Lockheed Martin to Carry ILS Liabilities into 2008

Lockheed Martin’s financial exposure to International Launch Services (ILS) likely will continue into 2008 as it retains responsibility for advance payments from customers for future launches aboard ILS Proton-M rockets, Lockheed Martin said.

In a July 27 filing to the U.S. Securities and Exchange Commission, Bethesda, Md.-based Lockheed Martin said that as of June 30, its potential liability for nonperformance of future ILS launches totaled $293 million. That is the value of ILS launch contracts guaranteed by Lockheed Martin that are yet to be performed.

Lockheed Martin’s ongoing responsibility relates to launches that were placed under contract

before the company

concluded the

sale of its ILS stake in October 2006. Launch customers typically make progress payments in the months leading up to launch, meaning Lockheed’s exposure to ILS for each contract signed before the sale will increase until the launch successfully is completed.

Lockheed Martin said it continues to carry on its balance sheet ILS-related assets that as of June 30 were valued at $230 million.

These are mainly Lockheed payments made to Proton’s prime contractor, Khrunichev State Research and Production Space Center of Moscow, before the ILS sale.

Offsetting Lockheed Martin’s ILS liability is $66 million in cash that will be paid to ILS once the launches are successfully completed


To provide a further cushion against a possible future liability, Lockheed Martin is not recognizing the $60 million deferred net gain it reported on the ILS sale.

In a July 24 conference call with investors, Lockheed Martin Chief Financial Officer Christopher E. Kubasik said the company is staying out of most commercial satellite contract competitions because they do not meet the company’s profit threshold. Current

and prospective work on classified and defense-related satellites for the U.S. government is more than enough to offset the

commercial satellite division’s more conservative approach to bidding on

contracts, he said.

Lockheed Martin appears to be following the path of Boeing Satellite Systems International in refusing to

bid on

commercial satellite manufacturing contracts

whose profit margins are thin at best and occasionally end up at less than zero.

“We have continued to exercise financial discipline in pursuing new awards,” Kubasik said

. “As a result of our selective approach to new commercial satellite opportunities, we expect a decline in 2008 with respect to commercial satellite revenue.”

Lockheed Martin’s commercial-satellite bidding policy comes at a time when a rebound in

demand, coupled with the relative weakness of the U.S. dollar, provides the company with

incentives to compete for such


Nevertheless, recent commercial satellite contests have more often than not featured just four aggressive bidders: Space Systems/Loral and Orbital Sciences Corp. of the United States, and ThalesAlenia Space and Astrium Satellites of Europe.

Meanwhile, Lockheed Martin Space Systems reported increased operating profit for the six months ending June 30 despite a

reduced number of commercial-satellite deliveries relative to a year earlier

and the absence of the Atlas rocket division from its accounts. Atlas rocket production has been transferred to United Launch Alliance, a joint venture with Boeing Co. that sells rockets to the U.S. government.

said work on NASA’s Orion Crew Exploration Vehicle, plus sales of strategic and other missiles, combined with work on classified and other government satellites to boost profit despite a slight decrease in revenues.

The company said its Space Systems division revenues for the first six months of this year were $3.86 billion, down 5 percent from a year earlier. Operating profit, at $400 million, was up by 4.7 percent.

New iDirect Subsidiary Focused on Government

Satellite broadband solutions provider iDirect Technologies Inc.

of Herndon, Va., announced July 26 the creation of a wholly owned subsidiary to focus on the growing U.S. government market for Internet Protocol-based satellite network services.

Government Government Technologies will handle the increasing number of classified contracts for satellite-delivered broadband services, the company said. The new subsidiary will be led by John Ratigan, who previously has served as iDirect’s vice president for U.S. federal sales.

Technologies, a subsidiary of Vision Technology Systems, provides satellite network solutions to both government and commercial customers. The government uses iDirect’s secure network solutions for applications including disaster recovery and global logistics.

Allied Defense Group Sells SeaSpace to Korean Firm

Allied Defense Group will sell its SeaSpace subsidiary, which makes satellite ground station hardware and software, to Acetopia holdings of Seoul, South Korea, for $1.65 million, Allied Defense of Vienna, Va., announced July 25.

, located in Poway, Calif., specializes in remote-sensing satellite ground stations, tracking antennas and software.

ILS Nabs Contract from Former Corporate Parent

Inmarsat is in final negotiations with International Launch Services (ILS) to launch the 6,000-kilogram Inmarsat 4 F3 mobile communications satellite on a

Proton rocket in 2008, according to industry officials.

London-based Inmarsat has a contract with Lockheed Martin Commercial Launch Services to launch the satellite in 2009 aboard an Atlas rocket. But Inmarsat has said it is in a hurry to place the spacecraft in geostationary orbit over the Pacific to serve U.S. government and other customers, and to fill out the coverage of the fourth-generation Inmarsat system. ILS and Inmarsat officials declined to comment on the negotiations.

The first two Inmarsat 4 satellites are in orbit. The third is completed and ready for delivery by prime contractor Astrium Satellites.

U.S., Europe Agree on Civil Navigation Signal

U.S. and European negotiators on July 26 concluded an agreement on a common civil signal for their future navigation and positioning satellite systems, a development that should permit higher-precision tracking in urban canyons and other difficult environments.

Meeting at the European Union headquarters in Brussels, Belgium, the two sides agreed that the future GPS 3A and Galileo Open Service signals will employ a common structure.

The agreement follows a June 2004 accord that committed the United States and Europe to work together to assure maximum compatibility and interoperability between the GPS 3 and Galileo systems.

A U.S. State Department official said July 27 that the agreement should permit navigation terminal manufacturers to integrate the GPS 3 L1C and Galileo L1F signals into a single chipset. With more satellites in view, users will get improved accuracy and signal reliability.

GPS 3 and Galileo are both several years away from entering service. But agreeing on signal compatibility now gives hardware builders and designers of the GPS 3 system sufficient lead time to integrate the common signal structure into their products.

MDA Awards Contract for Studies of European Site

The U.S. Missile Defense Agency (MDA) awarded Boeing a contract potentially worth

$80 million over six years to assist in the planning of the proposed U.S.

missile defense site in Europe, the Pentagon announced

July 26


Under the contract, which has an initial value of

$3.7 million,

Boeing will contribute to the overall site concept plan and floor layouts of the facilities

, MDA spokesman Rick Lehner said.

The MDA intends to place 10 missile interceptors in Poland and a tracking and cueing radar in the Czech Republic. However, these countries have yet to approve the arrangement, and its prospects for being funded by the U.S. Congress are unclear.

said he could not speculate on the fate of the plan in the event Congress chooses not to fund the sites.

NATO Increases Value of Globecomm GPS Contract

Globecomm Systems Inc.

of Hauppauge, N.Y., nabbed

a $2 million contract modification from the


alliance to add more features to a

GPS-based tracking device

designed to identify friendly forces, according to a July 24 company news release.

originally signed a $20.9 million contract with NATO in 2006 to provide their GPS-Based Force Tracking System. The system was recently deployed for use by NATO forces in Afghanistan, the company said. The contract modification will cover installation of

additional features on

deployed vehicles.

XM Reports Strong Growth In Revenue, Subscriptions

XM Satellite Radio reported a 22 percent increase in revenue and a

more than 16 percent jump in



its 2007 second quarter

compared to the same period a year ago.

The growth

was driven largely by

sales of cars with factory-installed

XM radios,


company said in a July 26 press release.

Revenue for the three-month period ending June 30 grew from $228 million to $277 million, and the number of

subscribers grew from 6.9 million to more than 8.25 million compared to the same period

last year, XM said. The company reduced its net loss by

23 percent,

from $229 million to $176 million.


June 30, 2006,

XM has signed

deals to install XM-compatible radios in new production vehicles from General Motors, Hyundai, Lexus, Honda, Acura and Harley-Davidson.

“XM added more automotive gross subscriber additions than during any quarter in the company’s history,”

Hugh Panero, XM’s outgoing chief executive, said in a prepared statement. “XM’s partners include the nation’s largest and fastest-growing automakers and XM is well positioned for this segment to provide sustained subscriber growth as production of XM-equipped vehicles ramps up for the 2008 model year and beyond.”

, who will be leaving XM in August, also said the company’s planned merger with Sirius Satellite Radio, now undergoing regulatory review, is expected to close in late 2007.

Prototype NASA Rovers Survey Arctic Crater

Two NASA rovers

are surveying

a crater inside the Arctic Circle to demonstrate

how automated vehicles


help future astronauts probe sites on the Moon and Mars,

NASA’s Ames Research Center, Moffet Field, Calif., said in a July 20 press release


The four-wheel-drive rovers

, dubbed K10 Black and K10 Red,

are exploring the

Haughton Crater on

Devon Island, Canada. Haughton Crater is similar to Shackleton Crater at the Moon’s South Pole, which is a prime candidate for human exploration,

NASA said on its official Web site

. The craters roughly are the same size and both were formed by asteroid impacts.

The area also provides a good environment for testing planetary operations because it has no local

resources or infrastructure.


developed the 74.25 kilogram


, which are surveying a roughly 30-hectare patch inside the Haughton Crater

called Drill Hill

. They navigate using a combination of GPS data, stereo cameras, a 3-D scanner and sun trackers, which are

automated solar panels that follow the sun.

The surveying scanners used by the rovers

provide 3-D images with 5-millimeter resolution,

according to Terry Fong, director of the Ames Intelligent Robots Group


The rovers also can collect subsurface structural data to depths up to 5 meters using a radar instrument built by NASA’s Jet Propulsion Laboratory in Pasadena, Calif.

When conducting site surveys, the K10 robots operate with a great deal of autonomy

, receiving commands between individual surveys. By contrast,

the Mars Exploration Rovers currently operating on the red planet receive daily commands, Fong

said in a July 24 e-mail.

“A typical scenario involves multiple rovers autonomously surveying a region while humans supervise and assess data from a remote location,” Fong said in a prepared statement.

NASA will use the robots to do the detailed ground analysis that orbiters are incapable of doing. For example, Fong said, the images taken by the K10 rovers are 100-200 times more detailed than those to be taken by NASA’s planned Lunar Reconnaissance Orbiter.

“Although remote sensing from orbiters can provide extremely useful survey information, particularly wide-area coverage, there is always a need for surface surveys,” Fong said in the e-mail.

XM Satellite Radio Chief Will be Leaving in August

Hugh Panero,

chief executive officer

of Washington-based XM Satellite Radio, will

leave the company in August, the company said in a July 24 press release.

Davis, currently XM’s president and chief operating officer

, will serve as interim chief executive

. Davis, an XM board member since 1999, was recruited by Panero in July 2006 to take his current position.


comes as XM and rival Sirius Satellite Radio await a U.S. government ruling on their planned merger.

Plans call for Sirius Chief Executive Mel Karmazin to take that position in the merged company.

XM Chairman

Gary Parsons

would be

chairman of the combined company.

“Hugh took satellite radio from a concept and turned it into the popular, mass market, consumer entertainment product it is today. I thank Hugh personally for his friendship, and professionally, for nearly a decade of industry leadership,”

Parsons said in the release.

Chilton Nominated for Space Command Post

U.S. Air Force Gen. Kevin P. Chilton has been nominated by U.S.

President George W. Bush to succeed Marine Corps Gen. James Cartwright as

commander of U.S. Strategic Command, Defense Secretary Robert Gates announced July 24

. Chilton’s deputy, Air Force Lt. Gen. Claude Robert “Bob” Kehler, was nominated to replace him as

commander of U.S. Air Force Space Command.

Both nominations are contingent upon Cartwright’s successful Senate confirmation to become vice chairman of the Joint Chiefs of Staff. Cartwright’s confirmation hearing

is scheduled for July 31

; the Chilton and Kehler

confirmation hearings have not yet been scheduled.

European Regulators OK SESEutelsat S-Band Deal

European regulators have approved a joint venture between Europe’s two biggest satellite-fleet operators, SES and Eutelsat, to develop a mobile television and two-way communications service in S-band using a satellite to be launched in 2009, the European Commission announced July 25.

SES of Luxembourg and Eutelsat of Paris in mid-2006 announced that instead of building separate S-band satellites for a market they view as risky, they would divide the cost

of adding an S-band antenna to Eutelsat’s W2A satellite.

The companies estimated that the cost of building and integrating the antenna, plus making other modifications to the W2A spacecraft to assure its core C- and Ku-band telecommunications missions, would be 130 million euros ($179.8


In its July 25 ruling, the Brussels-based European Commission said having the two companies join forces in this way will not stifle competition because several competing terrestrially

based mobile broadcast technologies are already in development.

The same is true for two-way communications, which SES and Eutelsat have said would be a supplemental business for

the S-band joint venture. The commission said the market for providing two-way voice and data communications in Europe is already highly competitive and will remain that way regardless of what SES and Eutelsat do.

The commission also concluded that the S-band joint venture is not the start of a broader collaboration for satellite television and other satellite telecommunications between the two competitors.

Colombian Company Orders 400 More VSATs from Gilat

of Bogota, Columbia, has ordered more than 400 additional VSAT terminals from

Satellite Networks as part of a network expansion program


of PetahTikva, Israel, said in a July 25 press release


Axesat will add the terminals to its

existing network of more than 2,000 VSATs, or very small aperture terminals, in Columbia. The VSATs will provide broadband Internet, voice and data services to corporate customers in the country.

Terms of the contract were not disclosed.

First GPS 2R Satellite Marks 10th Anniversary

The first U.S. Air Force GPS

Block 2R positioning and navigation satellite, built in Valley Forge, Pa., by Lockheed Martin Space Systems, has surpassed its 10-year design life of in-orbit service,

according to a company

news release dated July 23.

Launched from Cape Canaveral Air Force Station in Florida

July 23, 1997, the satellite is one of 21 GPS 2R satellites built by Lockheed and one of 30 operational GPS satellites currently in orbit. The GPS constellation provides critical situational awareness and precision weapon guidance to the military, as well as supporting a host of civil, scientific and commercial functions. Lockheed Martin is under contract to upgrade eight of the GPS 2R satellites with new capabilities and also is competing against Boeing Integrated Defense Systems of St. Louis to

build the next-generation GPS 3 system.

SBIRS Geo Sensor Clears Thermal Vacuum Testing

Lockheed Martin Space Systems

of Sunnyvale, Calif., announced July 23 the successful completion of thermal vacuum testing of the main payload for the U.S. Air Force’s first dedicated Space Based Infrared System (SBIRS) missile warning satellite.

The satellite, the first of a planned three SBIRS craft that will be deployed in geosynchronous orbit to detect missile launches and other thermal events on the ground, is slated for launch in late 2008

. The infrared sensor payload was built by Northrop Grumman Electronic Systems in Azusa, Calif.

The tests, conducted March 11 to June 15 at Northrop Grumman’s Azusa facilities, demonstrated the function and performance of the payload in vacuum conditions and

temperatures designed to simulate

the environment

in which

SBIRS satellites will operate

. Among the key functions tested was the simultaneous tasking of the instrument’s wide-area scanning and staring capabilities, as well as the payload’s ability to distinguish targets from background clutter and format data for downlinking, Lockheed Martin said.

The payload will be delivered to Lockheed’s Sunnyvale

facilities in early August for integration with the

satellite. Lockheed Martin is expected to build three geosynchronous-orbiting SBIRS satellites and already has delivered two missile-warning sensors hosted by classified satellites operating in highly elliptical orbits. At least one of those payloads is already on orbit.

BAE Imagery Software Incorporates Google Earth

BAE Systems Inc.

of Rockville, Md., has released a new version of

its imagery analysis and mapping software that incorporates Google Earth and the Environmental Systems Research Institute

(ESRI) geodatabase data storage management tool, according to a July 17 BAE Systems news release.


interacts with Google Earth to quickly produce 3-D color scenes

that provide geospatial context to areas of interest to intelligence analysts and mission planners, BAE said. The connection to the ESRI geodatabase allows users to work with, produce and analyze data products on secure networks, BAE said.

Lockheed, U.S. Air Force

Reposition Milstar Fleet

Engineers from the U.S. Air Force and Lockheed Martin Space Systems of Sunnyvale, Calif., successfully completed an on-orbit repositioning of the Milstar satellite constellation to improve service, according to a Lockheed Martin news release dated July 16.

The repositioning of the satellites relative to one another is meant to maximize and improve the constellation’s Earth coverage, Lockheed Martin said.

The seven-month repositioning process was executed by the 4th Space Operations Squadron at Schriever Air Force Base, Colo., along with Lockheed engineers. According to Lockheed Martin, there were no unplanned service disruptions during the repositioning.

The five-satellite Milstar constellation has provided a protected global communications network for the joint forces of the U.S. military since its launch in the mid-1990s. Lockheed Martin built the Milstar satellites.


Inc. To Acquire Swiss Antenna Maker

Satellite telecommunications terminal manufacturer ViaSat Inc. is purchasing a small Swiss designer of mobile Ku-band satellite terminals in a deal that will give ViaSat a foothold in Europe, ViaSat announced July 24.

Carlsbad, Calif.-based ViaSat is purchasing JAST Antenna Systems of Lausanne for $2 million immediately and up to $4.5 million in additional cash or stock payments, depending on JAST’s growth in the next two years.

JAST, a spinoff of the Swiss Federal Institute of Technology in Lausanne (EPFL), was purchased by its current management in 2003 and since then has been developing a series of small, low-cost antennas for mobile communications using Ku-band frequencies.

The company had less than 1 million euros ($1.38

million) in 2006 revenue and currently has a work force of eight people, according to Stefano Vaccaro, JAST’s engineering and research director.

The company currently provides automobile- and boat-mounted antennas that receive maritime weather reports and radio programming as part of the WorldSpace satellite-radio system.

JAST is part of a contracting team including satellite-fleet operator SES of Luxembourg that is developing a vehicle-rooftop mobile Ku-band antenna for consumer and business use as part of a European Space Agency-financed program called HiSat.

Commercial production of the antennas, which are 20 centimeters in diameter for the consumer market, could begin in 2009 after prototype testing, Vaccaro said July 24.

“We have spent the last four years developing our technologies and we are now preparing to introduce them,” Vaccaro said, adding that the ViaSat bid was an unsolicited offer.

, which provides communications gear for military and commercial markets, including the WildBlue consumer-broadband service in the United States, has been working with satellite-fleet operator Eutelsat of Paris to use ViaSat technology and Eutelsat satellite capacity to promote consumer broadband in Europe.

Chairman Mark Dankberg, in a July 24 statement, said adding JAST to ViaSat’s product portfolio will improve ViaSat’s competitiveness in mobile satellite and terrestrial communications. “Their location in Switzerland can help us better support our European partners and initiatives,” Dankberg said.

EMS Delivers AEHF Anti-Jamming Gear

EMS Technologies

of Atlanta has delivered the anti-jamming hardware for all three U.S. Air Force Advanced Extremely High Frequency (AEHF) satellites under construction, the company said in

a July 23 news release.

Work was completed in March on the five-year, $29 million contract, EMS said. The anti-jamming device, called beam forming network


enables a

satellite to shape its receive beam when jamming signals are

detected so transmissions can continue unaffected.

Northrop Grumman Space Technology of Redondo Beach, Calif., which is building the AEHF payloads, has installed the hardware on two of the three payloads, according to Kevin Lane, EMS’s AEHF program manager.

The AEHF communications system will provide highly secure

communications for the Defense Department. The first satellite is slated to launch in


Lockheed Martin Space Systems, of Sunnyvale, Calif., is the prime contractor.

Ukraine Govt.

Approves Eight-Year Space Plan

The Ukrainian government has approved a national space exploration program for 2008-2015 that calls for annual expenditures of 300 million hryvnias ($61.2 million), the National Space Agency of Ukraine said July 18.

In comparison, expenditures on space exploration during “the previous years” have

averaged about

65 million

annually, the agency said in a press release posted on its official Web site.

The program provides for development of



constellations of satellites for

Earth observation and telecommunications

, the

press release said.

ATK To Develop a Second Orion Launch Abort Motor

Techsystems (ATK) Launch Systems Group of Magna, Utah, nabbed

a contract from Orbital Sciences Corp. worth about $70 million to develop the

attitude control motor for the launch abort system for NASA’s Orion crew exploration vehicle,

ATK said in a July 23 press release.

Orbital Sciences of Dulles, Va., is the lead contractor on the launch abort system, which is designed to carry the Lockheed Martin-built Orion capsule and its crew to safety in the event that something goes wrong during launch.

Earlier in July, ATK, which specializes in solid-rocket motors, announced it had landed a contract worth $62.5 million to develop the main propulsion system for the launch abort system.

The work on the attitude control motor will be done at ATK’s facilities in Elkton, Md. ATK said it will be aided on the effort by Moog Inc. of Buffalo, N.Y., and Fiber Materials Inc. of Biddleford, Maine.


Wins Deal To Study Reprogrammable FPGAs

Actel Corp. of Mountain View Calif., won a $10.2 million U.S. Air Force contract to explore the challenges associated with using reprogrammable versions of a type of semiconductor known as a field programmable gate array (FPGA) in space, according to a July 20 U.S. Defense Department announcement.

The space industry now mostly uses FPGAs that are non-reprogrammable because of concerns about reliability, Actel spokeswoman Stephanie Mrus. Reprogrammable versions could make satellites more flexible even after they reach orbit, she said.

Raytheon Delivers First Short-Range Interceptor

Raytheon Missile Systems of Tucson, Ariz.,

has delivered the first production Near Term Sea-Based Terminal missile defense weapon to the U.S. Navy

following a successful sea trial in May 2006

, when the short-range interceptor successfully hit

a Lance target, according to a July 19 Raytheon news release.

Raytheon, the Navy and Johns Hopkins University’s Applied Physics Laboratory of Laurel, Md., collaborated

to update the Standard Missile 2 Block 4


to better defend against short-range ballistic missile threats. These weapons will be deployed on the Navy’s Aegis-class warships.

Orbital Nabs Nashville Fleet Management Deal

A Tennessee public school district

has awarded Orbital Sciences Corp. of Dulles, Va., a $9 million contract to equip its bus fleet with

communications and tracking capabilities

, Orbital said in a July 23 press release.

Transportation Management Systems division will install its fleet management system aboard the 685 buses operated by the

Metropolitan Nashville Public Schools to improve

efficiency and safety, the company said

. The system will include two-way radios, satellite-enabled tracking software and hardware, and display monitors that provide route information updates, Orbital said.

The installation work will take about 36 months to complete, Orbital said.

Louisiana Govt. Orders Spacenet VSAT System

Spacenet Inc.

of McLean, Va., will provide a satellite-based

on-demand data backup network for the state of Louisiana’s emergency response network with its Connexstar very small aperture terminal, or VSAT, services, according to a July 16 Spacenet news release.

The network, deployed and managed by reseller partner Orbital Data Net, Columbia, Mo.,

provides high-speed links to back up critical

networks for the state government in the case of disaster or

terrestrial connectivity failure. Louisiana is the first government agency to use the Connexstar VSAT services, Spacenet said. Spacenet declined to release the value of the contract.

SGT is Part of Team on Supercomputing Contract

Stinger Ghaffarian Technologies Inc. (SGT) of Greenbelt, Md., will provide technical services as part of a team led by Computer Sciences Corp. that recently won a contract to support NASA’s

Advanced Supercomputing Division at Ames Research Center in Moffett Field, Calif., SGT said July 23.

For SGT, the contract has a potential value of

approximately $60 million. The overall contract to Computer Sciences of El Segundo Calif., is potentially worth

$600 million over 10 years.