<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994
------------------------
COMMISSION FILE NUMBER 1-4238
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LORAL CORPORATION
600 Third Avenue
New York, New York 10016
Telephone: (212) 697-1105
State of incorporation: New York
IRS identification number: 13-1718360
------------------------
The registrant has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and
has been subject to such filing requirements for the past 90 days.
As of October 31, 1994, there were 84,094,178 shares of Loral Corporation
Common Stock outstanding.
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<PAGE> 2
PART I. FINANCIAL INFORMATION
LORAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ------------------------
1994 1993 1994 1993
---------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Sales.......................................... $1,345,300 $836,633 $2,690,125 $1,686,084
Costs and expenses............................. 1,222,212 758,237 2,453,398 1,537,506
---------- -------- ---------- ----------
Operating income............................... 123,088 78,396 236,727 148,578
Interest and investment income................. 14,467 759 15,258 2,087
Interest expense............................... 28,953 7,590 52,652 15,930
---------- -------- ---------- ----------
Income before income taxes and equity in net
income (loss) of affiliates.................. 108,602 71,565 199,333 134,735
Income taxes................................... 41,269 25,403 75,747 48,776
---------- -------- ---------- ----------
Income before equity in net income (loss) of
affiliates................................... 67,333 46,162 123,586 85,959
Equity in net income (loss) of affiliates...... (1,080) 555 (2,369) 1,109
---------- -------- ---------- ----------
Net income..................................... 66,253 46,717 121,217 87,068
Retained earnings, beginning of period......... 686,643 490,308 643,373 460,288
Dividends...................................... (12,581) (11,590) (24,275) (21,921)
---------- -------- ---------- ----------
Retained earnings, end of period............... $ 740,315 $525,435 $ 740,315 $ 525,435
========= ======== ========= =========
Weighted average number of common shares
outstanding.................................. 85,134 83,693 84,936 83,523
========= ======== ========= =========
Earnings per share (primary)................... $ .78 $ .56 $ 1.43 $ 1.04
========= ======== ========= =========
Cash dividends per common share................ $ .15 $ .14 $ .29 $ .265
========= ======== ========= =========
</TABLE>
See notes to condensed consolidated financial statements.
1
<PAGE> 3
LORAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER
30, MARCH 31,
1994 1994
---------- ----------
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents.......................................... $ 189,860 $ 238,498
Contracts in process............................................... 1,364,299 1,328,338
Deferred income taxes.............................................. 75,063 104,063
Other current assets............................................... 133,578 173,714
---------- ----------
Total current assets................................................. 1,762,800 1,844,613
---------- ----------
Property, plant and equipment........................................ 1,982,042 1,926,978
Less, accumulated depreciation and amortization.................... 720,689 620,554
---------- ----------
1,261,353 1,306,424
---------- ----------
Cost in excess of net assets acquired, less amortization............. 1,324,957 1,342,872
Investment in affiliates............................................. 158,180 163,479
Deferred income taxes................................................ 22,873 37,873
Prepaid pension cost and other assets................................ 480,790 480,907
---------- ----------
$5,010,953 $5,176,168
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Current portion of debt............................................ $ 391 $ 173,928
Accounts payable, trade............................................ 197,180 248,657
Customer advances.................................................. 251,079 286,273
Accrued employment costs........................................... 224,337 201,238
Income taxes....................................................... 87,165 77,815
Other current liabilities.......................................... 316,179 302,256
---------- ----------
Total current liabilities............................................ 1,076,331 1,290,167
---------- ----------
Postretirement benefits.............................................. 635,507 639,266
Other liabilities.................................................... 237,653 241,368
Long-term debt....................................................... 1,558,619 1,624,061
Shareholders' equity:
Preferred stock, $1.00 par value................................... -- --
Common stock, $.25 par value....................................... 21,216 21,056
Capital surplus.................................................... 796,015 773,676
Retained earnings.................................................. 740,315 643,373
---------- ----------
1,557,546 1,438,105
Less:
Treasury stock, at cost......................................... 19,663 19,681
Equity adjustments.............................................. 35,040 37,118
---------- ----------
Total shareholders' equity........................................... 1,502,843 1,381,306
---------- ----------
$5,010,953 $5,176,168
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 4
LORAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
--------------------
1994 1993
-------- --------
<S> <C> <C>
Operating activities:
Net income....................................................... $121,217 $ 87,068
Deferred income taxes............................................ 44,000 23,196
Depreciation and amortization.................................... 128,372 75,481
Equity in net (income) loss of affiliates........................ 2,369 (1,109)
Changes in assets and liabilities:
Contracts in process.......................................... (35,961) 32,847
Other current assets.......................................... 46,407 31,878
Other assets.................................................. (1,904) (8,239)
Accounts payable and accrued liabilities...................... 708 (15,354)
Income taxes.................................................. 12,280 (22,507)
Postretirement benefits and other liabilities................. (7,474) (2,660)
Other......................................................... (1,507) (615)
-------- --------
Net cash provided by operating activities.......................... 308,507 199,986
-------- --------
Investing activities:
Acquisition of businesses........................................ (3,750) (25,767)
Advances to affiliates........................................... (6,271) (3,957)
Notes receivable................................................. 20,935
Capital expenditures, net........................................ (55,496) (33,750)
-------- --------
(65,517) (42,539)
-------- --------
Financing activities:
Net payments under revolving credit facilities and commercial
paper......................................................... (888,768) (231,713)
Proceeds from borrowings......................................... 650,000 200,000
Payments of debt................................................. (211) (37,536)
Seller financing in connection with acquisition of business...... (50,357)
Dividends paid................................................... (24,275) (21,921)
Proceeds from common stock issuance for stock options and
employee
benefit plans................................................. 21,983 4,453
-------- --------
(291,628) (86,717)
-------- --------
Net (decrease) increase in cash and cash equivalents............... (48,638) 70,730
Cash and cash equivalents, beginning of period..................... 238,498 116,902
-------- --------
Cash and cash equivalents, end of period........................... $189,860 $187,632
======== ========
Supplemental information:
Interest paid during the period.................................. $ 39,609 $ 16,450
======== ========
Income taxes paid during the period.............................. $ 18,394 $ 43,906
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 5
LORAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company pursuant to the rules of the Securities and
Exchange Commission ("SEC") and, in the opinion of the Company, include all
adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of financial position, results of operations and cash flows.
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 SEC rules. The
Company believes that the disclosures made are adequate to make the
information presented not misleading. The condensed consolidated statements
of income for the three and six months ended September 30, 1994 are not
necessarily indicative of the results to be expected for the full year. It
is suggested that these financial statements be read in conjunction with the
audited financial statements and notes thereto included in the Company's
latest annual report.
2. ACCOUNTING CHANGE:
Effective April 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits" ("SFAS 112"). SFAS 112 requires that the costs of benefits
provided to employees after employment but before retirement be recognized
in the financial statements on an accrual basis. The adoption of SFAS 112
did not have a material effect on the financial position or results of
operations of the Company.
3. ACQUISITIONS:
On March 1, 1994, effective January 1, 1994, the Company, through its newly
formed wholly-owned subsidiary, Loral Federal Systems Company ("LFS"),
acquired substantially all the assets and liabilities of the Federal Systems
Company, a division of International Business Machines Corporation, for
$1,503,500,000 in cash, plus acquisition costs of $8,000,000.
This acquisition has been accounted for as a purchase. As such, the
condensed consolidated financial statements reflect the results of
operations of the acquired entity from the date of acquisition. Had this
acquisition occurred on April 1, 1993, the unaudited pro forma sales, net
income and earnings per share for the six months ended September 30, 1993
would have been: $2,791,100,000; $80,200,000; and $.96, respectively. The
results, which are based on various assumptions, are not necessarily
indicative of what would have occurred had the acquisition been consummated
as of April 1, 1993.
Performance under acquired contracts in process of LFS and prior
acquisitions contributed after-tax income of $21,829,000 and $23,402,000,
net of after-tax interest cost on debt related to the acquisitions, and
incremental amortization of cost in excess of net assets acquired of
$36,365,000 and $9,475,000 for the six months ended September 30, 1994 and
1993, respectively.
4
<PAGE> 6
LORAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. CONTRACTS IN PROCESS:
Billings and accumulated costs and profits on long-term contracts,
principally U.S. Government, comprise the following:
<TABLE>
<CAPTION>
SEPTEMBER
30, MARCH 31,
1994 1994
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Billed contract receivables................................ $ 402,085 $ 423,894
Unbilled contract receivables.............................. 1,899,996 1,901,156
Inventoried costs.......................................... 453,003 557,259
----------- -----------
2,755,084 2,882,309
Less, unliquidated progress payments....................... (1,390,785) (1,553,971)
----------- -----------
Net contracts in process................................... $ 1,364,299 $ 1,328,338
========== ==========
</TABLE>
5. DEBT:
In May 1994, the Company increased its existing shelf registration statement
to issue up to $800,000,000 of debt or equity securities.
In June 1994, the Company issued $250,000,000 7 5/8% Senior Notes due 2004
and $400,000,000 8 3/8% Senior Debentures due 2024 under the shelf
registration statement. These securities are not callable and are not
subject to any sinking fund provisions. The proceeds were used to reduce the
Company's outstanding commercial paper borrowings.
The Company has no immediate plans to utilize the remaining balance of
$150,000,000 available under the shelf registration statement.
In June 1994, the Company cancelled its $500,000,000 364-day revolving
credit facility.
6. INVESTMENT IN AFFILIATES:
In September 1994, the Company exchanged the $30,000,000 14 3/4% pay-in-kind
Subordinated Convertible Debenture due 2004 (the "Debenture") issued in 1989
by K & F Industries, Inc. ("K&F") in connection with the purchase by K&F of
certain divisions of the Company. The Debenture was exchanged for
$11,514,000 in cash, net of expenses, representing a non-recurring gain
recorded as interest income, and a 22 1/2% equity interest in K&F. After the
exchange, the Chairman of Loral owns approximately 27% of K&F. In accordance
with Securities and Exchange Commission Staff Accounting Bulletin No. 81,
the Company had not recognized the value of the Debenture and has not
recognized any value for its 22 1/2% equity interest in K&F.
5
<PAGE> 7
LORAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
7. CONTINGENCIES:
At acquisition, LFS's contracts in process included a systems integration
contract with the Federal Aviation Administration ("FAA") for the
modernization of the U.S. air traffic control system. Prior to the
acquisition, discussions were held between LFS and FAA officials with
respect to modifying certain terms and conditions. In December 1993, the FAA
initiated a comprehensive review of the contract. In June 1994, the FAA (i)
reduced the scope of the contract by eliminating certain requirements of the
program and (ii) suspended certain other program activities pending
completion of their review. In September 1994, the FAA completed its review
and announced that LFS would continue as the contractor under a revised
program. The FAA has requested LFS to submit a proposal for a modified
contract, and the parties anticipate completing negotiation of the scope and
structure of the modified contract in early 1995. The ultimate extent of the
contract modifications is not determinable at this time. The final purchase
price of LFS is subject to a reduction, up to a specified limit, based upon
the outcome of these matters. In the opinion of management, and in light of
the potential reduction of the LFS purchase price and reserves provided, the
ultimate outcome of this matter will not have a material adverse effect on
the financial position or results of operations of the Company.
6
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Effective January 1, 1994, the Company, through Loral Federal Systems
Company ("LFS") acquired substantially all the assets and liabilities of the
Federal Systems Company, a division of International Business Machines
Corporation. The results of operations of LFS are included from the effective
date of acquisition. (See Note 3 to Condensed Consolidated Financial
Statements.)
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1994 AND SEPTEMBER 30, 1993
Sales for the quarter ended September 30, 1994 increased to $1.345 billion
from $836.6 million in the prior year. Net income for the quarter ended
September 30, 1994 increased to $66.3 million, or $.78 per share, compared with
$46.7 million or $.56 per share, in the prior year. The results of operations of
LFS contributed $7.6 million, or $.09 per share, to the current quarter's
earnings.
Earnings per share for the quarter ended September 30, 1994 are based on
85.1 million primary weighted average shares outstanding, compared with 83.7
million in the prior year.
The sales increase was attributable to the sales of LFS business divisions
which, including $81.6 million of sales related to new business awards
subsequent to the acquisition, amounted to $563.9 million. Sales also include
higher volume of $17.0 million for ALR-56M radar warning systems and $8.6
million for the Army Tactical Missile System (ATACMS); offset by lower volume of
$17.0 million for the F/A-18 Forward Looking Infrared (FLIR) targeting and
weapon delivery system, $12.0 million for gyro-optic assemblies for Maverick
missiles, $10.3 million for the Automated Remote Tracking Station (ARTS) and
$8.2 million for the AN/BSY-2 combat control system for the U.S. Navy's SSN-21
attack submarine. The Company has a diverse base of programs, none of which is
expected to account for more than 7% of fiscal 1995 revenues. The change in
sales from period to period includes increases and decreases on a variety of
programs which individually are not significant to the overall sales change.
Although the Company is not immune to the effects of declining U.S. defense
spending, the Company believes that its areas of concentration, its diverse base
of programs, complemented and broadened by the program base of businesses
recently acquired, as well as other business opportunities, will enable the
Company to offset overall U.S. budget decline impacts.
Operating income increased to $123.1 million from $78.4 million in the
prior year. The operating income increase includes $35.3 million attributable to
the results of the acquired LFS business. Operating income as a percentage of
sales declined to 9.1% in the quarter ended September 30, 1994 from 9.4% in the
prior year. However, excluding the effect of the acquired LFS business,
operating income as a percentage of sales increased to 11.2% from 9.4% as a
result of improved margins due to sales mix and operating efficiencies,
particularly at the Loral Vought Systems division.
Interest expense, net of interest and investment income, increased to $14.5
million from $6.8 million in the prior year primarily due to the $23.0 million
impact of debt incurred as a result of the LFS acquisition, offset by a
non-recurring gain, net of expenses, of $11.5 million ($.08 per share) for the
exchange of K&F debentures for cash and equity (see Note 6 to the Condensed
Consolidated Financial Statements) and strong cash flow. The Company's free cash
flow (net cash from operating activities, less net capital expenditures, plus
proceeds of stock purchases by employee benefit plans and exercises of stock
options) was $388.6 million for the twelve months ended September 30, 1994, of
which $119.0 million was generated in the quarter ended September 30, 1994.
The Company's effective tax rate increased to 38% in the quarter ended
September 30, 1994 from 35.5% in the prior year due to the Omnibus Budget
Reconciliation Act of 1993, which was signed into law on August 10, 1993.
Equity in net income (loss) of affiliates was a loss of $1.1 million for
the quarter ended September 30, 1994 compared with income of $.6 million in the
prior year, reflecting the Company's share of the development costs of
Globalstar, a limited partnership formed in March 1994.
7
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION -- (CONTINUED)
FINANCIAL CONDITION
The LFS purchase price was initially financed through cash on hand and
commercial paper borrowings, which were supported by $1.2 billion five year and
$500 million 364-day revolving credit facilities. In May 1994, the Company
increased its existing shelf registration statement to issue up to $800 million
of debt or equity securities. As originally planned, in order to fix interest
costs and lengthen maturities, in June 1994, the Company issued $250 million
7 5/8% Senior Notes due 2004 and $400 million 8 3/8% Senior Debentures due 2024,
under the shelf registration statement. The proceeds were used to reduce the
Company's outstanding commercial paper borrowings, including the $173.5 million
which was classified as current portion of debt at March 31, 1994. Additionally,
the Company cancelled the $500 million 364-day revolving credit facility. The
Company has no immediate plans to utilize the balance available under the shelf
registration statement. (See Note 5 to Condensed Consolidated Financial
Statements.)
The majority of the Company's foreign currency hedges are entered into at
the direction of a customer pursuant to the contractual requirements of one of
the Company's contracts. Any gain or loss on the hedges accrues for the benefit
or detriment of the customer and does not expose the Company to risk. The
remaining foreign currency hedges are not material.
The Company's current ratio improved to 1.6:1 at September 30, 1994,
compared with 1.4:1 at March 31, 1994. The debt (net of cash) to equity ratio
improved to .91:1 at September 30, 1994 from 1.13:1 at March 31, 1994.
COMPARISON OF RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED
SEPTEMBER 30, 1994 AND SEPTEMBER 30, 1993
Sales for the six months ended September 30, 1994 increased to $2.690
billion from $1.686 billion in the prior year. Net income for the six months
ended September 30, 1994 increased to $121.2 million, or $1.43 per share,
compared with $87.1 million or $1.04 per share, in the prior year. The results
of operations of LFS contributed $15.5 million, or $.18 per share, to the
current period's earnings.
Earnings per share for the six months ended September 30, 1994 are based on
84.9 million primary weighted average shares outstanding, compared with 83.5
million in the prior year.
The sales increase was attributable to the sales of LFS business divisions
which, including $140.1 million of sales related to new business awards
subsequent to the acquisition, amounted to $1.111 billion. Sales also include
higher volume of $20.5 million for the Army Tactical Missile System (ATACMS) and
$14.5 million for ALR-56M radar warning systems; offset by lower volume of $24.6
million for gyro-optic assemblies for Maverick missiles, $22.7 million for the
AN/BSY-2 combat control system for the U.S. Navy's SSN-21 attack submarine and
$20.6 million for the Automated Remote Tracking Station (ARTS). The Company has
a diverse base of programs, none of which is expected to account for more than
7% of fiscal 1995 revenues. The change in sales from period to period includes
increases and decreases on a variety of programs which individually are not
significant to the overall sales change. Although the Company is not immune to
the effects of declining U.S. defense spending, the Company believes that its
areas of concentration, its diverse base of programs, complemented and broadened
by the program base of businesses recently acquired, as well as other business
opportunities, will enable the Company to offset overall U.S. budget decline
impacts.
Operating income increased to $236.7 million from $148.6 million in the
prior year. The operating income increase includes $68.9 million attributable to
the results of the acquired LFS business. Operating income as a percentage of
sales remained constant at 8.8%. However, excluding the effect of the acquired
LFS business, operating income as a percentage of sales increased to 10.6% in
the six months ended September 30, 1994 from 8.8% in the prior year as a result
of improved margins due to sales mix and operating efficiencies, particularly at
the Loral Vought Systems division.
8
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION -- (CONTINUED)
Interest expense, net of interest and investment income, increased to $37.4
million from $13.8 million in the prior year primarily due to the $43.9 million
impact of debt incurred as a result of the LFS acquisition, offset by a
non-recurring gain, net of expenses, of $11.5 million ($.08 per share) for the
exchange of K&F debentures for cash and equity (see Note 6 to the Condensed
Consolidated Financial Statements) and strong cash flow. The Company's free cash
flow (net cash from operating activities, less net capital expenditures, plus
proceeds of stock purchases by employee benefit plans and exercises of stock
options) was $388.6 million for the twelve months ended September 30, 1994, of
which $275.0 million was generated in the six months ended September 30, 1994.
The Company's effective tax rate increased to 38% in the six months ended
September 30, 1994 from 36.2% in the prior year due to the Omnibus Budget
Reconciliation Act of 1993, which was signed into law on August 10, 1993.
Equity in net income (loss) of affiliates was a loss of $2.4 million for
the six months ended September 30, 1994 compared with income of $1.1 million in
the prior year, reflecting the Company's share of the development costs of
Globalstar, a limited partnership formed in March 1994.
9
<PAGE> 11
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibits are filed as part of this report:
<TABLE>
<S> <C>
Exhibit 11.1 Computation of Earnings per Common Share for the three months ended
September 30, 1994 and 1993
Exhibit 11.2 Computation of Earnings per Common Share for the six months ended
September 30, 1994 and 1993
Exhibit 12 Computation of Ratio of Earnings to Fixed Charges for the six months
ended September 30, 1994 and 1993
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended September 30,
1994.
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 thereunto duly authorized.
<TABLE>
<S> <C>
LORAL CORPORATION
-----------------------------------------------
Registrant
Date: November 11, 1994 MICHAEL P. DEBLASIO
-----------------------------------------------
Michael P. DeBlasio
Senior Vice President -- Finance
(Principal Financial Officer)
and
Registrant's Authorized Officer
</TABLE>
10
<PAGE> 12
EXHIBIT INDEX
-------------
Exhibit
No. Description
------ ------------
11.1 Computation of Earnings per Common Share
for the three months ended September 30, 1994
and 1993
11.2 Computation of Earnings per Common Share for the
six months ended September 30, 1994 and 1993
12 Computation of Ratio of Earnings to Fixed Charges
for the six months ended September 30, 1994 and 1993
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 11.1
LORAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
-------------------
1994 1993
------- -------
<S> <C> <C>
Primary:
Net income applicable to common shares............................... $66,253 $46,717
======= =======
Shares:
Weighted average common shares outstanding........................ 83,665 82,490
Common equivalent shares applicable to stock options.............. 1,469 1,203
------- -------
Average number of shares outstanding and common equivalent
shares........................................................... 85,134 83,693
======= =======
Primary earnings per common share and common equivalent share.......... $ .78 $ .56
======= =======
Fully Diluted:
Net income applicable to common shares............................... $66,253 $46,717
======= =======
Shares:
Average number of common shares as adjusted for primary
computation...................................................... 85,134 83,693
Incremental increase to shares under stock options where the
quarter's ending market price is higher than the average market
price during the quarter......................................... 66 14
------- -------
Average number of shares outstanding on a fully diluted basis..... 85,200 83,707
======= =======
Earnings per common share assuming full dilution....................... $ .78 $ .56
======= =======
</TABLE>
11
<PAGE> 1
EXHIBIT 11.2
LORAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
-------------------
1994 1993
-------- -------
<S> <C> <C>
Primary:
Net income applicable to common shares................................. $121,217 $87,068
======== =======
Shares:
Weighted average common shares outstanding.......................... 83,499 82,421
Common equivalent shares applicable to stock options................ 1,437 1,102
-------- -------
Average number of shares outstanding and common equivalent shares... 84,936 83,523
======== =======
Primary earnings per common share and common equivalent share............ $ 1.43 $ 1.04
======== =======
Fully Diluted:
Net income applicable to common shares................................. $121,217 $87,068
======== =======
Shares:
Average number of common shares as adjusted for primary
computation........................................................ 84,936 83,523
Incremental increase to shares under stock options where the
quarter's ending market price is higher than the average market
price during the quarter........................................... 33 74
-------- -------
Average number of shares outstanding on a fully diluted basis....... 84,969 83,597
======== =======
Earnings per common share assuming full dilution......................... $ 1.43 $ 1.04
======== =======
</TABLE>
12
<PAGE> 1
EXHIBIT 12
LORAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
--------------------
1994 1993
-------- --------
<S> <C> <C>
Earnings:
Income before taxes and equity in net income (loss) of affiliates... $199,333 $134,735
Add:
Interest expense................................................. 51,924 15,815
Amortization of debt expense..................................... 728 115
Amortization of capitalized interest............................. 574 709
Interest component of rent expense............................... 12,264 8,476
-------- --------
Earnings............................................................ $264,823 $159,850
======== ========
Fixed charges:
Interest expense.................................................... $ 51,924 $ 15,815
Amortization of debt expense........................................ 728 115
Capitalized interest................................................ 110 100
Interest component of rent expense.................................. 12,264 8,476
-------- --------
Fixed charges....................................................... $ 65,026 $ 24,506
======== ========
Ratio of earnings to fixed charges.................................... 4.07x 6.52x
======== ========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
LORAL CORPORATION
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> SEP-30-1994
<CASH> 189,860
<SECURITIES> 0
<RECEIVABLES> 1,044,613
<ALLOWANCES> 0
<INVENTORY> 319,686
<CURRENT-ASSETS> 1,762,800
<PP&E> 1,982,042
<DEPRECIATION> 720,689
<TOTAL-ASSETS> 5,010,953
<CURRENT-LIABILITIES> 1,076,331
<BONDS> 1,558,619
<COMMON> 21,216
0
0
<OTHER-SE> 1,481,627
<TOTAL-LIABILITY-AND-EQUITY> 5,010,953
<SALES> 2,690,125
<TOTAL-REVENUES> 2,705,383
<CGS> 2,453,398
<TOTAL-COSTS> 2,453,398
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,652
<INCOME-PRETAX> 199,333
<INCOME-TAX> 75,747
<INCOME-CONTINUING> 123,586
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 121,217
<EPS-PRIMARY> 1.43
<EPS-DILUTED> 1.43
</TABLE>
