SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1996
Commission File Number 1-4929
COMSAT CORPORATION
6560 Rock Spring Drive
Bethesda, MD 20817
(301) 214-3000
District of Columbia 52-0781863
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve (12) months (or for such
shorter period that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past ninety (90)
days. Yes [X] No [ ]
48,012,000 shares of the Registrant's common stock were outstanding as of
March 31, 1996.
<PAGE>
PART I. Financial Information
Item 1. Interim Financial Statements for the Corporation (Unaudited)
COMSAT CORPORATION AND SUBSIDIARIES
Condensed Consolidated Income Statements
<TABLE>
<CAPTION>
<S> <C> <C>
Quarter Ended March 31,
In thousands, except per share amounts 1996 1995
- - - ----------------------------------------------------------------------------------------------------------
Revenues $ 245,725 $ 207,883
------------ ------------
Operating expenses:
Cost of services 155,026 121,213
Depreciation and amortization 52,704 47,378
Research and development 5,142 4,605
General and administrative 7,089 4,930
------------ ------------
Total operating expenses 219,961 178,126
------------ ------------
Operating income 25,764 29,757
Interest and other income (expense), net (1,356) 2,029
Interest expense, net of amounts capitalized (9,101) (8,875)
------------ ------------
Income before taxes 15,307 22,911
Income tax expense (5,980) (8,338)
------------ ------------
Net income $ 9,327 $ 14,573
============ ============
Earnings per share $ 0.19 $ 0.31
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
COMSAT CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, December 31,
In thousands 1996 1995
- - - ----------------------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 10,356 $ 124,156
Receivables 263,693 234,465
Inventories 27,942 26,851
Other 36,590 40,353
------------ ------------
Total current assets 338,581 425,825
------------ ------------
Property and equipment (net of accumulated depreciation
of $1,165,132 in 1996 and $1,156,518 in 1995) 1,562,903 1,528,053
Investments 125,991 88,378
Goodwill 66,269 67,569
Franchise rights 106,757 107,962
Other assets 152,952 96,479
------------ ------------
Total assets $ 2,353,453 $ 2,314,266
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current notes payable $ 62,193 $ 11,688
Accounts payable and accrued liabilities 140,825 164,801
Due to related parties 18,242 22,825
Other 9,591 5,155
Total current liabilities 230,851 204,469
------------ ------------
Long-term debt 660,166 664,601
Deferred income taxes and investment tax credits 139,159 134,208
Accrued postretirement benefit costs 49,968 49,497
Other long-term liabilities 133,067 129,911
------------ ------------
Total liabilities 1,213,211 1,182,686
------------ ------------
Minority interest 91,001 92,147
------------ ------------
Preferred securities issued by subsidiary 200,000 200,000
------------ ------------
Stockholders' equity:
Common stock 328,448 324,074
Retained earnings 533,911 533,238
Treasury stock (8,083) (9,020)
Other (5,035) (8,859)
Total stockholders' equity 849,241 839,433
------------ ------------
Total liabilities and stockholders' equity $ 2,353,453 $ 2,314,266
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
COMSAT CORPORATION AND SUBSIDIARIES
Condensed Consolidated Cash Flow Statements
<TABLE>
<CAPTION>
<S> <C> <C>
Quarter Ended March 31,
In thousands 1996 1995
- - - ----------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 9,327 $ 14,573
Adjustments for noncash depreciation and amortization 52,704 47,378
Changes in operating assets and liabilities (42,866) (28,270)
Other 8,097 (1,703)
------------ ------------
Net cash provided by operating activities 27,262 31,978
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (91,713) (86,576)
Decrease in INTELSAT ownership - 12,022
Decrease (increase) in Inmarsat ownership 5,739 (9,146)
Investments in unconsolidated businesses (34,783) (11,680)
Other (4,198) (862)
------------ ------------
Net cash used in investing activities (124,955) (96,242)
------------ ------------
Cash flows from financing activities:
Common stock issued 2,234 2,582
Cash dividends paid (9,328) (9,178)
Proceeds from issuance of long-term debt - 57,136
Repayment of long-term debt (5,830) (4,137)
Net short-term borrowings 47,998 20,412
Repayment of borrowings against company-owned life
insurance policies (51,175) -
Other (6) (4,887)
------------ ------------
Net cash provided (used) by financing activities (16,107) 61,928
------------ ------------
Net decrease in cash and cash equivalents (113,800) (2,336)
Cash and cash equivalents, beginning of period 124,156 18,658
------------ ------------
Cash and cash equivalents, end of period $ 10,356 $ 16,322
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
COMSAT CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Financial Statement Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared by COMSAT Corporation (COMSAT or the
corporation) pursuant to the rules and regulations of the Securities and
Exchange Commission (the SEC). These financial statements should be read in
the context of the financial statements and notes thereto filed with the
SEC in the corporation's 1995 Annual Report on Form 10-K. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such regulations. The
accompanying condensed consolidated financial statements reflect all
adjustments and disclosures which are, in the opinion of management,
necessary for a fair presentation. All such adjustments are of a normal
recurring nature. The results of operations for the interim periods are not
necessarily indicative of the results of the entire year.
2. INTELSAT and Inmarsat Share Changes
The corporation's ownership share of INTELSAT has increased slightly
since December 31, 1995.
The corporation received cash proceeds of $5.7 million for a reduction
in its ownership share in Inmarsat from 24.0% at December 31, 1995 to 23.0%
as of March 31, 1996.
3. Inventories
Inventories, stated at the lower of cost (first-in, first-out) or
market, consist of the following:
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, December 31,
In thousands 1996 1995
- - - ----------------------------------------------------------------------------------------------------------
Finished goods $ 8,383 $ 8,137
Work in progress 10,618 10,260
Raw materials 8,941 8,454
------------ ------------
Total $ 27,942 $ 26,851
============ ============
</TABLE>
4. Investments
As discussed in Notes 7 and 10 to the 1995 financial statements, the
corporation and Inmarsat have committed to invest in I-CO Global
Communications (Holdings) Limited (ICO). In January 1996, the corporation
made an additional $29.2 million investment in ICO. The total of the
corporation's and Inmarsat's investments in ICO was $54.2 million as of
March 31, 1996. See Notes 7 and 8 of this Form 10-Q for further discussions of
ICO matters.
5
<PAGE>
5. Satellite Launch Failure
On February 14, 1996, the launch of the INTELSAT 708 satellite failed.
The corporation's share of the construction and capitalized interest costs
was fully insured. Insurance proceeds of $39.2 million were received in
April 1996 and $11.8 million were received in May 1996. An additional $2.8
million is expected to be received before the end of the second quarter of
1996.
6. Denver Arena Development Project
On March 28, 1996, Ascent Entertainment Group Inc. (Ascent), an 80.67%
owned subsidiary of COMSAT, entered into an agreement with The Anschutz
Corporation (TAC), with which Ascent had been jointly developing a proposed
arena project in Denver Colorado, to purchase TAC's interests and assets
related to the project. Ascent paid TAC $6.6 million in cash. Ascent also
agreed to pay an additional $5.0 million and granted a paid-up suite
license both contingent on the construction and occupancy of the proposed
arena. This obligation, net of discount, has been accrued and is included
in the accompanying balance sheet as short-term debt of $2.5 million and
long-term debt of $2.0 million at March 31, 1996. As part of the agreement,
TAC agreed to use reasonable efforts to facilitate the development of the
proposed arena. In connection with this agreement, Ascent also purchased
TAC's limited partnership interest in New Elitch Gardens, Ltd. (Elitch
Gardens), which owns an amusement park in downtown Denver, for $4.1
million. The purchase of TAC's interest in Elitch Gardens increased
Ascent's interest from 13% to 26%.
Additionally, in March 1996, Ascent entered into an agreement with
Southern Pacific Transportation Company to purchase land in downtown Denver
for $20.0 million for the proposed arena site. The land purchase agreement
is subject to several conditions including obtaining reasonable financing
and the release of the teams from their current lease at McNichols Arena.
7. Regulatory Matters and Contingencies
Investment in ICO. As discussed in Note 10 to the 1995 financial
statements, the corporation has applied to the FCC for authority to
participate as an investor and service provider in ICO. In acting on the
application, which is opposed by ICO's competitors, the FCC will determine
whether the corporation satisfies the requisite legal and policy criteria
to participate in ICO. The corporation believes that all necessary
operating authorizations with respect to ICO will be obtained, although the
FCC may condition U.S. service via ICO on reciprocal access by ICO's U.S.
competitors to foreign markets. In addition, the provision of ICO service
in the U.S. may be subject to the availability of adequate spectrum on an
economic basis.
Inmarsat Satellites. As discussed in Note 11 to the 1995 financial
statements, the corporation had received FCC authorization to participate
in the procurement of four third- generation Inmarsat satellites, with an
application relating to a fifth satellite pending. The first Inmarsat-3
satellite was successfully launched in April 1996 and was placed in service
in May
6
<PAGE>
1996. In May 1996, the corporation received authorization to participate in
the procurement of the fifth satellite and to provide communications
services, including its Planet 1SM and other land mobile services, over the
Inmarsat-3 satellites.
Litigation. As discussed in Note 11 to the 1995 financial statements,
the corporation is defending an antitrust suit brought by PanAmSat against
the corporation. Discovery in the suit ended in November 1994; however,
PanAmSat has motions pending which, if granted, would result in additional
discovery. In December 1994, the corporation filed a motion which is
pending before the court for summary judgment directed to dismissal of all
claims in the complaint. In the opinion of management, the complaint
against the corporation is without merit, and the ultimate disposition of
this matter will not have a material adverse effect on the corporation's
financial statements.
8. Subsequent Events
On April 19, 1996, the board of directors of Ascent and its majority
owned subsidiary, On Command Video Corporation (OCV), approved a
transaction in which Ascent would acquire the assets of SpectraVision Inc.
(SpectraVision), which is currently operating in bankruptcy. Ascent intends
to combine OCV with SpectraVision's assets and certain of its liabilities
to form a new company which is expected to be 72.5% owned by Ascent and the
current minority shareholders of OCV. The new company, expected to be named
On Command Video, would provide pay-per-view entertainment and information
services to approximately one million hotel rooms worldwide. The
SpectraVision bankruptcy estate is expected to receive 27.5% of the new
company's stock. The new company will also issue warrants to Ascent's
designee to purchase 13% of the new company's common stock and warrants to
SpectraVision's estate to purchase another 7% of the stock. The transaction
is subject to bankruptcy court approval, antitrust clearance and other
conditions.
On May 10, 1996, TRW, Inc. filed a patent infringement lawsuit in the
U.S. District Court for the Central District of California against ICO (see
Note 4 of this Form 10-Q). The suit seeks injunctive relief and monetary
damages. The corporation has been advised by ICO that it intends to
vigorously defend the lawsuit.
9. New Accounting Pronouncement
As discussed in Note 1 to the corporation's 1995 financial statements,
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation" was issued in 1995 and is effective beginning
January 1, 1996. SFAS No. 123 requires expanded disclosures of stock-based
compensation arrangements with employees and encourages (but does not
require) compensation cost to be measured based on the fair value of the
equity instrument awarded. Companies are permitted, however, to continue to
apply APB Opinion No. 25, "Accounting for Stock Issued to Employees," which
recognizes compensation based on the intrinsic value of the equity
instrument awarded. The corporation has elected to continue to account for
its stock-based compensation awards to employees under APB No. 25 and will
disclose the required pro forma effect on net income and earnings per share
in the corporation's 1996 annual financial statements.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations for the Quarter Ended March 31, 1996
ANALYSIS OF OPERATIONS
Consolidated Operations
Consolidated revenues for the first quarter of 1996 were $245.7
million, an increase of $37.8 million over the first quarter of 1995. The
majority of the increase came from the Technology Services and Entertainment
segments.
Operating income in the first quarter was $25.8 million, a decline of
$4.0 million from the prior year. Establishment of a contingency reserve in
International Communication's regulated World Systems division, increased
operating losses in the Entertainment segment related to the Colorado
Avalanche, which was not included in COMSAT's consolidated results until
the second half of 1995, and nonrecurring general and administrative costs
contributed to the decrease in operating income. Offsetting these factors
in part were cost improvements in Mobile Communications and the favorable
impact of increased sales in the Technology Services segment.
Interest and other income (expense), net, decreased in the first
quarter by $3.4 million from last year due to dividends of $4.1 million on
the $200 million of Monthly Income Preferred Securities (MIPS) which were
issued in July 1995.
Interest expense, net of amounts capitalized, increased slightly from
the first quarter of 1995. Interest capitalized, primarily on satellite
construction projects, declined in the first quarter by $0.5 million due to
the completion of several satellites. Offsetting the impact of the decrease
in capitalized interest were lower interest costs resulting from a decline
in short-term borrowings.
Net income for the first quarter of 1996 was $9.3 million, $5.2
million lower than the same period last year. Earnings per share for the
quarter were $0.19, down $0.12 from the comparative period in 1995.
8
<PAGE>
Segment Operating Results
Commencing in 1996, the corporation reports operating results in three
segments: International Communications, Technology Services and
Entertainment. The International Communications segment includes, COMSAT
World Systems (CWS), COMSAT Mobile Communications (CMC) and COMSAT
International Ventures (CIV). Prior to 1996, CMC was reported in a separate
segment.
Results by Segment:
<TABLE>
<CAPTION>
<S> <C> <C>
Quarter Ended March 31,
In millions 1996 1995
- - - ----------------------------------------------------------------------------------------------------------
REVENUES
International Communications:
World Systems $ 65.6 $ 62.7
Mobile Communications 42.6 47.1
International Ventures 11.9 7.9
-------- --------
Total International Communications 120.1 117.7
Technology Services 61.6 46.8
Entertainment 69.5 47.4
Eliminations and other (5.5) (4.0)
-------- --------
Total revenues $ 245.7 $ 207.9
======== ========
OPERATING INCOME (LOSS)
International Communications:
World Systems $ 25.5 $ 27.6
Mobile Communications 13.7 12.6
International Ventures (3.9) (3.4)
-------- --------
Total International Communications 35.3 36.8
Technology Services 3.4 2.6
Entertainment (4.2) (3.2)
-------- --------
Total segment operating income 34.5 36.2
General and administrative expenses (7.1) (4.9)
Other (1.6) (1.5)
-------- --------
Total operating income $ 25.8 $ 29.8
======== ========
</TABLE>
International Communications
This segment's revenues in the first quarter were $120.1 million, a 2%
improvement over the same period in 1995. Operating income was $35.3
million, $1.5 million lower than the first quarter of 1995.
9
<PAGE>
CWS's first quarter 1996 revenues increased $2.9 million over the same
quarter in 1995 mainly due to increases in IBS traffic, VSAT leases,
Wide-band Mobile and INTELSAT system revenues. Conversion of analog to
lower cost digital circuits as well as 15% price reductions implemented in
1996 on long-term contracts somewhat offset the traffic increases.
Operating income in CWS declined $2.1 million as compared to the previous
year because of the establishment of a contingency reserve in the regulated
business offset in part by lower operating costs and higher revenues.
Revenues in CMC in the first quarter declined 10% from the prior year
predominantly due to continued price competition in analog telephone
services and the expiration of the American Mobile Satellite Corporation
(AMSC) service contract as AMSC began using its own satellite. Digital
traffic, however, grew almost 50% this quarter versus the same period last
year. Operating income in CMC improved 8% despite the decrease in revenue
as a result of the cost savings from the third quarter 1995 restructuring
and improvements in CMC's share of Inmarsat's operating performance.
CIV's first quarter revenues of $11.9 million were 50% higher than the
previous year. This improvement was principally driven by continued growth
in Argentina and Brazil as well as the introduction of new services in
Turkey and Venezuela. The operating loss for the quarter was $0.5
million worse than 1995 due to start-up costs in newer ventures.
Technology Services
The Technology Services segment includes COMSAT RSI (CRSI) and COMSAT
Laboratories. First quarter revenues for this segment increased 32% from
the prior year. The improvement came in part from increased sales in the
wireless networks business which benefited from the inclusion of two new
companies, Plexsys and Jefa, which were not included in consolidated
results until the second half of 1995. Revenue growth also came from
increases in advanced system sales, classified satellite services and
wireless antennas. Operating income improved 29% over the first quarter of
1995 which reflects the improved segment revenues, offset by increased
research and development.
Entertainment
The Entertainment segment is comprised of Ascent Entertainment Group,
Inc. (Ascent). The corporation owns 80.67% of Ascent's common stock.
Revenues for the quarter improved to $69.5 million, a 47% increase over the
first quarter of 1995. The majority of the increase came from the inclusion
of the Colorado Avalanche National Hockey League franchise which was
acquired in July 1995 and was not included in the consolidated results
until the second half of last year. Operating income decreased $1.0 million
predominantly because of the inclusion of the Colorado Avalanche.
Outlook
Many of the statements that follow 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. Although
10
<PAGE>
the corporation has attempted to identify some of the important factors
that may cause actual results to differ materially from those anticipated,
those factors should not be viewed as the only factors which may affect
future operating results.
CWS's quarterly operating income is not expected to change
significantly for the balance of the year as compared to the first quarter
of 1996. In 1995, CWS signed a five-year agreement with News Corporation to
provide satellite services beginning in 1996. In March 1996, News
Corporation rescinded this agreement. The corporation has commenced a
lawsuit against News Corporation and other parties to recover damages
arising out of News Corporation's breach of obligation to COMSAT.
INTELSAT successfully launched one satellite in the first quarter 1996
and plans two more launches in 1996. In February 1996, there was a launch
failure of the INTELSAT 708 satellite aboard a China Long March vehicle.
The corporation's investment in the satellite, including capitalized
interest, was fully insured. The majority of the insurance proceeds were
received in April and May 1996 with the balance of the proceeds expected
before the end of the second quarter of 1996. Receipt of the insurance
proceeds will reduce the corporation's rate base for jurisdictional
rate-making purposes, resulting in a slight reduction of earnings capacity.
The corporation announced in February 1996 that it had reached
agreement with the U.S. Government concerning a joint proposal that would
transfer approximately 50% of INTELSAT's assets, including satellites, to a
new commercial affiliate. The existing intergovernmental organization would
continue to provide basic public network services. The proposal also
contemplates that a majority of the affiliate's stock would be sold to
external investors. The corporation's objective is to build a consensus on
the proposal that can be considered for adoption at the next INTELSAT
Assembly of Parties to be held in 1997. A vote of two-thirds of the 139
governments that are members of the INTELSAT consortium is necessary for
approval.
As a result of increasing competition, CMC expects continued pressure
on revenues for the balance of 1996. Anticipated increases in revenues from
traffic growth are expected to be offset by a reduction in service charges
caused by competitive pressures and lower-priced digital versus analog
telephone service charges. Operating income is expected to decline as a
direct result of increased costs related to the introduction of Planet 1SM,
CMC's first generation of personal satellite communications.
CIV's revenues are expected to continue to grow, driven by increases
in its ventures in Argentina and Brazil. Losses for 1996 are anticipated to
decrease, compared to 1995, as improvements are made in the two ventures
that experienced difficulties in 1995, Belcom (Russia) and Philcom
(Philippines).
Revenues in Technology Services are expected to continue to grow as a
result of strong worldwide demand for wireless communications
infrastructure and increased U.S. Government spending on advanced
communications products and services. Backlog in the Technology Services
segment increased $17 million during the quarter to approximately $246
million at March 31, 1996, a 19% improvement over the first quarter of
1995.
11
<PAGE>
Operating losses in the Entertainment segment are expected for the
balance of the year as a result of continued losses related to the Denver
Nuggets, the Colorado Avalanche and Beacon Communications.
On a consolidated basis, the corporation expects continued improvement
in revenues as a result of growth predominantly within the Technology
Services and Entertainment segments. Improvements in operating income are
projected in Technology Services but are expected to be offset by costs in
CMC related to the introduction of Planet 1SM service. Interest costs are
expected to increase during the balance of 1996 due to increased borrowings
primarily for capital expenditures. The corporation also expects that the
amount of interest capitalized will decrease as several INTELSAT and
Inmarsat satellites are placed in service during 1996. Consolidated net
income is expected to remain approximately at current levels.
In early 1996, the corporation retained an investment banker to assess
strategic alternatives for enhancing shareholder value and to analyze the
capital needs of its businesses for continued expansion. As part of that
effort, the corporation is examining a number of options with a view toward
enhancing the ability of certain of its businesses to continue to
accelerate their strategic investment programs, while permitting COMSAT as
a parent organization to reduce debt, strengthen its balance sheet and
improve liquidity.
LIQUIDITY AND CAPITAL RESOURCES
The primary sources of cash in the first three months of 1996 were
operations and short-term borrowings. The corporation's working capital
decreased from $221.4 million at December 31, 1995 to $107.7 million at
March 31, 1996. Cash was expended primarily for property and equipment,
repayment of life insurance loans, investment in ICO and the first quarter
dividend.
The corporation has $26 million remaining at March 31, 1996 under a
$100 million medium-term note program, which is unchanged from year-end
1995. The medium-term note program is part of a $200 million debt
securities shelf registration program initiated in 1994.
The corporation has access to short- and long-term financing at
favorable rates. The corporation's current long-term debt ratings were
downgraded one level in early 1996 to A- by Standard and Poor's and to A3
by Moody's. The corporation's current commercial paper ratings were also
downgraded one level in early 1996 to A2 by Standard and Poor's and to P2
by Moody's.
The corporation's debt-financing activities are regulated by the FCC.
Under existing FCC guidelines, the corporation is subject to a maximum
long-term debt to total capital ratio of 45%, a limit of $200 million in
short-term debt and an interest coverage ratio of 2.3 to 1. At March 31,
1996 the corporation was in compliance with those guidelines. The
corporation is required to submit its financial plan to the FCC for review
annually and in April 1996 submitted its current plan. In the current
submission, the corporation requested a temporary decrease in its interest
coverage ratio to a minimum of 1.9 to 1 for the 1996 plan year and an
increase in its short-term debt limit to a maximum of $275 million as long
as the financials of Ascent are consolidated with those of COMSAT. If the FCC
approves the modification to guidelines as requested, the corporation
expects that the cash flows from operations and its short-term borrowing
capacity will be ufficient to fund its cash requirements in 1996.
12
<PAGE>
If the FCC does not approve modification of the guidelines by year-end
1996, the corporation could be required to reduce or reschedule planned
capital investments, reduce cash outlays, or reduce debt.
13
<PAGE>
PART II. Other Information
Item 1. Legal Proceedings
See Notes 7 and 8 this Form 10-Q incorporated
herein by reference.
Item 2. Change in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. (a) Exhibits
No. 11 - Computation of Earnings per Share
No. 27 - Financial Data Schedule
(b) Reports on Form 8-K
(i) Report dated February 14, 1996, reporting a joint
proposal between the U.S. Government and INTELSAT
to restructure INTELSAT.
(ii) Report dated April 19, 1996, reporting that Ascent
Entertainment Group, Inc. had entered into an
agreement to acquire certain assets of SpectraVision,
Inc.
14
<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
By /s/ Alan G. Korobov
Alan G. Korobov
Controller
Date: May 15, 1996
15
<PAGE>
Exhibit 11
COMSAT CORPORATION AND SUBSIDIARIES
Computation of Earnings Per Share
<TABLE>
<CAPTION>
<S> <C> <C>
Quarter Ended March 31,
In thousands, except per share amounts 1996 1995
- - - ----------------------------------------------------------------------------------------------------------
PRIMARY
Earnings $ 9,327 $ 14,573
============ ============
Shares:
Weighted average number of common shares outstanding 47,904 46,989
Add shares issuable from assumed exercise of options 643 668
------------ ------------
Weighted average shares 48,547 47,657
============ ============
Primary earnings per share $ 0.19 $ 0.31
============ ============
ASSUMING FULL DILUTION
Earnings $ 9,327 $ 14,573
============ ============
Shares:
Weighted average number of common shares outstanding 47,904 46,989
Add shares issuable from assumed exercise of options 846 668
------------ ------------
Weighted average shares 48,750 47,657
============ ============
Fully diluted earnings per share $ 0.19 $ 0.31
============ ============
</TABLE>
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0000022698
<NAME> COMSAT
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1.00
<CASH> 10,356
<SECURITIES> 0
<RECEIVABLES> 263,693
<ALLOWANCES> 0
<INVENTORY> 27,942
<CURRENT-ASSETS> 338,581
<PP&E> 2,728,035
<DEPRECIATION> 1,165,132
<TOTAL-ASSETS> 2,353,453
<CURRENT-LIABILITIES> 230,851
<BONDS> 660,166
0
0
<COMMON> 328,448
<OTHER-SE> 520,793
<TOTAL-LIABILITY-AND-EQUITY> 2,353,453
<SALES> 0
<TOTAL-REVENUES> 245,725
<CGS> 0
<TOTAL-COSTS> 155,026
<OTHER-EXPENSES> 64,935
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,101
<INCOME-PRETAX> 15,307
<INCOME-TAX> 5,980
<INCOME-CONTINUING> 9,327
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,327
<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.19
</TABLE>
