SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 22, 1996
-------------
COMSAT Corporation
-------------------------------------------------
(Exact name of Registrant as specified in Charter)
District of Columbia 1-4929 52-0781863
------------------------ ----------- --------------
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification
Number)
6560 Rock Spring Drive, Bethesda, MD 20817
--------------------------------------- --------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (301) 214-3000
Not applicable.
------------------------------------------------
(Former name or former address, if changed since last report).
<PAGE>
ITEM 5. OTHER EVENTS
Attached to this report as Exhibit 99.1, and incorporated by reference
in this item, is a Press Release of the Corporation, distributed on July
19, 1996, announcing the resignation of Bruce Crockett as President and
Chief Executive Officer and as a director of the Corporation. The release
also announces that Betty C. Alewine has been elected by the Board of
Directors to serve as President and Chief Executive Officer and as a
director of the Corporation.
Attached to this report as Exhibit 99.2, and incorporated by reference
in this item, is a Press Release of the Corporation, distributed on July
19, 1996, announcing second quarter operating results and the status of the
Corporation's assessment of strategic alternatives.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits (listed according to the number assigned in Item 601 of
Regulation S-K).
Exhibit No. Description
- ----------- -----------
99.1 Press Release dated July 19, 1996 announcing
resignation of the Corporation's President and the
election of a successor.
99.2 Press Release dated July 19, 1996 announcing
second quarter operating results and the status of
the Corporation's assessment of strategic
alternatives.
2
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
COMSAT Corporation
------------------
/s/Alan Korobov
By: ---------------
Alan Korobov
Controller
Date: July 19, 1996
3
<PAGE>
EXHIBIT INDEX
--------------
Exhibit No. Description
----------- -----------
99.1 Press Release dated July 19, 1996 announcing
resignation of the Corporation's President and the
election of a successor.
99.2 Press Release dated July 19, 1996 announcing second
quarter operating results and the status of the
Corporation's assessment of strategic alternatives.
<PAGE>
COMSAT CORPORATION NEWS RELEASE
FROM: COMSAT Corporation
6560 Rock Spring Drive
Bethesda, MD 20817
PHONE: 301 214 3442
FAX: 301 214 7130
DATE: July 19, 1996
For Immediate Release
- ---------------------
COMSAT Announces Resignation Of CEO,
Election Of Successor
Bethesda, Md. -- COMSAT Corporation (NYSE: CQ) today announced that
Bruce Crockett has resigned as president and chief executive officer and as
a director of the Corporation, effective immediately, to pursue other
business interests. The Board of Directors has elected Betty C. Alewine to
serve as president and chief executive officer of the Corporation. Mrs.
Alewine also was elected to the Corporation's Board of Directors.
"Mrs. Alewine has exhibited exemplary leadership in managing the
Corporation's core international telecommunications businesses over the
past few years and, in the Board's view, is the person best qualified to
lead the Corporation," said C. J. Silas, chairman of the Corporation's
Board of Directors. Mrs. Alewine joined COMSAT in 1986, having previously
been employed at MCI in a senior management capacity. Most recently, Mrs.
Alewine has been the president of COMSAT International Communications
(CIC).
"The CIC operating divisions under Mrs. Alewine's direction accounted
for more than half of the Corporation's consolidated revenues and over'
two-thirds of COMSAT's total operating income in 1995," said Silas. "Mrs.
Alewine also has played a key role in COMSAT's efforts to restructure
INTELSAT and Inmarsat, which continue to be a top priority of the
Corporation, and her experience as a recent past Chairman of the INTELSAT
Board of Governors remains invaluable to that initiative. Under her
leadership, COMSAT's international ventures unit expanded its operations
into 13 countries and experienced a twelve-fold increase in revenue in less
than four years."
"COMSAT's core strengths are in international telecommunications
services and international ventures. The Corporation plans to concentrate
its primary efforts on those businesses," stated Silas. "International
communications is the fastest growing segment of the telecommunications
industry, and COMSAT is ideally positioned to capitalize on those growth
opportunities, given its long history and involvement in those markets.
-- more --
COMSAT and (graphic trademark) are the registered trademark of COMSAT
Corporation.
<PAGE>
Annoucement of CEO Successor -- Page 2
To leverage that experience and market position, the Corporation
intends, over time, to deploy its capital into international
telecommunications services and ventures. This could entail a further
reduction in the Corporation's ownership interest in Ascent Entertainment
Group, Inc. COMSAT's interest in Ascent is a valuable asset that can be
monetized at the right time to achieve that objective." COMSAT currently
owns 80.67 percent of Ascent's common stock.
In a separate press release issued today, the Corporation also
announced its earnings for the second quarter.
A biography of Mrs. Alewine is attached to this press release.
COMSAT Corporation is a global provider of communications services and
products.
# # #
CONTACT:
- -------
Press:
Janet Dewar Vice President, Corporate Affairs (301) 214-3442
Financial Community:
Allen Flower Vice President and Chief Financial Officer (301) 214-3660
<PAGE>
Betty C. Alewine
Betty C. Alewine is president and chief executive officer of COMSAT
Corporation, an international telecommunications products and services
company with annual revenues of $852 million.
Mrs. Alewine became CEO in July 1996 after serving for the past two
years as President of COMSAT International Communications (CIC), the
company's largest operating unit, which includes COMSAT World Systems
(CWS), COMSAT Mobile Communications (CMC), COMSAT Personal Communications
(CPC) and COMSAT International Ventures (CIV). The operating divisions
under her direction accounted for more than half of the Corporation's
consolidated revenues and over two-thirds of COMSAT's total operating
income in 1995.
Under Mrs. Alewine's leadership, COMSAT's international ventures
expanded operations to 13 countries and experienced a twelve-fold increase
in revenues in less than four years. She has been the president of COMSAT
Argentina, a wholly-owned subsidiary of COMSAT and also served on the
boards of several other COMSAT foreign ventures.
Mrs. Alewine has been a principal architect in the recent
organizational restructuring and strategic realignment of COMSAT's mobile
communications business, and she continues to be actively involved in
COMSAT's efforts to restructure INTELSAT and Inmarsat, a top priority of
the Corporation.
From 1990-1995, Mrs. Alewine served as the United States'
representative to the Board of Governors of the International
Telecommunications Satellite Organization (INTELSAT). The INTELSAT Board of
Governors is the body responsible for the strategic business, financial and
operating decisions of the consortium. In June 1994, Mrs. Alewine was
elected chairman of the Board of Governors for a one-year term, having
served the previous year as vice chairman.
Earlier at COMSAT, Mrs. Alewine served as vice president and general
manager of COMSAT's INTELSAT Satellite Services (ISS) -- the forerunner to
today's CWS -- where she built a marketing and operations organization
prepared to meet growing competition in international satellite
communications. Prior to that, she was vice president of sales and
marketing for both ISS and Maritime Services.
Mrs. Alewine joined COMSAT in 1986 from MCI where she was a senior
national accounts manager. She began her career in sales and marketing
management at Xerox Corporation.
Mrs. Alewine is a member of the U.S. Department of State's Advisory
Committee on International Communications and Information Policy. She is
also on the Inter-American Development Bank Advisory Council.
<PAGE>
COMSAT CORPORATION NEWS RELEASE
FROM: COMSAT Corporation
6560 Rock Spring Drive
Bethesda, MD 20817
PHONE: 301 214 3442
FAX: 301 214 7130
DATE: July 19, 1996
For Immediate Release
- ---------------------
COMSAT ANNOUNCES SECOND QUARTER RESULTS
Bethesda, Md. -- COMSAT Corporation (NYSE: CQ) today reported second
quarter 1996 net income of $5.8 million, or 12 cents per share, on revenues
of $232.3 million. Although revenues increased $21.5 million vs. the second
quarter last year, net income decreased by $16.2 million or 34 cents per
share. EBITDA (earnings before interest, taxes, depreciation and
amortization), the measure many analysts use to assess a company's
performance, decreased one percent in the second quarter and was flat for
the first half of 1996. Year-to-date net income was down $21.5 million or
46 cents per share.
"While we anticipated continued competitive pressure on revenues from
the digital services of our mobile communications business and some
additional losses in our Russian venture, the magnitude of the earnings
impact was greater than expected," said COMSAT Chairman C. J. "Pete" Silas.
"We believe, however, that the actions now being implemented to address
these problems will enable us to improve profitability over time and take
greater advantage of the communications markets where we operate."
"In our mobile communications business, we are striving to meet the
competitive challenges by reducing prices and improving service quality,"
continued Silas. "We are also preparing to introduce Planet 1 (SM) service
to the market later this year." He indicated, however, that although the
company believes these actions will improve mobile communications revenues
in the longer term, "lower service prices and the start-up costs of Planet
1 will lower operating results in the second half of this year."
"In our Russian venture, we have installed a new management team to
run the company based on the model of our successful Latin American
companies," said Silas. "However, we now think the turnaround will take
longer than anticipated."
"Meanwhile, for CIV overall, the well established momentum in revenue
growth continued," he added, "with both first- and second-quarter revenues
increasing by 50 percent."
-- more --
COMSAT and (graphic trademark) are the registered trademark of COMSAT
Corporation.
<PAGE>
2ND QUARTER 1996 -- Page 2
COMSAT RSI also posted a strong performance in the second quarter
according to Silas. Second quarter revenue was 47 percent higher than the
same period last year. About half the revenue increase came from two new
wireless businesses acquired last year, Plexsys and JEFA, although there
were gains throughout the division. COMSAT RSI also continued to increase
its backlog which reached a new high of $231 million in the second quarter.
When the pension curtailment gain of last year is excluded, COMSAT RSI also
experienced an improvement in pre-tax income.
Earlier this year, COMSAT and the U.S. Government together submitted a
proposal to INTELSAT to restructure the consortium. Commenting on the
momentum of the restructuring process, Silas said, "we are encouraged by
the progress being made and the fact that the concepts now under
consideration are generally supportive of the principles in our proposal."
He noted that the restructuring process remains on schedule, with April
1997 still the target date for a decision by the INTELSAT Assembly of
Parties.
Silas said that operating losses in Ascent Entertainment reflected
higher costs in the company's sports teams. These were partially offset by
improved margins in the multimedia business. As previously reported (Ascent
news release, July 18), Ascent expects to complete its acquisition of
Spectravision in the third quarter of this year. "While extremely
beneficial to both Ascent's EBITDA growth rate and asset value, this
acquisition will have a negative impact on COMSAT's reported earnings per
share," said Silas. "This fact does not alter our belief that Ascent is on
the right strategic course and is a valuable asset for COMSAT that, as we
said in our 1995 Annual Report, can be monetized at the right time to
support our international telecommunications services and ventures
business."
Earnings per share in the second half of 1996 will be below comparable
earnings per share for the same period in 1995 before extraordinary items.
Silas also commented on the Corporation's work with Merrill Lynch &
Co. that was announced in February. "COMSAT retained Merrill Lynch to
examine a number of options developed by management to enhance the ability
of the Corporation's various businesses to finance their investment
programs, while allowing COMSAT as a parent organization to improve
earnings, reduce debt, increase liquidity and strengthen its balance
sheet," said Silas.
"Merrill Lynch's portion of the review has been completed. The
Corporation is now actively considering the alternatives encompassed by the
study and is prioritizing those options in light of strategic, operational
and market conditions," Slias continued. "We will announce actions
resulting from that assessment as and when decisions are made."
-- more --
<PAGE>
2ND QUARTER 1996 -- Page 3
COMSAT's Board of Directors declared a regular quarterly dividend of
19.5 cents, payable September 9, 1996, to shareholders of record August 9,
1996. This is the 104th consecutive quarterly dividend declared by the
corporation.
A fuller description of COMSAT's financial performance during the
second quarter and first half of 1996 is contained in the attached
financial highlights.
Many of the statements in this release are forward-looking and relate
to anticipated future operating results. Statements which look forward in
time are based on management's current expectations and assumptions, which
may be affected by subsequent developments and business conditions, and
necessarily involve risks and uncertainties. Therefore, there can be no
assurance that actual future results will not differ materially from
anticipated results.
Readers should refer to the Corporation's disclosure documents filed
with the Securities and Exchange Commission, including the Corporation's
1995 Form 10-K and the Form 10-Q for the first quarter, for a discussion of
some of the important factors that might affect these trends.
COMSAT Corporation is a global provider of communications services and
products.
# # #
CONTACT:
- -------
Janet Dewar Vice President, Corporate Affairs (301) 214-3442
Allen Flower Chief Financial Officer (301) 214-3660
<PAGE>
COMSAT Corporation
Financial Highlights
Second Quarter 1996
SUMMARY
- -------
Consolidated revenues for the second quarter and the first six
months of 1996 increased 10% and 14%, respectively, over the same
periods of last year. Income declined $6.8 million for the
second quarter and $12.0 million for the first half of 1996
compared to last year, excluding non-recurring items in 1995.
Earnings per share declined $0.14 per share for the second
quarter and $0.26 per share year-to-date compared to last year,
excluding the non-recurring items. During the second quarter of
1995, the Corporation recorded non-recurring revenues associated
with the NBA expansion ($8.8 million), a COMSAT RSI benefit plan
curtailment gain ($2.7 million pre-tax) and a credit in COMSAT
Mobile Communications (CMC) for Inmarsat-related costs which were
over-accrued during 1994 ($3.3 million pre-tax).
TELECOMMUNICATIONS BUSINESSES
- -----------------------------
REVENUES for the second quarter of 1996 were $183.2 million, a
13% improvement over the same period of 1995. Year-to-date
revenues were $359.3 million which were 12% over last year.
WORLD SYSTEMS revenues for the second quarter and first half
of 1996 improved 7% and 6%, respectively, over the same
periods of last year mostly due to increases in VSAT leases,
INTELSAT system revenues, IBS traffic and Wide-band Mobile.
MOBILE COMMUNICATIONS revenues, as compared to last year,
decreased 15% in the second quarter and 12% for the first
six months of 1996 primarily as a result of the expiration
of the AMSC service contract, lower revenues from IDB and a
decline in telex traffic. While analog telephone traffic has
remained flat year-to-year, lower prices because of
continued competitive pressures have resulted in a decrease
in revenues over last year. A slight increase in digital
telephone revenues partially offset the declines in other
areas. CMC is in the process of improving the operational
performance of its digital services.
INTERNATIONAL VENTURES revenues increased 50% over
last year for both the second quarter and the first
six months of 1996 due principally to growth in the
ventures in Argentina and Brazil, offset slightly by
decreases in the Russian venture, BelCom. In 1995,
CIV experienced operational difficulties at BelCom
and management changes were made during the first
quarter of 1996. Additional time will be needed to
see the impact of these changes in the financials.
The following chart shows COMSAT's share of revenues
and operating income for its international ventures.
<PAGE>
International Ventures Summary
Six Months Ending June 30
($ millions, unaudited proportional operating data)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Revenues Operating Income (Loss)
-------- -----------------------
Ventures 1996 1995 1996 1995
-------- --------------------------- -----------------------
Americas(1) $ 20.7 $ 11.1 $ 1.3 $ 0.4
Europe(2) 6.0 5.0 (5.4) (3.9)
Asia/Pacific(3) 3.8 5.0 (0.5) 0.5
-------- --------- --------- -------
Existing Venture Total 30.5 21.1 (4.6) (3.0)
New Ventures(4) 0.8 0.0 (0.9) (0.3)
-------- --------- --------- -------
Total 31.3 21.1 (5.5) (3.3)
======== ========= ========= =======
Note: This information was developed by taking COMSAT's ownership
percentage of each venture multiplied by total venture revenues and
operating income/loss.
(1) Americas: Argentina, Bolivia, Brazil, Colombia, Guatemala and Venezuela
(2) Europe: BelCom, Viatel and Turkey (IBS)
(3) Asia/Pacific: PhilCom
(4) Includes ventures less than 24 months old: China, India and Turkey (VSAT)
</TABLE>
TECHNOLOGY SERVICES reported a 46% improvement in
revenues in the second quarter and a 39% increase year-
to-date over the same periods last year. Approximately
half of the revenue growth was related to the
consolidation of revenues from JEFA and Plexsys
International. JEFA was purchased in September 1995
and Plexsys was consolidated starting in July 1995.
Much of the balance of the improvement came from the
Communications Satellite Communications Initiative
(CSCI) contract with the U.S. Department of Defense,
mobile satellite services programs and shipments of
wireless antennas which were mostly for the U.S. PCS
market.
COST OF SERVICES for the second quarter of 1996 were
$104.5 million, 38% higher than the same period last
year. Year-to-date costs were $203.1 million, a 27%
increase over 1995. Excluding the non-recurring items
recorded in the second quarter of 1995, cost of
services increased approximately 28% and 23%,
respectively, for the quarter and year-to-date. The
higher costs are predominately attributable to the
increased sales in the International Ventures and
Technology Services businesses and the contingency
reserve established in the regulated business. These
increases were offset slightly by cost savings
resulting from the restructuring actions taken in the
third quarter of 1995.
Page 2 of 5
<PAGE>
DEPRECIATION AND AMORTIZATION increased 9% in the second
quarter and 7% year-to-date due to increased
depreciation associated with INTELSAT and Inmarsat
satellites which were placed into service during the
last twelve months and the continued expansion of
ventures in Brazil, Argentina, Russia and Venezuela.
ASCENT ENTERTAINMENT GROUP (ASCENT) Highlights from the
Ascent operating results release as reported on
Thursday July 18 included the following:
REVENUES for the second quarter were $49.1 million as
compared to $49.3 million for the same period of last
year. The second quarter of 1995 included non-
recurring revenues of $8.8 million related to the NBA
expansion and $6.8 million for the Satellite Cinema
business which ceased operations at the end of 1995.
For the first six months of 1996, revenues were $118.7
million as compared to $96.7 million for the first half
of 1995, including $8.8 million of NBA expansion fees
noted above and Satellite Cinema revenues of $13.7
million.
EBITDA for this year's second quarter was $9.0 million
versus $18.6 million for 1995. For the first half of
1996 EBITDA was $20.8 million, a decline of $5.8
million from last year. The decreases in EBITDA for
both periods is primarily attributable to the non-
recurring 1995 NBA expansion fees and losses related to
the Ascent sports franchises which were partially
offset by the growth in the multimedia segment.
COMSAT CONSOLIDATED
GENERAL AND ADMINISTRATIVE expenses were 2.4% of revenues
for the quarter as compared to 2.7% for the same period
last year. For the year-to-date, general and
administrative expenses were 2.6% of revenues which is
unchanged from 1995.
RESEARCH AND DEVELOPMENT expenses were 2.5% of revenues
for the second quarter and 2.3% for the year-to-date as
compared to 2.9% and 2.5%, respectively, for the same
periods of last year.
INTEREST AND OTHER INCOME (EXPENSE) for the second
quarter and first six months of 1996 was $1.9 million
and $5.3 million, respectively, worse than the same
periods last year and was primarily due to dividend
payments on the Monthly Income Preferred Securities
issued during the third quarter of 1995 offset in part
by the minority interest in the Ascent loss.
INTEREST EXPENSE, NET OF AMOUNTS CAPITALIZED for the
quarter as well as year-to-date was relatively
unchanged from 1995 as interest capitalized was lower
due to completion of satellite projects, offset by a
decrease in interest expense because of reduced short-
term borrowings.
Page 3 of 5
<PAGE>
INCOME TAX EXPENSE for both the second quarter and year-
to-date reflects a higher accrual rate compared to last
year due to an increase in non-deductible expenses.
NET INCOME for the second quarter was $5.8 million which
was $16.2 million below that of the same period last
year. Year-to-date net income was $15.1 million which
was $21.5 million lower than the first half of 1995.
Income for the second quarter declined $6.8 million and
income for the first six months of 1996 decreased $12.0
million, excluding the non-recurring items in last
year's second quarter.
EARNINGS PER SHARE for the second quarter were $0.12 as
compared to $0.26 last year excluding non-recurring
items. Year-to-date earnings per share were $0.31
versus $0.57 last year excluding the non-recurring
items.
WEIGHTED AVERAGE SHARES OUTSTANDING at the end of the
second quarter were 49.3 million, approximately 1.5
million higher than the end of the second quarter of
1995.
CASH AND LIQUIDITY
- ------------------
CASH AND EQUIVALENTS decreased $97 million during the
first six months of 1996. Cash was used primarily for
capital expenditures and investments.
SHORT TERM BORROWINGS and current maturities of long-term
debt increased $52 million during the first half of
1996 and was used by Ascent to fund installation of new
hotel room entertainment systems at On Command Video,
movie production costs at Beacon Communications and
working capital needs.
LONG TERM DEBT has declined slightly during the six months of 1996.
Page 4 of 5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Telecom EBITDA Summary
-----------------------
($ millions, unaudited)
1996 1995
---- ----
1st Qtr 2nd Qtr 1st Qtr 2nd Qtr
---------------------- ----------------------
World Systems $47.2 $46.9 $49.5 $48.5
Mobile 23.3 22.2 22.0 27.7
Ventures (0.9) (1.5) (1.8) (2.7)
Technology 5.3 6.9 4.3 8.2
Other (8.1) (5.6) (5.8) (7.0)
------ ------ ------ ------
Telecom EBITDA $66.8 $68.9 $68.2 $74.7
====== ====== ====== ======
</TABLE>
Page 5 of 5
<PAGE>
<TABLE>
<CAPTION>
COMSAT CORPORATION
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
(In millions, except per share amounts)
<S> <C> <C> <C> <C>
For the Quarters Ended For the Six Months Ended
----------------------------- --------------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
----------- ----------- -------- -------------
Revenues $232.3 $210.8 $478.0 $418.7
----------- ----------- -------- -------------
Operating expenses:
Cost of services 143.0 105.2 298.0 226.4
Depreciation and amortization 55.4 48.9 108.1 96.2
Research and development 5.7 6.0 10.9 10.7
General and administrative 5.5 5.8 12.6 10.7
----------- ----------- ----------- -------------
Total operating expenses 209.6 165.9 429.6 344.0
----------- ----------- ----------- -------------
Operating income 22.7 44.9 48.4 74.7
- - - -
Interest and other income (expense), net (1.1) 0.8 (2.5) 2.8
Interest expense, net of amounts
capitalized (10.2) (10.4) (19.3) (19.3)
----------- ----------- ----------- -------------
Income before taxes 11.4 35.3 26.6 58.2
Income tax expense (5.6) (13.3) (11.5) (21.6)
----------- ----------- ----------- -------------
Net income $5.8 $22.0 $15.1 $36.6
=========== =========== =========== =============
Earnings per share $0.12 $0.46 $0.31 $0.77
=========== =========== =========== =============
Average shares 49.3 47.9 48.9 47.8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMSAT CORPORATION
OPERATING RESULTS BY BUSINESS SEGMENT (UNAUDITED)
(In millions)
<S> <C> <C> <C> <C> <C> <C>
1995 1996
------------------------------------------------ ---------------------------
QTR 1 QTR 2 QTR 3 QTR 4 TOTAL QTR 1 QTR 2 TOTAL
------------------------------------------------ ---------------------------
Revenues
International Communications
World Systems $62.7 $63.0 $62.9 $66.1 $254.7 $65.6 $67.5 $133.1
Mobile Communications 47.1 46.1 47.5 39.7 180.4 42.6 39.3 81.9
International Ventures 7.9 8.2 9.7 11.9 37.7 11.9 12.4 24.3
------------------------------------------------ ---------------------------
Total International Communications 117.7 117.3 120.1 117.7 472.8 120.1 119.2 239.3
Technology Services 46.8 48.1 50.9 60.1 205.9 61.6 70.4 132.0
Entertainment 47.4 49.3 37.6 57.2 191.5 69.6 49.1 118.7
Eliminations and other (4.0) (3.9) (4.7) (5.5) (18.1) (5.6) (6.4) (12.0)
------------------------------------------------- ----------------------------
Total revenues $207.9 $210.8 $203.9 $229.5 $852.1 $245.7 $232.3 $478.0
================================================= ============================
1995 1996
----------------------------------------------- ----------------------------
QTR 1 QTR 2 QTR 3 QTR 4 TOTAL QTR 1 QTR 2 TOTAL
----------------------------------------------- ----------------------------
Operating income (loss)
International Communications
World Systems $27.6 $26.7 $26.8 $27.5 $108.6 $25.4 $24.0 $49.4
Mobile Communications 12.6 17.6 13.3 10.0 53.5 13.7 11.2 24.9
International Ventures (3.4) (4.6) (7.0) (5.7) (20.7) (3.9) (4.6) (8.5)
------------------------------------------------ ----------------------------
Total International Communications 36.8 39.7 33.1 31.8 141.4 35.2 30.6 65.8
Technology Services 2.6 6.5 0.6 4.3 14.0 3.4 5.1 8.5
Entertainment (3.2) 6.3 (6.4) (12.1) (15.4) (4.2) (6.9) (11.1)
Total segment operating income 36.2 52.5 27.3 24.0 140.0 34.4 28.8 63.2
General and administrative expenses (4.9) (5.8) (5.8) (3.4) (19.9) (7.1) (5.5) (12.6)
Provision for restructuring - - (20.1) - (20.1) - - -
Other (1.5) (1.8) (0.8) (0.3) (4.4) (1.6) (0.6) (2.2)
------------------------------------------------ ----------------------------
Total operating income $29.8 $44.9 $0.6 $20.3 $95.6 $25.7 $22.7 $48.4
================================================ ============================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMSAT CORPORATION
CONDENSED BALANCE SHEETS (UNAUDITED)
(In millions)
<S> <C> <C>
June 30, December 31,
1996 1995
---------- ------------
Current assets:
Receivables $279.0 $234.5
Other current assets 93.0 191.3
---------- ------------
Total current assets 372.0 425.8
---------- ------------
Property in service, net 1,249.2 1,165.8
Property under construction 282.4 362.3
Other assets 456.0 360.4
---------- ------------
Total assets $2,359.6 $2,314.3
========== ============
Current liabilities:
Current notes payable $64.0 $11.7
Other current liabilities 172.9 192.8
---------- -----------
Total current liabilities 236.9 204.5
---------- -----------
Long-term debt 657.6 664.6
Other noncurrent liabilities 327.5 313.7
Minority interest 288.2 292.1
Stockholders' equity 849.4 839.4
---------- -----------
Total liabilities & stockholders' equity $2,359.6 $2,314.3
========== ===========
</TABLE>
