Globalstar, Inc. Annual Report, Year Ended Dec 31, 2006

Globalstar, Inc. reported its fiscal year results ending December 31, 2006, showing a year-over-year increase in total revenue to $136.7 million, primarily driven by a 13% rise in service revenue to $92.0 million. This growth was fueled by a 34% increase in its subscriber base to approximately 263,000 users. Despite revenue growth, operating income declined by 28.4% to $15.7 million due to increased operating expenses, including higher costs for services, subscriber equipment, and marketing, general, and administrative activities. Notably, the company also recognized a significant deferred tax benefit of $21.4 million from its election to be taxed as a C corporation, contributing to a net income increase of 26.2% to $23.6 million. A critical concern highlighted is the degradation of S-band antenna amplifiers on a number of its satellites, which is accelerating faster than anticipated and could impact two-way communication services by mid-2008. The company is actively working on mitigating this issue and is progressing with its second-generation satellite constellation, aiming for improved services and expanded capabilities. Key financial activities in 2006 included the completion of its initial public offering, raising approximately $116.6 million in net proceeds, and significant capital expenditures related to spare and second-generation satellites. The company's liquidity appears sufficient for its current needs, supported by its IPO proceeds and ongoing operations.