Commercial Space Industry Overview and Trends

1. Commercial Space IndustryOverview and Trends Carissa Christensen International Space Development Conference May 28, 2009 Proprietary

2. Space Industry Elements

3. Global Space Industry About $265 Billion Space budgets and revenues

4. Global Space Industry Growth Rates, 2005 to 2008 Global space industry growth rates in USD, 2005-2008

5. Commercial hardware, facilities, and services that enable space products and services, such as Launch vehicles Satellites Ground equipment (excluding most end-user hardware) Launch ranges Minimal growth since 2005 Augmented substantially by government infrastructure Commercial infrastructure = roughly 20% of total commercial space revenue Government infrastructure = roughly 80% of total government space budgets Big news Major launch providers and satellite operators remain stable Major satellite operators are maintaining revenue, even seeing growth, and ordering future spacecraft – about 80% of the market New starts are struggling, capital unavailable, some will fail, and others will delay market entry – about 20% of the market Personal spaceflight development activities continue Commercial Infrastructure

6. Personal Spaceflight • Suborbital spaceflight • About 8 minutes in space • $100,000 to $200,000 per trip • Over $40M in deposits held • Orbital spaceflight • Two weeks in space • $20M-30M per trip • 7 flights, 6 total customers, all since 2002 • Market characteristics • Identified with space • Exciting and unique • Optional and high end • Revenue potential uncertain, business risks high • Potential for game changing payoffs • Over $1.2B in investment • About $275M in revenues per year, mostly leveraging hardware development services • Growing interest in secondary markets • Science payloads • Small satellites • Cargo delivery • Stress but survival in 2009 • Industry composition changing • 2006: Start-up • 2009: Small to medium integrated aerospace firm Proprietary

7. Civil and military government spending on space infrastructure and space-related products and services Single digit annual growth in overall government spending since 2005 Majority of global government space expenditure is by the United States, followed by ESA Big News NASA plans increased use of commercial services for LEO operations; is also reviewing ISS and LEO activities, which may increase relative to lunar activities Japan and Russia planning to double space budgets China is developing a new family of launch vehicles, with plans to compete internationally Government Space Budgets

8. Government Space Budgets

9. Products and Services Products and services that use the space environment; at this time, almost exclusively satellite-related, including Satellite backbone for telephone, television, and internet Direct-to-home television Global positioning handsets and consumer services Highest revenue and growth generated by value-added combination with non-space content or capability, plus low marginal cost for next user Direct-to-home television revenues were $70B in 2008 GPS handsets and services revenues were about $60B in 2008 Both revenue streams have increased over 50% since 2005 Big News DTH and GPS growth rates slowed for 2007 to 2008 Still positive, but now in single digits DTH supported by dramatic growth in Indian DTH market Satellite service revenues for established providers are generally remaining strong Good cash flow, deep pockets = stability, investment Startups struggling, lack of capital

10. Near-term Prospects • Launch providers and satellite manufacturers will see a contraction over the next few years, but not collapse • Few new starts until capital is more accessible • Consumer-driven services such as DTH and GPS will continue to see a mix of growth (introduction in new markets, technology upgrades) and slow down (reduced consumer spending) • Government space expenditures will continue to grow