Globalstar Annual Report 2007 Globalstar, Inc. 461 S Milpitas Blvd. Milpitas, CA 95035 USA +1.408.933.4000 www.globalstar.com Executive Office Board of Directors Steven Bell Senior Vice President, Globalstar, Inc. James Monroe III International Sales, Chairman of the Board and Marketing and Customer Care 461 S. Milpitas Blvd. Chief Executive Officer Milpitas, CA 95035 USA Robert D. Miller (408) 933-4000 Peter J. Dalton Senior Vice President, Chief Executive Officer Engineering and Ground World Wide Web Dalton Partners Inc. Operations (Management Firm) Home Page William F. Adler Kenneth E. Jones Vice President, Legal and www.globalstar.com Chairman, Globe Wireless, Regulatory Affairs Inc. Stockholder (Maritime Communications) Paul A. Monte Information Vice President, Engineering James F. Lynch and Product Development Managing Director For further information about Thermo Capital Partners, Martin E. Neilsen the company, additional hard L.L.C. Vice President, New Business copies of this report, SEC (Private Equity Investment) filings, and other published Ventures corporate information please J. Patrick McIntyre visit the Company website President and Chief Common Stock noted above or call Operating Officer (408) 933-4006. Lauridsen Group The Company’s stock is Incorporated traded on The NASDAQ Transfer Agent (Nutritional Functional Global Select Market under Proteins) the symbol GSAT. On March Computershare Shareholder 26, 2008, the company had Services, Inc. Richard S. Roberts approximately 85,199,777 250 Royall Street VP & General Counsel shares outstanding and 305 Canton, MA 02021 Thermo Development Inc. holders of record. (781) 575-4238 (Management Firm) www.computershare.com Notice of Annual Executive Officers Meeting Independent Auditors James Monroe III Chairman of the Board and May 13, 2008, 10:00 a.m. PT Crowe Chizek and Company Chief Executive Officer Merrill Corporation LLP 1731 Embarcadero Rd. Oak Brook, IL Anthony J. Navarra Palo Alto, CA USA President, Global Operations 94303 Legal Counsel (650) 493-1400 Fuad Ahmad Alternate contact for Taft Stettinius & Hollister LLP Vice President and Chief directions - please call Cincinnati, OH Financial Officer (408) 933-4006 Dennis C. Allen Senior Vice President, Sales and Marketing Dear Fellow Stockholders, I would like to extend a sincere welcome to all of our stockholders who have invested in our company since my last letter and thank all of you, old and new, for your faith in Globalstar. We appreciate your continued commitment and support. I am proud to provide a summary of our company’s progress last year and share your management’s vision of Globalstar’s potential. As you are well-aware, 2007 was marked by a number of achievements and some new challenges both here on earth and high above in orbit. Last year we launched eight satellites and the most highly- praised new satellite communications product of the last year, if not the last decade—the SPOT↩ satellite messenger. We continued the process of designing and manufacturing our second-generation constellation that is engineered to serve until at least 2025. We also added over 21,000 customers in 2007 and thus remained the largest North American based mobile satellite services provider. Our staff of professional engineers and managers dealt better than we could have hoped with the two-way communications capabilities of our satellite fleet, and our sales and marketing folks have gone above and beyond to keep our subscribers satisfied and on our network while we transition to the replacement constellation. This year and next we will continue to focus our energies on driving new revenues, protecting our core businesses, successfully launching new data products and encouraging and rewarding the superb performance of our talented employees. 2007: NEW SATELLITES, PRODUCTS, TERRITORIES AND OPPORTUNITIES Globalstar successfully launched eight first-generation satellites during 2007. These satellites will all be in commercial service by June. They will enhance the service quality for our voice and duplex data customers and will anchor our second-generation constellation. Our second-generation satellites are being designed and manufactured by Thales Alenia Space for a 15-year service life, twice the design life of our first-generation. In September we signed a contract with Arianespace for the launch of the second-generation constellation. Preparations are on schedule and the design of the dispenser to deliver six satellites per launch, as opposed to four in our first generation, on a Soyuz rocket is near completion. We expect to start launching the second-generation constellation beginning in the second half of 2009. Globalstar announced a number of new and innovative Simplex data products highlighted by the November initial sales of the SPOT satellite messenger. The SPOT satellite messenger, which is marketed by our subsidiary SPOT Inc., is a revolutionary and affordable consumer product designed to address the safety concerns of people around the world. It is the first product to combine a GPS receiver with a global satellite transmitter and enables users to send routine messages to friends, family and employers or 911 alerts to emergency responders. Its tracking function permits the location of the user to be tracked on Google MapsTM. As a Design and Engineering Award honoree for 2008, the SPOT satellite messenger was a big hit at the Consumer Electronics Show in Las Vegas with CRN placing it 10th out of over 20,000 products on display. More recently it was featured in television and print media including CNN, Fox News, ABC, Walt Mossberg’s All Things Digital and The Mossberg Solution in the Wall Street Journal. You might have read recent articles about how it has already assisted in several rescues. The SPOT satellite messenger saves lives and we’re proud to have developed it. We were also busy broadening the market for our Simplex products. During the summer we expanded our Simplex data coverage to include all of Australia, New Zealand and the surrounding maritime region. In September Globalstar signed an agreement with Radyne Corporation business unit AeroAstro to purchase more Simplex appliques´ to expand our Simplex geographic coverage in Southeast Asia and Latin America. In May we entered into an agreement with Singapore Telecom to construct a gateway in Singapore. When the gateway goes into service later this year, it will provide our voice and data services for the first time throughout significant portions of Southeast Asia. In December we reached agreement with Globaltouch West Africa Limited for Globaltouch to offer our services in Nigeria and adjacent regions of Western Africa. Globaltouch intends to begin building a new satellite gateway in Kaduna, Nigeria by mid-year. On the regulatory front, on April 10, 2008 the Federal Communications Commission expanded our authority to use our satellite spectrum for terrestrial wireless services from 11 MHz to 19.275 MHz. This complementary terrestrial wireless offering is called Ancillary Terrestrial Component or ATC. Developing the potential of our satellite spectrum and ATC authority is one of the cornerstones of our business strategy, thus we are extremely pleased with the decision and appreciate the FCC’s diligence in completing this process promptly. The decision provides potential partners with both the ability and the incentive to proceed with plans to develop and offer innovative and high quality ATC wireless services in conjunction with our satellite services. In anticipation of the FCC’s expanding our ATC authority, in October we signed a conditional agreement with Open Range Communications to use a portion of our spectrum. Open Range subsequently received a loan of $267 million from the Department of Agriculture’s Rural Utilities Service program and intends to deploy a WiMAX wireless service in more than 500 rural communities using our spectrum. Our agreement includes both fixed and variable revenue streams, and as far as we are aware it is the first ATC agreement of its type in the US. MEETING THE CHALLENGE Last year presented us with the challenge of managing our current satellite constellation until we transition to our second-generation. In February we reported a satellite condition which impacts our voice and also affects some of our duplex data services. Our growing body of Simplex data and SPOT users are not affected by this condition. To the contrary, our recent testing indicates a Simplex reliability of greater than 99 percent in our primary coverage areas. By launching our eight spare satellites, we were able to mitigate the consequences of the degradation to a certain extent. Six of these eight satellites are now operational and providing service, and our voice customers have already noted the improvement. We expect the last two satellites to reach their final orbital locations shortly and begin providing service in late April and June of this year. We also introduced our Optimum Satellite Availability Tool, or OSAT to help subscribers determine when during the day satellite coverage at their location will be the strongest. OSAT is easy to use. A customers needs only to know his or her geographic coordinates which he or she enters onto a web page. In our tests, our OSAT allows a subscriber to achieve a completion rate of approximately 95 percent. Our duplex data customers are accommodating to the lower satellite availability by using ‘‘store and forward’’ techniques which hold transmissions until the satellites are in optimum position over the particular location. One of our customers consistently uses approximately 4,000 data minutes per month. Combined with our superior pricing and voice and data quality, which remain unsurpassed, these tools are helping us to maintain and even grow our customer base as we transition to our second- generation constellation. LOOKING AHEAD I would be foolish to try to predict the future, but let me share with you my sense of Globalstar’s potential. As one such example, the new Globalstar network will be capable of processing approximately 30 billion SMS messages, or short emails, per day.