SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant {X}
Filed by a Party other than the Registrant {_}
Check the appropriate box:
{_} Preliminary Proxy Statement
{_} Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
{_} Definitive Proxy Statement
{_} Definitive Additional Materials
{X} Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COMSAT CORPORATION
-----------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
{X} No fee required.
{_} Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): ___
(4) Proposed maximum aggregate value of transactions: ________________
(5) Total fee paid.
{_} Fee paid previously with preliminary materials.
{_} Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: __________________________________________
(2) Form, Schedule or Registration Statement No.: ____________________
(3) Filing Party: ____________________________________________________
(4) Date Filed: ______________________________________________________
[SLIDE PRESENTATION]
[COMSAT CORPORATION LOGO]
[GLOBE]
Many of the statements in this presentation are forward-looking
and relate to anticipated future operating results. Forward-
looking statements 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.
Please refer to COMSAT disclosure documents filed with the
Securities and Exchange Commission, including the corporation's
1996 Form 10-K, for a more complete discussion of some of the
important factors that might affect these trends.
[COMSAT CORPORATION LOGO]
Presentation to the
Investment Community
Betty C. Alewine
President and Chief Executive Officer
Spring 1997
[GLOBE]
[COMSAT CORPORATION LOGO]
Overview
o COMSAT pre-restructuring
o Restructuring plan
o COMSAT post-restructuring
o Financial summary
[GLOBE]
[COMSAT CORPORATION LOGO]
Organization Chart Today
[Corporate Organization Chart showing "COMSAT Corporation"
holding "International", "Entertainment" and "Technologies";
"International" holding "World Systems", "Mobile" and "Int'l
Ventures"; "Entertainment" holding "Ascent (80%)" and "OCC
(57%)"; and "Technologies" holding "CRSI" and "Labs".]
[GLOBE]
[COMSAT CORPORATION LOGO]
Restructuring Plan
[GLOBE]
[COMSAT CORPORATION LOGO]
Restructuring Plan Underway
Initial sale of ICO 12/96
Sale of Philcom 1/97
Dividend policy review 4/97
Divest Ascent Mid-97
Sell CRSI Late 97
Resolve Belcom Late 97
Sell other non-core assets Ongoing
[GLOBE]
[COMSAT CORPORATION LOGO]
Ascent Divestiture
o Tax free spin-off pending IRS ruling
o Delivers shareholder value in tax-efficient manner
o Deconsolidation by mid-year
[GLOBE]
[COMSAT CORPORATION LOGO]
CRSI Sale
o Non-core products and manufacturing business
o Morgan Stanley retained
o Divest by year end 1997
[GLOBE]
[COMSAT CORPORATION LOGO]
COMSAT Restructuring Results
o Stronger cash flow
o More stable balance sheet
o Focused on core strengths
[GLOBE]
[COMSAT CORPORATION LOGO]
COMSAT Post-Restructuring
[GLOBE]
[COMSAT CORPORATION LOGO]
Organization Chart Post-Restructuring
[Organizational Chart showing "COMSAT Corporation" holding
"Satellite Services" and "Network Services"; "Satellite Services"
holding "COMSAT World Systems" and "COMSAT Mobile and Personal
Communications" and "Network Services" holding "COMSAT
International" and "COMSAT Labs."]
[GLOBE]
[COMSAT CORPORATION LOGO]
Focused on Core Strengths
o Existing satellites with global coverage
- 24 INTELSAT satellites
- 7 Inmarsat satellites
o State-of-the-art satellite and network technology
- "Instant infrastructure"
- ATM breakthrough
o Established customer base with backlog
o Solid reputation and operating experience in emerging
markets
[GLOBE]
[COMSAT CORPORATION LOGO]
COMSAT World Systems
o U.S. signatory to INTELSAT
- Largest owner, user with 19% stake
- 24-satellite global network
- Existing interconnections to 180 countries
o Provide satellite services to U.S. Carriers and broadcasters
[GLOBE]
[COMSAT CORPORATION LOGO]
INTELSAT Global Satellite System
[map of the world]
[COMSAT CORPORATION LOGO]
COMSAT Mobile Communications
o U.S. signatory to Inmarsat
- Largest owner, user with 23% stake
- 7-satellite global system
o Provides maritime, aeronautical, land mobile services
o COMSAT Personal Communications
- Planet 1
[GLOBE]
[COMSAT CORPORATION LOGO]
Inmarsat Global Coverage
[World map showing overlap of hemisphere beams of Inmarsat
satellite coverage.]
[COMSAT CORPORATION LOGO]
Satellite Services Value Drivers
o Future of Inmarsat
o INTELSAT privatization
o COMSAT deregulation
[GLOBE]
[COMSAT CORPORATION LOGO]
Future of Inmarsat
o Competition among members is long-term issue
o Existing global system requires little additional cap-ex for
5-7 years
o Generates substantial cash flow and earnings
[GLOBE]
[COMSAT CORPORATION LOGO]
INTELSAT Privatization
o Privatization of broadcast services
- Only realistic option
o IPO in 1999 timeframe
o Non-privatized elements very strong
- Opportunity in digital communications
o Requires consensus of 140 government parties
[GLOBE]
[COMSAT CORPORATION LOGO]
INTELSAT Privatization Benefits
o COMSAT will own interest in privatized affiliate
o COMSAT will retain value leased satellite capacity
o COMSAT will retain interest in non-privatized entity
[GLOBE]
[COMSAT CORPORATION LOGO]
COMSAT Deregulation
o Non-dominant status is critical
o Operating and financial flexibility
o FCC filing in May
o COMSAT optimistic about outcome
[GLOBE]
[COMSAT CORPORATION LOGO]
Network Services
[GLOBE]
[COMSAT CORPORATION LOGO]
Overview
o International private-network services
o Customers: large corporations, national carriers,
governments
o Markets underserved by incumbent carriers
[GLOBE]
[COMSAT CORPORATION LOGO]
COMSAT International operations
[Map showing twelve countries served by COMSAT International.]
[COMSAT CORPORATION LOGO]
Competitive Advantages
o Reputation/international relationships
o Satellite-networking expertise and technology
o 14 companies, 15 operating licenses in 12 countries
o Business model works
[GLOBE]
[COMSAT CORPORATION LOGO]
Bolsa de Cereales case study
o Initiated point-to-point service for high data volumes to
regional exchange
[Map of Argentina illustrating satellite transmission between
Buenes Aires and Bahia Blanca.]
[COMSAT CORPORATION LOGO]
Bolsa de Cereales case study
o Added national multipoint VSAT service
[Illustration of multipoint transmission service for Bolsa de Cereales.]
[COMSAT CORPORATION LOGO]
Bolsa de Cereales case study
o Service expanded to include intracompany network
[Illustration of intracompany network in Argentina consisting of an array
of equipment to facilitate transmission of voice, facsimile and data, as
well as linking LANs.]
[COMSAT CORPORATION LOGO]
<TABLE>
<CAPTION>
Argentina
($ millions) 92 93 94 95 96
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues 1.9 4.3 12.2 20.0 27.8
EBITDA (.2) 0.7 4.8 7.6 10.5
Margin --- 16% 39% 38% 38%
Profit before taxes (.7) (0.2) 2.2 2.6 3.4
Margin --- --- 18% 13% 12%
Capital
expenditures 6.0 8.4 15.5 18.8 23.2
</TABLE>
[GLOBE]
[COMSAT CORPORATION LOGO]
Investment Criteria
o High-growth markets
o COMSAT operational control
o Low entry cost
o Cash-flow neutral within 2-3 years
o Targeted IRR 25% plus
[GLOBE]
[COMSAT CORPORATION LOGO]
Why Invest In Network Services?
o Growth opportunity in emerging markets
o COMSAT has critical competitive advantages
o COMSAT will operate within its means
[GLOBE]
[COMSAT CORPORATION LOGO]
Network Services Value Creation
o Business in major value-creation stage
o Sell-down will not maximize COMSAT shareholder value
o Non-core asset divestiture and segment disclosure will
highlight Network Services results
[GLOBE]
[COMSAT CORPORATION LOGO]
Financial Overview
Allen E. Flower
Vice President and Chief Financial Officer
[GLOBE]
[COMSAT CORPORATION LOGO]
<TABLE>
<CAPTION>
Summary Capitalization
1996 1996
($ millions) Actual Pro forma*
--------------------------------------------------------
<S> <C> <C>
Short-term debt 178 114
Long-term debt 636 478
Preferred securities 200 200
Stockholders' equity 843 626
LT debt/total capital 43% 43%
* Assumes Ascent divestiture, CRSI sale, debt tender
</TABLE>
[GLOBE]
[COMSAT CORPORATION LOGO]
<TABLE>
<CAPTION>
Summary Income and Cash Flow Statements
1996 1996
($ millions) Actual Pro forma*
-------------------------------------------------------
<S> <C> <C>
Revenues 1,015 557
EBITDA 289 252
Margin 29% 45%
Net income 9 36
Capital expenditures 364 267
* Assumes Ascent divestiture, CRSI sale, debt tender
</TABLE>
[GLOBE]
[COMSAT CORPORATION LOGO]
<TABLE>
<CAPTION>
COMSAT Segment Operating Results
$ millions 94 95 96
----------------------------------------------------------
<S> <C> <C> <C>
Revenues World Systems 252 255 273
Mobile Communications 194 180 154
International 19 38 58
Laboratories 1 15 12 19
EBITDA World Systems 182 196 196
Mobile Communications 89 94 76
International (1) (9) 0
Laboratories 2 (1) 5
1 Excludes $8 million GI settlement in 1996
</TABLE>
[GLOBE]
[COMSAT CORPORATION LOGO]
<TABLE>
<CAPTION>
COMSAT Revenue Mix
1996 1996 2001
Actual Post-Restructuring
<S> <C> <C>
[Pie Chart showing [Pie Chart showing [Pie Chart showing
approximately 75% approximately 75% approximately 50%
Satellite Services and Satellite Services, and Satellite Services and
Network Services, and approximately 25% approximately 50%
approximately 25% Network Services.] Network Services.]
Entertainment.]
</TABLE>
[GLOBE]
[COMSAT CORPORATION LOGO]
<TABLE>
<CAPTION>
COMSAT EBITDA Mix
1996 1996 2001
Actual Post-Restructuring
<S> <C> <C>
[Pie Chart showing [Pie Chart showing [Pie Chart showing
approximately 85% approximately 97% approximately 70%
Satellite Services and Satellite Services, and Satellite Services and
Network Services, and approximately 3% approximately 30%
approximately 15% Network Services] Network Services.]
Entertainment.]
</TABLE>
[GLOBE]
[COMSAT CORPORATION LOGO]
Summary
[GLOBE]
[COMSAT CORPORATION LOGO]
Why Invest in COMSAT?
o Sound restructuring underway
o Global coverage through existing Satellite Services
- "Instant infrastructure"
- Cash flow generator
o Management experienced in global satellite business and
complex regulatory issues
o Upside from COMSAT deregulation and INTELSAT privatization
o Enormous opportunity in emerging telecommunications markets
[GLOBE]
[COMSAT CORPORATION LOGO]
COMSAT Corporation ("COMSAT") and certain
persons named below may be deemed to be "participants"
within the meaning of Regulation 14A under the
Securities Exchange Act of 1934. The participants in
this solicitation may include the directors of COMSAT
(C. J. Silas, Betty C. Alewine, Lucy Wilson Benson,
Edwin I. Colodny, Lawrence S. Eagleburger, Neal B.
Freeman, Arthur Hauspurg, Caleb B. Hurtt, Peter S.
Knight, Peter W. Likins, Howard M. Love, Charles T.
Manatt, Robert G. Schwartz, and Dolores D. Wharton);
the following executive officers of COMSAT (Janet L.
Dewar, Allen E. Flower, Paul G. Pizzani and Warren Y.
Zeger); and the following other employees of COMSAT
(Gary S. Sharpe and Charles H. Taylor, Jr.). As of
March 1, 1997, Betty C. Alewine and Warren Y. Zeger
beneficially owned 321,301 shares and 179,979 shares of
COMSAT, respectively (including shares subject to stock
options exercisable within 60 days). The remaining
participants do not beneficially own, individually or
in the aggregate, in excess of 1% of COMSAT's equity
securities.
[GLOBE]
[COMSAT CORPORATION LOGO]
APPENDIX
Consolidated Income Statements
Consolidated Balance Sheets
Consolidated Cash Flow Statements
Statements of Changes in
Consolidated Stockholders' Equity
Twelve-Year Financial Summary
Operating Results by Business Segment
Telecom EBITDA Summary
COMSAT International Summary
[LARGE WORLD GLOBE]
<TABLE>
<CAPTION>
COMSAT CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Years Ended December 31, 1996, 1995 and 1994
IN THOUSANDS, EXCEPT PER SHARE AMOUNTS 1996 1995 1994
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES $1,015,261 $ 862,912 $ 835,665
---------- ---------- ----------
Operating expenses:
Cost of services 666,345 506,660 471,043
Depreciation and amortization 236,276 202,024 167,784
Research and development 24,618 18,693 16,369
General and administrative 23,941 19,856 22,851
Merger and integration costs - - 7,367
Provision for restructuring - 20,044 -
---------- ---------- ----------
Total operating expenses 951,180 767,277 685,414
---------- ---------- ----------
OPERATING INCOME 64,081 95,635 150,251
Gain on sale of minority interest - 19,286 -
Other income (expense), net (11,139) (7,557) 2,689
Interest cost (61,559) (59,487) (48,940)
Interest capitalized 15,760 20,355 23,662
---------- ---------- ----------
Income before taxes and minority interest 7,143 68,232 127,662
Income tax expense (16,144) (34,911) (49,939)
Minority interest in net losses (income)
of consolidated subsidiaries 17,623 4,496 (81)
---------- ---------- ----------
NET INCOME $ 8,622 $ 37,817 $ 77,642
========== ========== ==========
EARNINGS PER SHARE $ 0.18 $ 0.79 $ 1.64
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
COMSAT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
In thousands 1996 1995
------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 12,721 $ 124,156
Receivables 314,766 234,465
Inventories 39,635 26,851
Deferred income taxes 12,756 12,445
Other 29,961 27,908
---------- ----------
Total current assets 409,839 425,825
---------- ----------
Property and equipment 1,656,763 1,528,053
Investments 133,592 88,378
Goodwill 155,250 67,569
Franchise rights 102,189 107,962
Other assets 208,170 96,479
---------- ----------
TOTAL ASSETS $2,665,803 $2,314,266
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Short-term borrowings and current
maturities of long-term debt $ 159,719 $ 11,688
Commercial paper 17,993 -
Accounts payable and accrued liabilities 168,039 126,980
Deferred income 81,942 38,060
Due to related parties 34,602 22,825
Accrued income taxes 17,411 -
Accrued interest 5,377 5,155
---------- ----------
Total current liabilities 485,083 204,708
---------- ----------
Long-term debt 635,474 664,601
Deferred income taxes 123,972 119,018
Deferred investment tax credits 12,350 15,190
Accrued postretirement benefit costs 50,423 49,497
Other long-term liabilities 147,818 129,911
Commitments and contingencies (notes 10, 11 & 18) - -
Minority interest 167,472 91,908
Preferred securities issued by subsidiary 200,000 200,000
STOCKHOLDERS' EQUITY:
Common stock, without par value, 100,000 shares authorized,
49,090 shares issued in 1996 and 48,612 in 1995 340,691 324,074
Preferred stock, 5,000 shares authorized, no shares
issued or outstanding - -
Retained earnings 502,839 533,238
Treasury stock, at cost, 269 shares in 1996 and 857
in 1995 (3,006) (9,020)
Unearned compensation (3,869) (5,484)
Other 6,556 (3,375)
---------- ----------
Total stockholders' equity 843,211 839,433
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,665,803 $2,314,266
========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
COMSAT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
For the Years Ended December 31, 1996, 1995 and 1994
In thousands 1996 1995 1994
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 8,622 $ 37,817 $ 77,642
Adjustments for noncash expenses:
Depreciation and amortization 236,276 202,024 167,784
Provision for restructuring - 20,044 -
Gain on sale of minority interest - (19,286) -
Changes in operating assets and liabilities:
Receivables and other current assets (63,155) (11,959) (17,169)
Current liabilities 30,557 (12,431) (14,847)
Noncurrent liabilities 15,498 24,748 25,808
Other 3,482 22,161 3,690
---------- ---------- ----------
Net cash provided by operating activities 231,280 263,118 242,908
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (364,427) (308,161) (274,562)
Expenditures for film production costs (21,050) (12,549) (181)
Investments in unconsolidated businesses (64,707) (32,810) (53,397)
Purchase of subsidiaries (9,264) (78,240) (35,676)
Purchase of minority shares of subsidiaries (1,461) (92) (4,016)
Proceeds from sale of investments 29,684 - -
Insurance proceeds from satellite launch failure 54,443 - -
Decrease (increase) in INTELSAT ownership (1,238) 17,919 13,520
Decrease (increase) in Inmarsat ownership 5,746 (6,978) 3,573
Other 15,579 (2,930) (3,471)
---------- ---------- ----------
Net cash used in investing activities (356,695) (423,841) (354,210)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 126,645 154,119 112,296
Net short-term borrowings (repayments) 158,323 (121,356) 74,123
Borrowings (repayments) against company-owned
life insurance policies (51,443) 2,542 32,437
Common stock issued 16,445 10,834 5,291
Proceeds from issuance of preferred securities of
subsidiary - 200,000 -
Proceeds from issuance of subsidiary's common
stock - 78,985 1,486
Repayment of long-term debt (196,543) (9,970) (77,023)
Cash dividends paid (37,698) (36,874) (33,547)
Other (1,749) (12,059) (1,333)
---------- ---------- ----------
Net cash provided by financing activities 13,980 266,221 113,730
---------- ---------- ----------
Net increase (decrease) in cash and cash
equivalents (111,435) 105,498 2,428
Cash and cash equivalents, beginning of year 124,156 18,658 16,230
---------- ---------- ----------
Cash and cash equivalents, end of year $ 12,721 $ 124,156 $ 18,658
========== ========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid, net of amount capitalized $ 40,623 $ 36,710 $ 24,880
Income taxes paid $ 1,255 $ 20,607 $ 30,639
Noncash financing of Inmarsat satellites $ 5,602 $ 7,551 $ 7,197
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
COMSAT CORPORATION AND SUBSIDIARIES
STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1996, 1995 and 1994
Shares Shares Common Retained Treasury Unearned
In thousands Issued Outstanding Stock Earnings Stock Compensation Other
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1993 48,404 46,373 $311,506 $488,090 $(21,473) $(10,891) (3,792)
Net income 77,642
Cash dividends (33,547)
Common stock issued:
Stock options and restricted stock
units, including tax benefits 105 948 808
Employee stock purchase, 401(k)
and Investors' Plus plans 333 333 6,432
Amortization of unearned compensation
and incentive plan expense 1,420 2,868
Retirement of treasury stock (683) (8,163) 8,163
Translation adjustment 5,343
Other 44 774 744
--------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1994 48,054 46,811 312,143 532,229 (12,502) (7,249) 2,295
Net income 37,817
Cash dividends (36,874)
Common stock issued:
Stock options and restricted stock
units, including tax benefits 334 1,705 3,373
Employee stock purchase, 401(k)
and Investors' Plus plans 558 558 10,276
Restricted stock awarded 91 871 911 (1,782)
Amortization of unearned compensation
and incentive plan expense 619 2,131
Forfeiture and cancellation of
restricted stock awards (39) (1,540) (802) 798
Minimum pension liability adjustment (2,006)
Translation adjustment (3,664)
Other 66 618
--------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1995 48,612 47,755 324,074 533,238 (9,020) (5,484) (3,375)
Net income 8,622
Cash dividends (37,698)
Common stock issued:
Stock options and restricted stock
units, including tax benefits 4 484 4,768 5,149
Employee stock purchase, 401(k)
and Investors' Plus plans 474 474 8,888
Restricted stock awarded 183 597 1,980 (2,577)
Amortization of unearned compensation
and incentive plan expense 437 2,685
Forfeiture and cancellation of
restricted stock awards (75) (51) (1,115) 360
Minimum pension liability adjustment 383
Translation adjustment 924
Unrealized gain on available for sale
securities, net of taxes 8,624
Other 1,978 (1,323) 1,147
--------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1996 49,090 48,821 $340,691 $502,839 $ (3,006) $ (3,869) $6,556
================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
TWELVE-YEAR FINANCIAL SUMMARY (1)
Unaudited
Compounded Growth Rates
-----------------------
In thousands except per share, 10-Year 5-Year
ratio, and employee information 1986-96 1991-96 1996 1995 1994 1993 1992 1991
------- ------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Revenues 11.1% 9.3% $1,015,261 $ 862,912 $ 835,665 $ 758,015 $ 690,245 $ 651,211
Operating expenses 951,180 767,277 685,414 606,435 585,263 508,499
Operating income (loss) (2.1%) (14.8%) 64,081 95,635 150,251 151,580 104,982 142,712
Income (loss) from continuing
operations before cumulative
effect of changes in accounting
principles (15.7%) (36.1%) 8,622 37,817 77,642 82,469 53,292 81,014
Cumulative effect of changes in
accounting principles - - - 1,925 - (26,607)
Net income (loss) (18.1%) (30.8%) 8,622 37,817 77,642 84,394 53,292 54,407
CASH FLOW DATA
Cash provided (used) by operating
and investing activities (113,854) (160,723) (111,302) 23,431 (7,596) (7,396)
Net increase (decrease) in cash
and cash equivalents (111,435) 105,498 2,428 4,453 (2,915) 8,157
Dividends paid 5.6% 7.8% 37,698 36,874 33,547 30,410 27,837 25,867
BALANCE SHEET DATA
Total assets 7.6% 12.6% 2,665,803 2,314,266 1,975,992 1,773,513 1,654,985 1,469,516
Long-term debt 6.5% 10.2% 635,474 664,601 515,542 410,550 496,804 391,308
Stockholders' equity 3.0% 5.1% 843,211 839,433 826,916 763,440 702,292 657,783
STOCK INFORMATION
Market capitalization (2) 1,202,217 889,437 871,855 1,379,597 1,094,478 769,454
Stock price-high 33 1/8 24 5/8 30 35 1/4 24 1/2 18 7/8
Stock price-low 16 3/4 17 5/8 17 1/2 23 3/4 17 1/8 11 1/2
Stock price-close 24 5/8 18 5/8 18 5/8 29 3/4 23 7/8 17 1/4
Book value per share 17.27 17.58 17.66 16.46 15.32 14.75
Primary earnings per share 0.18 0.79 1.64 1.79 1.16 1.22
Dividends paid per share 0.78 0.78 0.76 0.74 0.70 0.67
Shares outstanding 48,821 47,755 46,811 46,373 45,842 44,606
Average shares outstanding for
primary earnings per share 49,090 47,998 47,356 47,095 45,875 44,556
STATISTICAL INFORMATION
Long-term debt to total capital 43.0% 44.2% 38.4% 35.0% 41.4% 37.3%
Return on net assets (3) 1.7% 3.2% 5.4% 6.3% 4.8% 5.1%
Return on average assets 0.3% 1.8% 4.1% 4.9% 3.4% 3.9%
Return on average equity 1.0% 4.5% 9.8% 11.5% 7.8% 8.5%
Return on revenues 0.8% 4.4% 9.3% 11.1% 7.7% 8.4%
Current ratio 0.8 2.1 0.9 0.9 1.3 1.0
Employees at year end 3,766 2,991 2,894 2,770 2,707 2,427
Revenues per employee (4) $301 $293 $295 $277 $269 $282
Notes:
(1) As discussed in Note 6 to the financial statements, the corporation
consummated its merger with Radiation Systems, Inc. (RSI) in June
1994. The merger has been treated as a pooling of interests for
accounting purposes. Accordingly, financial information for all
periods prior to the merger has been restated to include RSI.
Information for 1984 through 1987 has been restated for operations
discontinued in subsequent years. Information for 1992 through 1995
has been restated for certain costs historically reflected as
reduction of revenues and now classified as costs of services.
(2) Market capitalization is the product of year-end stock price
multiplied by the number of shares outstanding at each year end.
(3) Return on net assets is calculated as net income excluding interest
(net of tax) divided by average total assets less average current
liabilities (excluding current notes payable and current maturities
of long-term obligations).
(4) Revenues per employee is based on the average number of employees for
each year.
</TABLE>
<TABLE>
<CAPTION>
1990 1989 1988 1987 1986 1985
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$ 563,462 $ 474,917 $ 407,338 $ 365,272 $ 354,204 $ 343,329
583,980 383,074 323,083 318,105 274,762 250,298
(518) 91,843 84,256 47,167 79,442 93,031
(9,045) 66,234 65,986 20,741 47,600 64,157
(9,045) 66,234 65,986 (44,358) 63,176 (38,473)
- - - - - -
20,652 (59,545) (89,331) 94,863 (17,585) (38,495)
(2,508) (54,064) (70,731) 11,021 19,869 38,654
25,219 25,024 23,722 22,292 21,873 21,725
1,300,683 1,337,817 1,233,247 1,172,776 1,281,744 1,212,393
383,695 373,686 376,602 329,436 337,814 357,486
619,150 649,647 603,033 559,211 628,909 569,884
528,444 781,674 585,212 596,764 609,960 739,589
19 1/4 20 3/8 15 3/8 17 3/8 20 1/4 19 1/4
10 1/4 13 12 5/8 11 3/4 14 1/8 12 3/4
12 17 7/8 13 1/2 14 14 1/8 17 3/4
14.06 14.86 13.91 13.12 14.56 13.68
(0.21) 1.52 1.54 (1.03) 1.48 (0.92)
0.66 0.66 0.63 0.60 0.60 0.60
44,037 43,730 43,349 42,626 43,183 41,667
43,818 43,620 42,805 43,125 42,755 41,622
38.3% 36.5% 38.4% 37.1% 34.9% 38.5%
(0.6%) 5.5% 6.3% (3.3%) 6.3% (3.2%)
(0.7%) 5.2% 5.5% (3.6%) 5.1% (3.2%)
(1.4%) 10.6% 11.4% (7.5%) 10.5% (6.4%)
(1.6%) 13.9% 16.2% (12.1%) 17.8% (11.2%)
1.5 1.6 2.2 1.9 2.6 2.3
2,196 1,956 1,841 1,886 2,789 3,110
$271 $250 $219 $156 $120 $105
</TABLE>
<TABLE>
<CAPTION>
COMSAT CORPORATION
OPERATING RESULTS BY BUSINESS SEGMENT (UNAUDITED)
(In millions)
1995 1996
------------------------------------------ -------------------------------------------
QTR 1 QTR2 QTR3 QTR4 TOTAL QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------------------------------------------ -------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES
--------
International Communications
World Systems $ 62.7 $ 63.0 $ 62.9 $ 66.1 $254.7 $ 65.6 $ 67.5 $ 67.0 $ 72.8 $ 272.9
Mobile Communications 47.1 46.1 47.5 39.7 180.4 42.6 39.3 38.4 34.9 155.2
International 7.9 8.2 9.7 11.9 37.7 11.9 12.4 15.6 18.2 58.1
------------------------------------------ -------------------------------------------
Total International Communications 117.7 117.3 120.1 117.7 472.8 120.1 119.2 121.0 125.9 486.2
Technology Services 46.8 48.1 50.9 60.1 205.9 61.6 70.4 83.0 85.6 300.6
Entertainment 49.5 52.6 40.0 60.2 202.3 72.4 56.0 38.1 91.6 258.1
Eliminations and other (4.0) (3.9) (4.7) (5.5) (18.1) (5.5) (6.4) (8.1) (9.6) (29.6)
------------------------------------------ --------------------------------------------
TOTAL REVENUES $210.0 $214.1 $206.3 $232.5 $862.9 $248.6 $239.2 $234.0 $293.5 $1,015.3
========================================== ============================================
1995 1996
------------------------------------------ -------------------------------------------
QTR 1 QTR2 QTR3 QTR4 TOTAL QTR 1 QTR 2 QTR 3 QTR 4 TOTAL
------------------------------------------ -------------------------------------------
OPERATING INCOME (LOSS)
----------------------
International Communications
World Systems $ 27.6 $ 26.7 $ 26.8 $ 27.5 $108.6 $ 25.4 $ 24.0 $ 24.2 $ 30.4 $ 104.0
Mobile Communications 12.6 17.6 13.3 10.0 53.5 13.7 11.2 7.2 (0.8) 31.3
International (3.4) (4.6) (7.0) (5.7) (20.7) (3.8) (4.6) (3.7) (5.2) (17.3)
------------------------------------------ --------------------------------------------
Total International Communications 36.8 39.7 33.1 31.8 141.4 35.3 30.6 27.7 24.4 118.0
Technology Services 2.6 6.5 0.6 4.3 14.0 3.4 5.1 13.5 (3.0) 19.0
Entertainment (3.2) 6.3 (6.4) (12.1) (15.4) (4.2) (6.9) (7.1) (27.7) (45.9)
------------------------------------------ --------------------------------------------
Total segment operating income
(loss) 36.2 52.5 27.3 24.0 140.0 34.5 28.8 34.1 (6.3) 91.1
General and administrative
expenses (4.9) (5.8) (5.8) (3.4) (19.9) (7.1) (5.5) (5.8) (5.5) (23.9)
Provision for restructuring - - (20.1) - (20.1) - - - - -
Other (1.5) (1.8) (0.8) (0.3) (4.4) (1.6) (0.6) (2.1) 1.2 (3.1)
------------------------------------------ --------------------------------------------
TOTAL OPERATING INCOME (LOSS) $ 29.8 $ 44.9 $ 0.6 $ 20.3 $ 95.6 $ 25.8 $ 22.7 $ 26.2 ($10.6) $ 64.1
========================================== ============================================
</TABLE>
<TABLE>
<CAPTION>
TELECOM EBITDA SUMMARY
----------------------
($ millions, unaudited)
Fourth Quarter Full Year
--------------- ----------------
1996 1995 1996 1995
--------------- ----------------
<S> <C> <C> <C> <C>
World Systems $53.9 $49.7 $195.7 $196.6
Mobile 12.0 20.2 76.5 93.6
International (0.3) (2.8) (2.5) (12.5)
Technology (1.0) 6.0 26.6 21.2
Other (3.8) (3.1) (24.8) (22.0)
--------------- ----------------
Telecom EBITDA $60.8 $70.0 $271.5 $276.9
=============== ================
Note: 1995 excludes restructuring and reorganization charges.
</TABLE>
<TABLE>
<CAPTION>
COMSAT INTERNATIONAL SUMMARY
----------------------------
Twelve Months Ending December 31, 1996
($ millions, unaudited proportional operating data)
Revenues Operating Income (Loss)
----------------------- -----------------------
Companies 1996 1995 1996 1995
---------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
Americas (1) $48.0 $26.4 $ 6.3 $ 2.4
Europe (2) 5.7 7.1 (8.1) (6.4)
Asia/Pacific (3) 6.9 8.6 0.9 (2.6)
---------------------- ---------------------
Existing Company Total 60.6 42.1 (0.9) (6.6)
New Companies (4) 5.2 1.3 (4.8) (1.5)
---------------------- ---------------------
Total $65.8 $43.4 ($5.7) ($8.1)
====================== =====================
Note: This information was developed by taking COMSAT's ownership percentage
of each company multiplied by total company revenues and operating
income/loss.
1. Americas: Argentina, Bolivia, Brazil and Guatemala
2. Europe: BelCom (Russia) and Turkey (IBS), excluding Viatel
3. Asia/Pacific: PhilCom
4. Includes companies less than 24 months old: Colombia, Peru, Venezuela,
China, India and Turkey (VSAT)
</TABLE>
