<PAGE> 1
================================================================================
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, 1995
------------------------
COMMISSION FILE NUMBER 1-4238
------------------------
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, 1995, there were 172,321,436 shares of Loral Corporation
Common Stock outstanding.
================================================================================
<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,
------------------------- -------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales..................................... $1,604,951 $1,345,300 $3,109,108 $2,690,125
Costs and expenses........................ 1,432,931 1,222,212 2,790,364 2,453,398
---------- ---------- ---------- ----------
Operating income.......................... 172,020 123,088 318,744 236,727
Interest and investment income............ 3,365 14,467 7,023 15,258
Interest expense.......................... 37,576 28,953 72,191 52,652
---------- ---------- ---------- ----------
Income before income taxes and equity in
net loss of affiliates.................. 137,809 108,602 253,576 199,333
Income taxes.............................. 52,368 41,269 96,359 75,747
---------- ---------- ---------- ----------
Income before equity in net loss of
affiliates.............................. 85,441 67,333 157,217 123,586
Equity in net loss of affiliates.......... 3,370 1,080 5,877 2,369
---------- ---------- ---------- ----------
Net income................................ 82,071 66,253 151,340 121,217
Retained earnings, beginning of period.... 938,573 686,643 882,104 643,373
Dividends................................. (13,739) (12,581) (26,539) (24,275)
---------- ---------- ---------- ----------
Retained earnings, end of period.......... $1,006,905 $ 740,315 $1,006,905 $ 740,315
========== ========== ========== ==========
Weighted average number of common shares
outstanding............................. 175,150 170,268 174,458 169,872
========== ========== ========== ==========
Earnings per share (primary).............. $ .47 $ .39 $ .87 $ .71
========== ========== ========== ==========
Cash dividends per common share........... $ .08 $ .075 $ .155 $ .145
========== ========== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
1
<PAGE> 3
LORAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1995 1995
------------- ----------
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents........................................ $ 111,097 $ 125,674
Contracts in process............................................. 1,461,166 1,147,233
Deferred income taxes............................................ 126,784 138,374
Other current assets............................................. 159,558 141,846
---------- ----------
Total current assets............................................... 1,858,605 1,553,127
---------- ----------
Property, plant and equipment...................................... 2,143,579 1,899,804
Less, accumulated depreciation and amortization.................. 837,176 758,279
---------- ----------
1,306,403 1,141,525
---------- ----------
Cost in excess of net assets acquired, less amortization........... 1,787,194 1,265,932
Investment in affiliates........................................... 244,715 250,977
Deferred income taxes.............................................. 24,325 7,568
Prepaid pension cost and other assets.............................. 606,328 591,217
---------- ----------
$ 5,827,570 $4,810,346
========== ==========
LIABILITIES and SHAREHOLDERS' EQUITY:
Current liabilities:
Current portion of debt.......................................... $ 1,043 $ 958
Accounts payable, trade.......................................... 237,210 169,743
Billings and estimated earnings in excess of cost................ 453,819 313,379
Accrued employment costs......................................... 243,148 235,260
Income taxes..................................................... 74,141 80,642
Other current liabilities........................................ 315,436 216,585
---------- ----------
Total current liabilities.......................................... 1,324,797 1,016,567
---------- ----------
Postretirement benefits............................................ 611,965 611,911
Other liabilities.................................................. 199,194 178,798
Long-term debt..................................................... 1,832,209 1,315,530
Shareholders' equity:
Preferred stock, $1.00 par value................................. -- --
Common stock, $.25 par value..................................... 43,442 21,464
Capital surplus.................................................. 852,271 828,734
Retained earnings................................................ 1,006,905 882,104
---------- ----------
1,902,618 1,732,302
Less:
Treasury stock, at cost....................................... 20,112 19,738
Equity adjustments............................................ 23,101 25,024
---------- ----------
Total shareholders' equity......................................... 1,859,405 1,687,540
---------- ----------
$ 5,827,570 $4,810,346
========== ==========
</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,
-----------------------
1995 1994
--------- ---------
<S> <C> <C>
Operating activities:
Net income........................................................... $ 151,340 $ 121,217
Deferred income taxes................................................ 40,000 44,000
Depreciation and amortization........................................ 133,383 128,372
Equity in net loss of affiliates..................................... 5,877 2,369
Changes in assets and liabilities:
Contracts in process............................................... (128,206) (35,961)
Other current assets............................................... 21,887 46,407
Other assets....................................................... (2,740) (1,904)
Accounts payable and accrued liabilities........................... 93,354 708
Income taxes....................................................... (2,086) 12,280
Postretirement benefits and other liabilities...................... (4,771) (7,474)
Other.............................................................. 276 (1,507)
--------- ---------
Net cash provided by operating activities............................ 308,314 308,507
--------- ---------
Investing activities:
Acquisition of businesses, net of cash acquired...................... (791,161) (3,750)
Advances to affiliates............................................... (13,925) (6,271)
Capital expenditures, net............................................ (48,807) (55,496)
--------- ---------
(853,893) (65,517)
--------- ---------
Financing activities:
Net borrowings (payments) under revolving credit facilities and
commercial paper................................................... 362,460 (888,979)
Proceeds from borrowings............................................. 150,000 650,000
Seller financing in connection with acquisition of business.......... (50,357)
Dividends paid....................................................... (26,539) (24,275)
Proceeds from common stock issuance for stock options and
employee benefit plans............................................. 45,081 21,983
--------- ---------
531,002 (291,628)
--------- ---------
Net decrease in cash and cash equivalents............................ (14,577) (48,638)
Cash and cash equivalents, beginning of period....................... 125,674 238,498
--------- ---------
Cash and cash equivalents, end of period............................. $ 111,097 $ 189,860
========= =========
Supplemental information:
Interest paid during the period................................. $ 67,191 $ 39,609
========= =========
Income taxes paid during the period............................. $ 54,864 $ 18,394
========= =========
</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, 1995 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. ACQUISITIONS:
On May 5, 1995, the Company acquired substantially all the assets and
liabilities of the Defense Systems operations of Unisys Corporation ("Loral
UDS"). The previously reported effective purchase price of $803,400,000 was
adjusted to $862,609,000, net of cash acquired, as a result of receiving
additional net assets. Additionally, acquisition expenses of $6,000,000 have
been recorded. Included in Other Current Liabilities is the purchase price
balance of $86,008,000, payable to Unisys Corporation. The assets and
liabilities recorded in connection with the purchase price allocation are
based upon preliminary estimates of fair values. The acquisition was
financed through commercial paper borrowings.
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, 1994, the unaudited pro forma sales, net
income and earnings per share for the six months ended September 30, 1994
would have been: $3,357,500,000; $130,600,000; and $.77, 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, 1994. The pro forma effect of the acquisition of Loral UDS on
the results of operations for the six months ended September 30, 1995, is
not material.
Performance under acquired contracts in process of Loral UDS and prior
acquisitions contributed after-tax income of $10,694,000 and $21,829,000,
net of after-tax interest cost on debt related to the acquisitions, and
incremental amortization of cost in excess of net assets acquired of
$42,728,000 and $36,365,000 for the six months ended September 30, 1995 and
1994, respectively. The decline in after-tax income reflects a reduction in
sales from acquired contracts in process of Loral Federal Systems, acquired
effective January 1, 1994, and Loral Vought Systems, acquired August 31,
1992.
The Company has acquired other businesses in the six months ended September
30, 1995. These acquisitions did not have a material effect on the
operations of the Company.
4
<PAGE> 6
LORAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. 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,
1995 1995
------------- -----------
(IN THOUSANDS)
<S> <C> <C>
Billed contract receivables............................... $ 454,920 $ 380,240
Unbilled contract receivables............................. 1,859,873 1,702,967
Inventoried costs......................................... 683,896 477,955
----------- -----------
2,998,689 2,561,162
Less, unliquidated progress payments...................... (1,537,523) (1,413,929)
----------- -----------
Net contracts in process.................................. $ 1,461,166 $ 1,147,233
=========== ===========
</TABLE>
4. DEBT:
In June 1995, the Company issued $150,000,000 7 5/8% Senior Notes due 2025
utilizing the balance of the Company's existing 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.
5. SHAREHOLDERS' EQUITY:
On September 14, 1995, the shareholders approved an increase in the number
of authorized shares of Common Stock from 150,000,000 to 300,000,000.
On September 29, 1995, the Company completed a two-for-one stock split in
the form of a 100% stock distribution to shareholders of record on September
21, 1995.
All share and per share information have been adjusted to reflect the
two-for-one stock split.
5
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 5, 1995, the Company acquired the Defense Systems operations of
Unisys Corporation. Unisys Defense Systems ("Loral UDS"), headquartered in
McLean, Virginia, is a leading systems integrator and software developer for
defense and non-defense government agencies worldwide, as well as a supplier of
electronic countermeasures, navigation and communication subsystems for surface
ships and submarines. Historical operating results of Loral UDS for the fiscal
year ended December 31, 1994 include sales of $1.431 billion, net income of
$77.5 million, funded backlog at December 31, 1994 of $1.098 billion and
approximately 8,600 employees. The results of operations of Loral UDS are
included from the effective date of acquisition. (See Note 2 to Condensed
Consolidated Financial Statements.)
On September 29, 1995, the Company completed a two-for-one stock split in
the form of a 100% distribution. All share and per share information have been
adjusted to reflect the two-for-one stock split. (See Note 5 to Condensed
Consolidated Financial Statements.)
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1994
Sales for the quarter ended September 30, 1995 increased to $1.605 billion
from $1.345 billion in the prior year. Net income for the quarter ended
September 30, 1995 increased to $82.1 million, or $.47 per share, compared with
$66.3 million, or $.39 per share, in the prior year. Included in the prior year
is a non-recurring after-tax gain of $6.9 million, or $.04 per share, for the
exchange of K&F debentures for cash and equity. The results of operations of
Loral UDS contributed $3.2 million, or $.02 per share, to the current quarter's
earnings; the Company's share of development costs of Globalstar, a limited
partnership formed in March 1994 to design, construct, and operate a worldwide
satellite-based telecommunications system, reduced the current quarter's
earnings by $4.6 million, or $.03 per share, compared to $2.7 million, or $.02
per share, in the prior year.
Earnings per share for the quarter ended September 30, 1995 are based on
175.2 million primary weighted average shares outstanding, compared with 170.3
million in the prior year.
The sales increase was attributable primarily to the sales of the acquired
Loral UDS which amounted to $252.2 million. Sales also include higher volume of
$34.7 million for the United Kingdom's EH-101 Merlin ASW helicopter and $29.7
million for the Patriot Advanced Capability (PAC-3) missile, formerly known as
Extended Range Interceptor (ERINT); offset by lower volume of $13.7 million for
the U.S. Navy's Light Airborne Multipurpose System (LAMPS) MK III ASW
helicopter, $13.1 million for the Army Tactical Missile System (ATACMS), $12.9
million for ALR-56 radar warning systems and $10.6 million for the Multiple
Launch Rocket System (MLRS). The Company has a diverse base of programs, none of
which is expected to account for more than 6% of fiscal 1996 revenues. The
change in sales from period to period also includes increases and decreases on a
variety of other programs which individually are not significant to the overall
sales change.
Operating income increased to $172.0 million from $123.1 million in the
prior year. The operating income increase includes $21.4 million attributable to
the results of the acquired Loral UDS business. Operating income as a percentage
of sales increased to 10.7% in the quarter ended September 30, 1995 from 9.1% in
the prior year. Excluding the effect of the acquired Loral UDS business,
operating income as a percentage of sales increased to 11.1% from 9.1% as a
result of improved margins due to operating efficiencies particularly for the
MLRS and ATACMS programs and the Loral Federal Systems business acquired
effective January 1994; offset by higher pension cost in the current period as a
result of the prior year's asset performance.
Interest expense, net of interest and investment income, increased to $34.2
million from $14.5 million in the prior year. This increase was primarily due to
the $16.3 million impact of debt incurred to finance the acquisition of Loral
UDS and the prior year non-recurring gain, net of expenses, of $11.5 million for
the exchange of K&F debentures for cash and equity. Excluding the impact of the
Loral UDS acquisition and the K&F transaction, interest expense, net decreased
by $8.1 million primarily as a result of strong Free Cash
6
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION -- (CONTINUED)
Flow, offset by an increase in the weighted average interest rate of debt. The
Company's Free Cash Flow (net cash from operating activities, less capital
expenditures, plus proceeds of stock purchases by employee benefit plans and
exercises of stock options) was $606.2 million for the twelve months ended
September 30, 1995, of which $142.8 million was generated in the quarter ended
September 30, 1995. The Company's weighted average interest rate of debt was
7.39% for the quarter ended September 30, 1995 compared with 7.07% for the
quarter ended September 30, 1994.
The Company's effective tax rate was 38% in the quarters ended September
30, 1995 and 1994.
FINANCIAL CONDITION
The Loral UDS purchase price was financed through additional commercial
paper borrowings which are supported by the Company's $1.2 billion revolving
credit facility. In June 1995, to take advantage of a decline in interest rates
and to fix interest costs and lengthen maturities, the Company issued $150
million 7 5/8% Senior Debentures due 2025 utilizing the balance of the Company's
existing shelf registration statement. The proceeds were used to reduce the
Company's outstanding commercial paper borrowings. (See Note 4 to Condensed
Consolidated Financial Statements.) Based on the current financial condition of
the Company, management believes that the internal cash flows of the combined
operations will be adequate to fund the future growth of the Company while
servicing interest and retiring the principal of the debt.
The majority of the Company's foreign currency hedges are entered into at
the direction of the customer pursuant to contractual requirements. Any gain or
loss on the hedges accrues to 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 declined slightly to 1.4:1 at September 30,
1995, compared with 1.5:1 at March 31, 1995. The debt (net of cash) to equity
ratio grew to .93:1 at September 30, 1995 from .71:1 at March 31, 1995 due to
the acquisition of Loral UDS.
Globalstar, with credit support expected from its strategic partners led by
Loral, is currently negotiating a $250 million revolving credit facility with a
group of banks, which will be drawn down as needed.
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, such as Globalstar,
will enable the Company to offset overall U.S. budget decline impacts.
COMPARISON OF RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED
SEPTEMBER 30, 1995 AND SEPTEMBER 30, 1994
Sales for the six months ended September 30, 1995 increased to $3.109
billion from $2.690 billion in the prior year. Net income for the six months
ended September 30, 1995 increased to $151.3 million, or $.87 per share,
compared with $121.2 million, or $.71 per share, in the prior year. Included in
the prior year is a non-recurring after-tax gain of $6.9 million, or $.04 per
share, for the exchange of K&F debentures for cash and equity. The results of
operations of Loral UDS contributed $6.6 million, or $.04 per share, to the
current period's earnings; the Company's share of development costs of
Globalstar, a limited partnership formed in March 1994 to design, construct, and
operate a worldwide satellite-based telecommunications system, reduced the
current period's earnings by $7.9 million, or $.05 per share, compared to $4.5
million, or $.03 per share, in the prior year.
Earnings per share for the six months ended September 30, 1995 are based on
174.5 million primary weighted average shares outstanding, compared with 169.9
million in the prior year.
The sales increase was attributable primarily to the sales of the acquired
Loral UDS business which amounted to $397.8 million. Sales also include higher
volume of $65.8 million for the United Kingdom's EH-101 Merlin ASW helicopter
and $55.4 million for the Patriot Advanced Capability (PAC-3) missile,
7
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION -- (CONTINUED)
formerly known as Extended Range Interceptor (ERINT); offset by lower volume of
$60.4 million for the Multiple Launch Rocket System (MLRS) and $29.6 million for
the Army Tactical Missile System (ATACMS). The Company has a diverse base of
programs, none of which is expected to account for more than 6% of fiscal 1996
revenues. The change in sales from period to period also includes increases and
decreases on a variety of other programs which individually are not significant
to the overall sales change.
Operating income increased to $318.7 million from $236.7 million in the
prior year. The operating income increase includes $38.1 million attributable to
the results of the acquired Loral UDS business. Operating income as a percentage
of sales increased to 10.3% for the six months ended September 30, 1995 from
8.8% in the prior year. Excluding the effect of the acquired Loral UDS business,
operating income as a percentage of sales increased to 10.4% in the six months
ended September 30, 1995 from 8.8% in the prior year as a result of improved
margins due to operating efficiencies particularly at the Loral Federal Systems
business acquired effective January 1994; offset by higher pension cost in the
current period as a result of the prior year's asset performance.
Interest expense, net of interest and investment income, increased to $65.2
million from $37.4 million in the prior year. This increase was primarily due to
the $27.4 million impact of debt incurred to finance the acquisition of Loral
UDS and the prior year non-recurring gain, net of expenses, of $11.5 million for
the exchange of K&F debentures for cash and equity. Excluding the impact of the
Loral UDS acquisition and the K&F transaction, interest expense, net decreased
by $11.1 million primarily as a result of strong Free Cash Flow, offset by an
increase in the weighted average interest rate of debt. The Company's Free Cash
Flow was $606.2 million for the twelve months ended September 30, 1995, of which
$304.6 million was generated in the six months ended September 30, 1995. The
Company's weighted average interest rate of debt was 7.41% for the six months
ended September 30, 1995 compared with 6.22% for the six months ended September
30, 1994.
The Company's effective tax rate was 38% in the six months ended September
30, 1995 and 1994.
8
<PAGE> 10
PART II -- OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On September 14, 1995, at a Special Meeting of Stockholders of Loral
Corporation, the proposal to amend the Company's Certificate of Incorporation to
increase the number of authorized Common Shares from 150,000,000 to 300,000,000
was approved. The votes, which do not give effect to the two-for-one stock
split, were:
<TABLE>
<S> <C>
For...................................................................... 65,873,312
Against.................................................................. 950,622
Abstentions.............................................................. 106,176
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibits are filed as part of this report:
Exhibit 11.1 Computation of Earnings per Common Share for the three
months ended September 30, 1995 and 1994
Exhibit 11.2 Computation of Earnings per Common Share for the six
months ended
September 30, 1995 and 1994
Exhibit 12 Computation of Ratio of Earnings to Fixed Charges for
the six months ended September 30, 1995 and 1994
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended September 30,
1995.
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.
LORAL CORPORATION
--------------------------------------
Registrant
Date: November 10, 1995 MICHAEL P. DEBLASIO
---------------------------------------------------------
Michael P. DeBlasio
Senior Vice President -- Finance
(Principal Financial Officer)
and
Registrant's Authorized Officer
9
<PAGE> 11
EXHIBIT INDEX
-------------
Exhibit
No. Description
- ------- -------------
11.1 Computation of Earnings per Common Share for
the three months ended September 30, 1995 and
1994.
11.2 Computation of Earnings per Common Share for
the six months ended September 30, 1995 and 1994.
12 Computation of Ratio of Earnings to Fixed Charges
for the six months ended September 30, 1995 and 1994.
<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,
-------------------
1995 1994
------- -------
<S> <C> <C>
Primary:
Net income applicable to common shares................................. $82,071 $66,253
======= =======
Shares:
Weighted average common shares outstanding.......................... 171,526 167,330
Common equivalent shares applicable to stock options................ 3,624 2,938
------- -------
Average number of shares outstanding and common equivalent shares... 175,150 170,268
======= =======
Primary earnings per common share and common equivalent share............ $.47 $.39
======= =======
Fully Diluted:
Net income applicable to common shares................................. $82,071 $66,253
======= =======
Shares:
Average number of common shares as adjusted for primary
computation........................................................ 175,150 170,268
Incremental increase to shares under stock options where the
quarter's ending market price is higher than the average market
price during the quarter........................................... 130 132
------- -------
Average number of shares outstanding on a fully diluted basis....... 175,280 170,400
======= =======
Earnings per common share assuming full dilution......................... $.47 $.39
======= =======
</TABLE>
10
<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,
---------------------
1995 1994
-------- --------
<S> <C> <C>
Primary:
Net income applicable to common shares............................... $151,340 $121,217
======== ========
Shares:
Weighted average common shares outstanding........................ 171,007 166,998
Common equivalent shares applicable to stock options.............. 3,451 2,874
-------- --------
Average number of shares outstanding and common equivalent
shares........................................................... 174,458 169,872
======== ========
Primary earnings per common share and common equivalent share.......... $.87 $.71
======== ========
Fully Diluted:
Net income applicable to common shares............................... $151,340 $121,217
======== ========
Shares:
Average number of common shares as adjusted for primary
computation...................................................... 174,458 169,872
Incremental increase to shares under stock options where the
quarter's ending market price is higher than the average market
price during the quarter......................................... 192 66
-------- --------
Average number of shares outstanding on a fully diluted basis..... 174,650 169,938
======== ========
Earnings per common share assuming full dilution....................... $.87 $.71
======== ========
</TABLE>
11
<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,
---------------------
1995 1994
-------- --------
<S> <C> <C>
Earnings:
Income before taxes and equity in net loss of affiliates............. $253,576 $199,333
Add:
Interest expense.................................................. 71,977 51,924
Amortization of debt expense...................................... 214 728
Amortization of capitalized interest.............................. 497 574
Interest component of rent expense................................ 13,950 12,264
-------- --------
Earnings............................................................. $340,214 $264,823
======== ========
Fixed charges:
Interest expense..................................................... $ 71,977 $ 51,924
Amortization of debt expense......................................... 214 728
Capitalized interest................................................. 4,142 110
Interest component of rent expense................................... 13,950 12,264
-------- --------
Fixed charges........................................................ $ 90,283 $ 65,026
======== ========
Ratio of earnings to fixed charges..................................... 3.77x 4.07x
======== ========
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF LORAL CORPORATION FOR THE SIX MONTHS ENDED SEPTEMBER 30,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> SEP-30-1995
<CASH> 111,097
<SECURITIES> 0
<RECEIVABLES> 1,084,175
<ALLOWANCES> 0
<INVENTORY> 376,991
<CURRENT-ASSETS> 1,858,605
<PP&E> 2,143,579
<DEPRECIATION> 837,176
<TOTAL-ASSETS> 5,827,570
<CURRENT-LIABILITIES> 1,324,797
<BONDS> 1,832,209
<COMMON> 43,442
0
0
<OTHER-SE> 1,815,963
<TOTAL-LIABILITY-AND-EQUITY> 5,827,570
<SALES> 3,109,108
<TOTAL-REVENUES> 3,116,131
<CGS> 2,790,364
<TOTAL-COSTS> 2,790,364
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 72,191
<INCOME-PRETAX> 253,576
<INCOME-TAX> 96,359
<INCOME-CONTINUING> 151,340
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 151,340
<EPS-PRIMARY> .87
<EPS-DILUTED> .87
</TABLE>
