Operating Highlights

Subscribers in the first quarter 2009 were up 31.2% to 328,000 from 250,000 in the first quarter of 2008. While subscriber equipment revenue declined 34.3% to $20.5 million in the first quarter of 2009 compared to $31.2 million in the first quarter of 2008, commercial service revenue increased 26.9% in the first quarter of 2009 to $36.8 million, compared to $29.0 million in the first quarter of 2008, such that overall revenue increased 2.0% to $75.8 million in the first quarter of 2009 from $74.3 million for the first quarter of 2008. Operational EBITDA(1) increased 4.9% to $27.6 million in the first quarter of 2009 from $26.3 million in the first quarter of 2008. Net income declined 41.9% to $9.7 million in the first quarter of 2009 from $16.7 million in the first quarter of 2008, primarily due to increased expenses related to Iridium NEXT, the company's next-generation satellite program.

"Iridium continued to grow, although the pace slowed given the current economic climate," said Matt Desch, chief executive officer, Iridium. "Our growth in the quarter was driven by high-margin commercial service revenues, which are stable and recurring. At the same time, our subscriber equipment sales slowed, although equipment sales remained profitable for the company.

"Iridium remains unique for our truly global coverage, with a diversity of applications that are prized by our customers and delivered by a vast ecosystem of service providers. Iridium provides critical services in the maritime, government, aviation and industrial sectors that operate in remote locations, in the air and at sea, where there is often no communication alternative. Communicating to and from remote locations is not a luxury for our customers, and this is evident in Iridium's continued service revenue and subscriber growth," said Desch.

On the decline in equipment sales, year-over-year comparisons of revenue are affected by $2 million of equipment amortization relating to sales of equipment in prior years that are included in the first quarter of 2008. Without the impact of the amortization, overall revenue would have increased 4.8% versus 2.0% and equipment revenue would have declined by 29.8% versus 34.3%.

Desch commented, "In addition to the impact of phasing out equipment amortization, we believe the general economic climate is affecting equipment sales, as is the transition of newly introduced products into the distribution channel as our partners move existing inventory to make way for new product."

"Iridium continued its growth and remained profitable during a tough first quarter in the global economy," Desch concluded. "And we expect to continue to grow through the remainder of 2009, on the strength of our service revenues and as our new products gain traction in the market. We expect operational EBITDA to grow in the range of 11% to 20% to produce between $120 and $130 million on low single-digit revenue growth during 2009."

Transaction Highlights

As previously announced, on April 28, 2009, Iridium and GHL Acquisition Corp. (NYX: GHQ), or GHL Acquisition, amended the transaction proposed by the two companies on September 23, 2008. The amendment revised the total consideration payable to Iridium owners to reflect changes in equity market valuations since the parties entered the original transaction agreement. The companies anticipate that the deal will close in the coming months, pending the completion of regulatory approvals and approval by GHL Acquisition shareholders.

In connection with the transaction, GHL Acquisition has retained Deutsche Bank as a financial advisor.

Separately, Banc of America Securities LLC (BofA), together with its affiliates, agreed to sell all of the approximately 3.7 million GHL Acquisition warrants that it owns to GHL Acquisition for an aggregate consideration of approximately $1.8 million, subject to the closing of the transaction between GHL Acquisition and Iridium. GHL Acquisition may, subject to market conditions, engage in various open-market and privately negotiated transactions in its common stock and warrants, such as this transaction with BofA.

GHL Acquisition further announced that BofA has agreed to reduce the amount of its deferred underwriting compensation by approximately $8.2 million.

Growth Highlights

Iridium reported growth over the prior year quarter in commercial service revenue and subscribers, as well as growth in government services revenue.

Commercial

Combined commercial voice and data traffic in the markets that Iridium serves, including maritime, aviation and land mobile, grew 11.5% for the first quarter of 2009 compared to the same period in 2008. This included growth in voice traffic of 7.1% and growth in data traffic of 23.2% during the quarter, as compared to the same quarter in 2008.

"Despite the economy, ships are sailing and Iridium is one of the most cost-effective communications options available to them - especially in industries such as fishing," said Don Thoma, executive vice president, marketing, Iridium. "Maritime continues to represent great opportunity for Iridium, and crew calling remains a bright spot with particularly strong growth for first quarter 2009 over the first quarter of last year.