Reaching New Performance Milestones in a Remarkable Year

January 10, 2011

To Our Customers:

Your support of ILS has led to another remarkable year of performance. In 2010, ILS and Khrunichev closed out the year with an incredible launch pace of eight successful commercial missions; a record number for ILS.  Along with four Federal Protons, the Proton launched at the robust rate of one launch per month.

The strength of our business and success over the past year is directly attributed to you, our customers and your continued confidence and support of ILS by providing us the opportunity to perform your launch services. Secondly, our solid partnership with our majority owner, Khrunichev  has led to the long-term reinvestment in the Proton vehicle, the quality assurance program, and launch infrastructure, achieving a marked increase in production and performance, demonstrating real value to our customers, flexibility and schedule assurance that you count on.  This was the commitment we made to you over the last several years.

Earlier in the year, following our first commercial launch of the Intelsat 16 satellite, we met a performance milestone with our customer EchoStar, launching the EchoStar XIV satellite. This was the first commercial use of the Phase III Proton enhancement, launching the heaviest satellite to date at 6.38 metric tons with an optimized delivery to GTO.  Next, we launched SES-1 for SES, with the high-performing Proton, demonstrating a direct injection into GSO, which increased the lifetime of the satellite significantly.

In June, we celebrated our 15 year anniversary in the commercial launch business. Since the inaugural ILS Proton launch in 1996 with SES’s Astra 1F satellite, we have worked hard to meet the challenges and opportunities presented in an ever changing marketplace to best serve our global customers.

ILS and Khrunichev are proud to foster industry growth with some of the new industry technologies and innovations that have been developed. For example, we launched SkyTerra 1  for LightSquared in November, which will be the first hybrid terrestrial and satellite 4G network to be available throughout the United States.  We closed out the year with our long-term partner Eutelsat, with the launch of the KA-SAT satellite, the first European High Throughput Satellites to operate fully in Ka-band.

However, our year was not without issues. On December 5, the Russian Federal program suffered a setback with the loss of three GLONASS-M satellites launched on a Proton M/Block DM-03.  The Russian State Commission determined and declared that Proton M performed successfully as designed. The 1,500 – 2000 kg fuel overload of the Block DM-03 upper stage was the cause of the GLONASS failure. Unlike commercial ILS Proton commercial launches which use the Khrunichev-provided Breeze M upper stage, for the Federal GLONASS missions, Khrunichev only provides the three stages of the Proton M vehicle as a subcontractor and has no oversight responsibility for the Block DM-03 upper stage which is provided and managed by RSC Energia.

Additionally, for all commercial ILS Proton missions, Khrunichev has total systems performance responsibility for the overall performance of the mission. The Eutelsat customer and ILS reviewed the post flight data provided by Khrunichev on the Proton M portion of the GLONASS mission and concurred with the State Commission findings that cleared the Proton M’s performance. With the cooperation, teamwork and open communication between ILS, Khrunichev, Eutelsat and the insurance community, we were able to successfully launch the KA-SAT mission on December 27.

We competitively secured seven new orders in 2010 with new and existing customers. With SES, we announced the first shared launch on ILS Proton with the SES-3 satellite and another firm mission assignment under and extension of our Multi Launch Agreement. With Intelsat, we will launch Intelsat 22 with a hosted payload to serve the U.S. and Australian militaries, as well as another firm mission assignment under our long term agreement. We were entrusted with two Telesat missions, first with Nimiq 6, then with Anik G1.  Our first Russian commercial missions were secured this year with a contract for the Yamal 401 and 402 satellites. A launch contract was announced in October, to launch AsiaSat 7 for AsiaSat, and last month, we secured a contract with a new customer, Satmex, for the launch of Satmex 8 in 2012.  With a firm backlog of 21 missions, ILS is a strong, sustainable business with a healthy outlook for the future.

Our goal is to continually create value for our customers, supporting each of your missions with focused teamwork and dedication.  We thrive on reaching milestones, as we have over the past year, but more importantly, supporting your business plans and expansion for growth.

On behalf of the entire ILS/Khrunichev team, we thank you for your support and trust. We wish you the very best and a prosperous New Year!

Frank McKenna