Mr. Kearney: The company was formed in 1984 with the vision of developing and operating privately owned assets on the US Space Shuttle. This is a normal business model; what was abnormal about it was that we were planning to do it in the space flight operations environment. SPACEHAB was the first company to successfully bring that kind of private investment or commercial service to the human space market. We received our first contract for four space shuttle missions in 1990. Then our assets were used to support the Space Station Mir in the mid-1990s with seven space shuttle missions. Following that, in 1998, we were awarded a contract supporting both research ' such as the John Glenn mission, where about 45% of the payloads were from commercial SPACEHAB sources ' and ISS cargo and resupply. That contract continued until recently when we were, at NASA's request, added to the Lockheed Martin Cargo Mission contract to support the International Space Station, or ISS, in the future. We support ISS by providing pressurized modules ' these are laboratories about the size of a school bus that fly inside the space shuttle ' and with cross-bay pallets, or unpressurized (exposed to the elements) carriers, for things like spare orbital replaceable units and other cargo that are attached to the space shuttle across the payload bay. In 1997 we acquired Astrotech Space Operations, which serves the commercial unmanned launch business and has been doing so since the mid-1980s by providing high-quality spacecraft processing facilities in Florida. They have supported the processing of 100% of the commercial telecommunications satellites launched from Florida. Then in 1998 we acquired a company called Johnson Engineering, which provides engineering services to the Johnson Space Center here in Houston under a normal, government contracting arrangement. We now refer to that business unit as SPACEHAB Government Services or (SGS). SGS provides support services, under cost-type contracts that complement and enhance our commercial services by building an excellent relationship with our customer, currently, the International Space Station Program Office. Finally, we have a small media arm referred to as Space Media. That subsidiary operates the world's largest online space merchandise store. Now, as far as the status of the company today, over the last few years we have been realizing about 100 million in total annual revenue, with Astrotech and Government Services each providing about 15% of that total and flight services the other 70%. Because of the delay in the space shuttle, from the accident last year until next March, and because we downsized our Government Services organization in the fall last year, revenue for the next two years ' until the space shuttle returns to flight ' will be somewhat less than 100 million. Today's environment, though, offers exciting opportunities for each of those businesses. The commercial satellite industry served by Astrotech is expected to experience growth beginning in 2006 as the major US launch suppliers, Lockheed Martin and Boeing, begin to deliver the next generation of broadband communications capability to serve an increasingly hungry world market for bandwidth. Because our new satellite processing facility provides a unique, state-of-the-art capability not yet found elsewhere, we are well positioned to experience growth consistent with the growth that's expected at our two primary customers, Lockheed Martin and Boeing. In addition, we've added NASA planetary missions and military satellites to our list of satisfied customers over the last two years, and we expect to continue to serve them. Our Government Services unit recently won a subcontract for configuration management services to the International Space Station that will provide a foundation over the five-year life of that contract to allow us to grow our program support core competencies to both NASA and other customers. We have already experienced growth of almost 10% in the size of that contract. Our Flight Services business remains a key part of the ISS and space shuttle teams, and currently, our assets, which are privately owned, are manifested on four of the next six space shuttle missions, beginning with the first flight in March of next year. Although our revenue will be inhibited in this business unit until that flight occurs, there is a strong demand for our assets to support both the assembly of the space station and its use through at least 2010. The prospects for all three of these businesses are enhanced by the President's announcement of a new National Space Vision on January 14 of this year. In addition to priority research on the space station, NASA will now focus on the exploration of our solar system with an initial objective of returning humans to the moon by 2020, this time to live and work there for an extended duration. Before that, a number of robotic exploratory missions will journey to the Moon and Mars. The objective is to send humans to Mars to explore and evaluate the potential for life and conduct research while using the resources on Mars to support habitation. We anticipate serving the program of activities for these initiatives by helping NASA execute the program, processing some of the vehicles at Astrotech, and participating in the design and development of the new systems that are required. In addition, the President has directed that NASA seek private investment to help reduce the cost of space access from its current price of around 10,000 a pound. Two weeks ago, I testified before a President's Commission to assess the key issues related to the National Vision to explore the Moon, Mars and beyond. It is clear that there is momentum to encourage NASA to purchase commercial cargo to low-earth orbit at a fixed price per pound. We believe that we have a competitive advantage in this emerging market because, together with RSC Energia in Moscow, we've invested in the space assets and intellectual property that will allow us to be schedule-responsive and price-responsive once NASA issues a solicitation.
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