US Government Peter Hadinger President

Inmarsat has always been USG’s largest mobile SATCOM supplier with >60% market share

• First in, last out – Inmarsat is their most portable bandwidth

• Reliable – Inmarsat is always on and everywhere

• Universal – Inmarsat products in every USG service and agency

USG is Inmarsat’s largest customer – 17% of revenues

• Demands the very best – challenges us technically

• Sets the standards for government SATCOM worldwide

USG Business Unit built on two structural components

• Wholesale – focus on channel partners, policy and investment

• Retail - Inmarsat Government (IG) delivers user solutions

• Proxy agreement protects classified information

US Government business at a glance

Source: NSR Government and Military Satellite Communications, 10th Edition

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Global, Innovative, Assured, Trusted, High Value Add

Hagel: Iraq crisis may require DoD To rethink 2015 budget

Don't look now but Libya is falling apart

DISA weighs contract consolidation as sequester solution

Sequester fears return

Jacoby: “virtually impossible right now to make a strategic decision” due to funding unpredictability”

Hyten: “[FY20] 16 scares the heck out of me”

Bennett: “We are looking to see where we have opportunities to combine contracts

Packard: “The theme is that the department will be sequestered in [fiscal 2016], we believe

FP: “fighting has only grown more intense over the summer, raising questions about whether Libya is on the fast track to civil war -- or already in one.”

Chinese fighter buzzes US patrol aircraft

The interception was “very close, very dangerous ... pretty aggressive and very unprofessional.”

Hagel: “You’re constantly shaping a budget to assure that resources match the mission - and the mission and the resources match the threat”

Tight budgets clash with geopolitics

C4ISR&Networks 20140821; DefenseNews 20140821; ForeignPolicy 20140821; C4ISR&Networks 20140821

Headlines of just one day (21 August )

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Intense budget pressure Continuing demand vs.

No large force deployments, but:

Current events in places without established USG infrastructure – demands global mobility

Tactical profile well matched to Inmarsat’s global ‘on-demand’ mobility model

Innovative products stand out

• Very successful USG tests led to first users on GX

• Customers investing in GX insertion on platforms

• Growing operational deployment of L-TAC

Key Inmarsat discriminators:

Seamlessly augment USG assets

• Anywhere in the world at a moment’s notice

• Directly interoperable with large installed base

• No upfront commitment – users pay-as-you-go

Installed base of L-band terminals

Global uncertainty plays to our strengths

Global communications needs growing

Outstanding GX performance in USG tests

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Active conflicts

Areas of concern

Worldwide Naval and Air Transport

Domestic Civil SATCOM and Border Security

Deficit reduction drives “Sequestration” which aims to remove $1tn spending by 2023

SATCOM funded out of discretionary budgets – mostly defence “Supplementals”

• Squeezed between “Debt Ceiling” and mandatory spending

• Supplementals phasing out with drawdown

• Result: Near-term market pressure will continue

Medium-term growth opportunity strong

• Fundamental operational requirements rapidly changing to emphasise mobility/intelligence

• Focus on competition devalues fixed incumbents

• Differentiation to be based on cost-effectiveness

• Funding for growth will come from terminated “legacy” programmes – but takes time to unwind

Top-line USG budget remains the biggest limiter

Improving economy helps but broader structural debt problem dominates

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Source: Center for Strategic and International Studies 2012

Key trends to watch

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USG shifting users to its own satellites to reduce spending in short-term

• Especially hard on incumbent Ku-band operators

• Shift to military Ka-band actually facilitates use of Inmarsat GX

Growing bifurcation of commercial market – legacy vs. new programmes

• Older drones, planes, ships will remain Ku – too expensive to replace hardware

• Newer platforms all focused on Ka-band – both military and commercial

Shift to managed services will develop in the medium-term

• Consolidation of programme-unique networks into a “shared service cloud”

• Will increase demands on reliability and security

U.S. Marine Corps photo by Sgt. Emmanuel Ramos

We believe USG will adopt a commercial augmentation model1

• Well established model in air transport, fiber – emerging in aerial refueling, SATCOM

• This model is highly aligned with Inmarsat attributes

• Global access and mobility ideal for special operations uses

• Assured SATCOM – reliable and secure – critical to success

We laid out our augmentation strategy in 2012 - it is now in use

• We are fielding commercial augmentation to both WGS and MUOS

• Users want interoperability - maximise use, minimise transition cost

Sweet spot for Inmarsat - augmentation

1. The future of MILSATCOM CSBA 2013

Omega Air

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US DoD FY 15 budget request

9

15

6

7

11 7 5 3

16

16

5 Inmarsat Boeing Astrium L3 GCS

Globecomm Artel TCS DRS

Viasat GD Satcom Harris Kratos

Achieve Wholesale/Retail Goals

• Increase top partner footprint

• Broaden contract vehicles/skills

• Improve depth and user intimacy

Shift focus from commodity sales to roles in enduring programmes

• Access existing via integrator partners

• Custom products for new systems

Address enduring SATCOM demands

• Aero transport, AISR, Maritime

• Special Ops, Intel, State, Civil

Three steps to improve route to market

1. Source: NSR Government and Military Satellite Communications Report, 10th Ed

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Percentage of USG SATCOM service revenues (2012)

Strong Partner Footprint: >50% share

Now – leverage infrastructure: ours & USGs

• I-5 military Ka leases augment wideband WGS

• L-TAC leases augment narrowband MUOS

• Durable growth markets – Special Ops/Intel/Civil

Mid-term – expand to managed services

• Leverage Ku programmes with GX insertion

• Expanded bandwidth services over L-band

Long-term – extend range of augmentation

• USG remains a key part of a balanced portfolio

• Leverage development into allied governments

Layered Growth Strategy

L-3 Panther 1000s deployed

PRC-117 10,000s deployed

Sealift/Army 100s of vessels

Airlift/VIP 100s of aircraft

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Strategically positioned to capture new growth markets