conditions, and expiring five years from the effective date of the Public Offering
or earlier upon redemption or liquidation of the Company’s trust account established in connection with a Public
Offering (the “Trust Account”).

2008 Initial Public Offering

In February 2008, the Company sold in its initial public offering (“IPO”) 40.0 million units at a price of $10.00
per unit. Each unit consisted of one share of Common Stock and one Common Stock purchase warrant. Each
warrant entitled the holder to purchase from the Company one share of Common Stock at a price of $7.00 per
share commencing on the later of the completion of a Business Combination or 12 months from the effective date
of the Public Offering and expiring five years from the effective date of the Public Offering or earlier upon
redemption or liquidation (as defined in the warrant agreements) of the Trust Account. Total underwriting fees,

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Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

including contingent fees, related to the IPO were approximately $23.3 million. The Company paid $6.9 million
upon closing of the IPO. The underwriters agreed that approximately 70% of the underwriting fees would not be
payable unless and until the Company completed a Business Combination (as defined in the underwriting
agreement), and they waived their right to receive such payment upon the Company’s liquidation if the Company
was unable to complete a Business Combination. On June 2, 2009, the Company entered into an agreement with
Banc of America Securities LLC and its affiliate pursuant to which Banc of America Securities LLC waived its
right to receive approximately $8.2 million of deferred underwriting fees. On September 29, 2009, Banc of
America Securities LLC received a payment of approximately $4.3 million. The deferred underwriting
commission paid was less pro-rata reductions resulting from the exercise of the stockholder conversion rights.

2008 Private Placement of Warrants

In connection with the IPO, the Company sold an additional 8.0 million Common Stock purchase warrants to the
founding stockholder at a price of $1.00 per warrant. The warrant terms are generally identical to the terms of the
warrants sold in the IPO, except for certain restrictions on transfer and redemption and their ability to be
exercised on a cashless basis.

2008 Modification of Warrants Terms

In connection with the IPO, in February 2008, the Company modified the terms of the warrants issued originally
in November 2007, reducing the exercise price from $7.50 per share to $7.00 per share. The change in the fair
value of these warrants that resulted from the reduction in exercise price ($0.7 million), was treated as a “deemed
dividend” to the warrant holder.

$7.00 Warrants—General Terms

The Company may redeem all of the warrants with a $7.00 strike price (the “$7.00 warrants”) at a price of $0.01
per warrant upon 30 days’ prior notice, provided that the warrants are exercisable and the registration statement
covering the Common Stock issuable upon exercise of the warrants remains effective and available, and provided
further that such redemption can only be made if the last sales price of the Common Stock is at least $14.25 per
share (the “redemption price”) for any 20 trading days within a 30-trading-day period ending on the third day
prior to the date on which notice of redemption is given. If a registration statement is not effective at the time of
exercise, the holders of the $7.00 warrant will not be entitled to exercise the warrants, and in no event (whether in
the case of a registration statement not being effective or otherwise) will the Company be required to net cash
settle any such warrant exercise. Consequently, the $7.00 warrants could expire unexercised and unredeemed.
The number of shares of Common Stock issuable upon the exercise of each $7.00 warrant is subject to
adjustment from time to time upon the occurrence of certain events. The $7.00 warrants expire in 2013.

Following the appropriate accounting guidance in effect at the time, the $7.00 warrants initially were classified
within stockholders’ equity. On June 2, 2009, the Company entered into an agreement with Banc of America
Securities LLC and its affiliate to purchase the 3.7 million warrants held by Banc of America Securities LLC for
a price of approximately $1.8 million in cash upon completion of the Acquisition, which met the definition of a
Business Combination. Upon this modification, the Company determined that the completion of the Acquisition
was probable of occurrence and, accordingly, classified those warrants as derivative instruments as of June 30,
2009 at their then-current fair value; the Company “marked to market” the warrants through September 29, 2009
and the exchange agreements are no longer outstanding as of September 29, 2009.

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Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

2008 Cancellations, Forfeitures and Transfers

In January 2008,
the Company cancelled approximately 1.7 million of the units originally purchased in
November 2007, which were surrendered in a recapitalization. In March 2008, approximately 1.3 million
additional units originally purchased in November 2007 were forfeited pursuant to the terms of the applicable
purchase agreements. In February 2008, approximately 0.2 million units originally purchased in November 2007
were transferred from the original holders to certain of the Company’s directors; the Company’s directors then
forfeited approximately 20,000 of these units. The transferred units have the same terms and are subject to the
same restrictions on transfers as the original units.

2009 Warrant Restructure and Exchange Agreements

On July 29, 2009, the Company entered in agreements with the holders of approximately 26.8 million of the
$7.00 warrants. The agreements generally provided such holders, upon the consummation of the Acquisition, the
choice of tendering their warrants for (i) the right to demand payment (in cash and shares of common stock) by
the Company to settle the warrants in a ratio of consideration of 20% cash and 80% common stock, (ii) the right
to exchange their existing $7.00 warrants for new warrants with an $11.50 strike price (the “$11.50 warrants”)
which included the extension of the exercise term for two additional years until 2015 and the increase of the
redemption price from $14.25 to $18.00 per share or (iii) a combination thereof. The new $11.50 warrants have
terms similar to the $7.00 warrants, except as described below under “$11.50 Warrants — General Terms”. The
Company determined that the warrant restructure and exchange agreements created derivative instruments for the
warrants subject to settlement, and accordingly on July 29, 2009 reclassified the subject warrants from equity to
derivative instruments at their then-current fair value of approximately $28.6 million. On September 29, 2009,
upon consummation of the Acquisition, holders of approximately 12.4 million warrants demanded total payment
of approximately $3.1 million in cash and approximately 1.2 million shares of Common Stock with a value of
approximately $12.5 million, resulting in an expense during the third quarter of 2009 of approximately $2.3
million. Holders of approximately 14.4 million warrants exchanged their existing warrants for new $11.50
warrants, resulting in an expense during the third quarter of 2009 of approximately $31.8 million. Following the
appropriate accounting guidance, the new $11.50 warrants are classified within stockholders’ equity.

$11.50 Warrants — General Terms

The Company may redeem all of the $11.50 warrants at a price of $0.01 per warrant upon 30 days prior notice,
provided that the warrants are exercisable and the registration statement covering the Common Stock issuable
upon exercise of the warrants remains effective and available, and provided further that such redemption can
only be made if the last sales price of the Common Stock is at least $18.00 per share for any 20 trading days
within a 30-trading-day period ending on the third day prior to the date on which notice of redemption is given. If
the registration statement is not still effective at the time of exercise, the holders of the $11.50 warrants will not
be entitled to exercise the warrants, and in no event (whether in the case of a registration statement not being
effective or otherwise) will the Company be required to net cash settle any such warrant exercise. Consequently,
the $11.50 warrants may expire unexercised and unredeemed. The number of shares of Company Common Stock
issuable upon the exercise of each $11.50 warrant is subject to adjustment from time to time upon the occurrence
of specified events. The warrants expire in 2015.

2009 Follow-on Equity Offering and Repurchases

On September 29, 2009, the Company sold to the public 16.0 million shares of Common Stock for net proceeds
of $148.8 million. Concurrently with the follow-on offering, the Company repurchased, pursuant to existing

89

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

forward contracts, 16.3 million shares of Common Stock for $164.9 million. In addition,
the Company
repurchased approximately 9.2 million shares of Common Stock for $91.7 million, representing the shares held
by those stockholders who voted against the Acquisition. These shares were previously presented as common
stock subject to possible conversion on the Company’s consolidated balance sheet as of December 31, 2008.

2009 Forfeitures

In September 2009, 8.4 million warrants originally purchased in November 2007 and 4.0 million warrants
originally purchased in February 2008 as part of the private placement were forfeited by their holders.

Outstanding Warrants

As of December 31, 2009, after considering all purchases,
transfers,
repurchases and exchanges, the Company had 13.6 million $7.00 warrants and 14.4 million $11.50 warrants
outstanding, which are exercisable through February 2013 and February 2015, respectively. All outstanding
warrants are classified within stockholders’ equity.

issuances, cancellations, forfeitures,

5. Debt

As a result of the Acquisition, the Company assumed a $22.9 million (face value) 5% convertible subordinated
note due October 2015 (the “Note”), originally issued by Iridium to Greenhill & Co. Europe Holdings Limited in
connection with the Acquisition. The Note was converted into 1,995,629 shares of the Company’s Common
Stock on October 24, 2009.

The Company paid all outstanding amounts for its first and second lien credit facilities on September 30, 2009,
following the closing of the Acquisition on September 29, 2009.

6. Agreements with Motorola

Transition Services, Products and Asset Agreement

As a result of the Acquisition, the Company effectively acquired and assumed a Transition Services, Products
and Asset Agreement (“TSA”) by and among Iridium Holdings, Iridium Satellite LLC (“Iridium Satellite”) and
Motorola. Certain obligations under the TSA have been fully performed, including Motorola’s provision of
services and transfers of assets, but other obligations are on-going, as described below.

The TSA requires that Iridium Satellite use Boeing to provide continuing steady-state operations and
maintenance services with respect to the Satellite Network Operations Center, Telemetry, Tracking and Control
stations and the on-orbit satellites (collectively, the “Iridium System”) (see Note 7). These services include,
under certain circumstances, the removal of satellites in the constellation from operational or storage orbits and
preparation for re-entry into the earth’s atmosphere. In addition, Iridium Satellite must (i) obtain and pay the
premium for an in-orbit insurance policy on behalf of Boeing and certain other beneficiaries, (ii) pay the
premiums for an aviation products – completed operations liability insurance policy obtained by Motorola, and
(iii) maintain on deposit with Motorola an amount that at all times equals 150% of the current year’s annual
premium. The deposit of $0.8 million as of December 31, 2009 is classified within other assets in the
accompanying consolidated balance sheet. In addition, pursuant to the TSA and the O&M Agreement, Motorola
has the right to cause the de-orbit of the constellation upon the occurrence of certain enumerated events.

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Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

The TSA also provides for the payment to Motorola of up to $8.5 million plus accrued interest on certain
principal upon the occurrence of a “triggering event.” A triggering event is defined as the occurrence of a change
of control (as defined in the TSA) of Iridium, the consummation of an initial public offering by Iridium Holdings
or Iridium Satellite, a sale of all or a material portion of the assets of Iridium Holdings or Iridium Satellite, or
upon reaching the date of December 11, 2010. This amount consists of three components: (i) a $6.0 million
commitment fee, (ii) $1.25 million of deferred equipment financing and (iii) a $1.25 million product
manufacturing fee (plus, in the case of clauses (ii) and (iii), accrued interest from the effective date of the TSA to
the date of payment at an annual interest rate of prime plus 3%).

The Company discounted the $6.0 million commitment fee at an imputed rate of 12.5% over 10 years, resulting
in an original issue discount of $4.2 million. The net liability included in accrued expenses and other current
liabilities in the accompanying consolidated balance sheet as of December 31, 2009 is $5.3 million. The $1.25
million deferred equipment financing and accrued interest described above is also included in accrued expenses
and other current liabilities in the accompanying consolidated balance sheets as of December 31, 2009. The
Company does not believe it is obligated to pay the product manufacturing fee noted above.

Motorola Note Agreement

As a result of the Acquisition, the Company effectively acquired and assumed a Senior Subordinated Term Loan
Agreement (the “Note Agreement”), pursuant to which Iridium borrowed $30 million from Motorola, as
evidenced by a senior subordinated term note (the “Motorola Note”) dated December 11, 2000. The principal
amount of, and all interest accrued on, the Motorola Note, was paid in full on May 27, 2005. However, as
detailed below, certain additional payment obligations survived this repayment.

Under the Note Agreement, the Company is required to pay Motorola a commitment fee of $5.0 million upon the
earlier of December 11, 2010, and the occurrence of a “trigger event.” A “trigger event” means the first to occur
of: (a) a change of control (as defined in the Note Agreement), (b) the consummation of an initial public offering
by Iridium Holdings or Iridium Satellite, or (c) the sale of all or a material portion of the assets of Iridium
Holdings or Iridium Satellite. The Company is accruing the commitment fee through December 2010 using the
effective-interest method. As of December 31, 2009, the Company’s estimated liability approximated $4.5
million and is included in accrued expenses and other current liabilities in the accompanying consolidated
balance sheet.

Additionally, in the event of a “distribution event,” the Company is required to pay Motorola a loan success fee
equal to the amount that a holder of Class B units in Iridium constituting 5% of the total number of issued and
outstanding units (both Class A and B) would have received in the distribution event. A “distribution event”
means the (i) direct or indirect (a) payment of any dividend or other distribution (in the form of cash or
otherwise) in respect of the equity interests of Iridium or (b) purchase, conversion, redemption or other
acquisition for value or otherwise by Iridium of any equity interest in Iridium or (ii) initial public or any
secondary offering by Iridium Holdings or Iridium Satellite in which any holders of equity interests in Iridium
are afforded the opportunity to participate as a selling equity holder in such offering. There were no payments to
Motorola for loan success fees in the year ended December 31, 2009.

Finally, in addition to the above obligations, upon the first to occur of (a) any change of control (as defined in the
Note Agreement) or (b) the sale of all or a material portion of the assets of Iridium Holdings or Iridium Satellite,
the Company is required to pay a cash amount equal to the lesser of (i) an amount to be determined based on a
multiple of earnings before interest, taxes, depreciation, and amortization less capital contributions not returned

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Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

to Class A Unit holders and the amount of the $5.0 million commitment fee discussed above which has been or is
concurrently being paid and (ii) the value of the consideration that a holder of Class B Units in Iridium
constituting 5% of the total number of issued and outstanding units (both Class A and B) would receive in the
transaction.

On February 9, 2010, Motorola filed a complaint against Iridium Satellite and Iridium Holdings to seek recovery
of the commitment fee and the loan success fee under the Note Agreement in an aggregate amount they allege is
at least $24.7 million. However, the outcome of such complaint is uncertain; therefore, an estimate of the
contingency cannot be made at this time and no additional accrual has been made as of December 31, 2009.

7. Boeing Operations and Maintenance Agreement

As a result of the Acquisition, the Company acquired an operations and maintenance agreement between Iridium
Constellation and Boeing, pursuant to which Boeing agreed to provide transition services and continuing steady-
state operations and maintenance services with respect to the Iridium System (including engineering, systems
analysis, and operations and maintenance services). Since Iridium Constellation initially entered into the
agreement, there have been a number of amendments, including the O&M Agreement. As a result of these
various amendments, the period of performance has been extended to be concurrent with the useful life of the
satellite constellation, the schedule of monthly payments has been revised and a cost escalation according to a
prescribed formula is now included. In addition, pursuant to the O&M Agreement, Boeing has the unilateral right
to commence the de-orbit of the constellation upon the occurrence of certain enumerated events.

The O&M Agreement incorporates a revised de-orbit plan, which, if exercised, would cost approximately $16.0
million plus an amount equivalent to the premium of Section B de-orbit insurance coverage to be paid to Boeing
in the event of a mass de-orbit of the satellite constellation. The Company caused to be issued to Boeing a $15.4
million letter of credit as collateral for de-orbit costs. This letter of credit is cash collateralized, and is included in
restricted cash in the accompanying consolidated balance sheet at December 31, 2009.

Under the O&M Agreement, following the Acquisition, the Company incurred expenses of $11.9 million relating
to satellite operations and maintenance costs for the year ended December 31, 2009 included in cost of services
(exclusive of depreciation and amortization) in the accompanying consolidated statements of operations.

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Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

8. Property and Equipment

As a result of the Acquisition, property and equipment consisted of the following at:

Satellite system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Terrestrial system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gateway system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internally developed software and purchased software . . . . . . .
Building and leasehold improvements . . . . . . . . . . . . . . . . . . . .

Less: accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . .

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31, 2009

(In thousands)
$333,450
4,101
11,303
2,672
1,141
24,875

377,542
(18,614)

358,928
7,944
19,865

Total property and equipment, net of accumulated

depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$386,737

At December 31, 2009, construction in process consisted of assets being developed or constructed for various
uses including: internally developed software of $11.5 million, equipment of $6.2 million, gateway system of
$2.0 million, and terrestrial system of $0.2 million. Following the Acquisition, depreciation expense for the year
ended December 31, 2009 was $18.6 million.

9. Intangible Assets

As a result of the Acquisition, the Company had identifiable intangible assets as follows:

December 31, 2009

Useful lives

Gross Carrying
Value

Accumulated
Amortization

Net Carrying
Value

(In thousands)

Indefinite life intangible assets:

Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indefinite
Spectrum and licenses . . . . . . . . . . . . . . . . . . . . Indefinite

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$20,385
13,495

33,880

$ —
—

—

$20,385
13,495

33,880

Definite life intangible assets:

Customer relationships — government . . . . . . .
Customer relationships — commercial . . . . . . .
Core developed technology . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 years
5 years
5 years
5 years

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,577
31,790
4,657
1,948

57,972

(979)
(1,590)
(233)
(97)

(2,899)

18,598
30,200
4,424
1,851

55,073

Total intangible assets . . . . . . . . . . . . . . . .

$91,852

$(2,899)

$88,953

93

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

Intangible assets are carried at cost less accumulated amortization. Amortization is calculated using the straight-
line method over their estimated useful lives. The Company has determined the useful lives of its identified
intangible assets based on its assessment of all facts and circumstances, including (i) the expected use of the
asset; (ii) the expected useful life of another asset or a group of assets to which the useful life of the intangible
asset may relate; (iii) any legal, regulatory, or contractual provisions that may limit the useful life; (iv) the
Company’s own historical experience in renewing or extending similar arrangements (consistent with the
intended use of the asset), regardless of whether those arrangements have explicit renewal or extension
provisions; (v) the effects of obsolescence, demand, competition and other economic factors (such as the stability
of the industry, known technological advances, legislative action that results in an uncertain or changing
regulatory environment and expected changes in distribution channels); and (vi) the level of maintenance
expenditures required to obtain the expected future cash flows from the asset. The estimated useful lives may be
adjusted from time to time before September 29, 2010, the first year anniversary of the Acquisition, as better
information becomes available. The weighted average amortization period of intangible assets is 5 years.
Following the Acquisition, amortization expense for the year ended December 31, 2009 was $2.9 million.

Future amortization expense with respect to intangible assets existing at December 31, 2009, by year and in the
aggregate, is as follows:

Year ending December 31,

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount

(In thousands)
$11,594
11,594
11,594
11,594
8,697

Total estimated future amortization expense . . . . . . . . . . .

$55,073

10. Commitments and Contingencies

Supplier Purchase Commitments

The Company has a manufacturing agreement with a supplier to manufacture subscriber equipment, which
contains minimum monthly purchase requirements. The Company’s purchases have exceeded the monthly
minimum requirement since inception. Pursuant to the agreement, the Company may be required to purchase
excess materials if the materials are not used in production within the periods specified in the agreement. The
supplier will then generally repurchase such materials from the Company at the same price paid by the Company,
as required for the production of the devices. As of December 31, 2009, the Company has $1.0 million of excess
materials and the amount is included in inventory on the accompanying consolidated balance sheets.

Unconditional purchase obligations are $269.0 million, which include payments under our O&M Agreement with
Boeing, the Company’s agreement with a supplier for the manufacturing of the Company’s devices and various
commitments with other vendors. Unconditional purchase obligations are scheduled for the years ended
December 31, 2010, 2011, 2012, 2013 and 2014 in the amounts of $71.0 million, $52.8 million, $52.8 million,
$52.8 million, and $39.6 million, respectively.

In-Orbit Insurance

Due to various contractual requirements, the Company is required to maintain an in-orbit insurance policy with a
de-orbiting endorsement to cover potential claims relating to operating or de-orbiting the satellite constellation.

94

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

The policy covers the Company, Boeing as operator (see Note 7), Motorola (the original system architect and
prior owner), contractors and subcontractors of the insured, the U.S. government and certain other sovereign
nations.

The current policy has a one-year term, which expires December 12, 2010. The policy coverage is separated into
Sections A and B. Liability limits for claims under each of Sections A and B are $500 million per occurrence and
$1 billion in the aggregate. The deductible for claims is $250,000 per occurrence.

Section A coverage is currently in effect and covers risks in connection with in-orbit satellites. Section B
coverage is effective once requested by the Company (the “Attachment Date”) and covers risks in connection
with a decommissioning of the satellite system. The term of the coverage under Section B is 12 months from the
Attachment Date. The premium for Section B coverage is $2.5 million and is payable on or before the
Attachment Date. As of December 31, 2009, the Company had not requested Section B coverage since no
decommissioning activities are currently anticipated.

The balance of the unamortized premium payment for Section A coverage is included in prepaid expenses and
other current assets in the accompanying consolidated balance sheets. The Company has not accrued for any
deductible amounts related to either Section A or B of the policy as of December 31, 2009, since management
believes that the likelihood of an occurrence is remote.

Operating Leases

The Company leases land, office space, and office and computer equipment under noncancelable operating lease
agreements. Most of the leases contain renewal options of 1 to 10 years. The Company’s obligations under the
current terms of these leases extend through 2020.

Additionally, several of the Company’s leases contain clauses for rent escalation including, but not limited to, a
pro-rata share of increased operating and real estate tax expenses. Rent expense is recognized pursuant to the
existing accounting guidance, on a straight-line basis over the lease term. The Company leases facilities located
in Chandler, Arizona (lease expires March 2014), Tempe, Arizona (leases expire December 2015 and March
2016), Bethesda, Maryland (lease expires April 2013), McLean, Virginia (lease expires May 2020), Canada
(leases expire January 2015 and May 2015), and Norway (lease expires January 2016).

Future minimum lease payments, by year and in the aggregate, under noncancelable operating leases at
December 31, 2009, are as follows (in thousands):

Year Ending December 31,

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter

Operating
Leases

$ 2,510
3,129
3,194
2,948
2,282
8,154

$22,217

Rent expense for the years ended December 31, 2009 and 2008, and the period from November 2, 2007
(inception) to December 31, 2007 were $1.0 million, $0.1 million, and $0.0 million, respectively.

95

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

Contingencies

From time to time, in the normal course of business, the Company is party to various pending claims and
lawsuits. Other than the Motorola action described in Note 6, the Company is not aware of any such actions that
the Company would expect to have a material adverse impact on the Company’s business, financial results or
financial condition.

11. Stock-Based Compensation

During 2009, the Company’s stockholders approved a stock incentive plan (the “2009 Stock Incentive Plan”) to
provide stock-based awards, including nonqualified stock options, incentive stock options, restricted stock and
other equity securities, as incentives and rewards for employees, consultants and non-employee directors. As of
December 31, 2009, 8,000,000 shares of common stock have been authorized for issuance as awards under the
2009 Stock Incentive Plan. The Company did not issue stock-based awards prior to the adoption of the 2009
Stock Incentive Plan.

2009 Employee Stock Option Awards

In the fourth quarter of 2009, the Company granted approximately 2.6 million stock options to its employees.
The stock option awards generally (i) have a term of ten years, (ii) vest over a four-year period with 25% vesting
after the first year of service and ratably on a quarterly basis thereafter, (iii) are contingent upon employment on
the vesting date, and (iv) have an exercise price of $8.73 per share, which is equal to the fair value of the shares
at the date of grant. The fair value of each option is estimated on the date of grant using the Black-Scholes option
pricing model. Expected volatility is based on a review of the Company’s industry peer group’s historical and
implied volatility, which the Company believes is a reasonable indicator of the expected volatility of the
Company’s stock. The expected term of the award was calculated using the simplified method for all grants in
2009 as the Company currently does not have sufficient experience of its own option exercise patterns. The
Company does not anticipate paying dividends during the expected term of the grants; therefore the dividend rate
was assumed to be zero. The risk-free interest rate assumed is based upon U.S. Treasury Bond interest rates with
similar terms at similar dates.

Assumptions used in determining the fair value of the Company’s options were as follows:

Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (years) . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividends . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended
December 31, 2009

69%
5.75 – 6.25
0%
2.56% – 2.90%

96

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

At December 31, 2009, the weighted-average grant-date fair value was $5.61 per share. A summary of the
activity of the Company’s stock options as of December 31, 2009 is as follows:

Weighted-
Average Exercise
Price Per
Share

Shares

(In thousands, except per share amounts)

Options outstanding at January 1 . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cancelled or expired . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Options outstanding at December 31 . . . . . . . . . . . . . . . . .

Options exercisable at December 31 . . . . . . . . . . . . . . . . .

Options vested at December 31 . . . . . . . . . . . . . . . . . . . . .

—
2,636
—
—

2,636

—

—

Options exercisable and expected to vest at

December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,436

$ —
8.73
—
—

8.73

—

—

8.73

The Company recognized $0.4 million of stock-based compensation expense during 2009. The aggregate
intrinsic value for options exercisable and expected to vest was $0 since the exercise price was greater than the
market price at December 31, 2009. As of December 31, 2009, the total unrecognized cost related to non-vested
options was approximately $13.3 million. This cost is expected to be recognized over a weighted average period
of 3.9 years. To the extent the Company’s actual forfeiture rate is different from its estimate of such forfeitures,
the stock-based compensation may differ in future periods.

12. Segments, Significant Customers, Supplier and Service Providers and Geographic Information

The Company operates in one business segment, providing global satellite communication services and products.

The Company derived approximately 25% of its total revenue in the year ended December 31, 2009 (following
the Acquisition) and approximately 28% of its accounts receivable balances at December 31, 2009 from agencies
of the U.S. government. The two largest commercial customers accounted for approximately 19% of the
Company’s total revenue in the year ended December 31, 2009 (following the Acquisition) and approximately
18% of the Company’s accounts receivable balance at December 31, 2009.

The Company acquires subscriber equipment primarily from one manufacturer. Should events or circumstances
prevent the manufacturer from producing the equipment, the Company’s business could be adversely affected
until the Company is able to move production to other facilities of the manufacturer or secure a replacement
manufacturer.

A significant portion of the Company’s satellite operations and maintenance services is provided by Boeing.
Should events or circumstances prevent Boeing from providing these services, the Company’s business could be
adversely affected until the Company is able to assume operations and maintenance responsibilities or secure a
replacement service provider.

97

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

Net property and equipment by geographic area, was as follows:

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Satellites in orbit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,
2009

(In thousands)
$ 67,989
316,778
1,970

$386,737

(1) All others primarily includes subscriber equipment in international

waters.

Revenue by geographic area following the Acquisition was as follows:

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other countries(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended
December 31,
2009

(In thousands)
$35,762
10,241
8,733
21,253

$75,989

(1) No one other country represented more than 10% of revenue.

Revenue is attributed to geographic area based on the billing address of the distributor. Service location and the
billing address are often not the same. The Company’s distributors sell services directly or indirectly to
end-users, who may be located or use the Company’s products and services elsewhere. The Company cannot
provide the geographical distribution of end-users because it does not contract directly with them. The Company
does not have significant foreign exchange risk on sales, as nearly all invoices are denominated in United States
dollars.

13. Fair Value Measurements

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an
the measurement date. U.S GAAP establishes a
orderly transaction in the most advantageous market at
hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in
measuring fair value.

Financial Assets and Liabilities

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash were recorded at fair value at December 31, 2009 and December 31,
2008. The inputs used in measuring the fair value of these instruments are considered to be Level 1 in accordance
with the fair value hierarchy. The fair values are based on period-end statements supplied by the various banks
and brokers that held the majority of the Company’s funds deposited in institutional money market mutual funds

98

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

and regular interest bearing and non-interest bearing depository accounts and certificates of deposits with
commercial banks.

Short-term Financial Instruments

The fair values of short-term financial instruments (primarily cash and cash equivalents, prepaid expenses and
other current assets, accounts receivable, accounts payable, accrued expenses and other current liabilities, and
accrued compensation and employee benefits) approximate their carrying values because of their short-term
nature.

14. Employee Benefit Plan

The Company sponsors a defined-contribution 401(k) retirement plan (the “Plan”) that covers all employees.
Employees are eligible to participate in the Plan on the first day of the month following the date of hire, and
participants are 100% vested from the date of eligibility. The Company matches employees’ contributions equal
to 100% of the salary deferral contributions up to 5% of the employees’ compensation. Company-matching
contributions to the Plan were $0.2 million for the year ended December 31, 2009 (following the Acquisition).
The Company pays all administrative fees related to the Plan.

15. Indemnification Agreement

Iridium Satellite, Boeing, Motorola and the U.S. government entered into an indemnification agreement,
effective December 5, 2000, that provides, among other things, that: (a) Iridium Satellite will maintain satellite
liability insurance (see Notes 7 and 10); (b) Boeing will maintain aviation and space liability insurance; and
to the
(c) Motorola will maintain aviation products – completed operations liability insurance. Pursuant
indemnification agreement, the U.S. government may, in its sole discretion, require the Company, Boeing or
either of them to immediately de-orbit the Company’s satellites at no expense to the U.S. government upon the
occurrence of certain enumerated events. However, as discussed in Note 2, Management does not believe the
U.S. government will exercise this right.

16. Related Party Transaction

The Company paid $0.1 million, $0.1 million, and $0.0 million for the years ended December 31, 2009 and 2008,
and the period from November 2, 2007 (inception) to December 31, 2007, respectively, to a stockholder for the
use of office space and administrative services. This arrangement was terminated as of September 30, 2009.

17. Income Taxes

U.S. and foreign components of (loss) income before income taxes are presented below:

For the Year
Ended
December 31,
2009

For the Year
Ended
December 31,
2008

(In thousands)

U.S. (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(45,817)
336
Foreign income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total (loss) income . . . . . . . . . . . . . . . . . . . . . . . . . . $(45,481)

$3,012
—

$3,012

99

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

The components of the Company’s income tax (benefit) provision were as follows:

For the Year
Ended
December 31,
2009

For the Year
Ended
December 31,
2008

(In thousands)

Current taxes:

Federal (benefit) provision . . . . . . . . . . . . . . . . . . . . . $ (126)
440
State provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76
Foreign provision . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current tax expense . . . . . . . . . . . . . . . . . .

390

$ 1,587
937
—

2,524

Deferred taxes:

Federal (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign (benefit)

(977)
(687)
(47)

(734)
(434)
—

Total deferred tax (benefit) . . . . . . . . . . . . . . . .

(1,711)

(1,168)

Total income tax (benefit) provision . . . . . . . . . . . . . . . . . $(1,321)

$ 1,356

There was no tax benefit or provision for the period from November 2, 2007 (inception) to December 31, 2007.

The actual provision for income taxes differed from the statutory U.S. federal income tax rate as follow:

For the Year
Ended
December 31,
2009

For the Year
Ended
December 31,
2008

(In thousands)

U.S. federal tax at statutory rate . . . . . . . . . . . . . . . . . . . . $(15,918)
12,991
Warrant exchange and other permanent items . . . . . . . . . .
432
Prior year true-ups and other . . . . . . . . . . . . . . . . . . . . . . .
1,335
Branch profits tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(161)
State taxes, net of federal benefit . . . . . . . . . . . . . . . . . . . .

Total income tax (benefit) provision . . . . . . . . . . . . . $ (1,321)

$1,024
—
—
—
332

$1,356

100

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

The components of deferred tax assets and liabilities at December 31, 2009 and 2008 were as follows:

December 31,
2009

December 31,
2008

(In thousands)

$

2,697

$ —

Deferred tax assets — current:

Accruals and reserves . . . . . . . . . . . . . . . . . . . .
Federal and State net operating losses and R&D
and AMT credits . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other

1,359
1,253

Total gross deferred tax assets —

current

. . . . . . . . . . . . . . . . . . . . . . . . . .

5,309

Deferred tax assets — non-current:

Transaction costs . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . .
Accruals and reserves . . . . . . . . . . . . . . . . . . . .
Foreign net operating losses . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

Total gross deferred tax assets —

3,056
5,384
7,476
127
2,003

—
—

—

1,168
—
—
—
—

non-current . . . . . . . . . . . . . . . . . . . . . . .

18,046

1,168

Deferred tax liabilities — current:

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other

(1,642)
(1,067)

Total gross deferred tax liabilities —

current

. . . . . . . . . . . . . . . . . . . . . . . . . .

(2,709)

Deferred tax liabilities — non-current:

Fixed assets and intangibles . . . . . . . . . . . . . . . .
Accruals and reserves . . . . . . . . . . . . . . . . . . . .

(109,826)
(3,219)

Total gross deferred tax liabilities —

non-current . . . . . . . . . . . . . . . . . . . . . . .

(113,045)

—
—

—

—
—

—

Net deferred tax (liabilities) assets . . . . . . . . . . . . . . .

$ (92,399)

$1,168

The Company accounted for its business combination with Iridium Holdings by recording all assets acquired and
the Company recognized
liabilities assumed at
deferred assets and liabilities for the tax effects of differences between assigned book values and tax bases of the
assets acquired and liabilities assumed. As a result of the transaction, a net deferred tax liability of approximately
$95.2 million was established.

their respective Acquisition-date fair values. Accordingly,

As of December 31, 2009, the Company had cumulative U.S., state and foreign net operating loss carryforwards
for income tax reporting purposes of approximately $3.5 million, $2.6 million and $6.0 million, respectively. The
use of the cumulative net operating loss carryforward may be restricted due to changes in the Company’s
ownership. The net operating loss carryforwards expire at various dates through 2029. As of December 31, 2009,
the Company has research and development tax credits of approximately $0.5 million that expire at various dates
through 2029. The Company also has $0.6 million of Alternative Minimum Tax (“AMT”) credits.

101

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

income taxes on all undistributed earnings of its material foreign
The Company has provided for U.S.
subsidiaries since the Company does not permanently reinvest
the undistributed earnings. The Company
recognizes deferred tax assets and liabilities for future tax consequences attributable to the differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax basis, operating
losses and tax credit carryforwards. The Company measures deferred tax assets and liabilities using tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The Company recognizes the effect on deferred tax assets and liabilities of a change in tax
rates in income in the period that includes the enactment date.

The Company also recognizes valuation allowances to reduce deferred tax assets to the amount that is more
likely than not to be realized. In assessing the likelihood of realization, management considers: (i) future
reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary
differences and carryforwards; (iii) taxable income in prior carryback year(s) if carryback is permitted under
applicable tax law; and (iv) tax planning strategies.

Uncertain Income Tax Positions

The Company is subject to income taxes in the U.S., various states and numerous foreign jurisdictions. Significant
judgment is required in evaluating its tax positions and determining its provision for income taxes. The Company
establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional
taxes will be due. These reserves are established when the Company believes that certain positions might be
challenged despite its belief that its tax return positions are fully supportable. The Company adjusts these reserves in
light of changing facts and circumstances, such as the outcome of a tax audit. The provision for income taxes
includes the impact of reserve provisions and changes to reserves that are considered appropriate.

The amount of uncertain tax positions that would affect the effective tax rate if recognized at December 31, 2009
was $0.2 million.

It is anticipated that the amount of unrecognized tax benefit reflected at December 31, 2009 will not materially
change in the next 12 months; any changes are not anticipated to have significant impact on the results of
operations, financial position or cash flows of the Company.

The Company is subject to tax audits in all jurisdictions for which it files tax returns. Tax audits by their very
nature are often complex and can require several years to complete. Neither the Company nor any of its
subsidiaries are currently under audit by the Internal Revenue Service or by any state or foreign jurisdictions. The
Company’s corporate U.S. tax returns for 2007 and 2008 remain subject to examination by tax authorities.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:

Beginning balance of unrecognized tax benefits . . . . . . . .
Increases based on tax positions related to current

year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increases based on liabilities assumed in the

Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ending balance of unrecognized tax benefits . . . . . . . . . .

102

For the Year
Ended
December 31,
2009

(In thousands)
$—

18

125

$143

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

There were no unrecognized tax benefits prior to the Acquisition.

The Company has elected an accounting policy to classify accrued interest and penalties related to unrecognized
tax benefits as a component of income tax benefit. As of December 31, 2009, any potential interest and penalties
on unrecognized tax benefits were not significant.

18. (Loss) Earnings Per Share

The computations of basic and diluted (loss) earnings per share are set forth below:

For the Year
Ended
December 31,
2009

For the Year
Ended
December 31,
2008

For the Period
from
November 2,
2007
(Inception) to
December 31,
2007

Numerator for basic and diluted (loss)

earnings per share — net (loss) income . . . .

$(44,160)

$ 1,656

$

(4)

(In thousands, except per share amounts)

Denominator for basic and diluted (loss)

earnings per share — weighted average
shares outstanding . . . . . . . . . . . . . . . . . . . .

(Loss) earnings per share — basic and

53,964

43,268

11,500

diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

(0.82)

$

0.04

$ (0.00)

As of December 31, 2009, the Company had approximately 28.0 million warrants and 2.6 million stock options
outstanding; because there was a loss for the year ended December 31, 2009, these warrants and options were
considered to be anti-dilutive in those periods and therefore were excluded from the weighted average diluted
shares outstanding calculation. Warrants issued by the Company in the initial public offering and private
placement in 2008 and 2007, respectively, were contingently exercisable at the later of one year from the date of
the applicable offering and the consummation of a business combination, provided, in each case, there is an
effective registration statement covering the shares issuable upon exercise of the warrants. Therefore,
56.5 million and 11.5 million shares of common stock underlying the warrants were excluded from the basic and
diluted earnings per share calculation for the year ended December 31, 2008 and for the period from
November 2, 2007 (inception) to December 31, 2007, respectively.

103

Iridium Communications Inc.

Notes to Consolidated Financial Statements—(Continued)
December 31, 2009

19. Selected Quarterly Information (Unaudited)

The following represents the Company’s unaudited quarterly results for the years ended December 31, 2009 and
2008.

For the Quarter Ended

March 31,
2009

June 30,
2009

September 30,
2009

December 31,
2009

(In thousands, except per share amounts)

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ —

$ —

$ —

$75,989

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(464)

$ (328)

$ (6,093)

$ (5,427)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . .

$ 34

$ (17)

$(39,428)

$ (4,749)

Earnings (loss) per common share — basic and

diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$0.00

$(0.00)

$

(0.81)

$ (0.07)

For the Quarter Ended

March 31,
2008

June 30,
2008

September 30,
2008

December 31,
2008

(In thousands, except per share amounts)

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ —

$ —

$ —

$ —

Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(112)

$ (82)

$

(106)

$ (2,292)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . .

$ 545

$ 907

$ 1,097

$ (893)

Earnings (loss) per common share — basic and

diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$0.02

$ 0.02

$

0.02

$ (0.02)

The quarter ended September 30, 2009 includes a $34.1 million change in the fair value of warrants due to the
Company’s determination that the exchange agreements entered into with the holders of 26.8 million warrants
were derivative instruments. The quarter ended December 31, 2009 reflects the results of post-Acquisition
activities. The sum of the per share amounts does not equal the annual amounts due to changes in the weighted
average number of common shares outstanding during the year.

20. Subsequent Events

The Company has evaluated subsequent events through the date as of which its financial statements are being
issued. On February 9, 2010, Motorola filed a complaint against the Company. Refer to Note 6 for more
information.

104

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Iridium Communications Inc.

We have audited the accompanying consolidated balance sheets of Iridium Holdings LLC (predecessor of
Iridium Communications Inc.) as of December 31, 2008 and 2007, and the related consolidated statements of
income, changes in members’ deficit and comprehensive income, and cash flows for the years then ended, and
for the period from January 1, 2009 to September 29, 2009. These financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. We were not engaged to perform an audit of
the Company’s internal control over financial reporting. Our audits included consideration of internal control
over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Iridium Holdings LLC at December 31, 2008 and 2007, and the consolidated results of its
operations and its cash flows for the years then ended and for the period from January 1, 2009 to September 29,
2009, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

McLean, Virginia
March 16, 2010

105

Iridium Holdings LLC – Predecessor Company

Consolidated Balance Sheets
(In thousands, except unit data)

December 31,
2008

December 31,
2007

Assets
Current assets:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 24,810
120
41,031
29,847
—
5,547

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101,355

Property and equipment, net of accumulated depreciation . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred financing costs and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

63,090
15,400
10,724

$ 22,105
3,020
35,114
14,156
3,408
2,539

80,342

59,959
15,400
11,880

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$190,569

$167,581

Liabilities and members’ deficit
Current liabilities:

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued compensation and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit facility, current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued satellite operations and maintenance expense, net of current portion . . . . . . .
Motorola payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Convertible subordinated note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

6,650
23,973
10,586
30,379
25,366

96,954

9,898
10,849
106,541
22,900
5,657

252,799

$

2,361
19,415
8,843
12,933
24,152

67,704

12,372
9,761
151,542
—
4,649

246,028

Commitments and contingencies

Members’ deficit:

Members’ units:

Class A Units (1,083,872 units issued and outstanding) . . . . . . . . . . . . . . . .
Class B Units (518,012 and 455,209 units issued and outstanding,

respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total members’ deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

—
4,429
(63,497)
(3,162)

(62,230)

—
761
(75,576)
(3,632)

(78,447)

Total liabilities and members’ deficit

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$190,569

$167,581

See accompanying notes to consolidated financial statements

106

Iridium Holdings LLC – Predecessor Company

Consolidated Statements of Income
(In thousands, except per unit data)

For the
Period from
January 1,2009 to
September 29, 2009

Year Ended
December 31, 2008

Year Ended
December 31, 2007

Revenue:

Services:

Government
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subscriber equipment . . . . . . . . . . . . . . . . . . . . . . . .

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 56,039
120,706
66,206

242,951

Operating expenses:

Cost of subscriber equipment sales . . . . . . . . . . . . . .
Cost of services (exclusive of depreciation and

amortization) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . .
Transaction costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,265

58,978
44,505
17,432
10,850
12,478

Total operating expenses . . . . . . . . . . . . . . . . .

177,508

Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65,443

Other (expense) income:

Interest expense, net of capitalized interest of $324,
$1,303 and $775 for the period January 1, 2009
to September 29, 2009 and the year ended
December 31, 2008 and 2007, respectively . . . . .

Interest income and other income (expense), net . . .

(12,829)

670

Total other (expense) income . . . . . . . . . . . . . .

(12,159)

$ 67,759
133,247
119,938

320,944

67,570

69,882
55,105
32,774
12,535
7,959

245,825

75,119

$ 57,850
101,172
101,879

260,901

62,439

63,614
46,350
13,944
11,380
—

197,727

63,174

(21,094)

(146)

(21,240)

(21,771)

2,370

(19,401)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 53,284

$ 53,879

$ 43,773

Net income attributable to Class A Units . . . . . . . . . . . . .
Weighted average Class A Units outstanding — basic . .
Weighted average Class A Units outstanding —

diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings per unit — basic . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings per unit — diluted . . . . . . . . . . . . . . . . . . . . . . .

$ 36,143
1,084

1,168
$ 33.34
31.75
$

$ 36,456
1,084

1,098
33.63
33.40

$
$

$ 30,826
1,084

1,084
28.44
28.44

$
$

See accompanying notes to consolidated financial statements

107

Iridium Holdings LLC – Predecessor Company

Consolidated Statements of Changes in Members’ Deficit and Comprehensive Income
(In thousands except unit data)

Class A Units

Class B Units

Number
of
Units

Number
of

Amount

Units Amount

Additional
Paid-In
Capital

Accumulated
Other
Comprehensive
Loss

Accumulated
Deficit

Total
Member’s
Deficit

Comprehensive
Income

Balance at December 31, 2006 . . . . 1,083,872
—
—
—
—
—

Equity-based compensation . .
Class B Units issued . . . . . . . .
Class B Units forfeited . . . . . .
Anti-dilution adjustment . . . . .
Net income . . . . . . . . . . . . . . .
Other comprehensive

$— 435,703
—

$—
—
15,390 —
(1,539) —
5,655 —
—

—

—
—
—
—
—

loss — swap . . . . . . . . . . . .

—

—

—

—

Balance at December 31, 2007 . . . . 1,083,872 — 455,209 —

Total for the year ended

December 31, 2007 . . . . . . . . . .

$ 535
226
—
—
—
—

—

761

$(2,375)
—
—
—
—
—

(1,257)

(3,632)

$(119,349) $(121,189)
226
—
—
—
43,773

—
—
—
—
43,773

$43,773

—

(1,257)

(1,257)

(75,576)

(78,447)

Equity-based compensation . .
Exchange of profits interests

for B Units . . . . . . . . . . . . .

Class A and B Units

distributions . . . . . . . . . . . .
Anti-dilution adjustment . . . . .
Net income . . . . . . . . . . . . . . .
Other comprehensive

income — swap . . . . . . . . .

—

—

—
—
—

—

—

—

—
—
—

—

—

—

1,964

59,382 —

1,704

—

—
3,421 —
—

—

—

—

—
—
—

—

$42,516

—

—

1,964

1,704

(41,800)
—
53,879

(41,800)
—
53,879

$53,879

—

—

—
—
—

470

—

470

470

Balance at December 31, 2008 . . . . 1,083,872

$— 518,012

$—

$4,429

$(3,162)

$ (63,497) $ (62,230)

Total for the year ended

December 31, 2008 . . . . . . . . . .

Resignation of board

member . . . . . . . . . . . . . . . .
Equity-based compensation . .
Net income . . . . . . . . . . . . . . .
Cumulative translation

adjustment

. . . . . . . . . . . . .

Other comprehensive

income — swap . . . . . . . . .

Balance at September 29, 2009

$54,349

—
—
—

—

—

—
—
—

—

—

(3,958) —
—
—

—
—

—

—

—

—

—
2,616
—

—

—

—
—
—

104

2,028

—
—
53,284

—
2,616
53,284

$53,284

—

—

104

104

2,028

2,028

(date of acquisition) . . . . . . . . . . 1,083,872

$— 514,054

$—

$7,045

$(1,030)

$ (10,213) $

(4,198)

Total for the period-ended
September 29, 2009
(date of acquisition) . . . . . . . . . .

$55,416

See accompanying notes to consolidated financial statements

108

Iridium Holdings LLC – Predecessor Company

Consolidated Statements of Cash Flows
(In thousands)

Operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to cash provided by

operating activities:

Depreciation and amortization . . . . . . . . . . . . . . . . . . .
Other non-cash amortization and accretion . . . . . . . . .
Equity and profits interest compensation . . . . . . . . . . .
Change in certain operating assets and liabilities:

Accounts receivable, net . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . .
Deferred cost of sales . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent assets . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . .
Accrued compensation and employee benefits . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued satellite operations and maintenance

expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash provided by operating activities . . . . . . . . . . . . . . .

Investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net cash used in investing activities . . . . . . . . . . . . . . . . . . .

Financing activities:
Payments under credit facilities . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of Convertible Subordinated

Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of deferred financing fees . . . . . . . . . . . . . . . . . . .
Transfers from restricted cash for letters of credit . . . . . . . .
Distributions to Class A and B members . . . . . . . . . . . . . . .

For the Period from
January 1, 2009 to
September 29, 2009

For the
Year Ended
December 31, 2008

For the
Year Ended
December 31, 2007

$ 53,284

$ 53,879

$ 43,773

10,850
2,537
5,406

(5,539)
8,919
2,158
—
935
(2,368)
(7,134)
(2,908)
(54)

(1,856)

64,230

(7,698)

(7,698)

12,535
5,425
2,867

(6,193)
(15,691)
(3,008)
3,408
(3,206)
4,289
5,849
2,544
1,214

(2,474)

61,438

(13,913)

(13,913)

11,380
2,862
2,901

(9,943)
(3,852)
(692)
11,836
(5,790)
(2,631)
(3,439)
2,886
(10,256)

(2,475)

36,560

(19,787)

(19,787)

(23,327)

(27,554)

(26,526)

—
—
—
—

22,900
(1,688)
2,900
(41,378)

(44,820)

2,705
22,105

—
—
—
—

(26,526)

(9,753)
31,858

Net cash used in financing activities . . . . . . . . . . . . . . . . . . .

(23,327)

Net increase in cash and cash equivalents . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . . . . .

33,205
24,810

Cash and cash equivalents, end of period . . . . . . . . . . . . . . .

$ 58,015

$ 24,810

$ 22,105

Supplementary cash flow information:
Cash paid for interest

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 10,704

$ 16,991

$ 20,643

Supplementary disclosure of non-cash investing

activities:

Leasehold incentives in the form of leasehold

improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ —

$ 1,171

$

357

Property and equipment received but not paid for at

period end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2,403

$

581

$ —

See accompanying notes to consolidated financial statements

109

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements
September 29, 2009

1. Organization and Business

Organization

Iridium Holdings LLC (“Iridium Holdings” and, together with its direct and indirect subsidiaries, “Iridium”) was
formed under the laws of Delaware in 2000 and was organized as a limited liability company pursuant to the
Delaware Limited Liability Company Act. On December 11, 2000, Iridium Satellite LLC, a wholly owned
subsidiary of
Iridium Holdings, acquired certain satellite communication assets from Iridium LLC, a
non-affiliated debtor in possession, pursuant to an asset purchase agreement.

Business

Iridium is a provider of mobile voice and data communications services via satellite. Iridium holds various
licenses and authorizations from the Federal Communications Commission (the “FCC”) and from international
regulatory bodies that permit Iridium to conduct its business, including the operation of its satellite constellation.
Iridium offers voice and data communications services and products to businesses, U.S. and international
government agencies and other customers on a global basis.

On September 22, 2008, Iridium Holdings and its members entered into a transaction agreement, as amended on
April 28, 2009 (the “Transaction Agreement”), with GHL Acquisition Corp., a special purpose acquisition
company (“GHQ”), whereby GHQ agreed to purchase, directly or indirectly, all of the outstanding equity of
Iridium Holdings (the “Acquisition”). Following the closing of the Acquisition on September 29, 2009, GHQ
changed its name to Iridium Communications Inc. Total consideration included approximately 29.4 million
shares of GHQ’s common stock and $102.6 million in cash (which included a requirement to make a payment of
$25.5 million in cash to some of the former members of Iridium Holdings for tax benefits Iridium
Communications Inc. received, payable on December 29, 2009). Iridium is considered a predecessor entity to
Iridium Communications Inc.

2. Significant Accounting Policies and Basis of Presentation

Principles of Consolidation and Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States (“U.S. GAAP”). The accompanying consolidated financial statements include the
accounts of Iridium and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and
balances have been eliminated.

Reclassifications

Approximately $1.0 million of selling, general and administrative expense for the six months ended June 30,
2009 has been reclassified to cost of services (exclusive of depreciation and amortization).

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires Iridium to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ materially from those estimates.

110

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

Financial Instruments

The consolidated balance sheets include various financial instruments (primarily cash and cash equivalents,
convertible subordinated debt, restricted cash, accounts receivable, accounts payable, accrued expenses and other
liabilities, long-term debt, derivative instruments, and other obligations). Additional information regarding fair
value is disclosed in Note 13.

Concentrations of Credit Risk

Financial instruments that potentially subject Iridium to concentrations of credit risk consist primarily of cash
and cash equivalents and receivables. The majority of this cash is swept nightly into a money market fund with a
diversified portfolio. Iridium performs credit evaluations of its customers’ financial condition and records
reserves to provide for estimated credit losses. Accounts receivable are due from both domestic and international
customers (see Note 12). Iridium maintained its cash and cash equivalents with financial institutions with high
credit ratings, although at times Iridium maintained deposits in federally insured financial institutions in excess
of federally insured (FDIC) limits.

Cash and Cash Equivalents

Iridium considers all highly liquid investments with original maturities of three months or less to be cash
equivalents. The cash and cash equivalents balances at December 31, 2008 and 2007 consisted of cash deposited
in institutional money market mutual funds and regular interest bearing and non-interest bearing depository
accounts and certificates of deposits with commercial banks.

Accounts Receivable

Trade accounts receivable are generally recorded at the invoiced amount and are subject to late fee penalties.
Accounts receivable are stated net of allowances for doubtful accounts. Iridium had no allowance for doubtful
accounts at December 31, 2008 or 2007. Iridium develops its estimate of this allowance based on Iridium’s
experience with specific customers, aging of outstanding invoices, its understanding of their current economic
circumstances and its own judgment as to the likelihood that it will ultimately receive payment. Iridium writes
off its accounts receivable when balances are deemed uncollectible.

Foreign Currencies

The functional currency of Iridium’s foreign consolidated subsidiaries is its local currency. Assets and liabilities
of its foreign subsidiaries are translated to United States dollars based on exchange rates at the end of the
reporting period. Income and expense items are translated at the weighted average exchange rates prevailing
during the reporting period. Translation adjustments are accumulated in a separate component of members’
equity. Transaction gains or losses are classified as “Interest income and other income (expense), net” in the
statements of income.

Inventory

Inventory consists primarily of finished goods including Iridium OpenPort
terminals, handsets, L-Band
transceivers, data devices, related accessories, and replacement parts to be sold to customers to access Iridium
services. Iridium also has raw materials from third-party manufacturers (see Note 9). Iridium outsources
manufacturing of subscriber equipment primarily to a third-party manufacturer and purchases accessories from

111

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

third-party suppliers. Iridium’s cost of inventory includes an allocation of overhead (including salaries and
benefits of employees directly involved in bringing inventory to its existing condition, scrap, tooling and freight).
Inventories are valued using the average cost method, and are carried at the lower of cost or market.

Accounting for Equity-Based Compensation

Iridium accounts for equity-based compensation at fair value; accordingly Iridium expenses the estimated fair
value of share-based awards made in exchange for employee services over the requisite employee service period.
Share-based compensation cost is determined at the grant date using the Black-Scholes option pricing model. The
value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the
employee’s requisite service period and is classified in the statement of income in a manner consistent with the
statement of income’s classification of the employee’s salaries. No grants of equity based compensation occurred
in 2009.

The expected volatility assumption used in the option pricing model was based on a review of the expected
volatility of publicly traded entities similar to Iridium, which Iridium believes is a reasonable indicator of the
expected volatility. The risk-free interest rate assumption is based upon U.S. Treasury Bond interest rates with
terms similar to the expected term of the award. The dividend yield assumption is based on Iridium’s history of
not declaring and paying dividends. The expected term is based on Iridium’s best estimate for the period of time
for which the instrument is expected to be outstanding.

Since Iridium was a nonpublic entity, Iridium can make a policy decision regarding whether to measure all of the
liabilities incurred under share-based payment arrangements at fair value or to measure all such liabilities at
intrinsic value. Iridium’s policy is to measure all share-based payment liabilities using the intrinsic value method.
This intrinsic value is then amortized on a straight-line basis over the requisite service periods of the awards,
which are generally the vesting periods.

As a result of the Acquisition, certain employee share-based awards and certain other employee benefits were
automatically accelerated in vesting. The acceleration resulted in an additional $3.8 million expense in the
consolidated statement of income for the period January 1, 2009 to September 29, 2009 (the “2009 Period”). As
of September 29, 2009, the closing date of the Acquisition, there were no equity based awards outstanding.

Property and Equipment

Property and equipment
less accumulated depreciation. Leasehold improvements are
depreciated over the shorter of their useful life or their remaining lease term. Depreciation is calculated using the
straight-line method over the following estimated useful lives:

is carried at cost

Satellite system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Terrestrial system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gateway system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internally developed software and purchased software . . 3 – 7 years
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . Shorter of estimated useful life or

14 years
7 years
3 – 5 years
5 years

39 years

remaining lease term

112

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

Iridium capitalizes interest costs associated with the construction of capital assets and amortizes the cost over the
assets’ useful lives beginning when the assets are placed in service. Repairs and maintenance costs are expensed
as incurred.

Long-Lived Assets

Iridium assesses the impairment of long-lived assets when indicators of impairment are present. Recoverability
of assets is measured by comparing the carrying amounts of the assets to the future undiscounted cash flows
expected to be generated by the assets. Any impairment loss would be measured as the excess of the assets’
carrying amount over their fair value. Fair value is based on market prices where available, an estimate of market
value or various valuation techniques.

The carrying value of a satellite lost as a result of an in-orbit failure would be charged to operations upon the
occurrence of the loss. Iridium recorded $0.1 million of impairment charges in both the 2009 Period and the year
ended December 31, 2008 for lost use on satellites. No impairment losses were recorded in 2007.

Convertible Subordinated Note

In October 2008, Iridium issued to Greenhill & Co. Europe Holdings Limited (the “Holder”), a $22.9 million 5%
convertible subordinated note due October 2015 (the “Note”). Iridium has determined that the embedded
derivatives contained in the Note (including the conversion option, the Holder’s put options and Iridium’s call
option) do not require separate accounting, and therefore Iridium accounted for the Note as a conventional
convertible debt instrument. There are no beneficial conversion features associated with the Note. Interest on the
Note began accruing in April 2009 at 5% per year. Iridium recorded periodic interest cost using the effective
interest rate method.

Deferred Financing Costs

Costs incurred in connection with securing debt financing have been deferred and are amortized as additional
interest expense using the effective interest method over the term of the related debt.

Comprehensive Income

Comprehensive income is as follows:

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) to fair value of interest rate

swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative translation adjustments . . . . . . . . . . .

For the
2009 Period

$53,284

For the Year
Ended
December 31,
2008

(In thousands)
$53,879

2,028
104

470
—

For the Year
Ended
December 31,
2007

$43,773

(1,257)
—

Comprehensive income . . . . . . . . . . . . . . . . . . . .

$55,416

$54,349

$42,516

113

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

Asset Retirement Obligations

Liabilities arising from legal obligations associated with the retirement of long-lived assets are required to be
measured at fair value and recorded as a liability. Upon initial recognition of a liability for retirement obligations,
a company must record an asset, which is depreciated over the life of the asset to be retired.

Under certain circumstances, each of the U.S. government, The Boeing Company (“Boeing”) and Motorola, Inc.
(“Motorola”) has the unilateral right to require the de-orbit of Iridium’s satellite constellation. In the event
Iridium was required to effect a mass de-orbit, Iridium, pursuant to the amended and restated operations and
maintenance agreement with Boeing (the “O&M Agreement”), would be required to pay Boeing $16.0 million,
plus an amount equivalent to the premium for inception of Section B de-orbit insurance coverage ($2.5 million as
of December 31, 2008). Iridium has concluded that each of the foregoing de-orbit rights meets the definition of a
legal obligation and currently does not believe the U.S. government, Boeing or Motorola will exercise their
respective de-orbit rights. As a result, Iridium believes the likelihood of any future cash outflows associated with
the mass de-orbit obligation is remote. Accordingly, Iridium has not recorded an asset retirement obligation
relating to the potential de-orbit rights in its consolidated balance sheet.

There are other circumstances in which Iridium could be required, either by the U.S. government or for technical
reasons, to de-orbit an individual satellite; however, Iridium believes that such costs would not be significant
relative to the costs associated with the ordinary operations of the satellite constellation.

Revenue Recognition

Iridium derives its revenue primarily as a wholesaler of satellite communications products and services. The
primary types of revenue include (i) services revenue (access and usage-based airtime fees) and (ii) subscriber
equipment revenue. Additionally, Iridium generates revenue by providing engineering and support services to
commercial and government customers.

Wholesaler of satellite communications products and services

Pursuant to wholesale agreements, Iridium sells its products and services to service providers who, in turn, sell
the products and services to other distributors or directly to the end-users. Generally, Iridium recognizes revenue
when services are performed or delivery has occurred, evidence of an arrangement exists, the fee is fixed or
determinable, and collection is probable, as follows:

Contracts with multiple elements

At times, Iridium sells subscriber equipment through multi-element contracts that bundle subscriber equipment
with airtime services. When it sells subscriber equipment and airtime services in bundled arrangements that
include guaranteed minimum orders and determines that it has separate units of accounting, Iridium allocates
the bundled contract price among the various contract deliverables based on each deliverable’s relative fair
value. Iridium determines vendor specific objective evidence of fair value by assessing sales prices of
subscriber equipment and airtime services when they are sold to customers on a stand-alone basis.

Services revenue sold on a stand-alone basis

Services revenue is generated from Iridium’s service providers through usage of its satellite system and
through fixed monthly access fees per user charged to service providers. Revenue for usage is recognized

114

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

when usage occurs. Revenue for fixed-per-user access fees is recognized ratably over the period in which
the services are provided to the end-user. Revenue from prepaid services is recognized when usage occurs
or, if not used, when the customer’s right to access the unused prepaid services expires. Iridium does not
offer refund privileges for unused prepaid services. Deferred prepaid services revenue and access fees are
typically earned and recognized as income within one year of customer prepayment. Based on historical
information for prepaid scratch card services that do not have an initial expiration date, Iridium records
breakage associated with prepaid scratch card account balances for which the likelihood of redemption is
remote, which is generally determined after 36 months from issuance.

Subscriber equipment sold on a stand-alone basis

Iridium recognizes subscriber equipment sales and the related costs when title to the equipment (and the
risks and rewards of ownership) passes to the customer, typically upon shipment.

Services and subscriber equipment sold to the U.S. government

Iridium provides airtime to U.S. government subscribers through (i) fixed monthly fees on a per user basis for
unlimited voice services, (ii) fixed monthly fees per user for unlimited paging services and (iii) a tiered pricing
plan (based on usage) per device for data services. Revenue related to these services is recognized ratably over
the periods in which the services are provided; and costs are expensed as incurred. The U.S. government
purchases its equipment from third-party service providers and not directly from Iridium.

Government engineering and support services

Iridium provides maintenance services to the U.S. government’s dedicated gateway in Hawaii. This revenue is
recognized ratably over the periods in which the services are provided; costs are expensed as incurred.

Other government and commercial engineering and support services

Iridium also provides certain engineering services to assist customers in developing new technologies for use on
the Iridium satellite system. The revenue associated with these services is recorded when the services are
rendered, typically on a percentage of completion method of accounting based on Iridium’s estimate of total
costs expected to complete the contract; and costs are expensed as incurred. Revenue on cost-plus-fixed-fee
contracts is recognized to the extent of estimated costs incurred plus the applicable fees earned. Iridium considers
fixed fees under cost-plus-fixed-fee contracts to be earned in proportion to the allowable costs incurred in
performance of the contract.

Warranty Expense

Iridium generally provides its customers a warranty on subscriber equipment for one to two years from the date
of activation, depending on the product. A warranty accrual is made when it is estimable and probable that a loss
has been incurred. A warranty reserve is maintained based on historical experience of warranty costs and
expected occurrences of warranty claims on equipment. Costs associated with warranties are recorded as cost of
subscriber equipment sales and include equipment replacements, repairs and program administration.

115

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

The following is a summary of the activity in the warranty reserve account:

For the
2009 Period

Balance at beginning of period . . . . . . . . . . . . . .
Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (381)
(1,256)
976

For the Year
Ended
December 31,
2008

(In thousands)
$(483)
(318)
420

Balance at end of period . . . . . . . . . . . . . . . . . . .

$ (661)

$(381)

For the Year
Ended
December 31,
2007

$(218)
(610)
345

$(483)

Research and Development

Research and development costs are charged as an expense in the period in which they are incurred.

Advertising Costs

Costs associated with advertising and promotions are expensed as incurred. Advertising expenses, primarily
consisting of print media, were $0.3 million, $0.5 million and $0.4 million in the 2009 Period and the years
ended December 31, 2008 and 2007, respectively.

Income and Other Taxes

As a limited liability company that is treated as a partnership for federal income tax purposes, Iridium Holdings
is generally not subject to federal or state income tax directly. Rather, each member is subject to income taxation
based on the member’s portion of Iridium Holdings’ income or loss, as defined in Iridium Holdings’ amended
and restated limited liability company agreement (the “LLC Agreement”). Iridium Holdings is subject to income
taxes in certain non-U.S. jurisdictions in which its foreign affiliates operate.

Accounting Developments

In February 2007, the Financial Accounting Standards Board (“FASB”) issued accounting guidance that permits
entities to choose to measure many financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. Unrealized gains and losses on items for which the fair value
option has been elected are reported in earnings. This accounting guidance does not affect any existing
accounting literature that requires certain assets and liabilities to be carried at fair value. Iridium has chosen not
to adopt the alternative provided in this statement.

In April 2009, the FASB issued accounting guidance for other-than-temporary impairment guidance for debt
securities to make the guidance more operational and to improve the presentation and disclosure of other-than-
temporary impairments on debt and equity securities. The accounting guidance is effective for interim and annual
periods ending after June 15, 2009. Iridium adopted the accounting guidance in the second quarter of 2009 and
the adoption did not have a material impact on its financial position or results of operations.

In May 2009, the FASB issued accounting guidance for subsequent events, which establishes general standards of
accounting for and disclosure of events that occur after the balance sheet date but before financial statements are
issued or are available to be issued. The accounting guidance applies prospectively to both interim and annual

116

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

financial periods ending after June 15, 2009. Iridium adopted the accounting guidance for subsequent events in the
second quarter of 2009 and the adoption did not have a material impact on the reporting of its subsequent events.

3. Transition Services, Products and Asset Agreement

General

On December 11, 2000, Iridium Holdings and Iridium Satellite LLC (“Iridium Satellite”), a wholly owned
subsidiary of Iridium Holdings, entered into a Transition Services, Products and Asset Agreement (“TSA”) with
Motorola. Certain obligations under the TSA have been fully performed, including Motorola’s provision of
services and transfers of assets, but other obligations are on-going, as described below.

The TSA requires that Iridium use Boeing to provide continuing steady-state operations and maintenance
services with respect to the Satellite Network Operations Center, Telemetry, Tracking and Control stations and
the on-orbit satellites (collectively, the “Iridium System”) (see Note 4). These services include, under certain
circumstances, the removal of satellites in the constellation from operational or storage orbits and preparation for
re-entry into the earth’s atmosphere. In addition, Iridium must (i) obtain and pay the premium for an in-orbit
insurance policy on behalf of Boeing and certain other beneficiaries, (ii) pay the premiums for an aviation
products liability insurance policy obtained by Motorola, and (iii) maintain on deposit with Motorola an amount
that at all times equals 150% of the current year’s annual premium. The deposit of $0.8 million as of
December 31, 2008 is classified within deferred financing costs and other assets in the accompanying
consolidated balance sheets. In addition, pursuant to the TSA and the O&M Agreement, Motorola has the right to
cause the de-orbit of the constellation upon the occurrence of certain enumerated events.

Pursuant to the TSA, Class B Units were issued to Motorola in consideration of Motorola’s transfer of certain
licenses and equipment. These units have certain limited anti-dilution provisions (as described in the TSA).

Motorola Payables

The TSA also provides for the payment to Motorola of up to $8.5 million plus accrued interest on certain
principal upon the occurrence of a “triggering event.” A triggering event is defined as the occurrence of a change
of control (as defined in the TSA), the consummation of an initial public offering by Iridium Holdings or Iridium
Satellite, a sale of all or a material portion of the assets of Iridium Holdings or Iridium Satellite, or upon reaching
the date of December 11, 2010. This amount consists of three components: (i) a $6.0 million commitment fee,
(ii) $1.25 million of deferred equipment financing and (iii) a $1.25 million product manufacturing fee (plus, in
the case of clauses (ii) and (iii), accrued interest from the effective date of the TSA to the date of payment at an
annual interest rate of prime plus 3%).

Iridium discounted the $6.0 million commitment fee at an imputed rate of 12.5% over 10 years, resulting in an
original issue discount of $4.2 million. The net liability is included in the Motorola payable in the accompanying
consolidated balance sheets as of December 31, 2008 and 2007, respectively. The $1.25 million deferred
equipment financing and accrued interest described above is also included in the Motorola payable at
December 31, 2008 and 2007. Iridium does not believe it is obligated to pay to the product manufacturing fee
noted above. See Note 19 for more information on the Motorola payables.

4. Boeing Operations and Maintenance Agreement

On December 11, 2000, Iridium Constellation LLC (“Iridium Constellation”), a wholly owned subsidiary of
Iridium Holdings, entered into an operations and maintenance agreement with Boeing, pursuant to which Boeing

117

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

agreed to provide transition services and continuing steady-state operations and maintenance services with
to the Iridium System (including engineering, systems analysis, and operations and maintenance
respect
there have been a number of
services). Since Iridium Constellation initially entered into the agreement,
the period of
including the O&M Agreement. As a result of these various amendments,
amendments,
performance has been extended to be concurrent with the useful life of the satellite constellation, the schedule of
monthly payments has been revised and a cost escalation according to a prescribed formula is now included. In
addition, pursuant to the O&M Agreement, Boeing has the unilateral right to commence the de-orbit of the
constellation upon the occurrence of certain enumerated events.

The O&M Agreement incorporates a revised de-orbit plan, which, if exercised, would cost approximately $16.0
million plus an amount equivalent to the premium of Section B de-orbit insurance coverage to be paid to Boeing
in the event of a mass de-orbit of the satellite constellation. Iridium caused to be issued to Boeing a $15.4 million
letter of credit as collateral for de-orbit costs. This letter of credit is cash collateralized, which is included in
long-term restricted cash in the accompanying consolidated balance sheets.

Under the O&M Agreement, Iridium incurred expenses of $37.7 million, $48.7 million and $47.0 million relating
to satellite operations and maintenance costs for the 2009 Period and for the years ended December 31, 2008 and
2007, respectively.

The O&M Agreement previously provided for Boeing to receive an additional fee of 5% of any amounts
distributed to Class A or Class B members of Iridium to the extent that such distributions did not constitute a
return of members’ capital contributions or distributions in respect of the members’ tax liabilities. Boeing was
entitled to receive, upon any sale or exchange of substantially all of the interests of the Class A and B members
to an unrelated third party, 5% of the aggregate amount received by the Class A and B members. In 2007, Iridium
and Boeing agreed to terminate Boeing’s right to this additional fee in exchange for a payment of $7.8 million,
which was recorded as a prepaid expense. During the 2009 Period and for the years ended December 31, 2008
and 2007, related amortization expense was $0.9 million, $1.2 million, and $0.9 million respectively. Of the
remaining $5.7 million, $1.1 million was included in prepaid expenses and other current assets and $4.6 million
was included in deferred financing costs and other assets in the accompanying consolidated balance sheet as of
December 31, 2008.

118

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

5. Property and Equipment

Property and equipment consisted of the following at:

Satellite system . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Terrestrial system . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gateway system . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Internally developed software and purchased

software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building and leasehold improvements . . . . . . . . . . . .

Less: accumulated depreciation . . . . . . . . . . . . . . . . .

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in process . . . . . . . . . . . . . . . . . . . . . . .

Total property and equipment, net of accumulated

December 31,
2008

December 31,
2007

(In thousands)

$ 47,052
8,958
18,985
10,971

$ 47,332
9,453
15,490
9,308

27,465
11,299

124,730
(66,514)

58,216
1,280
3,594

10,599
9,160

101,342
(57,426)

43,916
1,280
14,763

depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 63,090

$ 59,959

At December 31, 2008, construction in process consisted of assets being constructed for various uses including:
equipment of $0.7 million, gateway system assets of $2.3 million, internally developed software of $0.5 million
and terrestrial system assets of $0.1 million. At December 31, 2007, construction in process consisted of assets
being constructed for various uses including: equipment of $1.2 million, gateway system assets of $0.1 million,
internally developed software of $13.3 million, and terrestrial system assets of $0.2 million. Depreciation
expense was $10.9 million, $12.5 million, and $11.4 million for the 2009 Period and the years ended
December 31, 2008 and 2007, respectively.

6. Credit Facility

On July 27, 2006, Iridium entered into a $170.0 million first lien credit facility and $40.0 million second lien
credit facility (collectively, the “Credit Facility”). The Credit Facility includes a $98.0 million four-year first lien
Tranche A term loan facility, a $62.0 million five-year first lien Tranche B term loan facility, and a $40.0 million
six-year second lien term loan facility. In addition, the facilities include a $10.0 million three-year revolving
credit facility. The proceeds of the Credit Facility were used to repay Iridium’s then existing credit facilities,
provide cash collateral for letters of credit, return capital to Iridium’s equity investors and for general corporate
purposes including development of new and advanced devices and services. Iridium elected the Eurodollar base
interest rate for the calculation of interest and currently uses the London Interbank Offered Rate (“LIBOR”),
which is an acceptable substitute to the Eurodollar base rate according to the Credit Facility agreement.

Mandatory principal prepayments are required based on net cash proceeds related to debt or equity issuances and
certain dispositions, as is a mandatory prepayment of 75% of excess cash flow, determined by a defined formula.
Iridium must also maintain hedge agreements in order to provide interest rate protection on a minimum of 50%
of the aggregate principal amounts outstanding during the first three years of the Credit Facility. As a result,
Iridium entered into four interest rate swap agreements upon the closing of the Credit Facility that ranged in

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Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

duration from one to four years and collectively in July 2006 provided interest rate protection on $170.0 million
(see Note 13).

The Credit Facility requires Iridium to abide by various covenants primarily related to limitations on liens,
indebtedness, sales of assets, investments, dispositions, distributions to members, transactions with affiliates and
certain financial covenants with respect to its consolidated leverage ratio on a quarterly basis. Iridium was
compliant with all covenants required by the Credit Facility at December 31, 2008 and 2007. Substantially all of
Iridium’s assets are pledged as collateral for the Credit Facility.

On October 17, 2008, Iridium entered into Amendment No. 1 to the first lien credit facility (“First Lien
Amendment”) and Amendment No. 1 to the second lien credit facility (“Second Lien Amendment”). The First
Lien Amendment and Second Lien Amendment included the consent of the respective lenders to the issuance of
the Convertible Subordinated Note with Greenhill & Co. Europe Holdings Limited (see Note 7).

Pursuant to the First Lien Amendment, Iridium and its requisite lenders agreed to, among other things:
(i) increase the applicable margin for Eurodollar loans by 75 basis points to 5%; (ii) increase permitted capital
expenditures for 2008 and 2009; (iii) permit distributions of up to $37.9 million to the members of Iridium in
2008; (iv) require Iridium to prepay $80.0 million of the outstanding balance if the Acquisition was
consummated and $15.0 million if the Acquisition was not consummated by June 29, 2009. $15.0 million was
paid in June 2009. If the Acquisition was consummated after June 29, 2009 Iridium was required to prepay the
remaining $65.0 million upon the Acquisition; and (v) to amend the definition of “Change of Control” to apply to
the post-acquisition public company. Upon the execution of the First Lien Amendment, Iridium prepaid $22.0
million of the outstanding balance under the first lien credit facility.

Pursuant to the Second Lien Amendment, Iridium and its requisite lenders agreed to, among other things:
(i) increase the applicable margin for Eurodollar loans by 75 basis points to 9%; (ii) increase permitted capital
expenditures for 2008 and 2009; (iii) permit distributions of up to $37.9 million to the members of Iridium in
2008; and (iv) amend the definition of “Change of Control” to apply to the post-Acquisition public company. As
a result of the Acquisition, Iridium Communications Inc. assumed liability for the Credit Facility and paid all
outstanding amounts under the Credit Facility on September 30, 2009, which resulted in the Credit Facility being
no long in effect.

$10.0 million First Lien Revolving Credit Facility

The proceeds of the revolving credit facility may be used for general corporate purposes of Iridium. Iridium paid
an up-front fee of 2% on the revolving facility ($0.2 million) and pays an annual unused facility fee of 0.5% on
the available balance of the commitment on a quarterly basis. As of December 31, 2008, Iridium had not drawn
any amounts under the revolving credit facility. Notwithstanding Iridium’s rights to access the credit facility,
Iridium is subject to counterparty risk associated with future access to the revolving credit facility, as one of the
counterparties to the revolving credit facility filed for bankruptcy during 2008. The revolving credit facility
matured on July 27, 2009.

$98.0 million First Lien Tranche A Term Loan

The Tranche A term loan matures on June 30, 2010, and requires quarterly principal payment amounts ranging
from $2.25 million to $9.75 million. Quarterly interest payments are also made. LIBOR, including the applicable
margin of 5.00% and 4.25%, was 8.47% and 9.24% at December 31, 2008 and 2007, respectively. Iridium can

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Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

prepay the First Lien Tranche A term loan in its entirety for par. At December 31, 2008 and 2007, the
outstanding principal balance was $37.2 million and $63.9 million, respectively. As a result of the Acquisition,
Iridium Communications Inc. assumed the loan and the outstanding balance was paid on September 30, 2009.

$62.0 million First Lien Tranche B Term Loan

The Tranche B term loan matures on July 27, 2011, and requires quarterly principal payment amounts starting on
September 30, 2010 in the amount of $14.9 million. Quarterly interest payments are also made. LIBOR including
the applicable margin of 5.00% and 4.25%, was 8.47% and 9.24% at December 31, 2008 and 2007, respectively.
Iridium can prepay the First Lien Tranche B term loan in its entirety at par. At December 31, 2008 and 2007, the
outstanding balance was $59.7 million and $60.5 million, respectively. As a result of the Acquisition, Iridium
Communications Inc. assumed the loan and the outstanding balance was paid on September 30, 2009.

$40.0 million Second Lien Term Loan

The Second Lien term loan matures on July 27, 2012, at which time the entire $40.0 million principal amount is
due. LIBOR including the applicable margin of 9.00% and 8.25%, was 12.47% and 13.24% at December 31,
2008 and 2007, respectively. Iridium is required to make quarterly interest payments. The Second Lien term loan
can be prepaid in its entirety at 101% through July 27, 2009, and at par thereafter. At December 31, 2008 and
2007, the outstanding balance was $40.0 million. As a result of the Acquisition, Iridium Communications Inc.
assumed the loan and the outstanding balance was paid on September 30, 2009.

Commitments Under First and Second Lien Credit Facilities at December 31, 2008

As of December 31, 2008, the scheduled annual principal payments on the first and second lien credit agreements
for each of the following four years were as follows (in thousands):

2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 30,379
39,969
26,572
40,000

$136,920

Interest payable associated with the Credit Facility was $2.4 million and $2.9 million (included in accrued
expenses and other current liabilities in the consolidated balance sheet) as of December 31, 2008 and 2007,
respectively.

Deferred financing costs associated with the Credit Facility were $4.4 million and $5.2 million (included in
deferred financing costs and other assets in the consolidated balance sheet) as of December 31, 2008 and 2007,
respectively.

As a result of the Acquisition, Iridium Communications Inc. assumed the Credit Facility and the outstanding
balance was paid on September 30, 2009.

7. Convertible Subordinated Note

In October 2008, Iridium issued to the Greenhill & Co. Europe Holdings Limited (the “Holder”), an affiliated
company of GHQ, a $22.9 million 5% convertible subordinated note due October 2015. Interest accrues

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Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

beginning in April 2009 and is payable if and when the principal balance is paid in full. Under certain
circumstances as described below, the Note is convertible, at the option of the holder, into a number of Class A
Units equal to the principal amount plus accrued and unpaid interest divided by the conversion price in effect at
that time. The initial conversion price is $272.87, resulting in approximately 84,000 Class A Units due to the
holder upon conversion of the Note. The conversion price is adjustable in certain circumstances, including as a
result of Iridium issuing additional equity or equity-linked securities at an effective price less the conversion
price then in effect.

The Note is convertible in full at the option of the Holder, at any time and from time to time beginning on the
later of (a) October 24, 2009, and (b) the earlier of the occurrence of a defined Termination Event or the closing
of the transactions contemplated by the Transaction Agreement (if notice of exercise of the right to convert is
given at least one business day before such closing).

If the closing of the Acquisition occurs prior to October 24, 2009, and the Holder has not converted the Note
prior to the earlier of (i) the closing of such transactions (unless notice of exercise of the right to convert has been
given by the Holder) or (ii) the closing of a defined qualified initial public offering of Iridium’s equity securities,
then the Holder’s right to convert terminates and Iridium has the right to redeem the note at an amount equal to
the principal amount plus any accrued and unpaid interest.

The Holder may require, at its option, Iridium to repurchase the Note (i) upon a defined change in control of
Iridium and (ii) in the event of a defined Termination Event occurring after January 31, 2013, at an amount equal
to the principal amount plus any accrued and unpaid interest. The Note was converted into 1,995,629 shares of
Iridium Communications Inc.’s common stock on October 24, 2009 and is no longer outstanding.

Deferred financing costs associated with the Note were $0.5 million (included in deferred financing costs and
other assets in the accompanying consolidated balance sheet) at December 31, 2008.

8. Motorola Note Agreement

On December 11, 2000, Iridium entered into a Senior Subordinated Term Loan Agreement (the “Note
Agreement”), pursuant to which Iridium borrowed $30 million from Motorola, as evidenced by a senior
subordinated term note (“Motorola Note”) dated December 11, 2000. The principal amount of, and all interest
accrued on, the Motorola Note, was paid in full on May 27, 2005. However, as detailed below, certain payment
obligations survive this repayment.

Under the Note Agreement, Iridium is required to pay Motorola a commitment fee of $5.0 million upon the
earlier of December 11, 2010, and the occurrence of a “trigger event.” A “trigger event” means the first to occur
of: (a) the occurrence of a change of control (as defined in the Note Agreement), (b) the consummation of an
initial public offering by Iridium Holdings or Iridium Satellite, or (c) the sale of all or a material portion of the
assets of Iridium Holdings or Iridium Satellite. Iridium is accruing the commitment fee through December 2010
using the effective-interest method. As of December 31, 2008 and December 31, 2007, Iridium’s liability
approximated $4.0 million and $3.5 million, respectively, and is included in the Motorola payable (see Note 3) in
the accompanying consolidated balance sheets.

Additionally, in the event of a “distribution event,” Iridium is required to pay Motorola a loan success fee equal
to the amount that a holder of Class B units in Iridium constituting 5% of the total number of issued and
outstanding units (both Class A and B) would have received in the distribution event. A “distribution event”

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Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

means the (i) direct or indirect (a) payment of any dividend or other distribution (in the form of cash or
otherwise) in respect of the equity interests of Iridium or (b) purchase, conversion, redemption or other
acquisition for value or otherwise by Iridium of any equity interest in Iridium or (ii) initial public or any
secondary offering by Iridium Holdings or Iridium Satellite in which any holders of equity interests in Iridium
are afforded the opportunity to participate as a selling equity holder in such offering. Iridium paid Motorola $2.2
million in loan success fees as required in the year ended December 31, 2008, and $0 in the 2009 Period and the
year ended December 31, 2007 (see Note 11).

Finally, in addition to the above obligations, upon the first to occur of (a) any change of control (as defined in the
Note Agreement) or (b) the sale of all or a material portion of Iridium Holdings or Iridium Satellite, Iridium is
required to pay a cash amount equal to the lesser of (i) an amount to be determined based on a multiple of
earnings before interest, taxes, depreciation, and amortization less capital contributions not returned to Class A
Unit holders and the amount of the $5.0 million commitment fee discussed above which has been or is
concurrently being paid and (ii) the value of the consideration that a holder of Class B Units in Iridium
constituting 5% of the total number of issued and outstanding units (both Class A and B) would receive in the
transaction. See Note 19 for information on Motorola’s compliant against Iridium in 2010.

9. Commitments and Contingencies

Supplier Purchase Commitments

Iridium entered into a manufacturing agreement with a supplier to manufacture subscriber equipment, which
contains minimum monthly purchase requirements. As a result of customer demand for subscriber equipment,
Iridium’s purchases have exceeded the monthly minimum requirement since inception. Iridium previously issued
a $2.9 million letter of credit to the supplier as collateral for certain purchase commitments the supplier made on
behalf of Iridium for component parts required. In 2008, Iridium and the supplier reached an agreement to release
the $2.9 million letter of credit, which is no longer classified as restricted cash in Iridium’s balance sheet at
December 31, 2008.

Unconditional purchase obligations for subscriber equipment and various goods and services totaled
$22.5 million at December 31, 2008, and are expected to be fulfilled within one year.

Unconditional purchase obligations under the O&M Agreement totaled $250.3 million at December 31, 2008.
Iridium expects to make annual cash payments of $50.1 million through December 31, 2013, in fulfillment of
these purchase obligations.

In-Orbit Insurance

Due to various contractual requirements, Iridium is required to maintain an in-orbit insurance policy with a
de-orbiting endorsement to cover potential claims relating to operating or de-orbiting the satellite constellation.
The policy covers Iridium, Boeing as operator (see Note 4), Motorola (the original system architect and prior
owner), Lehman Commercial Paper, Inc., contractors and subcontractors of the insured, the U.S. government and
certain other sovereign nations.

The current policy has a one-year term, which expires December 12, 2009. The policy coverage is separated into
Sections A and B. Liability limits for claims under each of Sections A and B are $500 million per occurrence and
$1 billion in the aggregate. The deductible for claims is $250,000 per occurrence.

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Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

Section A coverage is currently in effect and covers risks in connection with in-orbit satellites. Section B
coverage is effective once requested by Iridium (the “Attachment Date”) and covers risks in connection with a
decommissioning of the satellite system. The term of the coverage under Section B is 12 months from the
Attachment Date. The premium for Section B coverage is $2.5 million and is payable on or before the
Attachment Date. As of December 31, 2008, Iridium had not requested Section B coverage since no
decommissioning activities are currently anticipated.

The balance of the unamortized premium payment for Section A coverage is included in prepaid expenses and
other current assets in the accompanying consolidated balance sheets. Iridium has not accrued for any deductible
amounts related to either Section A or B of the policy as of December 31, 2008, since management believes that
the likelihood of an occurrence is remote.

Operating Leases

Iridium leases land, office space, and office and computer equipment under noncancelable operating lease
agreements. Most of the leases contain renewal options of 1 to 10 years. Iridium’s obligations under the current
terms of these leases extend through 2016.

Additionally, several of Iridium’s leases contain clauses for rent escalation including but not limited to a pro-rata
share of increased operating and real estate tax expenses. Rent expense is recognized pursuant to the existing
accounting guidance, on a straight-line basis over the lease term.

Future minimum lease payments, by year and in the aggregate, under noncancelable operating leases at
December 31, 2008, were as follows (in thousands):

Years ending December 31,
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter

Operating
Lease

$ 1,763
1,930
1,973
2,011
1,744
1,960

$11,381

Rent expense for the 2009 Period and the years ended December 31, 2008 and 2007 was $1.4 million,
$1.5 million, and $1.4 million, respectively. In 2008, the Company commenced the lease of a new corporate
facility in Tempe, Arizona. The facility will be used primarily for administrative purposes and is approximately
25,500 square feet. The lease term will expire in March 2016.

Contingencies

From time to time, in the normal course of business, Iridium is party to various pending claims and lawsuits.
Other than the Motorola action described in Note 19, Iridium is not aware of any such actions that Iridium would
expect to have a material adverse impact on Iridium’s business, financial results or financial condition.

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Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

Iridium, a director, and a former officer were named as defendants in a lawsuit commenced in 2007 by a former
member of Iridium’s Board of Directors (the “Plaintiff”). The lawsuit alleges, among other things, defamation
and tortuous interference with the Plaintiff’s economic/business relationship with his principal, an investor in
Iridium. These actions seek compensatory and other damages, and costs and expenses associated with the
litigation. Iridium settled this claim in May 2009.

Iridium was named as a defendant in a lawsuit commenced in December 2008 by a vendor alleging copyright
infringement by Iridium of certain software owned by the vendor. The lawsuit seeks (i) actual damages and any
infringer’s profits of Iridium attributable to the alleged infringement, (ii) punitive damages, (iii) statutory
damages, including certain enhanced damages based on Iridium’s alleged willful conduct (as an alternative to the
damages specified in (i) and (ii) above), (iv) a permanent injunction, and (v) costs and attorney’s fees under
applicable law. Iridium settled this claim in May 2009.

Iridium NEXT

Iridium has selected two contractors to participate in the final phase of its procurement process for Iridium
NEXT. This final phase is expected to end with Iridium awarding a full-scale development agreement for Iridium
NEXT to one prime contractor by mid-2009. The contractor not selected as the prime contractor will be paid a
bonus payment if they have successfully completed all milestones and deliverables required under this phase of
the contract. The potential bonus payments range from $0 to $10 million. As of December 31, 2008, Iridium has
accrued $3.9 million in connection with this potential bonus payment.

10. Equity Based Compensation

Interests in Iridium Employee Holdings LLC

Iridium, in its role as manager of Iridium Employee Holdings LLC (“Iridium Employee Holdings”), has granted
certain key employees equity interests in Iridium Employee Holdings. Iridium Employee Holdings was created
solely to own certain Class B non-voting units of Iridium and has no other operations. Each interest in Iridium
Employee Holdings represents and is equivalent to ownership of 15.484 Class B Units of Iridium. Interests in
Iridium Employee Holdings generally vest over a three to five year period, and Iridium Employee Holdings is
only required to make distributions with respect
to vested portions thereof. If an employee terminates
employment with Iridium, unvested interests are forfeited. Additionally, all interests fully vest in the event of a
change in control of Iridium. With respect to some of the interests granted to employees, a designated threshold
amount must be exceeded before employees become entitled to receive distributions with respect to their Iridium
Employee Holdings equity interests (and all distributions are first applied (without regard to vesting) against the
threshold amount until it has been fully satisfied). The Class B Units of Iridium held by Iridium Employee
Holdings are subject to the same vesting and threshold amount provisions that apply to Iridium Employee
Holdings equity interests granted to employees. As a result of the Acquisition, all interests were accelerated in
vesting and converted into shares of Iridium Communications Inc.’s common stock and cash.

Interests in Employee Holdings LLC

In 2008, Iridium, in its role as manager of Employee Holdings LLC (“Employee Holdings”), granted certain
executive-level employees equity interests in Employee Holdings. A total of 51,466 equity interests in Employee
Holdings were issued as a result of this grant. Employee Holdings was created solely to own certain Class B
non-voting units of Iridium and has no other operations. Each interest in Employee Holdings is intended to
represent and is equivalent to ownership of one Class B Unit of Iridium. Certain grants in Employee Holdings are

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Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

fully vested on the date of grant; others vest over a three- to four-year period, in each case subject to the
continued employment of the recipient. The equity interests in Employee Holdings contain restrictions on
transfer and a right of first refusal and Employee Holdings has repurchase rights from the recipients in the event
of a termination of service. Equity interests in Employee Holdings have a right to equivalent distributions to
those paid to Class B Unit holders of Iridium, provided, however, that all such distributions are first applied
toward the satisfaction of a designated threshold amount (without regard to vesting). Once the threshold amount
is satisfied, distributions to holders of interests in Employee Holdings are paid with respect to vested portions of
the grant and deferred with respect to unvested portions. If an employee terminates his employment with Iridium,
unvested equity interests are forfeited. Additionally, equity interests fully vest in certain cases in the event of a
change in control of Iridium and in other cases in the event of a termination of service as a result of such a
change in control of Iridium. The Class B Units of Iridium held by Employee Holdings are subject to the same
vesting and threshold amount provisions that apply to the Employee Holdings equity interests granted to
employees. As a result of the Acquisition, all interests were accelerated in vesting and converted into shares of
Iridium Communications Inc.’s common stock and cash.

Equity Compensation

During the 2009 Period and the years ended December 31, 2008, and 2007, Iridium recognized $2.6 million,
$2.0 million, and $0.2 million, respectively, of equity-based compensation expense related to the interests
granted to certain key employees. At December 31, 2008, there was $3.0 million of unrecognized compensation
expense related to non-vested equity-based compensation awards that was to be recognized over a weighted-
average period of approximately one year.

The following schedule provides a summary of Iridium’s nonvested Class B Units at September 29, 2009 and
changes during the 2009 Period:

Nonvested Class B
Units

Wtd. Avg. Grant
Date Fair Value Per Unit

Nonvested Class B Units at

December 31, 2008 . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . .

41,023
(41,023)

Nonvested Class B Units at

September 29, 2009 . . . . . . . . . . . . . . .

—

$76.04
$76.04

$ —

As a result of the Acquisition, certain employee share-based awards and certain other employee benefits were
automatically accelerated in vesting. The acceleration resulted in $3.8 million being expensed in the 2009 Period.
As of September 29, 2009, the closing date of the Acquisition, there were no equity based awards outstanding.

Profits Interests

Iridium has granted certain key executives and non-employee members of Iridium’s board of directors’ (the
“Board”) cash payment rights, or “profits interests.” These interests do not give the holder any equity ownership
interest in Iridium, but are intended to convey to the holder an economic interest similar to the appreciation in
value of Class B Units in Iridium. Certain profits interest grants were fully vested at the date of grant, others vest
over a three to four year period, in each case subject to the continued employment or Board service of the
recipient. The profits interests grants set forth a pro-rata threshold equity valuation of Iridium. All distributions
received by Class B holders after the date of grant of the profits interests are aggregated, and once the pro-rata

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Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

threshold value is exceeded, the recipient of the profits interests becomes entitled to receive, upon an applicable
payment event, cash equal to the aggregate distributions he would have received if he had held Class B Units of
Iridium from the date of grant of the profits interest through the date on which the applicable payment event
occurs. Vested profits interest rights will remain outstanding following termination of employment or Board
service and will become payable upon the earlier of a “change in control event,” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury regulations issued thereunder,
or December 31, 2017 (at which time the profits interest rights will terminate).

During the 2009 Period and for the years ended December 31, 2008 and 2007, Iridium recognized $2.8 million,
$0.9 million and $2.7 million, respectively, of compensation expense related to profits interests. As of
December 31, 2007, there was approximately $6.0 million of unrecognized compensation expense related to
nonvested profits interests awards that was to be recognized over a weighted-average period of approximately 2.6
years. As of December 31, 2008, there was $1.6 million of unrecognized compensation expense related to
non-vested profits interests awards that was to be recognized over a weighted-average period of approximately
1.7 years. Iridium will re-measure its liabilities under these payment arrangements at each reporting date until the
profits interests are terminated or otherwise settled. The liability balance for profits interests was $1.9 million
and $2.5 million at December 31, 2008 and 2007, respectively. As a result of the Acquisition, certain employee
share-based awards and certain other employee benefits were automatically accelerated in vesting and full
payment of this profits interests was made. As of September 29, 2009, the closing date of the Acquisition, there
were no grants of profits interests outstanding.

In 2008, in consideration for terminating their profits interests awards, certain employees received grants in
Employee Holdings, as discussed above, and two non-employee Board members received grants of Class B units
in Iridium (which units are only entitled to receive distributions from Iridium once such distributions exceed a
designated threshold amount and are subject to forfeiture if the Board member voluntarily resigns or is removed
from the Board before the expiration of his then current term). As a result, the corresponding “profits interests”
liability of $1.7 million was reclassified to members’ deficit during 2008.

11. Members’ Equity

Classes of Membership Units

Pursuant to the LLC Agreement, the members’ interests in Iridium are divided into Class A and Class B Units.
There are 1,083,872 Class A Units outstanding and 518,012 Class B Units outstanding at December 31, 2008. As
a result of the Acquisition, Class A and Class B Units were converted into common stock of Iridium
Communications Inc.

A description of each of the classes of membership units follows:

Class A Units—All voting rights of the members are vested in the Class A Units. Class A members whose
agreed capital commitments were at least $10.0 million or $20.0 million are entitled to appoint, remove, or
replace one or two directors to the Board, respectively. Those directors designated by a Class A member who is
not in default of its obligations to make capital contributions or provide credit enhancements for the benefit of
Iridium are entitled to cast, in the aggregate, such number of votes as equals the member’s agreed capital
commitment divided by $10.0 million, rounded down to the nearest whole number, allocated among the directors
(if such member has appointed more than one) as the member may specify. In addition, the current Chairman of
Iridium is entitled to cast one vote.

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Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

The Class A members may manage Iridium only through their designated directors and have no authority in their
capacity as members to act on behalf of or bind Iridium. The Board may issue additional Class A Units, but the
Class A members have the preemptive right to participate unless such offering involves a business acquisition or
combination. To the extent a Class A member declines to exercise its preemptive right, the other Class A
members succeed to such right on a proportionate basis. In addition, Class A members have a right of first refusal
on proposed sales of both Class A and Class B Units by other members.

Each Class A member has the right to receive the return of its capital contributions before any distributions are
made to Class B members. As of December 31, 2008, all capital contributions had been repaid to Class A
members.

Class B Units— Pursuant to the LLC Agreement, members holding Class B Units have rights that expressly
exclude any right to vote for or appoint directors. Additionally, Class B members receive no distributions until
such time as the Class A members have received the return of their full capital contributions. Distributions to
certain Class B members are also subject to limitations regarding vesting conditions and satisfaction of threshold
amounts (see Note 10). The Board may issue additional Class B Units provided, however, that without the
approval of two-thirds of the number of votes entitled to be cast by the directors, the number of Class B Units
issued or reserved for issuance may not exceed a certain percentage of the total number of Class A Units and
Class B Units then issued or reserved for issuance.

Allocation of Profits and Losses

The LLC Agreement provides that Iridium profits or losses for any fiscal year will be allocated among the
members as follows: For losses (i) to each of the members to the extent of (1) the aggregate amount of profit
allocated to such member for prior fiscal years reduced by (2) the aggregate amount of loss allocated to such
member in prior fiscal years, in proportion to the aggregate net profit for prior years of all the members then,
(ii) to each of the members having a positive capital account balance to the extent of and in proportion to such
balances, thereafter, (iii) in accordance with the members’ respective percentage interests. For profits, (i) to each
of the members to the extent of (1) the aggregate amount of losses allocated to such member in prior fiscal years
reduced by (2) the aggregate amount of profit allocated to such member in prior fiscal years in proportion to the
aggregate net loss for prior years of all the members, thereafter (ii) in accordance with the members’ respective
percentage interests.

Distributions

The Board determines available cash flow for distribution, but any such distribution may be made only in
accordance with the following priorities: (i) to return to the Class A members their capital contributions not
previously returned in proportion to the aggregate amount then remaining unreturned, then (ii) after the capital
contributions of the Class A members have been returned in full, to all of the members in accordance with their
respective percentage interests.

It is Iridium’s intent to distribute to all of the members such amounts as the Board from time to time determines
are necessary to defray the federal, state, and local income tax liabilities incurred by the members as a result of
including in their gross income their distributive share of Iridium’s income and gain. However, Iridium’s Credit
Facility (see Note 6) contains covenants that restrict the amount of distributions Iridium can make to its
members.

128

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

The net proceeds of a liquidation of Iridium’s assets and properties in connection with the winding up of Iridium
are applied as follows: (i) payment of the debts and liabilities of Iridium (including those owed to members) and
the expenses of liquidation; (ii) setting up of such reserves as the person charged with winding up Iridium’s
affairs may reasonably deem necessary for any contingent liabilities or obligations. The balance of such reserves,
if any, shall be distributed to the members in the priority set forth above.

No distribution was made to Class A or B members in the 2009 Period or in 2007. In 2008, Iridium made
distributions of $41.8 million to Class A and B members on a pro-rata basis.

Transfer of Interests

Except for a transfer to an affiliate, no member has the right to transfer all or any part of such member’s units in
Iridium, and no transferee is entitled to become a substituted member or to exercise any of the rights of a
member, except with the consent of two-thirds of the total number of votes entitled to be cast by all of the
directors of Iridium.

Indemnification

The LLC Agreement provides that Iridium will indemnify its members, officers, directors and employees for
liability and expenses incurred by any such person to the fullest extent permitted by law for actions taken in good
faith on behalf of Iridium if such actions were reasonably believed to be within the scope of authority conferred
to the person by Iridium or in accordance with the LLC Agreement.

Issuance/Forfeitures of Class B Units

During the year ended December 31, 2007, Iridium issued (subject to vesting requirements) an additional 15,390
Class B Units for the benefit of management personnel (representing 1.0% of the total outstanding units of
Iridium at December 31, 2007). A member of Employee Holdings left Iridium during 2007 forfeiting an
equivalent of 1,539 unvested units in Iridium (representing 0.1% of the total outstanding units of Iridium at
December 31, 2007).

During the year ended December 31, 2008 Iridium issued (subject to vesting requirements) an additional 59,382
Class B Units (representing 3.71% of the total outstanding units of Iridium at December 31, 2008). The Class B
Units were issued in exchange for certain profits interest awards that were held by key executives and members
of the Board. The exchange resulted in canceling the majority of outstanding profits interest awards and the
issuance of Class B Units in return. The economic interest of the canceled profits interest awards are consistent
with the replacement Class B Units.

During the 2009 Period, no Class B Units were issued.

Class B Units issued to key executives and members of the board are typically subject to designated threshold
amounts. Distributions are first applied toward the satisfaction of the designated threshold (without regard to
vesting). Once the threshold amount is satisfied, distributions are paid with respect to the vested portions of the
grant. Designated thresholds vary by grant and are up to $4.3 million.

Class B units granted to directors are subject to forfeiture if the director voluntarily resigns or is removed from
the Board before the expiration of his then current term. As a result of a director voluntarily resigning from the
Board in February 2009, 3,958 Class B units were forfeited.

129

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

12. Segments, Significant Customers, Supplier, and Service Providers and Geographic Information

Iridium operates in one segment, providing global satellite communication services and products.

Iridium derived approximately 23%, 21% and 22% of its total revenue during the 2009 Period and for the years
ended December 31, 2008 and 2007, respectively, from agencies of the U.S. government. Such agencies also
accounted for approximately 29% and 41% of Iridium’s accounts receivable balances at December 31, 2008 and
2007, respectively. Iridium’s two largest commercial customers accounted for 23%, 28% and 25% of total
revenue for the 2009 Period and for the years ended December 31, 2008 and 2007, respectively. The two largest
commercial customers accounted for approximately 24% and 20% of Iridium’s accounts receivable balances at
December 31, 2008 and 2007, respectively.

Iridium acquires subscriber equipment primarily from one manufacturer. Should events or circumstances prevent
the manufacturer from producing the equipment, Iridium’s business could be adversely affected until Iridium is
able to move production to other facilities of the manufacturer or secure a replacement manufacturer.

A significant portion of Iridium’s satellite operations and maintenance services are provided by Boeing. Should
events or circumstances prevent Boeing from providing these services, Iridium’s business could be adversely
affected until Iridium is able to assume operations and maintenance responsibilities or secure a replacement
service provider.

Property and equipment, net of accumulated depreciation by geographic area, were as follows:

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Satellites in orbit
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
All others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

December 31,
2008

December 31,
2007

(In thousands)

$44,332
16,547
2,211

$63,090

$38,486
19,820
1,653

$59,959

(1) All others primarily includes subscriber equipment in international waters.

Revenue by geographic area was as follows:

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . .
Other countries(1) . . . . . . . . . . . . . . . . . . . . . . . .

For the
2009 Period

$115,901
37,087
23,461
66,502

For the Year
Ended
December 31,
2008

(In thousands)
$155,923
55,271
25,516
84,234

$242,951

$320,944

For the Year
Ended
December 31,
2007

$125,251
44,211
20,951
70,488

$260,901

(1) No one other country represented more than 10% of revenue for any of the periods presented.

Revenue is attributed to geographic area based on the billing address of the distributor. Service location and the
billing address are often not the same. Iridium’s distributors sell services directly or indirectly to end-users, who

130

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

may be located or use Iridium’s products and services elsewhere. Iridium cannot provide the geographical
distribution of end-users because it does not contract directly with them. Iridium does not have significant
foreign exchange risk on sales, as nearly all invoices are denominated in United States dollars.

13. Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability that assumes an orderly
transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchal
disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair
value. These tiers include:

• Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;

• Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets;
quoted prices in markets that are not active; or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities; and

• Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an

entity to develop its own assumptions.

At December 31, 2008, all of Iridium’s financial and non-financial assets and liabilities were measured using
either Level 1 or Level 2 inputs.

Financial Assets and Liabilities

The following table summarizes information about Iridium’s financial assets and liabilities that were measured at
fair value on a recurring basis as of December 31, 2008 and 2007:

Restricted cash . . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . .
Foreign currency exchange contracts . . . .

Fair Value Measurements at December 31, 2008 Using

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

(In thousands)

Significant
Unobservable
Inputs
(Level 3)

$15,520
—
—

$15,520

$ —
(3,588)
(1,082)

$(4,670)

$—
—
—

$—

Total

$15,520
(3,588)
(1,082)

$10,850

Fair Value Measurements at December 31, 2007 Using

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

(In Thousands)

Total

Significant
Unobservable
Inputs
(Level 3)

Restricted cash . . . . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . . . .

$18,420
(3,737)

$18,420

—

$14,683

$18,420

131

$ —
(3,737)

$(3,737)

$—
—

$—

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

Cash, Cash Equivalents and Restricted Cash

All cash and cash equivalents were recorded at fair value at December 31, 2008 and 2007. The inputs used in
measuring the fair value of these instruments were considered to be Level 1 in accordance with the fair value
hierarchy. The fair values were based on period-end statements supplied by the various banks and brokers that
held the majority of Iridium’s funds deposited in institutional money market mutual funds (for overnight sweep
account funds) and the remainder held in regular interest bearing and non-interest bearing depository accounts
and certificates of deposits with commercial banks.

Short-term Financial Instruments

The fair values of short-term financial instruments (primarily cash and cash equivalents, restricted cash, accounts
receivable, accounts payable, accrued expenses and other liabilities) approximate their carrying values because of
their short-term nature.

Credit Facilities

The fair values of the credit facilities at December 31, 2008 were 88% of the carrying values for each of the First
Lien Tranche A, the First Lien Tranche B and the second lien.

Convertible Subordinated Note

Iridium has determined that it is not practicable to estimate the fair value of the Note at December 31, 2008 due
to the lack of quoted market prices. Iridium was unable to identify any similar instruments in the market place
and the Note is carried at face amount. In the 2009 Period, Iridium obtained a third party valuation on the Note
and the fair value of the Note was $19.3 million at the close of the Acquisition. The Note was converted into
1,995,629 shares of Iridium Communications Inc.’s common stock on October 24, 2009.

Interest Rate Swaps

Iridium accounts for its interest rate swaps on the balance sheet at their respective fair values. As required by
Iridium’s credit facilities, management executed four pay-fixed receive-variable interest rate swaps in 2006, all
of which were settled on or before September 29, 2009. Iridium hedged $86.0 million of variable interest rate
debt as of December 31, 2008 and $146.0 million as of December 31, 2007. The interest rate swaps were
designated as cash flow hedges. The objective for holding these instruments was to manage variable interest rate
risk related to Iridium’s $210.0 million credit facilities, by synthetically converting a portion of the variable rate
risk to fixed rate interest rate risk. The swaps were structured so that Iridium would pay a fixed rate of interest
and receive a variable interest payment, which, to the extent hedged, should offset the variable interest that was
being paid on its debt.

The principal market in which Iridium executes interest rate swap contracts is the retail market. For recognizing
the most appropriate value, the highest and best use of Iridium’s derivatives are measured using an in-exchange
valuation premise that considers the assumptions that market participants would use in pricing the derivatives.
Iridium has elected to use the income approach to value the derivatives, using observable Level 2 market
expectations at the measurement date and standard valuation techniques to convert future amounts to a single
present amount (discounted) assuming that participants are motivated, but not compelled to transact. Level 2
inputs for the swap valuations are limited to quoted prices for similar assets or liabilities in active markets
(specifically futures contracts on LIBOR for the first two years) and inputs other than quoted prices that are

132

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

observable for the asset or liability (specifically LIBOR cash and swap rates, and credit default swap rates at
commonly quoted intervals).

Mid-market pricing is used as a practical expedient for fair value measurements. Key inputs, including the cash
rates for very short term, futures rates for up to two years and LIBOR swap rates beyond the derivative maturity
are compared to provide spot rates at resets specified by each swap as well as to discount those future cash flows
to present value at the measurement date. Inputs are collected on the last market day of the period. The same
rates used to compare the yield curve are used to discount the future cash flows. A credit default swap basis
available at commonly quoted intervals is collected and applied to all cash flows when the swap is in an asset
position pre-credit effect.

The variable interest rates on the swaps reset every quarter concurrent with the reset of the variable rate on the
debt. The fixed rate will not change over the life of the swap. Each quarter-end, the swaps are measured against
current interest rates to determine a fair market value. The fair market value is recorded on the balance sheet and
the offset to the value, to the extent effective, is recorded in accumulated other comprehensive income. The
effectiveness of the swaps in offsetting the gain or loss on the debt is assessed on a contract-by-contract basis
quarterly, by regressing historical changes in the value of the swap against the historical change in value of the
underlying debt. To establish a value for the underlying debt, a “hypothetical” derivative is created with terms
that match the debt (e.g., notional amount, reset rates and terms, maturity) and which has a zero fair value at
designation. Subsequent to the closing of the Acquisition, Iridium closed the outstanding interest rate swaps,
which had no impact on the statements of income.

Foreign Currency Exchange Contracts

Iridium enters into foreign currency exchange contracts to mitigate foreign currency exposure on a product
consulting service contract denominated in foreign currency. Given the variability of its purchase commitments
and payment terms under the product consulting service contracts, Iridium has not elected hedge accounting for
these foreign currency exchange contracts. Accordingly, the foreign currency exchange contracts are marked to
market at each balance sheet date, with the changes in fair value being recognized as a current period gain or loss
in the accompanying consolidated statements of income. The inputs used in measuring the fair value of these
instruments are considered to be Level 2 in the fair value hierarchy. The fair market values are based on quoted
market values for similar contracts.

133

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

Derivative Instruments and Hedging Activities

The following table summarizes the gross fair market value of all derivative instruments classified as liabilities
(consisting of
location in the
accompanying consolidated balance sheet at December 31, 2008. Iridium did not hold derivative instruments
classified as assets at December 31, 2008.

rate swaps and foreign currency exchange contracts) and their

interest

Derivatives designated as
hedging instruments:

Interest rate swaps . . . . . . . . . .

Total derivatives

designated as hedging
instruments . . . . . . . . .

Derivatives not designated as

hedging instruments:
Foreign currency exchange

contracts . . . . . . . . . . . . . . .

Total derivatives not

designated as hedging
instruments . . . . . . . . .

Total derivatives . . . . . . . . . . .

Balance Sheet Location

Fair Value

(In thousands)

Accrued expenses and
other current liabilities

$(3,588)

(3,588)

Accrued expenses and
other current liabilities

(1,082)

(1,082)

$(4,670)

The following table summarizes the effect of derivative instruments designated as cash flow hedges (interest rate
swaps) on Iridium’s results of operations for the 2009 Period:

For the 2009 Period

Amount of
Loss
Recognized
in OCI on
Derivative
(Effective Portion)

Location of Loss
Reclassified from
Accumulated OCI
into Income
(Effective Portion)

Amount of Loss
Reclassified from
Accumulated OCI
into Income
(Effective Portion)

Location of Loss
Recognized in
Income on
Derivative
(Ineffective Portion)

Amount of Loss
Recognized in
Income on
Derivative
(Ineffective Portion)

(In thousands)

$(295)

$(295)

Interest expense

$(2,323)

Interest expense

$(2,323)

$(10)

$(10)

Derivatives in Cash Flow
Hedging Relationships

Accumulated other
comprehensive
loss . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . .

134

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

The following table summarizes the effect of derivative instruments not designated as hedges (foreign currency
exchange contracts) on Iridium’s results of operations for the 2009 Period:

Derivatives Not Designated as Hedging Instruments

For the 2009 Period

Location of Gain or
(Loss) Recognized in
Income on Derivative

Amount of Gain or
(Loss) Recognized in
Income on Derivative

(In thousands)

Foreign currency exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other income

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$298

$298

14. Employee Benefit Plan

Iridium sponsors a defined-contribution 401(k) retirement plan (“Plan”) that covers all employees of Iridium.
Employees are eligible to participate in the Plan on the first of the month following date of hire, and participants
are 100% vested from the date of eligibility. Iridium matches employees’ contributions equal to 100% of the
salary deferral contributions up to 5% of the employees’ compensation. Company-matching contributions to the
Plan were $0.8 million, $0.8 million, and $0.6 million for the 2009 Period and for the years ended December 31,
2008 and 2007, respectively. Iridium pays all administrative fees related to the Plan.

15. Indemnification Agreement

Iridium Satellite, Boeing, Motorola and the U.S. government entered into an indemnification agreement,
effective December 5, 2000, that provides, among other things, that: (a) Iridium Satellite will maintain satellite
liability insurance (see Notes 4 and 9); (b) Boeing will maintain aviation and space liability insurance; and
(c) Motorola will maintain aviation products – completed operations liability insurance. Pursuant
to the
indemnification agreement, the U.S. government may, in its sole discretion, require Iridium, Boeing or either of
them to immediately de-orbit the Iridium satellites at no expense to the U.S. government upon the occurrence of
certain enumerated events. However, management does not believe the U.S. government will exercise this right.

16. Related Party Transactions

A non-voting board member served on the Board of Directors of Iridium and was an employee of Wiley Rein
LLP as of December 31, 2008 and through the date of the Acquisition in 2009. Wiley Rein LLP provides services
to Iridium. For the 2009 Period, total fees paid to Wiley Rein LLP were $2.2 million. As of December 31, 2008,
the amount owed to Wiley Rein LLP was $0.3 million.

135

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

17. Earnings Per Unit Attributable to Class A Units

Basic earnings per unit is calculated by dividing net income attributable to Class A Unit holders by the weighted
average of the Class A Units outstanding for the period. Net income attributable to Class A Unit holders gives
effect to the net income allocable to Class B Unit holders as if such net income was distributed in the applicable
period pursuant to the terms of the LLC Agreement. Diluted earnings per Class A Unit takes into account the
conversion of the Note when such effect is dilutive.

For the
2009 Period

For the Year
Ended
December 31,
2008

For the Year
Ended
December 31,
2007

(In thousands except per unit data)

Numerator:

Net income . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments for Class B Units earnings

$ 53,284

$ 53,879

$ 43,773

participation . . . . . . . . . . . . . . . . . . . . . . .

(17,141)

(17,423)

(12,947)

Net income attributable to Class A Units,

basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment for interest on Note . . . . . . . . .

Net income attributable to Class A Units,

36,143
936

36,456
208

30,826
—

diluted . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 37,079

$ 36,664

$ 30,826

Denominator:

Weighted-average Class A Units

outstanding, basic . . . . . . . . . . . . . . . . . .
Units from assumed conversion of Note . . .

1,084
84

1,084
14

1,084
—

Weighted-average Class A Units

outstanding, diluted . . . . . . . . . . . . . . . . .

1,168

1,098

1,084

Earnings per unit:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 33.34
$ 31.75

$ 33.63
$ 33.40

$ 28.44
$ 28.44

18. Selected Quarterly Information (Unaudited)

For the 2009 Period

Quarter Ended
March 31,
2009

Quarter Ended
June 30,
2009

For the Period from
July 1, 2009 to
September 29, 2009

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating profit
. . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Class A Units . . . . . .
Earnings per unit — basic . . . . . . . . . . . . . . . . . .
Earnings per unit — diluted . . . . . . . . . . . . . . . . .

$75,789
$14,425
$ 9,718
$ 6,592
6.08
$
5.91
$

(In thousands)
$82,705
$32,663
$28,600
$19,399
$ 17.90
$ 16.88

$84,457
$18,355
$14,966
$10,152
9.37
$
8.96
$

136

Iridium Holdings LLC – Predecessor Company

Notes to Consolidated Financial Statements—(Continued)
September 29, 2009

For the Year Ended December 31, 2008

Quarter Ended
March 31,
2008

Quarter Ended
June 30,
2008

Quarter Ended
September 30,
2008

Quarter Ended
December 31,
2008

(In thousands)

Total revenue . . . . . . . . . . . . . . . . . .
Operating profit . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . .
Net income attributable to Class A

Units . . . . . . . . . . . . . . . . . . . . . . .
Earnings per unit - basic . . . . . . . . .
Earnings per unit - diluted . . . . . . . .

$74,300
$21,462
$16,722

$11,314
$ 10.44
$ 10.44

$81,678
$22,893
$18,676

$12,637
$ 11.66
$ 11.66

$88,213
$21,699
$16,937

$11,461
$ 10.57
$ 10.57

$76,753
$ 9,065
$ 1,544

$ 1,044
0.96
$
0.96
$

The sum of the per unit amounts do not equal the annual amounts due to changes in the number of weighted
average units outstanding during the year.

Iridium’s results of operations are subject to seasonal usage changes for its commercial customers. April through
October are typically the peak months for commercial voice service revenue and related subscriber equipment
sales. Iridium’s U.S. government revenue and commercial M2M revenue are less subject to seasonal usage
changes.

19. Subsequent Events

Iridium has evaluated subsequent events through the date as of which its financial statements are being issued.

Iridium Communications Inc. assumed and paid all outstanding amounts for Iridium’s first and second lien credit
facilities on September 30, 2009, following the Acquisition on September 29, 2009. The Note was converted into
1,995,629 shares of Iridium Communications Inc.’s common stock on October 24, 2009 and is no longer
outstanding.

On February 9, 2010, Motorola filed a complaint against Iridium to seek recovery of the commitment fee (see
Note 3) and the loan success fee under the Note Agreement (see Note 8) in an aggregate amount they allege is at
least $24.7 million. However, the outcome of such complaint is uncertain;
therefore, an estimate of the
contingency cannot be made at this time.

137

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer, who
is our principal executive officer, and our chief financial officer, who is our principal financial officer, we
conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e)
under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered
by this report. In evaluating the disclosure controls and procedures, management recognized that any controls
and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving
the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact
that there are resource constraints and that management is required to apply its judgment in evaluating the
benefits of possible controls and procedures relative to their costs. Based on this evaluation, our chief executive
officer and our chief financial officer concluded that our disclosure controls and procedures were effective to
provide reasonable assurance that information required to be disclosed by us in reports we file or submit under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and is accumulated and communicated to our management, including our principal
executive officer and principal financial officer, as appropriate to allow timely decisions regarding required
disclosures.

Management’s Report on Internal Control Over Financial Reporting

is responsible for establishing and maintaining adequate internal control over financial
Our management
reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under
the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal
financial officers and effected by our board of directors, management and other personnel, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with U.S. generally accepted accounting principles. Such internal control includes those
policies and procedures that:

•

•

•

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of the assets of the company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use
or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent
internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

limitations,

Management excluded from its assessment all internal controls over financial reporting maintained by Iridium
Holdings LLC, a wholly-owned subsidiary that we acquired on September 29, 2009. In accordance with guidance
issued by the SEC, we excluded Iridium Holdings LLC from our assessment of internal control over financial
reporting as of December 31, 2009 as we continue to integrate the acquired operations. At December 31, 2009,
Iridium Holdings LLC accounted for all of the Company’s revenue and a substantial portion of its total and net assets.

138

Our management assessed the effectiveness of our internal control over financial reporting as of December 31,
2009. In making this assessment, our management used the criteria set forth in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based
on its assessment, our management has determined that, as of December 31, 2009, our internal control over
financial reporting is effective based on those criteria.

Ernst & Young LLP has issued an attestation report on our internal control over financial reporting as of
December 31, 2009. This report is included in the Report of Independent Registered Public Accounting Firm
herein.

Changes in Internal Control Over Financial Reporting

Management has identified several changes in our internal control over financial reporting, as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f), that occurred during the fourth quarter of 2009 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting, including
changes related to our controls over significant transactions and accounting for stock-based compensation. The
identified changed controls were included in management’s assessment and evaluation of internal control over
financial reporting as of December 31, 2009.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Iridium Communications Inc.

We have audited Iridium Communications Inc.’s internal control over financial reporting as of December 31, 2009, based
on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (the COSO criteria). Iridium Communications Inc.’s management is responsible for
maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control
over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides
a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s
assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal
controls of Iridium Holdings LLC, a wholly-owned subsidiary that was acquired on September 29, 2009, which is
included in the 2009 consolidated financial statements of Iridium Communications Inc. and constituted a substantial
portion of the Company’s total and net assets as of December 31, 2009 and 100% of its revenues for the year then ended.
Our audit of internal control over financial reporting of Iridium Communications Inc. also did not include an evaluation of
the internal control over financial reporting of Iridium Holdings LLC.

In our opinion, Iridium Communications Inc. maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2009, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),
the consolidated balance sheets of Iridium Communications Inc. as of December 31, 2009 and 2008, and the related
consolidated statements of operations, changes in stockholders’ equity and comprehensive income (loss), and cash flows for
the years then ended and our report dated March 16, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

McLean, Virginia
March 16, 2010

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Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

EXECUTIVE OFFICERS AND DIRECTORS

Our executive officers and directors, and their ages as of February 25, 2010, are as follows:

Name

Age

Position

Matthew J. Desch . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eric H. Morrison . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John S. Brunette . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lt. Gen. John H. Campbell (Ret.) . . . . . . . . . . . . . . . .

52 Director and Chief Executive Officer
44 Chief Financial Officer
50 Chief Legal and Administrative Officer
62 Executive Vice President, Government Programs,

Cynthia C. Cann . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lee F. Demitry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42 Vice President and Controller, Iridium Satellite
56 Executive Vice President, “Iridium NEXT,”

Gregory C. Ewert

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

48 Executive Vice President, Sales, Global

Iridium Satellite

Iridium Satellite

John M. Roddy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Distribution Channels, Iridium Satellite
55 Executive Vice President, Global Operations and
Product Development, Iridium Satellite

Donald L. Thoma . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48 Executive Vice President, Marketing, Iridium

Robert H. Niehaus . . . . . . . . . . . . . . . . . . . . . . . . . . . .
J. Darrel Barros . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Scott L. Bok . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thomas C. Canfield . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brigadier Gen. Peter M. Dawkins (Ret.) . . . . . . . . . . .
Terry L. Jones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Alvin B. Krongard . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Steven B. Pfeiffer
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parker W. Rush . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Satellite

54 Director and Chairman
49 Director
50 Director
54 Director
71 Director
63 Director
73 Director
63 Director
50 Director

Executive Officers

Matthew J. Desch. Mr. Desch has been our Chief Executive Officer and a member of our Board of Directors
since the Acquisition in September 2009. Mr. Desch previously served as Chief Executive Officer of Iridium
Holdings from August 2006 to September 2009. Before that, he was Chief Executive Officer of Telcordia
Technologies, Inc., or Telcordia, a telecom software services provider, from 2002 to November 2005. Prior to
Telcordia, he spent 13 years at Nortel Networks Corporation, or Nortel, as president for its wireless networks
business where he was responsible for its global carrier customers in Europe, the Middle East, Asia and Latin
America. He left Nortel in March 2000. Mr. Desch served on the board of directors of Starent Networks, Corp.
from 2005 until late 2009, served on the board of directors of Airspan Networks, Inc. from 2000 to 2009 and
served on the board of directors of SAIC, Inc. from 2002 to 2005. He has a Bachelor of Science in computer
science from The Ohio State University and a Master of Business Administration from the University of
Chicago. Our Board of Directors has concluded that Mr. Desch should serve on the Board based on his deep

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knowledge of our company gained from his position as our Chief Executive Officer and previously as the Chief
Executive Officer of Iridium Holdings, as well as his extensive experience in the telecommunications industry.

Eric H. Morrison. Mr. Morrison has served as our Chief Financial Officer since the Acquisition in September
2009. Mr. Morrison previously served as Chief Financial Officer of Iridium Holdings from April 2006 to September
2009. Prior to becoming Chief Financial Officer of Iridium Holdings, Mr. Morrison served as Vice President,
Finance and Treasurer of Iridium Satellite from 2004 to April 2006. He graduated with a Master of Business
Administration and a Master of Accountancy from the University of Illinois at Champaign-Urbana. He graduated
from Southern Illinois University with a Bachelor’s degree in finance and he is also a Certified Public Accountant.

John S. Brunette. Mr. Brunette has been our Chief Legal and Administrative Officer since the Acquisition in
September 2009. Mr. Brunette previously served as Chief Legal and Administrative Officer of Iridium Holdings
from December 2007 to September 2009. Prior to joining Iridium Holdings, Mr. Brunette served as a consultant
to technology start up companies from March 2005 to November 2007. Mr. Brunette was previously with
Teleglobe Inc., or Teleglobe, a global voice and data services provider, where he served from 1998 to 2002 as
Executive Vice President, Chief Legal and Administrative Officer, and from 2002 to March 2005 as Chief
Executive Officer. In 2002, Teleglobe filed for bankruptcy. Mr. Brunette was also at MCI Communications
Corporation, or MCI, for twelve years where he led the company’s corporate legal group. He began his career
with the Satellite Business Systems division of IBM Corporation until MCI acquired it in 1986. He holds both a
Bachelor of Arts and a Juris Doctorate from The Catholic University of America.

Lt. Gen. John H. Campbell (Ret.). General Campbell, U.S. Air Force (Retired), has served as Executive Vice
President Government Programs of Iridium Satellite since November 2006. Prior to that, from 2004 to November
2006, he served as Principal, Defense and Intelligence, for Applied Research Associates, Inc., or ARA. General
Campbell joined ARA after retiring from the United States Air Force after a 32-year career. In the United States
Air Force, General Campbell served in a variety of operational and staff assignments around the world. From
1998 to 2000, he was Vice Director of the Defense Information Systems Agency and as the first commander of
the Joint Task Force - Computer Network Defense. From 1997 to 1998, he served on the Joint Staff of the
Pentagon as Deputy Director for Operations. Between 1971 and 1997, General Campbell served around the
world in a variety of operational assignments as an F-15 and F-16 fighter pilot and Wing Commander. General
Campbell is the recipient of numerous military and intelligence community awards, including the Defense
Distinguished Service Medal, the Legion of Merit, the Air Medal, the National Imagery and Mapping Agency
Award, the National Reconnaissance Distinguished Medal, and the National Security Agency Award. He is a
graduate of the University of Kentucky with a degree in Computer Science and a Masters of Business
Administration.

Cynthia C. Cann. Ms. Cann has served as Vice President and Controller of Iridium Satellite since January 2009.
Prior to that, Ms. Cann served in BearingPoint, Inc.’s State and Local Business Unit as Controller from May
2005 to December 2007 and as Head of Operations from January 2008 to January 2009. From January 2005 to
May 2005, Ms. Cann served as a consultant for KPMG LLP. Ms. Cann graduated with a Bachelor of Science
degree in Accounting from the Virginia Polytechnic Institute and State University, and received a six month
certification from the Georgetown University International Master of Business Administration Program. She is
also a Certified Public Accountant.

Lee F. Demitry. Mr. Demitry has served as the Executive Vice President, Iridium NEXT of Iridium Satellite
since December 2007. Prior to joining Iridium Satellite, Mr. Demitry was the Vice President of Engineering at
GeoEye, Inc. from 1998 to December 2007. He holds a Masters of Science in Astronautical Engineering from the
Massachusetts Institute of Technology and a Master’s degree and Masters of Business Administration from
Golden Gate University. Mr. Demitry served in the United States Air Force until he retired as a Colonel (select).

Gregory C. Ewert. Mr. Ewert has served as the Executive Vice President Sales, Global Distribution Channels
of Iridium Satellite since 2004. Prior to joining Iridium Satellite, he served as Executive Vice President for

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Marketing, Sales, Product Development, Business Development and Customer Service for COMSAT
International, Inc. from 2002 to 2004. Prior to COMSAT, he held executive positions within Teleglobe Inc.,
ranging from Senior Vice President of Global Data Services to Vice President and General Manager of Carrier
and Emerging Markets from 1998 to 2002. In 2002, Teleglobe filed for bankruptcy. Before Teleglobe, he worked
for Sprint Nextel Corporation from 1987 to 1997, where he held various positions including President of Sprint
International of Canada. He holds a Bachelor’s degree in Finance from Canisius College, Buffalo, New York.

John M. Roddy. Mr. Roddy has served as Executive Vice President Global Operations and Product Development
of Iridium Satellite since August 2007 and he served as a consultant from October 2006 until he joined as an
employee. Prior to joining Iridium Satellite, Mr. Roddy held numerous executive positions at Telcordia from
2003 to July 2006, including President, Telcordia Global Services; Senior Vice President, Global Operations; and
Chief Information Officer. Prior to joining Telcordia, at Nortel, he was Vice President and General Manager of
the Carrier Professional Services Business Unit serving the CLEC and new market entrants from 1999 to 2001.
Prior to that, he was Vice President, Technology and Director, Ottawa Laboratories for Public Carrier Networks
from 1997 to 1998. He also held the position of Vice President, Canadian Technical Services and Global Product
Support from 1993 to 1996. He holds a Master of Business Administration from McMaster University, Hamilton,
Canada.

Donald L. Thoma. Mr. Thoma has served as the Executive Vice President Marketing of Iridium Satellite LLC
since May 2008. Prior to that time, Mr. Thoma served as Executive Vice President of Corporate Development
from November 2006 to May 2008, as Executive Vice President of Vertical Markets from September 2004 to
November 2006 and as Executive Vice President of Data Services from June 2001 to September 2004. From
2001 to 2002, he served as Vice President of Marketing and Business Development for ObjectVideo, Inc. Prior to
that, from 1992 to 2000, he held various positions of responsibility for ORBCOMM ranging from Senior
Director of Transportation to Founder and General Manager of the Vantage Tracking Solutions business unit and
Vice President, Business Development. From 1988 to 1990, he was the director of integration and launch
operations for Orbital Sciences Corporation. Previously, he served as a Captain in the United States Air Force
Space Division from 1983 to 1988. He holds a Bachelor’s degree in Aeronautical Engineering from the
Rensselaer Polytechnic Institute, a Master’s degree in Aerospace Engineering from the University of Southern
California and a Masters of Business Administration from the Harvard Business School.

Non-Employee Directors

Robert H. Niehaus. Mr. Niehaus has served as a member of our Board of Directors since our inception and has
served as our Chairman since September 2009. Mr. Niehaus served as our Senior Vice President from inception
until the Acquisition and also served as our Chief Executive Officer for a brief period in September 2009. He has
been the Chairman of Greenhill Capital Partners since June 2000. Mr. Niehaus joined Greenhill & Co., Inc., or
Greenhill, in January 2000 as a managing director and served in such capacity through December 2009. Prior to
joining Greenhill, Mr. Niehaus spent 17 years at Morgan Stanley & Co., where he was a managing director in the
merchant banking department from 1990 to 1999. Mr. Niehaus was vice chairman and a director of the Morgan
Stanley Leveraged Equity Fund II, L.P., a private equity investment fund, from 1992 to 1999, and was Vice
Chairman and a director of Morgan Stanley Capital Partners III, L.P., a private equity investment fund, from
1994 to 1999. Mr. Niehaus was also the Chief Operating Officer of Morgan Stanley’s merchant banking
department from 1996 to 1998. Mr. Niehaus currently serves as a director of Heartland Payment Systems, Inc.
and previously served as a director of the following publicly held companies: American Italian Pasta Company
from 1992 to January 2008, Crusader Energy Group Inc. from July 2008 to July 2009, EXCO Resources Inc.
from November 2004 to June 2009, Global Signal, Inc. from October 2002 until its merger with Crown Castle
International Corp. in January 2007, and Crown Castle International Corp. from January 2007 to July 2007.
Mr. Niehaus is a graduate of Princeton University and the Harvard Business School. Our Board of Directors has
concluded that Mr. Niehaus should serve on the Board and on the Compensation Committee based on his
extensive corporate management experience, his financial expertise and his experience in working with
telecommunications companies.

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J. Darrel Barros. Mr. Barros has served on our Board of Directors since the Acquisition in September 2009.
Mr. Barros has served as the President of Syndicated Communications, Inc., or SCI, a private equity fund
focused on media and communications, since 2006. Mr. Barros has served as President of VGC, PC, a
Washington, DC based law firm specializing in private equity and early-stage investments since 2003.
Mr. Barros also served as a corporate and securities attorney in the venture capital practice group of DLA Piper
US LLP from 1997 to 2003. He is currently Executive Chairman of Haven Media Group, LLC, a music-media
company, and Chairman of Prestige Resort Properties, Inc., a resort and hospitality company. Mr. Barros
received a B.S. degree from Tufts University, a Master in Business Administration from the Amos Tuck School
of Business in Dartmouth College, and a Juris Doctorate degree from the University of Michigan. Our Board of
Directors has concluded that Mr. Barros should serve on the Board and on the Audit Committee based on his
extensive experience in working with technology companies and his financial management experience.

Scott L. Bok. Mr. Bok has served on our Board of Directors since our inception. He also served as our Chairman
and Chief Executive Officer from our formation in November 2007 until September 2009. Separately, Mr. Bok
has served as Co-Chief Executive Officer of Greenhill since October 2007, served as its U.S. President between
January 2004 and October 2007 and has been a member of its Management Committee since its formation in
January 2004. In addition, Mr. Bok has been a director of Greenhill since its incorporation in March 2004.
Mr. Bok has also served as a Senior Member of Greenhill Capital Partners, the merchant banking business of
Greenhill, since its formation. Mr. Bok joined Greenhill as a managing director in February 1997. Before joining
Greenhill, Mr. Bok was a managing director in the mergers, acquisitions and restructuring department of Morgan
Stanley & Co. Inc. where he worked from 1986 to 1997. From 1984 to 1986, Mr. Bok practiced mergers and
acquisitions and securities law in New York with Wachtell, Lipton, Rosen & Katz. Mr. Bok is a member of the
board of directors of various private companies and was previously a member of the board of Heartland Payment
Systems, Inc., from 2001 to 2008. Mr. Bok is a graduate of the University of Pennsylvania’s Wharton School. He
holds a Juris Doctorate from the University of Pennsylvania Law School. Our Board of Directors has concluded
that Mr. Bok should serve on the Board and on the Nominating and Corporate Governance Committee based on
his extensive corporate management experience and his financial expertise.

Thomas C. Canfield. Mr. Canfield has served on our Board of Directors since our inception. Mr. Canfield has
served as Senior Vice President and General Counsel of Spirit Airlines, Inc. since October 2007. Before that,
Mr. Canfield was General Counsel of Point Blank Solutions, Inc. from October 2006 to October 2007 and was
Chief Executive Officer and Plan Administrator for AT&T Latin America Corp. from February 2004 to July
2007. Prior to assuming those roles, Mr. Canfield was General Counsel and Secretary of AT&T Latin America
Corp. following its acquisition by FirstCom Corporation, or FirstCom, from August 2000 to February 2004.
AT&T Latin America Corp. filed for bankruptcy in April 2003. Mr. Canfield became General Counsel of
FirstCom in May 2000. Prior to joining FirstCom, Mr. Canfield was Counsel in the New York office of
Debevoise & Plimpton LLP. Mr. Canfield serves on the board of directors of Tricom S.A. Our Board of
Directors has concluded that Mr. Canfield should serve on the Board and on the Audit Committee based on his
management experience in the telecommunications industry and his particular familiarity with serving on the
boards of technology companies.

Brigadier Gen. Peter M. Dawkins (Ret.). Brigadier General Dawkins, U.S. Army (Retired), has served on our
Board of Directors since October 2009. Gen. Dawkins has been a Senior Partner at Flintlock Capital Asset
Management LLC since July 2009. He is also founder and principal of ShiningStar Capital LLC, or ShiningStar,
which he founded in May 2008. Prior to founding ShiningStar, Gen. Dawkins was Vice Chairman of Global
Wealth Management for Citigroup Inc., or Citigroup, from August 2007 to May 2008, Vice Chairman of the
Citigroup Private Bank from 2000 to August 2007, and Executive Vice President and Vice Chairman of The
Travelers Companies, Inc. during an eleven-year tenure with the firm. Previously, from 1991 to 1996, he served
as Chairman and Chief Executive Officer of Primerica Financial Services, Inc., and earlier served as head of the
U.S. consulting practice of Bain & Company Inc. Gen. Dawkins began his career in the private sector as head of
the Public Financing Banking division of Lehman Brothers Holdings Inc. A 1959 graduate of West Point,
Dawkins served in the U.S. Army for 24 years. He was promoted to Brigadier General in 1981. Gen. Dawkins

144

holds a Ph.D. and Master’s degree from the Woodrow Wilson School at Princeton University. He was selected as
a Rhodes Scholar and studied at Oxford University from 1959 through 1962. Our Board of Directors has
concluded that Gen. Dawkins should serve on the Board based on his extensive corporate management
experience, his military experience and his financial expertise.

Terry L. Jones. Mr. Jones has served on our Board of Directors since the Acquisition in September 2009 and
served on the board of directors of Iridium Holdings from 2001 to September 2009. Mr. Jones is the Managing
Member of the General Partner of Syndicated Communications Venture Partners IV, L.P. and the Managing
Member of Syncom Venture Management Co., LLC. Prior to joining Syncom in 1978, he was co-founding
stockholder and Vice President of Kiambere Savings and Loan in Nairobi, and a lecturer at the University of
Nairobi. He also worked as a Senior Electrical Engineer for the Westinghouse Electric Corporation, Aerospace
Division, and Litton Industries Corp. He is a member of the board of directors of Radio One, Inc. and PKS
Communications, Inc. He formerly served on the board of the Southern African Enterprise Development Fund,
and is on the Board of Trustees of Spellman College. Mr. Jones received a B.S. degree in Electrical Engineering
from Trinity College, an M.S. degree in Electrical Engineering from George Washington University and a
Masters of Business Administration from Harvard University. Our Board of Directors has concluded that
Mr. Jones should serve on the Board and on the Compensation and Nominating and Corporate Governance
Committees based on his extensive corporate management experience and, as a long-term member of the board
of Iridium Holdings, his deep knowledge of our company.

Alvin B. Krongard. Mr. Krongard has served as a member of our Board of Directors since the Acquisition in
September 2009 and served as a member of the board of directors of Iridium Holdings from 2006 to September
2009. Since 2004, Mr. Krongard has been pursuing personal interests. In 1991, Mr. Krongard was elected Chief
Executive Officer of Alex. Brown Incorporated, or Alex. Brown, an investment banking firm, and in 1994, he
became Chairman of the board of directors of Alex. Brown. Mr. Krongard also served as Vice Chairman of the
board of directors of Bankers Trust Company N.A. from 1997 to 1998, in addition to holding other financial
industry posts. He served as Counselor to the Director of the U.S. Central Intelligence Agency from 1998 to
2001, and then as Executive Director of the CIA from 2001 to 2004. Mr. Krongard served on the board of
directors of PHH Corporation from January 2005 to June 2009. He serves on the board of directors of Under
Armour, Inc., and as Vice Chairman of The Johns Hopkins Health System Corporation. Mr. Krongard received a
B.A. degree with honors from Princeton University and a Juris Doctorate degree from the University of
Maryland School of Law. Our Board of Directors has concluded that Mr. Krongard should serve on the Board
and on the Compensation and Nominating and Corporate Governance Committees based on his extensive
corporate management experience, his experience leading an agency of the U.S. government and, as a member of
the board of Iridium Holdings, his deep knowledge of our company.

Steven B. Pfeiffer. Mr. Pfeiffer has served on our Board of Directors since the Acquisition in September 2009
and served on the board of directors of Iridium Holdings from 2001 to September 2009. Mr. Pfeiffer has been a
partner in the law firm of Fulbright & Jaworski L.L.P. since 1983 and has served as the elected Chair of the
firm’s Executive Committee since 2003. He previously served as the Partner-In-Charge of the Washington, DC
and London offices, and headed the firm’s International Department. Mr. Pfeiffer is also a Non-Executive
Director of Barloworld Limited in South Africa, Chairman Emeritus of Wesleyan University, a trustee of The
Africa-America Institute in New York, a Director of Project HOPE in Washington, D.C., and a Director of the
NAACP Legal Defense and Educational Fund, Inc. Mr. Pfeiffer received a B.A. degree from Wesleyan
University in Middletown, Connecticut and studied at Oxford University as a Rhodes Scholar, completing a B.A.
and a M.A. in jurisprudence. He also holds a M.A. in Area Studies (Africa) from the School of Oriental and
African Studies of the University of London and holds a Juris Doctorate from Yale University. Mr. Pfeiffer
served as an officer on active and reserve duty in the U.S. Navy. Our Board of Directors has concluded that
Mr. Pfeiffer should serve on the Board and on the Compensation Committee based on his extensive corporate
management experience, his experience in working with technology companies, and, as a long-term member of
the board of Iridium Holdings, his deep knowledge of our company.

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Parker W. Rush. Mr. Rush has served on our Board of Directors since our inception. Mr. Rush has served as the
President and Chief Executive Officer and as a member of the Board of Directors of Republic Companies, Inc.,
or Republic, a provider of property and casualty insurance, since December 2003. Prior to his employment with
Republic, Mr. Rush served as a Senior Vice President and Managing Director at The Chubb Corporation and in
various other capacities since February 1980. Our Board of Directors has concluded that Mr. Rush should serve
on the Board and on the Audit Committee based on his extensive corporate management experience and his
financial expertise, including his qualification as an audit committee financial expert under SEC guidelines.

BOARD LEADERSHIP STRUCTURE

Our Board of Directors has an independent Chairman, Mr. Niehaus, who has authority, among other things, to
call and preside over Board meetings, including meetings of the independent directors, to set meeting agendas
and to determine materials to be distributed to the Board. Accordingly, the Chairman has substantial ability to
shape the work of the Board. We believe that separation of the positions of Chairman and Chief Executive
Officer reinforces the independence of the Board in its oversight of our business and affairs. In addition, we
believe that having an independent Chairman creates an environment that is more conducive to objective
evaluation and oversight of management’s performance, increasing management accountability and improving
the ability of the Board to monitor whether management’s actions are in the best interests of us and our
stockholders. As a result, we believe that having an independent Chairman can enhance the effectiveness of the
Board as a whole.

ROLE OF THE BOARD IN RISK OVERSIGHT

One of the Board’s key functions is informed oversight of our risk management process. The Board does not
have a standing risk management committee, but rather administers this oversight function directly through the
Board as a whole, as well as through various Board standing committees that address risks inherent in their
respective areas of oversight. In particular, while our Board is responsible for monitoring and assessing strategic
risk exposure, our Audit Committee has the responsibility to consider and discuss our major financial risk
exposures and the steps our management has taken to monitor and control these exposures, including guidelines
and policies to govern the process by which risk assessment and management is undertaken. Our Audit
Committee also monitors compliance with legal and regulatory requirements. Our Nominating and Corporate
Governance Committee monitors the effectiveness of our corporate governance guidelines, including whether
they are successful in preventing illegal or improper liability-creating conduct. Our Compensation Committee
assesses and monitors whether any of our compensation policies and programs has the potential to encourage
excessive risk-taking. It is the responsibility of the committee chairs to report findings regarding material risk
exposures to the Board. The Chairman has the responsibility of coordinating between the Board and management
with regard to the determination and implementation of responses to any problematic risk management issues.

MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors met eight times during 2009. Each Board member attended 75% or more of the aggregate
number of meetings of the Board and of the committees on which he served that were held during the portion of
the year for which he was a director or committee member.

INFORMATION REGARDING COMMITTEES OF THE BOARD OF DIRECTORS

Since the Acquisition, our Board has had three committees: an Audit Committee, a Compensation Committee
and a Nominating and Corporate Governance Committee. Prior to the Acquisition, our Board had an Audit

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Committee and a Nominating and Corporate Governance Committee. The following tables provide pre- and post-
Acquisition membership and meeting information for 2009 for each of the Board committees:

Pre-Acquisition:

Name

Audit

Nominating and Corporate
Governance

Thomas C. Canfield . . . . . . . . . . . . . . . . . . . . . .
Kevin P. Clarke . . . . . . . . . . . . . . . . . . . . . . . . .
Parker W. Rush . . . . . . . . . . . . . . . . . . . . . . . . .

Total pre-Acquisition meetings in 2009 . . . . . . .

X
X
X*

5

X*
X
X

—

Post-Acquisition:

Name

Audit

Compensation

Nominating and Corporate
Governance

Robert H. Niehaus . . . . . . . . . . . . . . . . . .
J. Darrel Barros . . . . . . . . . . . . . . . . . . . . .
Scott L. Bok . . . . . . . . . . . . . . . . . . . . . . .
Thomas C. Canfield . . . . . . . . . . . . . . . . .
Terry L. Jones . . . . . . . . . . . . . . . . . . . . . .
Alvin B. Krongard . . . . . . . . . . . . . . . . . .
Steven B. Pfeiffer . . . . . . . . . . . . . . . . . . .
Parker W. Rush . . . . . . . . . . . . . . . . . . . . .

Total post-Acquisition meetings in

X

X

X*

X

X
X
X*

X*

X
X

2009 . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

1

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* Committee Chairperson

Below is a description of each committee of our Board of Directors. The Board of Directors has determined that,
except as specifically described below, each member of each committee is independent within the meaning of the
NASDAQ listing standards and that each member is free of any relationship that would impair his individual
exercise of independent judgment with regard to us.

AUDIT COMMITTEE

The Audit Committee of our Board of Directors was established by the Board to oversee our corporate
accounting and financial reporting processes and audits of its financial statements. For this purpose, the Audit
Committee performs several functions. The Audit Committee evaluates the performance of and assesses the
qualifications of the independent registered public accounting firm; determines and approves the engagement of
the independent registered public accounting firm; determines whether to retain or terminate the existing
independent registered public accounting firm or to appoint and engage new a independent registered public
accounting firm; reviews and approves the retention of the independent registered public accounting firm to
perform any proposed permissible non-audit services; monitors the rotation of partners of the independent
registered public accounting firm on our audit engagement team as required by law; reviews and approves or
rejects transactions between us and any related persons; confers with management and the independent registered
public accounting firm regarding the effectiveness of internal controls over financial reporting; establishes
procedures, as required under applicable law, for the receipt, retention and treatment of complaints received by
us regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous

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submission by employees of concerns regarding questionable accounting or auditing matters; and meets to
review our annual audited financial statements and quarterly financial statements with management and the
independent registered public accounting firm. Prior to the Acquisition, the Audit Committee was composed of
Mr. Canfield, former director Kevin P. Clarke and Mr. Rush. Since the Acquisition, the Audit Committee has
been composed of Messrs. Rush (Chairman), Barros and Canfield. In 2009, the Audit Committee met five times
prior to the Acquisition and met twice after the Acquisition. The Audit Committee has adopted a written charter
that is available to stockholders on our website at http://investor.iridium.com/governance.cfm.

At least annually, the Board of Directors reviews the NASDAQ listing standards definition of independence for
Audit Committee members and has determined that all members of our Audit Committee are independent. The
Board of Directors has also determined that Mr. Rush qualifies as an “audit committee financial expert,” as
defined in applicable SEC rules.

Report of the Audit Committee of the Board of Directors

The Audit Committee has reviewed and discussed the audited financial statements for the year ended
December 31, 2009 with management of Iridium Communications Inc. The Audit Committee has discussed with
the independent registered public accounting firm the matters required to be discussed by Statement on Auditing
Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the
Public Company Accounting Oversight Board, or PCAOB, in Rule 3200T. The Audit Committee has also
received the written disclosures and the letter from the independent registered public accounting firm required by
applicable requirements of the PCAOB regarding the independent accountants’ communications with the audit
committee concerning independence, and has discussed with the independent registered public accounting firm
the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the
Board of Directors that the audited financial statements be included in this Annual Report on Form 10-K for the
year ended December 31, 2009.

Respectfully submitted,

AUDIT COMMITTEE

Parker W. Rush, Chairman
J. Darrel Barros
Thomas C. Canfield

COMPENSATION COMMITTEE

Prior to the Acquisition, our Board of Directors did not believe a compensation committee was necessary because
none of our executive officers or directors received compensation. Our Compensation Committee was formed in
connection with the Acquisition and since then has been composed of Messrs. Pfeiffer (Chairman), Jones,
Krongard and Niehaus. All members of our Compensation Committee are independent within the meaning of the
NASDAQ listing standards. In 2009,
the Compensation Committee met once after the Acquisition. The
Compensation Committee has adopted a written charter that is available to stockholders on our website at http://
investor.iridium.com/governance.cfm.

The Compensation Committee acts on behalf of the Board to review, approve, modify (as necessary) and oversee
our compensation strategy, policies, plans and programs, including:

•

establishment of corporate and individual performance objectives relevant to the compensation of our
executive officers and other senior management and evaluation of performance in light of these stated
objectives;

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•

review, approval and modification (as necessary) of the compensation and other terms of employment
or service, including severance and change in control arrangements, of our Chief Executive Officer and
the other executive officers and directors; and

•

oversight of our equity compensation plans, and other similar plan and programs.

Our Compensation Committee reviews with management our Compensation Discussion and Analysis and
considers whether to approve its inclusion in proxy statements and other filings.

Typically, the Compensation Committee meets quarterly and with greater frequency if necessary. The agenda for
each meeting is usually developed by the Chairman of the Compensation Committee. The Compensation
Committee meets regularly in executive session. However, from time to time, various members of management
and other employees as well as outside advisors or consultants may be invited by the Compensation Committee
to make presentations, to provide financial or other background information or advice or to otherwise participate
in Compensation Committee meetings. The Chief Executive Officer may not participate in, or be present during,
any deliberations or determinations of the Compensation Committee regarding his compensation or individual
performance objectives. The charter of the Compensation Committee grants the Compensation Committee full
access to all of our books, records, facilities and personnel, as well as authority to obtain, at our expense, advice
and assistance from internal and external legal, accounting or other advisors and consultants and other external
resources that the Compensation Committee considers necessary or appropriate in the performance of its duties.
In particular, the Compensation Committee has the sole authority to retain compensation consultants to assist in
its evaluation of executive and director compensation, including the authority to approve the consultant’s
reasonable fees and other retention terms.

During 2009, following the Acquisition, our Compensation Committee engaged a compensation consultant,
Frederic W. Cook & Co., Inc., to perform an update to a report the consultant had previously delivered to the
compensation committee of Iridium Holdings. The results of this updated report are described in more detail in
“Executive Compensation — Compensation Discussion and Analysis — Use of Compensation Consultant.”

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

The Nominating and Corporate Governance Committee of the Board of Directors is responsible for identifying,
reviewing and evaluating candidates to serve as our directors, consistent with criteria approved by the Board,
reviewing and evaluating incumbent directors, recommending to the Board for selection candidates for election
to the Board of Directors, making recommendations to the Board regarding the membership of the committees of
the Board, assessing the performance of the Board, and developing a set of corporate governance principles for
us. Prior to the Acquisition, our Nominating and Corporate Governance Committee was composed of Messrs.
Canfield, Clarke and Rush. Since the Acquisition, the Nominating and Corporate Governance Committee has
been composed of Messrs. Bok (Chairman), Jones and Krongard. All members of the Nominating and Corporate
Governance Committee are independent within the meaning of the NASDAQ listing standards. During 2009, the
Nominating and Corporate Governance Committee did not meet prior to or subsequent to the Acquisition. The
Nominating and Corporate Governance Committee has adopted a written charter that is available to stockholders
on our website at http://investor.iridium.com/governance.cfm.

The Nominating and Corporate Governance Committee believes that candidates for director should have
minimum qualifications, including having the ability to read and understand basic financial statements, being
over 21 years of age and having the highest personal integrity and ethics. The Nominating and Corporate
Governance Committee also intends to consider other factors, such as possessing relevant expertise upon which
to be able to offer advice and guidance to management, having sufficient time to devote to our affairs,
demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the

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commitment to rigorously represent the long-term interests of our stockholders. However, the Nominating and
Corporate Governance Committee can modify these qualifications from time to time. Candidates for director
nominees are reviewed in the context of the current composition of the Board, our operating requirements and the
long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance
Committee typically considers diversity, age, skills and such other factors as it deems appropriate given our
current needs and those of the Board to maintain a balance of knowledge, experience and capability. In the case
of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance
Committee reviews these directors’ overall service to us during their terms, including the number of meetings
attended, level of participation, quality of performance and any other relationships and transactions that might
impair the directors’ independence. In the case of new director candidates, the Nominating and Corporate
Governance Committee also determines whether the nominee is independent for NASDAQ purposes, which
determination is based upon applicable NASDAQ listing standards, applicable SEC rules and regulations and the
advice of counsel, if necessary. The Nominating and Corporate Governance Committee then uses its network of
contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional
search firm. The Nominating and Corporate Governance Committee conducts any appropriate and necessary
inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs
of the Board. The Nominating and Corporate Governance Committee meets to discuss and consider the
candidates’ qualifications and then recommends candidates to the Board for selection.

The Nominating and Corporate Governance Committee will consider director candidates recommended by
stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in
which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the
candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for
consideration by the Nominating and Corporate Governance Committee to become nominees for election to the
Board may do so by delivering a written recommendation to the Nominating and Corporate Governance
Committee at the following address: c/o Iridium Communications Inc., 6707 Democracy Blvd., Suite 300,
Bethesda, MD 20817, Attn: Secretary not less than 90 days but not more than 120 days prior to the anniversary
date of the last annual meeting of stockholders. Submissions must include the name and address of the
stockholder making the representation, the number of shares of our common stock beneficially owned by such
stockholder as of the date of the submission, the full name of the proposed nominee, a description of the
proposed nominee’s business experience for at least the previous five years, complete biographical information
for the nominee and a description of the proposed nominee’s qualifications as a director. Any such submission
must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a
director if elected.

STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Our Board has adopted a formal process by which stockholders may communicate with the Board or any of its
directors. Stockholders who wish to communicate with the Board or an individual director may send a written
communication to the Board or such director addressed to our Secretary at 6707 Democracy Blvd, Suite 300,
Bethesda, MD 20817. Each communication must set forth:

•

•

the name and address of the stockholder on whose behalf the communication is sent; and

the number of our shares that are owned beneficially by such stockholder as of the date of the
communication.

Each communication will be reviewed by our Secretary to determine whether it is appropriate for presentation to
the Board or such director. Examples of inappropriate communications include advertisements, solicitations or
hostile communications. Communications determined by our Secretary to be appropriate for presentation to the
Board or such director will be submitted to the Board or such director on a periodic basis.

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CODE OF ETHICS

We have adopted the Iridium Communications Inc. Code of Business Conduct and Ethics, or the Code, that
applies to all of our officers, directors and employees as well as those of our subsidiaries. The Code is available
on our website at http://investor.iridium.com/governance.cfm. If we make any substantive amendments to the
Code or grant any waiver from a provision of the Code to any executive officer or director, we will promptly
disclose the nature of the amendment or waiver on our website.

CORPORATE GOVERNANCE GUIDELINES

The Board of Directors has documented our governance practices by adopting Corporate Governance Guidelines,
or the Guidelines, to assure that the Board will have the necessary authority and practices in place to review and
evaluate our business operations as needed and to make decisions that are independent of our management. The
Guidelines are also intended to align the interests of directors and management with those of our stockholders.
The Guidelines set forth, among other things, the practices the Board intends to follow with respect to Board
composition and selection, Board meetings and involvement of senior management, Chief Executive Officer
performance evaluation and succession planning, and Board committees and compensation. The Guidelines may
be viewed at http://investor.iridium.com/governance.cfm.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than
ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and
reports of changes in ownership of our common stock and other equity securities. Officers, directors and greater
than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms
they file.

To our knowledge, based solely on a review of the copies of such reports furnished to us and written
representations that no other reports were required, during 2009, all Section 16(a) filing requirements applicable
to our officers, directors and greater than ten percent beneficial owners were timely complied with; except that
one report, covering one transaction, was filed 5 days late by Baralonco Limited.

Item 11. Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

Background

Prior to the Acquisition in September 2009, none of our officers received any compensation for service rendered
to us. Accordingly, this discussion and analysis relates to the compensation of executive officers of Iridium
Holdings who became our executive officers following the Acquisition. These executive officers included
Matthew J. Desch, Eric H. Morrison, John S. Brunette, Gregory C. Ewert and John M. Roddy, who are named in
the Summary Compensation Table below. We refer to the executive officers named in the Summary
Compensation Table as our named executive officers.

The compensation of these executives for the portion of 2009 prior to the Acquisition was determined by Iridium
Holdings. Following the Acquisition, we have retained and continued the 2009 compensation structure,
components and levels previously established by Iridium Holdings. Prior to the Acquisition, Iridium Holdings

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was a privately held company and accordingly was not as formal in its compensation practices and policies as
many publicly traded companies.

Immediately following the Acquisition, our Board of Directors established a Compensation Committee
consisting of Steven B. Pfeiffer, Terry L. Jones, Alvin B. Krongard and Robert H. Niehaus. Messrs. Pfeiffer,
Jones and Krongard had also been the members of the compensation committee of Iridium Holdings prior to the
Acquisition.

Objectives of Our Compensation Program

Our executive compensation program is designed to achieve the following three primary objectives:

•

•

•

to provide a competitive compensation package to attract and retain talented individuals to manage and
operate all aspects of our business;

to reward the achievement of corporate and individual objectives that promote the growth and
profitability of our business; and

to align the interests of executive officers with those of our stockholders by providing long-term
equity-based compensation.

To meet these objectives, our executive compensation package consists of a mix of base salary, performance-
based annual cash incentive bonuses, standard employee benefits and long-term incentives in the form of equity-
based awards. We believe that performance-based compensation is an important component of the total executive
compensation package for attracting, motivating and retaining high quality executives. Accordingly, a significant
portion of the compensation for the named executive officers is in the form of cash compensation that is subject
to the achievement of annual performance goals and equity-based compensation that enables them to share in the
growth of our company. We do not have formal or informal policies or guidelines for allocating compensation
between long-term and currently paid-out compensation, between cash and non-cash compensation, or among
different forms of cash compensation or non-cash compensation.

Role of the Chief Executive Officer

Prior to the Acquisition, the chief executive officer of Iridium Holdings, in consultation with the Iridium
Holdings compensation committee and its executive compensation consultant, played a significant role in the
development of its compensation program. All compensation decisions at Iridium Holdings were recommended
by its chief executive officer for the review and approval of the Iridium Holdings compensation committee, with
the exception of the compensation of the chief executive officer himself, which was determined by the committee
with input from the chief executive officer.

Use of Compensation Consultant

In late 2007, the Iridium Holdings compensation committee engaged a compensation consultant to review its
executive compensation structure in anticipation of becoming a publicly traded company. The compensation
consultant delivered reports to the committee during the first quarter of 2008 comparing the base salary, bonus,
equity compensation, long-term incentives and perquisites paid or provided to Iridium Holdings’ executive
officers to the compensation and benefits provided to the executive officers of a number of publicly traded
communications and technology companies regarded as comparable to Iridium Holdings. Based on these reports,
the Iridium Holdings compensation committee significantly increased the base salaries and target bonus amounts
of the named executive officers in 2008 to bring them more in line with those paid by comparable public
companies. The Iridium Holdings compensation committee did not use a compensation consultant in connection
with 2009 executive compensation, but, in light of the increases in 2008 and prevailing market conditions, the
Iridium Holdings compensation committee determined not to further increase salaries or bonus targets for 2009.

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After the closing of the Acquisition, our Compensation Committee requested from the compensation consultant
an update of the 2008 report focusing in particular on the cash components of the compensation program. The
compensation consultant delivered an updated report to the Compensation Committee in October 2009, which
compared the base salary and incentive cash bonus opportunity provided to the executive officers of Iridium
Holdings who had just become the executive management team of our company to the cash compensation
provided to the executive officers of the following communications and technology companies:

•

•

Intelsat Corporation

PAETEC Holding Corp.

• Time Warner Telecom Inc.

• Hughes Communications, Inc.

•

Inmarsat Finance plc

• Loral Space & Communications Inc.

• ViaSat, Inc.

•

Premiere Global Services Inc.

• Broadview Networks Holdings, Inc.

• NeuStar Inc.

• EMS Technologies, Inc.

•

J2 Global Communications Inc.

• Geoeye Inc.

• Globecomm Systems Inc.

• Globalstar, Inc.

•

SkyTerra Communications, Inc.

• ORBCOMM Inc.

This list of companies was developed by the compensation consultant and approved by our Compensation
Committee. The companies were chosen because they were public companies in the same industry as our
company or in related industries and because they were generally comparable with our company in terms of their
levels of revenue, EBITDA, net income, assets, market capitalization and number of employees. This list was
similar to the list of companies included in the 2008 report, but deleted two of the companies in the earlier report
and added seven new companies.

This report concluded that (1) the salary levels for our executive officers were at or somewhat above the median
of those at the comparable companies, (2) their target annual bonuses fell between the median and the 75th
percentile of those at the comparable companies and (3) their target overall annual cash compensation levels fell
between the median and the 75th percentile of those at the comparable companies. Based on the conclusions in
this updated report, our Compensation Committee determined not to change the 2009 salary and bonus amounts
previously established by Iridium Holdings.

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Elements of Executive Compensation

The compensation received by the named executive officers in 2009 consisted of the following elements:

Base Salary

Base salaries for our executive officers are generally based on the scope of their responsibilities, historical
performance and individual experience. We also aim to set base salaries at levels generally comparable with
those of executives in similar positions and with similar responsibilities at comparable companies as necessary to
attract, retain and motivate executives. Base salaries are reviewed annually, and may be further adjusted from
time to time.

As discussed above, the Iridium Holdings compensation committee significantly increased executive salaries in
2008 and, in view of those increases, determined to hold salary levels unchanged for 2009. Following the
Acquisition, our Compensation Committee did not make any changes to the 2009 base salary levels of the named
executive officers in effect prior to the Acquisition.

For 2009, Mr. Desch’s base salary was $675,000, Mr. Morrison’s base salary was $325,000, Mr. Brunette’s base
salary was $430,000, Mr. Ewert’s base salary was $340,000 and Mr. Roddy’s base salary was $320,000.

Annual Cash Incentive Bonus Program

We utilize cash incentive bonuses for executives to focus them on achieving key operational and financial
objectives within a yearly time horizon. In general, near the beginning of each year, we determine target bonus
amounts and performance parameters for our executives, which may be based on company-wide performance or
individual performance, or a combination of both. Following the end of the year, we then determine the level of
achievement by each executive and the appropriate bonus amount. Historically, all the target performance
objectives we have used have been company-wide objectives, with a subjective personal performance factor
being applied for each executive at the end of the process when the final bonus amounts are determined. We do
not have a policy to attempt to recover cash bonus payments paid to our executive officers if the performance
objectives that led to the determination of such payments were to be restated, or found not to have been met to
the extent that we originally believed.

In 2009, Iridium Holdings maintained such a performance-based cash incentive bonus program in which all of its
employees, including the named executive officers, participated. Our Compensation Committee determined
following the Acquisition that it was appropriate to continue this program for the remainder of 2009.

Target Bonuses. Under the terms of the cash incentive bonus program, each participant is assigned a target bonus
amount expressed as a percentage of such employee’s base salary. As discussed above, the Iridium Holdings
compensation committee determined to leave 2009 target bonus amounts unchanged from the 2008 amounts. The
target bonus amounts for 2009 for each named executive officer were:

• Mr. Desch’s target bonus was equal to 90% of his base salary;

•

the target bonus for each of Messrs. Morrison, Brunette and Ewert was equal to 75% of their respective
base salaries; and

• Mr. Roddy’s target bonus was equal to 60% of his base salary.

Determination of the 2009 Bonus Pool. Each year, the individual bonus targets of each employee in the bonus
program are added together to establish the “annual bonus pool target” for the program. The actual bonus pool
for the applicable year is funded based on the level of achievement of pre-established company-wide financial
performance goals and organizational imperatives. When the level of achievement of financial performance goals

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and organizational imperatives has been verified by our Compensation Committee following the end of the year,
the achieved financial performance goals and organizational imperatives are added together to determine the total
“corporate target bonus factor,” expressed as a percentage between 0% and the maximum potential percentage,
which was 170% in 2009. This corporate target bonus factor is then multiplied by the annual bonus pool target to
compute the total bonus pool.

The financial performance goals for Iridium Holdings for 2009 consisted of:

•

a company-wide revenue target of $344.2 million, weighted at 20% of the annual bonus pool target,
with:

•

•

•

achievement below 95% of the target resulting in no funding of the bonus pool;

achievement of at least 95% of the target but less than 100% resulting in funding based on a
sliding scale between 0% and 20% of the bonus pool; and

achievement between 100% and 116% of the target resulting in funding based on a sliding scale
between 20% and 40% of the bonus pool; and

•

an adjusted Operational EBITDA target of $133.9 million, weighted at 50% of the annual bonus pool
target, with:

•

•

•

achievement below 92% of the target resulting in no funding of the bonus pool;

achievement of at least 92% of the target but less than 100% resulting in funding based on a
sliding scale between 0% and 50% of the bonus pool; and

achievement between 100% and 120% of the target resulting in funding based on a sliding scale
between 50% and 100% of the bonus pool.

Operational EBITDA for Iridium Holdings was defined as earnings before interest; income taxes; depreciation
and amortization; Iridium NEXT revenue and expenses; and expenses associated with the Acquisition. Our
Compensation Committee, in measuring our achievement of Operational EBITDA following the end of 2009,
determined that
it would be fair and appropriate also to exclude from the calculation adjustments of
approximately $9.6 million attributable to purchase accounting as a result of the Acquisition. This decision
reflected our Compensation Committee’s view that these expenses would not have been incurred had Iridium
Holdings remained an independent company and that including these expenses would unfairly punish the
participants since the original target did not contemplate expenses of this nature.

Organizational imperatives accounted for the remaining 30% of the annual bonus pool target. The organizational
imperatives for 2009 were:

•

•

core organizational imperatives, consisting of the successful completion of activities leading to a
successful vote by the stockholders of our company on the Acquisition and the subsequent transition of
Iridium Holdings to being a public company, weighted at 15% of the target bonus pool; and finalizing
an agreement with a prime contractor for the development of Iridium NEXT, weighted at 15% of the
bonus pool; and

stretch organizational imperatives, consisting of delivering beneficial tax treatment for the unitholders
of Iridium Holdings, either through the closing of the Acquisition or otherwise, which would add an
additional 15% to the bonus pool; and the successful closing of a secondary payload agreement, which
would add an additional 15% to the bonus pool.

The organizational imperatives were individually weighted as shown above and were to contribute between 0%
of the total funding of the bonus pool
imperatives were achieved and 60% if all
organizational imperatives were achieved.

if no organizational

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The 2009 bonus pool was funded at 80% of the target bonus pool, reflecting (i) none of the 20% attributable to
the company-wide revenue target, since revenues were less than 95% of that target, (ii) all of the 50% attributable
to the achievement of the adjusted Operational EBITDA target, since we achieved $133.9 million, which was
100% of the target, and (iii) all of the 30% attributable to the achievement of the organizational imperatives,
since we achieved one of the core imperatives, the completion of the Acquisition, which was worth 15% of the
pool, and also achieved one of the stretch imperatives, delivering beneficial tax treatment to unitholders of
Iridium Holdings, which was worth an additional 15%.

Determination of Individual Bonuses for 2009. Once the actual amount of the bonus pool has been determined,
our Compensation Committee determines a “personal bonus factor” for each executive participating in the
program. This personal bonus factor can be between 0% and 150%.

For the named executive officers other than himself, Mr. Desch has the discretion to recommend to the
Compensation Committee, based on his assessment of the executive’s performance during the year, that it vary
the personal performance factor of each executive above or below 100%. The Compensation Committee then
makes its own determination whether or not to accept Mr. Desch’s recommendation. In making their respective
assessments, Mr. Desch and the Compensation Committee independently consider individual performance goals
communicated to the executive during the year, which include factors such as the introduction of new products,
the achievement of sales goals for existing products, exhibiting strong leadership skills, expanding international
licenses, execution of new partnering agreements,
increasing inventory efficiency and improving overall
customer satisfaction. None of these goals is individually weighted and Mr. Desch may take other factors into
account in recommending to the Compensation Committee the amount of bonus to award and the Compensation
Committee may utilize these or other factors in determining whether or not to accept or adjust Mr. Desch’s
recommendation.

In the case of Mr. Desch, the Compensation Committee makes its own independent evaluation of his personal
performance in determining his personal bonus factor.

Each executive’s incentive bonus will then be then calculated based on his target bonus multiplied by the
corporate target bonus factor multiplied by that executive’s personal bonus factor. For example, if an executive
had a base salary of $200,000 and a target bonus equal 50% of his base salary, such executive’s target bonus
would be $100,000. If we achieve a corporate target bonus factor of 90%, the executive’s bonus should equal
90% of his target bonus, or 45% of base salary, for a total bonus of $90,000. However, Mr. Desch might
recommend or the Compensation Committee might apply a personal bonus factor other than 100% to the annual
bonus the executive would have otherwise earned. In this example, if Mr. Desch recommended a personal factor
of 120% for the executive, and the Compensation Committee agreed with his recommendation, the executive’s
annual bonus would be 120% of $90,000, or $108,000.

For 2009, Messrs. Desch, Morrison, Brunette, Ewert and Roddy earned cash incentive bonuses of $486,000,
$214,500, $258,000, $193,800 and $145,920, respectively. In the case of Messrs. Desch, Morrison, Brunette,
Ewert and Roddy, the cash incentive bonus was calculated by multiplying such named executive officer’s target
bonus by 80% and then multiplying that result by a personal bonus factor of 100%, 110%, 100%, 95% and 95%,
respectively.

Equity-Based Incentive Compensation

We utilize stock options and other stock-based awards to reward long-term performance. We believe that
providing a meaningful portion of an executive’s total compensation package in the form of equity awards helps
to align the incentives of the executives with the interests of our stockholders. Our practice in general is to make
these awards subject to time-based vesting, which we believe helps to retain executives and motivate them. We
do not have any stock ownership guidelines or requirements for our executive officers.

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Iridium Holdings was a limited liability company. Because it was not a corporation and because of its pass-
through tax status, Iridium Holdings used a variety of equity and equity-like awards other than stock options to
provide long-term incentives to its executives. These are discussed in the following paragraphs to the extent they
were granted in 2009 or provided value to any of the named executive officers at the time of the Acquisition.

Treatment of Previously Granted Phantom Profits Interests in Iridium Holdings. In 2006, Iridium Holdings
granted phantom profits interests to Messrs. Desch and Roddy in connection with their employment. The
phantom profits interests provided that Messrs. Desch and Roddy would be entitled to receive cash payments as
if they held a 2.5% and a 0.5% ownership interest in Iridium Holdings, respectively, and were therefore entitled
to receive distributions from Iridium Holdings, but in each case only once such distributions exceeded a
designated threshold amount. The threshold amount was intended to reflect an estimate of the value of Iridium
Holdings at the time of the award and the awards were intended, among other things, to provide Messrs. Desch
and Roddy an interest in the appreciation of the value of Iridium Holdings in the event of a transaction like the
Acquisition.

Each of the phantom profits interests was granted subject to a time-based vesting schedule, with vesting over four
years in the case of Mr. Desch and over three years in the case of Mr. Roddy, but also provided that the phantom
profits interests would become fully vested upon the closing of a transaction such as the Acquisition. Pursuant to
the terms of the phantom profits interests, they were cashed out in full upon the closing of the Acquisition for
amounts reflecting their net value over the specified thresholds. The amount of these cash payments were
$4,483,698 in the case of Mr. Desch and $179,518 in the case of Mr. Roddy.

Treatment of Previously Granted Employee Holdings LLC Units. In 2008, Mr. Desch, along with several other
employees, was awarded units in Employee Holdings LLC, or Employee Holdings. The assets of Employee
Holdings consisted entirely of Class B units in Iridium Holdings. Mr. Desch received 39,582 units of Employee
Holdings, each representing one Iridium Holdings Class B unit. The units provided that Mr. Desch would be
indirectly entitled to receive distributions from Iridium Holdings, but only after such distributions exceeded a
designated threshold amount. The threshold amount was intended to reflect an estimate of the value of Iridium
Holdings at the time of the award and the awards were intended, among other things, to provide the recipients an
interest in the appreciation of the value of Iridium Holdings Class B units in the event of a transaction like the
Acquisition.

The units were granted subject to a time-based vesting schedule, with 25% of the units granted to Mr. Desch
being fully vested on the grant date and the remaining 75% vesting ratably over three years, with the units
becoming fully vested upon the closing of a transaction such as the Acquisition. Iridium Holdings elected in
connection with the Acquisition to permit Mr. Desch and the other holders of these units to make what amounted
to a net exercise or settlement to realize the net value of the units. Accordingly, immediately prior to the closing
of the Acquisition, the units were reduced to a lesser number of units not subject to a threshold amount based on
a ratio intended to maintain the same economic benefit for the units. The reduced number of units Mr. Desch
received was the indirect equivalent of 7,923 Iridium Holdings Class B units. The related Class B units were
exchanged in the Acquisition for consideration of $660,515 in cash and 151,993 shares of our common stock.

Treatment of Previously Granted Iridium Employee Holdings LLC Units. Over the last several years, Messrs.
Morrison and Ewert, along with several other employees, were awarded units in Iridium Employee Holdings
LLC, or Iridium Employee Holdings. Mr. Morrison was granted a total of three awards, one of 125 units in 2001,
one of 125 units in 2005 and one of 750 units in 2006. Mr. Ewert was granted one award of 1,000 units in 2005.
The assets of Iridium Employee Holdings consisted entirely of Class B units in Iridium Holdings. Each Iridium
Employee Holdings unit represented 15.484 Iridium Holdings Class B units. The units provided that Messrs.
Morrison and Ewert would be indirectly entitled to receive distributions from Iridium Holdings, but in the case of
the 2005 and 2006 grants, only once such distributions exceed a designated threshold amount. The threshold
amount was intended to reflect an estimate of the value of Iridium Holdings at the time of the respective award

157

and the awards were intended, among other things, to provide the recipients an interest in the appreciation of the
value of Iridium Holdings Class B units in the event of a transaction like the Acquisition.

The units were fully vested by the time of the Acquisition pursuant to their time-based vesting schedule. Iridium
Holdings elected in connection with the Acquisition to permit the holders of these units, including Messrs.
Morrison and Ewert, to make what amounted to a net exercise or settlement to realize the net value of the units.
Accordingly, immediately prior to the closing of the Acquisition, the units were reduced to a lesser number of
units not subject to a threshold amount based on a ratio that maintained the same economic benefit for all such
units. The reduced number of units was the indirect equivalent of 14,608 Iridium Holdings Class B units in the
case of Mr. Morrison and 14,481 Iridium Holdings Class B units in the case of Mr. Ewert. The related Class B
units were exchanged in the Acquisition for consideration of $1,217,738 in cash and 280,218 shares of our
common stock in the case of Mr. Morrison and $1,207,193 in cash and 277,791 shares of our common stock in
the case of Mr. Ewert.

Stock Option Grants. Following the Acquisition, only some of our executives had any equity interest in our
company, which they received in the Acquisition as partial consideration for their previous interests in Iridium
Holdings. Accordingly, in order to retain our executives and employees and further align their interests with
those of our stockholders, our Compensation Committee determined in November 2009 following the
Acquisition that it was appropriate to make a company-wide grant of options to acquire shares of our common
stock. These grants were made to all employees, including the named executive officers who joined our company
at the time of the Acquisition. These options have an exercise price of $8.73 per share, the closing price of our
common stock on the date of grant, and vest 25% on the first anniversary of grant and the remaining 75%
thereafter in 12 equal quarterly installments, except for Mr. Morrison’s option, which vests 50% on the first
anniversary of grant and the remaining 50% thereafter in four equal quarterly installments. The following table
indicates the number of options granted to each of the named executive officers in November 2009:

Name

Number of Shares
Underlying
Options

Matthew J. Desch . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eric H. Morrison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John S. Brunette . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gregory C. Ewert . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John M. Roddy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Scott L. Bok . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Robert H. Niehaus . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
Harold J. Rodriguez, Jr.

400,000
67,500
135,000
135,000
135,000
—
—
—

Severance Benefits

In connection with the commencement of their employment prior to the Acquisition, each of the named executive
officers individually negotiated the severance provisions set forth in their respective employment agreements or
employment letter agreements that are applicable under various termination scenarios, including termination
without cause, termination for good reason or constructive discharge and termination in connection with a change
in control. These provisions are discussed more fully in the section below under the heading “— Potential
Payments upon Termination or Change in Control.”

401(k) Plan

Our employees, including our named executive officers, are eligible to participate in our 401(k) plan. Our 401(k)
plan is intended to qualify as a tax qualified plan under Section 401 of the Internal Revenue Code of 1986, as
amended, or the Code. Our 401(k) plan provides that each participant may contribute a portion of his or her

158

pretax compensation, up to a statutory limit, which for most employees is $16,500 in 2009, with a larger “catch
up” limit for older employees. Employee contributions are held and invested by the plan’s trustee. We match
employee contributions dollar for dollar up to 5% of an employee’s salary, with a maximum match per employee
of $12,250 in each calendar year.

Other Benefits and Perquisites

Under the terms of his employment agreement with Iridium Holdings, which we effectively assumed in the
Acquisition, Mr. Desch is entitled to a leased automobile at our expense and we reimburse Mr. Desch for the
annual dues at a Washington, D.C.-area country club.

We provide medical insurance, dental insurance, vision coverage, life insurance and accidental death and
dismemberment insurance benefits to all full-time employees, including our named executive officers. These
benefits are available to all employees, subject to applicable laws. Our executive officers generally do not receive
any perquisites, except for the benefits described above for Mr. Desch. In addition, from time to time, we have
provided relocation expenses in connection with the relocation of executive officers. We do not make available
to any employees any defined benefit pension or nonqualified deferred compensation plan or arrangement.

Deductibility of Executive Compensation; Code Section 162(m)

One or more executive officer’s annual compensation may exceed $1.0 million. Code Section 162(m) denies a
federal income tax deduction for specified compensation in excess of $1.0 million per year paid to the chief
executive officer and the three other most highly paid executive officers, other than a company’s chief executive
officer and chief financial officer, of a publicly traded corporation. Some types of compensation, including
compensation based on performance criteria that are approved in advance by stockholders, are excluded from the
deduction limit. Our policy is to qualify compensation paid to our executive officers for deductibility for federal
income tax purposes to the extent feasible. However, to retain highly skilled executives and remain competitive
with other employers, our Compensation Committee may authorize compensation that would not be deductible
under Section 162(m) or otherwise if it determines that such compensation is in the best interests of our company
and its stockholders.

Accounting Considerations

Any equity compensation expense will be accounted for under accounting rules that require a company to
estimate and record an expense for each award of equity compensation over the service period of the award.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2009, the members of our Compensation Committee were Messrs. Pfeiffer, Jones, Krongard and Niehaus,
none of whom is a current or former employee of our company or of Iridium Holdings. During 2009 prior to the
Acquisition, the members of the Iridium Holdings compensation committee were Messrs. Pfeiffer, Jones and
Krongard. Mr. Niehaus served as our chief executive officer from September 20, 2009 until the closing of the
Acquisition on September 29, 2009 and as our senior vice president from our formation in 2007 through the
closing of the Acquisition.

For information about related-party transactions with Mr. Niehaus and his affiliates, see “Certain Relationships
and Related Transactions and Director Independence.” None of the other members of our Compensation
Committee had a direct or indirect material interest in any related-party transaction involving our company or
Iridium Holdings.

159

No interlocking relationships exist between our Board of Directors or our Compensation Committee and the
Board of Directors or the compensation committee of any other entity. None of our executive officers serves, or
in the past year has served, as a member of the Board of Directors or compensation committee of any entity that
has one or more executive officers serving on our Board of Directors or our Compensation Committee or on the
Board of Directors or compensation committee of Iridium Holdings.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and
Analysis for the year ended December 31, 2009. Based on the review and discussions, the Compensation
Committee approved the inclusion of the Compensation Discussion and Analysis in this Annual Report on
Form 10-K for the year ended December 31, 2009.

Respectfully submitted,

COMPENSATION COMMITTEE

Steven B. Pfeiffer, Chairman
Terry L. Jones
Alvin B. Krongard
Robert H. Niehaus

EXECUTIVE COMPENSATION

The following information regarding 2009 compensation to our named executive officers includes both
compensation they received from Iridium Holdings prior to the Acquisition in September 2009 and compensation
they received from us after they joined our executive team following the Acquisition. Information regarding 2008
compensation includes only compensation they received from Iridium Holdings. Prior to the Acquisition, none of
our officers received any compensation for service rendered to us.

The named executive officers consist of our chief executive officer, our chief financial officer, our other three
most highly compensated executive officers during 2009, and three other individuals who served as our chief
executive officer or chief financial officer during 2009 prior to the Acquisition.

160

Summary Compensation Table

The following table shows the total compensation earned by the named executive officers in 2008 and 2009.

Name and Principal Position

Year Salary(1)

Equity
Awards(2)

Option
Awards(3)

Non-Equity
Incentive Plan
Compensation(4)

All Other
Compensation

Total

Matthew J. Desch, . . . . . . . . .
Chief Executive Officer

2009 $675,000
2008 675,000 $3,573,953

— $2,246,964
—

$486,000
759,375

$23,353 (5) $3,431,317
5,040,717
32,389 (5)

Eric H. Morrison, . . . . . . . . . .
Chief Financial Officer

2009 325,000
2008 325,000

—
—

2009 430,000
2008 430,000

—
539,741

John S. Brunette,

. . . . . . . . . .

Chief Legal and
Administrative Officer

Gregory C. Ewert,

. . . . . . . . .

Executive Vice President
of Global Distribution
Channels

John M. Roddy, . . . . . . . . . . .
Executive Vice President
for Global Operations and
Product Development

2009 340,000
2008 340,000

2009 320,000
2008 320,000

Scott L. Bok,

. . . . . . . . . . . . .

former chief executive
officer(9)

Robert H. Niehaus,

. . . . . . . .

former chief executive
officer(11)

2009
2008

2009
2008

Harold J. Rodriguez, Jr.,
former chief financial
officer(12)

. . . .

2009
2008

—
—

—
—

—
—

364,635
—

758,350
—

214,500
304,688

258,000
258,000

12,250 (6)
11,500 (6)

916,385
641,188

12,250 (7)
4,480 (7)

1,458,600
1,232,221

758,350
—

193,800
318,750

12,250 (6)
11,500 (6)

1,304,400
670,250

758,350
—

145,920
240,000

12,250 (8)
40,871 (8)

1,236,520
600,871

—
—

—
—

—
—

—
—

—
—

—
—

25,000 (10)
—

25,000
—

25,000 (10)
—

25,000
—

—
—

—
—

—
—

—
—

—
—

—
—

—
—

(1) The amounts in this column for 2009 reflect the following amounts of salary paid by Iridium Holdings to the
respective executive for the period prior to the Acquisition: $506,250 to Mr. Desch, $243,750 to
Mr. Morrison, $322,500 to Mr. Brunette, $255,000 to Mr. Ewert and $240,000 to Mr. Roddy; plus the
following amounts of salary paid by us to the respective executive for the period following the Acquisition:
$168,750 to Mr. Desch, $81,250 to Mr. Morrison, $107,500 to Mr. Brunette, $85,000 to Mr. Ewert and
$80,000 to Mr. Roddy.

(2) The amounts in this column for 2008 reflect the aggregate dollar amount of the accounting expenses that
were recognized in 2008 and will be recognized in subsequent years for financial statement reporting
purposes with respect to LLC units in Employee Holdings granted in 2008. Pursuant to SEC rules, these
amounts exclude the impact of estimated forfeitures related to service-based vesting conditions.
Assumptions used in the calculation of these amounts are included in Note 2 to Iridium Holdings’
consolidated financial statements for the year ended December 31, 2008.

(3) The amounts in this column for 2009 reflect the aggregate dollar amount of the accounting expense that will
be recognized in 2009 and subsequent years for financial statement reporting purposes with respect to stock
options granted in 2009. Pursuant to SEC rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. Assumptions used in the calculation of these amounts
are included in Note 2 to our consolidated financial statements for the year ended December 31, 2009.

161

(4) The amounts in this column reflect cash incentive bonuses earned during the respective year and paid during

the first quarter of the following year.

(5) Consists in 2008 of $11,500 in 401(k) matching contributions, $8,889 of company-paid expenses for
personal use of a leased automobile and $12,000 in reimbursement of country club dues. Consists in 2009 of
$12,250 in 401(k) matching contributions, $3,803 of company-paid expenses for personal use of a leased
automobile and $7,300 in reimbursement of country club dues.

(6) Consists of 401(k) matching contributions.
(7) Consists of 401(k) matching contributions.
(8)

Includes 401(k) matching contributions of $11,500 in 2008 and $12,250 in 2009 and relocation assistance
valued at $29,371 in 2008.

(9) Mr. Bok served as chief executive officer of our company until September 20, 2009.
(10) Mr. Bok and Mr. Niehaus each received directors fees of $25,000 for their service on our Board for the
period following the Acquisition through the end of 2009. These fees are also reflected in the Director
Compensation for 2009 table below.

(11) Mr. Niehaus served as chief executive officer of our company from September 20, 2009 until the closing of

the Acquisition.

(12) Mr. Rodriguez served as chief financial officer of our company until the closing of the Acquisition.

Grants of Plan-Based Awards for 2009

The following table sets forth information relating to grants of plan-based incentive awards to the named
executive officers in 2009.

Name

Grant
Date

Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(1)

Threshold
($)

Target
($)

Maximum
($)

Matthew J. Desch . . . . . . . . . . . . . . .
Eric H. Morrison . . . . . . . . . . . . . . .
John S. Brunette . . . . . . . . . . . . . . . .
Gregory C. Ewert . . . . . . . . . . . . . . .
John M. Roddy . . . . . . . . . . . . . . . . .
Scott L. Bok . . . . . . . . . . . . . . . . . . . —
Robert H. Niehaus . . . . . . . . . . . . . . —
Harold J. Rodriguez, Jr. . . . . . . . . . . —

(3) —
(3) —
(3) —
(3) —
(3) —
—
—
—

607,500
243,750
322,500
255,000
192,000
—
—
—

1,549,125
621,563
822,375
650,250
489,600
—
—
—

Number of
Shares
Underlying
Option
Awards
(#)

400,000
67,500
135,000
135,000
135,000

—
—
—

Exercise
Price of
Option
Awards
($/Share)

8.73
8.73
8.73
8.73
8.73
—
—
—

Grant Date
Fair Value
of Option
Awards
($)(2)

2,246,964
364,635
758,350
758,350
758,350
—
—
—

(1) These amounts represent the target and maximum payments for each named executive officer under the
Iridium Holdings 2009 performance-based cash incentive bonus program. There were no minimum or
threshold amounts under this program.

(2) The amounts in this column reflect the aggregate dollar amount of the accounting expense that will be
recognized in 2009 and subsequent years for financial statement reporting purposes with respect to stock
options granted in 2009. Pursuant to SEC rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. Assumptions used in the calculation of these amounts
are included in Note 11 to our consolidated financial statements for the year ended December 31, 2009.
(3) All non-equity incentive awards were granted on February 24, 2009 and all stock options were granted on

November 19, 2009.

162

Outstanding Equity Awards at 2009 Year-End

The following table sets forth the equity-based awards held by the named executive officers that were
outstanding on December 31, 2009.

Name

Matthew J. Desch . . . . . . . . . . . . . . . . . . .
Eric H. Morrison . . . . . . . . . . . . . . . . . . . .
John S. Brunette . . . . . . . . . . . . . . . . . . . . .
Gregory C. Ewert . . . . . . . . . . . . . . . . . . . .
John M. Roddy . . . . . . . . . . . . . . . . . . . . .
Scott L. Bok . . . . . . . . . . . . . . . . . . . . . . . .
Robert H. Niehaus . . . . . . . . . . . . . . . . . . .
Harold J. Rodriguez, Jr. . . . . . . . . . . . . . . .

Option Awards

Number of Shares Underlying
Unexercised Options (#)

Exercisable(1)

Unexercisable(1)

Option
Exercise
Price
($/Share)

—
—
—
—
—
—
—
—

400,000
67,500
135,000
135,000
135,000

—
—
—

8.73
8.73
8.73
8.73
8.73
—
—
—

Option
Expiration
Date

11-19-2019
11-19-2019
11-19-2019
11-19-2019
11-19-2019
—
—
—

(1) All options shown vest 25% on November 19, 2010, the first anniversary of their grant date, and the
remaining 75% thereafter in 12 equal quarterly installments, except for Mr. Morrison’s option, which
vests 50% on November 19, 2010 and the remaining 50% thereafter in four equal quarterly installments.

Option and SAR Exercises in 2009

The following table sets forth, for each named executive officer, equity awards similar to stock appreciation
rights, or SARS, exercised during 2009. No named executive officer exercised any options in 2009.

Name

Matthew J. Desch . . . . . . . . . . . . . . . . . . . . . . . . .

Eric H. Morrison . . . . . . . . . . . . . . . . . . . . . . . . .
John S. Brunette . . . . . . . . . . . . . . . . . . . . . . . . . .
Gregory C. Ewert . . . . . . . . . . . . . . . . . . . . . . . . .
John M. Roddy . . . . . . . . . . . . . . . . . . . . . . . . . . .
Scott L. Bok . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Robert H. Niehaus . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
Harold J. Rodriguez, Jr.

SAR Exercises

Number of
Iridium Holdings
Units Acquired
on Exercise (#)

Value
Realized
on Exercise(3)
($)

39,582(1)
39,582(2)
15,484(1)
—
15,484(1)
7,976(2)
—
—
—

2,180,445
4,483,698
4,019,919

—

3,985,103
179,518

—
—
—

(1) Reflects the number of Iridium Holdings Class B units underlying the total (gross) number of units of
Employee Holdings and Iridium Employee Holdings held by the executive prior to the Acquisition, before
giving effect to the reduction of the number of units actually received by the executive at the time of the
Acquisition in a transaction akin to a net exercise, as described under the caption “—Compensation
Discussion and Analysis—Elements of Executive Compensation—Equity-Based Incentive Compensation”.
The reduced (net) number of Iridium Class B units indirectly received by the executives at the time of the
Acquisition was 7,923 in the case of Mr. Desch, 14,608 in the case of Mr. Morrison and 14,481 in the case
of Mr. Ewert.

(2) Reflects the gross number of Iridium Holdings Class B units equivalent to the executive’s phantom profits

interests in Iridium Holdings prior to the closing of the Acquisition.

(3) Reflects the value realized upon the exchange of the underlying Iridium Holdings Class B units for cash and
shares of our common stock in the Acquisition. Also reflects, in the case of Mr. Desch and Mr. Roddy, the
amounts they received upon the cash-out of their phantom profits interests in Iridium Holdings at the closing
of the Acquisition.

163

Employment Agreements

Mr. Desch’s Employment Agreement

Iridium Holdings entered into an employment agreement with Mr. Desch in September 2006 pursuant to which
he served as Iridium Holdings’ Chief Executive Officer. We assumed this agreement by virtue of the Acquisition
and it was immaterially amended in February 2010. The agreement has an initial term of four years ending
September 17, 2010 and will automatically renew for an additional two year term unless we or Mr. Desch give
written notice of intent not to renew the agreement not more than six months prior to the renewal date. The
employment agreement provides for payment of a base salary of no less than $550,000, which must be increased
each year by at least the same percentage the consumer price index for the Washington, D.C.- Baltimore metro
area increases for that year. Pursuant to his employment agreement, Mr. Desch is entitled to participate in our
annual
incentive plan with a target award of up to 70% of his then base salary as determined by our
Compensation Committee and based upon performance goals set by the Compensation Committee for the year.

Mr. Desch is eligible to participate in employee benefit plans made available to other senior executives. In
addition, we are required to provide him with an automobile and pay all the related expenses and reimburse him
for the cost of annual dues for a private club of his choice in the metropolitan Washington, D.C. area.

In his employment agreement, Mr. Desch has agreed not to compete with us nor solicit our employees for
alternative employment during the term of his agreement and for a period of one year after termination of
employment by us for cause or if he voluntarily terminates his employment without good reason.

Mr. Desch’s employment agreement provides for payments upon specified terminations of his employment. For a
description of these termination provisions, whether or not following a change in control, and a quantification of
benefits that would be received see the heading “—Potential Payments upon Termination or Change in Control”
below.

Other than the agreement with Mr. Desch, we do not have any other employment agreements with other named
executive officers. However, Iridium Holdings had entered into employment letter agreements with the other
named executive officers set forth below, which we have assumed by virtue of the Acquisition.

Employment Letter Agreements for Other Named Executive Officers

Mr. Morrison. Mr. Morrison entered into an employment letter agreement with Iridium Holdings on April 25,
2006, pursuant to which he served as its Executive Vice President and Chief Financial Officer. We assumed this
employment letter agreement by virtue of the Acquisition. The employment letter agreement provides for an
initial base salary of $260,000 and participation in our annual incentive plan with a target award of up to 35% of
base salary as determined by our Compensation Committee and based upon performance goals set by the
Compensation Committee for the year.

Mr. Brunette. Mr. Brunette entered into an employment letter agreement with Iridium Holdings on December 6,
2007 to serve as its Chief Administrative Officer and General Counsel. We assumed this employment letter
agreement by virtue of the Acquisition. The employment letter agreement provides for payment of a base salary
of $335,000 and participation in our annual incentive plan with a target award of up to 35% of his then base
salary as determined by our Compensation Committee and based upon performance goals set by the
Compensation Committee for the year.

Mr. Ewert. Mr. Ewert entered into an employment letter agreement with Iridium Holdings on September 30,
2004 to serve as its Executive Vice President of Marketing and Business Development. We assumed this
employment letter agreement by virtue of the Acquisition. The employment letter agreement provides for
payment of a base salary of $200,000 and participation in our annual incentive plan with a target award of up to
60% of his then base salary as determined by our Compensation Committee and based upon performance goals
set by the Compensation Committee for the year.

164

Mr. Roddy. Mr. Roddy entered into an employment letter agreement with Iridium Holdings on August 1, 2007 to
serve as its Executive Vice President of Customer Care, Gateway and Network Operations. We assumed this
agreement by virtue of the Acquisition. The employment letter agreement provides for payment of a base salary
of $260,000 and participation in our annual incentive plan with a target award of up to 35% of his then base
salary as determined by our Compensation Committee and based upon performance goals set by the
Compensation Committee for the year.

Each of the employment letter agreements provides for payments upon specified terminations of the executive’s
employment. For a description of these termination provisions, and a quantification of benefits that would be
received see the heading “— Potential Payments upon Termination or Change in Control” below.

Potential Payments upon Termination or Change in Control

Severance Payments.

The section below describes the payments that may be made to the named executive officers in connection with a
change in control or pursuant to specified termination events. In the absence of an employment agreement or
employment letter agreement to the contrary, the named executive officers are employed “at-will” and are not
entitled to any payments upon termination or a change in control other than their accrued but unpaid salary or
benefits.

Matthew J. Desch. The employment agreement for Mr. Desch, described above, provides for payments to him in
the event of the termination of his employment in the scenarios described below.

Termination by reason of death. In the case of Mr. Desch’s death, we are required to continue to pay to
Mr. Desch’s estate his base salary as of the date of death for a period of six months following his death and
continue benefits to his spouse in accordance with the terms of our benefit plans.

Termination without cause, for good reason or in connection with a change in control. In the event that we
terminate Mr. Desch’s employment without cause, Mr. Desch terminates employment for good reason, or his
employment is terminated in connection with a change in control, each as defined in his employment agreement,
we are required to pay, or provide, to him in a lump sum, 100% of his base salary as in effect on the date of
termination of employment plus 100% of his annual bonus amount under his employment agreement for the year
of termination, assuming all performance targets and objectives had been met. Also, we must provide Mr. Desch
with health insurance or reimburse him for the cost of his COBRA payments for one year following termination
of employment or until he is covered under a new employer’s health plan, whichever comes first.

Eric H. Morrison. The employment letter agreement for Mr. Morrison provides that he may be terminated by us
for any reason upon 30 days’ written notice. However, in the event he is terminated by us without cause or he
terminates his employment as a result of a constructive discharge, he will be entitled to three months of salary
continuation based upon his then current rate of pay. In addition, in the event his employment is terminated by us
without cause or he terminates his employment as a result of constructive discharge, he will be entitled to receive
a pro-rated portion of his target bonus amount for the year of termination based upon the actual achievement of
plan targets for the year of termination. For purposes of his employment letter agreement, constructive discharge
is defined as the assignment of duties materially inconsistent with his position, authority, duties or
responsibilities, or a substantially adverse alteration in the nature or status of his responsibilities.

John S. Brunette. The employment letter agreement for Mr. Brunette provides that he may be terminated by us
for any reason upon 30 days’ written notice. However, in the event his employment is terminated by us without
cause or he terminates his employment as a result of constructive discharge, he will be entitled receive a
pro-rated portion of his target bonus amount for the year of termination based upon the actual achievement of
plan targets for the year of termination. For purposes of his employment letter agreement, constructive discharge

165

is defined as the assignment of duties materially inconsistent with his position, authority, duties or
responsibilities, or a substantially adverse alteration in the nature or status of his responsibilities.

Gregory C. Ewert. The employment letter agreement for Mr. Ewert provides that in the event his employment is
terminated as a result of a change in control, he will be entitled to continuation of his then current base salary for
a period of six months following termination of employment.

John M. Roddy. The employment letter agreement for Mr. Roddy provides that he may be terminated by us for
any reason upon 30 days’ written notice. However, in the event he is terminated by us without cause by or he
terminates his employment as a result of constructive discharge, he will be entitled to salary continuation for a
period of six months following termination of employment. If, after the six month period, Mr. Roddy has not
found suitable employment, the salary continuation payments will continue for up to an additional three months
or until Mr. Roddy finds suitable employment, whichever comes first. In addition, in the event his employment is
terminated by us without cause or he terminates his employment as a result of constructive discharge, he will be
entitled to receive a pro-rated portion of his target bonus amount for the year of termination based upon the
actual achievement of plan targets for the year of termination. For purposes of his employment letter agreement,
constructive discharge is defined as the assignment of duties materially inconsistent with his position, authority,
duties or responsibilities, or a substantially adverse alteration in the nature or status of his responsibilities.

Estimated Current Value of Post-Employment Severance Benefits

The following table shows payments that would be made to each named executive officer in the event of a
termination of employment on December 31, 2009 under different scenarios.

Executive

Matthew J. Desch . . . . . . . . . . . . .
Eric H. Morrison . . . . . . . . . . . . .
John S. Brunette . . . . . . . . . . . . . .
Gregory C. Ewert . . . . . . . . . . . . .
John M. Roddy . . . . . . . . . . . . . . .
Scott L. Bok . . . . . . . . . . . . . . . . .
Robert H. Niehaus . . . . . . . . . . . .
Harold J. Rodriguez, Jr. . . . . . . . .

Death

$343,600(1)
—
—
—
—
—
—
—

Without Cause or
for Good
Reason/ Constructive
Discharge

Involuntary termination
in connection with a
Change in
Control

$1,294,700(2)
81,250(3)
322,500(4)
—
240,000(5)
—
—
—

$1,294,700(2)

—
—
170,000(1)
—
—
—
—

(1) Equal to 6 months of salary and continuation of health benefits for his spouse for 6 months.
(2) Equal to the sum of 12 months of base salary, annual bonus at target level and continuation of

health benefits for 12 months.

(3) Equal to 3 months of salary.
(4) Equal to annual target bonus.
(5) Equal to 9 months of salary.

166

Director Compensation for 2009

The following table provides summary information concerning compensation paid or accrued by us during 2009
to or on behalf of our directors and those of Iridium Holdings for services rendered during 2009. The amounts in
the table include both compensation received from Iridium Holdings prior to the Acquisition in September 2009
and compensation received from us after the Acquisition. In 2009, the outside directors of Iridium Holdings were
entitled to an annual cash retainer of $100,000, paid quarterly, and we maintained that policy following the
Acquisition. None of the directors received any compensation other than their cash retainer in consideration for
their service on our Board or that of Iridium Holdings. Mr. Desch, who is a named executive officer in addition
to being a director, did not receive any separate compensation for service in his capacity as a director and
accordingly he is not included in this table.

Name

Fees Earned
or Paid in
Cash(1)

J. Darrel Barros . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 25,000

Thomas C. Canfield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Peter M. Dawkins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Terry L. Jones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,000

25,000

25,000

Alvin B. Krongard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116,667

Steven B. Pfeiffer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Parker W. Rush . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scott L. Bok . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Robert H. Niehaus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kevin P. Clarke(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,000

25,000

25,000

25,000

—

(1) All fees in this column were paid by us following the Acquisition, except in the case of Mr. Krongard.
The amount for Mr. Krongard reflects $91,667 of fees paid by Iridium Holdings for the period prior to
the Acquisition plus $25,000 of fees paid by us for the period following the Acquisition.

(2) Mr. Clarke resigned from our Board of Directors upon the closing of the Acquisition on September 29,

2009.

We adopted a new compensation policy for non-employee directors effective January 1, 2010. Under this policy,
each non-employee director is eligible to receive an annual retainer of $140,000 for serving on the Board of
Directors. In addition, an annual retainer of $50,000 is awarded for serving as the Chairman of the Board, an
annual retainer of $20,000 is awarded for serving as the Chairman of the Audit Committee, an annual retainer of
$15,000 is awarded for serving as the Chairman of the Compensation Committee and an annual retainer of
$7,500 is awarded for serving as the Chairman of the Nominating and Corporate Governance Committee.

At the election of each non-employee director, the $140,000 retainer for serving on the Board of Directors may
be paid entirely in stock options, restricted stock or restricted stock units or some combination of these
instruments and up to $50,000 in cash. In addition, at the election of the non-employee director, the retainers for
serving as Chairman of the Board or chairman of a committee may be paid in either restricted stock units, cash or
a combination of both.

Any cash component of the compensation is paid, and any equity component vests, on a quarterly basis. Until six
months after the termination of the director’s service or upon a specified change of control of our company, if it
occurs earlier, the directors may not sell any of these shares of restricted stock or stock acquired upon the
exercise of these options and may not settle any of these restricted stock units.

167

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters

The following table sets forth certain information regarding the ownership of our common stock as of
February 25, 2010 by: (i) each director; (ii) each of the executive officers named in the Summary Compensation
Table; (iii) all of our executive officers and directors as a group; and (iv) all those known by us to be beneficial
owners of more than five percent of our common stock.

Beneficial Owner

Beneficial Ownership(1)

Number of
shares

Percentage

5% Holders
Baralonco Limited(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Greenhill & Co., Inc.(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Integrated Core Strategies (US) LLC(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Syndicated Communications, Inc.(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Syndicated Communications Venture Partners IV, L.P.(6) . . . . . . . . . . . . . . . . . . . . . . . .
T. Rowe Price Associates, Inc.(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,648,080
12,924,016
5,350,620
5,280,580
4,030,855
4,377,600

16.6%
17.4
7.1
7.5
5.7
6.2

Executive Officers and Directors
Matthew J. Desch(8)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eric H. Morrison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John S. Brunette . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gregory C. Ewert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John M. Roddy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Robert H. Niehaus(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Scott L. Bok(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thomas C. Canfield(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brigadier Gen. Peter M. Dawkins (Ret.)(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Terry L. Jones(13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Alvin B. Krongard(14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Steven B. Pfeiffer(15)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
J. Darrel Barros(16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parker W. Rush(17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Harold J. Rodriguez, Jr.(18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . .
All directors and executive officers as a group (18 persons)(19)

223,493
280,218
—
277,791
—
601,967
931,234
91,451
2,920
4,033,743
32,572
3,788
2,888
90,199
—
6,750,422

*
*
*
*
*
*
1.3
*
*
5.7
*
*
*
*
*
9.5

Less than 1% of the outstanding shares of common stock.

*
(1) This table is based upon information supplied by officers, directors and principal stockholders. Unless
otherwise indicated in the footnotes to this table and subject to community property laws where applicable,
we believe that each of the stockholders named in this table has sole voting and investment power with
respect to the shares indicated as beneficially owned. Applicable percentages are based on 70,247,701
shares outstanding on February 25, 2010.

(2) This information has been obtained from a Schedule 13D filed on October 8, 2009 by Baralonco Limited
and its sole owner, Khalid bin Abdullah bin Abdulrahman. According to the Schedule 13D, Khalid bin
Abdullah bin Abdulrahman shares voting and dispositive power with respect to the shares held by Baralonco
Limited. The principal business address of Baralonco Limited is: Craigmuir Chambers, P.O. Box 71, Road
Town, Tortola, British Virgin Islands VG1110.

(3) This information has been obtained from a Schedule 13G/A filed on February 10, 2010 by Greenhill & Co.,
Inc., or Greenhill. According to the Schedule 13G/A, Greenhill has sole voting and dispositive power with
respect to 12,924,106 shares of our common stock, which include 4,000,000 shares underlying immediately
exercisable warrants. Mr. Bok, one of our directors, is a managing director of Greenhill. Mr. Niehaus, a
director of our company, is Chairman of Greenhill Capital Partners. Mr. Rodriguez is our former Chief

168

Financial Officer and is Chief Administrative Officer, Chief Compliance Officer and a managing director of
Greenhill. The principal business address of Greenhill is: 300 Park Avenue, New York, NY 10022.

(4) This information has been obtained from a Schedule 13G filed on October 26, 2009 by Integrated Core
Strategies (US) LLC, or ICS, as supplemented by the stockholder. According to the Schedule 13G,
Millennium Management LLC, or Millennium, as the general partner of the managing member of ICS, and
Mr. Israel A. Englander, as the managing member of Millennium, shares voting and dispositive power with
respect to the 5,350,620 shares underlying immediately exercisable warrants. The principal business address
of ICS is: 666 Fifth Avenue, New York, NY 10103.

(5) This information has been obtained from a Schedule 13D filed on October 9, 2009 by Syndicated
Communications, Inc., or SCI. According to the Schedule 13D, Mr. Wilkins, who has a controlling
ownership interest in SCI, shares voting and dispositive power with respect to the shares held by SCI. The
principal business address of SCI is: 10420 Little Patuxent Way, Suite 495, Columbia, MD 21044.

(6) This information has been obtained from a Schedule 13D filed on October 9, 2009 by Syndicated
Communications Venture Partners IV, L.P., or the SynCom Fund. According to the Schedule 13D, WJM
Partners IV, LLC, or WJM, as the SynCom Fund’s General Partner, and Messrs. Terry L. Jones, Duane
McKnight, Herbert Wilkins, Sr., and Milford Anthony Thomas as the managing members of WJM shares
voting and dispositive power with respect to the shares held by the SynCom Fund. The principal business
address of the SynCom Fund is: 8515 Georgia Avenue, Suite 725, Silver Spring, MD 20910.

(7) This information has been obtained from a Schedule 13G filed on February 12, 2010 by T. Rowe Price
Associates, Inc., or T. Rowe Price. According to the Schedule 13G, T. Rowe Price has sole voting power
with respect to 836,000 shares of our common stock and sole dispositive power with respect to 4,377,600
shares of our common stock, which includes 389,700 and 1,985,500 shares underlying immediately
exercisable warrants, respectively. The principal business address of T. Rowe Price is 100 E. Pratt Street,
Baltimore, MD 21202.
Includes 27,000 shares underlying immediately exercisable warrants.
Includes 200,000 shares underlying immediately exercisable warrants and 3,691 shares underlying vested
restricted stock units.

(8)
(9)

(10) Includes 200,000 shares underlying immediately exercisable warrants and 4,734 shares underlying vested

restricted stock units.

(11) Includes 43,479 shares underlying immediately exercisable warrants and 4,493 shares underlying vested

restricted stock units.

(12) Consists of 2,920 shares underlying vested restricted stock units.
(13) Consists of 4,030,855 shares held by the SynCom Fund and 2,888 shares underlying vested restricted stock
units held directly by Mr. Jones. Mr. Jones is a managing member of WJM, the General Partner of the
SynCom Fund. Mr. Jones disclaims beneficial ownership of the shares held by the SynCom Fund except to
the extent of his pecuniary interest in such shares.

(14) Includes 7,384 shares issuable upon the exercise of stock options exercisable within 60 days of February 25,
2010. Excludes 115,233 shares held by The Krongard Irrevocable Equity Trust dated June 30, 2009, a trust
held for the benefit of Mr. Krongard’s children of which Mr. Krongard’s wife is the trustee. Mr. Krongard
disclaims beneficial ownership of any shares held by The Krongard Irrevocable Equity Trust dated June 30,
2009.

(15) Consists of 1,573 shares underlying vested restricted stock units and 2,215 shares issuable upon the exercise

of stock options exercisable within 60 days of February 25, 2010.
(16) Consists of 2,888 shares underlying vested restricted stock units.
(17) Includes 43,479 shares underlying immediately exercisable warrants and 3,241 shares underlying vested

restricted stock units.

(18) Excludes 15,000 shares and 15,000 shares underlying immediately exercisable warrants held by

Mr. Rodriguez’s wife, as to which Mr. Rodriguez disclaims beneficial ownership.

(19) Includes 9,599 shares issuable upon the exercise of stock options exercisable within 60 days of February 25,
2010, an aggregate of 513,958 shares underlying immediately exercisable warrants and 26,428 shares
underlying vested restricted stock units. See footnotes 8 through 17.

169

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides certain information with respect to all of our equity compensation plans in effect as
of December 31, 2009.

Plan Category

Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights

Weighted-average
exercise price of
outstanding options,
warrants and rights

Number of securities
remaining available for
issuance under equity
compensation plans
(excluding securities
reflected in first column)

Equity compensation plans approved by

security holders . . . . . . . . . . . . . . . . . . . .

2,636,400

Equity compensation plans not approved

by security holders . . . . . . . . . . . . . . . . . .

—

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,636,400

$8.73

—

$8.73

5,363,600

—

5,363,600

Item 13. Certain Relationships and Related Transactions and Director Independence

RELATED-PERSON TRANSACTIONS POLICY AND PROCEDURES

In 2009, we adopted a written Related-Person Transactions Policy that sets forth our policies and procedures
regarding the identification, review, consideration and approval or ratification of “related-persons transactions.”
For purposes of our policy only, a “related-person transaction” is a transaction, arrangement or relationship, or
any series of similar transactions, arrangements or relationships, in which we and any “related person” are
participants involving an amount that exceeds $120,000. Transactions involving compensation for services
provided to us as an employee, director, consultant or similar capacity by a related person are not covered by this
policy. A related person is any executive officer, director, or more than 5% stockholder of us, including any of
their immediate family members, and any entity owned or controlled by such persons.

Under the policy, where a transaction has been identified as a related-person transaction, management must
present information regarding the proposed related-person transaction to the Audit Committee (or, where Audit
Committee approval would be inappropriate, to another independent body of the Board) for consideration and
approval or ratification. The presentation must include a description of, among other things, the material facts,
the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether any
alternative transactions were available. To identify related-person transactions in advance, we rely on
information supplied by its executive officers, directors and certain significant stockholders. In considering
related-person transactions, the Committee takes into account the relevant available facts and circumstances
including, but not limited to (a) the risks, costs and benefits to us, (b) the impact on a director’s independence in
the event the related person is a director, immediate family member of a director or an entity with which a
director is affiliated, (c) the terms of the transaction, (d) the availability of other sources for comparable services
or products and (e) the terms available to or from, as the case may be, unrelated third parties or to or from
employees generally. In the event a director has an interest in the proposed transaction, the director must recuse
himself or herself form the deliberations and approval. The policy requires that, in determining whether to
approve, ratify or reject a related-person transaction, the Committee consider, in light of known circumstances,
whether the transaction is in, or is not inconsistent with, the best interests of us and our stockholders, as the
Committee determines in the good faith exercise of its discretion.

170

RELATED-PERSON TRANSACTIONS

Founding Stockholder’s Warrant Forfeiture in Connection with the Acquisition

Pursuant to letter agreements dated September 22, 2008 and April 28, 2009, Greenhill agreed to forfeit at the
closing of the Acquisition the following securities which it owned at the time: (1) 1,441,176 shares of our
common stock purchased as part of a unit purchase on November 13, 2007; (2) 8,369,563 warrants purchased as
part of a unit purchase on November 13, 2007; and (3) 4,000,000 warrants purchased in a private placement on
February 21, 2008. Greenhill did not receive any consideration for these forfeitures, but agreed to them in order
to facilitate the closing of the Acquisition. Greenhill is a significant stockholder of our company and two or our
directors, Messrs. Bok and Niehaus, and three of our executive officers prior to the Acquisition, Messrs. Bok,
Niehaus and Rodriguez, are managing directors of Greenhill.

At the closing of the Acquisition on September 29, 2009, Greenhill forfeited the securities described above.

Warrant Exchanges in Connection with the Acquisition

On July 29, 2009, we entered into agreements with Greenhill and Messrs. Bok and Niehaus to restructure, at the
closing of the Acquisition, warrants they held entitling them to acquire shares of our common stock. This was
part of a larger series of transactions in which we entered into agreements with a number of investors who had
acquired warrants in our initial public offering to repurchase or restructure those warrants. We negotiated this
series of transactions to reduce significantly the magnitude of the potential dilution to our stockholders and
potential short selling in connection with and following the consummation of the Acquisition.

In particular, we agreed with Greenhill and Messrs. Bok and Niehaus to restructure warrants held by them to
purchase 4,000,000, 200,000 and 200,000 shares, respectively, to:

•

•

•

increase their exercise price from $7.00 per share to $11.50 per share;

extend their exercise period by two years from February 2013 to February 2015; and

increase the price of our common stock at which we can redeem the restructured warrants from $14.25
to $18.00.

To effectuate the restructuring, we agreed, at the closing of the Acquisition, to enter into new warrant agreements
for the restructured warrants having terms substantially similar to the terms set forth in the old warrants, except
as set forth above.

We also agreed to file with the SEC, as soon as practicable following the issuance of the restructured warrants,
but in no event later than 15 business days following the issuance of the restructured warrants, a resale
registration statement to allow for the resale of shares of our common stock issued in connection with the
restructured warrants and the shares of our common stock underlying such restructured warrants. If the
registration statement had not been declared effective by the SEC within 30 business days following the issuance
of the restructured warrants, the warrant holders would have had the right to sell to us, for cash, the restructured
warrants for a price equal to the difference between the weighted average price of the shares of our common
stock during a specified period over the exercise price of the restructured warrants.

Upon the closing of the Acquisition, Greenhill and Messrs. Bok and Niehaus exchanged their old warrants for
new warrants having the restructured terms. We timely filed the registration statement covering the shares
underlying the warrants and the registration statement was declared effective by the SEC within the specified
time frame.

171

Note Conversion

In October 2009, Greenhill & Co. Europe Holdings Limited, or Greenhill Europe, elected to convert a
convertible note previously issued to it by Iridium Holdings in the principal amount of $22.9 million into
1,995,629 shares of our common stock. This conversion was in accordance with the terms of the note, which was
originally issued in 2008. Greenhill Europe is an affiliate of Greenhill and Messrs. Bok, Niehaus and Rodriguez.

Treatment of Equity Awards of Iridium Executives in the Acquisition; Stock Option Grants

At the closing of the Acquisition, phantom profits interests previously issued by Iridium Holdings to Messrs.
Desch and Roddy were cashed out in full pursuant to their terms. Messrs. Desch and Roddy were executive
officers of Iridium Holdings prior to the Acquisition and became executive officers of our company after the
Acquisition.

At the closing of the Acquisition, we permitted units previously issued to Messrs. Desch, Morrison and Ewert in
employee limited partnerships that in turn held units of Iridium Holdings to be settled in what amounted to a net
exercise.

In November 2010, we granted stock options to our executive officers.

For more information about the phantom profits interests and their cash-out in the Acquisition, the employee
in the Acquisition and the option grants, see “Executive Compensation—
units and their net settlement
Compensation Discussion and Analysis—Elements of Executive Compensation—Equity-Based Incentive
Compensation.”

172

Conversion of Iridium Holdings Units in the Acquisition

In connection with the Acquisition, pursuant to the terms of the Transaction Agreement between our company,
Iridium Holdings and the unitholders of Iridium Holdings, the following significant unitholders, executive
officers and directors of Iridium Holdings exchanged units held by them in Iridium Holdings for cash and shares
of our common stock, as set forth in the following table. The total cash received shown in the table includes cash
payments made subsequent to the closing of the Acquisition in respect of tax benefits received by us as a result of
the Acquisition.

Name

Total Cash
Received

Shares of
Common
Stock
Received

Significant Unit Holders:
Syncom Iridium Holdings Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Syndicated Communications Inc.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Baralonco, N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$10,555,095
22,947,728
27,882,794

4,030,855
5,280,580
10,648,080

Executive Officers:
Matthew J. Desch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Eric H. Morrison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dan Colussy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John S. Brunette . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lt. Gen. John H. Campbell (Ret.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cynthia C. Cann . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lee F. Demitry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gregory C. Ewert
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John M. Roddy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Donald L. Thoma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Directors:
Tyrone Brown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Terry L. Jones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Alvin B. Krongard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Steven B. Pfeiffer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

660,515
1,217,739
7,403,723
—
128,814
—
—
1,207,193
—
150,951

2,582,116
—
566,770
—

151,993
280,218
1,703,696

—
29,642
—
—

277,791

—
148,516

594,180

—
130,421
—

INDEPENDENCE OF THE BOARD OF DIRECTORS

As required under the NASDAQ listing standards, a majority of the members of a listed company’s Board of
Directors must qualify as “independent,” as affirmatively determined by the Board of Directors. Consistent with
these considerations, after review of all relevant identified transactions or relationships between each director, or
any of his family members, and us, our senior management and our independent registered public accounting
firm, the Board has affirmatively determined that the following nine directors are independent directors within
the meaning of the applicable NASDAQ listing standards: Messrs. Barros, Bok, Canfield, Dawkins, Jones,
Krongard, Niehaus, Pfeiffer and Rush. In making this determination, the Board found that none of these directors
had a material or other disqualifying relationship with us. Mr. Desch, our Chief Executive Officer, is not an
independent director by virtue of his position as our Chief Executive Officer.

173

Item 14. Principal Accountant Fees and Services

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table represents aggregate fees billed to us for the fiscal years ended December 31, 2009 and
December 31, 2008, by Ernst & Young LLP, our principal accountant.

Year Ended
December 31,

2009

2008

Audit fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax fees(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other fees(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 911,000
—
247,580
—

$100,000
—
—
239,960

Total fees(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,158,580

$339,960

The firm of Eisner LLP acted as our independent registered public accounting firm for the period November 20, 2007
through January 21, 2009. On January 21, 2009, we changed our independent registered public accounting firm to Ernst
& Young LLP from Eisner LLP. The decision to change independent registered public accounting firm was authorized
by our Board of Directors. The following table presents fees for the review of our interim financial statements for the
first three quarters for fiscal year 2008 and for all other services performed for fiscal year 2008 by Eisner LLP.

Audit fees(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2008

$181,955
—
—
—

Total fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$181,955

(1) Fees for audit services included fees associated with the annual audit, the reviews of our quarterly reports on

Form 10-Q, statutory audits required internationally, and fees related to registration statements.

(2) Tax fees included fees for tax compliance, tax advice and tax planning.
(3) All other fees included fees for financial and tax diligence services in connection with our proposed

acquisition of Iridium Holdings.

(4) Prior to our acquisition of Iridium Holdings, Ernst & Young LLP served as Iridium Holdings’ principal
accountant. The above table only includes those fees billed by Ernst & Young LLP to Iridium
Communications Inc. and does not include fees billed to Iridium Holdings prior to the Acquisition.

(5) Audit fees included fees for the audit of our annual financial statements and reviews of the financial

statements included in our quarterly reports on Form 10-Q.

All fees described above were approved by the Audit Committee.

PRE-APPROVAL POLICIES AND PROCEDURES.

The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services
rendered by our independent registered public accounting firm, Ernst & Young LLP. The policy generally
pre-approves specified services in the defined categories of audit services, audit-related services and tax services
up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope
of the engagement of the independent registered public accounting firm or on an individual, explicit,
case-by-case basis before the independent registered public accounting firm is engaged to provide each service.
The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the
decision must be reported to the full Audit Committee at its next scheduled meeting.

The Audit Committee has determined that the rendering of the services other than audit services by Ernst &
Young LLP is compatible with maintaining the principal accountant’s independence.

174

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Form 10-K:

(1) Financial Statements

The following documents are included as Part II, Item 8. of this Form 10-K:

Iridium Communications Inc.:

Reports of Independent Registered Public Accounting Firms
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income (Loss) . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Iridium Holdings LLC – Predecessor Company:

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Changes in Members’ Deficit and Comprehensive Income . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

71
73
74
75
76
77

105
106
107
108
109
110

(2) Financial Statement Schedules

The financial statement schedules are not
consolidated financial statements.

included here because required information is included in the

(3) Exhibits

See Item 15(b) below.

(b) Exhibits

Exhibit
No.

Document

2.1

2.2

3.1

3.2

4.1

Transaction Agreement dated September 22, 2008, incorporated herein by reference to Exhibit 1.1 of
the Registrant’s Current Report on Form 8-K filed with the SEC on September 25, 2008.

Amendment to Transaction Agreement dated April 28, 2009, incorporated herein by reference to
Exhibit 1.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on April 28, 2009.

Amended and Restated Certificate of Incorporation dated September 29, 2009, incorporated herein by
reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on
September 29, 2009.

Amended and Restated Bylaws, incorporated herein by reference to Exhibit 3.2 of the Registrant’s
Current Report on Form 8-K filed with the SEC on September 29, 2009.

incorporated herein by reference to Exhibit 4.2 of the
Specimen Common Stock Certificate,
Registrant’s Registration Statement on Form S-1 (Registration No. 333-147722) filed with the SEC
on February 4, 2008.

175

Exhibit
No.

4.2

4.3

4.4

4.5

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9†

10.10

Document

Amended and Restated Warrant Agreement between the Registrant and American Stock Transfer &
Trust Company, incorporated herein by reference to Exhibit 4.3 of the Registrant’s Current Report on
Form 8-K filed on February 26, 2008.

Specimen Warrant Certificate for $7.00 Warrants, incorporated herein by reference to Exhibit 4.4 of
the Registrant’s Registration Statement on Form S-1 (Registration No. 333-147722) filed with the
SEC on February 4, 2008.

Warrant Agreement for $11.50 Warrants between the Company and American Stock Transfer & Trust
Company, incorporated herein by reference to Exhibit 4.4 of the Registrant’s Current Report on Form
8-K filed with the SEC on September 29, 2009.

Specimen Warrant Certificate for $11.50 Warrants, incorporated herein by reference to Exhibit 4.5 of
the Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

Indemnification Contract, dated December 5, 2000, among Iridium Satellite LLC, The Boeing
Company, Motorola, Inc. and the United States, incorporated herein by reference to Exhibit 10.1 of
the Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

Transition Services, Products and Asset Agreement, dated as of December 11, 2000, by and among
Motorola, Inc., Iridium Holdings LLC and Iridium Satellite LLC, incorporated herein by reference to
Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on September 29,
2009.

Intellectual Property Rights Agreement, dated December 11, 2000, among Motorola Inc. and Iridium
Satellite LLC, incorporated herein by reference to Exhibit 10.3 of the Registrant’s Current Report on
Form 8-K filed with the SEC on September 29, 2009.

Subscriber Equipment Technology Agreement (Design), dated as of September 30, 2002, by and
among Motorola Inc. and SE Licensing LLC, incorporated herein by reference to Exhibit 10.4 of the
Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

Subscriber Equipment Technology Agreement (Manufacturing), dated as of September 30, 2002, by
and among Motorola Inc. and SE Licensing LLC, incorporated herein by reference to Exhibit 10.5 of
the Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

Senior Subordinated Term Loan Agreement, dated as of December 11, 2000, among Iridium Satellite
LLC and Motorola Inc., incorporated herein by reference to Exhibit 10.6 of the Registrant’s Current
Report on Form 8-K filed with the SEC on September 29, 2009.

Amended and Restated Contract for Transition, Steady State Operations and Maintenance, and
Re-Orbit of the Iridium Constellation System, dated as of January 1, 2003, among Iridium
Constellation LLC, Iridium Satellite LLC and The Boeing Company, as amended April 15, 2006,
incorporated herein by reference to Exhibit 10.7 of the Registrant’s Current Report on Form 8-K filed
with the SEC on September 29, 2009.

Form of Registration Rights Agreement, incorporated by reference to Annex D of the Registrant’s
Proxy Statement filed with the SEC on August 28, 2009.

Amended and Restated Agreement for Manufacture, dated January 1, 2007, among Iridium Satellite
LLC and Celestica Corporation, incorporated herein by reference to Exhibit 10.9 of the Registrant’s
Current Report on Form 8-K filed with the SEC on September 29, 2009.

Convertible Subordinate Promissory Note, dated October 24, 2008, of Iridium Holdings LLC for
Greenhill & Co. Europe Holdings Limited, incorporated herein by reference to Exhibit 10.10 of the
Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

176

Exhibit
No.

10.11*

Document

Employment Agreement, dated September 18, 2006, among Iridium Holdings LLC, Iridium Satellite
LLC and Matthew J. Desch, as amended April 20, 2007, January 21, 2008 and November 20, 2008,
incorporated herein by reference to Exhibit 10.11 of the Registrant’s Current Report on Form 8-K
filed with the SEC on September 29, 2009.

10.12†*

Offer Letter, dated December 6, 2007, for John S. Brunette, incorporated herein by reference to
Exhibit 10.12 of the Registrant’s Current Report on Form 8-K filed with the SEC on September 29,
2009.

10.13†*

Offer Letter, dated April 25, 2006, for Eric Morrison, incorporated herein by reference to Exhibit
10.13 of the Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

10.14*

10.15†*

10.16*

10.17*

10.18*

10.19*

10.20*

10.21*

10.22*

10.23*

21.1

23.1

23.2

Offer Letter, dated September 30, 2004, for Gregory Ewert, incorporated herein by reference to
Exhibit 10.14 of the Registrant’s Current Report on Form 8-K filed with the SEC on September 29,
2009.

Offer Letter, dated August 1, 2007, for John Roddy, as amended December 31, 2008, incorporated
herein by reference to Exhibit 10.15 of the Registrant’s Current Report on Form 8-K filed with the
SEC on September 29, 2009.

2009 Iridium Communications Inc. Stock Incentive Plan, incorporated by reference to Annex E of the
Registrant’s Proxy Statement filed with the SEC on August 28, 2009.

Form of Stock Option Award Agreement
for use in connection with the 2009 Iridium
Communications Inc. Stock Incentive Plan, incorporated herein by reference to Exhibit 10.1 of the
Registrant’s Current Report on Form 8-K filed with the SEC on November 19, 2009.

Form of Stock Appreciation Right Agreement for use in connection with the 2009 Iridium
Communications Inc. Stock Incentive Plan, incorporated herein by reference to Exhibit 10.2 of the
Registrant’s Current Report on Form 8-K filed with the SEC on November 19, 2009.

Form of Restricted Stock Award Agreement
for use in connection with the 2009 Iridium
Communications Inc. Stock Incentive Plan, incorporated herein by reference to Exhibit 10.3 of the
Registrant’s Current Report on Form 8-K filed with the SEC on November 19, 2009.

Non-Employee Director Compensation Plan, incorporated herein by reference to Exhibit 10.1 of the
Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2009.

Form of Stock Option Agreement for Non-Employee Directors for use in connection with the Iridium
Communications Inc. 2009 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.2 of
the Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2009.

Form of Restricted Stock Award Agreement for Non-Employee Directors for use in connection with
the Iridium Communications Inc. 2009 Stock Incentive Plan, incorporated herein by reference to
Exhibit 10.3 of the Registrant’s Current Report on Form 8-K filed with the SEC on December 22,
2009.

Form of Restricted Stock Unit Agreement for Non-Employee Directors for use in connection with the
Iridium Communications Inc. 2009 Stock Incentive Plan, incorporated herein by reference to Exhibit
10.4 of the Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2009.

List of Subsidiaries

Consent of Ernst & Young LLP, independent registered public accounting firm

Consent of Eisner LLP.

177

Exhibit
No.

31.1

31.2

32.1

Document

Certification of Chief Executive Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of The
Sarbanes-Oxley Act of 2002.

†

*

Confidential treatment has been granted for certain portions omitted from this exhibit pursuant to Rule
24b-2 under the Securities Exchange Act of 1934, as amended. Confidential portions of this exhibit have
been separately filed with the Securities and Exchange Commission.
Denotes compensatory plan, contract or arrangement.

178

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

IRIDIUM COMMUNICATIONS INC.

Date: March 16, 2010

By:

/S/ ERIC H. MORRISON

Eric H. Morrison
Chief Financial Officer
(Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated:

Name

Title

Date

/S/ MATTHEW J. DESCH

Chief Executive Officer and Director March 16, 2010

Matthew J. Desch

(Principal Executive Officer)

/S/ ERIC H. MORRISON

Chief Financial Officer

March 16, 2010

Eric H. Morrison

(Principal Financial Officer)

/S/ CYNTHIA C. CANN

Cynthia C. Cann

Vice President and Controller,

March 16, 2010

Iridium Satellite LLC
(Principal Accounting Officer)

/S/ ROBERT H. NIEHAUS

Director and Chairman of the Board March 16, 2010

Robert H. Niehaus

/S/

J. DARREL BARROS
J. Darrel Barros

/S/ SCOTT L. BOK

Scott L. Bok

Director

Director

March 16, 2010

March 16, 2010

/S/ THOMAS C. CANFIELD

Director

March 16, 2010

Thomas C. Canfield

/S/ PETER M. DAWKINS

Director

March 16, 2010

Peter M. Dawkins

/S/ TERRY L. JONES

Terry L. Jones

Director

March 16, 2010

/S/ ALVIN B. KRONGARD

Director

March 16, 2010

Alvin B. Krongard

/S/ STEVEN B. PFEIFFER

Director

March 16, 2010

Steven B. Pfeiffer

/S/ PARKER W. RUSH

Parker W. Rush

Director

179

March 16, 2010

(d) Exhibits

Exhibit
No.

EXHIBIT INDEX

Document

2.1

2.2

3.1

3.2

4.1

4.2

4.3

4.4

4.5

10.1

10.2

10.3

10.4

10.5

Transaction Agreement dated September 22, 2008, incorporated herein by reference to Exhibit 1.1 of
the Registrant’s Current Report on Form 8-K filed with the SEC on September 25, 2008.

Amendment to Transaction Agreement dated April 28, 2009, incorporated herein by reference to
Exhibit 1.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on April 28, 2009.

Amended and Restated Certificate of Incorporation dated September 29, 2009, incorporated herein by
reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on
September 29, 2009.

Amended and Restated Bylaws, incorporated herein by reference to Exhibit 3.2 of the Registrant’s
Current Report on Form 8-K filed with the SEC on September 29, 2009.

Specimen Common Stock Certificate,
incorporated herein by reference to Exhibit 4.2 of the
Registrant’s Registration Statement on Form S-1 (Registration No. 333-147722) filed with the SEC
on February 4, 2008.

Amended and Restated Warrant Agreement between the Registrant and American Stock Transfer &
Trust Company, incorporated herein by reference to Exhibit 4.3 of the Registrant’s Current Report on
Form 8-K filed on February 26, 2008.

Specimen Warrant Certificate for $7.00 Warrants, incorporated herein by reference to Exhibit 4.4 of
the Registrant’s Registration Statement on Form S-1 (Registration No. 333-147722) filed with the
SEC on February 4, 2008.

Warrant Agreement for $11.50 Warrants between the Company and American Stock Transfer & Trust
Company, incorporated herein by reference to Exhibit 4.4 of the Registrant’s Current Report on Form
8-K filed with the SEC on September 29, 2009.

Specimen Warrant Certificate for $11.50 Warrants, incorporated herein by reference to Exhibit 4.5 of
the Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

Indemnification Contract, dated December 5, 2000, among Iridium Satellite LLC, The Boeing
Company, Motorola, Inc. and the United States, incorporated herein by reference to Exhibit 10.1 of
the Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

Transition Services, Products and Asset Agreement, dated as of December 11, 2000, by and among
Motorola, Inc., Iridium Holdings LLC and Iridium Satellite LLC, incorporated herein by reference to
Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the SEC on September 29,
2009.

Intellectual Property Rights Agreement, dated December 11, 2000, among Motorola Inc. and Iridium
Satellite LLC, incorporated herein by reference to Exhibit 10.3 of the Registrant’s Current Report on
Form 8-K filed with the SEC on September 29, 2009.

Subscriber Equipment Technology Agreement (Design), dated as of September 30, 2002, by and
among Motorola Inc. and SE Licensing LLC, incorporated herein by reference to Exhibit 10.4 of the
Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

Subscriber Equipment Technology Agreement (Manufacturing), dated as of September 30, 2002, by
and among Motorola Inc. and SE Licensing LLC, incorporated herein by reference to Exhibit 10.5 of
the Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

180

Exhibit
No.

10.6

10.7

10.8

10.9†

10.10

10.11*

10.12†*

10.13†*

10.14*

10.15†*

10.16*

10.17*

10.18*

10.19*

Document

Senior Subordinated Term Loan Agreement, dated as of December 11, 2000, among Iridium Satellite
LLC and Motorola Inc., incorporated herein by reference to Exhibit 10.6 of the Registrant’s Current
Report on Form 8-K filed with the SEC on September 29, 2009.

Amended and Restated Contract for Transition, Steady State Operations and Maintenance, and Re-
Orbit of the Iridium Constellation System, dated as of January 1, 2003, among Iridium Constellation
LLC, Iridium Satellite LLC and The Boeing Company, as amended April 15, 2006, incorporated
herein by reference to Exhibit 10.7 of the Registrant’s Current Report on Form 8-K filed with the
SEC on September 29, 2009.

Form of Registration Rights Agreement, incorporated by reference to Annex D of the Registrant’s
Proxy Statement filed with the SEC on August 28, 2009.

Amended and Restated Agreement for Manufacture, dated January 1, 2007, among Iridium Satellite
LLC and Celestica Corporation, incorporated herein by reference to Exhibit 10.9 of the Registrant’s
Current Report on Form 8-K filed with the SEC on September 29, 2009.

Convertible Subordinate Promissory Note, dated October 24, 2008, of Iridium Holdings LLC for
Greenhill & Co. Europe Holdings Limited, incorporated herein by reference to Exhibit 10.10 of the
Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

Employment Agreement, dated September 18, 2006, among Iridium Holdings LLC, Iridium Satellite
LLC and Matthew J. Desch, as amended April 20, 2007, January 21, 2008 and November 20, 2008,
incorporated herein by reference to Exhibit 10.11 of the Registrant’s Current Report on Form 8-K
filed with the SEC on September 29, 2009.

Offer Letter, dated December 6, 2007, for John S. Brunette, incorporated herein by reference to
Exhibit 10.12 of the Registrant’s Current Report on Form 8-K filed with the SEC on September 29,
2009.

Offer Letter, dated April 25, 2006, for Eric Morrison, incorporated herein by reference to Exhibit
10.13 of the Registrant’s Current Report on Form 8-K filed with the SEC on September 29, 2009.

Offer Letter, dated September 30, 2004, for Gregory Ewert, incorporated herein by reference to
Exhibit 10.14 of the Registrant’s Current Report on Form 8-K filed with the SEC on September 29,
2009.

Offer Letter, dated August 1, 2007, for John Roddy, as amended December 31, 2008, incorporated
herein by reference to Exhibit 10.15 of the Registrant’s Current Report on Form 8-K filed with the
SEC on September 29, 2009.

2009 Iridium Communications Inc. Stock Incentive Plan, incorporated by reference to Annex E of the
Registrant’s Proxy Statement filed with the SEC on August 28, 2009.

Form of Stock Option Award Agreement
for use in connection with the 2009 Iridium
Communications Inc. Stock Incentive Plan, incorporated herein by reference to Exhibit 10.1 of the
Registrant’s Current Report on Form 8-K filed with the SEC on November 19, 2009.

Form of Stock Appreciation Right Agreement for use in connection with the 2009 Iridium
Communications Inc. Stock Incentive Plan, incorporated herein by reference to Exhibit 10.2 of the
Registrant’s Current Report on Form 8-K filed with the SEC on November 19, 2009.

Form of Restricted Stock Award Agreement
for use in connection with the 2009 Iridium
Communications Inc. Stock Incentive Plan, incorporated herein by reference to Exhibit 10.3 of the
Registrant’s Current Report on Form 8-K filed with the SEC on November 19, 2009.

10.20*

Non-Employee Director Compensation Plan, incorporated herein by reference to Exhibit 10.1 of the
Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2009.

181

Exhibit
No.

10.21*

10.22*

Document

Form of Stock Option Agreement for Non-Employee Directors for use in connection with the Iridium
Communications Inc. 2009 Stock Incentive Plan, incorporated herein by reference to Exhibit 10.2 of
the Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2009.

Form of Restricted Stock Award Agreement for Non-Employee Directors for use in connection with
the Iridium Communications Inc. 2009 Stock Incentive Plan, incorporated herein by reference to
Exhibit 10.3 of the Registrant’s Current Report on Form 8-K filed with the SEC on December 22,
2009.

10.23*

Form of Restricted Stock Unit Agreement for Non-Employee Directors for use in connection with the
Iridium Communications Inc. 2009 Stock Incentive Plan, incorporated herein by reference to Exhibit
10.4 of the Registrant’s Current Report on Form 8-K filed with the SEC on December 22, 2009.

21.1

23.1

23.2

31.1

31.2

32.1

List of Subsidiaries.

Consent of Ernst & Young LLP, independent registered public accounting firm

Consent of Eisner LLP.

Certification of Chief Executive Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of The
Sarbanes-Oxley Act of 2002.

†

*

Confidential treatment has been granted for certain portions omitted from this exhibit pursuant to Rule
24b-2 under the Securities Exchange Act of 1934, as amended. Confidential portions of this exhibit have
been separately filed with the Securities and Exchange Commission.
Denotes compensatory plan, contract or arrangement.

182

SUBSIDIARIES OF IRIDIUM COMMUNICATIONS INC.

EXHIBIT 21.1

Subsidiary

Iridium Holdings LLC

Iridium Satellite LLC

Iridium Constellation LLC

Iridium Government Services LLC

Iridium Carrier Holdings LLC

Iridium Carrier Services LLC

Jurisdiction of Organization

Delaware

Delaware

Delaware

Delaware

Delaware

Delaware

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Form S-3 Nos. 333-162206 and
333-159673) of Iridium Communications Inc. of our reports dated March 16, 2010, with respect
to the
consolidated financial statements of Iridium Communications Inc. and the effectiveness of internal control over
financial reporting of Iridium Communications Inc. and of our report dated March 16, 2010, with respect to the
consolidated financial statements of Iridium Holdings LLC (Predecessor of Iridium Communications Inc.),
included in this Annual Report (Form 10-K) for the year ended December 31, 2009.

/s/ Ernst & Young LLP

McLean, VA
March 16, 2010

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements of Iridium Communications Inc. on
Forms S-3 (File Nos. 333-162206 and 333-159673) of our report dated March 28, 2008 with respect to our audit
of the financial statements for the period ended December 31, 2007 of Iridium Communications Inc., included in
the December 31, 2009 annual report on Form 10-K of Iridium Communications Inc.

We also consent to the reference to our firm under the heading “Experts” in the Registration Statements on
Forms S-3.

/s/ Eisner LLP

New York, New York
March 16, 2010

CERTIFICATION

EXHIBIT 31.1

I, Matthew J. Desch, certify that:

1.

I have reviewed this annual report on Form 10-K of Iridium Communications Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision,
to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles];

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board
of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

Date: March 16, 2010

/s/ Matthew J. Desch

Matthew J. Desch
Chief Executive Officer

CERTIFICATION

EXHIBIT 31.2

I, Eric H. Morrison, certify that:

1.

I have reviewed this annual report on Form 10-K of Iridium Communications Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision,
to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles];

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board
of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant’s internal control over financial reporting.

Date: March 16, 2010

/s/ Eric H. Morrison

Eric H. Morrison
Chief Financial Officer

EXHIBIT 32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350),
each of Matthew J. Desch, Chief Executive Officer of Iridium Communications Inc., a Delaware corporation (the
“Company”), and Eric H. Morrison, Chief Financial Officer of the Company, does hereby certify that, to the best
of such officer’s knowledge:

1.

2.

The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (the “Form
10-K”), to which this Certification is attached as Exhibit 32.1 fully complies with the requirements of
Section 13(a) or Section 15(d) of the Exchange Act, and

The information contained in the Form 10-K fairly presents, in all material respects, the financial condition
and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 16th day of March 2010.

/s/ Matthew J. Desch

Matthew J. Desch
Chief Executive Officer

/s/ Eric H. Morrison

Eric H. Morrison
Chief Financial Officer

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and
Exchange Commission and is not to be incorporated by reference into any filing of the Company under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before
or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

2010 CORPORATE INFORMATION

CORPORATE OFFICERS

Matthew J. Desch
Chief Executive Officer

Thomas J. Fitzpatrick
Chief Financial Officer

John S. Brunette
Chief Legal and Administrative Officer

Lt. Gen. John H. Campbell (Ret.)
Executive Vice President Government Programs,
Iridium Satellite

Cynthia C. Cann
Vice President and Controller, Iridium Satellite

Gregory C. Ewert
Executive Vice President Sales, Global Distribution
Channels, Iridium Satellite

John M. Roddy
Executive Vice President Global Operations and
Product Development, Iridium Satellite

S. Scott Smith
Executive Vice President, Iridium NEXT

Donald L. Thoma
Executive Vice President Marketing, Iridium Satellite

BOARD OF DIRECTORS

Robert H. Niehaus
Chairman of the Board and Chairman,
Greenhill Capital Partners

J. Darrel Barros
President, Syndicated Communications, Inc.

Scott L. Bok
Co-Chief Executive Officer, Greenhill & Co., Inc.

Thomas C. Canfield
Senior Vice President and General Counsel,
Spirit Airlines, Inc.

Brigadier Gen. Peter M. Dawkins (Ret.)
Senior Partner, Flintlock Capital Asset Management LLC
and Principal, Shining Star Capital LLC

Matthew J. Desch
Chief Executive Officer

Terry L. Jones
Managing Member, WJM Partners IV, LLC and
Syncom Venture Management Co., LLC

Alvin B. Krongard
Former Chief Executive Officer and Chairman of the
Board, Alex. Brown Incorporated

Steven B. Pfeiffer
Partner and Chair, Executive Committee,
Fulbright & Jaworski L.L.P.

Parker W. Rush
President and Chief Executive Officer,
Republic Companies, Inc.

GENERAL INFORMATION

HEADQUARTERS:
Iridium Communications Inc.
1750 Tysons Boulevard, Suite 1400
McLean, Virginia 22102
Phone: (703) 287-7400
Facsimile: (703) 287-7450
www.iridium.com

TRANSFER AGENT AND REGISTRAR:
American Stock Transfer and Trust Company
59 Maiden Lane, Plaza Level
New York, New York 10038
(800) 937-5449

STOCK EXCHANGE:
NASDAQ Global Market
Common Stock (IRDM)
Units (IRDMU)
$7.00 Warrants (IRDMW)
$11.50 Warrants (IRDMZ)

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM:
Ernst & Young LLP

LEGAL COUNSEL:
Cooley Godward Kronish LLP

Only one communications company connects the entire globe 

Iridium is the world’s only truly global mobile communications company, with coverage of the 

entire Earth, including oceans, airways and Polar Regions. Iridium voice and data products provide 

communications solutions that allow global companies, government agencies and individuals to stay 

connected, everywhere. The unique Iridium constellation of 66 Low Earth Orbiting (LEO) cross-linked 

satellites routes communications traffic through space and around the world, creating highly efficient 

and reliable connections.

www.iridium.com

© Copyright 2010 Iridium Communications Inc. All rights reserved. Iridium and the logo are registered marks of Iridium Communications Inc.

All other registered marks, trademarks, service marks and logos are the property of their respective holders. Information is subject to change without notice.