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): October 20, 1997
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 October
20, 1997, describing the Corporation's financial results for the quarter
ending September 30, 1997.
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 October 20, 1997.
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 Korobov
-----------------
Alan Korobov
Controller
Date: October 22, 1997
2
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99.1 Press Release dated October 20, 1997.
3
FROM: COMSAT Corporation
6560 Rock Spring Drive
Bethesda, MD 20817
PHONE: 301 214 3442
FAX: 301 214 7130
DATE: October 20, 1997
For Immediate Release
COMSAT CORPORATION REPORTS THIRD QUARTER RESULTS
-- Declares Quarterly Dividend of 5 Cents Per Share --
BETHESDA, Md. -- COMSAT Corporation (NYSE:CQ) today reported income from
continuing operations for the quarter ended September 30, 1997 of $9.4
million, or 19 cents per share, versus $8.2 million, or 16 cents per share,
in the same period last year. Year-to-date income from continuing
operations was $26.6 million, or 53 cents per share, compared with $27.7
million, or 56 cents per share, in the first nine months of 1996.
Third-quarter 1997 and 1996 results in continuing operations, respectively,
included an after-tax gain of $4.2 million related to a real estate sale in
Clarksburg, Md. and $3.5 million from a licensing agreement that resolved
patent infringement disputes.
COMSAT's board of directors declared a regular quarterly dividend of 5
cents per share, payable December 8, 1997, to shareholders of record
November 14, 1997.
On a consolidated basis, COMSAT's results include the discontinued
operations of COMSAT RSI, a manufacturing subsidiary that the corporation
intends to sell. For the third quarter, COMSAT reported a consolidated net
loss of $20.8 million, or 41 cents per share, compared with net income of
$5.0 million, or 10 cents per share, in the same period a year ago. The
third quarter results include a charge of $30.2 million, or 60 cents per
share, after tax, on discontinued operations primarily attributable to
losses now anticipated on the separate disposition of JEFA Wireless
Systems, a subsidiary of COMSAT RSI, as well as adjustments in the
estimated cost to complete certain long-term contracts in COMSAT RSI.
The consolidated, year-to-date net loss was $36.4 million, or 73 cents
per share, compared to net income of $20.1 million, or 41 cents per share,
in the same period last year. Year-to-date results also include losses of
Ascent Entertainment Group, Inc., which was spun off to COMSAT shareholders
in June 1997.
-- more --
<PAGE>
3rd Quarter 1997 - Page 2
"The planned sale of COMSAT RSI and disposition of JEFA's assets
represent the last major elements of the corporation's restructuring, and
our goal is to have both actions completed by the end of the year." said
Betty C. Alewine, president and chief executive officer of COMSAT
Corporation.
"COMSAT's core businesses are strong, but operating results are
expected to continue to be constrained in the near term predominantly due
to the effects of regulation on satellite service operations," said
Alewine. "We remain optimistic that the Federal Communications Commission
will act favorably on the company's petition to have outdated
rate-of-return and structural separation restrictions lifted. The removal
of these restrictions will enable COMSAT to compete more effectively and
take greater advantage of growth opportunities in satellite-delivered
services.
"We are pleased with the pace of revenue growth in our younger network
services businesses," Alewine continued, "as COMSAT International expands
its customer base for advanced corporate networks in rapidly growing
markets around the world, and COMSAT Laboratories continues to build its
technical consulting and communications products operations."
A detailed description of COMSAT's financial performance during the
third quarter and first nine months of 1997 is contained in the attached
highlights.
Some of the statements in this news release, particularly those on the
sale of COMSAT RSI and JEFA Wireless Systems, are forward looking and
relate to anticipated future operating results. Forward-looking statements
are based on COMSAT 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 results will not differ materially from anticipated
results. The timetable and estimated proceeds for the sale of COMSAT RSI
and JEFA Wireless Systems have been and may continue to be affected by
factors, such as the completion of due diligence by prospective buyers and
negotiations of definitive agreements, which are not wholly within COMSAT's
control. Readers should refer to COMSAT's disclosure documents filed with
the Securities and Exchange Commission, including the corporation's 1996
Form 10-K and the Form 10-Q for the first and second quarters of 1997 for
specific details on some of the factors that may affect operating results.
COMSAT Corporation is a global provider of satellite services and
digital networking services and technology.
# # #
CONTACTS: Janet Dewar Vice President, Corporate Affairs (301) 214-3442
Gary Sharpe Director, Investor Relations (301) 214-3244
<PAGE>
October 20, 1997
COMSAT Corporation
Financial Highlights
Third Quarter 1997
SUMMARY
During the second quarter of 1997, the corporation placed both Ascent
Entertainment Group and COMSAT RSI in discontinued operations. The attached
consolidated income statements (unaudited) and condensed balance sheets
(unaudited) have been restated to conform with discontinued operations
presentation.
As disclosed in COMSAT's June 1997 Form 10-Q, the corporation expects to
sell COMSAT RSI in at least two pieces. One of those pieces is JEFA
Wireless Systems. The timing and estimated proceeds of those sales could be
adversely affected by factors that are not wholly within the corporation's
control, such as completion of due diligence by prospective purchasers and
negotiation of definitive agreements on mutually acceptable terms. The
corporation's objective is to complete the sales of COMSAT RSI and JEFA by
the end of 1997. Due primarily to losses now anticipated on the separate
disposition of JEFA assets, the corporation recorded a charge in
discontinued operations in the third quarter of $30.2 million, or 60 cents
per share. The third-quarter charge also includes adjustments related to
certain COMSAT RSI long-term contracts.
Consolidated revenues from continuing operations in the third quarter were
$147.1 million, up 3% from the same period of 1996. Revenues from
continuing operations in the nine months ended September 30, 1997 increased
4% to $422.2 million, compared with the first nine months of 1996.
Third-quarter revenues from fixed and mobile Satellite Services were up 2%,
and 1996 revenues from Network Services increased 14%, compared with the
third quarter of 1996.
The consolidated net loss for the quarter was $20.8 million, or 41 cents
per share, compared with net income of $5.0 million, or 10 cents per share,
in the same period a year ago. Through the first nine months of 1997, the
consolidated net loss was $36.4 million, or 73 cents per share, versus net
income of $20.1 million, or 41 cents per share, in the same period last
year. The 1997 year-to-date net loss includes an extraordinary loss for
early extinguishment of debt of $3.9 million, or 8 cents per share, as well
as losses of Ascent Entertainment Group, Inc., which was spun off to COMSAT
shareholders in June.
Income from continuing operations in the quarter was $9.4 million, or 19
cents per share, versus $8.2 million, or 16 cents per share, in the same
period last year. Results for the quarter include a gain of $4.2 million,
or 9 cents per share, from a real estate sale. The 1996 quarter results
include after-tax income of $3.5 million, or 7 cents per share, from a
licensing agreement that resolved patent-infringement disputes.
Year-to-date income from continuing operations was $26.6 million, or 53
cents per share, compared with $27.7 million, or 56 cents per share, in the
first nine months of 1996.
Page 1 of 5
<PAGE>
SATELLITE SERVICES
WORLD SYSTEMS (CWS) revenues were down slightly in the third quarter to
$66.0 million and essentially unchanged year-to-date at $199.3 million,
compared to the same periods in 1996. Increased revenues from growing
demand for high-speed data and Internet services largely offset a decline
in full-time voice revenues and lower fiber-optic cable restoration
revenues in the quarter. Division earnings before interest, taxes,
depreciation and amortization (EBITDA) decreased slightly in the quarter to
$46.9 million and increased 5% year-to-date to $149.8 million, compared
with the respective periods last year. EBITDA margins were 71% and 75%,
respectively, versus about 71% for both periods in 1996. World Systems
operating income was down 8% in the quarter to $22.3 million and up 5% for
the nine months to $77.6 million, compared with the same periods of 1996.
Federal Communications Commission regulations limit the amount that World
Systems can earn. During the second quarter of 1997, division operating
income was increased by the recovery of litigation costs. Accordingly,
third-quarter results are lower.
MOBILE COMMUNICATIONS (CMC) revenues were up 8% in the quarter to $41.6
million and down 4% year-to-date to $115.3 million from the same periods in
1996. Division EBITDA was up 13% in the quarter and down 7% year-to-date to
$21.6 million and $60.0 million, respectively. EBITDA margins were
approximately 52% for both periods, versus 50% and 54% in the respective
periods of 1996. Mobile operating income was $6.8 million in the quarter
and $17.7 million for the nine months, versus $7.3 million and $32.6
million, respectively, last year. The division's lower 1997 operating
income stems from lower revenues, increased depreciation expense associated
with three Inmarsat-3 satellites placed in service during 1996 and early
1997, and increased costs related to Planet 1(SM) service which was
launched in January 1997. The unfavorable year-to-date revenue and
operating income comparisons reflect the division's slightly higher market
share and service revenues in 1996. The division's performance declined
throughout 1996 due to increasing competition, but has stabilized in 1997.
NETWORK SERVICES
COMSAT INTERNATIONAL (CI) provides corporate data networking services to
approximately 650 customers from more than 5,000 points in developing
countries. Revenues increased 61% in the quarter and 57% year-to-date to
$25.1 million and $62.5 million, respectively, compared with the same
periods in 1996. Revenue increases were driven primarily by advances in CI
operations in Argentina, Brazil, Colombia and Venezuela. Revenues increased
in all international operating regions. Division EBITDA was $3.0 million in
the quarter and $7.8 million for the nine months, compared with break-even
and negative levels in the respective periods last year. EBITDA margins for
the 1997 periods were 12% and 13%, respectively. CI operating losses in the
quarter and year-to-date were $3.9 million and $10.5 million, versus losses
of $3.6 million and $12.1 million in the same periods of 1996. The
division's contracted revenue backlog at September 30, 1997 was $287
million, up 30% from the backlog at year end 1996.
Page 2 of 5
<PAGE>
COMSAT INTERNATIONAL
OPERATING COMPANIES INFORMATION (UNAUDITED)
(In millions)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1997 1996
--------------- ---------------
QTR 3 YTD QTR 3 YTD
----- ------ ----- ------
REVENUES
Existing companies
Americas $20.9 $51.5 $13.1 $32.4
Europe 2.0 5.9 1.8 5.6
---------------- ----------------
Total existing companies 22.9 57.4 14.9 38.0
New companies 2.2 5.1 0.7 1.8
Total revenues $25.1 $62.5 $15.6 $39.8
---------------- ----------------
1997 1996
---------------- ----------------
QTR 3 YTD QTR 3 YTD
----- ------ ----- ------
EBITDA
Existing companies
Americas $ 6.4 $18.4 $ 4.6 $11.2
Europe 0.7 0.3 (0.8) (4.1)
---------------- ----------------
Total existing companies 7.1 18.7 3.8 7.1
New companies (1.3) (3.6) (1.7) (2.8)
---------------- ----------------
EBITDA before CI Corporate 5.8 15.1 2.1 4.3
CI Corporate (2.8) (7.3) (1.7) (6.4)
---------------- ----------------
TOTAL EBITDA $ 3.0 $ 7.8 $ 0.4 $(2.1)
---------------- ----------------
</TABLE>
NOTES:
1 Existing companies in Americas include Argentina (100%), Bolivia
(100%), Brazil (100%), and Guatemala (100%). Existing companies in
Europe include BelCom (100%) and Turkey IBS (85%). Numbers in
parenthesis indicate COMSAT ownership.
2 New companies include Colombia (100%), Peru (65%), Venezuela (100%),
Turkey VSAT (51%) and China (55%) and Mexico (100%).
3 CI's share of India revenue not consolidated for accounting purposes
is $0.7, $1.3 for 3Q and YTD 1996 and $0.5, $1.2 for 3Q and YTD 1997,
respectively.
4 EBITDA (earnings before interest, income taxes, depreciation, and
amortization) is calculated by adding depreciation and amortization
and operating income (loss).
COMSAT LABORATORIES. Excluding $7.8 million of revenues in the third
quarter of 1996 from an agreement resolving patent-infringement disputes,
revenues were up 35% in the quarter and 60% for the nine months to $8.9
million and $26.8 million, compared with the respective periods of 1996.
The increases were primarily driven by technical consulting revenues.
Excluding the 1996 income from the agreement resolving the
patent-infringement disputes, Labs operating losses in both periods were
essentially unchanged. Division results now include the operating results
of the corporation's spacecraft construction monitoring business,
previously reported in COMSAT RSI. Laboratories external revenue backlog at
September 30 increased 19% from year-end 1996 levels to $25.4 million.
Page 3 of 5
<PAGE>
GOVERNMENT PROGRAMS posted a small operating loss in the quarter on
revenues of $15.6 million, versus operating income of $1.4 million on
revenues of $13.5 million in the same period last year. Year-to-date
operating income declined 85% to $500,000, despite a 27% increase in
revenues to $45.2 million. Division EBITDA for the nine months was
$900,000, down 77% from the same period in 1996. The division's 1997
year-to-date results reflect the decommissioning of a Marisat satellite
used by the U.S. Navy in 1996 and a decline in Bosnia-related traffic.
DISCONTINUED OPERATIONS
COMSAT discontinued operations are comprised of the results of Ascent
Entertainment Group (NASDAQ:GOAL) and COMSAT RSI (CRSI). Through June 27,
1997, COMSAT owned 80.67%, or 24 million shares, of Ascent. COMSAT's Ascent
shares were spun off to COMSAT shareholders as a special, tax-free
dividend. It is the corporation's objective to sell CRSI and dispose of
JEFA Wireless Systems by the end of 1997. Both transactions are major
components of COMSAT's previously announced strategic restructuring plan.
COMSAT CONSOLIDATED
GENERAL & ADMINISTRATIVE expenses from continuing operations were $5.4
million in the third quarter, down from $5.8 million in the same
quarter of 1996. For the nine months, G&A expenses totaled $18.0
million, down from $18.5 million in the same period last year.
RESEARCH & DEVELOPMENT expenses for the nine months totaled $6.2 million,
versus $7.6 million in the same period last year.
INTEREST AND OTHER INCOME/EXPENSE for the nine months was income of $6.3
million, compared with a net expense of $10.5 million in the same
period last year. The improvement stems primarily from increased
interest income, the impact of the sale of an equity investment and a
gain from the sale of real estate.
INTEREST EXPENSE, NET OF AMOUNTS CAPITALIZED for the nine months was $31.0
million, up $5.3 million from the same period last year. The increase
stems from reduced interest capitalized due to the completion of
several satellite projects.
INCOME TAX EXPENSE for the nine months totaled $14.5 million, down from
$23.8 million in the same period last year. The income-tax expense
reflects a lower effective tax rate due to a decrease in
non-deductible losses.
MINORITY INTEREST IN NET LOSSES OF CONSOLIDATED SUBSIDIARIES primarily
reflects increased ownership of CI operations in Russia.
Page 4 of 5
<PAGE>
EXTRAORDINARY LOSS FROM EARLY EXTINGUISHMENT OF DEBT, NET OF TAX represents
year-to-date costs incurred from the corporation's repurchase in the
first half of 1997 of $89.5 million of its 8.125% notes and $10
million of its 7.7% medium- term notes.
WEIGHTED AVERAGE SHARES OUTSTANDING at the end of the nine months were 50.0
million, up about 1 million from the end of the same period last year.
CASH AND LIQUIDITY
CASH AND CASH EQUIVALENTS totaled $7 million at the end of the nine months,
compared with $8 million at the end of 1996.
SHORT-TERM BORROWINGS and current maturities of long-term debt totaled $146
million at the end of the third quarter, compared with $32 million at
year-end 1996. The increase is due largely to the corporation's use of
commercial paper to retire a portion of its 8.125% notes.
LONG-TERM DEBT declined by $110 million to $469 million due to the
retirement of the 8.125% notes and a smaller share of INTELSAT debt as
a result of a reduction of COMSAT World Systems' ownership of INTELSAT
from 19.1% to 18.0% in March 1997.
Page 5 of 5
<PAGE>
COMSAT CORPORATION
CONDENSED BALANCE SHEETS (UNAUDITED)
(In millions)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
September 30, December 31,
1997 1996
------------- ------------
CURRENT ASSETS:
Receivables $167.6 $132.6
Other current assets 29.2 26.1
Net assets of discontinued operations 162.6 386.5
------------- -------------
Total current assets 359.4 545.2
------------- -------------
PROPERTY, NET 1,346.3 1,323.0
OTHER ASSETS 202.6 236.1
------------- -------------
TOTAL ASSETS $1,908.3 $2,104.3
============= =============
CURRENT LIABILITIES:
Short-term borrowings $146.0 $31.8
Other current liabilities 133.6 131.2
------------- -------------
Total current liabilities 279.6 163.0
------------- -------------
LONG-TERM DEBT 468.7 578.4
OTHER NONCURRENT LIABILITIES 348.4 316.8
MINORITY INTEREST 205.1 204.3
STOCKHOLDERS' EQUITY 606.5 841.8
------------- -------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $1,908.3 $2,104.3
============= =============
</TABLE>
NOTE:
The condensed consolidated balance sheets have been restated to reflect
Ascent Entertainment Group and substantially all of the assets of COMSAT
RSI as discontinued operations as of June 30, 1997.
--more-
<PAGE>
COMSAT CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
(In millions, except per share amounts)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Quarters Ended For the Nine Months Ended
September 30, September 30,
------------------------ -------------------------
1997 1996 199 1996
-------- -------- -------- --------
REVENUES $147.1 $143.1 $422.2 $407.7
-------- -------- -------- --------
Operating expenses:
Cost of services 74.5 63.6 198.3 183.9
Depreciation and amortization 47.2 40.0 135.5 113.2
Research and development 2.4 2.8 6.2 7.6
General and administrative 5.4 5.8 18.0 18.5
-------- -------- -------- --------
Total operating expenses 129.5 112.2 358.0 323.2
-------- -------- -------- --------
OPERATING INCOME 17.6 30.9 64.2 84.5
Interest and other income (expense), net 6.6 (3.2) 6.3 (10.5)
Interest expense, net of amounts capitalized (11.2) (10.1) (31.0) (25.7)
-------- -------- -------- --------
Income from continuing operations before taxes,
minority interest and extraordinary item 13.0 17.6 39.5 48.3
Income tax expense (4.2) (10.3) (14.5) (23.8)
Minority interest in net losses of consolidated
subsidiaries 0.6 0.9 1.6 3.2
-------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS BEFORE
EXTRAORDINARY ITEM 9.4 8.2 26.6 27.7
Loss from discontinued operations (net of tax) (30.2) (3.2) (59.1) (7.6)
-------- -------- -------- --------
Income (loss) before extraordinary item (20.8) 5.0 (32.5) 20.1
Extraordinary loss from early extinguishment of
debt (net of tax) - - (3.9) -
-------- -------- -------- --------
NET INCOME (LOSS) $(20.8) $5.0 $(36.4) $20.1
======== ======== ======== ========
EARNINGS (LOSS) PER SHARE
Continuing operations $0.19 $0.16 $0.53 $0.56
Discontinued operations (0.60) (0.06) (1.18) (0.15)
Extraordinary loss - - (0.08) -
-------- -------- -------- --------
Net income (loss) $(0.41) $0.10 $(0.73) $0.41
======== ======== ======== ========
Average shares 50.6 49.1 50.0 49.0
</TABLE>
Note:
The condensed consolidated income statements have been restated to reflect
Ascent Entertainment Group and substantially all of the operations of
COMSAT RSI as discontinued operations as of June 30, 1997.
--more--
<PAGE>
COMSAT CORPORATION
OPERATING RESULTS BY BUSINESS SEGMENT (UNAUDITED)
(In millions)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 1996
------------------------------- ---------------------------------------
QTR 1 QTR 2 QTR 3 TOTAL QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------- ------- ------- ------- ------- ------- ------- ------- -------
REVENUES
Satellite Services
World Systems $ 66.8 $ 66.5 $ 66.0 $ 199.3 $ 65.6 $ 67.5 $ 67.1 $ 72.8 $273.0
Mobile Communications 35.2 38.5 41.6 115.3 42.6 39.3 38.4 34.9 155.2
------- ------- ------- -------- ------- ------- ------- ------- -------
Total Satellite Services 102.0 105.0 107.6 314.6 108.2 106.8 105.5 107.7 428.2
Network Services
International 16.4 21.0 25.1 62.5 11.9 12.3 15.6 18.3 58.1
Laboratories 8.1 9.8 8.9 26.8 5.1 5.0 14.4 7.8 32.3
Government Programs 14.7 14.9 15.6 45.2 8.9 13.2 13.5 15.5 51.1
------- ------- ------- -------- ------- ------- ------- ------- -------
Total Network Services 39.2 45.7 49.6 134.5 25.9 30.5 43.5 41.6 141.5
Eliminations and other (7.4) (9.4) (10.1) (26.9) (3.6) (3.2) (5.9) (7.2) (19.9)
------- ------- ------- -------- ------- ------- ------- ------- -------
TOTAL REVENUES $133.8 $141.3 $147.1 $422.2 $130.5 $134.1 $143.1 $142.1 $549.8
======= ======= ======= ======== ======= ======= ======= ======= =======
1997 1996
------------------------------- ---------------------------------------
QTR 1 QTR 2 QTR 3 TOTAL QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------- ------- ------- ------- ------- ------- ------- ------- -------
OPERATING INCOME (LOSS)
Satellite Services
World Systems $28.1 $27.2 $22.3 $77.6 $25.6 $24.1 $24.4 $30.5 $104.6
Mobile Communications 5.5 5.4 6.8 17.7 13.9 11.4 7.3 (0.7) 31.9
------- ------ ------- ------- ------- ------- ------- ------- -------
Total Satellite Services 33.6 32.6 29.1 95.3 39.5 35.5 31.7 29.8 136.5
Network Services
International (4.5) (2.1) (3.9) (10.5) (3.9) (4.6) (3.6) (5.2) (17.3)
Laboratories (0.1) (0.2) (1.0) (1.3) (1.0) (0.9) 8.4 0.6 7.1
Government Programs 0.3 0.5 (0.3) 0.5 0.6 1.5 1.4 1.6 5.1
------- ------ ------- ------- ------- ------- ------- ------- -------
Total Network Services (4.3) (1.8) (5.2) (11.3) (4.3) (4.0) 6.2 (3.0) (5.1)
------- ------ ------- ------- ------- ------- ------- ------- -------
Total segment operating income 29.3 30.8 23.9 84.0 35.2 31.5 37.9 26.8 131.4
General and administrative expenses (5.8) (6.8) (5.4) (18.0) (7.1) (5.5) (5.8) (5.5) (23.9)
Other (0.3) (0.6) (0.9) (1.8) (0.7) 0.2 (1.2) 1.4 (0.3)
------- ------ ------- ------- ------- ------- ------- ------- -------
Total operating income $23.2 $23.4 $17.6 $64.2 $27.4 $26.2 $30.9 $22.7 $107.2
======= ====== ======= ======= ======= ======= ====== ======= =======
</TABLE>
<PAGE>
COMSAT CORPORATION
OPERATING RESULTS BY BUSINESS SEGMENT (UNAUDITED)
(In millions)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 1996
------------------------------- ----------------------------------------
QTR 1 QTR 2 QTR 3 TOTAL QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------- ------- ------- ------- ------- ------- ------- ------- -------
DEPRECIATION AND AMORTIZATION
Satellite Services
World Systems $23.8 $23.8 $24.6 $72.2 $21.8 $22.9 $23.4 $23.6 $91.7
Mobile Communications 13.3 14.2 14.8 42.3 9.7 11.0 11.7 12.8 45.2
------- ------ ------- ------- ------- ------- ------- ------- ------
Total Satellite Services 37.1 38.0 39.4 114.5 31.5 33.9 35.1 36.4 136.9
Network Services
International 5.5 5.9 6.9 18.3 2.9 3.1 4.0 4.8 14.8
Laboratories 0.2 0.3 0.2 0.7 0.2 0.3 0.2 0.3 1.0
Government Programs 0.1 0.1 0.2 0.4 0.2 0.1 0.1 0.1 0.5
------- ------ ------- ------- ------- ------- ------- ------- ------
Total Network Services 5.8 6.3 7.3 19.4 3.3 3.5 4.3 5.2 16.3
Other 0.5 0.6 0.5 1.6 0.5 0.5 0.6 0.5 2.1
------- ------ ------- ------- ------- ------- ------- ------- ------
TOTAL DEPRECIATION AND AMORTIZATION $43.4 $44.9 $47.2 $135.5 $35.3 $37.9 $40.0 $42.1 $155.3
======= ====== ======= ======= ======= ======= ======= ======== =======
1997 1996
------------------------------- ----------------------------------------
QTR 1 QTR 2 QTR 3 TOTAL QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------- ------- ------- ------- ------- ------- ------- ------- -------
EBITDA
Satellite Services
World Systems $51.9 $51.0 $46.9 $149.8 $47.4 $47.0 $47.8 $54.1 $196.3
Mobile Communications 18.8 19.6 21.6 60.0 23.6 22.4 19.0 12.1 77.1
------- ------ ------- ------- ------- ------- ------- ------- -------
Total Satellite Services 70.7 70.6 68.5 209.8 71.0 69.4 66.8 66.2 273.4
Network Services
International 1.0 3.8 3.0 7.8 (1.0) (1.5) 0.4 (0.4) (2.5)
Laboratories 0.1 0.1 (0.8) (0.6) (0.8) (0.6) 8.6 0.9 8.1
Government Programs 0.4 0.6 (0.1) 0.9 0.8 1.6 1.5 1.7 5.6
------- ------ ------- ------- ------- ------- ------- ------- -------
Total Network Services 1.5 4.5 2.1 8.1 (1.0) (0.5) 10.5 2.2 11.2
------- ------ ------- ------- ------- ------- ------- ------- -------
Other (5.6) (6.8) (5.8) (18.2) (7.3) (4.8) (6.4) (3.6) (22.1)
------- ------ ------- ------- ------- ------- ------- ------- -------
Total EBITDA $66.6 $68.3 $64.8 $199.7 $62.7 $64.1 $70.9 $64.8 $262.5
======= ====== ======= ======= ======= ======= ======= ======= =======
</TABLE>
Note:
EBITDA (earnings before interest, income taxes, depreciation and
amortization) is Calculated by adding depreciation and amortization and
operating income (loss). Other includes G&A expenses and Other from the
Operating income (loss) section.
